HireRight (HRT) - 2022 Q4 - Annual Report

Financial Obligations and Agreements - The company expects to pay approximately $210.5 million to certain pre-IPO equityholders over a period of approximately 12 years under the tax receivable agreement[10]. Employment and Workforce - As of December 31, 2022, the company employed approximately 3,078 employees, with no employees covered by a collective bargaining agreement[68]. - The company recognizes the importance of attracting and retaining talent, launching the IGNITE program to focus on professional growth and development initiatives[72]. Economic and Market Conditions - The annual inflation rate in the United States reached nearly the highest rate in over three decades in 2022, impacting the company's data costs and employment expenses[67]. - The company’s business is vulnerable to economic downturns, with recent macroeconomic volatility causing customers to adopt more cautious hiring practices[10]. - The company operates in an intensely competitive market, which may affect its ability to maintain competitive advantages necessary for growth and profitability[10]. Regulatory and Compliance Risks - The company is subject to significant governmental laws and regulations, including the Fair Credit Reporting Act and the California Consumer Privacy Act, which impose operational requirements and liability risks[74][78]. - The company may face increased operational requirements and liability risks due to privacy, data security, and data protection laws in its principal markets[10]. Technology and Geopolitical Risks - The company has significant technology development operations in Estonia, exposing it to geopolitical risks related to the ongoing conflict between Russia and Ukraine[10]. Growth and Reporting Status - The company qualifies as an "emerging growth company" and will remain so until the earlier of fiscal year-end following November 2, 2026, or achieving total annual gross revenue of at least $1.235 billion[83]. - The market value of the company's common stock held by non-affiliates must exceed $700 million for it to be deemed a large accelerated filer[83]. - The company intends to take advantage of reduced reporting requirements, including financial statements and executive compensation disclosures[84]. - The company plans to delay adopting new or revised accounting standards until they apply to private companies, which may affect comparability with other companies[85]. - The company is not required to comply with auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act[86]. - The company has reduced disclosure obligations regarding executive compensation in periodic reports and proxy statements[86]. - The company is exempt from holding a nonbinding advisory vote on executive compensation and stockholder approval of golden parachute payments not previously approved[86]. Operational Capabilities - The company must improve its operating capabilities and profitability to continue competing successfully in the market[10].