As filed with the Securities and Exchange Commission on October 6, 2022
Registration No. 333-264902
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 3 TO
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
TIGA ACQUISITION CORP.*
(Exact Name of Registrant as Specified in Its Charter)
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Cayman Islands
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6770
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N/A
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(State or other jurisdiction of incorporation
or organization)
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(Primary Standard Industrial
Classification Code Number)
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(I.R.S. Employer
Identification No.)
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Ocean Financial Centre
Level 40, 10 Collyer Quay, Singapore 049315
Tel: +65 6808 6288
(Address, including zip code, and telephone number,
including area code, of Registrant’s principal executive offices)
Maples Fiduciary Services (Delaware) Inc.
4001 Kennett Pike, Suite 302
Wilmington, Delaware, 19807
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies to:
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Neil Whoriskey
Rod Miller
Milbank LLP
55 Hudson Yards
New York, NY 10001
Tel: (212) 530-5000
and
David H. Zemans
Milbank LLP
12 Marina Boulevard, #36-03
Marina Bay Financial Centre Tower 3
Singapore 018982
Tel: +65 6428-2400
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David Peinsipp
Jamie Leigh
Kristin VanderPas
Garth Osterman
Cooley LLP
3 Embarcadero Center, 20th Floor
San Francisco, CA 94111
Tel: (415) 693-2000
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Approximate date of commencement of proposed sale of the securities
to the public: As soon as practicable after this registration statement is declared effective and all other conditions to the business combination described in the enclosed proxy statement/prospectus have been satisfied or waived.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with General Instruction G, check the following box: ☐
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering: ☐
If this Form is a post-effective amendment filed pursuant to Rule
462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering: ☐
Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in
Rule 12b-2 of the Exchange Act.
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Large accelerated filer
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Accelerated filer
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☐
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Non-accelerated filer
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☒
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Smaller reporting company
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☒
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Emerging growth company
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☒
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If an emerging growth company, indicate by check mark if the
registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐
If applicable, place an X in the box to designate the appropriate rule
provision relied upon in conducting this transaction:
Exchange Act Rule 13e-4(i) (Cross-Border Issuer Tender Offer) ☐
Exchange Act Rule 14d-l(d) (Cross-Border Third-Party Tender Offer) ☐
The registrant hereby amends this registration statement on such date
or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the
Securities Act or until the registration statement shall become effective on such date as the SEC, acting pursuant to said Section 8(a), may determine.
The information in this preliminary proxy statement/prospectus is not complete and may be changed. The registrant may not sell the securities
described in this preliminary proxy statement/prospectus until the registration statement filed with the Securities and Exchange Commission is declared effective. This preliminary proxy statement/prospectus is not an offer to sell these
securities and it is not a solicitation of an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.
PRELIMINARY—SUBJECT TO COMPLETION, DATED OCTOBER 6, 2022
PROXY STATEMENT FOR
EXTRAORDINARY GENERAL MEETING OF
TIGA ACQUISITION CORP.
(A CAYMAN ISLANDS EXEMPTED COMPANY)
PROSPECTUS FOR
223,143,717 SHARES OF COMMON STOCK
13,800,000 REDEEMABLE WARRANTS OF
TIGA ACQUISITION CORP.
(AFTER ITS DOMESTICATION AS A CORPORATION INCORPORATED IN THE STATE OF DELAWARE),
THE CONTINUING ENTITY FOLLOWING THE DOMESTICATION, WHICH WILL BE
RENAMED “GRINDR INC.” IN
CONNECTION WITH THE BUSINESS COMBINATION DESCRIBED HEREIN
The board of directors of Tiga Acquisition Corp., a Cayman
Islands exempted company (“Tiga” and, after the Domestication as described below, “New Grindr”), has unanimously approved (1) the
domestication of Tiga as a Delaware corporation (the “Domestication”); (2) the merger of Tiga Merger Sub LLC (“Merger Sub I”),
a Delaware limited liability company and a direct, wholly owned subsidiary of Tiga, with and into Grindr Group LLC (“Grindr”), a Delaware limited liability company (the “First Merger”), with Grindr surviving the First Merger as a wholly owned subsidiary of Tiga (Grindr, in its capacity as the surviving company of the First Merger, is sometimes referred to
herein as the “Surviving Company”), and as promptly as practicable and as part of the same overall transaction as the First Merger, the merger of such Surviving Company with and into Tiga
Merger Sub II LLC (“Merger Sub II”), a Delaware limited liability company and a direct wholly-owned subsidiary of Tiga (the “Second Merger”
and, together with the First Merger, the “Mergers” and, collectively with the Domestication, the “Business Combination”), with Merger
Sub II being the surviving entity of the Second Merger, pursuant to the terms of the Agreement and Plan of Merger, dated as of May 9, 2022, by and among Tiga, Merger Sub I and Grindr, attached to this proxy statement/prospectus as Annex A, as
amended by the First Amendment to Agreement and Plan of Merger, dated as of October 5, 2022, by and among Tiga, Merger Sub I, Merger Sub II and Grindr, attached to this proxy statement/prospectus as Annex A-1 (collectively, the “Merger Agreement”), as more fully described elsewhere in this proxy statement/prospectus; and (3) the other transactions contemplated by the Merger Agreement and documents related thereto. In
connection with the Business Combination, Tiga will change its name to “Grindr Inc.”
As a result of and upon the effective time of the Domestication,
among other things, (1) each then issued and outstanding Class A ordinary share, par value $0.0001 per share, of Tiga (the “Tiga Class A Ordinary Shares”), will convert automatically, on a one-for-one
basis, into a share of common stock, par value $0.0001 per share, of New Grindr (the “New Grindr Common Stock”); (2) each then issued and outstanding Class B ordinary share, par value $0.0001 per share, of
Tiga (the “Tiga Class B Ordinary Shares”) will convert automatically, on a one-for-one basis, into a share of New Grindr Common Stock; (3) each then issued and outstanding warrant of Tiga (the “Tiga Warrants”) will convert automatically into a warrant to acquire one share of New Grindr Common Stock (the “New Grindr Warrants”) pursuant to the Warrant Agreement,
dated November 23, 2020, between Tiga and Continental Stock Transfer & Trust Company (“Continental”), as warrant agent; and (4) each then issued and outstanding unit of Tiga (the “Tiga Units”) will be separated and converted automatically into one share of New Grindr Common Stock and one-half of one New Grindr Warrant.
Accordingly, this proxy statement/prospectus covers (1) 27,600,000
shares of New Grindr Common Stock to be issued in the Domestication in exchange for Tiga Class A Ordinary Shares, (2) 191,514,336 shares of New Grindr Common Stock to be issued in connection with the First Merger to certain holders of units of
Grindr as of immediately prior to the consummation of the First Merger, 4,029,831 shares of New Grindr Common Stock that may be issued in connection with the First Merger to certain holders of Grindr’s equity awards (including options) to
purchase Grindr Series X Ordinary Units in the event such equity awards are exercised prior to the consummation of the First Merger and (4) 13,800,000 redeemable New Grindr Warrants to be issued in the Domestication in exchange for redeemable
Tiga Warrants.
The total number of shares of New Grindr Common Stock to be
received by Grindr’s members or reserved for issuance to holders of the options to purchase shares of New Grindr Common Stock (“New Grindr Options”) into which options to purchase Grindr
Series X Ordinary Units (“Grindr Options”) are converted, will be equal to (x) the quotient obtained by dividing (i) the sum of (a)
the Company Valuation (as defined in the Merger Agreement) plus (b) the aggregate exercise price of all in-the-money Grindr Options that are issued and outstanding immediately prior to
the Effective Time by (ii) $10.00; plus (y) the number of forward purchase shares and backstop shares received by Grindr or which Grindr is entitled to receive under the A&R Forward
Purchase Agreement (the “Aggregate Merger Stock Consideration”).
The total number of shares of New Grindr Common Stock to be
received by Grindr’s members or reserved for issuance to holders of the warrants to purchase shares of New Grindr Common Stock (“New Grindr Warrants”) into which warrants to purchase Grindr
Series X Ordinary Units (“Grindr Warrants”) are converted, will be equal to and on the same terms as the forward purchase warrants and backstop warrants received by Grindr or which Grindr
is entitled to receive under the A&R Forward Purchase Agreement (the “Aggregate Merger Warrant Consideration”).
As a result of and upon the Closing, among other things, each
outstanding Grindr Series X Ordinary Unit will be cancelled upon the effective time of the First Merger in exchange for the right to receive a number of shares of New Grindr Common Stock equal to the quotient obtained by dividing (x) the number
of shares of New Grindr Common Stock constituting the Aggregate Merger Stock Consideration by (y) the aggregate number of Grindr Series X Ordinary Units that are outstanding on a fully diluted basis as of immediately prior to the Effective Time
(as defined in the Merger Agreement) of the First Merger, determined in accordance with the terms of the Merger Agreement. Immediately following the Closing, assuming no redemptions, our public shareholders are expected to own approximately %
of the voting power of New Grindr; our Sponsor is expected to own approximately % of the voting power of New Grindr; our independent directors are expected to own approximately % of the voting power of New Grindr on a combined basis; and
our executive directors are expected to own approximately % of the voting power of New Grindr on a combined basis. Immediately following the Closing, assuming maximum redemptions, our public shareholders are expected to own approximately %
of the voting power of New Grindr; our Sponsor is expected to own approximately % the voting power of New Grindr; our independent directors are expected to own approximately % of the voting power of New Grindr on a combined basis; and our
executive directors are expected to own approximately % of the voting power of New Grindr on a combined basis. Immediately after the Business Combination, San Vicente Investments, Inc. is expected to beneficially own more than 50% of the
voting power of New Grindr. As a result, New Grindr will be a “controlled company” within the meaning of the NYSE listing rules. However, New Grindr will not rely on any corporate governance exemptions available to controlled companies under
the NYSE listing rules. For further details, see “Beneficial Ownership of Securities.”
In addition, all Grindr Options and Grindr Warrants that are
outstanding as of immediately prior to the First Merger, will be converted into options and warrants to purchase shares of New Grindr Common Stock, respectively.
The Tiga Units, Tiga Class A Ordinary Shares and Tiga Warrants are
currently listed on the New York Stock Exchange (“NYSE”) under the symbols “TINV U,” “TINV” and “TINV WS,” respectively. Tiga will apply for listing, to be effective at the time of the Business
Combination, of New Grindr Common Stock and New Grindr Warrants on NYSE under the proposed symbols “GRND” and “GDR”, respectively. It is a condition of the consummation of the Business Combination described above that Tiga receives confirmation
from NYSE that the securities have been conditionally approved for listing on NYSE, but there can be no assurance such listing conditions will be met or that Tiga will obtain such confirmation from NYSE. If such listing conditions are not met or
if such confirmation is not obtained, the Business Combination described above will not be consummated unless the NYSE condition set forth in the Merger Agreement is waived by the applicable parties.
This proxy statement/prospectus provides shareholders of Tiga
with detailed information about the proposed business combination and other matters to be considered at the extraordinary general meeting of Tiga. We encourage you to read this entire document, including the Annexes and other documents referred
to herein, carefully and in their entirety. You should also carefully consider the risk factors described in “Risk Factors” beginning on
page 53 of this proxy statement/prospectus.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE
SECURITIES REGULATORY AGENCY HAS APPROVED OR DISAPPROVED THE TRANSACTIONS DESCRIBED IN THIS PROXY STATEMENT/PROSPECTUS, PASSED UPON THE MERITS OR FAIRNESS OF THE BUSINESS COMBINATION OR RELATED TRANSACTIONS OR PASSED UPON THE ADEQUACY OR ACCURACY
OF THE DISCLOSURE IN THIS PROXY STATEMENT/PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY CONSTITUTES A CRIMINAL OFFENSE.
This proxy statement/prospectus is dated , 2022, and
is first being mailed to Tiga’s shareholders on or about , 2022.
TIGA ACQUISITION CORP.
A Cayman Islands Exempted Company
Ocean Financial Centre
Level 40, 10 Collyer Quay Singapore 049315
Dear Tiga Acquisition Corp. Shareholders:
You are cordially invited to virtually attend the extraordinary
general meeting (the “extraordinary general meeting”) of Tiga Acquisition Corp., a Cayman Islands exempted company (“Tiga” and, after the Domestication, as
described below, “New Grindr”), at , on , 2022, via live webcast at , or at such other time, on such other date and at such other place to which the meeting may be adjourned. For purposes of the
articles of association of Tiga, the physical place of the meeting will be Milbank LLP, 55 Hudson Yards, New York, NY 10001.
At the extraordinary general meeting, Tiga shareholders will be
asked to consider and vote upon a proposal to approve and adopt the Agreement and Plan of Merger, dated as of May 9, 2022, by and among Tiga, Tiga Merger Sub LLC (“Merger Sub I”) and
Grindr Group LLC (“Grindr”), a copy of which is attached to the accompanying proxy statement/prospectus as Annex A, as amended by the First Amendment to Agreement and Plan of Merger, dated
as of October 5, 2022, by and among Tiga, Merger Sub I, Tiga Merger Sub II LLC (“Merger Sub II”) and Grindr, a copy of which is attached to the accompanying proxy statement/prospectus as
Annex A-1 (collectively, the “Merger Agreement” and such proposal, the “Business Combination Proposal”). The Merger Agreement
provides for, among other things, following the Domestication of Tiga to Delaware as described below, the merger of Merger Sub I with and into Grindr (the “First Merger”), with
Grindr surviving the First Merger as a wholly owned subsidiary of New Grindr (Grindr, in its capacity as the surviving company of the First Merger, is sometimes referred to herein as the “Surviving
Company”), and as promptly as practicable and as part of the same overall transaction as the First Merger, the merger of such Surviving Company with and into Merger Sub II (the “Second
Merger” and, together with the First Merger, the “Mergers”), with Merger Sub II being the surviving entity of the Second Merger, in accordance with the terms and subject to
the conditions of the Merger Agreement as more fully described elsewhere in the accompanying proxy statement/prospectus.
As a condition to the consummation of the Mergers, the board of
directors of Tiga has unanimously approved a change of Tiga’s jurisdiction of incorporation by deregistering as an exempted company in the Cayman Islands and continuing and domesticating as a corporation incorporated under the laws of the State
of Delaware (the “Domestication” and, together with the Mergers, the “Business Combination”). As described in this proxy statement/prospectus, you will be asked to
consider and vote upon a proposal to approve the Domestication (the “Domestication Proposal”). In connection with the consummation of the Business Combination, Tiga will change its name to “Grindr Inc.”
As a result of and upon the effective time of the Domestication,
(1) each then issued and outstanding Class A ordinary share, par value $0.0001 per share, of Tiga (the “Tiga Class A Ordinary Shares”), will convert automatically, on a one-for-one basis, into a share of
common stock, par value $0.0001 per share, of New Grindr (the “New Grindr Common Stock”), (2) each then issued and outstanding Class B ordinary share, par value $0.0001 per share, of Tiga (the “Class B Ordinary Shares”) will convert automatically, on a one-for-one basis, into a share of New Grindr Common Stock, (3) each then issued and outstanding warrant of Tiga will convert automatically into a
warrant to acquire one share of New Grindr Common Stock (the “New Grindr Warrants”) pursuant to the Warrant Agreement, dated November 23, 2022, between Tiga and Continental Stock Transfer & Trust
Company (“Continental”), as warrant agent, and (4) each then issued and outstanding unit of Tiga (the “Tiga Units”), will separate and convert automatically into
one share of New Grindr Common Stock and one-half of one New Grindr Warrant. As used herein, “public shares” shall mean the Tiga Class A Ordinary Shares (including those that underlie the Tiga Units) that
were registered pursuant to the Registration Statement on Form S-1 (333-249853) and the shares of New Grindr Common Stock issued as a matter of law upon the conversion thereof on the effective date of the Domestication. For further details, see “Domestication Proposal.”
You will also be asked to consider and vote
upon (1) a proposal to approve and adopt the proposed certificate of incorporation and bylaws of New Grindr (the “Organizational Documents Proposal”), (2) proposals
to approve, on a non-binding advisory basis, certain material differences between Tiga’s Amended and Restated Memorandum and Articles of Association (as may be amended from time to time, the “Cayman
Constitutional Documents”) and the proposed certificate of incorporation and bylaws of New Grindr, presented separately in accordance with the United States Securities and Exchange Commission requirements (the “Governance Proposal”), (3) a proposal to elect ten directors who, upon consummation of the Business
Combination, will be the directors of New Grindr (the “Director Election Proposal”), (4) a proposal to approve for the purposes of complying with the applicable provisions of Section 312.03 of the NYSE
Listed Company Manual, the issuance of New Grindr Common Stock to (a) the Forward Purchase Investors, pursuant to the Backstop Commitment and the Forward Purchase Commitment (each as defined in the accompanying proxy statement/prospectus) and
(b) Grindr’s members pursuant to the Merger Agreement (the “Stock Issuance Proposal") and (5) a proposal to approve the adjournment
of the extraordinary general meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies in the event that there are insufficient votes for the approval of one or more of the foregoing proposals at the
extraordinary general meeting (the “Adjournment Proposal”). The transactions contemplated by the Merger Agreement will be
consummated only if the Business Combination Proposal, the Domestication Proposal, the Organizational Documents Proposal and the Stock Issuance Proposal (collectively the “Condition Precedent Proposals”) are approved at the extraordinary general meeting. The Director Election Proposal is cross-conditioned on the approval of the others. The Adjournment Proposal is not conditioned upon the
approval of any other proposal set forth in the accompanying proxy statement/prospectus. The Governance Proposal is constituted of non-binding advisory proposals. Each of these proposals is more fully described in the accompanying proxy
statement/prospectus, which each shareholder is encouraged to read carefully and in its entirety.
The total number of shares of New Grindr Common Stock to be
received by Grindr’s members or reserved for issuance pursuant to the New Grindr Options into which Grindr options are converted will be equal to (x) the quotient obtained by dividing (i) the
sum of (a) the Company Valuation (as defined in the Merger Agreement) plus (b) the aggregate exercise price of all in-the-money Grindr options that are issued and outstanding immediately
prior to the Effective Time by (ii) $10.00; plus (y) the number of forward purchase shares and backstop shares received by Grindr or which Grindr is entitled to receive under the A&R
Forward Purchase Agreement (the “Aggregate Merger Stock Consideration”).
The total number of shares of New Grindr Common Stock to be
received by Grindr’s members or reserved for issuance pursuant to New Grindr Warrants into which Grindr Warrants are converted will be equal to and on the same terms as the forward purchase warrants and backstop warrants received by Grindr or
which Grindr is entitled to receive under the A&R Forward Purchase Agreement (the “Aggregate Merger Warrant Consideration”).
As a result of and upon the Closing, among other things, each
outstanding Grindr Series X Ordinary Unit will be cancelled upon the effective time of the First Merger in exchange for the right to receive a number of shares of New Grindr Common Stock equal to the quotient obtained by dividing (x) the number
of shares of New Grindr Common Stock constituting the Aggregate Merger Stock Consideration by (y) the aggregate number of Grindr Series X Ordinary Units that are outstanding on a fully diluted basis as of immediately prior to the Effective
Time, determined in accordance with the terms of the Merger Agreement.
In addition, all options and warrants to purchase Grindr Series X
Ordinary Units that are outstanding as of immediately prior to the First Merger, will be converted into options and warrants to purchase shares of New Grindr Common Stock, respectively.
In connection with the Business Combination, certain related
agreements have been, or will be, entered into on or prior to the date of the closing of the Business Combination (the “Closing Date”), including (i) the A&R Registration Rights Agreement, (ii) the
A&R Forward Purchase Agreement, (iii) the Unitholder Support Agreement and (iv) the Transaction Support Agreement. For additional information, see “Business Combination Proposal – Related Agreements” in
the accompanying proxy statement/prospectus.
Pursuant to the Cayman Constitutional Documents, any holder of
public shares (a “public shareholder”), excluding shares held by Tiga Sponsor LLC, a Delaware limited liability company and shareholder of Tiga (the “Sponsor”), and
certain related parties, may request that Tiga redeem all or a portion of such shareholder’s public shares for cash if the Business Combination is consummated. Holders of units must elect to separate the units into the underlying public shares
and warrants prior to exercising redemption rights with respect to the public shares. If holders hold their units in an account at a brokerage firm or bank, holders must notify their broker or bank that they elect to separate the units into the
underlying public shares and warrants, or if a holder holds units registered in its own name, the holder must contact the transfer agent directly and instruct it to do so. Public shareholders may elect to redeem
their public shares even if they vote “for” the Business Combination Proposal or any other Condition Precedent Proposal. If the Business Combination is not consummated, the public shares will be returned to the respective holder, broker
or bank. If the Business Combination is consummated, and if a public shareholder
properly exercises its right to redeem all or a portion of the public shares that it
holds and timely delivers its shares to Continental, Tiga’s transfer agent, New Grindr will redeem such public shares for a per-share price, payable in cash, equal to the pro rata portion of the trust account established at the consummation of
our initial public offering (the “trust account”), calculated as of two business days prior to the consummation of the Business Combination. For illustrative purposes, as of August 31, 2022, this would
have amounted to approximately $10.44 per issued and outstanding public share. If a public shareholder exercises its redemption rights in full, then it will be electing to exchange its public shares for cash and will no longer own public shares.
The redemption takes place following the Domestication and, accordingly, it is shares of New Grindr Common Stock that will be redeemed immediately after consummation of the Business Combination. See “Extraordinary
General Meeting of Tiga - Redemption Rights” in the accompanying proxy statement/prospectus for a detailed description of the procedures to be followed if you wish to redeem your public shares for cash.
Notwithstanding the foregoing, a public shareholder, together with
any affiliate of such public shareholder or any other person with whom such public shareholder is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended (“Exchange Act”)), will be restricted from redeeming its public shares with respect to more than an aggregate of 15% of the public shares. Accordingly, if a public shareholder, alone or acting in concert or as a group, seeks to
redeem more than 15% of the public shares, then any such shares in excess of that 15% limit would not be redeemed for cash.
The Sponsor and each director of Tiga have agreed to, among other
things, vote in favor of the Merger Agreement and the transactions contemplated thereby, and to waive their redemption rights in connection with the completion of the Business Combination with respect to any ordinary shares held by them. The
Class B Ordinary Shares held by the Sponsor and such other persons will be excluded from the pro rata calculation used to determine the per-share redemption price. As of the date of the accompanying proxy statement/prospectus, the Sponsor and
Tiga’s independent directors, collectively, own 20% of the issued and outstanding ordinary shares.
The Merger Agreement provides that the obligations of Grindr to
consummate the Mergers are conditioned on, among other things, that as of the Closing, the (a) amount of cash available in the trust account, after deducting the amount required to satisfy Tiga’s obligations to its shareholders (if any) that
exercise their rights to redeem their public shares pursuant to the Cayman Constitutional Documents (but prior to the payment of any (i) deferred underwriting commissions being held in the trust account and (ii) transaction expenses of Tiga
(including transaction expenses incurred, accrued, paid or payable by Tiga’s affiliates on Tiga’s behalf), plus (b) the Backstop Commitment Amount and the Forward Purchase Commitment Amount (each as defined in the accompanying proxy
statement/prospectus) actually received by Tiga prior to or substantially concurrently with the Closing (as defined herein), is equal to at least $100.0 million. This condition is for the sole benefit of Grindr. If such condition is not met, and
such condition is not waived under the terms of the Merger Agreement, then the Merger Agreement could terminate and the proposed Business Combination may not be consummated. The Merger Agreement also provides that the obligations of Tiga to
consummate the Mergers are conditioned on, among other things, that as of the Closing, the Backstop Commitment and the Forward Purchase Commitment shall have been consummated, where required. If such condition is not met, and such condition is
not waived under the terms of the Merger Agreement, then the Merger Agreement could terminate and the proposed Business Combination may not be consummated. In addition, pursuant to the Cayman Constitutional Documents, in no event will Tiga redeem
public shares in an amount that would cause New Grindr’s net tangible assets to be less than $5,000,001.
The Merger Agreement is also subject to the satisfaction or waiver
of certain other closing conditions as described in the accompanying proxy statement/prospectus. There can be no assurance that the parties to the Merger Agreement would waive any such provision of the Merger Agreement.
Tiga is providing the accompanying proxy statement/prospectus and
accompanying proxy card to Tiga’s shareholders in connection with the solicitation of proxies to be voted at the extraordinary general meeting and at any adjournments of the extraordinary general meeting. Information about the extraordinary
general meeting, the Business Combination and other related business to be considered by Tiga’s shareholders at the extraordinary general meeting is included in the accompanying proxy statement/prospectus.
Whether or not you plan to attend the
extraordinary general meeting, all of Tiga’s shareholders are urged to read the accompanying proxy statement/prospectus, including the Annexes and other documents referred to therein, carefully and in their entirety. You should also carefully
consider the risk factors described in “Risk Factors” beginning on page 53 of this proxy
statement/prospectus.
After careful consideration, the board of directors of Tiga has
unanimously approved the Business Combination and unanimously recommends that shareholders vote “FOR” the adoption of the Merger Agreement, and approval of the transactions contemplated thereby, including the Business Combination, and “FOR” all
other proposals presented to Tiga’s shareholders in the accompanying proxy statement/prospectus. When you consider the recommendation of these proposals by the board of directors of Tiga, you should keep in mind that certain of Tiga’s directors
and officers, including, without limitation, Messers Zage and Gupta, have interests in the Business Combination that may be in addition to or conflict with your interests as a shareholder. See the section
entitled “Business Combination Proposal—Interests of Certain Persons in the Business Combination” in the accompanying proxy
statement/prospectus for a further discussion of these considerations.
The approval of each of the Domestication Proposal and
Organizational Documents Proposal requires the affirmative vote of holders of at least two-thirds of the Tiga Common Stock represented in person or by proxy and entitled to vote thereon and who vote at the extraordinary general meeting. The
Business Combination Proposal, the Governance Proposal (which is constituted of non-binding advisory proposals), the Director Election Proposal, the Stock Issuance Proposal and the Adjournment Proposal require the affirmative vote of holders of a
majority of the ordinary shares represented in person or by proxy and entitled to vote thereon and who vote at the extraordinary general meeting.
Your vote is very important. Whether or not you plan to attend the extraordinary general meeting, please vote as soon as possible by following the instructions in the accompanying proxy statement/prospectus to make sure that your shares are
represented at the extraordinary general meeting. If you hold your shares in “street name” through a bank, broker or other nominee, you will need to follow the instructions provided to you by your bank, broker or other nominee to ensure that
your shares are represented and voted at the extraordinary general meeting. The transactions contemplated by the Merger Agreement will be consummated only if the Condition Precedent Proposals are approved at the extraordinary general meeting.
Each of the Condition Precedent Proposals is cross-conditioned on the approval of the others. The Director Election Proposal is conditioned on the approval of the Condition Precedent Proposals. The Adjournment Proposal is not conditioned upon
the approval of any other proposal set forth in the accompanying proxy statement/prospectus. The Governance Proposal is constituted of non-binding advisory proposals.
If you sign, date and return your proxy card without indicating how
you wish to vote, your proxy will be voted FOR each of the proposals presented at the extraordinary general meeting. If you fail to return your proxy card or fail to instruct your bank, broker or other nominee how to vote, and do not attend the
extraordinary general meeting in person, the effect will be, among other things, that your shares will not be counted for purposes of determining whether a quorum is present at the extraordinary general meeting and will not be voted. An
abstention will be counted towards the quorum requirement but will not count as a vote cast at the extraordinary general meeting. A broker non-vote will not be counted toward the quorum requirement and will not count as a vote cast at the
extraordinary general meeting. If you are a shareholder of record and you attend the extraordinary general meeting and wish to vote in person, you may withdraw your proxy and vote in person.
TO EXERCISE YOUR REDEMPTION RIGHTS, YOU MUST DEMAND IN WRITING THAT
YOUR PUBLIC SHARES ARE REDEEMED FOR A PRO RATA PORTION OF THE FUNDS HELD IN THE TRUST ACCOUNT AND TENDER YOUR SHARES TO TIGA’S TRANSFER AGENT AT LEAST TWO BUSINESS DAYS PRIOR TO THE VOTE AT THE GENERAL MEETING. YOU MAY TENDER YOUR SHARES BY
EITHER DELIVERING YOUR SHARE CERTIFICATE TO THE TRANSFER AGENT OR BY DELIVERING YOUR SHARES ELECTRONICALLY USING THE DEPOSITORY TRUST COMPANY'S DWAC (DEPOSIT WITHDRAWAL AT CUSTODIAN) SYSTEM. IF THE BUSINESS COMBINATION IS NOT COMPLETED, THEN
THESE SHARES WILL BE RETURNED TO YOU OR YOUR ACCOUNT. IF YOU HOLD THE SHARES IN STREET NAME, YOU WILL NEED TO INSTRUCT THE ACCOUNT EXECUTIVE AT YOUR BANK OR BROKER TO WITHDRAW THE SHARES FROM YOUR ACCOUNT IN ORDER TO EXERCISE YOUR REDEMPTION
RIGHTS.
On behalf of the Tiga Board, we would like to thank you for your
support and look forward to the successful completion of the Business Combination.
Sincerely,
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G. Raymond Zage, III
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Ashish Gupta
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Chairman and CEO
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Director and President
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE
SECURITIES REGULATORY AGENCY HAS APPROVED OR DISAPPROVED THE TRANSACTIONS DESCRIBED IN THE ACCOMPANYING PROXY STATEMENT/PROSPECTUS, PASSED UPON THE MERITS OR FAIRNESS OF THE BUSINESS COMBINATION OR RELATED TRANSACTIONS OR PASSED UPON THE ADEQUACY
OR ACCURACY OF THE DISCLOSURE IN THE ACCOMPANYING PROXY STATEMENT/PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY CONSTITUTES A CRIMINAL OFFENSE.
The accompanying proxy statement/prospectus is dated , 2022 and
is first being mailed to shareholders on or about , 2022.
TIGA ACQUISITION CORP.
A Cayman Islands Exempted Company
Ocean Financial Centre
Level 40, 10 Collyer Quay
Singapore 049315
NOTICE OF EXTRAORDINARY GENERAL MEETING
TO BE HELD ON , 2022
TO THE SHAREHOLDERS OF TIGA ACQUISITION CORP.:
NOTICE IS HEREBY GIVEN that an extraordinary general meeting (the “extraordinary general meeting”) of Tiga Acquisition Corp., a Cayman Islands exempted company (“Tiga”), will be held at , on 2022, virtually via live webcast at
. For purposes of the articles of association of Tiga, the physical place of the meeting will be Milbank LLP, 55 Hudson Yards, New York, NY 10001. You are cordially invited to attend the extraordinary general meeting, which will be held for
the following purposes:
Proposal No. 1 - The Business Combination Proposal - to consider and vote upon a proposal to approve by ordinary resolution and adopt the Agreement and Plan of Merger, dated as of May 9, 2022, by and among Tiga, Tiga
Merger Sub LLC (“Merger Sub I”) and Grindr Group LLC (“Grindr”), a copy of which is attached to this proxy statement/prospectus as Annex A, as amended by the First Amendment to Agreement and Plan of Merger, dated
as of October 5, 2022, by and among Tiga, Merger Sub I, Tiga Merger Sub II LLC (“Merger Sub II”) and Grindr, a copy
of which is attached to this proxy statement/prospectus as Annex A-1 (collectively, the “Merger Agreement”).
The Merger Agreement provides for, among other things, the merger of Tiga Merger Sub II LLC (“Merger Sub II”) with and into Grindr (the “First Merger”), with Grindr surviving the First
Merger as a wholly owned subsidiary of Tiga (Grindr, in its capacity as the surviving company of the First Merger, is sometimes referred to herein as the “Surviving Company”), and as promptly as practicable and as part of the same overall transaction as the First Merger, the merger of such Surviving Company with and into Merger
Sub II (the “Second Merger” and, together with the First Merger, the “Mergers”), with Merger Sub II being the surviving entity of the Second Merger, in accordance with the terms and subject to the conditions of the Merger Agreement
as more fully described elsewhere in this proxy statement/prospectus (the “Business Combination Proposal”);
Proposal No. 2 - The Domestication Proposal - to consider and vote upon a proposal to approve by special resolution, the change of Tiga’s jurisdiction of incorporation by deregistering as an exempted company in the Cayman Islands and continuing and
domesticating as a corporation incorporated under the laws of the State of Delaware (the “Domestication” and, together with the Mergers, the
“Business Combination”) (the “Domestication Proposal”);
Proposal No. 3 - The Organizational Documents Proposal - to consider and vote upon a proposal to approve by special resolution and adopt the proposed new certificate of incorporation (“Proposed Certificate of
Incorporation”) and the proposed new bylaws (“Proposed Bylaws”) of Tiga Acquisition Corp., a
corporation incorporated in the State of Delaware, and the filing with and acceptance by the Secretary of State of Delaware of the certificate of domestication in accordance with Section 388 of the Delaware General Corporation Law (the “DGCL”), which will be renamed “Grindr Inc.” in connection with the Business Combination (Tiga after the Domestication, including after such change of
name, is referred to herein as “New Grindr”) (the “Organizational Documents
Proposal”);
Proposal No. 4 - The Governance Proposal - to consider and vote upon on a proposal by ordinary resolution, on a non-binding advisory basis, certain material differences between Tiga’s Amended and Restated Memorandum and Articles of Association (as may be
amended from time to time, the “Cayman Constitutional Documents”) and the Proposed Certificate of Incorporation and Proposed Bylaws,
presented separately in accordance with the United States Securities and Exchange Commission requirements (the “Governance Proposal”);
Proposal No. 5 - The Director Election Proposal - to consider and vote upon a proposal by ordinary resolution of the holders of Class B ordinary shares to elect ten directors who, upon consummation of the Business Combination, will be the directors of New Grindr
(the “Director Elections Proposal”);
Proposal No. 6 - The Stock Issuance Proposal - to consider and vote upon a proposal to approve by ordinary resolution, for the purposes of complying with the applicable provisions of Section 312.03 of the NYSE Listed Company Manual, the issuance of New Grindr
Common Stock to (a) the Tiga Sponsor LLC pursuant to the Backstop Commitment and the Forward Purchase Commitment and (b) Grindr’s members pursuant to the Merger Agreement (the “Stock
Issuance Proposal”); and
Proposal No. 7 - The Adjournment Proposal - to consider and vote upon a proposal to approve the adjournment of the extraordinary general meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies in the event that there are insufficient
votes for the approval of one or more proposals at the extraordinary general meeting (the “Adjournment Proposal”).
Each of Proposal No. 1 through 3 and 6 (the “Condition Precedent Proposals”) are cross-conditioned on the approval of the others. Proposal No. 5 is conditioned on the approval of the Condition Precedent Proposals. The Adjournment Proposal is not
conditioned upon the approval of any other proposal set forth in this proxy statement/prospectus. Proposal No. 4 is constituted of non-binding advisory proposals.
These items of business are described in this proxy
statement/prospectus, which we encourage you to read carefully and in its entirety before voting.
Only holders of record of ordinary shares at the close of business
on , 2022 are entitled to notice of and to vote and have their votes counted at the extraordinary general meeting and any adjournment of the extraordinary general meeting.
This proxy statement/prospectus and accompanying proxy card is
being provided to Tiga’s shareholders in connection with the solicitation of proxies to be voted at the extraordinary general meeting and at any adjournment of the extraordinary general meeting. Whether or not you plan to virtually attend the
extraordinary general meeting, all of Tiga 's shareholders are urged to read this proxy statement/prospectus, including the Annexes and the documents referred to herein, carefully and in their entirety. You should also carefully consider the
risk factors described in “Risk Factors” beginning on page 53 of this proxy statement/prospectus.
After careful consideration, the board of
directors of Tiga has unanimously approved the Business Combination and unanimously recommends that shareholders vote “FOR” the adoption of the Merger Agreement, and approval of the transactions contemplated thereby, including the Business
Combination, and “FOR” all other proposals presented to Tiga’s shareholders in this proxy statement/prospectus. When you consider the recommendation of these proposals by the board of directors of Tiga, you should keep in mind that certain of
Tiga’s directors and officers, including without limitation, Messers. Zage and Gupta have interests in the Business Combination that may be in addition to or conflict with your interests as a shareholder. See the section entitled “Business Combination Proposal—Interests of Certain Persons in the Business Combination” in this proxy statement/prospectus for a further discussion of these considerations.
Pursuant to the Cayman Constitutional Documents, a holder of public
shares (as defined herein) (a “public shareholder”) may request of Tiga that New Grindr redeem all or a portion of its public shares for cash if the Business Combination is consummated. As a holder of
public shares, you will be entitled to receive cash for any public shares to be redeemed only if you:
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(i)
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(a) hold public shares, or (b) if you hold public shares through units, you elect to separate your units into the underlying
public shares and public warrants prior to exercising your redemption rights with respect to the public shares;
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(ii)
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submit a written request to Continental Stock Transfer & Trust Company (“Continental”), Tiga’s transfer agent, that New
Grindr redeem all or a portion of your public shares for cash; and
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(iii)
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deliver your public shares to Continental, Tiga’s transfer agent, physically or electronically through The Depository Trust
Company.
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Holders must complete the procedures for electing
to redeem their public shares in the manner described above prior to 5:00 p.m., Eastern Time, on , 2022 (two business days before the extraordinary general meeting) in order for their shares to be redeemed.
Holders of units must elect to separate the units into the
underlying public shares and warrants prior to exercising redemption rights with respect to the public shares. If holders hold their units in an account at a brokerage firm or
bank, holders must notify their broker or bank that they elect to separate the units
into the underlying public shares and warrants, or if a holder holds units registered in its own name, the holder must contact Continental, Tiga’s transfer agent, directly and instruct them to do so. Public shareholders may elect to redeem public
shares regardless of how they vote in respect of the Business Combination Proposal. If the Business Combination is not consummated, the public shares will be returned to the respective holder, broker or bank.
If the Business Combination is consummated, and if a public
shareholder properly exercises its right to redeem all or a portion of the public shares that it holds and timely delivers its shares to Continental, Tiga’s transfer agent, New Grindr will redeem such public shares for a per-share price, payable
in cash, equal to the pro rata portion of the trust account established at the consummation of our initial public offering (the “trust account”), calculated as of two business days prior to the
consummation of the Business Combination. For illustrative purposes, as of August 31, 2022, this would have amounted to approximately $10.44 per issued and outstanding public share. If a public shareholder exercises its redemption rights in full,
then it will be electing to exchange its public shares for cash and will no longer own public shares. The redemption takes place following the Domestication and, accordingly, it is shares of New Grindr Common Stock that will be redeemed promptly
after consummation of the Business Combination. See “Extraordinary General Meeting of Tiga—Redemption Rights” in this proxy statement/prospectus for a detailed description of the procedures to be
followed if you wish to redeem your public shares for cash.
Notwithstanding the foregoing, a public shareholder, together with
any affiliate of such public shareholder or any other person with whom such public shareholder is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Exchange Act), will be restricted from redeeming its public shares with
respect to more than an aggregate of 15% of the public shares. Accordingly, if a public shareholder, alone or acting in concert or as a group, seeks to redeem more than 15% of the public shares, then any such shares in excess of that 15% limit
would not be redeemed for cash.
Tiga Sponsor LLC, a Delaware limited liability company and
shareholder of Tiga (the “Sponsor”), and each director of Tiga have agreed to, among other things, vote in favor of the Merger Agreement and the transactions contemplated thereby, and to waive their
redemption rights with respect to their founder shares, forward purchase shares and backstop shares, if any, in connection with the completion of the Business Combination. The Class B Ordinary Shares held by the Sponsor and such other persons
will be excluded from the pro rata calculation used to determine the per-share redemption price. As of the date of the accompanying proxy statement/prospectus, the Sponsor and Tiga’s independent directors, collectively, own 20% of the issued and
outstanding ordinary shares.
The Merger Agreement provides that the obligations of Grindr to
consummate the Mergers are conditioned on, among other things, that as of the Closing, the (a) amount of cash available in the trust account, after deducting the amount required to satisfy Tiga’s obligations to its shareholders (if any) that
exercise their rights to redeem their public shares pursuant to the Cayman Constitutional Documents (but prior to the payment of any (i) deferred underwriting commissions being held in the trust account and (ii) transaction expenses of Tiga
(including transaction expenses incurred, accrued, paid or payable by Tiga’s affiliates on Tiga’s behalf), plus (b) the Backstop Commitment Amount and the Forward Purchase Commitment Amount (each as defined in the accompanying proxy
statement/prospectus) actually received by Tiga prior to or substantially concurrently with the Closing (as defined herein), is equal to at least $100.0 million. This condition is for the sole benefit of Grindr. If such condition is not met, and
such condition is not waived under the terms of the Merger Agreement, then the Merger Agreement could terminate and the proposed Business Combination may not be consummated. The Merger Agreement also provides that the obligations of Tiga to
consummate the Mergers are conditioned on, among other things, that as of the Closing, the Backstop Commitment and the Forward Purchase Commitment shall have been consummated. If such condition is not met, and such condition is not waived under
the terms of the Merger Agreement, then the Merger Agreement could terminate and the proposed Business Combination may not be consummated. In addition, pursuant to the Cayman Constitutional Documents, in no event will Tiga redeem public shares in
an amount that would cause New Grindr’s net tangible assets to be less than $5,000,001.
The Merger Agreement is also subject to the satisfaction or waiver
of certain other closing conditions as described in the accompanying proxy statement/prospectus. There can be no assurance that the parties to the Merger Agreement would waive any such provision of the Merger Agreement.
The approval of each of the Domestication Proposal and
Organizational Documents Proposals requires the affirmative vote of holders of at least two-thirds of the ordinary shares represented in person or by proxy and entitled to vote thereon and who vote at the extraordinary general meeting. The
Business Combination Proposal, the
Governance Proposal (which is constituted of non-binding advisory proposals), the
Director Election Proposal, the Stock Issuance Proposal and the Adjournment Proposal require the affirmative vote of holders of a majority of the ordinary shares represented in person or by proxy and entitled to vote thereon and who vote at the
extraordinary general meeting.
Your vote is very important.
Whether or not you plan to attend the extraordinary general meeting, please vote as soon as possible by following the instructions in the accompanying proxy statement/prospectus to make sure that your shares are represented at the extraordinary
general meeting. If you hold your shares in “street name” through a bank, broker or other nominee, you will need to follow the instructions provided to you by your bank, broker or other nominee to ensure that your shares are represented and voted
at the extraordinary general meeting. The transactions contemplated by the Merger Agreement will be consummated only if the Condition Precedent Proposals are approved at the extraordinary general meeting. Each of the Condition Precedent Proposals
is cross-conditioned on the approval of the others. The Director Election Proposal is conditioned on the approval of the Condition Precedent Proposals. The Adjournment Proposal is not conditioned upon the approval of any other proposal set forth
in the accompanying proxy statement/prospectus. The Governance Proposal is constituted of non-binding advisory proposals.
If you sign, date and return your proxy card without indicating how
you wish to vote, your proxy will be voted FOR each of the proposals presented at the extraordinary general meeting. If you fail to return your proxy card or fail to instruct your bank, broker or other nominee how to vote, and do not virtually
attend the extraordinary general meeting in person, the effect will be, among other things, that your shares will not be counted for purposes of determining whether a quorum is present at the extraordinary general meeting and will not be voted.
An abstention will be counted towards the quorum requirement but will not count as a vote cast at the extraordinary general meeting. A broker non-vote will not be counted toward the quorum requirement and will not count as a vote cast at the
extraordinary general meeting. If you are a shareholder of record and you virtually attend the extraordinary general meeting and wish to vote virtually, you may withdraw your proxy and vote virtually.
Your attention is directed to the remainder of the proxy
statement/prospectus following this notice (including the Annexes and other documents referred to herein) for a more complete description of the proposed Business Combination and related transactions and each of the proposals. You are encouraged
to read this proxy statement/prospectus carefully and in its entirety, including the Annexes and other documents referred to herein.
If you have any questions or need assistance voting your ordinary
shares, please contact Morrow Sodali, our proxy solicitor, by calling (800) 662-5200 (toll-free), or banks and brokers can call collect at (203) 658-9400 or by emailing tinv.info@investor.morrowsodali.com.
Thank you for your participation. We look forward to your continued
support.
By Order of the Board of Directors of Tiga Acquisition Corp., ,
2022
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G. Raymond Zage, III
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Ashish Gupta
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Chairman and CEO
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Director and President
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TO EXERCISE YOUR REDEMPTION RIGHTS, YOU MUST DEMAND IN WRITING THAT
YOUR PUBLIC SHARES ARE REDEEMED FOR A PRO RATA PORTION OF THE FUNDS HELD IN THE TRUST ACCOUNT AND TENDER YOUR SHARES TO TIGA’S TRANSFER AGENT AT LEAST TWO BUSINESS DAYS PRIOR TO THE VOTE AT THE EXTRAORDINARY GENERAL MEETING. YOU MAY TENDER YOUR
SHARES BY EITHER DELIVERING YOUR SHARE CERTIFICATE TO THE TRANSFER AGENT OR BY DELIVERING YOUR SHARES ELECTRONICALLY USING THE DEPOSITORY TRUST COMPANY'S DWAC (DEPOSIT WITHDRAWAL AT CUSTODIAN) SYSTEM. IF THE BUSINESS COMBINATION IS NOT
CONSUMMATED, THEN THESE SHARES WILL BE RETURNED TO YOU OR YOUR ACCOUNT. IF YOU HOLD THE SHARES IN STREET NAME, YOU WILL NEED TO INSTRUCT THE ACCOUNT EXECUTIVE AT YOUR BANK OR BROKER TO WITHDRAW THE SHARES FROM YOUR ACCOUNT IN ORDER TO EXERCISE
YOUR REDEMPTION RIGHTS.
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This proxy statement/prospectus includes estimates regarding market
and industry data and forecasts and projections, which are based on publicly available information, industry publications and surveys, reports from government agencies, reports by market participants and research firms and other independent
sources, as well as our own estimates, forecasts and projections based on our management’s knowledge of and experience in the market sectors in which we compete. The numbers of MAUs presented in this proxy statement/prospectus are based on
internal company data, and we use these numbers in managing our business. We believe that these numbers are reasonable estimates, and we take measures to improve their accuracy. See “Risk Factors—Risks Related to
Grindr’s Business—Risks Related to Grindr’s Brand, Products and Services, and Operations—We rely on certain key operating metrics that have not been independently verified to manage our business, we may periodically change our metrics, and real
or perceived inaccuracies in such metrics may harm our reputation and negatively affect our business.” In addition, projections, assumptions and estimates of the future performance of the industry in which we operate and our future
performance are necessarily subject to uncertainty and risk due a variety of factors, including those described in the section entitled “Risk Factors.”
The sources of certain statistical data, estimates and forecasts
contained in this proxy statement/prospectus include the following independent industry publications or reports:
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Global Social Networking Applications Industry, Independent Market Research by Frost & Sullivan, March 2022, which was
commissioned by Grindr in 2021 and 2022 (the “Frost & Sullivan Study”).
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•
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ILGA World, State-Sponsored Homophobia Global Legislation Overview Update Report, 2022 (the “ILGA
World Report”).
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Morning Consult April–May 2022 Q1 Survey of 1000 GBTQ US Adults, commissioned by Grindr (the “Morning
Consult Survey”).
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Certain monetary amounts, percentages and other figures included in
this proxy statement/prospectus have been subject to rounding adjustments. Accordingly, figures shown as totals in certain tables or charts may not be the arithmetic aggregation of the figures that precede them, and figures expressed as
percentages in the text may not total 100% or, as applicable, when aggregated may not be the arithmetic aggregation of the percentages that precede them.
This proxy statement/prospectus also contains trademarks, service
marks, copyrights and trade names of other companies, which are the property of their respective owners. We do not intend our use or display of other companies’ trademarks, copyrights or trade names to imply a relationship with, or endorsement or
sponsorship of us by any other companies. Solely for convenience, our trademarks and trade names referred to in this proxy statement/prospectus may appear without the ® or TM symbols, but such references are not intended to indicate,
in any way, that we will not assert, to the fullest extent under applicable law, our rights or the right of the applicable licensor to these trademarks and trade names.
1
Unless otherwise stated in this proxy statement/prospectus or the
context otherwise requires, references to:
“A&R Forward Purchase
Agreement” are to the second amended and restated forward purchase agreement entered into as of May 9, 2022, by and between Tiga and the Sponsor, attached hereto as Annex D;
“A&R Registration Rights Agreement” are to that certain amended and restated registration rights agreement, to be entered into at Closing by and among New Grindr, the Sponsor, the independent directors of Tiga and
certain former members of Grindr, in the form attached hereto as Annex E;
“Aggregate Merger Stock
Consideration” are to a number of shares of New Grindr Common Stock equal to (x) the quotient obtained by dividing (i) the sum of (a) the Grindr Valuation plus (b)
the aggregate exercise price of all in-the-money Grindr Options that are issued and outstanding immediately prior to the Effective Time by (ii) $10.00; plus (y) the number of forward
purchase shares and backstop shares received by Grindr or which Grindr is entitled to receive under the A&R Forward Purchase Agreement.
“Aggregate Merger
Warrant Consideration” are to a number of New Grindr Warrants equal to and on the same terms as the forward purchase warrants and backstop warrants received by Grindr or which Grindr is entitled to receive under the A&R
Forward Purchase Agreement.
“amended and restated memorandum
and articles of association” are to Tiga’s amended and restated memorandum and articles of association adopted on July 27, 2020;
“Adjusted ARPPU”
are to the Adjusted Average Direct Revenue per Paying User, which is calculated using Adjusted Direct Revenue (excluding purchase accounting adjustments) in any measurement period, divided by Paying Users in such a period divided by the number
of months in the period;
“ARPU” are to Average Total
Revenue per User, which is calculated based on Total Revenue in any measurement period, divided by our MAUs in such a period divided by the number of months in the period;
“ARPPU” are to the Average
Direct Revenue per Paying User, which is calculated based on Direct Revenue in any measurement period, divided by Paying Users in such a period divided by the number of months in the period;
“Available Closing Tiga Cash”
are to an amount equal to (i) all amounts in the trust account (after reduction for the aggregate amount of payments required to be made in connection with the Tiga Shareholder Redemption), plus (ii) the Forward Purchase Commitment Amount, the
Backstop Subscription Amount and the PIPE Investment, if any (without, for the avoidance of doubt, taking into account any transaction fees, costs and expenses paid or required to be paid in connection with the Business Combination, the Forward
Purchase Commitment, the Backstop Commitment or the PIPE Investment);
“Backstop Commitment” are
to the allocation of up to $50,000,000 of capital of the Forward Purchase Investors to subscribe for up to 5,000,000 backstop shares and up to 2,500,000 backstop warrants, in one or multiple private placements to close prior to or concurrently
with the Closing, for the Backstop Subscription Amount pursuant to the A&R Forward Purchase Agreement;
“backstop shares” are to
such number of shares of New Grindr Common Stock up to 5,000,000 New Grindr Common Stock to be subscribed by the Forward Purchase Investors pursuant to the Backstop Commitment on the terms of the A&R Forward Purchase Agreement;
“Backstop Subscription Amount”
are to the aggregate purchase price actually received by Tiga prior to or substantially concurrently with the closing of the Backstop Commitment;
“backstop warrants” are to
such number of New Grindr Warrants up to 2,500,000 New Grindr Warrants to be subscribed by the Forward Purchase Investors pursuant to the Backstop Commitment on the terms of the A&R Forward Purchase Agreement;
“Business Combination” are to
the Domestication together with the Merger;
“Closing” are to the
consummation of the Business Combination;
“Closing Date” are to the date
on which the Mergers are consummated;
“Code” are to the Internal
Revenue Code of 1986, as amended;
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“Companies Act” are to the
Companies Act (As Revised) of the Cayman Islands;
“completion window” are to
the period (ending on November 27, 2022) following the completion of the initial public offering at the end of which, if Tiga has not completed an initial business combination, it will redeem the public shares, at a per-share price, payable in
cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account and not previously released to us to pay our taxes, if any (less up to $100,000 of interest to pay
dissolution expenses) divided by the number of the then-outstanding public shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any);
“Company,” “we,” “us,” and “our” are to Tiga prior to its domestication as a corporation in the State of Delaware and to New Grindr after
its domestication as a corporation incorporated in the State of Delaware, including after its change of name to “Grindr Inc.”;
“Condition Precedent Proposals”
are to the Business Combination Proposal, the Domestication Proposal, the Organizational Documents Proposals and the Stock Issuance Proposal, collectively;
“COVID-19” are to
SARS-CoV-2 or COVID-19, any evolution or variations existing as of or following the date of the Merger Agreement, or any epidemics, pandemics or disease outbreaks;
“COVID-19 Measures” are to
any quarantine, “shelter in place,” “stay at home,” workforce reduction, social distancing, shut down, closure, sequester or any other law, government order, action, directive, pronouncement, guidelines or recommendations by any governmental
authority (including the Centers for Disease Control and Prevention and the World Health Organization) in connection with, related to or in response to COVID-19, including, but not limited to, the Coronavirus Aid, Relief, and Economic Security
Act and the Families First Coronavirus Response Act, or any changes thereto;
“Credit Agreement” are to
the credit agreement dated as of June 10, 2020 by and among Grindr GAP LLC, Grindr Capital LLC, Fortress Credit Corp. and other parties thereto, as amended by Amendment No. 1 to the Credit Agreement, dated as of February 25, 2021, and as further
amended by Amendment No. 2 to the Credit Agreement, dated as of June 13, 2022;
“DGCL” are to the Delaware
General Corporation Law, as amended;
“Effective Time” are to the
time at which the First Merger shall become effective in accordance with the terms of the Merger Agreement;
“Exchange Act” are to the
Securities Exchange Act of 1934, as amended;
“extraordinary general meeting”
are to the extraordinary general meeting of Tiga duly called by the Tiga Board and held for the purpose of considering and voting upon the proposals set forth in this proxy statement/prospectus;
“First Merger” are to the
merger of Merger Sub I with and into Grindr, with Grindr surviving the merger as a wholly owned subsidiary of Tiga;
“founder shares” are to
Tiga Class B ordinary shares, and shares of New Grindr Common Stock to be issued to the Sponsor and certain related parties in respect thereof in connection with the Domestication;
“Forward Purchase Commitment”
are to the purchase, on a private placement basis, of the forward purchase shares and the forward purchase warrants by the Forward Purchase Investors for the Forward Purchase Commitment Amount pursuant to the A&R Forward Purchase Agreement;
“Forward Purchase Commitment
Amount” are to the aggregate purchase price of $50,000,000 received by Tiga prior to or substantially concurrently with the closing of the Forward Purchase Commitment;
“Forward Purchase
Investors” are to those certain investors participating in the Backstop Commitment and/or the Forward Purchase Commitment pursuant to the Forward Purchase Agreement;
“forward purchase shares”
are to the 5,000,000 shares of New Grindr Common Stock to be purchased, on a private placement basis, by the Forward Purchase Investors pursuant to the A&R Forward Purchase Agreement;
“forward purchase warrants”
are to the 2,500,000 New Grindr Warrants to be purchased, on a private placement basis, by the Forward Purchase Investors pursuant to the A&R Forward Purchase Agreement;
3
“GAAP” are to generally
accepted accounting principles in the United States;
“Grindr” are to Grindr Group
LLC prior to the Business Combination;
“Grindr App” or “s” are to Grindr’s mobile-based applications;
“Grindr Applications” are
to Grindr’s applications through which Grindr currently, or may in the future may provide, its products and services, whether offered via mobile applications or web applications/clients;
“Grindr Awards” are to
Grindr Options;
“Grindr Distribution Amount”
are to the actual amount of any cash dividend or other dividend or distribution in respect of Grindr Units or equity interests Grindr makes, declares, sets aside, establishes a record date for or makes a payment date for between the date hereof
and the Effective Time, provided that the amount of any such dividend or distribution may not exceed the Permitted Distribution Amount;
“Grindr Group LLC Agreement”
are to the amended and restated limited liability company agreement of Grindr Group LLC dated December 14, 2020;
“Grindr Options” are to
options to purchase Grindr Series X Ordinary Units;
“Grindr Series X Ordinary Units”
are to Grindr Series X ordinary units;
“Grindr Series Y Preferred Units”
are to Grindr Series Y preferred units;
“Grindr Members” are to
members of Grindr immediately prior to the consummation of the Business Combination;
“Grindr Units” are to Grindr
Series X Ordinary Units and Grindr Series Y Preferred Units;
“Grindr Valuation” are to
$1,584,000,000 plus the amount, if any, by which the Permitted Distribution Amount exceeds the Grindr Distribution Amount;
“Grindr Warrants” are to
warrants (excluding Grindr Options) to purchase Grindr Units;
“HSR Act” are to the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended;
“initial public offering”
are to Tiga’s initial public offering that was consummated on November 27, 2020;
“initial shareholders” are
to the Tiga’s Sponsor and independent directors as of November 27, 2020;
“IPO registration statement”
are to the Registration Statement on Form S-1 (333-249853) filed by Tiga in connection with its initial public offering, which became effective on November 23, 2020;
“IRS” are to the U.S.
Internal Revenue Service;
“Investment Company Act” are
to the Investment Company Act of 1940, as amended;
“JOBS Act” are to the
Jumpstart Our Business Startups Act of 2012;
“Joinder and
Assignment Agreement to A&R Forward Purchase Agreement” are to that certain Joinder and Assignment Agreement to A&R Forward Purchase Agreement to be entered into by and among, San Vicente Parent LLC, Tiga and the
Sponsor, the form of which is attached hereto as Annex D-1;
“MAUs”, or Monthly Active
Users, are unique devices that have demonstrated activity on the Grindr App over the course of the specified period. Activity on the app is defined as opening the app, chatting with another user, or viewing the cascade of other users. Grindr also
excludes devices where all linked profiles have been banned for spam. We calculate MAUs as a monthly average, by counting number of MAUs in each month and then dividing by the number of months in the relevant period;
“Mergers” are to the First
Merger and Second Merger;
“Merger Agreement”
are to that certain Agreement and Plan of Merger, dated as of May 9, 2022, by and among Tiga, Merger Sub I and Grindr, a copy of which is attached hereto as Annex A, as amended by that certain First Amendment to Agreement and Plan of Merger,
dated as of October 5, 2022, by and among Tiga, Merger Sub I, Merger Sub II and Grindr, a copy of which is attached hereto as Annex A-1;
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“Merger Agreement
Amendment No. 1” are to that certain First Amendment to Agreement and Plan of Merger, dated as of October 5, 2022, by and among Tiga, Merger Sub I, Merger Sub II and Grindr, a copy of which is attached hereto as Annex A-1;
“Merger Sub I” are to Tiga
Merger Sub LLC;
“Merger Sub II” are to Tiga
Merger Sub II LLC;
“Minimum Cash Condition”
are to the condition that the obligations of Grindr to consummate the Mergers are conditioned on, among other things, that as of the Closing, after distribution of the funds in the Trust Account and deducting all amounts to be paid pursuant to
the exercise of redemption rights of public shareholders and after giving effect to (i) the Backstop Subscription Amount and the Forward Purchase Commitment Amount actually received by Tiga at or prior to the Closing Date plus (ii) any PIPE
Investment Amount actually received by Tiga at or prior to the Closing Date, is equal to or greater than $100,000,000, Tiga having cash on hand equal to or in excess of $100,000,000 (without, for the avoidance of doubt, taking into account any
transaction fees, costs and expenses paid or required to be paid in connection with the Business Combination, the Backstop Commitment, the Backstop Commitment or the PIPE Investment);
“New Grindr” are to Tiga
after the Domestication and its name change from Tiga Acquisition Corp. to “Grindr Inc.”;
“New Grindr Board” are to the
board of directors of New Grindr;
“New Grindr Common Stock” are
to shares of common stock of New Grindr, par value $0.0001 per share;
“New Grindr Options” are to
options to purchase shares of New Grindr Common Stock;
“New Grindr Warrants” are
to warrants to purchase one (1) share of New Grindr Common Stock at an exercise price of eleven Dollars fifty cents ($11.50) issued as a matter of law upon conversion of the Tiga Warrants at the time of the Domestication;
“NYSE” are to The New York
Stock Exchange;
“ordinary shares” are to
the Tiga Class A ordinary shares and the Tiga Class B ordinary shares, collectively;
“Paying Users” are to
users that have purchased or renewed a Grindr subscription and/or purchased premium add-ons on the Grindr App. We calculate Paying Users as a monthly average, by counting the number of Paying Users in each month and then dividing by the number of
months in the relevant measurement period;
“Permitted Distribution Amount”
are to $370,000,000;
“private placement shares” are
to Tiga Class A ordinary shares underlying the private placement warrants;
“private placement warrants”
are to Tiga’s warrants sold to the Sponsor simultaneously with the consummation of Tiga’s initial public offering, as well as in connection with the extension of the time period for Tiga to consummate a business combination;
“Proposed Bylaws” are to
the proposed bylaws of New Grindr upon the effective date of the Domestication attached to this proxy statement/prospectus as Annex H;
“Proposed Certificate of
Incorporation” are to the proposed certificate of incorporation of New Grindr upon the effective date of the Domestication attached to this proxy statement/prospectus as Annex G;
“Proposed Organizational Documents”
are to the Proposed Certificate of Incorporation and the Proposed Bylaws;
“public shares” are to Tiga
Class A ordinary shares sold as part of the units in the initial public offering (whether they were purchased in the initial public offering or thereafter in the open market);
“public shareholders” are
to the holders of public shares, including the Sponsor and Tiga’s officers and directors to the extent the Sponsor and Tiga’s officers or directors purchase public shares, provided that each of their status as a “public shareholder” shall only
exist with respect to such public shares;
“public warrants” are to
warrants sold as part of the units in the initial public offering (whether they were purchased in the initial public offering or thereafter in the open market);
“SEC” are to the United States
Securities and Exchange Commission;
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“Second Merger” are to
the merger of Grindr with and into Merger Sub II following the First Merger, with Merger Sub II surviving the merger as a wholly owned subsidiary of Tiga;
“Sponsor” are to Tiga
Sponsor LLC, a Delaware limited liability company;
“SV Investments”
are to San Vicente Investments, Inc. Immediately prior to the Closing, SV Investments may convert into a limited liability company in the State of Delaware with the name San Vicente Investments LLC;
“Surviving Company” are to Grindr in its capacity as the surviving company of the First Merger;
“Tiga” are to Tiga
Acquisition Corp. prior to its domestication as a corporation in the State of Delaware;
“Tiga Board” are to the
board of directors of Tiga;
“Tiga Class A ordinary shares”
are to Tiga’s Class A ordinary shares, par value $0.0001 per share;
“Tiga Class B ordinary shares”
are to Tiga’s Class B ordinary shares, par value $0.0001 per share;
“Tiga Warrants” are to
Tiga’s private placement warrants and public warrants;
“Transaction Support Agreement”
are to that certain letter agreement, dated as of May 9, 2022, by and between Grindr, Tiga, Merger Sub I, the Sponsor and the independent directors of Tiga, a copy of which is attached hereto as Annex B;
“Treasury Regulations” are
to the regulations promulgated under the Code;
“trust account” are to the
trust account of Tiga that holds the proceeds from the initial public offering;
“Trust Agreement” are to
the Investment Management Trust Agreement, effective as of November 23, 2020, by and between Tiga and Continental Stock Transfer & Trust Company, as trustee;
“units” are to each issued
and outstanding unit of Tiga prior to the Domestication;
“Unitholder Support Agreement”
are to that certain letter agreement, dated as of May 9, 2022 , by and between Grindr, Tiga, Merger Sub I, the Sponsor and certain unitholders of Grindr, substantially in the form attached hereto as Annex C; and
“Warrant Agreement” are to
that certain Warrant Agreement, dated as of November 23, 2020, by and between Tiga and Continental Stock Transfer & Trust Company.
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This summary term sheet, together with the sections entitled “Questions and Answers About the Proposals” and “Summary of the Proxy Statement/Prospectus,” summarizes certain information contained in this proxy statement/prospectus,
but does not contain all of the information that is important to you. You should read carefully this entire proxy statement/prospectus, including the attached Annexes, for a more complete understanding of the matters to be considered at the
extraordinary general meeting. In addition, for definitions used commonly throughout this proxy statement/prospectus, including this summary term sheet, please see the section entitled “Frequently Used Terms.”
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Tiga Acquisition Corp., a Cayman Islands exempted company, which we refer to as “Tiga,”
“we,” “us,” or “our,” is a special purpose acquisition company incorporated for the purpose of effecting a merger,
share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses or entities.
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On November 27, 2020, we consummated the initial public offering of 27,600,000 units, including the issuance of 3,600,000 units
as a result of the underwriters’ exercise of their over-allotment option in full. Each unit consists of one Class A ordinary share and one-half of one redeemable warrant. Each warrant entitles the holder thereof to purchase one Class A
ordinary share at a price of $11.50 per share. The units were sold at an offering price of $10.00 per unit, generating gross proceeds, before expenses, of $276,000,000.
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Prior to the consummation of the initial public offering, on July 27, 2020, the Sponsor received 5,750,000 founder shares in
exchange for a capital contribution of $25,000, or $0.004 per share. On November 23, 2020, we effected a 1,150,000 share dividend, resulting in Tiga’s initial shareholders holding an aggregate of 6,900,000 founder shares. All share and
per-share amounts have been retroactively restated to reflect the share dividend. On November 23, 2020, the Sponsor transferred 20,000 founder shares to each of David Ryan, Carman Wong and Ben Falloon for the same per-share price
initially paid by the Sponsor, resulting in the Sponsor holding 6,840,000 founder shares. In connection with the underwriters’ exercise of their over-allotment option in full prior to the closing of the initial public offering, on
November 27, 2020, no founder shares were surrendered.
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Simultaneously with the consummation of the initial public offering, we consummated the private sale of an aggregate of
10,280,000 warrants, each exercisable to purchase one Class A ordinary share at $11.50 per share, to the Sponsor at the time of the initial public offering at a price of $1.00 per warrant, generating gross proceeds, before expenses, of
approximately $10,280,000 (the “initial private placement”). The warrants sold in the initial private placement, or the initial private placement warrants, are identical to the warrants included in
the units sold in the initial public offering, except that, so long as they are held by their initial purchasers or their permitted transferees, (i) they will not be redeemable by Tiga, (ii) they (including the Class A ordinary shares
issuable upon exercise of these warrants) may not, subject to certain limited exceptions, be transferred, assigned or sold until 30 days after Tiga completes its initial business combination, (iii) they may be exercised by the holders on
a cashless basis and (iv) they will be entitled to registration rights. Upon the closing of the initial public offering and the initial private placement, $278,760,000 was placed in a trust account with Continental Stock Transfer &
Trust Company acting as trustee, and were subsequently invested only in U.S. government securities within the meaning of Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “Investment
Company Act”) with a maturity of 185 days or less or in money market funds investing solely in United States Treasuries and meeting certain conditions under Rule 2a-7 under the Investment Company Act, until the earlier of: (i)
the completion of an initial business combination and (ii) Tiga’s redemption of 100% of the outstanding public shares upon its failure to consummate a business combination within the completion window.
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After the payment of underwriting discounts and commissions (excluding the deferred portion of $9,660,000 in underwriting
discounts and commissions, which amount will be payable upon consummation of Tiga’s initial business combination if consummated) and approximately $556,649 in expenses relating to the initial public offering, $1,843,237 of the net
proceeds of the initial public offering and initial private placement was not deposited into the trust account and was retained by us for working capital purposes. The net proceeds deposited into the trust account remain on deposit in the
trust account earning interest. Our management has broad discretion with respect to the specific application of such net proceeds, although substantially all of the net proceeds are intended to be applied generally toward consummating a
business combination.
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On January 14, 2021, we announced that, commencing January 14, 2021, holders of the 27,600,000 units sold in the initial public
offering may elect to separately trade the shares of Class A common stock and the warrants included in the units. Those units not separated continued to trade on NYSE under the symbol “TINV.U” and the shares of Class A common stock and
warrants that were separated trade under the symbols “TINV” and “TINV WS,” respectively.
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On May 18, 2021, we announced the approval and extension of the time period to consummate a business combination and the
approval of the issuance and sale of certain private placement warrants in connection therewith. On May 20, 2021, the required deposit of $2,760,000 was placed into the trust account and on May 25, 2021, Tiga issued and sold to the
Sponsor 2,760,000 private placement warrants.
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On November 17, 2021, we announced the approval and extension of the time period to consummate a business combination and the
approval of the issuance and sale of certain private placement warrants in connection therewith. On November 22, 2021, the required deposit of $2,760,000 was placed into the trust account and on November 23, 2021, Tiga issued and sold to
the Sponsor 2,760,000 private placement warrants.
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On May 23, 2022, we announced the approval and extension of the time period to consummate a business combination and the
approval of the issuance and sale of certain private placement warrants in connection therewith. On May 24, 2022, the required deposit of $2,760,000 was placed into the trust account and on May 25, 2022, Tiga issued and sold to the
Sponsor 2,760,000 private placement warrants. With these extensions, Tiga will have until November 27, 2022 to consummate a business combination. The total amount of outstanding private placement warrants is 18,560,000 and the total
deposits into the trust account have been $287,040,000 ($10.40 per public share).
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Grindr Group LLC, a Delaware corporation, which we refer to as “Grindr,” owns and operates a social networking application
focused on the LGBTQ+ community.
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On May 9, 2022, Tiga entered into an Agreement and Plan of Merger with Grindr and Merger Sub I, as amended by the First
Amendment to Agreement and Plan of Merger, dated as of October 5, 2022, by and among Tiga, Merger Sub I, Merger Sub II and Grindr, which among other things, provides for, following the Domestication of Tiga to Delaware as described
herein, the merger of Merger Sub I with and into Grindr, with Grindr surviving the First Merger as a wholly owned subsidiary of New Grindr, and as promptly as practicable and as part of the same overall transaction as the First Merger,
the merger of such Surviving Company with and into Merger Sub II, with Merger Sub II being the surviving entity of the Second Merger, in accordance with the terms and subject to the conditions of the Merger Agreement.
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The total number of shares of New Grindr Common Stock to be received by Grindr’s members or reserved for issuance pursuant
to the New Grindr equity awards into which Grindr Awards are converted will be equal to an aggregate number of shares of New Grindr Common Stock equal to the Aggregate Merger Stock Consideration.
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The total number of shares of New Grindr Common Stock to be received by Grindr’s members or reserved for issuance pursuant
to the Grindr Warrants assumed by New Grindr will be equal to an aggregate number of shares of New Grindr Common Stock equal to the Aggregate Merger Warrant Consideration.
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Subject to the terms of the Merger Agreement, the aggregate merger stock consideration payable to holders of Grindr Series X
Ordinary Units and options will be equal to the Aggregate Merger Stock Consideration. Subject to the terms of the Merger Agreement, the aggregate merger warrant consideration payable to holders of Grindr Warrants will be equal to the
Aggregate Merger Warrant Consideration.
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In addition, all options to purchase Grindr Series X Ordinary Units that are outstanding as of immediately prior to the First
Merger, will be converted into options to purchase shares of New Grindr Common Stock. All warrants to purchase Grindr Series X Ordinary Units that remain outstanding and unexercised as of immediately prior to the First Merger will
automatically be assumed by Tiga in accordance with their respective terms (including as to vesting and exercisability).
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At and following the Closing, the New Grindr Board shall be comprised of nine (9) directors and the majority of the directors
shall be independent directors. At the Closing, the initial composition of the New Grindr Board is expected to include James Fu Bin Lu, G. Raymond Zage, III, J. Michael Gearon, Jr.,
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Nathan Richardson, Daniel Brooks Baer, George Arison, Gary I. Horowitz, Meghan
Stabler and Maggie Lower.
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Immediately following the Closing, assuming no redemptions, our public shareholders are expected to own approximately of
the voting power of New Grindr; our Sponsor is expected to own approximately of the voting power of New Grindr; our independent directors are expected to own approximately of the voting power of New Grindr on a combined basis; and our
executive directors are expected to own approximately of the voting power of New Grindr on a combined basis. Immediately following the Closing, assuming maximum redemptions, our public shareholders are expected to own approximately of the
voting power of New Grindr; our Sponsor is expected to own approximately of the voting power of New Grindr; our independent directors are expected to own approximately of the voting power of New Grindr on a combined basis; and our
executive directors are expected to own approximately of the voting power of New Grindr on a combined basis. Immediately after the Business Combination, SV Investments is expected to beneficially own more than 50% of the voting power of
New Grindr. As a result, New Grindr will be a “controlled company” within the meaning of the NYSE listing rules. However, New Grindr will not rely on any corporate governance exemptions available to controlled companies under the NYSE
listing rules. For further details, see “Beneficial Ownership of Securities.”
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Tiga management and the Tiga Board considered various factors in determining whether to approve the Merger Agreement and the
Business Combination. For more information about the reasons that the Tiga Board considered in making its recommendation, please see the section entitled “Proposal No. 1—The Business Combination Proposal—
Tiga’s Board of Directors’ Reasons for Approval of the Business Combination.” When you consider the Tiga Board’s recommendation of these proposals, you should keep in mind that our directors and
officers have interests in the Business Combination that are different from, or in addition to, the interests of Tiga shareholders generally. Please see the section entitled “Proposal No. 1—The Business
Combination Proposal—Interests of Certain Persons in the Business Combination” for additional information. The Tiga Board was aware of these interests, among other matters, in evaluating and negotiating the Business Combination
and in recommending to the Tiga shareholders that they vote “FOR” the proposals presented at the extraordinary general meeting.
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At the extraordinary general meeting, Tiga’s shareholders will be asked to consider and vote on the following proposals:
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Proposal No. 1 – The Business Combination Proposal – to consider and vote upon a
proposal to approve by ordinary resolution and adopt the Merger Agreement. The Merger Agreement provides for, among other things, the merger of Merger Sub I with and into Grindr, with Grindr surviving the First Merger as a wholly owned
subsidiary of Tiga, and as promptly as practicable and as part of the same overall transaction as the First Merger, the merger of such Surviving Company with and into Merger Sub II, with Merger Sub II being the surviving entity of the
Second Merger, in accordance with the terms and subject to the conditions of the Merger Agreement as more fully described elsewhere in this proxy statement/prospectus (the “Business Combination Proposal”).
Please see the section entitled “Proposal No. 1—The Business Combination Proposal”;
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Proposal No. 2 – The Domestication Proposal – to and vote upon a proposal to approve by
special resolution, the change of Tiga’s jurisdiction of incorporation by deregistering as an exempted company in the Cayman Islands and continuing and domesticating as a corporation incorporated under the laws of the State of Delaware
(the “Domestication Proposal”). Please see the section entitled “Proposal No. 2—The Domestication Proposal”;
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Proposal No. 3 – The Organizational Documents Proposal – to consider and vote upon a
proposal to approve by special resolution and adopt the proposed new certificate of incorporation (“Proposed Certificate of Incorporation”) and the proposed new bylaws (“Proposed Bylaws”) of Tiga Acquisition Corp., a corporation incorporated in the State of Delaware, and the filing with and acceptance by the Secretary of State of Delaware of the certificate of domestication in accordance
with Section 388 of the DGCL, and the change of name of the Company from Tiga Acquisition Corp. to Grindr Inc. in connection with the Business Combination (the “Organizational Documents Proposal”).
Please see the section entitled “Proposal No. 3—The Organizational Documents Proposal”;
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Proposal No. 4 – The Governance Proposal – to consider and vote upon by ordinary
resolution, on
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a non-binding advisory basis, certain material differences between Tiga’s amended and
restated memorandum and articles of association and the Proposed Certificate of Incorporation and Proposed Bylaws, presented separately in accordance with the United States Securities and Exchange Commission requirements (the “Governance Proposal”). Please see the section entitled “Proposal No. 4—The Governance Proposal”;
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Proposal No. 5 – The Director Election Proposal – to consider and vote upon a
proposal to approve by ordinary resolution of the holders of Tiga Class B ordinary shares the election of nine (9) directors who, upon consummation of the Business Combination, will be the directors of the New Grindr Board. Each
director shall be nominated for a one (1) year term to be elected at the subsequent annual meeting of the shareholders following the effectiveness of the Proposed Certificate of Incorporation. At each succeeding annual meeting of the
shareholders of New Grindr, beginning with the first annual meeting of the shareholders of New Grindr following the effectiveness of the Proposed Certificate of Incorporation, each of the successors elected to replace the directors
whose term expires at that annual meeting shall be elected for a one-year term or until the election and qualification of their respective successors in office, subject to their earlier death, resignation or removal (the “Director Election Proposal”). Please see the section entitled “Proposal No. 5—The Governance Proposal”;
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Proposal No. 6 – The Stock Issuance Proposal – to consider and vote upon a
proposal to approve by ordinary resolution, for the purposes of complying with the application provisions of Section 312.03 of the NYSE Listed Company Manual, the issuance of New Grindr Common Stock to (a) Grindr’s members pursuant to
the Merger Agreement and (b) the Forward Purchase Investors pursuant to the Forward Purchase Commitment and the Backstop Commitment, if any (the “Stock Issuance Proposal”).
Please see the section entitled “Proposal No. 6—The Stock Issuance Proposal; and
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Proposal No. 7 – The Adjournment Proposal – a proposal by ordinary
resolution to adjourn the extraordinary general meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies in the event that there are insufficient votes for, or otherwise in connection with, the
approval of one or more proposals at the extraordinary general meeting (the “Adjournment Proposal”). Please see the section entitled “Proposal
No. 7—The Adjournment Proposal.”
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Each of Proposal No. 1 through 3 and 6 (the “Condition Precedent Proposals”) are cross-conditioned on the approval of the others. Proposal No. 5 is conditioned on the approval of the Condition Precedent Proposals. The Adjournment Proposal is not
conditioned upon the approval of any other proposal in this proxy statement/prospectus. Proposal No. 4 is constituted of non-binding advisory proposals.
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The questions and answers below highlight only
selected information from this proxy statement/prospectus and only briefly address some commonly asked questions about the extraordinary general meeting and the proposals to be presented at the extraordinary general meeting, including with
respect to the proposed Business Combination. The following questions and answers do not include all the information that is important to Tiga shareholders. Shareholders are urged to read carefully this entire proxy statement/prospectus,
including the Annexes and the other documents referred to herein, to fully understand the proposed Business Combination and the voting procedures for the extraordinary general meeting.
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Q.
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Why am I receiving this proxy statement/prospectus?
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A.
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Tiga and Grindr have agreed to the Business Combination under the
terms of the Merger Agreement that is described in this proxy statement/prospectus. A copy of the Merger Agreement is attached to this proxy statement/prospectus as Annex A and a copy of the Merger
Agreement Amendment No. 1 is attached to this proxy statement/prospectus as Annex A-1, and Tiga encourages its shareholders to read them in their entirety. Tiga’s
shareholders are being asked to consider and vote upon a proposal to adopt the Merger Agreement and approve the Business Combination, which, among other things, include provisions for the merger of Merger Sub I
with and into Grindr, with Grindr surviving the First Merger as a wholly owned subsidiary of Tiga, and as promptly as practicable and as part of the same overall transaction as the First Merger,
the merger of such Surviving Company with and into Merger Sub II, with Merger Sub II being the surviving entity of the Second Merger, in accordance with the terms and subject to the conditions of the Merger
Agreement as more fully described elsewhere in this proxy statement/prospectus. Please see the section entitled “Proposal No. 1—The Business
Combination Proposal.”
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As a condition to the Mergers, Tiga will change its jurisdiction of incorporation by
effecting a deregistration under the Companies Act and a domestication under Section 388 of the DGCL, pursuant to which Tiga’s jurisdiction of incorporation will be changed from the Cayman Islands to the State of Delaware. As a result of and upon
the effective time of the Domestication, (1) each then issued and outstanding Tiga Class A ordinary share will convert automatically, on a one-for-one basis, into a share of New Grindr Common Stock in accordance with the amended and restated
memorandum and articles of association; (2) each then issued and outstanding redeemable Tiga Warrant will convert automatically into a New Grindr Warrant, pursuant to the Warrant Agreement; and (3) each then issued and outstanding unit of Tiga
will be separated and converted automatically into one share of New Grindr Common Stock and one-half of one New Grindr Warrant. Please see the section entitled “Proposal No. 2—The Domestication Proposal.”
This proxy statement/prospectus and its Annexes contain important information about
the proposed Business Combination and the other matters to be acted upon at the extraordinary general meeting. You should read this proxy statement/prospectus and its Annexes carefully and in their entirety.
The provisions of the Proposed Organizational Documents will
differ materially from the amended and restated memorandum and articles of association. Please see “What amendments will be made to the current constitutional documents of Tiga?” below.
Your vote is important. You are encouraged to submit your proxy as soon as possible
after carefully reviewing this proxy statement/prospectus and its Annexes.
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Q.
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When and where is the extraordinary general meeting?
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A.
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The extraordinary general meeting will be held at
and via live webcast on at Eastern Time at . The extraordinary general meeting can be accessed by visiting https://www.virtualshareholdermeeting.com/TINV2022SM,
where you will be able to listen to the meeting live and vote during the meeting. For the purposes of the articles of association of the company, the physical place of the meeting will be Milbank LLP, 55 Hudson Yards,
New York, NY 10001.
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Q.
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What are the proposals on which I am being asked to vote at the extraordinary general meeting?
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A.
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The shareholders of Tiga will be asked to consider and vote on the
following proposals at the extraordinary meeting:
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1.
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a proposal to approve by ordinary resolution the Business Combination described in this proxy statement/prospectus, including
(a) adopting the Merger Agreement and (b) approving the related agreements described in this proxy statement/prospectus. Please see the section entitled “Proposal No. 1—The Business Combination Proposal”;
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2.
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a proposal to approve by special resolution the Domestication. Please see the section entitled “Proposal No. 2—The Domestication Proposal”;
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a proposal to approve by special resolution and adopt the proposed new certificate of incorporation and the proposed new bylaws
of TRAC and the change of name from TRAC to Grindr Inc. Please see the section entitled “Proposal No. 3—The Organizational Documents Proposal”;
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4.
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a proposal to approve by ordinary resolution, on a non-binding advisory basis, certain material differences between Tiga’s
Amended and Restated Memorandum and Articles of Association and the Proposed Certificate of Incorporation and Proposed Bylaws. Please see the section entitled “Proposal No. 4—The Governance Proposal”;
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5.
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a proposal to approve by ordinary resolution of the holders of Tiga Class B ordinary shares the election of nine (9) directors
who, upon consummation of the Business Combination, will be the directors of the New Grindr Board. Please see the section entitled “Proposal No. 5—The Director Election Proposal”;
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6.
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a proposal to approve by ordinary resolution, for the purposes of complying with the applicable listing rules of The New York
Stock Exchange, the issuance of shares of New Grindr Common Stock to Grindr’s members pursuant to the Merger Agreement. Please see the section entitled “Proposal No. 6—The Stock Issuance Proposal”;
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7.
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a proposal by ordinary resolution to adjourn the extraordinary general meeting to a later date or dates, if necessary, to
permit further solicitation and vote of proxies in the event that there are insufficient votes for, or otherwise in connection with, the approval of one or more proposals at the extraordinary general meeting. Please see the section
entitled “Proposal No. 7—The Adjournment Proposal.”
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If Tiga’s shareholders do not approve each of the Condition Precedent Proposals, then
unless certain conditions in the Merger Agreement are waived by the applicable parties to the Merger Agreement, the Merger Agreement could terminate and the Business Combination may not be consummated. The Adjournment Proposal is not conditioned
upon the approval of any other proposal in this proxy statement/prospectus. The Governance Proposal is constituted of non-binding advisory proposals.
Tiga will hold the extraordinary general meeting to consider and vote upon these
proposals. This proxy statement/prospectus contains important information about the proposed Business Combination and the other matters to be acted upon at the extraordinary general meeting. Shareholders should read it carefully.
The vote of shareholders is important. Shareholders are encouraged to vote as soon as
possible after carefully reviewing this proxy statement/prospectus.
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Q.
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Are the proposals conditioned on one another?
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A.
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Yes. Each of the Condition Precedent Proposals is cross-conditioned on
the approval of the others. The Director Election Proposal is conditioned on the approval of the Condition Precedent Proposals. The Adjournment Proposal is not conditioned upon the approval of any other proposal set forth in this proxy
statement/prospectus. The Governance Proposal is constituted of non-binding advisory proposals.
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Q.
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Why is Tiga proposing the Business Combination?
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A.
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Tiga was organized to effect a merger, share exchange, asset acquisition,
share purchase, reorganization or other similar business combination with one or more businesses or entities.
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On November 27, 2020, Tiga consummated the initial public offering of 27,600,000
units, including the issuance of 3,600,000 units as a result of the underwriters’ exercise of their over-allotment option in full. Each unit
12
consists of one Class A ordinary share and one-half of one redeemable warrant.
Each warrant entitles the holder thereof to purchase one Class A ordinary share at a price of $11.50 per share. The units were sold at an offering price of $10.00 per unit, generating gross proceeds, before expenses, of $276,000,000.
Simultaneously with the consummation of the initial public offering, Tiga consummated
the private sale of an aggregate of 10,280,000 warrants, each exercisable to purchase one Class A ordinary share at $11.50 per share, to the Sponsor at the time of the initial public offering at a price of $1.00 per warrant, generating gross
proceeds, before expenses, of approximately $10,280,000 (the “initial private placement”). The warrants sold in the initial private placement, or the initial private placement warrants, are identical to
the warrants included in the units sold in the initial public offering, except that, so long as they are held by their initial purchasers or their permitted transferees, (i) they will not be redeemable by Tiga, (ii) they (including the Class A
ordinary shares issuable upon exercise of these warrants) may not, subject to certain limited exceptions, be transferred, assigned or sold until 30 days after Tiga completes its initial business combination, (iii) they may be exercised by the
holders on a cashless basis and (iv) they will be entitled to registration rights. Upon the closing of the initial public offering and the initial private placement, $278,760,000 was placed in a trust account with Continental Stock Transfer &
Trust Company acting as trustee, and were subsequently invested only in U.S. government securities within the meaning of Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “Investment Company
Act”) with a maturity of 185 days or less or in money market funds investing solely in United States Treasuries and meeting certain conditions under Rule 2a-7 under the Investment Company Act, until the earlier of: (i) the completion of
an initial business combination and (ii) Tiga’s redemption of 100% of the outstanding public shares upon its failure to consummate a business combination within the completion window.
On May 8, 2021, we announced the approval and extension of the time period to
consummate a business combination and the approval of the issuance and sale of certain private placement warrants in connection therewith. On May 20, 2021, the required deposit of $2,760,000 was placed into the trust account and on May 25, 2021,
Tiga issued and sold to the Sponsor 2,760,000 private placement warrants.
On November 17, 2021, we announced the approval and extension of the time period to
consummate a business combination and the approval of the issuance and sale of certain private placement warrants in connection therewith. On November 22, 2021, the required deposit of $2,760,000 was placed into the trust account and on
November 23, 2021, Tiga issued and sold to the Sponsor 2,760,000 private placement warrants.
On May 23, 2022, we announced the approval and extension of the time period to
consummate a business combination and the approval of the issuance and sale of certain private placement warrants in connection therewith. On May 24, 2022, the required deposit of $2,760,000 was placed into the trust account and on May 25, 2022,
Tiga issued and sold to the Sponsor 2,760,000 private placement warrants. With these extensions, Tiga will have until November 27, 2022 to consummate a business combination. The total amount of outstanding private placement warrants is 18,560,000
and the total deposits into the trust account have been $287,040,000 ($10.40 per public share).
Since the initial public offering, Tiga’s activity has been limited to the evaluation
of Business Combination candidates.
Grindr is the world’s largest social network focused on the LGBTQ+ community with
approximately 10.8 million Monthly Active Users (“MAUs”) and approximately 601 thousand Paying Users in 2021. Grindr’s Paying Users were over 765 thousand and 744 thousand for the three and
six months ended June 30, 2022, respectively. According to the Frost & Sullivan Study commissioned by Grindr, Grindr is the largest and most popular gay mobile app in the world, with more MAUs than other LGBTQ+ social networking
applications. Grindr enables users to find and engage with each other, share content and experiences, and generally express themselves. Grindr is a pioneer and leading influence on the lifestyle trends and discourse among the global LGBTQ+
community. Grindr is devoted to providing a platform for social interactions for this vibrant community and to cultivating a safe and accepting environment where all are welcome and feel a sense of belonging. As a result, the Grindr platform
has become a meaningful part of our users’ social lives embedded at the center of the community as the preferred channel for broadening their connections and engaging with like-minded individuals within the LGBTQ+ community.
The Tiga Board carefully considered the results of the due diligence review of
Grindr’s business, the industries in which Grindr operates and Grindr’s current prospects for growth, including the financial and other
13
information provided by Grindr in the course of their negotiations in connection
with the Merger Agreement. For additional information, see “Proposal No. 1—The Business Combination Proposal — Tiga’s Board of Directors’ Reasons for Approval of the
Business Combination.”
Tiga believes that the Business Combination with Grindr will provide Tiga
shareholders with an opportunity to participate in the ownership of a company with significant growth potential. Please see the section entitled “Proposal No. 1—The Business Combination Proposal— Tiga’s Board of Directors’ Reasons for Approval of the Business Combination.” Although the Tiga Board believes that the Business Combination presents a unique Business Combination opportunity and is advisable
and in the best interests of Tiga shareholders, the Tiga Board did consider certain potentially material negative factors in arriving at that conclusion. Please see the section entitled “Risk Factors—Risks
Related to Grindr’s Business.”
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Q.
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What will happen in the Business Combination?
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A.
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Pursuant to the Merger Agreement, and upon the terms and subject to the
conditions set forth therein, Tiga will acquire Grindr in a series of transactions we collectively refer to as the “Business Combination.” The Merger Agreement provides for the merger of Merger Sub I with and into Grindr, with Grindr surviving the First Merger as a wholly owned subsidiary of Tiga, and as promptly as practicable and as part of the same overall
transaction as the First Merger, the merger of such Surviving Company with and into Merger Sub II, with Merger Sub II being the surviving entity of the Second Merger, in accordance with the terms and subject to the conditions of the
Merger Agreement as more fully described elsewhere in this proxy statement/prospectus.
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As a condition to the Mergers, Tiga will change its jurisdiction of incorporation by
effecting a deregistration under the Companies Act and a domestication under Section 388 of the DGCL, pursuant to which Tiga’s jurisdiction of incorporation will be changed from the Cayman Islands to the State of Delaware. As a result of and upon
the effective time of the Domestication, (1) each then issued and outstanding Tiga Class A ordinary share will convert automatically, on a one-for-one basis, into one share of New Grindr Common Stock in accordance with the amended and restated
memorandum and articles of association; (2) each then issued and outstanding redeemable Tiga Warrant will convert automatically into a New Grindr Warrant, pursuant to the Warrant Agreement; and (3) each then issued and outstanding unit of Tiga
will be separated and converted automatically into one share of New Grindr Common Stock and one-half of one New Grindr Warrant.
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Q.
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What will Grindr members receive in return for Tiga’s acquisition of all of the issued and outstanding equity
interests of Grindr?
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A.
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The total number of shares of New Grindr Common Stock to be received
by Grindr’s members or reserved for issuance pursuant to the New Grindr equity awards into which Grindr Awards are converted will be equal to an aggregate number of shares of New Grindr Common Stock equal to a
number of shares of New Grindr Common Stock equal to the Aggregate Merger Stock Consideration. For further details, see “Business Combination
Proposal—The Merger Agreement—Consideration—Aggregate Merger Stock Consideration.”
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The total number of shares of New Grindr Common Stock to be received by Grindr’s
members or reserved for issuance pursuant to the Grindr warrants assumed by New Grindr will be equal to an aggregate number of shares of New Grindr Common Stock equal to the Aggregate Merger Warrant Consideration. For further details, see “Business Combination Proposal—The Merger Agreement—Consideration—Aggregate Merger Warrant Consideration.”
In addition, all Grindr Options that are outstanding as of immediately prior to the
First Merger, will be converted into New Grindr Options. All Grindr Warrants that remain outstanding and unexercised as of immediately prior to the First Merger will automatically be assumed by Tiga in accordance with their respective terms
(including as to vesting and exercisability). For further details, see “Business Combination Proposal—Consideration—Treatment of Grindr Options” and “Business Combination
Proposal—Consideration—Treatment of Grindr Warrants.”
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Q.
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What equity stake will current Tiga shareholders and Grindr members hold in New Grindr immediately after the
consummation of the Business Combination?
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A.
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As of the date of this proxy statement/prospectus, there are 34,500,000
ordinary shares issued and outstanding, which includes the 6,840,000 founder shares held by the Sponsor, the 20,000 founder shares held by each of David Ryan, Carman Wong and Ben Falloon and the 27,600,000 public shares. As of the date
of this proxy
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14
statement/prospectus, there are outstanding an aggregate of 32,360,000 Tiga
Warrants, which includes the 18,560,000 private placement warrants held by the Sponsor and the 13,800,000 public warrants. Each whole warrant entitles the holder thereof to purchase one Tiga Class A ordinary share and, following the
Domestication, will entitle the holder thereof to purchase one share of New Grindr Common Stock. Therefore, as of the date of this proxy statement/prospectus (without giving effect to the Business Combination), the Tiga fully diluted share
capital would be 66,860,000.
Upon completion of the Business Combination, we anticipate that: (1) Grindr
unitholders (without taking into account shares of New Grindr Common Stock issuable to holders of Grindr options) are expected to hold an ownership interest of 81.1% of the issued and outstanding New Grindr Common Stock, (2) the Sponsor (other
than the Forward Purchase Investors) and our intimal shareholders are expected to hold an ownership interest of 3.4% of the issued and outstanding New Grindr Common Stock, (3) Tiga’s public stockholders will retain an ownership interest of 12.1%
of the issued and outstanding New Grindr Common Stock and (4) the Forward Purchase Investors are expected to hold an ownership interest of 5.0% of the issued and outstanding New Grindr Common Stock. These levels of ownership interest assume (i)
that no public stockholders exercise their redemption rights in connection with the Business Combination, (ii) no exercises of warrants to purchase New Grindr Common Stock, (iii) that Grindr reserves shares of New Grindr Common Stock for
potential future issuance upon the exercise of New Grindr Options, (iv) Tiga sells and issues 10,000,000 shares of New Grindr Common Stock to the Forward Purchase Investors and (v) Grindr does not make a distribution to Grindr Holdings
immediately before closing in an amount up $370.0 million. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Grindr—Financing Arrangements—Deferred Payment.” If
the actual facts are different from these assumptions, the percentage ownership retained by the current Tiga shareholders in Grindr will be different.
For more information, please see the sections entitled “Summary of the Proxy Statement/Prospectus—Impact of the Business Combination on New Grindr’s Public Float”, “Unaudited Pro Forma Combined Financial Information” and “Risk Factors— Risks Related
to Tiga and the Business Combination—Our stockholders will experience immediate dilution as a consequence of the issuance of New Grindr Common Stock as consideration in the Business Combination and may be further diluted following the closing
of the Business Combination as a result of the terms thereof. Having a minority share position may reduce the influence that our current shareholders have on the management of New Grindr.”
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Q.
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Who will control New Grindr after the Business Combination?
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A.
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Immediately after the Business Combination, SV Investments is expected to
beneficially own more than 50% of the voting power of New Grindr. As a result, New Grindr will be a “controlled company” within the meaning of the NYSE listing rules. However, New Grindr will not rely on any corporate governance
exemptions available to controlled companies under the NYSE listing rules.
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Q.
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Will New Grindr obtain new financing in connection with the Business Combination?
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A.
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Yes. Tiga has entered into the A&R Forward Purchase Agreement with
the Sponsor which provides for the purchase by the Forward Purchase Investors of an aggregate of 5,000,000 forward purchase shares, plus an aggregate of 2,500,000 forward purchase warrants to purchase one share of New
Grindr Common Stock at $11.50 per share, for an aggregate purchase price of $50,000,000, or $10.00 per share, in a private placement to close prior to or concurrently with the Closing. To the extent that the
Non-FPS Amount (as defined in the A&R Forward Purchase Agreement) is less than $50,000,000 immediately prior to the Closing but following the Domestication, the Forward Purchase
Investors have agreed pursuant to the A&R Forward Purchase Agreement to purchase (a) a number of shares of backstop shares equal to (A) (x) $50,000,000 minus (y) the Non-FPS Amount, divided by (B) $10.00,
rounded down to the nearest whole number and (b) a number of backstop warrants equal to (I) the number of backstop shares in clause (a) multiplied by (II) 0.5, rounded down to the nearest whole number. In addition to
the foregoing, each Forward Purchase Investor may, at its discretion (regardless of the Non-FPS Amount), subscribe for up to 5,000,000 backstop shares plus up to 2,500,000 backstop
warrants at $11.50 per share, for an aggregate purchase price of $50,000,000, or $10.00 for each backstop share and one-half of one backstop warrant. The obligations under the Forward
Purchase Agreement do not depend on whether any Tiga Class A ordinary shares are redeemed by the public shareholders. The forward purchase warrants and the backstop warrants will have the same terms as the public
warrants issued as part of the units. Prior to the Closing, we expect that Tiga, the Sponsor and San Vicente Parent LLC will enter
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15
into the Joinder and Assignment Agreement to A&R Forward Purchase
Agreement, which among other things, will provide for the transfer and assignment of the Sponsor’s rights and obligations under the A&R Forward Purchase Agreement to San Vicente Parent LLC. We further expect that San Vicente Parent LLC will
satisfy its obligations under the A&R Forward Purchase Agreement prior to the SV Consolidation (as defined below) and Closing.
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Q.
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Why is Tiga proposing the Domestication?
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A.
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Our board of directors believes that there are significant advantages to
us that will arise as a result of a change of Tiga’s domicile to Delaware. Further, the Tiga Board believes that any direct benefit that the DGCL provides to a corporation also indirectly benefits its shareholders, who are the owners of
the corporation. The Tiga Board believes that there are several reasons why a reincorporation in Delaware is in the best interests of Grindr and its shareholders, including, (i) the prominence, predictability and flexibility of the
DGCL, (ii) Delaware’s well-established principles of corporate governance and (iii) the increased ability for Delaware corporations to attract and retain qualified directors. Each of the foregoing are discussed in greater detail in the
section entitled “Domestication Proposal—Reasons for the Domestication.”
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To effect the Domestication, Tiga will file such documents required pursuant to the
Companies Act with the Cayman Islands Registrar of Companies, and file a certificate of incorporation and a certificate of corporate domestication with the Secretary of State of the State of Delaware, under which Tiga will be domesticated and
continue as a Delaware corporation.
The approval of the Domestication Proposal is a condition to the closing of the
Mergers under the Merger Agreement. The approval of the Domestication Proposal requires special resolution under Cayman Islands law, being the affirmative vote of the holders of a majority of at least two-thirds of the ordinary shares represented
in person, virtually or by proxy and entitled to vote thereon and who vote at the extraordinary general meeting. Abstentions and broker non-votes, while considered present for the purposes of establishing a quorum, will not count as a vote cast
at the extraordinary general meeting.
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Q.
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What amendments will be made to the current constitutional documents of Tiga?
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A.
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The consummation of the Business Combination is conditioned, among other
things, on the Domestication. Accordingly, in addition to voting on the Business Combination, Tiga’s shareholders are also being asked to consider and vote upon a proposal to approve the Domestication and to approve the replacement
Tiga’s amended and restated memorandum and articles of association under Cayman Islands law with the Proposed Organizational Documents under the DGCL, which will be materially modified from the amended and restated memorandum and
articles of association in the following respects:
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•
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change the purpose of New Grindr to engage in “any lawful act or activity for which a corporation may be organized under the
DGCL”;
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•
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provide that the affirmative vote of the holders of at least 66 2/3% of the voting power of all then-outstanding New Grindr
Common Stock entitled to vote generally in the election of directors, voting together as a single class, is required to adopt, amend or repeal the Proposed Bylaws and the provisions in the Proposed Certificate of Incorporation related to
Directors, Indemnification and Limitation on Liability of Directors, Forum Selection and Amendments;
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•
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change the name of Tiga to “Grindr Inc.” and delete the provisions relating to Tiga’s status as a blank check company and
retain the default of perpetual existence under the DGCL;
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•
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change the authorized shares of all classes of capital stock to shares, consisting of shares of New Grindr Common Stock
and shares of preferred stock;
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•
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adopt Delaware as the exclusive forum for certain shareholder litigation;
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•
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provide for transfer restrictions with respect to shares of New Grindr Common Stock issued (i) as consideration to members of
Grindr in connection with the Mergers and (ii) to directors, officers and employees of New Grindr upon the settlement or exercise of equity awards outstanding immediately following the Closing in respect of Grindr Awards outstanding
immediately prior to the Closing; and
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•
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directors will be elected each year and serve a one-year term.
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See “Proposal No. 2—The Organizational Documents
Proposal” for additional information.
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Q.
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How will the Domestication affect my ordinary shares, warrants and units?
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A.
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As a result of and upon the effective time of the Domestication, (1) each
then issued and outstanding Tiga Class A ordinary share will convert automatically, on a one-for-one basis, into a share of New Grindr Common Stock in accordance with the amended and restated memorandum and articles of association, (2)
each then issued and outstanding Tiga Class B ordinary share will convert automatically, on a one-for-one basis, into a share of New Grindr Common Stock in accordance with the amended and restated memorandum and articles of association;
(3) each then issued and outstanding Tiga Warrant will convert automatically into a New Grindr Warrant, pursuant to the Warrant Agreement and (4) each then issued and outstanding unit of Tiga that has not been previously separated into
the underlying Tiga Class A ordinary share and underlying fractional Tiga Warrant upon the request of the holder thereof, will be cancelled and will entitle the holder thereof to one share of New Grindr Common Stock and one-half of one
New Grindr Warrant. See “Proposal No. 2—The Domestication Proposal” for additional information.
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Q.
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What are the U.S. federal income tax consequences of the Domestication?
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A.
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As discussed more fully under “U.S. Federal Income Tax Considerations,” it is intended that the Domestication will constitute a reorganization within the meaning of Section 368(a)(1)(F) of the U.S.
Internal Revenue Code of 1986, as amended (the “Code”). Assuming that the Domestication so qualifies, and subject to the “passive
foreign investment company” (“PFIC”) rules discussed below and under “U.S.
Federal Income Tax Considerations,” U.S. Holders (as defined therein) will be subject to Section 367(b) of the Code and, as a result:
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•
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A U.S. Holder whose Tiga Class A ordinary shares have a fair market value of less than $50,000 on the date of the Domestication
and who, on the date of the Domestication, owns (actually or constructively) less than 10% of the total combined voting power of all classes of Tiga shares entitled to vote and less than 10% of the total value of all classes of Tiga
shares will not recognize any gain or loss and will not be required to include any part of Tiga’s earnings in income;
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•
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A U.S. Holder whose Tiga Class A ordinary shares have a fair market value of $50,000 or more and who, on the date of the
Domestication, owns (actually or constructively) less than 10% of the total combined voting power of all classes of Tiga shares entitled to vote and less than 10% of the total value of all classes of Tiga shares generally will recognize
gain (but not loss) on the exchange of Tiga Class A ordinary shares for New Grindr Common Stock pursuant to the Domestication. As an alternative to recognizing gain, such U.S. Holder may file an election to include in income as a deemed
dividend the “all earnings and profits amount” (as defined in the Treasury Regulations under Section 367 of the Code) attributable to its Tiga Class A ordinary shares provided certain other requirements are satisfied; and
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•
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U.S. Holder who owns (actually or constructively) 10% or more of the total combined voting power of all classes of Tiga shares
entitled to vote or 10% or more of the total value of all classes of Tiga shares generally will be required to include in income as a deemed dividend the “all earnings and profits amount” attributable to its Tiga Class A ordinary shares.
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Tiga does not expect to have significant cumulative earnings and profits, if any, on
the date of the Domestication. As discussed more fully under “U.S. Federal Income Tax Considerations,” Tiga believes that it is likely classified as a PFIC for U.S. federal income tax purposes. In such
case, notwithstanding the U.S. federal income tax consequences of the Domestication discussed above, proposed Treasury Regulations under Section 1291(f) of the Code (which have a retroactive effective date), if finalized in their current form,
generally would require a U.S. Holder to recognize gain on the exchange of Tiga Class A ordinary shares or warrants for New Grindr Common Stock or warrants pursuant to the Domestication. Any such gain would be taxable income with no corresponding
receipt of cash in the Domestication. The tax on any such gain would be imposed at the rate applicable to ordinary income and an interest charge would apply based on a complex set of rules. In addition, the proposed Treasury Regulations provide
coordinating rules with other sections of the Code, including Section 367(b), which affect the manner in which the rules under such other sections apply to transfers of PFIC stock. However, it is difficult to predict whether, in what form, and
with what effective date, final Treasury Regulations under Section 1291(f) of the Code may be adopted and how any such Treasury Regulations would apply. Importantly, however, U.S. Holders that make or have made certain elections discussed further
under “U.S. Federal Income Tax Considerations” with respect to their Tiga Class A ordinary shares generally are not
17
subject to the same gain recognition rules under the currently proposed Treasury
Regulations under Section 1291(f) of the Code. Currently, there are no elections available that apply to Tiga warrants, and the application of the PFIC rules to Tiga warrants is unclear. For a more complete discussion of the potential application
of the PFIC rules to U.S. Holders as a result of the Domestication, see the section entitled “U.S. Federal Income Tax Considerations.”
Each U.S. Holder of Tiga Class A ordinary shares or warrants is urged to consult its
own tax advisor concerning the application of the PFIC rules, including the proposed Treasury Regulations, to the exchange of Tiga Class A ordinary shares and warrants for New Grindr Common Stock and warrants pursuant to the Domestication.
Additionally, the Domestication may cause non-U.S. Holders (as defined in “U.S. Federal Income Tax Considerations”) to become subject to U.S. federal income withholding taxes on any amounts treated as dividends paid in respect of such non-U.S. Holder’s New Grindr Common Stock after
the Domestication.
The tax consequences of the Domestication are complex and will depend on a holder’s
particular circumstances. All holders are urged to consult their tax advisor regarding the tax consequences to them of the Domestication, including the applicability and effect of U.S. federal, state, local and non-U.S. tax laws. For a more
complete discussion of the U.S. federal income tax considerations of the Domestication, see the section entitled “U.S. Federal Income Tax Considerations.”
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Q.
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What conditions must be satisfied to complete the Business Combination?
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A.
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There are a number of closing conditions in the Merger Agreement,
including receipt of certain regulatory approvals, a minimum available cash condition and the approval by the shareholders of Tiga and Grindr of the Business Combination and related agreements and transactions.
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For a summary of the conditions that must be satisfied or waived prior to completion
of the Business Combination, please see the section entitled “Proposal No. 1—The Business Combination Proposal—Certain Agreements Related to the Business Combination—Merger Agreement.”
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Q.
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Are there any arrangements to help ensure that Tiga will have sufficient funds, together with the proceeds in
its trust account and from the Forward Purchase Commitment and the Backstop Commitment, to fund the aggregate purchase price and meet the minimum available cash condition?
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A.
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The Merger Agreement provides that the consummation of the Business
Combination is conditioned upon, among other things, Tiga having at least $5,000,001 of net tangible assets remaining after giving effect to all public shareholders that properly and timely demand redemption of their shares for cash.
Additionally, the obligations of the parties to consummate the Business Combination are conditioned upon, among others, the satisfaction of the Minimum Cash Condition.
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Assuming the Forward Purchase Commitment and the Backstop Commitment are both funded
in the amount of $50,000,000 each, and in each case, in accordance with their terms, the Minimum Cash Condition will be satisfied regardless of the number of shareholders electing to redeem any shares of Tiga’s Class A ordinary shares.
Assuming (i) the Forward Purchase Commitment is funded in the amount of $50,000,000
and the Backstop Commitment is not funded, in each case, in accordance with their terms, and (ii) shareholders holding less than 82.4% of Tiga’s Class A ordinary shares elect to redeem any shares of Tiga’s Class A ordinary shares, the Minimum
Cash Condition will also be satisfied.
Please see the section entitled “Proposal No. 1—The
Business Combination Proposal—Sources and Uses for the Business Combination.”
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Q.
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What happens if I sell my Tiga Class A ordinary shares before the extraordinary general meeting?
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A.
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The record date for the extraordinary general meeting is earlier than the
date that the Business Combination is expected to be completed. If you transfer your Tiga Class A ordinary shares after the record date, but before the extraordinary general meeting, unless the transferee obtains from you a proxy to
vote those shares, you will retain your right to vote at the extraordinary general meeting. However, you will not be able to seek redemption of your Tiga Class A ordinary shares because you will no longer be able to return them for
cancellation upon
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18
the Closing. If you transfer your Tiga Class A ordinary shares prior to the record
date, you will have no right to vote those shares at the extraordinary general meeting or redeem those shares for a pro rata portion of the proceeds held in the trust account.
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Q.
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What constitutes a quorum at the extraordinary general meeting?
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A.
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The holders of a majority of the issued and outstanding Tiga ordinary
shares entitled to vote as of the record date at the extraordinary general meeting must be present in person, via the virtual meeting platform, or represented by proxy, at the extraordinary general meeting to constitute a quorum and in
order to conduct business at the extraordinary general meeting. Abstentions and broker non-votes, while considered present for the purposes of establishing a quorum, will not count as a vote cast at the extraordinary general meeting. As
of the record date for the extraordinary general meeting, Tiga ordinary shares would be required to be present at the extraordinary general meeting to achieve a quorum.
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Q.
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What vote is required to approve the proposals presented at the extraordinary general meeting?
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A.
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The following votes are required for each proposal at the extraordinary
general meeting:
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•
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Business Combination Proposal: The approval of the Business
Combination Proposal requires an ordinary resolution under Cayman Islands law, being the affirmative vote of holders of a majority of the ordinary shares represented in person, virtually or by proxy and entitled to vote thereon and who
vote at the extraordinary general meeting.
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•
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Domestication Proposal: The approval of the Domestication Proposal
requires a special resolution under Cayman Islands law, being the affirmative vote of the holders of a majority of at least two-thirds of the ordinary shares represented in person, virtually or by proxy and entitled to vote thereon and
who vote at the extraordinary general meeting.
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•
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Organizational Documents Proposal: The approval of the
Organizational Documents Proposal requires a special resolution under Cayman Islands law, being the affirmative vote of the holders of a majority of at least two-thirds of the ordinary shares represented in person, virtually or by proxy
and entitled to vote thereon and who vote at the extraordinary general meeting.
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•
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Governance Proposal: The Governance Proposal is constituted of
non-binding advisory proposals, and requires an ordinary resolution under Cayman Islands law, being the affirmative vote of the holders of a majority of the ordinary shares represented in person, virtually or by proxy and entitled to vote
thereon and who vote at the extraordinary general meeting.
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•
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Director Election Proposal: The approval of the Director Election
Proposal requires an ordinary resolution of the holders of Tiga Class B ordinary shares under Cayman Islands law, being the affirmative vote of the holders of a majority of the Tiga Class B ordinary shares represented in person, virtually
or by proxy and entitled to vote thereon and who vote at the extraordinary general meeting.
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•
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Stock Issuance Proposal: The approval of the Stock Issuance
Proposal requires an ordinary resolution under Cayman Islands law, being the affirmative vote of the holders of a majority of the ordinary shares represented in person, virtually or by proxy and entitled to vote thereon and who vote at
the extraordinary general meeting.
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•
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Adjournment Proposal: The approval of the Adjournment Proposal
requires an ordinary resolution under Cayman Islands law, being the affirmative vote of the holders of a majority of the ordinary shares represented in person, virtually or by proxy and entitled to vote thereon and who vote at the
extraordinary general meeting.
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Q.
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How many votes do I have at the extraordinary general meeting?
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A.
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Our shareholders are entitled to one vote on each proposal presented at
the extraordinary general meeting for each ordinary share of Tiga held of record as of , 2022, the record date for the extraordinary general meeting. As of the close of business on the record date, there were outstanding Tiga
Class A ordinary shares and outstanding Tiga Class B ordinary shares.
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Q.
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Did Tiga’s Board obtain a third-party fairness opinion in determining whether or not to proceed with the
transaction?
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A.
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Yes. A special committee of Tiga’s Board consisting solely of independent directors received a fairness opinion from Kroll,
LLC (“Duff & Phelps”), operating through its Duff & Phelps Opinions Practice, as to the fairness, from a financial point of view, to Tiga, of the consideration to be paid by
Tiga pursuant to the Merger Agreement. For additional information, please see the section entitled “Proposal No. 1 — The Business Combination Proposal — Opinion of Financial
Advisor to the Special Committee” and the opinion of Duff & Phelps attached hereto as Annex I for additional information.”
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Q.
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Do I have redemption rights?
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A.
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If you are a public shareholder, you have the right to demand that Tiga
redeem such shares for a pro rata portion of the cash held in the trust account. Tiga sometimes refers to these rights to demand redemption of the public shares as “redemption
rights.”
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Notwithstanding the foregoing, a public shareholder, together with any affiliate of
such holder or any other person with whom such holder is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Exchange Act) will be restricted from seeking redemption with respect to more than 15% of the public shares.
Accordingly, all public shares in excess of 15% held by a public shareholder, together with any affiliate of such holder or any other person with whom such holder is acting in concert or as a “group,” will not be redeemed without the prior
consent of Tiga.
Under Tiga’s current amended and restated memorandum and articles of association, the
Business Combination may be consummated only if Tiga has at least $5,000,001of net tangible assets after giving effect to all public shareholders that properly and timely demand redemption of their shares for cash.
The Sponsor has agreed, for no consideration, to waive its redemption rights with
respect to all of its ordinary shares in connection with the consummation of the Business Combination. Such shares will be excluded from the pro rata calculation used to determine the per-share redemption price.
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Q.
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How do I exercise my redemption rights?
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A.
