What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2023-02-10 compared with 2022-02-11 · 241 added, 278 removed, 751 unchanged (41% of the section changed)

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the stockholders and the Board of Directors of DHI Group, Inc.

Opinion on the Financial Statements

To the shareholders and the Board of Directors of DHI Group, Inc.

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of DHI Group, Inc.

and subsidiaries (the "Company") as of December 31, 2021 and 2020, the related consolidated statements of operations, comprehensive income (loss), shareholders' equity, and cash flows for each of the three years in the period ended December 31, 2021, and the related notes and the schedule listed in the Index at Item 15 (collectively referred to as the "financial statements").

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 11, 2022, expressed an unqualified opinion on the Company's internal control over financial reporting.

Basis for Opinion

These financial statements are the responsibility of the Company's management.

Our responsibility is to express an opinion on the Company's financial statements based on our audits.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

and subsidiaries (the "Company") as of December 31, 2022 and 2021, the related consolidated statements of operations, comprehensive income (loss), stockholders' equity, and cash flows, for each of the three years in the period ended December 31, 2022, and the related notes and the schedule listed in the Index at Item 15 (collectively referred to as the "financial statements").

We also have audited the Company’s internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2022, in conformity with accounting principles generally accepted in the United States of America.

Also, in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.

Basis for Opinions

The Company’s management is responsible for these financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control Over Financial Reporting.

Our responsibility is to express an opinion on these financial statements and an opinion on the Company’s internal control over financial reporting based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the financial statements included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures to respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk.

Our audits also included performing such other procedures as we considered necessary in the circumstances.

We believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matters

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The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing a separate opinion on the critical audit matters or on the accounts or disclosures to which they relate.

Discontinued Operations - Transfer of majority interest in eFinancialCareers– Refer to Notes 1 and 4 to the financial statements

Critical Audit Matter Description

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

As a result, eFC was deconsolidated as of June 30, 2021 and is reflected as a discontinued operation.

The deconsolidation and related evaluation of the loss of control required significant accounting judgments.

This required a high degree of auditor judgment and increased level of effort when performing audit procedures to evaluate the reasonableness of management’s judgments.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the deconsolidation of eFC included the following, among others:

• We tested the effectiveness of controls over the accounting and reporting for significant non-recurring transactions, which included the deconsolidation of eFC.

• With the assistance of firm specialists having expertise in consolidation accounting, we evaluated management’s accounting judgments related to the deconsolidation of eFC.

• We evaluated the presentation and disclosure of the eFC Transaction in the financial statements.

Goodwill – Refer to Notes 2, 4 and 11 to the financial statements

Goodwill and Indefinite Long-Lived Acquired Intangible Assets – Refer to Notes 2, 9, and 10 to the financial statements

Critical Audit Matter Description

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If the fair value of the reporting unit is less than its carrying amount, an impairment charge is recorded for the amount the carrying value exceeds the fair value.

Fair values are determined by using a combination of a discounted cash flow methodology and a market comparable method.

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, such as forecasted revenues and earnings before interest, taxes, depreciation and amortization (EBITDA) margins.

Changes in these assumptions could have a significant impact on the determination of fair value.

On June 30, 2021, the Company transferred a majority interest of eFC, which was part of the Tech-focused reporting unit, to eFC management.

In order to account for the eFC Transaction and allocate the reporting unit goodwill, the Company performed an interim valuation analysis to determine the fair value of eFC and the continuing business as of June 30, 2021.

The Company allocated $5.3 million and $128.1 million of goodwill to eFC and the continuing business, respectively, using a relative fair value approach.

Given the significant judgments made by management to determine the relative fair value of, and goodwill allocated to, eFC and the continuing business, performing auditing procedures to evaluate the reasonableness of management’s judgments regarding the business and valuation assumptions utilized in the valuation models, particularly the forecasts of future revenue and EBITDA margins and the selection of the discount rates, required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists.

The Company determined the fair value of its reporting unit by using a combination of a discounted cash flow methodology and a market comparable method.

Similarly, the Company’s evaluation of its indefinite lived trademark and brand intangible asset (“Dice”) involves the comparison of the fair value to its carrying value.

The Company determined the fair value of Dice using a relief from royalty rate valuation method.

The determination of the fair value for the Company’s reporting unit (“Tech-focused”) is judgmental and required management to make significant estimates and assumptions including forecasts of future revenue, EBITDA margin and the discount rate.

The determination of the fair value of Dice required management to make significant estimates and assumptions including forecasts of future revenue, the royalty rate and the discount rate.

The goodwill balance was $128.1M as of December 31, 2022.

The fair value of the reporting unit exceeded its carrying value as of the measurement date, October 1, 2022, and therefore, no goodwill impairment was recognized.

The carrying value of Dice was $23.8M as of December 31, 2022.The fair value of Dice exceeded its carrying value as of the measurement date, October 1, 2022, and therefore no impairment was recognized

Given the significant estimates and assumptions management makes to estimate the fair value of goodwill and the Dice brand, performing auditing procedures to evaluate the reasonableness of management’s forecasts of revenue, EBITDA margin, the royalty rate and the discount rates required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the forecasts of future revenues and EBITDA margins and selection of the discount rates used by management to estimate the fair value of eFC and the continuing business included the following, among others:

• We tested the effectiveness of controls over management’s determination of the fair value of eFC and the continuing business, including controls related to management’s forecasts of future revenues and EBITDA margins and selection of the discount rates.

• We tested the allocation of goodwill to eFC and the continuing business based on the weighting of the relative fair value.

• We evaluated the reasonableness of management’s forecasts of future revenues and EBITDA margins by comparing the forecasts with:

◦ Historical revenues and EBITDA margins and forecasted information in industry reports.

◦ Internal communications to management and the Board of Directors.

• With the assistance of our fair value specialists, we evaluated the reasonableness of the (1) valuation methodology and (2) valuation assumptions, including the discount rates, by:

◦ Testing the source information underlying the determination of the assumption and testing the mathematical accuracy of the calculation.

◦ Developing a range of independent estimates and comparing those to the assumptions selected by management.

