What changed in this filing

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Item 1. Financial Statements

2023-05-10 compared with 2022-11-02 · 160 added, 308 removed, 374 unchanged (56% of the section changed)

3 unchanged sentences

(in thousands, except per share data)

September 30,

2023 December 31, 2022

Current assets

Cash and cash equivalents $ 3,848 $ 1,540

Cash $ 5,368 $ 3,006

Accounts receivable, net of allowance for doubtful accounts of $ 985 and $ 1,374

24,980 20,494

Income taxes receivable — 354

Prepaid and other current assets 3,815 4,294

4 unchanged sentences

Investments 5,968 5,646

Investments, at fair value — 3,000

Acquired intangible assets 23,800 23,800

11 unchanged sentences

Operating lease liabilities 8,007 8,428

Long-term debt, net 30,000 22,730

Long-term debt 46,000 30,000

Deferred income taxes 4,667 5,515

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(in thousands, except per share amounts)

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

2022 2021 2022 2021

Three Months Ended March 31,

Revenues $ 38,620 $ 34,334

5 unchanged sentences

Depreciation 4,173 3,958

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

Total operating expenses 38,047 33,706

1 unchanged sentence

Income from equity method investment 171 155

Gain (loss) on investments — ( 641 ) 320 1,198

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

Interest expense and other ( 798 ) ( 245 )

1 unchanged sentence

Income tax benefit ( 514 ) ( 763 )

Income (loss) from continuing operations ( 926 ) ( 2,434 ) 1,825 ( 634 )

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

Net income (loss) $ ( 926 ) $ ( 2,434 ) $ 1,825 $ ( 29,974 )

Basic earnings (loss) per share - continuing operations $ ( 0.02 ) $ ( 0.05 ) $ 0.04 $ ( 0.01 )

Diluted earnings (loss) per share - continuing operations $ ( 0.02 ) $ ( 0.05 ) $ 0.04 $ ( 0.01 )

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

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

Basic earnings (loss) per share $ ( 0.02 ) $ ( 0.05 ) $ 0.04 $ ( 0.64 )

Diluted earnings (loss) per share $ ( 0.02 ) $ ( 0.05 ) $ 0.04 $ ( 0.64 )

Net income $ 460 $ 1,301

Basic earnings per share $ 0.01 $ 0.03

Diluted earnings per share $ 0.01 $ 0.03

Weighted-average basic shares outstanding 43,886 44,702

2 unchanged sentences

DHI GROUP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands)

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

2022 2021 2022 2021

Net income (loss) $ ( 926 ) $ ( 2,434 ) $ 1,825 $ ( 29,974 )

Other comprehensive income (loss):

Three Months Ended March 31,

Net income $ 460 $ 1,301

Other comprehensive income:

Foreign currency translation adjustment 150 8

Cumulative translation adjustments reclassified to the Statement of Operations — — — 28,063

Total other comprehensive income (loss) ( 200 ) — ( 250 ) 28,519

Comprehensive income (loss) $ ( 1,126 ) $ ( 2,434 ) $ 1,575 $ ( 1,455 )

Total other comprehensive income 150 8

Comprehensive income $ 610 $ 1,309

See accompanying notes to the condensed consolidated financial statements.

16 unchanged sentences

Purchase of treasury stock under stock repurchase plan 743 ( 3,521 ) ( 3,521 )

Cumulative-effect of new accounting principle (See Note 2) 332 332

Balance at March 31, 2023 — $ — 78,833 $ 790 $ 254,495 30,716 $ ( 182,899 ) $ 29,197 $ ( 331 ) $ 101,252

Net income 1,450 1,450

Other comprehensive loss - translation adjustments ( 58 ) ( 58 )

Stock-based compensation 2,456 2,456

Restricted stock forfeited or withheld to satisfy tax obligations ( 26 ) ( 1 ) — 59 ( 348 ) ( 349 )

Performance-Based Restricted Stock Units forfeited or withheld to satisfy tax obligations — — — 5 ( 22 ) ( 22 )

Purchase of treasury stock under stock repurchase plan 625 ( 3,701 ) ( 3,701 )

Issuance of common stock upon ESPP purchase 29 — 124 124

Balance at June 30, 2022 — $ — 76,117 $ 761 $ 246,645 27,592 $ ( 166,170 ) $ 26,980 $ ( 111 ) $ 108,105

Net income ( 926 ) ( 926 )

