What changed in this filing

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Item 1. Financial Statements

2021-11-10 compared with 2021-08-06 · 208 added, 175 removed, 485 unchanged (44% of the section changed)

3 unchanged sentences

(in thousands, except per share data)

September 30,

2021 December 31, 2020

4 unchanged sentences

Income taxes receivable 174 533

Equity security 1,839 —

Prepaid and other current assets 4,563 4,101

2 unchanged sentences

Fixed assets, net 21,201 23,033

Acquired intangible assets 23,800 23,800

Capitalized contract costs 7,029 6,189

Goodwill 128,100 128,100

Operating lease right-of-use assets 7,333 10,804

Equity investments 3,640 —

Investments 3,640 —

Investments, at fair value 3,000 —

Acquired intangible assets 23,800 23,800

Goodwill 128,100 128,100

Other assets 1,590 1,378

4 unchanged sentences

Accounts payable and accrued expenses $ 16,142 $ 15,308

Operating lease liabilities 2,246 2,075

Deferred revenue 42,486 35,547

Income taxes payable 997 —

Operating lease liabilities 2,102 2,075

Current liabilities of discontinued operations — 12,455

Total current liabilities 60,730 65,385

Deferred revenue 917 1,035

Operating lease liabilities 7,591 9,371

Long-term debt, net 17,693 19,583

Deferred income taxes 9,174 9,765

Deferred revenue 958 1,035

Accrual for unrecognized tax benefits 995 941

Operating lease liabilities 8,191 9,371

Other long-term liabilities 1,924 2,049

19 unchanged sentences

(in thousands, except per share amounts)

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

7 unchanged sentences

Impairment of intangible assets — 8,000 — 15,200

Impairment of goodwill — 22,607 — 22,607

Impairment of right-of-use asset 1,919 — 1,919 —

Total operating expenses 32,973 55,627 88,066 117,523

Operating income (loss) 488 1,655 304 ( 4,915 )

Operating loss ( 2,215 ) ( 28,478 ) ( 1,911 ) ( 33,393 )

Interest expense and other ( 150 ) ( 273 ) ( 432 ) ( 622 )

Impairment of equity investment — — — ( 2,002 )

Unrealized gain (loss) on equity security ( 674 ) — 1,839 —

Income (loss) before income taxes ( 273 ) 1,494 1,861 ( 7,266 )

Income tax expense (benefit) ( 61 ) 332 61 ( 893 )

Income (loss) from continuing operations ( 212 ) 1,162 1,800 ( 6,373 )

Impairment of investment — — — ( 2,002 )

Gain (loss) on investments ( 641 ) — 1,198 —

Loss before income taxes ( 3,006 ) ( 28,751 ) ( 1,145 ) ( 36,017 )

Income tax benefit ( 572 ) ( 1,758 ) ( 511 ) ( 2,651 )

Loss from continuing operations ( 2,434 ) ( 26,993 ) ( 634 ) ( 33,366 )

Income (loss) from discontinued operations, net of tax — ( 329 ) ( 29,340 ) 1,356

Net income (loss) $ ( 30,211 ) $ 1,862 $ ( 27,540 ) $ ( 4,688 )

Basic earnings (loss) per share - continuing operations $ — $ 0.02 $ 0.04 $ ( 0.13 )

Diluted earnings (loss) per share - continuing operations $ — $ 0.02 $ 0.04 $ ( 0.13 )

Net loss $ ( 2,434 ) $ ( 27,322 ) $ ( 29,974 ) $ ( 32,010 )

Basic loss per share - continuing operations $ ( 0.05 ) $ ( 0.56 ) $ ( 0.01 ) $ ( 0.69 )

Diluted loss per share - continuing operations $ ( 0.05 ) $ ( 0.56 ) $ ( 0.01 ) $ ( 0.69 )

Basic earnings (loss) per share - discontinued operations $ — $ ( 0.01 ) $ ( 0.63 ) $ 0.03

Diluted earnings (loss) per share - discontinued operations $ — $ ( 0.01 ) $ ( 0.63 ) $ 0.03

Basic earnings (loss) per share $ ( 0.64 ) $ 0.04 $ ( 0.58 ) $ ( 0.10 )

Diluted earnings (loss) per share $ ( 0.64 ) $ 0.04 $ ( 0.56 ) $ ( 0.10 )

Basic loss per share $ ( 0.05 ) $ ( 0.57 ) $ ( 0.64 ) $ ( 0.66 )

Diluted loss per share $ ( 0.05 ) $ ( 0.57 ) $ ( 0.64 ) $ ( 0.66 )

Weighted-average basic shares outstanding 45,807 47,955 46,740 48,503

4 unchanged sentences

(in thousands)

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

Net income (loss) $ ( 30,211 ) $ 1,862 $ ( 27,540 ) $ ( 4,688 )

Net loss $ ( 2,434 ) $ ( 27,322 ) $ ( 29,974 ) $ ( 32,010 )

Other comprehensive income (loss):

2 unchanged sentences

Total other comprehensive income (loss) — 2,719 28,519 ( 1,351 )

Comprehensive income (loss) $ ( 1,989 ) $ 1,657 $ 979 $ ( 8,758 )

Comprehensive loss $ ( 2,434 ) $ ( 24,603 ) $ ( 1,455 ) $ ( 33,361 )

See accompanying notes to the condensed consolidated financial statements.

