DHI GROUP, INC. 10-Q

ITEM 1. Financial Statements DHI GROUP, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) (in thousands, except per share data) September 30, 2021 December 31, 2020 ASSETS Current assets Cash and cash equivalents $ 3,486 $ 4,542 Accounts receivable, net of allowance for doubtful accounts of $ 816 and $ 1,001 15,267 16,134 Income taxes receivable 174 533 Prepaid and other current assets 4,563 4,101 Current assets of discontinued operations — 8,175 Total current assets 23,490 33,485 Fixed assets, net 21,201 23,033 Capitalized contract costs 7,029 6,189 Operating lease right-of-use assets 7,333 10,804 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 Non-current assets of discontinued operations — 14,198 Total assets $ 219,183 $ 240,987 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities Accounts payable and accrued expenses $ 16,142 $ 15,308 Deferred revenue 42,486 35,547 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 Accrual for unrecognized tax benefits 995 941 Other long-term liabilities 1,924 2,049 Non-current liabilities of discontinued operations — 5,288 Total liabilities 99,024 113,417 Commitments and Contingencies (Note 11) Stockholders’ equity Convertible preferred stock, $ .01 par value, authorized 20,000 shares; no shares issued and outstanding — — Common stock, $ .01 par value, authorized 240,000 ; issued: 73,576 and 71,233 shares, respectively; outstanding: 49,868 and 51,220 shares, respectively 735 714 Additional paid-in capital 239,766 233,554 Accumulated other comprehensive loss — ( 28,519 ) Accumulated earnings 23,997 53,971 Treasury stock, 23,708 and 20,013 shares, respectively ( 144,339 ) ( 132,150 ) Total stockholders’ equity 120,159 127,570 Total liabilities and stockholders’ equity $ 219,183 $ 240,987 See accompanying notes to the condensed consolidated financial statements. 2 Table of Contents DHI GROUP, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) (in thousands, except per share amounts) Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Revenues $ 30,758 $ 27,149 $ 86,155 $ 84,130 Operating expenses: Cost of revenues 3,791 3,549 11,086 10,532 Product development 4,056 3,697 11,168 10,839 Sales and marketing 11,292 9,065 31,214 30,177 General and administrative 7,556 6,319 20,649 20,438 Depreciation 4,359 2,390 12,030 7,730 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 loss ( 2,215 ) ( 28,478 ) ( 1,911 ) ( 33,393 ) Interest expense and other ( 150 ) ( 273 ) ( 432 ) ( 622 ) 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 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 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 Weighted-average diluted shares outstanding 45,807 47,955 46,740 48,503 See accompanying notes to the condensed consolidated financial statements. 3 Table of Contents DHI GROUP, INC. CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (unaudited) (in thousands) Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Net loss $ ( 2,434 ) $ ( 27,322 ) $ ( 29,974 ) $ ( 32,010 ) Other comprehensive income (loss): Foreign currency translation adjustment — 2,719 456 ( 1,351 ) Cumulative translation adjustments reclassified to the Statements of Operations — — 28,063 — Total other comprehensive income (loss) — 2,719 28,519 ( 1,351 ) Comprehensive loss $ ( 2,434 ) $ ( 24,603 ) $ ( 1,455 ) $ ( 33,361 ) See accompanying notes to the condensed consolidated financial statements. 4 Table of Contents DHI GROUP, INC. CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (unaudited) (in thousands) Convertible Preferred Stock Common Stock Additional Paid-in Capital Treasury Stock Accumulated Earnings Accumulated Other Comprehensive Loss Total Shares Issued Amount Shares Issued Amount Shares Amount Balance at December 31, 2020 — $ — 71,233 $ 714 $ 233,554 20,013 $ ( 132,150 ) $ 53,971 $ ( 28,519 ) $ 127,570 Net income 2,671 2,671 Other comprehensive income - translation adjustments 297 297 Stock based compensation 1,758 1,758 Restricted stock issued 1,468 15 15 Restricted stock forfeited or withheld to satisfy tax obligations ( 204 ) ( 2 ) 369 ( 984 ) ( 986 ) Performance-Based Restricted Stock Units forfeited or withheld to satisfy tax obligations ( 39 ) — 139 ( 357 ) ( 357 ) Performance-Based Restricted Stock Units eligible to vest 813 8 8 Purchase of treasury stock under stock repurchase plan 590 ( 1,546 ) ( 1,546 ) Balance at March 31, 2021 — $ — 73,271 $ 735 $ 235,312 21,111 $ ( 135,037 ) $ 56,642 $ ( 28,222 ) $ 129,430 Net loss ( 30,211 ) ( 30,211 ) Other comprehensive income - translation adjustments 159 159 Cumulative translation adjustments reclassified to the Statements of Operations 28,063 28,063 Stock based compensation 2,302 2,302 Restricted stock issued 292 2 2 Restricted stock forfeited or withheld to satisfy tax obligations ( 328 ) ( 4 ) 135 ( 430 ) ( 434 ) Performance-Based Restricted Stock Units forfeited or withheld to satisfy tax obligations — — 17 ( 57 ) ( 57 ) Purchase of treasury stock under stock repurchase plan 532 ( 1,756 ) ( 1,756 ) 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 