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If you are a public shareholder and wish to exercise your redemption
rights, you must demand that Tiga redeem your shares into cash no later than the second business day preceding the vote on the Business Combination Proposal at the extraordinary general meeting by delivering your shares certificate
physically or your shares electronically (and any other redemption forms) to Tiga’s transfer agent using Depository Trust Company’s DWAC (Deposit and Withdrawal at Custodian) system at least two business days prior to the vote on the
Business Combination Proposal at the extraordinary general meeting. Any public shareholder will be entitled to demand that such holder’s shares be redeemed for a full pro rata portion of the amount then in the trust account (which, for
illustrative purposes, was approximately $ or $ per share, as of , 2022, the record date for the extraordinary general meeting). Such amount, less any owed but unpaid taxes on the funds in the trust account, will be paid
promptly upon the Closing. However, under Cayman Islands law, the proceeds held in the trust account could be subject to claims which could take priority over those of Tiga’s public shareholders exercising redemption rights, regardless
of whether such holders vote for or against the Business Combination Proposal. Therefore, the per-share distribution from the trust account in such a situation may be less than originally anticipated due to such claims. Your vote will
have no impact on the amount you will receive upon exercise of your redemption rights.
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Any request for redemption, once made by a holder of public ordinary shares, may not
be withdrawn once submitted to Tiga unless the Tiga Board determines (in its sole discretion) to permit the withdrawal of such redemption request (which it may do in whole or in part).
If you deliver your shares (and/or share certificates (if any) and other redemption
forms) for redemption to Tiga’s transfer agent and later decide at any time up to two days prior to the extraordinary general meeting not to elect redemption, you may request that Tiga’s transfer agent return the shares (physically or
electronically). You may make such request by contacting Tiga’s transfer agent at the address listed at the end of this section.
Any corrected or changed proxy card or withdrawal of a written demand of redemption
rights must be received by Tiga’s transfer agent prior to the vote taken on the Business Combination Proposal at the extraordinary
20
meeting. No demand for redemption will be honored unless the holder’s share
(and/or share certificates (if any) and other redemption forms) have been delivered (either physically or electronically) to the transfer agent at least two business days prior to the vote at the extraordinary general meeting.
If a public shareholder properly and timely makes a demand as described above, then,
if the Business Combination is consummated, New Grindr will redeem these shares for a pro rata portion of funds deposited in the trust account. If you exercise your redemption rights, then you will be exchanging your ordinary shares of Tiga for
cash.
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Q.
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How do the public warrants differ from the private placement warrants and what are the related risks for any
public warrant holders post Business Combination?
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A.
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The public warrants are identical to the private placement warrants in
material terms and provisions, except that the private placement warrants will not be redeemable by Tiga so long as they are held by the Sponsor or any of its permitted transferees. If the private placement warrants are held by holders
other than the Sponsor or any of its permitted transferees, they will be redeemable by Tiga and exercisable by the holders on the same basis as the public warrants. The Sponsor has agreed not to transfer, assign or sell any of the
private placement warrants until 30 days after the consummation of the Business Combination.
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In addition, following the consummation of the Business Combination, New Grindr
has the ability to redeem the outstanding public warrants at any time after they become exercisable and prior to their expiration, at a price of $0.10 per warrant upon a minimum of 30 days’ prior written notice of redemption to each warrant
holder, provided that, among other things, the closing price of New Grindr Common Stock is equal to or exceeds $10.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as
described under the section entitled “Description of Securities – Warrants – Redemption of Warrants for Cash when the price per share of New Grindr Common Stock
equals or exceeds $10.00”) for any 20-trading days within a 30-trading day period ending on the third trading day prior to proper notice of such redemption. Since the consummation of the initial public offering and the
subsequent separate trading of the Tiga Class A ordinary shares, the last reported sale price of Tiga’s Class A ordinary shares has equaled or exceeded a Reference Value of $10.00 per share from time to time; however, we will not be entitled to
redeem the warrants until the Reference Value equals or exceeds $10.00 per share at such time as such warrants are exercisable (i.e., the later of (i) the date that is thirty (30) days after the first date following the consummation of the
Business Combination and (ii) the date that is twelve (12) months following the consummation of the initial public offering). The value received upon exercise of the warrants (i) may be less than the value the holders would have received if
they have exercised their warrants at a later time when the underlying share price is higher and (ii) may not compensate the holders for the value of the warrants, including because the number of shares of New Grindr Common Stock received upon
exercise of the warrants in connection with redemption is capped at 0.3611 shares of New Grindr Common Stock per warrant (subject to adjustment).
In the event New Grindr determined to redeem the public warrants, holders of the
redeemable warrants would be notified of such redemption as described in the Warrant Agreement. In addition, New Grindr may redeem warrants after they become exercisable for a number of shares of New Grindr Common Stock determined based on the
redemption date and the fair market value of New Grindr Common Stock. Any such redemption may have similar consequences to a cashless redemption described in the section entitled “Description of Securities – Warrants – Public Shareholders’
Warrants”. In addition, such redemption may occur at a time when the warrants are “out-of-the-money”, in which case warrant holders would lose any potential embedded value from a subsequent increase in the value of New Grindr Common Stock had the
warrants remained outstanding. For more information, see the section entitled “Description of Securities – Warrants – Public Shareholders’ Warrants”.
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Q.
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What are the U.S. federal income tax consequences of exercising my redemption rights?
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A.
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It is expected that a U.S. Holder (as defined in “U.S. Federal Income Tax Considerations”) that exercises its redemption rights to receive cash from the trust account in exchange for its New
Grindr Common Stock generally will be treated as selling such New Grindr Common Stock resulting in the recognition of capital gain or capital loss. There may be certain circumstances, however, in which the redemption may be treated as a
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21
distribution for U.S. federal income tax purposes, depending on the amount of New
Grindr Common Stock that such U.S. Holder owns or is deemed to own (including through the ownership of warrants). For a more complete discussion of the U.S. federal income tax considerations of an exercise of redemption rights, see the section
entitled “U.S. Federal Income Tax Considerations.”
Additionally, because the Domestication will occur immediately prior to the
redemption of any shareholder, U.S. Holders exercising redemption rights will be subject to the potential tax consequences of Section 367 of the Code as well as potential tax consequences of the U.S. federal income tax rules relating to PFICs.
The tax consequences of Section 367 of the Code and the PFIC rules are discussed more fully below under “U.S. Federal Income Tax Considerations.”
All holders considering exercising redemption rights are urged to consult their tax
advisor on the tax consequences to them of an exercise of redemption rights, including the applicability and effect of U.S. federal, state, local and non-U.S. tax laws.
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Q.
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Do I have appraisal rights if I object to the proposed Business Combination?
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A.
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The holders of Tiga shares will not have dissenters’ rights under Cayman
Islands law in connection with the Mergers as Tiga is not a constituent company of the Mergers. The holders of Tiga units or warrants will not have appraisal rights in connection with the Mergers.
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Q.
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What happens to the funds deposited in the trust account after the Closing?
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A.
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On November 27, 2020, Tiga consummated the initial public offering of
27,600,000 units, including the issuance of 3,600,000 units as a result of the underwriters’ exercise of their over-allotment option in full. The units were sold at an offering price of $10.00 per unit, generating gross proceeds, before
expenses, of $276,000,000. Simultaneously with the consummation of the initial public offering, Tiga consummated the private sale of an aggregate of 10,280,000 warrants, each exercisable to purchase one Class A ordinary share at $11.50
per share, to the Sponsor at the time of the initial public offering at a price of $1.00 per warrant, generating gross proceeds, before expenses, of approximately $10,280,000 (the “initial private placement”). Upon the closing of the initial public offering and the initial private placement, $278,760,000 was placed in a trust account with Continental Stock
Transfer & Trust Company acting as trustee.
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On May 8, 2021, we announced the approval and extension of the time period to
consummate a business combination and the approval of the issuance and sale of certain private placement warrants in connection therewith. On May 20, 2021, the required deposit of $2,760,000 was placed into the trust account and on May 25, 2021,
Tiga issued and sold to the Sponsor 2,760,000 private placement warrants.
On November 17, 2021, we announced the approval and extension of the time period to
consummate a business combination and the approval of the issuance and sale of certain private placement warrants in connection therewith. On November 22, 2021, the required deposit of $2,760,000 was placed into the trust account and on
November 23, 2021, Tiga issued and sold to the Sponsor 2,760,000 private placement warrants.
On May 23, 2022, we announced the approval and extension of the time period to
consummate a business combination and the approval of the issuance and sale of certain private placement warrants in connection therewith. On May 24, 2022, the required deposit of $2,760,000 was placed into the trust account and on May 25, 2022,
Tiga issued and sold to the Sponsor 2,760,000 private placement warrants. With these extensions, Tiga will have until November 27, 2022 to consummate a business combination. The total amount of outstanding private placement warrants is 18,560,000
and the total deposits into the trust account have been $287,040,000 ($10.40 per public share).
Following the Closing, the funds in the trust account will be used by New Grindr
to pay public shareholders who exercise redemption rights, to fund the Aggregate Merger Stock Consideration and the Aggregate Merger Warrant Consideration, to pay transaction expenses of Tiga and Grindr and to strengthen the balance sheet of
New Grindr.
Please see the section entitled “Proposal No. 1—The
Business Combination—Sources and Uses for the Business Combination.”
22
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Q.
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What happens if a substantial number of public shareholders vote in favor of the proposals and exercise their
redemption rights?
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A.
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Tiga’s public shareholders may vote in favor of the proposals and still
exercise their redemption rights. Accordingly, if the minimum available cash condition and the other closing conditions are satisfied or waived in accordance with the Merger Agreement, the Business Combination may be consummated even
though the funds available from the trust account and the number of public shareholders are substantially reduced as a result of redemptions by public shareholders.
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Q.
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What happens if the Business Combination is not consummated?
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A.
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If Tiga does not complete the Business Combination for any reason
(including because the minimum available cash condition has not been met as a result of redemptions), Tiga would search for another target business with which to complete a business combination. If the Business Combination is not
approved or completed for any reason (including because the minimum available cash condition has not been met as a result of redemptions), then Tiga’s public shareholders who elected to exercise their redemption rights will not be
entitled to redeem their shares for a full pro rata portion of the trust account. In such case, Tiga will promptly return any shares returned by public shareholders in accordance with the instructions provided in this proxy
statement/prospectus. If Tiga does not complete the Business Combination with Grindr or another target business by November 27, 2022, Tiga must redeem the public shares, at a per-share price, payable in cash, equal to the aggregate
amount then on deposit in the trust account, including interest earned on the funds held in the trust account and not previously released to us to pay our taxes, if any (less up to $100,000 of interest to pay dissolution expenses)
divided by the number of the then-outstanding public shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any). The Sponsor
does not have any redemption rights in the event a business combination is not effected in the completion window, and, accordingly, their founder shares will be worthless. Additionally, in the event of such liquidation, there will be no
distribution with respect to Tiga’s outstanding warrants. Accordingly, the warrants will be worthless.
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Q.
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How does the Sponsor intend to vote on the proposals?
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A.
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The Sponsor will own of record, on an as-converted basis, an aggregate of
19.8% of the outstanding Tiga ordinary shares (excluding the Class A ordinary shares underlying the private placement warrants) as of the record date. The Sponsor has agreed to vote any and all founder shares and any and all public
shares held by them as of the record date, in favor of the Business Combination. The Sponsor may have interests in the Business Combination that may conflict with your interests as a shareholder. See the sections entitled “Summary of the Proxy Statement/Prospectus—Interests of Certain Persons in the Business Combination” and “Proposal No. 1—The Business Combination Proposal—Interests of Certain Persons in the Business Combination.”
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Q.
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When do you expect the Business Combination to be completed?
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A.
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It is currently anticipated that the Business Combination will be
consummated promptly following the Tiga extraordinary general meeting which is set for , 2022, subject to the satisfaction of customary closing conditions; however, such meeting could be adjourned, as described above. For a
description of the conditions to the completion of the Business Combination, please see the section entitled “Proposal No. 1—The Business Combination Proposal—Certain
Agreements Related to the Business Combination —Conditions to Closing of the Business Combination.”
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Q.
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What do I need to do now?
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A.
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Tiga urges you to read carefully and consider the information contained
in this proxy statement/prospectus, including the Annexes, and to consider how the Business Combination will affect you as a shareholder and/or warrant holder of Tiga. Shareholders should then vote as soon as possible in accordance with
the instructions provided in this proxy statement/prospectus and on the enclosed proxy card, or, if you hold your shares through a brokerage firm, bank or other nominee, on the voting instruction form provided by the broker, bank or
other nominee.
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Q.
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How do I vote?
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A.
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The extraordinary general meeting will be held at and via live
webcast at Eastern Time, on , at . The extraordinary general meeting can be accessed by visiting
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https://www.virtualshareholdermeeting.com/TINV2022SM, where you will be able to
listen to the meeting live and vote during the meeting. For the purposes of the articles of association of the company, the physical place of the meeting will be Milbank LLP, 55 Hudson Yards, New York, NY 10001.
If you are a holder of record of Tiga’s ordinary shares on , 2022, the record date
for the extraordinary general meeting, you may vote at the extraordinary general meeting by attending in person, via the virtual meeting platform or by submitting a proxy for the extraordinary general meeting. You may submit your proxy by
completing, signing, dating and returning the enclosed proxy card in the accompanying pre-addressed postage paid envelope. If you hold your shares in “street name,” which means your shares are held of record by a broker, bank or nominee, you
should contact your broker to ensure that votes related to the shares you beneficially own are properly counted. In this regard, you must provide the broker, bank or nominee with instructions on how to vote your shares or, if you wish to attend
the meeting and vote, obtain a proxy from your broker, bank or nominee.
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Q.
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If my shares are held in “street name,” will my broker, bank or nominee automatically vote my shares for me?
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A.
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No. Under the rules of various national and regional securities
exchanges, your broker, bank or nominee cannot vote your shares with respect to non-routine matters unless you provide instructions on how to vote in accordance with the information and procedures provided to you by your broker, bank or
nominee. We believe the proposals presented to the shareholders at the extraordinary general meeting will be considered non-routine and, therefore, your broker, bank or nominee cannot vote your shares without your instruction on any of
the proposals presented at the extraordinary general meeting. If you do not provide instructions with your proxy, your broker, bank or other nominee may deliver a proxy card expressly indicating that it is NOT voting your shares; this
indication that a broker, bank or nominee is not voting your shares is referred to as a “broker non-vote.” Broker non-votes will be counted as present for the purposes of determining the existence of a quorum but will not be counted for
purposes of determining the number of votes cast at the extraordinary general meeting. Your bank, broker or other nominee can vote your shares only if you provide instructions on how to vote. You should instruct your broker to vote your
shares in accordance with directions you provide.
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Q.
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How will a broker non-vote impact the results of each proposal?
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A.
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Broker non-votes will not have any effect on the outcome of any
proposals. Broker non-votes will be counted as present for the purposes of determining the existence of a quorum.
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Q.
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May I change my vote after I have mailed my signed proxy card?
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A.
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Yes. Shareholders of record may send a later-dated, signed proxy card to
Tiga’s transfer agent at the address set forth at the end of this section so that it is received prior to the vote at the extraordinary general meeting or attend the extraordinary general meeting and vote. Shareholders also may revoke
their proxy by sending a notice of revocation to Tiga’s transfer agent, which must be received prior to the vote at the extraordinary general meeting.
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Q.
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What happens if I fail to take any action with respect to the extraordinary general meeting?
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A.
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If you fail to take any action with respect to the extraordinary general
meeting and the proposals are approved by shareholders and the other closing conditions are met, the Business Combination will be consummated in accordance with the terms of the Merger Agreement. As a corollary, failure to vote either
for or against any of the proposals will not affect your redemption rights in connection with the Business Combination and your ability exchange your Tiga ordinary shares for a pro rata share of the funds held in Tiga’s trust account.
If you fail to take any action with respect to the extraordinary general meeting and the relevant proposal(s) is not approved, we will not consummate the Business Combination.
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Q.
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What will happen if I sign and return my proxy card without indicating how I wish to vote?
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A.
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Signed and dated proxies received by us without an indication of how the
shareholder intends to vote on a proposal will be voted “FOR” each proposal presented to the shareholders. The proxyholders may use their discretion to vote on any other matters which properly come before the extraordinary general
meeting.
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24
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Q.
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What should I do if I receive more than one set of voting materials?
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A.
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Shareholders may receive more than one set of voting materials, including
multiple copies of this proxy statement/prospectus and multiple proxy cards or voting instruction cards. For example, if you hold your shares in more than one brokerage account, you will receive a separate voting instruction card for
each brokerage account in which you hold shares. If you are a holder of record and your shares are registered in more than one name, you will receive more than one proxy card. Please complete, sign, date and return each proxy card and
voting instruction card that you receive in order to cast a vote with respect to all of your ordinary shares of Tiga.
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Q.
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Who will solicit and pay the cost of soliciting proxies?
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A.
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Tiga will pay the cost of soliciting proxies for the extraordinary
general meeting. Tiga has engaged Morrow Sodali LLC, which we refer to as “Morrow Sodali,” to assist in the solicitation of proxies for the extraordinary general meeting. Tiga has agreed to
pay Morrow Sodali a fee of $30,000, plus disbursements. Tiga will reimburse Morrow Sodali for reasonable out-of-pocket expenses and will indemnify Morrow Sodali and
its affiliates against certain claims, liabilities, losses, damages and expenses. Tiga will also reimburse banks, brokers and other custodians, nominees and fiduciaries representing beneficial owners of Tiga ordinary
shares for their reasonable expenses in forwarding soliciting materials to beneficial owners of the Tiga ordinary shares and in obtaining voting instructions from those owners. Tiga’s directors, officers and employees
may also solicit proxies by telephone, by facsimile, by mail, on the Internet or in person. They will not be paid any additional amounts for soliciting proxies.
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Q.
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Who can help answer my questions?
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A.
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If you have questions about the Business Combination or if you need
additional copies of the proxy statement/prospectus or the enclosed proxy card you should contact:
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To obtain timely delivery, our shareholders must request any additional materials no
later than five (5) business days prior to the extraordinary general meeting. You may also obtain additional information about Tiga from documents filed with the SEC by following the instructions in the section entitled “Where You Can Find More Information.” If you are a public shareholder and you intend to seek redemption of your public shares, you will need to deliver your shares (and/or share certificates (if any) and other redemption forms)
physically or your shares electronically to Tiga’s transfer agent at the address below no later than two business days prior to the vote at the extraordinary general meeting. See the section entitled “Proposal
No. 1—The Business Combination Proposal—Redemption Rights.”
If you have questions regarding the certification of your position or delivery of your
shares, share certificates (if any) and/or other redemption forms, please contact:
Continental Stock Transfer & Trust Company
1 State Street 30th Floor
New York, New York 10004
Attn: Mark Zimkind
E-mail: mzimkind@continentalstock.com
25
This summary highlights selected information
from this proxy statement/prospectus and does not contain all of the information that is important to you. To better understand the proposals to be submitted for a vote at the extraordinary general meeting,
including the Business Combination proposal, you should read this entire document carefully, including the Merger Agreement attached as Annex A to this proxy statement/prospectus. The Merger Agreement
is the legal document that governs the Business Combination that will be undertaken in connection with the Business Combination. It is also described in detail in this proxy statement/prospectus in the section entitled “Proposal No. 1—The
Business Combination Proposal—Certain Agreements Related to the Business Combination— Merger Agreement.”
Unless the context otherwise requires, all
references in this subsection to the “Company,” “we,” “us” or “our” refer to Tiga prior to the consummation of the Business Combination.
Combined Business Summary
The Parties
Tiga
Tiga Acquisition Corp., incorporated on July 27, 2020, is a blank
check company incorporated as a Cayman Islands exempted company for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses or entities.
Tiga’s units, Tiga’s Class A ordinary shares and Tiga’s warrants
are listed on the NYSE under the symbols “TINV U,” “TINV” and “TINV WS,” respectively.
The mailing address of Tiga’s principal executive office is Ocean
Financial Centre, Level 40, 10 Collyer Quay, Singapore 049315.
Merger Sub I
Merger Sub I is a wholly owned subsidiary of Tiga formed solely
for the purpose of effectuating the First Merger described herein. Merger Sub I was incorporated under the laws of the State of Delaware on April 11, 2022. Merger Sub I owns no material assets and does not operate any business. On the date
immediately prior to the Closing Date, Merger Sub I will merge with and into Grindr.
The mailing address of Merger Sub I’s principal executive office
is Ocean Financial Centre, Level 40, 10 Collyer Quay, Singapore 049315.
Merger Sub II
Merger Sub II is a wholly owned subsidiary of Tiga formed solely
for the purpose of effectuating the Second Merger described herein. Merger Sub II was incorporated under the laws of the State of Delaware on September 9, 2022. Merger Sub II owns no material assets and does not operate any business. As
promptly as practicable and as part of the same overall transaction as the First Merger, Merger Sub II will merge with and into the Surviving Company.
The mailing address of Merger Sub II’s principal executive office
is Ocean Financial Centre, Level 40, 10 Collyer Quay, Singapore 049315.
Grindr
Grindr is the world’s largest social network focused on the
LGBTQ+ community with approximately 10.8 million MAUs and approximately 601 thousand Paying Users, on average, in 2021. Grindr’s Paying Users were over 765 thousand and 744 thousand for the three and six months ended June 30, 2022,
respectively. According to the Frost & Sullivan Study commissioned by Grindr, Grindr is the largest and most popular gay mobile app in the world, with more MAUs than other LGBTQ+ social networking applications. Grindr enables users to
find and engage with each other, share content and experiences, and generally express themselves. Grindr is a pioneer and leading influence on the lifestyle trends and discourse among the global LGBTQ+ community. Grindr is devoted to
providing a platform for social interactions for this vibrant community and to cultivating a safe and accepting environment where all are welcome and feel a sense of belonging. As a result, the Grindr platform has become a meaningful part of
users’ social lives and has embedded Grindr at the center of the community as the preferred channel for broadening their connections and engaging with like-minded individuals within the LGBTQ+ community. The Grindr business,
26
founded in 2009, is held by a Delaware limited liability company, incorporated in
April 2020. The mailing address of Grindr’s principal executive office is PO Box 69176, West Hollywood, CA 90069.
Proposals to be Put to the Shareholders of Tiga at the Extraordinary
General Meeting
Business Combination Proposal
As discussed in this proxy statement/prospectus, Tiga is asking
its shareholders to approve by ordinary resolution the Merger Agreement, a copy of which is attached to the accompanying proxy statement/prospectus as Annex A as well as the Merger
Agreement Amendment No. 1, a copy of which is attached to this proxy statement/prospectus as Annex A-1. The Merger Agreement provides for, among other things, following the Domestication of Tiga to Delaware as described below, the merger of
Merger Sub I with and into Grindr (the “First Merger”), with Grindr surviving the First Merger as a wholly owned subsidiary of New Grindr (Grindr, in its capacity as the surviving
entity of the First Merger, is sometimes referred to herein as the “Surviving Company”), and as promptly as practicable and as part of the same overall transaction as the First Merger,
the merger of such Surviving Company with and into Merger Sub II (the “Second Merger” and, together with the First Merger, the “Mergers”),
with Merger Sub II being the surviving entity of the Second Merger, in accordance with the terms and subject to the conditions of the Merger Agreement as more fully described elsewhere in this proxy statement/prospectus.
The total number of shares of New Grindr Common Stock to be
received by Grindr’s members or reserved for issuance pursuant to the New Grindr equity awards into which Grindr Awards are converted will be equal to a number of shares of New Grindr Common Stock equal to (x) the quotient obtained by
dividing (i) the sum of (a) the Grindr Valuation plus (b) the aggregate exercise price of all in-the-money Grindr Options that are issued and outstanding immediately prior to the
Effective Time by (ii) $10.00; plus (y) the number of forward purchase shares and backstop shares received by Grindr or which Grindr is entitled to receive under the A&R Forward
Purchase Agreement (the “Aggregate Merger Stock Consideration”).
The total number of shares of New Grindr Common Stock to be
received by Grindr’s members or reserved for issuance pursuant to New Grindr Warrants into which Grindr Warrants are converted will be equal to and on the same terms as the forward purchase warrants and backstop warrants received by Grindr or
which Grindr is entitled to receive under the A&R Forward Purchase Agreement (the “Aggregate Merger Warrant Consideration”).
In addition, all Grindr Options that are outstanding as of
immediately prior to the First Merger, will be converted into New Grindr Options. All Grindr Warrants that remain outstanding and unexercised as of immediately prior to the First Merger will automatically be assumed by Tiga in accordance with
their respective terms (including as to vesting and exercisability). For further details, see “Business Combination Proposal—Consideration—Treatment of Grindr Options” and “Business Combination Proposal—Consideration—Treatment of Grindr Warrants.”
In addition, Tiga has entered into the A&R Forward Purchase
Agreement with the Sponsor which provides for the purchase by the Forward Purchase Investors of an aggregate of 5,000,000 forward purchase shares, plus an aggregate of 2,500,000 forward purchase warrants to purchase one share of New Grindr
Common Stock at $11.50 per share, for an aggregate purchase price of $50,000,000, or $10.00 per share, in a private placement to close prior to or concurrently with the Closing. To the extent that the Non-FPS Amount (as defined in the A&R
Forward Purchase Agreement) is less than $50,000,000 immediately prior to the Closing but following the Domestication, the Forward Purchase Investors have agreed pursuant to the A&R Forward Purchase Agreement to purchase (a) a number of
shares of backstop shares equal to (A) (x) $50,000,000 minus (y) the Non-FPS Amount, divided by (B) $10.00, rounded down to the nearest whole number and (b) a number of backstop warrants equal to (I) the number of backstop shares in clause
(a) multiplied by (II) 0.5, rounded down to the nearest whole number. In addition to the foregoing, each Forward Purchase Investor may, at its discretion (regardless of the Non-FPS Amount), subscribe for up to 5,000,000 backstop shares plus
up to 2,500,000 backstop warrants at $11.50 per share, for an aggregate purchase price of $50,000,000, or $10.00 for each backstop share and one-half of one backstop warrant. The obligations under the A&R Forward Purchase Agreement do not
depend on whether any Tiga Class A ordinary shares are redeemed by the public shareholders. The forward purchase warrants and the backstop warrants will have the same terms as the public warrants issued as part of the units. Prior to the
Closing, we expect that Tiga, the Sponsor and San Vicente Parent LLC will enter into the Joinder and Assignment Agreement to A&R Forward Purchase Agreement, which among other things, will provide for the transfer and assignment of the
Sponsor’s rights and obligations under the A&R Forward Purchase Agreement to San Vicente Parent LLC. We further expect that San Vicente Parent LLC will satisfy its obligations under the A&R Forward Purchase Agreement prior to the SV
Consolidation (as defined below) and Closing. The proceeds of the Forward Purchase Commitment and the Backstop Commitment, if any, together
27
with the amounts remaining in Tiga’s trust account as of immediately following the
effective time of the First Merger, will be retained by New Grindr following the Closing. For additional information on the A&R Forward Purchase Agreement, see “Business Combination Proposal—Related
Agreements—A&R Forward Purchase Agreement.”
Domestication Proposal
As discussed in this proxy statement/prospectus, if the Business
Combination Proposal is approved, then Tiga will ask its shareholders to approve by special resolution the Domestication Proposal. As a condition to closing the Business Combination pursuant to the terms of the Merger Agreement, the Tiga Board
has unanimously approved the Domestication Proposal. The Domestication Proposal, if approved, will authorize a change of Tiga’s jurisdiction of incorporation from the Cayman Islands to the State of Delaware. Accordingly, while Tiga is currently
governed by the Companies Act, upon the Domestication, New Grindr will be governed by the DGCL. There are differences between Cayman Islands corporate law and Delaware corporate law as well as the amended and restated memorandum and articles of
association and the Proposed Organizational Documents.
As a result of and upon the effective time of the Domestication,
(1) each then issued and outstanding Tiga Class A ordinary share will convert automatically, on a one-for-one basis, into a share of New Grindr Common Stock in accordance with the amended and restated memorandum and articles of association, (2)
each then issued and outstanding Tiga Class B ordinary share will convert automatically, on a one-for-one basis, into a share of New Grindr Common Stock in accordance with the amended and restated memorandum and articles of association,
(3) each then issued and outstanding Tiga Warrant will convert automatically into a warrant to acquire one share of New Grindr Common Stock, pursuant to the Warrant Agreement and (4) each then issued and outstanding Tiga Unit will separate and
convert automatically into one share of New Grindr Common Stock and one-half of one New Grindr Warrant.
Organizational Documents Proposal
If the Business Combination Proposal and the Domestication
Proposal are approved, Tiga will ask its shareholders to approve by special resolution the Organizational Documents Proposal in connection with the replacement of the amended and restated memorandum and articles of association, under the
Companies Act, with the Proposed Certificate of Incorporation and the Proposed Bylaws, under the DGCL. The Tiga Board has unanimously approved the Organizational Documents Proposal and believes such proposal is necessary to adequately address
the needs of New Grindr after the Business Combination. Approval of the Organizational Documents Proposal is a condition to the consummation of the Business Combination.
Governance Proposal
Assuming the Business Combination Proposal, the Domestication
Proposal, the Organizational Documents Proposal and the Stock Issuance Proposal are approved, Tiga’s shareholders are also being asked to consider and vote upon by ordinary resolutions, on a non-binding advisory basis, certain material
differences between Tiga’s amended and restated memorandum and articles of association and the Proposed Certificate of Incorporation and Proposed Bylaws, presented separately in accordance with the United States Securities and Exchange
Commission requirements.
The Proposed Organizational Documents differ in certain material
respects from the amended and restated memorandum and articles of association and Tiga encourages shareholders to carefully review the information set out in the sections entitled “Organizational Documents
Proposal,” “Governance Proposal,” the amended and restated memorandum and articles of association, attached hereto as Annex F and the Proposed
Organizational Documents of New Grindr, attached hereto as Annex G and Annex H.
Director Election Proposal
Assuming the Business Combination Proposal, the Domestication
Proposal and the Organizational Documents Proposal are approved, Tiga’s shareholders are also being asked to approve by ordinary resolution of the holders of Tiga Class B ordinary shares the Director Election Proposal. For additional
information, see “Proposal No. 5—The Director Election Proposal.” Approval of the Director Election Proposal is a condition to the consummation of the Business Combination.
Stock Issuance Proposal
Assuming the Business Combination Proposal, the Domestication
Proposal and the Organizational Documents Proposal are approved, Tiga’s shareholders are also being asked to approve by ordinary resolution the Stock Issuance Proposal. For additional information, see “Proposal
No. 6—The Stock Issuance Proposal.”
28
Adjournment Proposal
If, based on the tabulated vote, there are not sufficient votes at
the time of the extraordinary general meeting to authorize Tiga to consummate the Business Combination (because any of the Condition Precedent Proposals have not been approved (including as a result of the failure of any other cross-conditioned
Condition Precedent Proposals to be approved)), the Tiga Board may submit a proposal by ordinary resolution to adjourn the extraordinary general meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies.
For additional information, see “Proposal No. 7—The Adjournment Proposal.”
Related Agreements
This section describes certain additional agreements entered into
or to be entered into pursuant to the Merger Agreement. For additional information, see “Business Combination Proposal – Related Agreements.”
A&R Registration Rights Agreement
The Merger Agreement contemplates that, at the Closing, New
Grindr, the Sponsor, the independent directors of Tiga and certain significant unitholders of Grindr will enter into the A&R Registration Rights Agreement, pursuant to which New Grindr will agree to register for resale, pursuant to Rule 415
under the Securities Act, certain shares of New Grindr Common Stock and other equity securities of New Grindr that are held by the parties thereto from time to time. The A&R Registration Rights Agreement amends and restates the registration
rights agreement that was entered into by Tiga, the Sponsor and other holders of Tiga’s securities party thereto in connection with the initial public offering. For additional information, see “Proposal No. 1—The Business Combination
Proposal—Related Agreements—A&R Registration Rights Agreement.”
A&R Forward Purchase Agreement
Tiga has entered into the A&R Forward Purchase Agreement
with the Sponsor which provides for the purchase by the Forward Purchase Investors of an aggregate of 5,000,000 forward purchase shares, plus an aggregate of 2,500,000 forward purchase warrants to purchase one share of New Grindr Common Stock
at $11.50 per share, for an aggregate purchase price of $50,000,000, or $10.00 per share, in a private placement to close prior to or concurrently with the Closing. To the extent that the Non-FPS Amount (as defined in the A&R Forward
Purchase Agreement) is less than $50,000,000 immediately prior to the Closing but following the Domestication, the Forward Purchase Investors have agreed pursuant to the A&R Forward Purchase Agreement to purchase (a) a number of shares of
backstop shares equal to (A) (x) $50,000,000 minus (y) the Non-FPS Amount, divided by (B) $10.00, rounded down to the nearest whole number and (b) a number of backstop warrants equal to (I) the number of backstop shares in clause (a)
multiplied by (II) 0.5, rounded down to the nearest whole number. In addition to the foregoing, each Forward Purchase Investor may, at its discretion (regardless of the Non-FPS Amount), subscribe for up to 5,000,000 backstop shares plus up to
2,500,000 backstop warrants at $11.50 per share, for an aggregate purchase price of $50,000,000, or $10.00 for each backstop share and one-half of one backstop warrant. The obligations under the A&R Forward Purchase Agreement do not
depend on whether any Tiga Class A ordinary shares are redeemed by the public shareholders. The forward purchase warrants and the backstop warrants will have the same terms as the public warrants issued as part of the units. Prior to the
Closing, we expect that Tiga, the Sponsor and San Vicente Parent LLC will enter into the Joinder and Assignment Agreement to A&R Forward Purchase Agreement, which among other things, will provide for the transfer and assignment of the
Sponsor’s rights and obligations under the A&R Forward Purchase Agreement to San Vicente Parent LLC. We further expect that San Vicente Parent LLC will satisfy its obligations under the A&R Forward Purchase Agreement prior to the SV
Consolidation (as defined below) and Closing.
Transaction Support Agreement
In connection with the execution of the Merger Agreement, Grindr,
Tiga, Merger Sub I, the Sponsor and the directors of Tiga entered into the Transaction Support Agreement. Pursuant to the terms of the Transaction Support Agreement, the Sponsor and the directors of Tiga agreed to, among other things: (i) vote
or cause its shares to vote in favor of the Business Combination Proposal and the other proposals included in the accompanying proxy statement/prospectus, (ii) subject to certain exceptions, not transfer, sell, pledge, encumber, assign, grant
an option with respect to, hedge, swap, convert or otherwise dispose of their private placement units, Tiga Class A ordinary shares, Tiga Class B ordinary shares or Tiga Warrants (including the Tiga Class A ordinary shares issuable upon
exercise thereof) held by the Sponsor and the independent directors of Tiga until the earlier of the Closing or the valid termination of the Merger Agreement, (iii) not, directly or indirectly, solicit, initiate, continue or engage in
alternative business combination proposals and (iv) waive applicable anti-dilution protections in Tiga’s amended and restated memorandum and articles of association with respect
29
to the conversion of the Tiga Class B ordinary shares held by Sponsor and the
independent directors of Tiga upon consummation of the Business Combination. For additional information, see “Director Designation Rights” and “Proposal No. 1—The
Business Combination Proposal—Related Agreements—Transaction Support Agreement.”
Before or substantially simultaneously with Closing, we expect
the Sponsor will assign its obligations under the Backstop Commitment and the Forward Purchase Commitment to San Vicente Parent LLC, San Vicente Parent LLC will assume the obligations thereunder and the SV Consolidation will be consummated.
In connection with Closing, the Deferred Payment will also be fully repaid. For more information, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations of
Grindr—Financing Arrangements—Deferred Payment”, “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Grindr—Financing Arrangements—SV
Consolidation”, “Risk Factors—Risks Related to Grindr’s Business—Risks related to our Indebtedness— Our indebtedness could materially adversely affect our
financial condition, our ability to raise additional capital to fund our operations, operate our business, react to changes in the economy or our industry, meet our obligations under our outstanding indebtedness, including
significant operating and financial restrictions imposed on us by our debt agreements, and it could divert our cash flow from operations for debt payments”, and “Unaudited Pro
Forma Combined Financial Information.”
The following table illustrates varying ownership levels of issued
and outstanding New Grindr Common Stock upon completion of the Business Combination, presented under three assumed redemption scenarios (no redemptions, 50% redemption and maximum redemptions by Tiga’s public shareholders) assuming (i) no
exercise of warrants to purchase New Grindr Common Stock, and (ii) that Grindr reserves shares of New Grindr Common Stock for potential future issuance upon the exercise of New Grindr Options. If the actual facts are different from these
assumptions, the percentage ownership retained by the current Tiga shareholders in Grindr will be different.
|
|
| |
Assuming No
Redemptions
|
| |
Assuming 50%
Redemptions(7)
|
| |
Assuming Maximum
Redemptions(8)
|
|||||||||
|
|
| |
Number
of Shares
|
| |
%
Ownership
|
| |
Number of
Shares
|
| |
%
Ownership
|
| |
Number
of Shares
|
| |
%
Ownership
|
|
Sponsor and certain affiliates(1)(2)
|
| |
6,900,000
|
| |
3.4%
|
| |
6,900,000
|
| |
3.7%
|
| |
6,900,000
|
| |
3.9%
|
|
Public Shareholders(3)
|
| |
27,600,000
|
| |
13.8%
|
| |
13,800,000
|
| |
7.4%
|
| |
—
|
| |
0.0%
|
|
Forward Purchase Investors(4)
|
| |
10,000,000
|
| |
5.0%
|
| |
10,000,000
|
| |
5.3%
|
| |
10,000,000
|
| |
5.7%
|
|
Former Grindr unitholders(5)(6)
|
| |
156,223,962
|
| |
77.8%
|
| |
156,223,962
|
| |
83.6%
|
| |
158,983,490
|
| |
90.4%
|
|
Total
|
| |
200,723,962
|
| |
100.0%
|
| |
186,923,962
|
| |
100.0%
|
| |
175,883,490
|
| |
100.0%
|
|
(1)
|
Reflects 6,840,000 of founder shares held by the Sponsor and 60,000 founder shares held by independent directors that will
convert into New Grindr Common Stock.
|
|
(2)
|
Excludes 18,560,000 of private placement warrants as the warrants are not expected to be in the money at Closing. Excludes
1,680,000 of private placement warrants available to be issued in the event the $1.7 million related party note disclosed in Tiga’s historical financial statements is converted to warrants upon Closing. The loan is expected to be
repaid in cash in connection with the Closing as the conversion price is approximately 150% higher than the value of the warrants as of June 30, 2022.
|
|
(3)
|
Excludes 13,800,000 public warrants as the warrants are not expected to be in the money at Closing.
|
|
(4)
|
Reflects the sale and issuance of 10,000,000 shares of New Grindr Common Stock to certain investors through the A&R
Forward Purchase Agreement at $10.00 per share and excludes the additional 5,000,000 redeemable warrants that will be issued in connection with the 10,000,000 shares of New Grindr Common Stock. We expect that prior to Closing, the
Sponsor will assign its obligations under the Backstop Commitment and the Forward Purchase Commitment to San Vicente Parent LLC. We further expect that San Vicente Parent LLC will satisfy its obligations under the A&R Forward
Purchase Agreement. As part of the SV Consolidation, San Vicente Parent LLC will merge into Grindr and Grindr will assume the rights and all remaining obligations of San Vicente Parent LLC under the A&R Forward Purchase Agreement,
and be entitled to receive the shares of New Grindr Common Stock and redeemable warrants issuable thereunder.
|
|
(5)
|
Excludes 3,947,439, 3,947,439 and 4,017,166 shares of New Grindr Common Stock to be issued to the former Grindr unitholders
for their historical option awards which will be converted at the same Exchange Ratio in the no redemptions, 50% redemptions, and maximum redemptions scenarios, respectively. Such additional shares would further increase the common
stock ownership percentage of the Grindr unitholders and would dilute the share ownership of all other New Grindr shareholders. In the no redemptions, 50% redemptions and maximum redemptions scenarios, respectively, the former Grindr
unitholders figures include 6,514,692, 6,514,692 and 6,511,512 shares of New Grindr Common Stock associated with the Series P share based compensation units described in “Beneficial Ownership of
Securities”.
|
|
(6)
|
Reflects distributions to former Grindr unitholders of $287.8 million, $287.8 million and $259.5 million in the no
redemptions, 50% redemptions and maximum redemptions scenarios, respectively. Of that amount, $155.0 million is to be used to extinguish the remaining Deferred Payment as defined in “Unaudited
Pro Forma Combined Financial Information” These distributions in all of the redemption scenarios include $4.5 million of unpaid distribution accrued for on the Grindr historical balance sheet. These distributions
combined with the $78.8 million June 2022 distribution paid as disclosed in Note 9 of Grindr’s historical unaudited financial statements make up the total distribution as referenced in the Merger Agreement of $366.6 million, $366.6
million, and $338.3 million dividend in the no redemptions, 50% redemptions and maximum redemptions scenarios, respectively.
|
|
(7)
|
Assumes redemptions of 13,800,000 Tiga Class A ordinary shares at approximately $10.40 per share in connection with the
Business Combination.
|
|
(8)
|
Assumes maximum redemptions of 27,600,000 Tiga Class A ordinary shares at approximately $10.40 per share in connection with
the Business Combination.
|
30
Organizational Structure (Grindr)
The diagrams below depict simplified versions of the current
organizational structures of Grindr and the San Vicente Entities (as defined below) involved in the SV Consolidation (as defined below), which will occur prior to the consummation of the Business Combination.
(1) Prior to Closing, SV Investments may incorporate a new subsidiary, San
Vicente Investments II, Inc. (“SV Investments II”).
31
The diagram below depicts a simplified version of our
organizational structure immediately following the completion of the Business Combination. To see the voting and economic interests of the various post-merger shareholders, please see the question “What equity stake will current Tiga
shareholders and Grindr members hold in New Grindr immediately after the consummation of the Business Combination?” in the section entitled “Questions and Answers About the Proposals.” Further,
consistent with the voting and economic interest disclosed elsewhere in this proxy statement/prospectus, the diagram below does not take into consideration any shares of New Grindr Common Stock issuable upon exercise of public warrants or
private placement interests.
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(1)
|
Prior to the Closing, we expect that Tiga, the Sponsor and San Vicente Parent LLC will enter into the Joinder and
Assignment Agreement to A&R Forward Purchase Agreement, which among other things, will provide for the transfer and assignment of the Sponsor’s rights and obligations under the A&R Forward Purchase Agreement to San Vicente
Parent LLC. We further expect that San Vicente Parent LLC will satisfy its obligations under the A&R Forward Purchase Agreement prior to the SV Consolidation and Closing.
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For more information, see the sections entitled “Proposal No. 1—The Business Combination Proposal,” “Proposal No. 2—The Domestication Proposal,” “Proposal No. 3—The Organizational
Documents Proposal,” “Proposal No. 4—The Governance Proposal,” “Proposal No. 5—The Director Election Proposal,” “Proposal
No. 6— The Stock Issuance Proposal” and “Proposal No. 7—The Adjournment Proposal.”
Date, Time and Place of Extraordinary General Meeting of Tiga
The extraordinary general meeting of Tiga will be held at
and via live webcast at Eastern Time, on , at . The extraordinary general meeting can be accessed by visiting https://www.virtualshareholdermeeting.com/TINV2022SM, where you will be able to listen to the meeting live and vote during
the meeting. For the purposes of the articles of association of the company, the physical place of the meeting will be Milbank LLP, 55 Hudson Yards, New York, NY 10001.
At the extraordinary general meeting, shareholders will be asked
to consider and vote upon the proposals to be put to the extraordinary general meeting and, if necessary, the Adjournment Proposal to permit further solicitation and vote of proxies if Tiga is not able to consummate the Business Combination.
Voting Power; Record Date
Shareholders will be entitled to vote or direct votes to be cast
at the extraordinary general meeting if they owned Tiga Class A ordinary shares at the close of business on , which is the record date for the extraordinary general meeting. Shareholders will have one vote for each Tiga Class A ordinary
share owned at the close of business on the
32
record date. If your shares are held in “street name” or are in a margin or
similar account, you should contact your broker to ensure that votes related to the shares you beneficially own are properly counted. Tiga Warrants do not have voting rights.
On the record date, there were Tiga ordinary shares
outstanding, of which were public shares with the rest being held by the Sponsor.
Quorum and Vote of Tiga Shareholders
A quorum of Tiga shareholder is necessary to hold a valid meeting.
A quorum will be present at the Tiga extraordinary general meeting if the holders of a majority of the issued and outstanding shares entitled to vote at the meeting are represented in person or by proxy. Proxies that are marked “abstain” will
be treated as shares present for purposes of determining the presence of a quorum on all matters. Abstentions and broker non-votes, while considered present for the purposes of establishing a quorum, will not count as a vote cast at the
extraordinary general meeting.
The Sponsor will own of record, on an as-converted basis, 19.8% of
the outstanding Tiga ordinary shares as of the record date. Such shares, as well as any Tiga ordinary acquired in the aftermarket by the Sponsor, will be voted in favor of the proposals presented at the extraordinary general meeting.
The following votes are required for each proposal at the
extraordinary general meeting:
|
•
|
Business Combination Proposal: The approval of the Business
Combination Proposal requires an ordinary resolution under Cayman Islands law, being the affirmative vote of the holders of a majority of the ordinary shares represented in person, virtually or by proxy and entitled to vote thereon and
who vote at the extraordinary general meeting.
|
|
•
|
Domestication Proposal: The approval of the Domestication
Proposal requires a special resolution under Cayman Islands law, being the affirmative vote of the holders of a majority of at least two-thirds of the ordinary shares represented in person, virtually or by proxy and entitled to vote
thereon and who vote at the extraordinary general meeting.
|
|
•
|
Organizational Documents Proposal: The approval of the
Organizational Documents Proposal requires a special resolution under Cayman Islands law, being the affirmative vote of the holders of a majority of at least two-thirds of the ordinary shares represented in person, virtually or by proxy
and entitled to vote thereon and who vote at the extraordinary general meeting.
|
|
•
|
Governance Proposal: The Governance Proposal is constituted of
non-binding advisory proposals, and requires an ordinary resolution under Cayman Islands law, being the affirmative vote of holders of a majority of the ordinary shares represented in person, virtually or by proxy and entitled to vote
thereon and who vote at the extraordinary general meeting.
|
|
•
|
Director Election Proposal: The approval of the Director Election
Proposal requires an ordinary resolution of the holders of Tiga Class B ordinary shares under Cayman Islands law, being the affirmative vote of the holders of a majority of the Tiga Class B ordinary shares represented in person,
virtually or by proxy and entitled to vote thereon and who vote at the extraordinary general meeting.
|
|
•
|
Stock Issuance Proposal: The approval of the Stock Issuance
Proposal requires an ordinary resolution under Cayman Islands law, being the affirmative vote of holders of a majority of the ordinary shares represented in person, virtually or by proxy and entitled to vote thereon and who vote at the
extraordinary general meeting.
|
|
•
|
Adjournment Proposal: The approval of the Adjournment Proposal
requires an ordinary resolution under Cayman Islands law, being the affirmative vote of holders of a majority of the ordinary shares represented in person, virtually or by proxy and entitled to vote thereon and who vote at the
extraordinary general meeting.
|
Each of the Condition Precedent Proposals is cross-conditioned on
the approval of the others. The Director Election Proposal is conditioned on the approval of the Condition Precedent Proposals. The Adjournment Proposal is not conditioned upon the approval of any other proposal set forth in this proxy
statement/prospectus. The Governance Proposal is constituted of non-binding advisory proposals.
33
Redemption Rights
Pursuant to Tiga’s current amended and restated memorandum and
articles of association, a public shareholder may demand that Tiga redeem such shares for cash if the Business Combination is consummated. Public shareholders will be entitled to receive cash for these shares only if they demand that Tiga
redeem their shares for cash no later than the second business day prior to the vote on the Business Combination Proposal by delivering their shares (and/or share certificates (if any) and other redemption forms) to Tiga’s transfer agent no
later than two business days prior to the vote at the meeting. If the Business Combination is not completed, these shares will not be redeemed. If a public shareholder properly and timely demands redemption, New Grindr will redeem each public
share held by such shareholder for a full pro rata portion of the trust account, calculated as of two business days prior to the Closing. As of , 2022 the record date for the extraordinary general meeting, this would amount to approximately
$ per share. If a public shareholder exercises its redemption rights, then it will be exchanging its New Grindr shares for cash and will no longer own the shares. Please see the section entitled “Extraordinary
General Meeting of Tiga—Redemption Rights” for a detailed description of the procedures to be followed if you wish to redeem your shares for cash.
Notwithstanding the foregoing, a public shareholder, together with
any affiliate of such holder or any other person with whom such holder is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Exchange Act), will be restricted from seeking redemption rights with respect to more than 15% of
the public shares.
Accordingly, all public shares in excess of 15% held by a public
shareholder, together with any affiliate of such holder or any other person with whom such holder is acting in concert or was a “group,” will not be redeemed for cash without the prior consent of Tiga.
The Business Combination will not be consummated if Tiga has net
tangible assets of less than $5,000,001 after taking into account public shareholders that have properly and timely demanded redemption of their shares for cash.
Holders of Tiga Warrants will not have redemption rights with respect
to such securities.
Dissenters’ Rights
The holders of Tiga shares will not have dissenters’ rights under
Cayman Islands law in connection with the Mergers as Tiga is not considered a constituent company of the Mergers. The holders of Tiga units or warrants will not have appraisal rights in connection with the Mergers.
Proxy Solicitation
Proxies may be solicited by mail, telephone or in person. Tiga
has engaged Morrow Sodali to assist in the solicitation of proxies. If a shareholder grants a proxy, it may still vote its shares during the meeting if it revokes its proxy before the extraordinary general meeting. A shareholder may also
change its vote by submitting a later-dated proxy as described in the section entitled “Extraordinary General Meeting of Tiga—Revoking Your Proxy.”
Interests of Certain Persons in the Business Combination
When you consider the recommendation of the Tiga Board in favor of
approval of the Business Combination Proposal, you should keep in mind that the Sponsor, Tiga’s directors and executive officers and certain of their affiliates have interests in such proposal that are different from, or in addition to, those
of Tiga shareholders and warrant holders generally. These interests include, among other things, the interests listed below. In each of the minimum redemption scenario and the maximum redemption scenario, as well as all interim levels of
redemptions, the Forward Purchase Investors will pay $10.00 per share of New Grindr Common Stock in connection with the Forward Purchase Commitment and the Backstop Commitment, and the consideration payable to security holders of Grindr, which
will be paid in the form of shares of New Grindr Common Stock, is being valued at $10.00 per share. As such, regardless of the extent of redemptions, the shares of New Grindr Common Stock owned by non-redeeming shareholders will have an implied
value of $10.00 per share upon the consummation of the Business Combination. Notwithstanding the foregoing, public shareholders should be aware that the foregoing interests, and those set forth in more detail below, present a risk that the
Sponsor and its affiliates will benefit from the completion of a business combination, including in a manner that may not be aligned with public shareholders – as such, the Sponsor may be incentivized to complete an acquisition of a less
favorable target company or on terms less favorable to public shareholders rather than liquidate. The Tiga Board was aware of these interests, among other matters, in evaluating and negotiating the Business Combination and in recommending to
the Tiga shareholders that they vote “FOR” the
34
proposals presented at the extraordinary general meeting. In considering the
recommendations of the Tiga Board to vote for the proposals, its shareholders should consider these interests. These interests are described under “Business Combination Proposal—Interests of Certain Persons in
the Business Combination.”
Certain Engagements in Connection with the Business Combination and
Related Transactions
Raine Securities LLC (“Raine”)
were engaged by Tiga to act as financial advisors to Tiga in connection with the Business Combination and will receive compensation in connection therewith. Raine (together with its affiliates) is a global investment and advisory firm focused
exclusively on the technology, media, and telecom sectors. As such, Raine and its affiliates provide a diversified range of financial services in a broad spectrum of activities, including investment banking, private placement and lending,
principal investing, financial and merger & acquisition advisory services, underwriting, investment management activities, sponsoring and managing private investment funds, brokerage, trustee and similar activities on a global basis. In
addition, Raine and its affiliates may provide investment banking and other commercial dealings to Tiga, Grindr and their respective affiliates in the future, for which they would expect to receive customary compensation.
In addition, in the ordinary course of its business activities,
Raine and its affiliates, officers, directors and employees may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities) and financial instruments (including bank loans) for
their own account and for the account of their customers. Such investments and securities activities may involve securities and/or instruments of Tiga or Grindr, or their respective affiliates.
Recommendation to Shareholders
The Tiga Board believes that the Business Combination Proposal and
the other proposals to be presented at the extraordinary general meeting are advisable and in the best interest of Tiga’s shareholders and unanimously recommends that its shareholders vote “FOR” the Business Combination Proposal, “FOR” the
Domestication Proposal, “FOR” the Governance Proposal, “FOR” the Director Election Proposal, “FOR” the Stock Issuance Proposal, “FOR” the Organizational Documents Proposal and “FOR” the Adjournment Proposal, if presented.
When you consider the Tiga Board’s recommendation of these
proposals, you should keep in mind that our directors and officers have interests in the business combination that are different from, or in addition to, the interests of Tiga shareholders generally. Please see the section entitled “Proposal No. 1—The Business Combination Proposal—Interests of Certain Persons in the Business Combination” for additional information. The Tiga Board was aware of these interests, among other matters, in
evaluating and negotiating the Business Combination and in recommending to the Tiga shareholders that they vote “FOR” the proposals presented at the extraordinary general meeting.
Board of Directors Following the Business Combination
At and following the Closing, the New Grindr Board shall be
comprised of nine (9) directors, and the majority of the directors shall be independent directors. At the Closing, the initial composition of the New Grindr Board is expected to include James Fu Bin Lu, G. Raymond Zage, III, J. Michael Gearon,
Jr., Nathan Richardson, Daniel Brooks Baer, George Arison, Gary I. Horowitz, Meghan Stabler and Maggie Lower.
Each director shall be nominated for a one (1) year term to be
elected at the subsequent annual meeting of the shareholders following the effectiveness of the Proposed Certificate of Incorporation. At each succeeding annual meeting of the shareholders of New Grindr, beginning with the first annual meeting
of the shareholders of New Grindr following the effectiveness of the Proposed Certificate of Incorporation, each of the successors elected to replace the directors whose term expires at that annual meeting shall be elected for a one-year term
or until the election and qualification of their respective successors in office, subject to their earlier death, resignation or removal.
Please see the sections entitled “Proposal No. 1—The Business Combination Proposal—Governance of New Grindr Post-Closing” and “Management of New Grindr Following the Business Combination” for additional information.
35
Conditions to Closing of Business Combination
Conditions to the Obligations of Each Party
The obligations of each party to the Merger Agreement to
consummate, or cause to be consummated, the Business Combination are subject to the satisfaction of the following conditions, any one or more of which may be waived (if legally permitted) in writing by Grindr and Tiga:
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•
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the approval of the proposals set forth in this proxy statement/prospectus by Tiga’s shareholders, will have been obtained;
|
|
•
|
Grindr unitholder approval shall have been obtained;
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•
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this proxy statement/prospectus will have become effective under the Securities Act and no stop order suspending the
effectiveness of this proxy statement/prospectus will have been issued and no proceedings for that purpose will have been initiated or threatened by the SEC and not withdrawn;
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•
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the applicable waiting period or periods under the HSR Act (and any extensions thereof, including any agreement with any
governmental authority to delay consummation of the transactions contemplated by the Merger Agreement) applicable to the transactions contemplated by the Merger Agreement will have expired or been terminated, the parties shall have
received CFIUS approval, if and as required or otherwise deemed advisable by the parties after good faith discussions;
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•
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there will not be in force any governmental order, statute, rule or regulation or other action restraining, enjoining or
otherwise prohibiting the consummation of the Mergers or otherwise making the consummation of the Mergers illegal or otherwise prohibited;
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•
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Tiga will have at least $5,000,001 of net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange
Act) remaining after the share redemptions; and
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•
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the shares of New Grindr Common Stock to be issued in connection with the Mergers will have been approved for listing on the
NYSE subject to official notice thereof.
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Conditions to the Obligations of the Tiga Parties
The obligations of the Tiga Parties to consummate, or cause to be
consummated, the Business Combination are subject to the satisfaction of the following additional conditions, any one or more of which may be waived in writing by Tiga:
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•
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the Grindr Fundamental Representations since the date of the most recent balance sheet will be true and correct in all
respects as of the Closing Date, except with respect to such representations and warranties that are made as of an earlier date, which representations and warranties will be true and correct in all respects at and as of such date;
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•
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each of the remaining representations and warranties of Grindr contained in the Merger Agreement (disregarding any
qualifications and exceptions contained therein relating to materiality, Grindr Material Adverse Effect or any similar qualification or exception) will be true and correct as of the Closing Date, except with respect to such
representations and warranties that are made as of an earlier date, which representations and warranties will be true and correct at and as of such date, except for, in each case, inaccuracies or omissions that would not, individually
or in the aggregate, reasonably be expected to have a Grindr Material Adverse Effect;
|
|
•
|
each of the covenants of Grindr to be performed as of or prior to the Closing will have been performed in all material
respects (subject to a 30-day cure period);
|
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•
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no Grindr Material Adverse Effect shall have occurred between the date of the Merger Agreement and the Closing Date;
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•
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the full repayment and final settlement of the promissory note owed to Grindr by Catapult GP II LLC;
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•
|
all parties to each of the Ancillary Agreements (other than Tiga) shall have delivered, or caused to be delivered, to Tiga
copies of each of the Ancillary Agreements duly executed by all such parties, and each of the Ancillary Agreements shall be in full force and effect and shall not have been rescinded by any of the parties thereto (other than Tiga and
Merger Sub I); and
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•
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other than those persons identified as continuing directors in the Grindr disclosure letter, all members of the board of
managers of Grindr and all executive officers of Grindr shall have executed written resignations effective as of the Effective Time.
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36
Conditions to the Obligations of Grindr
The obligations of Grindr to consummate, or cause to be
consummated, the Business Combination are subject to the satisfaction of the following additional conditions, any one or more of which may be waived in writing by Grindr:
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•
|
the Tiga Fundamental Representations in the no redemptions, 50% redemptions and maximum redemptions scenarios, respectively
will be true and correct in all respects as of the Closing Date, except with respect to such representations and warranties that are made as of an earlier date, which representations and warranties will be true and correct in all
respects at and as of such date;
|
|
•
|
each of the representations and warranties of Tiga regarding absence of any changes, the authorized share capital of Tiga and
the exercisability of the Tiga Warrants will be true and correct other than de minimis inaccuracies as of the Closing Date, except with respect to such representations and warranties which speak as to an earlier date, which
representations and warranties will be true and correct other than de minimis inaccuracies at and as of such date, except for changes after the date of the Merger Agreement which are contemplated or expressly permitted by the Merger
Agreement or the Ancillary Agreements,
|
|
•
|
each of the other representations and warranties of Tiga (disregarding any qualifications and exceptions contained therein
relating to materiality and material adverse effect or any similar qualification or exception) will be true and correct as of the Closing Date, except with respect to such representations and warranties which speak as to an earlier
date, which representations and warranties will be true and correct at and as of such date, except for, in each case, inaccuracies or omissions that would not, individually or in the aggregate, reasonably be expected to have a material
adverse effect; provided, that, the representations and warranties regarding absence of any changes shall be true and correct solely as of the date of the Merger Agreement;
|
|
•
|
each of the covenants of Tiga to be performed as of or prior to the Closing will have been performed in all material respects
(subject to a 30-day cure period);
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|
•
|
the Domestication will have been completed as contemplated by the Merger Agreement and a time-stamped copy of the certificate
issued by the Delaware Secretary of State in relation thereto will have been delivered to Grindr (for additional information, see “Domestication Proposal”);
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•
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excluding deferred underwriting fees and commissions and any fees and expenses incurred in connection with the negotiation,
preparation and execution of the Merger Agreement and the performance of the transactions contemplated thereby, the total outstanding liabilities of Tiga shall not exceed $2,700,000;
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•
|
the Minimum Cash Condition. For more information, see “Business Combination
Proposal—Minimum Cash Condition” above;
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|
•
|
the Backstop Commitment and the Forward Purchase Commitment shall have been consummated, where required;
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|
•
|
other than those persons identified as continuing directors on Grindr’s disclosure letter, all members of the Tiga Board and
all executive officers of Tiga shall have executed written resignations effective as of the Effective Time; and
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|
•
|
all parties to each of the Ancillary Agreements (other than Grindr) shall have delivered, or caused to be delivered, to
Grindr copies of each of the Ancillary Agreements duly executed by all such parties.
|
Anticipated Accounting Treatment
The Domestication
The Domestication is being proposed solely for the purpose of
changing the legal domicile of Tiga. There will be no accounting effect or change in the carrying amount of the assets and liabilities of Tiga as a result of the Domestication. The business, capitalization, assets and liabilities and financial
statements of New Grindr immediately following the Domestication will be the same as those of Tiga immediately prior to the Domestication.
The Business Combination
The Business Combination will be accounted for as a reverse
recapitalization for which Grindr has been determined to be the accounting acquirer (the “Reverse Recapitalization”). As the Business Combination will be
37
accounted for as a Reverse Recapitalization, no goodwill or other intangible
assets will be recorded, in accordance with GAAP. Under this method of accounting, Tiga will be treated as the “acquired” company for financial reporting purposes. Accordingly, for accounting purposes, the Reverse Recapitalization will be
treated as the equivalent of Grindr issuing stock for the net assets of Tiga, accompanied by a recapitalization. The net assets of Tiga will be stated at historical cost, with no goodwill or other intangible assets recorded. Operations prior to
the Reverse Recapitalization will be those of Grindr.
Regulatory Matters
Under the HSR Act and the rules that have been promulgated
thereunder by the Federal Trade Commission (the “FTC”), certain transactions may not be consummated unless information has been furnished to the Antitrust Division of the Department of Justice (the “Antitrust Division”) and the FTC and certain waiting period requirements have been satisfied. The Business Combination is subject to these requirements and may not be completed until the expiration of a
30-day waiting period following the filing of the required Notification and Report Forms with the Antitrust Division and the FTC. On May 23, 2022, Tiga and Grindr filed the required notice and furnished the required information under the HSR
Act to the Antitrust Division of the DOJ and the FTC. The 30-day HSR waiting period expired on June 22, 2022 at 11:59 PM.
At any time before or after consummation of the Business
Combination, notwithstanding termination of the waiting period under the HSR Act, competition authorities could take such action under applicable antitrust laws as each deems necessary or desirable in the public interest, including seeking to
enjoin the consummation of the Business Combination. Private parties may also seek to take legal action under the antitrust laws under certain circumstances. There is no assurance that the Antitrust Division, the FTC, any state attorney
general, or any other government authority or private party will not attempt to challenge the Business Combination on antitrust grounds, and, if such a challenge is made, we cannot assure you as to its result.
Neither Tiga nor Grindr is aware of any material regulatory
approvals or actions that are required for completion of the Business Combination other than the expiration of the waiting period under the HSR Act. It is presently contemplated that if any such additional regulatory approvals or actions are
required, those approvals or actions will be sought. There can be no assurance, however, that any additional approvals or actions will be obtained.
Emerging Growth Company
Tiga is an “emerging growth company,” as defined in Section 2(a)
of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). As such, it is eligible to take advantage of certain exemptions from various reporting requirements
that are applicable to other public companies that are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), reduced disclosure obligations regarding executive compensation in their periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory
vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.
Further, section 102(b)(1) of the JOBS Act exempts emerging growth
companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities
registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that
apply to non-emerging growth companies but any such election to opt out is irrevocable. Tiga has elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application
dates for public or private companies, Tiga, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of Tiga’s financial statements with
certain other public companies difficult or impossible because of the potential differences in accounting standards used.
We will remain an emerging growth company until the earlier of:
(1) the last day of the fiscal year (a) following the fifth anniversary of the completion of the initial public offering, (b) in which we have total annual gross revenue of at least $1.235 billion, or (c) in which we are deemed to be a large
accelerated filer, which means the market value
38
of our common equity that is held by non-affiliates exceeds $700 million as of the
end of the prior fiscal year’s second fiscal quarter; and (2) the date on which we have issued more than $1.00 billion in non-convertible debt during the prior three-year period. References herein to “emerging growth company” shall have the
meaning associated with it in the JOBS Act.
Risk Factors
In evaluating the Business Combination and the relevant
proposals to be considered and voted on as described in this proxy statement/prospectus, you should carefully review and consider the risk factors set forth under the section entitled “Risk Factors”
beginning on page 53 of this proxy statement/prospectus. The occurrence of one or more of the events or circumstances described in that section, alone or in combination with other events or circumstances, may
have a material adverse effect on (i) the ability of the Tiga and Grindr to complete the Business Combination, and (ii) the business, cash flows, financial condition, and results of operations of Grindr prior to the consummation of the
Business Combination, and (iii) New Grindr following consummation of the Business Combination. Some of the more significant challenges and risks related to Grindr, Tiga, the Business Combination and New Grindr Common Stock are summarized
below:
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•
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Grindr’s business depends on the strength and market perception of the Grindr brand, and if events occur that damage Grindr’s
reputation and brand, its ability to expand its base of users may be impaired, and its business could be materially and adversely affected.
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•
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Changes to Grindr’s existing products and services, or the development and introduction of new products and services, could
fail to attract or retain users or generate revenue and profits.
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•
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If Grindr fails to retain existing users or add new users, or if its users decrease their level of engagement with its
products and services or do not convert to paying users, its revenue, financial results and business may be significantly harmed.
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•
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Inappropriate actions by certain of Grindr’s users could be attributed to Grindr and damage Grindr brand or reputation, or
subject Grindr to regulatory inquiries, legal action, or other liabilities, which, in turn, could materially adversely affect its business.
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•
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Unfavorable media coverage could materially and adversely affect Grindr’s business, brand, or reputation.
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•
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The online social networking industry in which Grindr operates is highly competitive, and if Grindr cannot compete
effectively its business will suffer.
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•
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Grindr’s quarterly operating results and other operating metrics may fluctuate from quarter to quarter, which makes these
metrics difficult to predict.
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•
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The distribution, marketing of, and access to Grindr’s products and services depend, in large part, on third-party platforms
and mobile application stores, among other third-party providers. If these third parties limit, prohibit, fail to operate, or otherwise interfere with the distribution or use of Grindr’s products or services in any material way, it
could materially and adversely affect its business, financial condition, and results of operations.
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•
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Privacy concerns relating to Grindr’s products and services and the use of user information could negatively impact its user
base or user engagement, which could have a material and adverse effect on Grindr’s business, financial condition, and results of operations.
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•
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Grindr relies primarily on the Apple App Store and Google Play Store as the channels for processing of payments. In addition,
access to Grindr’s products and services depend on mobile App stores and other third parties such as data center service providers, as well as third-party payment aggregators, computer systems, internet transit providers and other
communications systems and service providers. Any deterioration in Grindr’s relationship with Apple, Google or other such third parties may negatively impact its business.
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•
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Adverse social and political environments for the LGBTQ+ community in certain parts of the world, including actions by
governments or other groups, could limit Grindr’s geographic reach, business expansion, and user growth, any of which could materially and adversely affect its business, financial condition, and results of operation.
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39
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•
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Grindr has identified material weaknesses in its internal control over financial reporting which, if not corrected, could
affect the reliability of its consolidated financial statements, and have other adverse consequences.
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•
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Security breaches, unauthorized access to or disclosure of Grindr’s data or user data, other hacking and phishing attacks on
its systems, or other data security incidents could compromise sensitive information related to its business and/or user personal data processed by Grindr or on its behalf and expose Grindr to liability, which could harm its reputation,
generate negative publicity, and materially and adversely affect its business.
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Grindr’s success depends, in part, on the integrity of its information technology systems and infrastructures and on its
ability to enhance, expand, and adapt these systems and infrastructures in a timely and cost-effective manner.
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Grindr’s success depends, in part, on its ability to access, collect, and use personal data about its users and to comply
with applicable privacy and data protection laws and industry best practices.
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•
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Grindr’s business is subject to complex and evolving U.S. and international laws and regulations. Many of these laws and
regulations are subject to change or uncertain interpretation, and could result in claims, changes to Grindr’s business practices, monetary penalties, increased cost of operations, declines in user growth or engagement, negative
publicity; or other harm to its business.
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•
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The varying and rapidly evolving regulatory framework on privacy and data protection across jurisdictions could result in
claims, changes to Grindr’s business practices, monetary penalties, increased cost of operations, or declines in user growth or engagement, or otherwise harm its business.
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•
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Grindr is subject to litigation, regulatory and other government investigations, enforcement actions, and settlements, and
adverse outcomes in such proceedings could have a materially adverse effect on its business, financial condition, and results of operation.
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•
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Activities of Grindr’s users or content made available by such users could subject Grindr to liability.
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Grindr’s indebtedness could materially adversely affect its financial condition, its ability to raise additional capital to
fund its operations, operate its business, react to changes in the economy or its industry, meet its obligations under its outstanding indebtedness, including significant operating and financial restrictions imposed on Grindr by its
debt agreements, and it could divert its cash flow from operations for debt payments.
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Please see the section entitled “Risk Factors” beginning on page 53 of this proxy statement/prospectus for a discussion of these and other factors you should consider in evaluating the Business Combination.
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The Sponsor has agreed to vote in favor of the Business Combination, regardless of how Tiga’s public shareholders vote.
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The Sponsor, certain members of the Tiga Board and certain Tiga officers have interests in the Business Combination that are
different from or are in addition to other shareholders in recommending that shareholders vote in favor of approval of the Business Combination Proposal and approval of the other proposals described in this proxy statement/prospectus.
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40
The information presented below is derived from Tiga’s unaudited
financial statements included elsewhere in this proxy statement/prospectus for the six months ended June 30, 2022 and 2021 and the balance sheet data as of June 30, 2022 and Tiga’s audited financial statements included elsewhere in this proxy
statement/prospectus for the year ended December 31, 2021 and for the period from July 27, 2020 (inception) through December 31, 2020 and the balance sheet data as of December 31, 2021 and 2020.
The historical results presented below are not necessarily
indicative of the results to be expected for any future period. You should read carefully the following selected information in conjunction with “Tiga’s Management’s Discussion and Analysis of Financial
Condition and Results of Operations” and Tiga’s historical financial statements and accompanying footnotes, included elsewhere in this proxy statement/prospectus.
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As of June 30,
|
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As of December 31,
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|
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2022
|
| |
2021
|
| |
2020
|
|
ASSETS
|
| |
|
| |
|
| |
|
|
Current Assets
|
| |
|
| |
|
| |
|
|
Cash
|
| |
$165,655
|
| |
$17,499
|
| |
$1,144,776
|
|
Prepaid expenses
|
| |
106,875
|
| |
123,750
|
| |
262,499
|
|
Total Current Assets
|
| |
272,530
|
| |
141,249
|
| |
1,407,275
|
|
|
| |
|
| |
|
| |
|
|
Cash and Investments held in Trust Account
|
| |
287,542,770
|
| |
284,379,776
|
| |
278,774,646
|
|
Total Assets
|
| |
$287,815,300
|
| |
$284,521,025
|
| |
$280,181,921
|
|
|
| |
|
| |
|
| |
|
|
LIABILITIES AND SHAREHOLDERS’ DEFICIT
|
| |
|
| |
|
| |
|
|
Current Liabilities:
|
| |
|
| |
|
| |
|
|
Accrued expenses
|
| |
3,254,399
|
| |
$559,183
|
| |
$37,067
|
|
Convertible promissory note – related party
|
| |
1,680,000
|
| |
—
|
| |
26,780
|
|
Total Current Liabilities
|
| |
4,934,399
|
| |
559,183
|
| |
63,847
|
|
|
| |
|
| |
|
| |
|
|
Forward Purchase Agreement Liabilities
|
| |
5,521,061
|
| |
5,008,045
|
| |
6,757,777
|
|
Warrant liability
|
| |
19,134,810
|
| |
21,220,018
|
| |
39,232,167
|
|
Deferred underwriting fee payable
|
| |
9,660,000
|
| |
9,660,000
|
| |
9,660,000
|
|
Total Liabilities
|
| |
39,250,270
|
| |
36,447,246
|
| |
55,713,791
|
|
|
| |
|
| |
|
| |
|
|
Commitments and Contingencies
|
| |
|
| |
|
| |
|
|
Class A ordinary shares subject to possible redemption,
$0.0001 par value; 27,600,000 shares at redemption value of $10.42, $10.30 and $10.10 per share as of June 30, 2022, December 31, 2021 and 2020, respectively
|
| |
287,542,770
|
| |
284,280,000
|
| |
278,760,000
|
|
|
| |
|
| |
|
| |
|
|
Shareholders’ Deficit
|
| |
|
| |
|
| |
|
|
Preference shares, $0.0001 par value; 1,000,000 shares
authorized; no shares issued and outstanding
|
| |
—
|
| |
—
|
| |
—
|
|
Class A ordinary shares, $0.0001 par value; 200,000,000
shares authorized; no shares issued or outstanding, excluding 27,600,000 shares subject to possible redemption at June 30, 2022 and December 31, 2021
|
| |
—
|
| |
—
|
| |
—
|
|
Class B ordinary shares, $0.0001 par value; 20,000,000
shares authorized; 6,900,000 shares issued and outstanding as of June 30, 2022, December 31, 2021 and December 31, 2020, respectively
|
| |
690
|
| |
690
|
| |
690
|
|
Additional paid-in capital
|
| |
—
|
| |
—
|
| |
—
|
|
Accumulated deficit
|
| |
(38,978,430)
|
| |
(36,206,911)
|
| |
(54,292,560)
|
|
Total Shareholders’ Deficit
|
| |
(38,977,740)
|
| |
(36,206,221)
|
| |
(54,291,870)
|
|
Total Liabilities and Shareholders’ Deficit
|
| |
$287,815,300
|
| |
$284,521,025
|
| |
$280,181,921
|
41
Statement of Operations
|
|
| |
For the three months ended
June 30,
|
| |
For the six months
ended June 30,
|
| |
For the
year ended
December 31,
|
| |
For the
period from
July 27,
2020
(inception) to
December 31,
|
||||||
|
|
| |
2022
|
| |
2021
|
| |
2022
|
| |
2021
|
| |
2021
|
| |
2020
|
|
Operating costs
|
| |
$3,037,584
|
| |
$650,003
|
| |
$4,243,935
|
| |
$834,787
|
| |
$1,761,362
|
| |
$124,923
|
|
Loss from operations
|
| |
(3,037,584)
|
| |
(650,003)
|
| |
(4,234,935)
|
| |
(834,787)
|
| |
(1,761,362)
|
| |
(124,923)
|
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
Other income (expenses):
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
Interest earned on investments held in Trust Account
|
| |
363,264
|
| |
3,355
|
| |
402,994
|
| |
35,076
|
| |
85,130
|
| |
14,646
|
|
Change in fair value of warrant liabilities
|
| |
(81,153)
|
| |
79,548
|
| |
4,926,361
|
| |
11,534,063
|
| |
23,121,405
|
| |
(11,408,319)
|
|
Fair value of private placement warrants in excess of
purchase price
|
| |
(4,031,433)
|
| |
4,205,105
|
| |
(81,153)
|
| |
79,548
|
| |
—
|
| |
(1,646,600)
|
|
Change in fair value of forward purchase agreement
liabilities
|
| |
(731,176)
|
| |
1,787,878
|
| |
(513,016)
|
| |
184,109
|
| |
1,749,732
|
| |
(3,358,302)
|
|
Initial loss on forward purchase agreement liabilities
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
(3,399,475)
|
|
Transaction costs allocable to derivatives
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
(928,450)
|
|
Total other income (expenses), net
|
| |
(4,480,498)
|
| |
6,075,886
|
| |
4,735,186
|
| |
11,832,796
|
| |
24,956,267
|
| |
(20,726,500)
|
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
Net income (loss)
|
| |
$(7,518,082)
|
| |
$5,425,883
|
| |
$491,251
|
| |
$10,998,009
|
| |
$23,194,905
|
| |
$(20,851,423)
|
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
Weighted average shares outstanding of Class A ordinary
shares
|
| |
27,600,000
|
| |
27,600,000
|
| |
27,600,000
|
| |
27,600,000
|
| |
27,600,000
|
| |
21,660,759
|
|
Basic and diluted net income (loss) per
share, Class A ordinary shares
|
| |
$(0.22)
|
| |
$0.16
|
| |
$0.01
|
| |
$0.32
|
| |
$0.67
|
| |
$(0.79)
|
|
Weighted average shares outstanding of Class B ordinary
shares
|
| |
6,900,000
|
| |
6,900,000
|
| |
6,900,000
|
| |
6,900,000
|
| |
6,900,000
|
| |
4,870,253
|
|
Basic and diluted net income (loss) per
share, Class B ordinary shares
|
| |
$(0.22)
|
| |
$0.16
|
| |
$0.01
|
| |
$0.32
|
| |
$0.67
|
| |
$(0.79)
|
42
Statement of Cash Flows
|
|
| |
For the six months ended June 30,
|
| |
For the
year ended
December 31,
|
| |
For the
period from
July 27,
2020
(inception) to
December 31,
|
|||
|
|
| |
2022
|
| |
2021
|
| |
2021
|
| |
2020
|
|
Cash Flows from Operating Activities:
|
| |
|
| |
|
| |
|
| |
|
|
Net income (loss)
|
| |
$491,251
|
| |
$10,998,009
|
| |
$23,194,905
|
| |
$(20,851,423)
|
|
Adjustments to reconcile net income (loss) to net cash
used in operating activities:
|
| |
|
| |
|
| |
|
| |
|
|
Change in fair value of warrant liabilities
|
| |
(4,926,361)
|
| |
(11,534,063)
|
| |
(23,121,405)
|
| |
11,408,319
|
|
Change in fair value of forward purchase agreement
liabilities
|
| |
513,016
|
| |
(184,109)
|
| |
(1,749,732)
|
| |
3,358,302
|
|
Fair value of private placement warrants in excess of
purchase price
|
| |
81,153
|
| |
(79,548)
|
| |
—
|
| |
1,646,600
|
|
Interest earned on investments held in Trust Account
|
| |
(402,994)
|
| |
(35,076)
|
| |
(85,130)
|
| |
(14,646)
|
|
Formation cost paid by Sponsor in exchange for issuance of
founder shares
|
| |
—
|
| |
|
| |
—
|
| |
5,000
|
|
Initial loss on forward purchase agreement liabilities
|
| |
—
|
| |
|
| |
—
|
| |
3,399,475
|
|
Transaction costs allocable to derivatives
|
| |
—
|
| |
|
| |
—
|
| |
928,450
|
|
Changes in operating assets and liabilities:
|
| |
|
| |
|
| |
|
| |
|
|
Prepaid expenses
|
| |
16,875
|
| |
22,860
|
| |
138,749
|
| |
(262,499)
|
|
Accrued expenses
|
| |
2,695,216
|
| |
497,767
|
| |
522,116
|
| |
37,067
|
|
Net cash used in operating activities
|
| |
$(1,531,844)
|
| |
$(314,160)
|
| |
$(1,100,497)
|
| |
$(345,355)
|
|
|
| |
|
| |
|
| |
|
| |
|
|
Cash Flows from Investing Activities:
|
| |
|
| |
|
| |
|
| |
|
|
Investment of cash into Trust Account
|
| |
(2,760,000)
|
| |
(2,760,000)
|
| |
$(5,520,000)
|
| |
$(278,760,000)
|
|
Net cash used in investing activities
|
| |
(2,760,000)
|
| |
(2,760,000)
|
| |
$(5,520,000)
|
| |
$(278,760,000)
|
|
|
| |
|
| |
|
| |
|
| |
|
|
Cash Flows from Financing Activities:
|
| |
|
| |
|
| |
|
| |
|
|
Proceeds from sale of Units, net of underwriting discounts
paid
|
| |
—
|
| |
—
|
| |
—
|
| |
270,480,000
|
|
Proceeds from promissory note – related party
|
| |
1,680,000
|
| |
—
|
| |
—
|
| |
300,000
|
|
Repayment of promissory note – related party
|
| |
—
|
| |
—
|
| |
—
|
| |
(300,000)
|
|
Payment of offering costs
|
| |
—
|
| |
(26,780)
|
| |
(26,780)
|
| |
(509,869)
|
|
Proceeds from sale of Private Placements Warrants
|
| |
2,760,000
|
| |
2,760,000
|
| |
5,520,000
|
| |
10,280,000
|
|
Net cash provided by financing activities
|
| |
$4,440,000
|
| |
2,733,220
|
| |
$5,493,220
|
| |
$280,250,131
|
|
|
| |
|
| |
|
| |
|
| |
|
|
Net Change in Cash
|
| |
$148,156
|
| |
$(340,940)
|
| |
$(1,127,277)
|
| |
$1,144,776
|
|
Cash – Beginning of period
|
| |
$17,499
|
| |
$1,144,776
|
| |
1,144,776
|
| |
—
|
|
Cash – End of period
|
| |
$165,655
|
| |
$803,836
|
| |
$17,499
|
| |
$1,144,776
|
|
|
| |
|
| |
|
| |
|
| |
|
|
Non-Cash investing and financing activities:
|
| |
|
| |
|
| |
|
| |
|
|
Offering costs included in accrued offering costs
|
| |
$—
|
| |
$26,780
|
| |
$—
|
| |
$26,780
|
|
Deferred offering costs paid by Sponsor in exchange for
the issuance of Class B ordinary shares
|
| |
$—
|
| |
$—
|
| |
$—
|
| |
$20,000
|
|
Deferred underwriting fee payable
|
| |
$—
|
| |
$—
|
| |
$—
|
| |
$9,660,000
|
43
The following tables set forth a summary of Grindr’s historical
consolidated financial and operating data as of, and for the periods ended on, the dates indicated.
The selected historical consolidated statements of operations and
comprehensive income (loss) data and statement of cash flows data presented below of Grindr are derived from Grindr’s unaudited condensed consolidated financial statements included elsewhere in this proxy statement/prospectus for the three and
six months ended June 30, 2022 and 2021 and the selected historical unaudited condensed consolidated balance sheet data as of June 30, 2022 and Grindr’s audited consolidated financial statements included elsewhere in this proxy
statement/prospectus for the year ended December 31, 2021 and the period from June 11, 2020 to December 31, 2020 (Successor), the period from January 1, 2020 to June 10, 2020 and the year ended December 31, 2019 (Predecessor) and the historical
consolidated balance sheet data as of December 31, 2021 and December 31, 2020 (Successor). In Grindr’s management’s opinion, the unaudited interim financial statements include all adjustments necessary to state fairly Grindr’s financial
position as of June 30, 2022, and the results of operations for the three and six months ended June 30, 2022 and 2021.
The historical results presented below are not necessarily
indicative of the results to be expected for any future period and the interim results are not necessarily indicative for the annual period. You should read carefully the following selected information in conjunction with “Grindr’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Grindr’s historical consolidated financial statements and accompanying footnotes, included elsewhere in
this prospectus.
|
|
| |
Successor
|
|||||||||
|
(Amounts in thousands, except per share data)
|
| |
Three Months
Ended June 30,
2022
|
| |
Three Months
Ended June 30,
2021
|
| |
Six Months
ended June 30,
2022
|
| |
Six Months
ended June 30,
2021
|
|
Consolidated Statements of
Operations and Comprehensive Loss Data
|
| |
|
| |
|
| |
|
| |
|
|
Revenue
|
| |
$46,555
|
| |
$34,779
|
| |
$90,085
|
| |
$62,563
|
|
Operating costs and expenses
|
| |
|
| |
|
| |
|
| |
|
|
Cost of revenue (exclusive of depreciation and
amortization shown separately below)
|
| |
12,102
|
| |
8,588
|
| |
23,803
|
| |
16,102
|
|
Selling, general and administrative expenses
|
| |
23,241
|
| |
6,549
|
| |
33,491
|
| |
13,463
|
|
Product development expense
|
| |
4,175
|
| |
2,206
|
| |
7,822
|
| |
4,581
|
|
Depreciation and amortization
|
| |
9,092
|
| |
10,721
|
| |
18,118
|
| |
21,826
|
|
Total operating costs and expenses
|
| |
48,610
|
| |
28,064
|
| |
83,234
|
| |
55,972
|
|
Income (loss) from operations
|
| |
(2,055)
|
| |
6,715
|
| |
6,851
|
| |
6,591
|
|
Other (expense) income
|
| |
|
| |
|
| |
|
| |
|
|
Interest (expense) income, net
|
| |
(3,256)
|
| |
(4,489)
|
| |
(6,212)
|
| |
(10,563)
|
|
Other income (expense), net
|
| |
2
|
| |
26
|
| |
(66)
|
| |
(30)
|
|
Total other (expense) income
|
| |
(3,254)
|
| |
(4,463)
|
| |
(6,278)
|
| |
(10,593)
|
|
Net income (loss) before income tax
|
| |
(5,309)
|
| |
2,252
|
| |
573
|
| |
(4,002)
|
|
Income tax provision (benefit)
|
| |
(1,000)
|
| |
458
|
| |
253
|
| |
(675)
|
|
Net income (loss) and comprehensive income (loss)
|
| |
$(4,309)
|
| |
$1,794
|
| |
$320
|
| |
$(3,327)
|
|
Net income (loss) per unit/share - Basic and Diluted
|
| |
$(0.04)
|
| |
$0.02
|
| |
$—
|
| |
$(0.03)
|
|
|
| |
|
| |
|
| |
|
| |
|
|
Consolidated Balance Sheet Data (at
period end/year end):
|
| |
|
| |
|
| |
|
| |
|
|
Cash and cash equivalents
|
| |
$25,548
|
| |
|
| |
$25,548
|
| |
|
|
Total assets
|
| |
$446,067
|
| |
|
| |
$446,067
|
| |
|
|
Total debt
|
| |
$195,660
|
| |
|
| |
$195,660
|
| |
|
|
Total liabilities
|
| |
248,775
|
| |
|
| |
248,775
|
| |
|
|
Total members’ / stockholders’ equity
|
| |
197,292
|
| |
|
| |
197,292
|
| |
|
|
|
| |
|
| |
|
| |
|
| |
|
|
Statement of Cash Flows Data:
|
| |
|
| |
|
| |
|
| |
|
|
Net cash (used in) provided by operating activities
|
| |
|
| |
|
| |
27,836
|
| |
3,579
|
|
Net cash (used in) provided by investing activities
|
| |
|
| |
|
| |
(2,176)
|
| |
(1,295)
|
|
Net cash (used in) provided by financing activities
|
| | | | | |
(15,890)
|
| |
(2,880)
|
||
44
|
|
| |
Successor
|
| |
Predecessor
|
||||||
|
(Amounts in thousands, except per share data)
|
| |
Year ended
December 31,
2021
|
| |
Period from
June 11, 2020
to December 31,
2020
|
| |
Period from
January 1,
2020 to June 10,
2020
|
| |
Year ended
December 31,
2019
|
|
Consolidated Statements of
Operations and Comprehensive Loss Data
|
| |
|
| |
|
| |
|
| |
|
|
Revenue
|
| |
$145,833
|
| |
$61,078
|
| |
$43,385
|
| |
$108,698
|
|
Operating costs and expenses
|
| |
|
| |
|
| |
|
| |
|
|
Cost of revenue (exclusive of depreciation and
amortization shown separately below)
|
| |
37,358
|
| |
18,467
|
| |
12,954
|
| |
27,545
|
|
Selling, general and administrative expenses
|
| |
30,618
|
| |
15,671
|
| |
15,583
|
| |
32,573
|
|
Product development expense
|
| |
10,913
|
| |
7,278
|
| |
7,136
|
| |
11,059
|
|
Depreciation and amortization
|
| |
43,234
|
| |
17,639
|
| |
10,642
|
| |
27,412
|
|
Total operating costs and expenses
|
| |
122,123
|
| |
59,055
|
| |
46,315
|
| |
98,589
|
|
Income (loss) from operations
|
| |
23,710
|
| |
2,023
|
| |
(2,930)
|
| |
10,109
|
|
Other (expense) income
|
| |
|
| |
|
| |
|
| |
|
|
Interest (expense) income, net
|
| |
(18,698)
|
| |
(15,082)
|
| |
277
|
| |
386
|
|
Other income (expense), net
|
| |
1,288
|
| |
142
|
| |
(76)
|
| |
(348)
|
|
Total other (expense) income
|
| |
(17,410)
|
| |
(14,940)
|
| |
201
|
| |
38
|
|
Net income (loss) before income tax
|
| |
6,300
|
| |
(12,917)
|
| |
(2,729)
|
| |
10,147
|
|
Income tax provision (benefit)
|
| |
1,236
|
| |
(1,958)
|
| |
(615)
|
| |
2,441
|
|
Net income (loss) and comprehensive income (loss)
|
| |
$5,064
|
| |
$(10,959)
|
| |
$(2,114)
|
| |
$7,706
|
|
Net income (loss) per unit/share - Basic and Diluted
|
| |
$0.05
|
| |
$(0.11)
|
| |
$(0.02)
|
| |
$0.08
|
|
|
| |
|
| |
|
| |
|
| |
|
|
Consolidated Balance Sheet Data (at
period end/year end):
|
| |
|
| |
|
| |
|
| |
|
|
Cash and cash equivalents
|
| |
$15,778
|
| |
$41,394
|
| |
$66,454
|
| |
47,950
|
|
Total assets
|
| |
$449,726
|
| |
$503,705
|
| |
|
| |
|
|
Total debt
|
| |
$137,119
|
| |
$193,933
|
| |
|
| |
|
|
Total liabilities
|
| |
$186,489
|
| |
247,447
|
| |
|
| |
|
|
Total members’ / stockholders’ equity
|
| |
$263,237
|
| |
256,258
|
| |
$369,003
|
| |
$370,774
|
|
|
| |
|
| |
|
| |
|
| |
|
|
Statement of Cash Flows Data:
|
| |
|
| |
|
| |
|
| |
|
|
Net cash (used in) provided by operating activities
|
| |
34,430
|
| |
9,602
|
| |
16,456
|
| |
37,973
|
|
Net cash (used in) provided by investing activities
|
| |
(3,797)
|
| |
(264,991)
|
| |
534
|
| |
(4,684)
|
|
Net cash (used in) provided by financing activities
|
| |
(56,249)
|
| |
298,175
|
| |
1,514
|
| |
—
|
45
The following summary unaudited pro forma combined financial
information (the “Summary Unaudited Pro Forma Information”) gives effect to the Business Combination. The Business Combination will be accounted for as a reverse recapitalization in accordance with GAAP.
Under this method of accounting, Tiga will be treated as the “acquired” company for financial reporting purposes. Accordingly, the Business Combination will be reflected as the equivalent of Grindr issuing stock for the net assets of Tiga,
accompanied by a recapitalization whereby no goodwill or other intangible assets are recorded. Operations prior to the Business Combination will be those of Grindr. The summary unaudited pro forma combined balance sheet data as of June 30, 2022
gives effect to the Business Combination as if it had occurred on June 30, 2022. The summary unaudited pro forma combined statements of operations data for the year ended December 31, 2021 and six months ended June 30, 2022 give effect to the
Business Combination as if it had occurred on January 1, 2021.
The following Summary Unaudited Pro Forma Information has been
prepared in accordance with Article 11 of Regulation S-X as amended by the final rule, Release No. 33-10786 “Amendments to Financial Disclosures about Acquired and Disposed Businesses.” The Summary Unaudited Pro Forma Information has been
derived from, and should be read in conjunction with the following information appearing elsewhere in this proxy statement/prospectus:
|
•
|
the historical audited or unaudited financial statements of Grindr and Tiga, and their respective related notes, for the
applicable periods;
|
|
•
|
the sections entitled “Tiga’s Management’s Discussion and Analysis of Financial Condition
and Results of Operations” and “Grindr’s Management’s Discussion and Analysis of Financial Condition and Results of Operations;”
|
|
•
|
the more detailed Unaudited Pro Forma Information included in the section entitled “Unaudited
Pro Forma Combined Financial Information;”
|
|
•
|
the accompanying notes to the Unaudited Pro Forma Combined Financial Information; and
|
|
•
|
the other financial information included elsewhere in this proxy statement/prospectus.
|
The Summary Unaudited Pro Forma Information has been presented for
informational purposes only and is not necessarily indicative of what New Grindr’s financial position or results of operations actually would have been had the Business Combination been completed as of the dates indicated. In addition, the
Summary Unaudited Pro Forma Information does not purport to project the future financial position or operating results of New Grindr.
The pro forma adjustments giving effect to the Business
Combination and related transactions are discussed in further detail in the footnotes to the unaudited pro forma condensed combined financial information included elsewhere in this proxy statement/prospectus.
The Summary Unaudited Pro Forma Information has been prepared
using the assumptions below with respect to the potential redemption of Tiga ordinary shares into cash:
|
•
|
Assuming No Redemptions: Assuming that no public shareholders of Tiga exercise
redemption rights with respect to their public shares for a pro rata share of the funds in the trust account.
|
|
•
|
Assuming 50% Redemptions: Assuming that Tiga shareholders holding 13.8 million of the
public shares will exercise their redemption rights for their pro rata share (approximately $10.40 per share) of the funds in the trust account. This scenario gives effect to public share redemptions for aggregate redemption payments of
$143.5 million using a per share redemption price of $10.40 per share.
|
|
•
|
Assuming Maximum Redemptions: Assuming that Tiga shareholders holding 27.6 million of
the public shares will exercise their redemption rights for their pro rata share (approximately $10.40 per share) of the funds in the trust account. This scenario gives effect to public share redemptions for aggregate redemption
payments of $287.0 million using a per share redemption price of $10.40 per share. The Merger Agreement includes as a condition to closing the Business Combination that, at the Closing, Tiga will have (i) a minimum of $100,000,000 in
Available Closing Tiga Cash and cash freely available in Grindr’s and its subsidiaries’ bank accounts and (ii) a minimum of $5,000,001 of net tangible assets. To determine the outcomes of the maximum redemption scenario, the Available
Closing Tiga Cash set forth in the Merger Agreement is considered. The Available Closing Tiga Cash is determined as the sum of (i) all amounts in the trust account (after reduction for the aggregate amount of payments required to be
made in connection with the Tiga Shareholder Redemption), plus (ii) the Forward Purchase Commitment Amount, the Backstop Subscription Amount and the PIPE
|
46
Investment, if any (without, for the avoidance of doubt, taking into account any
transaction fees, costs and expenses paid or required to be paid in connection with the Business Combination, the Forward Purchase Commitment, the Backstop Commitment or the PIPE Investment). In the minimum redemptions, 50% redemptions and
maximum redemptions scenarios, it is assumed that the Available Closing Tiga Cash condition shall be met through the Forward Purchase Commitment and the Backstop Commitment proceeds of $100.0 million.
The following summarizes the pro forma New Grindr Common Stock
issued and outstanding immediately after the Business Combination, presented under the assumed redemption scenarios:
|
|
| |
Share Ownership in New Grindr
|
|||||||||||||||
|
|
| |
Pro Forma Combined
(Assuming
No Redemptions)
|
| |
Pro Forma Combined
(Assuming 50%
Redemptions)(7)
|
| |
Pro Forma Combined
(Assuming Maximum
Redemptions)(7)
|
|||||||||
|
|
| |
Number of
Shares
|
| |
%
Ownership
|
| |
Number of
Shares
|
| |
%
Ownership
|
| |
Number of
Shares
|
| |
%
Ownership
|
|
Sponsor and certain affiliates(1)(2)
|
| |
6,900,000
|
| |
3.4%
|
| |
6,900,000
|
| |
3.7%
|
| |
6,900,000
|
| |
3.9%
|
|
Public Shareholders(3)
|
| |
27,600,000
|
| |
13.8%
|
| |
13,800,000
|
| |
7.4%
|
| |
—
|
| |
0.0
|
|
Forward Purchase Investors(4)
|
| |
10,000,000
|
| |
5.0%
|
| |
10,000,000
|
| |
5.3%
|
| |
10,000,000
|
| |
5.7%
|
|
Former Grindr unitholders(5)(6)
|
| |
156,223,962
|
| |
77.8%
|
| |
156,223,962
|
| |
83.6%
|
| |
158,983,490
|
| |
90.4%
|
|
Total
|
| |
200,723,962
|
| |
100.0%
|
| |
186,923,962
|
| |
100.0%
|
| |
175,883,490
|
| |
100.0%
|
|
(1)
|
Reflects 6,840,000 of founder shares held by Tiga’s Sponsor and 60,000 founder shares held by independent directors that will
convert into New Grindr Common Stock.
|
|
(2)
|
Excludes 18,560,000 of private placement warrants as the warrants are not expected to be in the money at Closing. 2,760,000
of the private placement warrants were issued by Tiga in May 2022 for proceeds of $2.8 million. Excludes 1,680,000 of private placement warrants available to be issued in the event the $1.7 million related party note disclosed in
Tiga’s historical financial statements is converted to warrants upon Closing. The loan is expected to be repaid in cash in connection with the Closing as the conversion price is approximately 150% higher than the value of the warrants
as of June 30, 2022.
|
|
(3)
|
Excludes 13,800,000 public warrants as the warrants are not expected to be in the money at Closing.
|
|
(4)
|
Reflects the sale and issuance of 10,000,000 shares of New Grindr Common Stock to certain investors (including the Sponsor
and its Affiliates) through the A&R Forward Purchase Agreement at $10.00 per share and excludes the additional 5,000,000 redeemable warrants that will be issued in connection with the 10,000,000 shares of New Grindr Common Stock.
We expect that prior to Closing, the Sponsor will assign its obligations under the Backstop Commitment and the Forward Purchase Commitment to San Vicente Parent LLC. We further expect that San Vicente Parent LLC will satisfy its
obligations under the A&R Forward Purchase Agreement. As part of the SV Consolidation, San Vicente Parent LLC will merge into Grindr and Grindr will assume the rights and all remaining obligations of San Vicente Parent LLC under
the A&R Forward Purchase Agreement, and be entitled to receive the shares of New Grindr Common Stock and redeemable warrants issuable thereunder.
|
|
(5)
|
Excludes 3,947,439, 3,947,439, and 4,017,166 shares of New Grindr Common Stock to be issued to the former Grindr unitholders
for their historical option awards which will be converted at the same Exchange Ratio in the no redemptions, 50% redemptions, and maximum redemptions scenarios, respectively. In the no redemptions, 50% redemptions and maximum
redemptions scenarios, respectively, the former Grindr unitholders figures include 6,514,692, 6,514,692 and 6,511,512 shares of New Grindr Common Stock associated with the Series P share based compensation units described in “Beneficial Ownership of Securities”.
|
|
(6)
|
Reflects distributions to former Grindr unitholders of $287.8 million, $287.8 million and $259.5 million in the no
redemptions, 50% redemptions and maximum redemptions scenarios, respectively. Of that amount, $155.0 million is to be used to extinguish the remaining Deferred Payment as defined in “Unaudited Pro Forma
Combined Financial Information” These distributions in all of the redemption scenarios include $4.5 million of unpaid distribution accrued for on the Grindr historical balance sheet. These distributions combined with the
$78.8 million June 2022 distribution paid as disclosed in Note 9 of Grindr’s historical unaudited financial statements make up the total distribution as referenced in the Merger Agreement of $366.6 million, $366.6 million, and
$338.3 million dividend in the no redemptions, 50% redemptions and maximum redemptions scenarios, respectively.
|
|
(7)
|
Assumes 50% redemptions of 13,800,000 public Class A ordinary shares and maximum redemptions of 27,600,000 public Class A
ordinary shares in connection with the transaction at approximately $10.40 per share based on Trust Account figures as of June 30, 2022 in the 50% redemptions and maximum redemptions scenarios, respectively.
|
If the actual facts are different than these assumptions, then the
amounts and shares outstanding in the unaudited pro forma combined financial information will be different and those changes could be material.
|
Selected Unaudited Pro Forma Combined Balance Sheet Data
as of June 30, 2022
(in thousands)
|
| |
Pro Forma
Combined
(Assuming
No Redemptions)
|
| |
Pro Forma
Combined
(Assuming
50% Redemptions)
|
| |
Pro Forma
Combined
(Assuming
Maximum
Redemptions)
|
|
Cash and cash equivalents
|
| |
$113,216
|
| |
$19,696
|
| |
$26,476
|
|
Total assets
|
| |
$544,711
|
| |
$451,191
|
| |
$457,971
|
|
Total liabilities
|
| |
$267,528
|
| |
$317,528
|
| |
$437,528
|
|
Total shareholders' equity (deficit)
|
| |
$277,183
|
| |
$133,663
|
| |
$20,443
|
47
|
Selected Unaudited Pro Forma Combined Statement of
Operations Data for the Six Months Ended June 30, 2022
(in thousands, except for per share data)
|
| |
Pro Forma
Combined
(Assuming
No Redemptions)
|
| |
Pro Forma
Combined
(Assuming 50%
Redemptions)
|
| |
Pro Forma
Combined
(Assuming
Maximum
Redemptions)
|
|
Revenue
|
| |
$90,085
|
| |
$90,085
|
| |
$90,085
|
|
Net income (loss) attributable to common shareholders -
basic and diluted
|
| |
$(246)
|
| |
$(1,821)
|
| |
$(5,351)
|
|
Net income (loss) per share attributable to common
shareholders - basic
|
| |
$(0.00)
|
| |
$(0.01)
|
| |
$(0.03)
|
|
Net income (loss) per share attributable to common
shareholders - diluted
|
| |
$(0.00)
|
| |
$(0.01)
|
| |
$(0.03)
|
|
Weighted-average shares outstanding - basic
|
| |
200,723,962
|
| |
186,923,962
|
| |
175,883,490
|
|
Weighted-average shares outstanding - diluted
|
| |
200,723,962
|
| |
186,923,962
|
| |
175,883,490
|
|
Selected Unaudited Pro Forma Combined Statement of
Operations Data for the Year Ended December 31, 2021
(in thousands, except for per share data)
|
| |
Pro Forma
Combined
(Assuming
No Redemptions)
|
| |
Pro Forma
Combined
(Assuming
50% Redemptions)
|
| |
Pro Forma
Combined
(Assuming
Maximum
Redemptions)
|
|
Revenue
|
| |
$145,833
|
| |
$145,833
|
| |
$145,833
|
|
Net income (loss) attributable to common shareholders -
basic and diluted
|
| |
$19,774
|
| |
$16,624
|
| |
$10,447
|
|
Net income (loss) per share attributable to common
shareholders - basic
|
| |
$0.10
|
| |
$0.09
|
| |
$0.06
|
|
Net income (loss) per share attributable to common
shareholders - diluted
|
| |
$0.10
|
| |
$0.09
|
| |
$0.06
|
|
Weighted-average shares outstanding - basic
|
| |
200,723,962
|
| |
186,923,962
|
| |
175,883,490
|
|
Weighted-average shares outstanding - diluted
|
| |
200,780,434
|
| |
186,980,434
|
| |
175,939,962
|
48
The following table sets forth summary historical comparative
share information for Tiga and Grindr and unaudited pro forma combined per share information after giving effect to the Business Combination. The pro forma book value information reflects the Business Combination as if it had occurred on
June 30, 2022. The weighted-average shares outstanding and net income (loss) per share information reflect the Business Combination as if it had occurred on January 1, 2021.
The unaudited pro forma combined income (loss) per share
information should be read in conjunction with, the historical financial statements and related notes of Tiga and the historical consolidated financial statements and related notes of Grindr for the applicable periods included in this proxy
statement/prospectus, the sections entitled “Tiga’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Grindr’s Management’s Discussion and Analysis of Financial Condition and Results of Operations,” the
more detailed pro forma information included in the section entitled “Unaudited Pro Forma Combined Financial Information” and related notes, and the other financial information included elsewhere in this proxy statement/prospectus. The
unaudited pro forma combined income (loss) per share information has been presented for informational purposes only and is not necessarily indicative of what New Grindr’s results of operations actually would have been had the Business
Combination been completed as of the dates indicated. In addition, the unaudited pro forma combined book value per share information does not purport to project the future financial position or operating results of the post-combination company.
The Summary Unaudited Pro Forma Information has been prepared
using the assumptions below with respect to the potential redemption of Tiga ordinary shares into cash:
|
•
|
Assuming No Redemptions: Assuming that no public shareholders of Tiga exercise
redemption rights with respect to their public shares for a pro rata share of the funds in the trust account.
|
|
•
|
Assuming 50% Redemptions: Assuming that Tiga shareholders holding 13.8 million of the
public shares will exercise their redemption rights for their pro rata share (approximately $10.40 per share) of the funds in the trust account. This scenario gives effect to public share redemptions for aggregate redemption payments of
$143.5 million using a per share redemption price of $10.40 per share.
|
|
•
|
Assuming Maximum Redemptions: Assuming Tiga stockholders holding
27.6 million of the public shares will exercise their redemption rights for their pro rata share (approximately $10.40 per share) of the funds in the trust account. This scenario gives effect to public share redemptions for aggregate
redemption payments of $287.0 million using a per share redemption price of $10.40 per share. The Merger Agreement includes as a condition to closing the Business Combination that, at the Closing, Tiga will have (i) a minimum of
$100,000,000 in cash comprising Available Closing Tiga Cash and cash freely available in Grindr’s and its subsidiaries’ bank accounts and (ii) a minimum of $5,000,001 of net tangible assets. To determine the outcomes of the maximum
redemption scenario, the Available Closing Tiga Cash set forth in the Merger Agreement is considered. The Available Closing Tiga Cash is determined as the sum of (i) all amounts in the trust account (after reduction for the aggregate
amount of payments required to be made in connection with the Tiga Shareholder Redemption), plus (ii) the Forward Purchase Commitment Amount, the Backstop Subscription Amount and the PIPE Investment, if any (without, for the avoidance
of doubt, taking into account any transaction fees, costs and expenses paid or required to be paid in connection with the Business Combination, the Forward Purchase Commitment, the Backstop Commitment or the PIPE Investment). In the
minimum redemptions, 50% redemptions and maximum redemptions scenarios, the Available Closing Tiga Cash condition shall be met through the Forward Purchase Commitment and the Backstop Commitment proceeds of $100.0 million.
|
49
The unaudited pro forma combined per share information has been
presented under the three assumed redemption scenarios as follows:
|
As of and for the Six Months
Ended June 30, 2022
(in thousands, except share
and per share data)
|
| |
Tiga
(Historical)
|
| |
Grindr
(Historical)
|
| |
Pro Forma
Combined
(Assuming
No Redemptions)
|
| |
Pro Forma
Combined
(Assuming
50% Redemptions)
|
| |
Pro Forma
Combined
(Assuming
Maximum
Redemptions)
|
|
Book value per share(1)
|
| |
$(1.13)
|
| |
$1.78
|
| |
$1.38
|
| |
$0.72
|
| |
$0.12
|
|
Net income (loss) per share - basic
|
| |
$0.01
|
| |
$0.00
|
| |
$(0.00)
|
| |
$(0.01)
|
| |
$(0.03)
|
|
Net income (loss) per share - diluted
|
| |
$0.01
|
| |
$0.00
|
| |
$(0.00)
|
| |
$(0.01)
|
| |
$(0.03)
|
|
Weighted-average shares outstanding - basic
|
| |
34,500,000
|
| |
110,927,428
|
| |
200,723,962
|
| |
186,923,962
|
| |
175,883,490
|
|
Weighted-average shares outstanding - diluted
|
| |
34,500,000
|
| |
111,663,628
|
| |
200,723,962
|
| |
186,923,962
|
| |
175,883,490
|
|
Net income (loss) per redeemable Class A ordinary
share
|
| |
$0.01
|
| |
|
| |
|
| |
|
| |
|
|
Weighted-average redeemable Class A ordinary shares
outstanding - basic and diluted
|
| |
27,600,000
|
| |
|
| |
|
| |
|
| |
|
|
Net income (loss) per Class B ordinary share
|
| |
$0.01
|
| |
|
| |
|
| |
|
| |
|
|
Weighted-average Class B ordinary shares outstanding
- basic and diluted
|
| |
6,900,000
|
| |
|
| |
|
| |
|
| |
|
|
(1)
|
Book value per share is calculated as (a) total shareholders’ equity (deficit) divided by (b) the total number of shares of
common stock outstanding, inclusive of shares subject to possible redemption. Tiga’s historical book value per share calculation is based on all shares issued and outstanding related to Tiga’s Class A ordinary shares subject to possible
redemption and Class B ordinary shares. Grindr’s historical book value per share calculation is based on all shares issued and outstanding related to Grindr ordinary units. New Grindr’s pro forma combined book value per share is based
on all shares of New Grindr Common Stock to be issued and outstanding on a pro forma combined basis immediately after the Transaction under the no redemptions, 50% redemptions and maximum redemptions scenarios, respectively.
|
|
As of and for the Year Ended December 31, 2021
(in thousands, except share and per share data)
|
| |
Tiga
(Historical)
|
| |
Grindr
(Historical)
|
| |
Pro Forma
Combined
(Assuming
No Redemptions)
|
| |
Pro Forma
Combined
(Assuming
50% Redemptions)
|
| |
Pro Forma
Combined
(Assuming
Maximum
Redemptions)
|
|
Net income (loss) per share - basic
|
| |
$0.67
|
| |
$0.05
|
| |
$0.10
|
| |
$0.09
|
| |
$0.06
|
|
Net income (loss) per share - diluted
|
| |
$0.67
|
| |
$0.05
|
| |
$0.10
|
| |
$0.09
|
| |
$0.06
|
|
Weighted-average shares outstanding - basic
|
| |
34,500,000
|
| |
108,922,180
|
| |
200,723,962
|
| |
186,923,962
|
| |
175,883,490
|
|
Weighted-average shares outstanding - diluted
|
| |
34,500,000
|
| |
108,962,336
|
| |
200,780,434
|
| |
186,980,434
|
| |
175,939,962
|
|
Net income (loss) per redeemable Class A ordinary
share
|
| |
$0.67
|
| |
|
| |
|
| |
|
| |
|
|
Weighted-average redeemable Class A ordinary shares
outstanding - basic and diluted
|
| |
27,600,000
|
| |
|
| |
|
| |
|
| |
|
|
Net income (loss) per Class B ordinary share
|
| |
$0.67
|
| |
|
| |
|
| |
|
| |
|
|
Weighted-average Class B ordinary shares outstanding
- basic and diluted
|
| |
6,900,000
|
| |
|
| |
|
| |
|
| |
|
50
This proxy statement/prospectus includes statements that express
Tiga’s and Grindr’s opinions, expectations, beliefs, plans, objectives, assumptions, forecasts or projections regarding future events or future results and therefore are, or may be deemed to be, “forward-looking statements.” These
forward-looking statements can generally be identified by the use of forward-looking terminology, including the terms “believes,” “estimates,” “anticipates,” “expects,” “seeks,” “projects,” “intends,” “plans,” “may,” “will” or “should” or, in
each case, their negative or other variations or comparable terminology, but the absence of these words does not mean that a statement is not forward-looking. These forward-looking statements include all matters that are not historical facts.
They appear in a number of places throughout this proxy statement/prospectus and include statements regarding our intentions, beliefs and current expectations and projections concerning, among other things, the Business Combination, the
benefits of the Business Combination, including results of operations, financial condition, liquidity, prospects, growth, strategies and the markets in which Grindr operates. Such forward-looking statements are based on available current market
material and management’s expectations, beliefs, forecasts and projections concerning future events impacting Tiga and Grindr.
Forward-looking statements in this proxy statement/prospectus may
include, for example, statements about:
|
•
|
Tiga’s ability to complete the Business Combination, or, if Tiga does not consummate such Business Combination, any other
initial business combination;
|
|
•
|
satisfaction or waiver (if applicable) of the conditions to the Business Combination, including, among other things:
|
|
•
|
the satisfaction or waiver of certain customary closing conditions, including, among others, (i) approval of the Business
Combination and related agreements by the respective shareholders of Tiga and Grindr, (ii) effectiveness of the registration statement of which this proxy statement/prospectus forms a part of, (iii) early termination or expiration of
the waiting period under the HSR Act or other applicable regulatory regime, (iv) that Tiga have at least $5,000,001 of net tangible assets upon Closing and (v) the absence of any injunctions;
|
|
•
|
the Minimum Cash Condition being satisfied;
|
|
•
|
the occurrence of any other event, change or other circumstances that could give rise to the termination of the Merger
Agreement;
|
|
•
|
the outcome of any legal proceedings that may be instituted against Tiga, New Grindr or others following the announcement of
the Business Combination and any definitive agreements with respect thereto;
|
|
•
|
the ability to recognize the anticipated benefits of the Business Combination, which may be affected by, among other things,
competition, the ability of New Grindr to grow and manage growth profitability, maintain relationships with customers and suppliers and retain its management and key employees;
|
|
•
|
costs related to the Business Combination;
|
|
•
|
the projected financial information, anticipated growth rate, and market opportunity of Grindr, and estimates of expenses and
profitability;
|
|
•
|
the ability to meet listing requirements and maintain the listing of New Grindr Common Stock and warrants on the NYSE
following the Business Combination;
|
|
•
|
the potential liquidity and trading of public securities of Tiga or New Grindr;
|
|
•
|
the ability to raise financing in the future by New Grindr or Tiga;
|
|
•
|
Tiga officers and directors allocating their time to other businesses and potentially having conflicts of interest with
Tiga’s business or in approving the Business Combination;
|
|
•
|
the use of proceeds not held in the trust account or available to us from interest income on the trust account balance;
|
|
•
|
the benefits of the Business Combination;
|
51
|
•
|
the future financial and operational performance of, and anticipated financial impact on, Grindr following the Business
Combination; and
|
|
•
|
New Grindr’s expansion plans and opportunities.
|
Any forward-looking statements contained in this proxy
statement/prospectus are based on Tiga’s and Grindr’s current expectations and beliefs concerning future developments and their potential effects on the Business Combination and Grindr. There can be no assurance that future developments
affecting Tiga or Grindr will be those that Tiga or Grindr has anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond either Tiga’s or Grindr’s control) or other assumptions that may
cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors described under the “Risk Factors” section. Should one or more of these risks or uncertainties materialize, or should any of the assumptions prove incorrect, actual results may vary in material respects from those projected in
these forward-looking statements. Tiga and Grindr undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable
securities laws.
Before any Tiga shareholder grants its proxy or instructs how its
vote should be cast or votes on the Business Combination Proposal or any other proposal, it should be aware that the occurrence of the events described in the “Risk Factors” section and elsewhere in this
proxy statement/prospectus may adversely affect Tiga and Grindr.