26 unchanged sentences

Balance at June 30, 2021 — $ — 73,235 $ 733 $ 237,614 21,795 $ ( 137,280 ) $ 26,431 $ — $ 127,498

Net loss ( 2,434 ) ( 2,434 )

Stock based compensation 2,154 2,154

Restricted stock issued 463 4 ( 4 ) —

Restricted stock forfeited or withheld to satisfy tax obligations ( 116 ) ( 2 ) 2 89 ( 303 ) ( 303 )

Performance-Based Restricted Stock Units forfeited or withheld to satisfy tax obligations ( 6 ) — — — — —

Purchase of treasury stock under stock repurchase plan 1,824 ( 6,756 ) ( 6,756 )

Balance at September 30, 2021 — $ — 73,576 $ 735 $ 239,766 23,708 $ ( 144,339 ) $ 23,997 $ — $ 120,159

DHI GROUP, INC.

7 unchanged sentences

Balance at December 31, 2019 — $ — 69,509 $ 696 $ 227,227 15,591 $ ( 121,466 ) $ 83,986 $ ( 29,248 ) $ 161,195

Net income ( 6,550 ) ( 6,550 )

Net loss ( 6,550 ) ( 6,550 )

Other comprehensive loss ( 3,865 ) ( 3,865 )

13 unchanged sentences

Balance at June 30, 2020 — $ — 71,079 $ 712 $ 230,638 18,144 $ ( 128,065 ) $ 79,298 $ ( 33,318 ) $ 149,265

Net loss $ ( 27,322 ) ( 27,322 )

Other comprehensive income 2,719 2,719

Stock based compensation 1,525 1,525

Restricted stock issued 282 2 2

Restricted stock forfeited or withheld to satisfy tax obligations ( 74 ) — 95 ( 218 ) ( 218 )

Performance-Based Restricted Stock Units forfeited or withheld to satisfy tax obligations ( 5 ) — — — —

Purchase of treasury stock under stock repurchase plan 349 ( 854 ) ( 854 )

Balance at September 30, 2020 — $ — 71,282 $ 714 $ 232,163 18,588 $ ( 129,137 ) $ 51,976 $ ( 30,599 ) $ 125,117

See accompanying notes to the condensed consolidated financial statements.

2 unchanged sentences

(in thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

Cash flows from (used in) operating activities:

6 unchanged sentences

Impairment of intangible assets — 15,200

Impairment of equity investment — 2,002

Unrealized gain on equity security ( 1,839 ) —

Gain on sale of equity investment — ( 200 )

Impairment of goodwill — 23,626

Impairment of right-of-use asset 1,919 —

Impairment of investment — 2,002

Gain on investments ( 1,198 ) ( 200 )

Change in accrual for unrecognized tax benefits 54 62

11 unchanged sentences

Cash transferred with discontinued operations ( 2,951 ) —

Cash received from sale of equity investment — 200

Cash paid for investment ( 3,000 ) —

Cash received from sale of investments 1,198 200

Purchases of fixed assets ( 10,707 ) ( 12,536 )

20 unchanged sentences

Although the Company believes that the disclosures are adequate to make the information presented not misleading, these financial statements should be read in conjunction with the Company’s audited consolidated financial statements as of and for the year ended December 31, 2020 included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 (the “Annual Report on Form 10-K”).

Operating results for the six month period ended June 30, 2021 are not necessarily indicative of the results to be achieved for the full year.

Operating results for the nine month period ended September 30, 2021 are not necessarily indicative of the results to be achieved for the full year.

Preparation of the condensed consolidated financial statements in conformity with U.S.

2 unchanged sentences

Actual results could differ materially from management’s estimates reported in the condensed consolidated financial statements and footnotes thereto.

There have been no significant changes in the Company’s assumptions regarding critical accounting estimates during the six month period ended June 30, 2021.

There have been no significant changes in the Company’s assumptions regarding critical accounting estimates during the nine month period ended September 30, 2021.

On June 30, 2021, the Company transferred majority ownership and control of its eFinancialCareers ("eFC") business to eFC's management, while retaining a 40 % common share interest.

The eFC business was significant to the Company and the transfer was considered to be a strategic shift from the financial services industry and from the geographies eFC serves that had a major effect on the Company's operations.

As a result, the eFC business has been deconsolidated from the Company's consolidated financial statements as of June 30, 2021 and is reflected as a discontinued operation in the Condensed Consolidated Balance Sheets and the Condensed Consolidated Statements of Operations for all periods presented.

As a result, the eFC business was deconsolidated from the Company's consolidated financial statements as of June 30, 2021 and is reflected as a discontinued operation in the Condensed Consolidated Balance Sheets and the Condensed Consolidated Statements of Operations for all periods presented.

The historical Condensed Consolidated Statements of Comprehensive Income (Loss), Stockholders’ Equity and Cash Flows have not been revised to reflect the effects of the transfer of control of eFC.

18 unchanged sentences

Company adopted this standard on January 1, 2021, and the adoption did not have a material effect on the Company's consolidated financial statements.

FAIR VALUE MEASUREMENTS

The FASB ASC topic on Fair Value Measurements and Disclosures defines fair value, establishes a framework for measuring fair value and requires certain disclosures for each major asset and liability category measured at fair value on either a recurring or nonrecurring basis.

