Pro Diversity Network (IPDN) to Sell Controlling Stake in PDN to Cosmic Forward Limited

August 15, 2016 7:03 AM EDT
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Professional Diversity Network, Inc. (“PDN”) (NASDAQ: IPDN) today announced that it has entered into a definitive agreement to sell a controlling stake in PDN to Cosmic Forward Limited, a Seychelles private company wholly-owned by a group of Chinese investors.

“We are pleased to welcome the proposed investment from Cosmic Forward Limited,” said Jim Kirsch, Executive Chair of PDN’s Board of Directors. “This infusion of capital will provide resources to enable our company to execute its business plan and fund future growth, including expansion into China, where professional networking and career services opportunities have increased as the Chinese economy has grown and matured. We look forward to reaching our strategic goals and expanding our business to enhance shareholder value.”

Under the terms of the agreement, Cosmic Forward Limited will purchase newly issued shares of common stock equal to approximately 51% of PDN’s outstanding common stock on a fully-diluted basis, after giving effect to the transaction and the partial tender offer that PDN will commence prior to closing as described below. The purchase price will be $1.20 per share, representing an approximately 126% premium over the closing price of PDN common stock on August 12, 2016 ($0.53). After giving effect to the tender offer and assuming no exercise of any existing co-sale rights, PDN would receive gross proceeds of approximately $20,500,000, based on PDN’s capitalization, on a fully-diluted basis, as of the date on which the definitive agreement was signed, and expected net proceeds of approximately $17,500,000, before giving effect to any repayment of indebtedness at the closing and before payments associated with the tender offer.

Prior to the closing of Cosmic Forward Limited’s investment, PDN will commence a partial issuer tender offer to purchase from its stockholders up to 2,500,000 shares of its outstanding common stock at a price per share equal to $1.20, net to the tendering holder in cash but subject to reduction for any required withholding of taxes. To the extent that fewer than 2,500,000 shares are purchased in the tender offer, Cosmic Forward Limited will have an option to purchase such additional shares as necessary to obtain ownership of 51% of PDN’s outstanding common stock, on a fully-diluted basis.

Aegis Capital Corp. is acting as the exclusive placement agent in connection with the proposed transactions. Greenberg Traurig, LLP is acting as legal counsel to PDN and Cassel Salpeter & Co., LLC is acting as financial advisor to PDN in connection with the proposed transactions. White & Case LLP is acting as legal counsel to CFL and Nymex Capital Partners LLC is acting as financial advisor to CFL in connection with the proposed transactions.

The proposed transactions are subject to customary closing conditions, including PDN stockholder approval, and will be reviewed by the Committee on Foreign Investment in the United States. PDN expects to complete the proposed transactions in the fourth quarter of 2016.

The shares of PDN’s common stock are being offered and sold to Cosmic Forward Limited in a private placement under Section 4(a)(2) under the Securities Act of 1933, as amended, and Rule 506(b) promulgated thereunder and have not been registered under the Securities Act.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such jurisdiction.



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