5 Table of Contents DHI GROUP, INC. CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (unaudited) (in thousands) Convertible Preferred Stock Common Stock Additional Paid-in Capital Treasury Stock Accumulated Earnings Accumulated Other Comprehensive Loss Total Shares Issued Amount Shares Issued Amount Shares Amount Balance at December 31, 2019 — $ — 69,509 $ 696 $ 227,227 15,591 $ ( 121,466 ) $ 83,986 $ ( 29,248 ) $ 161,195 Net loss ( 6,550 ) ( 6,550 ) Other comprehensive loss ( 3,865 ) ( 3,865 ) Stock based compensation 1,796 1,796 Restricted stock issued 1,468 15 15 Restricted stock forfeited or withheld to satisfy tax obligations ( 163 ) ( 1 ) 381 ( 1,048 ) ( 1,049 ) Performance-Based Restricted Stock Units forfeited or withheld to satisfy tax obligations ( 5 ) — 100 ( 300 ) ( 300 ) Purchase of treasury stock under stock repurchase plan 660 ( 1,643 ) ( 1,643 ) Balance at March 31, 2020 — $ — 70,809 $ 710 $ 229,023 16,732 $ ( 124,457 ) $ 77,436 $ ( 33,113 ) $ 149,599 Net income $ 1,862 1,862 Other comprehensive loss ( 205 ) ( 205 ) Stock based compensation 1,615 1,615 Restricted stock issued 393 4 4 Restricted stock forfeited or withheld to satisfy tax obligations ( 118 ) ( 2 ) 65 ( 162 ) ( 164 ) Performance-Based Restricted Stock Units forfeited or withheld to satisfy tax obligations ( 5 ) — 5 ( 13 ) ( 13 ) Purchase of treasury stock under stock repurchase plan 1,342 ( 3,433 ) ( 3,433 ) 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. 6 Table of Contents DHI GROUP, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) (in thousands) Nine Months Ended September 30, 2021 2020 Cash flows from (used in) operating activities: Net loss $ ( 29,974 ) $ ( 32,010 ) Adjustments to reconcile net loss to net cash flows from (used in) operating activities: Depreciation 12,804 9,079 Deferred income taxes ( 710 ) ( 2,220 ) Amortization of deferred financing costs 110 110 Stock based compensation 6,214 4,936 Impairment of intangible assets — 15,200 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 Loss on disposition of discontinued operations 30,203 — Changes in operating assets and liabilities: Accounts receivable 2,016 4,297 Prepaid expenses and other assets ( 1,160 ) ( 251 ) Capitalized contract costs ( 888 ) 954 Accounts payable and accrued expenses ( 1,383 ) ( 2,895 ) Income taxes receivable/payable 442 ( 126 ) Deferred revenue 7,332 ( 9,499 ) Other, net ( 158 ) 1,379 Net cash flows from operating activities 25,623 14,444 Cash flows from (used in) investing activities: Cash transferred with discontinued operations ( 2,951 ) — Cash paid for investment ( 3,000 ) — Cash received from sale of investments 1,198 200 Purchases of fixed assets ( 10,707 ) ( 12,536 ) Net cash flows used in investing activities ( 15,460 ) ( 12,336 ) Cash flows from (used in) financing activities: Payments on long-term debt ( 9,000 ) ( 9,444 ) Proceeds from long-term debt 7,000 36,444 Payments under stock repurchase plan ( 10,199 ) ( 5,930 ) Purchase of treasury stock related to vested restricted and performance stock units ( 2,128 ) ( 1,742 ) Net cash flows from (used in) financing activities ( 14,327 ) 19,328 Effect of exchange rate changes 10 ( 12 ) Net change in cash and cash equivalents for the period ( 4,154 ) 21,424 Cash and cash equivalents, beginning of period 7,640 5,381 Cash and cash equivalents, end of period $ 3,486 $ 26,805 See accompanying notes to the condensed consolidated financial statements. 7 Table of Contents DHI GROUP, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 1. BASIS OF PRESENTATION The accompanying unaudited condensed consolidated financial statements of DHI Group, Inc. (“DHI” or the “Company”) have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC"). Certain information and disclosures normally included in annual audited consolidated financial statements prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) have been omitted and condensed pursuant to such rules and regulations. In the opinion of the Company’s management, all adjustments (consisting of only normal and recurring accruals) have been made to present fairly the financial position, results of operations and cash flows of the Company for the periods presented. 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 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. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the period. Management believes the most complex and sensitive judgments, because of their significance to the condensed consolidated financial statements, result primarily from the need to make estimates about the effects of matters that are inherently uncertain. 