Other comprehensive income (loss) - translation adjustments ( 200 ) ( 200 )

Stock-based compensation 2,497 2,497

Restricted stock issued 294 3 ( 3 ) —

Restricted stock forfeited or withheld to satisfy tax obligations ( 8 ) — — 88 ( 379 ) ( 379 )

Purchase of treasury stock under stock repurchase plan 720 ( 3,763 ) ( 3,763 )

Balance at September 30, 2022 — $ — 76,403 $ 764 $ 249,139 28,400 $ ( 170,312 ) $ 26,054 $ ( 311 ) $ 105,334

Preferred Stock Common Stock Additional

13 unchanged sentences

Balance at March 31, 2022 — $ — 76,114 $ 762 $ 244,065 26,903 $ ( 162,099 ) $ 25,530 $ ( 53 ) $ 108,205

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

See accompanying notes to the condensed consolidated financial statements.

2 unchanged sentences

(in thousands)

Nine Months Ended September 30,

Three Months Ended March 31,

Cash flows from (used in) operating activities:

Net income (loss) $ 1,825 $ ( 29,974 )

Adjustments to reconcile net income (loss) to net cash flows from (used in) operating activities:

Net income $ 460 $ 1,301

Adjustments to reconcile net income to net cash flows from (used in) operating activities:

Depreciation 4,173 3,958

3 unchanged sentences

Income from equity method investment ( 171 ) ( 155 )

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

Gain on investments ( 320 ) ( 1,198 )

Change in accrual for unrecognized tax benefits 60 93

Impairment of investment 2,300 —

Loss on disposition of discontinued operations — 30,203

Changes in operating assets and liabilities:

7 unchanged sentences

Net cash flows from operating activities 11 9,218

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 investment 320 1,198

Cash flows used in investing activities:

Purchases of fixed assets ( 4,833 ) ( 4,091 )

3 unchanged sentences

Proceeds from long-term debt 19,000 14,000

Financing costs paid ( 515 ) —

Payments under stock repurchase plan ( 3,521 ) ( 7,499 )

Purchase of treasury stock related to vested restricted and performance stock units ( 5,295 ) ( 4,202 )

Proceeds from issuance of common stock through ESPP 124 —

Net cash flows used in financing activities ( 13,305 ) ( 14,327 )

Effect of exchange rate changes — 10

Net change in cash and cash equivalents for the period 2,308 ( 4,154 )

Cash and cash equivalents, beginning of period 1,540 7,640

Cash and cash equivalents, end of period $ 3,848 $ 3,486

Net cash flows from (used in) financing activities 7,184 ( 1,701 )

Net change in cash for the period 2,362 3,426

Cash, beginning of period 3,006 1,540

Cash, end of period $ 5,368 $ 4,966

See accompanying notes to the condensed consolidated financial statements.

3 unchanged sentences

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").

(“DHI” or the “Company” or "we" or "us") 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.

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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, 2022 included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 (the “Annual Report on Form 10-K”).

Operating results for the nine-month period ended September 30, 2022 are not necessarily indicative of the results to be achieved for the full year.

Operating results for the three-month period ended March 31, 2023 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.

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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, 2022.

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 condensed consolidated balance sheets and statements of operations as of June 30, 2021 and is reflected as a discontinued operation for all periods presented on or before June 30, 2021.

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 .

There have been no significant changes in the Company’s assumptions regarding critical accounting estimates during the three-month period ended March 31, 2023.

The Company allocates resources and assesses financial performance on a consolidated basis, as all services pertain to the Company's Tech-focused strategy.

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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.

On January 1, 2023, under the modified retrospective method as required by the standard, the Company recorded a cumulative-effect adjustment of $ 0.3 million to increase accumulated earnings and reduce the allowance for doubtful accounts.

Prior period amounts were not adjusted, and will continue to be reported under the accounting standards in effect for the period presented.

FAIR VALUE MEASUREMENTS

2 unchanged sentences

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

DHI GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

• 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, 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 nine months ended September 30, 2022.

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

DHI GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The carrying amounts reported in the condensed consolidated balance sheets for cash, accounts receivable, other assets, accounts payable and accrued expenses and long-term debt approximate their fair values.

Investments, non-current that were carried at fair value, prior to the conversion to preferred shares as described in Note 6, 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.

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

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.

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 %.

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

DISCONTINUED OPERATIONS

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 on or before June 30, 2021.

