DHI Group Adopts Tax Benefit Preservation Plan to Safeguard Capital Loss Carryforwards

DHI Group, Inc. (NYSE: DHX) has announced the implementation of a shareholder rights plan geared towards safeguarding stockholder value by preserving the access to the Company’s net capital loss carryforwards and other tax attributes in accordance with the Internal Revenue Code of 1986. The plan, known as the “Section 382 Rights Plan,” aims to shield the Company’s valuable assets, especially its Carryforwards, representing about $109 million as of September 30, 2024. These assets serve to mitigate the Company’s upcoming federal income tax expenses related to capital gains.

The core objective of the Section 382 Rights Plan is to restrict potential ownership shifts at DHI by dissuading any single entity or group from attaining beneficial ownership of 4.99% or more of DHI’s outstanding common stock. The plan intends to act as a deterrent for individuals or groups seeking to acquire substantial shares of the Company’s common stock without the approval of the Board of Directors.

Consequent to the Section 382 Rights Plan implementation, DHI’s Board has declared a dividend of one “right” for each outstanding common stock share, scheduled for distribution to stockholders as of the record date on February 7, 2025. New shares of the Company’s common stock issued post the record date will be accompanied by a right. These rights will initially merge with the common stock and could only become exercisable if a party or group acquires 4.99% or more of the Company’s outstanding common stock. If activated, all rights holders, except the triggering entity, will be entitled to purchase additional common stock shares at a 50% discount.

The rights under the Section 382 Rights Plan are set to expire on January 28, 2028, or upon the occurrence of certain events, such as a determination by the Board that the plan is no longer essential for Carryforwards preservation. While the plan bears similarities to those adopted by other companies with significant tax assets, it allows for redemption under specified situations, ensuring compatibility with decisions favoring the Company and its stakeholders.

Although the Section 382 Rights Plan is designed to prevent an ownership change as per Section 382, undisclosed acquisitions or divestitures of the Company’s common stock by external parties could potentially result in such changes. Full details regarding the Section 382 Rights Plan will be included in a Form 8-K and a Registration Statement on Form 8-A to be lodged with the Securities and Exchange Commission.

This article was generated by an automated content engine and was reviewed by a human editor prior to publication. For additional information, read DHI Group’s 8K filing here.

DHI Group Company Profile

DHI Group, Inc provides data, insights, and employment connections through specialized services for technology professionals and other select online communities in the United States. Its solutions include talent profiles; job postings; employer branding; and other services comprising virtual and live career events, sourcing services, and content and data services that provides tailored content to help professionals manage their careers and provide employers insight into recruiting strategies and trends.