As a basis for considering assumptions, a three-tier fair value hierarchy is used, which prioritizes the inputs used in measuring fair value as follows:

• Level 1 – Quoted prices for identical instruments in active markets.

• Level 2 – Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-derived valuations, in which all significant inputs are observable in active markets.

• Level 3 – Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

The carrying amounts reported in the Condensed Consolidated Balance Sheets for cash and cash equivalents, accounts receivable, other assets, accounts payable and accrued expenses and long-term debt approximate their fair values.

Investments, current, are carried at fair value using values available on a public exchange based on a Level 1 input.

Investments, non-current that are carried at fair value use a discounted cash flow technique based on the probability of one or more possible outcomes, based on Level 3 inputs, which inputs and fair value did not change during the three and nine month periods ended September 30, 2021.

The fair value of the long-term debt was estimated using present value techniques and market based interest rates and credit spreads.

The estimated fair value of long-term debt is based on Level 2 inputs.

Certain assets and liabilities are measured at fair value on a non-recurring basis.

These assets include equity investments, operating right-of-use assets and goodwill and intangible assets which resulted from prior acquisitions.

Items valued using such internally generated valuation techniques are classified according to the lowest level input or value driver that is significant to the valuation.

Thus, an item may be classified in Level 3 even though there may be some significant inputs that are readily observable.

Such instruments are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances, for example, when there is evidence of impairment.

On June 30, 2021, the Company transferred majority ownership and control of its eFC business to eFC's management, while retaining a 40 % common share interest.

The Company valued its 40 % interest in eFC utilizing a combination of a discounted cash flow and a market approach.

The discounted cash flow included declining revenues for the years ending December 31, 2021 and 2022 as compared to the year ended December 31, 2020 and then increasing moderately.

The discounted cash flow also included operating margin declines for the year ending December 31, 2022 compared to the year ending December 31, 2021 and then increasing moderately.

The Company utilized a discount rate of 19.0 %.

The market approach included the analysis of data from transactions on guideline companies and applied multiples of those transactions to eFC's results.

DISCONTINUED OPERATIONS

1 unchanged sentence

As a result, we have reflected eFC's financial results as discontinued operations in the Condensed Consolidated Balance Sheets and the Condensed Consolidated Statements of Operations for all periods presented.

DHI GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The assets and liabilities classified as discontinued operations on the Condensed Consolidated Balance Sheets were as follows (in thousands):

28 unchanged sentences

The results of discontinued operations on the Condensed Consolidated Statements of Operations were as follows (in thousands):

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

1 unchanged sentence

Operating expenses — ( 6,201 ) ( 10,821 ) ( 17,519 )

Operating income 627 798 1,309 2,118

Operating income (loss) — ( 100 ) 1,309 2,018

Loss on disposition of discontinued operations (1)

5 unchanged sentences

(1) The loss was comprised of $28.1 million related to the reclassification of currency translation adjustments and $5.2 million from the removal of eFC's net assets.

The loss was partially offset by the recording of an equity investment of $3.6 million and eFC's earnings during the three and six month periods ended June 30, 2021.

The loss was partially offset by the recording of an equity investment of $3.6 million and eFC's earnings during the six month period ended June 30, 2021.

Depreciation, fixed asset purchases and other significant non-cash items related to discontinued operations were as follows (in thousands):

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

11 unchanged sentences

The following table provides information about disaggregated revenue by brand and includes a reconciliation of the disaggregated revenue (in thousands):

Three Months Ended June 30 Six Months Ended June 30

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

6 unchanged sentences

The following table provides information about opening and closing balances of receivables and contract liabilities from contracts with customers as required under Topic 606 (in thousands):

As of June 30, 2021 As of December 31, 2020

As of September 30, 2021 As of December 31, 2020

Receivables $ 15,267 $ 16,134

2 unchanged sentences

We receive payments from customers based upon contractual billing schedules;

accounts receivable is recorded when customers are invoiced per the contractual billings schedules.

accounts receivable are recorded when customers are invoiced per the contractual billings schedules.

As the Company's standard payment terms are less than one year, the Company elected the practical expedient, where applicable.

4 unchanged sentences

T he Company recognized the following revenues as a result of changes in the contract liability balances in the respective periods (in thousands):

Three Months Ended Six Months Ended

June 30, 2021 June 30, 2020 June 30, 2021 June 30, 2020

Three Months Ended Nine Months Ended

September 30, 2021 September 30, 2020 September 30, 2021 September 30, 2020

Revenue recognized in the period from:

3 unchanged sentences

Tech-focused $ 22,603 $ 20,325 $ 427 $ 48 $ 43,403

FAIR VALUE MEASUREMENTS

As a basis for considering assumptions, a three-tier fair value hierarchy is used, which prioritizes the inputs used in measuring fair value as follows:

• Level 1 – Quoted prices for identical instruments in active markets.

• Level 3 – Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

The equity security is carried at fair value using values available on a public exchange and is based on a Level 1 input.

The fair value of the long-term debt was estimated using present value techniques and market based interest rates and credit spreads.

The estimated fair value of long-term debt is based on Level 2 inputs.

DHI GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Certain assets and liabilities are measured at fair value on a non-recurring basis.