Our audit procedures related to the forecasts of future revenues, EBITDA margins and selection of the royalty and discount rates used by management to estimate the fair value of Tech focused and Dice included the following, among others:

• We tested the effectiveness of controls over management’s goodwill and Dice brand intangible asset impairment tests, including controls related to management’s forecasts of revenue, EBITDA margin, royalty rate and the discount rates.

• We evaluated management’s ability to accurately forecast revenue growth rates and EBITDA margin by comparing actual results to management’s historical forecasts.

• We evaluated the reasonableness of management’s forecasts of revenues by comparing the forecasts of revenues to external market sources.

• With the assistance of our fair value specialists we evaluated the reasonableness of management’s selected royalty rate by comparing it to those of industry participants from external sources.

• With the assistance of our fair value specialists we evaluated the reasonableness of management’s selected discount rates by computing an independent estimate of those rates.

/s/ Deloitte & Touche LLP

Des Moines, Iowa

Denver, Colorado

February 10, 2023

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Accounts receivable, net of allowance for doubtful accounts of $ 1,374 and $ 733

20,494 18,385

Income taxes receivable — 354

Prepaid and other current assets 4,294 4,177

Current assets of discontinued operations — 8,175

Total current assets 27,794 24,456

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Other assets 3,854 1,853

Non-current assets of discontinued operations — 14,198

Total assets $ 226,704 $ 221,578

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Deferred revenue 50,121 45,217

Income taxes payable 34 —

Operating lease liabilities 105 2,388

Current liabilities of discontinued operations — 12,455

Total current liabilities 74,078 63,464

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Other long-term liabilities 932 1,011

Non-current liabilities of discontinued operations — 5,288

Total liabilities 120,465 105,216

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Treasury stock, 29,075 and 24,828 shares, respectively

( 174,083 ) ( 150,398 )

Total stockholders’ equity 106,239 116,362

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

Disposition related and other costs (Note 16) — — 1,414

Total operating expenses 146,181 121,655 143,557

Loss on sale of business (Note 6) — — ( 537 )

Other operating income:

Proceeds from settlement 2,061 — —

Operating income (loss) 5,560 ( 1,752 ) ( 32,390 )

Income from equity method investment 1,597 190 —

Interest expense and other ( 667 ) ( 831 ) ( 703 )

Impairment of investment ( 2,300 ) — ( 2,002 )

Gain on investment 1,198 — —

Gain on investments 320 1,198 —

Interest expense and other ( 1,580 ) ( 667 ) ( 831 )

Income (loss) before income taxes 3,597 ( 1,031 ) ( 35,223 )

Income tax expense (benefit) ( 629 ) ( 2,826 ) 2,794

Income tax benefit ( 579 ) ( 629 ) ( 2,826 )

Income (loss) from continuing operations 4,176 ( 402 ) ( 32,397 )

Income (loss) from discontinued operations, net of tax ( 29,340 ) 2,382 5,920

Loss from discontinued operations, net of tax — ( 29,340 ) 2,382

Net income (loss) $ 4,176 $ ( 29,742 ) $ ( 30,015 )

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Balance at January 1, 2020 — $ — 69,509 $ 696 $ 227,227 15,591 $ ( 121,466 ) $ 83,986 $ ( 29,248 ) $ 161,195

Net income 12,551 12,551

Net loss ( 30,015 ) ( 30,015 )

Other comprehensive income 729 729

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Restricted stock issued 2,173 22 22

Restricted stock forfeited or withheld to satisfy tax obligations ( 560 ) ( 5 ) 616 ( 1,904 ) ( 1,909 )

Performance-based restricted stock units eligible to vest 449 4 4

Purchase of treasury stock related to vested restricted and performance stock units ( 430 ) ( 4 ) 874 ( 2,248 ) ( 2,252 )

Performance-based restricted stock units forfeited ( 19 ) — —

Retirement of treasury stock (Note 14) ( 20,000 ) ( 200 ) ( 161,600 ) ( 20,000 ) 161,800 —

Purchase of treasury stock under stock repurchase plan 3,548 ( 8,436 ) ( 8,436 )

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Other comprehensive income 395 395

Cumulative translation adjustments reclassified to the Statements of Operations 28,063 28,063

Stock based compensation 8,303 8,303

Restricted stock issued 2,267 23 ( 5 ) 18

Purchase of treasury stock related to vested restricted and performance stock units ( 430 ) ( 4 ) 874 ( 2,248 ) ( 2,252 )

Performance-based restricted stock units forfeited ( 19 ) — —

Performance-based restricted stock units eligible to vest 813 8 8

Restricted stock forfeited or withheld to satisfy tax obligations ( 685 ) ( 7 ) 2 666 ( 2,073 ) ( 2,078 )

Performance based restricted stock forfeited or withheld to satisfy tax obligations ( 44 ) — 244 ( 907 ) ( 907 )

Purchase of treasury stock under stock repurchase plan 3,905 ( 15,268 ) ( 15,268 )

Balance at December 31, 2021 — — 73,584 738 241,854 24,828 ( 150,398 ) 24,229 ( 61 ) 116,362

Net loss ( 29,742 ) ( 29,742 )

Other comprehensive income 395 395

Cumulative translation adjustments reclassified to the Statements of Operations 28,063 28,063

Net income 4,176 4,176

Other comprehensive loss ( 420 ) ( 420 )

Stock based compensation 9,519 9,519

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Performance based restricted stock forfeited or withheld to satisfy tax obligations ( 93 ) ( 1 ) 1 368 ( 1,958 ) ( 1,958 )

Issuance of common stock upon ESPP purchase 68 1 286 287

Purchase of treasury stock under stock repurchase plan 3,287 ( 18,530 ) ( 18,530 )

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Stock based compensation 9,519 8,303 6,327

Income from equity method investment ( 1,597 ) ( 190 ) —

Impairment of intangible assets — — 15,200

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Impairment of investment 2,300 — 2,002

Gain on investments ( 320 ) ( 1,198 ) ( 200 )

Change in accrual for unrecognized tax benefits ( 16 ) ( 156 ) ( 446 )

Income from equity method investment ( 190 ) — —

Gain on sale of investment ( 1,198 ) ( 200 ) —

Loss on sale of businesses — — 537

Loss on disposition of discontinued operations — 30,203 —

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Cash paid for investment — ( 3,000 ) —

Cash received from sale of investments 1,198 200 —

Cash received from sale of investment 320 1,198 200

Purchases of fixed assets ( 17,976 ) ( 14,307 ) ( 16,104 )

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Proceeds from long-term debt 18,000 14,000 36,444

Financing costs paid ( 515 ) — —

Payments under stock repurchase plan ( 18,530 ) ( 15,409 ) ( 8,294 )

Purchase of treasury stock related to vested restricted and performance stock units ( 5,155 ) ( 2,978 ) ( 2,248 )

Proceeds from issuance of common stock through ESPP 287 — —

Net cash flows used in financing activities ( 16,913 ) ( 15,387 ) ( 542 )

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DHI Group, Inc.