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 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 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. For further information on discontinued operations, see Note 4, “Discontinued Operations.” Unless noted otherwise, discussion in the notes to the condensed consolidated financial statements pertain to continuing operations . The Company allocates resources and assesses financial performance on a consolidated basis, as all services pertain to the Company's Tech-focused strategy. As a result, t he Company has a single reportable segment, Tech-focused, which now includes only the Dice and ClearanceJobs brands, as well as corporate related costs. All operations are in the United States and the Company no longer has revenues and long-lived assets, which includes fixed assets and lease right of use assets, outside of the United States. 2. NEW ACCOUNTING STANDARDS In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments . ASU 2016-13 changes how entities will account for credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The guidance replaces the current "incurred loss" model with an "expected loss" model that requires consideration of a broader range of information to estimate expected credit losses over the lifetime of a financial asset. ASU 2016-13 is effective for interim and annual reporting periods in fiscal years beginning after December 15, 2022 for Smaller Reporting Companies. The Company is evaluating the expected impact of this standard on its consolidated financial statements. In December 2019, the FASB issued ASU No. 2019-12, Simplifying the Accounting for Income Taxes, which eliminates certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating taxes during interim quarters and the recognition of deferred tax liabilities for outside basis differences. This guidance also simplifies aspects of accounting for franchise taxes, specifies the timing for recognizing certain income tax effects of changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. The pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2020, with early adoption permitted. The 8 Table of Contents DHI GROUP, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Company adopted this standard on January 1, 2021, and the adoption did not have a material effect on the Company's consolidated financial statements. 3. 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. 4. DISCONTINUED OPERATIONS As further described in Note 1, 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. 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. 9 Table of Contents 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): December 31, 2020 Cash and cash equivalents $ 3,098 Accounts receivable, net 4,164 Income taxes receivable 511 Prepaid and other current assets 402 Current assets of discontinued operations 8,175 Fixed assets, net 1,511 Capitalized contract costs 1,545 Goodwill 5,253 Deferred income taxes 19 Operating lease right-of-use assets 5,601 Other assets 269 Non-current assets of discontinued operations 14,198 Total assets of discontinued operations $ 22,373 Accounts payable and accrued expenses $ 4,118 Operating lease liabilities 1,335 Deferred revenue 6,879 Income taxes payable 123 Current liabilities of discontinued operations 12,455 Deferred income taxes 171 Deferred revenue 33 Accrual for unrecognized tax benefits 406 Operating lease liabilities 4,333 Other long-term liabilities 345 Non-current liabilities of discontinued operations 5,288 Total liabilities of discontinued operations $ 17,743 10 Table of Contents DHI GROUP, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS The results of discontinued operations on the Condensed Consolidated Statements of Operations were as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Revenues $ — $ 6,101 $ 12,130 $ 19,537 Operating expenses — ( 6,201 ) ( 10,821 ) ( 17,519 ) Operating income (loss) — ( 100 ) 1,309 2,018 Loss on disposition of discontinued operations (1) — — ( 30,203 ) — Other income (expense) — ( 1 ) 1 4 Income (loss) before income taxes — ( 101 ) ( 28,893 ) 2,022 Income tax expense — 228 447 666 Net income (loss) $ — $ ( 329 ) $ ( 29,340 ) $ 1,356 (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 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 September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Depreciation $ — $ 417 $ 774 $ 1,349 Purchases of fixed assets $ — $ 12 $ 447 $ 156 Cash paid for amounts included in measurement of lease liabilities: Operating cash flows from operating leases $ — $ 373 $ 804 $ 1,128 5. REVENUE RECOGNITION The Company recognizes revenue when control of the promised goods or services is transferred to our customers at an amount that reflects the consideration to which we expect to receive in exchange for those goods or services. Revenue is recognized net of customer discounts ratably over the service period. Customer billings delivered in advance of services being rendered are recorded as deferred revenue and recognized over the service period. The Company generates revenue from recruitment packages, advertising, classifieds, and virtual and live career fair and recruitment event booth rentals. Disaggregation of revenue Our brands primarily serve the technology and security cleared professions. The following table provides information about disaggregated revenue by brand and includes a reconciliation of the disaggregated revenue (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Dice $ 22,272 $ 19,823 $ 61,906 $ 62,797 ClearanceJobs 8,486 7,326 24,249 21,333 Total $ 30,758 $ 27,149 $ 86,155 $ 84,130 11 Table of Contents DHI GROUP, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Contract Balances 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 September 30, 2021 As of December 31, 2020 Receivables $ 15,267 $ 16,134 Short-term contract liabilities (deferred revenue) 42,486 35,547 Long-term contract liabilities (deferred revenue) 917 1,035 We receive payments from customers based upon contractual billing 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. As a result, the Company does not consider the effects of a significant financing component. Contract liabilities include customer billings delivered in advance of performance under the contract, and associated revenue is realized when services are rendered under the contract. Receivables increase due to customer billings and decrease by cash collected from customers. Contract liabilities increase due to customer billings and are decreased as performance obligations are satisfied under the contracts. 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 Nine Months Ended September 30, 2021 September 30, 2020 September 30, 2021 September 30, 2020 Revenue recognized in the period from: Amounts included in the contract liability at the beginning of the period $ 20,666 $ 19,821 32,572 $ 38,676 The following table includes estimated deferred revenue expected to be recognized in the future related to performance obligations that are unsatisfied or partially unsatisfied at the end of the reporting period (in thousands): Remainder of 2021 2022 2023 2024 Total Tech-focused $ 22,603 $ 20,325 $ 427 $ 48 $ 43,403 6. LEASES The Company has operating leases for corporate office space and certain equipment. The leases have original terms from one year to eight years , some of which include options to renew the lease, and are included in the lease term when it is reasonably certain that the Company will exercise the option. No leases include options to purchase the leased property. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. We do not have any lease agreements with related parties. 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. When readily available, the Company uses the implicit rate in determining the present value of the lease payments. When leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on information available at the commencement of the lease, including the lease term. Because the implicit rate in each lease is not available, the Company used its incremental borrowing rate to determine the present value of lease payments. Leases with an initial term of 12 months or less are not recorded on the balance sheet. 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 12 Table of Contents 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 September 30, For the Nine Months Ended September 30, 2021 2020 2021 2020 Operating lease cost (1) $ 507 $ 557 $ 1,629 $ 1,991 Sublease income ( 183 ) ( 178 ) ( 543 ) ( 838 ) Total lease cost $ 324 $ 379 $ 1,086 $ 1,153 (1) Includes short-term lease costs and variable lease costs, which are immaterial. Supplemental cash flow information related to leases was as follows (in thousands): For the Nine Months Ended September 30, 2021 2020 Cash paid for amounts included in measurement of lease liabilities: Operating cash flows from operating leases $ 1,831 $ 2,192 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ — $ 292 Supplemental balance sheet information related to leases was as follows (in thousands, except lease term and discount): 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 Operating lease liabilities - non-current 7,591 9,371 Total operating lease liabilities $ 9,693 $ 11,446 Weighted Average Remaining Lease Term (in years) Operating leases 3.8 4.7 Weighted Average Discount Rate Operating leases 3.84 % 3.86 % (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 October 1, 2021 through December 31, 2021 $ 492 2022 2,625 2023 2,451 2024 1,965 2025 1,946 2026 and thereafter 1,074 Total lease payments $ 10,553 Less imputed interest 860 Total $ 9,693 13 Table of Contents 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. 7. INVESTMENTS 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. 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 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 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. 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 14 Table of Contents 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. 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 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. 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. 