These assets include equity investments and goodwill and intangible assets which resulted from prior acquisitions.

Items valued using such internally generated valuation techniques are classified according to the lowest level input or value driver that is significant to the valuation.

Thus, an item may be classified in Level 3 even though there may be some significant inputs that are readily observable.

Such instruments are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances, for example, when there is evidence of impairment.

On June 30, 2021, the Company transferred majority ownership and control of its eFC business to eFC's management, while retaining a 40 % common share interest.

The Company valued its 40 % interest in eFC utilizing a combination of a discounted cash flow and a market approach.

The discounted cash flow included declining revenues for the years ending December 31, 2021 and 2022 as compared to the year ended December 31, 2020 and then increasing moderately.

The discounted cash flow also included operating margin declines for the year ending December 31, 2022 compared to the year ending December 31, 2021 and then increasing moderately.

The Company utilized a discount rate of 19.0 %.

The market approach included the analysis of data from transactions on guideline companies and applied multiples of those transactions to eFC's results.

Equity Security at Fair Value

Through its predecessor companies, the Company owns a minority interest representing less than 1% of the common stock of a technology company that completed an initial public offering ("IPO") and became publicly traded during the first quarter of 2021.

Prior to the IPO, the Company had elected the measurement alternative in accordance with FASB ASC 321, Investments – Equity Securities.

As of December 31, 2020, it was not practicable to estimate the fair value of its interest because there were no observable transactions for the investment.

Accordingly, the investment was carried at its original cost, less impairments, which resulted in a carrying value of zero as of December 31, 2020.

As a result of the IPO, the shares now have a readily determinable fair market value, which was $ 1.8 million as of June 30, 2021.

The investment is accounted for as an equity security, with unrealized gains and losses included in earnings.

Unrealized gain (loss) of ($ 0.7 ) million and $ 1.8 million has been recorded for the three and six month periods ended June 30, 2021, respectively.

Other Investments

At January 1, 2018, the Company held preferred stock representing a 10.0 % interest in the fully diluted shares of a tech skills assessment company.

During 2018, the skills assessment company completed an additional equity offering, lowering DHI's total interest to 7.6 %.

The Company did not adjust the recorded value of the investment because the shares issued under the new share offering were not similar to the Company's share rights.

As of December 31, 2019 it was not practicable to estimate the fair value of the preferred stock as the shares are not traded.

The investment was carried at its original cost of $ 2.0 million and was included in the other assets section of the Condensed Consolidated Balance Sheets.

During the three months ended March 31, 2020, based on the investment's historical cash burn rate, uncertainty of its ability to meet revenue and cash flow projections, current liquidity position, lack of access to additional capital, and impacts from the COVID-19 pandemic, the Company determined the value to be zero.

Accordingly, the Company recorded an impairment charge of $ 2.0 million during the first quarter of 2020.

As of June 30, 2021, there have been no additional shares issued that were similar to the Company's share rights and the investment is recorded at zero as of June 30, 2021.

On January 31, 2018, the Company transferred a majority ownership of the BioSpace business to BioSpace management with zero proceeds received from the transfer, while retaining a 20 % preferred share interest in the BioSpace business.

During the second quarter of 2020, the Company sold its 20 % interest in BioSpace to BioSpace management for $ 0.2 million.

At the time of sale, the recorded value of the investment was zero.

Accordingly, the Company recognized a $ 0.2 million gain on sale, which was included in interest expense and other on the Condensed Consolidated Statements of Operations.

Rigzone is a website dedicated to delivering online content, data, and career services in the oil and gas industry in North America, Europe, the Middle East, and Asia Pacific.

Oil and gas companies, as well as companies that serve the energy industry, use Rigzone to find talent for roles such as petroleum engineers, sales professionals with energy industry expertise and skilled tradesmen.

On August 31, 2018, the Company transferred a majority ownership and control of the Rigzone business to Rigzone management, while retaining a 40 % common share interest, with zero proceeds received from the transfer.

The Company has evaluated the 40 % common share interest in the Rigzone business and has determined the investment meets the definition and criteria of a variable interest entity ("VIE").

The Company evaluated the VIE and determined that the Company does not have a controlling financial interest in the VIE, as the Company does not have the power to direct the activities of the

DHI GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

VIE that most significantly impact the VIE's economic performance.

The common share interest is being accounted for under the equity method of accounting as the Company has the ability to exercise significant influence over Rigzone.

As accumulated earnings of the VIE have been approximately zero since the date of transfer, the investment is recorded at zero at June 30, 2021.

As further described in Notes 1 and 5, on June 30, 2021, the Company transferred majority ownership and control of its eFC business to eFC's management, while retaining a 40 % common share interest with zero proceeds received from the transfer.

The Company incurred approximately $ 0.1 million in selling costs and recognized a $ 30.2 million loss on the transfer in the second quarter of 2021, which included a $ 28.1 million charge related to accumulated foreign currency loss that was previously a reduction to equity.

eFC is a financial services careers website, operating websites in multiple markets in four languages mainly across the United Kingdom, Continental Europe, Asia, the Middle East and North America.

Professionals from across many sectors of the financial services industry, including asset management, risk management, investment banking, and information technology, use eFC to advance their careers.

The Company has evaluated the 40 % common share interest in the eFC business and has determined the investment meets the definition and criteria of a variable interest entity ("VIE").