As a result of a number of known and unknown risks and
uncertainties, New Grindr’s actual results or performance may be materially different from those expressed or implied by these forward-looking statements. Some factors that could cause actual results to differ include:
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the success in retaining or recruiting, or changes required in, our directors, officers or key employees following the
completion of the Business Combination;
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the impact of the regulatory environment and complexities with compliance related to such environment;
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the ability to respond to general economic conditions;
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factors relating to the business, operations and financial performance of New Grindr and its subsidiaries, including:
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competition in the dating and social networking products and services industry;
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the ability to maintain and attract users;
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fluctuation in quarterly and yearly results;
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natural disasters, outbreaks and pandemics, economic, social, weather, growth constraints and regulatory conditions or other
circumstances affecting the industry in which New Grindr operates;
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the ability to adapt to changes in technology and user preferences in a timely and cost-effective manner;
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the ability to maintain compliance with privacy and data protection laws and regulations;
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the ability to protect systems and infrastructures from cyber-attacks and prevent unauthorized data access;
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the dependence on the integrity of third-party systems and infrastructure;
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New Grindr’s ability to protect its intellectual property rights from unauthorized use by third parties; and
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other factors detailed under the “Risk Factors” section.
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You should carefully review and consider the
following risk factors, together with all of the other information contained in this proxy statement/prospectus, including the financial statements and notes to the financial statements included herein, in deciding how to vote on the proposals
presented in this proxy statement/prospectus. Unless the context otherwise suggests, in this section, “Grindr”, “we,” “us,” “our” and the “Company” refer to the business and operations of Grindr and its subsidiaries prior to the Business
Combination, which will be the business of New Grindr and its subsidiaries following the consummation of the Business Combination. The occurrence of one or more of the events or circumstances described in these risk factors, alone or in
combination with other events or circumstances, may adversely affect the ability to complete or realize the anticipated benefits of the Business Combination, and may have an adverse effect on the business, cash flows, financial condition, and
results of operations of New Grindr following the Business Combination. The risks discussed below may not prove to be exhaustive and are based on certain assumptions made by Grindr, Tiga and New Grindr, which later may prove to be incorrect or
incomplete. Grindr, Tiga and New Grindr may face additional risks and uncertainties that are not presently known to such entity, or that are currently deemed immaterial, which may also impair their business or financial condition.
This proxy statement/prospectus also contains
forward-looking statements that involve risks and uncertainties, and actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including the risks described below and
elsewhere in this proxy statement/prospectus. See “Cautionary Note Regarding Forward-Looking Statements.” New Grindr may face additional risks and uncertainties that are not presently known to us, or that New Grindr currently deem immaterial,
which may also impair New Grindr’s business or financial condition. The following discussion should be read in conjunction with the financial statements, the notes to the financial statements, and the other information contained in this proxy
statement/prospectus.
Risks Related to Grindr’s Business
Risks Related to Grindr’s Brand, Products and
Services, and Operations
Our business depends on the strength and
market perception of the Grindr brand and if events occur that damage our reputation and brand, our ability to expand our base of users may be impaired, and our business could be materially and adversely affected.
We believe that our brand has significantly contributed to the
success of our business. Our business and financial performance are highly dependent on the strength and market perception of our brand. We have achieved significant organic growth mainly through word-of-mouth referrals to our platform, without
relying on traditional advertising for user acquisition, and therefore we believe it is critical to ensure that our users remain favorably inclined toward the Grindr brand. In addition, we believe that maintaining and enhancing our brand will be
critical to expanding our user base, advertising relationships, and other partnerships.
Maintaining and enhancing our brand will depend on an array of
factors, including our ability to continue to provide useful, fun, reliable, trustworthy, and innovative products and services, which we may not do successfully or as successfully as we hope. Our products and services may not always appeal to our
users, which may negatively affect our brand and our ability to retain existing users, upgrade users to paid accounts or add new users. See “—If we fail to retain existing users or add new users, or if our users
decrease their level of engagement with our products and services or do not convert to paying users, our revenue, financial results, and business may be significantly harmed.” In addition, the actions of our advertisers or partners may
negatively affect our brand if users have a negative impression of such brands or do not have a positive experience using third-party products or services that are integrated into our platform. See “—The
distribution, marketing of, and access to our products and services depends, in large part, on third-party platforms and mobile application stores, among other third-party providers. If these third parties limit, prohibit, fail to operate, or
otherwise interfere with the distribution or use of our products and services in any material way, it could adversely affect our business, financial condition, and results of operations.” Moreover, illicit or inappropriate conduct by
users, advertisers, partners, or bad actors may adversely affect our brand, particularly if we fail to respond expeditiously to objectionable content on our platform or otherwise to address user concerns. See “—Inappropriate
actions by certain of our users could be attributed to us and damage our brand or reputation, or subject us to regulatory inquiries, legal action, or other liabilities, which, in turn, could materially adversely affect our business.” We
have also experienced, and expect to continue to experience, media,
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legislative, and regulatory scrutiny, as well as legal action and regulatory
investigations, regarding user privacy and data protection, interactions between users, and other issues, which have harmed our reputation and brand and may seriously harm our reputation and brand in the future. See “—Unfavorable media coverage could materially and adversely affect our business, brand, or reputation.” If events occur that damage our reputation or brand, our business, financial condition, and results of operations could be
materially and adversely affected.
Changes to our existing products and services,
or the development and introduction of new products and services, could fail to attract or retain users or generate revenue and profits.
Our ability to retain, expand, monetize and engage our user base,
and to increase our revenue, depends heavily on our ability to keep pace with user demands and technological changes in the industry by, among other things, continuing to evolve our existing products and services and developing successful new
products and services. We operate in an industry characterized by rapidly changing technologies in response to evolving industry standards, frequent new product and service announcements and enhancements, and changing user demands, and our
competitors in the online social networking industry are constantly developing new technologies and products and services. Our performance will therefore depend on our ability to adapt in response to this environment by, among other things,
continuing to improve the speed, performance, features, ease of use, and reliability of our products and services, in response to evolving user demands and competitive dynamics. Any failure to keep pace with rapid technological changes could
cause us to lose market share and thus have a material adverse effect on our business, financial condition, and results of operation.
In addition, our ability to retain, expand, monetize and engage our
user base, and to increase our revenue, depends on our ability to continue to improve our existing products and services and to develop and introduce successful new products and services, both independently and together with third parties. We may
introduce significant changes to our existing products and services or develop and introduce new or unproven products and services, including using technologies with which we have little or no prior development or operating experience. While we
believe we can further improve our monetization capabilities by diversifying our subscription offerings, introducing more stand-alone premium functions, and further optimizing our advertising offerings, these efforts may not ultimately be
successful or translate into meaningful additional revenue. If we do not continue to innovate and provide attractive products and services to our users, or if we fail to consistently tailor our products and services to accommodate our users’
changing demands, we may not be able to retain a large and active user base or to generate sufficient revenue, operating margin, or other value, to justify our investments, any of which may materially adversely affect our business.
We have also invested in, and expect to continue to invest in new
products and services and other initiatives, which may involve unproven products, services, and technologies, to generate revenue. We regularly update our Grindr Applications to introduce new features and improve our Grindr Applications’
performance. However, there is no guarantee that our investment in new products and services, new features, and other initiatives will succeed or generate revenue or other benefits for us. New products, services, and features may provide
temporary increases in engagement that may ultimately fail to attract and retain users such that they may not produce the long-term benefits that we expect. We may also introduce new products, services, features or terms of service or policies,
and seek to find new, effective ways to show our community new and existing products and services and alert them to events and opportunities to connect, that our users do not like, which may negatively affect our brand. If our new or enhanced
brand, products and services or product extensions fail to engage users, marketers, or developers, or if our business plans are unsuccessful, we may fail to attract or retain users or to generate sufficient revenue, operating margin, or other
value to justify our investments, any of which may materially adversely affect our business.
If we fail to retain existing users or add new
users, or if our users decrease their level of engagement with our products and services or do not convert to paying users, our revenue, financial results, and business may be significantly harmed.
The size of our user base and our users’ level of engagement are
critical to our success. Our financial performance has been and will continue to be significantly determined by our success in adding, retaining, and engaging users of our products and services and converting users into paying subscribers or
premium add-on payers. We expect that the size of our user base will fluctuate or decline in one or more markets from time to time. If our user growth rate slows down, our business performance will become increasingly dependent on our ability to
retain existing users and enhance user engagement on our platform in current and new markets. In addition, although we have primarily grown our user base organically, attracting and retaining additional users for our products and services
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may require increasingly large sales and marketing expenditures. If our platform
ceases to be one of the most frequently used social networking applications for LGBTQ+ individuals, or if people do not perceive our products and services to be useful, reliable, and/or trustworthy, we may not be able to attract or retain users
or otherwise maintain or increase the frequency, duration, and depth of their engagement.
Several other online social networking companies that achieved early
popularity have since experienced slower growth or declines in their user bases or levels of engagement. We may experience a similar erosion of our user base or engagement levels, particularly as we achieve higher market penetration rates. User
engagement can be difficult to measure, particularly as we introduce new and different products and services. Any number of factors can negatively affect user retention, growth, and engagement, including if:
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users increasingly engage with competing products or services;
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user behavior on any of our products and services change, including decreases in the quality of the user base and frequency of
use of our products and services;
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our competitors mimic our products and services or penetrate our markets (or markets we would like to enter) and therefore harm
our user retention, engagement, and growth;
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users have difficulty installing, updating, or otherwise accessing our products and services on mobile devices because of
actions by us or third parties that we rely on to distribute our products and services;
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we fail to introduce new and improved products and services that appeal to our users, or if we make changes to existing
products and services that do not appeal to our users;
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we are unable to continue to develop products and services that work with a variety of mobile operating systems, networks, and
smartphones;
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users are no longer willing to pay for premium (fee-based) subscriptions or premium add-ons;
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we are unable to successfully balance our efforts to provide a compelling user experience with the decisions we make with
respect to the frequency, prominence, and size of advertisements and other commercial content that we display on our platform;
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we fail to protect our brand image or reputation;
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we experience decreases in user sentiment related to the quality of our products and services, or based upon concerns related
to data privacy and the sharing of user data, safety, security, or well-being, among other factors;
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we, or other companies in the industry, are the subject of adverse media reports or other negative publicity, including because
of our data practices or other companies’ data practices;
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we fail to keep pace with evolving online, market, and industry trends (including the introduction of new and enhanced digital
services);
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initiatives designed to attract and retain users and engagement are unsuccessful or discontinued;
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we adopt terms, policies, or procedures concerning user data or advertising, among other areas, that are perceived negatively
by our users or the general public;
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we are unable to combat inappropriate or abusive use of our platform;
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we fail to address user or regulatory concerns related to privacy, data security, personal safety, or other factors;
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we are unable to manage and prioritize information to ensure users are presented with content that is interesting, useful and
relevant to them;
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we fail to provide adequate customer service to users, advertisers, or other partners;
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technical or other problems prevent us from delivering our products and services in a rapid and reliable manner or otherwise
affect the user experience, such as security breaches, distributed denial-of-service attacks or failure to prevent or limit spam or similar content;
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our current or future products and services reduce user activity on Grindr by making it easier for our users to interact and
share on third-party websites;
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third-party initiatives that may enable greater use of our products and services, including low cost or discounted data plans,
are discontinued;
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there is decreased engagement with our products and services because of changes in prevailing social, cultural, or political
preferences in the markers in which we operate; and
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there are changes mandated by legislation, regulations, or government actions.
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From time to time, certain of these factors have negatively affected
user retention, growth, and engagement to varying degrees. If we are unable to maintain or increase our user base and user engagement, our revenue and financial results may be materially adversely affected. In addition, we may not experience
rapid user growth or engagement in countries where, even though mobile device penetration is high, due to the lack of sufficient cellular based data networks, consumers rely heavily on Wi-Fi and may not access our products and services regularly
throughout the day. Any decrease in user retention, growth, or engagement could render our products and services less attractive to users, which is likely to have a material and adverse impact on our revenue, business, financial condition, and
results of operations. If our user growth rate slows or declines, we will become increasingly dependent on our ability to maintain or increase levels of user engagement and monetization to drive revenue growth.
Inappropriate actions by certain of our users
could be attributed to us and damage our brand or reputation, or subject us to regulatory inquiries, legal action, or other liabilities, which, in turn, could materially adversely affect our business.
Our platform allows users to freely connect and communicate with
other users. Our platform may be misused by individuals or groups of individuals to engage in illicit or otherwise inappropriate activities, which may adversely affect the public perception of our brand and our ability to retain existing users or
add new users. Our content moderation team frequently detects and addresses user actions that violate our Terms and Conditions of Service, Communities Guidelines, or other policies applicable to our platform, which prohibit, among other things,
any form of harassment, hate speech, violence of any kind, and other offensive content; profile pictures with nudity, pornography, or drugs; impersonation of another person; minor activity on the platform (including uploading images depicting
minors or communicating with another user believed to be a minor); and illegal actions such as the advertising of sexual services or drugs. With a combination of human moderation and automated tooling, violations are frequently detected and
addressed by our content moderation team, and we expect to continue to endeavor to detect and address these issues in the future.
While we have systems and processes in place that aim to monitor and
review the appropriateness of the content generated on our platform, including our content moderation team, automated tools, and in-App features that allow users to report illicit or otherwise inappropriate activity to us, and have adopted
policies regarding the illicit or otherwise inappropriate use of our products and services, our users have in the past, and could in the future, nonetheless engage in activities on our platform that violate our policies or the law. These
safeguards may not be sufficient to ensure the safety of our users and this may harm our reputation and brand, especially if any instances of illicit or otherwise inappropriate conduct become well-publicized, as has occurred in the past.
In addition, while our policies attempt to address the illicit or
otherwise inappropriate use of our products and services, and we publish and make available resources that provide users with information designed to help protect users’ digital security, personal safety (both on our Grindr Applications and off
our Grindr Applications), and self-care, we do not control what happens if our users decide to meet in person after connecting on our platform.
Our platform allows users to freely connect and communicate with
other users in the same geographic area or in the other geographic areas around the world through the “Explore” feature. Users of our products and services have been, and may in the future be, physically, financially, emotionally, or otherwise
harmed by other individuals that they have met or may meet through the use of our products and services. For example, we have in the past received, and could in the future receive, complaints about users being assaulted or subjected to other
forms of illicit conduct after meeting other users in person through our products and services. When one or more of our users suffers or alleges to have suffered any harm either on our platform or in person after meeting another user on our
platform, we have in the past, and could in the future, experience legal action, regulatory investigations, or negative publicity that could damage our brand and reputation. See “—Risks Related to Regulation and
Litigation—We are subject to litigation, regulatory and other government investigations, enforcement actions, and settlements, and adverse
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outcomes in such proceedings could have a materially adverse
effect on our business, financial condition, and results of operation.” Similar events with respect to users of our competitors’ products and services could result in negative publicity for the overall social
networking industry, or the LGBTQ+ social networking industry more specifically, which could in turn negatively affect our business, financial condition, and results of operation. See “—Unfavorable media coverage could materially and
adversely affect our business, brand, or reputation.”
Unfavorable media coverage could materially and
adversely affect our business, brand, or reputation.
We receive a high degree of media coverage around the world, partly
due to the social and cultural sensitivity associated with the unique demographic group that we serve, all of which has affected, and could in the future affect, the reputation and market perception of our brand. Regardless of its accuracy or
authenticity, negative publicity concerning us, including media coverage regarding the actions of our users on or off our platform, our Terms and Conditions of Service or privacy practices, the quality or safety of our products and services, the
actions of our advertisers or other partners, litigation or regulatory activity, and/or the actions of other companies that provide similar services to us, could materially and adversely affect our brand, which could, in turn, materially and
adversely affect the size, engagement, and loyalty of our user base, as well as the number and quality of advertisers that choose to advertise on our platform. For example, since at least 2016, multiple news outlets and research groups have
identified ways to allegedly determine the precise geolocation of users of Grindr and similar services. Although we do not always use the full precision of the user’s location, and our users have the choice not to display their relative location
in the Grindr cascade, trilateration, the process of estimating a user’s location by combining the distance measurement from three points surrounding a user, is a common risk in location-based apps and could be perceived as a threat to users’
location privacy in some jurisdictions. These risks have led to multiple regulatory inquiries. See “Risks Related to Regulation and Litigation—The varying and rapidly evolving regulatory framework on privacy and
data protection across jurisdictions could result in claims, changes to our business practices, monetary penalties, increased cost of operations, or declines in user growth or engagement, or otherwise harm our business.”
Additionally, in 2018, negative media reports raised concerns,
leading to multiple regulatory inquiries, regarding our sharing of user-provided HIV status with service providers that we engaged to perform analytics services to help us improve the user experience. Although our users had consented to sharing
their profile data with service providers, we had contractual protections limiting service provider use of user data, and the user data was shared in compliance with those contractual obligations and with applicable law , in response to the media
reports and investigations, we discontinued sharing user-provided HIV status information with these service providers, among other measures. This unfavorable media coverage created negative sentiment regarding our brand and our privacy practices
among our current and potential user base, advertisers, platform partners, and other stakeholders as well as the general public, some of which continues to this day. See “—Risks Related to Regulation and
Litigation—The varying and rapidly evolving regulatory framework on privacy and data protection across jurisdictions could result in claims, changes to our business practices, monetary penalties, increased cost of operations, or declines in
user growth or engagement, or otherwise harm our business.” Furthermore, in 2021, a religious blog claimed to have used a “commercially available” data set which contains “signal” data which allegedly included Grindr’s “data,” among
other unidentified sources, to reveal that a Catholic priest had utilized Grindr’s app, resulting in that priest resigning his position. Although in response to the blog we took steps to clarify our data practices (and to inquire into the
potential data sources relied on by the blog), the blog may have created negative sentiment regarding our brand and our privacy practices, regardless of the accuracy or authenticity of the blog.
We cannot assure you that we will be able to defuse negative
publicity about us and/or our services to the satisfaction of our users, advertisers, platform partners, and other stakeholders. If we fail to protect our brand or reputation, given our reliance on the strength of our brand and organic growth, we
may experience material adverse effects to the size, demographics, engagement, and loyalty of our user base, resulting in decreased revenue, fewer App installs (or increased App uninstalls), fewer conversions to premium subscription versions of
our Grindr App, or slower user growth rates, among other negative effects. Negative publicity, especially when it is directly addressed against us, may also require us to engage in defensive media campaigns which, in turn, may cause us to
increase our marketing expenses and divert our management’s attention and may adversely impact our business and results of operations. If events occur that damage our brand and reputation and we fail to respond promptly or if we incur excessive
expenses in these types of efforts, our business, financial condition and results of operations could be materially and adversely affected. See “—Our business depends on the strength and market perception of the
Grindr brand. If events occur that damage our reputation and brand, our ability to expand our base of users may be impaired, and our business could be materially adversely affected”.
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The online social networking industry in
which we operate is highly competitive, and if we cannot compete effectively our business will suffer.
The online social networking industry is highly competitive, with a
consistent stream of new products and services and entrants. We compete primarily with other global companies that provide dating and networking products and services that have LGBTQ+ users, such as Tinder and OKCupid, and regional companies that
provide dating and networking products and services for LGBTQ+ users, such as Scruff and PlanetRomeo. Some of our competitors may enjoy better competitive positions in certain geographical regions, user demographics, or other key areas that we
currently serve or may serve in the future. These advantages could enable these competitors to offer products and services that are more appealing to users and potential users than our products and services, or to respond more quickly and/or
cost-effectively than us to new or changing opportunities. In addition, to the extent that some of our competitors were first movers in particular geographic regions, their positions in those regions could create barriers to our entry.
In addition, within the social networking industry more generally,
costs for users to switch between products and services are low, and users have a propensity to try new approaches to connecting with other people and to use multiple products and services at the same time. As a result, new products and services,
entrants, and business models are likely to continue to emerge. It is possible that a new product could gain rapid scale at the expense of existing brands through harnessing a new technology or distribution channel, or a new or existing
distribution channel, creating a new approach to connecting people or some other means.
Potential competitors include larger companies that could devote
greater resources to the promotion or marketing of their products and services, take advantage of acquisition or other opportunities more readily than we do, or develop and expand their products and services more quickly than we do. Potential
competitors also include established social media companies, which may develop products and services, features, or services that compete with ours, and which may have easier access to new markets or potential users than we do. For example,
Facebook recently launched Facebook Dating in North America, Europe, and other markets around the globe. Facebook and similar competitors could gain competitive advantages over Grindr through, for example, their access to existing large pools of
potential users and preexisting information about those potential users and/or their strong or dominant positions in one or more markets, or by offering different product features or products and services at low or no cost to users. Our
competitors may develop products and services, features, or services similar to ours or that achieve greater market acceptance than our products and services, features, or services, they may undertake more far-reaching and successful product
development efforts or marketing campaigns than we do, or they may adopt more aggressive pricing policies than we do. Any of these efforts, if successful, may enable our competitors to acquire and engage users at the expense of our user growth or
engagement, which may have a material adverse effect on our business, financial condition, and results of operation. See “—If we fail to retain existing users or add new users, or if our users decrease their
level of engagement with our products and services or do not convert to paying users, our revenue, financial results, and business may be significantly harmed.”
Moreover, in emerging international markets, where mobile devices
often lack large storage capabilities, among other technical limitations, we may compete with other applications for the limited space available on a user’s mobile device. We also face competition from traditional and online media businesses for
advertising budgets. As we introduce new products and services, as our existing products and services evolve, or as other companies introduce new products and services, we may become subject to additional competition.
In addition, we believe that our ability to compete effectively
depends upon many factors both within and beyond our control, including:
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the usefulness, ease of use, performance, and reliability of our products and services compared to our competitors;
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the size and demographics of our user base;
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the scale, growth, and engagement of our users with our products and services relative to those of our competitors;
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our ability to acquire efficiently new users for our products and services;
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the timing and market acceptance of our products and services;
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our ability to introduce new, and improve on existing, features, products and services, and services in response to
competition, user sentiment or requirements, online, market, social, and industry trends, the ever-evolving technological landscape, and the ever-changing regulatory landscape (in particular, as it relates to the regulation of online
social networking platforms);
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our ability to continue monetizing our products and services;
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the frequency, size, and relative prominence of the ads and other commercial content displayed by us or our competitors;
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our customer service and support efforts;
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the reputation of our brand for trust and safety and privacy and data protection, among other things;
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adverse media reports or other negative publicity;
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the effectiveness of our advertising and sales teams;
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continued growth in internet access and smartphone adoption in certain regions of the world, particularly emerging markets;
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changes mandated by legislation, regulatory authorities, or litigation, including settlements and consent decrees, some of
which may have a disproportionate effect on us;
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acquisitions or consolidations within our industry, which may result in more formidable competitors;
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our ability to attract, retain, and motivate talented employees, particularly software engineers;
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our ability to protect our intellectual property, including against our competitors’ possible attempts to mimic or copy aspects
of our Grindr Applications;
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our ability to cost-effectively manage and grow our operations; and
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our ability to maintain the value and reputation of our brand relative to our competitors.
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If we are not able to effectively compete against our current or
future competitors and products and services that may emerge, our user base and level of user engagement may decrease, which could have a material adverse effect on our business, financial condition, and results of operations.
We have grown rapidly in recent years and
certain members of our management team have joined us recently. If we are unable to manage our growth effectively, our brand, company culture, and financial performance may suffer.
Since launching our platform in 2009, we have experienced rapid
growth and demand for our services. We have expanded our operations rapidly worldwide, and certain members of our management team have joined us recently. As we grow, our business becomes increasingly complex and the process of implementing
operations at scale takes time. We have increased our employee headcount, and we expect our headcount growth to continue for the foreseeable future. To effectively manage and capitalize on our growth, we must continue to expand our sales and
marketing, focus on innovative product and content development, and upgrade our information systems and other processes, among other changes. Our continued growth could strain our existing resources, and we could experience ongoing operating
difficulties in managing our business across numerous jurisdictions, including difficulties in hiring, training, and managing a diverse, remote-first, and growing employee base. We expect to continue to make investments to maintain and improve
the capacity, capability and reliability of our infrastructure. To the extent that we do not effectively address capacity constraints as we grow and continually develop our technology and infrastructure to accommodate actual and anticipated
changes in technology, our business and results of operations may be negatively affected. Failure to scale and preserve our company culture with growth could harm our future success, including our ability to retain and recruit personnel and to
focus on and pursue our corporate objectives effectively. If our management team does not effectively manage our growth, we may experience erosion to our brand, the quality of our products and services may suffer, and our company culture may be
harmed. Moreover, we have been, and may in the future be, subject to legacy claims or liabilities arising from policies, systems, and/or controls in earlier periods of our rapid development.
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The rapidly evolving nature of the markets in which we operate
creates substantial uncertainty concerning how these markets may develop, and reduce our ability to accurately forecast quarterly or annual revenue and future growth. Failure to manage our future growth effectively could have a material adverse
effect on our business, financial condition, and operating results.
Our quarterly operating results and other
operating metrics may fluctuate from quarter to quarter, which makes these metrics difficult to predict.
Our quarterly operating results and other operating metrics have
fluctuated in the past and may continue to fluctuate from quarter to quarter, which makes them difficult to predict. Our financial condition and operating results in any given quarter can be influenced by numerous factors, many of which we cannot
predict or are outside of our control, including:
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fluctuations in the rate at which we retain existing users and attracts new users, the level of engagement by our users, or our
ability to convert users from the free version of the platform to premium (fee-based) subscriptions;
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our development, improvement, and introduction of new products and services, services, technology, and features, and the
enhancement of existing products and services, services, technologies, and features;
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successful expansion into international markets, particularly in emerging markets;
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errors in our forecasting of user demand;
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increases in engineering, product development, marketing, or other operating expenses that we may incur to grow and expand
operations and to remain competitive;
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changes in our relationship with Apple, Google, or other third parties;
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announcements by competitors of significant new products and services, services, licenses, or acquisitions;
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the diversification and growth of our revenue sources;
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our ability to maintain gross margins and operating margins;
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fluctuations in currency exchange rates and changes in the proportion of our revenue and expenses denominated in foreign
currencies;
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changes in our effective tax rate;
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changes in accounting standards, policies, guidance, interpretations, or principles;
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the continued development and upgrading of our technology platform;
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our ability to effectively prevent and remediate system failures or breaches of security or privacy;
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our ability to obtain, maintain, protect and enforce intellectual property rights and successfully defend against claims of
infringement, misappropriation, or other violations of third-party intellectual property;
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adverse litigation judgments, settlements, or other litigation-related costs;
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changes in the legislative or regulatory environment, including with respect to privacy, intellectual property, consumer
product safety, and advertising, or enforcement by government regulators, including fines, orders, or consent decrees; and
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changes in business or macroeconomic conditions, including the impact of the current COVID-19 outbreak, inflation, lower
consumer confidence in our business or in the social networking industry generally, recessionary conditions, increased unemployment rates, stagnant or declining wages, political unrest, armed conflicts, or natural disasters.
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Any one of the factors above or the cumulative effect of some of the
factors above may result in significant fluctuations in our results of operations.
The variability and unpredictability of our quarterly operating
results or other operating metrics could result in our failure to fully meet the expectations or those of analysts that could cover us or investors with respect to revenue or other operating results for a particular period. If we fail to meet or
exceed such expectations, the market price of the stock could fall substantially, and we could face costly lawsuits, including securities class action suits.
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The distribution, marketing of, and access
to our products and services depend, in large part, on third-party platforms and mobile application stores, among other third-party providers. If these third parties limit, prohibit, or fail to operate, or otherwise interfere with the
distribution or use of our products or services in any material way, it could materially and adversely affect our business, financial condition, and results of operations.
We market and distribute our products and services primarily through
the Apple App Store and Google Play Store. We are subject to the standard terms, conditions, and guidelines of these platforms for App developers, which govern the promotion and distribution of our products and services on their respective
platforms, and our ability to market the Grindr brand on any given property or channel is subject to the policies of the relevant third party. In addition, there is no guarantee that these popular mobile platforms will continue to feature or make
available our products, or that we will be able to comply with the standard terms, conditions, and guidelines of these platforms, such that our products and services continue to be available through these platforms. Apple App Store and Google
Play Store have and may continue to impose access restrictions for users in Russia and other geopolitical regions in relation to the conflict between Russia and Ukraine or other events that are beyond Grindr’s control, such as terrorism, public
health crises, or political unrest, which could result in the inability to access and use our products and services and other negative experiences for our users and, in turn, harm our user reputation and adversely affect our business. In
addition, there is no guarantee that users will continue to use our products and services rather than competing products and services.
We also depend on the interoperability of our products and services
with popular mobile operating systems, networks, technologies, products and services, and standards that we do not control, such as the iOS and Android operating systems. Any changes, bugs, or technical issues in these systems, or changes in our
relationships with third party product or service providers such as our mobile operating system partners, handset manufacturers, or mobile carriers, or changes in their agreements, terms of service or policies that degrade our products and
services’ functionality, reduce or eliminate our ability to update or distribute our products and services, give preferential treatment to competitive products and services, limit our ability to deliver, target, or measure the effectiveness of
ads, or charge fees related to the distribution of our products and services or our delivery of ads, could impact the usage of our products and services on mobile devices and have a material adverse effect on our business, financial condition,
and results of operations. For example, starting with iOS version 14, Apple has required App developers to ask users for their permission to track them or to access their device’s advertising identifier (known as the IDFA). Tracking refers to the
act of linking user or device data collected from one App with user or device data collected from other companies’ Apps, websites, or offline properties for targeted advertising (e.g., personalized ads) or advertising measurement purposes. As of
September 30, 2021, iOS App users’ opt-in rate to grant IDFA access was approximately 21%. As such, the ability of advertisers to accurately target and measure their advertising campaigns at the user level has become, and may continue to be,
significantly limited and App developers may experience increased cost per registration.
In addition, certain channels have, from time to time, limited or
prohibited advertisements for similar products and services, including because of poor behavior by other industry participants. There is no assurance that we will not be limited or prohibited from using certain current or prospective marketing
channels or providing certain features in the future.
Further, many users historically registered for (and logged into)
our Grindr App exclusively through their Apple IDs, Google usernames, or Facebook profiles. While we have alternate authentication methods that allow users to register for (and log into) our Grindr App using an email address or their mobile phone
numbers, there can be no assurances that users will use these other methods. Apple, Google, and Facebook have broad discretion to change their terms and conditions in ways that could limit, eliminate, or otherwise interfere with our ability to
use Apple IDs, Google usernames, or Facebook profiles as a registration method or to allow these entities to use such data to gain a competitive advantage. If Apple, Google, or Facebook did so, our business, financial condition, and results of
operations could be materially adversely affected. Additionally, if security on Apple, Google, or Facebook is compromised, if our users are locked out from their accounts, or if Apple, Google, or Facebook experiences an outage, our users may be
unable to access our products and services. If our ability to distribute our products and services to our users is impaired, even if for a temporary period, user growth and engagement on our service could be materially adversely affected, even if
for a temporary period. Any of these events could materially adversely affect our business, financial condition, and results of operations.
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Privacy concerns relating to our products
and services and the use of user information could negatively impact our user base or user engagement, which could have a material and adverse effect on our business, financial condition, and results of operations.
We collect user profile, precise user location, and other personal
data from our users to provide them with our products and services and to better facilitate connections among our users. As discussed above, despite the increased level of social acceptance of the LGBTQ+ community, identification as LGBTQ+
remains stigmatized, marginalized, and deemed illegal in certain parts of the world. Grindr embraces all sexual orientations and gender identities, including those who identify expressly as straight, gay, bi+ (i.e., those open to multiple genders
like pansexual, polysexual, queer, fluid, and flexible), transexual, lesbian, demisexual, among others. However, certain of our existing and potential users may prefer not to associate with our platform publicly, not to identify themselves
publicly as LGBTQ+, not to have assumptions or perceptions formed about their sexual orientation or gender identity, and/or not to have their sexual orientations and gender identities known by others in the LGBTQ+ community.
While we will endeavor to monitor adverse legal developments
globally, including legislative action and restrictive regulatory interpretations related to the processing of personal data, including special categories of personal data which Grindr collects and processes, and attempt to comply with these
legal developments, we may in the future be subject to more stringent obligations or claims under such adverse legislation or regulatory interpretations, which can materially impact Grindr’s ability to provide its services in certain locales with
restrictive data privacy regulatory frameworks.
In addition, although our products and services aim to create an
environment inclusive of all people (both within and outside of the LGBTQ+ community), our potential users may be reluctant to use our products and services out of fear of the ramifications of being associated with our platform or identified or
perceived as a potential member of the LGBTQ+ community. Concerns about being identified or perceived in a certain way, as well as concerns about the collection, use, disclosure, or security of personal information or chat history or other
privacy-related matters, even if unfounded, could damage our reputation and discourage potential users from choosing our platform, all of which may adversely affect our business, financial condition, and results of operations. See “—Adverse social and political environments for the LGBTQ+ community in certain parts of the world, including actions by governments or other groups, could limit our geographic reach, business expansion, and user
growth, any of which could materially and adversely affect our business, financial condition, and results of operation.”
Any incidents where our users’ information is accessed without
authorization, or is improperly used, or incidents that otherwise violate our policies or do not comply with applicable laws and best practices, could damage our reputation and diminish our competitive position. Affected users or government
authorities could initiate legal or regulatory actions against us over these incidents, which could cause us to incur significant expense and liability or result in orders or consent decrees forcing us to modify our business practices. In
addition, our advertising and other business partners also have varying expectations and demands with respect to data privacy and protection measures and practices, and our failure to fully meet such expectations or demands may cause our
advertising or other business partners to take adverse actions, including without limitation suspension, termination, or other unexpected changes in the business relationship which may materially and adversely affect our financial condition,
business outlook, or reputation. Our success depends, in part, on our ability to access, collect, and use personal data about our users and to comply with applicable privacy and data protection laws and industry best practices. See “—Risks Related to Regulation and Litigation—Our success depends, in part, on our ability to access, collect, and use personal data about our users and to comply with applicable privacy and data protection laws and
industry best practices.”
In addition, from time to time, we receive requests or demands for
information from law enforcement agencies that seek access to our user content. In some cases, these requests or demands seek information that we are not able to provide or have determined it is not appropriate to provide due to technical
limitations, privacy concerns, or retention practices. Maintaining the trust of our users is important to sustain our user growth, retention, and engagement. Concerns over our privacy practices, whether actual or unfounded, could damage our
reputation and brand and deter users, advertisers, and partners from using our products and services, any of which may adversely affect our business, financial condition, and results of operations.
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We rely primarily on the Apple App Store and
Google Play Store as the channels for processing of payments. In addition, access to our products and services depends on mobile App stores and other third parties such as data center service providers, as well as third-party payment aggregators,
computer systems, internet transit providers and other communications systems and service providers. Any deterioration in our relationship with Apple, Google or other such third parties may negatively impact our business.
Our products and services mainly depend on mobile App stores and the
continued services and performance of other third parties such as data center service providers, third party payment aggregators, computer systems, internet transit providers, and other communications systems and service providers. We primarily
make our Grindr App available to users through, and therefore largely depend upon, the Apple App Store and the Google Play Store. While our Grindr App is generally free to download from these stores, we offer our users the opportunity to purchase
subscriptions and premium add-ons. We determine the prices for these subscriptions and premium add-ons, but at this time, they are primarily processed through the in-App payment systems provided by Apple and Google. We also utilize Stripe in
order to process payments related to certain legacy subscriptions. Apple and Google, as well as other third parties such as Stripe, have broad discretion to make changes to their operating systems or payment services or change the manner in which
their mobile operating systems function and their respective terms and conditions applicable to the distribution of our Grindr App, including the amount of, and requirement to pay, certain fees associated with purchases required to be facilitated
by such third parties through our Grindr App, and to interpret their respective terms and conditions in ways that may limit, eliminate, or otherwise interfere with our products and services, our ability to distribute our Grindr App through their
stores, our ability to update our Grindr App, including to make bug fixes or other feature updates or upgrades, the features we provide, the manner in which we market our in-App products and services, our ability to access native functionality or
other aspects of mobile devices, and our ability to access information about our users that they collect.
To the extent such third parties do so, our business, financial
condition, and results of operations could be materially adversely affected. For example, our business could suffer materially if Apple or Google, including other third parties, albeit to a lesser extent, change their standard terms and
conditions, interpretations, or other policies and practices in a way that is detrimental to us or if they determine that we are in violation of their standard terms and conditions and prohibit us from distributing our Grindr App on their
platforms.
There can be no assurance that Apple or Google, or any other similar
third party, will not limit, delay, eliminate, or otherwise interfere with the distribution of our Grindr App, or that we will not be limited or prohibited from using certain current or prospective distribution or marketing channels in the
future. For example, either Apple or Google could block or delay the distribution of a new version of our platform or our products and services based upon alleged non-compliance with their policies concerning safety or in-App content, technical
performance, or design, among other issues. In addition, Google could immediately terminate our Google Play distribution agreement if we experience a change of control, which would have a material adverse effect on our business. If Apple or
Google took any such actions, or if we experience a deterioration in either relationship, our business, financial condition, and results of operations could be materially adversely affected.
Apple recently announced that it would allow app developers to
process payments for subscriptions and other premium add-ons outside of Apple’s payment system. However, there can be no assurance that we will be successful in our effort to process payments outside of Apple’s payment systems.
In addition, we rely on a wide array of additional third parties in
various other aspects of our operations, including software developers, computing, storage, and bandwidth service providers, suppliers of technology infrastructures, mobile application optimization and analytics firms, sales and marketing
channels, contract engineers, contract content contributors, as well as LGBTQ+ rights advocacy organizations around the world. Any deterioration in our relationships with these third-party suppliers, vendors, and business partners, or any adverse
change in the terms and conditions governing these relationships, could have a negative impact on our business, financial condition, and results of operations.
Our user growth, engagement, and monetization
on mobile devices depend upon effective operation with mobile operating systems, networks, and standards that we do not control.
To deliver a high-quality user experience, our products and services
must work well across a range of mobile operating systems, networks, technologies, mobile devices, and standards that we do not control. We may not be successful in developing relationships with key participants in the mobile industry or in
developing services that operate effectively with these mobile operating systems, handset manufacturers, networks, mobiles devices, mobile
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carriers, and standards. In addition, any future changes to mobile operating
systems, networks, mobile devices, mobile carriers, or standards may impact the accessibility, speed, functionality, and other performance aspects of our products and services. These issues may, and likely will, occur in the future from time to
time. If users experience issues accessing or using our products and services, particularly on their mobile devices, or if our users choose not to access or use our products and services on their mobile devices, our user growth, retention, and
engagement could be harmed, and our business, financial condition, and results of operation could be adversely affected.
As discussed above, we market, distribute, and make our products and
services available across several mobile operating systems and devices (e.g., iOS and Android) and through a number of third-party publishers and distribution channels (e.g., the Apple App Store and Google Play Store). There can be no guarantee
that popular mobile devices will continue to feature our products and services, or that mobile device users will continue to use our products and services over competing products and services. In addition, if the number of platforms for which we
develop our products and services increases, our costs and expenses will also increase, as will the risks of bugs, outages, or other technical issues. Moreover, our products and services require high-bandwidth data capabilities. If the costs of
data usage increase, our user growth, retention, and engagement may be seriously harmed.
Adverse social and political environments for
the LGBTQ+ community in certain parts of the world, including actions by governments or other groups, could limit our geographic reach, business expansion, and user growth, any of which could materially and adversely affect our business,
financial condition, and results of operation.
While there has been substantial progress in the protection of
LGBTQ+ rights in certain parts of the world, identification as LGBTQ+ remains stigmatized, marginalized, and deemed illegal in many parts of the world. We have faced and may continue to face incidents in which government authorities in certain
countries use our products and services to entrap and arrest LGBTQ+ individuals under charges of “promoting sexual deviancy” and “inciting immorality,” among others.
In addition, some countries, including Pakistan and the Crimean
Peninsula in Ukraine, have banned our products and services and the products and services of other companies in the industry that provide services for and promote the LGBTQ+ community. Access to our Grindr App in other countries, such as China,
Turkey, Lebanon, Indonesia, the United Arab Emirates, Saudi Arabia, and Qatar, may only be available through the use of services such as virtual private networks, or VPNs, or via home wireless networks, thereby decreasing accessibility to our
products and services. Adverse social and political environments for the LGBTQ+ community in anti-LGBTQ+ countries could limit our geographical reach, business expansion, and user growth, any of which could materially and adversely affect our
business, financial condition, and results of operation.
In addition, government authorities in various countries may seek to
restrict user access to our products and services, if they consider us to be in violation of their laws, a threat to public safety, or for other reasons, including if they consider the content on our products and services to be immoral or
indecent. In the event that content shown on our products and services is subject to censorship, access to our products and services may be restricted (in whole or in part) in one or more countries, we may be required to or elect to make changes
to our operations or other restrictions may be imposed on our products and services. If our competitors are able to successfully penetrate new geographic markets or capture a greater share of existing geographic markets that we cannot access or
where we face other restrictions, our ability to retain, expand, and engage our user base and qualify advertisers may be adversely affected, we may not be able to maintain or grow our revenue as anticipated, and our business, financial condition,
and results of operations could be materially adversely affected.
Our success depends on the demographics of the
community that we serve and our ability to foresee and respond to changing market and user demands.
Our success depends heavily upon a variety of factors specific to
the adult LGBTQ+ community that we serve. Changes in the population size, gender distribution, disposable income, and other demographic characteristics of the global LGBTQ+ community could have a significant impact on demand for our products and
services and our attractiveness to advertisers who pay to reach our user base.
In addition, changes in the demographic characteristics of the
LGBTQ+ community could result in shifts in its members’ demands and preferences. The significant diversity within the adult LGBTQ+ global population further imposes challenges for us to successfully foresee and respond to the changing preferences
and interests of this community. Should we fail to adequately foresee and respond to the demands and preferences of the markets we serve, our business, financial condition, and results of operations would be materially and adversely affected.
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Our growth and monetization strategies may
not be successfully implemented or generate sustainable revenue and profit.
To sustain our revenue growth, we must effectively monetize our user
base and expand the monetization of our products and services. Our growth and monetization strategies are constantly evolving. We plan to offer our users more types of subscription packages, additional offers to encourage conversion to premium
(fee-based) subscriptions, and stand-alone for-pay features, among other strategies. In addition, we intend to diversify our advertiser portfolio and strengthen the performance of our online self-service advertising system. However, these efforts
might not be successful and may not justify our investment, or we may not be able to pursue them at all. We have limited and may continue to limit the user data shared with third-party advertising partners, which could have a negative effect on
our ability to maximize our advertising revenue. In addition, we are continuously seeking to balance the growth objectives and monetization strategies with our desire to provide an optimal user experience, and we may not be successful in
achieving a balance that continues to retain and attract users. If our growth and monetization strategies do not generate sustainable revenue, our business, financial condition, and results of operations could be materially adversely affected.
Our product development, investment, and other
business decisions may not prioritize short-term financial results and may not produce the long-term benefits that we expect.
We frequently make product development and investment decisions that
may not prioritize short-term financial results, if we believe that the decisions benefit the aggregate user experience and will thereby improve our financial performance over the long term. For example, we launched our Grindr 4 Equality
initiative to better serve the LGBTQ+ community and strengthen our brand image without focusing on immediate financial returns. Likewise, we occasionally launch features that we cannot monetize (and may never be able to monetize), but those
features aim to improve the overall user experience and thus improve our long-term financial performance by driving user engagement and retention, among other potential effects. However, these sorts of decisions may not produce the long-term
benefits that we expect, in which case our user growth and engagement, our relationships with partners and advertisers, and our business, financial conditions, and results of operations could be materially adversely affected.
The failure to attract new advertisers, the
loss of existing advertisers, a deterioration in any of our advertising relationships, or a reduction in their spending could adversely harm our business.
We currently generate a material portion of our revenue from
advertising on our products and services, which is included under our Indirect Revenue. We attract third-party advertisers because of our extensive LGBTQ+ user base worldwide, among other factors. Any decrease or a slower growth in our user base
or user engagement may discourage new or existing advertisers from advertising on our products and services. The advertisers control their respective development and operation, and we have little input, if any at all, on how their platforms
operate. In addition, we largely do not have control over the type of advertisers or the content of their advertisements on our platform. Any deterioration in our relationship with these platforms, any changes in how they operate their platforms
or in the requirements regarding the content on our platform, or any deterioration in the platforms’ relationships with advertisers that advertise on our platform may materially adversely affect our advertising revenue. Any loss of existing
advertisers or failure to attract new advertisers will materially adversely affect our business, financial condition, and results of operations.
Our advertisers typically do not have long-term advertising
commitments with us. The majority of our advertisers spend only a relatively small portion of their overall advertising budget with us. In addition, certain advertisers may view some of our products and services as controversial, experimental or
unproven. Advertisers will not continue to do business with us, or they will reduce the prices they are willing to pay to advertise with us, if we do not deliver ads and other commercial content in an effective manner, or if they do not believe
that their investment in advertising with us will generate a competitive return relative to other alternatives. Moreover, we rely on the ability to collect and disclose data and metrics for our advertisers to attract new advertisers and retain
existing advertisers. Any restriction, whether by law, regulation, policy, or any other reason, on our ability to collect and disclose data to our advertisers would impede our ability to attract and retain advertisers. Our ability to collect and
disclose data may also be adversely affected by third-parties, such as third-party publishers and platforms. See “—The distribution, marketing of, and access to our products and services depend, in large part, on
third-party platforms and mobile application stores, among other third-party providers. If these third parties limit, prohibit, or otherwise interfere with the distribution or use of our products and services in any material way, it could
materially adversely affect our business, financial condition, and results of operations.”
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In addition, we believe that our advertising revenue could also
be adversely affected by many factors both within and beyond our control, including:
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decreases in monthly active users and user growth and engagement, including time spent on our products and services;
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decreased user access to and engagement with us through our mobile products and services;
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the degree to which our users cease or reduce the number of times they engage with ads placed through our products and
services;
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changes in our demographics that make us less attractive to advertisers;
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product changes or inventory management decisions that we make that reduce the size, frequency, or prominence of ads and other
commercial content displayed on our products and services;
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our inability to improve our analytics and measurement solutions that demonstrate the value of our ads and other commercial
content;
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loss of advertising market share to our competitors;
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adverse legal developments relating to advertising, including legislative action, regulatory developments, and litigation;
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competitive developments or advertiser perception of the value of our products and services that change the rates we can charge
for advertising or the volume of advertising on our products and services;
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adverse media reports or other negative publicity involving us or other companies in our industry;
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our inability to create new products and services that sustain or increase the value of our ads and other commercial content;
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changes in the pricing of online advertising;
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difficulty and frustration from advertisers who may need to reformat or change their advertisements to comply with our
guidelines;
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the impact of new technologies that could block or obscure the display of our ads and other commercial content; and
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the impact of macroeconomic conditions and conditions in the advertising industry in general.
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The occurrence of any of these or other factors could result in a
reduction in demand for our ads and other commercial content, which may reduce the prices we receive for our ads and other commercial content, or cause advertisers to stop advertising with us altogether, any of which could negatively affect our
business, financial condition, and results of operation.
We may not be able to charge subscription
fees or premium add-on fees at a sufficient level or raise these fees.
We currently offer two premium (fee-based) subscription versions of
our platform, Grindr Xtra and Grindr Unlimited, each of which offers a wide range of premium services to subscribers through additional features. Subscribers can choose different subscription packages for different periods, with deeper discounts
typically being offered to subscribers who select longer subscription periods. In addition, we at times offer users the option to purchase certain premium add-ons, such as one-day day pass memberships to Grindr’s premium subscription versions of
the platform, among other premium add-on offers. Given the increasing market competition that we face, the constantly changing user demands and preferences that we must address, and the uncertainties in the overall economic environment, we may
not be able to charge fees at a sufficient level or raise fees, especially in emerging markets.
In addition, our pricing strategies may fail to gain acceptance
among users or compete effectively against our competitors, especially in emerging markets where we have less of an operating history. Moreover, we may be unable to convert our users from our free products and services to our subscription-based
products and services at a sufficient rate, or at all. In any of these events, our business, financial condition, and results of operations could be materially adversely affected.
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We have significant internationally sourced
revenue and plan to expand our operations abroad in markets in which we have more limited operating experience. As a result, we may face additional risks in connection with certain of our international operations that could adversely affect our
financial results.
We have significant internationally sourced revenue and plan to
continue the international expansion of our business, including through the translation of our products and services. As of June 30, 2022, we distribute the iOS and Android versions of our Grindr App in 9 and 21 languages, respectively, and had
registered users in most countries and territories in which the Apple App Store and Google Play Store operate (except Cuba, China, Iran, Sudan and Ukraine). Our international revenues represented 37.8%, 37.0%, 35.8%, 42.7%, and 36.7% of our total
revenue for the three and six months ended June 30, 2022, the year ended December 31, 2021, the combined Successor 2020 Period and Predecessor 2020 Period, and the year ended December 31, 2019, respectively.
We may enter new international markets and expand our operations in
existing international markets, where we have limited or no experience in marketing, selling, and deploying our products and services. In addition, some or all of our products or services may not be permitted or made available in certain markets
due to legal and regulatory complexities and different societal perceptions of LGBTQ identities. See “—Adverse social and political environments for the LGBTQ+ community in certain parts of the world, including
actions by governments or other groups, could limit our geographic reach, business expansion, and user growth, any of which could materially and adversely affect our business, financial condition, and results of operation.” If we fail to
deploy, manage, or oversee our international expansion successfully, our business may suffer.
In addition, we believe that operating internationally, particularly
in countries in which we have more limited experience, exposes us to a number of additional risks both within and beyond our control, including:
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operational and compliance challenges caused by distance, language, and cultural differences;
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political tensions, social unrests, or economic instability, particularly in the countries in which we operate;
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differing levels of social and technological acceptance of our products and services, or lack of acceptance of them generally;
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low usage and/or penetration of internet-connected consumer electronic devices;
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risks related to the legal and regulatory environment in foreign jurisdictions, including with respect to privacy, data
security and unexpected changes in laws, regulatory requirements, and enforcement;
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potential damage to our brand and reputation due to compliance with local laws, including potential censorship or requirements
to provide user information to local authorities;
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our lack of a critical mass of users in certain markets;
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fluctuations in currency exchange rates;
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higher levels of credit risk and payment fraud;
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enhanced difficulties of integrating any foreign acquisitions;
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burdens of complying with a variety of foreign laws, including multiple tax jurisdictions;
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competitive environments that favor local businesses;
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reduced protection for intellectual property rights in some countries;
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difficulties in staffing and managing global operations and the increased travel, infrastructure, and legal compliance costs
associated with multiple international locations;
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regulations that might add difficulties in repatriating cash earned outside the U.S. and otherwise preventing us from freely
moving cash;
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import and export restrictions and changes in trade regulations;
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political unrest, terrorism, military conflict (such as the conflict involving Russia and Ukraine), war, health and safety
epidemics (such as the COVID-19 pandemic and the 2022 monkeypox outbreak) or the threat of any of these events;
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export controls and economic sanctions administered by the U.S. Department of Commerce Bureau of Industry and Security and the
U.S. Department of the Treasury Office of Foreign Assets Control and similar regulatory entities in other jurisdictions;
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compliance with the U.S. Foreign Corrupt Practices Act, the U.K. Bribery Act, and similar anti-corruption laws in other
jurisdictions; and
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compliance with statutory equity requirements and management of tax consequences.
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Moreover, geopolitical tensions in or involving countries in which
we operate, such as Russia, may prevent us from operating in certain countries or increase our costs of operating in those countries. See “—A downturn in the global economy, especially in the United States and
Europe, where a substantial majority of our revenue is generated could adversely harm our business.” In addition, if enforcement authorities demand access to our user data, our failure to comply could lead to our inability to operate in
such countries or other punitive acts. For example, in 2018, Russia blocked access to the messaging app Telegram after it refused to provide access to the Russian government to encrypted messages.
The occurrence of any of these or other factors or our failure to
effectively manage the complexity of our global operations could materially adversely affect our international operations, which could, in turn, negatively affect our business, financial condition, and results of operations.
Our business and results of operations may
be materially adversely affected by the recent COVID-19 pandemic, the 2022 monkeypox outbreak or other similar outbreaks.
Our business could be materially adversely affected by the outbreak
of a widespread health epidemic or pandemic, including the recent COVID-19 pandemic and newly declared public health emergencies such as the 2022 monkeypox outbreak. The COVID-19 pandemic has reached across the globe, resulting in the
implementation of significant governmental measures, including lockdowns, closures, quarantines, and travel bans intended to control the spread of the virus. While some of these measures have been relaxed over the past few months in various parts
of the world, ongoing social distancing measures, and future prevention and mitigation measures, as well as the potential for some of these measures to be reinstituted in the event of repeat waves of the virus, are likely to have an adverse
impact on global economic conditions and consumer confidence and spending, and could materially adversely affect demand, or our users’ ability to pay, for our products and services. The 2022 monkeypox outbreak has spread to many regions of the
world, including to regions where we conduct our business operations. We have seen slower active user growth in areas with significant monkeypox outbreaks. If the monkeypox outbreak continue to spread, any resulting fluctuation in our user base
and user activity may have a material and adversely affect our business operations and financial results.
A public health epidemic, pandemic or public health emergency,
including COVID-19 and 2022 monkeypox outbreak, poses the risk that we or our employees, contractors, vendors, and other business partners may be prevented or impaired from conducting ordinary course business activities for an indefinite period,
including due to shutdowns necessitated for the health and well-being of our employees, the employees of business partners, or shutdowns that may be requested or mandated by governmental authorities. In addition, in response to the COVID-19
pandemic, we have taken several precautions that may adversely impact employee productivity, such as moving to a remote-first work environment, imposing travel restrictions within the U.S. and internationally, and temporarily closing office
locations.
A widespread epidemic, pandemic, or other health crisis could also
cause significant volatility in global markets. The COVID-19 pandemic has caused disruption in financial markets, which if it continues or intensifies, could reduce our ability to access capital and thereby negatively impact our liquidity.
We have in the past experienced, and may in the future experience
volatility in our user and revenue growth rates as a result of the COVID-19 pandemic and the 2022 monkeypox outbreak. We intend to continue to execute on our strategic plans and operational initiatives; however, the uncertainties may result in
delays or modifications to these plans and initiatives. Part of our growth strategy includes increasing the number of international users and expanding into additional geographies. The timing and success of our international expansion may be
negatively impacted by COVID-19, the 2022 monkeypox outbreak or other disease outbreaks, which could impede our anticipated growth. As we experience volatility or decline in growth rates, investors’ perceptions of our business may be adversely
affected, and the trading price of New Grindr’s common stock may decline.
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The ultimate extent of the impact of any epidemic, pandemic, or
other health crisis on our business will depend on multiple factors that are highly uncertain and cannot be predicted, including its severity, location and duration, and actions taken to contain or prevent further its spread. In addition, the
COVID-19 pandemic and the 2022 monkeypox outbreak could increase the magnitude of many of the other risks described in this proxy statement/prospectus and may have other material adverse effects on Our operations that we are not currently able to
predict. If our business and the markets in which it operates experience a prolonged occurrence of adverse public health conditions, such as COVID-19, the 2022 monkeypox outbreak and other similar outbreaks, it could materially adversely affect
our business, financial condition, and results of operations.
We have identified material weaknesses in our
internal control over financial reporting which, if not corrected, could affect the reliability of our consolidated financial statements, and have other adverse consequences.
In connection with the audits of our consolidated financial
statements for the years ended December 31, 2021, 2020, and 2019, and continuing into 2022 material weaknesses in our internal control over financial reporting were identified in relation to (i) the appropriateness and sufficiency of management’s
review controls for unusual and nonrecurring transactions, (ii) the appropriateness and sufficiency of management’s review controls around the underlying data and bookings reporting from the mobile application platforms upon which we rely in
order to record direct revenue, a currently manual process, and (iii) as a result of the above, the accuracy and timeliness of our financial statement closing process. A material weakness is a deficiency or combination of deficiencies in internal
control over financial reporting such that there is a reasonable possibility that a material misstatement of our consolidated financial statements would not be prevented or detected on a timely basis.
The identified material weaknesses could result in a material
misstatement to our consolidated financial statements that may not be prevented or detected. Given that we operated as a private company prior to the Business Combination, we did not have the necessary formalized processes to effectively
implement review controls within our internal control over financial reporting.
We have implemented the following actions to remediate the material
weaknesses described above. These remediation measures are ongoing and include the following:
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hiring additional technical personnel to bolster our accounting capabilities and capacity, including the evaluation of
technical and reporting accounting materials;
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designing and implementing an automatic intake process with respect to direct revenue information from third parties, engaging
tax consultants to regularly review changes in tax requirements in applicable jurisdictions for appropriate tax assessment, and conducting monthly review processes to enhance direct revenue information accuracy;
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designing and implementing appropriate modules in our financial systems to automate manual reconciliations and calculations;
and
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evaluating, designing and implementing the internal controls and procedures with respect to the closing process, including the
measures stated above, to limit human judgment errors, enhance adequacy of reviews to assure timely and accurate financial control.
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We believe all the remediation efforts taken as a whole will result
in comprehensive financial reporting reviews and a reduction in manual processes to ensure a timely close and accurate financial reporting. However, we cannot assure you the measures we are taking to remediate the material weakness will be
sufficient or that they will prevent future material weaknesses. Additional material weaknesses or failure to maintain effective internal control over financial reporting could cause us to fail to meet our reporting obligations as a public
company and may result in a restatement of our financial statements for prior periods.
If not remediated, these material weaknesses could result in further
material misstatements to our annual or interim consolidated financial statements that might not be prevented or detected on a timely basis, or in delayed filing of required periodic reports. If we are unable to assert that our internal control
over financial reporting is effective, or when required in the future after the consummation of the Business Combination, if our Independent Registered Public Accounting Firm is unable to express an unqualified opinion as to the effectiveness of
the internal control over financial reporting, investors may lose confidence in the accuracy and completeness of our financial reports, the market price of the stock could be adversely affected, and we could become subject to litigation or
investigations by the NYSE, the SEC, or other regulatory authorities, which could require additional financial and management resources.
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The forecasts and projections herein are
based upon certain assumptions, analyses and estimates. If these assumptions, analyses or estimates prove to be incorrect or inaccurate, our actual results may differ materially from those forecasted or projected.
The forecasts and projections, including projected revenue growth,
Adjusted EBITDA Margin and the anticipated market opportunity, growth and penetration, are subject to significant uncertainty and are based on certain assumptions, analyses and estimates, including with reference to third-party forecasts, any or
all of which may prove to be incorrect or inaccurate. These include assumptions, analyses and estimates about future pricing and future costs, all of which are subject to a wide variety of business, regulatory and competitive risks and
uncertainties. If these assumptions, analyses or estimates prove to be incorrect or inaccurate, our actual results may differ materially from those forecasted or projected, adversely affecting the value of New Grindr Common Stock.
We depend on our key personnel and we may
not be able to operate or grow our business effectively if we lose the services of any of our key personnel or are unable to attract qualified personnel in the future.
We currently depend on the continued services and performance of our
key personnel, including members of senior management, product development and revenue teams, engineering personnel, and privacy and information security employees, among other key staff. In addition, some of our key technologies and systems have
been, or may be in the future, custom-made for our business by our key personnel. If one or more of our senior management or other key employees cannot or chose not to continue their employment with us, we might not be able to replace them
easily, in a timely manner, or at all. In addition, the risk that competitors or other companies may poach our talent increases as we continue to build our brand and become more well-known. Our key personnel likely have been, and may continue to
be, subject to poaching efforts by our competitors and other internet and high-growth companies, including well-capitalized players in the social media and consumer internet space. The loss of key personnel, including members of management,
product development and revenue teams, engineering personnel, and privacy and information security employees, could disrupt our operations and have a material adverse effect on our business, financial condition, and results of operations.
Our future success will depend upon our continued ability to
identify, hire, develop, motivate, and retain highly skilled individuals across the globe, with the continued contributions of our senior management being especially critical to our success. We face intense competition in the industry for
well-qualified, highly skilled employees and our continued ability to compete effectively depends, in part, upon our ability to attract and retain new employees. While we have established programs to attract new employees and provide incentives
to retain existing employees, particularly our senior management, we cannot guarantee that we will be able to attract new employees or retain the services of our senior management or any other key employees in the future. Additionally, we believe
that our culture and core values have been, and will continue to be, a key contributor to our success and our ability to foster the innovation, creativity, and teamwork that we believe we need to support our operations. If we fail to effectively
manage our hiring needs and successfully integrate our new hires, or if we fail to effectively manage remote work arrangements resulting from the COVID-19 pandemic, among other factors, our efficiency and ability to meet our forecasts and our
ability to maintain our culture, employee morale, productivity, and retention could suffer, and our business, financial condition, and results of operations could be materially adversely affected.
Finally, effective succession planning will be important to our
future success. If we fail to ensure the effective transfer of senior management knowledge and to create smooth transitions involving senior management across our various businesses, our ability to execute short and long term strategic,
financial, and operating goals, as well as our business, financial condition, and results of operations generally, could be materially adversely affected.
Our management team has a limited history
working together operating the company and, as a result, our past results may not be indicative of future operating performance.
As explained above, we have a limited history working together operating the company,
which makes it difficult to forecast our future results. See “—We have grown rapidly in recent years and certain members of our management team have joined us recently. If we are unable to manage our growth
effectively, our brand, company, culture, and financial performance may suffer.” You should not rely on our past quarterly operating results as indicators of future performance. In addition, you should consider and evaluate our prospects
in light of the risks and uncertainties frequently encountered by companies in rapidly evolving markets like ours, as well as the information included in this proxy statement/prospectus.
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Our employees could engage in misconduct that
materially adversely affects us.
Our employees could engage in misconduct that could have a
materially adverse effect on us. We may not be able to prevent or detect misconduct by our employees, either personal or in the course of their duties on behalf of Grindr, and the precautions we take to prevent and detect this activity may not be
effective. See “—Risks Related to Regulation and Litigation—Online applications are subject to various laws and regulations relating to children’s privacy and protection, which if violated, could subject us to an
increased risk of litigation and regulatory actions.” If any of our employees were to engage in or be accused of misconduct, we could be exposed to legal liability, negative publicity, our business and reputation could be materially
adversely affected, and we could fail to retain key employees. See “—Unfavorable media coverage could materially and adversely affect our business, brand, or reputation.”
We have limited insurance coverage with respect
to our business and operations.
Although we maintain property insurance, professional liability
insurance, technology error and omission/cyber liability insurance, and commercial general liability insurance, we cannot assure you that our insurance coverage will be sufficient or that future coverage will be available at reasonable costs.
Accordingly, we may determine that we cannot obtain insurance on acceptable terms or at all. However, we have in the past, and may in the future, experience issues obtaining cyber insurance that provides third-party reimbursement or obtaining
such insurance on favorable terms.
In addition, our business disruption insurance covers only loss of
business income sustained due to direct physical loss or damage to property on our premises, and insurance policies covering damage to our IT infrastructure or information technology systems are limited. Any disruptions to our IT infrastructures
or systems or an uncovered business disruption event could result in substantial cost to us and diversion of our resources.
Problems with any insurer, or the general limitations of our
insurance policies, including any applicable retentions or caps, could result in limited coverage for us and cause us to incur significant operating expenses. Additionally, if a significant loss, judgment, claim or other event is not covered by
insurance, the loss and related expenses could harm our business, financial condition and results of operations. The occurrence of any of these or other factors could negatively affect our business, financial condition, and results of operations.
We rely on certain key operating metrics that
have not been independently verified to manage our business, we may periodically change our metrics, and real or perceived inaccuracies in such metrics may harm our reputation and negatively affect our business.
We regularly review metrics, such as MAUs, to evaluate growth
trends, measure our performance, and make strategic decisions. The MAUs are calculated using unique devices that demonstrate activity on our Grindr App on a calendar month basis and the devices counted may not exactly correlate to the number of
users of our Grindr App. The MAUs are also calculated using internal company data gathered on analytics platforms that we developed or deployed and operate, and they have not been validated by an independent third party. In addition, our internal
systems measure MAUs by detecting user activity when users open our Grindr App on their devices, regardless of whether the users engage in any further activities using the application, and therefore these metrics cannot measure the extent to
which our users use our products and services, or accurately estimate the impact that it may have on our financial results. See “Grindr’s Management’s Discussion and Analysis of Financial Condition and Results of
Operations—Key Operating and Financial Metrics” for more details. While these metrics are based on what we believe to be reasonable estimates of our user base for the applicable periods, there are inherent challenges in measuring how our
products and services are used across large populations globally and in accounting for spam accounts (as opposed to genuine users). Our user metrics are also affected by technology on certain mobile devices that automatically runs in the
background of our Grindr App when another phone function is used, and this activity can cause our system to miscount the user metrics associated with such an account. The methodologies used to measure these metrics require significant judgment
and are also susceptible to algorithm or other technical errors. In addition, we are continually seeking to improve our estimates of our user base, and such estimates may change due to improvements or changes in our methodology.
Errors or inaccuracies in our metrics or data could also result in
incorrect business decisions and inefficiencies. For instance, if a significant understatement or overstatement of MAUs were to occur, we may expend resources to implement unnecessary business measures or fail to take required actions to attract
a sufficient number of users to satisfy our growth strategies. We continually seek to address technical issues in our ability to record such data and
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improve our accuracy, but given the complexity of the systems involved, the rapidly
changing nature of mobile devices and systems, how our platform manages identity, and the way our users use the Grindr App, we expect these issues to continue. We are currently exploring and developing an alternative identifier in an effort to
capture different use cases on our platform, such as when a user logs into their account from multiple devices or when users periodically uninstall and then reinstall our Grindr App. This identifier may not be applicable retroactively to
historical data. This technology is still nascent, and it may be some time before we determine the resultant data is reliable or useful. To the extent we switch to reporting MAU data in the future based on this alternative identifier, it may be
difficult for investors to evaluate period over period comparisons of these metrics. We may periodically change the metrics we use for internal or external reporting purposes. If advertisers, partners, or investors do not perceive our user,
geographic, or other demographic metrics to be accurate representations of our user base, or if we discover material inaccuracies in our user, geographic, or other demographic metrics, our reputation may be seriously harmed. If customers,
platform partners, or investors do not perceive our user, geographic, or other demographic metrics to be accurate representations of our user base or user engagement, or if we discover material inaccuracies in our user, geographic, or other
demographic metrics, our reputation may be materially adversely impacted and users, platform partners, and investors may be less willing to allocate their resources or spending to our Grindr App, any of which could materially negatively affect
our business, financial condition, and results of operation.
Our reported financial results may be
adversely affected by changes in accounting principles generally accepted in the United States.
Generally accepted accounting principles in the United States are
subject to interpretation by the Financial Accounting Standards Board (“FASB”), the American Institute of Certified Public Accountants, the SEC and various bodies formed to promulgate and interpret
appropriate accounting principles. A change in these principles or interpretations could have a significant effect on our reported financial results, and could affect the reporting of transactions completed before the announcement of a change.
The requirements of being a public company may
strain our resources, divert management’s attention and affect our ability to attract and retain executive management and qualified board members.
As a public company, we are subject to the reporting requirements of
the Exchange Act, the listing standards of NYSE and other applicable securities rules and regulations. We expect that the requirements of these rules and regulations will continue to increase our legal, accounting and financial compliance costs,
make some activities more difficult, time-consuming, and costly, and place significant strain on our personnel, systems and resources. Furthermore, several members of our management team do not have prior experience in running a public company.
For example, the Exchange Act requires, among other things, that we file annual, quarterly and current reports with respect to our business and results of operations. As a result of the complexity involved in complying with the rules and
regulations applicable to public companies, our management’s attention may be diverted from other business concerns, which could harm our business, results of operations and financial condition. Although we have already hired additional employees
to assist us in complying with these requirements, we may need to hire more employees in the future or engage outside consultants, which will increase our operating expenses. In addition, changing laws, regulations and standards relating to
corporate governance and public disclosure are creating uncertainty for public companies, increasing legal and financial compliance costs and making some activities more time-consuming. These laws, regulations and standards are subject to varying
interpretations, in many cases due to their lack of specificity, and, as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies. This could result in continuing uncertainty
regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. We intend to invest substantial resources to comply with evolving laws, regulations and standards, and this investment may
result in increased general and administrative expenses and a diversion of management’s time and attention from business operations to compliance activities. If our efforts to comply with new laws, regulations and standards differ from the
activities intended by regulatory or governing bodies due to ambiguities related to their application and practice, regulatory authorities may initiate legal proceedings against us and our business may be harmed. We also expect that being a
public company that is subject to these new rules and regulations will make it more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced coverage or incur substantially higher costs to
obtain coverage. These factors could also make it more difficult for us to attract and retain qualified members of our board of directors, particularly members who can serve on our audit committee, and qualified executive officers. As a result of
the disclosure obligations required of a public company, our business and financial condition will become more visible, which may result in an increased risk of threatened or actual litigation, including by competitors and other
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third parties. If such claims are successful, our business, results of operations
and financial condition would be harmed, and even if the claims do not result in litigation or are resolved in our favor, these claims, and the time and resources necessary to resolve them, would divert the resources of our management and harm
our business, results of operations and financial condition.
A downturn in the global economy, especially
in the U.S. and Europe, where a substantial majority of our revenue is generated could adversely harm our business.
Our performance depends, at least in part, on global economic
conditions and their impact on levels of spending by our subscribers and advertisers. A decline in general economic conditions, including but not limited to recent inflationary movements, especially in the U.S. and Europe, where we generate a
substantial majority of our revenue, may adversely affect levels of consumer discretionary spending, the demands for our products and services, as well as advertising expenditures, any of which could materially adversely affect our business,
financial condition, and results of operations.
In addition, given the cyclical nature of the global economy, a
recessionary period may occur in the future, which could negatively affect our business, financial condition, and results of operation. The ongoing U.S.-China trade tension and other international diplomatic issues, as well as geopolitical
conflicts, including the military conflict involving Russia and Ukraine, and the economic sanctions imposed on Russia, present additional uncertainties for the U.S. and global economies. There can be no assurances that future economic conditions
in the U.S. or elsewhere around the world will be favorable to our business.
Foreign currency exchange rate fluctuations
could materially adversely affect our results of operations.
We operate in various international markets. During the three and
six months ended June 30, 2022, the year ended December 31, 2021, the combined Successor 2020 Period and Predecessor 2020 Period and the year ended December 31, 2019, our international revenue represented 37.8%, 37.0%, 35.8%, 42.7% and 36.7% of
our total revenue, respectively. We translate international revenues into U.S. dollar-denominated operating results, and during periods of a strengthening U.S. dollar, our international revenues will be reduced when translated into U.S. dollars.
In addition, as foreign currency exchange rates fluctuate, the translation of our international revenues into U.S. dollar-denominated operating results affects the period-over-period comparability of such results and can result in foreign
currency exchange gains and losses.
We have exposure to foreign currency exchange risk related to
transactions carried out in a currency other than the U.S. dollar, and investments in foreign subsidiaries with a functional currency other than the U.S. dollar.
Brexit has caused, and may continue to cause, volatility in currency
exchange rates between the U.S. dollar and the British pound, or GBP, and the full impact of Brexit remains uncertain. To the extent that the U.S. dollar strengthens relative to the GBP, the translation of our international revenues into U.S.
dollars will reduce its U.S. dollar denominated operating results and will affect their period-over-period comparability. See “—Risks Related to Regulation and Litigation—Legal, political, and economic
uncertainty surrounding the exit of the United Kingdom from the European Union, or Brexit, and the implementation of the trade and cooperation agreement between the United Kingdom and the European Union could have a material adverse effect on
our business.”
Significant foreign exchange rate fluctuations, in the case of one
currency or collectively with other currencies, could materially adversely affect our business, financial condition, and results of operations.
Risks Related to Information Technology Systems
and Intellectual Property
Security breaches, unauthorized access to or
disclosure of our data or user data, other hacking and phishing attacks on our systems, or other data security incidents could compromise sensitive information related to our business and/or user personal data processed by us or on our behalf and
expose us to liability, which could harm our reputation, generate negative publicity, and materially and adversely affect our business.
Our products and services and the operation of our business involve
the collection, storage, processing, and transmission of data, including personal data regarding our users. The information systems that store and process such data are susceptible to increasing threats of continually evolving cybersecurity
risks. Cyber-attacks by third parties seeking unauthorized access to confidential or sensitive data, including personal data regarding our users, or seeking to disrupt our ability to provide services, have become prevalent in our industry. We may
also face attempts to create false or undesirable user accounts or take other actions for the purposes of spamming, spreading misinformation or
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other objectionable ends. Given our Grindr App's popularity and user demographics,
bad actors may attempt to target or exploit our systems or users. We face an ever-increasing number of threats to our information systems from a broad range of potential bad actors, including foreign governments, criminals, competitors, computer
hackers, cyber terrorists, and politically or socially motivated groups or individuals, and we have previously experienced various attempts to access our information systems. These threats include physical or electronic break-ins, security
breaches from inadvertent or intentional actions by our employees, contractors, consultants, and/or other third parties with otherwise legitimate access to our systems, website, or facilities, or from cyber-attacks by malicious third parties
which could breach our data security and disrupt our systems. The motivations of such actors may vary, but breaches that compromise our information technology systems can cause interruptions, delays, or operational malfunctions, which, in turn,
could have a material adverse effect on our business, financial condition, and results of operations.
In addition, the risks related to a security breach or disruption,
including through a distributed denial-of-service, or DDoS, attack, computer and mobile malware, worms, viruses, social engineering (predominantly spear phishing attacks), attempts to misappropriate customer information, including credit card
information and account login credentials, and general hacking, have become more prevalent in our industry and these risks have generally increased as the number, intensity, and sophistication of attempted attacks and intrusions from around the
world have increased. Ransomware attacks, including those perpetrated by organized criminal threat actors, nation-states, and nation-state supported actors, are also becoming increasingly prevalent and severe and can lead to significant
interruptions in our operations, loss of data and income, reputational harm, and diversion of funds. Extortion payments may alleviate the negative impact of a ransomware attack, but we may be unwilling or unable to make such payments due to, for
example, applicable laws or regulations prohibiting payments.
Security incidents or disruptions have occurred on our systems in
the past, and they will continue to occur in the future and may be inherently difficult to detect for long periods of time. As a result of our market leader position, the size of our user base, and the types and volume of personal data on our
systems, we believe that we are a particularly attractive target for such breaches and attacks, including from highly sophisticated, state-sponsored, or otherwise well-funded actors. Though it is difficult to determine what, if any, harm may
directly result from any specific interruption or attack, any failure to maintain performance, reliability, security, and availability of our products and services and technical infrastructure to the satisfaction of our users may harm our
reputation and our ability to retain existing users and attract new users, as well as generate negative publicity.
Although we have devoted and continue to devote significant
resources to protect our data and user data, we cannot assure you that such measures will provide absolute security and we may also incur significant costs in protecting against or remediating cyberattacks. In addition, some of the user data we
collected is stored in facilities provided by third parties which are beyond our control. Any failure to prevent or mitigate security breaches and unauthorized access to or disclosure of our data or user data, including personal information,
content, or payment information from users, or information from marketers, could result in the loss, modification, disclosure, destruction, or other misuse of such data, which could subject us to legal liability, including investigations by
regulatory authorities and/or litigation that could result in liability to third parties, harm our business and reputation, and diminish our competitive position. We may incur significant costs in protecting against or remediating such incidents
and as cybersecurity incidents continue to evolve, we may be required to expend significant additional resources to continue to modify or enhance our protective measure or to investigate and remediate any information security vulnerabilities. Our
efforts to protect our confidential and sensitive data, the data of our users or other personal information we receive, and to disable undesirable activities on our platform, may also be unsuccessful due to software bugs or other technical
malfunctions; employee, contractor, or vendor error or malfeasance, including defects or vulnerabilities in our service providers’ information technology systems or offerings; government surveillance; breaches of physical security of our
facilities or technical infrastructure; or other threats that may surface or evolve.
In addition, third parties may attempt to fraudulently induce
employees or users to disclose information to gain access to our data or our users’ data. Although we have developed systems and processes that are designed to protect our data and user data, to prevent data loss, to disable undesirable accounts
and activities on our platform, and to prevent or detect security breaches, we cannot assure you that such measures will be successful, that we will be able to anticipate or detect all cyber-attacks or other breaches, that we will be able to
react to cyber-attacks or other breaches in a timely manner, or that our remediation efforts will be successful. We may also incur significant legal
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and financial exposure, including legal claims, higher transaction fees, and
regulatory fines and penalties because of any compromise or breach of our systems or data security, or the systems and data security of our third-party providers. Any of the foregoing could have a material adverse effect on our business,
financial condition, and results of operations.
Moreover, supply-chain attacks have increased in frequency and
severity, and we cannot guarantee that third parties and infrastructure in our supply chain have not been compromised or that they do not contain exploitable defects or bugs that could result in a breach of or disruption to our information
technology systems (including our products and services) or the third-party information technology systems that support us and our services. Some of our partners may receive or store information provided by us or by our users through mobile or
web applications integrated with our Grindr Applications, and we use third-party service providers to store, transmit, and otherwise process certain confidential, sensitive, or personal information on our behalf. If these third parties fail to
adopt or adhere to adequate data security practices, or in the event of a breach of their networks, our data or our users’ data may be improperly accessed, used, or disclosed, which could subject us to legal liability. We cannot control such
third parties and cannot guarantee that a security breach will not occur on their systems. Although we may have contractual protections with our third-party service providers, contractors, and consultants, any actual or perceived security breach
could harm our reputation and brand, expose us to potential liability or require us to expend significant resources on data security and in responding to any such actual or perceived breach. Any contractual protections we may have from our
third-party service providers, contractors, or consultants may not be sufficient to adequately protect us from any such liabilities and losses, and we may be unable to enforce any such contractual protections.
While our insurance policies include liability coverage for certain
of these matters, if we experience a significant security incident, we could be subject to liability or other damages that exceed our insurance coverage and we cannot be certain that such insurance policies will continue to be available to us on
economically reasonable terms, or at all, or that any insurer will not deny coverage as to any future claim. See “—Risks Related to Grindr’s Brand, Products and Services, and Operations—We have limited insurance
coverage with respect to our business and operations.” The successful assertion of one or more large claims against us that exceed available insurance coverage, or the occurrence of changes in our insurance policies, including premium
increases or the imposition of large deductible or coinsurance requirements, could have a material adverse effect on our business, financial condition, and results of operations.
The occurrence of any of these or other factors could negatively
affect our business, financial condition, and results of operations.
Our success depends, in part, on the integrity
of our information technology systems and infrastructures and on our ability to enhance, expand, and adapt these systems and infrastructures in a timely and cost-effective manner.
Our reputation and ability to attract, retain, and serve users
depends on the reliable performance of our products and services and our underlying technology infrastructure. Our products and services and systems rely on highly technical and complex software and hardware, and they depend on the ability of
such software and hardware to store, retrieve, process, and manage immense amounts of data. While we have not experienced any material outages in the recent past, we have in the past experienced performance delays and other glitches, and we
expect to face similar issues in the future. In addition, our systems may not be adequately designed with the necessary reliability and redundancy to avoid performance delays, other glitches, or outages that could make some or all of our systems
or data temporarily unavailable and prevent our products and services from functioning properly for our users. Any such interruption could arise for any number of reasons, including human errors, and could materially and adversely affect our
business, financial condition, and results of operations.
Moreover, our systems and infrastructures are vulnerable to damage
from fire, power loss, hardware and operating software errors, cyber-attacks, technical limitations, telecommunications failures, acts of God, and similar events. While we have back-up systems in place for certain aspects of our operations, not
all of our systems and infrastructures have redundancies or back-up systems. In addition, disaster recovery planning can never account for all possible eventualities and our property and business interruption insurance coverage may not be
adequate to compensate us fully for any losses that we may suffer. Any interruptions or outages, regardless of the cause, could negatively impact our users’ experiences with our products and services, tarnish our reputations and decrease demand
for our products and services, and result in significant negative publicity, any of which could materially adversely affect our business, financial condition, and results of operations. Moreover, even if detected, the resolution of such
interruptions may take a long time, during which customers may not be able to access, or may have limited access to, our products and services.
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We also continually work to expand and enhance the efficiency and
scalability of our technology and network systems to improve the experience of our users, accommodate substantial increases in the volume of traffic to our various products and services, ensure acceptable load times for our products and services,
and keep up with changes in technology and user preferences. Any failure to do so in a timely and cost-effective manner could materially adversely affect our users’ experience with our various products and services, thereby negatively impacting
the demand for our products and services, and could increase our costs, any of which could materially adversely affect our business, financial condition, and results of operations.
If the security of personal and confidential
or sensitive user information that we maintain and store is breached, or otherwise accessed by unauthorized persons, it may be costly to remediate such breach, it may generate negative publicity, and our reputation could be harmed.
We receive, process, store, and transmit a significant amount of
personal information regarding our users and other confidential or sensitive information, including user-to-user communications, and personal information of our employees and users, and enable our users to share their personal information,
including some which may be interpreted as special or sensitive information under certain privacy and data protection regulations, with each other through their public Grindr profiles or private in-App messages. In some cases, we engage
third-party service providers to store this information. We continuously develop and maintain systems to protect the security, integrity, and confidentiality of this information, but we have experienced past incidents of inadvertent or
unauthorized use or disclosure of such information. See “—Risks Related to Grindr’s Brand, Products and Services, and Operations—Unfavorable media coverage could materially and adversely affect our business,
brand, or reputation.” In addition, we may in the future experience additional incidents of inadvertent or unauthorized use or disclosure of information, or third parties may gain unauthorized access to information despite our efforts.
When such incidents occur, we may not be able to remedy them, we may be required by law to notify regulators and individuals whose personal information was used or disclosed without authorization, we may be subject to claims against us, including
government enforcement actions or investigations, fines and litigation, we may be subject to negative publicity, and we may have to expend significant capital and other resources to mitigate the impact of such events, including developing and
implementing protections to prevent future events of this nature from occurring. When breaches of our or our third-party service providers’ and partners’ information technology systems occur or unauthorized access to any of the confidential,
sensitive, or other personal information that we collect or process occurs, the perception of the effectiveness of our security measures, the security measures of our partners, and our reputation may be harmed, we may lose current and potential
users and the recognition of our brand and our brand’s competitive positions may be diminished, any of which could materially adversely affect our business, financial condition, and results of operations.
The occurrence of any of these or other factors could negatively
affect our business, financial condition, and results of operations.
We are subject to risks related to credit
card payments, including data security breaches and fraud that we or third parties experience or additional regulation, any of which could materially adversely affect our business, financial condition, and results of operations.
In addition to purchases through the Apple App Store and the Google
Play Store, we accept payment from our users through certain other online payment service providers, and we expect to explore and implement additional payment mechanisms based in part upon Apple’s recent announcement that it would allow app
developers to process payments for subscriptions and other premium add-ons outside of Apple’s payment system. See “—Risks Related to Grindr’s Brand, Products and Services, and Operations—We rely primarily on the
Apple App Store and Google Play Store as the channels for processing of payments. In addition, access to our products and services depends on mobile app stores and other third parties such as data center service providers, as well as third
party payment aggregators, computer systems, internet transit providers and other communications systems and service providers. Any deterioration in our relationship with Apple, Google either of them or other such third parties may negatively
impact our business.” The ability to process credit card information or other account charges on a real-time basis without having to proactively reach out to the consumer each time we process an auto-renewal payment or a payment for the
purchase of a premium feature on any of our products and services will be critical to our success and to a seamless experience for our users. When we or a third party experiences a data security breach involving credit card information, affected
cardholders will often cancel their credit cards. In the case of a breach experienced by a third party, the more sizable the third party’s customer base and the greater the number of credit card accounts impacted, the more likely it is that our
users would be impacted by such a breach. To the extent our
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users are ever affected by such a breach experienced by us or a third party,
affected users would need to be contacted to obtain new credit card information and process any pending transactions. It is likely that we would not be able to reach all affected users, and even if we could, some users’ new credit card
information may not be obtained and some pending transactions may not be processed, which could materially adversely affect our business, financial condition, and results of operations.
In addition, even if our users are not directly impacted by a given
data security breach, they may lose confidence in the ability of service providers to protect their personal information generally, which could cause them to stop using their credit cards online and choose alternative payment methods that are not
as convenient for us or restrict our ability to process payments without significant cost or user effort.
Moreover, if we fail to adequately prevent fraudulent credit card
transactions, we may face litigation, fines, governmental enforcement action, civil liability, diminished public perception of our security measures, significantly higher credit card-related costs and substantial remediation costs, or refusal by
credit card processors to continue to process payments on our behalf, any of which could materially adversely affect our business, financial condition, and results of operations.
Finally, the passage or adoption of any legislation or regulation
affecting the ability of service providers to periodically charge consumers for, among other things, recurring subscription payments may materially adversely affect our business, financial condition, and results of operations. For example,
pursuant to the U.K.’s Payment Services Regulations 2017, banks and other payment services providers must develop and implement strong customer authentication protocols by March 14, 2022, to ensure that the person requesting access to an account
or trying to make a payment has the necessary authority and permission. This implementation could materially adversely affect our payment authorization rate and user experience in connection with payments. In addition, many U.S. states are
considering similar legislation or regulation, or changes to existing legislation or regulation governing subscription payments. While we will monitor and attempt to comply with these legal developments, we may in the future be subject to claims
under such legislation or regulation.
The occurrence of any of these or other factors could negatively
affect our business, financial condition, and results of operations.
Our success depends, in part, on the integrity
of third-party systems and infrastructures and on continued and unimpeded access to our products and services on the internet.
We rely on third parties, primarily data center and cloud-based,
hosted web service providers, such as Amazon Web Services, as well as software development services, computer systems, internet transit providers, and other communications systems and service providers, in connection with the provision of our
products and services generally, as well as to facilitate and process certain transactions with our users. See “—Risks Related to Grindr’s Brand, Products and Services, and Operations—The distribution, marketing
of, and access to our products and services depends, in large part, on third-party platforms and mobile application stores, among other third-party providers. If these third parties limit, prohibit, or otherwise interfere with the distribution
or use of our products and services in any material way, it could adversely affect our business, financial condition, and results of operations.” We have no control over any of these third parties or their operations. While we seek
actively reduce risk by trying to minimize reliance on any single third party or our operations, and by creating back-up systems where possible, we cannot guarantee that third-party providers will not experience system interruptions, outages or
delays, or deterioration in the performance.
Problems or insolvency experienced by any of these third-party
providers, the telecommunications network providers with which we or they contract, the systems through which telecommunications providers allocate capacity among their customers, or any other providers or related services, could also materially
and adversely affect us. Any changes in service levels at our data centers or any interruptions, outages, or delays in our systems or those of our third-party providers, or deterioration in the performance of these systems, could impair our
ability to provide our products and services or process transactions with our users, which could materially adversely impact our business, financial condition, and results of operations. In addition, if we need to migrate our business to
different third-party providers because of any such problems or insolvency, it could impact our ability to retain our existing users or add new users, among other materially adverse effects. See “—Risks Related
to Grindr’s Brand, Products and Services, and Operations—If we fail to retain existing users or add new users, or if our users decrease their level of engagement with our products and services or do not convert to paying users, our revenue,
financial results, and business may be significantly harmed.”
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The occurrence of any of these or other factors could negatively
affect our business, financial condition, and results of operations.
Our products and services and internal systems
rely on highly technical software and, if it contains undetected errors or vulnerabilities, we could be subject to liability and our business could be materially adversely affected.
As explained above, our products and services and internal systems
rely on highly technical and complex software, including software developed or maintained internally and/or by third parties. In addition, our products and services and internal systems depend on the ability of such software to store, retrieve,
process, and manage immense amounts of data. The software on which we rely has contained, and may now and in the future contain, undetected errors, bugs, or vulnerabilities. Some errors may only be discovered after the code has been released for
external or internal use and can manifest in any number of ways in our products and services, including through diminished performance, security vulnerabilities, malfunctions, or even permanently disabled products and services. Errors, bugs,
vulnerabilities, or other defects within the software on which we rely have in the past, and may in the future, result in a negative experience for users and marketers who use our products and services, delay product introductions or
enhancements, result in targeting, measurement, or billing errors, compromise our ability to protect the data of our users and/or our intellectual property, result in negative publicity, or lead to reductions in our ability to provide some or all
of our services. In addition, any errors, bugs, vulnerabilities, or defects discovered in the software on which we rely, and any associated degradations or interruptions of service, could result in damage to our reputation, loss of users, loss of
revenue, or liability for damages, any of which could adversely affect our business, financial condition, and results of operations.
We could also face claims for product liability, tort, breach of
warranty, or other causes of action. Although our Terms and Conditions of Service contain provisions relating to warranty disclaimers and liability limitations, among other provisions our Terms and Conditions of Service or, these contractual
terms may not be upheld or enforceable in all jurisdictions in which we distribute our products and services, and they may not offer us any protections from liability in potential legal action. In addition, defending a lawsuit, regardless of its
merit, is costly and may divert management’s attention and seriously harm our reputation and our business. Moreover, if our liability insurance coverage proves inadequate or future coverage is unavailable on acceptable terms or at all, our
business could be adversely affected. See “—Risks Related to Grindr’s Brand, Products and Services, and Operations—We have limited insurance coverage with respect to our business and operations.”
The occurrence of any of these or other factors could negatively
affect our business, financial condition, and results of operations.
From time to time, we are party to
intellectual property-related litigations and proceedings that are expensive and time consuming to defend, and, if resolved adversely, could materially adversely impact our business, financial condition, and results of operations.
We may become party to disputes from time to time over rights and
obligations concerning our intellectual property or intellectual property held by third parties, and we may not prevail in these disputes. Companies on the internet, technology, and social media industries are frequently involved in litigation
based upon allegations of infringement of intellectual property rights, unfair competition, invasion of privacy, defamation, and other violations of other parties’ rights. Many companies in these industries, including many of our competitors,
have substantially larger intellectual property portfolios than we do (and substantially more resources), which could make us a target for litigation as we may not be able to assert counterclaims against parties that sue us for infringement,
misappropriation, or other violations of patent or other intellectual property rights. In addition, various “non-practicing entities” that own patents and other intellectual property rights often attempt to assert claims to extract value from
technology companies. Given that these patent holding companies or other adverse intellectual property rights holders typically have no relevant product revenue, our own issued or pending patents and other intellectual property rights may provide
little or no deterrence to these rights holders in bringing intellectual property rights claims against us. From time to time we receive claims from third parties which allege that we have infringed upon their intellectual property rights, and we
have also been a party to several patent infringement litigations from such third parties. Further, from time to time we may introduce new products and services, product features and services, including in areas where we currently do not have an
offering, which could increase our exposure to patent and other intellectual property claims from competitors and non-practicing entities. In addition, some of our agreements with third-party partners require us to indemnify them for certain
intellectual property claims asserted against them, which could require us to incur considerable costs in defending such claims and may require us to pay significant damages
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in the event of an adverse ruling. Such third-party partners may also discontinue
their relationships with us because of injunctions or otherwise, which could result in loss of revenue and adversely impact our business operations.
In addition, although we try to ensure that our employees and
consultants do not use the proprietary information or know-how of others in their work for us, we may be subject to claims that we or our employees or consultants have inadvertently or otherwise used or disclosed intellectual property, including
trade secrets, software code or other proprietary information, of a former employer or other third parties. Litigation may be necessary to defend against these claims and, if we fail in defending any such claims, in addition to paying monetary
damages, we may lose valuable intellectual property rights or personnel. Furthermore, although we generally require our employees and contractors who may be involved in the conception or development of intellectual property to execute agreements
assigning such intellectual property to us, we may be unsuccessful in executing such an agreement with each party who, in fact, conceives or develops intellectual property that we regard as our own. Moreover, any such assignment of intellectual
property rights may not be self-executing, the assignment agreements may be breached or the agreements may not effectively assign ownership of relevant intellectual property rights to us, and we may be forced to bring claims against third
parties, or defend claims that they may bring against us, to determine the ownership of what we regard as our intellectual property.
As we face increasing competition and develop new products and
services, we expect the number of patent and other intellectual property claims against us may grow. There may be intellectual property or other rights held by others, including issued or pending patents, that cover significant aspects of our
products and services, and we cannot be sure that we are not infringing or violating, and have not infringed or violated, any third-party intellectual property rights or that we will not be held to have done so or be accused of doing so in the
future.
Any litigation of this nature, regardless of outcome or merit, could
result in substantial costs and diversion of management and technical resources. Some of our competitors have substantially greater resources than we do and can sustain the costs of complex intellectual property litigation to a greater degree and
for longer periods of time than we could. The outcome of any litigation is inherently uncertain, and there can be no assurances that favorable final outcomes will be obtained in all cases. In addition, third parties may seek, and we may become
subject to, preliminary or provisional rulings during any such litigation, including potential preliminary injunctions requiring us to cease some or all of our operations. We may decide to settle such lawsuits and disputes on terms that are
unfavorable to us or that require us to make material changes to our business. Similarly, if any litigation to which we are a party is resolved adversely, we may be subject to an unfavorable judgment that may not be reversed upon appeal,
including being subject to a permanent injunction and being required to pay substantial monetary damages, including treble damages and attorneys’ fees, if we are found to have willfully infringed a party’s intellectual property rights. The terms
of such a settlement or judgment may require us to cease some or all of our operations or pay substantial amounts to the other party. In addition, we may have to seek a license to continue practices found to be in violation of a third-party’s
rights. If we are required or choose to enter into royalty or licensing arrangements, such arrangements may not be available on reasonable terms, or at all, and may significantly increase our operating costs and expenses. Such arrangements may
also only be available on a non-exclusive basis such that third parties, including our competitors, could have access to the same licensed technology to compete with us. As a result, we may also be required to develop or procure alternative
non-infringing technology, which could require significant effort, time and expense or discontinue use of the technology or practices, which could negatively affect the user experience or may not be feasible. There also can be no assurance that
we would be able to develop or license suitable alternative technology to permit us to continue offering the affected products or services. If we cannot develop or license alternative technology for any allegedly infringing aspect of our
business, we would be forced to limit our products and services and may be unable to compete effectively. Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk
that some of our confidential information could be compromised by disclosure during this type of litigation. Any of the foregoing, and any unfavorable resolution of such disputes and litigation, would materially and adversely impact our business,
financial condition, and results of operations.
The occurrence of any of these or other factors could negatively
affect our business, financial condition, and results of operations.
We may fail to adequately protect our
intellectual property rights or to prevent third parties from making unauthorized use of such rights, and our registered intellectual property is subject to challenge.
Our intellectual property is a material asset of our business, and
our success depends in part on our ability to protect our proprietary rights and intellectual property. For example, we heavily rely upon our trademarks, designs,
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copyrights, and related domain names, social media handles, and logos to market our
brand and to build and maintain brand loyalty and recognition. We rely upon patented and patent-pending proprietary technologies and trade secrets, as well as a combination of laws, and contractual restrictions, including confidentiality
agreements with employees, customers, users, suppliers, affiliates, and others, to establish, protect, and enforce our various intellectual property rights. For example, we have generally registered and continue to apply to register and renew, or
secure by contract where appropriate, trademarks and service marks as they are developed and used, and reserve, register, and renew domain names and social media handles as we deem appropriate. If our trademarks and trade names are not adequately
protected, then we may not be able to build and maintain name recognition in our markets of interest and our business may be adversely affected. In addition, effective intellectual property protection may not be available or may not be sought in
every country in which our products and services are made available, or in every class of goods and services in which we operate, and contractual disputes may affect the use of marks governed by private contract. Our registered or unregistered
trademarks or trade names may be challenged, infringed, circumvented, declared generic, or determined to be infringing on other marks. Our competitors may also adopt trade names or trademarks like ours, thereby impeding our ability to build brand
identity and possibly leading to market confusion. Similarly, not every variation of a domain name or social media handle may be available or be registered by us, even if available. The occurrence of any of these events could result in the
erosion of our brand and limit our ability to market our brand using our various domain names and social media handles, as well as impede our ability to effectively compete against competitors with similar technologies or products and services,
any of which could materially adversely affect our business, financial condition, and results of operations.
We cannot guarantee that our efforts to obtain and maintain
intellectual property rights are adequate, that we have secured, or will be able to secure, appropriate permissions or protections for all of the intellectual property rights we use or rely on. Even in cases where we seek intellectual property
registration or other protections, there is no assurance that the resulting registration, issuance or other protection will effectively protect every significant feature of our products and services. Moreover, even if we can obtain intellectual
property rights, any challenge to our intellectual property rights could result in them being narrowed in scope or declared invalid or unenforceable. In addition, third parties may also knowingly or unknowingly infringe our proprietary rights,
third parties may challenge proprietary rights held by us, and pending and future trademark and patent applications may not be approved. Other parties may also independently develop technologies that are substantially similar or superior to ours
and we may not be able to stop such parties from using such independently developed technologies from competing with us. These circumstances make it challenging for us to protect our intellectual property rights and may materially adversely
impact our business.
In addition, our intellectual property rights and the enforcement or
defense of such rights may be affected by developments or uncertainty in laws and regulations relating to intellectual property rights. Moreover, many companies have encountered, and may in the future encounter, significant problems in protecting
and defending intellectual property rights in foreign jurisdictions, particularly in emerging markets. The legal systems of some foreign jurisdictions may not favor the enforcement of patents, trade secrets, and other intellectual property
protection, which could make it difficult for us to stop the infringement, misappropriation, or other violation of our intellectual property or marketing of competing products and services in violation of our intellectual property rights
generally.
We also may be forced to bring claims against third parties to
determine the ownership of what we regard as our intellectual property or to enforce our intellectual property against infringement, misappropriation, or other violations by third parties. However, the measures we take to protect our intellectual
property from unauthorized use by others may not be effective and there can be no assurance that our intellectual property rights will be sufficient to protect against others offering products or services that are substantially similar or
superior to ours and that compete with our business. We may not prevail in any intellectual property-related proceedings that we initiate against third parties. In addition, in any such proceedings or in proceedings before patent, trademark, and
copyright agencies, our asserted intellectual property could be found to be invalid or unenforceable, in which case we could lose valuable intellectual property rights. Moreover, even if we are successful in enforcing our intellectual property
against third parties, the damages or other remedies awarded, if any, may not be commercially meaningful. Regardless of whether any such proceedings are resolved in our favor, such proceedings could cause us to incur significant expenses and
could disrupt our business and distract our personnel from their normal responsibilities. Accordingly, our efforts to enforce our intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from
the intellectual property that we develop or license.
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In addition, despite any measures we take to protect our
intellectual property, our intellectual property rights may still not be protected in a meaningful manner, challenges to contractual rights could arise, or third parties could copy or otherwise obtain and use our intellectual property without
authorization. The occurrence of any of these events could result in the erosion of our brand and limit our ability to market our products and services using our intellectual property, as well as impede our ability to effectively compete against
competitors with similar technologies, any of which could adversely affect our business, financial condition, and results of operations. The occurrence of any of these or other factors could negatively affect our business, financial condition,
and results of operations.
We have obtained certain patents that are material to the operation
of our applications, e.g., our patent titled “Systems and methods for providing location-based cascading displays” (the “Cascade Patent”). However, we cannot offer any assurances that the Cascade Patent or
any other patent we may obtain in the future may be found valid or enforceable if challenged or otherwise threatened by third parties. Any successful opposition to these patents or any other patents owned by or, if applicable in the future,
licensed to us could deprive us of rights necessary for the successful commercialization of products and services that we may develop. Since patent applications in the United States and most other countries are confidential for a period of time
after filing (in most cases 18 months after the filing of the priority application), we cannot be certain that we were the first to file on the technologies covered in several of the patent applications related to our technologies or products and
services. Furthermore, a derivation proceeding can be provoked by a third party, or instituted by the United States Patent and Trademark Office (“USPTO”), to determine who was the first to invent any of
the subject matter covered by the patent claims of our applications.
Patent law can be highly uncertain and involve complex legal and
factual questions for which important principles remain unresolved. In the United States and in many international jurisdictions, policy regarding the breadth of claims allowed in patents can be inconsistent and/or unclear. The United States
Supreme Court and the Court of Appeals for the Federal Circuit have made, and will likely continue to make, changes in how the patent laws of the United States are interpreted. Similarly, international courts and governments have made, and will
continue to make, changes in how the patent laws in their respective countries are interpreted. We cannot predict future changes in the interpretation of patent laws by United States and international judicial bodies or changes to patent laws
that might be enacted into law by United States and international legislative bodies.
Moreover, in the United States, the Leahy-Smith America Invents Act,
or the Leahy-Smith Act, enacted in September 2011, brought significant changes to the United States patent system, including a change from a “first to invent” system to a “first to file” system. Other changes in the Leahy-Smith Act affect the way
patent applications are prosecuted, redefine prior art and may affect patent litigation. The USPTO developed new regulations and procedures to govern administration of the Leahy-Smith Act, and many of the substantive changes to patent law
associated with the Leahy-Smith Act became effective on March 16, 2013. The Leahy-Smith Act and its implementation could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of
our issued patents, which could have a material adverse effect on our business and financial condition.
Our use of “open-source” software could
subject our proprietary software to general release, adversely affect our ability to sell our products and services, and subject us to possible legal action.
From time to time, we make software source code and other technology
we develop available for licensing under open-source licenses. In addition, we or third parties include open-source software in connection with a portion of our products and services and, and we expect to continue to use open-source software in
the future. Open-source software is generally licensed by its authors or other third parties under open-source licenses. From time to time, companies that use third-party open-source software have faced claims challenging the use of such
open-source software and requesting compliance with the open-source software license terms.
Furthermore, from time to time, we may face claims from others
challenging our use of open-source software, claiming ownership of, or seeking to enforce the license terms applicable to such open-source software, including by demanding release of the open-source software, derivative works, or the proprietary
source code that we have developed using such software. We may also be subject to suits by parties claiming ownership of what we believe to be open-source software or claiming non-compliance with the applicable open-source licensing terms. These
claims could result in litigation and could require us to make our software source code freely available, seek licenses from third parties to continue offering our products and services for certain uses, or cease offering the products and
services associated with the open-source software unless and until we can re-engineer them to avoid infringement, any of which may materially adversely affect our business, financial condition, and results of operations. In addition,
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if the license terms for the open-source code change, we may be forced to
re-engineer our software or incur additional costs, which could be very costly. Moreover, the terms of many open-source licenses to which we are subject have not been interpreted by U.S. or foreign courts. Accordingly, we face a risk that
open-source software licenses could be construed in a manner that imposes unanticipated conditions or restrictions on our ability to market or provide our products and services.
In addition, the use of third-party open-source software typically
exposes us to greater risks than the use of third-party commercial software because open-source licensors generally do not provide warranties or controls on the functionality or origin of the software. Use of open-source software may also present
additional security risks because the public availability of such software may make it easier for hackers and other third parties to determine how to compromise our platform.
The occurrence of any of these or other factors could negatively
affect our business, financial condition, and results of operations.
If the use of third-party cookies or other
tracking technology is rejected by our users, restricted by third parties outside of our control, or otherwise subject to unfavorable regulation, our performance could be negatively impacted and we could incur revenue loss.
We employ a number of technologies that collect information about
our users. For instance, we use third-party Software Development Kits (“SDKs”) within our Grindr App. SDKs are industry-standard technology which allows app developers to develop applications for specific
platforms. SDKs also allow app developers to enhance app functionality and offer features such as advertising, account creation via third-party platforms (e.g., Login with Google), and user analytics. Similar to SDKs on our mobile app, Grindr
utilizes small text files, commonly referred to as “cookies,” placed through a browser on a user’s machine which corresponds to a data set that we keep on our servers, to gather relevant data when users visit the Grindr website. Our cookies
collect personal information regarding to the user’s visits and experiences, such as location-based information about the user’s device through the use of our cookies and other tracking technologies. We use these technologies to provide a more
seamless user experience and collect, aggregate and/or detect and prevent irregular or fraudulent activities. However, users may delete or block cookies in their internet browsers, and users can decline consent for certain non-essential SDKs via
our mobile consent management platform (“CMP”). In addition, companies such as Google have disclosed their intention to move away from third-party cookies to another form of persistent unique identifier,
or ID, to identify individual internet users or internet-connected devices. If our cookies cannot function as designed or companies do not use shared IDs across the entire ecosystem, then our ability to recognize, record or track users could be
negatively affected, which may reduce the effectiveness of our services and marketing efforts.
We may also experience challenges in obtaining appropriate consent
to our use of cookies from users, which may adversely affect our operations and business. In addition, we may not be able to develop or implement additional tools that compensate for the lack of data associated with cookies. Even if we are able
to do so, such additional tools may be subject to further regulation, time consuming to develop or costly to obtain, and less effective than the current use of cookies, which may, in turn, materially and adversely affect our business, results of
operations and financial condition.
Risks Related to Regulation and Litigation
Our success depends, in part, on our ability to
access, collect, and use personal data about our users and to comply with applicable privacy and data protection laws and industry best practices.
We and other companies in the industry have been criticized by
consumer protection groups, privacy groups, governmental bodies, and other individuals and entities for certain data practices or for perceptions about data practices. Increased attention to or regulation of data utilization practices, including
self-regulation or findings under existing laws that limit our ability to collect, transfer, and use information and other data, could have a material adverse effect on our business, financial condition, and results of operation. In addition, if
we or our third-party vendors were to disclose data about our users in an objectionable manner, if we or our third-party vendors are perceived to have disclosed data about our users in an objectionable manner, or if we or our third-party vendors
fail to comply with applicable privacy and data protection laws and industry best practices, our business reputation could be materially adversely affected. We may receive negative publicity, and we could face potential legal claims or regulatory
investigations that could impact our operating results. We and/or our third-party vendors have in the past been subject to such matters and we expect to face similar issues in the future.
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In addition, we may become subject to additional and/or more
stringent legal obligations concerning our treatment of user data and other personal information, such as laws regarding data collection, localization and/or restrictions on data transfers, particularly internationally. Recent legal developments
in Europe have created complexity and uncertainty regarding transfers of personal data subject to the GDPR and UK GDPR to organizations established in third countries, including the U.S.
European data protection legislation, including the GDPR and the
United Kingdom’s GDPR (i.e., the GDPR as it continues to form part of the law of the United Kingdom after its withdrawal from the European Union, by virtue of section 3 of the EU (Withdrawal) Act 2018 and as subsequently amended) (“U.K. GDPR”)), generally restricts the transfer of personal information from Europe, including the European Economic Area, United Kingdom. and Switzerland, to the United States and most other countries unless
the parties to the transfer have implemented specific safeguards to protect the transferred personal information. One of the primary safeguards allowing U.S. organizations to import personal information from the EEA and the United Kingdom, as in
the case of certain data collection by Grindr, has been certification to the EU-U.S. Privacy Shield frameworks administered by the U.S. Department of Commerce. However, in July 2020, the Court of Justice of the European Union (CJEU) issued a
decision invalidating the EU-U.S. Privacy Shield framework. The same decision also raised questions about whether one of the primary alternatives to the EU-U.S. Privacy Shield, namely, the European Commission’s Standard Contractual Clauses (“SCCs”), can lawfully be used for personal information transfers from the EEA to the United States or most other countries. The Court states that controllers or processors, acting as exporters, are responsible
for verifying, on a case-by-case basis and, where appropriate, in collaboration with the importer in the third country, if the law or practice of the third country impinges on the effectiveness of the appropriate safeguards offered by the data
transfer tool. In those cases, the Court still leaves open the possibility for exporters to implement supplementary measures that fill these gaps in the protection and bring it up to the level required by European data protection legislation. The
Court does not specify which measures these could be. However, the Court underlines that exporters will need to identify them on a case-by-case basis.
To align with the CJEU’s decision in respect of the E.U.-U.S.
Privacy Shield, on September 8, 2020, the United Kingdom’s government similarly invalidated the use of the EU-U.S. Privacy Shield as a mechanism for lawful personal data transfers from the United Kingdom to the U.S. under the UK GDPR and the
Swiss Federal Data Protection and Information Commissioner announced that the Swiss-U.S. Privacy Shield regime was also inadequate for the purposes of personal data transfers from Switzerland to the U.S. entities who had self-certified under the
Swiss Privacy Shield.
On June 4, 2021, the European Commission adopted new SCCs, which
impose additional obligations on companies relating to data transfers, including the obligation to conduct a transfer impact assessment (TIA) and depending on a party’s role in the transfer, to implement additional security measures and to update
internal privacy practices. The United Kingdom has also adopted the international data transfer agreement (IDTA), the international data transfer addendum to the European Commission’s SCCs (Addendum) and a document setting out transitional
provisions, which came into force on March 21, 2022. The IDTA and Addendum replaced the SCCs as a transfer tool to comply with Article 46 of the UK GDPR when making restricted transfers from the United Kingdom.
Where we elect to rely on the SCCs, the IDTA or the Addendum for
data transfers, we may be required to incur significant time and resources to update our contractual arrangements, to perform TIAs and to comply with new obligations. The SCCs, the IDTA or the Addendum may increase the legal risks and liabilities
associated with cross-border data transfers, and result in material increased compliance and operational costs. At present, there are few, if any, viable alternatives to the SCCs, the IDTA or the Addendum, which are mechanisms on which we have
relied for onward transfers of personal information from the EEA and the United Kingdom to third countries. If we are unable to implement a valid solution for personal information transfers from the EEA and the United Kingdom, we may face
increased exposure to regulatory actions, substantial fines, and injunctions against processing or transferring personal information from the EEA and the United Kingdom to third countries, and we may be required to increase our data processing
capabilities in multiple jurisdictions at significant expense. Inability to collect personal information from EEA or UK users or to transfer their personal information to the United States or other countries may decrease demand for our products
and services, as some of our users are established in the EEA and the United Kingdom, therefore, they may seek alternatives that do not involve their personal information being processed or transferred out of Europe. Limitations on our ability to
import personal information to the United States and other countries where our key vendors are established may decrease the functionality or effectiveness of our products and services and adversely impact our marketing efforts, plans and
activities. European Union regulators
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and the UK Information Commissioner’s Office (“ICO”)
may aggressively enforce these laws restricting data transfers to the U.S. and other countries without a legally sound transfer mechanism, and it is possible that European Union regulators and the ICO could prevent Grindr from transferring any
personal data out of the European Union or the United Kingdom to certain countries like the U.S. or to our vendors established in countries not offering an adequate level of protection.
These and related developments may require us to review and amend
the legal mechanisms by which we make and/or receive personal data transfers to/in the United States and other third countries. In particular, Grindr is undertaking a process to enhance its Data Processing Agreement to ensure it complies with the
GDPR and UK GDPR data transfer requirements, which includes the EU SCCs issued by the European Commission and the IDTA and the Addendum issued by the ICO. Furthermore, these and related developments, including the obligation to perform TIAs in
certain scenarios, may oblige us to suspend or prevent us to transfer personal information to third parties if we are unable to implement effective supplementary measures. As supervisory authorities issue further guidance on personal data export
mechanisms, including circumstances where Grindr needs to perform a TIA and the SCCs, IDTA or the Addendum may need to be supplemented with additional safeguards, and/or start taking enforcement action, we could suffer additional costs,
complaints and/or regulatory investigations or fines if our compliance efforts are not deemed sufficient with the most recent regulatory guidance on measures regarding supplement transfer tools. In addition, if we are otherwise unable to transfer
personal data between and among countries and regions in which we operate and/or use key vendors, it could affect the manner in which we provide our solutions, the geographical location or segregation of our relevant systems and operations,
reduce demand for our solutions and this could adversely affect our financial results.
In the event any court blocks personal data transfers to or from a
particular jurisdiction, this could give rise to operational interruption in the performance of services for customers, greater costs to implement permissible alternative data transfer mechanisms, regulatory liabilities, or reputational harm and
negative publicity. Failure to comply with the evolving interpretation of privacy and data protection laws could subject us to liability, and to the extent that we need to alter our business model or practices to adapt to these obligations, or to
respond to inquiries regarding our compliance with privacy and data protection laws, we could incur additional and significant expenses, which may in turn materially adversely affect our business, financial condition, and results of operations.
Privacy activist groups have also previously provided, and may
continue to provide, resources to support individuals who wish to pursue privacy claims or put pressure on companies to change data processing practices. High-profile brands such as ours risk being targeted by such groups and, due to the nature
of the data that we hold, there is a risk that, if a user became disgruntled with our data processing practices, they could leverage support from such privacy activist groups to take legal action, cause the initiation of regulatory investigation,
or gain publicity for their cause. There is also a risk that these groups will seek to challenge our practices, particularly in relation to our consent practices, third-party advertising practices, and/or international data transfers, among other
data and privacy practices. Any such campaign could require significant resources to mount a response, it could disrupt our operations or distract management, and it could lead to negative publicity and potential investigation from regulators,
among other negative effects, any of which may materially adversely affect our business, financial condition, and results of operations.
The occurrence of any of these or other factors could negatively
affect our business, financial condition, and results of operations.
Investments in our business may be subject to
U.S. foreign investment regulations which may impose conditions on or limit certain investors’ ability to purchase our stock or otherwise participate in the Business Combination, potentially making the stock less attractive to investors. Our
future investments in U.S. companies may also be subject to U.S. foreign investment regulations.
The Committee on Foreign Investment in the United States (“CFIUS”) is an interagency body of the U.S. government authorized to review certain foreign investment transactions in U.S. businesses (“Covered Transactions”) in order
to determine the effect of such transactions on the national security of the United States. If a Covered Transaction could pose a risk to the national security of the United States, CFIUS can recommend that the President of the United States
address such risks by suspending, prohibiting, or unwinding the transaction. CFIUS could also enter into a negotiated mitigation agreement with the parties to a Covered Transaction in order to address U.S. national security concerns raised by the
Covered Transaction. As widely reported in media coverage, we have previously been the subject of CFIUS scrutiny in connection with a prior Covered Transaction.
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Certain Covered Transactions must be notified to CFIUS prior to
closing. For example, a CFIUS notification may be required for Covered Transactions involving U.S. businesses that deal in “critical technology”—a regulatory term covering, among other things, certain technology that is subject to control under
U.S. export control regimes. A CFIUS notification also may be required for Covered Transactions where a foreign government holds a minimum voting interest in a foreign investor that will itself acquire a minimum voting interest in a U.S. company
that deals in certain technology, data, or infrastructure. Failure to make such mandatory filings can subject the transaction parties to civil penalties.