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

Nine Months Ended September 30,

Revenues $ 12,130

Operating expenses ( 10,821 )

Operating income 1,309

Loss on disposition of discontinued operations 1

Other income 1

Loss before income taxes ( 28,893 )

Income tax expense 447

Net loss $ ( 29,340 )

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

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

DHI GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

Nine Months Ended September 30,

Depreciation $ 774

Purchases of fixed assets $ 447

Cash paid for amounts included in measurement of lease liabilities:

Operating cash flows from operating leases $ 804

REVENUE RECOGNITION

6 unchanged sentences

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

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

2022 2021 2022 2021

Three Months Ended March 31,

$ 26,910 $ 24,634

4 unchanged sentences

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

As of September 30, 2022 As of December 31, 2021

As of March 31, 2023 As of December 31, 2022

Receivables $ 24,980 $ 20,494

11 unchanged sentences

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

Three Months Ended Nine Months Ended

September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021

Three Months Ended

March 31, 2023 March 31, 2022

Revenue recognized in the period from:

3 unchanged sentences

Tech-focused $ 54,750 $ 3,980 $ 111 $ 3 $ 58,844

Credit Losses

The Company is exposed to credit losses through the inability of its customers to make required payments on accounts receivable.

The Company segments accounts receivable based on credit risk characteristics and estimates future losses for each segment based on historical trends and current market conditions, as applicable.

Expected losses on accounts receivable are recorded as allowance for doubtful accounts in the condensed consolidated balance sheets and as an expense in the condensed consolidated statement of operations.

The portion of accounts receivable that is reflected as deferred revenue in the condensed consolidated balance sheets is not considered at risk for credit losses.

If the financial condition of DHI’s customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required.

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

4 unchanged sentences

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

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

2022 2021 2022 2021

For the Three Months Ended March 31,

Operating lease cost (1)

$ 592 $ 507 $ 1,636 $ 1,629

Sublease income ( 130 ) ( 123 )

2 unchanged sentences

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

For the Nine Months Ended September 30,

For the Three Months Ended March 31,

Cash paid for amounts included in measurement of lease liabilities:

3 unchanged sentences

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

September 30, 2022 December 31, 2021

March 31, 2023 December 31, 2022

Operating lease right-of-use-assets $ 6,088 $ 6,581

Operating lease liabilities - current 2,079 2,231

Operating lease liabilities - non-current 5,267 6,982

tenant improvement allowance ( 2,079 ) ( 2,126 )

Operating lease liabilities - current (as reported) — 105

Operating lease liabilities - non-current (as reported) 8,007 8,428

Total operating lease liabilities $ 8,007 $ 8,533

6 unchanged sentences

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

No impairment was recorded during the three and nine months ended September 30, 2022.

During the three and nine months ended September 30, 2021, due to the continuing impacts of COVID-19 on the real estate markets and its impact on the future cash flows attributable to its ROU assets, the Company recorded an impairment charge of $ 1.9 million.

As of September 30, 2022, future operating lease payments were as follows (in thousands):

No impairment was recorded during the three months ended March 31, 2023 and 2022.

As of March 31, 2023, future operating lease payments were as follows (in thousands):

Operating Leases

October 1, 2022 through December 31, 2022 $ 679

April 1, 2023 through December 31, 2023 $ 1,765

2028 and thereafter 3,316

Total lease payments $ 11,872

Less imputed interest 524

imputed interest 1,786

tenant improvement allowance 2,079

Total $ 8,007

As of September 30, 2022 the Company has no additional operating or finance leases that have not yet commenced.

Investments, Current, at Fair Value

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

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

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

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

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

During the first quarter of 2021, the Company recognized a $ 2.5 million unrealized gain on the investment.

During the second and third quarters of 2021, the Company recognized unrealized losses of $ 0.7 million and $ 0.6 million, respectively, related to the investment.

The investment was sold during the third quarter of 2021, and the Company recognized a realized gain of $ 1.2 million for the nine months ended September 30, 2021.

Accordingly, the recorded value as of December 31, 2021 was zero.

DHI GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

As of March 31, 2023 the Company has no additional operating or finance leases that have not yet commenced.

Investments, Non-current, at Fair Value

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.

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 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 June 30, 2022 and December 31, 2021.

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 would convert its investment into shares of preferred stock at 80 % of the per share value in the Qualified Financing.

Prior to the Qualified Financing, the investment was recorded at $ 3.0 million and as a trading security at fair value with realized and unrealized gains and losses included in earnings.