The Company evaluated the VIE and determined that the Company does not have a controlling financial interest in the VIE, as the Company does not have the power to direct the activities of the VIE that most significantly impact the VIE's economic performance.

The common share interest is being accounted for under the equity method of accounting as the Company has the ability to exercise significant influence over eFC.

The investment was recorded at its fair value on June 30, 2021, the date of transfer, which was $3.6 million.

The recorded value will adjust in the future based on the Company's proportionate share of eFC's net income.

The Company has operating leases for corporate office space and certain equipment.

4 unchanged sentences

Operating lease right-of-use "ROU" assets and liabilities are recognized at the commencement date of the lease based on the present value of lease payments over the lease term.

Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term.

When readily available, the Company uses the implicit rate in determining the present value of the lease payments.

3 unchanged sentences

All operating lease expense is recognized on a straight-line basis over the lease term.

The Company reviews its ROU assets for impairment if indicators of impairment exist.

The impairment review process compares the fair value of the ROU asset to its carrying value.

If the carrying value exceeds the fair value, an impairment loss is recorded.

During the three months ended September 30, 2021, due to the continuing impacts of COVID-19 on the real estate

DHI GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

markets and its impact on the future cash flows attributable to its ROU assets, the Company recorded an impairment charge of $ 1.9 million.

No impairment was recorded during the nine month period ended September 30, 2020.

The components of lease cost were as follows (in thousands):

For the Three Months Ended June 30, For the Six Months Ended June 30,

For the Three Months Ended September 30, For the Nine Months Ended September 30,

2021 2020 2021 2020

4 unchanged sentences

(1) Includes short-term lease costs and variable lease costs, which are immaterial.

DHI GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Supplemental cash flow information related to leases was as follows (in thousands):

For the Six Months Ended June 30,

For the Nine Months Ended September 30,

Cash paid for amounts included in measurement of lease liabilities:

3 unchanged sentences

Supplemental balance sheet information related to leases was as follows (in thousands, except lease term and discount):

June 30, 2021 December 31, 2020

September 30, 2021 December 31, 2020

Operating lease right-of-use-assets (1)

$ 7,333 $ 10,804

Operating lease liabilities - current 2,102 2,075

5 unchanged sentences

Operating leases 3.84 % 3.86 %

As of June 30, 2021, future operating lease payments were as follows (in thousands):

(1) During the three months ended September 30, 2021, the Company recorded an impairment of $1.9 million.

As of September 30, 2021, future operating lease payments were as follows (in thousands):

Operating Leases

July 1, 2021 through December 31, 2021 $ 1,258

October 1, 2021 through December 31, 2021 $ 492

2026 and thereafter 1,074

2 unchanged sentences

Total $ 9,693

As of June 30, 2021 the Company has no additional operating or finance leases that have not yet commenced.

DHI GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2021 the Company has no additional operating or finance leases that have not yet commenced.

Investments, Current, at Fair Value

Through its predecessor companies, the Company owned a minority interest representing less than 1% of the common stock of a technology company that completed an initial public offering ("IPO") and became publicly traded during the first quarter of 2021.

Prior to the IPO, the Company had elected the measurement alternative in accordance with FASB ASC 321, Investments – Equity Securities.

As of December 31, 2020, it was not practicable to estimate the fair value of its interest because there were no observable transactions for the investment.

Accordingly, the investment was carried at its original cost, less impairments, which resulted in a carrying value of zero as of December 31, 2020.

The investment was accounted for as an equity security, with realized and unrealized gains and losses included in earnings.

During the three months ended September 30, 2021, the investment was sold for $ 1.2 million.

Accordingly, the recorded value as of September 30, 2021 was zero.

An unrealized loss of $ 0.6 million and a realized gain of $ 1.2 million has been recorded for the three and nine month periods ended September 30, 2021, respectively.

Investments, Non-current, at Fair Value

During the three months ended September 30, 2021, the Company invested $ 3.0 million through a subordinated convertible promissory note (the "Note") of $ 3.0 million with a values-based career destination company that allows the next generation workforce to search for jobs at companies whose people, perks and values align with their unique professional needs.

The Note earns interest at 6.00 % and matures at the earlier of a Qualified Financing, as described in the Note, or settled in cash on or after August 20, 2022, at the option of the Company.

Upon a Qualified Financing, the Company will convert its investment into shares of preferred stock at 80 % of the per share value in the Qualified Financing.

The investment is recorded as a trading security at fair value with realized and unrealized gains and losses included in earnings.

The Note is recorded at $ 3.0 million as of September 30, 2021 and there was no gain or loss included in earnings during the three months ended September 30, 2021.

Investments, Non-current

Rigzone is a website dedicated to delivering online content, data, and career services in the oil and gas industry in North America, Europe, the Middle East, and Asia Pacific.

The Company has evaluated the 40 % common share interest in the Rigzone business and has determined the investment meets the definition and criteria of a variable interest entity ("VIE").

The common share interest is being accounted for under the equity method of accounting as the Company has the ability to exercise significant influence over Rigzone.

As accumulated earnings of the VIE have been approximately zero since the date of transfer, the investment is recorded at zero at September 30, 2021.