8. ACQUIRED INTANGIBLE ASSETS, NET Considering the recognition of the Dice brand, its long history, awareness in the talent acquisition and staffing services market, and the intended use, the remaining useful life of the Dice.com trademarks and brand name was determined to be indefinite. We determine whether the carrying value of recorded indefinite-lived acquired intangible assets is impaired on an annual basis or more frequently if indicators of potential impairment exist. The impairment review process compares the fair value of the indefinite-lived acquired intangible assets to its carrying value. If the carrying value exceeds the fair value, an impairment loss is recorded. 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. The Company’s ability to achieve these revenue projections may be impacted by, among other things, uncertainty related to COVID-19, competition in the technology recruiting market, challenges in developing and introducing new products and product enhancements to the market and the Company’s ability to attribute value delivered to customers. The September 30, 2020 analysis included a small reduction in operating margin during the year ending December 31, 2021 and then increasing modestly. 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 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 %. The determination of whether or not indefinite-lived acquired intangible assets have become impaired involves a significant level of judgment in the assumptions underlying the approach used to determine the value of the indefinite-lived acquired intangible assets. Fair values are determined using a profit allocation methodology which estimates the value of the trademarks and brand name by capitalizing the profits saved because the company owns the asset. 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 15 Table of Contents 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. 9 . GOODWILL 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. During the three months ended September 30, 2020, because of the impacts of the COVID-19 pandemic and its potential impact on future earnings and cash flows for the reporting unit, the Company recorded an impairment charge of $ 23.6 million. On June 30, 2021, the Company transferred a majority interest of its eFC business, which was part of the Tech-focused reporting unit, to management. As a result, the Company performed an interim impairment analysis of goodwill. 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 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. The Company’s ability to achieve these revenue projections may be impacted by, among other things, any future impacts of the COVID-19 pandemic, competition in the technology recruiting market, challenges in developing and introducing new products and product enhancements to the market and the Company’s ability to attribute value delivered to customers. The operating margin for the year ending December 31, 2021, as included in the June 30, 2021 analysis, approximates the operating margin for the year ended December 31, 2020, and then the margin increases as revenue growth drives profitability. Determining the fair value of a reporting unit is judgmental in nature and requires the use of estimates and key assumptions, particularly assumed discount rates and projections of future operating results. The discount rate applied for the Tech-focused reporting unit in the June 30, 2021 analysis was 15.5 %. An increase to the discount rate applied or reductions to future projected operating results could result in a future impairment of the Tech-focused reporting unit’s goodwill. It is reasonably possible that changes in judgments, assumptions and estimates the Company made in assessing the fair value of goodwill could cause the Company to consider some portion or all of the goodwill of the Tech-focused reporting unit to become impaired. 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. 10. INDEBTEDNESS Credit Agreement —In November 2018, the Company, together with Dice, Inc. (a wholly-owned subsidiary of the Company) and its wholly-owned subsidiary, Dice Career Solutions, Inc. (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, 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. Borrowings under the Credit Agreement bear interest, at the Company’s option, at a LIBOR rate or a base rate plus a margin. The margin ranges from 1.75 % to 2.50 % on LIBOR loans and 0.75 % to 1.50 % on base rate loans, determined by the Company’s most recent consolidated leverage ratio. The Company incurs a commitment fee ranging from 0.30 % to 0.45 % on any unused capacity under the revolving loan facility, determined by the Company’s most recent consolidated leverage ratio. The facility may be prepaid at any time without penalty. The Credit Agreement contains various customary affirmative and negative covenants and also contains certain financial covenants, including a consolidated leverage ratio and a consolidated interest coverage ratio. Borrowings 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 2.50 to 1.00 . Negative covenants include restrictions on incurring certain liens; making certain payments, such as stock repurchases and dividend payments; making certain investments; making certain acquisitions; making certain dispositions; and incurring additional