On September 20, 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.

The Company's preferred shares are substantially

DHI GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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 September 30, 2022 and is recorded as an investment in the condensed consolidated balance sheet.

Accordingly, the Company recognized an impairment loss during the three and nine months ended September 30, 2022 of $ 2.3 million.

Subsequent to the Qualified Financing, the Company valued the investment at $ 0.7 million, and it is recorded as an investment in the condensed consolidated balance sheet as of March 31, 2023.

The Company recognized an impairment loss during the three months ended September 30, 2022 of $ 2.3 million.

No impairment was recognized during the three months ended March 31, 2023 and 2022.

During the first quarter of 2023, the majority investor purchased additional shares of the business as was contemplated in, and at the same price as, in the Qualified Financing.

As a result, the Company's ownership, on a fully-diluted basis, on March 31, 2023 was reduced to 4.1 %.

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

As of September 30, 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 September 30, 2022, as described above.

As of March 31, 2023, 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 March 31, 2023, as described above.

Investments, Non-current

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Accordingly, the Company recognized a $ 0.3 million gain on sale, which was included in gain (loss) on investment on the condensed consolidated statements of operations.

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.

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.

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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 three and nine months ended September 30, 2022.

Accordingly, the Company recorded amortization of less than $ 0.1 million for the three months ended March 31, 2023.

There was no amortization recorded during the three months ended March 31, 2022 because it was not material.

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.

For the three and nine months ended September 30, 2022, the Company recorded $ 0.6 million and $ 1.1 million, respectively, of income related to its proportionate share of eFC's net income,

DHI GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

net of currency translation adjustments and amortization of the basis difference.

The Company's proportionate share of eFC's net income for the three and nine months ended September 30, 2021 was zero.

For each of the three-month periods ended March 31, 2023 and 2022, 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.

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.

The investment is recorded at zero as of September 30, 2022 and December 31, 2021.

The investment is recorded at zero as of March 31, 2023 and December 31, 2022.

DHI GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

ACQUIRED INTANGIBLE ASSETS, NET

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

As of September 30, 2022 and December 31, 2021, the Company had an indefinite-lived acquired intangible asset of $ 23.8 million related to the Dice trademarks and brand name.

No impairment was recorded during the three and nine month periods ended September 30, 2022 and 2021.

As of March 31, 2023 and December 31, 2022, the Company had an indefinite-lived acquired intangible asset of $ 23.8 million related to the Dice trademarks and brand name.

No impairment was recorded during the three month periods ended March 31, 2023 and 2022.

The projections utilized in the October 1, 2022 analysis included increasing revenues at 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 Company’s ability to achieve these revenue projections may be impacted by, among other things, general market conditions, 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 October 1, 2022 analysis included operating margins during the year ending December 31, 2022 that approximate operating margins for the year ended 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, 2022 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 March 31, 2023 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 and 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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We consider factors such as historical performance, anticipated market conditions, operating expense trends and capital expenditure requirements.

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

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

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

Goodwill for the Tech-focused reporting unit as of September 30, 2022 and December 31, 2021 was $ 128.1 million.

There were no changes to goodwill from December 31, 2021 to September 30, 2022.

Goodwill as of March 31, 2023 and December 31, 2022, which was allocated to the Tech-focused reporting unit, was $ 128.1 million.

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

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 first quarter of 2023 and estimated future results as of March 31, 2023 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 March 31, 2023.

Therefore, no quantitative impairment test was performed as of March 31, 2023.

There were no changes to goodwill and no impairments were recorded during the three months ended March 31, 2023 and 2022.

The projections utilized in the October 1, 2022 analysis included increasing revenues at rates approximating industry growth projections.

The October 1, 2022 analysis included operating margins during the year ending December 31, 2022 that approximate operating margins for the year ended December 31, 2021 and then increasing modestly.

If future cash flows that are attributable to the Tech-focused reporting unit are not achieved, the Company could realize an impairment in a future period.

DHI GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Results for the Tech-focused reporting unit for the fourth quarter of 2021 and the first nine months of 2022 and estimated future results as of September 30, 2022 have exceeded the projections used in the October 1, 2021 impairment test.

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 September 30, 2022.

Therefore, no quantitative impairment test was performed as of September 30, 2022.

No impairment was recorded during the three and nine months ended September 30, 2022 and 2021.