As further described in Notes 1 and 4, on June 30, 2021, the Company transferred majority ownership and control of its eFC business to eFC's management, while retaining a 40 % common share interest with zero proceeds received from the transfer.

eFC is a financial services careers website, operating websites in multiple markets in four languages mainly across the United Kingdom, Continental Europe, Asia, the Middle East and North America.

The Company has evaluated the 40 % common share interest in the eFC business and has determined the investment meets the definition and criteria of a variable interest entity ("VIE").

The common share interest is being accounted for under the equity method of accounting as the Company has the ability to exercise significant

DHI GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

influence over eFC.

The investment was recorded at its fair value on June 30, 2021, the date of transfer, which was $ 3.6 million.

The recorded value is adjusted based on the Company's proportionate share of eFC's net income and is recorded three months in arrears.

At January 1, 2018, the Company held preferred stock representing a 10.0 % interest in the fully diluted shares of a tech skills assessment company.

During 2018, the skills assessment company completed an additional equity offering, lowering DHI's total interest to 7.6 %.

The Company did not adjust the recorded value of the investment because the shares issued under the new share offering were not similar to the Company's share rights.

As of December 31, 2019 it was not practicable to estimate the fair value of the preferred stock as the shares are not traded.

The investment was carried at its original cost of $ 2.0 million and was included in the other assets section of the Condensed Consolidated Balance Sheets.

Accordingly, the Company recorded an impairment charge of $ 2.0 million during the first quarter of 2020.

As of September 30, 2021, there have been no additional shares issued that were similar to the Company's share rights and the investment is recorded at zero as of September 30, 2021.

During the second quarter of 2020, the Company sold its 20 % interest in BioSpace to BioSpace management for $ 0.2 million.

At the time of sale, the recorded value of the investment was zero.

Accordingly, the Company recognized a $ 0.2 million gain on sale, which was included in interest expense and other on the Condensed Consolidated Statements of Operations.

ACQUIRED INTANGIBLE ASSETS, NET

3 unchanged sentences

If the carrying value exceeds the fair value, an impairment loss is recorded.

As of June 30, 2021 and December 31, 2020, the Company had an indefinite-lived acquired intangible asset of $ 23.8 million related to the Dice trademarks and brand name.

DHI GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

brand name, the Company recorded impairment charges of $ 7.2 million and $ 8.0 million, respectively.

No impairment was recorded during the six month period ended June 30, 2021.

As of September 30, 2021 and December 31, 2020, the Company had an indefinite-lived acquired intangible asset of $ 23.8 million related to the Dice trademarks and brand name.

During the first and third quarters of 2020, because of the impacts of the COVID-19 pandemic and its potential impact on future earnings and cash flows that are attributable to the Dice trademarks and brand name, the Company recorded impairment charges of $ 7.2 million and $ 8.0 million, respectively.

No impairment was recorded during the nine month period ended September 30, 2021.

The projections utilized in the September 30, 2020 analysis included a decline in revenues for the year ending December 31, 2021 compared to the year ended December 31, 2020, and then increasing revenues to rates approximating industry growth projections.

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If future cash flows that are attributable to the Dice trademarks and brand name are not achieved, the Company could realize an impairment in a future period.

The Company's operating results attributable to the Dice trademarks and brand name through June 30, 2021 and projections of future results have met or exceeded those included in the projections utilized in the September 30, 2020 analysis.

The Company's operating results attributable to the Dice trademarks and brand name through September 30, 2021 and projections of future results have met or exceeded those included in the projections utilized in the September 30, 2020 analysis.

In the September 30, 2020 analysis, the Company utilized a relief from royalty rate method to value the Dice trademarks and brand name using a royalty rate of 4.0 % based on comparable industry studies and a discount rate of 15.5 %.

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We consider factors such as historical performance, anticipated market conditions, operating expense trends and capital expenditure requirements.

Changes in our strategy, uncertainty related to COVID-19, and/or changes in market conditions could significantly impact these judgments and require adjustments to recorded amounts of intangible assets.

Changes in our strategy, uncertainty related to COVID-19, and/or changes in market conditions could significantly impact these judgments and

DHI GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

require adjustments to recorded amounts of intangible assets.

If projections are not achieved, the Company could realize an impairment in the foreseeable future.

Goodwill as of June 30, 2021 and December 31, 2020, which was allocated to the Tech-focused reporting unit, was $ 128.1 million.

There were no changes to goodwill from December 31, 2020 to June 30, 2021.

Goodwill as of September 30, 2021 and December 31, 2020, which was allocated to the Tech-focused reporting unit, was $ 128.1 million.

There were no changes to goodwill from December 31, 2020 to September 30, 2021.

The annual impairment test for the Tech-focused reporting unit is performed on October 1 of each year.

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The results indicated that the fair value of the Tech-focused reporting unit was substantially in excess of the carrying value as of June 30, 2021.

No impairment was recorded during the six month periods ended June 30, 2021 and 2020.

No impairment was recorded during the nine month period ended September 30, 2021.

Revenue projections attributable to the Tech-focused reporting unit used in the June 30, 2021 analysis included revenue growth for the year ending December 31, 2021 compared to the year ended December 31, 2020 as the business recovers from the impacts of the COVID-19 pandemic and then continues its growth at rates approximating industry growth projections.

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In addition, a future decline in the overall market conditions, uncertainty related to COVID-19, political instability, and/or changes in the Company’s market share could negatively impact the estimated future cash flows and discount rates used to determine the fair value of the reporting unit and could result in an impairment charge in the foreseeable future.