(“DHI” or the “Company”), a Delaware corporation, was incorporated on June 28, 2005.

(“DHI,” the “Company,” “we,” “us” or “our”), a Delaware corporation, was incorporated on June 28, 2005.

DHI is a leading provider of data, insights and employment connections through its specialized services for technology professionals and other select online communities.

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All intercompany balances and transactions have been eliminated in consolidation.

Investments in companies that are not consolidated are included in the Company's consolidated financial statements as described in notes 4 and 8 to the consolidated financial statements.

Investments in companies that are not consolidated are included in the Company's consolidated financial statements as described in Notes 4 and 7 of the notes to consolidated financial statements.

Revenue Recognition — We recognize 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.

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Recruitment packages.

Recruitment package revenues are derived from the sale to recruiters and employers of a combination of job postings and/or access to candidate profiles on Dice and ClearanceJobs.

Recruitment package revenues are derived from the sale of a subscription to recruiters and employers that includes a combination of job postings and/or access to candidate profiles on Dice and ClearanceJobs.

Certain of the Company’s arrangements include multiple performance obligations, which primarily consists of the ability to post jobs and access to candidate profiles.

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Revenue from these sales are recognized when the career fair or recruitment event is held.

Cash and cash equivalents— Cash equivalents consist of demand deposits and highly liquid investments which have an original maturity of three months or less.

Concentration of Credit Risk— Cash and cash equivalents are maintained with several financial institutions.

Deposits held with banks may exceed the amount of insurance provided on such deposits.

These deposits may be redeemed upon demand.

The Company believes it is not exposed to any significant credit risk.

Cash and cash equivalents potentially subject the Company to a concentration of credit risk as substantially all of its deposits held in financial institutions were in excess of the Federal Deposit Insurance Corporation (“FDIC”) insurance limits as of December 31, 2022 and 2021.

The Company performs credit evaluations of its customers’ financial condition as needed and does not require collateral on accounts receivable.

No single customer represents 10% or more of revenues for the years ended December 31, 2021, 2020 and 2019.

No single customer represents 10% or more of accounts receivable as of December 31, 2022 and 2021 and no single customer represents 10% or more of revenues for the years ended December 31, 2022, 2021 and 2020.

Allowance for Doubtful Accounts— The Company maintains allowances for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments.

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Costs related to the planning and post implementation phases of website development efforts are expensed as incurred.

Capitalized Contract Costs— The Company capitalizes certain contract acquisition costs consisting primarily of commissions paid when contracts are signed.

For costs incurred to obtain new business sales contracts, the Company capitalizes and expenses these costs over an average customer life, which was approximately two years as of December 31, 2021.

For the remaining

DHI GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

sales contracts, the Company capitalizes and expenses these costs over a weighted average contract term, which was approximately one year as of December 31, 2021.

Capitalized Contract Costs— The Company capitalizes certain contract acquisition costs consisting primarily of commissions paid when contracts are signed.

For costs incurred to obtain new business sales contracts, the Company capitalizes and expenses these costs over an average customer life, which was approximately two years as of December 31, 2022.

For the remaining sales contracts, the Company capitalizes and expenses these costs over a weighted average contract term, which was approximately one year as of December 31, 2022.

See Note 5 for additional disclosures.

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

The initial measurement of the lease liability is calculated on the basis of the present value of the remaining lease payments, and the right-of-use asset is measured on the basis of this liability, adjusted by prepaid and accrued rent, lease incentives, and initial direct costs.

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

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

The Company sold its 40 % common share interest in Rigzone in the second quarter of 2022.

See Note 7 for additional disclosures.

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The primary sources of temporary differences are stock-based compensation, amortization and impairment of intangible assets, depreciation of fixed assets, and capitalized contract costs.

DHI GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Stock-Based Compensation— The Company has a plan to grant equity awards to certain employees and directors of the Company and its subsidiaries.

In accordance with FASB ASC Topic 718 Compensation-Stock Compensation , the Company accounts for forfeitures when they occur.

See Note 15 for additional disclosures.

Fair Value of Financial Instruments— The carrying amounts reported in the consolidated balance sheets for cash and cash equivalents, accounts receivable, and accounts payable and accrued expenses approximate their fair values.

The Company’s

DHI GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

long-term debt consists of borrowings under its credit facility.

Investments consist of promissory notes and common share ownership interests in businesses.

The Company’s long-term debt consists of borrowings under its credit facility.

Investments consist of common and preferred share ownership interests in businesses.

See Notes 3 and 11 for additional disclosures.

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

DHI GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FAIR VALUE MEASUREMENTS

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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:

DHI GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

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The carrying amounts reported in the 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 year ended December 31, 2021.

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

Investments, non-current that were carried at fair value, prior to the conversion to preferred shares as described in Note 7, used 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 2022 period prior to the conversion.

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.

Certain assets and liabilities are measured at fair value on a non-recurring basis as they are subject to fair value adjustments in certain circumstances, for example, when there is evidence of impairment.

Such instruments are not measured at fair value on an ongoing basis.

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

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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.

On June 30, 2021, 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.

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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 consolidated balance sheets and the consolidated statements of operations for all periods presented.

DHI GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The assets and liabilities classified as discontinued operations on the 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

As a result, we have reflected eFC's financial results as discontinued operations in the consolidated statements of operations.

DHI GROUP, INC.

