Condensed Financial Statements

 
                      First Advantage Corporation 
                  Condensed Consolidated Balance Sheets 
                               (Unaudited) 
 
(in thousands, except 
share and per share 
amounts)                    September 30, 2024     December 31, 2023 
                           --------------------   ------------------- 
ASSETS 
CURRENT ASSETS 
   Cash and cash 
    equivalents             $           307,392    $          213,774 
   Restricted cash                           88                   138 
   Accounts receivable 
    (net of allowance for 
    doubtful accounts of 
    $1,284 and $1,036 at 
    September 30, 2024 
    and December 31, 
    2023, respectively)                 143,020               142,690 
   Prepaid expenses and 
    other current assets                 13,667                13,426 
   Income tax receivable                  2,808                 3,710 
                               ----------------       --------------- 
     Total current assets               466,975               373,738 
   Property and 
    equipment, net                       55,403                79,441 
   Goodwill                             822,277               820,654 
   Trade names, net                      60,990                66,229 
   Customer lists, net                  238,821               275,528 
   Other intangible 
    assets, net                           1,898                 2,257 
   Deferred tax asset, 
    net                                   3,172                 2,786 
   Other assets                           7,598                10,021 
                               ----------------       --------------- 
TOTAL ASSETS                $         1,657,134    $        1,630,654 
                               ================       =============== 
LIABILITIES AND EQUITY 
CURRENT LIABILITIES 
   Accounts payable         $            71,108    $           47,024 
   Accrued compensation                  18,687                16,379 
   Accrued liabilities                   22,962                16,162 
   Current portion of 
    operating lease 
    liability                             2,566                 3,354 
   Income tax payable                     3,534                   264 
   Deferred revenues                      2,495                 1,856 
                               ----------------       --------------- 
     Total current 
      liabilities                       121,352                85,039 
   Long-term debt (net of 
    deferred financing 
    costs of $4,880 and 
    $6,268 at September 
    30, 2024 and December 
    31, 2023, 
    respectively)                       559,844               558,456 
   Deferred tax 
    liability, net                       48,181                71,274 
   Operating lease 
    liability, less 
    current portion                       4,340                 5,931 
   Other liabilities                      2,703                 3,221 
                               ----------------       --------------- 
     Total liabilities                  736,420               723,921 
EQUITY 
   Common stock - $0.001 
    par value; 
    1,000,000,000 shares 
    authorized, 
    145,558,948 and 
    145,074,802 shares 
    issued and 
    outstanding at 
    September 30, 2024 
    and December 31, 
    2023, respectively                      146                   145 
   Additional 
    paid-in-capital                     998,707               977,290 
   Accumulated deficit                  (59,442)              (49,545) 
   Accumulated other 
    comprehensive loss                  (18,697)              (21,157) 
                               ----------------       --------------- 
     Total equity                       920,714               906,733 
                               ----------------       --------------- 
TOTAL LIABILITIES AND 
 EQUITY                     $         1,657,134    $        1,630,654 
                               ================       =============== 
 
 
 
                     First Advantage Corporation 
          Condensed Consolidated Statements of Operations and 
                      Comprehensive (Loss) Income 
                              (Unaudited) 
 
                                 Three Months Ended September 30, 
                               ------------------------------------ 
(in thousands, except share 
and per share amounts)                2024                 2023 
                               -------------------  ------------------ 
REVENUES                        $         199,119   $       200,364 
 
OPERATING EXPENSES: 
   Cost of services 
    (exclusive of 
    depreciation and 
    amortization below)                   100,879           101,410 
   Product and technology 
    expense                                12,909            13,107 
   Selling, general, and 
    administrative expense                 46,050            30,217 
   Depreciation and 
    amortization                           30,168            32,419 
                                   --------------    -------------- 
     Total operating expenses             190,006           177,153 
                                   --------------    -------------- 
INCOME FROM OPERATIONS                      9,113            23,211 
                                   --------------    -------------- 
 
OTHER EXPENSE, NET: 
   Interest expense, net                   17,191             7,557 
                                   --------------    -------------- 
     Total other expense, net              17,191             7,557 
                                   --------------    -------------- 
(LOSS) INCOME BEFORE 
 PROVISION FOR INCOME TAXES                (8,078)           15,654 
   Provision for income taxes                 782             4,881 
                                   --------------    -------------- 
NET (LOSS) INCOME               $          (8,860)  $        10,773 
                                   ==============    ============== 
 
Foreign currency translation 
 income (loss)                              5,531            (1,610) 
                                   --------------    -------------- 
COMPREHENSIVE (LOSS) INCOME     $          (3,329)  $         9,163 
                                   ==============    ============== 
 
NET (LOSS) INCOME               $          (8,860)  $        10,773 
Basic net (loss) income per 
 share                          $           (0.06)  $          0.08 
Diluted net (loss) income per 
 share                          $           (0.06)  $          0.07 
Weighted average number of 
 shares outstanding - basic           144,096,312       143,231,707 
Weighted average number of 
 shares outstanding - 
 diluted                              144,096,312       144,733,357 
 
 
 
                      First Advantage Corporation 
             Condensed Consolidated Statements of Cash Flows 
                               (Unaudited) 
 
                                   Nine Months Ended September 30, 
                                ------------------------------------- 
(in thousands)                          2024                 2023 
                                ---------------------  ----------------- 
CASH FLOWS FROM OPERATING 
ACTIVITIES 
Net (loss) income                $         (9,907)     $       22,480 
Adjustments to reconcile net 
(loss) income to net cash 
provided by operating 
activities: 
   Depreciation and 
    amortization                           89,968              96,341 
   Amortization of deferred 
    financing costs                         1,388               1,362 
   Bad debt expense                            92                 134 
   Deferred taxes                         (23,115)             (8,723) 
   Share-based compensation                19,303              10,449 
   Loss on foreign currency 
    exchange rates                             --                  26 
   (Gain) loss on disposal of 
    fixed assets and 
    impairment of ROU assets                 (272)              1,724 
   Change in fair value of 
    interest rate swaps                    (1,006)             (2,201) 
Changes in operating assets 
and liabilities: 
   Accounts receivable                       (151)            (12,162) 
   Prepaid expenses and other 
    assets                                  1,184               8,661 
   Accounts payable                        23,115                 531 
   Accrued compensation and 
    accrued liabilities                     9,917              (8,389) 
   Deferred revenues                          591                  87 
   Operating lease liabilities               (722)             (1,134) 
   Other liabilities                         (673)               (198) 
   Income taxes receivable and 
    payable, net                            4,150              (2,908) 
                                    -------------       ------------- 
     Net cash provided by 
      operating activities                113,862             106,080 
                                    -------------       ------------- 
CASH FLOWS FROM INVESTING 
ACTIVITIES 
   Capitalized software 
    development costs                     (20,384)            (18,781) 
   Purchases of property and 
    equipment                              (1,386)             (1,798) 
   Other investing activities                  29                (231) 
   Acquisitions of businesses, 
    net of cash acquired                       25             (41,122) 
                                    -------------       ------------- 
     Net cash used in 
      investing activities                (21,716)            (61,932) 
                                    -------------       ------------- 
CASH FLOWS FROM FINANCING 
ACTIVITIES 
   Proceeds from issuance of 
    common stock under 
    share-based compensation 
    plans                                   5,862               4,089 
   Net settlement of 
    share-based compensation 

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