DHI GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Credit Agreement —In November 2018, the Company, together with Dice, Inc.

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(collectively, the “Borrowers”), entered into a Second Amended and Restated Credit Agreement, as further amended in June 2021 (the “Credit Agreement”), which matures in November 2023, and replaced the previously existing credit agreement dated November 2015.

The June 2021 amendment modified the credit agreement to allow for the disposition of the eFC business.

The June 2021 amendment modified the credit agreement to allow for the disposition of the eFC business, removed the option to borrow in Euros and Sterling, and incorporated certain form updates.

The Credit Agreement provides for a revolving loan facility of $ 90 million, with an expansion option up to $ 140 million, as permitted under the terms of the Credit Agreement.

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and incurring additional indebtedness.

Restricted payments are allowed under the Credit Agreement to the extent the consolidated leverage ratio, calculated on a pro forma basis, is equal to or less than 2.00 to 1.00 , plus an additional $ 5.0 million of restricted payments.

Restricted payments are allowed under the Credit Agreement to the extent the consolidated leverage

DHI GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

ratio, calculated on a pro forma basis, is equal to or less than 2.00 to 1.00 , plus an additional $ 5.0 million of restricted payments.

The Credit Agreement also provides that the payment of obligations may be accelerated upon the occurrence of customary events of default, including, but not limited to, non-payment, change of control, or insolvency.

As of June 30, 2021, the Company was in compliance with all of the financial covenants under the Credit Agreement.

As of September 30, 2021, the Company was in compliance with all of the financial covenants under the Credit Agreement.

The obligations under the Credit Agreement are guaranteed by two of the Company’s U.S.

based wholly-owned subsidiaries and secured by substantially all of the assets of the Borrowers and the guarantors.

The amounts borrowed as of June 30, 2021 and December 31, 2020 are as follows (dollars in thousands):

The amounts borrowed as of September 30, 2021 and December 31, 2020 are as follows (dollars in thousands):

September 30,

2021 December 31,

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The Company records provisions for losses when claims become probable and the amounts are reasonably estimable.

Although the outcome of these legal matters, except as described below and recorded in the condensed consolidated

DHI GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

financial statements, cannot be determined, it is the opinion of management that the final resolution of these matters will not have a material effect on the Company’s financial condition, operations or liquidity.

Although the outcome of these legal matters, except as described below and recorded in the condensed consolidated financial statements, cannot be determined, it is the opinion of management that the final resolution of these matters will not have a material effect on the Company’s financial condition, operations or liquidity.

Tax Contingencies

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The following table summarizes the Stock Repurchase Plans approved by the Board:

DHI GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

May 2019 to May 2020 May 2020 to May 2021 (1)

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(1) During the first quarter of 2021, the Company completed its purchases under the plan, which consisted of 2.2 million shares for $5.0 million, effectively ending the plan prior to its original expiration date.

(2) During the second quarter of 2021, the Company amended its stock repurchase program approved in February 2021 and allowed for the purchase of an additional $12.0 million of our common stock through June 2022, bringing total authorized purchases under the plan to $20.0 million.

As of June 30, 2021 the value of shares that may yet be purchased under the current plan was $ 17.8 million.

(2) During the second quarter of 2021, the Company amended its $8 million stock repurchase program approved in February 2021 and allowed for the purchase of an additional $12.0 million of our common stock through June 2022, bringing total authorized purchases under the plan to $20.0 million.

As of September 30, 2021 the value of shares that may yet be purchased under the current plan was $ 11.0 million.

Purchases of the Company's common stock pursuant to the Stock Repurchase Plans were as follows:

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

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(2) Average price paid per share includes costs associated with the repurchases.

There were 135,330 and 8,905 unsettled share repurchases as of June 30, 2021 and 2020, respectively.

There were 29,274 and 7,811 unsettled share repurchases as of September 30, 2021 and 2020, respectively.

STOCK BASED COMPENSATION

Under the 2012 Omnibus Equity Award Plan, the Company has granted stock options, restricted stock and Performance-Based Restricted Stock Units (“PSUs”) to certain employees and directors.

The Company recorded total stock based compensation expense of $ 1.8 million and $ 3.4 million during each of the three and six month periods ended June 30, 2021, respectively, and $ 1.5 million and $ 3.1 million during the three and six months periods ended June 30, 2020.

At June 30, 2021, there was $ 10.6 million of unrecognized compensation expense related to unvested awards, which is expected to be recognized over a weighted-average period of approximately 1.4 years.

The Company recorded total stock based compensation expense of $ 2.2 million and $ 6.2 million during each of the three and nine month periods ended September 30, 2021, respectively, and $ 1.5 million and $ 4.9 million during the three and nine months periods ended September 30, 2020.

At September 30, 2021, there was $ 10.5 million of unrecognized compensation expense related to unvested awards, which is expected to be recognized over a weighted-average period of approximately 1.3 years.

Restricted Stock— Restricted stock is granted to employees of the Company and its subsidiaries, and to non-employee members of the Company’s Board.

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There was no cash flow impact resulting from the grants.

DHI GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Restricted stock vests in various increments either quarterly or on the anniversaries of each grant, subject to the recipient’s continued employment or service through each applicable vesting date.