1 unchanged sentence

The results of discontinued operations on the consolidated statements of operations were as follows (in thousands):

For the year ended December 31,

2021 2020 2019

Revenues $ 12,130 $ 25,711

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Loss on disposition of discontinued operations (1)

( 30,203 ) — —

Other income 1 4

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

For the year ended December 31,

2021 2020 2019

Depreciation $ 774 $ 1,760

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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.

Revenue is recognized net of customer discounts.

We recognize revenue when control of the goods or services are transferred to the customer either on a ratable basis over the contract period beginning on the date that our service is made available to the customer or as the products and services are used.

The Company excludes sales tax from the transaction price and therefore, recognizes revenue net of applicable sales taxes.

Customer billings delivered in advance of services being rendered are recorded as deferred revenue and recognized over the service period.

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Total $ 149,680 $ 119,903 $ 111,167

(1) Includes Dice U.S.

and Career Events.

(1) Includes Dice and Career Events.

DHI GROUP, INC.

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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 December 31, 2021 As of December 31, 2020

As of December 31, 2022 As of December 31, 2021 As of December 31, 2020

Receivables $ 20,494 $ 18,385 $ 16,134

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Tech-focused $ 50,121 $ 668 $ 75 $ 50,864

SALE OF BUSINESSES

The Company sold the Hcareers business on May 22, 2018.

During the second quarter of 2019, the related escrow of $ 1.7 million and working capital terms and contingencies were finalized.

This resulted in the Company recording an additional loss on sale of $ 0.5 million and receiving cash of $ 0.7 million from the escrow and $ 0.2 million from working capital.

The Company sold the RigLogix portion of the Rigzone business on February 20, 2018.

In the first quarter of 2019, the related escrow of $ 0.4 million was released to the Company.

The Company sold the Health eCareers business on December 4, 2017.

In the second quarter of 2019, the related escrow of $ 1.5 million was released to the Company.

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

The leases have 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.

DHI GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The leases have terms from one year to ten 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.

Our recorded lease right-of-use asset and lease liability were each reduced $ 2.1 million as of December 31, 2022, which represents a tenant improvement allowance that is expected to be consumed in 2023.

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

1 unchanged sentence

Operating lease cost 1

$ 2,103 $ 2,277 $ 2,551

Sublease income ( 475 ) ( 543 ) ( 1,018 )

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

(2) Total lease costs is recorded in general and administrative expenses in the consolidated statements of operations.

DHI GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

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$ 1,542 $ — $ 292

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

Year Ended December 31, 2021 Year Ended December 31, 2020

Operating lease right-of-use assets $ 6,888 $ 10,804

(1) During the year ended December 31, 2022, our right-of-use asset obtained in exchanged for lease obligations was reduced by $2.1 million, which represents a tenant improvement allowance expected to be consumed in 2023.

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

December 31, 2022 December 31, 2021

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

$ 6,581 $ 6,888

Operating lease liabilities - current $ 2,231 $ 2,388

Operating lease liabilities - non-current 6,982 9,371

tenant improvement allowance ( 2,126 ) —

Operating lease liabilities - current (as reported) 105 2,388

Operating lease liabilities - non-current (as reported) 8,428 6,982

Total operating lease liabilities

$ 8,533 $ 9,370

Weighted average remaining lease term

Operating leases

3.6 years 4.6 years

Weighted average discount rate

Operating leases

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

Weighted average remaining lease term - operating leases 5.8 years 3.6 years

Weighted average discount rate - operating leases 4.4 % 3.8 %

(1) At December 31, 2022, our right-of-use asset includes a reduction of $ 2.1 million, which represents a tenant improvement allowance expected to be consumed in 2023.

The Company reviews its right-of-use ("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.

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No impairment was recorded during the years ended December 31, 2022 and 2020.

DHI GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

As of December 31, 2021, future operating lease payments were as follows:

(in thousands):

As of December 31, 2022, future operating lease payments were as follows (in thousands):

Operating Leases

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Total lease payments

Less imputed interest ( 769 )

imputed interest ( 1,899 )

tenant improvement allowance ( 2,126 )

DHI GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

As of December 31, 2022, the Company has no additional operating or finance leases that have not yet commenced.

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During the third quarter of 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.

The Note earned interest at 6.00 % and matured 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 December 31, 2021 and there was no gain or loss included in earnings during the year ended December 31, 2021.

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

The Note was recorded at $ 3.0 million as of December 31, 2021.

In the third quarter of 2022, a Qualified Financing occurred and the Note was converted into preferred shares representing 4.9 % of the outstanding equity in the underlying business, on a fully-diluted basis.

The Company's preferred shares are substantially similar to shares purchased by a third party investor in the Qualified Financing that resulted in such investor becoming the majority owner of the business, holding 50.5 % of the outstanding equity in the business, on a fully-diluted basis.

Therefore, the Company's shares in the business were recorded at fair value based on the price per share realized in the Qualified Financing.

The value of the Company's investment was $ 0.7 million as of December 31, 2022 and is recorded as an investment in the consolidated balance sheet.

Accordingly, the Company recognized an impairment loss during the year ended December 31, 2022 of $ 2.3 million.

The Company has elected the measurement alternative in accordance with FASB ASC 321, Investments – Equity Securities.

As of December 31, 2022, subsequent to the Qualified Financing, 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 the value realized in the Qualified Financing as of December 31, 2022, as described above.

Investments, Non-current

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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.

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

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.

During the second quarter of 2022, the Company sold its 40 % interest in Rigzone to Rigzone management for $ 0.3 million.

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

Accordingly, the Company recorded a $ 0.3 million gain on sale, which was included in gain on investments on the consolidated statements of operations.

During the fourth quarter of 2022, the Company entered into a legal settlement with a former employee of Rigzone and received $ 2.1 million, net of certain legal costs and subject to other agreements.

The settlement is recorded as proceeds from settlement in the consolidated statements of operations for the year ended December 31, 2022.

DHI GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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 December 31, 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.

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The difference between the Company's recorded value and its equity in net assets of eFC is amortized against the recorded value of the investment in accordance with ASC 323 Investments - Equity Method and Joint Ventures .