In circumstances where a mandatory filing is not required, parties
to Covered Transactions may choose to submit a voluntary filing to CFIUS. Moreover, where CFIUS perceives that a Covered Transaction poses a potential risk to U.S. national security, CFIUS may unilaterally initiate a review of a Covered
Transaction, or may ask parties to a Covered Transaction to submit a voluntary filing concerning the same.
With respect to any transaction that is subject to CFIUS’
jurisdiction, the parties must determine whether (i) a CFIUS notification is required, (ii) a voluntary notification to CFIUS is advisable, or (iii) consummation of the transaction without a CFIUS notification is permitted and warranted.
Submission of a notification to CFIUS with respect to a transaction relating to the Business Combination could result in significant transaction delays, as CFIUS’ review of a Covered Transaction can last between thirty days and several months,
depending on the form of the filing, the complexity of the transaction, the nationality and identity of the parties, and the underlying national security risks associated with the Covered Transaction. CFIUS may condition its approval of a Covered
Transaction on the transaction parties’ agreement to mitigation measures and, in rare cases, the President of the United States could prohibit a pending foreign investment or order divestment of interest post-closing.
In the event CFIUS reviews a Covered Transaction relating to the
Business Combination there can be no assurances that the relevant foreign investor will be able to maintain, or proceed with, participation in the Covered Transaction on terms acceptable to such investor. In connection with its review, CFIUS may,
for example, require limits on information sharing with the investor, modifications to governance agreements, or annual reporting requirements, among other things. Potential restrictions on the ability of foreign persons to invest in us could
affect the price that an investor may be willing to pay for our units, or, after the Business Combination, New Grindr’s common stock. In some circumstances, moreover, we may choose not to pursue certain investments or other transactions, which
are otherwise attractive, solely or in part based on an evaluation of the associated CFIUS risks.
Our business is subject to complex and
evolving U.S. and international laws and regulations. Many of these laws and regulations are subject to change or uncertain interpretation, and could result in claims, changes to our business practices, monetary penalties, increased cost of
operations, declines in user growth or engagement, negative publicity, or other harm to our business.
We are subject to a variety of laws and regulations in the U.S. and
other jurisdictions that involve matters that may impact our business, including broadband internet access, online commerce, advertising, user privacy, data protection, content moderation, intermediary liability, online terms and agreements,
protection of minors, consumer protection, sex trafficking, and taxation, among other areas. The introduction of new products and services, expansion of our activities in certain jurisdictions, or other actions that we may take may subject us to
additional laws, regulations, or other scrutiny by governmental agencies and other entities. In addition, foreign laws and regulations can impose different obligations or be more restrictive than those imposed upon us in the U.S., which may harm
our business or subject us to liability.
These U.S. federal, state, and municipal and foreign laws and
regulations, which in some cases can be enforced by private parties in addition to government entities, are constantly evolving and can be subject to significant change. For example, as explained above, FOSTA provides potential civil remedies for
certain victims of online sex trafficking crimes. See “—Risks Related to Grindr’s Brand, Products and Services, and Operations—Inappropriate actions by certain of our users could be attributed to us and damage
our brand or reputation, or subject us to regulatory inquiries, legal action, or other liabilities, which, in turn, could materially adversely affect our business.” In addition, as explained above, the introduction of new products and
services, expansion of our activities in certain jurisdictions, or other actions that we may take may subject us to additional laws, regulations, or other scrutiny by governmental agencies and other entities. The application, interpretation, and
enforcement of these laws and regulations are often uncertain, particularly in the new and rapidly evolving industry in which we operate. In addition, these laws and regulations may be interpreted and applied inconsistently from state-to-state
and country-to-country, and they may be inconsistent with our current policies and practices. These laws and regulations, as well as any associated inquiries, legal action, investigations, or any other government actions, may be costly to comply
with and
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may delay or impede the development of new products and services, result in negative
publicity, increase our operating costs, require significant management time and attention, and subject us to liability to remedies that may harm our business, including fines, demands, or orders that we modify or cease existing business
practices. For example, a variety of laws and regulations govern the ability of users to cancel subscriptions and auto-payment renewals. Likewise, a variety of laws and regulations govern the application and enforcement of arbitration clauses and
limitations on liability, like those set forth in our Terms and Conditions of Service. We have in the past and may in the future be subject to claims under a variety of U.S. and international laws and regulations that could materially adversely
affect our business, financial condition, and results of operation.
In addition, the promulgation of new laws or regulations, or the new
interpretation of existing laws and regulations, that restrict or otherwise unfavorably impact our business, or our ability to provide our products and services, could require us to change certain aspects of our business and operations to ensure
compliance, which could decrease demand for our products and services, reduce revenues, increase costs, and subject us to additional liabilities. For example, in February 2019, the Secretary of State for Digital, Culture, Media and Sport of the
United Kingdom indicated in public comments that his office intends to inquire as to the measures utilized by online dating platforms to prevent access by underage users. In addition, in April 2019, the United Kingdom published proposed
legislation which would establish a new regulatory body to establish duties of care for internet companies and to assess compliance with these duties of care. Under the proposed law, failure to comply could result in fines, blocking of services,
and personal liability for senior management. There have also been calls for legislation to limit or remove the protections afforded technology platforms under the Communications Decency Act in the United States and under the e-Commerce Directive
in the European Union. To the extent this or other initiatives require us to implement any new or more stringent measures, our business, financial condition, and results of operations could be materially adversely affected.
In addition, concerns about harms and the use of dating products and
services and social networking platforms for such illegal and harmful conduct have produced and could continue to produce future legislation or other governmental action. For example, in January 2020, the Committee on Oversight Subcommittee on
Economic and Consumer Policy of the U.S. House of Representatives launched an investigation into the online dating industry’s user safety policies, including certain of our practices relating to the identification and removal of registered sex
offenders and underage individuals from our platforms. As set forth above, the United Kingdom and European Union have also been considering legislation on this topic, with the United Kingdom having released its Online Harms White Paper which
resulted in the United Kingdom’s Online Safety Bill, and the European Union introducing the Digital Services Act, which in each case, would expose platforms to similar or more expansive liability. See “—Risks
Related to Regulation and Litigation—The varying and rapidly evolving regulatory framework on privacy and data protection across jurisdictions could result in claims, changes to our business practices, monetary penalties, increased cost of
operations, or declines in user growth or engagement, or otherwise harm our business.” Any proposed legislation on these or other topics could expose platforms to liability similar to existing legislation in other jurisdictions or, in
some cases, more expansive liability. For instance, the Digital Services Act proposed in the European Union intends to limit or remove protections afforded to online platforms under the e-Commerce Directive. Likewise, proposed legislation in the
United States, including the EARN IT Act, the PACT Act, the BAD ADS Act, and others, purport to limit or remove the critical protections provided to technology platforms under the Communications Decency Act, which protects technology platforms
from civil liability for certain type of content and actions of the platform’s users. The FCC also is considering a Trump Administration petition to adopt rules limiting the protection available under the Communications Decency Act. There is no
schedule for action by the FCC on the petition, although the Democratic members of the FCC, who now control its agenda, have indicated that they oppose the proposal. In addition, there are pending cases before the judiciary that may result in
changes to the protections afforded to internet platforms, including a lawsuit by former President Trump that, if successful, would greatly limit the scope of the Communications Decency Act protections. If these proposed or similar laws are
passed, if future legislation or governmental action is proposed or taken to address concerns regarding such harms, and if existing protections are limited or removed, changes could be required to our products and services that could restrict or
impose additional costs upon the conduct of our business, subject us to additional liability, or cause users to abandon our products or services, any of which may materially adversely affect our business, financial condition, and results of
operations.
In addition, we depend on the ability of our users to access the
internet. Many users receive internet access from companies that have significant market power in the broadband and internet access marketplace, including incumbent telephone companies, cable companies, mobile communications companies,
government-owned service providers,
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device manufacturers and operating system providers, any of which could take actions
that degrade, disrupt, or increase the cost of user access to our products or services, which would, in turn, negatively impact our business. The adoption of any laws or regulations that adversely affect access to, or the growth, popularity, or
use of, the internet, including laws governing internet neutrality, could decrease the demand for, or the usage of, our products and services and increase our cost of doing business, which would, in turn, negatively impact our business. For
example, the Federal Communications Commission (“FCC”) has, in the past, adopted “open internet rules” to prohibit mobile providers in the United States from impeding access to most content, or otherwise
unfairly discriminating against content providers like us. These rules also prohibited mobile providers from entering into arrangements with specific content providers for faster or better access over their data networks. While those rules
largely were repealed in an order adopted in December 2017, and that order generally was affirmed by a federal appeals court, petitions for reconsideration of the order remain pending at the FCC, and Democratic control of the Executive Branch,
Congress, and the FCC following the 2020 elections increases the likelihood of legislative or FCC action to reverse the 2017 decision or adopt new network neutrality rules. In addition, a number of states have adopted or are adopting or
considering legislation or executive actions that would regulate the conduct of broadband providers. The European Union similarly requires equal access to internet content. If the FCC, Congress, the European Union, or the courts modify these open
internet rules, mobile providers may be able to limit our users’ ability to access our products and services or make our products and services a less attractive alternative to our competitors’ products and services. If that occurred, our business
would be seriously harmed. Additionally, as part of its Digital Single Market initiative, the European Union may impose network security, disability access, or 911-like obligations on “over-the-top” services such as those provided by us, which
could increase our costs and, in turn, negatively impact our business. Any of these developments may adversely affect our business, financial condition, and results of operations.
Moreover, the adoption of any laws or regulations that adversely
affect the popularity or growth in use of the internet or our products and services, including laws or regulations that undermine open and neutrally administered internet access, could decrease user demand for our service offerings and increase
our cost of doing business. For example, in December 2017, the FCC adopted an order reversing net neutrality protections in the United States, including the repeal of specific rules against blocking, throttling or “paid prioritization” of content
or services by internet service providers. Numerous parties filed judicial challenges to the order, and on October 1, 2019, the United States Court of Appeals for the District of Columbia Circuit released a decision that rejected nearly all of
the challenges to the new rules, but reversed the FCC’s decision to prohibit all state and local regulation targeted at broadband internet service, requiring case-by-case determinations as to whether state and local regulation conflicts with the
FCC’s rules. The court also required the FCC to reexamine three issues from the order but allowed the order to remain in effect, while the FCC conducted that review. On October 27, 2020, the FCC adopted an order concluding that the three issues
remanded by the court did not provide a basis to alter its conclusions in the 2018 order. Petitions for reconsideration of this decision are pending. Democratic control of the Executive Branch, Congress, and the FCC following the 2020 elections
increases the likelihood of legislative or FCC action to reverse the 2018 decision or adopt new network neutrality rules. In addition, a number of states have adopted or are adopting or considering legislation or executive actions that would
regulate the conduct of broadband providers. A federal court judge denied a request for injunction against California’s state-specific network neutrality law, and as a result, California began enforcing that law on March 25, 2021. On March 10,
2021, trade associations representing internet service providers appealed the district court’s ruling denying the preliminary injunction, and the appeal was denied on January 28, 2022. The trade associations have sought rehearing with the full
court of appeal. Nevertheless, to the extent internet service providers engage in such blocking, throttling or “paid prioritization” of content, or engaged in similar actions because of the reversal of net neutrality protections, our business,
financial condition, and results of operations could be materially adversely affected.
In addition, concerns about various sorts of harms and the use of
similar products and services and social networking platforms for illicit or otherwise inappropriate conduct, such as romance scams and financial fraud, could result in future legislation or other governmental action that affects the overall
social networking industry. For example, in April 2018, the Fight Online Sex Trafficking Act of 2017, or FOSTA, became effective in the U.S. FOSTA created new federal crimes against entities that operate websites that promote or facilitate sex
trafficking, as well as civil remedies for certain victims of online sex trafficking crimes. In addition, FOSTA eliminated any immunity under the Communications Decency Act of 1996 from certain civil claims and state criminal prosecutions. U.S.
legislators have proposed several additional bills that would reduce or eliminate platform liability protections. In addition, the European Union and the United Kingdom have launched consultations aimed at considering potential legislation to
address online harms, and the United Kingdom has released an Online Harms White Paper regarding
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proposed legislation that would expose platforms to more expansive liability than
FOSTA. If these proposed laws are passed, or if future legislation or governmental action is proposed or taken to address concerns regarding these sorts of harms, changes could be required to our products and services that could restrict or
impose additional costs upon our business and/or cause users to abandon our products and services, and we may be subject to legal action.
In addition, the international nature of our business exposes us to
compliance obligations and related risks under economic sanctions, export controls and anti-corruption laws administered and enforced by various governments. We are subject to rules and regulations of the United States and other jurisdictions
relating to export controls and economic sanctions, including economic sanctions administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury, as well as the Export Administration Regulations administered by the
Bureau of Industry and Security of the U.S. Department of Commerce. Economic sanctions and export controls laws and regulations restrict the ability of persons subject to their jurisdiction to invest in, or otherwise engage in dealings with or
involving, certain individuals, entities, governments or countries (collectively, “Sanction Targets”), including individuals and entities resident, domiciled or incorporated in Cuba, Syria, North Korea, Iran or the Crimea Region, the so-called
Donetsk People’s Republic or Luhansk People’s Republic located in Ukraine, unless such activities are authorized pursuant to regulatory authorizations or general or specific licenses. These regulations may limit our ability to market, sell,
distribute, or otherwise transfer our products and services or technology to certain countries or persons. Changes in our products and services and technology or changes in export controls or economic sanctions laws and regulations may create
delays in the introduction of our products and services into international markets or, in some cases, prevent the provision or expansion of our business and our products and services to or for certain countries, governments or persons altogether.
Pursuant to the applicable economic sanctions and export controls
laws and regulations of the United States and other relevant jurisdictions, we may be obliged to limit business activities, may incur costs in order to implement and maintain compliance programs, and may be subject to investigations, enforcement
actions or penalties relating to actual or alleged instances of noncompliance with such laws and regulations. It may also be necessary for us to take certain actions in order to maintain compliance with, or satisfy obligations under, economic
sanctions and export controls, which could have an adverse effect on the business and results of operation. Grindr maintains policies and procedures that it believes to be adequate and customary to support its compliance with applicable economic
sanctions and export controls. We can provide no assurances, however, that our products and services are not provided inadvertently in violation of such laws, despite the precautions we take.
We are also subject to the U.S. Foreign Corrupt Practices Act of
1977, as amended, (commonly known as the FCPA), the U.S. domestic bribery statute contained in 18 U.S.C. § 201, (commonly known as the U.S. Travel Act), the United Kingdom Bribery Act 2010, (commonly known as the Bribery Act), and other
anti-corruption, anti-bribery, and similar laws in the United States and other countries in which we conduct activities. Anti-corruption and anti-bribery laws generally prohibit companies and their employees, agents, intermediaries and other
third parties from directly or indirectly promising, authorizing, making or offering improper payments or other benefits to government officials and others in the private sector. We may be held liable for the corrupt or other illegal activities
of third-party business partners and intermediaries, or our employees, representatives, contractors, and other third parties, even if we do not explicitly authorize such activities. Grindr maintains policies and procedures that we believe to be
adequate and customary to support our compliance with applicable anti-corruption and anti-bribery laws. However, there can be no assurance that our implementation of such policies and procedures will prevent, at all times, all Grindr employees,
representatives, contractors, partners, agents, intermediaries or other third parties that Grindr engages to interact with government officials or commercial counterparties on its behalf, from taking actions in the future in violation of our
polices or applicable anti-corruption or anti-bribery laws and regulations.
In recent years, U.S. and other governments have increased their
oversight and enforcement activities with respect to these economic sanctions, export controls and anti-corruption laws and regulations and it is expected that the relevant agencies will continue to increase such investigative and enforcement
activities. A violation of these laws or regulations, including through certain dealings with Sanction Targets, could result in severe criminal or civil penalties and reputational harm, which could negatively affect our business, financial
condition, and results of operations.
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The varying and rapidly evolving regulatory
framework on privacy and data protection across jurisdictions could result in claims, changes to our business practices, monetary penalties, increased cost of operations, or declines in user growth or engagement, or otherwise harm our business.
As discussed above, we process a significant volume of personal
information and other regulated information from our users, employees and other third parties. The many countries in which we operate impose numerous laws regarding data security, privacy, and the storage, sharing, use, processing, disclosure,
and protection of this kind of information. In addition, the scope of these laws is constantly changing, and in some cases, they may be inconsistent, conflicting, and subject to differing interpretations, as new laws of this nature are proposed
and adopted. At any time one of the numerous regulators to which Grindr is subject could argue that we are non-compliant with its country’s data protection regulation or that Grindr has not sufficiently operationalized all of our legal
obligations with all such varying laws. In addition, these laws are becoming increasingly rigorous and could be interpreted and applied in ways that may have a material adverse effect on our business, financial condition, and results of
operations. We have experienced enforcement actions related to certain of these laws, we have ongoing enforcement actions related to certain of these laws, and future enforcement actions are likely to continue for the foreseeable future.
In recent years, there has been an increase in attention to and
regulation of data protection and data privacy across the globe, including in the United States, the European Union and the United Kingdom. We are subject to the European Union’s General Data Protection Regulation (“GDPR”), that became effective in May 2018 and the UK GDPR (i.e., the GDPR as it continues to form part of the law of the United Kingdom by virtue of section 3 of the EU (Withdrawal) Act 2018 and subsequently amended); the
California Consumer Privacy Act (“CCPA”), which took effect in January 2020; and the Brazilian General Data Protection Law (“LGPD”), which entered into effect in
September 2020 and imposes requirements similar to the GDPR on products and services offered to users in Brazil. LGPD penalties may include fines of up to 2% of the organization’s revenue in Brazil in the previous year or 50 million reais
(approximately $9.3 million U.S. dollars). In addition, China’s Personal Information Protection Law of the P.R.C. (“PIPL”), which became effective in November 2021, has many aspects that are similar to the
GDPR. The PIPL sets rules for the processing activities such as collection, use, sharing, transfer, and disclosure of personal information in China. If we fail to comply with the requirements of the PIPL, we could incur severe penalties,
including a fine of up to RMB50 million or 5% of our annual turnover in the preceding year and revocation of our license to do business in China. Other comprehensive data privacy or data protection laws or regulations have been passed or are
under consideration in other jurisdictions, including India and Japan, as well as various U.S. states. Laws such as these give rise to an increasingly complex set of compliance obligations on us, as well as on many of our service providers. These
obligations include, without limitation, imposing restrictions on our ability to gather personal data, providing individuals with the ability to opt out of personal data collection, imposing obligations on our ability to share data with others,
and potentially subject us to fines, lawsuits, and regulatory scrutiny.
The GDPR and the UK GDPR greatly increased the jurisdictional reach
of the European Union and United Kingdom’s laws and added a broad array of requirements related to the handling of personal data. Under the GDPR, European Union member states must enact, and many have enacted, certain implementing legislation
that adds to and/or further interprets the GDPR’s requirements and potentially extends our obligations and potential liability for failing to meet these obligations. The GDPR and the UK GDPR also include obligations and restrictions concerning
the consent and rights of individuals to whom the personal data relates, the transfer of personal data out of the European Economic Area and the United Kingdom, security breach notifications, and the security and confidentiality of personal data
more generally. In addition, individuals have a right to compensation under the GDPR and the UK GDPR for financial or non-financial losses.
Under the GDPR and the UK GDPR we may be subject to fines of up to
€20 million/£17,500,000 or up to 4% of the total worldwide annual group turnover of the preceding financial year (whichever is higher), as well as face claims from individuals based on the GDPR and UK GDPR’s private right of action. The GDPR and
UK GDPR have been, and will continue to be, interpreted respectively by European Union data protection regulators and the ICO, which may require that we make changes to our business practices, which could be time-consuming and expensive, and
could generate additional risks and liabilities.
We are also subject to evolving European Union and United Kingdom
privacy laws on cookies and e-marketing. In the European Union and the United Kingdom, regulators are increasingly focusing on compliance with requirements in the online behavioral advertising ecosystem, and current national laws that implement
the ePrivacy Directive are highly likely to be replaced by an EU regulation known as the ePrivacy Regulation which will significantly increase fines for non-compliance when implemented. In the European Union and the United Kingdom,
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informed consent is required for the placement of a cookie or similar technologies
on a user’s device and/or for the access to data stored on a user’s device, and for direct electronic marketing. The GDPR and the UK GDPR also impose conditions on obtaining valid consent, such as a prohibition on pre-checked consents and a
requirement to ensure separate consents are sought for each type of cookie or similar technology. While the text of the ePrivacy Regulation is still under development, a recent European court decision, regulators’ recent guidance and recent
campaigns by a not-for-profit organization are driving increased attention to cookies and tracking technologies. If regulators start to enforce the strict approach in recent guidance, this could lead to substantial costs, require significant
systems changes, limit the effectiveness of our marketing activities, divert the attention of our technology personnel, adversely affect our margins, increase costs and subject us to additional liabilities. Regulation of cookies and similar
technologies, and any decline of cookies or similar online tracking technologies as a means to identify and potentially target users, may lead to broader restrictions and impairments on our marketing and personalization activities and may
negatively impact our efforts to understand users. We treat data protection and privacy, compliance seriously. However, to the extent we are determined to be not in compliance with the GDPR, UK GDPR or e-Privacy legislation, such determination
could materially adversely affect our business, financial condition, and results of operations.
Because we do not have a main establishment in the European Union,
we are subject to inquiries from any of the EU data protection regulators. Over the last few years, we have received and responded to inquiries from the Norwegian Data Protection Authority, the Spanish Data Protection Authority, the Slovenian
Data Protection Authority, and the Austrian Data Protection Authority, among other non-EU data protection authorities, including the ICO and various U.S. regulators. For example, in January 2021, the Norwegian Data Protection Authority (“Datatilsynet”) notified us of its preliminary decision that we had disclosed personal data to third parties without a legal basis in violation of Article 6(1) GDPR and that we disclosed special categories of
personal data to third parties without a valid exemption from the prohibition in Article 9(1) GDPR. In addition, Datatilsynet notified us of their preliminary intent to impose an administrative fine for these alleged violations of NOK 100,000,000
(approximately ~$11,700,300). We responded to the preliminary decision on March 8, 2021, by contesting the draft findings and the proposed fine. On December 13, 2021, Datatilsynet issued a final administrative fine against us in the reduced
amount of NOK 65,000,000 (approximately $7,375,187.30). We submitted our appeal to the Datatilsynet’s fine and decision on February 14, 2022 and will consider our options as that matter unfolds. Although we are challenging the administrative fine
imposed by Datatilsynet, the proceeding has caused us to incur significant expense, we have been the subject of negative publicity, and the existence of the proceeding has, and may continue to, negatively impact our efforts to retain existing
users and add new users and deteriorated our relationships with advertisers and other third parties. The ultimate outcome of this proceeding may materially adversely affect our business, financial condition, and result of operations.
In addition, Brexit (as defined below) and ongoing developments in
the United Kingdom could result in the application of new data privacy and protection laws and standards to our activities in the United Kingdom and our handling of personal data of users located in the United Kingdom. The relationship between
the United Kingdom and the European Union in relation to certain aspects of data protection law remains unclear, and it is unclear how UK data protection laws and regulations will develop in the medium to longer term, and how data transfers to
the United Kingdom from the EEA will be regulated in the long term. For example, though the European Commission has adopted an adequacy decision in favor of the United Kingdom, enabling data transfers from the EEA to the United Kingdom, the
decision will automatically expire in June 2025 unless the European Commission re-assesses and renews/ extends that decision, and remains under review by the Commission during this period. As a consequence of Brexit, we are exposed to two
parallel regimes (the GDPR and the UK GDPR), each of which potentially authorizes similar, but separate, fines and other potentially divergent enforcement actions for the same alleged violations. Other countries have also passed or are
considering passing laws requiring local data residency and/or restricting the international transfer of data. As set forth above, over the last few years, we have received and responded to inquiries from the ICO.
In addition, multiple legislative proposals concerning privacy and
the protection of user information are being considered by both U.S. state and federal legislatures, and certain U.S. state legislatures, such as California, have already passed and enacted privacy legislation. For example, the CCPA requires
covered companies to provide new disclosures to California consumers (including employees), and provide such consumers new data protection and privacy rights, including the ability to opt-out of certain sales of personal information. In addition,
the CCPA allows for statutory fines for noncompliance (up to $7,500 per violation), as well as a private right of action for certain data breaches that result in the loss of personal information. This private right of action may increase the
likelihood of,
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and risks associated with, data breach litigation. Moreover, the California Privacy
Rights Act of 2020 (“CPRA”), which becomes operative on January 1, 2023 (with a look back for certain obligations to January 2022), will significantly modify the CCPA. For example, the CPRA will expand
consumers’ rights with respect to certain sensitive personal information, among other modifications. The CPRA also creates a new state agency that will be vested with the authority to implement and enforce the CPRA.
New legislation proposed or enacted in various other U.S. states
imposes or has the potential to impose additional obligations on companies that collect, store, use, retain, disclose, transfer, and otherwise process sensitive and personal information, and will continue to shape the data privacy environment
nationally. For example, Virginia passed its Consumer Data Protection Act, Colorado passed the Colorado Privacy Act, and Utah passed the Utah Consumer Privacy Act, all of which differ from the CPRA and become effective in 2023. State laws are
changing rapidly and there is discussion in Congress of a new federal data protection and privacy law, which if enacted, would be applicable to Grindr. Moreover, governmental agencies like the Consumer Financial Protection Bureau and the Federal
Trade Commission have adopted, or are considering adopting, laws and regulations concerning personal information and data security. For example, the Federal Trade Commission has increased its focus on privacy and data security practices at
digital companies, as evident from its imposition of a $5 billion fine against Facebook for privacy violations and increasing fines against companies found to be in violation of the Children’s Online Privacy Protection Act (“COPPA”).
As discussed above, the myriad, overlapping international and U.S.
privacy and data breach laws are not consistent, and compliance in the event of a widespread data breach is difficult and may be costly. Moreover, states have been frequently amending existing laws, requiring constant attention to ever-changing
legal and regulatory requirements. In addition to government regulation, privacy advocates and industry groups have from time to time proposed, and may in the future continue to propose, self-regulatory standards. These and other industry
standards may legally or contractually apply to us, or we may elect to comply with such standards to keep pace with best practices in the industry. We expect that there will continue to be new proposed laws and regulations concerning data privacy
and security, and we cannot yet determine the impact such future laws, regulations, and standards may have on our business. Because the interpretation and application of data protection laws, regulations, standards, and other obligations are
still uncertain, and often contradictory and in flux, it is possible that the scope and requirements of these laws may be interpreted and applied in a manner that is inconsistent with our practices and our efforts to comply with the evolving data
protection rules may be unsuccessful. To the extent we are determined to be not in compliance with any U.S. laws, such determination could materially adversely affect our business, financial condition, and results of operations.
In 2018 and 2019, after media reports regarding our data sharing
practices, multiple State Attorneys General (the “Multistate”) informed us that they had opened investigations into our sharing of user-shared HIV status with two service providers that performed analytics
services and helped us improve the user experience, and into our practices around the security and processing of user geolocation information. Since that time, we have responded to multiple requests for information and discontinued the sharing of
user-shared HIV status. In November 2020, the Multistate notified us of its preliminary findings that we failed to comply with U.S. state laws prohibiting unfair or deceptive trade practices by allegedly misrepresenting to users how we shared
user-shared HIV status and failing to employ appropriate controls and oversight over that sharing, and by allegedly failing to secure user geolocation information and misrepresenting users’ ability to hide their geolocation information from other
users. In addition, the Multistate proposed settlement terms that includes a monetary payment of $11,000,000, among other measures. We responded in February 2021 by providing the Multistate with a paper state detailing the factual and legal
deficiencies in the Multistate’s claims. Since that time, we have continued to provide additional information to the Multistate. Although we expect to challenge any penalty that the Multistate may seek to impose, the proceeding has been
burdensome and caused us to incur significant expense. The existence of this proceeding has, and may continue to, negatively impact our efforts to retain existing users and add new users and deteriorate our relationships with advertisers and
other third parties. The outcome of this proceeding may materially adversely affect our business, financial condition, and result of operations, particularly if the Multistate pursues any penalties.
We make public statements about our use and disclosure of personal
information through our Privacy Policy, information provided on our website, and through blog posts and press statements. Although we endeavor to comply with our blog posts, public statements, and documentation regarding our use and disclosure of
personal information, we may at times fail to do so or be alleged to have failed to do so. We may be subject to potential government or legal action if such policies or statements are found to be deceptive, unfair, or misrepresentative of our
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practices. In addition, from time to time, concerns may be expressed about whether
our products and services compromise the privacy of our users and others. Any concerns about our data privacy and security practices (even if unfounded), or any failure, real or perceived, by us to comply with our posted privacy policies or with
any legal or regulatory requirements, standards, certifications or orders, or other privacy or consumer protection-related laws and regulations applicable to us, could cause our users to reduce or stop their use of our products and services.
While we make great effort to comply with industry standards and
applicable laws and regulations relating to privacy and data protection in all material respects, there can be no assurance that we will not be subject to claims that we have violated applicable laws, regulations, or industry standards, that we
will be able to successfully defend against such claims, or that we will not be subject to significant fines and penalties in the event of a finding of non-compliance with any applicable laws or industry standards. We have been subject to these
types of claims in the past and we may be subject to additional claims in the future. Moreover, if state-level privacy and data protection laws continue to be introduced with inconsistent or conflicting standards and there is no federal law to
preempt such laws, compliance with such laws could be difficult to achieve and noncompliance could lead to fines and penalties in these jurisdictions.
Furthermore, enforcement actions and investigations by regulatory
authorities related to data security incidents and privacy violations continue to increase. We have in the past received, and may continue to receive in the future, inquiries from various international and U.S. regulators regarding our data
privacy practices, some of which remain ongoing. Any failure or perceived failure by us (or the third parties with whom we have contracted to process such information) to comply with applicable privacy and security laws, policies or related
contractual obligations, or any compromise of security that results in unauthorized access, or the use or transmission of, personal user information, could result in a variety of claims against us, including governmental enforcement actions and
investigations, class action privacy litigation in certain jurisdictions, and/or proceedings by data protection authorities, among other potential legal action. We could also be subject to significant fines, other litigation, claims of breach of
contract and indemnity by third parties, and negative publicity. When such events occur, our reputation may be harmed, we may lose current and potential users, the competitive positions of our brand might be diminished, and we could incur
additional costs and expenses, any of which could materially adversely affect our business, financial condition, and results of operations. In addition, if our practices are not consistent or viewed as not consistent with legal and regulatory
requirements, including changes in laws, regulations, and standards, or new interpretations or applications of existing laws, regulations, and standards, we may become subject to audits, inquiries, whistleblower complaints, negative publicity,
investigations, loss of export privileges, or severe criminal or civil sanctions, any of which may have a material adverse effect on our business, financial condition, and results of operations.
We are subject to litigation, regulatory and
other government investigations, enforcement actions, and settlements, and adverse outcomes in such proceedings could have a materially adverse effect on our business, financial condition, and results of operation.
We are, have been, and may from time to time become, subject to
litigation and various legal proceedings that involve claims for substantial amounts of money or for other relief that might necessitate changes to our business or operations, including litigation and proceedings related to intellectual property
matters, privacy and consumer protection laws, class action lawsuits, litigation by former employees, legal claims brought by our users, and other matters. In addition, we are, have been, and may from time to time become, subject to
investigations or inquiries from regulators and government entities, both domestically and internationally, regarding our compliance with laws and regulations, many of which are evolving and subject to interpretation. See “—Risks Related to Grindr’s Brand, Products and Services, and Operations—The varying and rapidly evolving regulatory framework on privacy and data protection across jurisdictions could result in claims, changes to our
business practices, monetary penalties, increased cost of operations, or declines in user growth or engagement, or otherwise harm our business.” As set forth above, we have ongoing regulatory inquiries before Datatilsynet and the
Multistate, as well as active civil litigation in the U.S. and internationally. As we continue to grow and expand our operations, we have been and expect to continue to be the subject of investigations, inquiries, data requests, actions, and
audits in the U.S., Europe, or in other parts of the world, particularly in the areas of privacy, data protection, law enforcement, consumer protection, and competition.
The defense of these actions is time consuming and expensive,
disruptive to our operations, and a distraction for management. We evaluate these litigation claims and legal proceedings to assess the likelihood of unfavorable outcomes and to estimate, if possible, potential losses. Based on these assessments
and estimates, we may establish reserves and/or disclose the relevant litigation claims or legal proceedings, as and when required or appropriate.
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These assessments and estimates are based on information available to management at
the time of such assessment or estimation and involve a significant amount of judgment. As a result, actual outcomes or losses could differ materially from those envisioned by our current assessments and estimates. Our failure to successfully
defend or settle any of these litigation or legal proceedings could result in liability that, to the extent not covered by our insurance, could have a material adverse effect on our business, financial condition, and results of operations.
We may be held liable for information or
content displayed on, retrieved from, or transmitted over our platform, as well as interactions that result from the use of our platform.
We have faced and may continue to face claims relating to
information or content that is displayed on, retrieved from, or transmitted over our platform by our users or otherwise. In particular, the nature of our business exposes us to claims related to defamation, civil rights infringement, negligence,
copyright or trademark infringement, invasion of privacy, discrimination, and personal injury, among other claims brought by users based upon interactions they have on or off the platform. Such proceedings have, and could cause us to incur
significant expense, become the subject of negative publicity, and negatively impact our efforts to retain existing users or add new users as well as our relationships with advertisers and other third parties.
The risk of these or similar claims is enhanced in certain
jurisdictions outside of the U.S. where our protection from liability for third-party actions may be unclear or nonexistent, where there are decreased legislative protections for the LGBTQ+ community, and where we may be less protected under
local laws than we are in the U.S. We could incur significant costs in investigating and defending against claims arising from information displayed on, retrieved from, or transmitted over our platform, even if we ultimately are not held liable.
If any of these events occurs, our revenue could be adversely affected, or we could incur significant additional expense, any of which could have a material adverse effect on our business, financial condition, and results of operations.
Activities of our users or content made available
by such users could subject us to liability.
We provide products and services that enable our users to exchange
information and engage in various online activities, so our products and services include substantial user-generated content. For instance, users can provide information in their Grindr App public profiles, share images via their profile and in
messages with other Grindr App users and generate audio and video messages. User content or activity may be infringing, illegal, hostile, offensive, unethical, or inappropriate or may violate our terms of service. We have in the past been, and
may be in the future, subject to lawsuits arising from the conduct of our users, or subject to other regulatory enforcement actions relating to their contents or actions. Even if claims against us are ultimately unsuccessful, defending against
such claims will increase our legal expenses and divert management’s attention from the operation of our business, which could materially and adversely impact our business and results of operations, and our brand, reputation, and financial
results may be harmed.
We and other intermediate online service providers rely primarily on
two sets of laws in the U.S. to shield us from legal liability with respect to user activity. The Digital Millennium Copyright Act (“DMCA”), provides service providers a safe harbor from monetary damages
for copyright infringement claims, provided that service providers comply with various requirements designed to stop or discourage infringement on their platforms by their users. Section 230 of the Communications Decency Act (“CDA”), protects providers of an interactive computer service from liability with respect to most types of content provided over their service by others, including users. Both the DMCA safe harbor and Section
230 of the CDA face regular calls for revision, including without limitation in a number of CDA reform bills currently being considered by legislators. Furthermore, recent litigation involving cloud hosting companies has created uncertainty with
respect to the applicability of DMCA protections to companies that host substantial amounts of user content. For these reasons and others, now or in the future, the DMCA, CDA, and similar provisions may be interpreted as not applying to us or may
provide us with incomplete or insufficient protection from claims.
We do not fully monitor the contents or activities of our users, so
inappropriate content may be posted or activities executed before we are able to take protective action, which could subject us to legal liability. Even if we comply with legal obligations to remove or disable content, we may continue to allow
use of our products or services by individuals or entities who others find hostile, offensive, or inappropriate. The activities or content of our users may lead us to experience adverse political, business and reputational consequences,
especially if such use is high profile. Conversely, actions we take in response to the activities of our users, up to and including banning them from using our products, services, or properties, may harm our brand and reputation.
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In addition to liability based on our activities in the United
States, we may also be deemed subject to laws in other countries that may not have the same protections or that may impose more onerous obligations on us, which may impose additional liability or expense on us, including additional theories of
intermediary liability. For example, in 2019, the European Union approved a copyright directive that will impose additional obligations on online platforms, and failure to comply could give rise to significant liability. Other recent laws in
Germany (extremist content), Australia (violent content), India (intermediary liability) and Singapore (online falsehoods), as well as other new similar laws, may also expose cloud-computing companies like us to significant liability. We may
incur additional costs to comply with these new laws, which may have an adverse effect on our business, results of operations, and financial condition. Potential litigation could expose us to claims for damages and affect our operations.
Online applications are subject to various
laws and regulations relating to children’s privacy and protection, which if violated, could subject us to an increased risk of litigation and regulatory actions.
In recent years, a variety of laws and regulations have been adopted
aimed at protecting children using the internet, including the COPPA and Article 8 of the GDPR and the UK GDPR. We implement certain precautions designed to prevent minors from gaining access to our product and services, and we use a combination
of human and automated tooling to identify and block accounts that may be associated with minors. Despite these and other measures, minors may gain access to our products and services and there can be no assurances that the measures we take will
be sufficient to eliminate minors’ potential access which could result in allegations of COPPA and related violations, which could expose us to significant liability, penalties, reputational harm, and loss of revenue, among other things. We have
been in the past, and may be in the future, subject to litigation or allegations relating to our products and services being accessed by minors. Additionally, new regulations are being considered in various jurisdictions to require the monitoring
of user content or the verification of users’ identities and age. Any such new regulations, or changes to existing regulations, could increase the cost of our operations and expose us to significant liability, penalties, reputational harm, and
loss of revenue, among other things. Grindr’s policy and practice are that when we learn that Child Sexual Abuse Materials (CSAM) have been transmitted on the platform, Grindr bans the user, removes the content, and submits a report to the
National Center for Missing and Exploited Children. However, Grindr may not always identify circumstances in which CSAM is transmitted on the platform.
The occurrence of any of these or other factors could negatively
affect our business, financial condition, and results of operations.
We have a limited operating history and, as a
result, our past results may not be indicative of future operating performance.
As explained above, our management team has limited history working
together, which makes it difficult to forecast our future results. See “—Risks Related to Grindr’s Brand, Products and Services, and Operations—We have grown rapidly in recent years and certain members of our
management team have joined us recently. If we are unable to manage our operations or growth effectively, our brand, company culture, and financial performance may suffer.” You should not rely on our past quarterly operating results as
indicators of future performance. In addition, you should consider and evaluate our prospects in light of the risks and uncertainties frequently encountered by companies in rapidly evolving markets like ours, as well as the information included
in this proxy statement/prospectus.
We are subject to taxation-related risks in
multiple jurisdictions and may have exposure to greater than anticipated tax liabilities.
Grindr is a U.S.-based multinational company subject to taxes in
multiple U.S. and foreign tax jurisdictions. Our income tax obligations are based on our corporate operating structure and third party and intercompany arrangements, including the way we develop, value, manage, protect and use our intellectual
property and the valuations of our intercompany transactions. The tax laws applicable to our international business activities, including the laws of the U.S., Canada and other jurisdictions, are subject to change and uncertain interpretation.
The taxing authorities of the jurisdictions in which we operate may challenge our methodologies for valuing developed technology, intercompany arrangements, or transfer pricing, which could increase our worldwide effective tax rate and the amount
of taxes we pay and seriously harm our business. In addition, our future income taxes could be adversely affected by earnings being lower than anticipated in jurisdictions that have lower statutory tax rates and higher than anticipated in
jurisdictions that have higher statutory tax rates, by changes in the valuation of our deferred tax assets and liabilities,
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or by changes in tax laws, regulations, or accounting principles. Taxing authorities
may also determine that the way we operate our business is not consistent with how we report our income, which could increase our effective tax rate and the amount of taxes we pay and harm our business. We are subject to regular review and audit
by U.S. federal and state and foreign tax authorities. Any adverse outcome from a review or audit could have a negative effect on our business, financial condition, results of operation and cash flows.
In addition, tax laws are frequently being re-examined and evaluated
globally. New laws and interpretations of the law are considered for financial statement purposes in the quarter or year in which they become applicable. Tax authorities are increasingly scrutinizing the tax positions of companies. Many countries
in the European Union, as well as several other countries and organizations such as the Organization for Economic Cooperation and Development and the European Commission, are actively considering changes to existing tax laws that, if enacted,
could increase our tax obligations in countries where we conduct our business. These proposals include changes to the existing framework to calculate income taxes, as well as proposals to change or impose new types of non-income taxes, such as
taxes based on a percentage of revenue. For example, several countries in the European Union have proposed or enacted taxes applicable to digital services, which includes business activities on social media platforms and online marketplaces and
would likely apply to our business. Many questions remain about the enactment, form, and application of these digital services taxes. The interpretation and implementation of the various digital services taxes (especially if there is
inconsistency in the application of these taxes across tax jurisdictions) could have a materially adverse impact on our business, results of operations, and cash flows. For example, recently published Treasury Regulations may limit or eliminate
the availability of foreign tax credits for some or all of any digital services taxes we pay in non-U.S. jurisdictions, thereby increasing our overall tax burden. Moreover, if the U.S., Canada or other foreign tax authorities change applicable
tax laws, our overall taxes could increase, and our business, financial condition or results of operations may be adversely impacted.
In addition, the determination of our worldwide provision for income
taxes and other tax liabilities requires significant judgment by management, and there are many transactions where the ultimate tax determination is uncertain. Although we believe that our estimates are reasonable and consistent with the tax laws
in the jurisdictions in which we conduct our business, the ultimate tax outcome may differ from the amounts recorded in our financial statements and our positions may be challenged by jurisdictional tax authorities, any of which may materially
affect our financial results in the period or periods for which such determination is made. Therefore, our future income tax obligations could be volatile and difficult to predict due to changes in tax laws, regulation or accounting principles.
Legal, political, and economic uncertainty
surrounding the exit of the United Kingdom from the European Union, or Brexit, and the implementation of the trade and cooperation agreement between the United Kingdom and the European Union could have a material adverse effect on our business.
Because we conduct business in the United Kingdom and the European
Union, we face risks associated with the potential uncertainty and disruptions related to the withdrawal of the United Kingdom from the European Union, commonly referred to as “Brexit.” Although the United Kingdom and the European Union have
entered into a trade and cooperation agreement (the “Trade and Cooperation Agreement”), the long-term nature of the United Kingdom’s relationship with the European Union following the Brexit and the
implementation and application of the Trade and Cooperation Agreement remain uncertain, including with respect to volatility in exchange rates and interest rates, disruptions to the free movement of data, goods, services, people and capital
between the United Kingdom and the European Union, and potential material changes to the regulatory regime applicable to our operations in the United Kingdom. The uncertainty concerning the United Kingdom’s future legal, political, and economic
relationship with the European Union could adversely affect political, regulatory, economic, or market conditions in the European Union, the United Kingdom and worldwide, and could contribute to instability in global political institutions,
regulatory agencies, and financial markets. These developments, or the perception that any of them could occur, have had, and may continue to have, a material adverse effect on global economic conditions and the stability of global financial
markets, and they could significantly reduce global market liquidity and limit the ability of key market participants to operate in certain financial markets. Brexit could also lead to a period of considerable uncertainty in relation to the
United Kingdom financial and banking markets, as well as to the regulatory process in Europe. Asset valuations, currency exchange rates, and credit ratings may also be subject to increased market volatility.
As a result of Brexit, we may also face new regulatory costs and
challenges that could have a material adverse effect on our operations. For example, as of January 1, 2021, the United Kingdom lost the benefits of global trade agreements negotiated by the European Union on behalf of its members, which may
result in increased trade barriers that could make our ability to conduct business in areas that are subject to such global trade agreements more
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difficult. In addition, Brexit could lead to legal uncertainty and potentially
divergent national laws and regulations as the United Kingdom determines which laws of the European Union to replace or replicate. For example, Brexit could lead to potentially divergent laws and regulations, such as with respect to data
protection and data transfer laws, that could be costly and difficult for us to comply with. There may continue to be economic uncertainty surrounding the consequences of Brexit that adversely impact customer confidence resulting in customers
reducing their spending budgets on our services. While we continue to monitor these developments, the full effect of Brexit on our operations is uncertain and our business our business, financial condition, and results of operations could be
materially and adversely affected.
Risks Related to Our Indebtedness
Our indebtedness could materially adversely
affect our financial condition, our ability to raise additional capital to fund our operations, operate our business, react to changes in the economy or our industry, meet our obligations under our outstanding indebtedness, including significant
operating and financial restrictions imposed on us by our debt agreements, and it could divert our cash flow from operations for debt payments.
As of June 30, 2022, we had total outstanding indebtedness (net) of
approximately $195.7 million, consisting of outstanding borrowings under our senior secured credit facilities.
In June 2020, as part of San Vicente Holding LLC’s (“SVH”) indirect acquisition of approximately 98.6% interest in Grindr (and its subsidiaries) from Kunlun Grindr Holdings Limited (“Kunlun”), San
Vicente Acquisition LLC, an indirect subsidiary of SVH (“SV Acquisition”) agreed to pay what, after adjustments provided for in the acquisition agreement, amounted to a $230.0 million
deferred consideration payment liability to Kunlun, payable on the second and third anniversary of the closing date (the “Deferred Payment”). In connection with the acquisition, SV
Acquisition assigned the obligations for the Deferred Payment to Grindr, and subsequently, through a series of assumption agreements, SV Acquisition re-assumed the obligations for the Deferred Payment. In June 2022, Grindr declared a
distribution of $83.3 million to its members, including an affiliate of SV Acquisition, on a pro rata basis. Grindr paid this distribution in June and July 2022. SV Acquisition’s affiliate, San Vicente Group Holdings LLC (“SV Group Holdings”), received its ratable share of this distribution, being $75.0 million, and distributed that amount through intermediate holding companies to SV Acquisition, which then
paid such amount to Kunlun in partial satisfaction of the Deferred Payment obligation, thereby reducing such obligation to $155.0 million. The cash transfer to Kunlun was effected by Grindr at the instruction of SV Group Holdings. Substantially
simultaneously with Closing, we expect the Deferred Payment obligation will be fully repaid. Please see the section entitled “Grindr’s Management's Discussion and Analysis of Financial Condition
and Results of Operation—Financing Arrangements” that appears elsewhere in this proxy statement/prospectus for further information. The obligations under the Credit Agreement are subject to automatic acceleration upon a
voluntary or involuntary bankruptcy event of default, and are subject to acceleration at the election of the lenders upon the continuance of any other event of default, including a material adverse change in the business, operations or
conditions of the Company. Failure by SV Acquisition or its affiliates to pay, when due, any part of the Deferred Payment within ten (10) business days of Kunlun’s notice of default to SV Acquisition will be deemed an event of default under the
terms of the Credit Agreement.
The Credit Agreement that governs our senior secured credit
facilities imposes significant operating and financial restrictions on us. These restrictions will limit our ability and/or the ability of our subsidiaries to, among other things:
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In addition, the Credit Agreement requires us to maintain a total
leverage ratio of no greater than 4.75 to 1.00 prior to and through March 31, 2022, and thereafter, no greater than 3.25 to 1.00. As a result of these and other restrictions, we may be limited as to how it conducts business, and we may be unable
to raise additional debt or equity financing to compete effectively or to take advantage of new business opportunities. The terms of any future indebtedness that we may incur could include similar or more restrictive covenants. We cannot assure
you that it will be able to maintain compliance with these covenants in the future and, if it fails to do so, that we will be able to obtain waivers from the lenders and/or amend the covenants. Our failure to comply with the restrictive or
financial covenants described above, as well as the terms of any future indebtedness could result in an event of default, which, if not cured or waived, could result in us being required to repay these borrowings before their due date. If we are
forced to refinance these borrowings on less favorable terms or if it is unable to refinance these borrowings, our business, financial condition, and results of operations could be materially adversely affected.
Furthermore, we may be able to incur substantial additional
indebtedness in the future. The terms of the credit agreements governing our indebtedness limit, but do not prohibit, us from incurring additional indebtedness, and the additional indebtedness incurred in compliance with these restrictions could
be substantial. These restrictions will also not prevent us from incurring obligations that do not constitute “Indebtedness” as defined in the agreements governing our indebtedness. If new indebtedness is added to our current debt levels, the
related risks that we now face could intensify.
The obligations under the Credit Agreement are subject to automatic
acceleration upon a voluntary or involuntary bankruptcy event of default, and are subject to acceleration at the election of the lenders upon the continuance of any other event of default, including a material adverse change in the business,
operations or conditions of the Company. A default interest rate of an additional 2.0% per annum will apply on all outstanding obligations during the occurrence and continuance of an event of default. The Credit Agreement includes restrictive
non-financial and financial covenants, including the requirement to maintain a total leverage ratio no greater than 4.75:1.00 prior to and through March 31, 2022, and no greater than 3.25:1.00 thereafter. Please see the section entitled “Grindr's Management's Discussion and Analysis of Financial Condition and Results of Operation—Financing Arrangements” that appears elsewhere in this proxy statement/prospectus for further information.
Offshore Holdings’ independent registered
public accounting firm has expressed substantial doubt as to Offshore Holdings’ ability to continue as a going concern in its reports.
In its reports on Offshore Holdings' financial statements, Offshore
Holdings' independent registered public accounting firm included an explanatory paragraph expressing substantial doubt regarding Offshore Holdings’ ability to continue as a going concern. See Note 1 to Offshore Holdings' unaudited consolidated
financial statements and audited consolidated financial statements included elsewhere in this proxy statement/prospectus. As of June 30, 2022, Offshore Holdings had cash of $25.5 million and had a liability of $135.0 million related to the
Deferred Payment which matures in June 2023. In accordance with the terms of the Agreement and Plan of Merger with Tiga that was signed on May 9, 2022, Grindr is permitted to distribute up to $370.0 million to its members to repay the entire
Deferred Payment that currently exists with cash from the Business Combination. In June 2022, Grindr declared a distribution of $83.3 million to its members and subsidiaries of Offshore Holdings used Offshore Holdings' pro rata share of the
distribution, being $75.0 million, to partially satisfy the Deferred Payment obligation. In connection with Closing, we expect the Deferred Payment obligation will be fully repaid. However, there remains substantial doubt about Offshore Holdings'
ability to continue its operations unless it completes the Business Combination.
Risks Related to Tiga and the Business Combination
Unless the context otherwise requires, all
references in this subsection to the “Company,” “we,” “us” or “our” refer to Tiga prior to the consummation of the Business Combination, which will be the business of New Grindr and its subsidiaries following the consummation of the Business
Combination.
The Sponsor and the independent directors of
Tiga have agreed to vote in favor of the Business Combination, regardless of how Tiga’s public shareholders vote.
Unlike many other blank check companies in which the initial
shareholders agree to vote their founder shares in accordance with the majority of the votes cast by the public shareholders in connection with an initial business combination, the Sponsor and the independent directors of Tiga have agreed to vote
any and all of Tiga’s ordinary shares owned by them in favor of the Merger Agreement and the Business Combination, in each case, subject to the
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terms and conditions contemplated by the Transaction Support Agreement. As of the
date of this proxy statement/prospectus, the Sponsor and the independent directors of Tiga collectively own shares, on an as-converted basis, equal to approximately 19.8% of the issued and outstanding Tiga ordinary shares (excluding the Class A
ordinary shares underlying the private placement warrants). Accordingly, it is more likely that the necessary shareholder approval will be received for the Business Combination than would be the case if the Sponsor and the independent directors
of Tiga agreed to vote any Tiga ordinary shares owned by them in accordance with the majority of the votes cast by the public shareholders.
The Sponsor, certain members of the Tiga Board
and certain Tiga officers, including without limitation Messers. Zage and Gupta, have interests in the Business Combination that are different from or are in addition to other shareholders in recommending that shareholders vote in favor of
approval of the Business Combination Proposal and approval of the other proposals described in this proxy statement/prospectus.
When considering the Tiga Board’s recommendation that our
shareholders vote in favor of the approval of the Business Combination Proposal and the other proposals described in this proxy statement/prospectus, our shareholders should be aware that the Sponsor and certain directors and officers of Tiga,
including without limitation, Messers. Zage and Gupta, have interests in the Business Combination that may be different from, or in addition to, the interests of our shareholders generally. Public shareholders should be aware that these
interests, as set forth in more detail below, present a risk that the Sponsor and its affiliates will benefit from the completion of a business combination, including in a manner that may not be aligned with public shareholders – as such, the
Sponsor may be incentivized to complete an acquisition of a less favorable target company or on terms less favorable to public shareholders rather than liquidate. Shareholders should take these interests into account in deciding whether to
approve the Business Combination. In considering the recommendations of the Tiga Board to vote for the proposals, its shareholders should consider these interests. These interests include, among other things:
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1.
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the fact that G. Raymond Zage, III, one of the controlling persons of the Sponsors and our Chairman and Chief Executive
Officer, indirectly holds an approximately 43.0% indirect non-voting equity interest in Grindr and that Ashish Gupta, one of the controlling persons of the Sponsor and a Director and our President, indirectly holds an approximately 4.5%
indirect non-voting equity interest in Grindr;
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2.
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the fact that, Tiga and the Sponsor have entered into the A&R Forward Purchase Agreement pursuant to which Messers. Zage
and Gupta may purchase up to 10,000,000 additional shares in New Grindr at $10.00 per share. As such, regardless of the extent of redemptions, the shares of New Grindr Common Stock owned by non-redeeming shareholders will have an implied
value of $10.00 per share upon the consummation of the Business Combination;
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3.
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the fact that immediately following the Closing and, assuming none of Tiga’s shareholders elect to redeem their shares of
Company Class A common stock in connection with the Business Combination, by virtue of the holdings by Messers. Zage and Gupta and their affiliates, including, Mr. Zage is expected to beneficially own approximately % of New Grindr and
Mr. Gupta is expected to beneficially own approximately % of New Grindr;
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4.
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the fact that the Sponsor has agreed, for no consideration, not to redeem any of the founder shares in connection with a
shareholder vote to approve a proposed initial business combination;
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5.
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the fact that the Sponsor paid an aggregate of $25,000 for its 6,900,000 founder shares, which will have a significantly higher
value at the time of the Business Combination, which if unrestricted and freely tradable would be valued at approximately $70,725,000 based on the closing price of Tiga Class A ordinary shares on the NYSE on May 6, 2022;
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6.
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the fact that the Sponsor has agreed to waive their rights to liquidating distributions from the trust account with respect to
their founder shares if we fail to complete an initial business combination by November 27, 2022;
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7.
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the fact that the Sponsor paid an aggregate of approximately $18,560,000 million for its 18,560,000 private placement warrants
to purchase Tiga Class A ordinary shares and that such private placement warrants will expire worthless if the Business Combination is not consummated by November 27, 2022;
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8.
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the fact that the Sponsor and its affiliates may realize a positive rate of return on such investment even if other Tiga
shareholders experience a negative rate of return following the Business Combination, given the differential in purchase price that the Sponsor paid for the founder shares as compared to the price of the
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Tiga Units sold in the initial public offering and subsequent number of shares of
Tiga Class A ordinary shares that the Sponsor will receive upon conversion of the founder shares in connection with the Business Combination;
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9.
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the fact that the Sponsor will benefit from the completion of the Business Combination and may be incentivized to complete an
acquisition of a less favorable target company or on terms less favorable to Tiga shareholders than liquidate;
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10.
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the fact that if the trust account is liquidated, including in the event we are unable to complete an initial business
combination within the required time period, the Sponsor has agreed that it will be liable to ensure that the proceeds in the trust account are not reduced below $10.40 per public share, or such lesser per public share amount as is in the
trust account on the liquidation date, by the claims of prospective target businesses with which we have discussed entering into an acquisition agreement or claims of any third party for services rendered or products sold to us, but only
if such target business or vendor has not executed a waiver of any and all rights to seek access to the trust account;
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the fact that we have not adopted a policy that expressly prohibits our directors, officers, security holders or affiliates
from having a direct or indirect pecuniary or financial interest in any investment to be acquired or disposed of by us or in any transaction to which we are a party or have an interest. We do not have a policy that expressly prohibits any
such persons from engaging for their own account in business activities of the types conducted by us; further, such activity is expressly allowed under Tiga’s amended and restated memorandum and articles of association.
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12.
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the anticipated election of G. Raymond Zage, III, who is an officer and director of Tiga, as director of New Grindr;
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13.
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the continued indemnification of our existing directors and officers and the continuation of our directors’ and officers’
liability insurance after the Business Combination;
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14.
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the fact that the sponsor, our officers and directors, including Messers. Zage and Gupta, will lose their entire investment in
us and will not be reimbursed for any out-of-pocket expenses if an initial business combination is not consummated by November 27, 2022; and
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15.
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the fact that at the Closing we will enter into an A&R Registration Rights Agreement, which provides for registration
rights for the Sponsor, Messers. Zage and Gupta and certain of their affiliates.
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The Tiga Board was aware of these interests, among other matters, in
evaluating and negotiating the Business Combination and in recommending to the Tiga shareholders that they vote “FOR” the proposals presented at the extraordinary general meeting. The Tiga Board considered a wide variety of factors in connection
with its evaluation of the Business Combination. In light of the complexity of those factors, the Tiga Board, as a whole, did not consider it practicable to, nor did it attempt to, quantify or otherwise assign relative weights to the specific
factors it took into account in reaching its decision. The Tiga Board viewed its decision as being based on all of the information available and the factors presented to and considered by it.
In addition, the Tiga Board established a special committee of
non-conflicted directors, comprised of three directors determined to be independent and disinterested with respect to the potential business combination with Grindr for the purposes of managing any conflicts of interest involving the Sponsor and
certain members of the Tiga Board, including, without limitation, Messers. Zage and Gupta. The Tiga Board agreed that it would not approve or recommend the potential business combination with Grindr or recommend the potential business combination
with Grindr to the shareholders of Tiga for their approval without a favorable recommendation from the Special Committee. In making its recommendation to the Tiga Board, the Special Committee also relied on fairness opinion from Duff & Phelps
as to the fairness, from a financial point of view, to Tiga, of the consideration to be paid by Tiga pursuant to the Merger Agreement. The Tiga Board considered the factors supporting, and risks and uncertainties related to, a business
combination with Grindr as set forth under “Proposal No. 1—The Business Combination Proposal—Background to the Business Combination”.
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Because the post-combination company will
become a publicly-traded company by virtue of a merger as opposed to an underwritten initial public offering, the process does not use the services of one or more underwriters, which could result in less diligence being conducted.
In an underwritten initial public offering, underwriters typically
conduct due diligence on the company being taken public in order to establish a due diligence defense against liability claims under federal securities laws. Because Tiga is already a publicly-traded company, an underwriter has not been engaged.
Because Grindr will become a public reporting company by means of consummating the Business Combination rather than by means of a traditional underwritten initial public offering, there is no independent third-party underwriter selling the
shares, which presents certain risks. These risks include the absence of operational diligence by an underwriter, the absence of financial diligence by an underwriter, the absence of comfort letters delivered by the Grindr’s independent auditors
and the absence of liability for any material misstatements or omissions in a registration statement. While Sponsor may have an inherent conflict of interest because its shares and warrants will be worthless if a business combination is not
completed, management and the board of directors of the acquirer, as well as private investors, undertake a certain level of due diligence – however, this due diligence is not necessarily the same level of due diligence undertaken by an
underwriter in a traditional initial public offering and, therefore, there could be a heightened risk of an incorrect valuation of the target business or material misstatements or omissions in this proxy statement/prospectus.
In addition, because there are no underwriters engaged in connection
with the Business Combination, prior to the opening of trading on the NYSE on the trading day immediately following the Closing, there will be no book building process and no price at which underwriters initially sold shares to the public to help
inform efficient and sufficient price discovery with respect to the initial post-closing trades on the NYSE. Therefore, buy and sell orders submitted prior to and at the opening of the initial post-closing trading of the New Grindr Common Stock
on NYSE will not have the benefit of being informed by a published price range or a price at which the underwriters initially sold shares to the public, as would be the case in an underwritten initial public offering. There will be no
underwriters assuming risk in connection with an initial resale of shares of the New Grindr Common Stock or helping to stabilize, maintain or affect the public price of New Grindr Common Stock following the Closing. Moreover, we will not engage
in, and have not and will not, directly or indirectly, request the financial advisors to engage in, any special selling efforts or stabilization or price support activities in connection with the New Grindr Common Stock that will be outstanding
immediately following the Closing. All of these differences from an underwritten public offering of Grindr’s securities could result in a more volatile price for New Grindr Common Stock.
Further, we will not conduct a traditional “roadshow” with
underwriters prior to the opening of initial post-closing trading of the New Grindr Common Stock on the NYSE. There can be no guarantee that any information made available in this proxy statement/prospectus and/or otherwise disclosed or filed
with the SEC will have the same impact on investor education as a traditional “roadshow” conducted in connection with an underwritten initial public offering. As a result, there may not be efficient or sufficient price discovery with respect to
the New Grindr Common Stock or sufficient demand among potential investors immediately after the closing, which could result in a more volatile price for the New Grindr Common Stock.
In addition, our initial shareholders, including our Sponsor, as
well as their respective affiliates and permitted transferees, have interests in the Business Combination that are different from or are in addition to our shareholders and that would not be present in an underwritten public offering of Grindr’s
securities. Such interests may have influenced our board of directors in making their recommendation that you vote in favor of the approval of the Business Combination Proposal and the other proposals described in this proxy statement/prospectus.
Such differences from an underwritten public offering may present
material risks to unaffiliated investors that would not exist if Grindr became a publicly listed company through an underwritten initial public offering instead of upon completion of the merger. Accordingly, unaffiliated investors in Grindr will
not receive the benefit of the protections that would be present in a traditional underwritten offering.
The exercise of Tiga’s directors’ and
executive officers’ discretion in agreeing to changes or waivers in the terms of the Business Combination may result in a conflict of interest when determining whether such changes to the terms of the Business Combination or waivers of conditions
are appropriate and in Tiga’s shareholders’ best interest.
In the period leading up to the Closing, events may occur that,
pursuant to the Merger Agreement, would require Tiga to agree to amend the Merger Agreement, to consent to certain actions taken by Grindr or to waive rights that Tiga is entitled to under the Merger Agreement. Such events could arise because of
changes in the course of Grindr’s
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business or a request by Grindr to undertake actions that would otherwise be
prohibited by the terms of the Merger Agreement. In any of such circumstances, it would be at Tiga’s discretion, to grant its consent or waive those rights. The existence of financial and personal interests of one or more of the directors
described in the preceding risk factors (and described elsewhere in this proxy statement/prospectus) may result in a conflict of interest on the part of such director(s) between what he, she or they may believe is best for Tiga and its
shareholders and what he, she or they may believe is best for himself, herself or themselves in determining whether or not to take the requested action. As of the date of this proxy statement/prospectus, Tiga does not believe there will be any
changes or waivers that Tiga’s directors and executive officers would be likely to make after shareholder approval of the Business Combination Proposal has been obtained. While certain changes could be made without further shareholder approval,
Tiga will circulate a new or amended proxy statement/prospectus and resolicit Tiga’s shareholders if changes to the terms of the transaction that would have a material impact on its shareholders are required prior to the vote on the Business
Combination Proposal.
Subsequent to consummation of the Business
Combination, we may be exposed to unknown or contingent liabilities and may be required to subsequently take write-downs or write-offs, restructuring and impairment or other charges that could have a significant negative effect on our financial
condition, results of operations and our share price, which could cause you to lose some or all of your investment.
We cannot assure you that the due diligence conducted in relation to
Grindr has identified all material issues or risks associated with Grindr, its business or the industry in which it competes.
Furthermore, we cannot assure you that factors outside of Grindr’s
and our control will not later arise. As a result of these factors, we may be exposed to liabilities and incur additional costs and expenses and we may be forced to later write-down or write-off assets, restructure our operations, or incur
impairment or other charges that could result in our reporting losses. Even if our due diligence has identified certain risks, unexpected risks may arise and previously known risks may materialize in a manner not consistent with our preliminary
risk analysis. If any of these risks materialize, this could have a material adverse effect on our financial condition and results of operations and could contribute to negative market perceptions about our securities or New Grindr. Additionally,
we have no indemnification rights against the Grindr unitholders under the Merger Agreement and all of the purchase price consideration will be delivered at the Closing.
Accordingly, any shareholders or warrant holders of Tiga who choose
to remain New Grindr shareholders or warrant holders following the Business Combination could suffer a reduction in the value of their shares, warrants and units. Such shareholders or warrant holders are unlikely to have a remedy for such
reduction in value unless they are able to successfully claim that the reduction was due to the breach by our directors or officers of a duty of care or other fiduciary duty owed to them, or if they are able to successfully bring a private claim
under securities laws that the registration statement or proxy statement/prospectus relating to the Business Combination contained an actionable material misstatement or material omission.
The Sponsor is liable to ensure that
proceeds of the trust are not reduced by vendor claims in the event a business combination is not consummated. Such liability may have influenced the Sponsor’s decision to approve the Business Combination.
If the Business Combination or another business combination are not
consummated by Tiga within the completion window, the Sponsor will be liable under certain circumstances to ensure that the proceeds in the trust account are not reduced by the claims of target businesses or claims of vendors or other entities
that are owed money by Tiga for services rendered or contracted for or products and services sold to Tiga. Neither Tiga nor the Sponsor has any reason to believe that the Sponsor will not be able to fulfill its indemnity obligations to Tiga.
Please see the section entitled “Other Information Related to Tiga—Liquidation if No Business Combination” for further information.
These obligations of the Sponsor may have influenced the Sponsor’s
decision to approve the Business Combination and to continue to pursue such Business Combination. In considering the recommendations of the Tiga Board to vote for the Business Combination Proposal and the other proposals described in this proxy
statement/prospectus, Tiga’s shareholders should consider these interests.
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If Tiga is unable to complete the Business
Combination or another initial business combination by November 27, 2022, Tiga will cease all operations except for the purpose of winding up, redeeming 100% of the outstanding public shares and, subject to the approval of its remaining
shareholders and the Tiga Board, dissolving and liquidating. In such event, third parties may bring claims against Tiga and, as a result, the proceeds held in the trust account could be reduced and the per-share liquidation price received by
shareholders could be less than $10.00 per share.
Under the terms of Tiga’s current amended and restated memorandum
and articles of association, Tiga must complete a business combination before the end of the completion window, or Tiga must cease all operations except for the purpose of winding up, redeeming 100% of the outstanding public shares and, subject
to the approval of its remaining shareholders and the Tiga Board, dissolving and liquidating. In such event, third parties may bring claims against Tiga. Although Tiga has obtained waiver agreements from certain vendors and service providers it
has engaged and owes money to, and the prospective target businesses it has negotiated with, whereby such parties have waived any right, title, interest or claim of any kind they may have in or to any monies held in the trust account, there is no
guarantee that they or other vendors who did not execute such waivers will not seek recourse against the trust account notwithstanding such agreements. Furthermore, there is no guarantee that a court will uphold the validity of such agreements.
Accordingly, the proceeds held in the trust account could be subject to claims which could take priority over those of Tiga’s public shareholders. If Tiga is unable to complete a business combination within the completion window, the Sponsor will
be liable under certain circumstances to ensure that the proceeds in the trust account are not reduced by the claims of target businesses or claims of vendors or other entities that are owed money by Tiga for services rendered or contracted for
or products and services sold to Tiga. However, they may not be able to meet such obligation. Therefore, the per-share distribution from the trust account in such a situation may be less than $10.00 due to such claims.
Additionally, if Tiga is forced to file a bankruptcy case or an
involuntary bankruptcy case is filed against it which is not dismissed, or if Tiga otherwise enters compulsory or court supervised liquidation, the proceeds held in the trust account could be subject to applicable bankruptcy law, and may be
included in its bankruptcy estate and subject to the claims of third parties with priority over the claims of its shareholders. To the extent any bankruptcy claims deplete the trust account, Tiga may not be able to return to its public
shareholders at least $10.00 per share.
Tiga’s shareholders may be held liable for
claims by third parties against Tiga to the extent of distributions received by them.
If Tiga is unable to complete the Business Combination or another
business combination within the completion window, Tiga will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten (10) business days thereafter, redeem 100% of the
outstanding public shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any), subject to applicable law, and (iii) as promptly as
reasonably possible following such redemption, subject to the approval of its remaining shareholders and the Tiga Board, liquidate and dissolve, subject (in each case) to its obligations under Cayman Islands law to provide for claims of creditors
and the requirements of other applicable law. Tiga cannot assure you that it will properly assess all claims that may be potentially brought against Tiga. As such, Tiga’s shareholders could potentially be liable for any claims to the extent of
distributions received by them (but no more) and any liability of its shareholders may extend well beyond the third anniversary of the date of distribution. Accordingly, Tiga cannot assure you that third parties will not seek to recover from its
shareholders amounts owed to them by Tiga.
If Tiga is forced to file a bankruptcy case or winding up petition
or an involuntary bankruptcy case or winding up petition is filed against it which is not dismissed, any distributions received by shareholders could be viewed under applicable debtor/creditor and/or bankruptcy laws and/or insolvency laws as
either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy or insolvency court could seek to recover all amounts received by Tiga’s shareholders. Furthermore, because Tiga intends to distribute the proceeds held in
the trust account to its public shareholders promptly after the expiration of the time period to complete a business combination, this may be viewed or interpreted as giving preference to its public shareholders over any potential creditors with
respect to access to or distributions from its assets. Furthermore, the Tiga Board may be viewed as having breached their fiduciary duties to Tiga’s creditors and/or may have acted in bad faith, and thereby exposing itself and Tiga to claims of
punitive damages, by paying public shareholders from the trust account prior to addressing the claims of creditors. Tiga cannot assure you that claims will not be brought against it for these reasons.
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Activities taken by existing Tiga
shareholders to increase the likelihood of approval of the Business Combination Proposal and the other proposals described in this proxy statement/prospectus could have a depressive effect on Tiga’s securities.
At any time prior to the extraordinary general meeting, during a
period when they are not then aware of any material nonpublic information regarding Tiga or its securities, the Sponsor, directors, officers, advisors or any of their respective affiliates and/or their respective affiliates may purchase shares
from institutional and other investors who vote, or indicate an intention to vote, against the Business Combination Proposal, or execute agreements to purchase such shares from such investors in the future, or they may enter into transactions
with such investors and others to provide them with incentives to acquire Tiga ordinary shares or vote their shares in favor of the Business Combination Proposal. The purpose of such share purchases and other transactions would be to increase the
likelihood of satisfaction of the requirements to consummate the Business Combination where it appears that such requirements would otherwise not be met. Entering into any such arrangements may have a depressive effect on Tiga’s securities. For
example, as a result of these arrangements, an investor or holder may have the ability to effectively purchase shares at a price lower than the market price and may therefore be more likely to sell the shares they own, either prior to or after
the extraordinary general meeting.
Tiga may amend the terms of the warrants in a
manner that may be adverse to holders of public warrants with the approval by the holders of at least 65% of the then outstanding public warrants. As a result, the exercise price of the warrants could be increased, the exercise period could be
shortened and the number of Tiga Class A ordinary shares purchasable upon exercise of a warrant could be decreased, all without approval of each warrant affected.
Warrants were issued in registered form under a Warrant Agreement
between the Warrant Agent and Tiga. The Warrant Agreement provides that the terms of the warrants may be amended without the consent of any holder to cure any ambiguity or correct any defective provision, but requires the approval by the holders
of at least 65% of the then outstanding public warrants to make any change that adversely affects the interests of the registered holders of public warrants. Accordingly, Tiga may amend the terms of the public warrants in a manner adverse to a
holder if holders of at least 65% of the then outstanding public warrants approve of such amendment. Although Tiga’s ability to amend the terms of the public warrants with the consent of at least 65% of the then outstanding public warrants is
unlimited, examples of such amendments could be amendments to, among other things, increase the exercise price of the warrants, convert the warrants into cash, shorten the exercise period or decrease the number of Tiga Class A ordinary shares
purchasable upon exercise of a warrant.
Tiga may redeem unexpired warrants prior to
their exercise at a time that is disadvantageous to holders of warrants, thereby making such warrants worthless.
Tiga has the ability to redeem outstanding warrants at any time
after they become exercisable and prior to their expiration, at a price of $0.01 per warrant; provided that the last sale price of Tiga Class A ordinary shares equals or exceeds $18.00 per share (as adjusted for share splits, share
capitalizations, reorganizations, recapitalizations and the like) on each of 20 trading days within a 30 trading-day period ending on the third trading day prior to the date on which notice of such redemption is given. Tiga will not redeem the
warrants unless an effective registration statement under the Securities Act covering the Tiga Class A ordinary shares issuable upon exercise of the warrants is effective and a current proxy statement/prospectus relating to those Tiga Class A
ordinary shares is available throughout the 30-day redemption period, except if the warrants may be exercised on a cashless basis and such cashless exercise is exempt from registration under the Securities Act. If and when the warrants become
redeemable by Tiga, Tiga may exercise its redemption right even if it is unable to register or qualify the underlying securities for sale under all applicable state securities laws. Redemption of the outstanding warrants could force holders
thereof to (i) exercise warrants and pay the exercise price therefor at a time when it may be disadvantageous for such holder to do so, (ii) sell warrants at the then-current market price when such holder might otherwise wish to hold warrants or
(iii) accept the nominal redemption price which, at the time the outstanding warrants are called for redemption, is likely to be substantially less than the market value of such warrants. None of the private placement warrants will be redeemable
by Tiga so long as they are held by their initial purchasers or their permitted transferees. In addition, Tiga may redeem warrants after they become exercisable for a number of Tiga Class A ordinary shares determined based on the redemption date
and the fair market value of Tiga Class A ordinary shares. Any such redemption may have similar consequences to a cash redemption described above. Tiga’s Class A Ordinary Shares have never traded above $18.00 per share.
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In addition, such redemption may occur at a time when the
warrants are “out-of-the-money,” in which case holders thereof would lose any potential embedded value from a subsequent increase in the value of the Tiga Class A ordinary shares had such warrants remained outstanding.
The Tiga Warrants may have an adverse effect on
the market price of the New Grindr Common Stock.
Upon the First Merger, the Tiga Warrants will be assumed and
converted into New Grindr Warrants and will entitle the holders to purchase shares of New Grindr Common Stock. Such New Grindr Warrants, when exercised, will increase the number of issued and outstanding shares of New Grindr Common Stock and
reduce the value of the New Grindr Common Stock.
Warrants will become exercisable for New
Grindr Common Stock, which would increase the number of shares eligible for future resale in the public market and result in dilution to our shareholders. Such dilution will increase if more shares of Tiga Class A ordinary shares are redeemed.
Outstanding warrants to purchase an aggregate of up to 32,360,000
shares of New Grindr Common Stock, 13,800,000 public warrants and 18,560,000 private placement warrants will become exercisable in accordance with the terms of the Warrant Agreement governing those securities. However, there is no guarantee that
the public warrants will ever be in the money prior to their expiration, and, as such, the warrants may expire worthless. See “— Even if Tiga consummates the Business Combination, there is no guarantee that the
public warrants will ever be in the money, and they may expire worthless.”
To the extent the warrants are exercised, additional shares of New
Grindr Common Stock will be issued, which will result in dilution to the holders of New Grindr Common Stock and increase the number of shares eligible for resale in the public market. The dilution, as a percentage of outstanding shares, caused by
the exercise of the warrants will increase if a large number of Tiga shareholders elect to redeem their shares in connection with the Business Combination. Holders of the warrants do not have a right to redeem the warrants. Further, the
redemption of Tiga Class A ordinary shares without any accompanying redemption of public warrants will increase the dilutive effect of the exercise of public warrants. Sales of substantial numbers of shares issued upon the exercise of warrants in
the public market or the potential that such warrants may be exercised could also adversely affect the market price of New Grindr Common Stock.
Even if Tiga consummates the Business
Combination, there is no guarantee that the public warrants will ever be in the money, and they may expire worthless.
The exercise price for Tiga public warrants is $11.50 per share of
Tiga’s Class A ordinary shares. There is no guarantee that the public warrants will ever be in the money prior to their expiration, and, as such, the warrants may expire worthless. If Tiga is unable to complete an initial business combination
during the completion window, Tiga’s warrants will expire worthless.
Public Stockholders who redeem their shares of
Tiga Class A ordinary shares may continue to hold any Tiga Warrants that they own, which results in additional dilution to non-redeeming holders upon exercise of the Tiga Warrants.
Public stockholders who redeem their shares of Tiga Class A ordinary
shares may continue to hold any Tiga Warrants that they owned prior to redemption, which results in additional dilution to non-redeeming holders upon exercise of such Tiga Warrants. Assuming the maximum redemption of the shares of Tiga Class A
ordinary shares held by the redeeming public shareholders, 13,800,000 public warrants would be retained by redeeming public shareholders with an aggregate market value of $ , based on the market price of $ per Tiga Warrant as of , 2022. As a
result, the redeeming public shareholders would recoup their entire investment and continue to hold public warrants with an aggregate market value of $ , while non-redeeming public shareholders would suffer additional dilution in their
percentage ownership and voting interest of New Grindr upon exercise of the Tiga Warrants held by redeeming public shareholders.
The Sponsor and existing members of Grindr and
the Forward Purchase Investors will beneficially own a significant equity interest in New Grindr and may take actions that conflict with your interests.
The interests of the Sponsor and existing members of Grindr and the
Forward Purchase Investors may not align with the interests of current Tiga shareholders. The Sponsor and certain existing members of Grindr are each in the business of making investments in companies and may acquire and hold interests in
businesses that compete directly or indirectly with
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Grindr. The Sponsor and existing members of Grindr and the Forward Purchase
Investors, and their respective affiliates, may also pursue acquisition opportunities that may be complementary to Grindr’s business and, as a result, those acquisition opportunities may not be available to New Grindr. The Proposed Certificate of
Incorporation of New Grindr will provide that certain parties may engage in competitive businesses and renounces any entitlement to certain corporate opportunities offered to the Sponsor or certain existing Grindr members or any of their
respective officers, directors, employees, equity holders, members, principals, affiliates and subsidiaries (other than Grindr and its subsidiaries), other than those that are expressly offered to any non-employee director of Grindr in their
capacity as a director or officer of Grindr. The Proposed Certificate of Incorporation of Grindr will also provide that Sponsor, certain existing Grindr members and any of their respective officers, directors, employees, equity holders, members,
principals, affiliates and subsidiaries (other than Grindr and its subsidiaries) do not have any fiduciary duty to refrain from engaging, directly or indirectly, in the same or similar business activities or lines of business as Grindr or any of
its subsidiaries.
Our shareholders will experience immediate
dilution as a consequence of the issuance of New Grindr Common Stock as consideration in the Business Combination and may be further diluted following the closing of the Business Combination as a result of the terms thereof. Having a minority
share position may reduce the influence that our current shareholders have on the management of New Grindr.
Prior to Closing, we expect the Sponsor will assign its
obligations under the Backstop Commitment and the Forward Purchase Commitment to San Vicente Parent LLC, that San Vicente Parent LLC will assume the obligations thereunder and the SV Consolidation will be consummated. In connection with
Closing, the Deferred Payment will also be fully repaid. For more information, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Grindr—Financing
Arrangements—Deferred Payment”, “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Grindr—Financing Arrangements—SV Consolidation”,
“Risk Factors—Risks Related to Grindr’s Business—Risks related to our Indebtedness— Our indebtedness could materially adversely affect our financial condition, our ability to
raise additional capital to fund our operations, operate our business, react to changes in the economy or our industry, meet our obligations under our outstanding indebtedness, including significant operating and financial
restrictions imposed on us by our debt agreements, and it could divert our cash flow from operations for debt payments”, and “Unaudited Pro Forma Combined
Financial Information.”
The following table illustrates varying ownership levels of issued
and outstanding New Grindr Common Stock upon completion of the Business Combination, presented under three assumed redemption scenarios (no redemptions, 50% redemption and maximum redemptions by Tiga’s public shareholders) assuming (i) no
exercises of warrants to purchase New Grindr Common Stock and (ii) that Grindr reserves shares of New Grindr Common Stock for potential future issuance upon the exercise of New Grindr Options. If the actual facts are different from these
assumptions, the percentage ownership retained by the current Tiga shareholders in Grindr will be different.
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Assuming No Redemptions
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Assuming 50% Redemptions(7)
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Assuming
Maximum Redemptions(8)
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Number of
Shares
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| |
%
Ownership
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| |
Number of
Shares
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| |
%
Ownership
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Number of
Shares
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| |
%
Ownership
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Sponsor and certain affiliates(1)(2)
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6,900,000
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3.4%
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6,900,000
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3.7%
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| |
6,900,000
|
| |
3.9%
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Public Shareholders(3)
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| |
27,600,000
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13.8%
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13,800,000
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7.4%
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—
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0.0%
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Forward Purchase Investors(4)
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10,000,000
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5.0%
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10,000,000
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5.3%
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| |
10,000,000
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| |
5.7%
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Former Grindr unitholders(5)(6)
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156,223,962
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77.8%
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| |
156,223,962
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| |
83.6%
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| |
158,983,490
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| |
90.4%
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Total
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| |
200,723,962
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| |
100.0%
|
| |
186,923,962
|
| |
100.0%
|
| |
175,883,490
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100.0%
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(1)
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Reflects 6,840,000 of founder shares held by the Sponsor and 60,000 founder shares held by independent directors that will
convert into New Grindr Common Stock.
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(2)
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Excludes 18,560,000 of private placement warrants as the warrants are not expected to be in the money at Closing. Excludes
1,680,000 of private placement warrants available to be issued in the event the $1.7 million related party note disclosed in Tiga’s historical financial statements is converted to warrants upon Closing. The loan is expected to be repaid
in cash in connection with the Closing as the conversion price is approximately 150% higher than the value of the warrants as of June 30, 2022.
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(3)
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Excludes 13,800,000 public warrants as the warrants are not expected to be in the money at Closing.
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(4)
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Reflects the sale and issuance of 10,000,000 shares of New Grindr Common Stock to certain investors through the A&R
Forward Purchase Agreement at $10.00 per share and excludes the additional 5,000,000 redeemable warrants that will be issued in connection with the 10,000,000 shares of New Grindr Common Stock. We expect that prior to Closing, the
Sponsor will assign its obligations under the Backstop Commitment and the Forward Purchase Commitment to San Vicente Parent LLC and Tiga will sell and issue 10,000,000 shares of New
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Grindr Common Stock and 5,000,000 redeemable warrants to San Vicente Parent
LLC, or its assign. As part of the SV Consolidation, San Vicente Parent LLC will merge into Grindr and Grindr will assume the rights and remaining obligations of San Vicente Parent LLC under the A&R Forward Purchase Agreement, and be
entitled to receive the shares of New Grindr Common Stock and redeemable warrants issuable thereunder.
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(5)
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Excludes 3,947,439, 3,947,439, and 4,017,166 shares of New Grindr Common Stock to be issued to the former Grindr unitholders
for their historical option awards which will be converted at the same Exchange Ratio. Such additional shares would further increase the common stock ownership percentage of the Grindr unitholders and would dilute the share ownership of
all other New Grindr shareholders in the no redemptions, 50% redemptions, and maximum redemptions scenarios, respectively. In the no redemptions, 50% redemptions and maximum redemptions scenarios, respectively, the former Grindr
unitholders figures include 6,514,692, 6,514,692 and 6,511,512 shares of New Grindr Common Stock associated with the Series P share based compensation units described in “Beneficial Ownership of
Securities”.
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(6)
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Reflects distributions to former Grindr unitholders of $287.8 million, $287.8 million and $259.5 million in the no redemptions,
50% redemptions and maximum redemptions scenarios, respectively. Of that amount, $155.0 million is to be used to extinguish the remaining Deferred Payment as defined in “Unaudited Pro Forma Combined
Financial Information” These distributions in all of the redemption scenarios include $4.5 million of unpaid distribution accrued for on the Grindr historical balance sheet. These distributions combined with the $78.8 million
June 2022 distribution paid as disclosed in Note 9 of Grindr’s historical unaudited financial statements make up the total distribution as referenced in the Merger Agreement of $366.6 million, $366.6 million, and $338.3 million dividend
in the no redemptions, 50% redemptions and maximum redemptions scenarios, respectively.
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(7)
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Assumes redemptions of 13,800,000 Tiga Class A ordinary shares at approximately $10.40 per share in connection with the Business
Combination.
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(8)
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Assumes maximum redemptions of 27,600,000 Tiga Class A ordinary shares at approximately $10.40 per share in connection with the
Business Combination.
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There are currently outstanding an aggregate of 13,800,000 public
warrants and 18,560,000 private placement warrants to acquire New Grindr Common Stock. Each of New Grindr’ outstanding whole warrants is exercisable commencing 30 days following the Closing for one share of New Grindr Common Stock in accordance
with its terms. Therefore, following the Business Combination and upon the conversion of New Grindr Common Stock warrants into warrants exercisable for New Grindr Common Stock pursuant to the Business Combination, if we assume that each
outstanding whole warrant is exercised and one New Grindr Common Stock is issued as a result of such exercise, with payment to New Grindr of the exercise price of $11.50 per share, our fully-diluted share capital (subject to the assumptions in
the preceding paragraph) would increase by a total of 32,360,000 shares, with approximately $372,140,000 paid to New Grindr to exercise the warrants.
Having a minority ownership interest in New Grindr may reduce the
influence that Tiga’s current public shareholders have on the management of New Grindr.
New Grindr may issue additional shares of New
Grindr Common Stock or other equity securities without your approval, which would dilute your ownership interests and may depress the market price of your shares.
New Grindr may issue additional shares of New Grindr Common Stock or
other equity securities of equal or senior rank in the future in connection with, among other things, future acquisitions or repayment of outstanding indebtedness, without shareholder approval, in a number of circumstances.
New Grindr’s issuance of additional shares of New Grindr Common
Stock or other equity securities of equal or senior rank could have the following effects:
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your proportionate ownership interest will decrease;
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•
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the relative voting strength of each previously outstanding Tiga ordinary share will be diminished; or
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the market price of our shares may decline.
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The Sponsor, directors, executive officers,
advisors and their affiliates may elect to purchase shares or warrants from public shareholders prior to the consummation of the Business Combination, which may influence the vote on the Business Combination and reduce the public “float” of our
securities.
The Sponsor and Tiga’s directors, officers, advisors or their
respective affiliates may purchase shares or warrants in privately negotiated transactions or in the open market either prior to or following the completion of the Business Combination. However, they have no current commitments, plans or
intentions to engage in any such transactions and have not formulated any terms or conditions for any such transactions. None of the funds in the trust account will be used to purchase shares or warrants in such transactions. If they engage in
such transactions, they will not make any such purchases when they are in possession of any material non-public information not disclosed to the seller or if such purchases are prohibited by Regulation M under the Exchange Act. Such a purchase
may include a contractual acknowledgement that such shareholder, although still the record holder of Tiga’s shares, is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights.
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In the event that the Sponsor or Tiga’s directors, officers,
advisors or their affiliates purchase shares in privately negotiated transactions from public shareholders who have already elected to exercise their redemption rights, such selling shareholders would be required to revoke their prior elections
to redeem their shares.
The purpose of such purchases would be to (i) vote such shares in
favor of the Business Combination and thereby increase the likelihood of obtaining shareholder approval of the Business Combination or (ii) to increase the likelihood of satisfaction of the Minimum Cash Condition or ensure that Tiga’s net
tangible assets are at least $5,000,001, where it appears that such requirement would otherwise not be met. The purpose of any such purchases of warrants could be to reduce the number of warrants outstanding or to vote such warrants on any
matters submitted to the warrant holders for approval in connection with the Business Combination. Any such purchases of our securities may result in the completion of the Business Combination that may not otherwise have been possible.
In addition, if such purchases are made, the public “float” of Tiga
Class A ordinary shares may be reduced and the number of beneficial holders of our securities may be reduced, which may make it difficult to maintain or obtain the quotation, listing or trading of our securities on a national securities exchange.
The Sponsor and Tiga’s officers, directors and/or their affiliates
anticipate that they may identify the shareholders with whom the Sponsor or Tiga’s officers, directors or their affiliates may pursue privately negotiated purchases by either the shareholders contacting us directly or by our receipt of redemption
requests submitted by shareholders (in the case of Class A Ordinary Shares) following our mailing of proxy materials in connection with the Business Combination. To the extent that the Sponsor or Tiga’s officers, directors, advisors or their
affiliates enter into a private purchase, they would identify and contact only potential selling shareholders who have expressed their election to redeem their shares for a pro rata share of the trust account or vote against the Business
Combination but only if such shares have not already been voted at the extraordinary general meeting. The Sponsor and Tiga’s officers, directors, advisors or their affiliates will only purchase shares if such purchases comply with Regulation M
under the Exchange Act and the other federal securities laws.
Any purchases by the Sponsor or Tiga’s officers, directors and/or
their affiliates who are affiliated purchasers under Rule 10b-18 under the Exchange Act will only be made to the extent such purchases are able to be made in compliance with Rule 10b-18, which is a safe harbor from liability for manipulation
under Section 9(a)(2) and Rule 10b-5 of the Exchange Act. Rule 10b-18 has certain technical requirements that must be complied with in order for the safe harbor to be available to the purchaser. The Sponsor and Tiga’s officers, directors and/or
their affiliates will not make purchases of Tiga Class A ordinary shares if the purchases would violate Section 9(a)(2) or Rule 10b-5 of the Exchange Act.
Tiga has no operating history and its results
of operations and those of New Grindr may differ significantly from the Unaudited Pro Forma Financial Information included in this proxy statement/prospectus.
Tiga is a blank check company with no operating history or results.
This proxy statement/prospectus includes unaudited pro forma
combined financial statements for New Grindr.
The unaudited pro forma combined statement of operations for the six
months ended June 30, 2022 combines the historical unaudited statement of operations of Tiga for the six months ended June 30, 2022 and the historical unaudited condensed consolidated statement of operations of Grindr for the six months ended
June 30, 2022 on a pro forma basis as if the Business Combination and the other events, summarized below, had been consummated on January 1, 2021, the beginning of the earliest period presented. The unaudited pro forma combined statement of
operations for the year ended December 31, 2021 combines the historical audited statement of operations of Tiga for the year ended December 31, 2021 and the historical audited consolidated statement of operations of Grindr for the year ended
December 31, 2021 on a pro forma basis as if the Business Combination and the other events, summarized below, had been consummated on January 1, 2021, the beginning of the earliest period presented. The unaudited pro forma combined balance sheet
as of June 30, 2022 combines the historical unaudited balance sheet of Tiga as of June 30, 2022 with the historical unaudited condensed consolidated balance sheet of Grindr as of June 30, 2022 on a pro forma basis as if the Business Combination
and the other events, summarized below, had been consummated on June 30, 2022.
The unaudited pro forma combined financial statements are presented
for illustrative purposes only, are based on certain assumptions, address a hypothetical situation and reflect limited historical financial data. Therefore, the unaudited pro forma combined financial statements are not necessarily indicative of
the results of operations and financial position that would have been achieved had the Business Combination been consummated on the dates
107
indicated above, or the future consolidated results of operations or financial
position of New Grindr. Accordingly, New Grindr’s business, assets, cash flows, results of operations and financial condition may differ significantly from those indicated by the unaudited pro forma combined financial statements included in this
proxy statement/prospectus. For more information, please see the section entitled “Unaudited Pro Forma Combined Financial Information.”
The announcement of the proposed Business
Combination could disrupt Grindr’s relationships with its clients, members, providers, business partners and others, as well as its operating results and business generally.
Whether or not the Business Combination and related transactions are
ultimately consummated, as a result of uncertainty related to the proposed Business Combination, risks relating to the impact of the announcement of the Business Combination on Grindr’s business include the following:
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its employees may experience uncertainty about their future roles, which might adversely affect;
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•
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clients, members, providers, business partners and other parties with which Grindr maintains business relationships may
experience uncertainty about its future and seek alternative relationships with third parties, seek to alter their business relationships with Grindr or fail to extend an existing relationship or subscription with Grindr; and
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•
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Grindr has expended and will continue to expend significant costs, fees and expenses for professional services and transaction
costs in connection with the proposed Business Combination.
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If any of the aforementioned risks were to materialize, they could
lead to costs which may impact Grindr’s results of operations and cash available to fund its business.
Grindr’s financial forecasts, which were
presented to the Tiga Board and are included in this proxy
statement/prospectus, may not prove accurate.
In connection with the Business Combination, Tiga management
presented certain forecasted financial information for Grindr to the Tiga Board, which was internally prepared and provided by Grindr, and adjusted by Tiga management to take into consideration the consummation of the Business Combination
(assuming that no Tiga Class A ordinary shares are elected to be redeemed by Tiga shareholders), as well as certain adjustments that were appropriate in their judgment and experience. The forecasts were based on numerous variables and assumptions
known to Grindr and Tiga at the time of preparation. Such variables and assumptions are inherently uncertain and many are beyond the control of Grindr or Tiga. Important factors that may affect actual results and cause the forecasts to not be
achieved include, but are not limited to, risks and uncertainties relating to the businesses of Grindr (including its ability to achieve strategic goals, objectives and targets over applicable periods), industry performance, the competitive
environment, changes in technology, general business and economic conditions. Various assumptions underlying the forecasts may prove to not have been, or may no longer be, accurate. The forecasts may not be realized, and actual results may be
significantly higher or lower than projected in the forecasts. The forecasts also reflect assumptions as to certain business strategies or plans that are subject to change. As a result, the inclusion of such forecasts in this proxy
statement/prospectus should not be relied on as “guidance” or as otherwise predictive of actual future events, and actual results may differ materially from the forecasts.
Tiga and Grindr have incurred and expect to
incur significant costs associated with the Business Combination. Whether or not the Business Combination is completed, the incurrence of these costs will reduce the amount of cash available to be used for other corporate purposes by Tiga if the
Business Combination is not completed.
Tiga and Grindr expect to incur significant transaction and
transition costs associated with the Business Combination and operating as a public company following the Closing. We and Grindr may also incur additional costs to retain key employees. Certain transaction expenses incurred in connection with the
Merger Agreement (including the Business Combination), including all legal, accounting, consulting, investment banking and other fees, expenses and costs, will be paid by New Grindr following the Closing. Even if the Business Combination is not
completed, Tiga currently expects to incur approximately $9.4 million in expenses. These expenses will reduce the amount of cash available to be used for other corporate purposes by Tiga if the Business Combination is not completed.
108
Our ability to successfully effect the
Business Combination and to be successful thereafter will be dependent upon the efforts of certain key personnel, including the key personnel of Grindr whom we expect to stay with the post-combination business following the Business Combination.
The loss of key personnel could negatively impact the operations and profitability of our post-combination business and its financial condition could suffer as a result.
Our ability to successfully effect the Business Combination is
dependent upon the efforts of our key personnel, including the key personnel of Grindr. Although some key personnel may remain with the post-combination business in senior management or advisory positions following the Business Combination, it is
possible that we will lose some key personnel, the loss of which could negatively impact the operations and profitability of our post-combination business. We anticipate that some or all of the management of Grindr will remain in place.
Grindr’s success depends to a significant degree upon the continued
contributions of senior management, certain of whom would be difficult to replace. Departure by certain of Grindr’s officers could have a material adverse effect on Grindr’s business, financial condition, or operating results.
Uncertainty about the effect of the Business Combination on
employees and third parties may have an adverse effect on Tiga and Grindr. These uncertainties may impair our or Grindr’s ability to retain and motivate key personnel and could cause third parties that deal with any of us or them to defer
entering into contracts or making other decisions or seek to change existing business relationships. If key employees depart because of uncertainty about their future roles and the potential complexities of the Business Combination, our or
Grindr’s business could be harmed.
Unanticipated changes in effective tax rates
or adverse outcomes resulting from examination of our income or other tax returns could adversely affect our financial condition and results of operations.
New Grindr will be subject to income taxes in the United States, and
its tax liabilities will be subject to the allocation of expenses in differing jurisdictions. Our future effective tax rates could be subject to volatility or adversely affected by a number of factors, including:
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changes in the valuation of our deferred tax assets and liabilities;
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expected timing and amount of the release of any tax valuation allowances;
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tax effects of stock-based compensation;
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costs related to intercompany restructurings;
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changes in tax laws, regulations or interpretations thereof; or
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lower than anticipated future earnings in jurisdictions where New Grindr has lower statutory tax rates and higher than
anticipated future earnings in jurisdictions where New Grindr has higher statutory tax rates.
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In addition, New Grindr may be subject to audits of our income,
sales and other transaction taxes by taxing authorities. Outcomes from these audits could have an adverse effect on our financial condition and results of operations.
Following the Closing, New Grindr’s only
significant asset will be its ownership interest in the Grindr business and such ownership may not be sufficiently profitable or valuable to enable New Grindr to pay any dividends on New Grindr Common Stock or satisfy New Grindr’s other financial
obligations.
Following the Closing, New Grindr will have no direct operations and
no significant assets other than its ownership interest in the Grindr business. New Grindr will depend on the Grindr business for distributions, loans and other payments to generate the funds necessary to meet its financial obligations, including
its expenses as a publicly traded company and to pay any dividends with respect to New Grindr Common Stock. The earnings from, or other available assets of, the Grindr business may not be sufficient to pay dividends or make distributions or loans
to enable Grindr to pay any dividends on New Grindr Common Stock or satisfy its other financial obligations.
This lack of diversification may subject us to numerous economic,
competitive and regulatory risks, any or all of which may have a substantial adverse impact upon the particular industry in which we may operate subsequent to the Business Combination. Please see the sections titled “Tiga’s Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources” and “Grindr’s Management’s
Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources” for more information.
109
Following the Closing, New Grindr may be
required to take write-downs or write-offs, restructuring and impairment or other charges that could have a significant negative effect on New Grindr’s financial condition, results of operations and its stock price, which could cause you to lose
some or all of your investment.
Although Tiga has conducted due diligence on the Grindr business,
Tiga cannot assure you that this diligence was sufficient to surface, or allow the thorough evaluation of, all of the material issues that may be present in such business, that it would have been possible to uncover all material issues through a
customary amount of due diligence, that Tiga properly evaluated and assessed the risks identified by such diligence and made appropriate determinations with respect thereto, or that factors outside of the Grindr business and/or outside of Tiga’s
and Grindr’s control will not later arise and impair the value of Grindr. As a result of these factors, New Grindr may be forced to later write-down or write-off assets, restructure operations, or incur impairment or other charges or otherwise
suffer losses in respect of its investment in Grindr. Even if Tiga’s due diligence successfully identified certain risks, unexpected risks may arise, and previously known risks may materialize in a manner not consistent with Tiga’s preliminary
risk analysis. If any of these risks materialize, or get worse, this could have a material adverse effect on New Grindr’s financial condition and results of operations and could contribute to negative market perceptions about our securities or
New Grindr.
Accordingly, any of Tiga’s shareholders or warrant holders who
choose to remain stockholders or warrant holders of New Grindr following the Business Combination could suffer a reduction in the value of their shares and warrants. Such shareholders or warrant holders are unlikely to have a remedy for such
reduction in value unless they are able to successfully claim that the reduction was due to the breach by our directors or officers of a duty of care or other fiduciary duty owed to them, or if they are able to successfully bring a private claim
under securities laws that the registration statement or proxy statement/prospectus relating to the Business Combination contained an actionable material misstatement or material omission.
A market for New Grindr’s securities may not
continue, which would adversely affect the liquidity and price of New Grindr’s securities.
Tiga is currently a blank check company and there has not been a
public market for Grindr Series X Ordinary Units or Grindr Series Y Preferred Units since it is a private limited liability company. Following the Business Combination, the price of New Grindr’s securities may fluctuate significantly due to the
market’s reaction to the Business Combination and general market and economic conditions. An active trading market for New Grindr’s securities following the Business Combination may never develop or, if developed, it may not be sustained. In
addition, the price of New Grindr’s securities after the Business Combination can vary due to general economic conditions and forecasts, New Grindr’s general business condition and the release of New Grindr’s financial reports.
In the absence of a liquid public trading market:
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you may not be able to liquidate your investment in shares of New Grindr Common Stock;
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you may not be able to resell your New Grindr Common Stock at or above the price attributed to them in the Business
Combination;
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the market price of shares of New Grindr Common Stock may experience significant price volatility; and
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there may be less efficiency in carrying out your purchase and sale orders.
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Additionally, if New Grindr’s securities become delisted from the
NYSE for any reason, and are quoted on the OTC Bulletin Board, an inter-dealer automated quotation system for equity securities that is not a national securities exchange, the liquidity and price of New Grindr’s securities may be more limited
than if New Grindr was quoted or listed on the NYSE or another national securities exchange. You may be unable to sell your securities unless a market can be established or sustained.
If the Business Combination’s benefits do not
meet the expectations of investors, shareholders or financial analysts, the market price of New Grindr Common Stock may decline.
If the benefits of the Business Combination do not meet the
expectations of investors, shareholders or securities analysts, the market price of New Grindr Common Stock following the Closing may decline. The market price of New Grindr Common Stock at the time of the Business Combination may vary
significantly from the market price of Tiga’s Class A ordinary shares on the date the Merger Agreement was executed, the date of this proxy statement/prospectus, or the date on which Tiga’s shareholders vote on the Business Combination.
110
In addition, following the Business Combination, fluctuations in
the price of New Grindr’s securities could contribute to the loss of all or part of your investment. Prior to the execution of the Merger Agreement, there was not a public market for stock relating to the Grindr business. Accordingly, the
valuation ascribed to the Grindr business in the Business Combination may not be indicative of the price that will prevail in the trading market following the Business Combination.
The trading price of New Grindr Common Stock following the Business
Combination may fluctuate substantially and may be lower than the current market price of Tiga’s Class A ordinary shares. This may be especially true for companies like ours with a small public float. If an active market for New Grindr’s
securities develops and continues, the trading price of New Grindr’s securities following the Business Combination could be volatile and subject to wide fluctuations. The trading price of New Grindr Common Stock following the Business Combination
will depend on many factors, including those described in this “Risk Factors” section, many of which are beyond New Grindr’s control and may not be related to New Grindr’s operating performance. These
fluctuations could cause you to lose all or part of your investment in New Grindr Common Stock since you might be unable to sell your shares at or above the price attributed to them in the Business Combination. Any of the factors listed below
could have a material adverse effect on your investment in New Grindr’s securities and New Grindr’s securities may trade at prices significantly below the price you paid for them. In such circumstances, the trading price of New Grindr’s
securities may not recover and may experience a further decline.
Factors affecting the trading price of New Grindr securities
following the Business Combination may include:
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actual or anticipated fluctuations in our quarterly financial results or the quarterly financial results of companies perceived
to be similar to ours;
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changes in the market’s expectations about our operating results;
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the public’s reaction to our press releases, other public announcements and filings with the SEC;
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speculation in the press or investment community;
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actual or anticipated developments in New Grindr’s business, competitors’ businesses or the competitive landscape generally;
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the operating results failing to meet the expectation of securities analysts or investors in a particular period;
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changes in financial estimates and recommendations by securities analysts concerning us or the market in general;
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operating and stock price performance of other companies that investors deem comparable to ours;
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changes in laws and regulations affecting New Grindr’s business;
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commencement of, or involvement in, litigation involving New Grindr;
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changes in New Grindr’s capital structure, such as future issuances of securities or the incurrence of additional debt;
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the volume of New Grindr Common Stock available for public sale;
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any major change in the New Grindr Board or management;
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sales of substantial amounts of New Grindr Common Stock by our directors, officers or significant shareholders or the
perception that such sales could occur;
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general economic and political conditions such as recessions, interest rates, “trade wars,” pandemics (such as COVID-19) and
acts of war or terrorism; and
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other risk factors listed under “Risk Factors.”
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Broad market and industry factors may materially harm the market
price of New Grindr’s securities irrespective of New Grindr’s operating performance. The stock market in general and the NYSE have experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the
operating performance of the particular companies affected. The trading prices and valuations of these stocks, and of New Grindr’s securities, may not be predictable. A loss of investor confidence in the market for the stocks of other companies
which investors perceive to be similar to New Grindr’s could depress New Grindr’s stock price regardless of New Grindr’s business, prospects, financial conditions or results of operations. Broad market and industry factors, including, most
recently, the impact of the novel coronavirus, COVID-19, and any other global pandemics, as well as general economic,
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political and market conditions such as recessions or interest rate changes, may
seriously affect the market price of New Grindr Common Stock, regardless of New Grindr’s actual operating performance. These fluctuations may be even more pronounced in the trading market for our stock shortly following the Business Combination.
A decline in the market price of New Grindr’s securities also could adversely affect New Grindr’s ability to issue additional securities and New Grindr’s ability to obtain additional financing in the future.
In addition, in the past, following periods of volatility in the
overall market and the market prices of particular companies’ securities, securities class action litigations have often been instituted against these companies. Litigation of this type, if instituted against us, could result in substantial costs
and a diversion of our management’s attention and resources. Any adverse determination in any such litigation or any amounts paid to settle any such actual or threatened litigation could require that we make significant payments.
New Grindr’s quarterly operating results may fluctuate significantly
and could fall below the expectations of securities analysts and investors due to a variety of factors, some of which are beyond New Grindr’s control, resulting in a decline in New Grindr’s stock price.
Upon consummation of the Business Combination,
the rights of holders of New Grindr Common Stock arising under the DGCL as well as the governing documents of New Grindr will differ from and may be less favorable to the rights of holders of Tiga Class A ordinary shares arising under Cayman
Islands law as well as our current amended and restated memorandum and articles of association.
Upon consummation of the Business Combination, the rights of holders
of New Grindr Common Stock will arise under the governing documents of New Grindr as well as the DGCL. Those new governing documents and the DGCL contain provisions that differ in some respects from those in our current amended and restated
memorandum and articles of association and Cayman Islands law and, therefore, some rights of holders of New Grindr Common Stock could differ from the rights that holders of Tiga Class A ordinary shares currently possess. For instance, while class
actions are generally not available to shareholders under Cayman Islands law, such actions are generally available under the DGCL. This change could increase the likelihood that New Grindr becomes involved in costly litigation, which could have a
material adverse effect on New Grindr.
In addition, there are differences between the new governing
documents of New Grindr and the current governing documents of Tiga. The forms of the amended and restated certificate of incorporation of New Grindr and the Proposed Bylaws are attached as Annex G and Annex H, respectively, to this proxy statement/prospectus and we urge you to read them. Additionally, Please see the section entitled “Proposal No. 1—The Business Combination
Proposal—Comparison of Shareholder Rights under Applicable Corporate Law Before and After the Business Combination.”
The JOBS Act permits “emerging growth
companies” like us to take advantage of certain exemptions from various reporting requirements applicable to other public companies that are not emerging growth companies.
We currently qualify as an “emerging growth company” as defined in
Section 2(a)(19) of the Securities Act, as modified by the JOBS Act. As such, we take and will continue to take advantage of certain exemptions from various reporting requirements applicable to other public companies that are not emerging growth
companies for as long as we continue to be an emerging growth company, including: (i) the exemption from the auditor attestation requirements with respect to internal control over financial reporting under Section 404 of the Sarbanes-Oxley Act;
(ii) the exemptions from say-on-pay, say-on-frequency and say-on-golden parachute voting requirements; and (iii) reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statement/prospectus. As a result,
our shareholders may not have access to certain information they deem important. We will remain an emerging growth company until the earliest of (x) the last day of the fiscal year: (a) following November 27, 2025, the fifth anniversary of the
initial public offering; (b) in which we have total annual gross revenue of at least $1.235 billion; or (c) in which we are deemed to be a large accelerated filer, which means the market value of New Grindr Common Stock that is held by
non-affiliates exceeds $700 million as of the last business day of our prior second fiscal quarter, and (y) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period.
In addition, Section 107 of the JOBS Act also provides that an
emerging growth company can take advantage of the exemption from complying with new or revised accounting standards provided in Section 7(a)(2)(B) of the Securities Act as long as we are an emerging growth company. An emerging growth company can
therefore delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. The JOBS
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Act provides that a company can elect to opt out of the extended transition period
and comply with the requirements that apply to non-emerging growth companies, but any such election to opt out is irrevocable. We have elected to avail ourselves of such extended transition period, which means that when a standard is issued or
revised and it has different application dates for public or private companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of
our financial statements with another public company that is neither an emerging growth company nor an emerging growth company that has opted out of using the extended transition period difficult or impossible because of the potential differences
in accounting standards used.
We cannot predict if investors will find New Grindr Common Stock
less attractive because we rely on these exemptions. If some investors find New Grindr Common Stock less attractive as a result, there may be a less active trading market for New Grindr Common Stock and our stock price may be more volatile.
If third parties bring claims against us, the
proceeds held in the trust account could be reduced and the per-share redemption amount received by shareholders may be less than $10.40 per share.
Our placing of funds in the trust account may not protect those
funds from third party claims against us. Although we will seek to have all vendors, service providers (other than our independent registered public accounting firm), prospective target businesses and other entities with which we do business
execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account for the benefit of our public shareholders, such parties may not execute such agreements, or even if they execute
such agreements they may not be prevented from bringing claims against the trust account, including, but not limited to, fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the
enforceability of the waiver, in each case in order to gain advantage with respect to a claim against our assets, including the funds held in the trust account. If any third party refuses to execute an agreement waiving such claims to the monies
held in the trust account, our management will perform an analysis of the alternatives available to it and will only enter into an agreement with a third party that has not executed a waiver if management believes that such third party’s
engagement would be significantly more beneficial to us than any alternative.
Examples of possible instances where we may engage a third party
that refuses to execute a waiver include the engagement of a third party consultant whose particular expertise or skills are believed by management to be significantly superior to those of other consultants that would agree to execute a waiver or
in cases where management is unable to find a service provider willing to execute a waiver. In addition, there is no guarantee that such entities will agree to waive any claims they may have in the future as a result of, or arising out of, any
negotiations, contracts or agreements with us and will not seek recourse against the trust account for any reason. Upon redemption of our public shares, if we are unable to complete our initial business combination within the prescribed
timeframe, or upon the exercise of a redemption right in connection with our business combination, we will be required to provide for payment of claims of creditors that were not waived that may be brought against us within the 10 years following
redemption. Accordingly, the per-share redemption amount received by public shareholders could be less than the $10.40 per public share initially held in the trust account, due to claims of such creditors.
Pursuant to that certain letter agreement, the Sponsor has agreed
that it will be liable to us if and to the extent any claims by a third party (other than our independent registered public accounting firm) for services rendered or products sold to us, or a prospective target business with which we have entered
into a written letter of intent, confidentiality or other similar agreement or business combination agreement, reduce the amount of funds in the trust account to below the lesser of (i) $10.40 per public share and (ii) the actual amount per
public share held in the trust account as of the date of the liquidation of the trust account, if less than $10.40 per share due to reductions in the value of the trust assets, in each case net of the interest that may be withdrawn to pay our
taxes, if any, provided that such liability will not apply to any claims by a third party or prospective target business that executed a waiver of any and all rights to seek access to the trust account nor will it apply to any claims under our
indemnity of the underwriters of this offering against certain liabilities, including liabilities under the Securities Act. Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not
be responsible to the extent of any liability for such third party claims. However, we have not asked the Sponsor to reserve for such indemnification obligations, nor have we independently verified whether the Sponsor has sufficient funds to
satisfy its indemnity obligations and we believe that the Sponsor’s only assets are securities of our company. Therefore, we cannot assure you that the Sponsor would be able to satisfy those obligations. As a result, if any such claims were
successfully made against the trust account, the funds available for our initial business combination and redemptions
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could be reduced to less than $10.40 per public share. In such event, we may not be
able to complete our initial business combination, and you would receive such lesser amount per share in connection with any redemption of your public shares. None of our officers or directors will indemnify us for claims by third parties
including, without limitation, claims by vendors and prospective target businesses.
Legal proceedings in connection with the
Business Combination, the outcomes of which are uncertain, could delay or prevent the completion of the Business Combination.
Lawsuits may be filed against Tiga or its directors and officers in
connection with the Business Combination. Defending such lawsuits could require Tiga to incur significant costs and draw the attention of Tiga’s management team away from the Business Combination. Further, the defense or settlement of any lawsuit
or claim that remains unresolved at the time the transactions are consummated may adversely affect New Grindr’s business, financial condition, results of operations and cash flows. Such legal proceedings could delay or prevent the Business
Combination from becoming effective within the agreed upon timeframe.
In connection with the Business Combination, five purported
shareholders of Tiga have sent demand letters requesting that Tiga provide additional disclosures in an amendment to the registration statement filed in connection with the Business Combination. We believe that the allegations in the demand
letters are meritless and no additional disclosure is required in such registration statement. No litigation has been filed in respect of these allegations and we are currently unable to reasonably determine the outcome or estimate any
potential losses should any litigation be filed, and, as such, have not recorded a loss contingency. There is no material litigation, arbitration or governmental proceeding currently pending against Tiga or any members of our management team in
their capacity as such.
If, after we distribute the proceeds in the
trust account to our public shareholders, Tiga files a winding-up or bankruptcy petition or an involuntary winding-up or bankruptcy petition is filed against us that is not dismissed, a bankruptcy court may seek to recover such proceeds, and we
and our board of directors may be exposed to claims of punitive damages.
If, after we distribute the proceeds in the trust account to our
public shareholders, we file a winding-up or bankruptcy petition or an involuntary winding-up or bankruptcy petition is filed against us that is not dismissed, any distributions received by shareholders could be viewed under applicable
debtor/creditor and/or insolvency laws as a voidable performance. As a result, a liquidator could seek to recover all amounts received by our shareholders. In addition, our board of directors may be viewed as having breached its fiduciary duty to
our creditors or having acted in bad faith, thereby exposing it and us to claims of punitive damages, by paying public shareholders from the trust account prior to addressing the claims of creditors. We cannot assure you that claims will not be
brought against us for these reasons.
If, before distributing the proceeds in the
trust account to our public shareholders, we file a winding-up or bankruptcy petition or an involuntary winding-up or bankruptcy petition is filed against us that is not dismissed, the claims of creditors in such proceeding may have priority over
the claims of our shareholders and the per share amount that would otherwise be received by our shareholders in connection with our liquidation may be reduced.