indebtedness. Restricted payments are allowed under the Credit Agreement to the extent the consolidated leverage 16 Table of Contents 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 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 September 30, 2021 and December 31, 2020 are as follows (dollars in thousands): September 30, 2021 December 31, 2020 Amounts borrowed: Revolving credit facility $ 18,000 $ 20,000 Less: deferred financing costs, net of accumulated amortization of $ 430 and $ 319 ( 307 ) ( 417 ) Long-term debt, net $ 17,693 $ 19,583 Available to be borrowed under revolving facility, subject to certain limitations $ 72,000 $ 70,000 Interest rates: LIBOR rate loans: Interest margin 1.75 % 2.00 % Actual interest rates 1.88 % 2.19 % Commitment fee 0.30 % 0.35 % There are no scheduled principal payments until maturity of the Credit Agreement in November 2023. 11 . COMMITMENTS AND CONTINGENCIES Litigation The Company is subject to various claims from taxing authorities, lawsuits and other complaints arising in the ordinary course of business. 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 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 The Company operates in a number of tax jurisdictions and is routinely subject to examinations by various tax authorities with respect to income taxes and indirect taxes. The determination of the Company’s liability for taxes requires judgment and estimation. The Company has reserved for potential examination adjustments to our provision for income taxes and accrual of indirect taxes in amounts which the Company believes are reasonable. 12. EQUITY TRANSACTIONS Stock Repurchase Plans —The Company's Board of Directors ("Board") approved a stock repurchase program that permits the Company to repurchase its common stock. Management has discretion in determining the conditions under which shares may be purchased from time to time. The following table summarizes the Stock Repurchase Plans approved by the Board: 17 Table of Contents DHI GROUP, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS May 2019 to May 2020 May 2020 to May 2021 (1) Feb 2021 to Jun 2022 (2) Approval Date April 2019 May 2020 February 2021 Authorized Repurchase Amount of Common Stock $ 7 million $ 5 million $ 20 million (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 $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 September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Shares repurchased (1) 1,823,585 349,273 2,945,932 2,351,940 Average purchase price per share (2) $ 3.72 $ 2.45 $ 3.43 $ 2.52 Dollar value of shares repurchased (in thousands) $ 6,792 $ 854 $ 10,095 $ 5,930 (1) No shares of our common stock were purchased other than through a publicly announced plan or program. (2) Average price paid per share includes costs associated with the repurchases. There were 29,274 and 7,811 unsettled share repurchases as of September 30, 2021 and 2020, respectively. 13. 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 $ 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. These shares are part of the compensation plan for services provided by the employees or Board members. The closing price of the Company’s stock on the date of grant is used to determine the fair value of the grants. The expense related to restricted stock grants is recorded over the vesting period as described below. There was no cash flow impact resulting from the grants. 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 September 30, 2021 and 2020 and the changes during the periods then ended is presented below: 18 Table of Contents 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 Non-vested at beginning of the period 3,476,056 $ 2.55 4,153,171 $ 2.48 Granted 463,000 $ 3.93 282,500 $ 2.34 Forfeited ( 115,757 ) $ 2.82 ( 74,586 ) $ 2.63 Vested ( 231,721 ) $ 2.33 ( 204,816 ) $ 2.42 Non-vested at end of period 3,591,578 $ 2.74 4,156,269 $ 2.47 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 Non-vested at beginning of the period 3,877,853 $ 2.49 3,994,787 $ 2.46 Granted 2,222,683 $ 2.94 2,143,000 $ 2.68 Forfeited ( 647,891 ) $ 2.72 ( 354,884 ) $ 2.85 Vested ( 1,861,067 ) $ 2.47 ( 1,626,634 ) $ 2.64 Non-vested at end of period 3,591,578 $ 2.74 4,156,269 $ 2.47 PSUs —PSUs are granted to employees of the Company and its subsidiaries. These shares are granted under two compensation agreements that are for services provided by the employees. The first agreement expired and was terminated during the first quarter of 2020 and had no unvested shares as of March 31, 2020. Under the second agreement, the fair value of the PSUs are measured at the grant date fair value of the award, which was determined based on an analysis of the probable performance outcomes. The performance period is over one year and is based on the achievement of bookings targets during the year of grant, as defined in the agreement. The earned shares will then vest over a three year period, one-third on each of the first, second, and third anniversaries of the grant date, or if later, the date the Compensation Committee certifies the performance results with respect to the performance period. For the performance period ending December 31, 2020, as a result of the COVID-19 pandemic and its impact on the overall economy, the bookings targets were modified during the third quarter of 2020. Accordingly, the Company remeasured the awards. There was no cash flow impact resulting from the grants. 