The amortization was not material for the year ended December 31, 2021.

The amortization was not material for the years ended December 31, 2022 and 2021.

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

During the fourth quarter of 2021, the Company recorded $ 0.2 million of income related to its proportionate share of eFC's net income, net of currency translation adjustments and amortization of the basis difference.

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.

During the years ended December 31, 2022 and 2021, the Company recorded $ 1.6 million and $ 0.2 million, respectively, of income related to its proportionate share of eFC's net income, net of currency translation adjustments and amortization of the basis difference.

As of December 31, 2019, the Company held preferred stock representing a 7.6% interest in the fully diluted shares of a tech skills assessment company.

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

The investment was carried at its original cost of $ 2.0 million and was included in the other assets section of the consolidated balance sheets.

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Fixed assets, net $ 21,252 $ 20,581

During the years ended December 31, 2022, 2021, and 2020, depreciation expense was $ 17.5 million, $ 16.3 million, and $ 10.3 million, respectively.

DHI GROUP, INC.

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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 annual impairment test for the Dice trademarks and brand name is performed on October 1 of each year.

The impairment review process compares the fair value of the indefinite-lived acquired intangible assets to its carrying value.

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As of December 31, 2022 and 2021, the Company had an indefinite-lived acquired intangible asset of $ 23.8 million related to the Dice trademarks and brand name.

The annual impairment test for the Dice trademarks and brand name is performed on October 1 of each year.

During the first and third quarters of 2020, because of the initial 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 an impairment charge of $ 7.2 million and $ 8.0 million, respectively.

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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 December 31, 2021 and projections of future results have met or exceeded those included in the projections utilized in the October 1, 2021 analysis.

In the October 1, 2021 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 12.5 %.

The Company's operating results attributable to the Dice trademarks and brand name through December 31, 2022 and projections of future results approximate those included in the projections utilized in the October 1, 2022 analysis.

In the October 1, 2022 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 licensing agreements and the profitability attributable to the Dice trademarks an brand name and a discount rate of 12.0 %.

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.

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Goodwill at December 31, 2021 $ 128,100

Activity during 2022 —

Goodwill at December 31, 2022 $ 128,100

Accumulated impairment losses at December 31, 2022, 2021 and 2020 was $ 22.6 million.

Goodwill as of December 31, 2022 and 2021, which was allocated to the Tech-focused reporting unit, was $ 128.1 million.

There were no changes to goodwill during the year ended December 31, 2021.

During the third quarter 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 $ 22.6 million.

On June 30, 2021, the

DHI GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

The results of the impairment tests indicated that the fair value of the Tech-focused reporting unit was substantially in excess of the carrying value as of June 30, 2021 and October 1, 2021.

Results for the Tech-focused reporting unit for the fourth quarter of 2021 and estimated future results as of December 31, 2021 have exceeded the projections used in the October 1, 2021 analysis.

The results of the impairment test indicated that the fair value of the Tech-focused reporting unit was substantially in excess of the carrying value as of October 1, 2022.

Results for the Tech-focused reporting unit for the fourth quarter of 2022 and estimated future results as of December 31, 2022 approximate the projections used in the October 1, 2022 analysis.

As a result, the Company believes it is not more likely than not that the fair value of the reporting unit is less than the carrying value as of December 31, 2022.

Therefore, no quantitative impairment test was performed as of December 31, 2022.

No impairment was recorded during the years ended December 31, 2021 and 2019.

During the third quarter of 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 $ 22.6 million.

There were no changes to goodwill and no impairments were recorded during the years ended December 31, 2022 and 2021.

The projections utilized in the October 1, 2021 analysis included increasing revenues at rates approximating industry growth projections.

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Changes in our strategy and/or market conditions could significantly impact these judgments and require adjustments to recorded amounts of goodwill.

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

Credit Agreement —In June 2022, 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 (the “Credit Agreement”), which matures in November 2023, and replaces the previously existing credit agreement dated November 2015.

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

(collectively, the “Borrowers”), entered into a Third Amended and Restated Credit Agreement (the “Credit Agreement”), which matures in June 2027 and replaces the Company's Old Credit Agreement (defined below).

The Credit Agreement provides for a revolving loan facility of $ 100 million ($ 90 million under the Old Credit Agreement), with an expansion option of $ 50 million, bringing the total facility to $ 150 million, as permitted under the terms of the Credit Agreement.

At the closing of the Credit Agreement, the Company borrowed $ 30 million to repay, in full, all outstanding indebtedness, including accrued interest, under the Old Credit Agreement.

Unamortized debt issuance costs from the previous credit agreement of $ 0.2 million and debt issuance costs of $ 0.5 million related to the new agreement were recorded as other assets on the consolidated balance sheets and are recorded to interest expense over the term of the Credit Agreement.

DHI GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Borrowings under the Credit Agreement denominated in U.S.

dollars bear interest, payable at least quarterly, at the Company’s option, at the Secured Overnight Financing Rate ("SOFR") or a base rate plus a margin.

Borrowings under the credit agreement denominated in pounds sterling, if any, bear interest at the Sterling Overnight Index Average ("SONIA") rate plus a margin.

The margin ranges from 2.00 % to 2.75 % on SOFR and SONIA loans and 1.00 % to 1.75 % on base rate loans, determined by the Company’s most recent consolidated leverage ratio, plus an additional spread of 0.10%.

The Company incurs a commitment fee ranging from 0.35 % to 0.50 % on any unused capacity under the revolving loan facility, determined by the Company’s most recent consolidated leverage ratio.

There were no borrowings in pounds sterling as of December 31, 2022 and December 31, 2021.

The facility may be prepaid at any time without penalty.

Interest expense on long-term debt for the years ended December 31, 2021, 2020, and 2019 was $ 0.8 million, $ 1.1 million, and $ 0.9 million, respectively.

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 .

The Credit Agreement contains various 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 is equal to or less than 2.50 to 1.00 , subject to the terms of the Credit Agreement.

Negative covenants include restrictions on incurring certain liens;

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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.

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.

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

As of December 31, 2022, 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 obligations under the Credit Agreement are guaranteed by one of the Company’s wholly-owned subsidiaries and secured by substantially all of the assets of the Borrowers and the guarantors.