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

The October 1, 2021 impairment test included operating margins during the year ending December 31, 2021 that approximate operating margins for the year ended December 31, 2020 and then increasing modestly.

If future cash flows that are attributable to the Tech-focused reporting unit are not achieved, the Company could realize an impairment in a future period.

The discount rate applied for the Tech-focused reporting unit in the October 1, 2021 impairment test was 11.5 %.

The discount rate applied for the Tech-focused reporting unit in the October 1, 2022 analysis was 11.0 %.

An increase to the discount rate applied or reductions to future projected operating results could result in 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, 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.

The determination of whether or not goodwill has become impaired 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 margins and capital expenditure requirements.

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

The discounted cash flow methodology is based on projections of the amounts and timing of future revenues and cash flows, assumed discount rates and other assumptions as deemed appropriate.

Factors such as historical performance, anticipated market conditions, operating expense trends and capital expenditure requirements are considered.

Additionally, the discounted cash flows analysis takes into consideration cash expenditures for product development, other technological updates and advancements to the websites and investments to improve the candidate databases.

The market comparable method indicates the fair value of a business by comparing it to publicly traded companies in similar lines of business or to comparable transactions or assets.

Considerations for factors such as size, growth, profitability, risk and return on investment are analyzed and compared to the comparable businesses and adjustments are made.

A market value of invested capital of the publicly traded companies is calculated and then applied to the entity’s operating results to arrive at an estimate of value.

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

In addition, a future decline in the overall market conditions 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.

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

(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.

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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.

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.

DHI GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

There were no borrowings in pounds sterling as of September 30, 2022 and December 31, 2021.

There were no borrowings in pounds sterling as of March 31, 2023 and December 31, 2022.

The facility may be prepaid at any time without penalty.

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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, 2022, the Company was in compliance with all of the financial covenants under the Credit Agreement.

As of March 31, 2023, the Company was in compliance with all of the financial covenants under the Credit Agreement.

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.

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

The amounts borrowed as of September 30, 2022 and December 31, 2021 are as follows (dollars in thousands):

September 30,

DHI GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The amounts borrowed as of March 31, 2023 and December 31, 2022 are as follows (dollars in thousands):

2023 December 31,

Amounts borrowed:

Revolving credit facility $ 30,000 $ 23,000

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

Long-term debt, net $ 30,000 $ 22,730

Available to be borrowed under revolving facility, subject to certain limitations $ 70,000 $ 67,000

Long-term debt under revolving credit facility (1)

$ 46,000 $ 30,000

Available to be borrowed under revolving facility (2)

$ 54,000 $ 70,000

Interest rates:

SOFR/LIBOR rate loans:

SOFR rate loans:

Interest margin (3)

2.10 % 2.35 %

Actual interest rates (4)

6.90 % 6.67 %

Commitment fee 0.35 % 0.40 %

(1) In connection with the new Credit Agreement entered into during the three months ended June 30, 2022, the Company recorded deferred financing costs of $ 0.7 million to other assets on the condensed consolidated balance sheets.

Accumulated amortization as of September 30, 2022 was less than $ 0.1 million.

Accumulated amortization as of March 31, 2023 was $ 0.1 million.

(2) The amount available to be borrowed is subject to certain limitations, such as a consolidated leverage ratio, as defined in the credit agreement.

(3) Includes additional spread of 0.10 %.

(4) Computed as the weighted average interest rate on all borrowings.

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

DHI GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

COMMITMENTS AND CONTINGENCIES

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

The number, price, structure, and timing of the repurchases, if any, will be at our sole discretion and future repurchases will be evaluated by us depending on market conditions, liquidity needs, restrictions under the agreements governing our indebtedness, and other factors.

Share repurchases may be made in the open market or in privately negotiated transactions.

The repurchase authorization does not oblige us to acquire any particular amount of our common stock.

The Board may suspend, modify, or terminate the repurchase program at any time without prior notice.

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

May 2020 to May 2021 (1)

Feb 2021 to Jun 2022 (2)

Feb 2022 to Feb 2023 (3)

Approval Date May 2020 February 2021 February 2022

DHI GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

February 2021 to June 2022 (1)

February 2022 to February 2023 (2)

February 2023 to February 2024 (3)

Approval Date February 2021 February 2022 February 2023

Authorized Repurchase Amount of Common Stock $ 20 million $ 15 million $ 10 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.

(1) 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 September 30, 2022 the value of shares that may yet be purchased under the current plan was $ 5.7 million.