If, before distributing the proceeds in the trust account to our
public shareholders, we file a winding-up or bankruptcy petition or an involuntary winding-up or bankruptcy petition is filed against us that is not dismissed, the proceeds held in the trust account could be subject to applicable insolvency law,
and may be included in our liquidation estate and subject to the claims of third parties with priority over the claims of our shareholders. To the extent any liquidation claims deplete the trust account, the per share amount that would otherwise
be received by our shareholders in connection with our liquidation may be reduced.
Our shareholders may be held liable for claims
by third parties against us to the extent of distributions received by them upon redemption of their shares.
If we are forced to enter into an insolvent liquidation, any
distributions received by shareholders could be viewed as an unlawful payment if it was proved that immediately following the date on which the distribution was made, we were unable to pay our debts as they fall due in the ordinary course of
business. As a result, a liquidator could seek to recover all amounts received by our shareholders. Furthermore, our directors may be viewed as having breached their fiduciary duties to us or our creditors or may have acted in bad faith, and
thereby exposing themselves and our company to claims, by paying public shareholders from the trust account prior to addressing the claims of creditors. We cannot assure you that claims will not be brought against us for these reasons.
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We may face litigation and other risks as a
result of the material weakness in our internal control over financial reporting.
As a result of the material weaknesses we identified in our internal
controls over financial reporting, we may face potential for litigation or other disputes which may include, among others, claims invoking the federal and state securities laws, contractual claims or other claims arising from the material
weaknesses in our internal control over financial reporting and the preparation of our financial statements. As of the date of this proxy statement/prospectus, we have no knowledge of any such litigation or dispute. However, we can provide no
assurance that such litigation or dispute will not arise in the future. Any such litigation or dispute, whether successful or not, could have a material adverse effect on our business, results of operations and financial condition or our ability
to complete the Business Combination.
Warrants will become exercisable for New
Grindr Common Stock, which would increase the number of shares eligible for future resale in the public market and result in dilution to our shareholders.
Outstanding warrants to purchase an aggregate of 32,600,000 shares
of New Grindr Common Stock will become exercisable in accordance with the terms of the Warrant Agreement governing those securities. These warrants will become exercisable at any time commencing on the later of 30 days after the completion of the
Business Combination and 12 months from the closing of our initial public offering. The exercise price of these warrants will be $11.50 per share. To the extent such warrants are exercised, additional shares of New Grindr Common Stock will be
issued, which will result in dilution to the holders of New Grindr Common Stock and increase the number of shares eligible for resale in the public market. Sales of substantial numbers of such shares in the public market or the fact that such
warrants may be exercised could adversely affect the market price of New Grindr Common Stock. However, there is no guarantee that the public warrants will ever be in the money prior to their expiration, and as such, the warrants may expire
worthless. See “—Even if the Business Combination is consummated, the public warrants may never be in the money.”
We may be able to redeem the unexpired
outstanding warrants prior to their exercise at a time and at a price that is disadvantageous to holders of warrants, thereby making their warrants worthless, and an exercise of a significant number of warrants could adversely affect the market
price of New Grindr Common Stock.
We have the ability to redeem the outstanding warrants at any time
after they become exercisable and prior to their expiration, at a price of $0.01 per warrant if, among other things, the last reported sale price of New Grindr Common Stock for any 20 trading days within a 30-trading day period ending on the
third trading day prior to the date on which we send the notice of redemption to the warrant holders (the “Reference Value”) equals or exceeds $18.00 per share (as adjusted for share splits, share
dividends, rights issuances, subdivisions, reorganizations, recapitalizations and the like). If and when the warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying
securities for sale under all applicable state securities laws. As a result, we may redeem the warrants as set forth above even if the holders are otherwise unable to exercise the warrants. Redemption of the outstanding warrants as described
above could force you to: (i) exercise your warrants and pay the exercise price therefor at a time when it may be disadvantageous for you to do so, (ii) sell your warrants at the then-current market price when you might otherwise wish to hold
your warrants; or (iii) accept the nominal redemption price which, at the time the outstanding warrants are called for redemption, we expect would be substantially less than the market value of your warrants. Tiga’s Class A Ordinary Shares have
never traded above $18.00 per share.
In addition, we have the ability to redeem the outstanding warrants
at any time after they become exercisable and prior to their expiration, at a price of $0.10 per warrant if, among other things, the Reference Value equals or exceeds $10.00 per share (as adjusted for share splits, share dividends, rights
issuances, subdivisions, reorganizations, recapitalizations and the like). In such a case, the holders will be able to exercise their warrants prior to redemption for a number of shares of New Grindr Common Stock determined based on the
redemption date and the fair market value of our New Grindr Common Stock.
Since the consummation of the initial public offering and the
subsequent separate trading of the Tiga Class A ordinary shares, the last reported sale price of Tiga’s Class A ordinary shares has equaled or exceeded a Reference Value of $10.00 per share from time to time; however, we will not be entitled to
redeem the warrants until the Reference Value equals or exceeds $10.00 per share at such time as such warrants are exercisable (i.e., the later of (i) the date that is thirty (30) days after the first date following the consummation of the
Business Combination and (ii) the date that is twelve (12) months following the consummation of the initial public offering).
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None of the private placement warrants will be redeemable by us
so long as they are held by our Sponsor or its permitted transferees; provided, that the private placement warrants may be redeemed in accordance with the warrant agreement (and must be redeemed, if the public warrants are being redeemed) if the
Reference Value equals or exceeds $10.00 per share and does not equal or exceed $18.00 per share.
In the event we elect to redeem the outstanding warrants, we will
fix a date for the redemption (the “Redemption Date”) and provide notice of the redemption to be mailed by first class mail, postage prepaid by New Grindr not less than thirty (30) days prior to the
Redemption Date to the registered holders of the warrants (who will, in turn, notify the beneficial holders thereof).
The value received upon exercise of the warrants (1) may be less
than the value the holders would have received if they had exercised their warrants at a later time where the underlying share price is higher and (2) may not compensate the holders for the value of the warrants, including because the number of
ordinary shares received is capped at 0.3611 shares of New Grindr Common Stock per warrant (subject to adjustment) irrespective of the remaining life of the warrants.
Following the Business Combination, New Grindr currently intends to
retain its future earnings, if any, to finance the further development and expansion of its business and does not intend to pay cash dividends in the foreseeable future. Any future determination to pay dividends will be at the discretion of the
New Grindr Board and will depend on its financial condition, results of operations, capital requirements and future agreements and financing instruments, business prospects and such other factors as the New Grindr Board deems relevant.
Tiga’s and Grindr’s ability to consummate the
Business Combination, and the operations of New Grindr following the Business Combination, may be materially adversely affected by the recent COVID-19 pandemic or other public health emergencies, such as the 2022 monkeypox outbreak.
In December 2019, a novel strain of coronavirus was reported to have
surfaced in Wuhan, China, which has and is continuing to spread throughout the world, including the United States. On January 30, 2020, the World Health Organization declared the COVID-19 outbreak a “Public Health Emergency of International
Concern.” On January 31, 2020, the U.S. Department of Health and Human Services declared a public health emergency for the United States to aid the U.S., and on March 11, 2020, the World Health Organization characterized the COVID-19 outbreak as
a “pandemic.” The COVID-19 pandemic has reached across the globe, resulting in the implementation of significant governmental measures, including lockdowns, closures, quarantines, and travel bans intended to control the spread of the virus. While
some of these measures have been relaxed over the past few months in various parts of the world, ongoing social distancing measures, and future prevention and mitigation measures, as well as the potential for some of these measures to be
reinstituted in the event of repeat waves of the virus, are likely to have an adverse impact on global economic conditions and consumer confidence and spending, which may delay or prevent the consummation of the Business Combination, and the
business of Grindr or New Grindr following the Business Combination could be materially and adversely affected. The extent of such impact will depend on future developments, which are highly uncertain and cannot be predicted, including new
information which may emerge concerning the severity of COVID-19 and the actions to contain COVID-19 or treat its impact, among others. While vaccines for COVID-19 are being, and have been developed, there is no guarantee that any such vaccine
will be durable and effective consistent with current expectations. In addition, if any treatment or vaccine for the COVID-19 is ineffective or underutilized, any impact on Grindr or New Grindr may be prolonged.
The 2022 monkeypox outbreak has spread to many regions of the world,
including the United States. The extent to which the monkeypox outbreak impacts Grindr or New Grindr’s business and operating results will depend on future developments that are highly uncertain and cannot be accurately predicted, including new
information that may emerge, if the outbreak is ultimately upgraded to a pandemic, and the actions to contain monkeypox or treat its impact, among others. As of August 2022, it is still classified as an outbreak by the World Health Organization,
but this may be upgraded to a pandemic in the event of future spread of the disease. See “Risks Related to Grindr's Business—Risks Related to Grindr's Brand, Products and Services, and Operations—Our business and results of operations may be
materially adversely affected by the recent COVID-19 pandemic, the 2022 monkeypox outbreak or other similar outbreaks” for details on the impact on Grindr's business from the COVID-19 pandemic and the 2022 monkeypox outbreak.
The parties will be required to consummate the Business Combination
after the Merger Agreement has been entered into, even if Grindr, its business, financial condition and results of operations are materially affected by COVID-19 or other public health emergencies, such as the 2022 monkeypox outbreak. The
disruptions posed by
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COVID-19 have continued, and other matters of global concern may continue, for an
extensive period of time, and if Grindr is unable to recover from business disruptions due to COVID-19 or other matters of global concern on a timely basis, Grindr’s ability to consummate the Business Combination and New Grindr’s financial
condition and results of operations following the Business Combination may be materially adversely affected. Each of Grindr and New Grindr may also incur additional costs due to delays caused by COVID-19 or other public health emergencies, which
could adversely affect New Grindr’s financial condition and results of operations.
Because the market price of shares of Tiga
Class A ordinary shares will fluctuate, the security holders of Grindr cannot be sure of the value of the Business Combination consideration they will receive.
Upon completion of the Business Combination, the market value of
Tiga securities at the effective time of the Business Combination may vary significantly from their respective values on the date the Merger Agreement was executed or at other dates. Because the exchange ratio with respect to the shares of New
Grindr Common Stock to be issued in the Business Combination is fixed and will not be adjusted to reflect any changes in the market value of shares of Tiga Class A ordinary shares, the market value of the shares of New Grindr Common Stock issued
in connection with the Business Combination may be higher or lower than the values of those shares on earlier dates, and may be higher or lower than the value used to determine the exchange ratio. Stock price changes may result from a variety of
factors, including changes in the business, operations or prospects of Tiga, regulatory considerations, and general business, market, industry or economic conditions. Many of these factors are outside of the control of Tiga.
The market price of shares of New Grindr
Common Stock after the Business Combination may be affected by factors different from those currently affecting the price of shares of Tiga.
Upon completion of the Business Combination, Grindr’s security
holders will become holders of shares of New Grindr Common Stock. Prior to the Business Combination, Tiga has had limited operations. Upon completion of the Business Combination, New Grindr’s results of operations will depend upon the performance
of Grindr’s business, which is affected by factors that are different from those currently affecting the results of operations of Tiga.
Tiga may waive one or more of the conditions to
the Business Combination.
Tiga may agree to waive, in whole or in part, one or more of the
conditions to Tiga’s obligations to complete the Business Combination, to the extent permitted by Tiga’s Cayman Constitutional Documents and applicable laws. For example, it is a condition to Tiga’s obligations to close the Business Combination
that Grindr have performed and complied in all material respects with the obligations required to be performed or complied with by Grindr under the Merger Agreement. However, if the Tiga Board determines that a breach of this obligation is not
material, then the Tiga Board may elect to waive that condition and close the Business Combination. Please see the section entitled “The Merger Agreement—Closing Conditions” beginning on
page 145 of this proxy statement/prospectus for additional information.
Termination of the Merger Agreement could
negatively impact Tiga.
If the Business Combination is not completed for any reason,
including as a result of Tiga shareholders declining to approve the proposals required to effect the Business Combination, the ongoing businesses of Tiga may be adversely impacted and, without realizing any of the anticipated benefits of
completing the Business Combination, Tiga would be subject to a number of risks, including the following:
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Tiga may experience negative reactions from the financial markets, including negative impacts on its share price (including to
the extent that the current market price reflects a market assumption that the Business Combination will be completed);
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Tiga will have incurred substantial expenses and will be required to pay certain costs relating to the Business Combination,
whether or not the Business Combination is completed; and
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since the Merger Agreement restricts the conduct of Tiga’s businesses prior to completion of the Business Combination, Tiga
may not have been able to take certain actions during the pendency of the Business Combination that would have benefitted it as an independent company, and the opportunity to take such actions may no longer be available (see the section
entitled “The Merger Agreement—Covenants and Agreements” beginning on page 136 of this proxy statement/prospectus for a description of the
restrictive covenants applicable to Tiga).
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If the Merger Agreement is terminated and the Tiga Board seeks
another business combination target, Tiga shareholders cannot be certain that Tiga will be able to find another acquisition target that would constitute a business combination or that such other business combination will be completed. See “The Merger Agreement—Termination; Effectiveness” beginning on page 147 of this proxy statement/prospectus. As
of the date of this proxy statement/prospectus, Tiga has until November 27, 2022 to consummate a business combination. If Tiga does not complete the Business Combination with Grindr or another target business by November 27, 2022, Tiga must
redeem its public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account and not previously released to Tiga to pay its
taxes, if any (less up to $100,000 of interest to pay dissolution expenses) divided by the number of the then-outstanding public shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the
right to receive further liquidation distributions, if any).
Grindr will be subject to business
uncertainties and contractual restrictions while the Business Combination is pending.
Uncertainty about the effect of the Business Combination on
employees and other business participants may have an adverse effect on Grindr and consequently on Tiga. These uncertainties may impair Grindr’s ability to attract, retain and motivate key personnel until the Business Combination is completed,
and could cause others that deal with Grindr to seek to change existing business relationships with Grindr. Retention of certain employees may be challenging during the pendency of the Business Combination, as certain employees may experience
uncertainty about their future roles. If key employees depart because of issues relating to the uncertainty or a desire not to remain with the business, New Grindr’s business following the Business Combination could be negatively impacted. In
addition, the Merger Agreement restricts Grindr from making certain expenditures and taking other specified actions without the consent of Tiga until the Business Combination occurs. These restrictions may prevent Grindr from pursuing
attractive business opportunities that may arise prior to the completion of the Business Combination. See “The Merger Agreement—Covenants and Agreements” beginning on page 136 of this proxy statement/prospectus.
The Business Combination will result in
changes to the New Grindr Board that may affect the strategy of New Grindr.
If the parties complete the Business Combination, the composition of
the New Grindr Board will change from the current Tiga Board. The New Grindr Board will consist of nine (9) directors, as more fully set forth in this proxy statement/prospectus. The composition of the New Grindr Board may affect the business
strategy and operating decisions of New Grindr upon the completion of the Business Combination.
Neither Tiga nor its shareholders will have
the protection of any indemnification, escrow, purchase price adjustment or other provisions that allow for a post-closing adjustment to be made to the consideration that is payable in the Mergers in the event that any of the representations and
warranties made by Grindr in the Merger Agreement ultimately proves to be inaccurate or incorrect.
The representations and warranties contained in the Merger Agreement
will not survive the completion of the Business Combination, and only the covenants and agreements that by their terms survive such time will do so. As a result, Tiga and its shareholders will not have the protection of any indemnification,
escrow, purchase price adjustment or other provisions that allow for a post-closing adjustment to be made to the consideration that is payable in the Mergers if any representation or warranty made by Grindr in the Merger Agreement proves to be
inaccurate or incorrect. Accordingly, to the extent such representations or warranties are incorrect, our financial condition or results of operations could be adversely affected.
Our independent registered public accounting
firm has expressed substantial doubt as to our ability to continue as a going concern in its report.
In its report on our financial statements for the period ending
December 31, 2021, our independent registered public accounting firm included an explanatory paragraph expressing substantial doubt regarding our ability to continue as a going concern. A “going concern” opinion means, in general, that our
independent registered public accounting firm has substantial doubt about our ability to continue our operations unless we complete a business combination within the terms as defined in our amended and restated memorandum and articles of
association.
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We currently intend to only complete one
Business Combination with the proceeds of our initial public offering, which will cause us to be solely dependent on New Grindr’s business. This lack of diversification may negatively impact our operations and profitability.
We currently intend to only complete one Business Combination with
the proceeds of our initial public offering. By completing our Business Combination with only a single entity our lack of diversification may subject us to numerous economic, competitive and regulatory risks. Further, we would not be able to
diversify our operations or benefit from the possible spreading of risks or offsetting of losses, unlike other entities which may have the resources to complete several business combinations in different industries or different areas of a single
industry. Accordingly, the prospects for our success will be solely dependent upon the business and financial performance of Grindr.
This lack of diversification may subject us to numerous economic,
competitive and regulatory risks, any or all of which may have a substantial adverse impact upon the particular industry in which we may operate subsequent to the Business Combination. See “—Risks Related to
Grindr’s Business” for risks we may face as a result of consummating the Business Combination with New Grindr.
If the SEC adopts the proposed rules and
regulations relating to, among other things, enhancing disclosures in business combination transactions involving SPACs, our ability to complete an initial business combination could be adversely and materially affected.
On March 30, 2022, the SEC issued certain proposed rules relating
to, among other items, enhancing disclosures in business combination transactions involving SPACs and private operating companies; amending the financial statement requirements applicable to transactions involving shell companies; increasing the
liability of projections in SEC filings in connection with proposed business combination transactions; increasing the potential liability of certain participants in proposed business combination transactions; and modifying the extent to which
SPACs could become subject to regulation under the Investment Company Act, including a proposed rule that would provide SPACs a safe harbor from treatment as an investment company if they satisfy certain conditions that limit a SPAC’s duration,
asset composition, business purpose and activities. These rules, if adopted, whether in the form proposed or in revised form, may increase the costs and time needed to negotiate and complete an initial business combination or impair our ability
to complete an initial business combination, which may materially and adversely affect us.
Risks Related to the Redemption
Unless the context otherwise requires, all
references in this subsection to the “Company,” “we,” “us” or “our” refer to Tiga prior to the consummation of the Business Combination.
You must tender your Tiga Class A ordinary
shares in order to validly seek redemption at the extraordinary general meeting.
In connection with tendering your shares for redemption, you must
elect either to physically tender your share certificates to Tiga’s transfer agent or to deliver your Tiga ordinary shares (and/or share certificates (if any) and other redemption forms) to the transfer agent electronically using The Depository
Trust Company’s DWAC (Deposit/Withdrawal At Custodian) System, which election would likely be determined based on the manner in which you hold your Tiga ordinary shares, in each case, by two business days prior to the extraordinary general
meeting. The requirement for physical or electronic delivery by two business days prior to the extraordinary general meeting ensures that a redeeming holder’s election to redeem is irrevocable once the Business Combination is approved. Any
failure to observe these procedures will result in your loss of redemption rights in connection with the vote on the Business Combination.
Tiga does not have a specified maximum redemption threshold. The
absence of such a redemption threshold may make it possible for us to complete a business combination with which a substantial majority of Tiga’s shareholders do not agree.
Tiga’s current amended and restated memorandum and articles of
association does not provide a specified maximum redemption threshold, except that Tiga will not redeem public shares in an amount that would cause Tiga’s net tangible assets to be less than $5,000,001 (as determined in accordance with Rule
3a51-1(g)(1) of the Exchange Act). However, the Merger Agreement provides that Tiga’s and Grindr’s respective obligations to consummate the Business Combination are conditioned on Tiga having at least $5,000,001 of net tangible assets as of
Closing Date and the Minimum Cash condition being satisfied. As a result, Tiga may be able to complete the Business Combination even though a substantial portion of public shareholders do not approve the Business Combination and have
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redeemed their shares or have entered into privately negotiated agreements to sell
their shares to the Sponsor, directors or officers or their affiliates. As of the date of this proxy statement/prospectus, no agreements with respect to the private purchase of public shares by Tiga or the persons described above have been
entered into with any such investor or holder. Tiga will file a Current Report on Form 8-K with the SEC to disclose private arrangements entered into or significant private purchases made by any of the aforementioned persons that would affect the
vote on the Business Combination proposal or the other proposals (as described in this proxy statement/prospectus) at the extraordinary general meeting.
In the event that the aggregate cash consideration that Tiga would
be required to pay for all Tiga Class A ordinary shares that are validly submitted for redemption, plus any amount required to satisfy the foregoing cash condition pursuant to the terms of the Merger Agreement, exceeds the aggregate amount of
cash available to Tiga, Tiga may not complete the Business Combination or redeem any shares, all Tiga Class A ordinary shares submitted for redemption will be returned to the holders thereof and Tiga may instead search for an alternate business
combination.
Based on the amount of approximately $ million in Tiga’s trust
account as of , 2022, the record date for the extraordinary general meeting, and taking into account the anticipated gross proceeds of the Forward Purchase Commitment and the Backstop Commitment, if any, and assuming that Grindr will have $
million in freely available cash at the Closing, million shares of New Grindr Common Stock may be redeemed and still enable Tiga to have sufficient cash to satisfy the closing condition under the Merger Agreement. We refer to this as the
“maximum redemption scenario.”
Public shareholders, together with any
affiliates of theirs or any other person with whom they are acting in concert or as a “group,” will be restricted from seeking redemption rights with respect to more than 15% of the public shares.
A public shareholder, together with any of his, her or its
affiliates or any other person with whom it is acting in concert or as a “group” (as defined under Section 13(d) of the Exchange Act), will be restricted from redeeming in the aggregate his, her or its shares or, if part of such a group, the
group’s shares, in excess of 15% of the Tiga Class A ordinary shares included in the units sold in the initial public offering unless such shareholder first obtains Tiga’s prior consent. In order to determine whether a shareholder is acting in
concert or as a group with another shareholder, Tiga will require each public shareholder seeking to exercise redemption rights to certify to Tiga whether such shareholder is acting in concert or as a group with any other shareholder. Such
certifications, together with other public information relating to stock ownership available to Tiga at that time, such as Schedule 13D, Schedule 13G and Section 16 filings under the Exchange Act, will be the sole basis on which Tiga makes the
above-referenced determination. Your inability to redeem any such excess shares will reduce your influence over Tiga’s ability to consummate the Business Combination and you could suffer a material loss on your investment in Tiga if you sell such
excess shares in open market transactions. Additionally, you will not receive redemption distributions with respect to such excess shares if Tiga consummates the Business Combination without the prior consent of Tiga. As a result, you may
continue to hold that number of shares aggregating to more than 15% of the shares sold in the initial public offering and, in order to dispose of such excess shares, would be required to sell your stock in open market transactions, potentially at
a loss. Tiga cannot assure you that the value of such excess shares will appreciate over time following the Business Combination or that the market price of shares of New Grindr Common Stock will exceed the per-share redemption price.
Notwithstanding the foregoing, shareholders may challenge Tiga’s determination as to whether a shareholder is acting in concert or as a group with another shareholder in a court of competent jurisdiction.
However, Tiga’s shareholders’ ability to vote all of their shares
(including such excess shares) for or against the Business Combination is not restricted by this limitation on redemption.
There is no guarantee that a shareholder’s
decision to redeem its shares for a pro rata portion of the trust account will put the shareholder in a better future economic position.
We can give no assurance as to the price at which a shareholder may
be able to sell its public shares in the future following the completion of the Business Combination or any alternative business combination. Certain events following the consummation of any initial business combination, including the Business
Combination, may cause an increase in our share price, and may result in a lower value realized now than a shareholder of Tiga might realize in the future had the shareholder not redeemed its shares. Similarly, if a shareholder does not redeem
its shares, the shareholder will bear the risk of ownership of the public shares after the consummation of any initial business
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combination, and there can be no assurance that a shareholder can sell its shares in
the future for a greater amount than the redemption price set forth in this proxy statement/prospectus. A shareholder should consult the shareholder’s own tax and/or financial advisor for assistance on how this may affect his, her or its
individual situation.
Shareholders of Tiga who wish to redeem their Tiga Class A ordinary
shares for a pro rata portion of the trust account must comply with specific requirements for redemption that may make it more difficult for them to exercise their redemption rights prior to the deadline. If shareholders fail to comply with the
redemption requirements specified in this proxy statement/prospectus, they will not be entitled to redeem their Tiga Class A ordinary shares for a pro rata portion of the funds held in the trust account.
Shareholders electing to redeem their Tiga Class A ordinary shares
will receive their pro rata portion of the trust account less franchise and income taxes payable, calculated as of two business days prior to the anticipated consummation of the Business Combination. Please see the section entitled “Extraordinary General Meeting of Tiga—Redemption Rights” of this proxy statement/prospectus for additional information on how to exercise your redemption rights.
If, despite Tiga’s compliance with the proxy rules, a shareholder
fails to receive Tiga proxy materials, such shareholder may not become aware of the opportunity to redeem its Tiga Class A ordinary shares. In addition, the proxy materials that Tiga is furnishing to public shareholders of Tiga’s Class A ordinary
shares in connection with the Business Combination describes the various procedures that must be complied with in order to validly redeem Tiga Class A ordinary shares. In the event that a shareholder fails to comply with these procedures, its
Tiga Class A ordinary shares may not be redeemed.
There is uncertainty regarding the U.S.
federal income tax consequences of the redemption of the holders of New Grindr Common Stock.
There is uncertainty regarding the U.S. federal income tax
consequences to holders of New Grindr Common Stock who exercise their redemption rights. The uncertainty of tax consequences relates primarily to the individual circumstances of the taxpayer and includes (i) whether the redemption is treated as a
distribution from New Grindr, which would be taxable in the same manner that distributions are taxed, or as a sale, which would be taxable as capital gain or loss, and (ii) whether capital gain, if any, is “long-term” or “short-term.” Whether the
redemption qualifies for sale treatment, resulting in taxation as capital gain or loss, will depend largely on whether the holder owns (or is deemed to own) any shares of New Grindr Common Stock following the redemption, and if so, the total
number of shares of New Grindr Common Stock held by the holder both before and after the redemption relative to all shares of New Grindr Common Stock outstanding both before and after redemption. The redemption generally will be treated as sale,
rather than a distribution, if the redemption (i) is “substantially disproportionate” with respect to the holder, (ii) results in a “complete termination” of the holder’s interest of New Grindr or (ii) is “not essentially equivalent to a
dividend” with respect to the holder. Due to the personal nature of certain of such tests and the absence of clear guidance from the IRS, there is uncertainty as to whether a holder who elects to exercise its redemption rights will be taxed on
any proceeds from the redemption as a distribution potentially giving rise to dividend income or sale proceeds treated as capital gain. See the section entitled “U.S. Federal Income Tax Considerations.”
A new 1% U.S. federal excise tax could be imposed
on us in connection with redemptions by us of our shares.
On August 16, 2022, the Inflation Reduction Act of 2022 (the “IR Act”) was signed into federal law. The IR Act provides for, among other things, a new U.S. federal 1% excise tax on certain repurchases (including redemptions) of stock by publicly traded domestic (i.e.,
U.S.) corporations and certain domestic subsidiaries of publicly traded foreign corporations. The excise tax is imposed on the repurchasing corporation itself, not its shareholders from which shares are repurchased. The amount of the excise tax
is generally 1% of the fair market value of the shares repurchased at the time of the repurchase. However, for purposes of calculating the excise tax, repurchasing corporations are permitted to net the fair market value of certain new stock
issuances against the fair market value of stock repurchases during the same taxable year. In addition, certain exceptions apply to the excise tax.
The U.S. Department of the Treasury (the “Treasury”) has been given authority to provide regulations and other guidance to carry out and prevent the abuse or avoidance of the excise tax. The IR Act applies only to repurchases that occur after December 31, 2022.
Any redemption or other repurchase that occurs after December 31,
2022, in connection with a business combination or otherwise, may be subject to the excise tax. Whether and to what extent we would be subject to the
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excise tax in connection with a business combination would depend on a number of
factors, including (i) the fair market value of the redemptions and repurchases in connection with the business combination, (ii) the structure of the business combination, (iii) the nature and amount of any “PIPE” or other equity issuances in
connection with the business combination (or otherwise issued not in connection with the business combination but issued within the same taxable year of the business combination) and (iv) the content of regulations and other guidance from the
Treasury. In addition, because the excise tax would be payable by us and not by the redeeming holder, the mechanics of any required payment of the excise tax have not been determined.
Risks Related to the Consummation of the Domestication
Unless the context otherwise requires, all
references in this subsection to the “Company,” “we,” “us” or “our” refer to New Grindr after the consummation of the Business Combination.
The Domestication may result in adverse tax
consequences for holders of Tiga Class A ordinary shares and warrants, including holders exercising their redemption rights with respect to the Tiga Class A ordinary shares.
Tiga intends for the Domestication to qualify as a reorganization
within the meaning of Section 368(a)(1)(F) of the Code, i.e., an “F Reorganization.” Milbank LLP will deliver an opinion that the Domestication will qualify as an
F Reorganization. The form of such opinion is filed by amendment as Exhibit 5.2 to the registration statement of which this proxy statement/prospectus forms a part and is based on customary assumptions, representations and covenants. If any of
the assumptions, representations or covenants on which the opinion is based is or becomes incorrect, incomplete, inaccurate or is otherwise not complied with, the validity of the opinion described above may be adversely affected and the tax
consequences of the Domestication could differ from those described herein. An opinion of counsel is not binding on the IRS or any court, and there can be no certainty that the IRS will not challenge the conclusions reflected in the opinion or
that a court would not sustain such a challenge. If the Domestication fails to qualify as an F Reorganization, a U.S. Holder (as defined in “U.S. Federal Income Tax Considerations”) of Tiga Class A
ordinary shares or warrants generally would recognize gain or loss with respect to its Tiga Class A ordinary shares or warrants in an amount equal to the difference, if any, between the fair market value of the corresponding common stock or
warrants of New Grindr received in the Domestication and the U.S. Holder’s adjusted tax basis in its Tiga Class A ordinary shares or warrants surrendered. Because the Domestication will occur prior to the redemption of U.S. Holders that exercise
redemption rights with respect to Tiga Class A ordinary shares, U.S. Holders exercising such redemption rights will be subject to the potential tax consequences of the Domestication. Additionally, Non-U.S. Holders (as defined in “U.S. Federal Income Tax Considerations”) may become subject to withholding tax on any amounts treated as dividends paid on New Grindr Common Stock after the Domestication.
Assuming that the Domestication qualifies as an F Reorganization,
subject to the PFIC rules discussed below, U.S. Holders generally will be subject to Section 367(b) of the Code. A U.S. Holder whose Tiga Class A ordinary shares have an aggregate fair market value of less than $50,000 and who, on the date of the
Domestication, beneficially owns (actually or constructively) less than 10% of the total combined voting power of all classes of Tiga shares entitled to vote and less than 10% of the total value of all classes of Tiga shares generally will not
recognize any gain or loss and will not be required to include any part of Tiga’s earnings in income as a result of the Domestication. A U.S. Holder whose Tiga Class A ordinary shares have an aggregate fair market value of $50,000 or more and
who, on the date of the Domestication, beneficially owns (actually or constructively) less than 10% of the total combined voting power of all classes of Tiga shares entitled to vote and less than 10% or more of the total value of all classes of
Tiga shares, generally will recognize gain (but not loss) in respect of the Domestication as if such U.S. Holder exchanged its Tiga Class A ordinary shares for New Grindr Common Stock in a taxable transaction, unless such U.S. Holder elects in
accordance with applicable Treasury Regulations to include in income as a deemed dividend deemed paid by Tiga the “all earnings and profits amount” (as defined in the Treasury Regulations under Section 367 of the Code) attributable to the Tiga
Class A ordinary shares held directly by such U.S. Holder. A U.S. Holder who, on the date of the Domestication, beneficially owns (actually or constructively) 10% or more of the total combined voting power of all classes of Tiga shares entitled
to vote or 10% or more of the total value of all classes of Tiga stock, generally will be required to include in income as a deemed dividend deemed paid by Tiga the “all earnings and profits amount” (as defined in the Treasury Regulations under
Section 367 of the Code) attributable to the Tiga Class A ordinary shares held directly by such U.S. Holder as a result of the Domestication.
Additionally, even if the Domestication qualifies as an F
Reorganization, proposed Treasury Regulations promulgated under Section 1291(f) of the Code (which have a retroactive effective date) generally require that a U.S. person who disposes of stock of a PFIC (including for this purpose exchanging Tiga
Warrants for newly issued
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New Grindr Warrants in the Domestication) must recognize gain equal to the excess of
the fair market value of such PFIC stock over its adjusted tax basis, notwithstanding any other provision of the Code. Tiga believes that it is likely classified as a PFIC for U.S. federal income tax purposes. As a result, these proposed Treasury
Regulations, if finalized in their current form, would generally require a U.S. Holder of Tiga Class A ordinary shares to recognize gain under the PFIC rules on the exchange of Tiga Class A ordinary shares for New Grindr Common Stock pursuant to
the Domestication unless such U.S. Holder has made certain tax elections with respect to such U.S. Holder’s Tiga Class A ordinary shares. In addition, the proposed Treasury Regulations provide coordinating rules with other sections of the Code,
including Section 367(b), which affect the manner in which the rules under such other sections apply to transfers of PFIC stock. These proposed Treasury Regulations, if finalized in their current form, would also apply to a U.S. Holder who
exchanges Tiga Warrants for newly issued New Grindr Warrants; currently, however, the elections mentioned above do not apply to Tiga Warrants (for discussion regarding the unclear application of the PFIC rules to Tiga Warrants, see the section
entitled “U.S. Federal Income Tax Considerations”). Any gain recognized from the application of the PFIC rules described above would be taxable income with no corresponding receipt of cash. The tax on any
such gain would be imposed at the rate applicable to ordinary income and an interest charge would apply based on complex rules designed to offset the tax deferral to such U.S. Holder on the undistributed earnings, if any, of Tiga. It is not
possible to determine at this time whether, in what form, and with what effective date, final Treasury Regulations under Section 1291(f) of the Code may be adopted or how any such Treasury Regulations would apply.
Upon consummation of the Business Combination,
the rights of holders of New Grindr Common Stock arising under the DGCL as well as Proposed Organizational Documents will differ from and may be less favorable to the rights of holders of Tiga Class A ordinary shares arising under Cayman Islands
law as well as our current memorandum and articles of association.
Upon consummation of the Business Combination, the rights of holders
of New Grindr Common Stock will arise under the Proposed Organizational Documents as well as the DGCL. Those new organizational documents and the DGCL contain provisions that differ in some respects from those in our current memorandum and
articles of association and Cayman Islands law and, therefore, some rights of holders of New Grindr Common Stock could differ from the rights that holders of Tiga Class A ordinary shares currently possess. For instance, while class actions are
generally not available to shareholders under Companies Act, such actions are generally available under the DGCL. This change could increase the likelihood that New Grindr becomes involved in costly litigation, which could have a material adverse
effect on New Grindr.
In addition, there are differences between the new organizational
documents of New Grindr and the current constitutional documents of Tiga. The forms of the Proposed Certificate of Incorporation and the Proposed Bylaws of New Grindr are attached as Annex G and Annex H, respectively, to this proxy statement/prospectus and we urge you to read them.
Delaware law and New Grindr’s Proposed
Organizational Documents contain certain provisions, including anti-takeover provisions that limit the ability of shareholders to take certain actions and could delay or discourage takeover attempts that shareholders may consider favorable.
The Proposed Organizational Documents that will be in effect upon
consummation of the Business Combination, and the DGCL, contain provisions that could have the effect of rendering more difficult, delaying, or preventing an acquisition that shareholders may consider favorable, including transactions in which
shareholders might otherwise receive a premium for their shares. These provisions could also limit the price that investors might be willing to pay in the future for shares of our common stock, and therefore depress the trading price of New
Grindr Common Stock. These provisions could also make it difficult for shareholders to take certain actions, including electing directors who are not nominated by the current members of the New Grindr Board or taking other corporate actions,
including effecting changes in our management. Among other things, the Proposed Organizational Documents include provisions regarding:
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the ability of the New Grindr Board to issue shares of preferred stock, including “blank check” preferred stock and to
determine the price and other terms of those shares, including preferences and voting rights, without shareholder approval, which could be used to significantly dilute the ownership of a hostile acquirer;
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the New Grindr Proposed Certificate of Incorporation will prohibit cumulative voting in the election of directors, which limits
the ability of minority shareholders to elect director candidates;
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the limitation of the liability of, and the indemnification of, New Grindr’s directors and officers;
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the ability of the New Grindr Board to amend the bylaws, which may allow the New Grindr Board to take additional actions to
prevent an unsolicited takeover and inhibit the ability of an acquirer to amend the bylaws to facilitate an unsolicited takeover attempt;
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advance notice procedures with which shareholders must comply to nominate candidates to the New Grindr Board or to propose
matters to be acted upon at a shareholders’ meeting, which could preclude shareholders from bringing matters before annual or extraordinary general meetings of shareholders and delay changes in the New Grindr Board and also may discourage
or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of New Grindr;
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providing that the New Grindr Board is expressly authorized to make, alter or repeal the Proposed Bylaws;
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the removal of the directors of the New Grindr Board by its shareholders with or without cause;
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the ability of the New Grindr Board to fill a vacancy created by the expansion of the board of directors or the resignation,
death, or removal of a director in certain circumstances;
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the Proposed Certificate of Incorporation will prohibit, subject to the rights of the holders of shares of preferred stock
permitting the holders of such series of preferred stock to call a special general meeting of the holders of such series the New Grindr shareholders to call a special general meeting of the shareholders;
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the Proposed Certificate of Incorporation will prohibit, subject to the rights of the holders of shares of preferred stock to
act by written consent, any shareholders from taking any action by written consent;
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that certain provisions may be amended only by the affirmative vote of holders of at least 66 2/3% of the shares of the
outstanding capital stock entitled to vote generally in the election of New Grindr directors; and
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pursuant to the business combination provisions in the Certificate of Incorporation, New Grindr will be prevented, under
certain circumstances, from engaging in a “business combination” with (i) a shareholder who owns 15% or more of New Grindr’s outstanding voting stock (otherwise known as an “interested shareholder”), (ii) an affiliate of an interested
shareholder or (iii) an associate of an interested shareholder, in each case, for three years following the date that such shareholder became an interested shareholder (in each case, subject to certain exceptions).
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These provisions, alone or together, could delay or prevent hostile
takeovers and changes in control or changes in the New Grindr Board or management.
The provisions of the Proposed Certificate of
Incorporation requiring exclusive forum in the Court of Chancery of the State of Delaware for certain types of lawsuits may have the effect of discouraging lawsuits against our directors and officers.
New Grindr’s Proposed Certificate of Incorporation provides that,
unless New Grindr consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware shall be the sole and exclusive forum for the following types of actions or proceedings under Delaware statutory or
common law: (A) any derivative action or proceeding brought on behalf of New Grindr; (B) any action or proceeding asserting a claim of breach of a fiduciary duty owed by any current or former director, officer or other employee of New Grindr or
any shareholder to New Grindr or New Grindr’s shareholders; (C) any action or proceeding asserting a claim against New Grindr or any current or former director, officer or other employee of New Grindr or any shareholder arising pursuant to any
provision of the DGCL, the Proposed Certificate of Incorporation and the Proposed Bylaws (as each may be amended from time to time); (D) any action or proceeding to interpret, apply, enforce or determine the validity of the Proposed Certificate
of Incorporation or the Proposed Bylaws (including any right, obligation or remedy thereunder); (E) any action or proceeding as to which the DGCL confers jurisdiction to the Court of Chancery of the State of Delaware; and (F) any action asserting
a claim against New Grindr or any director, officer or other employee of New Grindr or any shareholder, governed by the internal affairs doctrine, in all cases to the fullest extent permitted by law and subject to the court’s having personal
jurisdiction over the indispensable parties named as defendants. However, this provision will not apply to suits brought to enforce a duty or liability created by the Securities Exchange Act of 1934 or any other claim for which the federal courts
have exclusive jurisdiction. In addition, unless New Grindr consents in writing to the selection of an alternative forum, the federal district courts of the United States of America shall be
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the exclusive forum for the resolution of any complaint asserting a cause or causes
of action arising under the Securities Act of 1933, as amended, including all causes of action asserted against any defendant named in such complaint.
These provisions may have the effect of discouraging lawsuits
against New Grindr’s directors and officers. The enforceability of similar choice of forum provisions in other companies’ certificates of incorporation has been challenged in legal proceedings, and it is possible that, in connection with any
applicable action brought against New Grindr, a court could find the choice of forum provisions contained in the Proposed Certificate of Incorporation to be inapplicable or unenforceable in such action.
Risks If the Adjournment Proposal Is Not Approved
If the adjournment proposal is not approved,
and an insufficient number of votes have been obtained to authorize the Closing, the Tiga Board will not have the ability to adjourn the extraordinary general meeting to a later date in order to solicit further votes, and, therefore, the Business
Combination will not be approved.
The Tiga Board is seeking approval to adjourn the extraordinary
general meeting to a later date or dates if, at the extraordinary general meeting, Tiga is unable to consummate the Business Combination. If the Adjournment Proposal is not approved, the Tiga Board will not have the ability to adjourn the
extraordinary general meeting to a later date and, therefore, will not have more time to solicit votes to approve the Adjournment Proposal. In such events, the Business Combination would not be completed.
Additional Risks Related to Ownership of New Grindr Common Stock
Following the Business Combination and New Grindr Operating as a Public Company
Unless the context otherwise requires, all
references in this subsection to the “Company,” “we,” “us” or “our” refer to New Grindr after the consummation of the Business Combination.
We will incur significantly increased costs
and devote substantial management time as a result of operating as a public company.
As a public company, New Grindr will incur significant legal,
accounting and other expenses that Grindr does not incur as a private company. For example, we will be subject to the reporting requirements of the Exchange Act, and will be required to comply with the applicable requirements of the
Sarbanes-Oxley Act and the Dodd-Frank Wall Street Reform and Consumer Protection Act, as well as rules and regulations of the SEC and NYSE, including the establishment and maintenance of effective disclosure and financial controls, changes in
corporate governance practices and required filing of annual, quarterly and current reports with respect to our business and results of operations. Any failure to develop or maintain effective controls or any difficulties encountered in their
implementation or improvement could harm our results of operations or cause us to fail to meet our reporting obligations. We expect that compliance with these requirements will increase New Grindr’s legal and financial compliance costs and will
make some activities more time-consuming and costly. In addition, we expect that New Grindr’s management and other personnel will need to divert attention from operational and other business matters to devote substantial time to these public
company requirements. In particular, we expect to incur significant expenses and devote substantial management effort toward ensuring compliance with the requirements of Section 404 of the Sarbanes-Oxley Act, which will increase when New Grindr
is no longer an emerging growth company. We are in the process of hiring additional accounting personnel and, as a public company, may need to hire additional accounting and financial staff with appropriate public company experience and technical
accounting knowledge and may need to establish an internal audit function.
We also expect that operating as a public company will make it more
expensive for New Grindr to obtain director and officer liability insurance, and New Grindr may be required to accept reduced coverage or incur substantially higher costs to obtain same or similar coverage. This could also make it more difficult
for New Grindr to attract and retain qualified people to serve on its board of directors, board committees or as executive officers.
NYSE may not list New Grindr’s securities on
its exchange, which could limit investors’ ability to make transactions in New Grindr’s securities and subject New Grindr to additional trading restrictions.
In connection with the Business Combination, in order to continue to
obtain the listing of New Grindr’s securities on NYSE, New Grindr will be required to demonstrate compliance with NYSE’s initial listing requirements, which are more rigorous than NYSE’s continued listing requirements. We will apply to have New
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Grindr’s securities listed on NYSE upon consummation of the Business Combination. We
cannot assure you that New Grindr will be able to meet all initial listing requirements. Even if New Grindr’s securities are listed on NYSE, New Grindr may be unable to maintain the listing of its securities in the future
If, in connection with or after the Business Combination, New Grindr
fails to meet the initial listing requirements or maintain the listing, and if NYSE or another national securities exchange does not list its securities on its exchange, New Grindr shareholders could face significant material adverse
consequences, including:
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a limited availability of market quotations for New Grindr securities;
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reduced liquidity for New Grindr’s securities;
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a determination that New Grindr Common Stock is a “penny stock” which will require brokers trading New Grindr Common Stock to
adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for New Grindr securities;
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a limited amount of news and analyst coverage; and
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a decreased ability to issue additional securities or obtain additional financing in the future.
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The National Securities Markets Improvement Act of 1996, which is a
federal statute, prevents or preempts the states from regulating the sale of certain securities, which are referred to as “covered securities.” If New Grindr’s securities were not listed on the NYSE, such securities would not qualify as covered
securities and New Grindr would be subject to regulation in each state in which it offers its securities because states are not preempted from regulating the sale of securities that are not covered securities.
The price of New Grindr’s securities may be
volatile.
Upon consummation of the Business Combination, the price of New
Grindr’s securities may fluctuate due to a variety of factors, including:
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changes in the industry in which New Grindr operates;
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the success of competitive services or technologies;
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developments involving New Grindr’s competitors;
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regulatory or legal developments in the United States and other countries;
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developments or disputes concerning our intellectual property or other proprietary rights;
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the recruitment or departure of key personnel;
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actual or anticipated changes in estimates as to financial results, development timelines or recommendations by securities
analysts;
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variations in our financial results or those of companies that are perceived to be similar to us;
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general economic, industry and market conditions, such as the effects of the COVID-19 pandemic, recissions, interest rates,
inflation, international currency fluctuations, political instability and acts of war or terrorism; and
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the other factors described in this “Risk Factors” section.
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These market and industry factors may materially reduce the market
price of New Grindr Common Stock regardless of the operating performance of New Grindr, including the Grindr businesses acquired in the Business Combination.
Future resales of New Grindr Common Stock
after the consummation of the Business Combination may cause the market price of New Grindr securities to drop significantly, even if New Grindr’s business is doing well.
Pursuant to the A&R Registration Rights Agreement, after the
consummation of the Business Combination, the Sponsor will be contractually restricted from selling or transferring any of its shares of New Grindr Common Stock (the “Lock-up Shares”), other than (i) any
transfer to an affiliate of a holder, (ii) distribution to profit interest holders or other equity holders in such holder or (iii) as a pledge in a bona fide transaction to third parties as collateral to secure obligations under lending
arrangements with third parties. Such restrictions begin at Closing and end on the date that is 12 months after the Closing.
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However, following the expiration of such lockup, the Sponsor
will not be restricted from selling shares of New Grindr stock held by them, other than by applicable securities laws. Additionally, neither the Forward Purchase Investors nor the Grindr unitholders party to the A&R Registration Rights
Agreement will be restricted from selling any of their shares of New Grindr Common Stock following the closing of the Business Combination. As such, sales of a substantial number of shares of New Grindr Common Stock in the public market could
occur at any time. These sales, or the perception in the market that the holders of a large number of shares intend to sell shares, could reduce the market price of New Grindr Common Stock. The shares held by Sponsor may be sold after the
expiration of the applicable lock-up period under the A&R Registration Rights Agreements. As restrictions on resale end and registration statements (filed after the Closing to provide for the resale of such shares from time to time) are
available for use, the sale or possibility of sale of these shares could have the effect of increasing the volatility in New Grindr’s share price or the market price of New Grindr Common Stock could decline if the holders of currently restricted
shares sell them or are perceived by the market as intending to sell them.
In addition, New Grindr may issue additional shares of New Grindr
Common Stock or other equity securities without the approval of investors, which would reduce investors’ proportionate ownership interests and may depress the market price of New Grindr Common Stock.
New Grindr may be subject to securities
litigation, which is expensive and could divert management attention.
The market price of New Grindr securities may be volatile and, in
the past, companies that have experienced volatility in the market price of their securities have been subject to securities class action litigation. New Grindr may be the target of this type of litigation in the future. Securities litigation
against New Grindr could result in substantial costs and divert management’s attention from other business concerns, which could seriously harm its business.
Reports published by analysts, including
projections in those reports that differ from New Grindr’s actual results, could adversely affect the price and trading volume of New Grindr Common Stock.
Securities research analysts may establish and publish their own
periodic projections for New Grindr following consummation of the Business Combination. These projections may vary widely and may not accurately predict the results New Grindr actually achieves. New Grindr’s share price may decline if its actual
results do not match the projections of these securities research analysts. Similarly, if one or more of the analysts who write reports on New Grindr downgrades New Grindr’s stock or publishes inaccurate or unfavorable research about New Grindr’s
business, New Grindr’s share price could decline. If one or more of these analysts ceases coverage of New Grindr or fails to publish reports on New Grindr regularly, New Grindr’s securities price or trading volume could decline. While we expect
research analyst coverage following consummation of the Business Combination, if no analysts commence coverage of New Grindr, the market price and volume for New Grindr’s securities could be adversely affected.
New Grindr does not intend to pay cash
dividends for the foreseeable future.
Following the Business Combination, New Grindr currently intends to
retain its future earnings, if any, to finance the further development and expansion of its business and does not intend to pay cash dividends in the foreseeable future. Any future determination to pay dividends will be at the discretion of the
New Grindr Board and will depend on its financial condition, results of operations, capital requirements and future agreements and financing instruments, business prospects and such other factors as its board of directors deems relevant. As a
result, you may not receive any return on an investment in New Grindr Common Stock unless you sell New Grindr Common Stock for a price greater than that which you paid for it.
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General
Tiga is furnishing this proxy statement/prospectus to Tiga’s
shareholders as part of the solicitation of proxies by the Tiga Board for use at the extraordinary general meeting of Tiga to be held on , and at any adjournment or postponement thereof. This proxy statement/prospectus provides Tiga’s
shareholders with information they need to know to be able to vote or instruct their vote to be cast at the extraordinary general meeting.
Date, Time and Place
The extraordinary general meeting will be held at and via
live webcast at Eastern Time, on , at . The extraordinary general meeting can be accessed by visiting https://www.virtualshareholdermeeting.com/TINV2022SM, where you will be able to listen to the meeting live and vote during the
meeting. Please have your Control Number, which can be found on your proxy card, to join the extraordinary general meeting. If you do not have a control number, please contact the Continental Stock Transfer & Trust Company, the Transfer
Agent.
For the purposes of the articles of association of the company, the
physical place of the meeting will be Milbank LLP, 55 Hudson Yards, New York, NY 10001.
Purpose of the Tiga Extraordinary General Meeting
At the extraordinary general meeting, Tiga is asking holders of
Tiga’s ordinary shares to consider and vote upon:
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a proposal to approve by ordinary resolution and adopt the Merger Agreement. The Merger Agreement provides for, among other
things, the merger of Merger Sub I with and into Grindr, with Grindr surviving the First Merger as a wholly owned subsidiary of Tiga, and as promptly as practicable and as part of the same overall transaction as the First Merger, the
merger of such Surviving Company with and into Merger Sub II, with Merger Sub II being the surviving entity of the Second Merger, in accordance with the terms and subject to the conditions of the Merger Agreement as more fully described
elsewhere in this proxy statement/prospectus. Please see the section entitled “Proposal No. 1—The Business Combination Proposal”;
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a proposal to approve by special resolution, the change of Tiga’s jurisdiction of incorporation by deregistering as an exempted
company in the Cayman Islands and continuing and domesticating as a corporation incorporated under the laws of the State of Delaware. Please see the section entitled “Proposal No. 2—The Domestication
Proposal”;
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a proposal to approve by special resolution and adopt the proposed new certificate of incorporation and the proposed new bylaws
of Tiga Acquisition Corp., a corporation incorporated in the State of Delaware, and the filing with and acceptance by the Secretary of State of Delaware of the certificate of domestication in accordance with Section 388 of the DGCL, and
the change of name of the Company from Tiga Acquisition Corp. to Grindr Inc. in connection with the Business Combination. Please see the section entitled “Proposal No. 3—The Organizational Documents
Proposal”;
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a non-binding advisory basis by ordinary resolution, certain material differences between Tiga’s amended and restated
memorandum and articles of association and the Proposed Certificate of Incorporation and Proposed Bylaws, presented separately in accordance with the United States Securities and Exchange Commission requirements. Please see the section
entitled “Proposal No. 4—The Governance Proposal”;
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a proposal to approve by ordinary resolution of the holders of Tiga Class B ordinary shares the election of nine (9) directors
who, upon consummation of the Business Combination, will be the directors of the New Grindr Board. Each director shall be nominated for a one (1) year term to be elected at the subsequent annual meeting of shareholders following the
effectiveness of the Proposed Certificate of Incorporation. At each succeeding annual meeting of the shareholders of New Grindr, beginning with the first annual meeting of the shareholders of New Grindr following the effectiveness of the
Proposed Certificate of Incorporation, each of the successors elected to replace the directors whose term expires at that annual meeting shall be elected for a one-year term or until the election and qualification of their respective
successors in office, subject to their earlier death, resignation or removal. Please see the section entitled “Proposal No. 5—The Director Election Proposal”;
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a proposal to approve by ordinary resolution, for the purposes of complying with the application provisions of Section 312.03
of the NYSE Listed Company Manual, the issuance of New Grindr Common Stock to Grindr’s members pursuant to the Merger Agreement. Please see the section entitled “Proposal No. 6—The Stock Issuance Proposal”;
and
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a proposal by ordinary resolution to adjourn the extraordinary general meeting to a later date or dates, if necessary, to
permit further solicitation and vote of proxies in the event that there are insufficient votes for, or otherwise in connection with, the approval of one or more proposals at the extraordinary general meeting. Please see the section
entitled “Proposal No. 7—The Adjournment Proposal.”
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The Business Combination Proposal, The Domestication Proposal, The
Organizational Documents Proposal and the Stock Issuance Proposal (the “Condition Precedent Proposals”) are each cross-conditioned on the approval of the others. The Director Election Proposal is
conditioned on the approval of the Condition Precedent Proposals. The Adjournment Proposal is not conditioned upon the approval of any other proposal set forth in this proxy statement/prospectus. The Governance Proposal is constituted of
non-binding advisory proposals.
Recommendation of the Tiga Board
The Tiga Board believes that the Business Combination Proposal and
the other proposals to be presented at the extraordinary general meeting are in the best interest of Tiga’s shareholders and unanimously recommends that its shareholders vote “FOR” the Business Combination Proposal, “FOR” the Domestication
Proposal, “FOR” the Organizational Documents Proposal, “FOR” the Governance Proposal, “FOR” the Director Election Proposal, “FOR” the Stock Issuance Proposal and “FOR” the Adjournment Proposal, in each case, if presented to the extraordinary
general meeting.
When you consider the Tiga Board’s recommendation of these
proposals, you should keep in mind that our directors and officers have interests in the Business Combination that are different from, or in addition to, the interests of Tiga shareholder shareholders generally. Please see the section entitled “Proposal No. 1—The Business Combination Proposal—Interests of Certain Persons in the Business Combination” for additional information. The Tiga Board was aware of these interests, among other matters, in
evaluating and negotiating the Business Combination and in recommending to the Tiga shareholders that they vote “FOR” the proposals presented at the extraordinary general meeting.
Record Date; Persons Entitled to Vote
Tiga has fixed the close of business on , 2022, as the record
date for determining Tiga shareholder shareholders entitled to notice of and to attend and vote at the extraordinary general meeting. As of the close of business on the record date, there were Tiga ordinary outstanding and entitled to vote. Each
Tiga ordinary share is entitled to one vote per share at the extraordinary general meeting.
Quorum
The presence at the extraordinary general meeting by attendance in
person via the virtual meeting website or by proxy, of the holders of a majority of the Tiga outstanding ordinary shares as of the record date entitled to vote constitutes a quorum at the extraordinary general meeting. Proxies that are marked
“abstain” will be treated as shares present for purposes of determining the presence of a quorum on all matters. Abstentions and broker non-votes, while considered present for the purposes of establishing a quorum, will not count as a vote cast
at the extraordinary general meeting.
Vote Required
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Business Combination Proposal: The approval of the Business
Combination Proposal requires an ordinary resolution under Cayman Islands law, being the affirmative vote of holders of a majority of the ordinary shares represented in person, virtually or by proxy and entitled to vote thereon and who
vote at the extraordinary general meeting.
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Domestication Proposal: The approval of the Domestication Proposal
requires a special resolution under Cayman Islands law, being the affirmative vote of the holders of a majority of at least two-thirds of the ordinary shares represented in person, virtually or by proxy and entitled to vote thereon and
who vote at the extraordinary general meeting.
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Organization Documents Proposal: The approval of the Organizational
Documents Proposal requires a special resolution under the Cayman Islands law, being the affirmative vote of the holders of a majority of at least two-thirds of the ordinary shares represented in person, virtually or by proxy and entitled
to vote thereon and who vote at the extraordinary general meeting.
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Governance Proposal: The Governance Proposal is constituted of
non-binding advisory proposals, and requires an ordinary resolution under the Cayman Islands law, being the affirmative vote of holders of a majority of the ordinary shares represented in person, virtually or by proxy and entitled to vote
thereon and who vote at the extraordinary general meeting.
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Director Election Proposal: The approval of the Director Election
Proposal requires an ordinary resolution of the holders of Tiga Class B ordinary shares under Cayman Islands law, being the affirmative vote of holders of a majority of the Tiga Class B ordinary shares represented in person, virtually or
by proxy and entitled to vote thereon and who vote at the extraordinary general meeting.
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Stock Issuance Proposal: The approval of the Stock Issuance
Proposal requires an ordinary resolution under Cayman Islands law, being the affirmative vote of holders of a majority of the ordinary shares represented in person, virtually or by proxy and entitled to vote thereon and who vote at the
extraordinary general meeting.
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Adjournment Proposal: The approval of the Adjournment Proposal
requires an ordinary resolution under Cayman Islands law, being the affirmative vote of holders of a majority of the ordinary shares represented in person, virtually or by proxy and entitled to vote thereon and who vote at the
extraordinary general meeting.
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The Condition Precedent Proposals are each cross-conditioned on the
approval of the others. The Director Election Proposal is conditioned on the approval of the Condition Precedent Proposals. The Adjournment Proposal is not conditioned upon the approval of any other proposal set forth in this proxy
statement/prospectus. The Governance Proposal is constituted of non-binding advisory proposals.
Effect of Abstentions and Broker Non-Votes
Abstentions and broker non-votes, while considered present for the
purposes of establishing a quorum, will not count as a vote cast at the extraordinary general meeting.
Under the rules of various national and regional securities
exchanges, your broker, bank or nominee cannot vote your shares with respect to non-routine matters unless you provide instructions on how to vote in accordance with the information and procedures provided to you by your broker, bank or nominee.
We believe the proposals presented to the shareholders at the extraordinary general meeting will be considered non-routine and, therefore, your broker, bank or nominee cannot vote your shares without your instruction on any of the proposals
presented at the extraordinary general meeting. If you do not provide instructions with your proxy, your broker, bank, or other nominee may deliver a proxy card expressly indicating that it is NOT voting your shares; this indication that a
broker, bank or nominee is not voting your shares is referred to as a “broker non-vote.”
Broker non-votes will be counted as present for the purposes of
determining the existence of a quorum, but will not be counted for purposes of determining the number of votes cast at the extraordinary general meeting. Your bank, broker or other nominee can vote your shares only if you provide instructions on
how to vote. You should instruct your broker to vote your shares in accordance with directions you provide.
Voting Your Shares
Each Tiga ordinary share that you own in your name entitles you to
one vote. If your shares are held in “street name” or are in a margin or similar account, you should contact your broker to ensure that votes related to the shares you beneficially own are properly counted.
There are two ways to vote your Tiga ordinary shares at the
extraordinary general meeting:
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You Can Vote By Signing and Returning the Enclosed Proxy Card. If you vote by proxy
card, your “proxy,” whose name is listed on the proxy card, will vote your shares as you instruct on the proxy card. If you sign and return the proxy card but do not give instructions on how to vote your shares, your shares will be voted
“FOR” the Business Combination Proposal, “FOR” the Domestication Proposal, “FOR” the
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Organizational Documents Proposal, “FOR” the Governance Proposal, “FOR” the Director
Election Proposal, “FOR” the Stock Issuance Proposal and “FOR” the Adjournment Proposal, if presented. Votes received after a matter has been voted upon at the extraordinary general meeting will not be counted.
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You can attend the extraordinary general meeting in person or via the virtual meeting platform and vote during the meeting
by following the instructions on your proxy card. You can access the extraordinary general meeting by visiting the website https://www.virtualshareholdermeeting.com/TINV2022SM. You will need your control number for access. If you do not
have a control number, please contact Continental Stock Transfer & Trust Company. Instructions on how to attend and participate at the extraordinary general meeting are available at .
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However, if your shares are held in the name of your broker, bank or
another nominee, you must get a proxy from the broker, bank or other nominee. That is the only way Tiga can be sure that the broker, bank or nominee has not already voted your shares.
Revoking Your Proxy
If you are a shareholder and you give a proxy, you may revoke it at
any time before it is exercised by doing any one of the following:
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you may send another proxy card with a later date;
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you may notify Tiga’s Secretary in writing before the extraordinary general meeting that you have revoked your proxy; or
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you may attend the extraordinary general meeting, revoke your proxy, and vote at the extraordinary general meeting, as
indicated above.
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Who Can Answer Your Questions About Voting Your Shares
If you are a shareholder and have any questions about how to vote
or direct a vote in respect of your ordinary shares of Tiga, you may call Morrow Sodali, Tiga’s proxy solicitor, at (800) 662-5200 (toll-free) or Tiga at .
Redemption Rights
Pursuant to our current amended and restated memorandum and articles
of association, public shareholders may seek to redeem their shares for cash, regardless of whether they vote “for” or “against” the Business Combination Proposal or vote at all. Any shareholder holding public shares as of the record date may
demand that Tiga redeem such shares for a full pro rata portion of the trust account (which, for illustrative purposes, was approximately $ per share as of , 2022 the record date for the extraordinary general meeting), calculated as of two
business days prior to the anticipated consummation of the Business Combination. If a holder properly and timely seeks redemption as described in this section and the Business Combination is consummated, New Grindr will redeem these shares for a
pro rata portion of funds deposited in the trust account and the holder will no longer own these shares following the Business Combination.
Notwithstanding the foregoing, a public shareholder, together with
any affiliate such holder or any other person with whom such holder is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Exchange Act), will be restricted from seeking redemption rights with respect to more than 15% of the
public shares. Accordingly, all public shares in excess of 15% held by a public shareholder, together with any affiliate of such holder or any other person with whom such holder is acting in concert or as a “group,” will not be redeemed for cash
without the prior consent of Tiga.
The Sponsor has agreed, for no consideration, not to exercise
redemption rights with respect to any ordinary shares of Tiga owned by them in connection with the Business Combination.
Public shareholders may demand redemption by delivering their share
certificates physically or their shares electronically (and any other redemption forms) using Depository Trust Company’s DWAC System, to Tiga’s transfer agent no later than two business days prior to the vote at the extraordinary general meeting.
If you hold the shares in street name, you will have to coordinate with your broker to have your shares certificated or delivered electronically. Certificates that have not been tendered (either physically or electronically) in accordance with
these procedures will not be redeemed for cash. There is a nominal cost associated with this tendering process and the act
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of certificating the shares or delivering them through the DWAC system. The transfer
agent will typically charge the tendering broker $80.00 and it would be up to the broker whether or not to pass this cost on to the redeeming shareholder. In the event the proposed Business Combination is not consummated this may result in an
additional cost to shareholders for the return of their shares.
Any request for redemption, once made by a holder of public ordinary
shares, may not be withdrawn once submitted to Tiga unless the Tiga Board determines (in its sole discretion) to permit the withdrawal of such redemption request (which they may do in whole or in part). Furthermore, if a public shareholder
delivered its certificate and any other redemption forms in connection with an election of its redemption and subsequently decides prior to the applicable date not to elect to exercise such rights, it may simply request that the transfer agent
return the certificate (physically or electronically).
If the Business Combination is not approved or completed for any
reason (including because the minimum available cash condition has not been met as a result of redemptions), then Tiga’s public shareholders who elected to exercise their redemption rights will not be entitled to redeem their shares for a full
pro rata portion of the trust account, as applicable. In such case, Tiga will promptly return any shares or share certificates (if applicable) delivered by public shareholders. Additionally, if Tiga would be left with less than $5,000,001 of net
tangible assets as a result of the public shareholders properly and timely demanding redemption of their shares for cash, Tiga will not be able to consummate the business combination.
The closing price of Tiga’s Class A ordinary shares on , the
record date for the extraordinary general meeting, was $ per share. The cash held in the trust account on such date was approximately $ ($ per public share). Prior to exercising redemption rights, shareholders should verify the
market price of Tiga’s ordinary shares as they may receive higher proceeds from the sale of their Tiga’s ordinary shares in the public market than from exercising their redemption rights if the market price per share is higher than the redemption
price. Tiga cannot assure its shareholders that they will be able to sell their ordinary shares of Tiga in the open market, even if the market price per share is higher than the redemption price stated above, as there may not be sufficient
liquidity in its securities when its shareholders wish to sell their shares.
If a public shareholder exercises its redemption rights, then it
will be exchanging its shares of New Grindr for cash and will no longer own those shares. You will be entitled to receive cash for these shares only if you properly and timely demand redemption no later than the close of the vote on the Business
Combination Proposal by delivering your share certificate (either physically or electronically) and other redemption forms to Tiga’s transfer agent no later than two business days prior to the vote at the extraordinary general meeting, and the
Business Combination is Consummated.
Dissenters’ Rights
The holders of Tiga shares will not have dissenters’ rights under
Cayman Islands law in connection with the Mergers as Tiga is not a constituent company of the Mergers. The holders of Tiga units or warrants will not have appraisal rights in connection with the Mergers.
Proxy Solicitation Costs
Tiga is soliciting proxies on behalf of the Tiga Board. This
solicitation is being made by mail. Tiga and its directors, officers and employees may also solicit proxies in person, by telephone or by other electronic means. Tiga will bear the cost of the solicitation.
Tiga has hired Morrow Sodali to assist in the proxy solicitation
process. Tiga will pay that firm a fee of $30,000 plus disbursements. Such payment will be made from non-trust account funds.
Tiga will ask banks, brokers and other institutions, nominees and
fiduciaries to forward the proxy materials to their principals and to obtain their authority to execute proxies and voting instructions. Tiga will reimburse them for their reasonable expenses.
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Tiga is asking its shareholders to approve by ordinary resolution
and adopt the Merger Agreement. Tiga shareholders should read carefully this proxy statement/prospectus in its entirety for more detailed information concerning the Merger Agreement, a copy of which is attached as Annex A to this proxy
statement/prospectus. In addition, a copy of the Merger Agreement Amendment No. 1 is attached to this proxy statement/prospectus as Annex A-1. Please see the subsection entitled “The Merger Agreement”
below for additional information and a summary of certain terms of the Merger Agreement. You are urged to read carefully the Merger Agreement in its entirety before voting on this proposal.
Because Tiga is holding a shareholder vote on the Mergers, Tiga may
consummate the Mergers only if it is approved by the affirmative vote of the holders of a majority of ordinary shares that are voted at the extraordinary general meeting.
The Merger Agreement
This subsection of the proxy
statement/prospectus describes the material provisions of the Merger Agreement, but does not purport to describe all of the terms of the Merger Agreement. The following summary is qualified in its entirety by reference to the complete text of
the Merger Agreement, a copy of which is attached as Annex A to this proxy statement/prospectus. In addition, a copy of the Merger Agreement Amendment No. 1 is attached to this proxy statement/prospectus as Annex A-1. You are urged to read the
Merger Agreement in its entirety because it is the primary legal document that governs the Mergers.
The Merger Agreement contains representations,
warranties and covenants that the respective parties made to each other as of the date of the Merger Agreement or other specific dates. The assertions embodied in those representations, warranties and covenants were made for purposes of the
contract among the respective parties and are subject to important qualifications and limitations agreed to by the parties in connection with negotiating the Merger Agreement. The representations, warranties and covenants in the Merger Agreement
are also modified in part by the underlying disclosure letters (the “disclosure letters”), which are not filed publicly and which are subject to a contractual standard of materiality different from that generally applicable to shareholders and
were used for the purpose of allocating risk among the parties rather than establishing matters as facts. We do not believe that the disclosure letters contain information that is material to an investment decision. Additionally, the
representations and warranties of the parties to the Merger Agreement may or may not have been accurate as of any specific date and do not purport to be accurate as of the date of this proxy statement/prospectus. Accordingly, no person should
rely on the representations and warranties in the Merger Agreement or the summaries thereof in this proxy statement/prospectus as characterizations of the actual state of facts about Tiga, Grindr or any other matter.
Structure of the Mergers
On May 9, 2022, Tiga entered into the Merger Agreement with
Merger Sub I and Grindr, which was subsequently amended on October 5, 2022 in accordance with the Merger Agreement Amendment No. 1, by and among Tiga, Merger Sub I, Merger Sub II and Grindr, pursuant to which, among other things, following the
Domestication, (i) Merger Sub I will merge with and into Grindr, the separate corporate existence of Merger Sub I will cease and Grindr will be the surviving company and a wholly owned subsidiary of Tiga, (ii) as soon as practicable following
the First Merger and as part of the same overall transaction as the First Merger, the Surviving Company will merge with and into Merger Sub II, the separate corporate existence of such Surviving Company will cease and Merger Sub II will be the
surviving entity and a wholly owned subsidiary of Tiga and (iii) Tiga will change its name to Grindr, Inc.
Prior to and as a condition of the Mergers, pursuant to the
Domestication, Tiga will change its jurisdiction of incorporation by effecting a deregistration under the Companies Act and a domestication under Section 388 of the DGCL, pursuant to which Tiga’s jurisdiction of incorporation will be changed from
the Cayman Islands to the State of Delaware. For more information, see “The Domestication Proposal.”
Consideration
Aggregate Merger Stock Consideration
The total number of shares of New Grindr Common Stock to be
received by Grindr’s unitholders or reserved for issuance to holders of New Grindr Options will be equal to (x) the quotient obtained by dividing (i) the sum of
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(a) the Grindr Valuation plus
(b) the aggregate exercise price of all in-the-money Grindr Options that are issued and outstanding immediately prior to the Effective Time by (ii) $10.00, plus (y) the number of forward
purchase shares and backstop shares received by Grindr or which Grindr is entitled to receive under the A&R Forward Purchase Agreement.
Aggregate Merger Warrant Consideration
The total number of shares of New Grindr Common Stock to be
received by Grindr’s unitholders or reserved for issuance to holders of New Grindr Warrants will be equal to and on the same terms as the forward purchase warrants and backstop warrants received by Grindr or which Grindr is entitled to receive
under the A&R Forward Purchase Agreement (the “Aggregate Merger Warrant Consideration”).
Treatment of Grindr Units
At the Effective Time, by virtue of the First Merger and without
any action on the part of any holder of Grindr Units, each Grindr Unit that is issued and outstanding immediately prior to the Effective Time (other than any Grindr Units subject to Grindr Options or any Grindr Units subject to Grindr
Warrants), shall be cancelled and converted into the right to receive a number of shares of New Grindr Common Stock equal to the Exchange Ratio. Accordingly, each holder of Grindr Units as of immediately prior to the Effective Time shall be
entitled to receive the applicable portion of the Aggregate Merger Stock Consideration equal to (A) the Exchange Ratio, multiplied by (B) the number of Grindr Units held by such holder as
of immediately prior to the Effective Time, with fractional shares rounded down to the nearest whole share.
Treatment of Grindr Options
As of the Effective Time, each Grindr Option that is then
outstanding and unexercised shall be converted into the right to receive New Grindr Options relating to shares of New Grindr Common Stock upon substantially the same terms and conditions as are in effect with respect to such Grindr Option
immediately prior to the Effective Time, including with respect to vesting and termination-related provisions, except that (i) such New Grindr Option shall relate to that whole number of shares of New Grindr Common Stock (rounded down to the
nearest whole share) equal to the number of Grindr Units subject to such Grindr Option, multiplied by the Exchange Ratio, and (ii) the exercise price per share for each such New Grindr Option shall be
equal to the exercise price per unit of such Grindr Option in effect immediately prior to the Effective Time, divided by the Exchange Ratio (the exercise price per share, as so determined, being rounded
up to the nearest full cent).
Treatment of Grindr Warrants
As of the Effective Time, each Grindr Warrant that is outstanding
immediately prior to the Effective Time shall be converted into the right to receive its pro rata share of the Aggregate Merger Warrant Consideration.
Closing
In accordance with the terms and subject to the conditions of the
Merger Agreement, the closing of the Mergers (the “Closing”) will take place at 10:00 a.m., New York Time, on the date that is two (2) business days after the first date on which all conditions set forth
in the Merger Agreement shall have been satisfied or, to the extent legally permissible, waived (other than those conditions that by their terms are to be satisfied at the Closing, but subject to the satisfaction or, to the extent legally
permissible, waiver thereof) or such other time and place as Tiga and Grindr may mutually agree in writing. The date on which the Closing actually occurs is referred to in this Agreement as the “Closing Date.”
Representations and Warranties
The Merger Agreement contains representations and warranties of
Tiga, Merger Sub I and Grindr, certain of which are qualified by materiality and material adverse effect (as defined below) and may be further modified and limited by the disclosure letters. See “Business
Combination Proposal— Material Adverse Effect” below. The representations and warranties of Tiga are also qualified by information included in Tiga’s public filings filed or submitted to the SEC on or prior to the date of the Merger
Agreement (subject to certain exceptions contemplated by the Merger Agreement).
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Representations and Warranties of Grindr
Grindr has made representations and warranties relating to, among
other things, company organization, subsidiaries, due authorization, no conflict, governmental authorities and consents, capitalization of Grindr and its subsidiaries, financial statements, undisclosed liabilities, litigation and proceedings,
legal compliance, contracts and no defaults, Grindr benefit plans, employment and labor relations, taxes, brokers’ fees, insurance, licenses, equipment and other tangible property, real property, intellectual property, data protection, privacy
and cybersecurity, environmental matters, absence of changes, anti-corruption compliance, sanctions and international trade compliance, information supplied, vendors, customers, government contracts and no additional representations or
warranties.
The representations and warranties of Grindr identified as
fundamental under the terms of the Merger Agreement are those made pursuant to: the first and second sentences of Section 4.1 of the Merger Agreement (Company Organization), the first and second sentences
of Section 4.2 of the Merger Agreement (Subsidiaries), Section 4.3 of the Merger Agreement (Due Authorization), Section 4.6 of the Merger Agreement (Capitalization of the Company), Section 4.7 of the Merger Agreement (Capitalization of Subsidiaries) and Section 4.16 of the Merger Agreement (Brokers’ Fees) (collectively, the “Grindr Fundamental Representations”).
Representations and Warranties of Tiga, Merger Sub I
Tiga and Merger Sub I have made representations and warranties
relating to, among other things, company organization, no substantial government ownership interest, due authorization, no conflict, litigation and proceedings, SEC filings, internal controls, listing, financial statements, governmental
authorities and consents, trust account, Investment Company Act and JOBS Act, absence of changes, no undisclosed liabilities, capitalization, brokers’ fees, indebtedness, taxes, business activities, stock market quotation, proxy
statement/registration statement, no outside reliance, fairness opinion, no additional representations or warranties, employees and Section 280G of the Internal Revenue Code of 1986, as amended.
The representations and warranties of Tiga identified as fundamental
under the terms of the Merger Agreement are those made pursuant to the first and second sentences of Section 5.1 of the Merger Agreement (Company Organization), Section 5.3(a) of the Merger Agreement (Due Authorization), Section 5.13 of the Merger Agreement (Capitalization of Acquiror) and Section 5.14 of the Merger Agreement (Brokers’
Fees) (collectively, the “Tiga Fundamental Representations”).
Survival of Representations and Warranties
Except in the case of claims against a person in respect of such
person’s actual fraud, the representations and warranties of the respective parties to the Merger Agreement generally will not survive the Closing.
Material Adverse Effect
Under the Merger Agreement, certain representations and warranties
of Grindr are qualified in whole or in part by a material adverse effect standard for purposes of determining whether a breach of such representations and warranties has occurred. Under the Merger Agreement, certain representations and warranties
of Tiga are qualified in whole or in part by a material adverse effect on the ability of Tiga to enter into and perform its obligations under the Merger Agreement standard for purposes of determining whether a breach of such representations and
warranties has occurred.
Pursuant to the Merger Agreement, a material adverse effect with
respect to Grindr and its subsidiaries, (“Grindr Material Adverse Effect”) means any condition, change, event, state of facts, development, circumstance, occurrence or effect (collectively, “Events”) that, individually or in the aggregate with all other Events, (i) has had, or would reasonably be expected to have, a material adverse effect on the business, assets, liabilities, results of
operations or condition (financial or otherwise) of Grindr and its subsidiaries, taken as a whole or (ii) does or would reasonably be expected to prevent or materially delay, impair or impede the ability of Grindr to consummate the Mergers and
the transactions contemplated thereby.
However, in no event would any of the following, alone or in
combination, be deemed to constitute, or be taken into account in determining whether there has been or will be, a “Grindr Material Adverse Effect” pursuant to clause (i) above:
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any change in applicable laws or GAAP or any interpretation thereof following the date of the Merger Agreement;
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(b)
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any change in interest rates or economic, political, business or financial market conditions generally;
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(c)
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the taking of any action required by the Merger Agreement;
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(d)
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any natural disaster (including hurricanes, storms, tornados, flooding, earthquakes, volcanic eruptions or similar
occurrences), pandemic (including, for the avoidance of doubt, COVID-19) or change in climate (including any effect directly resulting from, directly arising from or otherwise directly related to such natural disaster, pandemic, or change
in climate);
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(e)
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any acts of terrorism or war, the outbreak or escalation of hostilities, geopolitical conditions, local, national or
international political conditions;
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(f)
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any failure of Grindr to meet any projections or forecasts (provided that this clause will not prevent any Event not otherwise
excluded from this definition of Grindr Material Adverse Effect underlying such failure to meet projections or forecasts from being taken into account in determining if a Grindr Material Adverse Effect has occurred or would reasonably be
expected to occur);
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(g)
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any Events generally applicable to the industries or markets in which Grindr and its subsidiaries operate;
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(h)
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the announcement of the Merger Agreement and consummation of the transactions contemplated thereby, including any termination
of, reduction in the scope of, or similar adverse impact (but in each case only to the extent attributable to such announcement or consummation) on relationships, contractual or otherwise, with any landlords, customers, suppliers,
distributors, partners or employees of Grindr and its subsidiaries (it being understood that this clause will be disregarded for purposes of the representation and warranties in Section 4.4 of the Merger Agreement and the corresponding
condition to Closing); or
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(i)
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any action taken by, or at the written request of, Tiga or Merger Sub I.
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Any Event referred to in clauses (a), (b), (d), (e) or (g) above may
be taken into account in determining if a Grindr Material Adverse Effect has occurred to the extent it has a disproportionate and adverse effect on the business, assets, liabilities, results of operations or condition (financial or otherwise) of
Grindr and its subsidiaries, taken as a whole, relative to similarly situated companies in the industry in which Grindr and its subsidiaries conduct their respective operations, but only to the extent of the incremental disproportionate effect on
Grindr and its subsidiaries, taken as a whole, relative to similarly situated companies in the industry in which Grindr and its subsidiaries conduct their respective operations.
Grindr has made covenants relating to, among other things, conduct
of business, purchase agreement, inspection, preparation and delivery of certain audited and unaudited financial statements and affiliate agreements.
Tiga has made covenants relating to, among other things, employee
matters, trust account proceeds and related available equity, listing, the extension of Tiga’s deadline to complete a business combination, Tiga’s conduct of business, post-closing directors and officers, domestication, indemnification and
insurance, Tiga SEC filings, Backstop Commitment and Forward Purchase Commitment and shareholder litigation.
Conduct of Business by Grindr
Grindr has agreed that from the date of the Merger Agreement through
the earlier of the Closing or the termination of the Merger Agreement (the “Interim Period”), it will, and will cause its subsidiaries to, except (i) as otherwise explicitly contemplated by the Merger
Agreement or the Ancillary Agreements (as defined in the Merger Agreement), (ii) as required by law, (iii) as consented to by Tiga in writing (which consent will not be unreasonably conditioned, withheld, delayed or denied), (iv) as required to
comply with COVID-19 Measures (as defined in the Merger Agreement) or (v) in connection with any commercially reasonable action taken or not taken by Grindr or any of its subsidiaries in good faith to mitigate the risk to Grindr or any of its
subsidiaries as a result of adverse changes arising after the date hereof in respect of COVID-19 (in each case of clause (iv) and/or clause (v), but only to the extent reasonable and prudent in light of the business of Grindr and its subsidiaries
and, where applicable, the circumstances giving rise to adverse changes in respect of COVID-19 or the COVID-19 Measures), operate the business of Grindr in the ordinary course, maintain its relationship with key customers and suppliers, and
continue to accrue and collect accounts receivable, accrue and pay accounts payable and other expenses, establish reserves for uncollectible accounts and doubtful receivables and manage inventory, assets, properties and goodwill, in each case,
consistent with past practice.
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During the Interim Period, Grindr has also agreed not to, and to
cause its subsidiaries not to, except as otherwise contemplated by the Merger Agreement or the Ancillary Agreements as required by law, as required to comply with COVID-19 Measures or in connection with any commercially reasonable action taken by
Grindr or any of its subsidiaries in good faith to mitigate the risk to the Grindr or any of its subsidiaries as a result of adverse changes arising after the date hereof in respect of COVID-19 (in each case only to the extent reasonable and
prudent in light of the business of the Grindr and its subsidiaries and, where applicable, the circumstances giving rise to adverse changes in respect of COVID-19 or the COVID-19 Measures), as set forth in Grindr’s disclosure letter or as
consented to by Tiga in writing (which consent will not be unreasonably conditioned, withheld, delayed or denied), except that consent shall not be required if Grindr reasonably believes that obtaining such consent may violate law:
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change or amend the governing documents of Grindr or any of its subsidiaries or form or cause to be formed any new subsidiary
of Grindr;
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other than a distribution in an amount no greater than the Permitted Distribution Amount (as defined in the Merger Agreement),
make, declare, set aside, establish a record date for or pay any dividend or distribution to the members of Grindr or make any other distributions in respect of any of the Grindr Units or equity interests;
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split, combine, reclassify, recapitalize or otherwise amend any terms of any shares or series of Grindr’s or any of its
subsidiaries’ capital stock or equity interests, except for any such transaction by a wholly owned subsidiary of Grindr that remains a wholly owned subsidiary of Grindr after consummation of such transaction;
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purchase, repurchase, redeem or otherwise acquire any issued and outstanding share capital, outstanding shares of capital
stock, membership interests or other equity interests of Grindr or its subsidiaries, except for (i) the acquisition by Grindr or any of its subsidiaries of any shares of capital stock, membership interests or other equity interests (other
than Grindr Options) of Grindr or its subsidiaries in connection with the forfeiture or cancellation of such interests and (ii) transactions between Grindr and any wholly-owned subsidiary of Grindr or between wholly owned subsidiaries of
Grindr;
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except in the ordinary course of business consistent with past practice (i) enter into, modify in any material respect or
terminate (other than expiration in accordance with its terms) any material contracts or any real property lease or (ii) waive, delay the exercise of, release or assign any material rights or claims under any material contract or any real
property lease;
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sell, assign, transfer, convey, lease, license, abandon, allow to lapse or expire, subject to or grant any lien on or otherwise
dispose of any material assets or properties of Grindr or its subsidiaries, except for (i) dispositions of obsolete or worthless equipment and (ii) transactions among Grindr and its wholly owned subsidiaries or among its wholly owned
subsidiaries;
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acquire any ownership interest in any real property;
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except as required by an existing benefit plan (i) grant any change in control or similar pay (including any cash or equity or
equity-based incentive) (ii) grant any new cash retention payment, except in connection with the (x) hiring of any employee of the Company or its Subsidiaries or (y) promotion of any employee of the Company or its Subsidiaries below the
level of Vice President, in each case, in the ordinary course of business consistent with past practice (which amount will not exceed $500,000 in the aggregate), (iii) grant any severance, termination or similar pay, except in connection
with the promotion, hiring or termination of employment of any employee of Grindr or its subsidiaries in the ordinary course of business consistent with past practice, (iv) make any change in the key management structure of Grindr or any
of Grindr’s subsidiaries, including (x) the hiring of additional employees with annual compensation in excess of $300,000 or additional officers or (y) the termination of existing employees with annual compensation in excess of $300,000
or existing officers, other than terminations for cause or due to death or disability, (v) terminate, adopt, enter into or amend any benefit plan other than with respect to welfare benefit plans in the ordinary course of business
consistent with past practice, (vi) increase the annual base salary or bonus opportunity of any employee, officer, director or other individual service provider with annual compensation in excess of $300,000, (vii) establish any trust or
take any other action to secure the payment
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of any compensation payable by Grindr or any of Grindr’s subsidiaries or (vii) take
any action to amend or waive any performance or vesting criteria or to accelerate the time of payment of vesting of any compensation or benefit payable by Grindr or any of Grindr’s subsidiaries, except in the ordinary course of business
consistent with past practice;
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directly or indirectly acquire by merger or consolidation with, or merge or consolidate with, or purchase substantially all or
a material portion of the assets or equity interests of, any corporation, partnership, association, joint venture or other business organization or division thereof;
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(i) make or change any material election in respect of material taxes, (ii) materially amend, modify or otherwise change any
filed income or other material tax return, (iii) adopt or request permission of any taxing authority to change any accounting method in respect of material taxes, (iv) enter into any closing agreement in respect of taxes or enter into any
tax sharing or similar agreement (other than customary commercial contracts entered in the ordinary course of business, the principal subject of which is not taxes), (v) settle any claim or assessment in respect of taxes, (vi) knowingly
surrender or allow to expire any right to claim a refund of material taxes, (vii) consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of material taxes (other than in connection
with a customary extension of the due date for filing a tax return obtained in the ordinary course of business), (viii) request a ruling or similar guidance from any governmental authority with respect to any tax matter, or (ix) file any
income or other material tax return in a manner inconsistent with past practice;
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enter into or amend any agreement with, or pay, distribute or advance any assets or property to, any of its officers,
directors, managers, employees, partners, members or other affiliates, subject to limited exceptions;
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implement employee layoffs, plant closing, reductions in force, furloughs, temporary layoffs, salary or wage reductions, work
schedule changes or other such actions that could reasonably be expected to require advance notice under the WARN Act;
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take or knowingly fail to take any action, where such action or failure to act could reasonably be expected to prevent the
First Merger, taken together with the Second Merger, from qualifying as a “reorganization” within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended and the Treasury Regulations;
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issue any additional Grindr Units or securities exercisable for or convertible into Grindr Units (including any Grindr Option),
other than (i) the issuance of Grindr Options in the ordinary course of business or (ii) the issuance of Grindr Units upon the exercise or settlement of Grindr Options, in each case, to the extent required pursuant to the terms of the
applicable award agreement in effect as of the date of the Merger Agreement;
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adopt a plan of, or otherwise enter into or effect a, complete or partial liquidation, dissolution, restructuring,
recapitalization or other reorganization of Grindr or its subsidiaries (other than the Mergers);
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(i) cancel or compromise any claim or indebtedness owed to Grindr or any of its subsidiaries or (ii) waive, release, settle,
compromise or otherwise resolve any action, litigation or other proceedings, except where such waivers, releases, settlements or compromises only the payment of monetary damages in an amount less than $250,000 in the aggregate;
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sell, assign, lease, license, sublicense, covenant not to assert, encumber, cancel, dispose of, abandon, fail to maintain,
permit to lapse or expire, convey, or otherwise transfer (or agree to do any of the foregoing with respect to), directly or indirectly, any material Grindr intellectual property, except for (i) the expiration of Grindr’s registered
intellectual property in accordance with the applicable statutory term (without the possibility of any further extension or renewal) or (ii) non-exclusive, non-source code licenses granted in the ordinary course of business consistent
with past practice;
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disclose or agree to disclose to any person (other than Tiga or any of its representatives) any trade secret or any other
material confidential or proprietary information, know-how or process of Grindr or any of its subsidiaries, in each case, other than in the ordinary course of business consistent with past practice and pursuant to customary contractual
obligations to maintain the confidentiality thereof;
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make or commit to make capital expenditures other than in an amount not in excess of the amount disclosed in Grindr’s
disclosure letter, in the aggregate;
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enter into or extend any collective bargaining agreement or similar labor agreement, or recognize or certify any labor union,
labor organization, or group of employees of Grindr or its subsidiaries as the bargaining representative for any employees of Grindr or its subsidiaries;
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terminate without replacement or fail to use reasonable efforts to maintain any license that is material to the conduct of the
business of Grindr and its subsidiaries, taken as a whole;
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waive the restrictive covenant obligations of any current employee of Grindr or any of Grindr’s subsidiaries;
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(i) limit the right of Grindr or any of its subsidiaries to engage in any line of business or in any geographic area, to
develop, market or sell products or services, or to compete with any person or (ii) grant any exclusive or similar rights to any person, in each case, except where such limitation or grant does not, and would not be reasonably likely to,
individually or in the aggregate, materially and adversely affect, or materially disrupt, the ordinary course operation of the businesses of Grindr and its subsidiaries, taken as a whole;
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terminate without replacement or amend in a manner materially detrimental to Grindr and its subsidiaries, taken as a whole, any
insurance policy insuring the business of Grindr or any of its subsidiaries;
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incur, guarantee or otherwise become liable for (whether directly, contingently or otherwise) any indebtedness, issue or sell
any debt securities or any rights to acquire debt securities of Grindr or any of its subsidiaries, or enter into any arrangement having the economic effect of any of the foregoing;
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incur any liens other than specified permitted liens;
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make any loans or advance any money or other property to any person, except for (i) prepayments and deposits paid to suppliers
of Grindr or any of its subsidiaries in the ordinary course of business or (ii) trade credit extended to customers of Grindr or any of its subsidiaries in the ordinary course of business;
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enter into a material new line of business;
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make any change in its customary accounting principles or methods of accounting materially affecting the reported consolidated
assets, liabilities or results of operations of Grindr or any of its subsidiaries, other than as may be required by applicable law, GAAP or regulatory guidelines;
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enter into, modify or supplement in any material respect, waive any material rights under or terminate any contract that is (or
would be if entered into prior to the date of the Merger Agreement) a material contract, other than in the ordinary course of business or as required by law; or
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enter into any agreement or otherwise become obligated to take any of the above actions prohibited under the Merger Agreement.
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Conduct of Business of Tiga
Tiga has agreed that during the Interim Period, it will, and will
cause Merger Sub I to, except as required by law, as contemplated by the Merger Agreement (including as contemplated by the Backstop Commitment, the Forward Purchase Commitment and any PIPE Investment or in connection with the Domestication), in
connection with the Domestication or as consented to by Grindr in writing (which consent will not be unreasonably conditioned, withheld, delayed or denied), operate its business in the ordinary course and consistent with past practice, operate
its business in the ordinary course and consistent with past practice.
During the Interim Period, except as consented to by Grindr in
writing (which consent shall not be unreasonably conditioned, withheld, delayed or denied), Tiga has also agreed not to, and to cause Merger Sub I not to, except as otherwise contemplated by the Merger Agreement (including as contemplated by the
Backstop Commitment, the Forward Purchase Commitment and any PIPE Investment or in connection with the Domestication) or the Ancillary Agreements or as required by applicable law:
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seek any approval from Tiga’s shareholders to change, modify or amend the Trust Agreement or the governing documents of Tiga or
Merger Sub I, except as otherwise contemplated by the proposals set forth in this proxy statement/prospectus;
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(i) make or declare any dividend or distribution to the shareholders of Tiga or make any other distributions in respect of any
of Tiga’s equity interests or Merger Sub I’s capital stock, share capital or equity interests, (ii) split, combine, reclassify or otherwise amend any terms of any shares or series of Tiga’s equity interests, Merger Sub I’s capital stock
or (iii) purchase, repurchase, redeem or otherwise acquire any issued and outstanding share capital, outstanding shares of capital stock, share capital or membership interests, warrants or other equity interests of Tiga or Merger Sub I
other than a redemption of Tiga Class A ordinary shares effected in connection with the Mergers;
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take certain actions with respect to tax related matters, including, among others, make or change any material election in
respect of material taxes, amend, modify or otherwise change any filed income or other material tax return and related activities or enter into any closing agreement, tax sharing or similar agreement in respect of taxes;
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take or knowingly fail to take any action, where such action or failure to act could reasonably be expected to prevent either
the First Merger, taken together with the Second Merger, from qualifying as a “reorganization” within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended and the Treasury Regulations thereunder;
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enter into, renew or amend in any material respect, any transaction or contract with an affiliate of Tiga or Merger Sub I
(including, for the avoidance of doubt, (i) the Sponsor and (ii) any person in which the Sponsor has a direct or indirect legal, contractual or beneficial ownership interest of 5% or greater);
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incur or assume any indebtedness or guarantee any indebtedness of another person, issue or sell any debt securities or warrants
or other rights to acquire any debt securities of Grindr or any of its subsidiaries or guaranty any debt security of another person, other than (i) any indebtedness for borrowed money or guarantee from its affiliates and members or
shareholders in order to meet its reasonable administrative costs and expenses and other capital requirements (including the costs and expenses necessary for any PIPE Investment, investment made under the Backstop Commitment and the
Forward Purchase Commitment), with any such loans to be made only as reasonably required by the operation of Tiga in due course on a non-interest basis and otherwise on arm’s-length terms and conditions and repayable at the Closing,
(ii) any Indebtedness in respect of any working capital loan in an aggregate amount not to exceed $950,000 (in addition to the $1,250,000 outstanding under working capital loans as of the date of the Merger Agreement), or (iii) incurred
between Tiga and Merger Sub I;
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(i) issue any securities of Tiga or securities exercisable for or convertible into securities of Tiga, other than (x) the
issuance of the shares of New Grindr Common Stock comprising the Aggregate Merger Stock Consideration, (y) the issuance of New Grindr Warrants comprising the Aggregate Merger Warrant Consideration, (z) the issuance of Tiga private
placement warrants to the Sponsor in connection with the extension of the time period for Tiga to consummate a business combination, or (aa) as contemplated by the Merger Agreement (including but not limited to pursuant to the Backstop
Commitment, the Forward Purchase Commitment or a PIPE Investment), (ii) grant any options, warrants or other equity-based awards with respect to securities of Tiga, not outstanding on the date of the Merger Agreement, other than the
issuance of Tiga private placement warrants to the Sponsor for the purpose of extending the period of time to consummate a business combination, or (iii) modify or waive any of the material terms or rights set forth in any Tiga warrant
or the Warrant Agreement, including any amendment, modification or reduction of the warrant price set forth therein;
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hire any employees or engage any independent contractors, advisors or consultants, in each case, with annual compensation in
excess of $200,000; or
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or enter into any agreement to do any of the above actions prohibited under the Merger Agreement.
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Covenants of Tiga
Pursuant to the Merger Agreement, Tiga has agreed, among other things,
to:
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prior to the Closing Date, obtain approval for and adopt an incentive equity plan and an employee stock purchase plan, in each
case, in a form to be mutually agreed by Tiga and Grindr;
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as soon as reasonably practicable following the expiration of the sixty-day period after Tiga has filed current Form 10
information with the SEC, file an effective registration statement on Form S-8 (or other
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applicable form, including Form S-3) with respect to the New Grindr Common Stock
issuable under the incentive equity plan and the employee stock purchase plan and use reasonable best efforts to maintain the effectiveness of such registration statement(s) (and the current status of the prospectus or prospectuses contained
therein) for so long as awards granted thereunder remain outstanding;
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take certain actions so that the Available Closing Tiga Cash will be released from the trust account and so that the trust
account will terminate thereafter, in each case, pursuant to the terms and subject to the terms and conditions of the Trust Agreement;
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during the Interim Period, use reasonable best efforts to cause Tiga to remain listed as a public company on NYSE and obtain
approval for the listing of the shares of New Grindr Common Stock issuable in the First Merger and the Domestication;
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cause the Sponsor to extend the deadline by which it must complete its business combination to November 27, 2022, consistent
with its governing documents;
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use its reasonable best efforts to ensure that the board of directors of New Grindr shall consist of the individuals listed on
Tiga’s disclosure letter and the additional individuals agreed between Tiga and Grindr pursuant to the parameters set forth on Tiga’s disclosure letter;
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subject to the terms of Tiga’s governing documents, take all such action within its power as may be necessary or appropriate
such that immediately following the Effective Time, the board of directors of New Grindr shall have a majority of “independent” directors for the purposes of the NYSE, each of whom shall serve in such capacity in accordance with the terms
of the governing documents of New Grindr following the Effective Time; and the initial officers of Tiga will be as set forth in Tiga’s disclosure letter, each of whom will serve in such capacity in accordance with the terms of the
governing documents of New Grindr following the Effective Time;
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subject to approval of Tiga’s shareholders, cause the Domestication to become effective prior to the Effective Time (see “Domestication Proposal”);
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after the Effective Time, indemnify and hold harmless each present and former director, manager and officer of Grindr and Tiga
and each of their respective subsidiaries against any costs, expenses, damages or liabilities incurred in connection with any action, to the fullest extent that would have been permitted under applicable law and the applicable governing
documents to indemnify such person;
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maintain, and cause its subsidiaries to maintain for a period of not less than six years from the Effective Time (i) provisions
in its governing documents and those of its subsidiaries concerning the indemnification and exoneration of its subsidiaries and their subsidiaries’ former and current officers, directors and employees and agents, no less favorable than as
contemplated by the applicable governing documents of Grindr immediately prior to the Effective Time and (ii) a directors’/managers’ and officers’ liability insurance policy covering those persons who are currently covered by Tiga’s,
Grindr’s or their respective subsidiaries’ directors’/managers’ and officers’ liability insurance policies on terms no less favorable than the terms of such current insurance coverage, except that in no event will Tiga be required to pay
an annual premium for such insurance in excess of 300% of the aggregate annual premium payable by Tiga or Grindr, as applicable, for such insurance policy for the year ended December 31, 2021;
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on the Closing Date, enter into customary indemnification agreements reasonably satisfactory to each of Grindr and Tiga with
the post-Closing directors and officers of New Grindr, which indemnification agreements will continue to be effective following the Closing;
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during the Interim period, use its reasonable best efforts to keep current and timely file all reports required to be filed or
furnished with the SEC;
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except as otherwise approved by Grindr (which approval shall not be unreasonably withheld, conditioned or delayed) or as would
not increase conditionally or impose any new obligation on Grindr or Tiga, not agree to reduce the Backstop Subscription Amount (but only in the case where the Non-FPS Amount is less than $50,000,000 immediately prior to the Closing but
following the Domestication) or the Forward Purchase Commitment Amount or reduce or impair the rights of Tiga or any third-party beneficiary rights of Grindr under the A&R Forward Purchase Agreement, not permit any material amendment
or modification to be made to, any material waiver (in whole or in part) of, or provide consent to modify
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(including consent to terminate), any material provision or material remedy under, or
any replacements of, the A&R Forward Purchase Agreement, in each case, other than any assignment or transfer contemplated therein or expressly permitted thereby (without any further amendment, modification or waiver to such assignment or
transfer provision);
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use its reasonable best efforts to take, or to cause to be taken, all actions required, necessary or that it deems to be proper
or advisable to consummate the transaction contemplated by the A&R Forward Purchase Agreement on the terms described therein, including using its reasonable best efforts to enforce its rights under the A&R Forward Purchase
Agreement to cause the Forward Purchase Investors to pay to (or as directed by) Tiga the applicable purchase price under the A&R Forward Purchase Agreement in accordance with its terms; and
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prior to the Closing Date, promptly notify and keep Grindr reasonably informed of the status of any litigation brought or, to
Tiga’s knowledge, threatened in writing against Tiga or its board of directors by any of Tiga’s shareholders in connection with the Merger Agreement, any Ancillary Agreement or the transactions contemplated therein, and will provide
Grindr with the opportunity to participate in the defense of such litigation and will not settle or any such litigation without the prior written consent of Grindr (such consent not to be unreasonably withheld, conditioned or delayed).
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Covenants of Grindr
Pursuant to the Merger Agreement, Grindr has agreed, among other
things, to:
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subject to confidentiality obligations that may be applicable to information furnished to Grindr or any of its subsidiaries by
third parties and except for any information that is subject to attorney-client privilege, and to the extent permitted by applicable law, afford Tiga and its accountants, counsel and other representatives reasonable access during the
Interim Period to (i) their properties, books, contracts, commitments, tax returns, records and (promptly following the execution of a consent in form and substance reasonably acceptable to such auditors or independent accountants)
accounts and work papers of Grindr and its subsidiaries’ independent accountants and auditors and (ii) appropriate officers and employees and furnish such representatives will all financial and operating data and other information
concerning the business and affairs of Grindr and its subsidiaries that are in the possession of Grindr or its subsidiaries as such representatives may reasonably request;
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provide to Tiga and, if applicable, its accountants, counsel or other representatives, (i) such information and such other
materials and resources relating to any action initiated, pending or threatened during the Interim Period, or to the compliance and risk management operations and activities of Grindr and its subsidiaries during the Interim Period, in
each case, as Tiga or such representative may reasonably request, (ii) prompt written notice of any material status updates in connection with any such actions or otherwise relating to any compliance and risk management matters or
decisions of Grindr or its subsidiaries, and (iii) copies of any communications sent or received by Grindr or its subsidiaries in connection with such actions, matters and decisions;
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act in good faith to deliver to Tiga, as soon as reasonably practicable following the date of the Merger Agreement, (i) the
audited financial statements (together with the auditor’s reports thereon) of Grindr and its subsidiaries as of and for the year ended December 31, 2021, (ii) as soon as reasonably practicable following May 14, 2022, unaudited financial
statements of Grindr and its subsidiaries as of and for the three-month period ended March 31, 2022 and (iii) if the Effective Time has not occurred prior to August 12, 2022, unaudited financial statements of Grindr and its subsidiaries
as of and for the three-month period ended June 30, 2022; and
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at or prior to Closing, terminate and settle all Affiliate Agreements (as defined in the Merger Agreement) set forth in the
applicable section of Grindr’s disclosure letter without further liability to Tiga, Grindr or any of its subsidiaries and deliver to Tiga evidence of such termination of settlement.
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Joint Covenants of Tiga and Grindr
In addition, each of Tiga and Grindr has agreed, among other things, to
take certain actions set forth below.
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Each of Tiga and Grindr will (and, to the extent required, will cause its affiliates to) (i) comply promptly but in no event
later than ten (10) business days after the date hereof with the notification and reporting
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requirements of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended,
and the rules and regulations promulgated thereunder (the “HSR Act”) to consummate the transactions contemplated in the Merger Agreement, and use their reasonable best efforts to cause the expiration or
termination of any applicable waiting periods under the HSR Act and promptly to obtain required consents, approvals, and expirations or terminations of waiting periods under any other applicable antitrust laws (the “Required Regulatory Approvals”), (ii) use their reasonable best efforts to cooperate with each other in making all filings and timely obtaining all Required Regulatory Approvals and (iii) unless otherwise agreed by Tiga and
Grindr in writing, supply to any governmental entity as promptly as practicable any additional information or documents that may be requested pursuant to, and substantially comply with any information or document requests with respect to
antitrust matters, as contemplated by the Merger Agreement.
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Tiga and Grindr shall, if and as required or otherwise deemed advisable after good faith discussions, seek and achieve approval
of the Committee on Foreign Investment in the United States, including each member agency acting in such capacity (“CFIUS”), including by: (i) using their respective reasonable best efforts to
obtain CFIUS approval as promptly as practicable after the date of the Merger Agreement; (ii) taking or causing to be taken the following actions as promptly as practicable following the date of this Agreement, (A) providing all necessary
information needed for a notice to CFIUS (a “CFIUS Notice”), (B) submitting a CFIUS Notice to CFIUS (in whichever form Grindr and Tiga agree), and (C) providing any information requested by CFIUS
or any other U.S. governmental entity in connection with the CFIUS review or investigation of the Mergers, within the time periods specified or otherwise provided by CFIUS; and (iii) in connection with the efforts to obtain CFIUS
Approval, (A) cooperating in all respects and reasonably consulting and coordinating with each other in connection with the CFIUS Notice; (B) promptly informing the other parties of any material communication received from, or given to,
CFIUS; and (C) to the extent permitted by CFIUS, permitting the other parties to review in advance any communication with, and consulting with each other in advance of any meeting, substantive telephone call or conference with, CFIUS, and
giving any other party a reasonable opportunity to attend and participate in any meetings, substantive telephone calls or conferences with CFIUS, in each of clauses (A), (B) and (C) immediately above, subject to confidentiality
considerations contemplated by Section 721 of the Defense of Production Act of 1950, as amended or as may be required by CFIUS.
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Tiga and Grindr will jointly prepare and Tiga will file with the SEC this proxy statement/prospectus, as mutually agreed upon
by Tiga and Grindr in connection with the registration under the Securities Act of (i) the shares of New Grindr Common Stock and New Grindr Warrants to be issued in connection with the Domestication and (ii) the shares of New Grindr
Common Stock to be issued in the First Merger.
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Each of Tiga and Grindr will use its reasonable best efforts to (i) cause this proxy statement/prospectus to comply with the
rules and regulations promulgated by the SEC and (ii) to have this proxy statement/prospectus declared effective under the Securities Act as promptly as practicable after such filing and to keep this proxy statement/prospectus effective
as long as is necessary to consummate the transactions contemplated by the Merger Agreement and otherwise ensure that the information contained therein contains no untrue statement of material fact or material omission.
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Tiga will, as promptly as practicable after this proxy statement/prospectus is declared effective under the Securities Act,
(i) disseminate this proxy statement/prospectus to shareholders of Tiga, (ii) give notice, convene and hold a meeting of the shareholders to vote on the proposals set forth in this proxy statement/prospectus, in each case in compliance
with applicable law, for a date no later than 30 business days following the date this proxy statement/prospectus is declared effective, (iii) solicit proxies from the holders of public shares of Tiga to vote in favor of each of the
proposals set forth in this proxy statement/prospectus and (iv) provide its shareholders (including the holders of Tiga Class A ordinary shares) with the opportunity to elect to effect a redemption.
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Grindr will use its reasonable best efforts to obtain pursuant to the written consent, in form and substance reasonably
acceptable to Tiga, the solicit and obtain the requisite unitholder approval in favor of the adoption and approval of the Merger Agreement and the transactions contemplated thereby, including the Mergers, after the date on which this
proxy statement/prospectus becomes effective, but in any event within two (2) business days following the date that Tiga notifies Grindr of the effectiveness of the effectiveness of this proxy statement/prospectus.
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Tiga and Grindr will each, and will cause their respective subsidiaries to, use reasonable best efforts to obtain all material
consents and approvals of third parties that any of Tiga, Grindr, or their respective affiliates are required to obtain in order to consummate the Mergers.
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Each of Grindr and Tiga will, prior to the Closing, take all such steps as may be required (to the extent permitted under
applicable law) to cause any dispositions of shares of Grindr units or acquisitions of shares of New Grindr Common Stock (including, in each case, securities deliverable upon exercise, vesting or settlement of any derivative securities)
resulting from the transactions contemplated by the Merger Agreement by each individual who may become subject to the reporting requirements of Section 16(a) of the Exchange Act in connection with the transactions contemplated thereby to
be exempt under Rule B-3 promulgated under the Exchange Act.
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Each of Grindr and Tiga will, and will cause their respective subsidiaries and its and their representatives to, prior to the
Closing, reasonably cooperate in a timely manner in connection with any financing arrangement the parties mutually agree to seek in connection with the transactions contemplated by the Merger Agreement.
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Tiga will use its reasonable best efforts to, and will instruct its financial advisors to, keep Grindr and its financial
advisors reasonably informed with respect to the Backstop Commitment and the Forward Purchase Commitment until the Closing Date.
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Each of Grindr and Tiga (i) will each not, and will each cause their respective affiliates and subsidiaries and their
representatives not to directly or indirectly, prior to the Closing, (a) encourage, solicit, initiate, facilitate or continue inquiries regarding proposals with respect to alternative transactions (which (x) in the case of Grindr,
consists of any inquiry, proposal or offer concerning a merger, consolidation, liquidation, recapitalization, share exchange or other transaction involving the sale, transfer, lease, exchange or other disposition of more than five percent
(5%) of the properties or assets or equity interests of the Grindr and its subsidiaries and (y) in the case of Tiga, consists of alternative business combinations); (b) enter into discussions or negotiations with, or provide any
information to, any person concerning a possible alternative transaction proposal; or (c) enter into any agreements or other instruments (whether or not binding) regarding an alternative transaction proposal, and (ii) will immediately
cease and cause to be terminated, and shall direct its affiliates and all of its and their representatives to immediately cease and cause to be terminated, all existing discussions or negotiations with any persons conducted with respect
to, or that could lead to, any alternative transaction proposal.
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If Tiga elects to seek a PIPE Investment, Tiga and Grindr shall, and shall cause their respective representatives to, cooperate
with each other and their respective representatives in connection with such PIPE Investment and use their respective commercially reasonable efforts to cause such PIPE Investment to occur (including having the Grindr’s senior management
participate in any investor meetings and roadshows as reasonably requested by Tiga); provided, Tiga may not enter into any agreement for a PIPE Investment without the express written consent of
Grindr. To the extent Grindr provides such written consent and Tiga enters into an agreement for a PIPE Investment, Tiga shall not agree to reduce the PIPE Investment amount or the subscription amount under the PIPE Investment agreement
or reduce or impair the rights of Tiga or any third-party rights of Grindr under the PIPE Investment agreement, and Tiga shall not permit any amendment or modification to be made to, any waiver (in whole or in part) of, or provide consent
to modify (including consent to terminate), any provision or remedy under, or any replacements of, the PIPE Investment agreement, in each case, unless approved in writing by Grindr (which approval shall not be unreasonably withheld,
conditioned or delayed).
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Modification in Recommendation
Tiga has agreed that its board of directors will not withdraw,
amend, qualify or modify its recommendation to Tiga’s shareholders that they vote in favor of the proposals set forth in this proxy statement/prospectus (a “Modification in Recommendation”); however, the
Tiga Board may make a Modification of Recommendation if it determines in good faith, after consultation with its outside legal counsel and financial advisors, that a failure to make a Modification in Recommendation would be inconsistent with its
fiduciary and other duties to Tiga’s shareholders under applicable law. Prior to any such Modification in Recommendation, Tiga shall use its reasonable best efforts to notify Grindr of its intention to make a Modification in Recommendation at
least two (2) business days prior to the taking of such action by Tiga and use reasonable best efforts to negotiate in good faith with Grindr if so requested
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by Grindr regarding any revisions or adjustments proposed by Grindr to the terms and
conditions of the Merger Agreement as would enable the Tiga Board to reaffirm its recommendation and not make such Modification in Recommendation. Tiga may make a Modification in Recommendation only if its board of directors, following any such
negotiation and after considering in good faith any revisions or adjustments to the terms and conditions of the Merger Agreement that Grindr shall have offered in writing to Tiga, prior to the expiration of the two (2) business day period,
continues to determine in good faith that failure to make a Modification in Recommendation would be inconsistent with its fiduciary duties to Tiga’s shareholders under applicable law. To the fullest extent permitted by applicable law, no
Modification in Recommendation shall affect Tiga’s obligations to establish a record date for, duly call, give notice of, convene and hold the extraordinary general meeting, and Tiga has agreed to establish a record date for, duly call, give
notice of, convene and hold the extraordinary general meeting and submit for approval the proposals set forth in this proxy statement/prospectus.
The consummation of the Mergers are conditioned upon the
satisfaction or waiver by the applicable parties to the Merger Agreement of the conditions set forth below. Therefore, unless these conditions are waived by the applicable parties to the Merger Agreement, the Mergers may not be consummated. There
can be no assurance that the parties to the Merger Agreement would waive any such provisions of the Merger Agreement.
Minimum Cash Condition
The Merger Agreement provides that the obligations of Grindr to
consummate the Mergers are conditioned on, among other things, that as of the Closing, after distribution of the funds in the Trust Account and deducting all amounts to be paid pursuant to the exercise of redemption rights of public shareholders
and after giving effect to (i) the Backstop Subscription Amount and the Forward Purchase Commitment Amount actually received by Tiga at or prior to the Closing Date plus (ii) any PIPE Investment Amount actually received by Tiga at or prior to the
Closing Date, is equal to or greater than $100,000,000, Tiga having cash on hand equal to or in excess of $100,000,000 (without, for the avoidance of doubt, taking into account any transaction fees, costs and expenses paid or required to be paid
in connection with the Business Combination, the Backstop Commitment, the Backstop Commitment or the PIPE Investment) (the “Minimum Cash Condition”).
Conditions to the Obligations of Each Party
The obligations of each party to the Merger Agreement to consummate,
or cause to be consummated, the Mergers are subject to the satisfaction of the following conditions, any one or more of which may be waived in writing by all of such parties:
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the approval of the proposals set forth in this proxy statement/prospectus by Tiga’s shareholders, will have been obtained;
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Grindr unitholder approval shall have been obtained;
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this proxy statement/prospectus will have become effective under the Securities Act and no stop order suspending the
effectiveness of this proxy statement/prospectus will have been issued and no proceedings for that purpose will have been initiated or threatened by the SEC and not withdrawn;
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the applicable waiting period or periods under the HSR Act (and any extensions thereof, including any agreement with any
governmental authority to delay consummation of the transactions contemplated by the Merger Agreement) applicable to the transactions contemplated by the Merger Agreement will have expired or been terminated, the parties shall have
received CFIUS approval, if and as required or otherwise deemed advisable by the parties after good faith discussions;
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there will not be in force any governmental order, statute, rule or regulation or other action restraining, enjoining or
otherwise prohibiting the consummation of the Mergers or otherwise making the consummation of the Mergers illegal or otherwise prohibited;
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Tiga will have at least $5,000,001 of net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange
Act) remaining after the share redemptions; and
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the shares of New Grindr Common Stock to be issued in connection with the First Merger will have been approved for listing on
the NYSE subject to official notice thereof.