Previous Credit Agreement - The Borrowers previously maintained a Second Amended and Restated Credit Agreement (the "Old Credit Agreement"), which was scheduled to mature in November 2023.

The Old Credit Agreement, when entered into during November 2018, provided for a revolving loan facility of $ 90 million, with an expansion option of $ 50 million, bringing the total facility to $ 140 million, as permitted by the terms of the Old Credit Agreement.

Borrowings under the Old Credit Agreement accrued interest, at the Company's option, at the London Inter-bank Offered Rate ("LIBOR") or a base rate plus a margin.

The margin ranged 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 incurred 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.

There was no penalty for prepayment of the Old Credit Agreement.

DHI GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The amounts borrowed as of December 31, 2022 and 2021 are as follows (dollars in thousands):

2 unchanged sentences

Revolving credit facility $ 30,000 $ 23,000

deferred financing costs, net of accumulated amortization of $467 and $319 ( 270 ) ( 417 )

deferred financing costs, net of accumulated amortization of $ 467 as of December 31, 2021 (1)

Total borrowed $ 30,000 $ 22,730

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Commitment Fee 0.40 % 0.30 %

There are no scheduled payments until maturity of the Credit Agreement in November 2023.

(1) In connection with the new Credit Agreement entered into during the second quarter of 2022, the Company recorded deferred financing costs of $ 0.7 million to other assets on the consolidated balance sheets.

Accumulated amortization as of December 31, 2022 was less than $ 0.1 million.

There are no scheduled payments until maturity of the Credit Agreement in June 2027.

COMMITMENTS AND CONTINGENCIES

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The Company operates in a number of tax jurisdictions and is routinely subject to examinations by various tax authorities with respect to both income and indirect taxes.

The determination of the Company’s worldwide provision for taxes requires judgment and estimation.

The determination of the Company’s provision 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.

DHI GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

EQUITY TRANSACTIONS

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Management has discretion in determining the conditions under which shares may be purchased from time to time.

DHI GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table summarizes the stock repurchase plans approved by the Board of Directors:

May 2018 to May 2019 May 2019 to May 2020 May 2020 to May 2021 (1)

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

Feb 2021 to Jun 2022 (2)

Approval Date May 2018 April 2019 May 2020 February 2021

Feb 2022 to Feb 2023 (3)

Approval Date April 2019 May 2020 February 2021 February 2022

Authorized Repurchase Amount of Common Stock $ 7 million $ 5 million $ 20 million $ 15 million

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(2) During the second quarter of 2021, the Company amended its $ 8.0 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.

During the first quarter of 2022, the Company completed its purchases under the plan, which consisted of approximately 4.4 million shares for $ 20.0 million, effectively ending the plan prior to its original expiration date.

(3) On February 15, 2022 the Company announced that its Board of Directors approved a new stock repurchase program that permits the purchase of up to $ 15.0 million of the Company's common stock through February 2023.

As of December 31, 2022, the value of shares available to be purchased under the current plan was $ 2.1 million.

During January 2022, the Company repurchased approximately 742,000 shares for $ 4.3 million under the current plan.

Subsequent to December 31, 2022, the Company's Board of directors announced a new stock repurchase program that permits the repurchase of up to $ 10 million of the Company's common stock through February 2024.

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

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Dollar value of shares repurchased (in thousands) (3)

$ 18,596 $ 15,323 $ 8,436

(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.

(3) The value of shares repurchased as of December 31, 2022, 2021, and 2020 includes $ 65,990 , $ 55,780 , and $ 71,217 , respectively, of costs associated with the repurchase.

There were 19,220 , 48,260 and 63,451 unsettled shares as of December 31, 2022, 2021 and 2020, respectively.

The Company's Board approved the retirement of 20 million shares of treasury stock during the first quarter of 2019 and, as a result, the Company reduced additional paid in capital by $ 161.6 million and Common Stock by $ 0.2 million during the quarter.

The value of treasury stock retired was computed based on the average repurchase price of all treasury shares as of March 31, 2019, which was $ 8.09 per share.

Stock Repurchases Pursuant to the 2022 Omnibus Equity Award Plan -Under the 2022 Omnibus Equity Award Plan, as further described in Note 15 to the consolidated financial statements, the Company repurchases its common stock withheld for income tax from vesting of employee restricted stock or performance-based restricted stock units ("PSUs").

The Company remits the value, which is based on the closing share price on the vesting date of the common stock withheld to the appropriate tax authority on behalf of the employee and the related shares become treasury stock.

Purchases of the Company's common stock pursuant to the 2022 Omnibus Equity Award Plan were as follows:

Year Ended December 31,

2022 2021 2020

Shares repurchased upon restricted stock/PSU vesting 948,582 910,171 873,594

Average purchase price per share $ 5.43 $ 3.27 $ 2.57

Dollar value of shares repurchased upon restricted stock/PSU vesting (in thousands) $ 5,155 $ 2,978 $ 2,248

Convertible Preferred Stock— The Company has 20 million shares of convertible preferred stock authorized, with a $ 0.01 par value.

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The Company’s amended and restated certificate of incorporation permits the terms of any preferred stock to be determined at the time of issuance.

DHI GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Dividend provisions

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There are no redemption rights associated with the preferred stock.

DHI GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Liquidation rights

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Balance at end of year $ ( 481 ) $ ( 61 ) $ ( 28,519 )

DISPOSITION RELATED AND OTHER COSTS

In May 2017, the Company announced plans to divest a number of its online professional communities to achieve greater focus and resource allocation toward its core tech-focused business.

The planned divestitures were completed in 2018 and included BioSpace, Hcareers, and Rigzone.

The Company also ceased the Dice Europe operations in 2018 and vacated certain offices.

In connection with the planned divestitures and reorganization to the tech-focused strategy, the Company incurred certain costs, including severance and retention, lease exit, business closure, professional fees related to activist shareholders, search, financial advisory, and legal services, and other costs to further these strategic objectives.

The activities associated with disposition related and other costs were substantially completed during the year ended December 31, 2019.

Disposition related and other costs were zero for the years ended December 31, 2021 and 2020 and were $ 1.4 million for the year ended December 31, 2019.