(2) During February 2023, the stock repurchase program approved in February 2022 expired with a total of 2.6 million shares purchased for $ 14.7 million.

(3) On February 9, 2023, the Company announced that its Board approved a new stock repurchase program that permits the purchase of up to $ 10.0 million of the Company's common stock through February 2024.

As of March 31, 2023 the value of shares that may yet be purchased under the current plan was $ 8.2 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,

2022 2021 2022 2021

Three Months Ended March 31,

Shares repurchased 742,536 1,302,226

719,777 1,823,585 2,647,072 2,945,932

Average purchase price per share (1)

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Dollar value of shares repurchased (in thousands) (1)

(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 20,020 and 29,274 unsettled share repurchases as of September 30, 2022 and 2021, respectively.

$ 3,536 $ 7,525

(1) Average price paid per share and dollar value of shares repurchased include costs associated with the repurchases.

There were 10,084 and 20,665 unsettled share repurchases as of March 31, 2023 and 2022, respectively.

Stock Repurchases Pursuant to the 2022 Omnibus Equity Award Plan —Under the 2022 Omnibus Equity Award Plan, as further described in note 12 to the condensed consolidated financial statements, the Company repurchases its common stock withheld for income tax from the 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.

DHI GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

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

2022 2021 2022 2021

Three Months Ended March 31,

Shares repurchased upon restricted stock/PSU vesting 898,890 773,048

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Dollar value of shares repurchased upon restricted stock/PSU vesting (in thousands) $ 5,295 $ 4,202

No shares of the Company's common stock were purchased other than through the stock repurchase plans and the 2022 Omnibus Equity Award Plan, as described above.

STOCK-BASED COMPENSATION

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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.

On April 26, 2023, the stockholders of the Company approved the DHI Group, Inc.

2022 Omnibus Equity Award Plan, as Amended and Restated, which had been previously approved by the Company’s Board of Directors on March 16, 2023.

The 2022 Omnibus Equity Award Plan was amended and restated to, among other things, increase the number of shares of common stock authorized for issuance as equity awards under the plan by 2.9 million shares.

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

DHI GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

and will continue to grant restricted stock and PSUs to certain employees and directors pursuant to the 2022 Omnibus Equity Award Plan, as Amended and Restated.

The Company also offers an Employee Stock Purchase Plan.

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

The Company recorded total stock-based compensation expense of $ 2.5 million and $ 7.2 million during the three and nine months ended September 30, 2022, respectively, and $ 2.2 million and $ 6.2 million during the three and nine month periods ended September 30, 2021, respectively.

At September 30, 2022, there was $ 15.6 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.

The Company recorded total stock-based compensation expense of $ 2.9 million and $ 2.2 million during the three months ended March 31, 2023 and 2022, respectively.

At March 31, 2023, there was $ 20.8 million of unrecognized compensation expense related to unvested awards, which is expected to be recognized over a weighted-average period of approximately 1.6 years.

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

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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, 2022 and 2021 and the changes during the periods then ended is presented below:

Three Months Ended September 30, 2022 Three Months Ended September 30, 2021

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

Non-vested at beginning of the period 2,686,073 $ 3.77 3,476,056 $ 2.55

Granted 288,831 $ 4.98 463,000 $ 3.93

Forfeited ( 8,000 ) $ 5.17 ( 115,757 ) $ 2.82

Vested ( 239,502 ) $ 3.48 ( 231,721 ) $ 2.33

Non-vested at end of period 2,727,402 $ 3.92 3,591,578 $ 2.74

DHI GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Nine Months Ended September 30, 2022 Nine Months Ended September 30, 2021

A summary of the status of restricted stock awards as of March 31, 2023 and 2022 and the changes during the periods then ended is presented below:

Three Months Ended March 31, 2023 Three Months Ended March 31, 2022

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

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Non-vested at end of period 2,780,108 $ 4.88 3,124,491 $ 3.62

Expected to vest 2,780,108 $ 4.88 3,124,491 $ 3.62

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

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The fair value of the PSUs is 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 performance period is over one year and is based on the achievement of bookings targets during the year of grant, as defined in the applicable award 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.

There was no cash flow impact resulting from the grants.