Vesting occurs over one year for Board members and over two to four years for employees.

A summary of the status of restricted stock awards as of June 30, 2021 and 2020 and the changes during the periods then ended is presented below:

Three Months Ended June 30, 2021 Three Months Ended June 30, 2020

A summary of the status of restricted stock awards as of September 30, 2021 and 2020 and the changes during the periods then ended is presented below:

DHI GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Three Months Ended September 30, 2021 Three Months Ended September 30, 2020

Shares Weighted- Average Fair Value at Grant Date Shares Weighted- Average Fair Value at Grant Date

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Non-vested at end of period 3,591,578 $ 2.74 4,156,269 $ 2.47

Six Months Ended June 30, 2021 Six Months Ended June 30, 2020

Nine Months Ended September 30, 2021 Nine Months Ended September 30, 2020

Shares Weighted- Average Fair Value at Grant Date Shares Weighted- Average Fair Value at Grant Date

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There was no cash flow impact resulting from the grants.

A summary of the status of PSUs as of June 30, 2021 and 2020 and the changes during the periods then ended is presented below:

Three Months Ended June 30, 2021 Three Months Ended June 30, 2020

A summary of the status of PSUs as of September 30, 2021 and 2020 and the changes during the periods then ended is presented below:

Three Months Ended September 30, 2021 Three Months Ended September 30, 2020

Shares Weighted- Average Fair Value at

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Forfeited ( 16,290 ) $ 2.63 ( 14,851 ) $ 2.55

Vested ( 42,139 ) $ 2.75 ( 14,552 ) $ 3.00

Non-vested at end of period 1,799,242 $ 2.53 1,572,756 $ 2.41

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Six Months Ended June 30, 2021 Six Months Ended June 30, 2020

Nine Months Ended September 30, 2021 Nine Months Ended September 30, 2020

Shares Weighted- Average Fair Value at

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There was no cash flow impact resulting from the grants.

No stock options were granted during the six months ended June 30, 2021 and 2020.

A summary of the status of options previously granted as of June 30, 2021 and 2020, and the changes during the periods then ended, is presented below:

Three Months Ended June 30, 2021

No stock options were granted during the nine months ended September 30, 2021 and 2020.

A summary of the status of options previously granted as of September 30, 2021 and 2020, and the changes during the periods then ended, is presented below:

Three Months Ended September 30, 2021

Options Weighted-Average Exercise Price Aggregate Intrinsic Value

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Exercisable at end of period — $ — $ —

Three Months Ended June 30, 2020

Three Months Ended September 30, 2020

Options Weighted-Average Exercise Price Aggregate Intrinsic Value

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Exercisable at end of period 110,000 $ 7.40 $ —

Six Months Ended June 30, 2021

Nine Months Ended September 30, 2021

Options Weighted-Average Exercise Price Aggregate Intrinsic Value

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Six Months Ended June 30, 2020

Nine Months Ended September 30, 2020

Options Weighted-Average Exercise Price Aggregate Intrinsic Value

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Exercisable at end of period 110,000 $ 7.40 $ —

The weighted-average remaining contractual term of options exercisable at June 30, 2021 is 0.3 years.

The following table summarizes information about options outstanding as of June 30, 2021:

Exercise Price Options Outstanding and Exercisable Weighted-

Contractual Life

$ 8.00 - $ 8.99

EARNINGS PER SHARE

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Diluted EPS is computed based on the weighted-average number of shares of common stock outstanding plus common stock equivalents, where dilutive.

For the three month period ended June 30, 2021 and for the six month period ended June 30, 2020, 0.4 million and 1.4 million dilutive shares, respectively, were excluded from the computation of shares contingently issuable upon exercise as we recognized a net loss.

Outstanding stock-based awards that were anti-dilutive and excluded from the calculation of diluted EPS were approximately 1.9 million and 1.7 million shares for the three and six month periods ended June 30, 2021 and approximately 2.1 million and 2.0 million shares for the three and six month periods ended June 30, 2020, respectively.

As shown in the table below, certain dilutive shares were excluded from the computation of shares contingently issuable upon exercise as we recognized a loss from continuing operations.

Outstanding stock-based awards that were anti-dilutive and excluded from the calculation of diluted EPS were approximately 0.3 million and 0.7 million shares for the three and nine month periods ended September 30, 2021, respectively, and approximately 2.3 million shares for the three and nine month periods ended September 30, 2020.

The following is a calculation of basic and diluted earnings per share and weighted-average shares outstanding (in thousands, except per share amounts):

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

Income (loss) from continuing operations $ ( 212 ) $ 1,162 $ 1,800 $ ( 6,373 )

Loss from continuing operations $ ( 2,434 ) $ ( 26,993 ) $ ( 634 ) $ ( 33,366 )

Income (loss) from discontinued operations, net of tax $ — $ ( 329 ) $ ( 29,340 ) $ 1,356

Net income (loss) $ ( 30,211 ) $ 1,862 $ ( 27,540 ) $ ( 4,688 )

Net loss $ ( 2,434 ) $ ( 27,322 ) $ ( 29,974 ) $ ( 32,010 )

Weighted-average shares outstanding—basic 45,807 47,955 46,740 48,503

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Weighted-average shares outstanding—diluted 45,807 47,955 46,740 48,503