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 records expense based upon the number of awards outstanding with no estimate for forfeitures.

Stock based compensation disclosures within this footnote include expense and shares related to the eFC business.

On July 13, 2022, the stockholders of the Company approved the DHI Group, Inc.

2022 Omnibus Equity Award Plan, which had been previously approved by the Company's Board of Directors on May 13, 2022 (the "2022 Omnibus Equity Award Plan").

The 2022 Omnibus Equity Award Plan generally mirrors the terms of the Company's prior omnibus equity award plan, which expired in accordance with its terms on April 20, 2022 (the "2012 Omnibus Equity Award Plan").

The Company has previously granted restricted stock and PSUs to certain employees and directors pursuant to the 2012 Omnibus Equity Award Plan and continues to grant restricted stock and PSUs to certain employees and directors pursuant to the 2022 Omnibus Equity Award Plan.

The Company also offers an Employee Stock Purchase Plan.

Stock-based compensation disclosures within this note include expense and shares related to the eFC business through June 30, 2021.

DHI GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company recorded stock based compensation expense of $ 9.5 million, $ 8.3 million, and $ 6.3 million during the years ended December 31, 2022, 2021, and 2020, respectively.

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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

DHI GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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.

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There was no cash flow impact resulting from the grants.

The 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.

The restricted stock vests in various increments 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.

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Non-vested at end of period 2,639,286 $ 3.96 3,371,832 $ 2.80 3,877,853 $ 2.49

Expected to vest 2,639,286 $ 3.96 3,371,832 $ 2.80 3,877,853 $ 2.49

PSUs— PSUs are granted to employees of the Company and its subsidiaries.

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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.

For the performance period ended 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 were no cash flow impact resulting from the grants.

DHI GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

A summary of the status of PSUs as of December 31, 2022, 2021, and 2020 and the changes during the periods then ended, is presented below:

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Non-vested at beginning of the period 1,593,775 $ 2.62 1,352,438 $ 2.50 1,664,650 $ 2.53

Granted 990,000 $ 2.62 911,460 $ 2.65 837,150 $ 2.54

1,553,332 $ 3.77 990,000 $ 2.62 911,460 $ 2.65

Forfeited (2)

( 93,341 ) $ 2.40 ( 161,946 ) $ 2.63 ( 695,628 ) $ 3.26

Vested ( 966,833 ) $ 2.64 ( 586,717 ) $ 2.32 ( 528,044 ) $ 1.88

Non-vested at end of period 2,086,933 $ 3.48 1,593,775 $ 2.62 1,352,438 $ 2.50

Expected to vest 2,086,933 $ 3.48 1,593,775 $ 2.62 1,352,438 $ 2.50

(1) PSUs granted includes 853,332 additional PSUs granted in the first quarter of 2022 related to the bookings achievement for the performance period ended December 31, 2021.

(2)PSUs forfeited includes 48,633 PSUs forfeited in the first quarter of 2021 related to the bookings achievement for the performance period ended December 31, 2020.

Stock Options— The fair value of each option grant is estimated using the Black-Scholes option-pricing model using the weighted-average assumptions in the table below.

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,

DHI GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

a risk-free interest rate and expected dividends.

The expected life of options granted is derived from historical exercise behavior.

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No stock options were granted during the years ended December 31, 2022, 2021, and 2020.

There were no options outstanding as of December 31, 2022.

A summary of the status of options previously granted as of December 31, 2021, and 2020, and the changes during the periods then ended is presented below:

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Exercisable at December 31 110,000 $ 7.40 $ —

Year Ended December 31, 2019

Options Weighted-Average Exercise Price Aggregate Intrinsic Value

Options outstanding at January 1 327,000 $ 8.35 $ —

Forfeited ( 137,000 ) $ 8.46 —

Options outstanding at December 31 190,000 $ 8.28 $ —

Exercisable at December 31 190,000 $ 8.28 $ —

Employee Stock Purchase Plan— On March 11, 2020 the Company's Board of Directors adopted an Employee Stock Purchase Plan ("ESPP").

The ESPP was approved by the Company's stockholders on April 21, 2020.

The ESPP provides eligible employees the opportunity to purchase shares of the Company's common stock through payroll deductions during six-month

DHI GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

offering periods.

The purchase price per share of common stock is 85 % of the lower of the closing stock price on the first or last trading day of each offering period.

The offering periods are January 1 to June 30 and July 1 to December 31.

The maximum number of shares of common stock available for purchase under the ESPP is 500,000 , subject to adjustment as provided under the ESPP.

Individual employee purchases are limited to $ 25,000 per calendar year, based on the fair market value of the shares on the purchase date.

The first offering period commenced January 1, 2022, and the second offering period commenced July 1, 2022.

During the year ended December 31, 2022, 67,905 shares were issued under the ESPP and the Company received $ 0.3 million of proceeds.

No shares were issued during the years ended December 31, 2021 and 2020.

DHI GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Deferred tax assets (liabilities) included in the balance sheet as of December 31, 2022 and 2021 are as follows (in thousands):

3 unchanged sentences

Provision for accrued expenses and other, net 1,283 1,726

Investments 534 —

Stock-based compensation 2,692 2,245

9 unchanged sentences

Net deferred tax liability $ ( 5,515 ) $ ( 9,315 )

Recognized in consolidated balance sheets:

Deferred tax liability ( 9,315 ) ( 9,765 )

Net deferred tax liability $ ( 9,315 ) $ ( 9,765 )

The Company had deferred tax assets of $ 4.9 million and $ 5.0 million, respectively, at December 31, 2022 and 2021 related to capital loss carryforwards and $ 0.3 million at December 31, 2022 and 2021 related to tax credit carryforwards.