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Conditions to the Obligations of Tiga and Merger Sub I
The obligations of each party to the Merger Agreement to consummate,
or cause to be consummated, the Mergers are subject to the satisfaction of the following conditions, any one or more of which may be waived in writing by all of such parties:
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the Grindr Fundamental Representations since the date of the most recent balance sheet will be true and correct in all respects
as of the Closing Date, except with respect to such representations and warranties that are made as of an earlier date, which representations and warranties will be true and correct in all respects at and as of such date;
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each of the remaining representations and warranties of Grindr contained in the Merger Agreement (disregarding any
qualifications and exceptions contained therein relating to materiality, Grindr Material Adverse Effect or any similar qualification or exception) will be true and correct as of the Closing Date, except with respect to such
representations and warranties that are made as of an earlier date, which representations and warranties will be true and correct at and as of such date, except for, in each case, inaccuracies or omissions that would not, individually or
in the aggregate, reasonably be expected to have a Grindr Material Adverse Effect;
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each of the covenants of Grindr to be performed as of or prior to the Closing will have been performed in all material respects
(subject to a 30-day cure period);
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no Grindr Material Adverse Effect shall have occurred between the date of the Merger Agreement and the Closing Date;
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all parties to each of the Ancillary Agreements (other than Tiga) shall have delivered, or caused to be delivered, to Tiga
copies of each of the Ancillary Agreements duly executed by all such parties, and each of the Ancillary Agreements shall be in full force and effect and shall not have been rescinded by any of the parties thereto (other than Tiga and
Merger Sub I); and
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other than those persons identified as continuing directors in the Grindr disclosure letter, all members of the board of
managers of Grindr and all executive officers of Grindr shall have executed written resignations effective as of the Effective Time.
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Conditions to the Obligations of Grindr
The obligation of Grindr to consummate, or cause to be consummated,
the Mergers are subject to the satisfaction of the following conditions, any one or more of which may be waived in writing by Grindr:
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the Tiga Fundamental Representations will be true and correct in all respects as of the Closing Date, except with respect to
such representations and warranties that are made as of an earlier date, which representations and warranties will be true and correct in all respects at and as of such date;
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each of the representations and warranties of Tiga regarding absence of any changes, the authorized share capital of Tiga and
the exercisability of the Tiga Warrants will be true and correct other than de minimis inaccuracies as of the Closing Date, except with respect to such representations and warranties which speak as to an earlier date, which
representations and warranties will be true and correct other than de minimis inaccuracies at and as of such date, except for changes after the date of the Merger Agreement which are contemplated or expressly permitted by the Merger
Agreement or the Ancillary Agreements,
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each of the other representations and warranties of Tiga (disregarding any qualifications and exceptions contained therein
relating to materiality and material adverse effect or any similar qualification or exception) will be true and correct as of the Closing Date, except with respect to such representations and warranties which speak as to an earlier date,
which representations and warranties will be true and correct at and as of such date, except for, in each case, inaccuracies or omissions that would not, individually or in the aggregate, reasonably be expected to have a material adverse
effect; provided, that, the representations and warranties regarding absence of any changes shall be true and correct solely as of the date of the Merger Agreement;
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each of the covenants of Tiga to be performed as of or prior to the Closing will have been performed in all material respects
(subject to a 30-day cure period);
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the Domestication will have been completed as contemplated by the Merger Agreement and a time-stamped copy of the certificate
issued by the Delaware Secretary of State in relation thereto will have been delivered to Grindr (for additional information, see “Domestication Proposal”);
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excluding deferred underwriting fees and commissions and any fees and expenses incurred in connection with the negotiation,
preparation and execution of the Merger Agreement and the performance of the transactions contemplated thereby, the total outstanding liabilities of Tiga shall not exceed $2,700,000;
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the Minimum Cash Condition. For more information, see “Business Combination Proposal—Minimum
Cash Condition” above;
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the Backstop Commitment and the Forward Purchase Commitment shall have been consummated, where required;
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other than those persons identified as continuing directors on Grindr’s disclosure letter, all members of the Tiga Board and
all executive officers of Tiga shall have executed written resignations effective as of the Effective Time; and
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all parties to each of the Ancillary Agreements (other than Grindr) shall have delivered, or caused to be delivered, to Grindr
copies of each of the Ancillary Agreements duly executed by all such parties.
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The Merger Agreement may be terminated and the Mergers abandoned at any
time prior to the Closing:
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by written agreement of Grindr and Tiga;
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by Grindr or Tiga if any governmental order has become final and nonappealable which has the effect of restraining, enjoining
or otherwise prohibiting the consummation of the Mergers, or if there shall be adopted any law or regulation making consummation of the Mergers illegal or otherwise preventing or prohibiting the Mergers;
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by Grindr or Tiga if Tiga shareholder approval will not have been obtained by reason of the failure to obtain the required vote
at a meeting of Tiga’s shareholders duly convened therefor or at any adjournment thereof;
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by Tiga if either (i) Grindr unitholder approval will not have been obtained or (ii) any part of the Deferred Amount shall not
have been paid in accordance with the Purchase Agreement;
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by Grindr, within five days if there has been a Modification in Recommendation of the Tiga Board with respect to any of the
proposals set forth in this proxy statement/prospectus;
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by written notice to Grindr from Tiga in the event of certain uncured breaches on the part of Grindr or if the Closing has not
occurred on or before 12:01 am Eastern Time on December 31, 2022 (the “Agreement End Date”), unless Tiga is in material breach of the Merger Agreement; or
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by written notice to Tiga from Grindr in the event of certain uncured breaches on the part of Tiga or Merger Sub I or if the
Closing has not occurred on or before the Agreement End Date, unless Grindr is in material breach of the Merger Agreement.
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In the event of the termination of the Merger Agreement, the Merger
Agreement will become void and have no effect, without any liability on the part of any party thereto or its respective affiliates, officers, directors, managers, members or shareholders, other than liability of Grindr, Tiga or Merger Sub I, as
the case may be, for any willful and material breach of the Merger Agreement occurring or actual fraud prior to such termination, other than with respect to certain exceptions contemplated by the Merger Agreement (including the terms of the
Confidentiality Agreement) that will survive any termination of the Merger Agreement.
Waiver; Amendments
No provision of the Merger Agreement may be waived unless such
waiver is in writing and signed by the party or parties against whom such waiver is effective. Any party to the Merger Agreement may, at any time prior to the Closing, by action taken by its board of directors, board of managers, managing member
or other officers or persons thereunto duly authorized, to the extent permitted by law, (a) extend the time for the performance of the obligations or acts of the other parties hereto, (b) waive any inaccuracies in the representations and
warranties (of another party
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hereto) that are contained in the Merger Agreement or (c) waive compliance by the
other parties hereto with any of the agreements or conditions contained in the Merger Agreement, but such extension or waiver will be valid only if in writing signed by the waiving party.
The Merger Agreement may be amended or modified in whole or in part,
only by a duly authorized agreement in writing that is executed in the same manner as the Merger Agreement and which makes reference to the Merger Agreement. Any waiver or amendment pursuant to the terms of the Merger Agreement on behalf of Tiga
shall require the approval of the Special Committee.
Fees and Expenses
If the Closing does not occur, each party to the Merger Agreement
will be responsible for and pay its own expenses incurred in connection with the Merger Agreement and the transactions contemplated hereby, including all fees of its legal counsel, financial advisers and accountants.
If the Closing occurs, New Grindr will, upon the consummation of the
Mergers and release of proceeds from the trust account, pay or cause to be paid all accrued and unpaid transaction expenses of Grindr and pay or cause to be paid all accrued transaction expenses of Tiga or its affiliates (including the Sponsor).
Related Agreements
This section describes certain additional
agreements entered into or to be entered into pursuant to the Merger Agreement, but does not purport to describe all of the terms thereof. The following summary is qualified in its entirety by reference to the complete text of each of the
agreements. The full text of the Related Agreements, or forms thereof, are filed as annexes to this proxy statement/prospectus or as exhibits to the registration statement of which this proxy statement/prospectus forms a part, and the following
descriptions are qualified in their entirety by the full text of such annexes and exhibits. Shareholders and other interested parties are urged to read such Related Agreements in their entirety prior to voting on the proposals presented at the
extraordinary general meeting.
A&R Registration Rights Agreement
The Merger Agreement contemplates that, at the Closing, New Grindr,
the Sponsor, the independent directors of Tiga and certain significant unitholders of Grindr will enter into the A&R Registration Rights Agreement, pursuant to which New Grindr will agree to register for resale, pursuant to Rule 415 under the
Securities Act, certain shares of New Grindr Common Stock and other equity securities of New Grindr that are held by the parties thereto from time to time. The A&R Registration Rights Agreement amends and restates the registration rights
agreement that was entered into by Tiga, the Sponsor and other holders of Tiga’s securities party thereto in connection with the initial public offering. For additional information, see “Proposal No. 1—The
Business Combination Proposal—Related Agreements—A&R Registration Rights Agreement.”
A&R Forward Purchase Agreement
On May 9, 2022, Tiga and the Forward Purchase Investors entered into
the A&R Forward Purchase Agreement, which amends and restates the amended and restated forward purchase agreement that was entered into by Tiga and the parties thereto in connection with the initial public offering. Pursuant to the A&R
Forward Purchase Agreement, Tiga has agreed to issue and sell, and the Forward Purchase Investors have agreed to purchase, on a private placement basis, an aggregate of 5,000,000 forward purchase shares, plus an aggregate of 2,500,000 forward
purchase warrants to purchase one share of New Grindr Common Stock at $11.50 per share, for an aggregate purchase price of $50,000,000, or $10.00 per share, in a private placement to close prior to or concurrently with the Closing on the terms
and conditions set forth therein.
To the extent that the Non-FPS Amount (as defined in the A&R
Forward Purchase Agreement) is less than $50,000,000 immediately prior to the Closing but following the Domestication, the Forward Purchase Investors have agreed pursuant to the A&R Forward Purchase Agreement to purchase (a) a number of
shares of backstop shares equal to (A) (x) $50,000,000 minus (y) the Non-FPS Amount, divided by (B) $10.00, rounded down to the nearest whole number and (b) a number of backstop warrants equal to (I) the number of backstop shares in clause (a)
multiplied by (II) 0.5, rounded down to the nearest whole number. In addition to the foregoing, each Forward Purchase Investor may, at its discretion (regardless of the Non-FPS Amount), subscribe for up to 5,000,000 backstop shares plus up to
2,500,000 backstop warrants at $11.50 per share, for an aggregate purchase price of $50,000,000, or $10.00 for each backstop share and one-half of one backstop warrant.
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The obligations under the A&R Forward Purchase Agreement
do not depend on whether any Tiga Class A ordinary shares are redeemed by the public shareholders. The Forward Purchase Warrants and the Backstop Warrants will have the same terms as the public warrants issued as part of the units. Prior to the
Closing, we expect that San Vicente Parent LLC will enter into the Joinder and Assignment Agreement to A&R Forward Purchase Agreement with Tiga and the Sponsor, which among other things, will provide for, the transfer and assignment of all
of the Sponsor’s rights and obligations under the A&R Forward Purchase Agreement to San Vicente Parent LLC.
Transaction Support Agreement
In connection with the execution of the Merger Agreement, Grindr,
Tiga, Merger Sub I, the Sponsor and the independent directors of Tiga entered into the Transaction Support Agreement. Pursuant to the terms of the Transaction Support Agreement, the Sponsor and the independent directors of Tiga agreed to, among
other things: (i) vote or cause its shares to vote in favor of the Business Combination Proposal and the other proposals included in the accompanying proxy statement/prospectus, (ii) subject to certain exceptions, not transfer, sell, pledge,
encumber, assign, grant an option with respect to, hedge, swap, convert or otherwise dispose of their private placement units, Tiga Class A ordinary shares, Tiga Class B ordinary shares or Tiga Warrants (including the Tiga Class A ordinary shares
issuable upon exercise thereof) held by the Sponsor and the independent directors of Tiga until the earlier of the Closing or the valid termination of the Merger Agreement, (iii) not, directly or indirectly, solicit, initiate, continue or engage
in alternative business combination proposals and (iv) waive applicable anti-dilution protections in Tiga’s amended and restated memorandum and articles of association with respect to the conversion of the Tiga Class B ordinary shares held by
Sponsor and the independent directors of Tiga upon consummation of the Business Combination.
Background to the Business Combination
Tiga is a blank check company incorporated on July 27, 2020 as a
Cayman Islands exempted company formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses. Tiga has neither engaged in any
operations nor generated any revenue to date. Based on Tiga’s business activities, Tiga is a “shell company” as defined under the Exchange Act of 1934 because it has no operations and nominal assets consisting almost entirely of cash.
The Business Combination is the result of an extensive search for a
potential transaction using the network, investing and operating experience of Tiga’s management team and the Tiga Board. The terms of the Merger Agreement were the result of arm’s-length negotiations between Tiga and Grindr and certain of its
members and their respective representatives. The following is a brief description of the background of these negotiations and summary of the key meetings and events that led to the signing of the Merger Agreement. The following chronology does
not purport to catalogue every conversation among the parties to the Merger Agreement or their representatives.
On November 27, 2020, Tiga consummated its initial public offering
of 27,600,000 units, including the issuance of 3,600,000 units as a result of the underwriters’ exercise of their over-allotment option in full. Each unit consists of one Tiga Class A ordinary share and one-half of one redeemable warrant. Each
warrant entitles the holder thereof to purchase one Tiga Class A ordinary share at a price of $11.50 per share. The units were sold at an offering price of $10.00 per unit, generating gross proceeds, before expenses, of $276,000,000.
Prior to the consummation of the initial public offering, on
July 27, 2020, the Sponsor received 5,750,000 founder shares in exchange for a capital contribution of $25,000, or $0.004 per share. On November 23, 2020, Tiga effected a 1,150,000 share dividend, resulting in our initial shareholders holding an
aggregate of 6,900,000 founder shares. On November 23, 2020, the Sponsor transferred 20,000 founder shares to each of David Ryan, Carman Wong and Ben Falloon for the same per-share price initially paid by the Sponsor, resulting in the Sponsor
holding 6,840,000 founder shares. In connection with the underwriters’ exercise of their over-allotment option in full prior to the closing of the initial public offering, on November 27, 2020, no founder shares were surrendered.
Simultaneously with the consummation of the initial public offering,
Tiga consummated the private sale of an aggregate of 10,280,000 warrants, each exercisable to purchase one Tiga Class A ordinary share at $11.50 per share, to the Sponsor at the time of the initial public offering at a price of $1.00 per warrant,
generating gross proceeds, before expenses, of approximately $10,280,000. The warrants sold in that initial private placement are identical to the warrants included in the units sold in the initial public offering, except that, so long as they
are held by their initial purchasers or their permitted transferees, (i) they will not be redeemable by Tiga, (ii) they (including the Tiga Class A ordinary shares issuable upon exercise of these warrants) may not, subject to certain limited
exceptions, be transferred, assigned or sold until 30 days after Tiga completes its initial business combination, (iii) they may be
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exercised by the holders on a cashless basis and (iv) they will be entitled to
registration rights. Upon the closing of the initial public offering and the Initial Private Placement, $278,760,000 was placed in the trust account.
On May 18, 2021, Tiga announced the approval and extension of the
time period to consummate a business combination and the approval of the issuance and sale of certain private placement warrants in connection therewith. On May 20, 2021, the required deposit of $2,760,000 was placed into the trust account and on
May 25, 2021, Tiga issued and sold to the Sponsor 2,760,000 private placement warrants.
On November 17, 2021, Tiga announced the approval and extension of
the time period to consummate a business combination and the approval of the issuance and sale of certain private placement warrants in connection therewith. On November 22, 2021, the required deposit of $2,760,000 was placed into the trust
account and on November 23, 2021, Tiga issued and sold to the Sponsor 2,760,000 private placement warrants.
On May 23, 2022, we announced the approval and extension of the time
period to consummate a business combination and the approval of the issuance and sale of certain private placement warrants in connection therewith. On May 24, 2022, the required deposit of $2,760,000 was placed into the trust account and on May
25, 2022, Tiga issued and sold to the Sponsor 2,760,000 private placement warrants. With these extensions, Tiga will have until November 27, 2022 to consummate a business combination. The total amount of outstanding private placement warrants is
18,560,000 and the total deposits into the trust account have been $287,040,000 ($10.40 per public share).
Prior to the consummation of the initial public offering, neither
Tiga, nor anyone on its behalf, selected a target business or had any substantive discussions, formal or otherwise, with respect to such a transaction with a target business.
After the completion of its initial public offering, Tiga commenced
an active search for prospective business combination targets and considered numerous potential target businesses with the objective of consummating its initial business combination. Tiga used the following general criteria and guidelines (among
others) as it sought to focus its search on businesses that it believed would:
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be growth-oriented, market-leading companies;
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have a durable and/or defensible market position, with demonstrated competitive advantages to maintain barriers to entry;
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have recurring, predictable revenues and a history of, or the near-term potential to, generate stable and sustainable free cash
flow;
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have strong management teams with established track records of driving growth and profitability; and who would benefit from
Tiga management’s network and expertise, capital structure optimization, acquisition advice or operational and technological changes to drive improved financial performance;
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be fundamentally sound companies that may currently be underperforming their potential;
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exhibit unrecognized value or other characteristics, desirable returns on capital and a need for capital to achieve their
growth strategy, particularly where these attributes may have been misevaluated by the marketplace based on its analysis and due diligence review;
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offer an attractive risk-adjusted return for Tiga shareholders, potential upside from growth in the target business and an
improved capital structure, as weighed against any identified downside risk; and
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benefit from being publicly traded, be prepared to be a publicly traded company and could utilize access to broader capital
markets.
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Tiga evaluated a number of potential targets, including both
privately held companies and assets or divisions owned by publicly traded companies. During that period, Tiga’s management:
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developed an initial list of potential business combination candidates, which were primarily identified through Tiga’s and the
Sponsor’s respective knowledge and network;
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considered and conducted an analysis of over 20 potential target businesses (other than Grindr); and
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engaged in preliminary, high-level discussions of illustrative transaction structure to effect an initial business combination
with six of those target businesses.
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Of these six potential candidates, Tiga engaged in meaningful and
detailed discussions, due diligence, and negotiation with three potential business combination candidates or their representatives, the last of which was Grindr. Tiga entered into nondisclosure agreements with each of these candidates. The
potential enterprise valuations discussed for these potential targets ranged from $1.2 billion to over $6.0 billion and these target businesses operated in a variety of industries, including in the consumer, entertainment and technology markets.
On June 1, 2021, Tiga signed a non-binding letter of intent with a
company operating in the hospitality and leisure sector (“Potential Target”). In the months that followed, representatives of Tiga and Potential Target engaged in discussions regarding terms for a
potential business combination as well as Potential Target’s business strategy and financial information, as Tiga and its representatives conducted business and legal due diligence on Potential Target. Simultaneously with these discussions, Tiga
entered into engagement letters with certain financial institutions to act as placement agents for Tiga in respect of a potential financing transaction (the “Potential PIPE Financing”) in connection with
the potential business combination transaction between Tiga and Potential Target. From July 2021 to August 2021, Tiga entered into non-disclosure agreements with more than 10 potential investors regarding the Potential PIPE Financing (the “Potential PIPE Investors”). The Potential PIPE Investors were eventually wall crossed and certain confidential information relating to Tiga, the potential business combination transaction between Tiga and
Potential Target, Potential Target, and Potential Target’s controlling shareholder was shared with the Potential PIPE Investors. However, the discussions between Tiga and Potential Target were eventually discontinued due to a divergence of
expectations between the parties around timing of a business combination, valuation of the Potential Target, and other transaction terms. Consequently, the non-disclosure agreements with the Potential PIPE Investors were terminated effective as
of November 8, 2021.
Through an introduction by Mr. Zage, Grindr management reached out
to Mr. Gupta in June 2021 to discuss potential listing options for Grindr. Mr. Zage (owner of the Sponsor) has been affiliated with Grindr since June 2020. Mr. Zage indirectly holds an approximately 43.0% indirect non-voting equity interest in
Grindr and Mr. Gupta indirectly holds approximately 4.5% indirect non-voting equity interest in Grindr. In June 2021, Mr. Zage and Mr. Gupta held an introductory telephone call with certain Board members of Grindr. The initial discussions were
focused on Grindr’s desire to be a publicly listed company. Mr. Zage and Mr. Gupta discussed their experience and their ability to provide a path to listing and capital raising to Grindr. During this time, Grindr was already in discussions with a
number of special purpose acquisition companies (“SPAC”) sponsors to determine the best fit for their objectives, that included valuation, timing and certainty of completion of a business combination.
Grindr created a SPAC transaction sub-committee comprised of certain members of the Grindr Board and management to make decisions regarding the selection of the most appropriate deal for them. Messrs. Zage and Gupta were not participants in these
discussions from the Grindr side and were not members of the transaction sub-committee.
In June 2021, Grindr invited Mr. Zage and Mr. Gupta to submit a
proposal based on a form term sheet the Grindr transaction sub-committee had approved (the “Term Sheet”) and asked interested parties to submit a markup of the term sheet as a proposal for business
combination. In late June 2021, Mr. Gupta submitted a markup to Grindr’s proposed term sheet proposing a potential business combination with Grindr (the “Potential Business Combination”). This submission
from Mr. Gupta was preliminary and prior to detailed due diligence. This submission proposed an equity valuation for Grindr’s business of $2.5 billion to $2.8 billion. Between July 2021 and November 2021, Mr. Zage and Mr. Gupta conducted
preliminary business and financial due diligence with respect to Grindr and researched Grindr’s market outlook. On July 2, 2021, Grindr provided an initial set of financial projections to Mr. Gupta. Mr. Gupta and Grindr continued negotiations on
the Term Sheet in August, September and October 2021 regarding the terms of the Potential Business Combination to be set out in a non-binding letter of intent (the “Letter of Intent”).
On November 4, 2021, Tiga’s management sent a draft Letter of Intent
to Grindr reflecting the outcome of negotiations up to that point. A draft nondisclosure agreement was also sent to Grindr for review. On November 9, 2021, Tiga and Grindr signed the nondisclosure agreement that allowed disclosure of certain
non-public, confidential or proprietary information. The nondisclosure agreement did not contain a standstill provision. On November 13, 2021, Grindr provided Tiga and its legal advisors with access to an online data room, and Tiga continued its
valuation, business and financial due diligence. During this time, Tiga, Grindr and their respective representatives continued to negotiate the terms of a proposed Letter of Intent.
On December 22, 2021, the Tiga Board met via video teleconference to
discuss the Potential Business Combination. Representatives of Maples and Calder (Cayman) LLP (“Maples”), Cayman Islands counsel to Tiga and Milbank LLP (“Milbank”),
counsel to Tiga, attended the meeting. During the meeting, the Tiga Board, Maples and
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Milbank reviewed the proposed terms of the Potential Business Combination as set out
in the latest draft of the Letter of Intent. The Tiga Board considered, amongst other things key transaction terms, due diligence conducted to date, opportunities for value creation, and projected financial performance, among other items. The
Tiga Board authorized the Tiga management team to continue to negotiate the terms of the Letter of Intent, including a proposed equity valuation of Grindr of $2.3 billion. As the Potential Business Combination may create or involve circumstances
in which the interests of certain of the owners of the Sponsor, a shareholder of Tiga, and certain directors of Tiga, are different from the interests of Tiga, in particular, as a result of the investment interests in Grindr by Mr. Zage and
Mr. Gupta (the “Interested Investors”), the Tiga Board unanimously resolved on December 24, 2021 to establish a special committee of non-conflicted directors of Tiga (the “Special
Committee”) to consider and evaluate the Potential Business Combination, such Special Committee to be comprised of three directors determined to be independent and disinterested with respect to the Potential Business Combination. The
Special Committee consisted of David Ryan, Carman Wong and Ben Falloon. Tiga’s Board authorized the Special Committee, among other things, to review and evaluate the terms and conditions of the Potential Business Combination, and to obtain an
opinion from an independent investment banking firm or another valuation or appraisal firm or an independent accounting firm to determine whether the Potential Business Combination is fair to Tiga from a financial point of view.
The Special Committee had the responsibility to report to the Tiga
Board and any other appropriate committee thereof its recommendations and conclusions with respect to the Potential Business Combination, including a determination and recommendation as to whether the Potential Business Combination is fair to and
in the best interests of Tiga and should be approved by the Tiga Board. The Tiga Board also agreed that it would not approve or recommend the Potential Business Combination or recommend the Potential Business Combination to the shareholders of
Tiga for their approval without a favorable recommendation from the Special Committee.
On January 12, 2022, Tiga and Grindr entered into the Letter of
Intent which contemplated additional due diligence and provided for, among other things, an equity valuation of Grindr of $2.3 billion, without adjustment for cash, debt or working capital, and including a minimum of $50 million and up to
$100 million of committed capital from the Sponsor or its assignees through certain forward purchase agreements, which would result in a minimum post-closing cash of at least $100 million when taken together with amounts held in the trust
account. Tiga’s view on valuation was informed by, among other things, comparable valuations of publicly traded peer firms, Tiga’s understanding of the market and information provided by Grindr and its advisors as part of preliminary due
diligence. At the time of ongoing negotiations of the Potential Business Combination and the execution of the Letter of Intent, Tiga’s proposed valuation reflected a discount to peer companies of Grindr. The Letter of Intent also provided that
Grindr may undertake a capital distribution of up to $250 million, that such distribution be recorded in the books of Grindr prior to the business combination, and that such distribution occur at the time of closing of the business combination.
Between November 13, 2021 and May 8, 2022, Tiga’s third-party
advisors continued to conduct or commenced conducting legal, accounting, tax, insurance, and other due diligence, including by requesting documentation from and telephonic conferences with the Grindr management team and its advisors. In January
2022, Tiga began working with Raine Securities LLC (“Raine”) as its financial advisor in connection with the Potential Business Combination and began discussing the key financial terms, including
valuation, sources and uses, and the form of consideration to be delivered to existing unitholders of Grindr.
Pursuant to the Letter of Intent, the consideration to be paid to
current members of Grindr would consist of newly issued common shares of New Grindr valued at $10.00 per share. The Letter of Intent stipulated that the merger agreement would contain certain customary closing conditions, including the requisite
approval of Tiga’s shareholders, all necessary regulatory approvals, no injunction having been issued with the effect of restraining, enjoining or otherwise prohibiting the consummation of the business combination, a customary “bring down” of
representations, warranties and covenants and, solely as conditions precedent to Grindr’s obligations, among other things, a minimum cash condition of no less than $100 million for Tiga. The Letter of Intent also contemplated the adoption of a
new incentive equity plan and, if designed by Grindr, a new employee stock purchase plan at the consummation of the business combination. Finally, the Letter of Intent contemplated that the board of directors of New Grindr upon completion of the
business combination would consist of seven directors, at least four of which shall be independent as defined by applicable SEC and exchange listing requirements. One of such independent directors would be nominated by the Sponsor and the
remaining three independent directors would be elected by certain current members of Grindr. The Letter of Intent provided for exclusivity, with the exclusivity period expiring on the earlier of (i) March 15, 2022 (if definitive documentation had
not been entered into) or (ii) March 31, 2022.
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The Letter of Intent also included a termination provision that if definitive
documentation had not been entered into by March 15, 2022, unless extended in writing by Tiga and Grindr, the Letter of Intent would terminate. The Letter of Intent did not contemplate any “lock-up” terms for Grindr’s shareholders following the
consummation of a potential business combination.
On January 10, 2022, Morris, Nichols, Arsht & Tunnell LLP (“Morris Nichols”) was contacted by the Special Committee to discuss the potential engagement of Morris Nichols as independent counsel to the Special Committee. On January 12, 2022, the Special Committee
provisionally selected Morris Nichols as counsel, subject to negotiation of an engagement letter and completion of a conflicts check. The Special Committee finalized an engagement letter with Morris Nichols on January 15, 2022.
During the period from January 13, 2022 through January 20, 2022,
the Special Committee and Morris Nichols solicited and interviewed potential independent financial advisors for the Special Committee.
On January 19, 2022, Morris Nichols and Milbank participated in an
introductory call to discuss preliminary considerations in connection with the Potential Business Combination and the due diligence process.
On January 20, 2022, Tiga appointed Houlihan Lokey Financial
Advisors, Inc. (“Houlihan Lokey”) as its pro forma financial accountant and for the purposes of conducting further accounting and tax due diligence.
On January 24, 2022, Tiga and Morris Nichols participated in
introductory calls with potential financial advisors to discuss the Potential Business Combination and to provide information to facilitate the submission of draft engagement letters and fee quotes from such potential financial advisors.
Between January 24, 2022 and January 26, 2022, the Special Committee
received proposals and materials from two prospective financial advisors identified by the Special Committee and one financial advisor identified by Tiga for the Special Committee’s consideration.
On January 26, 2022, Tiga and Morris Nichols participated in an
introductory call with one potential financial advisor regarding its potential engagement.
On January 27, 2022, the Special Committee met via video conference
to discuss the process and the potential financial advisors. Representatives of Morris Nichols attended the meeting. Morris Nichols reported to the Special Committee regarding the results of discussions with each committee member prior to the
meeting to confirm his or her independence. Also at this meeting, the Special Committee discussed the proposals it had received from each of the three independent financial advisors. The Special Committee provisionally determined to engage one of
the advisors subject to the advisor’s acceptance of a lower and differently structured fee.
Between January 30, 2022 and February 1, 2022, Tiga and its advisors
contacted Morris Nichols to express concern about the name recognition of the potential financial advisor provisionally selected by the Special Committee, particularly in the geographic areas where many of Tiga’s investors were located.
On February 1, 2022, Morris Nichols met with the Special Committee
via video conference to report on the discussions with the potential financial advisors and to report on the issues raised by Tiga and its advisors with regard to the name recognition of the one potential independent financial advisor.
Based on instruction from the Special Committee, from February 8,
2022 through February 14, 2022, Morris Nichols solicited proposals from two additional independent financial advisors to potentially serve as independent financial advisor to the Special Committee, including Duff & Phelps.
During the period from February 14, 2022 through February 17, 2022,
the Special Committee received proposals from and interviewed the two potential financial advisors, including Duff & Phelps. Representatives of Morris Nichols, Tiga and Milbank attended each interview at the invitation of the Special
Committee. During each interview, the advisors presented their respective qualifications and experience, as well as their scope of work and fee proposals relating to the Potential Business Combination.
On February 17, 2022, immediately following the Special Committee’s
interview with Duff & Phelps, the Special Committee met via video conference with Morris Nichols in attendance to discuss the Special Committee’s views of each financial advisor and each proposal, including the proposed fees and the conflicts
reports from each advisor. The Special Committee expressed its view that both firms would be well qualified to serve as independent financial advisor to the Special Committee but expressed concerns about the difference in fee proposals.
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On February 21, 2022, the Special Committee met with Morris
Nichols in attendance to discuss the engagement of an independent financial advisor. Following discussion, the Special Committee directed Morris Nichols to notify Duff & Phelps of the Special Committee’s decision to engage Duff & Phelps
and to proceed with finalizing Duff & Phelps’ engagement. Morris Nichols confirmed that it would also reach out to the other advisors that had been considered to notify them of the Special Committee’s determination.
On March 4, 2022, the Special Committee engaged Duff & Phelps as
its independent financial advisor to provide an opinion in respect of the Potential Business Combination.
On March 8, 2022, Duff & Phelps received access to the online
data room from Grindr. Between February 2, 2022 and March 11, 2022, representatives from Tiga and Grindr, as well as certain members of the Tiga Board held due diligence sessions via video conference and telephone to further Tiga’s business,
financial, legal, tax and accounting due diligence with respect to Grindr, covering such topics as Grindr’s industry, financial performance, growth opportunities, competitive positioning and management team. Representatives of Raine also attended
these sessions, with Morris Nichols attending the due diligence sessions of February 2, 2022 and February 3, 2022 on behalf of the Special Committee. In addition, the third-party advisors reviewed and analyzed documents and data provided in the
online data room, including board and audit committee minutes and materials, management presentations and other selected background information, and held numerous discussions with Grindr’s management team.
Between March 6, 2022 and May 4, 2022, representatives from Tiga and
Grindr met via video conference and telephone with representatives of Duff & Phelps to discuss such topics as Grindr’s industry, financial performance, growth opportunities, competitive positioning and management team. In addition,
representatives of Duff & Phelps reviewed and analyzed documents and data provided in the online data room and held numerous discussions with Tiga’s and Grindr’s management teams.
On multiple occasions, members of Tiga’s management team held
meetings via teleconference with the third-party advisors to review and discuss an analysis of Grindr and its business operations, inclusive of a detailed quality of earnings analysis. In addition, Tiga’s management team and its advisors
discussed updates on the risks and rewards of pursuing the Potential Business Combination and key terms. Representatives from Milbank also regularly provided Tiga’s management with updates on the legal due diligence process and findings.
Representatives from Tiga and Grindr also held meetings via
teleconference on a regular basis to discuss certain commercial and structuring terms of the Potential Business Combination, including the proposed refinancing of Grindr’s existing credit facility extended by, among others, Fortress Credit Corp.
and the terms of the A&R Forward Purchase Agreement. Simultaneously, representatives of Tiga and Grindr and certain of their respective advisors conducted regular virtual meetings to discuss progress on, and provide updates with respect to,
key work streams and other aspects of the Potential Business Combination and, as needed, further refine the transaction timeline and steps and related work plan.
On March 18, 2022, representatives of Milbank delivered a draft
Merger Agreement to Cooley. From March 18, 2022 through May 9, 2022, the parties and their advisors negotiated the Merger Agreement and related transaction documents, including the A&R Forward Purchase Agreement, the A&R Registration
Rights Agreement, the Proposed Organizational Documents, the Transaction Support Agreement and the Unitholders Support Agreement. The various drafts exchanged reflected the parties’ negotiations on, among other things, the consideration
structure, the components to be included in calculation of the consideration to be paid under the Merger Agreement, certain risk allocation points, closing conditionality, the overall suite of representations, warranties and covenants to be
provided by each party under the Merger Agreement, post-closing governance matters, and the scope of registration rights. The key terms under these agreements, including with respect to consideration structure, post-closing governance matters,
voting arrangements and registration rights, were negotiated on the basis of prior discussions on these topics, including the terms in the Letter of Intent. Over the same period of time, the representatives and advisors for Tiga and Grindr held
numerous conference calls and came to agreement on the outstanding issues.
On March 25, 2022, Duff & Phelps received the current projection
model from Grindr (the “Grindr Management Projections”).
On March 29, 2022, the Special Committee, Duff & Phelps and
Morris Nichols received for their review and consideration the draft financial and tax due diligence reports prepared by Houlihan Lokey.
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On March 30, 2022, Morris Nichols participated in a call with
Maples to discuss certain Cayman law aspects of the Potential Business Combination.
Between April 4, 2022 and April 12, 2022, representatives from Tiga
and Grindr, and their respective legal advisors, held telephonic due diligence sessions with respect to certain litigation and data privacy matters affecting Grindr.
On April 5, 2022, the Special Committee met via video conference
with representatives of Morris Nichols and Duff & Phelps in attendance to receive an update from Duff & Phelps on its work and an update from Morris Nichols on the process. Also on April 5, 2022, Morris Nichols received the draft Merger
Agreement and certain draft transaction documents from Milbank. Morris Nichols continued to receive drafts of documents and to provide comments throughout the process.
On April 6, 2022, Houlihan Lokey sent its draft financial and legal
due diligence reports to the Special Committee, Morris Nichols and Milbank.
On April 11, 2022, the Special Committee met via video conference
with representatives of Houlihan Lokey, Morris Nichols, Duff & Phelps, Tiga and Milbank in attendance, during which Houlihan Lokey presented its due diligence findings in respect of tax and accounting matters and public company readiness with
respect to Grindr. The Special Committee had an opportunity to ask questions throughout the meeting and the presentation was followed by fulsome discussion. Following the discussion, the Special Committee met via a separate video conference line
with Duff & Phelps and Morris Nichols to discuss the Potential Business Combination. Duff & Phelps discussed the Grindr Management Projections with the Special Committee and the Special Committee members requested additional background
with respect to the Grindr Management Projections and additional analysis on the impact of market changes on valuation since the start of the process.
On April 14, 2022, the Special Committee met via video conference
with representatives of Tiga, Morris Nichols and Duff & Phelps in attendance at the request of the Special Committee and requested that Tiga management provide additional information about Tiga management’s view of the Potential Business
Combination. Discussion covered an overview of the work and due diligence done in connection with the Potential Business Combination, Tiga management’s view of the Grindr Management Projections, the impact of the current environment for
technology talent and Tiga management’s view of the Potential Business Combination given recent market volatility. Tiga management and the Special Committee agreed to continue to analyze the Potential Business Combination and the proposed terms.
On April 18, 2022, Duff & Phelps received financial projections
of Grindr provided by management of Tiga based on Grindr Management Projections, which included Tiga management estimates of projected cash and equity compensation (the “Financial Projections”).
On April 19, 2022, the Special Committee met via video conference
with representatives of Morris Nichols and Duff & Phelps in attendance for Duff & Phelps to present its preliminary valuation analysis of the enterprise value of Grindr to the Special Committee. Duff & Phelps based its analysis on the
market conditions and valuation multiples for the selected public companies overall, and Bumble Inc. and Match Group, Inc. in particular, as they existed as of April 18, 2022. Based on its analysis, Duff & Phelps presented illustrative ranges
of enterprise value of Grindr as of April 18, 2022 using a discounted cash flow analysis and selected public companies and M&A transactions analysis, relative to the proposed terms of the Potential Business Combination as of that date which
implied a $2.7 billion enterprise value of Grindr based on the $2.3 billion equity value in the Letter of Intent. Morris Nichols advised the Special Committee to continue to analyze the Potential Business Combination to ensure a transaction in
the best interests of Tiga and, in particular, the public shareholders of Tiga. Following this discussion, the Special Committee instructed Morris Nichols to contact Tiga management to set up a meeting to discuss a decrease in the proposed
valuation of Grindr in connection with the Potential Business Combination.
On April 21, 2022, the Special Committee met via video conference
with Morris Nichols in attendance to discuss its current perspective on the Potential Business Combination and the proposed valuation. Discussion ensued regarding, among other things, changes to the market, and the decrease in the valuations and
valuation multiples of both Bumble Inc. and Match Group Inc. since the start of the process, the valuation negotiated in the Letter of Intent and the various ways of looking at the Potential Business Combination from a financial perspective. The
Special Committee determined to pursue a change to the proposed valuation of Grindr that was reflected in the Letter of Intent, based in part on market volatility and the decline in stock price of both Bumble Inc. and Match Group Inc.
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since the start of the process. At the invitation of the Special Committee, the
representatives of Tiga then joined the meeting. The Special Committee reported to the representatives of Tiga its request to reduce the valuation of Grindr for purposes of pricing the Potential Business Combination and its reasons therefor. Tiga
acknowledged the Special Committee’s determination and reasoning and discussed next steps. The Special Committee requested that Duff & Phelps provide an updated analysis of the implied valuation multiples of Bumble Inc. and Match Group, Inc.
relative to implied valuation multiples for a range of potential enterprise values for Grindr for illustrative purposes. The Special Committee requested that the chart be shared with Tiga.
From April 22 to April 24, 2022, Morris Nichols participated in
discussions with each member of the Special Committee to confirm the Special Committee’s position with respect to the proposed valuation of Grindr in connection with the Potential Business Combination. On April 24, 2022, Mr. Ryan, on behalf of
the Special Committee, discussed the Special Committee’s position with Mr. Gupta. Mr. Gupta conveyed Tiga’s intent to negotiate with Grindr for a reduced fully diluted enterprise valuation of approximately $2.1 billion. Tiga management determined
the revised valuation taking into account the significant decline since the date of the Letter of Intent in market valuations of technology companies in general and Grindr’s expected peer group in particular, and incorporating a suitable discount
for Grindr being a new entrant to a public stock market. Tiga and Grindr then entered into negotiation for the revised valuation. Grindr management came up with various potential structures to address Tiga’s concerns on valuation. Finally, a
reduction to the equity valuation was agreed, taking into account pre-money equity value for Grindr, revised terms regarding dividends (up to $370 million as against previously agreed $250 million) and inclusion of unexercised stock options
issued by Grindr.
On May 1, 2022, a representative of Tiga updated the Special
Committee and Morris Nichols via email regarding the negotiation of the revised financial terms of the Potential Business Combination and sought the Special Committee’s input regarding such revised terms. The representative of Tiga reported that
Grindr had agreed to a reduced equity valuation of Grindr of approximately $2.1 billion in fully diluted enterprise value, resulting in an equity value of approximately 1.6 billion. On May 2, 2022, Mr. Ryan, on behalf of the Special Committee,
informed Mr. Gupta that the Special Committee was supportive of continuing to move forward with the discussions and negotiations with respect to the Potential Business Combination at the new valuation, subject to the completion of financial
analysis by Duff & Phelps and Tiga’s continued diligence.
On May 4, 2022, the Special Committee met via video conference with
representatives of Milbank, Morris Nichols and Tiga in attendance, during which Milbank presented its due diligence findings in respect of legal matters with respect to Grindr. The Special Committee had an opportunity to ask questions throughout
the meeting and the presentation was followed by fulsome discussion.
On May 5, 2022, the Special Committee met via video conference with
representatives of Morris Nichols and Duff & Phelps in attendance, during which Duff & Phelps presented its financial analysis with respect to the consideration to be paid by Tiga in the Potential Business Combination. On May 9, 2022, the
Special Committee met via video conference with representatives of Morris Nichols and Duff & Phelps to discuss the Potential Business Combination. The Special Committee confirmed receipt of the draft transaction documents in connection with
the Potential Business Combination. Duff & Phelps verbally rendered its opinion to the Special Committee. The Special Committee adopted resolutions that, based on their review of all relevant factors, and in reliance in part upon the input
from the Special Committee’s advisors, (i) determined that the transaction documents and the Potential Business Combination were in the best interests of Tiga and Tiga’s shareholders, including the Tiga’s public shareholders (ii) recommended that
the Tiga Board approve the transaction documents and the Potential Business Combination and (iii) recommended that the Tiga Board recommend the Potential Business Combination to Tiga’s shareholders.
Immediately following the Special Committee’s approval and
recommendation on May 9, 2022, the Tiga Board met via video teleconference with representatives of Morris Nichols, Duff & Phelps and Milbank. Duff & Phelps verbally confirmed its opinion to the Tiga Board, which was subsequently confirmed
in writing by delivery of Duff & Phelps’ written opinion, dated May 9, 2022, to the Tiga Board (including the Special Committee (solely in their capacity as members of the Special Committee or the Tiga Board)). The Tiga Board adopted
resolutions to approve the Potential Business Combination and the related transaction documents, and to recommend the Potential Business Combination to Tiga’s shareholders.
On May 9, 2022, Tiga, Grindr, and Merger Sub I executed the Merger
Agreement. Concurrently with the execution of the Merger Agreement, Tiga and the Sponsor entered into the A&R Forward Purchase Agreement, and Tiga, Grindr, Merger Sub I, the Sponsor and the directors of Tiga entered into the Transaction
Support Agreement.
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Later on May 9, 2022, Tiga and Grindr issued a joint press
release announcing the execution of the Merger Agreement, which it filed with a Current Report on Form 8-K along with the executed Merger Agreement, the executed Transaction Support Agreement, the form of the Unitholder Support Agreement that
was executed by Grindr and certain unitholders of Grindr, the form of the A&R Registration Rights Agreement and an investor presentation prepared by members of Tiga’s and Grindr’s management team regarding Grindr and the Business
Combination.
On August 16, 2022, representatives of Cooley sent
representatives of Milbank a draft of the Merger Agreement Amendment No. 1, which provided for, among other things, the treatment of Grindr warrants in connection with the Mergers. From September 2022 to October 2022, representatives of Tiga,
Grindr, Milbank and Cooley met telephonically to discuss and align on the details of the proposed changes to the Business Combination.
On September 27, 2022, representatives of Milbank sent
representatives of Cooley a draft of the form of the Joinder and Assignment Agreement to A&R Forward Purchase Agreement. On October 4, 2022, representatives of Milbank sent representatives of Cooley a revised draft amendment to the Merger
Agreement.
The Tiga Board and the Special Committee unanimously approved the
Merger Agreement Amendment No. 1 and the Joinder and Assignment Agreement to A&R Forward Purchase Agreement on October 5, 2022. Later on October 5, 2022, Tiga, Grindr and Merger Sub I executed the Merger Agreement Amendment No. 1.
Tiga’s Board of Directors’ Reasons for Approval of the Business
Combination
The Tiga Board, in evaluating the Business Combination, consulted
with Tiga’s management and financial, legal and other advisors. In reaching its unanimous resolution (i) that the Merger Agreement and the Business Combination are advisable and in the best interests of Tiga and its shareholders and (ii) to
recommend that the shareholders adopt the Merger Agreement and approve the Business Combination and the transactions contemplated thereby, the Tiga Board considered and evaluated a number of factors, including the factors discussed below. The
Tiga Board did not consider it practicable to, and did not attempt to, quantify or otherwise assign relative weights to the specific factors it considered in reaching its determination. The Tiga Board viewed its decision as being based on all of
the information available and the factors presented to and considered by it. In addition, individual directors may have given different weight to different factors. This explanation of the Tiga Board’s reasons for the Business Combination and all
other information presented in this section is forward-looking in nature and, therefore, should be read in light of the factors discussed under “Cautionary Statement Regarding Forward-Looking Statements.”
The Tiga Board considered a number of factors pertaining to the
Business Combination as generally supporting its decision to enter into the Merger Agreement and the Ancillary Agreements and the transactions contemplated thereby, including but not limited to, the following material factors:
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Reasonableness of Aggregate Merger Stock Consideration and Aggregate
Merger Warrant Consideration. Following a review of the financial data provided to Tiga, including certain unaudited prospective financial information, Tiga’s due diligence review of Grindr’s business, the Tiga
Board considered the aggregate consideration to be paid and determined that the aggregate consideration was reasonable in light of such data, financial information and current market conditions.
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Market leader and known brand. The Tiga Board assessed that Grindr is a market leader
in the social networking and online dating industry for gay, bi, trans, and queer people. It was one of the first geosocial apps for gay men when it launched in March 2009 and has since become a popular mobile app for the global LGBTQ+
community.
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Attractive growth profile. The Tiga Board considered the growing demand for Grindr’s
services, including incremental business opportunities, anticipated growth in revenue, geographic and partnership expansion and new category expansion.
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•
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Attractive financial profile. The Tiga Board also considered factors such as Grindr’s
outlook, financial plan and debt structure, an asset light approach that can enable rapid scalability and an opportunity to leverage its existing infrastructure. Grindr’s strong growth and unit economics have made Grindr highly
profitable.
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Attractive valuation. The Tiga Board also considered the fact that the overall
valuation of Grindr implied in the Business Combination, and the consideration being paid to acquire Grindr, presented an attractive investment opportunity and represented a discount to selected publicly listed companies in the industry,
compared to many which Grindr has grown at a faster rate.
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Due Diligence. Tiga conducted a diligence review of Grindr and its business, including
review of relevant documentation and discussions with Grindr’s management and Grindr’s financial, legal and other advisors.
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Opinion of the Financial Advisor to the Special Committee. The Tiga Board
took into account the financial analysis reviewed by Duff & Phelps with the Special Committee on May 5, 2022 and Duff & Phelps’ written opinion addressed to the Special Committee dated May 9, 2022, as to the fairness, from a
financial point of view, to Tiga of the Aggregate Merger Consideration to be paid by Tiga in the Merger pursuant to the Merger Agreement, prior to giving effect to Merger Agreement Amendment No. 1.
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Other Alternatives. After a review of other business combination opportunities
reasonably available to Tiga, the Tiga Board believes that the proposed Business Combination represents the best potential business combination for Tiga and the most attractive opportunity for Tiga’s shareholders based upon the process
utilized to evaluate and assess other potential acquisition targets, and that such process has not presented a better alternative.
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Negotiated Transaction. The financial and other terms and conditions of the Merger
Agreement are reasonable and were the product of arm’s length negotiations between Tiga and Grindr.
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Board of Directors of the Post-Combination Company. The Tiga Board considered that the
initial board of directors of New Grindr would be comprised of Grindr’s chief executive officer at Closing as well as a majority of independent directors, all of whom will be members of the LGBTQ+ community.
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Role of Independent Directors. The Tiga Board is comprised of a majority of independent
directors who are not affiliated with the Sponsor and its affiliates. In connection with the Business Combination, Tiga’s independent directors took an active role in evaluation the proposed terms of the Mergers, including the Merger
Agreement and the related agreements. Tiga’s independent directors evaluated and unanimously approved, as members of the Tiga Board, the Merger Agreement and the related agreements and the transactions contemplated thereby.
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The Tiga Board also considered a variety of uncertainties and risks
and other potentially negative factors concerning the Business Combination, including, but not limited to, the following:
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Macroeconomic Risks. Macroeconomic uncertainty, including the potential impact of the
COVID-19 pandemic, and the effects they could have on New Grindr’s revenues.
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Benefits May Not Be Achieved. The risk that the potential benefits of the Business
Combination may not be fully achieved or may not be achieved within the expected timeframe.
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Growth Initiatives May Not be Achieved. The risk that the growth initiatives may not be
fully achieved or may not be achieved within the expected timeframe.
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Geopolitical Risk. Grindr currently conducts business in over 200 countries around the
world, and customers or suppliers in such foreign jurisdictions may react negatively to the proposed Business Combination or other influences.
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Regulatory Risks. The risks of changes in Grindr’s regulatory environment, including
data privacy and intellectual property regulations or laws.
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Liquidation. The risks and costs to Tiga if the Business Combination is not completed,
including the risk of diverting management focus and resources from other businesses combination opportunities, which could result in Tiga being unable to effect a Business Combination within the completion window and force Tiga to
liquidate.
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Shareholder Vote. The risk that Tiga shareholders may fail to vote to approve the
Business Combination.
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Redemption Risk. The potential that a significant number of Tiga shareholders elect to
redeem their public shares prior to the consummation of the Business Combination pursuant to Tiga’s Cayman Constitutional Documents, which would potentially make the Business Combination more difficult or impossible to complete.
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Closing Conditions. The fact that completion of the Business Combination is conditioned
on the satisfaction of certain closing conditions that are not within Tiga’s control.
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Listing Risks. The challenges associated with preparing Grindr, a private company, for
the applicable disclosure and listing requirements to which New Grindr will be subject as a publicly traded company on the NYSE.
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Tiga Shareholders Holding a Minority Position in New Grindr. The risk that Tiga public
shareholders will hold a minority position in New Grindr (approximately 13.8%, assuming the no redemption scenario), which may reduce the influence that Tiga’s current shareholders have on the management of Tiga.
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Litigation. The possibility of litigation challenging the Business Combination or that
an adverse judgment granting permanent injunctive relief could indefinitely enjoin consummation of the Business Combination.
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Fees and Expenses. The fees and expenses associated with completing the Business
Combination.
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Other Risks. Various other risks associated with the business of Grindr, as described
in the section entitled “Risk Factors” appearing elsewhere in this proxy statement/prospectus.
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In addition to considering the factors described above, the Tiga Board also considered
the following:
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Interests of Certain Persons in the Business Combination. Some owners of the Sponsor, a
shareholder of Tiga, and certain directors of Tiga may have interests in the Business Combination as individuals that are in addition to, and that may be different from, the interests of Tiga shareholders (see section entitled “Interests of Certain Persons in the Business Combination”). Tiga’s independent directors and the Special Committee reviewed and considered these interests during the negotiation of the Business
Combination and in evaluating and unanimously approving, as members of the Tiga Board, the Merger Agreement and the Business Combination.
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The Tiga Board concluded that the potential benefits that it expected Tiga and its
shareholders to achieve as a result of the Business Combination outweighed the potentially negative factors associated with the Business Combination. The Tiga Board also noted that Tiga shareholders would have a substantial economic interest in
New Grindr (depending on the level of Tiga shareholders that sought redemption of their public shares into cash). Accordingly, the Tiga Board unanimously determined that the Merger Agreement and the Ancillary Agreements and the transactions
contemplated thereby were advisable and in the best interests of Tiga and its shareholders.
Projected Financial Information
Grindr provided Tiga with its internally prepared annual forecasts
for the four-year period ending December 31, 2025. Grindr does not, as a matter of general practice, publicly disclose forecasts or internal projections of future performance, revenue, financial condition or other results. The Grindr forecasts
were prepared solely for internal use and not with a view toward public disclosure, or with a view toward complying with the published guidelines of the SEC regarding projections or the guidelines established by the American Institute of
Certified Public Accountants for preparation and presentation of prospective financial information or GAAP. The financial projections include Revenue (Non-GAAP) and Adjusted EBITDA, both of which are non-GAAP financial measures. Grindr included
such measures in the financial projections because it believed that such measures may be useful in evaluating, on a prospective basis, the potential operating performance of its business. These non-GAAP measures should not be considered in
isolation from, or as a substitute for, financial information presented in compliance with GAAP, and non-GAAP financial measures such as those used in the financial projections may not be comparable to similarly titled amounts used by other
companies or persons. The SEC rules, which otherwise would require a reconciliation of a non-GAAP measure to a GAAP measure, do not apply to non-GAAP measures provided to a board of directors or financial advisors in connection with a proposed
business combination transaction such as the proposed Business Combination if the disclosure is included in a document such as this proxy statement/prospectus. Accordingly, no such reconciliation is provided. In the view of Grindr’s management,
the financial projections were prepared on a reasonable basis reflecting such management’s currently available estimates and judgments at the time of such preparation.
The inclusion of financial projections in this proxy
statement/prospectus should not be regarded as an indication that Tiga, the Tiga Board, or their respective affiliates, advisors or other representatives considered, or now considers, such financial projections to be fact or necessarily to be
predictive of actual future results, and these financial projections should not be relied upon as such. The financial projections are not being included to influence you to vote for or against the Business Combination Proposal, and,
accordingly, you are cautioned not to rely on the projections in making a decision regarding the Business Combination. We will not refer back to the financial projections in our future periodic reports filed under the Exchange Act.
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Grindr’s management expects that its business may grow
primarily in three ways: first, the Company will continue improving its product and feature set in its mobile app for its current customers in the US and UK. Second, the Company plans to further expand internationally in significant regions,
including Europe, Latin America, and Brazil. Third, with an expansion of its platform, the Company expects that it will be able to grow its customer base through the addition of internet accessibility and community building. As a result,
Grindr’s management expects that there will be future partnership opportunities through increasing the accessibility of products and services to the communities in which Grindr operates its business. All of these efforts should drive growth in
users and/or improve conversion, monetization, and retention.
The financial projections reflect numerous estimates and
assumptions with respect to general business, economic, regulatory, market and financial conditions and other future events, as well as matters specific to Grindr’s business, all of which are difficult to predict with certainty and many of
which are beyond Grindr’s control. Some significant assumptions on which Grindr’s management based its financial projects include:
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Revenue (Non-GAAP)
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Direct Revenue and Indirect Revenue to increase in line with improved monetization strategies through the projection period,
including development of interactive value add features such as enhancements in user visibility from video and profile boosts, improvements in user conversion through in-app lifecycle marketing, and expansion of indirect partnership-ad
opportunities in verticals such as travel, pharmaceuticals, health and beauty;
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Annual revenue growth of approximately 41%, 41%, 35% and 31%, in the years ending December 31, 2022, 2023, 2024 and 2025,
respectively, which is higher than or on par with recent growth rates of some of Grindr’s competitors, including Match and Bumble, as they have been monetizing at scale with annual growth rates between 25% and 30% in the years ended
December 31, 2020 and 2021;
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Anticipate meeting or exceeding prior growth rates and those of Grindr’s competitors, through
the projection period, as it scales its user conversions and revenue per paid user to industry benchmarks.
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Continued capture of Paying Users/MAUs
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Number of Paying Users to increase in accordance with Grindr’s business strategy to further
scale up its user base in certain geographical regions, in particular, the United States, the UK, Europe, Latin America and Brazil, throughout the projected period;
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MAUs to increase to approximately 12 million, 15 million, 18 million and 21 million for the years
ending December 31, 2022, 2023, 2024 and 2025, respectively;
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Grindr to continue to improve its user experience and implement innovative and user-friendly features
to its products and services to attract new users and generate greater user activities; and
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No material changes in Paying Users’ purchasing behaviors and preferences.
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Expected increase in Average Total Revenue per User
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Averaged Total Revenue per User expected to increase to approximately $1.4, $1.6, $1.8 and
$2.0 for the years ending December 31, 2022, 2023, 2024 and 2025, respectively, based on the factors above and assuming a steady recovery from COVID-19 and no material adverse impact from the 2022 monkeypox
outbreak, as well as no worse-than-expected economic conditions in 2022 and 2023.
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Adjusted EBITDA
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Grindr’s revenues and operating costs and expenses based on historical operating trends, with historical gross margins being
consistently in the 70-75% range;
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Gross margins expected to increase through the projection period due to greater mix of high margin
products that Grindr will continue to implement;
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Grindr’s historical Adjusted EBITDA Margin increased from 45% for the year ended December 31, 2020 to 53% for the year ended
December 31, 2021;
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Adjusted EBITDA Margin to improve based on scalable business and maintenance and improvement
of current cost structure; and
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Adjusted EBITDA Margin to be positively affected by continued investments and increases in headcounts
and other administrative and sales and marketing costs due to overall business expansion, through the projection period.
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Other economic, regulatory, market and financial factors
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Economic, market or regulatory factors may also impact the financial projections for Grindr, but they are difficult to
predict or quantify with certainty and we assumed, among other things, that, through the projection period, there will be:
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No material changes in the market landscape in which Grindr operates;
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No regulatory changes in relation to privacy and data protection that materially and
negatively impact Grindr’s operations; and
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No material negative impact from the continued spread of COVID-19 and the 2022 monkeypox outbreak.
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The financial projections are forward-looking statements that are
inherently subject to significant uncertainties and contingencies, many of which are beyond Grindr’s and Tiga’s control. The various risks and uncertainties include those set forth in the “Risk Factors,”
“Grindr’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Cautionary Note Regarding
Forward-Looking Statements” sections of this proxy statement/prospectus. As a result, there can be no assurance that the projected results will be realized or that actual results will not be significantly higher or lower than
projected. Since the financial projections cover multiple years, such information by its nature becomes less reliable with each successive year. These financial projections are subjective in many respects and thus are susceptible to multiple
interpretations and periodic revisions based on actual experience and business developments. In light of the foregoing factors and the uncertainties inherent in these financial projections, stockholders are cautioned not to place undue, if any,
reliance on the projections.
The projected financial information included in this document has
been prepared by, and is the responsibility of, Grindr’s management. The financial projections do not take into account any circumstances or events occurring after the date they were prepared. Neither Ernst & Young LLP nor any other
independent accountant has compiled, reviewed, examined, performed any other assurance procedures, or expressed any form of assurance with respect to the prospective financial information included in this proxy statement/prospectus. The report of
Ernst & Young LLP included in this proxy statement/prospectus relates to Grindr Group LLC’s historical audited financial statements and does not extend to the unaudited prospective financial information and should not be read to do so.
Nonetheless, a summary of the financial projections is provided in this proxy statement/prospectus because they were made available to Tiga and the Tiga Board in connection with their review of the proposed Business Combination.
The key elements of the projections provided by management of Grindr
to Tiga are summarized in the table below:
Projected Financial Performance
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($ in millions)
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2022P
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2023P
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2024P
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2025P
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Revenue (Non-GAAP)(1)
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$206
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$290
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$390
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$512
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Adjusted EBITDA(2)
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$96
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$145
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$199
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$265
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(1)
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Non-GAAP Revenue reflects revenue adjusted for certain non-core revenue adjustments.
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(2)
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Adjusted EBITDA is defined as net income (loss) excluding income tax provision, interest expense, depreciation and amortization,
stock-based compensation expense, non-core expenses/losses (gains). Non-core expenses/losses (gains) include purchase accounting adjustments related to deferred revenue, transaction-related costs, asset impairments, and management fees.
For a historical reconciliation of Adjusted EBITDA to net income (loss), the most directly comparable measure calculated and presented in accordance with GAAP, please see the section entitled “Grindr’s
Management’s Discussion and Analysis of Financial Condition and Results of Operations–Non-GAAP Financial Measures.”
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EXCEPT TO THE EXTENT REQUIRED BY APPLICABLE FEDERAL SECURITIES LAWS, BY INCLUDING IN
THIS PROXY STATEMENT/PROSPECTUS A SUMMARY OF THE FINANCIAL PROJECTIONS FOR GRINDR, TIGA UNDERTAKES NO OBLIGATIONS AND EXPRESSLY DISCLAIMS ANY RESPONSIBILITY
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TO UPDATE OR REVISE, OR PUBLICLY DISCLOSE ANY UPDATE OR REVISION TO, THESE
FINANCIAL PROJECTIONS TO REFLECT CIRCUMSTANCES OR EVENTS, INCLUDING UNANTICIPATED EVENTS, THAT MAY HAVE OCCURRED OR THAT MAY OCCUR AFTER THE PREPARATION OF THESE FINANCIAL PROJECTIONS, EVEN IN THE EVENT THAT ANY OR ALL OF THE ASSUMPTIONS
UNDERLYING THE FINANCIAL PROJECTIONS ARE SHOWN TO BE IN ERROR OR CHANGE.
Opinion of Financial Advisor to the Special Committee
On March 4, 2022, Tiga retained Duff & Phelps to serve as an
independent financial advisor to the Special Committee, specifically to provide to the Tiga Board a fairness opinion in connection with the Business Combination.
On May 5, 2022, Duff & Phelps presented its financial
analysis with respect to the consideration to be paid by Tiga in the Business Combination. On May 9, Duff & Phelps delivered its written opinion (the “Opinion”), to the Tiga Board
(including the Special Committee (solely in their capacity as members of the Special Committee or the Board of Directors)) that, as of the date of the Opinion and subject to and based on the assumptions made, procedures followed, matters
considered, limitations of the review undertaken and qualifications contained in the Opinion, the Aggregate Merger Consideration to be paid by Tiga in the transactions pursuant to the Merger Agreement is fair to Tiga, from a financial point of
view.
In selecting Duff & Phelps, the Special Committee considered,
among other things, the fact that Duff & Phelps is a global leader in providing fairness opinions to boards of directors and special committees. Duff & Phelps is regularly engaged in the valuation of businesses and their securities and
the provision of fairness opinions in connection with various transactions.
The Opinion was approved by Duff & Phelps’ fairness opinions
committee. The Opinion was provided for the information of, and directed to, the Tiga Board (in its capacity as such) and only addressed the fairness, from a financial point of view, to Tiga of the Aggregate Merger Consideration to be paid by
Tiga in the transactions pursuant to the Merger Agreement and did not address any other aspect or implication of the Business Combination or any other agreement, arrangement or understanding.
The full text of the Opinion is attached to this
proxy statement/prospectus as Annex I and is incorporated into this document by reference. The summary of the Opinion set forth herein is qualified in its entirety by reference to the full text of the Opinion. Tiga’s shareholders are urged to
read the Opinion carefully and in its entirety for a discussion of the procedures followed, assumptions made, matters considered, limitations of the review undertaken by Duff & Phelps in connection with the Opinion, as well as other
qualifications contained in the Opinion. However, neither the Opinion nor the summary of the Opinion and the related analyses set forth in this proxy statement/prospectus are intended to be, and do not constitute, advice or a recommendation to
the Tiga Board, any security holder of Tiga or any other person as to how to act or vote with respect to any matter relating to the Business Combination.
In connection with the Opinion, Duff & Phelps made such reviews,
analyses and inquiries that Duff & Phelps deemed necessary and appropriate under the circumstances to enable Duff & Phelps to render the Opinion. Duff & Phelps also took into account its assessment of general economic, market and
financial conditions, as well as its experience in securities and business valuation, in general, and with respect to similar transactions, in particular. Duff & Phelps’ procedures, investigations, and financial analysis with respect to the
preparation of the Opinion included, but were not limited to, the items summarized below:
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1.
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Reviewed the following documents:
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a.
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Tiga’s audited financial statements for the fiscal years ended December 31, 2020 and 2021 included in Tiga’s Form 10-K filed
with the Securities and Exchange Commission (the “SEC”), which Tiga’s management identified as being the most current financial statements available;
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b.
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Grindr's audited financial statements for the fiscal years ended December 31, 2020;
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c.
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Grindr's draft audited financial statements for the fiscal year ended December 31, 2021;
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d.
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Grindr's unaudited internally prepared financial statements for the quarter ended March 31, 2022, which at such time of the
review, Grindr's management identified as being the most current financial statements available;
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e.
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Other internal documents relating to the history, current operations, and probable future outlook of
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Grindr, including financial projections of Grindr for the years 2022 through 2025,
prepared by management of Grindr (the “Grindr Management Projections”);
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f.
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Financial projections of Grindr for the years 2022 through 2025, provided to us by management of Tiga, which is based on Grindr
Management Projections and includes Tiga management's estimates of projected cash and equity compensation (the “Financial Projections”);
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g.
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Tiga’s Form S-1 registration statement dated November 4, 2020; and
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h.
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Documents related to the Business Combination, including the draft Amended and Restated Forward Purchase Agreement dated as of
May 8, 2022 and the draft of the Merger Agreement, dated as of May 8, 2022;
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2.
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Discussed the information referred to above and the background and other elements of the Business Combination with the
management of Tiga and Grindr;
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3.
|
Reviewed the historical trading price and trading volume of the publicly traded securities of certain companies that Duff &
Phelps deemed relevant;
|
|
4.
|
Performed certain valuation and comparative analyses using generally accepted valuation and analytical techniques including a
discounted cash flow analysis, an analysis of selected public companies that Duff & Phelps deemed relevant, and an analysis of selected transactions that Duff & Phelps deemed relevant; and
|
|
5.
|
Conducted such other analyses and considered such other factors as Duff & Phelps deemed appropriate.
|
In performing its analyses and rendering the Opinion with respect to
the Business Combination, Duff & Phelps, with Tiga’s consent:
|
1.
|
Relied upon the accuracy, completeness, and fair presentation of all information, data, advice, opinions and representations
obtained from public sources or provided to it from private sources, including Tiga and Grindr management, and did not independently verify such information;
|
|
2.
|
Relied upon the fact that the Tiga Board and Tiga have been advised by counsel as to all legal matters with respect to the
Business Combination, including whether all procedures required by law to be taken in connection with the Business Combination have been duly, validly and timely taken;
|
|
3.
|
Assumed that any estimates, evaluations, forecasts and projections (including the Grindr Management Projections and the
Financial Projections) furnished to Duff & Phelps were reasonably prepared and based upon the best currently available information and good faith judgment of the person furnishing the same, and Duff & Phelps expresses no opinion
with respect to such projections or the underlying assumptions;
|
|
4.
|
Assumed that information supplied and representations made by Tiga and Grindr management are substantially accurate regarding
Grindr and the Business Combination;
|
|
5.
|
Assumed that the representations and warranties made in the Merger Agreement are substantially accurate;
|
|
6.
|
Assumed that the final versions of all documents reviewed by Duff & Phelps in draft form conform in all material respects
to the drafts reviewed;
|
|
7.
|
Assumed that there has been no material change in the assets, liabilities, financial condition, results of operations,
business, or prospects of Tiga or Grindr since the date of the most recent financial statements and other information made available to Duff & Phelps, and that there is no information or facts that would make the information reviewed
by Duff & Phelps incomplete or misleading;
|
|
8.
|
Assumed that all of the conditions required to implement the Business Combination will be satisfied and that the Business
Combination will be completed in accordance with the Merger Agreement without any amendments thereto or any waivers of any terms or conditions thereof; and
|
|
9.
|
Assumed that all governmental, regulatory or other consents and approvals necessary for the consummation of the Business
Combination will be obtained without any adverse effect on Tiga or Grindr.
|
Given Tiga’s nature as a special purpose acquisition company, for
purposes of the Opinion and its analysis and with Tiga’s consent, Duff & Phelps assumed a value of $10.00 per share for Tiga’s Common Stock, with such $10.00 value being based on Tiga’s initial public offering and Tiga’s approximate cash per
outstanding share of Tiga
163
Common Stock (excluding, for the avoidance of doubt, the dilutive impact of any Tiga
Warrants or Forward Purchase Rights). Further, for purposes of the Opinion and its analysis and with Tiga’s consent, Duff & Phelps assumed the accuracy and completeness of the capitalization information for Grindr prepared by Tiga.
To the extent that any of the foregoing assumptions or any of the
facts on which the Opinion is based prove to be untrue in any material respect, Duff & Phelps informed the Tiga Board the Opinion cannot and should not be relied upon. Furthermore, in Duff & Phelps’ analysis and in connection with the
preparation of the Opinion, Duff & Phelps has made numerous assumptions with respect to industry performance, general business, market and economic conditions and other matters, many of which are beyond the control of any party involved in
the Business Combination.
Duff & Phelps prepared the Opinion effective as of May 9,
2022. The Opinion is necessarily based upon market, economic, financial and other conditions as they exist and can be evaluated as of such date, and Duff & Phelps disclaims any undertaking or obligation to advise any person of any change in
any fact or matter affecting the Opinion which may come or be brought to the attention of Duff & Phelps after such date. Accordingly, references to the “Merger Agreement” and the “Aggregate Merger Consideration” in the sections of this
proxy statement/prospectus regarding the Opinion, refer to the Merger Agreement and aggregate merger consideration prior to giving effect to Merger Agreement Amendment No. 1.
Duff & Phelps did not evaluate Tiga’s or Grindr’s solvency or
conduct an independent appraisal or physical inspection of any specific assets or liabilities (contingent or otherwise). Duff & Phelps was not requested to, and did not, (i) initiate any discussions with, or solicit any indications of
interest from, third parties with respect to the Business Combination, the assets, businesses or operations of Tiga or Grindr, or any alternatives to the Business Combination, (ii) negotiate the terms of the Merger Agreement, or (iii) advise the
Tiga Board or any other party with respect to alternatives to the Business Combination.
Duff & Phelps did not express any opinion as to the market price
or value of Tiga’s common stock (or anything else) after the announcement or the consummation of the Business Combination. The Opinion should not be construed as a valuation opinion, credit rating, solvency opinion, an analysis of Tiga’s or
Grindr’s credit worthiness, as tax advice, or as accounting advice. Duff & Phelps did not make, and assumes no responsibility to make, any representation, or render any opinion, as to any legal matter.
In rendering the Opinion, Duff & Phelps did not express any
opinion with respect to the amount or nature of any compensation to any of Tiga’s or Grindr’s officers, directors, or employees, or any class of such persons, relative to the Aggregate Merger Consideration to be paid by Tiga in the Business
Combination, or with respect to the fairness of any such compensation.
The Opinion was furnished for the use and benefit of the Tiga
Board in connection with its consideration of the Business Combination and is not intended to, and does not, confer any rights or remedies upon any other person, and is not intended to be used, and may not be used, by any other person or for
any other purpose, without Duff & Phelps’ express consent. The Opinion (i) did not address the merits of the underlying business decision to enter into the Business Combination versus any alternative strategy or transaction; (ii) does not
address any transaction related to the Business Combination; (iii) is not a recommendation as to how the Tiga Board or any stockholder should vote or act with respect to any matters relating to the Business Combination, or whether to proceed
with the Business Combination or any related transaction, and (iv) does not indicate that the Aggregate Merger Consideration to be paid by Tiga is the best possibly attainable under any circumstances; instead, it merely states whether the
Aggregate Merger Consideration to be paid by Tiga in the Business Combination is within a range suggested by certain financial analyses. The decision as to whether to proceed with the Business Combination or any related transaction may depend
on an assessment of factors unrelated to the financial analysis on which the Opinion is based. The Opinion should not be construed as creating any fiduciary duty on the part of Duff & Phelps to any party.
Set forth below is a summary of the material analyses performed by
Duff & Phelps in connection with the delivery of the Opinion to the Tiga Board. This summary is qualified in its entirety by reference to the full text of the Opinion, attached to this proxy statement/prospectus as Annex I. While this summary
describes the analyses and factors that Duff & Phelps deemed material in its presentation to the Tiga Board, it is not a comprehensive description of all analyses and factors considered by Duff & Phelps. The preparation of a fairness
opinion is a complex process that involves various determinations as to appropriate and relevant methods of financial analysis and the application of these methods to the particular circumstances. Therefore, a fairness opinion is not readily
susceptible to partial analysis or summary description. In arriving at the Opinion, Duff & Phelps did not attribute any particular weight to
164
any analysis or factor considered by it, but rather made qualitative judgments as to
the significance and relevance of each analysis and factor. Accordingly, Duff & Phelps believes that its analyses must be considered as a whole and that selecting portions of its analyses and of the factors considered by it in rendering the
Opinion without considering all analyses and factors could create a misleading or incomplete view of the evaluation process underlying the Opinion. The conclusion reached by Duff & Phelps was based on all analyses and factors taken as a
whole, and also on the application of Duff & Phelps’ own experience and judgment.
The financial analyses summarized below include information
presented in tabular format. In order for Duff & Phelps’ financial analyses to be fully understood, the tables must be read together with the text of each summary. The tables alone do not constitute a complete description of the financial
analyses. Considering the data below without considering the full narrative description of the financial analyses, including the methodologies and assumptions underlying the analyses, could create a misleading or incomplete view of Duff &
Phelps’ financial analyses.
Valuation Methodologies Utilized
Discounted Cash Flow Analysis
The Discounted Cash Flow Analysis (the “DCF Analysis”), approach is
a valuation technique that provides an estimation of the value of a business based on the cash flows that a business can be expected to generate. The DCF Analysis begins with an estimation of the annual cash flows the subject business is expected
to generate over a discrete projection period. The estimated cash flows for each of the years in the discrete projection period are then converted to their present value equivalents using a rate of return appropriate for the risk of achieving the
projected cash flows. The present value of the estimated cash flows is then added to the present value equivalent of the residual/terminal value of the business at the end of the discrete projection period to arrive at an estimate of value.
Duff & Phelps performed a DCF Analysis of the estimated future
unlevered free cash flows attributable to Grindr for the years ending December 31, 2022 through December 31, 2025, with “unlevered free cash flow” defined as cash that is available either to reinvest or to distribute to security holders. For the
purposes of its discounted cash flow analysis, Duff & Phelps utilized and relied upon the Adjusted EBITDA figures included in the Projected Financial Performance section and made the following
adjustments using information received from Grindr management and Tiga management to arrive at unlevered free cash flows: (i) deducted incremental cash and equity compensation not included in the Adjusted EBITDA figures shown in the Projected Financial Performance section, as instructed by Tiga management; (ii) deducted stock-based compensation and depreciation and amortization to derive earnings before interest and taxes; (iii) deducted
taxes equal to 25% of earnings before interest and taxes; (iv) added depreciation and amortization; (v) deducted capital expenditures and capitalized software development costs; and (vi) made adjustments for changes in net working capital, to
arrive at unlevered free cash flow of approximately $31 million for the nine months ending December 31, 2022, approximately $91 million for the year ending December 31, 2023, approximately $127 million for the year ending December 31, 2024, and
approximately $169 million for the year ending December 31, 2025.
Duff & Phelps estimated the net present value of all unlevered
free cash flows for Grindr after fiscal year 2025 (the “Terminal Values”) by applying an EBITDA Pre-SBC (earnings before interest, taxes, depreciation and amortization and before deducting stock-based compensation) multiple range to Grindr’s
projected 2025 EBITDA Pre-SBC in the Financial Projections. Duff & Phelps discounted the unlevered free cash flows in the discrete period and the Terminal Values in 2025 back to the present to estimate an illustrative range of implied
enterprise values of Grindr.
Market Approach
The “Market Approach” is a valuation technique that provides an
estimation of value by applying a valuation multiple to a specific financial metric for the subject company. These valuation multiples are either observed or derived from (i) market prices of actively traded, public companies, publicly available
historical financial information and consensus equity research analyst estimates of future financial performance or (ii) prices paid in actual mergers, acquisitions or other transactions. The valuation process includes, but is not limited to, a
comparison of various quantitative and qualitative factors between the subject business and other similar businesses.
Duff & Phelps utilized the Market Approach to (i) select a range
of valuation multiples consisting of enterprise value to projected 2022 and 2023 EBITDA Pre-SBC multiples and enterprise value to projected 2022 and 2023 EBITDA Post-SBC multiples to apply to Grindr’s 2022 and 2023 EBITDA both Pre-SBC and
post-SBC and (ii) to estimate the Terminal Values for the DCF Analysis.
165
Due to the fact that there are two dating application companies
that are publicly traded, Bumble Inc. and Match Group, Inc., Duff & Phelps’ selection of valuation multiples was primarily based on the valuation multiples derived from these two companies. In addition, Duff & Phelps identified three
publicly traded consumer subscription companies, Netflix, Inc., Roku, Inc. and Spotify Technology S.A., and four publicly traded social media and marketplace companies, Etsy, Inc., Pinterest, Inc., Yelp Inc. and ZipRecruiter, Inc. The valuation
multiples derived from these companies were viewed by Duff & Phelps as supplementary to the valuation multiples derived from the dating application companies.
Duff & Phelps selected the public companies based on their
relative similarity, primarily in terms of services offered, revenue growth history and outlook, profit margins and other characteristics, to that of Grindr. Duff & Phelps noted that the public companies that it selected for purpose of its
analysis were not perfectly comparable to Grindr. Duff & Phelps does not have access to non-public information of any of the companies used for comparative purposes. Accordingly, a complete valuation analysis of Grindr cannot rely solely upon
a quantitative review of the selected public companies but involves complex considerations and judgments concerning differences in financial and operating characteristics of such companies, as well as other factors that could affect their value
relative to that of Grindr. Therefore, the Market Approach is subject to certain limitations.
|
COMPANY NAME
|
| |
ENTERPRISE VALUE AS A MULTIPLE OF
|
||||||||||||||||||
|
Company Name
|
| |
LTM
EBITDA
Pre-SBC
|
| |
2022
EBITDA
Pre-SBC
|
| |
2023
EBITDA
Pre-SBC
|
| |
LTM
EBITDA
Post-SBC
|
| |
2022
EBITDA
Post-SBC
|
| |
2023
EBITDA
Post-SBC
|
| |
LTM
Revenue
|
|
Dating Apps
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
Bumble Inc.**
|
| |
24.9x
|
| |
20.5x
|
| |
16.0x
|
| |
61.9x
|
| |
35.6x
|
| |
25.0x
|
| |
6.73x
|
|
Match Group, Inc.*
|
| |
24.6x
|
| |
20.9x
|
| |
17.1x
|
| |
28.5x
|
| |
23.9x
|
| |
19.5x
|
| |
8.80x
|
|
Mean / Median
|
| |
24.7x
|
| |
20.7x
|
| |
16.5x
|
| |
45.2x
|
| |
29.7x
|
| |
22.2x
|
| |
7.77x
|
|
Consumer Subscriptions
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
Netflix, Inc.*
|
| |
13.7x
|
| |
13.4x
|
| |
12.0x
|
| |
14.6x
|
| |
14.6x
|
| |
13.0x
|
| |
3.10x
|
|
Roku, Inc.*
|
| |
28.7x
|
| |
NM
|
| |
32.2x
|
| |
63.1
|
| |
NM
|
| |
NM
|
| |
3.89
|
|
Spotify Technology S.A.*
|
| |
37.7x
|
| |
39.9x
|
| |
28.6x
|
| |
NM
|
| |
NM
|
| |
56.7
|
| |
1.61
|
|
Mean
|
| |
26.7x
|
| |
26.7x
|
| |
24.2x
|
| |
38.9x
|
| |
14.6x
|
| |
34.8x
|
| |
2.87x
|
|
Median
|
| |
28.7x
|
| |
26.7x
|
| |
28.6x
|
| |
38.9x
|
| |
14.6x
|
| |
34.8x
|
| |
3.10x
|
|
Social Media and Marketplace
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
Etsy, Inc.*
|
| |
18.8x
|
| |
17.3x
|
| |
13.9x
|
| |
23.4x
|
| |
21.1x
|
| |
16.8x
|
| |
5.80x
|
|
Pinterest, Inc.**
|
| |
14.7x
|
| |
18.2x
|
| |
13.1x
|
| |
29.7x
|
| |
49.6x
|
| |
25.9x
|
| |
4.44x
|
|
Yelp Inc.*
|
| |
9.0x
|
| |
8.2x
|
| |
6.9x
|
| |
23.4x
|
| |
20.0x
|
| |
15.0x
|
| |
2.15x
|
|
ZipRecruiter, Inc.**
|
| |
19.5x
|
| |
20.6x
|
| |
16.3x
|
| |
NM
|
| |
58.9x
|
| |
36.8x
|
| |
3.74x
|
|
Mean
|
| |
15.5x
|
| |
16.1x
|
| |
12.6x
|
| |
25.5x
|
| |
37.4x
|
| |
23.6x
|
| |
4.03x
|
|
Median
|
| |
16.7x
|
| |
17.8x
|
| |
13.5x
|
| |
23.4x
|
| |
35.3x
|
| |
21.4x
|
| |
4.09x
|
|
Consolidated Mean
|
| |
21.3x
|
| |
19.9x
|
| |
17.3x
|
| |
34.9x
|
| |
31.9x
|
| |
26.1x
|
| |
4.47x
|
|
Consolidated Median
|
| |
19.5x
|
| |
19.4x
|
| |
16.0x
|
| |
28.5x
|
| |
23.9x
|
| |
22.2x
|
| |
3.89x
|
LTM = Latest Twelve Months; Represents period ended 3/31/2022 for Netflix, Roku,
Spotify and Pinterest; Period ended 12/31/2022 for Bumble, Match, Etsy, Yelp, and Ziprecruiter
EBITDA = Earnings Before Interest, Taxes, Depreciation and Amortization
SBC = Stock Based Compensation
CAGR = Compounded Annual Growth Rate
Enterprise Value = [Market Capitalization + Management Equity + Debt + Finance Leases
+ Operating Leases (for IFRS/non-US GAAP companies only) + Preferred Stock + Non-Controlling Interest] - [Cash & Equivalents + Long-Term Investments + Net Non-Operating Assets]
|
*
|
Projected SBC calculated by applying a historical 3-year average percentage of revenue to analyst projected revenues
|
|
**
|
Projected SBC based on average analyst estimates due to non-recurring amounts of equity compensation in historical 3-year averages
|
Source: S&P Capital IQ, SEC Filings, Annual and Interim Reports, Grindr management,
Tiga management, Financial Projections
166
Duff & Phelps also identified certain precedent merger and
acquisition transactions involving target companies that had businesses deemed similar in certain respects to that of Grindr. Duff & Phelps compared Grindr to the target companies involved in the selected transactions listed in the table
below. The selection of these transactions was based, among other things, on the target company’s industry, relative size of the applicable transactions compared to Grindr and the availability of public information related to the applicable
transactions. These multiples of implied enterprise value to revenue and enterprise value to EBITDA were also considered when selecting multiples to apply to Grindr’s EBITDA in the market approach and when selecting multiples to apply to 2025
EBITDA in the DCF Analysis.
M&A Transactions Analysis
($ in millions)
|
Announced
|
| |
Target
Name
|
| |
Acquirer
Name
|
| |
Enterprise
Value
|
| |
LTM
Revenue
|
| |
LTM
EBITDA
|
| |
EBITDA
Margin
|
| |
EV /
Revenue
|
| |
EV /
EBITDA
|
|
4/13/2022
|
| |
Twitter, Inc.(1)
|
| |
Elon R. Musk
|
| |
$46,305.9
|
| |
$5,242.4
|
| |
$817.8
|
| |
15.6%
|
| |
8.83x
|
| |
56.6x
|
|
1/18/2022
|
| |
Activision Blizzard, Inc.
|
| |
Microsoft Corporation
|
| |
$68,987.1
|
| |
$8,803.0
|
| |
$3,452.0
|
| |
39.2%
|
| |
7.84x
|
| |
20.0x
|
|
1/9/2022
|
| |
Zynga Inc.
|
| |
Take-Two Interactive Software, Inc.
|
| |
$12,328
|
| |
$2,801
|
| |
$457
|
| |
16.3%
|
| |
4.40x
|
| |
27.0x
|
|
11/5/2021
|
| |
McAfee Corp.
|
| |
Private Equity Consortium
|
| |
$20,014.2
|
| |
$1,826.0
|
| |
$652.0
|
| |
35.7%
|
| |
10.96x
|
| |
30.7x
|
|
7/14/2021
|
| |
Avast plc
|
| |
NortonLifeLock Inc.
|
| |
$7,662.1
|
| |
$931.1
|
| |
$482.3
|
| |
51.8%
|
| |
8.23x
|
| |
15.9x
|
|
2/9/2021
|
| |
Hyperconnect, Inc.
|
| |
MG Korea Services Limited
|
| |
$1,725.0
|
| |
$237.0
|
| |
$25.3
|
| |
10.7%
|
| |
7.28x
|
| |
68.1x
|
|
2/8/2021
|
| |
Glu Mobile Inc.
|
| |
Electronic Arts Inc.
|
| |
$1,983.0
|
| |
$540.5
|
| |
$28.5
|
| |
5.3%
|
| |
3.67x
|
| |
69.6x
|
|
8/27/2020
|
| |
Leyou Technologies Holdings Limited
|
| |
Image Frame Investment (HK) Limited
|
| |
$1,390.7
|
| |
$199.3
|
| |
$43.3
|
| |
21.7%
|
| |
6.98x
|
| |
32.1x
|
|
8/5/2020
|
| |
Ancestry.com LLC
|
| |
Blackstone Inc.
|
| |
$4,700.0
|
| |
$757.0
|
| |
$266.2
|
| |
35.2%
|
| |
6.21x
|
| |
17.7x
|
|
3/5/2020
|
| |
The Meet Group, Inc.
|
| |
Parship Group GmbH
|
| |
$505.5
|
| |
$211.7
|
| |
$30.0
|
| |
14.2%
|
| |
2.39x
|
| |
16.9x
|
|
12/20/2019
|
| |
Care.com, Inc.(2)
|
| |
IAC/InterActiveCorp (nka:Match Group, Inc.)
|
| |
$525
|
| |
$207
|
| |
$22
|
| |
10.4%
|
| |
2.53x
|
| |
24.4x
|
|
12/17/2019
|
| |
LogMeIn, Inc.
|
| |
Francisco Partners Management, L.P.; Evergreen Coast Capital
|
| |
$4,557.8
|
| |
$1,247.9
|
| |
$327.3
|
| |
26.2%
|
| |
3.65x
|
| |
13.9x
|
|
11/8/2019
|
| |
Bumble Inc.(3)
|
| |
Blackstone Inc.
|
| |
$3,000.0
|
| |
$488.9
|
| |
$99.7
|
| |
20.4%
|
| |
6.14x
|
| |
30.1x
|
|
7/29/2019
|
| |
Just Eat plc
(nka:Just Eat Limited)
|
| |
Takeaway.com N.V. (nka:Just Eat Takeaway.com N.V.)
|
| |
$8,466.4
|
| |
$1,125.4
|
| |
$172.6
|
| |
15.3%
|
| |
7.52x
|
| |
49.1x
|
|
|
| |
|
| |
Mean
|
| |
$13,011
|
| |
$1,758
|
| |
$491
|
| |
22.7%
|
| |
6.19x
|
| |
33.7x
|
|
|
| |
|
| |
Median
|
| |
$4,629
|
| |
$844
|
| |
$219
|
| |
18.4%
|
| |
6.59x
|
| |
28.5x
|
|
(1)
|
Twitter metrics based on EBITDA adjusted for non-recurring items post-stock based compensation
|
|
(2)
|
Care.com metrics based on company adjusted EBITDA post-stock based compensation
|
|
(3)
|
Bumble metrics based on company adjusted EBITDA post-stock based compensation per S-1 Filing
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Source: Capital IQ and company filings
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Summary of Financial Analyses
Discounted Cash Flow Analysis
Based on the data shown in the tables above, Duff & Phelps
selected a range of multiples to apply to Grindr’s projected 2025 EBITDA Pre-SBC to estimate an illustrative range of Terminal Values to incorporate into the DCF Analysis. Duff & Phelps analyzed revenue growth, EBITDA Pre-SBC growth, EBITDA
Pre-SBC margins, and multiples of enterprise value to EBITDA Pre-SBC for the selected public companies compared to projected 2025 revenue growth, projected 2025 EBITDA Pre-SBC growth, and projected 2025 EBITDA Pre-SBC margin for Grindr, based on
the Financial Projections. Such analysis informed the selection of terminal multiples of projected 2025 EBITDA Pre-SBC for Grindr. Duff & Phelps selected multiples that, in its judgement, reflected Grindr’s sustainability of revenue growth
outlook, profit margins, and other characteristics relative to the selected public companies. Based on its analysis, Duff & Phelps selected a terminal EBITDA Pre-SBC multiple range of 14.0x to 17.0x to apply to Grindr’s projected 2025 EBITDA
Pre-SBC, which was utilized in the DCF Analysis to estimate an illustrative range of implied enterprise values of Grindr.
Determination of an appropriate discount rate to use in the DCF
Analysis requires a degree of judgment. Duff & Phelps considered a number of factors in determining the discount rate range, including the results of published studies on discount rates. Duff & Phelps also considered Grindr’s projected
financial performance and growth and the risks facing Grindr in order to achieve the projected results, including execution risk and competitive risks, among others.
Duff & Phelps estimated Grindr’s weighted average cost of
capital (“WACC”) using the Capital Asset Pricing Model and information derived from the selected public companies and the cost of debt calculation as well as an estimate of the capital structure as exhibited by the selected public companies. In
addition, Duff & Phelps assessed the expected rates of return on a range of asset classes, including rates of returns required in private equity investments and later stage venture capital returns. Based on these factors and the published
discount rate studies, Duff & Phelps selected discount rates ranging from 16% to 20%.
Based on these assumptions, Duff & Phelps’ DCF Analysis resulted
in an estimated enterprise value range for Grindr of $2,175 million to $2,900 million. Duff & Phelps further estimated the range of total equity value of Grindr following the Business Combination by adding pro forma cash and cash equivalents
of $15 million (which assumes no redemptions) and option proceeds of $15 million, and subtracting the pro forma debt of $75 million (which assumes no redemptions), the estimate value of outstanding warrants of $21 million, and estimated value of
future purchase rights of $5 million. This resulted in an estimated value of the 78.2% equity interest in Tiga, which represents Aggregate Consideration being paid by Tiga, to range from approximately $1,645 million to $2,213 million.
Market Approach
Based on the data shown in the tables above, Duff & Phelps also
selected a range of valuation multiples to apply to Grindr’s projected 2022 and 2023 EBITDA Pre-SBC and projected 2022 and 2023 EBITDA Post-SBC to estimate a range of current enterprise values for Grindr using the Market Approach. Duff &
Phelps analyzed the historical and projected metrics for Bumble Inc. and Match Group, Inc., as well as for the other selected publicly traded companies, and compared these metrics to the historical and projected metrics of Grindr. Duff &
Phelps selected multiples that, in its judgement, reflected Grindr’s services offerings, revenue growth outlook, profit margins, and other characteristics relative to the selected public companies based on historical financial results and the
Financial Projections.
Based on the analysis described above, Duff & Phelps selected
valuation multiples ranging from 21.0x to 24.0x to apply to Grindr’s 2022 EBITDA Pre-SBC of $95 million; valuation multiples ranging from 14.0x to 17.0x to apply to Grindr’s 2023 EBITDA Pre-SBC of $144 million; valuation multiples ranging from
24.0x to 27.0x to apply to Grindr’s 2022 EBITDA Post-SBC of $81 million; and valuation multiples ranging from 16.5x to 19.5x to apply to Grindr’s 2023 EBITDA Post-SBC of $131 million.
Duff & Phelps’ Market Approach resulted in an estimated
enterprise value range for Grindr of $2,025 million to $2,375 million. Duff & Phelps further estimated the range of total equity value of Grindr following the Business Combination by adding pro forma cash and cash equivalents of $15 million
(which assumes no redemptions) and option proceeds of $15 million, and subtracting the pro forma debt of $75 million (which assumes no redemptions),
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the estimated value of outstanding warrants of $21 million, and estimated value of
future purchase rights of $5 million. This resulted in an estimated value of the 78.2% equity interest in Tiga, which represents the Aggregate Consideration being paid by Tiga, to range from approximately $1,528 million to $1,802 million.
Conclusion
Based on Duff & Phelps’ analyses, Duff & Phelps noted that
the consideration of $1,599 million to be paid by Tiga in the Business Combination was at the bottom of the estimated value range of the 78.2% equity interest in Tiga, ranging from $1,587 million to $2,017 million. This range is based on the
average of the illustrative enterprise value indications from the DCF Analysis, ranging from $2,175 million to $2,900 million, and the Market Approach, ranging from $2,025 million to $2,375 million, to which Duff & Phelps added pro forma cash
and cash equivalents of $15 million (which assumes no redemptions) and option proceeds of $15 million, and subtracted the pro forma debt of $75 million (which assumes no redemptions), the estimated value of outstanding warrants of $21 million,
and estimated value of future purchase rights of $5 million. This resulted in an estimated adjusted aggregate equity value range for Grindr of $2,028 million to $2,578 million and the estimated value of the 78.2% equity interest in Tiga, which
represents the consideration being paid by Tiga, ranging from approximately $1,587 million to $2,017 million.
Fees and Expenses
As compensation for Duff & Phelps’ services in connection
with the rendering of the Opinion to the Tiga Board, the Special Committee agreed to pay Duff & Phelps a professional fee of $600,000. A portion of the fee was payable upon delivery. Of this fee, $50,000 was paid when Duff & Phelps was
engaged, $150,000 was paid when Duff & Phelps was asked to deliver the Opinion, and the remaining $400,000 is payable upon the closing of the Business Combination.
No portion of Duff & Phelps’ fee is refundable or contingent
upon the consummation of a transaction or the conclusion reached in the Opinion.
Furthermore, Duff & Phelps is entitled to be paid additional
fees at a percentage of Duff & Phelps’ standard hourly rates for any time incurred should Duff & Phelps be called upon to support its findings subsequent to the delivery of its opinion. The Special Committee has also agreed to reimburse
Duff & Phelps for its reasonable out-of-pocket expenses, other expenses and reasonable fees and expenses of outside counsel retained by Duff & Phelps in connection with the negotiation and performance of this engagement and the
preparation of, and assistance with respect to, the Opinion, relevant transaction documents and related documents and matters. The Special Committee has also agreed to indemnify Duff & Phelps for certain liabilities arising out of its
engagement.
The terms of the fee arrangements with Duff & Phelps, which the
Special Committee believes are customary in transactions of this nature, were negotiated at arm’s length, and the Special Committee is aware of these fee arrangements.
Disclosure of Prior Relationships
During the two years preceding the date of the Opinion, Duff &
Phelps has not had any material relationship with any party to the Business Combination for which compensation has been received or is intended to be received, nor is any such material relationship or related compensation mutually understood to
be contemplated. Duff & Phelps did not act as an underwriter in the initial public offering of Tiga.
Interests of Certain Persons in the Business Combination
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When you consider the recommendation of the Tiga Board in favor of approval of the Business Combination Proposal, you should
keep in mind that the Sponsor, Tiga’s directors and executive officers and certain of their affiliates have interests in such proposal that are different from, or in addition to, those of Tiga shareholders and warrant holders generally.
These interests include, among other things, the interests listed below. In each of the minimum redemption scenario and the maximum redemption scenario, as well as all interim levels of redemptions, the Forward Purchase Investors will pay
$10.00 per share of New Grindr Common Stock in connection with the Forward Purchase Commitment and the Backstop Commitment, and the consideration payable to security holders of Grindr, which will be paid in the form of shares of New
Grindr Common Stock, is being valued at $10.00 per share. As such, regardless of the extent of redemptions, the shares of New Grindr Common Stock owned by non-redeeming shareholders
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will have an implied value of $10.00 per share upon the consummation of the Business
Combination. Notwithstanding the foregoing, public shareholders should be aware that the foregoing interests, and those set forth in more detail below, present a risk that the Sponsor and its affiliates will benefit from the completion of a
business combination, including in a manner that may not be aligned with public shareholders – as such, the Sponsor may be incentivized to complete an acquisition of a less favorable target company or on terms less favorable to public
shareholders rather than liquidate. The following interests with respect to Raymond Zage and Ashish Gupta and their respective affiliates:
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Mr. Zage indirectly owns 43.0% of all of the equity interests (such interests non-voting) in Grindr and Ashish Gupta indirectly
owns 4.5% of all of the equity interests (such interests non-voting) in Grindr; and
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Immediately following the Closing and, assuming none of Tiga’s shareholders elect to redeem their public shares in connection
with the Closing, by virtue of the holdings by Raymond Zage and Ashish Gupta and their respective affiliates, subject to certain adjustments and limitations described herein, Mr. Zage is expected to beneficially own approximately % of
the economic interests of New Grindr and % of the voting power of the capital stock of New Grindr whereas Ashish Gupta is expected to beneficially own approximately % of the economic interests of New Grindr and % of the voting
power of the capital stock of New Grindr.
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Prior to the consummation of the initial public offering, on July 27, 2020, the Sponsor received 5,750,000 founder shares in
exchange for a capital contribution of $25,000, or $0.004 per share. On November 23, 2020, Tiga effected a 1,150,000 share dividend, resulting in Tiga’s initial shareholders holding an aggregate of 6,900,000 founder shares. All share and
per-share amounts have been retroactively restated to reflect the share dividend. These 6,900,000 founder shares will have a significantly higher value at the time of the Business Combination, which if unrestricted and freely tradable
would be valued at approximately $71,484,000 based on the closing price of Tiga Class A ordinary shares ($10.36 per share) on the NYSE at September 9, 2022. On November 23, 2020, the Sponsor transferred 20,000 founder shares to each of
David Ryan, Carman Wong and Ben Falloon for the same per-share price initially paid by the Sponsor, resulting in the Sponsor holding 6,840,000 founder shares. If Tiga does not consummate a business combination by November 27, 2022 or
prior to the expiration of any extended time that Tiga has to consummate a business combination beyond November 27, 2022 as a result of a shareholder vote to amend Tiga’s memorandum and articles of association, subject to the Sponsor
purchasing additional private placement warrants, subject to applicable law, it would cease all operations except for the purpose of winding up, redeeming all of the outstanding public shares for cash and, subject to the approval of its
remaining shareholders and its board of directors, dissolving and liquidating, subject in each case to its obligations under the Companies Act to provide for the claims of creditors and the requirements of other applicable law. In such
event, the 6,900,000 Tiga Class B ordinary shares collectively owned by the Sponsor and three independent directors (David Ryan, Carman Wong and Ben Falloon) would be worthless because following the redemption of the public shares, Tiga
would likely have few, if any, net assets and because the Sponsor and Tiga’s directors and officers have agreed to waive their respective rights to liquidating dissolutions from the trust account in respect of any Tiga Class A ordinary
shares and Tiga Class B ordinary shares held by them, as applicable, if Tiga fails to complete a business combination within the required period. Additionally, in such event, the 18,560,000 private placement warrants purchased by the
Sponsor for an aggregate purchase price of $18,560,000 (at $1.00 per warrant), will also expire worthless.
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The 6,900,000 shares of New Grindr Common Stock into which the 6,900,000 Tiga Class B ordinary shares collectively held by the
Sponsor, David Ryan, Carman Wong and Ben Falloon will automatically convert in connection with the First Merger (including after giving effect to the Domestication), if unrestricted and freely tradeable, would have had an aggregate market
value of (1) $ based upon the closing price of $ per Tiga Class A ordinary share on the NYSE on , 2022, the most recent practicable date prior to the date of this proxy statement/prospectus and (2) $ million, based upon the
per share value implied in the Business Combination of $10.00 per share of New Grindr Common Stock. However, given that such shares of New Grindr Common Stock will be subject to certain restrictions, including those described above, Tiga
believes that such shares have less value. The 18,560,000 New Grindr Warrants into which the 18,560,000 Tiga private placement warrants held by the Sponsor will automatically convert in connection with the First Merger (including after
giving effect to the Domestication), if unrestricted and
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freely tradeable, would have had an aggregate market value of based upon the
closing price of $ per Tiga Warrant on the NYSE on , 2022, the most recent practicable date prior to the date of this proxy statement/prospectus. Consequently, because (a) Tiga’s public shareholders purchased the Tiga units at $10.00 per
unit, (b) the purchase price of the founder shares (following surrender of 6,900,000 shares for no consideration) was approximately $ per share and (c) the price of the private placement warrants was $1.00 per warrant, the Sponsor may earn a
positive rate of return even if the share price of New Grindr Common Stock falls significantly below the per share value implied in the Business Combination of $10.00 per share of New Grindr Common Stock and the public shareholders of Tiga
experience a negative rate of return.
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In addition, the Sponsor and its affiliates will subscribe for an aggregate of 5,000,000 forward purchase shares, plus an
aggregate of 2,500,000 forward purchase warrants to purchase one share of New Grindr Common Stock at $11.50 per share, for an aggregate purchase price of $50,000,000, or $10.00 per share. The Sponsor and its affiliates may also subscribe
for up to 5,000,000 backstop shares plus up to 2,500,000 backstop warrants at $11.50 per share, for an aggregate purchase price of $50,000,000, or $10.00 for each backstop share and one-half of one backstop warrant.
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Raymond Zage, Chairman and Chief Executive Officer of Tiga, is expected to be a director of New Grindr after the consummation
of the Business Combination. As such, in the future, Raymond Zage may receive fees for his service as director, which may consist of cash and/or stock-based awards, and any other remuneration that New Grindr’s board of directors
determines to pay to its non-employee directors.
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The Sponsor will benefit from the completion of the Business Combination and may be incentivized to complete an acquisition of
a less favorable target company or on terms less favorable to Tiga shareholders than liquidate.
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Given the differential in purchase price that the Sponsor paid for the founder shares as compared to the price of the Tiga
Units sold in the initial public offering and subsequent number of shares of Tiga Class A ordinary shares that the Sponsor will receive upon conversion of the founder shares in connection with the Business Combination, the Sponsor and its
affiliates may realize a positive rate of return on such investment even if other Tiga shareholders experience a negative rate of return following the Business Combination.
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Pursuant to the underwriting agreement entered into in connection with Tiga’s initial public offering, the underwriters are
entitled to a deferred fee of $0.35 per unit, or $9,660,000 in the aggregate. The deferred fee will become payable to the underwriters from the amounts held in the trust account solely in the event that Tiga completes a business
combination, subject to the terms of the underwriting agreement. The underwriters of the initial public offering have agreed to waive their rights to the deferred fee in the event Tiga does not complete an initial business combination
within the time period provided in Tiga’s amended and restated memorandum and articles of association.
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The Sponsor (including its representatives and affiliates) and Tiga’s directors and officers, are, or may in the future become,
affiliated with entities that are engaged in a similar business to Tiga. The Sponsor and Tiga’s directors and officers are not prohibited from sponsoring, or otherwise becoming involved with, any other blank check companies prior to Tiga
completing its initial business combination. Moreover, certain of Tiga’s directors and officers have time and attention requirements for other investments. Tiga’s directors and officers also may become aware of business opportunities
which may be appropriate for presentation to Tiga, and the other entities to which they owe certain fiduciary or contractual duties. Accordingly, they may have had conflicts of interest in determining to which entity a particular business
opportunity should be presented. These conflicts may not be resolved in Tiga’s favor and such potential business opportunities may be presented to other entities prior to their presentation to Tiga, subject to applicable fiduciary duties
under the Companies Act. Tiga’s Cayman Constitutional Documents provide that Tiga renounces its interest in any corporate opportunity offered to any director or officer of Tiga unless such opportunity is expressly offered to such person
solely in his or her capacity as a director or officer of Tiga and it is an opportunity that Tiga is able to complete on a reasonable basis. This provision in Tiga’s Cayman Constitutional Documents may present a conflict of interest in
the event that a director or officer of Tiga is offered a corporate opportunity in a capacity other than his or her capacity as a director or officer of Tiga that is suitable for Tiga. Tiga does not believe that such potential conflict of
interest impacted Tiga’s search for a business combination target.
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Tiga’s existing directors and officers will be eligible for continued indemnification and continued coverage under Tiga’s
directors’ and officers’ liability insurance after the Mergers and pursuant to the Merger Agreement.
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In the event that Tiga fails to consummate a business combination within the prescribed time frame (pursuant to the Cayman
Constitutional Documents), or upon the exercise of a redemption right in connection with the Business Combination, Tiga will be required to provide for payment of claims of creditors that were not waived that may be brought against Tiga
within the ten years following such redemption. In order to protect the amounts held in the trust account, the Sponsor has agreed that it will be liable to Tiga if and to the extent any claims by a third party (other than Tiga’s
independent auditors) for services rendered or products sold to Tiga, or a prospective target business with which Tiga has discussed entering into a transaction agreement, reduce the amount of funds in the trust account to below (i)
$10.00 per public share or (ii) such lesser amount per public share held in the trust account as of the date of the liquidation of the trust account, due to reductions in value of the trust assets, in each case, net of the amount of
interest which may be withdrawn to pay taxes, except as to any claims by a third party who executed a waiver of any and all rights to seek access to the trust account and except as to any claims under the indemnity of the underwriters of
Tiga’s initial public offering against certain liabilities, including liabilities under the Securities Act.
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The Sponsor, or an affiliate of the Sponsor, or certain of Tiga’s officers and directors advanced funds to Tiga for working
capital purposes. The Sponsor advanced Tiga $700,000 to be used for working capital purposes. In addition, the Sponsor also loaned Tiga an aggregate of $300,000 to cover expenses related to the initial public offering pursuant to a
promissory note. This advance and promissory note were non-interest bearing and payable on the earlier of (i) January 31, 2021 and (ii) the completion of the initial public offering. Tiga fully repaid the advance and the promissory note
to the Sponsor on November 27, 2020. On March 16, 2022, the Tiga Board authorized the execution and delivery of a Convertible Promissory Note in the principal amount of $2,000,000 (the “Convertible
Promissory Note”). On January 25, 2022, the Sponsor had advanced the sum of $750,000 to Tiga on account of the Convertible Promissory Note and on June 30, 2022, there was $1,680,000 outstanding under the Convertible Promissory
Note. All unpaid principal under the Convertible Promissory Note shall be due and payable in full on the effective date of Tiga’s initial business combination, unless accelerated upon the occurrence of an event of default. The Sponsor and
its affiliates have no other loans for which they would receive compensation if a business combination is completed.
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Tiga has outstanding administrative fees of $20,000 as of June 30, 2022, which are included in accrued expenses in Tiga’s
condensed balance sheets as of June 30, 2022, and which are also payable to the Sponsor or an affiliate upon the effective date of the Business Combination. Other than the foregoing, no compensation of any kind, including finder’s and
consulting fees, will be paid by Tiga to the Sponsor, executive officers and directors, or any of their respective affiliates, for services rendered prior to or in connection with the completion of an initial business combination.
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Following the consummation of the Business Combination, the Sponsor, Tiga’s officers and directors and their respective
affiliates would be entitled to reimbursement for certain reasonable out-of-pocket expenses related to identifying, investigating and consummating an initial business combination, and repayment of any other loans (including the
Convertible Promissory Note) on such terms as to be determined by Tiga from time to time, made by the Sponsor or certain of Tiga’s officers and directors to finance transaction costs in connection with an intended initial business
combination. However, if Tiga fails to consummate a business combination within the required period, the Sponsor and Tiga’s officers and directors and their respective affiliates will not have any claim against the Trust Account for
reimbursement. Notwithstanding the foregoing, the Sponsor, Tiga’s officers and directors and their respective affiliates will not have any reimbursement or out-of-pocket expenses, to which they would receive compensation if a business
combination is completed.
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Pursuant to the A&R Registration Rights Agreement, the Sponsor and certain related parties will have customary registration
rights, including demand and piggy-back rights, subject to cooperation and cut-back provisions with respect to the shares of New Grindr Common Stock and warrants held by such parties following the consummation of the Business Combination.
See “Certain Relationships and Related Person
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Transactions—Certain Relationships and Related Person
Transactions—Tiga—A&R Registration Rights Agreement”.
The Sponsor has agreed to vote all the founder shares and any other
public shares purchased during or after Tiga’s initial public offering in favor of the Business Combination, regardless of how our public shareholders vote. Unlike some other blank check companies in which the initial shareholders agree to vote
their shares in accordance with the majority of the votes cast by the public shareholders in connection with an initial business combination, the Sponsor and each director of Tiga have agreed to, among other things, vote in favor of the Merger
Agreement and the transactions contemplated thereby. As of the date of this proxy statement/prospectus, the Sponsor (including Tiga’s independent directors) owns 19.8% of Tiga’s issued and outstanding ordinary shares.
The Sponsor and Tiga’s directors, officers, advisors or their
respective affiliates may purchase shares or warrants in privately negotiated transactions or in the open market either prior to or following the completion of the Business Combination. However, they have no current commitments, plans or
intentions to engage in any such transactions and have not formulated any terms or conditions for any such transactions. None of the funds in the trust account will be used to purchase shares or warrants in such transactions. If they engage in
such transactions, they will not make any such purchases when they are in possession of any material non-public information not disclosed to the seller or if such purchases are prohibited by Regulation M under the Exchange Act. Such a purchase
may include a contractual acknowledgement that such shareholder, although still the record holder of Tiga’s shares, is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights.
In the event that the Sponsor or Tiga’s directors, officers,
advisors or their affiliates purchase shares in privately negotiated transactions from public shareholders who have already elected to exercise their redemption rights, such selling shareholders would be required to revoke their prior elections
to redeem their shares.
The purpose of such purchases would be to (i) vote such shares in
favor of the Business Combination and thereby increase the likelihood of obtaining shareholder approval of the Business Combination or (ii) to increase the likelihood of satisfaction of the Minimum Cash Condition or ensure that Tiga’s net
tangible assets are at least $5,000,001, where it appears that such requirement would otherwise not be met. The purpose of any such purchases of warrants could be to reduce the number of warrants outstanding or to vote such warrants on any
matters submitted to the warrant holders for approval in connection with the Business Combination. Any such purchases of Tiga securities may result in the completion of the Business Combination that may not otherwise have been possible.
In addition, if such purchases are made, the public “float” of Tiga
Class A ordinary shares may be reduced and the number of beneficial holders of our securities may be reduced, which may make it difficult to maintain or obtain the quotation, listing or trading of Tiga securities on a national securities
exchange.
The Sponsor and Tiga’s officers, directors and/or their affiliates
anticipate that they may identify the shareholders with whom the Sponsor or Tiga’s officers, directors or their affiliates may pursue privately negotiated purchases by either the shareholders contacting Tiga directly or by our receipt of
redemption requests submitted by shareholders (in the case of Tiga Class A ordinary shares) following Tiga’s mailing of proxy materials in connection with the Business Combination. To the extent that the Sponsor or Tiga’s officers, directors,
advisors or their affiliates enter into a private purchase, they would identify and contact only potential selling shareholders who have expressed their election to redeem their shares for a pro rata share of the trust account or vote against the
Business Combination but only if such shares have not already been voted at the extraordinary general meeting. The Sponsor and Tiga’s officers, directors, advisors or their affiliates will only purchase shares if such purchases comply with
Regulation M under the Exchange Act and the other federal securities laws.
Any purchases by the Sponsor or Tiga’s officers, directors and/or
their affiliates who are affiliated purchasers under Rule 10b-18 under the Exchange Act will only be made to the extent such purchases are able to be made in compliance with Rule 10b-18, which is a safe harbor from liability for manipulation
under Section 9(a)(2) and Rule 10b-5 of the Exchange Act. Rule 10b-18 has certain technical requirements that must be complied with in order for the safe harbor to be available to the purchaser. The Sponsor and Tiga’s officers, directors and/or
their affiliates will not make purchases of Tiga Class A ordinary shares if the purchases would violate Section 9(a)(2) or Rule 10b-5 of the Exchange Act.
The existence of financial and personal interests of one or more of
Tiga’s directors may result in a conflict of interest on the part of such director(s) between what he, she or they may believe is in the best interests of Tiga and
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its shareholders and what he, she or they may believe is best for himself, herself
or themselves in determining to recommend that shareholders vote for the proposals. In addition, Tiga’s officers have interests in the Business Combination that may conflict with your interests as a shareholder.
Expected Accounting Treatment of the Business Combination
The Business Combination will be accounted for as a reverse
recapitalization, in accordance with GAAP. Under this method of accounting, although New Grindr will issue shares for outstanding equity interests of Grindr in the Business Combination, Tiga will be treated as the “acquired” company for financial
reporting purposes. Accordingly, the Business Combination will be treated as the equivalent of Grindr issuing stock for the net assets of Tiga, accompanied by a recapitalization. The net assets of Tiga will be stated at historical cost, with no
goodwill or other intangible assets recorded. Operations prior to the Business Combination will be those of Grindr.
Estimated Sources and Uses for the Business Combination
The Estimated Sources and Uses are shown on a pro forma basis as if
the Business Combination and the other events, summarized elsewhere in this proxy statement/prospectus, had been consummated on June 30, 2022. The Estimated Sources and Uses has been derived from, and should be read in conjunction with, the more
detailed unaudited pro forma condensed combined financial information prepared in accordance with Article 11 of Regulation S-X appearing elsewhere in this proxy statement/prospectus and the accompanying notes in the section entitled “Unaudited Pro Forma Combined Financial Information.” The unaudited pro forma combined financial information is derived from, and should be read in conjunction with, the historical financial statements and
accompanying notes of Tiga and Grindr for the applicable periods included elsewhere in this proxy statement/prospectus. The unaudited pro forma adjustments represent management’s estimates based on information available as of the date of these
unaudited pro forma combined financial information and are subject to change as additional information becomes available and analyses are performed. If the actual facts are different from these assumptions, the percentage ownership of New Grindr
held by such constituencies will be different.
Estimated Sources and Uses – No Redemptions
The following table summarizes the estimated sources and uses of
funding the Business Combination (all amounts in millions of $). These figures assume (a) that no public shareholders exercise their redemption rights in connection with the Business Combination, (b) that New Grindr issues 160,171,401 shares of
New Grindr Common Stock to former unitholders of Grindr as of immediately prior to the Effective Time and (c) that New Grindr issues 10.0 million shares of New Grindr Common Stock to the Forward Purchase Investors pursuant to the Forward Purchase
Commitment and Backstop Commitment.
