Business Context and Reporting Period
Grindr Inc. filed this Form 8-K on November 23, 2022, reporting events beginning November 18, 2022. The filing documents the completion of the business combination between Tiga Acquisition Corp. and Legacy Grindr, following Tiga’s domestication as a Delaware corporation on November 17, 2022. Tiga changed its name to Grindr Inc., and Grindr began trading on the NYSE under the symbols GRND and GRND WS.
Key Financial and Capitalization Metrics
| Metric | Reported amount or status |
|---|---|
| Gross cash proceeds at closing | Approximately $105.1 million, before expenses, obligations, the Kunlun Deferred Amount, and a pre-closing distribution to Legacy Grindr unitholders. |
| Sources of gross proceeds | Approximately $5.1 million from the Tiga trust account, $50.0 million from forward purchase securities, and $50.0 million from backstop securities. |
| Supplemental term loans | Aggregate principal amount of approximately $170.8 million borrowed under an amended credit agreement with Fortress Credit Corp. and other lenders. |
| Catapult Note repayment | Catapult GP II paid approximately $12.0 million to Legacy Grindr toward repayment of the outstanding Catapult Note. |
| Tiga redemptions | 27,114,767 shares were redeemed at $10.50 per share. |
| Shares outstanding after closing | 173,524,360 shares of Grindr common stock. |
| Ownership concentration | Post-closing directors, executive officers, and affiliated entities beneficially owned approximately 75.2% of outstanding shares and voting power. Tiga pre-closing securityholders owned approximately 49.5%. |
The filing incorporates historical and interim financial statements and management discussion for periods including the nine months ended September 30, 2022, but the supplied filing text does not provide clear revenue, net income, operating cash flow, margins, cash balance, or liquidity figures for those periods.
Material Changes Versus the Prior Comparable Period
- The transaction converted Tiga from a shell company into the operating public company Grindr Inc.
- Tiga’s ordinary shares and warrants were converted into Grindr common stock and warrants. The public units separated into their component securities and ceased trading as units.
- The company incurred or assumed significant transaction-related financing, including approximately $170.8 million of supplemental term loans.
- Tiga’s $2.0 million convertible promissory note to its sponsor was repaid in full in connection with the business combination.
- Ernst & Young LLP was selected to replace WithumSmith+Brown, PC as the independent registered public accounting firm for 2022, subject to client acceptance procedures.
- The company adopted a new Delaware certificate of incorporation and bylaws, entered into amended registration rights arrangements, and approved the 2022 Equity Incentive Plan.
Guidance, Outlook, Commentary, Risks, and Unusual Items
No quantitative financial guidance is provided in the supplied filing text. The company states that it intends to retain future earnings, if any, to fund business development and does not expect to pay cash dividends in the foreseeable future.
Forward-looking statements refer generally to the potential benefits of the transaction and the combined company’s ability to serve Grindr’s platform and LGBTQ+ community. Risks identified include regulatory and compliance requirements, competition, user retention and acquisition, fluctuating results, technology and user-preference changes, privacy and data-protection compliance, cybersecurity, reliance on third-party infrastructure, intellectual-property protection, transaction disruption, employee retention, litigation, exchange listing requirements, securities-price volatility, and the ability to execute business plans.
Closing conditions were waived, including certain lender payoff documentation, repayment and settlement of a unitholder promissory note, termination of specified affiliate agreements, adoption of an employee stock purchase plan, and receipt of CFIUS approval before closing.
Unusual items include the substantial redemption of Tiga shares, concentrated post-closing ownership, pledged shares and warrants held by certain beneficial owners, the new debt financing, and the change in accounting firms. The filing states that a previously identified material weakness in Tiga’s internal controls over financial reporting had been remediated during the six months ended June 30, 2022.
Important Facts for Investors to Verify
- Review Exhibit 99.2 and Exhibit 99.4 for actual revenue, profitability, cash flow, balance-sheet, and operating metrics for the three and nine months ended September 30, 2022 and 2021.
- Review Exhibit 99.3 for the unaudited pro forma effects of the business combination, including transaction accounting, leverage, and ownership.
- Confirm the final terms, interest rates, maturities, covenants, and collateral associated with the approximately $170.8 million of supplemental term loans.
- Assess the effects of 27.1 million share redemptions and the resulting concentration of voting power.
- Review registration rights, warrants, options, pledged securities, and potential dilution following the transaction.
- Evaluate privacy, data-security, regulatory, CFIUS-related, litigation, and NYSE-listing risks described in the filing and incorporated proxy materials.
- Confirm EY’s final engagement and the status of the previously remediated internal-control weakness.