14 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

A reconciliation between tax expense at the federal statutory rate and the reported income tax expense is summarized as follows:

A reconciliation between tax expense (benefit) at the federal statutory rate and the reported income tax expense (benefit) is summarized as follows:

Year Ended December 31,

1 unchanged sentence

Federal statutory rate $ 755 $ ( 216 ) $ ( 7,397 )

Loss (gain) on sale of businesses or investments ( 251 ) ( 42 ) 84

Gain on sale of businesses or investments — ( 251 ) ( 42 )

Stock-based compensation ( 1,130 ) ( 84 ) 432

4 unchanged sentences

Research and development tax credits ( 763 ) ( 478 ) ( 530 )

Income from equity method investment ( 335 ) — —

Change in valuation allowance 1

Other ( 50 ) ( 96 ) 89

1 unchanged sentence

Effective tax rate ( 16.1 ) % 61.0 % 8.0 %

(1) - Includes $0.5 million for deferred tax assets related to investments and $0.1 million of other items.

An uncertain tax position represents the Company’s expected treatment of a tax position taken in a filed tax return, or planned to be taken in a tax return not yet filed, that has not been reflected in measuring income tax expense for financial reporting purposes.

At December 31, 2021 and 2020, the Company has recorded a liability of $ 0.8 million and $ 0.9 million, respectively, which consists of unrecognized tax benefits of $ 0.7 million and $ 0.9 million, respectively, and estimated accrued interest and penalties of $ 0.1 million and $ 0.0 million , respectively.

The Company recognizes interest and penalties related to uncertain tax positions in income tax expense.

At December 31, 2022 and 2021, the Company's accrual for unrecognized tax benefits consists of the following:

Unrecognized tax benefits $ 734 $ 730

Estimated accrued interest and penalties 35 55

Accrual for unrecognized tax benefits, as recorded $ 769 $ 785

During the years ended December 31, 2022, 2021 and 2020, interest expense (income) and penalties recorded in the consolidated statements of operations were $( 20,000 ), $( 27,000 ), and $( 195,000 ), respectively.

3 unchanged sentences

Increases in tax positions related to current year 194 165 134

Increases in tax positions related to prior year — — 41

Decreases in tax positions related to prior year — ( 42 ) —

12 unchanged sentences

The Company believes it is reasonably possible that as much as $ 0.2 million of its unrecognized tax benefits may be recognized by the end of 2023 as a result of a lapse of the statute of limitations.

DHI GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

EMPLOYEE SAVINGS PLAN

2 unchanged sentences

The Company contributed $ 2.1 million, $ 1.7 million, and $ 1.6 million for the years ended December 31, 2022, 2021 and 2020, respectively, to match employee contributions to the Savings Plan.

DHI GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

EARNINGS (LOSS) PER SHARE

1 unchanged sentence

Diluted earnings per share 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.

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

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

2022 2021 2020

11 unchanged sentences

Diluted earnings (loss) per share $ 0.09 $ ( 0.64 ) $ ( 0.62 )

Shares issuable from stock-based awards (1)

2,579 1,293 —

Shares excluded from the calculation of diluted earnings per share (2)

487 2,279 506

(1) Represents shares excluded from the computation of shares contingently issuable upon exercise as we recognized a net loss from continuing operations.

(1) For the twelve months ended December 31, 2021 and 2020, 2.6 million and 1.3 million shares, respectively, were excluded from the computation of shares contingently issuable upon exercise as we recognized a net loss from continuing operations.

(2) Represents outstanding stock-based awards that were anti-dilutive and excluded from the calculation of diluted earnings per share.

DHI GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

The following is a summary of unaudited quarterly results of operations for 2021 and 2020 and has been restated to reflect the transfer of majority ownership and control of the eFC business to eFC's management, which is presented as a discontinued operation, as described in note 4:

For the Three Months Ended

March 31 June 30 September 30 December 31

(in thousands, except per share amounts)

Revenues $ 26,676 $ 28,721 $ 30,758 $ 33,748

Total operating expenses 26,860 28,233 32,973 33,589

Operating income (loss) $ ( 184 ) $ 488 $ ( 2,215 ) $ 159

Income (loss) from continuing operations 2,012 ( 212 ) ( 2,434 ) 232

Income (loss) from discontinued operations, net of tax 659 ( 29,999 ) — —

Net income (loss) $ 2,671 $ ( 30,211 ) $ ( 2,434 ) $ 232

Basic income (loss) per share - continuing operations $ 0.04 $ — $ ( 0.05 ) $ 0.01 (1)

Diluted income (loss) per share - continuing operations $ 0.04 $ — $ ( 0.05 ) $ — (1)

Basic earnings (loss) per share - discontinued operations $ 0.01 $ ( 0.64 ) $ — $ — (1)

Diluted earnings (loss) per share - discontinued operations $ 0.01 $ ( 0.64 ) $ — $ — (1)

Basic earnings (loss) per share $ 0.06 $ ( 0.64 ) $ ( 0.05 ) $ 0.01 (1)

Diluted earnings (loss) per share $ 0.05 $ ( 0.64 ) $ ( 0.05 ) $ — (1)

Revenues $ 29,385 $ 27,596 $ 27,149 $ 27,037

Total operating expenses 35,955 25,941 55,627 26,034

Operating income (loss) $ ( 6,570 ) $ 1,655 $ ( 28,478 ) $ 1,003

Income (loss) from continuing operations ( 7,535 ) 1,162 ( 26,993 ) $ 969

Income (loss) from discontinued operations, net of tax 985 700 ( 329 ) $ 1,026

Net income (loss) $ ( 6,550 ) $ 1,862 $ ( 27,322 ) $ 1,995

Basic income (loss) per share - continuing operations $ ( 0.15 ) $ 0.02 $ ( 0.56 ) $ 0.02 (1)

Diluted income (loss) per share - continuing operations $ ( 0.15 ) $ 0.02 $ ( 0.56 ) $ 0.02 (1)

Basic earnings (loss) per share - discontinued operations $ 0.02 $ 0.01 $ ( 0.01 ) $ 0.02 (1)

Diluted earnings (loss) per share - discontinued operations $ 0.02 $ 0.01 $ ( 0.01 ) $ 0.02 (1)

Basic earnings (loss) per share $ ( 0.13 ) $ 0.04 $ ( 0.57 ) $ 0.04 (1)

Diluted earnings (loss) per share $ ( 0.13 ) $ 0.04 $ ( 0.57 ) $ 0.04 (1)

(1) The sum of the quarters may not equal the full year amount.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosures

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data