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Sources
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Uses
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Cash and investments held in trust account(1)
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287.5
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Grindr rollover equity(3)
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1,601.7
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Forward Purchase Commitment and Backstop Commitment(2)
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100.0
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Distribution for Deferred Payment(4)
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155.0
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Tiga and Grindr balance sheet cash(1)
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25.7
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Distribution(4)
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132.8
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Catapult loan repayment(1)
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29.7
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Repayment of existing loans(5)
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203.2
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Repayment of Tiga related party loan(1)
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1.7
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Bank loan (net of fees)
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200.0
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Cash to balance sheet
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113.1
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Grindr rollover equity(3)
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1,601.7
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Transaction expenses(6)
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37.1
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Total sources
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2,244.6
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Total uses
|
| |
2,244.6
|
|
(1)
|
Calculated as of June 30, 2022.
|
|
(2)
|
Shares issued pursuant to the Forward Purchase Commitment and Backstop Commitment are at a deemed value of $10.00 per share.
|
|
(3)
|
Equity rollover includes (i) 156,223,962 shares of New Grindr Common Stock issued to Grindr unitholders, of which 6,514,692
shares of New Grindr Common Stock are associated with the Series P share-based compensation units described in “Beneficial Ownership of Securities” and (ii) 3,947,439 shares
of New Grindr Common Stock reserved for issuance in respect of the conversion of Grindr Options.
|
|
(4)
|
Reflects a total estimated cash distribution to Grindr unitholders of $287.8 million through a capital distribution to be
declared prior to the closing of the Transaction and paid at Closing. Of that amount, $155.0 million is to be used to extinguish the remaining Deferred Payment. The $132.8 million includes $4.5 million of unpaid distribution accrued for
on the Grindr historical balance sheet.
|
|
(5)
|
Reflects the extinguishment of Grindr’s existing debt and the principal balance and prepayment premium of the debt.
|
|
(6)
|
Includes deferred underwriting commission of $9.7 million and other estimated transaction expenses.
|
174
Please see the section titled “Unaudited Pro Forma
Combined Financial Information” for further information.
Estimated Sources and Uses – 50% Redemptions
The following table summarizes the estimated sources and uses of
funding the Business Combination (all amounts in millions of $). These figures assume (a) that 50% of public shareholders exercise their redemption rights in connection with the Business Combination, (b) that New Grindr issues 160,171,401 shares
of New Grindr Common Stock to former unitholders of Grindr as of immediately prior to the Effective Time and (c) that New Grindr issues 10.0 million shares of New Grindr Common Stock to the Forward Purchase Investors pursuant to the Forward
Purchase Commitment and Backstop Commitment.
|
Sources
|
| |
|
| |
Uses
|
| |
|
|
Cash and investments held in trust account(1)
|
| |
143.8
|
| |
Grindr rollover equity(3)
|
| |
1,601.7
|
|
Forward Purchase Commitment and Backstop Commitment(2)
|
| |
100.0
|
| |
Distribution for Deferred Payment(4)
|
| |
155.0
|
|
Tiga and Grindr balance sheet cash(1)
|
| |
25.7
|
| |
Distribution(4)
|
| |
132.8
|
|
Catapult loan repayment(1)
|
| |
29.7
|
| |
Repayment of existing loans(5)
|
| |
203.2
|
|
|
| |
|
| |
Repayment of Tiga related party loan(1)
|
| |
1.7
|
|
Bank loan (net of fees)
|
| |
250.0
|
| |
Cash to balance sheet
|
| |
19.4
|
|
Grindr rollover equity(3)
|
| |
1,601.7
|
| |
Transaction expenses(6)
|
| |
37.1
|
|
Total sources
|
| |
2,150.9
|
| |
Total uses
|
| |
2,150.9
|
|
(1)
|
Calculated as of June 30, 2022.
|
|
(2)
|
Shares issued pursuant to the Forward Purchase Commitment and Backstop Commitment are at a deemed value of $10.00 per share.
|
|
(3)
|
Equity rollover includes (i) 156,223,962 shares of New Grindr Common Stock issued to Grindr unitholders, of which 6,514,692
shares of New Grindr Common Stock are associated with the Series P share-based compensation units described in “Beneficial Ownership of Securities” and (ii) 3,947,439 shares of New Grindr Common
Stock reserved for issuance in respect of the conversion of Grindr Options.
|
|
(4)
|
Reflects a total estimated cash distribution to Grindr unitholders of $287.8 million through a capital distribution to be
declared prior to the closing of the Transaction and paid at Closing. Of that amount, $155.0 million is to be used to extinguish the remaining Deferred Payment. The $132.8 million includes $4.5 million of unpaid distribution accrued for
on the Grindr historical balance sheet
|
|
(5)
|
Reflects the extinguishment of Grindr’s existing debt and the principal balance and prepayment premium of the debt.
|
|
(6)
|
Includes deferred underwriting commission of $9.7 million and other estimated transaction expenses.
|
Please see the section titled “Unaudited Pro Forma
Combined Financial Information” for further information.
Estimated Sources and Uses – Maximum Redemptions
The following table summarizes the estimated sources and uses of
funding the Business Combination (all amounts in millions of $). These figures assume (a) that all public shareholders exercise their redemption rights in connection with the Business Combination, (b) that New Grindr issues 163,000,656 shares of
New Grindr Common Stock to former unitholders of Grindr as of immediately prior to the Effective Time and (c) that New Grindr issues 10.0 million shares of New Grindr Common Stock to the Forward Purchase Investors pursuant to the Forward Purchase
Commitment and Backstop Commitment.
|
Sources
|
| |
|
| |
Uses
|
| |
|
|
Cash and investments held in trust account(1)
|
| |
—
|
| |
Grindr rollover equity(3)
|
| |
1,630.0
|
|
Forward Purchase Commitment and Backstop Commitment(2)
|
| |
100.0
|
| |
Distribution for Deferred Payment(4)
|
| |
155.0
|
|
Tiga and Grindr balance sheet cash(1)
|
| |
25.7
|
| |
Distribution(4)
|
| |
104.5
|
|
Catapult loan repayment(1)
|
| |
29.7
|
| |
Repayment of existing loans(5)
|
| |
203.2
|
|
|
| |
|
| |
Repayment of Tiga related party loan(1)
|
| |
1.7
|
|
Bank loan (net of fees)
|
| |
370.0
|
| |
Cash to balance sheet
|
| |
25.9
|
|
Grindr rollover equity(3)
|
| |
1,630.0
|
| |
Transaction expenses(6)
|
| |
35.1
|
|
Total sources
|
| |
2,155.4
|
| |
Total uses
|
| |
2,155.4
|
|
(1)
|
Calculated as of June 30, 2022.
|
|
(2)
|
Shares issued pursuant to the Forward Purchase Commitment and Backstop Commitment are at a deemed value of $10.00 per share.
|
|
(3)
|
Equity rollover includes (i) 158,983,490 shares of New Grindr Common Stock issued to Grindr unitholders, of which 6,511,512
shares of New Grindr Common Stock are associated with the Series P share-based compensation units described in “Beneficial Ownership of Securities” and (ii) 4,017,166 shares of New Grindr Common
Stock reserved for issuance in respect of the conversion of Grindr Options
|
|
(4)
|
Reflects a total estimated cash distribution to Grindr unitholders of $259.5 million through a capital distribution to be
declared prior to the closing of the Transaction and paid at Closing. Of that amount, $155.0 million is to be used to extinguish the remaining Deferred Payment. The $104.5 million includes $4.5 million of unpaid distribution accrued for
on the Grindr historical balance sheet.
|
|
(5)
|
Reflects the extinguishment of Grindr’s existing debt and the principal balance and prepayment premium of the debt.
|
175
|
(6)
|
Includes deferred underwriting commission of $9.7 million and other estimated transaction expenses.
|
Please see the section titled “Unaudited Pro
Forma Combined Financial Information” for further information.
Regulatory Matters
Under the HSR Act and the rules that have been promulgated
thereunder by the FTC, certain transactions may not be consummated unless information has been furnished to the Antitrust Division and the FTC and certain waiting period requirements have been satisfied. The Business Combination is subject to
these requirements and may not be completed until the expiration or early termination of a 30-day waiting period following the filing of the required Notification and Report Form by each party with the Antitrust Division and the FTC. On May 23,
2022, Tiga and Grindr filed the required notice and furnished the required information under the HSR Act to the Antitrust Division of the DOJ and the FTC. The 30-day HSR waiting period expired on June 22, 2022 at 11:59 PM.
At any time before or after consummation of the Business
Combination, notwithstanding termination of the respective waiting periods under the HSR Act, the Department of Justice or the FTC, or states or foreign governmental authorities could take such action under applicable antitrust laws as such
authority deems necessary or desirable in the public interest, including seeking to enjoin the consummation of the Business Combination, conditionally approving the Business Combination upon divestiture of assets, subjecting the completion of the
Business Combination to regulatory conditions or seeking other remedies. Private parties may also seek to take legal action under the antitrust laws under certain circumstances. Tiga cannot assure you that the Antitrust Division, the FTC, a state
attorney general or another government authority will not attempt to challenge the Business Combination on antitrust grounds, and, if such a challenge is made, Tiga cannot assure you as to its result.
Neither Tiga nor Grindr are aware of any material regulatory
approvals or actions that are required for completion of the Business Combination other than the expiration or early termination of the waiting period under the HSR Act. If any additional regulatory approvals or actions are required, such as in
relation to CFIUS Approval (as defined in the Merger Agreement), there can be no assurance that any additional approvals or actions will be obtained.
Vote Required for Approval
The approval of the Business Combination Proposal requires an
ordinary resolution under Cayman Islands law, being the affirmative vote of holders of a majority of the ordinary shares represented in person or by proxy and entitled to vote thereon and who vote at the extraordinary general meeting.
Accordingly, if a valid quorum is established, a Tiga shareholder’s failure to vote by proxy or to vote at the extraordinary general meeting, abstentions and broker non-votes with regard to the Business Combination Proposal will have no effect on
such proposal.
The Business Combination Proposal is conditioned on the approval of
each of the other Condition Precedent Proposals. Therefore, if each of the other Condition Precedent Approvals is not approved, the Business Combination Proposal will have no effect, even if approved by holders of ordinary shares.
Resolution to be Voted Upon
The full text of the resolution to be passed is as follows:
“RESOLVED,
as an ordinary resolution, that the Company’s entry into the Merger Agreement, dated as of May 9, 2022, by and among the Company, Tiga Merger Sub LLC, (“Merger Sub I”), a Delaware
limited liability company and subsidiary of the Company, and Grindr Group LLC (“Grindr”), a Delaware limited liability company, a copy of which is attached to the proxy statement/prospectus
as Annex A, as amended by the Merger Agreement Amendment No. 1, dated as of October 5, 2022, by and among Tiga, Merger Sub I, Tiga Merger Sub II LLC (“Merger Sub II”) and Grindr, a
copy of which is attached to the proxy statement/prospectus as Annex A-1 (collectively, the “Merger Agreement”), pursuant to which, among other things, following the de-registration of the
Company in the Cayman Islands and the registration by way of continuation as a corporation in the State of Delaware, the merger of Merger Sub I with and into Grindr (the “First Merger”),
with Grindr surviving the First Merger as a wholly owned subsidiary of the Company (Grindr, in its capacity as the surviving company of the First Merger, the “Surviving Company”);
and as promptly as practicable and as part of the same overall transaction as the First Merger, the merger of such Surviving Company with and into Tiga Merger Sub II LLC (“Merger Sub II”),
a Delaware limited liability company and subsidiary of the Company (the “Second Merger” and, together with the First Merger, the “Mergers”),
with Merger Sub II being the surviving entity of the Second Merger, in accordance with the terms and subject to the conditions of the Merger Agreement, be approved, ratified and confirmed in all respects.”
176
Recommendation of Tiga’s Board of Directors
THE TIGA BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE TIGA
SHAREHOLDERS VOTE “FOR” THE APPROVAL OF THE BUSINESS COMBINATION PROPOSAL.
177
Overview
Tiga is asking its shareholders to approve the Domestication
Proposal. The Tiga Board has unanimously approved a change of Tiga’s jurisdiction of incorporation by deregistering as an exempted company in the Cayman Islands and continuing and domesticating as a corporation incorporated under the laws of the
State of Delaware. Tiga will file a notice of deregistration with the Cayman Islands Registrar of Companies, together with the necessary accompanying documents, and file a certificate of incorporation and a certificate of corporate domestication
with the Secretary of State of the State of Delaware, under which Tiga will be domesticated and continue as a Delaware corporation.
As a result of and upon the effective time of the Domestication, (1)
each then issued and outstanding Tiga Class A ordinary share will convert automatically, on a one-for-one basis, into a share of New Grindr Common Stock, (2) each then issued and outstanding Tiga Class B ordinary share will convert automatically,
on a one-for-one basis, into a share of New Grindr Common Stock, (3) each then issued and outstanding Tiga Warrant will convert automatically into a New Grindr Warrant, pursuant to the Warrant Agreement and (4) each then issued and outstanding
Tiga unit will be cancelled and will entitle the holder thereof to one share of New Grindr Common Stock and one-half of one New Grindr Warrant.
The Domestication Proposal, if approved, will approve a change of
Tiga’s jurisdiction of incorporation from the Cayman Islands to the State of Delaware. Accordingly, while Tiga is currently governed by the Companies Act, upon the Domestication, New Grindr will be governed by the DGCL. Additionally, we note that
Tiga is also asking its shareholders to approve the Organizational Documents Proposal (discussed below), which, if approved, will replace Tiga’s current memorandum and articles of association under the Companies Act with a new certificate of
incorporation and bylaws of New Grindr under the DGCL. The Proposed Organizational Documents differ in certain material respects from the Cayman Constitutional Documents and we encourage shareholders to carefully consult the information set out
below under “Organizational Documents Proposal,” “Governance Proposal,” the Cayman Constitutional Documents of Tiga, attached hereto as Annex F and the Proposed
Organizational Documents of New Grindr, attached hereto as Annex G and Annex H.
Reasons for the Domestication
Our board of directors believes that there are significant
advantages to us that will arise as a result of a change of our domicile to Delaware. Further, our board of directors believes that any direct benefit that the DGCL provides to a corporation also indirectly benefits its shareholders, who are the
owners of the corporation.
The board of directors of Tiga believes that there are several
reasons why a reincorporation in Delaware is in the best interests of Tiga and its shareholders. As explained in more detail below, these reasons can be summarized as follows:
Prominence, Predictability, and Flexibility of
Delaware Law. For many years, Delaware has followed a policy of encouraging incorporation in its state and, in furtherance of that policy, has been a leader in adopting, construing, and implementing
comprehensive, flexible corporate laws responsive to the legal and business needs of corporations organized under its laws. Many corporations have chosen Delaware initially as a state of incorporation or have subsequently changed corporate
domicile to Delaware. Because of Delaware’s prominence as the state of incorporation for many major corporations, both the legislature and courts in Delaware have demonstrated the ability and a willingness to act quickly and effectively to meet
changing business needs. The DGCL is frequently revised and updated to accommodate changing legal and business needs and is more comprehensive, widely used and interpreted than other state corporate laws. This favorable corporate and regulatory
environment is attractive to businesses such as ours.
Well-Established Principles of Corporate
Governance. There is substantial judicial precedent in the Delaware courts as to the legal principles applicable to measures that may be taken by a corporation and to the conduct of a company’s board of
directors, such as under the business judgment rule and other standards. Because the judicial system is based largely on legal precedents, the abundance of Delaware case law provides clarity and predictability to many areas of corporate law. We
believe such clarity would be advantageous to New Grindr, its board of directors and management to make corporate decisions and take corporate actions with greater assurance as to the validity and consequences of those decisions and actions.
Further, investors and securities professionals are generally more
178
familiar with Delaware corporations, and the laws governing such corporations,
increasing their level of comfort with Delaware corporations relative to other jurisdictions. The Delaware courts have developed considerable expertise in dealing with corporate issues, and a substantial body of case law has developed construing
Delaware law and establishing public policies with respect to corporate legal affairs. Moreover, Delaware’s vast body of law on the fiduciary duties of directors provides appropriate protection for New Grindr’s shareholders from possible abuses
by directors and officers.
Increased Ability to Attract and Retain
Qualified Directors. Reincorporation from the Cayman Islands to Delaware is attractive to directors, officers, and shareholders alike. New Grindr’s incorporation in Delaware may make New Grindr more attractive to
future candidates for our board of directors, because many such candidates are already familiar with Delaware corporate law from their past business experience. To date, we have not experienced difficulty in retaining directors or officers, but
directors of public companies are exposed to significant potential liability. Thus, candidates’ familiarity and comfort with Delaware laws - especially those relating to director indemnification (as discussed below) - draw such qualified
candidates to Delaware corporations. The Tiga Board therefore believes that providing the benefits afforded directors by Delaware law will enable New Grindr to compete more effectively with other public companies in the recruitment of talented
and experienced directors and officers. Moreover, Delaware’s vast body of law on the fiduciary duties of directors provides appropriate protection for our shareholders from possible abuses by directors and officers.
The frequency of claims and litigation pursued against directors and
officers has greatly expanded the risks facing directors and officers of corporations in carrying out their respective duties. The amount of time and money required to respond to such claims and to defend such litigation can be substantial. While
both Cayman and Delaware law permit a corporation to include a provision in its governing documents to reduce or eliminate the monetary liability of directors for breaches of fiduciary duty in certain circumstances, we believe that, in general,
Delaware law is more developed and provides more guidance than Cayman law on matters regarding a company’s ability to limit director liability. As a result, we believe that the corporate environment afforded by Delaware will enable the surviving
corporation to compete more effectively with other public companies in attracting and retaining new directors.
Expected Accounting Treatment of the Domestication
The Domestication is being proposed solely for the purpose of
changing the legal domicile of Tiga. There will be no accounting effect or change in the carrying amount of the assets and liabilities of Tiga as a result of the Domestication. The business, capitalization, assets and liabilities and financial
statements of New Grindr immediately following the Domestication will be the same as those of Tiga immediately prior to the Domestication.
Vote Required for Approval
The approval of the Domestication Proposal requires a special
resolution under Cayman Islands law, being the affirmative vote of holders of at least two-thirds of the ordinary shares represented in person or by proxy and entitled to vote thereon and who vote at the extraordinary general meeting.
Accordingly, if a valid quorum is established, a Tiga shareholder’s failure to vote by proxy or to vote at the extraordinary general meeting, abstentions and broker non-votes with regard to the Business Combination Proposal will have no effect on
such proposal.
The Domestication Proposal is conditioned on the approval of each of
the other proposals presented at the extraordinary general meeting. Therefore, if each of the other proposals presented at the extraordinary general meeting is not approved, the Domestication Proposal will have no effect, even if approved by
holders of ordinary shares.
Resolution to be Voted Upon
The full text of the resolution to be passed is as follows:
“RESOLVED, as a special
resolution, that the Company be de-registered in the Cayman Islands pursuant to Article 48 of the Amended and Restated Articles of Association of the Company (as amended) and be registered by way of continuation as a corporation in the State of
Delaware.”
Recommendation of the Tiga Board of Directors
THE TIGA BOARD OF DIRECTORS UNANIMOUSLY
RECOMMENDS THAT TIGA SHAREHOLDERS VOTE “FOR” THE APPROVAL OF THE DOMESTICATION PROPOSAL.
179
Overview
Tiga is asking its shareholder to approve the adoption of the
Proposed Organizational Documents in the forms attached hereto as Annex G and Annex H, which, in the judgment of the Tiga Board, is necessary to adequately address the needs of New Grindr following the consummation of the Business Combination.
The following is a summary of the key changes effected by the
Proposed Organizational Documents, but this summary is qualified in its entirety by reference to the full text of the Proposed Certificate of Incorporation and the Proposed Bylaws, copies of which are included as Annex G and Annex H,
respectively:
|
•
|
change the purpose of New Grindr to engage in “any lawful act or activity for which a corporation may be organized under the
DGCL;
|
|
•
|
provide that the affirmative vote of the holders of at least 66 2/3% of the voting power of all then-outstanding New Grindr
Common Stock entitled to vote generally in the election of directors, voting together as a single class, is required to adopt, amend or repeal the Proposed Bylaws unless approved by the majority of the authorized number of directors, and
the provisions in the Proposed Certificate of Incorporation related to Directors, Indemnification and Limitation on Liability of Directors, Forum Selection and Amendments;
|
|
•
|
change the name of Tiga to “Grindr Inc.” and delete the provisions relating to Tiga’s status as a blank check company and
retain the default of perpetual existence under the DGCL;
|
|
•
|
change the authorized shares of all classes of capital stock to shares, consisting of shares of New Grindr Common Stock
and shares of preferred stock;
|
|
•
|
adopt Delaware as the exclusive forum for certain shareholder litigation;
|
|
•
|
provide for transfer restrictions with respect to shares of New Grindr Common Stock issued (i) as consideration to shareholders
of Grindr in connection with the Mergers and (ii) to directors, officers and employees of New Grindr upon the settlement or exercise of equity awards outstanding immediately following the Closing in respect of Grindr Awards outstanding
immediately prior to the Closing;
|
|
•
|
provide that directors will be elected each year and serve a one-year term.
|
Reasons for the Amendments
Each of these amendments to the amended and restated memorandum and
articles of association of Tiga currently in effect was negotiated as part of the Business Combination. The Tiga Board’s reasons for proposing each of these key changes effected by the Proposed Organizational Documents are set forth below.
|
•
|
Providing that the purpose of New Grindr is “to engage in any lawful act or activity for which corporations may be organized
under the DGCL.” The Tiga Board believes this change is appropriate to remove language applicable to a blank check company.
|
|
•
|
The supermajority voting requirements are appropriate at this time to protect all shareholders against the potential
self-interested actions by one or a few large shareholders. In reaching this conclusion, the Tiga Board was cognizant of the potential for certain shareholders to hold a substantial portion of the beneficial ownership of New Grindr Common
Stock following the Business Combination. The Tiga Board further believes that, going forward, a supermajority voting requirement encourages any person or group seeking control of New Grindr to negotiate with the New Grindr board of
directors to reach terms that are appropriate for all shareholders.
|
|
•
|
Changing the name from “Tiga Acquisition Corp.” to “Grindr Inc.” and deleting the prior Article 48 to eliminate provisions
specific to Tiga’s status as a blank check company and to make conforming changes. These revisions are desirable because they will serve no purpose following the Business Combination.
|
|
•
|
Change to authorized shares of New Grindr Common Stock and preferred stock of New Grindr. The greater number of authorized
shares of capital stock is desirable for New Grindr to have sufficient shares to complete the Business Combination. Additionally, the Tiga Board believes that it is important for New Grindr to have available for issuance a number of
authorized shares sufficient to support its growth and to provide flexibility for future corporate needs (including, if needed, as part of financing for future growth acquisitions). The shares would be issuable for any proper corporate
purpose, including future acquisitions,
|
180
capital raising transactions consisting of equity or convertible debt, stock
dividends or issuances under current and any future stock incentive plans, pursuant to which New Grindr may provide equity incentives to employees, officers and directors. The Tiga Board believes that these additional shares will provide New
Grindr with needed flexibility to issue shares in the future in a timely manner and under circumstances New Grindr considers favorable without incurring the risk, delay and potential expense incident to obtaining shareholder approval for a
particular issuance.
|
•
|
Adopting Delaware as the exclusive forum for certain shareholder litigation is intended to assist New Grindr in avoiding
multiple lawsuits in multiple jurisdictions regarding the same matter. The ability to require such claims to be brought in a single forum will help to assure consistent consideration of the issues, the application of a relatively known
body of case law and level of expertise and should promote efficiency and cost-savings in the resolutions of such claims. The Tiga Board believes that the Delaware courts are best suited to address disputes involving such matters given
that after the Domestication, New Grindr will be incorporated in Delaware.
|
|
•
|
Providing for transfer restrictions with respect to certain shares of New Grindr Common Stock. As a material inducement to Tiga
entering into the Merger Agreement, Tiga required that each unitholder of Grindr receiving New Grindr Common Stock in connection with the consummation of the Business Combination, as well as directors, officer and employees of New Grindr
receiving shares of New Grindr Common Stock upon the settlement or exercise of equity awards outstanding immediately following the Closing in respect of Grindr Awards outstanding immediately prior to the Closing, would be required to
agree to transfer restrictions with respect to such shares. The Tiga Board believes that such transfer restrictions will align the parties with respect to the long-term success of New Grindr.
|
Vote Required for Approval
The approval of the Organizational Documents Proposal requires a
special resolution under the Companies Act, being the affirmative vote of holders of at least two-thirds of the ordinary shares represented in person or by proxy and entitled to vote thereon and who vote at the extraordinary general meeting.
Accordingly, if a valid quorum is established, a Tiga shareholder’s failure to vote by proxy or to vote at the extraordinary general meeting, abstentions and broker non-votes with regard to the Business Combination Proposal will have no effect on
such proposal.
The Organizational Documents Proposal is conditioned on the approval
of each of the other Condition Precedent Proposals. Therefore, if each of the other Condition Precedent Approvals is not approved, the Organizational Documents Proposal will have no effect, even if approved by holders of ordinary shares.
Resolution to be Voted Upon
The full text of the resolution to be passed is as follows:
“RESOLVED, as a special
resolution, that conditional upon, and with effect from, the registration of the Company as a corporation in the State of Delaware, the amended and restated memorandum and articles of association of the Company currently in effect be amended and
restated by their deletion in their entirety and the substitution in their place of the certificate of incorporation and bylaws (copies of which are attached to the notice of the meetings as Annex G (the “Proposed
Certificate of Incorporation”) and Annex H (the “Proposed Bylaws”), respectively) and that the name of the Company be changed to “Grindr Inc.” with effect from the consummation of the Mergers.
Recommendation of the Tiga Board of Directors
THE TIGA BOARD OF DIRECTORS UNANIMOUSLY
RECOMMENDS THAT TIGA SHAREHOLDERS VOTE “FOR” THE APPROVAL OF THE ORGANIZATIONAL DOCUMENTS PROPOSAL.
181
Overview
Tiga is asking its shareholders to vote on the governance provisions
referred to below, which are included in the Proposed Certificate of Incorporation. In accordance with SEC guidance, this proposal is being presented as separate sub-proposals to give shareholders the opportunity to present their separate views
on important corporate governance provisions, and each sub-proposal will be voted upon on a non-binding advisory basis.
In the judgment of the Tiga Board, these provisions are necessary to
adequately address the needs of New Grindr and its shareholders following the consummation of the Business Combination. Accordingly, regardless of the outcome of the non-binding advisory vote on these proposals, Tiga intends that the Proposed
Certificate of Incorporation and the Proposed Bylaws, in the form set forth on Annex G and Annex H, respectively, will take effect at consummation of the Business Combination, assuming adoption of the Organizational Documents Proposal.
Proposal No. 4A: Change the Authorized Capital Stock
Description of Amendment
The amendment is intended to authorize the change in the authorized
capital stock of Tiga from (i) 200,000,000 Tiga Class A ordinary shares, 20,000,000 Tiga Class B ordinary shares and 1,000,000 preferred shares, par value $0.0001 per share, of Tiga to (ii) shares of New Grindr Common Stock, having par value
per share of $0.0001 and shares of New Grindr preferred stock, having par value per share of $0.0001.
Reasons for Amendment
The principal purpose of this proposal is to provide for an
authorized capital structure of New Grindr that will enable it to continue as an operating company governed by the DGCL. The Tiga Board believes that it is important for us to have available for issuance a number of authorized shares of common
stock and preferred stock sufficient to support our growth and to provide flexibility for future corporate needs.
Proposal No. 4B: Change the Shareholder Vote Required to Amend the
Certificate of Incorporation
Description of Amendment
The additional amendment would require, that the affirmative vote of
holders of at least 66 2/3% of the voting power of all then-outstanding New Grindr Common Stock entitled to vote generally in the election of directors, voting together as a single class, to adopt, amend or repeal the Proposed Bylaws and the
provisions in the Proposed Certificate of Incorporation related to Directors, Indemnification and Limitation on Liability of Directors, Forum Selection and Amendments.
Reasons for Amendment
The amendment is intended to protect key provisions of the Proposed
Certificate of Incorporation from arbitrary amendment and to prevent a simple majority of shareholders from taking actions that may be harmful to other shareholders or making changes to provisions that are intended to protect all shareholders.
Proposal No. 4C: Delaware as Exclusive Forum
Description of Amendment
New Grindr’s Proposed Certificate of Incorporation provides that,
unless New Grindr consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware shall be the sole and exclusive forum for the following types of actions or proceedings under Delaware statutory or
common law: (A) any derivative action or proceeding brought on behalf of New Grindr; (B) any action or proceeding asserting a claim of breach of a fiduciary duty owed by any current or former director, officer or other employee of New Grindr or
any shareholder to New Grindr or New Grindr’s shareholders; (C) any action or proceeding asserting a claim against New Grindr or any current or former director, officer or other employee of New Grindr or any shareholder arising pursuant to any
provision of the DGCL, the Proposed Certificate of Incorporation and the Proposed Bylaws (as each may be amended from time to time); (D) any action or proceeding to interpret, apply, enforce or determine the validity of the Proposed Certificate
of Incorporation or the Proposed Bylaws (including any right, obligation or remedy thereunder); (E) any
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action or proceeding as to which the DGCL confers jurisdiction to the Court of
Chancery of the State of Delaware; and (F) any action asserting a claim against New Grindr or any director, officer or other employee of New Grindr or any shareholder, governed by the internal affairs doctrine, in all cases to the fullest extent
permitted by law and subject to the court’s having personal jurisdiction over the indispensable parties named as defendants. However, this provision will not apply to suits brought to enforce a duty or liability created by the Securities Exchange
Act of 1934 or any other claim for which the federal courts have exclusive jurisdiction. In addition, unless New Grindr consents in writing to the selection of an alternative forum, the federal district courts of the United States of America
shall be the exclusive forum for the resolution of any complaint asserting a cause or causes of action arising under the Securities Act of 1933, as amended, including all causes of action asserted against any defendant named in such complaint.
Reasons for Amendment
Adopting Delaware as the exclusive forum for certain shareholder
litigation is intended to assist New Grindr in avoiding multiple lawsuits in multiple jurisdictions regarding the same matter. The ability to require such claims to be brought in a single forum will help to assure consistent consideration of the
issues, the application of a relatively known body of case law and level of expertise and should promote efficiency and cost-savings in the resolutions of such claims. The Tiga Board believes that the Delaware courts are best suited to address
disputes involving such matters given that after the Domestication, New Grindr will be incorporated in Delaware.
Vote Required for Approval
The approval of the Governance Proposal requires an ordinary
resolution under the Companies Act, being the affirmative vote of holders of a majority of the ordinary shares represented in person or by proxy and entitled to vote thereon and who vote at the extraordinary general meeting. Accordingly, if a
valid quorum is established, a Tiga shareholder’s failure to vote by proxy or to vote at the extraordinary general meeting, abstentions and broker non-votes with regard to the Business Combination Proposal will have no effect on such proposal.
As discussed above, a vote to approve the Governance Proposal is an
advisory vote, and therefore, is not binding on Tiga, New Grindr or their respective boards of directors. Accordingly, regardless of the outcome of the non-binding advisory vote, Tiga and New Grindr intend that the Proposed Certificate of
Incorporation and the Proposed Bylaws, in the forms set forth on Annex G and Annex H, respectively, and containing the provisions noted above, will take effect at consummation of the Business Combination, assuming adoption of the Organizational
Documents Proposal.
Resolution to be Voted Upon
The full text of the resolution to be passed is as follows:
“RESOLVED, as an ordinary
resolution, that, on a non-binding advisory basis, the following material differences between the Company's amended and restated memorandum and articles of association and the Proposed Certificate of Incorporation and Proposed Bylaws be
approved in all respects:
Proposal No. 4A: Change the Authorized Capital Stock
The amendment is intended to authorize the change in the authorized capital stock of
the Company from (i) 200,000,000 Tiga Class A ordinary shares, 20,000,000 Tiga Class B ordinary shares and 1,000,000 preferred shares, par value $0.0001 per share, of the Company to (ii) shares of New Grindr common stock, having par value per
share of $0.0001 and shares of New Grindr preferred stock, having par value per share of $0.0001.
Proposal No. 4B: Change the Shareholder Vote Required to Amend the
Certificate of Incorporation
The additional amendment would require, that the affirmative vote of holders of at
least 66 2/3% of the voting power of all then-outstanding New Grindr Common Stock entitled to vote generally in the election of directors, voting together as a single class, to adopt, amend or repeal the Proposed Bylaws and the provisions in the
Proposed Certificate of Incorporation related to Directors, Indemnification and Limitation on Liability of Directors, Forum Selection and Amendments.
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Proposal No. 4C: Delaware as Exclusive Forum
New Grindr’s Proposed Certificate of Incorporation provides that, unless New Grindr
consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware shall be the sole and exclusive forum for the following types of actions or proceedings under Delaware statutory or common law: (A) any
derivative action or proceeding brought on behalf of New Grindr; (B) any action or proceeding asserting a claim of breach of a fiduciary duty owed by any current or former director, officer or other employee of New Grindr or any shareholder to
New Grindr or New Grindr’s shareholders; (C) any action or proceeding asserting a claim against New Grindr or any current or former director, officer or other employee of New Grindr or any shareholder arising pursuant to any provision of the
DGCL, the Proposed Certificate of Incorporation and the Proposed Bylaws (as each may be amended from time to time); (D) any action or proceeding to interpret, apply, enforce or determine the validity of the Proposed Certificate of Incorporation
or the Proposed Bylaws (including any right, obligation or remedy thereunder); (E) any action or proceeding as to which the DGCL confers jurisdiction to the Court of Chancery of the State of Delaware; and (F) any action asserting a claim against
New Grindr or any director, officer or other employee of New Grindr or any shareholder, governed by the internal affairs doctrine, in all cases to the fullest extent permitted by law and subject to the court’s having personal jurisdiction over
the indispensable parties named as defendants. However, this provision will not apply to suits brought to enforce a duty or liability created by the Securities Exchange Act of 1934 or any other claim for which the federal courts have exclusive
jurisdiction. In addition, unless New Grindr consents in writing to the selection of an alternative forum, the federal district courts of the United States of America shall be the exclusive forum for the resolution of any complaint asserting a
cause or causes of action arising under the Securities Act of 1933, as amended, including all causes of action asserted against any defendant named in such complaint.
Recommendation of the Tiga Board of Directors
THE TIGA BOARD OF DIRECTORS UNANIMOUSLY
RECOMMENDS THAT TIGA SHAREHOLDERS VOTE “FOR” THE GOVERNANCE PROPOSAL.
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Overview
The Director Election Proposal - to consider and vote upon a proposal to elect nine (9) directors who, upon consummation of the Business Combination, will be the directors of the New Grindr Board, with each director nominated for a one (1) year
term to be elected at the subsequent annual meeting of the shareholders following the effectiveness of the Proposed Certificate of Incorporation. At each succeeding annual meeting of the shareholders of New Grindr, beginning with the first
annual meeting of the shareholders of New Grindr following the effectiveness of the Proposed Certificate of Incorporation, each of the successors elected to replace the directors whose term expires at that annual meeting shall be elected for a
one-year term or until the election and qualification of their respective successors in office, subject to their earlier death, resignation or removal (“Director Election Proposal”).
Tiga’s shareholders are also being asked to approve, by ordinary
resolution, the Director Election Proposal.
Nominees
At and following the Closing, the New Grindr Board shall be
comprised of nine (9) directors and the majority of directors shall be independent directors. At the Closing, the initial composition of the New Grindr Board is expected to include James Fu Bin Lu, G. Raymond Zage, III, J. Michael Gearon, Jr.,
Nathan Richardson, Daniel Brooks Baer, George Arison, Gary I. Horowitz, Meghan Stabler and Maggie Lower.
Accordingly, the Tiga Board has nominated each of James Fu Bin Lu,
G. Raymond Zage III, J. Michael Gearon Jr., Nathan Richardson, Daniel Brooks Baer, Gary I. Horowitz, Meghan Stabler, Maggie Lower and George Arison to serve as our directors upon the consummation of the Business Combination, in each case, in
accordance with the terms and subject to the conditions of the Proposed Organizational Documents. For more information on the experience of each of these director nominees, please see the section entitled “Management
of New Grindr Following the Business Combination” of this proxy statement/prospectus.
Vote Required for Approval
The approval of the Director Election Proposal requires an ordinary
resolution of the holders of Tiga Class B ordinary shares under Cayman Islands law, being the affirmative vote of holders of a majority of the Tiga Class B ordinary shares represented in person or by proxy and entitled to vote thereon and who
vote at the extraordinary general meeting. Accordingly, if a valid quorum is established, a Tiga shareholder’s failure to vote by proxy or to vote at the extraordinary general meeting, abstentions and broker non-votes with regard to the Business
Combination Proposal will have no effect on such proposal.
The Director Election Proposal is conditioned on the approval of
each of the proposals presented at the extraordinary general meeting. Therefore, if each of the proposals presented at the extraordinary general meeting is not approved, the Director Election Proposal will have no effect, even if approved by
holders of ordinary shares.
Resolution to be Voted Upon
The full text of the resolution to be passed is as follows:
“RESOLVED, as an ordinary
resolution of the holders of Tiga Class B ordinary shares, that the following ten persons, James Fu Bin Lu, G. Raymond Zage III, J. Michael Gearon, Jr., Nathan Richardson, Daniel Brooks Baer, Gary I. Horowitz, Meghan Stabler, Maggie Lower and
George Arison be elected as directors to the New Grindr Board upon the consummation of the Business Combination until the first annual meetings of shareholders following the date of the effectiveness of the Proposed Certificate of Incorporation,
as applicable, or until the election and qualification of their respective successors in office, subject to their earlier death, resignation or removal.”
Recommendation of the Tiga Board of Directors
THE TIGA BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT TIGA
SHAREHOLDERS
VOTE “FOR” THE APPROVAL OF THE DIRECTOR ELECTION PROPOSAL.
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Overview
The Stock Issuance Proposal - to consider and vote upon a proposal to approve by ordinary resolution for the purposes of complying with the applicable provisions of Section 312.03 of the NYSE Listed Company Manual, the issuance of shares of
New Grindr Common Stock (a) to the Grindr members pursuant to the Merger Agreement and (b) to the Forward Purchase Investors pursuant to the Backstop Commitment and the Forward Purchase Commitment. (the “Stock Issuance Proposal”).
Assuming the Business Combination Proposal is approved, a portion of
the consideration payable in connection with the Closing will be paid to Grindr’s unitholders pursuant to the Merger Agreement through stock consideration consisting of newly issued shares of New Grindr Common Stock valued at $10.00 per share.
Based on the assumptions set forth in this proxy statement/prospectus, New Grindr expects the number of shares of New Grindr Common Stock to be issued as consideration to Grindr’s unitholders to be equal to .
Tiga has also entered into the A&R Forward Purchase Agreement
with the Forward Purchase Investors pursuant to which Tiga has agreed to issue and sell, and the Forward Purchase Investors have agreed to purchase, on a private placement basis, an aggregate of 5,000,000 forward purchase shares, plus an
aggregate of 2,500,000 forward purchase warrants to purchase one share of New Grindr Common Stock at $11.50 per share, for an aggregate purchase price of $50,000,000, or $10.00 per share, in a private placement to close prior to or concurrently
with the Closing. To the extent that the Non-FPS Amount (as defined in the A&R Forward Purchase Agreement) is less than $50,000,000 immediately prior to the Closing but following the Domestication, the Forward Purchase Investors have agreed
pursuant to the A&R Forward Purchase Agreement to purchase (a) a number of shares of backstop shares equal to (A) (x) $50,000,000 minus (y) the Non-FPS Amount, divided by (B) $10.00, rounded down to the nearest whole number and (b) a number
of backstop warrants equal to (I) the number of backstop shares in clause (a) multiplied by (II) 0.5, rounded down to the nearest whole number. In addition to the foregoing, each Forward Purchase Investor may, at its discretion (regardless of the
Non-FPS Amount), subscribe for up to 5,000,000 backstop shares plus up to 2,500,000 backstop warrants at $11.50 per share, for an aggregate purchase price of $50,000,000, or $10.00 for each backstop share and one-half of one backstop warrant.
At the Closing, Tiga, the Sponsor and Grindr will enter into the
A&R Registration Rights Agreement. Under the A&R Registration Rights Agreement, the Sponsor and certain related parties will have customary registration rights, including demand and piggy-back rights, subject to cooperation and cut-back
provisions with respect to the shares of New Grindr Common Stock and warrants held by such parties following the consummation of the Business Combination.
The terms of the stock consideration in the Business Combination,
the Backstop Commitment and the Forward Purchase Commitment are complex and only briefly summarized above. For further information, please see the full text of the Merger Agreement, which is attached as Annex A hereto, the A&R Forward
Purchase Agreement, which is attached as Annex D hereto and the form of the A&R Registration Rights Agreement, which is attached as Annex E hereto. The discussion herein is qualified in its entirety by reference to such documents.
Reasons for the Approval for Purposes of the NYSE Listed Company Manual
We are seeking shareholder approval in order to comply with Section
312.03 of the NYSE Listed Company Manual.
Under Section 312.03(b) of the NYSE Listed Company Manual, shareholder
approval is required:
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(i)
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prior to the issuance of common stock, or of securities convertible into or exercisable for common stock, in any transaction or
series of related transactions, to a director, officer or substantial security holder of the company (each a “Related Party”) if the number of shares of common stock to be issued, or if the number
of shares of common stock into which the securities may be convertible or exercisable, exceeds either one percent of the number of shares of common stock or one percent of the voting power outstanding before the issuance. However,
shareholder approval will not be required if such transaction is a cash sale for a price that is at least the minimum price (being a price that is the lower of: (1) the official closing price on the NYSE immediately preceding the signing
of the binding agreement; or (2) the average official closing price on the NYSE for the five trading days immediately preceding the signing of the binding agreement);
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(ii)
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prior to the issuance of common stock, or of securities convertible into or exercisable for common stock, where such securities
are issued as consideration in a transaction or series of related transactions in which a Related Party has a five percent or greater interest (or such persons collectively have a ten percent or greater interest), directly or indirectly,
in the company or assets to be acquired or in the consideration to be paid in the transaction or series of related transactions and the present or potential issuance of common stock, or securities convertible into common stock, could
result in an issuance that exceeds either five percent of the number of shares of common stock or five percent of the voting power outstanding before the issuance; and
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(iii)
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for any sale of stock to an employee, director or service provider is also subject to the equity compensation rules in Section
303A.08 of the NYSE Listed Company Manual.
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We expect that the Sponsor will assign its obligations under the
Backstop Commitment and the Forward Purchase Commitment to San Vicente Parent LLC. We further expect that San Vicente Parent LLC will satisfy its obligations under the A&R Forward Purchase Agreement. As part of the SV Consolidation, San
Vicente Parent LLC will merge into Grindr and Grindr will assume the rights and all remaining obligations of San Vicente Parent LLC under the A&R Forward Purchase Agreement, and be entitled to receive the shares of New Grindr Common Stock
and redeemable warrants issuable thereunder. New Grindr may issue % or more of its outstanding common stock or securities representing % or more of the voting power, in each case outstanding before the issuance, pursuant to the issuance
of New Grindr Common Stock in connection with the Backstop Commitment and the Forward Purchase Commitment. Therefore, we are seeking the approval of our shareholders. Under Section 312.03(c) of the NYSE Listed Company Manual, subject to certain
exceptions, shareholder approval is required prior to the issuance of common stock, or of securities convertible into or exercisable for common stock, in any transaction or series of related transactions if (i) the common stock has, or will
have upon issuance, voting power equal to or in excess of 20% of the voting power outstanding before the issuance of such stock or of securities convertible into or exercisable for common stock; or (ii) the number of shares of common stock to
be issued is, or will be upon issuance, equal to or in excess of 20% of the number of shares of common stock outstanding before the issuance of the common stock or of securities convertible into or exercisable for common stock.
New Grindr may issue 20% or more of its outstanding common stock or
securities representing 20% or more of the voting power, in each case outstanding before the issuance, pursuant to the issuance of New Grindr Common Stock in connection with the Business Combination, the Backstop Commitment and the Forward
Purchase Commitment.
Under Section 312.03(d) of the NYSE Listed Company Manual,
shareholder approval is required prior to an issuance that will result in a change of control of the issuer. Because the issuances to Grindr members in the Business Combination and to the Forward Purchase Investors in connection with the Backstop
Commitment and the Forward Purchase Commitment (in each case as described above) will result in such persons collectively owning more than 20% of the shares of New Grindr Common Stock outstanding before the issuance, such issuances may be deemed
a change of control. Therefore, we are seeking the approval of our shareholders.
In the event that this proposal is not approved by Tiga
shareholders, the Business Combination cannot be consummated. In the event that this proposal is approved by Tiga shareholders, but the Merger Agreement is terminated (without the Business Combination being consummated) prior to the issuance of
shares of New Grindr Common Stock pursuant to the Merger Agreement, the Backstop Commitment or the Forward Purchase Commitment, such shares of New Grindr Common Stock will not be issued.
Effect of Proposal on Current Shareholders
If the Stock Issuance Proposal is adopted and the Business
Combination are consummated, it is estimated that approximately shares of New Grindr Common Stock could be issued pursuant to the terms of the Merger Agreement as stock consideration in the Business Combination, which collectively represents
approximately % of the Grindr Tiga Class A ordinary shares outstanding on the date hereof. Additionally, New Grindr may issue up to an additional 5,000,000 shares of New Grindr Common Stock and 2,500,000 New Grindr Warrants in connection with
the Forward Purchase Commitment. New Grindr may also issue up to a further additional 5,000,000 shares of new Grindr Common Stock and 2,500,000 New Grindr Warrants in connection with the Backstop Commitment. The issuance of such shares would
result in significant dilution to Tiga’s public shareholders, and would afford Tiga’s shareholders a smaller percentage interest in the voting power, liquidation value and aggregate book value of Tiga.
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Vote Required for Approval
The approval of the Stock Issuance Proposal requires an ordinary
resolution under Cayman Islands law, being the affirmative vote of holders of a majority of the ordinary shares represented in person, virtually or by proxy and entitled to vote thereon and who vote at the extraordinary general meeting.
Accordingly, if a valid quorum is established, a Tiga shareholder’s failure to vote by proxy or to vote at the extraordinary general meeting, abstentions and broker non-votes with regard to the Business Combination Proposal will have no effect on
such proposal.
The Stock Issuance Proposal is conditioned on the approval of each
of the other proposals presented at the extraordinary general meeting. Therefore, if each of the other proposals presented at the extraordinary general meeting is not approved, the Stock Issuance Proposal will have no effect, even if approved by
holders of ordinary shares.
Resolution to be Voted Upon
The full text of the resolution to be passed is as
follows:
“RESOLVED, as an ordinary
resolution, that, for the purposes of complying with the application provisions of Section 312.03 of the NYSE Listed Company Manual, the issuance of shares of common stock of Grindr Inc. to (a) the investors pursuant to the Forward Purchase
Commitment (as defined in the notice of the meeting) and (b) Grindr Inc.’s members pursuant to the Merger Agreement be approved in all respects.”
Recommendation of the Tiga Board of Directors
THE TIGA BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT TIGA
SHAREHOLDERS
VOTE “FOR” THE APPROVAL OF THE STOCK ISSUANCE PROPOSAL.
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The Adjournment Proposal allows the Tiga Board to submit a proposal
to adjourn the extraordinary general meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies in the event that there are insufficient votes for, or otherwise in connection with, the approval of any of
the proposals presented at the extraordinary general meeting.
In no event will Tiga solicit proxies to adjourn the extraordinary
general meeting or consummate the Business Combination beyond the date by which it may properly do so under its amended and restated memorandum and articles of association and Cayman Islands law. The purpose of the Adjournment Proposal is to
provide more time for the Sponsor, Tiga and/or their respective affiliates to make purchases of public shares or other arrangements that would increase the likelihood of obtaining a favorable vote on such proposal and to meet the requirements
that are necessary to consummate the Business Combination. See the section entitled “Proposal No. 1—The Business Combination Proposal—Interests of Certain Persons in the Business Combination.”
Consequences if the Adjournment Proposal is Not Approved
If an Adjournment Proposal is presented at the extraordinary general
meeting and is not approved by the shareholders, the Tiga Board may not be able to adjourn the extraordinary general meeting to a later date. In such event, the Business Combination would not be completed.
Resolution to be Voted Upon
The full text of the resolution to be passed is as follows:
“RESOLVED, as an ordinary resolution, that the adjournment of the
extraordinary general meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies in the event that there are insufficient votes for, or otherwise in connection with, the approval of one or more proposals at
the extraordinary general meeting be approved in all respects.”
Vote Required for Approval
The approval of the Adjournment Proposal requires an ordinary
resolution under Cayman Islands law, being the affirmative vote of holders of a majority of the ordinary shares represented in person, virtually or by proxy and entitled to thereon and who vote at the extraordinary general meeting. Abstentions
and broker non-votes, while considered present for the purposes of establishing a quorum, will not count as a vote cast at the extraordinary general meeting.
Recommendation of the Tiga Board
THE TIGA BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT TIGA
SHAREHOLDERS
VOTE “FOR” THE APPROVAL OF THE ADJOURNMENT PROPOSAL.
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The following discussion is a summary of certain U.S. federal income
tax considerations (i) for U.S. Holders and Non-U.S. Holders (each as defined below, and together, “Holders”) of Tiga Class A ordinary shares and Tiga Warrants (each, a “Tiga
Security”) of the Domestication, (ii) for Holders of Tiga Class A ordinary shares that elect to have the New Grindr Common Stock they receive in connection with the Domestication redeemed for cash if the business combination is completed
and (iii) for Non-U.S. Holders relating to the ownership and disposition of New Grindr Common Stock and New Grindr Warrants by a Non-U.S. Holder after the Domestication. This section applies only to Holders that hold their Tiga Securities as
“capital assets” for U.S. federal income tax purposes (generally, property held for investment). For purposes of this discussion, because the components of a Tiga unit generally are separable at the option of the Holder, the Holder of a Tiga unit
generally should be treated, for U.S. federal income tax purposes, as the owner of the underlying Tiga Class A ordinary share and Tiga Warrant components of the Tiga unit. Accordingly, the separation of a Tiga unit into the Tiga Class A ordinary
share and the one-half of one Tiga Warrant underlying the Tiga unit generally should not be a taxable event for U.S. federal income tax purposes. This position is not free from doubt, and no assurance can be given that the Internal Revenue
Service (“IRS”) would not assert, or that a court would not sustain, a contrary position. Holders of Tiga Securities are urged to consult their tax advisors concerning the U.S. federal, state, local and
any non-U.S. tax consequences of the transactions contemplated by the Domestication and the Business Combination (including any redemption of the New Grindr Common Stock) with respect to any Tiga Class A ordinary shares and Tiga Warrants held
through Tiga units (including alternative characterizations of Tiga units).
This discussion is limited to U.S. federal income tax considerations
and does not address estate or any gift tax considerations or considerations arising under the tax laws of any state, local or non-U.S. jurisdiction. Further, this discussion does not describe the U.S. federal income tax consequences to holders
of Tiga Class B ordinary shares. Additionally, this discussion does not describe all of the U.S. federal income tax consequences that may be relevant to you in light of your particular circumstances, including the alternative minimum tax, the
special accounting rules under Section 451(b) of the Code, the “Medicare” tax on certain investment income and the different consequences that may apply if you are subject to special rules under U.S. federal income tax law that apply to certain
types of investors, such as:
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financial institutions or financial services entities;
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broker-dealers;
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taxpayers that are subject to the mark-to-market accounting rules with respect to the Tiga Securities;
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tax-exempt entities;
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pension plans;
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individual retirement or other tax-deferred accounts;
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governments or agencies or instrumentalities thereof;
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insurance companies;
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S corporations;
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regulated investment companies or real estate investment trusts;
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entities or arrangements treated as partnerships for U.S. federal income tax purposes;
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U.S. expatriates or former long-term residents of the United States;
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persons that actually or constructively own 5% or more (by vote or value) of Tiga Class A ordinary shares (except as
specifically provided below);
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the Sponsor or its affiliates, officers or directors or any person that acquired their Tiga Securities pursuant to the A&R
Forward Purchase Agreement;
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persons that acquired their Tiga Securities pursuant to an exercise of employee share options, in connection with employee
share incentive plans or otherwise as compensation;
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persons that hold their Tiga Securities as part of a straddle, constructive sale, hedging, wash sale, conversion or other
integrated or similar transaction;
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U.S. Holders (as defined below) whose functional currency is not the U.S. dollar; or
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“specified foreign corporations” (including “controlled foreign corporations”), “passive foreign investment companies” or
corporations that accumulate earnings to avoid U.S. federal income tax.
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If any entity or arrangement treated as a partnership for U.S.
federal income tax purposes holds Tiga Securities, the tax treatment of such partnership and a person treated as a partner of such partnership generally will depend on the status of the partner and the activities of the partnership. Partnerships
holding any Tiga Securities and persons that are treated as partners of such partnerships should consult their tax advisors as to the particular U.S. federal income tax consequences to them of the Domestication and the exercise of redemption
rights with respect to their Tiga Class A ordinary shares.
This discussion is based on the Code, proposed, temporary and final
Treasury Regulations promulgated thereunder, and judicial and administrative interpretations thereof, all as of the date hereof. All of the foregoing is subject to change, which change could apply retroactively and could affect the tax
considerations described herein.
We have not sought, and do not intend to seek, any rulings from the
IRS as to any U.S. federal income tax considerations described herein. There can be no assurance that the IRS will not take positions inconsistent with the considerations discussed below or that any such positions would not be sustained by a
court.
THIS DISCUSSION IS ONLY A SUMMARY OF CERTAIN U.S.
FEDERAL INCOME TAX CONSIDERATIONS ASSOCIATED WITH THE DOMESTICATION, THE EXERCISE OF REDEMPTION RIGHTS WITH RESPECT TO THE TIGA CLASS A ORDINARY SHARES AND THE OWNERSHIP AND DISPOSITON OF NEW GRINDR COMMON STOCK AND NEW GRINDR WARRANTS BY
NON-U.S. HOLDERS. EACH HOLDER SHOULD CONSULT ITS OWN TAX ADVISOR WITH RESPECT TO THE PARTICULAR TAX CONSEQUENCES TO SUCH HOLDER OF THE DOMESTICATION, AN EXERCISE OF REDEMPTION RIGHTS, THE OWNERSHIP AND DISPOSITION OF NEW GRINDR COMMON STOCK AND
NEW GRINDR WARRANTS AND THE BUSINESS COMBINATION, INCLUDING THE APPLICABILITY AND EFFECTS OF U.S. FEDERAL NON-INCOME, STATE AND LOCAL AND NON-U.S. TAX LAWS.
U.S. Holders
As used herein, a “U.S. Holder” is a beneficial owner of a Tiga
Security who or that is, for U.S. federal income tax purposes:
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an individual who is a citizen or resident of the United States;
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a corporation (or other entity that is treated as a corporation for U.S. federal income tax purposes) that is created or
organized (or treated as created or organized) in or under the laws of the United States or any state thereof or the District of Columbia;
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an estate whose income is subject to U.S. federal income tax regardless of its source; or
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a trust if (1) a U.S. court can exercise primary supervision over the administration of such trust and one or more United
States persons have the authority to control all substantial decisions of the trust or (2) it has a valid election in place to be treated as a United States person.
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Tax Effects of the Domestication on U.S. Holders
Generally
The U.S. federal income tax consequences of the Domestication will
depend primarily upon whether the Domestication qualifies as a “reorganization” within the meaning of Section 368 of the Code.
Under Section 368(a)(1)(F) of the Code, a reorganization includes a
“mere change in identity, form, or place of organization of one corporation, however effected” (an “F Reorganization”). To effect the Domestication, Tiga will deregister under the Companies Act (As
Revised) of the Cayman Islands and will domesticate under Section 388 of the Delaware General Corporation Law, pursuant to which Tiga’s jurisdiction of incorporation will be changed from the Cayman Islands to the State of Delaware and, as a
result of which (i) each Tiga Class A ordinary share will automatically convert into a share of New Grindr Common Stock, (ii) each Tiga Class B ordinary share will automatically convert into a share of New Grindr Common Stock and (iii) each
outstanding Tiga Warrant will become a New Grindr Warrant.
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Tiga intends for the Domestication to qualify as an F
Reorganization. Milbank LLP will deliver an opinion that the Domestication will qualify as an F Reorganization. The form of such opinion is filed by amendment as Exhibit 5.2 to the registration statement of which this proxy statement/prospectus
forms a part and is based on customary assumptions, representations and covenants. If any of the assumptions, representations or covenants on which the opinion is based is or becomes incorrect, incomplete, inaccurate or is otherwise not complied
with, the validity of the opinion described above may be adversely affected and the tax consequences of the Domestication could differ from those described herein. An opinion of counsel is not binding on the IRS or any court, and there can be no
certainty that the IRS will not challenge the conclusions reflected in the opinion or that a court would not sustain such a challenge. Tiga has not requested, and does not intend to request, a ruling from the IRS as to the U.S. federal income tax
consequences of the Domestication. Accordingly, each U.S. Holder of Tiga Securities is urged to consult its tax advisor with respect to the particular tax consequences of the Domestication to such U.S. Holder.
Assuming the Domestication qualifies as an F Reorganization, U.S.
Holders of Tiga Securities generally should not recognize gain or loss for U.S. federal income tax purposes on the Domestication, except as provided below under the sections entitled “—Effects of Section 367 to
U.S. Holders of Tiga Class A Ordinary Shares” and “—PFIC Considerations,” and the Domestication should be treated for U.S. federal income tax purposes as if Tiga (i) transferred all of its assets
and liabilities to New Grindr in exchange for all of the outstanding common stock and warrants of New Grindr; and (ii) then distributed the common stock and warrants of New Grindr to the holders of securities of Tiga in liquidation of Tiga. The
taxable year of Tiga will be deemed to end on the date of the Domestication.
Subject to the discussion below under the section entitled “—PFIC Considerations,” if the Domestication fails to qualify as an F Reorganization, a U.S. Holder of Tiga Securities generally would recognize gain or loss with respect to its Tiga Securities in an amount
equal to the difference, if any, between the fair market value of the corresponding common stock and warrants of New Grindr received in the Domestication and the U.S. Holder’s adjusted tax basis in its Tiga Securities surrendered.
Because the Domestication will occur prior to the redemption of U.S.
Holders that exercise redemption rights with respect to Tiga Class A ordinary shares, U.S. Holders exercising such redemption rights will be subject to the potential tax consequences of the Domestication. All U.S. Holders considering exercising
redemption rights with respect to Tiga Class A ordinary shares are urged to consult with their tax advisors with respect to the potential tax consequences to them of the Domestication and exercise of redemption rights.
Following the Domestication, a U.S. Holder generally would be
required to include in gross income as U.S. source dividend income the amount of any distribution of cash or other property paid on the New Grindr Common Stock to the extent the distribution is paid out of New Grindr’s current or accumulated
earnings and profits (as determined under U.S. federal income tax principles). U.S. Holders are urged to consult with their tax advisors regarding this and any other tax considerations of owning stock and warrants of a U.S. corporation, i.e., New Grindr, rather than a non-U.S. corporation following the Domestication.
Basis and Holding Period Considerations
Assuming the Domestication qualifies as an F Reorganization, subject
to the discussion below under the section entitled “—PFIC Considerations,” (i) the tax basis of a share of New Grindr Common Stock or New Grindr Warrant received by a U.S. Holder in the Domestication will
equal the U.S. Holder’s tax basis in the Tiga Class A ordinary share or Tiga Warrant surrendered in exchange therefor, increased by any amount included in the income of such U.S. Holder as a result of Section 367 of the Code (as discussed below)
and (ii) the holding period for a share of New Grindr Common Stock or a New Grindr Warrant received by a U.S. Holder will include such U.S. Holder’s holding period for the Tiga Class A ordinary share or Tiga Warrant surrendered in exchange
therefor.
Shareholders who hold different blocks of Tiga Securities
(generally, Tiga Securities purchased or acquired on different dates or at different prices) should consult their tax advisors to determine how the above rules apply to them, and the discussion above does not specifically address all of the
consequences to U.S. Holders who hold different blocks of Tiga Securities.
If the Domestication fails to qualify as an F Reorganization, the
U.S. Holder’s basis in the common stock and warrants of New Grindr would be equal to the fair market value of such common stock and warrants of New Grindr on the date of the Domestication, and such U.S. Holder’s holding period for such common
stock and warrants of New Grindr would begin on the day following the date of the Domestication.
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Effects of Section 367 to U.S. Holders of Tiga Class A Ordinary
Shares
The following section assumes that the Domestication will qualify as
an F reorganization for U.S. federal income tax purposes.
Section 367 of the Code applies to certain transactions involving
foreign corporations, including a domestication of a foreign corporation in a transaction that qualifies as an F Reorganization. Subject to the discussion below under the section entitled “—PFIC Considerations,”
Section 367 of the Code imposes U.S. federal income tax on certain U.S. persons in connection with transactions that would otherwise be tax-deferred. Section 367(b) of the Code will generally apply to U.S. Holders on the date of the
Domestication. Because the Domestication will occur prior to the redemption of U.S. Holders that exercise redemption rights with respect to their Tiga Class A ordinary shares, U.S. Holders exercising such redemption rights will be subject to the
potential tax consequences of Section 367 of the Code and the PFIC rules, as discussed below under the section entitled “—PFIC Considerations,” as a result of the Domestication.
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(a)
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U.S. Holders Who Own 10 Percent or More (By Vote or Value) of Tiga Shares
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Subject to the discussion below under the section entitled “—PFIC Considerations,” a U.S. Holder who beneficially owns (actually or constructively) 10% or more of the total combined voting power of all classes of Tiga shares entitled to vote or 10% or more of the total
value of all classes of Tiga shares (a “10% U.S. Shareholder”) on the date of the Domestication must include in income as a dividend deemed paid by Tiga the “all earnings and profits amount” attributable
to the Tiga Class A ordinary shares it directly owns within the meaning of Treasury Regulations under Section 367 of the Code. A U.S. Holder’s ownership of Tiga Warrants will be taken into account in determining whether such U.S. Holder is a 10%
U.S. Shareholder. Complex attribution rules apply in determining whether a U.S. Holder is a 10% U.S. Shareholder and all U.S. Holders are urged to consult their tax advisors with respect to these attribution rules.
A 10% U.S. Shareholder’s “all earnings and profits amount” with
respect to its Tiga Class A ordinary shares is the net positive earnings and profits of Tiga (as determined under Treasury Regulations under Section 367 of the Code) attributable to such Tiga Class A ordinary shares (as determined under Treasury
Regulations under Section 367 of the Code) but without regard to any gain that would be realized on a sale or exchange of such Tiga Class A ordinary shares. Treasury Regulations under Section 367 of the Code provide that the “all earnings and
profits amount” attributable to a shareholder’s stock is determined according to the principles of Section 1248 of the Code. In general, Section 1248 of the Code and the Treasury Regulations thereunder provide that the amount of earnings and
profits attributable to a block of stock (as defined in Treasury Regulations under Section 1248 of the Code) in a foreign corporation is the ratably allocated portion of the foreign corporation’s earnings and profits generated during the period
the shareholder held the block of stock.
Tiga does not expect to have significant, if any, cumulative net
earnings and profits on the date of the Domestication. If Tiga’s cumulative net earnings and profits through the date of the Domestication is less than or equal to zero, then a 10% U.S. Shareholder should not be required to include in gross
income an “all earnings and profits amount” with respect to its Tiga Class A ordinary shares. However, the determination of earnings and profits is a complex determination and may be impacted by numerous factors. It is possible that the amount of
Tiga’s cumulative net earnings and profits could be positive through the date of the Domestication, in which case a 10% U.S. Shareholder would be required to include its “all earnings and profits amount” in income as a deemed dividend deemed paid
by Tiga under Treasury Regulations under Section 367 as a result of the Domestication.
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(b)
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U.S. Holders Who Own Less Than 10% (By Vote and Value) of Tiga Shares
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Subject to the discussion below under the section entitled “—PFIC Considerations,” a U.S. Holder whose Tiga Class A ordinary shares have an aggregate fair market value of $50,000 or more and who, on the date of the Domestication, is not a 10% U.S. Shareholder generally
will recognize gain (but not loss) with respect to its Tiga Class A ordinary shares in the Domestication or, in the alternative, may elect to recognize the “all earnings and profits amount” attributable to such U.S. Holder’s Tiga Class A ordinary
shares as described below.
Subject to the discussion below under the section entitled “—PFIC Considerations,” unless such a U.S. Holder makes the “all earnings and profits election” as described below, such U.S. Holder generally must recognize gain (but not loss) with respect to its Tiga Class A
ordinary shares in an amount equal to the excess of the fair market value of the New Grindr Common Stock received in the Domestication over the U.S. Holder’s adjusted tax basis in the Tiga
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Class A ordinary shares deemed surrendered in exchange therefor. Subject to the
discussion below under the caption heading “—PFIC Considerations,” such gain should be capital gain, and should be long-term capital gain if the U.S. Holder has held the Tiga Class A ordinary shares for
longer than one year. Long-term capital gains of non-corporate taxpayers generally are subject to tax at preferential rates under current law. U.S. Holders who hold different blocks of Tiga Class A ordinary shares (generally, Tiga Class A
ordinary shares purchased or acquired on different dates or at different prices) should consult their tax advisors to determine how the above rules apply to them.
In lieu of recognizing any gain as described in the preceding
paragraph, a U.S. Holder may elect to include in income as a deemed dividend paid by Tiga the “all earnings and profits amount” attributable to its Tiga Class A ordinary shares under Section 367(b) of the Code. There are, however, strict
conditions for making this election. This election must comply with applicable Treasury Regulations and generally must include, among other things:
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i.
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a statement that the Domestication is a Section 367(b) exchange (within the meaning of the applicable Treasury Regulations);
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ii.
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a complete description of the Domestication;
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iii.
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a description of any stock, securities or other consideration transferred or received in the Domestication;
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iv.
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a statement describing the amounts required to be taken into account for U.S. federal income tax purposes;
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v.
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a statement that the U.S. Holder is making the election that includes (A) a copy of the information that the U.S. Holder
received from Tiga establishing and substantiating the U.S. Holder’s “all earnings and profits amount” with respect to the U.S. Holder’s Tiga Class A ordinary shares and (B) a representation that the U.S. Holder has notified Tiga (or New
Grindr) that the U.S. Holder is making the election; and
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vi.
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certain other information required to be furnished with the U.S. Holder’s tax return or otherwise furnished pursuant to the
Code or the Treasury Regulations.
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In addition, the election must be attached by an electing U.S.
Holder to such U.S. Holder’s timely filed U.S. federal income tax return for the year including the Domestication, and the U.S. Holder must send notice of making the election to Tiga or New Grindr no later than the date such tax return is filed.
Tiga does not expect to have significant, if any, cumulative
earnings and profits through the date of the Domestication. However, as noted above, if it were determined that Tiga had positive earnings and profits through the date of the Domestication, a U.S. Holder that makes the election described herein
could have an “all earnings and profits amount” with respect to its Tiga Class A ordinary shares, and thus could be required to include that amount in income as a deemed dividend deemed paid by Tiga under applicable Treasury Regulations as a
result of the Domestication.
EACH U.S. HOLDER IS URGED TO CONSULT ITS TAX
ADVISOR REGARDING THE CONSEQUENCES TO IT OF MAKING AN ELECTION TO INCLUDE IN INCOME THE “ALL EARNINGS AND PROFITS AMOUNT” ATTRIBUTABLE TO ITS TIGA CLASS A ORDINARY SHARES UNDER SECTION 367(b) OF THE CODE AND THE APPROPRIATE FILING REQUIREMENTS
WITH RESPECT TO SUCH AN ELECTION.
A U.S. Holder who is not a 10% U.S. Shareholder and whose Tiga
Class A ordinary shares have an aggregate fair market value of less than $50,000 on the date of the Domestication generally should not be required to recognize any gain or loss or include any part of the “all earnings and profits amount” in
income under Section 367 of the Code in connection with the Domestication. However, such U.S. Holder may be subject to taxation under the PFIC rules as discussed below under the section entitled “—PFIC
Considerations.”
Tax Consequences for U.S. Holders of Tiga Warrants
Assuming the Domestication qualifies as an F Reorganization, subject
to the considerations described under the section entitled “—Effects of Section 367 to U.S. Holders of Tiga Class A Ordinary Shares—U.S. Holders Who Own 10 Percent or More (By Vote or Value) of Tiga Shares”
above relating to a U.S. Holder’s ownership of Tiga Warrants being taken into account in determining whether such U.S. Holder is a 10% U.S. Shareholder for purposes of Section 367(b) of the Code, and the considerations described below under the
section entitled “—PFIC Considerations” relating to the PFIC rules, a U.S. Holder of Tiga Warrants generally should not be subject to U.S. federal income tax with respect to the exchange of its Tiga
Warrants for New Grindr Warrants in the Domestication.
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Following the Domestication, holders of New Grindr Warrants will
hold Warrants to acquire New Grindr Common Stock. The terms of each New Grindr Warrant will provide for an adjustment to the number of shares of New Grindr Common Stock for which the New Grindr Warrant may be exercised or to the exercise price of
the New Grindr Warrant in certain events. An adjustment which has the effect of preventing dilution generally is not a taxable event. Nevertheless, a U.S. Holder of New Grindr Warrants may be treated as receiving a constructive distribution from
New Grindr if, for example, the adjustment increases the holder’s proportionate interest in New Grindr’s assets or earnings and profits (e.g., through an increase in the number of shares of New Grindr
Common Stock that would be obtained upon exercise or through a decrease in the exercise price of the Warrants), including as a result of a distribution of cash or other property to the holders of shares of New Grindr Common Stock which is taxable
as a distribution to the holders of such shares. Any constructive distribution received by a U.S. Holder of New Grindr Warrants would be subject to tax in the same manner as if such U.S. Holder received a cash distribution from New Grindr equal
to the fair market value of such increased interest. Generally, a U.S. Holder’s adjusted tax basis in its Warrant would be increased to the extent any such constructive distribution is treated as a dividend for tax purposes.
ALL U.S. HOLDERS ARE URGED TO CONSULT THEIR TAX
ADVISORS WITH RESPECT TO THE APPLICATION OF SECTION 367 OF THE CODE TO THEIR PARTICULAR CIRCUMSTANCES.
PFIC Considerations
Regardless of whether the Domestication qualifies as an F
Reorganization (and, if the Domestication qualifies as an F Reorganization, in addition to the discussion under the section entitled “—Effects of Section 367 on U.S. Holders of Tiga Class A Ordinary Shares”
above), the Domestication could be a taxable event to U.S. Holders under the PFIC provisions of the Code if Tiga is considered a PFIC.
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(a)
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Definition of a PFIC
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A foreign (i.e., non-U.S.)
corporation will be classified as a PFIC for U.S. federal income tax purposes if either (i) at least 75% of its gross income in a taxable year, including its pro rata share of the gross income of any corporation in which it is considered to own
at least 25% of the shares by value, is passive income or (ii) at least 50% of its assets in a taxable year (generally determined based on fair market value and averaged quarterly over the year), including its pro rata share of the assets of any
corporation in which it is considered to own at least 25% of the shares by value, are held for the production of, or produce, passive income. Passive income generally includes dividends, interest, rents and royalties (other than rents or
royalties derived from the active conduct of a trade or business) and gains from the disposition of passive assets. The determination of whether a foreign corporation is a PFIC is made annually. Pursuant to a “startup exception,” a foreign
corporation will not be a PFIC for the first taxable year the foreign corporation has gross income (the “startup year”) if (1) no predecessor of the foreign corporation was a PFIC; (2) the foreign
corporation satisfies the IRS that it will not be a PFIC for either of the first two taxable years following the startup year; and (3) the foreign corporation is not in fact a PFIC for either of those years.
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(b)
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PFIC Status of Tiga
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Based upon the composition of its income and assets, and upon a
review of its financial statements, Tiga believes that it likely will not be eligible for the startup exception and therefore likely has been a PFIC since its first taxable year and will likely be considered a PFIC for the taxable year which ends
as a result of the Domestication.
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(c)
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Effects of PFIC Rules on the Domestication
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Even if the Domestication qualifies as an F Reorganization, Section
1291(f) of the Code requires that, to the extent provided in Treasury Regulations, a U.S. person who disposes of stock of a PFIC (including for this purpose exchanging warrants of a PFIC for newly issued warrants in connection with a
domestication transaction) recognizes gain notwithstanding any other provision of the Code. No final Treasury Regulations are currently in effect under Section 1291(f) of the Code. However, proposed Treasury Regulations under Section 1291(f) of
the Code have been promulgated with a retroactive effective date. If finalized in their current form, those proposed Treasury Regulations would require gain recognition by U.S. Holders of Tiga Class A ordinary shares and Tiga Warrants as a result
of the Domestication if:
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•
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Tiga were classified as a PFIC at any time during such U.S. Holder’s holding period in such Tiga Class A ordinary shares or
Tiga Warrants; and
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•
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the U.S. Holder had not timely made (a) a QEF Election (as defined below) for the first taxable year in which the U.S. Holder
owned such Tiga Class A ordinary shares or in which Tiga was a PFIC, whichever is later (or a QEF Election along with a purging election), or (b) an MTM Election (as defined below) with respect to such Tiga Class A ordinary shares.
Currently, applicable Treasury Regulations provide that neither a QEF Election nor an MTM Election can be made with respect to warrants.
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The tax on any such recognized gain would be imposed based on a
complex set of computational rules designed to offset the tax deferral with respect to the undistributed earnings of Tiga. Under these rules:
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•
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the U.S. Holder’s gain will be allocated ratably over the U.S. Holder’s holding period for such U.S. Holder’s Tiga Class A
ordinary shares or Tiga Warrants;
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|
•
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the amount of gain allocated to the U.S. Holder’s taxable year in which the U.S. Holder recognized the gain, or to the period
in the U.S. Holder’s holding period before the first day of the first taxable year in which Tiga was a PFIC, will be taxed as ordinary income;
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•
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the amount of gain allocated to other taxable years (or portions thereof) of the U.S. Holder and included in such U.S. Holder’s
holding period would be taxed at the highest tax rate in effect for that year and applicable to the U.S. Holder; and
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|
•
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an additional tax equal to the interest charge generally applicable to underpayments of tax will be imposed on the U.S. Holder
in respect of the tax attributable to each such other taxable year (described in the third bullet above) of such U.S. Holder.
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In addition, the proposed Treasury Regulations provide coordinating
rules with Section 367(b) of the Code. Under these proposed Treasury Regulations, if the gain recognition rule applies to a disposition of PFIC stock, and Section 367(b) of the Code requires a U.S. Holder to recognize gain or include an amount in
income as a deemed dividend deemed paid by Tiga as discussed above under the section entitled “—Effects of Section 367 to U.S. Holders of Tiga Class A Ordinary Shares,” the gain realized on the transfer is
taxable under the PFIC rules, and the excess, if any, of the amount to be included in income under Section 367(b) of the Code over the gain realized under these rules is taxable as provided under Section 367(b) of the Code.
It is difficult to predict whether, in what form and with what
effective date, final Treasury Regulations under Section 1291(f) of the Code may be adopted or how any such final Treasury Regulations would apply. Therefore, U.S. Holders of Tiga Class A ordinary shares that have not made a timely and effective
QEF Election (or a QEF Election along with a purging election) or an MTM Election (each as defined below) may, pursuant to the proposed Treasury Regulations, be subject to taxation under the PFIC rules on the Domestication with respect to their
Tiga Class A ordinary shares and Tiga Warrants under the PFIC rules in the manner set forth above. A U.S. Holder that made a timely and effective QEF Election (or a QEF Election along with a purging election) or an MTM Election with respect to
its Tiga Class A ordinary shares is referred to herein as an “Electing Shareholder” and a U.S. Holder that is not an Electing Shareholder is referred to herein as a “Non-Electing
Shareholder.”
The application of the PFIC rules to U.S. Holders of Tiga Warrants
is unclear. A proposed Treasury Regulation issued under the PFIC rules generally treats an “option” (which would include a Tiga Warrant) to acquire the stock of a PFIC as stock of the PFIC, while a final Treasury Regulation issued under the PFIC
rules provides that the QEF Election does not apply to options and no MTM Election (as defined below) is currently available with respect to options. Therefore, it is possible that the proposed Treasury Regulations if finalized in their current
form would apply to cause gain recognition on the exchange of Tiga Warrants for New Grindr Warrants pursuant to the Domestication.
Any gain recognized by a Non-Electing Shareholder of Tiga Class A
ordinary shares or a U.S. Holder of Tiga Warrants as a result of the Domestication pursuant to the PFIC rules would be taxable income to such U.S. Holder, taxed under the PFIC rules in the manner set forth above, with no corresponding receipt of
cash.
As noted above, the Domestication could be a taxable event under the
PFIC rules regardless of whether the Domestication qualifies as an F Reorganization if Tiga is considered a PFIC. If the Domestication fails to qualify as an F Reorganization, absent a QEF Election (or a QEF Election along with a purging
election) or an MTM Election, a U.S. Holder would be taxed under the PFIC rules in the manner set forth above.
ALL U.S. HOLDERS ARE URGED TO CONSULT THEIR TAX
ADVISORS REGARDING THE EFFECTS OF THE PFIC RULES ON THE DOMESTICATION, INCLUDING THE IMPACT OF ANY PROPOSED OR FINAL TREASURY REGULATIONS.
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(a)
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QEF Election and Mark-to-Market Election
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The impact of the PFIC rules on a U.S. Holder of Tiga Class A
ordinary shares will depend on whether the U.S. Holder has made a timely and effective election to treat Tiga as a “qualified electing fund” under Section 1295 of the Code for the taxable year that is the first year in the U.S. Holder’s holding
period of Tiga Class A ordinary shares during which Tiga qualified as a PFIC (a “QEF Election”) or, if in a later taxable year, the U.S. Holder made a QEF Election along with a purging election. A purging
election creates a deemed sale of the U.S. Holder’s Tiga Class A ordinary shares at their then fair market value and requires the U.S. Holder to recognize gain pursuant to the purging election subject to the special PFIC tax and interest charge
rules described above. As a result of any such purging election, the U.S. Holder would increase the adjusted tax basis in its Tiga Class A ordinary shares by the amount of the gain recognized and, solely for purposes of the PFIC rules, would have
a new holding period in its Tiga Class A ordinary shares. U.S. Holders are urged to consult their tax advisors as to the application of the rules governing purging elections to their particular circumstances.
A U.S. Holder’s ability to make a timely and effective QEF Election
(or a QEF Election along with a purging election) with respect to Tiga is contingent upon, among other things, the provision by Tiga of a “PFIC Annual Information Statement” to such U.S. Holder. Tiga will endeavor to provide PFIC Annual
Information Statements, upon written request, to U.S. Holders of Tiga Class A ordinary shares with respect to each taxable year for which Tiga determines it is (or has been) a PFIC. There is no assurance, however, that Tiga will timely provide
such information. As discussed further above, a U.S. Holder is not able to make a QEF Election with respect to Tiga Warrants under applicable final Treasury Regulations. An Electing Shareholder generally would not be subject to the adverse PFIC
rules discussed above with respect to its Tiga Class A ordinary shares. As a result, such an Electing Shareholder generally should not recognize gain or loss as a result of the Domestication except to the extent described under “—Effects of Section 367 to U.S. Holders of Tiga Class A Ordinary Shares” and subject to the discussion above under “—Tax Effects of the Domestication to U.S. Holders,”
but rather would include annually in gross income its pro rata share of the ordinary earnings and net capital gain of Tiga, whether or not such amounts are actually distributed.
The impact of the PFIC rules on a U.S. Holder of Tiga Class A
ordinary shares may also depend on whether the U.S. Holder has made a mark-to-market election under Section 1296 of the Code. U.S. Holders who hold (actually or constructively) stock of a foreign corporation that is classified as a PFIC may
annually elect to mark such stock to its market value if such stock is “marketable stock” (generally, stock that is regularly traded on a national securities exchange that is registered with the SEC, including the NYSE) (an “MTM Election”). No assurance can be given that the Tiga Class A ordinary shares are (or have been) considered to be marketable stock for purposes of the MTM Election or whether the other requirements of this
election are satisfied. If such an election is available and has been made, such U.S. Holders generally will not be subject to the special taxation rules of Section 1291 of the Code discussed herein with respect their Tiga Class A ordinary shares
in connection with the Domestication. Instead, in general, the U.S. Holder will include as ordinary income each year the excess, if any, of the fair market value of its Tiga Class A ordinary shares at the end of its taxable year over its adjusted
tax basis in its Tiga Class A ordinary shares. The U.S. Holder also will recognize an ordinary loss in respect of the excess, if any, of its adjusted tax basis in its Tiga Class A ordinary shares over the fair market value of its Tiga Class A
ordinary shares at the end of its taxable year (but only to the extent of the net amount of income previously included as a result of the MTM Election). The U.S. Holder’s basis in its Tiga Class A ordinary shares will be adjusted to reflect any
such income or loss amounts, and any further gain recognized on a sale or other taxable disposition of its Tiga Class A ordinary shares will be treated as ordinary income. However, if the MTM Election was not made by a U.S. Holder with respect to
the first taxable year of its holding period for the PFIC stock, then the Section 1291 rules discussed above will apply to certain dispositions of, distributions on and other amounts taxable with respect to Tiga Class A ordinary shares, including
in connection with the Domestication. An MTM Election is not available with respect to warrants, including the Tiga Warrants.
THE RULES DEALING WITH PFICS ARE VERY COMPLEX AND
ARE IMPACTED BY VARIOUS FACTORS IN ADDITION TO THOSE DESCRIBED ABOVE, INCLUDING THE APPLICATION OF THE RULES ADDRESSING OVERLAPS IN THE PFIC RULES AND THE SECTION 367(b) RULES AND THE RULES RELATING TO CONTROLLED FOREIGN CORPORATIONS. ALL U.S.
HOLDERS ARE URGED TO CONSULT THEIR TAX ADVISORS REGARDING THE CONSEQUENCES TO THEM OF THE PFIC RULES, INCLUDING, WITHOUT LIMITATION, WHETHER A QEF ELECTION (OR A QEF ELECTION ALONG WITH A PURGING ELECTION), AN MTM ELECTION OR ANY OTHER ELECTION
IS
197
AVAILABLE OR HAS BEEN MADE, WHETHER AND HOW ANY OVERLAP RULES
APPLY, THE CONSEQUENCES TO THEM OF ANY SUCH ELECTION OR OVERLAP RULE AND THE IMPACT OF ANY PROPOSED OR FINAL PFIC TREASURY REGULATIONS.
Tax Effects to U.S. Holders of Exercising
Redemption Rights
Generally
Because the Domestication will occur prior to the redemption of U.S.
Holders that exercise redemption rights, U.S. Holders exercising redemption rights will be subject to the potential tax consequences of Section 367 of the Code and the PFIC rules as a result of the Domestication (discussed further above).
The U.S. federal income tax consequences to a U.S. Holder of Tiga
Class A ordinary shares (which will be exchanged for New Grindr Common Stock in the Domestication) that exercises its redemption rights with respect to its Tiga Class A ordinary shares to receive cash in exchange for all or a portion of its New
Grindr Common Stock received in the Domestication will depend on whether the redemption qualifies as a sale of shares of New Grindr Common Stock under Section 302 of the Code. If the redemption qualifies as a sale of shares of New Grindr Common
Stock by a U.S. Holder, the tax consequences to such U.S. Holder are as described below under the section entitled “—Taxation of Redemption Treated as a Sale of New Grindr Common Stock.” If the redemption
does not qualify as a sale of shares of New Grindr Common Stock, a U.S. Holder will be treated as receiving a corporate distribution with the tax consequences to such U.S. Holder as described below under the section entitled “—Taxation of Redemption Treated as a Distribution.”
Whether a redemption of shares of New Grindr Common Stock qualifies
for sale treatment will depend largely on the total number of shares of New Grindr shares treated as held by the redeeming U.S. Holder before and after the redemption (including any stock constructively owned by the U.S. Holder as a result of
owning New Grindr Warrants and any New Grindr shares that a U.S. Holder directly or indirectly acquires pursuant to the Business Combination) relative to all of the New Grindr shares outstanding both before and after the redemption. The
redemption of New Grindr Common Stock generally will be treated as a sale of New Grindr Common Stock (rather than as a corporate distribution) if the redemption (1) is “substantially disproportionate” with respect to the U.S. Holder, (2) results
in a “complete termination” of the U.S. Holder’s interest in New Grindr or (3) is “not essentially equivalent to a dividend” with respect to the U.S. Holder. These tests are explained more fully below.
In determining whether any of the foregoing tests result in a
redemption qualifying for sale treatment, a U.S. Holder takes into account not only shares of New Grindr stock actually owned by the U.S. Holder, but also shares of New Grindr stock that are constructively owned by it under certain attribution
rules set forth in the Code. A U.S. Holder may constructively own, in addition to shares owned directly, shares owned by certain related individuals and entities in which the U.S. Holder has an interest or that have an interest in such U.S.
Holder, as well as any shares that the holder has a right to acquire by exercise of an option, which would generally include New Grindr Common Stock which could be acquired pursuant to the exercise of New Grindr Warrants. Moreover, any New Grindr
shares that a U.S. Holder directly or constructively acquires pursuant to the Business Combination generally should be included in determining the U.S. federal income tax treatment of the redemption.
In order to meet the substantially disproportionate test, the
percentage of New Grindr’s outstanding voting shares actually and constructively owned by the U.S. Holder immediately following the redemption of shares of New Grindr Common Stock must, among other requirements, be less than 80% of the percentage
of New Grindr’s outstanding voting shares actually and constructively owned by the U.S. Holder immediately before the redemption (taking into account both redemptions by other holders of New Grindr Common Stock and the New Grindr Common Stock to
be issued pursuant to the Business Combination). There will be a complete termination of a U.S. Holder’s interest if either (1) all of the shares of New Grindr stock actually and constructively owned by the U.S. Holder are redeemed or (2) all of
the shares of New Grindr stock actually owned by the U.S. Holder are redeemed and the U.S. Holder is eligible to waive, and effectively waives in accordance with specific rules, the attribution of shares owned by certain family members and the
U.S. Holder does not constructively own any other shares of New Grindr stock (including any shares constructively owned by the U.S. Holder as a result of owning New Grindr Warrants). The redemption of New Grindr Common Stock will not be
essentially equivalent to a dividend if the redemption results in a “meaningful reduction” of the U.S. Holder’s proportionate interest in New Grindr. Whether the redemption will result in a meaningful reduction in a U.S. Holder’s proportionate
interest in New Grindr will depend on the particular
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facts and circumstances. However, the IRS has indicated in a published ruling that
even a small reduction in the proportionate interest of a small minority shareholder in a publicly held corporation where such shareholder exercises no control over corporate affairs may constitute such a “meaningful reduction.”
If none of the foregoing tests is satisfied, then the redemption of
shares of New Grindr Common Stock will be treated as a corporate distribution to the redeemed U.S. Holder and the tax effects to such a U.S. Holder will be as described below under the section entitled “—Taxation
of Redemption Treated as a Distribution.” After the application of those rules, any remaining tax basis of the U.S. Holder in the redeemed New Grindr Common Stock will be added to the U.S. Holder’s adjusted tax basis in its remaining New
Grindr shares, or, if it has none, to the U.S. Holder’s adjusted tax basis in its New Grindr Warrants or possibly in other New Grindr shares constructively owned by it.
Taxation of Redemption Treated as a Distribution
If the redemption of a U.S. Holder’s shares of New Grindr Common
Stock is treated as a corporate distribution, as discussed above under the section entitled “—Generally,” the amount of cash received in the redemption generally will constitute a dividend for U.S. federal
income tax purposes to the extent paid from New Grindr’s current or accumulated earnings and profits, as determined under U.S. federal income tax principles. Distributions in excess of New Grindr’s current and accumulated earnings and profits
will constitute a return of capital that will be applied against and reduce (but not below zero) the U.S. Holder’s adjusted tax basis in its shares of New Grindr Common Stock. Any remaining excess will be treated as gain realized on the sale of
New Grindr Common Stock and will be treated as described below under the section entitled “—Taxation of Redemption Treated as a Sale of New Grindr Common Stock.”
Taxation of Redemption Treated as a Sale of New Grindr Common Stock
If the redemption of a U.S. Holder’s shares of New Grindr Common
Stock is treated as a sale, as discussed above under the section entitled “—Generally,” a U.S. Holder generally will recognize capital gain or loss in an amount equal to the difference between the amount
of cash received in the redemption and the U.S. Holder’s adjusted tax basis in the shares of New Grindr Common Stock redeemed. Any such capital gain or loss generally will be long-term capital gain or loss if the U.S. Holder’s holding period for
the New Grindr Common Stock so disposed of exceeds one year. Long-term capital gains recognized by non-corporate U.S. Holders generally will be eligible to be taxed at reduced rates. The deductibility of capital losses is subject to limitations.
U.S. Holders who hold different blocks of New Grindr Common Stock
(including as a result of holding different blocks of Tiga Class A ordinary shares purchased or acquired on different dates or at different prices) should consult their tax advisors to determine how the above rules apply to them.
ALL U.S. HOLDERS ARE URGED TO CONSULT THEIR TAX
ADVISORS AS TO THE TAX CONSEQUENCES TO THEM OF A REDEMPTION OF ALL OR A PORTION OF THEIR NEW GRINDR COMMON STOCK PURSUANT TO AN EXERCISE OF REDEMPTION RIGHTS.
Information Reporting and Backup Withholding
Payments of cash to a U.S. Holder as a result of the redemption of
New Grindr Common Stock may be subject to information reporting to the IRS and possible U.S. backup withholding. Backup withholding will not apply, however, to a U.S. Holder who furnishes a correct taxpayer identification number and makes other
required certifications, or who is otherwise exempt from backup withholding and establishes such exempt status.
Backup withholding is not an additional tax. Amounts withheld as
backup withholding may be credited against a U.S. Holder’s U.S. federal income tax liability, and the U.S. Holder generally may obtain a refund of any excess amounts withheld under the backup withholding rules by timely filing the appropriate
claim for refund with the IRS and furnishing any required information.
Non-U.S. Holders
As used herein, a “Non-U.S. Holder” is a beneficial owner (other
than a partnership or entity treated as a partnership for U.S. federal income tax purposes) of a Tiga Security who or that is not a U.S. Holder.
Effects of the Domestication to Non-U.S. Holders
The Domestication is not expected to result in any U.S. federal
income tax consequences to Non-U.S. Holders of Tiga Securities.
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Ownership and Disposition of New Grindr Common
Stock and New Grindr Warrants by a Non-U.S. Holder after the Domestication
The following describes U.S. federal income tax considerations
relating to the ownership and disposition of New Grindr Common Stock and New Grindr Warrants by a Non-U.S. Holder after the Domestication.
Distributions
In general, any distributions (including constructive distributions,
but not including certain distributions of New Grindr shares or rights to acquire New Grindr stock) made to a Non-U.S. Holder of shares of New Grindr Common Stock, to the extent paid out of New Grindr’s current or accumulated earnings and profits
(as determined under U.S. federal income tax principles), will constitute dividends for U.S. federal income tax purposes and, provided such dividends are not effectively connected with the Non-U.S. Holder’s conduct of a trade or business within
the United States, the gross amount of the dividend will be subject to withholding tax at a rate of 30%, unless such Non-U.S. Holder is eligible for a reduced rate of withholding tax under an applicable income tax treaty and provides proper
certification of its eligibility for such reduced rate (usually on an IRS Form W-8BEN or W-8BEN-E). In the case of any constructive dividend, it is possible that this tax would be withheld from any amount owed to a Non-U.S. Holder by the
applicable withholding agent, including cash distributions on other property or sale proceeds from warrants or other property subsequently paid or credited to such Non-U.S. Holder. Any distribution not constituting a dividend will be treated
first as reducing (but not below zero) the Non-U.S. Holder’s adjusted tax basis in its shares of New Grindr Common Stock and, to the extent such distribution exceeds the Non-U.S. Holder’s adjusted tax basis, as gain realized from the sale or
other disposition of the New Grindr Common Stock, which will be treated as described under “—Sale, Taxable Exchange or Other Taxable Disposition of New Grindr Common Stock and Warrants” below.
The withholding tax generally does not apply to dividends paid to a
Non-U.S. Holder who provides a Form W-8ECI, certifying that the dividends are effectively connected with the Non-U.S. Holder’s conduct of a trade or business within the United States. Instead, the effectively connected dividends will be subject
to regular U.S. federal income tax as if the Non-U.S. Holder were a U.S. person, subject to an applicable income tax treaty providing otherwise. A corporate Non-U.S. Holder receiving effectively connected dividends may also be subject to an
additional “branch profits tax” imposed at a rate of 30% (or a lower applicable treaty rate).
Following the Domestication, holders of New Grindr Warrants will
hold warrants to acquire New Grindr Common Stock. The terms of each New Grindr Warrant will provide for an adjustment to the number of shares of New Grindr Common Stock for which the New Grindr Warrant may be exercised or to the exercise price of
the New Grindr Warrant in certain events. An adjustment which has the effect of preventing dilution generally is not a taxable event. Nevertheless, a Non-U.S. Holder of New Grindr Warrants may be treated as receiving a constructive distribution
from New Grindr if, for example, the adjustment increases the holder’s proportionate interest in New Grindr’s assets or earnings and profits (e.g., through an increase in the number of shares of New Grindr
Common Stock that would be obtained upon exercise or through a decrease in the exercise price of the warrants), including as a result of a distribution of cash or other property to the holders of shares of New Grindr Common Stock which is taxable
as a distribution to the holders of such shares. Any constructive distribution received by a Non-U.S. Holder of New Grindr Warrants would be subject to tax in the same manner as if such Non-U.S. Holder received a cash distribution from New Grindr
equal to the fair market value of such increased interest. It is possible that any withholding tax on such a constructive distribution might be satisfied by New Grindr or the applicable withholding agent from other distributions to the Non-U.S.
Holder, or from proceeds subsequently paid or credited to such holder. Generally, a Non-U.S. Holder’s adjusted tax basis in its warrant would be increased to the extent any such constructive distribution is treated as a dividend for tax purposes.
Sale, Taxable Exchange or Other Taxable Disposition
of New Grindr Common Stock and Warrants
A Non-U.S. Holder generally will not be subject to U.S. federal
income or withholding tax in respect of gain recognized on a sale, taxable exchange or other taxable disposition of its New Grindr Common Stock or New Grindr Warrants (including an expiration or redemption of the New Grindr Warrants, or a
redemption of New Grindr Common Stock that is treated as a sale or exchange as described under “—Tax Effects on Non-U.S. Holders of Exercising Redemption Rights”), unless:
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the gain is effectively connected with the conduct by the Non-U.S. Holder of a trade or business within the United States (and,
under certain income tax treaties, is attributable to a U.S. permanent establishment or fixed base maintained by the Non-U.S. Holder);
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such Non-U.S. Holder is an individual who was present in the United States for 183 days or more in the taxable year of such
disposition and certain other requirements are met; or
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•
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New Grindr is or has been a “United States real property holding corporation” for U.S. federal income tax purposes at any time
during the shorter of the five-year period ending on the date of redemption or the period that the Non-U.S. Holder held New Grindr Common Stock and, in the case where shares of New Grindr Common Stock are regularly traded on an
established securities market, the Non-U.S. Holder has owned, directly or constructively, more than 5% of New Grindr Common Stock at any time within the shorter of the five-year period preceding the redemption or such Non-U.S. Holder’s
holding period for the shares of New Grindr Common Stock. There can be no assurance that New Grindr Common Stock will be treated as regularly traded on an established securities market for this purpose.
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Unless an applicable treaty provides otherwise, gain described in
the first bullet point above will be subject to tax at generally applicable U.S. federal income tax rates as if the Non-U.S. Holder were a U.S. person. Any gains described in the first bullet point above of a corporate Non-U.S. Holder may also be
subject to an additional “branch profits tax” at a 30% rate (or a lower applicable income tax treaty rate). If the second bullet point applies to a Non-U.S. Holder, such Non-U.S. Holder will be subject to U.S. tax on such Non-U.S. Holder’s net
capital gain for such year (including any gain realized in connection with the redemption) at a tax rate of 30%.
If the third bullet point above applies to a Non-U.S. Holder, gain
recognized by such holder will be subject to tax at generally applicable U.S. federal income tax rates. In addition, New Grindr may be required to withhold U.S. federal income tax at a rate of 15% of the amount realized upon such redemption. It
is not expected that New Grindr would be a United States real property holding corporation after the Domestication or immediately after the Business Combination is completed. However, such determination is factual in nature and subject to change
and no assurance can be provided as to whether New Grindr would be treated as a United States real property holding corporation in any future year.
Tax Effects to Non-U.S. Holders of Exercising
Redemption Rights
The U.S. federal income tax consequences to a Non-U.S. Holder of
Tiga Class A ordinary shares that exercises its redemption rights to receive cash from the trust account in exchange for all or a portion of its New Grindr Common Stock received in the Domestication will depend on whether the redemption qualifies
as a sale of the New Grindr Common Stock redeemed, as described above under “U.S. Holders—Tax Effects to U.S. Holders of Exercising Redemption Rights—Generally.” If such a redemption qualifies as a sale of
New Grindr Common Stock, the U.S. federal income tax consequences to the Non-U.S. Holder will be as described above under “—Sale, Taxable Exchange or Other Taxable Disposition of New Grindr Common Stock and
Warrants.” If such a redemption does not qualify as a sale of New Grindr Common Stock, the Non-U.S. Holder will be treated as receiving a corporate distribution, the U.S. federal income tax consequences of which are described above under
“—Distributions.”
Because it may not be certain at the time a Non-U.S. Holder is
redeemed whether such Non-U.S. Holder’s redemption will be treated as a sale of shares or a corporate distribution, and because such determination will depend in part on a Non-U.S. Holder’s particular circumstances, the applicable withholding
agent may not be able to determine whether (or to what extent) a Non-U.S. Holder is treated as receiving a dividend for U.S. federal income tax purposes. Therefore, the applicable withholding agent may withhold tax at a rate of 30% (or such lower
rate as may be specified by an applicable income tax treaty) on the gross amount of any consideration paid to a Non-U.S. Holder in redemption of such Non-U.S. Holder’s New Grindr Common Stock, unless (i) the applicable withholding agent has
established special procedures allowing Non-U.S. Holders to certify that they are exempt from such withholding tax and (ii) such Non-U.S. Holders are able to certify that they meet the requirements of such exemption (e.g., because such Non-U.S. Holders are not treated as receiving a dividend under the Section 302 tests described above under the section entitled “U.S. Holders—Tax Effects to U.S. Holders of
Exercising Redemption Rights— Generally”). However, there can be no assurance that any applicable withholding agent will establish such special certification procedures. If an applicable withholding agent withholds excess amounts from
the amount payable to a Non-U.S. Holder, such Non-U.S. Holder generally may obtain a refund of any such excess amounts by timely filing an appropriate claim for refund with the IRS. Non-U.S. Holders should consult their own tax advisors regarding
the application of the foregoing rules in light of their particular facts and circumstances and any applicable procedures or certification requirements.
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Information Reporting Requirements and Backup
Withholding
Information returns will be filed with the IRS in connection with
payments of distributions and the proceeds from a sale or other disposition of New Grindr Common Stock and New Grindr Warrants. A Non-U.S. Holder may have to comply with certification procedures to establish that it is not a U.S. person in order
to avoid information reporting and backup withholding requirements. The certification procedures required to claim a reduced rate of withholding under a treaty generally will satisfy the certification requirements necessary to avoid the backup
withholding as well. Backup withholding is not an additional tax. The amount of any backup withholding from a payment to a Non-U.S. Holder will be allowed as a credit against such Non-U.S. Holder’s U.S. federal income tax liability and may
entitle such Non-U.S. Holder to a refund, provided that the required information is timely furnished to the IRS.
Foreign Account Tax Compliance Act
Provisions commonly referred to as “FATCA” impose withholding of 30%
on payments of dividends (including constructive dividends) on New Grindr Common Stock and New Grindr Warrants to “foreign financial institutions” (which is broadly defined for this purpose and in general includes investment vehicles) and certain
other non-U.S. entities unless various U.S. information reporting and due diligence requirements (generally relating to ownership by U.S. persons of interests in or accounts with those entities) have been satisfied by, or an exemption applies to,
the payee (typically certified by the delivery of a properly completed IRS Form W-8BEN-E). Foreign financial institutions located in jurisdictions that have an intergovernmental agreement with the United States governing FATCA may be subject to
different rules. Under certain circumstances, a Non-U.S. Holder might be eligible for refunds or credits of such withholding taxes, and a Non-U.S. Holder might be required to file a U.S. federal income tax return to claim such refunds or credits.
Thirty percent withholding under FATCA was scheduled to apply to payments of gross proceeds from the sale or other disposition of property that produces U.S.-source interest or dividends beginning on January 1, 2019, but on December 13, 2018, the
IRS released proposed regulations that, if finalized in their proposed form, would eliminate the obligation to withhold on gross proceeds. Such proposed regulations also delayed withholding on certain other payments received from other foreign
financial institutions that are allocable, as provided for under final Treasury Regulations, to payments of U.S.-source dividends, and other fixed or determinable annual or periodic income. Although these proposed Treasury Regulations are not
final, taxpayers generally may rely on them until final Treasury Regulations are issued. Non-U.S. Holders should consult their tax advisors regarding the effects of FATCA on their ownership and disposition of New Grindr Common Stock and Warrants.
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Introduction
Tiga was incorporated on July 27, 2020 for the purpose of effecting
a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses or entities. Tiga’s efforts to identify a prospective target business were not limited to a particular
industry or geographic region. Prior to executing the Merger Agreement, Tiga’s efforts were limited to organizational activities, completion of its initial public offering and the evaluation of possible business combinations.
Initial Public Offering and Private Placements
On November 27, 2020, we consummated the initial public offering of
27,600,000 units, including the issuance of 3,600,000 units as a result of the underwriters’ exercise of their over-allotment option in full. Each unit consists of one Class A ordinary share and one-half of one redeemable warrant. Each warrant
entitles the holder thereof to purchase one Class A ordinary share at a price of $11.50 per share. The units were sold at an offering price of $10.00 per unit, generating gross proceeds, before expenses, of $276,000,000.
Prior to the consummation of the initial public offering, on
July 27, 2020, the Sponsor received 5,750,000 founder shares in exchange for a capital contribution of $25,000, or $0.004 per share. On November 23, 2020, we effected a 1,150,000 share dividend, resulting in our initial shareholders holding an
aggregate of 6,900,000 founder shares. All share and per-share amounts have been retroactively restated to reflect the share dividend. On November 23, 2020, the Sponsor transferred 20,000 founder shares to each of David Ryan, Carman Wong and Ben
Falloon for the same per-share price initially paid by the Sponsor, resulting in the Sponsor holding 6,840,000 founder shares. In connection with the underwriters’ exercise of their over-allotment option in full prior to the closing of the
initial public offering, on November 27, 2020, no founder shares were surrendered.
Simultaneously with the consummation of the initial public offering,
we consummated the private sale of an aggregate of 10,280,000 warrants, each exercisable to purchase one Class A ordinary share at $11.50 per share, to the Sponsor at the time of the initial public offering at a price of $1.00 per warrant,
generating gross proceeds, before expenses, of approximately $10,280,000 (the “initial private placement”). The warrants sold in the initial private placement, or the initial private placement warrants,
are identical to the warrants included in the units sold in the initial public offering, except that, so long as they are held by their initial purchasers or their permitted transferees, (i) they will not be redeemable by Tiga, (ii) they
(including the Class A ordinary shares issuable upon exercise of these warrants) may not, subject to certain limited exceptions, be transferred, assigned or sold until 30 days after Tiga completes its initial business combination, (iii) they may
be exercised by the holders on a cashless basis and (iv) they will be entitled to registration rights. Upon the closing of the initial public offering and the initial private placement, $278,760,000 was placed in a trust account with Continental
Stock Transfer & Trust Company acting as trustee, and were subsequently invested only in U.S. government securities within the meaning of Section 2(a)(16) of the Investment Company Act with a maturity of 185 days or less or in money market
funds investing solely in United States Treasuries and meeting certain conditions under Rule 2a-7 under the Investment Company Act, until the earlier of: (i) the completion of an initial business combination and (ii) Tiga’s redemption of 100% of
the outstanding public shares upon its failure to consummate a business combination within the completion window.
On May 18, 2021, we announced the approval and extension of the time
period to consummate a business combination and the approval of the issuance and sale of certain private placement warrants in connection therewith. On May 20, 2021, the required deposit of $2,760,000 was placed into the trust account and on
May 25, 2021, Tiga issued and sold to the Sponsor 2,760,000 private placement warrants.
On November 17, 2021, we announced the approval and extension of the
time period to consummate a business combination and the approval of the issuance and sale of certain private placement warrants in connection therewith. On November 22, 2021, the required deposit of $2,760,000 was placed into the trust account
and on November 23, 2021, Tiga issued and sold to the Sponsor 2,760,000 private placement warrants.
On May 23, 2022, we announced the approval and extension of the time
period to consummate a business combination and the approval of the issuance and sale of certain private placement warrants in connection therewith. On May 24, 2022, the required deposit of $2,760,000 was placed into the trust account and on May
25, 2022, Tiga issued and sold to the Sponsor 2,760,000 private placement warrants. With these extensions, Tiga will have until November 27, 2022 to consummate a business combination. The total amount of outstanding private placement warrants is
18,560,000 and the total deposits into the trust account have been $287,040,000 ($10.40 per public share).
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Fair Market Value of Target Business
The target business or businesses that Tiga acquires must
collectively have a fair market value equal to at least 80% of the net assets held in the trust account (excluding the deferred underwriting commissions and taxes payable on the income earned on the trust account) at the time of the execution of
a definitive agreement for its initial business combination. The Tiga Board determined that this test was met in connection with the proposed business combination with Grindr as described in the section entitled “Proposal
No. 1—The Business Combination Proposal.”
Shareholder Approval of Business Combination
Under Tiga’s current amended and restated memorandum and articles of
association, in connection with any proposed business combination, if Tiga must seek shareholder approval, Tiga will complete an initial business combination only if a majority of the ordinary shares, represented in person or by proxy and
entitled to vote thereon, voted at a shareholder meeting are voted in favor of the business combination. Each public shareholder may elect to redeem their public shares irrespective of whether they vote for or against the proposed transaction or
vote at all.
Voting Restrictions in Connection with Shareholder Meeting
In connection with any vote for a proposed initial business
combination, the Sponsor and each member of the Tiga management team have agreed to vote the founder shares, private placement shares and public shares in favor of such proposed business combination.
At any time at or prior to our initial business combination, subject
to applicable securities laws (including with respect to material nonpublic information), the Sponsor, our directors, executive officers, advisors or their affiliates may enter into transactions with investors and others to provide them with
incentives to acquire public shares, vote their public shares in favor of our initial business combination or not redeem their public shares, The purpose of such share purchases and other transactions would be to increase the likelihood of
satisfaction of the requirements that the business combination be approved where it appears that such requirements would otherwise not be met. All shares repurchased by Tiga’s affiliates pursuant to such arrangements would be voted in favor of
the proposed business combination.
Liquidation if No Business Combination
Under Tiga’s current amended and restated memorandum and articles of
association, if Tiga does not complete a business combination within the completion window, Tiga will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten (10) business days
thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account and not previously released to us to
pay our taxes, if any (less up to $100,000 of interest to pay dissolution expenses) divided by the number of the then-outstanding public shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including
the right to receive further liquidation distributions, if any) and (iii) as promptly as reasonably possible following such redemption, subject to the approval of Tiga’s remaining shareholders and its board of directors, liquidate and dissolve,
subject (in each case) to Tiga’s obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law. At such time, the warrants will expire. Holders of warrants will receive nothing upon a
liquidation with respect to such rights and the warrants will be worthless.
The Sponsor and each member of Tiga’s management team have each
agreed to waive its rights to participate in any distribution from Tiga’s trust account or other assets with respect to the founder shares. There will be no distribution from the trust account with respect to Tiga’s warrants, which will expire
worthless if Tiga is liquidated.
The proceeds deposited in the trust account could, however, become
subject to the claims of Tiga’s creditors which would be prior to the claims of the Tiga public shareholders. Although Tiga has obtained waiver agreements from certain vendors and service providers it has engaged and owes money to, and the
prospective target businesses Tiga has negotiated with, whereby such parties have waived any right, title, interest or claim of any kind they may have in or to any monies held in the trust account, and although Tiga will seek such waivers from
vendors it engages in the future (except our independent registered public accounting firm), there is no guarantee that they or other vendors who did not execute such waivers will not seek recourse against the trust account notwithstanding such
agreements. Accordingly, the actual per-share redemption price could be less than approximately $10.00, plus interest, due to claims of creditors. Additionally, if Tiga is forced to file a bankruptcy case or an involuntary
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bankruptcy case is filed against it which is not dismissed, the proceeds held in the
trust account could be subject to applicable bankruptcy law, and may be included in Tiga’s bankruptcy estate and subject to the claims of third parties with priority over the claims of Tiga’s shareholders. To the extent any bankruptcy claims
deplete the trust account, Tiga cannot assure you it will be able to return to the Tiga public shareholders at least approximately $10.00 per share. Tiga’s public shareholders are entitled to receive funds from the trust account only in the event
of its failure to complete a business combination within the completion window or if the shareholders properly and timely seek to have Tiga redeem their respective shares for cash upon a business combination which is actually completed by Tiga.
In no other circumstances does a shareholder have any right or interest of any kind to or in the trust account.
Facilities
Tiga currently maintains its principal executive offices at Ocean
Financial Centre, Level 40, 10 Collyer Quay, Singapore 049315 and maintains other offices as provided to it by its officers. The cost for this space is included in the $10,000 per-month aggregate fee the Sponsor or an affiliate of the Sponsor
charges Tiga for office space, secretarial and administrative services pursuant to a letter agreement between Tiga and such affiliate of the Sponsor. Tiga believes, based on rents and fees for similar services in the relevant areas, that the fee
charged by such affiliate of the Sponsor is at least as favorable as Tiga could have obtained from an unaffiliated person. Tiga considers its current office space, combined with the other office space otherwise available to its executive
officers, adequate for its current operations.
Upon the Closing, the principal executive offices of New Grindr will
be those of Grindr, at which time nothing more will be paid to such affiliate of the Sponsor in respect of office space.
Employees
Tiga has four executive officers. These individuals are not
obligated to devote any specific number of hours to Tiga’s matters and intend to devote only as much time as they deem necessary to its affairs. Tiga does not intend to have any full-time employees prior to the consummation of a business
combination.
Management, Directors and Executive Officers
Tiga’s current directors and executive officers are as follows:
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Name
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Age
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Title
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G. Raymond Zage, III
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52
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Chairman and Chief Executive Officer
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Ashish Gupta
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46
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Director and President
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David Ryan
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52
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Independent Director
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Carman Wong
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50
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Independent Director
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Ben Falloon
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51
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Independent Director
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Diana Luo
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44
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Chief Financial Officer
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Peter Chambers
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66
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Chief Operating Officer
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G. Raymond Zage, III is a founder and has served as a director, CEO and Chairman of Tiga since July 2020 and as the CEO of Tiga Investments Pte. Ltd. since November 2017. Mr. Zage is also the Chairman and CEO of Tiga Acquisition Corp II since January. In
April 2021 he also joined the board of directors of EDBI Pte Ltd, which is the fund management company for EDB Investment Pte Ltd, the independent equity investment arm of Singapore’s Economic Development Board. Prior to August 2018, Mr. Zage
was managing director and CEO of Farallon Capital Asia Pte Ltd, which invests capital on behalf of Farallon Capital Management LLC, where he was a partner. Mr. Zage joined Farallon Capital Management LLC as senior advisor in March 2000 and in
2002 set up and ran Farallon Capital Asia Pte Ltd (also previously known as Noonday Asset Management Asia Pte Ltd). Prior to joining Farallon, Mr. Zage was a vice president at Goldman Sachs (Singapore) Pte Ltd in the Investment Banking Division
having also worked for Goldman Sachs in New York and Los Angeles. Mr. Zage continues to serve as a senior advisor at Farallon and he is also a member of the board of directors of Toshiba Corporation and Whitehaven Coal Limited as well as a
member of the Board of Commissioners of PT Lippo Karawaci Tbk. Mr. Zage received his bachelor of science degree in finance and accounting from the University of Illinois, Urbana-Champaign in 1992. Mr. Zage’s qualifications to serve on our board
include nearly three decades of investment experience in public and private debt, public and private equity and real estate across a wide variety of industries and geographies, and his strategic vision and experience as a board member of public
and private companies in a wide variety of industries. Mr. Zage provides high-value added services to our board of directors and has sufficient time to focus on Tiga.
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Ashish Gupta
is a founder and has served as a director and President of Tiga since July 2020 and as Managing Director of Tiga Investments Pte. Ltd. since August 2019. Mr. Gupta is also the President of Tiga Acquisition Corp II since January 2021. He is a
member of the Board of Commissioners of PT Delta Dunia Makmur. He is also a member of the Board of Directors of Alchemo Pte. Ltd. Prior to July 2019, Mr. Gupta was partner and portfolio manager at Farallon Capital Asia Pte Ltd. Mr. Gupta joined
Farallon Capital Asia Pte Ltd in February 2007. Mr. Gupta continues to serve as advisor at Farallon Capital Management LLC. Prior to joining Farallon, Mr. Gupta worked as an investment banker at Goldman Sachs & Co., Kotak Investment Banking
and ICICI Securities. Mr. Gupta also serves on the boards of a number of private companies. Mr. Gupta received his bachelor of commerce degree from Shri Ram College of Commerce, Delhi, India in 1996 and his MBA from the Indian Institute of
Management, Ahmedabad in 2002. Mr. Gupta’s qualifications to serve on our board include his extensive experience with sourcing, evaluating and monitoring investments, his wide range of deal experience and track record of managing investments
throughout their entire life cycle. Mr. Gupta provides high-value added services to our board of directors and has sufficient time to focus on Tiga.
