Condensed Financial Information of Registrant (Parent Company Only)

12 Months Ended

Dec. 31, 2021

Condensed Financial Information Disclosure [Abstract]

Condensed Financial Information of Registrant (Parent Company Only)

Sterling Check Corp. (Parent Company Only)

Condensed Balance Sheets


(in thousands, except share amounts)	December 31, 2020		December 31, 2021
ASSETS
Cash and cash equivalents	$	8	$	8
Investment in subsidiaries of Parent	583,176		709,616
Total assets	$	583,184	$	709,624
LIABILITIES AND STOCKHOLDERS’ EQUITY
Commitments and contingencies (See note 12)
STOCKHOLDERS’ EQUITY:
Preferred stock ($0.01 par value; 100,000,000 shares authorized; no shares issued or outstanding)	—		—
Common stock ($0.01 par value; 239,600,000 shares authorized and 88,554,962 shares issued and outstanding as of December 31, 2020; and 1,000,000,000 shares authorized and 95,854,795 shares issued and 95,746,975 shares outstanding as of December 31, 2021, respectively)	1		68
Additional paid-in capital	770,714		916,578
Common stock held in treasury (107,820 shares in 2019 and 2020)	(897)		(897)
Accumulated deficit	(187,691)		(206,218)
Accumulated other comprehensive (loss) income	1,057		93
Total stockholders’ equity	583,184		709,624
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	583,184	$	709,624

Sterling Check Corp. (Parent Company Only)

Condensed Statements of Operations and Comprehensive Loss


(in thousands, except share and per share data)	December 31, 2019		December 31, 2020		December 31, 2021
Equity in net loss of subsidiaries	$	(46,682)	$	(52,293)	$	(18,527)
NET LOSS	(46,682)		(52,293)		(18,527)
Subsidiaries’ other comprehensive income	806		2,421		(964)
COMPREHENSIVE LOSS	$	(45,876)	$	(49,872)	$	(19,491)
Net loss per share attributable to stockholders
Basic	$	(0.53)	$	(0.59)	$	(0.21)
Diluted	$	(0.53)	$	(0.59)	$	(0.21)
Weighted average number of shares outstanding—basic and diluted
Basic	88,154,830		88,345,312		90,218,386
Diluted	88,154,830		88,345,312		90,218,386

The accompanying notes are an integral part of these consolidated financial statements.

A condensed statement of cash flows has not been presented as Sterling Check Corp. (the Parent) had no material operating, investing, or financing cash flow activities for the years ended December 31, 2019, 2020 and 2021.

Basis of Presentation

These condensed parent company-only financial statements have been prepared in accordance with Rule 12-04, Schedule I of Regulation S-X, as the restricted net assets of the subsidiaries of the Parent (as

defined in Rule 4-08(e)(3) of Regulation S-X) exceed 25% of the consolidated net assets of the Parent. The ability of the Parent’s operating subsidiaries to pay dividends may be restricted due to the terms of the subsidiaries’ First Lien Term Loan Agreement, as described in Note 8, “Debt” to the audited consolidated financial statements.

These condensed parent company financial statements have been prepared using the same accounting principles and policies described in the notes to the consolidated financial statements, with the only exception being that the parent company accounts for its subsidiaries using the equity method. These condensed financial statements should be read in conjunction with the audited consolidated financial statements and related notes thereto.