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 Grant Date Shares Weighted- Average Fair Value at Grant Date Non-vested at beginning of the period 1,815,532 $ 2.53 1,587,607 $ 2.50 Forfeited ( 16,290 ) $ 2.63 ( 14,851 ) $ 2.55 Non-vested at end of period 1,799,242 $ 2.53 1,572,756 $ 2.41 19 Table of Contents DHI GROUP, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 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 Non-vested at beginning of the period 1,352,438 $ 2.50 1,664,650 $ 2.53 Granted 990,000 $ 2.62 911,460 $ 2.65 Forfeited ( 161,946 ) $ 2.63 ( 680,778 ) $ 3.27 Vested ( 381,250 ) $ 2.60 ( 322,576 ) $ 1.92 Non-vested at end of period 1,799,242 $ 2.53 1,572,756 $ 2.41 Stock Options— The fair value of each option grant is estimated using the Black-Scholes option-pricing model. This valuation model requires the Company to make assumptions and judgments about the variables used in the calculation, including the fair value of the Company’s common stock, the expected life (the period of time that the options granted are expected to be outstanding), the volatility of the Company’s common stock, a risk-free interest rate and expected dividends. The expected life of options granted is derived from historical exercise behavior. The risk-free rate for periods within the expected life of the option is based on the U.S. Treasury rates in effect at the time of grant. The stock options vest 25% after one year, beginning on the first anniversary date of the grant, and 6.25% each quarter following the first anniversary. There was no cash flow impact resulting from the grants. 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 Options outstanding at beginning of the period 10,000 $ 8.25 $ — Forfeited ( 10,000 ) $ 8.25 $ — Options outstanding at end of period — $ — $ — Exercisable at end of period — $ — $ — Three Months Ended September 30, 2020 Options Weighted-Average Exercise Price Aggregate Intrinsic Value Options outstanding at beginning of the period 110,000 $ 7.40 $ — Options outstanding at end of period 110,000 $ 7.40 $ — Exercisable at end of period 110,000 $ 7.40 $ — Nine Months Ended September 30, 2021 Options Weighted-Average Exercise Price Aggregate Intrinsic Value Options outstanding at beginning of the period 110,000 $ 7.40 $ — Forfeited ( 110,000 ) $ 7.40 $ — Options outstanding at end of period — $ — $ — Exercisable at end of period — $ — $ — 20 Table of Contents DHI GROUP, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Nine Months Ended September 30, 2020 Options Weighted-Average Exercise Price Aggregate Intrinsic Value Options outstanding at beginning of the period 190,000 $ 8.28 $ — Forfeited ( 80,000 ) $ 9.48 $ — Options outstanding at end of period 110,000 $ 7.40 $ — Exercisable at end of period 110,000 $ 7.40 $ — 14. EARNINGS PER SHARE Basic earnings (loss) per share (“EPS”) is computed based on the weighted-average number of shares of common stock outstanding. Diluted EPS is computed based on the weighted-average number of shares of common stock outstanding plus common stock equivalents, where dilutive. 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 September 30, Nine Months Ended September 30, 2021 2020 2021 2020 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 loss $ ( 2,434 ) $ ( 27,322 ) $ ( 29,974 ) $ ( 32,010 ) Weighted-average shares outstanding—basic 45,807 47,955 46,740 48,503 Add shares issuable from stock-based awards — — — — Weighted-average shares outstanding—diluted 45,807 47,955 46,740 48,503 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 loss per share $ ( 0.05 ) $ ( 0.57 ) $ ( 0.64 ) $ ( 0.66 ) Diluted loss per share $ ( 0.05 ) $ ( 0.57 ) $ ( 0.64 ) $ ( 0.66 ) Shares issuable from stock-based awards (1) 2,561 1,383 2,004 1,342 (1) Represents shares excluded from the computation of shares contingently issuable upon exercise as we recognized a net loss from continuing operations. 15. INCOME TAXES The Company’s effective tax rate was 19 % and 45 % for the three and nine months ended September 30, 2021, respectively, and 6 % and 7 % for the three and nine months ended September 30, 2020, respectively. The following items caused the effective tax rate to differ from the U.S. statutory rate: 21 Table of Contents DHI GROUP, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS • Tax expense of $ 0.1 million during the three months ended September 30, 2021, and a tax benefit of $ 0.3 million during the nine months ended September 30, 2021, related to a valuation allowance on the Company's capital loss carryforward. • Tax expense of $ 5.5 million during the three and nine months ended September 30, 2020, related to nondeductible impairment charges.