A summary of the status of PSUs as of September 30, 2022 and 2021 and the changes during the periods then ended is presented below:

Three Months Ended September 30, 2022 Three Months Ended September 30, 2021

Shares Weighted- Average Fair Value at

Grant Date Shares Weighted- Average Fair Value at

Non-vested at beginning of the period 2,110,496 $ 3.48 1,815,532 $ 2.53

Forfeited — $ — ( 16,290 ) $ 2.63

Vested — $ — — $ —

Non-vested at end of period 2,110,496 $ 3.48 1,799,242 $ 2.53

Nine Months Ended September 30, 2022 Nine Months Ended September 30, 2021

DHI GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

A summary of the status of PSUs as of March 31, 2023 and 2022 and the changes during the periods then ended is presented below:

Three Months Ended March 31, 2023 Three Months Ended March 31, 2022

Shares Weighted- Average Fair Value at

3 unchanged sentences

Forfeited — $ — ( 93,341 ) $ 2.40

( 93,341 ) $ 2.40 ( 161,946 ) $ 2.63

Vested ( 1,236,074 ) $ 3.51 ( 928,717 ) $ 2.61

Non-vested at end of period 2,208,445 $ 4.77 2,125,049 $ 3.48

(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 2022 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.

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

DHI GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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-month periods ended September 30, 2022 and 2021.

There were no options outstanding as of September 30, 2022 and December 31, 2021.

A summary of options outstanding as of and for the periods ended September 30, 2021 are 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 — $ — $ —

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 — $ — $ —

Expected to vest 2,208,445 $ 4.77 2,125,049 $ 3.48

(1) PSUs granted in the first quarter of 2023 includes 587,587 additional PSUs related to the bookings achievement for the performance period ended December 31, 2022.

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

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

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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.

No shares were issued during the three months ended September 30, 2022 and 2021.

During the nine months ended September 30, 2022 and 2021, 29,253 and zero shares, respectively, were issued under the plan.

No shares were issued during the three months ended March 31, 2023 and 2022.

EARNINGS PER SHARE

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

DHI GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

2022 2021 2022 2021

Income (loss) from continuing operations $ ( 926 ) $ ( 2,434 ) $ 1,825 $ ( 634 )

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

Net income (loss) $ ( 926 ) $ ( 2,434 ) $ 1,825 $ ( 29,974 )

Three Months Ended March 31,

Net income $ 460 $ 1,301

Weighted-average shares outstanding—basic 43,886 44,702

1 unchanged sentence

Weighted-average shares outstanding—diluted 45,240 47,170

Basic earnings (loss) per share - continuing operations $ ( 0.02 ) $ ( 0.05 ) $ 0.04 $ ( 0.01 )

Diluted earnings (loss) per share - continuing operations $ ( 0.02 ) $ ( 0.05 ) $ 0.04 $ ( 0.01 )

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

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

Basic earnings (loss) per share $ ( 0.02 ) $ ( 0.05 ) $ 0.04 $ ( 0.64 )

Diluted earnings (loss) per share $ ( 0.02 ) $ ( 0.05 ) $ 0.04 $ ( 0.64 )

Basic earnings per share $ 0.01 $ 0.03

Diluted earnings per share $ 0.01 $ 0.03

Shares excluded from the calculation of diluted earnings per share 1

(1) For the three months ended September 30, 2022, 2.1 million shares were excluded from the computation of shares contingently issuable upon exercise as we recognized a net loss from continuing operations.

For the three and nine months ended September 30, 2021, 2.6 million and 2.0 million shares, respectively, were excluded from the computation of shares contingently issuable upon exercise as we recognized a net loss from continuing operations.

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

The Company’s effective tax rate was 1 % and ( 106 )% for the three and nine months ended September 30, 2022, respectively, and 19 % and 45 % for the three and nine months ended September 30, 2021, respectively.

The following items caused the effective tax rate to differ from the U.S.

statutory rate:

• Tax benefits of $ 0.1 million and $ 1.1 million during the three and nine months ended September 30, 2022, respectively, from the vesting of share-based compensation awards.

• A tax benefit of $ 0.1 million during the three months ended September 30, 2022, from research tax credits.

• Tax expense of $ 0.5 million during the three months ended September 30, 2022, from a valuation allowance related to the impairment of an investment.

• 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.

The Company’s effective tax rate was 952 % and ( 142 )% for the three months ended March 31, 2023 and 2022, respectively.

The effective tax rate differed from the U.S.

statutory rate due to tax benefits of $ 0.5 million and $ 0.8 million from the vesting of share-based compensation awards during the three months ended March 31, 2023 and 2022, respectively.

DHI GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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-Q

Item 1. Financial Statements