David Ryan
serves as a director of Tiga. Mr. Ryan spent 22 years working at Goldman Sachs across a variety of roles, both in the United States and in Asia. Mr. Ryan ultimately served as president of Goldman Sachs Asia (ex Japan) from 2010 to 2013,
chairing Goldman Sachs’ Asia management committee and sitting on the firm’s management committee. Although Mr. Ryan has retired from Goldman Sachs and no longer holds any management or employment position at Goldman Sachs, as a retired member
of the management committee he retains the title of senior director of Goldman Sachs. Mr. Ryan is also a corporate advisor to Temasek Holdings with respect to certain of its investments. Mr. Ryan is an independent director of Affiliated
Managers Group, Inc., a member of the board and investment committee of Mapletree Investments and Chairman of Mapletree Oakwood Holdings. Mr. Ryan also serves as a member of the board of the Jackson Institute for Global Affairs at Yale
University and as an independent director for World Lacrosse. Mr. Ryan received his bachelor of arts degree in economics and political science from Yale University in 1992. Mr. Ryan’s qualifications to serve on our board include his extensive
capital markets and mergers and acquisitions experience in both the United States and Asia, including both transaction execution and management oversight. Mr. Ryan provides high-value added services to our board of directors and has sufficient
time to focus on Tiga.
Carman Wong
serves as a director of Tiga. Ms. Wong also serves as a director of Tiga Acquisition Corp II since January 2021. Ms. Wong has over 25 years of experience in investment banking and private equity, in both the United States and in Asia, ranging
from managing high level corporate operations to leading transaction execution. Ms. Wong is currently a partner in Wellesley Partners, an executive search firm, and is also its chief operating officer. Ultimately Ms. Wong was a managing
director and chief operating officer of Nomura’s Asia ex Japan investment banking division. She was a member of the global investment bank’s international operating committee and Asia ex Japan investment bank’s management committee. Ms. Wong
received her bachelor of science degree in economics from the Wharton School at the University of Pennsylvania in 1994. Ms. Wong’s qualifications to serve on our board include her track record of building, expanding, integrating and managing
businesses with top management, clients, partners and vendors. Ms. Wong provides high-value added services to our board of directors and has sufficient time to focus on Tiga.
Ben Falloon
serves as a director of Tiga. Mr. Falloon has more than 20 years of experience in financial services in Asia on both the sell side and buy side in roles spanning day-to-day operations, management, trading, investment, compliance and business
strategy. In particular, his regulatory oversight responsibilities have involved direct accountability to multiple prudential regulators across Asia and worldwide. Mr. Falloon’s most recent role was Chief Revenue Officer of Trumid XT, a
technology company. Previously, Mr. Falloon was a managing director of Sun Hung Kai and Co, in its principal investment group. Prior to joining Sun Hung Kai and Co, Mr. Falloon spent almost 20 years at global investment banks in Hong Kong,
ultimately at Morgan Stanley as a managing director and head of fixed income for Asia Pacific, across trading, sales and structuring. Mr. Falloon received his bachelor of commerce degree in marketing and a post graduate diploma in commerce,
each from the University of Otago, New Zealand in 1992 and 1993 and has completed non-executive director training provided by the Financial Times. Mr. Falloon’s qualifications to serve on our board include his extensive experience in Asian
capital markets transactions and strong relationships across the Asia Pacific region. Mr. Falloon provides high-value added services to our board of directors and has sufficient time to focus on Tiga.
Diana Luo has
served as our Chief Financial Officer since July 2020. Ms. Luo also serves as the Chief Financial Officer of Tiga Acquisition Corp. II since January 2021. Prior to her appointment as our Chief Financial Officer,
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Ms. Luo served as finance and accounting manager at Farallon Capital Asia Pte Ltd
from May 2011 to March 2020. Ms. Luo received her bachelor of science degree from Cornell University, Ithaca, New York in 1999 and her MBA from Chicago Booth School of Business, Chicago, Illinois in 2010. Ms. Luo’s qualifications to serve as our
Chief Financial Officer include her extensive experience in institutional and asset level financial, accounting, and compliance through various industries and asset types.
Peter Chambers has served as our Chief Operating Officer since July 2020. Mr. Chambers also serves as the Chief Operating Officer of Tiga Acquisition Corp. II since January 2021. Mr. Chambers currently serves on a number of boards and has been
instrumental in leading operational improvement projects in both his board and management roles at large corporations. Mr. Chambers is currently on the boards of Siloam Hospitals, a major independent hospital group in Indonesia, Indo Mines
Limited, an Indonesia-based iron and sand mining company PT Delta Dunia Makmur, an Indonesian mining services company, and on the Advisory Board of PT SRLabs, the Indonesia branch of the hacking research collective and consulting thinktank.
Mr. Chambers also serves as a strategic advisor to PT Lippo Karawaci Tbk, one of Indonesia’s largest property groups. For many years Mr. Chambers served at PT XL Axiata Tbk, including as their Vice President Director and CFO where he was part
of the team that established the business, transforming it into what is today one of Indonesia’s largest mobile communications companies with a market capitalization of approximately $1.8 billion. In 2004 Mr. Chambers joined XL Axiata’s major
shareholder as a Managing Director, where one of his roles was part of the leadership team that led the operational improvement program at Semen Gresik, Indonesia’s largest cement company. At XL Axiata Mr. Chambers served as Chairman of the
Audit Committee and from 2008 to 2020 served as a Commissioner. From 2014 to 2019 Mr. Chambers served at the XLAxiata shareholder level where he was a Director of the Axiata Group Berhad digital services company and served on their Risk
Committee. From 2006 to 2018 Mr. Chambers served as the Chairman of their Cyber Security Committee. Mr. Chambers received a bachelor of business degree in finance and accounting from RMIT University, Melbourne, Australia, in 1986.
Director Independence
The listing standards of the NYSE require that a majority of the
Tiga Board be independent. The Tiga Board has determined that David Ryan, Carman Wong and Ben Falloon are “independent directors” as defined in the NYSE listing standards. Our independent directors will have regularly scheduled meetings at which
only independent directors are present.
Number and Terms of Office of Officers and Directors
The Tiga Board currently consists of five members in a single class
serving concurrent two-year terms. In accordance with NYSE corporate governance requirements, Tiga is not required to hold an annual general meeting until no later than one year after Tiga’s first fiscal year end following Tiga’s listing on the
NYSE. Tiga officers are appointed by the board of directors and serve at the discretion of the board of directors, rather than for specific terms of office. The Tiga Board is authorized to appoint persons to the offices set forth in Tiga’s
memorandum and articles of association as it deems appropriate. Tiga’s memorandum and articles of association provide that Tiga officers may consist of one or more chairmen of the board, chief executive officers, a president, chief financial
officer, vice presidents, secretary, treasurer and such other offices as may be determined by the board of directors.
Subject to any other special rights applicable to our shareholders,
any vacancies on the Tiga Board of directors may be filled by the affirmative vote of a majority of the holders of our founder shares.
Committees of the Board of Directors
The Tiga Board has three standing committees: an audit committee, a
nominating and corporate governance committee and a compensation committee. Our audit committee, our nominating and corporate committee and our compensation committee are composed solely of independent directors. Subject to phase-in rules, the
rules of NYSE and Rule 10A-3 of the Exchange Act require that the audit committee of a listed company be comprised solely of independent directors, and the rules of NYSE require that the compensation committee and the nominating and corporate
governance committee of a listed company be comprised solely of independent directors. Each committee operates under a charter that was approved by the Tiga Board and has the composition and responsibilities described below. The charter of each
committee is available on our website.
Audit Committee
We have an audit committee comprised of Carman Wong, David Ryan and
Ben Falloon, each of whom are independent under the NYSE listing standards and applicable SEC rules.
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Carman Wong serves as the Chairman of the audit committee. Each
member of the audit committee is financially literate and our board of directors has determined that Carman Wong qualifies as an “audit committee financial expert” as defined in applicable SEC rules.
The audit committee is responsible for:
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meeting with our independent accountants regarding, among other issues, audits, and adequacy of our accounting and control
systems;
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monitoring the independence of the independent registered public accounting firm;
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verifying the rotation of the lead (or coordinating) audit partner having primary responsibility for the audit and the audit
partner responsible for reviewing the audit as required by law;
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inquiring and discussing with management our compliance with applicable laws and regulations;
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pre-approving all audit services and permitted non-audit services to be performed by our independent registered public
accounting firm, including the fees and terms of the services to be performed;
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appointing or replacing the independent registered public accounting firm;
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determining the compensation and oversight of the work of the independent registered public accounting firm (including
resolution of disagreements between management and the independent registered public accounting firm regarding financial reporting) for the purpose of preparing or issuing an audit report or related work;
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establishing procedures for the receipt, retention and treatment of complaints received by us regarding accounting, internal
accounting controls or reports which raise material issues regarding our financial statements or accounting policies;
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monitoring compliance on a quarterly basis with the terms of the initial public offering and, if any noncompliance is
identified, immediately taking all action necessary to rectify such noncompliance or otherwise causing compliance with the terms of the initial public offering; and
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reviewing and approving all payments made to our existing holders, executive officers or directors and their respective
affiliates. Any payments made to members of our audit committee will be reviewed and approved by our board of directors, with the interested director or directors abstaining from such review and approval.
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The audit committee is governed by a charter that complies with the
rules of the NYSE.
Nominating Committee
We have a nominating and corporate governance committee composed of
David Ryan, Ben Falloon and Carman Wong, each of whom is an independent director under the NYSE’s listing standards. David Ryan serves as chair of the nominating and corporate governance committee.
The primary purposes of our nominating and corporate governance
committee are to assist the board in:
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identifying, screening and reviewing individuals qualified to serve as directors and recommending to the board of directors’
candidates for nomination for election at the annual general meeting or to fill vacancies on the board of directors;
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developing, recommending to the board of directors and overseeing implementation of our corporate governance guidelines;
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coordinating and overseeing the annual self-evaluation of the board of directors, its committees, individual directors and
management in the governance of the Company; and
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reviewing on a regular basis our overall corporate governance and recommending improvements as and when necessary.
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Our nominating and corporate governance committee will recommend to
the board of directors’ candidates for nomination for election at the first annual general meeting of Tiga. Prior to our initial business combination, the board of directors will also consider director candidates recommended for nomination by
holders of our founder shares
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during such times as they are seeking proposed nominees to stand for election at an
annual general meeting (or, if applicable, an extraordinary general meeting). Prior to our initial business combination, holders of our public shares will not have the right to recommend director candidates for nomination to our board. The
charter of the nominating and corporate governance committee complies with the rules of the NYSE.
We have not formally established any specific, minimum
qualifications that must be met or skills that are necessary for directors to possess. In general, in identifying and evaluating nominees for director, the board of directors considers educational background, diversity of professional experience,
knowledge of our business, integrity, professional reputation, independence, wisdom and the ability to represent the best interests of our shareholders.
Compensation Committee
We have a compensation committee comprised of Ben Falloon, Carman
Wong and David Ryan. Ben Falloon serves as chairman of the compensation committee. We have adopted a compensation committee charter, which details the principal functions of the compensation committee, including:
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reviewing and approving on an annual basis the corporate goals and objectives relevant to our chief executive officer’s
compensation, evaluating our chief executive officer’s performance in light of such goals and objectives and determining and approving the remuneration (if any) of our chief executive officers based on such evaluation;
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reviewing and approving the compensation of all of our other Section 16 executive officers;
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reviewing our executive compensation policies and plans;
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implementing and administering our incentive compensation equity-based remuneration plans;
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assisting management in complying with our proxy statement and annual report disclosure requirements;
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approving all special perquisites, special cash payments and other special compensation and benefit arrangements for our
executive officers and employees;
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producing a report on executive compensation to be included in our annual proxy statement; and
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reviewing, evaluating and recommending changes, if appropriate, to the remuneration for directors.
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The charter also provides that the compensation committee may, in
its sole discretion, retain or obtain the advice of a compensation consultant, legal counsel or other adviser and will be directly responsible for the appointment, compensation and oversight of the work of any such adviser. The charter of the
compensation committee complies with the rules of the NYSE.
However, before engaging or receiving advice from a compensation
consultant, external legal counsel or any other adviser, the compensation committee will consider the independence of each such adviser, including the factors required by the NYSE and the SEC.
Code of Ethics and Committee Charters
We have adopted a Code of Ethics that applies to our directors,
officers and employees. We have filed copies of our Code of Ethics and our audit committee, nominating and corporate governance committee and compensation committee charters as exhibits to the IPO registration statement in connection with the
initial public offering. You may review these documents by accessing our public filings at the SEC’s web site at www.sec.gov. In addition, a copy of the Code of Ethics will be provided without charge upon request from us in writing at Ocean
Financial Centre, Level 40, 10 Collyer Quay, Singapore 049315 or by telephone at +65 6808 6288. We intend to disclose any amendments to or waivers of certain provisions of our code of ethics in a Current Report on Form 8-K.
Legal Proceedings
There is no material litigation, arbitration, governmental
proceeding or any other legal proceeding currently pending or known to be contemplated against Tiga or any members of our management team in their capacity as such.
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Periodic Reporting and Audited Financial Statements
Tiga has registered its securities under the Exchange Act and has
reporting obligations, including the requirement to file annual and quarterly reports with the SEC. In accordance with the requirements of the Exchange Act, Tiga’s annual reports contain financial statements audited and reported on by Tiga’s
independent registered public accounting firm.
Conflicts of Interest
Under Cayman Islands law, directors and officers owe the following
fiduciary duties:
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duty to act in good faith in what the director or officer believes to be in the best interests of Tiga as a whole;
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duty to exercise powers for the purposes for which those powers were conferred and not for a collateral purpose;
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directors should not improperly fetter the exercise of future discretion;
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duty to exercise powers fairly as between different sections of shareholders;
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duty not to put themselves in a position in which there is a conflict between their duty to Tiga and their personal interests;
and
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duty to exercise independent judgment.
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In addition to the above, directors also owe a duty of care which is
not fiduciary in nature. This duty has been defined as a requirement to act as a reasonably diligent person having both the general knowledge, skill and experience that may reasonably be expected of a person carrying out the same functions as are
carried out by that director in relation to the Company and the general knowledge skill and experience of that director.
As set out above, directors have a duty not to put themselves in a
position of conflict and this includes a duty not to engage in self-dealing, or to otherwise benefit as a result of their position. However, in some instances what would otherwise be a breach of this duty can be forgiven and/or authorized in
advance by the shareholders provided that there is full disclosure by the directors. This can be done by way of permission granted in the memorandum and articles of association or alternatively by shareholder approval at general meetings.
Certain of our officers and directors have fiduciary and contractual
duties to affiliates of our Sponsor and to certain companies in which the foregoing have invested or will invest. These entities, including Tiga Acquisition Corp. II (“Tiga II”), may compete with us for
acquisition opportunities. If these entities decide to pursue any such opportunity, we may be precluded from pursuing such opportunities. None of our officers and directors who are also officers of our Sponsor and/or employees of its affiliates
have any obligation to present us with any opportunity for a potential business combination of which they become aware, subject to his or her fiduciary duties under Cayman Islands law. Our Sponsor and directors and officers are also not
prohibited from sponsoring, investing or otherwise becoming involved with, any other blank check companies, including in connection with their initial business combinations, prior to us completing our initial business combination. Accordingly, if
any of our officers or directors becomes aware of a business combination opportunity which is suitable for an entity to which he or she has then-current fiduciary or contractual obligations, he or she will honor his or her fiduciary or
contractual obligations to present such business combination opportunity to such entity, subject to their fiduciary duties under Cayman Islands law. Given the large target universe considered by Tiga’s management team, which included
consideration and analysis of over 20 potential target businesses (other than Grindr) and preliminary, high-level discussions of illustrative transaction structure to effect an initial business combination with six of those target businesses, the
Tiga Board did not believe that the other fiduciary duties or contractual obligations of Tiga’s officers and directors materially affected Tiga’s ability to source a potential business combination. The Tiga Board considered the factors
supporting, and risks and uncertainties related to, a business combination with Grindr as set forth under “Proposal No. 1 — The Business Combination Proposal — Background to the Business Combination,” and
did not believe that such other fiduciary duties or contractual obligations impacted such consideration.
Our Sponsor and officers and directors, in their capacities as
officers or employees of our Sponsor or its affiliates or in their other endeavors, may choose to present potential business combinations to the related entities described above, current or future entities affiliated with or managed by our
Sponsor, or third parties, before they present such opportunities to us, subject to his or her fiduciary duties under Cayman Islands law and any other applicable fiduciary duties. We expect that if an opportunity is presented to one of our
officers or directors in his or her capacity as an
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officer or director of one of those other entities, such opportunity would be
presented to such other entity and not to us. We do not believe, however, that the fiduciary duties or contractual obligations of our executive officers or directors will materially affect our ability to complete our initial business combination.
Below is a table summarizing the entities to which our executive
officers and directors currently have fiduciary duties or contractual obligations that may present a conflict of interest:
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Entity
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Entity’s Business
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Affiliation
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G. Raymond Zage, III
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Tiga Investments Pte. Ltd(1)
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Holding Company
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CEO
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Tiga Acquisition Corp. II
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Blank Check Company
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CEO
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Tiga Sponsor II LLC
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Holding Company
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Manager
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Tiga Sponsor III LLC
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Holding Company
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Manager
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Tiga Sponsor IV LLC
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Holding Company
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Manager
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Tiga Sponsor V LLC
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Holding Company
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Manager
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PT Lippo Karawaci Tbk
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Real Property
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Commissioner
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Whitehaven Coal Limited
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Resources
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Director
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Toshiba Corporation
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Electronics
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Director
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Deposco, Inc.
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Software
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Director
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Cosmose Limited
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Technology
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Director
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DBag Shopping Limited
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Services
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Director
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Farallon Capital Management LLC
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Investment
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Senior Advisor
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EDBI Pte. Ltd.
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Fund Management
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Director
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Willow Holdco Pte. Ltd
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Real Estate
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Director
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Hart Davis Hart
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Auction House
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Director
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Ashish Gupta
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Lawl Pte. Ltd.
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Investment
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Director
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Tiga Acquisition Corp. II
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Blank Check Company
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President
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Tiga Sponsor II LLC
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Holding Company
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Manager
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Tiga Sponsor III LLC
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Holding Company
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Manager
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Tiga Sponsor IV LLC
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Holding Company
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Manager
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Tiga Sponsor V LLC
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Holding Company
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Manager
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Agincourt Resources (S) Ltd.
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Resources
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Director
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Farallon Capital Management LLC
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Investment
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Advisor
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PT Delta Dunia Makmur
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Mining Services
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Commissioner
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Willow Holdco Pte. Ltd
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Real Estate
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Director
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Alchemo Pte. Ltd
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Technology
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Director
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Carman Wong
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Tiga Acquisition Corp. II
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Blank Check Company
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Director
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Diana Luo
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Tiga Acquisition Corp. II
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Blank Check Company
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CFO
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Willow Holdco Pte. Ltd
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Real Estate
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Director
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Peter Chambers
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PT Kredit Pintar
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FinTech
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Director
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PT Siloam Hospitals Tbk
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Healthcare
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Commissioners
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PT Lippo Karawaci Tbk
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Real Estate
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Advisor / Member of the Audit Committee
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Farallon Capital Asia Pte Ltd
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Investment
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Advisor
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PT BBIP
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Mining Services
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Director
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Indo Mining Limited
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Mining
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Director
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PT Delta Dunia Makmur
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Mining Services
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Commissioner
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PT SRLabs
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Technology
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Director
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Tiga Acquisition Corp. II
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Blank Check Company
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COO
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(1)
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Includes all portfolio companies of Tiga Investments Pte. Ltd. Mr. Zage and Mr. Gupta also serve as directors of holding
companies under Tiga Investments Pte. Ltd.
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Potential investors should also be aware of the following other
potential conflicts of interest:
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Tiga II, a special purpose acquisition company focusing on the technology, internet, consumer, infrastructure, materials and
financial services industries that intends to complete its initial public offering in the third quarter of 2022 and may pursue initial business combination targets in such industries until two years from the closing of its initial public
offering (absent an extension in accordance with its memorandum and articles of association).
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In the course of their other business activities, our directors and officers may become aware of investment and business
opportunities that may be appropriate for presentation to us as well as the other entities with which they are affiliated, including Tiga II. Our management may have conflicts of interest in determining to which entity a particular
business opportunity should be presented.
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Our executive officers and directors are not required to commit their full time to our affairs, which may result in a conflict
of interest in allocating their time between our operations and our search for a business combination and their other businesses. Certain of our executive officers are engaged in several other business endeavors for which such officers
may be entitled to substantial compensation, and our executive officers are not obligated to contribute any specific number of hours per week to our affairs.
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As of the date of this report, our initial shareholders held an aggregate of 6,900,000 founder shares and 18,560,000 private
placement warrants.
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Our initial shareholders and officers have entered into a letter agreement, and the forward purchaser has entered into the
amended and restated forward purchase agreement, with us, pursuant to which they have agreed to waive their redemption rights, with no consideration, with respect to their founder shares, forward purchase shares, backstop shares and
public shares in connection with the completion of our initial business combination. Additionally, our initial shareholders, officers and the forward purchaser have agreed to waive their rights to liquidating distributions from the Trust
Account with respect to their founder shares, forward purchase shares and backstop shares if we fail to complete our initial business combination within the prescribed time frame. If we do not complete our initial business combination
within the prescribed time frame, the private placement warrants will expire worthless.
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Certain of our directors and officers will directly or indirectly own founder shares and/ or private placement warrants
following this offering and, accordingly, may have a conflict of interest in determining whether a particular target business is an appropriate business with which to effectuate our initial business combination.
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Our officers and directors may have a conflict of interest with respect to evaluating a particular business combination if the
retention or resignation of any such officers and directors was included by a target business as a condition to any agreement with respect to our initial business combination.
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We are not prohibited from pursuing an initial business combination
with a business combination target that is affiliated with our Sponsor, officers or directors or making the acquisition through a joint venture or other form of shared ownership with our Sponsor, officers or directors. In the event we seek to
complete our initial business combination with a business combination target that is affiliated with our Sponsor, executive officers or directors, we, or a committee of independent directors, would obtain an opinion from an independent investment
banking which is a member of FINRA or an independent accounting firm, that such initial business combination is fair to our company from a financial point of view, and such transaction would be required to be approved by a majority of our
independent directors. We are not required to obtain such an opinion in any other context. Other than the foregoing or as otherwise discussed herein, no compensation of any kind, including finder’s and consulting fees, will be paid by us to our
Sponsor, executive officers and directors, or any of their respective affiliates, for services rendered prior to or in connection with the completion of an initial business combination. Further, commencing on the date our securities are first
listed on the NYSE, we will also pay an affiliate of our Sponsor $10,000 per month, or up to $240,000 in the aggregate, for overhead expenses and related services provided to us. On November 23, 2020, our Sponsor transferred 20,000 founder shares
to our independent directors at their original purchase price for services rendered as a board member prior to the completion of our initial business combination. Our Sponsor has agreed to reimburse such directors for reasonable out-of-pocket
expenses incurred in connection with fulfilling their roles as directors.
We cannot assure you that any of the above-mentioned conflicts will be
resolved in our favor.
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In the event that we submit our initial business combination to
our public shareholders for a vote, pursuant to the terms of a letter agreement entered into with us, our initial shareholders and officers have agreed (and their permitted transferees will agree) to vote their founder shares held by them and any
public shares purchased during or after this offering in favor of our initial business combination (including any proposals recommended by our board of directors in connection with such initial business combination).
Limitation on Liability and Indemnification of Officers and Directors
Cayman Islands law does not limit the extent to which a company’s
memorandum and articles of association may provide for indemnification of officers and directors, except to the extent any such provision may be held by the Cayman Islands courts to be contrary to public policy, such as to provide indemnification
against willful default, fraud or the consequences of committing a crime. Our amended and restated memorandum and articles of association provides for indemnification of our officers and directors to the maximum extent permitted by law, including
for any liability incurred in their capacities as such, except through their own actual fraud, willful default or willful neglect. We expect to purchase a policy of directors’ and officers’ liability insurance that insures our officers and
directors against the cost of defense, settlement or payment of a judgment in some circumstances and insures us against our obligations to indemnify our officers and directors.
We entered into agreements with our officers and directors to
provide contractual indemnification in addition to the indemnification provided for in our amended and restated memorandum and articles of incorporation. Pursuant to these agreements, our officers and directors have agreed to waive any right,
title, interest or claim of any kind in or to any monies in the trust account, and have agreed to waive any right, title, interest or claim of any kind they may have in the future as a result of, or arising out of, any services provided to us and
will not seek recourse against the trust account for any reason whatsoever. Accordingly, any indemnification provided will only be able to be satisfied by us if (i) we have sufficient funds outside of the trust account or (ii) we consummate an
initial business combination.
Our indemnification obligations may discourage shareholders from
bringing a lawsuit against our officers or directors for breach of their fiduciary duty. These provisions also may have the effect of reducing the likelihood of derivative litigation against our officers and directors, even though such an action,
if successful, might otherwise benefit us and our shareholders. Furthermore, a shareholder’s investment may be adversely affected to the extent we pay the costs of settlement and damage awards against our officers and directors pursuant to these
indemnification provisions.
We believe that these provisions, the insurance and the indemnity
agreements are necessary to attract and retain talented and experienced officers and directors. In connection with our initial public offering, we have undertaken that insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers or persons controlling us pursuant to the foregoing provisions, we have been informed that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is
therefore unenforceable.
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AND RESULTS OF OPERATIONS
The following discussion and analysis of the company’s financial
condition and results of operations should be read in conjunction with the financial statements and the notes thereto contained elsewhere in this report. Certain information contained in the discussion and analysis set forth below includes
forward-looking statements that involve risks and uncertainties.
Overview
We are a blank check company incorporated on July 27, 2020 as a
Cayman Islands exempted company for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses or entities. We are an emerging growth company
and, as such, we are subject to all of the risks associated with emerging growth companies.
Our sponsor is Tiga Sponsor LLC, a Delaware limited liability
company. Our IPO registration statement became effective on November 23, 2020. On November 27, 2020, we consummated the initial public offering of 27,600,000 units, including the issuance of 3,600,000 units as a result of the underwriters’
exercise of their over-allotment option in full. Each unit consists of one Class A ordinary share and one-half of one redeemable warrant. Each warrant entitles the holder thereof to purchase one Class A ordinary share at a price of $11.50 per
share. The units were sold at an offering price of $10.00 per unit, generating gross proceeds, before expenses, of $276,000,000.
Prior to the consummation of the initial public offering, on
July 27, 2020, the Sponsor received 5,750,000 founder shares in exchange for a capital contribution of $25,000, or $0.004 per share. On November 23, 2020, we effected a 1,150,000 share dividend, resulting in our initial shareholders holding an
aggregate of 6,900,000 founder shares. All share and per-share amounts have been retroactively restated to reflect the share dividend. On November 23, 2020, the Sponsor transferred 20,000 founder shares to each of David Ryan, Carman Wong and Ben
Falloon for the same per-share price initially paid by the Sponsor, resulting in the Sponsor holding 6,840,000 founder shares. In connection with the underwriters’ exercise of their over-allotment option in full prior to the closing of the
initial public offering, on November 27, 2020, no founder shares were surrendered.
Simultaneously with the consummation of the initial public offering,
we consummated the private sale of an aggregate of 10,280,000 warrants, each exercisable to purchase one Class A ordinary share at $11.50 per share, to the Sponsor at the time of the initial public offering at a price of $1.00 per warrant,
generating gross proceeds, before expenses, of approximately $10,280,000 (the “initial private placement”). The warrants sold in the initial private placement, or the initial private placement warrants,
are identical to the warrants included in the units sold in the initial public offering, except that, so long as they are held by their initial purchasers or their permitted transferees, (i) they will not be redeemable by Tiga, (ii) they
(including the Class A ordinary shares issuable upon exercise of these warrants) may not, subject to certain limited exceptions, be transferred, assigned or sold until 30 days after Tiga completes its initial business combination, (iii) they may
be exercised by the holders on a cashless basis and (iv) they will be entitled to registration rights. Upon the closing of the initial public offering and the initial private placement, $278,760,000 was placed in a trust account with Continental
Stock Transfer & Trust Company acting as trustee, and were subsequently invested only in U.S. government securities within the meaning of Section 2(a)(16) of the Investment Company Act with a maturity of 185 days or less or in money market
funds investing solely in United States Treasuries and meeting certain conditions under Rule 2a-7 under the Investment Company Act, until the earlier of: (i) the completion of an initial business combination and (ii) Tiga’s redemption of 100% of
the outstanding public shares upon its failure to consummate a business combination within the completion window.
On January 14, 2021, we announced that, commencing January 14, 2021,
holders of the 27,600,000 units sold in the initial public offering may elect to separately trade the shares of Class A common stock and the warrants included in the units. Those units not separated continued to trade on the NYSE under the symbol
“TINV.U” and the shares of Class A common stock and warrants that were separated trade under the symbols “TINV” and “TINV WS,” respectively.
On May 18, 2021, we announced the approval and extension of the time
period to consummate a business combination and the approval of the issuance and sale of certain private placement warrants in connection therewith. On May 20, 2021, the required deposit of $2,760,000 was placed into the trust account and on
May 25, 2021, Tiga issued and sold to the Sponsor 2,760,000 private placement warrants.
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On November 17, 2021, we announced the approval and extension of
the time period to consummate a business combination and the approval of the issuance and sale of certain private placement warrants in connection therewith. On November 22, 2021, the required deposit of $2,760,000 was placed into the trust
account and on November 23, 2021, Tiga issued and sold to the Sponsor 2,760,000 private placement warrants.
On May 23, 2022, we announced the approval and extension of the time
period to consummate a business combination and the approval of the issuance and sale of certain private placement warrants in connection therewith. On May 24, 2022, the required deposit of $2,760,000 was placed into the trust account and on May
25, 2022, Tiga issued and sold to the Sponsor 2,760,000 private placement warrants. With these extensions, Tiga will have until November 27, 2022 to consummate a business combination.
The total amount of outstanding private placement warrants is
18,560,000 and the total deposits into the trust account have been $287,040,000 ($10.40 per public share).
After the payment of underwriting discounts and commissions
(excluding the deferred portion of $9,660,000 in underwriting discounts and commissions, which amount will be payable upon consummation of our initial business combination if consummated) and approximately $556,649 in expenses relating to the
initial public offering, $1,843,237 of the net proceeds of the initial public offering and initial private placement was not deposited into the trust account and was retained by us for working capital purposes. The net proceeds deposited into the
trust account remain on deposit in the trust account earning interest. Our management has broad discretion with respect to the specific application of such net proceeds, although substantially all of the net proceeds are intended to be applied
generally toward consummating a business combination
As of December 31, 2021, there was $284.4 million in investments and
cash held in the trust account and $17,499 of cash held outside the trust account available for working capital purposes. As of June 30, 2022, there was $287.5 million in investments and cash held in the trust account and $165,655 of cash held
outside the Trust Account available for working capital purposes.
If we have not completed a business combination by November 27,
2022, we will (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the
aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account and not previously released to us to pay for our tax obligations, if any (less up to $100,000 of interest to pay dissolution
expenses), divided by the number of the then-outstanding public shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any); and
(iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders and its board of directors, liquidate and dissolve, subject in each case to our obligations under Cayman Islands law to
provide for claims of creditors and the requirements of other applicable law.
Proposed Business Combination
On May 9, 2022, we entered into the Merger Agreement.
Pursuant to the Merger Agreement, the parties thereto will enter
into a business combination transaction pursuant to which, among other things, following the Domestication of Tiga to Delaware as described herein, Merger Sub I will merge with and into Grindr, with Grindr surviving the First Merger as a wholly
owned subsidiary of New Grindr; and as promptly as practicable and as part of the same overall transaction as the First Merger, the Surviving Company will merge with and into Merger Sub II, with Merger Sub II surviving the Second Merger as a
wholly owned subsidiary of New Grindr.
Liquidity and Capital Resources
As of June 30, 2022, we had cash of $165,655. Until the consummation
of our initial public offering, our only source of liquidity was an initial purchase of ordinary shares by the Sponsor and loans from our Sponsor.
On March 16, 2022, the Board of Directors of the Company authorized
the execution and delivery of a Convertible Promissory Note in the principal amount of $2,000,000 (the “Convertible Promissory Note”) to the Sponsor, as part of the Working Capital Loans. On January 25,
2022, the Sponsor had advanced the sum of $750,000 to the Company on account of the Convertible Promissory Note and on March 30, 2022 another $300,000 was drawn down on the Convertible Promissory Note. All unpaid principal under the Convertible
Promissory Note shall be due and payable in full on the effective date of our initial business combination, unless accelerated upon the occurrence of an event of default.
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We will need to raise additional capital through loans or
additional investments from our initial shareholders, officers or directors. If we are unable to raise additional capital, we may be required to take additional measures to conserve liquidity, which could include, but not necessarily be limited
to, curtailing operations, suspending the pursuit of a potential transaction, and reducing overhead expenses. We cannot provide any assurance that new financing will be available to us on commercially acceptable terms, if at all. These conditions
raise substantial doubt about our ability to continue as a going concern.
Results of Operations
Our entire activity from inception through June 30, 2022 was in
preparation for our formation, the preparation of the initial public offering, the evaluation of potential targets for a business combination and due diligence on such targets. We will not be generating any operating revenues until the closing
and completion of our initial business combination, at the earliest.
For the six months ended June 30, 2022, we had a net income of
$491,251 which consisted of a change in fair value of warrant liabilities (Public Warrants and Private Placement Warrants) of $4,926,361 and interest earned on marketable securities held in the Trust Account of $402,994, offset by operating costs
of $4,243,935, change in fair value of Forward Purchase Agreement liabilities of $513,016 and a fair value of private placement in excess of purchase price of $81,153. Operating costs consisted of $3,921,059 in M&A related costs, $109,306 in
accounting related costs, $60,000 in administrative support fees, $62,500 in insurance costs, and $91,070 in miscellaneous costs.
For the year ended December 31, 2021, we had a net income of
$23,194,905, which consisted of a gain from change in fair value of warrant liabilities (public warrants and private placement warrants) of $23,121,405, a gain from change in fair value of FPA liabilities of $1,749,732, and interest earned on
marketable securities held in the Trust Account of $85,130 offset by operating costs of $1,761,362.
For the period from July 27, 2020 (inception) through December 31,
2020, we had net loss of $20,851,423, which consisted of operating cost of $124,923, change in fair value of warrant liabilities of $11,408,319, change in fair value of FPA liabilities of $3,358,302, fair value of private placement warrants in
excess of purchase price of $1,646,600, initial classification of FPA liabilities of $3,399,475 and transaction costs incurred in connection with the IPO of $928,450, offset by interest earned on investments held in the Trust Account of $14,646.
Contractual Obligations
The holders of founder shares, private placement warrants, and
warrants that may be issued upon conversion of working capital loans (and any Tiga Class A ordinary shares issuable upon the exercise of the private placement warrants and warrants that may be issued upon conversion of working capital loans), if
any, will be entitled to registration rights pursuant to a registration and shareholder rights agreement entered into on November 23, 2020. The holders of these securities are entitled to make up to three demands, excluding short form demands,
that we register such securities. These holders will be entitled to certain demand and “piggyback” registration rights with respect to registration statements filed subsequent to the completion of a business combination. We will bear the expenses
incurred in connection with the filing of any such registration statements.
We do not have any long-term debt, capital lease obligations,
operating lease obligations or long-term liabilities, other than an agreement to pay an affiliate of the Sponsor a monthly fee of $10,000 for overhead expenses and related services provided to Tiga. We began incurring these fees on November 23,
2020 and will continue to incur these fees monthly until the earlier of the completion of a business combination and Tiga’s liquidation.
The underwriters are entitled to a deferred fee of $0.35 per unit,
or $9,660,000 in the aggregate. The deferred fee will become payable to the underwriters from the amounts held in the trust account solely in the event that we complete a business combination, subject to the terms of the underwriting agreement.
However, one of the underwriters, Goldman Sachs (Asia) L.L.C., has agreed to waive its rights to the deferred underwriting commission in connection with its decision not to provide further services as a financial advisor, placement agent, capital
markets advisor or in any other capacity in connection with closing of the Business Combination.
We entered into a private placement warrants purchase agreement,
dated as of November 23, 2020, with the Sponsor which provides that at the option of the Sponsor, on the dates that are six, 12 and 18 months, respectively from the closing date of the initial public offering, Tiga shall issue and sell to the
Sponsor, its affiliates or permitted designees and the Sponsor shall purchase from Tiga, an additional 2,760,000, private placement warrants at a price of $1.00 per private placement warrant for an aggregate purchase price of $2,760,000. At June
30, 2022, the private placement warrants purchase agreement was fulfilled.
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We entered into a forward purchase agreement, dated as of
November 23, 2020, with the Sponsor or an affiliate of the Sponsor which provides for the purchase by the Sponsor of an aggregate of 5,000,000 Tiga Class A ordinary shares, plus an aggregate of 2,500,000 redeemable warrants to purchase one Tiga
Class A ordinary share at $11.50 per share, for an aggregate purchase price of $50,000,000, or $10.00 per Tiga Class A ordinary share, in a private placement to close prior to or concurrently with the closing of a business combination. Pursuant
to the forward purchase agreement, the forward purchaser was also granted an option to subscribe, in the forward purchaser’s sole discretion, for an additional 5,000,000 Tiga Class A ordinary shares plus an additional 2,500,000 redeemable
warrants to purchase one Tiga Class A ordinary share at $11.50 per share, for an additional purchase price of $50,000,000, or $10.00 per Tiga Class A ordinary share, in one or multiple private placements to close prior to or concurrently with the
closing of our initial business combination. The obligations under the forward purchase agreement do not depend on whether any Tiga Class A ordinary shares are redeemed by the public shareholders. The redeemable warrants will have the same terms
as the public warrants issued as part of the units.
Critical Accounting Policies and Estimates
The preparation of financial statements and related disclosures in
conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and
liabilities at the date of the financial statements, and income and expenses during the periods reported. Actual results could materially differ from those estimates. We identified the following critical accounting policies:
Tiga Warrant and Forward Purchase Agreement (FPA) Liability
Tiga accounts for the Tiga Warrants and FPA in accordance with the
guidance contained in ASC 815-40, under which the Tiga Warrants and FPA do not meet the criteria for equity treatment and must be recorded as liabilities. Accordingly, Tiga classifies the Tiga Warrants and FPA as liabilities at their fair value
and adjust the Tiga Warrants and FPA to fair value at each reporting period. These liabilities are subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in the statements of operations.
Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the statements of operations.
The public warrants for periods where no observable trade price was
available are valued using a Monte Carlo simulation. For periods subsequent to the detachment of the public warrants from the units, the public warrant quoted market price was used as the fair value as of each relevant date. The fair value of the
private placement warrants was determined using a Black-Scholes-Merton model. The committed units of the FPA are valued using a discounted valuation of a reconstructed unit price and the optional units of the FPA are valued using the same
reconstructed unit price within a Black-Scholes-Merton model framework.
Class A Ordinary Shares Subject to Possible Redemption
We account for our ordinary shares subject to possible redemption in
accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” Class A Ordinary shares subject to mandatory redemption (if any) are classified
as a liability instrument and is measured at fair value. Conditionally redeemable ordinary shares (including ordinary shares that features redemption rights that is either within the control of the holder or subject to redemption upon the
occurrence of uncertain events not solely within our control) is classified as temporary equity. At all other times, ordinary shares are classified as shareholders’ equity. Our Class A ordinary shares feature certain redemption rights that are
considered to be outside of our control and subject to occurrence of uncertain future events. Accordingly, Class A ordinary shares subject to possible redemption is presented as temporary equity, outside of the shareholders’ equity section of our
balance sheet.
Net Income (Loss) Per Ordinary Share
Net loss per ordinary share is computed by dividing net loss by the
weighted-average number of ordinary shares outstanding during the period. We apply the two-class method in calculating earnings per share. The net income or loss is allocated to each class of shares using an allocation of total shares, which is
then divided by the total shares for the respective class.
Recent Accounting Pronouncements
In August 2020, the FASB issued Accounting Standards Update (“ASU”) No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and
Contracts in an Entity’s Own Equity (“ASU 2020-06”), which simplifies
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accounting for convertible instruments by removing major separation models required
under current GAAP. The ASU also removes certain settlement conditions that are required for equity-linked contracts to qualify for the derivative scope exception, and it simplifies the diluted earnings per share calculation in certain areas. The
Company adopted ASU 2020-06 on January 1, 2021. Adoption of the ASU did not impact the Company’s financial position, results of operations or cash flows.
Our management does not believe that there are any recently issued,
but not yet effective, accounting pronouncements, if currently adopted, that would have a material effect on our financial statements.
Off-Balance Sheet Arrangements
We have no obligations, assets or liabilities, which would be
considered off-balance sheet arrangements as of June 30, 2022. We do not participate in transactions that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would
have been established for the purpose of facilitating off-balance sheet arrangements. We have not entered into any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other
entities, or purchased any non-financial assets.
JOBS Act
The JOBS Act contains provisions that, among other things, relax
certain reporting requirements for qualifying public companies. We qualify as an “emerging growth company” and under the JOBS Act are allowed to comply with new or revised accounting pronouncements based on the effective date for private (not
publicly traded) companies. We are electing to delay the adoption of new or revised accounting standards, and as a result, we may not comply with new or revised accounting standards on the relevant dates on which adoption of such standards is
required for non-emerging growth companies. As a result, the financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.
Additionally, we are in the process of evaluating the benefits of
relying on the other reduced reporting requirements provided by the JOBS Act. Subject to certain conditions set forth in the JOBS Act, if, as an “emerging growth company,” we choose to rely on such exemptions we may not be required to, among
other things, (i) provide an auditor’s attestation report on our system of internal controls over financial reporting pursuant to Section 404, (ii) provide all of the compensation disclosure that may be required of non-emerging growth public
companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (iii) comply with any requirement that may be adopted by the PCAOB regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional
information about the audit and the financial statements (auditor discussion and analysis) and (iv) disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of
the CEO’s compensation to median employee compensation. These exemptions will apply for a period of five years following the completion of the initial public offering or until we are no longer an “emerging growth company,” whichever is earlier.
Quantitative and Qualitative Disclosures about Market Risk
As of June 30, 2022, we were not subject to any significant market
or interest rate risk. The net proceeds of the initial public offering and the private placement warrants, included in the trust account, were invested in cash and may be invested in U.S. government securities with a maturity of 185 days or less
or in money market funds that meet certain conditions under Rule 2a-7 under the Investment Company Act of 1940, as amended, that invest only in direct U.S. government treasury obligations. Due to the short-term nature of these investments, we
believe there will be no associated material exposure to interest rate risk.
We have not engaged in any hedging activities since our inception
and we do not expect to engage in any hedging activities with respect to the market risk to which we are exposed.
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Unless the context otherwise requires, all
references in this section to the “Company,” “we,” “us,” or “our” refer to the business of Grindr Group LLC and its subsidiaries prior to the consummation of the Business Combination.
Our Mission
Connect LGBTQ+ people with one another and the world.
Our Company
Grindr is the world’s largest social network focused on the
LGBTQ+ community with approximately 10.8 million MAUs and approximately 601 thousand Paying Users in 2021. Our Paying Users for the three and six months ended June 30, 2022 were over 765 thousand and 744 thousand, respectively . According to
the Frost & Sullivan Study commissioned by Grindr, Grindr is the largest and most popular gay mobile app in the world, with more MAUs than other LGBTQ+ social networking applications. We enable our users to find and engage with each other,
share content and experiences, and generally express themselves. We are a pioneer and leading influence on the lifestyle trends and discourse among the global LGBTQ+ community. We are devoted to providing a platform for social interactions for
this vibrant community and to cultivating a safe and accepting environment where all are welcome and feel a sense of belonging. As a result, our platform has become a meaningful part of our users’ social lives and has embedded us at the center
of the community as the preferred channel for broadening their connections and engaging with like-minded individuals within the LGBTQ+ community.
We believe Grindr fulfills crucial needs for the LGBTQ+ community.
While the broader global landscape of social networks is highly competitive with many different platforms, there are few global platforms that focus solely on the LGBTQ+ community and addressing their unique needs, including LGBTQ+ centric social
activities or heightened privacy. For many years and still even today, people from the LGBTQ+ community are often discriminated against, marginalized, and targeted. Few global platforms exist where these individuals can truly be their authentic
selves and feel safe to express themselves freely. As a result, the queer community often have a difficult time finding other members of the community with similar interests, beliefs, or values. This experience can be isolating and disheartening.
Our platform enables the LGBTQ+ community to connect with each other
and the world. Our platform has many distinct user segments - a diverse set of queer genders and sexualities, varied ages and demographics, various sub-communities, private and discreet users, and urban and rural users. Our users also have a
range of motivations and use cases. Our platform helps our users find what they are looking for: casual dating, relationships and love, community and friendships, travel information, local and discovery, and beyond. By facilitating the connection
of our users around the world, we believe we have the potential to help our community find each other and interact, advance global LGBTQ+ rights, and make the world a safer place for all LGBTQ+ people.
Our core product, the Grindr app, has become an integral part of the
daily lives of millions of members of the LGBTQ+ community around the world, enabling them to discover and connect with each other effortlessly and anytime. The Grindr app offers a variety of location-based social features and functions,
including identity expression (profile, photos, presence), connection (search, filters, the Cascade, Viewed Me), interaction (chat, media sharing), trust and safety tools across the experience, and subscriptions for premium features offering more
access and control. Since our inception in 2009, we have continued to innovate our technologies to improve the Grindr app, adding new features and safety elements, which has allowed us to increase our MAUs and other metrics over the years. We
have expanded our presence into over 190 countries and territories, with significant MAUs in several markets as of June 30, 2022, including developed markets such as the United States, the U.K., France, Spain, and Canada, and emerging markets
such as Brazil, Mexico, India, Chile, and the Philippines, creating a high barrier to entry for our competitors.
We have attracted a highly engaged, and rapidly growing user base, as
evidenced by the following:
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Approximately 10.8 million MAUs in 2021.
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Approximately 601 thousand Paying Users in 2021. Our Paying Users increased by 2.2% in 2021, as compared to the combined
Successor 2020 Period and Predecessor 2020 Period. Our Paying Users were over 765 thousand and 744 thousand for the three and six months ended June 30, 2022, which represents an increase of 34.4% and 33.1%, as compared to the same periods
in 2021.
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MAUs in over 190 countries and territories in the world as of June 30, 2022.
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21 supported languages on Android and 9 on iOS as of June 30, 2022.
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On average, users on our platform sent over 260 million daily messages in 2021.
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Our profiles spent an average of 61 minutes per day each on the Grindr app in December 2021, which ranks us number one among
apps focused on the LGBTQ+ community, according to the Frost & Sullivan Study commissioned by Grindr.
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Our largest markets are currently North America and Europe, from
which we derived 67.2% and 22.3% of our total revenue for the year ended December 31, 2021, 65.3% and 22.9% of our total revenue for the three months ended June 30, 2022, and 66.0% and 22.0% of our total revenue for the six months ended June 30,
2022, respectively. After North America and Europe, Asia-Pacific makes up an additional 6.9%, 6.7% and 6.5% of our total revenue, and the remaining 3.6%, 5.1% and 5.5% are from other regions, including Latin America (comprising Central America
and South America) and Australia for the year ended December 31, 2021, for the three months ended June 30, 2022 and for the six months ended June 30, 2022, respectively.
Our target market is the worldwide LGBTQ+ community, which
comprises more than 538.4 million people globally that self-identify as LGBTQ+ and represented approximately 6.9% of the total global population as of December 31, 2021, according to the Frost & Sullivan Study commissioned by Grindr. With
the progression of LGBTQ+ culture and increase in LGBTQ+ rights around the world, this growing and highly engaged community has had an increasingly stronger voice and has been enabled to pursue more diverse lifestyles, express its opinions, and
advocate for equal rights. We are dedicated to creating value and a safe and accepting environment for the LGBTQ+ community.
We believe we have significant opportunities to leverage our unique
brand to both broaden and deepen our market penetration and offer products and services that address the growing and changing needs of the global LGBTQ+ community. With this broader opportunity in mind, we have continued to expand our platform,
which offers a unique combination of social networking functions, digital content, and other initiatives aimed at enriching and empowering the lives of the LGBTQ+ community, in the following ways:
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We help people find meaningful connections, whether it's casual dating, relationships and love, community and friendships,
travel information, local and discovery, and beyond.
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Our platform builds community and friendships. Our user experience is essentially a world without walls, connecting one user to
the next, allowing the community to see each other, many of whom sometimes feel unseen.
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We are advancing LGBTQ+ equality and safety. Our Grindr for Equality initiative, or G4E, has worked around the world for the
safety and justice for the LGTBQ+ community. Coordinating with NGOs, governments, and nonprofits, G4E has worked to change and inform policy, increase access to vital healthcare services such as HIV testing, and bring valuable information
to millions of people in over 50 languages.
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We bring empowerment through partnerships with organizations such as Aids/Lifecycle, National/Local Pride Organizations, and
Voting Campaigns.
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We drive social influence with fun and engaging ways on social media channels to help the general population better understand
our community, plight, and interconnectedness.
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We believe our brand and logo have become mainstays of the global
LGBTQ+ experience. According to the Morning Consult Survey, Grindr is the best-known gay dating app among Gay, Bisexual, Transgender, and Queer people, with 85.0% brand awareness, as well as the best-known gay dating app among the general
population. The strength of our brand has allowed us to grow our users virally and organically, as evidenced by the fact that our customer acquisition spend only comprised 0.1% of total revenue in 2021. This is a core feature of our business
model. As our user base continues to grow worldwide, more connections are made, and our user engagement and revenue increase. These increases enable us to reinvest in our platform, building more product and safety features and, as a result,
attract more users. This results in powerful network effects, driving user and revenue growth and reinforcing our brand awareness.
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We currently generate revenue from two revenue streams—Direct
Revenue and Indirect Revenue, both of which are driven by the Grindr app. Direct Revenue is revenue generated by our paying users who pay for subscriptions or add-ons to access premium features. While our app is free to use, our premium features
enable our users to customize their ability to experience and use our platform. Indirect Revenue is generated by third parties who pay us for access to our users, such as advertising or partnerships. Our financial model has significant benefits
and has experienced rapid revenue growth and profitability driven predominantly by organic user acquisition and the viral network effects enabled by our brand and market position.
For the years ended December 31, 2021 and 2020, we generated:
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Total revenue of $145.8 million and $104.5 million, respectively, representing year-over-year growth of 39.6%;
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Net income (loss) of $5.1 million and ($13.1) million, respectively, with a net income (loss) margin of 3.5% and (12.5%),
respectively; and
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Adjusted EBITDA of $77.1 million and $50.7 million, respectively, representing Adjusted EBITDA Margins of 52.8% and 48.5%,
respectively, and year-over-year growth of 52.1%.
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For the three months ended June 30, 2022 and 2021, we generated:
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Total revenue of $46.6 million and $34.8 million, respectively, representing period-over-period growth of 33.9%;
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Net income (loss) of $(4.3) million and $1.8 million, respectively, with a net income (loss) margin of (9.3)% and 5.2%,
respectively; and
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Adjusted EBITDA of $21.5 million and $19.5 million, respectively, representing Adjusted EBITDA Margins of 46.1% and 56.0%,
respectively, and period-over-period growth of 10.3%.
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For the six months ended June 30, 2022 and 2021, we generated:
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Total revenue of $90.1 million and $62.6 million, respectively, representing period-over-period growth of 43.9%;
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Net income (loss) of $0.3 million and $(3.3) million, respectively, with a net income (loss) margin of 0.3% and (5.3)%,
respectively; and
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Adjusted EBITDA of $41.7 million and $33.2 million, respectively, representing Adjusted EBITDA Margins of 46.3% and 53.1%,
respectively, and period-over-period growth of 25.6%.
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For a reconciliation of Adjusted EBITDA and Adjusted EBITDA Margin
to the most directly comparable GAAP financial measures, information about why we consider Adjusted EBITDA and Adjusted EBITDA Margin useful and a discussion of the material risks and limitations of these measures, please see “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Grindr—Non-GAAP Financial Measures.”
Market Overview
The global LGBTQ+ population has undergone steady growth in
recent years, growing at a compound annual growth rate (“CAGR”) of 6.7% from 390.0 million in 2016 to 538.4 million in 2021, according to the Frost & Sullivan Study, which was
commissioned by Grindr, of the global LGBTQ+ population. The Frost & Sullivan Study estimated this growth trend will continue over the next five years, growing at a CAGR of 4.2% and reaching 659.9 million in 2026.
The global growth of the LGBTQ+ population is not just driven by
overall population growth, but by the growing social acceptance level towards the LGBTQ+ community and the LGBTQ+ population’s willingness to express sexual orientation and gender identity. We believe increasing social acceptance of the LGBTQ+
community and more LGBTQ+ friendly political environments globally will continue to contribute to the increase in the number of people that self-identify as LGBTQ+. This is evidenced by Frost & Sullivan’s estimate of the LGBTQ+ population’s
percentage of the total population, growing from 5.3% in 2016 to 6.9% in 2021 to an estimated 8.2% by 2026. Additionally, the study also notes the LGBTQ+ population estimate may vary from country to country and in total, based on different
cultural backgrounds, the political system of the country, economic development, and other factors.
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We believe our global addressable market encompasses the entire
LGBTQ+ population and not just LGBTQ+ singles, as we are a social network and our users frequently use our platform and services for more than just dating. For example, many of our users are in relationships but continue to use our app for travel
or to stay connected with their friends or the broader LGBTQ+ community.
Estimated Self-identified LGBTQ+ Population and
Proportion of Total Population
According to the Frost & Sullivan Study commissioned by
Grindr, the GBTQ+ population make up the largest proportion of the overall LGBTQ+ population, comprising almost 81% of the total with 434.9 million people in 2021. The Frost & Sullivan Study commissioned by Grindr estimates the GBTQ+
population will continue to grow as a percentage of the overall LGBTQ+ population, with the percentage increasing to over 81% by 2026.
Estimated Self-Identified LGBTQ+ Population,
Breakdown by Gender Identity
The self-identified LGBTQ+ population skews towards younger
generations. According to the Frost & Sullivan Study commissioned by Grindr, self-identified LGBTQ+ 18-24 year olds are estimated at 10.3% of the total 18-24 year old global population in 2021, 25-34 year olds are estimated at 8.9%, and
35-49 year olds are estimated at 6.3%, respectively. These population percentages are expected to grow to 13.4% of the total 18-24 year old global population by 2026, 10.9% for 25-34 year olds, and 7.3% for 35-49 year olds, respectively.
Social development and rapidly changing points of view brought on by
the growth of the Internet has objectively caused Gen Z, (18-24 year olds), to be exposed to more ideas, such as gender awareness and sexual orientation, earlier than previous generations in the same period. Younger generations are more gender
fluid, with the definition of gender identity becoming more indistinct, blurring the boundary between the LGBTQ+ community and the heterosexual population. These younger generations are more likely to explore their sexuality, given more social
acceptability of alternative sexual identities today and the ability to express different sexual identities.
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Estimated Self-Identified LGBTQ+ Population
Penetration Rate, Breakdown by Age Group (Medium Estimate)
According to the Frost & Sullivan Study commissioned by
Grindr, the total self-identified LGBTQ+ population and self-identified LGBTQ+ population penetration rate in most regions is expected to continue to increase over time. The self-identified LGBTQ+ population and penetration rate in North
America will grow from 36.9 million and 9.9% in 2021 to 40.7 million and 10.7% in 2026, respectively. Europe will grow from 61.6 million and 8.2% in 2021 to 74.8 million and 10.0% in 2026, respectively. Asia will grow from 372.8 million and
8.0% in 2021 to 468.7 million and 9.6% in 2026, respectively. Latin America will grow from 56.8 million and 8.6% in 2021 to 62.1 million and 9.0% in 2026, respectively.
Estimated Self-identified LGBTQ+ Population,
Breakdown by Region
Global LGBTQ+ Social Context
In recent decades, societies around the world have generally become
more socially accepting of, and open to, LGBTQ+ culture and people, which has led to greater rights for members of the LGBTQ+ community. For example, The Netherlands was the first country to legalize same-sex marriage in 2000. According to
various sources, as of April 2022, over 75 countries and territories have legalized same-sex marriage, including jurisdictions in every inhabited continent across the globe. Additionally, according to the ILGA World Report, same-sex sexual
activities were legal in over 120 countries and territories worldwide, including all of the countries in North America and Europe and the majority of the countries in Asia and Latin America.
LGBTQ+ Population’s Consumption
We believe our user base represents a highly coveted demographic.
According to the Frost & Sullivan Study commissioned by Grindr, data from the American Community Survey showed that same-sex couples have the highest median household income than opposite-sex couples, with male same-sex couples having the
highest income. Educational attainment is an important social phenomenon, which is strongly linked to later success in terms of
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income, occupation, wealth, health, and life satisfaction. In the United States,
male same-sex households are more likely to have at least a bachelor’s degree than opposite-sex households. In 2020, 57.5% of male same-sex households had at least a bachelor’s degree compared to 42.4% of opposite-sex households. As individuals,
55.1% of the gay and bisexual men population have at least a bachelor’s degree compared to 30.3% of the straight male population.
From a macro-level perspective, the more LGBTQ+ inclusion a country
has, the more likely it is to be economically developed. LGBTQ+ inclusion and economic development are mutually reinforcing, and LGBTQ+ legal rights have a continued positive and statistically significant association with real GDP per capita
after controlling for gender equality. Also, from the perspective of society, employers who treat LGBTQ+ people equally in the workplace will generally see positive business outcomes such as higher productivity of LGBTQ+ workers, notable
improvements in health, lower costs, and a lower likelihood of employee turnover.
Estimated LGBTQ+ Population GDP at Purchasing
Power Parity (PPP)
As the global pandemic caused by COVID-19 gradually improves,
global GDP at purchasing power parity growth resumed upward trends in 2021 and experienced an estimated increase of 6.5%, according to the Frost & Sullivan Study commissioned by Grindr. Correspondingly, the estimated LGBTQ+ population GDP
at PPP has also seen an increase, reaching $10.9 billion by the end of 2021. GDP at PPP is the calculation of GDP taking relative costs and inflation into account.
Given this high purchasing power and economic potential, the LGBTQ+
community is an increasingly attractive demographic for marketers and advertisers. The scale of purchasing power associated with the LGBTQ+ demographic, coupled with a general interest to appeal to a younger demographic, have caused marketers to
increase their focus on reaching this community. Some of the world’s largest corporations and brands have launched LGBTQ+-themed or focused advertising campaigns, including Apple, Johnson & Johnson, GM, Coca-Cola, Campbell’s, American
Express, Unilever, Marriott, Anheuser-Busch, and Hilton, just to name a few.
Our Products and Services
Our flagship product “Grindr,” or the Grindr app, is a mobile
application with location-based connectivity features designed to help our users find one another and have meaningful interactions right here and now, or anywhere globally. The app is free to use, with premium subscription offerings for greater
access to other users and control over the experience.
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Key features of our Grindr app include:
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Identity expression: users
can create, manage, and control
their identity, profile,
and presence on the app.
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Connection: users can find
and be found by those they are
interested in; those nearby
right now, or anywhere globally.
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Interaction: users can chat
and interact with any profile
instantly, in an open, fun,
and engaging way.
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Trust and Safety: users
receive guidance and tools to be safe
across their experience.
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Premium: users can pay for
greater access to more users and
for more control over how
they find one another and interact.
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We launched the Grindr app in 2009 to create a new way for gay men
to find each other and form connections. Our initial differentiator was a cascade engine to help find other users nearby in an exciting and highly responsive app experience leading to high engagement and rapid organic growth. Our initial active
user segment of gay men, our real-time and hyper-local use case of casual dating, and our industry-defining cascade user interface and open messaging connection model, combine to create a fun and highly engaging experience on the app. This
engagement engine has fueled our rapid organic growth over time leading to more users, segments, geographies, and use cases.
Over time, we evolved into the world’s largest LGBTQ+ social network
and we enable our users to engage on our platform in a variety of ways. We believe we have played an integral role in both establishing, defining, and developing the location-based dating industry and developing wider mainstream acceptance of
LGBTQ+ individuals on a global basis.
User and Product Journey
Identity expression: Getting started on Grindr is easy. Users create
an account and profile that represents themselves and their identity on the platform. They create an account and verify important information to help maintain a trustworthy and safe environment on the app. Then they are able to create a rich,
visual, personalized profile with a wide range of data and information about themselves, their interests, and motivations. This helps them express who they are, what they seek, and makes it easy for all to meet one another and form meaningful
connections.
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1. Sign up: New users create an account with their email, or through social media
account authentication (e.g., Facebook, Google, Apple)
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2. Age verification: Users verify their age to confirm they are not a minor, and
that they are eligible to use the Grindr service.
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3. Human Verification: Users complete a human verification step to reduce the
spam and bot activity on the app, and sign our Terms and Conditions of Service, as well as our Privacy and Cookie Policy.
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4. Profile Photos: Users create a rich profile expressing their identity, by
first adding a visual representation of themselves through photos and media.
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5. About Me: Users personalize their profile by adding a display name and custom
“about me” narrative, enlivening their profile and helping them form more meaningful connections with others.
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6. Stats: Users can optionally share key data such as age, height, tribe, body
type, gender identity, ethnicity, relationship status, and self-reported sexual health information, to help them connect with others in the queer community.
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7. Tags: Users express their interests, identity, and community affiliation by
adding tags to their profile.
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8. Complete Profile: Users’ completed profile is their chosen representation of
themselves and their identity on the platform, and enables them to find and be found by those they are interested in.
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Connecting: Grindr helps users find meaningful connections easily and enjoyably. Grindr is unique in its “many-to-many” connection model: on “the cascade” (a grid of profiles nearby) users can actively
browse many profiles at once, and be found by multiple others searching for them. They can browse, search, and filter profiles nearby or anywhere across the globe, based on identity, key characteristics, and interests. They are notified when
others have viewed or expressed an interest in them (“taps”). These connectivity features create multiple avenues to meaningful interactions
quickly, easily, and in a fun and engaging way.
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3. Search: Users can find others with specific interests and community
affiliations by searching for others with specific tags on their profile
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4. Tags: Users can find community by browsing custom cascades composed of
profiles sharing the same tags
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5. Explore: Users can also explore cascades of other users in locations across
the globe, forming meaningful connections anywhere.
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6. Viewed Me: Users can see those who may be interested in them, having recently
viewed their profile.
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7. Taps: Users can express their interest in others by “tapping” the profile of
someone they have viewed.
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8. Favorites: Users can maintain meaningful connections by favoriting profiles,
and seeing a custom cascade of all their favorites anytime.
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Interacting: Once users find one another, Grindr helps them form meaningful connections with a fun and engaging messaging experience. Grindr is unique in its open messaging model: users can initiate a
message with any profile, regardless of whether interest has been expressed beforehand, a key aspect of our engagement engine. Within the messaging feature, users can form meaningful connections and deepen them over time by sharing rich media
and with a variety of messaging formats.
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5. Share video and audio: Users can also deepen connections by sharing video or
audio with one another through the messaging feature.
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6. Live Video Calls: Users can also interact with live video calls to further get
to know one another, or confirm their mutual interests.
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7. Group messaging: Multiple users can interact and meet one another through the
group messaging feature.
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8. Location sharing: When users have built up a trusting connection, they can
choose to share their location and make plans to meet in real life.
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Safety and support: Creating a trustworthy and safe environment is central to the health of our platform and for our community. Grindr provides users with a variety of tools, features, proactive assistance, help
and guidance across their experience to maintain the highest standards of trust and safety.
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1. Sexual health + testing information: Users can express their sexual health and
testing information on their profile, and view the same information from users who have chosen to share it. They can also choose to receive testing reminders to help maintain their health.
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2. Blocking: Users may block other profiles if they are not having a positive or
meaningful interaction.
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3. Reporting and proactive monitoring: Users may report behavior that may violate
the terms of the platform. Grindr provides reactive and proactive moderation services to support the user and platform safety.
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4. Help Center: Users are provided with easy access to helpful safety information
at any time in the app and at various points throughout the service.
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Premium Services: The free version of our service provides many of the features above on a limited basis for a valuable initial experience. Users can pay a subscription for premium features and services, giving
them greater access to more profiles, and additional control over the experience of finding others and forming meaningful connections.
The Grindr free ad-supported service provides:
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Access to view 100 profiles on the Nearby Cascade
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Use of some basic filters to find others
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Use of all tags to search for users with similar interest
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Tapping others to express interest
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Viewing user profiles in the explore tab
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Messaging openly with anyone from the Nearby Cascade
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Sharing photos and location information through messages to facilitate meaningful connections
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Grindr XTRA provides an initial set of premium features for a
subscription fee:
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600 profiles: access to 5x more (up to 600) profiles on our Nearby Cascade than our free version of the app
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No ads: removal of banner and interstitial ads, providing XTRA users with an ad-free experience
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Advanced filters: e.g. height, weight, body type, relationship status, online status, photos, and prior chat history
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XTRA Explore: increased utility of Explore mode, including the ability to chat with, tap, and favorite users
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Premium messaging features: e.g. frequently used phrases and message read receipts
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Grindr Unlimited provides unlimited access, control and
customization for a premium price. Grindr Unlimited includes all of the features of XTRA plus:
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Unlimited profiles: allowing users to view unlimited profiles on the Nearby, Explore, and Tag cascades
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Viewed Me: allowing users to see who is looking at their profile
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Incognito: allowing users to browse without being seen
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Unsend: allows users to undo sent messages and photos
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Typing status: allowing users to know when someone is in the process of messaging them
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Translate: allowing users to translate messages in different languages
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XTRA
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1. 600 Profiles
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2. No Ads
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3. Advanced Filters
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4. Saved phrases and read receipts
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Social Responsibility - Grindr for Equality
We launched G4E in 2012, with a mission to promote safety, health,
and human rights for LGBTQ+ people around the world through collaborations with advocacy groups in various countries. G4E leverages the Grindr app’s global reach and leadership to conduct research, spread information, and empower our users in the
fight for LGBTQ+ rights. We also fund innovative projects through G4E aimed at improving the welfare of the LGBTQ+ community, particularly in regions where protections are either lacking or nonexistent, such as Russia, Egypt, and India. For
example, in India, we worked with the Indian gender and sexuality organization, Varta Trust, and Chennai-based not-for-profit Solidarity and Action Against the HIV Infection in India (SAATHII), to develop an innovative and one-of-a-kind LGBTQ+
resource database and online HIV test center location guide for the country. Through G4E, we work with various groups worldwide to make HIV testing more accessible, encourage voting, and fight homophobia, biphobia, and transphobia.
G4E is a key way for us to connect with and serve the LGBTQ+
community and to strengthen our brand affinity within this community, especially in parts of the world where LGBTQ+ people are still highly marginalized. For advocacy groups with limited budgets, our platform is a helpful tool for them to reach a
wider audience and promote their services and resources. We hope to continue to increase our financial commitment to G4E, thereby furthering our continued and active advocacy for, and defense and support of, the LGBTQ+ community worldwide.
We encourage members of the LGBTQ+ community to have a voice,
express their opinions and help fight against oppression. Our geolocation technology enables us to send messages targeted towards specific areas and groups of users to keep them updated on the issues most relevant to them.
Our Competitive Advantages
While the broader global landscape of mobile-based social platforms
is highly competitive with many different players, the number of players that are specifically addressing the unique needs of the global LGBTQ+ community is limited. There are a number of key factors that drive demand for certain platforms
specifically dedicated to the LGBTQ+ community versus those that target the general population. For instance, LGBTQ+ users have heightened and special concerns relating to privacy, particularly with respect to identity protection, making it
important that independent online platforms dedicated to serving LGBTQ+ users provide a safe and secure place for users to express themselves. Additionally, general social platforms are less likely to offer LGBTQ+-specific community opportunities
to meet other LGBTQ+ users, whereas LGBTQ+ dedicated social networking platforms substantially improve the ability of LGBTQ+ users to find and join LGBTQ+ centric social activities. As a result, LGBTQ+ social networking users tend to show higher
engagement and retention on LGBTQ+ dedicated platforms.
We believe certain advantages will continue to provide us with
sustainable differentiation and success relative to our competitors:
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The Largest Global LGBTQ+ Focused Mobile Social Platform.
We were established in 2009 as the one of the first global social platforms exclusively addressing the needs of the LGBTQ+ community. We built our mobile social platform to address the broadly underserved LGBTQ+ community’s need for a
comprehensive digital platform to connect, share, and consume content. Driven by our first-mover advantage, we have rapidly built the world’s largest LGBTQ+ social platform in terms of users in 2021, according to the Frost &
Sullivan Study commissioned by Grindr. In 2021, we had approximately 10.8 million MAUs and users in over 190 countries and territories, with our Grindr app available in over 21 language versions. We have users in several markets as of
June 30, 2022, including developed markets such as the United States, the U.K., France, Spain, and Canada, and emerging markets such as Brazil, Mexico, India, Chile, and the Philippines.
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Large, Highly Engaged, and Growing User Base. Our large and highly
engaged global user base drives the continuous growth of our daily operations. The Grindr app had approximately 10.8 million MAUs in 2021. During the same period, our users on average sent over 260 million chats and each individual user
spent an average of 61 minutes per day on our Grindr app.
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Preeminent Brand within the LGBTQ+ Community. Our brand is one of
the most well-known in the LGBTQ+ community and has become broadly associated with LGBTQ+ culture. According to the Morning Consult Survey, Grindr is the best-known gay dating app among Gay, Bisexual, Transgender and Queer people, with
85% brand awareness, and is also the best-known gay dating app among the general population. We are frequently mentioned by world-class media, including the BBC, CNN, and other
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influential media platforms, and we have more social media followers than most of our
competitors on nearly every platform, which helps to constantly reinforce the social exposure of our brand. Additionally, our G4E campaigns have further strengthened our brand awareness and our position as a leader within the LGBTQ+ community.
Our G4E campaigns proactively promote justice, health, safety, and other LGBTQ+ rights. The various elements of our growing platform combine online and offline aspects of our users’ social presence to engage our users in novel and meaningful
ways, helping to embed us as a core part of the LGBTQ+ culture.
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Organic and Viral Growth Driven by Network Effects. As a pioneer in
the LGBTQ+ social networking space, we have benefited from a substantial first mover advantage and reached a scale that continues to propel the viral growth of our business, brand awareness, and user acquisition. Leveraging this strong
brand awareness and significant user network, our historical growth has been driven primarily by network effects, including strong word of mouth referrals and other organic means. The large scale of our user base offers ample
opportunities for potential connections and leads to a better experience for our users. The superior user experience of our products and services attracts more users to our platform and increases our rankings in search engines and app
stores. As a result, we believe we achieve a higher frequency of word-of-mouth referrals from satisfied users, which further drives our scale while maintaining low user acquisition costs. For the three months and the six months ended June
30, 2022 and 2021, sales and marketing, excluding personnel-related expenses, comprised 1.6%, 1.0%, 1.2%, 0.8%, respectively, of our revenue over the same time period. In the years ended December 31, 2021, 2020 and 2019, sales and
marketing, excluding personnel-related expenses, comprised 0.9%, 3.2% and 2.8% respectively, of our revenue over the same time period.
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Superior User Experience. We believe the superior user
experience we offer distinguishes us from our competitors. We have devoted substantial resources to continuously improving our products and services and enhancing the user experience. We emphasize technology and product innovations
based on robust data compiled from product usage, competitive studies, customer feedback, and our industry experience. Our geolocation technology, grid display interface, complex filter functions, and other innovative features and
functionalities enable users to discover and connect to each other effortlessly and seamlessly. Our profiles spent an average of 61 minutes per day each on the Grindr app in December 2021, which ranks us number one among apps targeting
the LGBTQ+ community, according to the Frost & Sullivan Study commissioned by Grindr.
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Strong Margins and Profitable Business Model. Our business model
generates strong margins and high cash flow given our revenue model and low paid user acquisition spend. Our margins have increased over time as a result of scaling revenue and achievement of cost efficiencies, despite continual
investment in our brand, product, technology, and anti-abuse platform. In the year ended December 31, 2021, our Adjusted EBITDA Margin was 52.8%, and in the year ended December 31, 2020, our Adjusted EBITDA Margin was 48.5%. For the three
months ended June 30, 2022 and 2021, our Adjusted EBITDA Margin was 46.1% and 56.0%, respectively. For the six months ended June 30, 2022 and 2021, our Adjusted EBITDA Margin was 46.3% and 53.1%, respectively.
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Our Growth Strategies
We believe there is significant opportunity in our core product
driven by the rising growth of the global LGBTQ+ population, especially younger users that are more technology savvy. We believe we are still in the early stages of our user growth and user monetization journeys and believe that our brand and
global reach uniquely position us to take advantage of the broader market growth trends.
Key elements of our growth strategy include:
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Expand Monetization Capabilities. We believe we can improve our
monetization capabilities by continuing to optimize and develop our subscription offerings, introducing more stand-alone premium functions, and further optimizing our indirect revenue offerings, as described in more detail below:
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Continue to optimize and develop our subscription offerings. We plan to continue to optimize our subscription conversion
through features like introductory offers, discounted trials, and win-back offers. We plan to continue to develop our subscription offerings by adding more premium features to
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our XTRA and Unlimited products and services, such as more advanced filters and
Cascade navigation, improvements to Viewed Me, and more premium messaging features. We also expect to continue to optimize subscription pricing globally.
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Introduce more stand-alone paid features. We intend to introduce more stand-alone paid features in addition to existing
subscription services. For example, we plan to allow some premium features to be purchased on a stand-alone basis, including better profile positions, appearance management, and other functions.
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Further optimize our indirect business. We intend to further optimize our indirect business by leveraging our advertising
partnerships, brand sales team, and self-serve advertising system. We will continue to experiment and evaluate opportunities to increase indirect revenue through brand partnerships, unique advertising units, and merchandise.
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Grow Our User Base. We plan to deepen our penetration in our
current markets, including in our key established markets such as the United States and Europe. We will continue to introduce additional features that boost user engagement, increase retention, and stimulate existing users to make
word-of-mouth referrals. We also plan to enhance our marketing initiatives in these core regions. We also plan to grow our user base by targeting geographic regions outside of our current core markets that have a large number of untapped
potential users and fast-growing economies. In order to attract users in these new markets, we may offer innovative and customized products and services and features adapted to specific market conditions and demands. To supplement our
organic user growth, we plan to selectively invest in paid online channels, digital video channels and, where appropriate, offline channels, to further improve our penetration and market share in certain markets.
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Continue to Innovate and Develop New Features. We plan to continue
to improve our products and services and introduce new features and functions for better user experiences and higher user engagement. These features and functions may be broadly implemented or strategically targeted at select regions. For
example, we recently released tags globally in the first quarter of 2022, a feature designed to allow our users to filter and find people with specific interests highlighted on user profiles. We evaluate new functions and features in
small target audiences and then roll out features with high test ratings to the larger global user base. For example, we recently released private albums first in Australia and New Zealand. After collecting initial feedback and improving
the product, we released it globally in 2022. We will also continue to enhance user experiences and engagement by continuously improving our existing features and functions, including through optimization of stability, loading speed, and
user interface design.
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Diversify Our Products and Services and Platform. We will continue
to diversify our offerings both vertically and horizontally. Our global reach and scale have given us insights into the unique challenges our user base experiences. We believe these insights will enable us to diversify our product into
other areas that touch or concern our users. We are in the early stages of building a web-based product that will allow our privacy-focused users a way to use our product without downloading an app through an app ecosystem. Additionally,
we are collaborating with several partners in related industries to explore complementary functions and products and services to serve the core social interaction needs of our users.
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Invest in Machine Learning and Data Science. We will continue to
invest in data to improve our product, protect our users, fight abuse and spam on our platform, and attract new users. We believe our efforts in machine learning and data science will help our users have more successful connections and
improve the overall experience on our platform.
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Pursue Strategic Investments and Acquisitions. In addition to
organic growth, we also plan to make strategic investments and acquisitions in targeted markets. We are continually seeking opportunities for potential strategic investments in, or acquisitions of, related or complementary businesses to
help build a stronger social ecosystem for the LGBTQ+ community.
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Technology
Our technology and product development process, designed for the
unique needs of our user base, is what differentiates our platform from other social networks. Our platform development principle is “user privacy and protection first” and all technology and product decisions stem from this key tenet. We have a
global team of engineers, data scientists, and product managers who work closely with our data privacy team to drive the development of our product and platform. We aim to build technology that protects our users and enables them to make
connections safely.
Key components of our technology platform include:
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Location-based Technologies. We have built a large-scale location
search system to connect our online users’ locations in real-time so they can seamlessly engage with their hyper-local community. This scale and accuracy of our system differentiates us from competitors. Our technology manages millions of
users’ real-time locations every second of every day. We have developed a carefully optimized system capable of handling thousands of location update requests as well as thousands of location search requests per second at the same time.
The system powers the main cascade user interface in our Grindr app where a user sees others who are also using the Grindr app at that moment based on distance and filter criteria.
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Data Management, Protection, and Privacy. We process over ten
terabytes of user data generated on our platform on a daily basis; from that we persist over seven terabytes of data per day. In order to do this, we have built our own data warehouse infrastructure on top of world class third-party
platforms. We have also built and deployed tools that allow for easy data summarization, ad hoc querying, and analysis of large datasets. These technologies help us provide each user with a personalized experience.
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Our Information Security and Data Protection Program closely aligns with the National Institute of Standards and Technologies’
(“NIST”) Cybersecurity Framework. In order to protect our data estate we have devised many procedures and controls to ensure our data is confidential, available, and maintains integrity. The level
of controls utilized to maintain confidentiality, availability, and integrity of our data is based upon a data matrix that takes into account the sensitivity and criticality of the data. Our controls implore the usage of industry standard
one-way hashing, and both symmetric and asymmetric encryption for data at rest and in transit.
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Access to data stores are made available by the usage of a virtual private network (“VPN”)
device and is further gated by role-based access controls of privileged accounts. If data access is required for business reasons, it is granted to a specific individual for a specific data asset. All permission requests are approved by a
data custodian and all access is monitored and reviewed on a regular basis.
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Large-scale Infrastructure. We have invested considerable resources
and investments on our underlying architecture to serve more than a billion daily application programmable interface (“API”) requests. We have also invested resources in adopting container
technologies, which allow us to scale our backend systems more easily. We run services in multiple availability zones (data centers) for redundancy. As a cloud-first company, everything we build is designed to scale and run in a stateless
environment. Externally, we process over four billion API requests per day. During February 2022, we processed over 12 billion messages per day. We believe these systems will easily continue to scale as we grow.
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Client first technologies. Our APIs are designed to support
real-time product features agnostic of the clients (mobile or web). We believe in the approach of build once and leverage across several clients to deliver superior uniform user experience. It’s common for users to switch between devices
and other mediums and this system ensures our users can pick up where they left off.
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Commitment to our Community
Our diverse, global community is at the heart of everything we do at
Grindr. While we support free speech and expression, it cannot be at the expense of our community’s health or well-being. We balance the right to self-expression with promoting a safe and inclusive environment. We take proactive measures to help
protect our community and promote safety throughout our users’ journey with us.
Our app has a suite of safety features, including safety
notifications and messages (translated and customized to the user’s region), a PIN to help keep our users’ accounts secure, discreet app icons which allow users to disguise Grindr’s app, a range of features giving control over the sharing of
images or messages and redacting them, and the
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ability to mute, block, and report other users. We also provide video and audio chat
so users can become comfortable with each other before meeting. We also publish a holistic security guide and safety tips as guidance.
We believe education promotes healthy behavior, so we provide an
extensive help center with resources and FAQ on health, wellness, community, identity, and safety. We are focused on creating inclusive and forward-thinking moderation policies and frameworks that honor the full expression of our users’ gender
identity and support a positive, safe experience for our whole global community. Our suite of tools and technology utilize a three-pillar approach to content moderation:
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Automated Review. We implement preventative technologies to help
mitigate risks of user misbehavior. We automatically scan profiles upon creation and conduct ongoing scans for fraudulent behavior or violations of our Community Guidelines. Our algorithms and automations remove many malicious profiles
before they can interact with our community. We utilize third party tooling to enhance our automated review capabilities. In addition, we provide users with a robust appeals system which allows our users to have a manual human review of
any automated decision.
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Manual Review. Our experienced human reviewers play an integral
role in our moderation process. As of June 30, 2022,we utilized a team of content review personnel dedicated to moderating content on the Grindr app. We believe empathy with and understanding of our community is key to making good
moderation decisions. In addition to general moderation training, our moderators regularly receive specific training on bias, gender, microaggressions, and discrimination, to help them make as fair and equitable decisions as possible. In
addition to removing and blocking profiles and illicit content, our moderators reinforce our Community Guidelines to our users through our in-app warning system, which reminds our users of our expectations before their behavior escalates.
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Community Feedback. Our engaged user base also helps us maintain a
safe, positive, and inclusive community. Through in-app tools, we encourage users to report inappropriate content and misbehavior.
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Branding and Marketing
We have grown primarily through user-driven organic means given the
strength of our brand awareness and our extensive user base. We benefit from the network effects and broad global brand awareness that resulted from first-mover advantage and compound to create a positive cycle of user-generated, organic growth.
Our valuable brand name and word-of-mouth referrals means we’ve been able to keep user acquisition costs low, which has allowed us to focus our marketing efforts to date largely on community centered campaigns that further our brand reputation
while providing opportunities for monetization through brand partnerships. We regularly evaluate opportunities across channels and geographies in which we can invest further to strategically accelerate user and revenue growth. The combination of
our strong brand and extensive and global user base has been our most effective marketing tool to date and has enabled us to grow our users.
We also employ paid online and offline marketing initiatives to
enhance our category leading brand reputation within the LGBTQ+ community and to accelerate our growth. Key elements of our branding and marketing strategy include:
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Online Initiatives. We attract new users and generate brand
awareness through data and insight-driven content marketing and social media initiatives, influencer marketing campaigns, and video and brand partnerships. In addition, we leverage the Grindr app’s internal marketing tools and
capabilities to connect external brands with our user base, and to drive awareness for our own new features and initiatives. We also partner with G4E to provide in-kind donations of digital marketing inventory to LGBTQ+ community groups
around the world. We regularly reassess growth opportunities across all of our organic, owned and operated, and paid channels. To date, relatively little paid online user acquisition has been required for us to grow, given our brand
awareness and word-of-mouth referrals.
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Offline Initiatives. We organize and participate in a variety of
offline events to increase brand awareness and underscore commitment to the LGBTQ+ community. These events can also provide opportunities for monetization through sponsorships. Examples include WorldPride sponsorships in New York and
Copenhagen, the Outfest premier of Grindr’s first original scripted web series Bridesman, annual
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activations at San Francisco’s Folsom Street Fair, and a partnership with GoFundMe
for the Save Our Spaces campaign that supported historic LGBTQ+ social venues affected by the pandemic and included hosting more than 30 Grindr-branded parties at local queer bars across the U.S. We intend to continue to explore additional
offline marketing opportunities.
Competition
The global LGBTQ+ social networking market is fast growing and far
from being fully addressed. It is also highly fragmented and competitive. We compete primarily with other global companies that provide dating and networking products and services that have LGBTQ+ users, such as Tinder and OKCupid, and regional
companies that provide dating and networking products and services for LGBTQ+ users, such as Scruff and PlanetRomeo. We also compete with other companies that provide similar social media platforms offering connection, sharing, discovery, and
communication products and services to users online, such as Instagram. In addition, while we compete with other social media platforms, we also face competition from other traditional means of meeting people, such as in-person matchmakers, as
well as other forms of dating and networking that involve people meeting offline without the use of dating or networking products or services altogether. We may also develop and introduce new products and services which could subject us to
additional competition.
Despite its competitive nature, the social networking industry is
not a winner-take-all market, with users typically using several different platforms at the same time. We believe very few of our competitors operate at our scale or level of brand awareness. We believe our ability to compete successfully depends
on various factors, including, but not limited to:
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our ability to maintain and further develop our well-established brand;
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our ability to continue to engage and grow our user base through technological innovation and introduction of new products and
services that meet user requirements;
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our ability to efficiently distribute our products and services to new and existing users;
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our ability to improve and maintain superior user experience of our platform, supported by well-designed products and services
and functions;
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our ability to monetize our products and services;
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our safety and security efforts and our ability to protect user data and to provide users with control over their data;
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our ability to expand and maintain our global footprint;
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our ability to navigate the changing regulatory landscape, particularly the changes in regulations relating to consumer digital
media platforms, privacy and data protection;
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our ability to attract, retain and motivate talented employees, particularly software engineers, designers and product
managers; and
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our ability to cost-effectively manage and grow our operations.
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Employees
We believe our unique culture is one of the keys to our success. We
are especially proud of how inclusive our company culture is, particularly for members of the LGBTQ+ community. Our company culture emphasizes transparency, collaboration, experimentation, a bias for action, and creating an environment in which
everyone can bring their full and best selves to work. More than half of our current employees identify as members of the LGBTQ+ community, which contributes to our deep understanding of our users and our user-first mindset and approach.
We demonstrate our commitment to this community by aiming to align
our employee benefits and support to meet the unique needs of our LGBTQ+ employees and their dependents. For example, we recently announced a gender-affirmation offering. This standard-setting offering provides low-friction assistance to
employees who are transgender, non-binary, or gender non-conforming through social affirmation, legal affirmation, and surgical affirmation assistance. Additionally, we have partnered with providers to help our LGBTQ+ employees and their
dependents find caregivers who they believe are competent in and compassionate towards the unique health needs of members of the LGBTQ+ community. By creating offerings that address the unique needs of all of our employees,
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we are demonstrating our commitment to not just our employees but to the LGBTQ+
community in general. We believe we are setting a new expectation for what are considered fair and equitable benefits, and we are quickly becoming regarded as best-in-class in this area.
As of June 30, 2022, we had 173 full-time employees globally. While
our headquarters is in West Hollywood, California, our workforce is currently remote-first. This allows us to find the right talent to serve our users, regardless of location. We have concentrations of employees in Los Angeles, the San Francisco
Bay Area, Chicago, and New York City, which allows our employees a mix of in-person and remote work. This approach continues to be an asset in our recruiting efforts, especially as other tech companies begin to require employees to return to the
office or take reductions in pay. Our non-US based employees are located in Taiwan and Canada.
We will continue to strike a balance between being remote-first
while facilitating in-person meetings to encourage collaboration, and we will continue to evaluate our location strategy post-pandemic.
Intellectual Property
We have developed our proprietary intellectual property over the
past thirteen years. Our patents, trademarks, copyrights, domain names, trade secrets, and other intellectual property rights distinguish our products and services from those of our competitors and contribute to our competitive advantage in the
markets in which we operate. To protect our intellectual property, we rely on a combination of patent, trademark, copyright and trade secret laws, confidentiality agreements, non-compete agreements, and assignment-for-inventions agreements with
our employees, contractors and others and contracts with third parties. We also regularly monitor any infringement or misappropriation of our intellectual property rights.
As of June 30, 2022, our intellectual property rights include the
following:
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registration of 64 domain names;
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57 trademarks and 5 trademark applications;
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12 copyright registrations; and
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6 patents and 1 patent application.
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As of June 30, 2022, we have secured six patents in the United
States, each of which is set to expire in 2031.
We license technology and other intellectual property from our
partners and rely on our license agreements with those partners to use the intellectual property. Third parties may assert claims related to intellectual property rights against our partners and us.
Facilities and Office Space
Our headquarters is located in West Hollywood, California, where we
lease and occupy approximately 25,000 square feet of office space. We also lease space at several co-working locations across the United States and globally, including in Brooklyn, Chicago, and Taipei, Taiwan. We believe our facilities are
generally adequate for our current anticipated and future use, although we may from time to time lease additional facilities or vacate existing facilities as our operations require.
Government Regulation
We are subject to a number of U.S. federal and state laws and
regulations, as well as foreign ones that involve matters that are important to, or may otherwise impact, our business and that may affect companies conducting business on the internet, including, but not limited to, Internet and eCommerce, labor
and employment, anti-discrimination, payments, whistleblowing and worker confidentiality obligations, product liability, intellectual property, consumer protection and warnings, marketing, taxation, privacy, data security, competition,
arbitration agreements and class action waiver provisions, terms of service, and mobile application and website accessibility. These regulations are often complex and subject to varying interpretations, in many cases due to their lack of
specificity, and as a result, their application in practice may change or develop over time through judicial decisions or as new guidance or interpretations are provided by regulatory and governing bodies in the United States and abroad, such as
federal, state, and local administrative agencies. Many of these laws and regulations are subject to change or uncertain interpretation, and could result in claims, changes to our business practices, monetary penalties, increased cost of
operations, declines in user growth or engagement, negative publicity, or other harm to our business. See “Risk Factors—Risks Related to Grindr’s Business—Risks Related to
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Regulation and Litigation—Our business is subject to complex and
evolving U.S. and international laws and regulations. Many of these laws and regulations are subject to change or uncertain interpretation, and could result in claims, changes to our business practices,
monetary penalties, increased cost of operations, declines in user growth or engagement, negatively publicity, or other harm to our business.” As a result, we could be subject to actions based on negligence,
various torts and trademark and copyright infringement, among other actions. See “Risk Factors—Risks Related to Grindr’s Business—Risks Related to Regulation and Litigation—We are subject to litigation, regulatory and other government
investigations, enforcement actions, and settlements, and adverse outcomes in such proceedings could have a materially adverse effect on our business, financial condition, and results of operation,” “Risk
Factors—Risks Related to Grindr’s Business—Risks Related to Regulation and Litigation —The varying and rapidly evolving regulatory framework on privacy and data protection across jurisdictions could result in claims, changes to our business
practices, monetary penalties, increased cost of operations, or declines in user growth or engagement, or otherwise harm our business,” “Risk Factors—Risks Related to Grindr’s Business—Risks Related to
Regulation and Litigation —Activities of our users or content made available by such users could subject us to liability,” “Risk Factors—Risks Related to Grindr’s Business—Risks Related to Regulation and
Litigation —Online applications are subject to various laws and regulations relating to children’s privacy and protection, which if violated, could subject us to an increased risk of litigation and regulatory actions,” and “Risk Factors—Risks Related to Grindr’s Business—Risks Related to Information Technology Systems and Intellectual Property—From time to time, we are party to intellectual property-related litigations and proceedings that
are expensive and time consuming to defend, and, if resolved adversely, could materially adversely impact our business, financial condition, and results of operations.”
In the ordinary course of our business, we may process a significant
volume of personal information and other regulated information from our users, employees and other third parties. Accordingly, we are, or may become, subject to numerous privacy and data protection obligations, including federal, state, local,
and foreign laws, regulations, guidance, and industry standards related to privacy and data protection. Such obligations may include, without limitation, the Federal Trade Commission Act, the Children’s Online Privacy Protection Act of 1998, the
California Consumer Privacy Act of 2018 (“CCPA”), the California Privacy Rights Act (“CPRA”) (starting in 2023), the European Union’s General Data Protection
Regulation 2016/679 (“EU GDPR”), the EU GDPR as it forms part of United Kingdom (“UK”) law by virtue of section 3 of the European Union (Withdrawal) Act 2018 (“UK GDPR”), and the ePrivacy Directive. In addition, several states within the United States have enacted or proposed data privacy laws. For example, Virginia passed the Consumer Data Protection Act, Colorado
passed the Colorado Privacy Act, and Utah passed the Utah Consumer Privacy Act, all of which become effective in 2023.
The CCPA, CPRA, EU GDPR and UK GDPR are examples of the increasingly
stringent and evolving regulatory frameworks related to personal data processing that may increase our compliance obligations and exposure for any noncompliance. For example, the CCPA imposes obligations on covered businesses to provide specific
disclosures related to a business’s collection, use, and disclosure of personal data and to respond to certain requests from California residents related to their personal data (for example, requests to know of the business’s personal data
processing activities, to delete the individual’s personal data, and to opt out of certain personal data disclosures). Also, the CCPA provides for civil penalties and a private right of action for certain data breaches. In addition, the CPRA,
effective January 1, 2023, will expand the CCPA. The CPRA will, among other things, give California residents the ability to limit use of certain sensitive personal data, establish restrictions on personal data retention, expand the types of data
breaches that are subject to the CCPA’s private right of action, and establish a new California Privacy Protection Agency to implement and enforce the new law. U.S. federal and state consumer protection laws also require us to publish statements
that accurately and fairly describe how we handle personal data and choices individuals may have about the way we handle their personal data.
Foreign data privacy and security laws (including the GDPR and UK
GDPR) impose significant and complex compliance obligations on entities that are subject to those laws. As one example, the GDPR applies to any company established in the EEA and to companies established outside the EEA that process personal data
in connection with the offering of goods or services to data subjects in the EEA or the monitoring of the behavior of data subjects in the EEA—the latter of which implicates Grindr as we have no EEA/UK operations. These obligations may include
limiting personal data processing to only what is necessary for specified, explicit, and legitimate purposes; increasing transparency obligations to data subjects; limiting the collection and retention of personal data; increasing rights for data
subjects; requiring the implementation and maintenance of technical and organizational safeguards for personal data; and mandating notice of certain personal data breaches to the relevant supervisory authority(ies) and affected individuals. Users
in the UK and EEA transfer their personal data directly to Grindr in the United States, and we notify users that United States may not afford the same privacy protections as their country of residence. There are
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also a number of legislative proposals pending before the U.S. Congress, various
state legislative bodies and foreign governments concerning content regulation and data protection that could affect us. See “Risk Factors—Risks Related to Grindr’s Business—Risks Related to Regulation and
Litigation—The varying and rapidly evolving regulatory framework on privacy and data protection across jurisdictions could result in claims, changes to our business practices, monetary penalties, increased cost of operations, or declines in
user growth or engagement, or otherwise harm our business.”
We take our data protection obligations seriously as any improper
disclosure, particularly with regard to our customers’ sensitive personal data, could negatively impact our business and/or our reputation. See “Risk Factors—Risks Relating to our Business—Security breaches and
improper access to or disclosure of our data or user data, or other hacking and phishing attacks on our systems, could harm our reputation and adversely affect our business” and “—The processing,
storage, use and disclosure of personal data could give rise to liabilities as a result of governmental regulation, conflicting legal requirements or differing applications of privacy regulations.”
Legal Proceedings
In the ordinary course of business, we are involved in various
claims, lawsuits, government investigations, settlements and proceedings relating to our operations. Although the results of the claims, lawsuits, government investigations, and proceedings in which we are involved cannot be predicted with
certainty, we do not believe the final outcome of certain matters will have a material adverse effect on our business, financial condition, or results of operations. Currently, it is too early to determine the outcome and probability of certain
legal proceedings and whether they would have a material adverse effect on the Company’s business. Please refer to Note 8 to Grindr’s unaudited condensed consolidated financial statements for the three and six months ended June 30, 2022 and Note
12 to Grindr’s audited consolidated financial statements for the year ended December 31, 2021 included elsewhere in this proxy statement/prospectus for more details.
In the future, we may be subject to additional legal proceedings,
the scope and severity of which is unknown and which could adversely affect our business. In addition, from time to time, others may assert claims against us and we may assert claims and legal proceedings against other parties, including in the
form of letters and other forms of communication.
The results of any current or future legal proceedings cannot be
predicted with certainty and, regardless of the outcome, can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.
For more information, see “Risk
Factors—Risks Related to Grindr’s Business—Risks Related to Regulation and Litigation—We are subject to litigation, regulatory and other government investigations, enforcement actions, and settlements, and adverse outcomes in such proceedings
could have a materially adverse effect on our business, financial condition, and results of operation.”
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AND RESULTS OF OPERATIONS
The following discussion and analysis of our
financial condition and results of operations should be read in conjunction with the “Selected Historical Consolidated Financial Information of Grindr” section of this prospectus and our consolidated financial statements and related notes that
appear in this proxy statement/prospectus. Our historical results do not necessarily reflect what our historical financial position and results of operations would have been had we been a stand-alone public company during the periods presented.
In addition, our historical results are not necessarily indicative of the results to be expected for any future period, and results for any interim period are not necessarily indicative of the results to be expected for the full year.
In addition to historical consolidated financial
information, the following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause
or contribute to these differences include those discussed below and elsewhere in this prospectus, particularly in “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” in this proxy statement/prospectus.”
Overview
Grindr is the world’s largest social network focused on the
LGBTQ+ community with approximately 10.8 million MAUs and approximately 601 thousand Paying Users in 2021. Our Paying Users were over 765 thousand and over 744 thousand for the three and six months ended June 30, 2022, respectively. According
to the Frost & Sullivan study commissioned by Grindr, Grindr is the largest and most popular gay mobile app in the world, with more MAUs than other LGBTQ+ social networking applications. Our mission is to connect queer people with one
another and the world. Since our inception in 2009 as a casual dating app for gay men, we have evolved into a global LGBTQ+ social network platform serving and addressing the needs of the entire LGBTQ+ queer community. We believe Grindr is a
vital utility for the LGBTQ+ community and our users, as evidenced by our user engagement. Our users are some of the most engaged, spending, on average, 61 minutes per day on our platform compared to 10-20 minutes on dating apps, according to
the Frost & Sullivan Study commissioned by Grindr, and 25-35 minutes on social networking apps, according to Statista.
We have grown significantly over the years since our product launch.
For the three months ended June 30, 2022 and 2021, we generated $46.6 million and $34.8 million of revenue, respectively, and for the six months ended June 30, 2022 and 2021, we generated $90.1 million and $62.6 million of revenue, respectively,
representing a period-over-period growth of 33.9% and 43.9% as compared to the three-month and six-month periods in 2021, respectively. We had over 765 and 744 thousand Paying Users for the three and six months ended June 30, 2022 representing a
period-over-period growth of 34.4% and 33.1% as compared to the same period in 2021. In 2021, we generated $145.8 million of revenue, representing year-over-year growth of 39.5% as compared to the combined Successor 2020 Period and Predecessor
2020 Period (as defined below) and approximately 601 thousand Paying Users, which is 2.2% higher than our Paying Users from 2020. We have users in over 190 countries or territories and support 21 languages on our platform. On average, profiles on
our platform sent over 260.0 million daily messages in 2021.
Despite our growth, we believe we are just beginning to scratch
the surface of our market opportunity and financial potential. According to the Frost & Sullivan Study commissioned by Grindr, the LGBTQ+ population is growing faster than the overall population and younger generations are driving this
growth. We expect this trend to continue as social norms shift, more progressive attitudes surface, and people become more comfortable expressing themselves openly. As this group grows, gains influence, and becomes more digitally connected, we
believe we are well positioned to continue to be the leading platform for this group to connect with each other. The Frost & Sullivan Study commissioned by Grindr estimates the global LGBTQ+ population at 538.4 million in 2021 with
approximately $10.9 trillion of GDP at purchasing power parity. In 2021, our MAUs and revenue imply we have only captured around 2.0% of the LGBTQ+ population and less than 0.01% of the spend. As the world’s largest social network focused on
the LGBTQ+ community, we have significant opportunities to grow both our users and our revenue through new products and services and additional monetization features.
In June 2020, SVH acquired, through SV Acquisition, approximately
98.6% interest in Grindr Inc. (and its subsidiaries) (the “Predecessor”) from Kunlun. The remaining interest was held as restricted stock. The transaction resulted in related entities being consolidated for financial reporting with the financial
statements reflecting the adjustments of assets and liabilities to fair market value (“FMV”) at the transaction date. The Predecessor reorganized and converted to Grindr Holdings LLC through a series of
related transactions and entities. To distinguish
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between the difference in basis of accounting due to the acquisition that occurred
on June 10, 2020, the information below presents operations for two periods, Predecessor and Successor, which relate to the periods preceding and the periods succeeding the acquisition, respectively. References to the “Successor 2020 Period” in
the discussion below refers to the period from June 11, 2020 to December 31, 2020. References to the “Predecessor 2020 Period” in the discussion below refers to the period from January 1, 2020 to June 10, 2020. We believe that it remains useful
to review the operating results for the Successor 2020 Period and Predecessor 2020 Period as combined for purposes of producing an analysis useful to a user of the financial statements. Therefore, some of the discussion below considers our
analysis of our financial results for the combined Successor 2020 Period and Predecessor 2020 Period (as defined below) with no pro forma adjustments applied to the periods to reflect the difference in basis.
Prior to the transaction with SVH, we experienced many years of
user, revenue, and Adjusted EBITDA growth. As a result of our growth, our infrastructure and systems were not keeping pace, just like many high growth tech companies in similar situations. Following the transaction with SVH, we spent the next
several months focused on reassessing strategic priorities, updating our technology infrastructure, upgrading our data systems, stabilizing our product, and optimizing our cost structure. As a result, by 2021 we had a nimbler company with modern
tools that resulted in a better and more stable product. This positioned us to take advantage of growth opportunities in 2021 and beyond.
The Grindr App is free to download and provides certain services and
features to our users for free, and then offers a variety of additional controls and features for users who subscribe to our premium products and services, Grindr XTRA and Grindr Unlimited. A substantial portion of our revenues are derived
directly from users in the form of recurring subscription fees, providing our users access to a bundle of features for the period of their subscription, or add-ons to access premium features. Leveraging the strong brand awareness and significant
user network stemming from our first mover advantage in the LGBTQ+ social networking space, our historical growth in number of users has been driven primarily by word of mouth referrals or other organic means.
While we have users in over 190 countries and territories, our core
markets are currently North America and Europe, from which we derived 88.2%, 88.0%, 89.5%, 86.1%, and 87.8% of our total revenues for the three and six months ended June 30, 2022, the year ended December 31, 2021, combined Successor 2020 Period
and Predecessor 2020 Period, and the year ended December 31, 2019, respectively. We intend to grow our user base and revenues by providing innovative and customized products and services and features to users in targeted geographic regions
outside of our current core markets that have a large number of untapped potential users, favorable regulatory environments, and fast-growing economies.
In addition to our revenue generated from subscription fees and
premium add-ons, we generate a portion of our revenues from both first-party and third-party advertising. Our advertising business provides advertisers with the unique opportunity to directly target and reach the LGBTQ+ community, which is
characterized by a higher-than-average proportion of well-educated, brand-conscious individuals with substantial aggregate global purchasing power. Advertisers on our Grindr App span across many different industries, including healthcare, gaming,
travel, automotive, and consumer goods. We offer a diverse range of advertising initiatives to advertisers, such as in-app banners, full-screen interstitials, rewarded video, and other customized units, typically sold on an impressions basis.
Additionally, we contract with a variety of third-party advertisement sales platforms to market and sell digital and mobile advertising inventory on our Grindr App. We will continue to evaluate opportunities to increase inventory with unique
advertising units and offerings.
Consolidated Results for the Three Months Ended June 30, 2022 and 2021
For the three months ended June 30, 2022 and 2021, we generated:
|
•
|
Revenues of $46.6 million and $34.8 million, respectively. The increase was $11.8 million, or 33.9%.
|
|
•
|
Net Income (Loss) of $(4.3) million and $1.8 million, respectively. The decrease was $6.1 million, or (338.9)%.
|
|
•
|
Adjusted EBITDA of $21.5 million and $19.5 million, respectively. The increase was $2.0 million, or 10.3%.
|
Consolidated Results for the Six Months Ended June 30, 2022 and 2021
For the six months ended June 30, 2022 and 2021, we generated:
|
•
|
Revenue of $90.1 million and $62.6 million, respectively. The increase was $27.5 million, or 43.9%.
|
|
•
|
Net Income (Loss) of $0.3 million and $(3.3) million, respectively. The increase was $3.6 million, or 109.1%.
|
|
•
|
Adjusted EBITDA of $41.7 million and $33.2 million, respectively. The increase was $8.5 million, or 25.6%.
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248
Consolidated Results for the Year Ended December 31, 2021 and 2020
For the year ended December 31, 2021, Successor 2020 Period and
Predecessor 2020 Period, we generated:
|
•
|
Revenue of $145.8 million, $61.1 million, and $43.4 million, respectively. The increase for the year ended December 31, 2021
compared to the combined Successor 2020 Period and Predecessor 2020 Period was $41.3 million, or 39.5%.
|
|
•
|
Net Income (Loss) of $5.1 million, $(11.0) million, and $(2.1) million, respectively. The increase for the year ended December
31, 2021 compared to the combined Successor 2020 Period and Predecessor 2020 Period was $18.2 million, or 138.9%.
|
|
•
|
Adjusted EBITDA of $77.1 million, $35.7 million, and $14.9 million, respectively. The increase for the year ended December 31,
2021 compared to the combined Successor 2020 Period and Predecessor 2020 Period was $26.5 million, or 52.4%. See “Grindr’s Management’s Discussion and Analysis of Financial Condition and Result of
Operations—Non-GAAP Financial Measures—Adjusted EBITDA” for more details on the calculations.
|
The Business Combination and Public Company Costs
On May 9, 2022, Grindr, Tiga and Merger Sub I entered into the
Merger Agreement pursuant to which Grindr will be merged with and into Merger Sub I, with Grindr surviving the First Merger as a wholly owned subsidiary of Tiga, and as promptly as practicable and as part of the same overall transaction as the
First Merger, the merger of such Surviving Company with and into Merger Sub II, with Merger Sub II being the surviving entity of the Second Merger, in accordance with the terms and conditions of the Merger Agreement. The transaction will provide
Grindr with up to $533.2 million of gross proceeds, including $284.4 million from the trust account, a minimum of $50.0 million from the sale of forward purchase shares and forward purchase warrants and up to an additional $50.0 million from the
sale of backstop shares and backstop warrants, the issuance of a new secured senior loan of at least $114.8 million, and an estimated $34.0 million cash settlement of the shareholder loan agreement with Catapult GP II. Grindr will be deemed the
accounting predecessor and the combined entity will be the successor registrant with the SEC, meaning that Grindr’s consolidated financial statements for previous periods will be disclosed in Tiga’s future periodic reports filed with the SEC.
While the legal acquirer in the Merger Agreement is Tiga, for
financial accounting and reporting purposes under U.S. GAAP, Grindr will be the accounting acquirer and the Business Combination will be accounted for as a “reverse recapitalization.” A reverse recapitalization (i.e., a capital transaction
involving the issuance of stock by Tiga for the stock of Grindr) does not result in a new basis of accounting, and the consolidated financial statements of the combined entity represent the continuation of the consolidated financial statements of
Grindr in many respects. Accordingly, the consolidated assets, liabilities and results of operations of Grindr will become the historical consolidated financial statements of New Grindr, and Tiga’s assets, liabilities, and results of operations
will be consolidated with Grindr beginning on the acquisition date. Operations prior to the Business Combination will be presented as those of Grindr in future reports. The net assets of Tiga will be recognized at historical cost (which is
expected to be consistent with carrying value), with no goodwill or other intangible assets recorded upon execution of the Business Combination.
As a consequence of the Business Combination, Grindr will become the
successor to an SEC-registered and NYSE-listed company, which will require Grindr to hire additional personnel and implement procedures and processes to address public company regulatory requirements and customary practices. Grindr expects to
incur additional annual expenses as a public company for, among other things, directors’ and officers’ liability insurance, director fees and additional internal and external accounting, legal and administrative resources, including increased
audit and legal fees. The Company will be classified as an Emerging Growth Company, as defined under the Jumpstart Our Business Act (the “Jobs Act”), which was enacted on April 5, 2012. As a result, upon
execution of the Business Combination, the Company will be provided certain disclosure and regulatory relief, provided by the SEC, as an Emerging Growth Company.
Grindr’s future results of consolidated operations and financial
position may not be comparable to historical results as a result of the Business Combination.
249
How We Generate Revenue
We currently generate revenue from two revenue streams—Direct
Revenue and Indirect Revenue. Direct Revenue is revenue generated by our users who pay for subscriptions or add-ons to access premium features. Indirect Revenue is generated by third parties who pay us for access to our users, such as advertising
or partnerships.
Direct Revenue is driven predominately by our subscription revenue
and premium add-ons. Our current subscription offerings are Grindr XTRA and Grindr Unlimited. Our subscription revenue has grown through organic user acquisition and the viral network effects enabled by our brand and market position. We utilize a
freemium model to drive increased user acquisition, subscriber conversions, and monetization on the Grindr App. Many of our users choose to pay for premium features and functionalities, such as access to more user profiles, ad-free environments,
advanced filters, unlimited blocks and favorites, and the ability to send multiple photos at the same time, to enhance their user experience. By continuously introducing new premium features, we continue to increase our Paying Users and average
revenue per paying user.
For the years ended December 31, 2021, the combined Successor Period
2020 and Predecessor Period 2020, and 2019, our Adjusted Direct Revenue (as defined below) accounted for 80.2%, 93.1%, and 77.3% of our total revenue, respectively. For the three and six months ended June 30, 2022 and the three and six months
ended June 30, 2021, our Adjusted Direct Revenue (as defined below) accounted for 83.2%, 83.4%, 78.2% and 81.7% of our total revenue, respectively.
Indirect Revenue primarily consists of revenue generated by third
parties who pay us for access to our users, including advertising, partnerships, merchandise, and other non-direct revenue. Our advertising business provides advertisers with the unique opportunity to directly target and reach the LGBTQ+
community, which generally consists of well-educated individuals with significant global purchasing power. We have attracted advertisers from a diverse array of industries, including healthcare, gaming, travel, automotive, and consumer goods.
We offer a diverse range of advertising initiatives to advertisers, such as in-app banners, full-screen interstitials, rewarded video, and other customized units, typically on a CPM basis. We contract with a variety of third-party ad platforms
to market and sell digital and mobile advertising inventory on our Grindr App. In exchange for facilitating the advertising process, we pay the relevant third-party ad platform a share of the revenue derived from the advertisements they place
on the Grindr App. We intend to continue to grow our Indirect Revenue through advertising, partnerships, merchandise, and other non-direct initiatives.
Key Operating and Financial Metrics
|
(in thousands, except Adjusted ARPPU, ARPPU and ARPU)
|
| |
Three
Months
Ended
June 30,
2022
|
| |
Three
Months
Ended
June 30,
2021
|
| |
Six
Months
Ended
June 30,
2022
|
| |
Six
Months
Ended
June 30,
2021
|
|
Key Operating Metrics
|
| |
|
| |
|
| |
|
| |
|
|
Paying Users
|
| |
765
|
| |
569
|
| |
744
|
| |
559
|
|
Adjusted Average Direct Revenue per Paying User
|
| |
$16.90
|
| |
$15.95
|
| |
$16.83
|
| |
$15.22
|
|
Average Direct Revenue per Paying User
|
| |
$16.90
|
| |
$15.84
|
| |
$16.83
|
| |
$14.95
|
|
Average Total Revenue per User
|
| |
$1.28
|
| |
$1.11
|
| |
$1.25
|
| |
$1.01
|
|
|
| |
Successor
|
| |
Predecessor
|
||||||
|
(in thousands, except Adjusted ARPPU, ARPPU and ARPU)
|
| |
Year ended
December 31,
2021
|
| |
Period from
June 11, 2020
to December 31,
2020
|
| |
Period from
January 1,
2020 to June 10,
2020
|
| |
Year ended
December 31,
2019
|
|
Key Operating Metrics
|
| |
|
| |
|
| |
|
| |
|
|
Paying Users
|
| |
601
|
| |
579
|
| |
601
|
| |
618
|
|
Adjusted Average Direct Revenue per Paying User
|
| |
$16.21
|
| |
$14.88
|
| |
$12.44
|
| |
$11.33
|
|
Average Direct Revenue per Paying User
|
| |
$16.08
|
| |
$12.76
|
| |
$12.44
|
| |
$11.32
|
|
Monthly Active Users
|
| |
10,799
|
| |
N/A
|
| |
N/A
|
| |
N/A
|
|
Average Total Revenue per User
|
| |
$1.13
|
| |
N/A
|
| |
N/A
|
| |
N/A
|
250
|
($ in thousands)
|
| |
Three Months
Ended June 30,
2022
|
| |
Three Months
Ended June 30,
2021
|
| |
Six Months
Ended June 30,
2022
|
| |
Six Months
Ended June 30,
2021
|
|
Key Financial and Non-GAAP Metrics(1)
|
| |
|
| |
|
| |
|
| |
|
|
Revenue
|
| |
$46,555
|
| |
$34,779
|
| |
$90,085
|
| |
$62,563
|
|
Adjusted Direct Revenue
|
| |
$38,757
|
| |
$27,197
|
| |
$75,155
|
| |
$51,088
|
|
Indirect Revenue
|
| |
$7,798
|
| |
$7,760
|
| |
$14,930
|
| |
$12,367
|
|
Net income (loss)
|
| |
$(4,309)
|
| |
$1,794
|
| |
$320
|
| |
$(3,327)
|
|
Net income (loss) margin
|
| |
(9.3)%
|
| |
5.2%
|
| |
0.4%
|
| |
(5.3)%
|
|
Adjusted EBITDA
|
| |
$21,455
|
| |
$19,464
|
| |
$41,744
|
| |
$33,206
|
|
Adjusted EBITDA Margin
|
| |
46.1%
|
| |
56.0%
|
| |
46.3%
|
| |
53.1%
|
|
Net cash provided by operating activities
|
| |
|
| |
|
| |
$27,836
|
| |
$3,579
|
|
|
| |
Successor
|
| |
Predecessor
|
||||||
|
($ in thousands)
|
| |
Year ended
December 31,
2021
|
| |
Period from
June 11, 2020
to December 31,
2020
|
| |
Period from
January 1,
2020 to June 10,
2020
|
| |
Year ended
December 31,
2019
|
|
Key Financial and Non-GAAP Metrics(1)
|
| |
|
| |
|
| |
|
| |
|
|
Revenue
|
| |
$145,833
|
| |
$61,078
|
| |
$43,385
|
| |
$108,698
|
|
Adjusted Direct Revenue
|
| |
$116,931
|
| |
$57,462
|
| |
$39,844
|
| |
$84,046
|
|
Indirect Revenue
|
| |
$29,802
|
| |
$11,810
|
| |
$3,545
|
| |
$24,698
|
|
Net income (loss)
|
| |
$5,064
|
| |
$(10,959)
|
| |
$(2,114)
|
| |
$7,706
|
|
Net income (loss) margin
|
| |
3.5%
|
| |
(17.9)%
|
| |
(4.9)%
|
| |
7.1%
|
|
Adjusted EBITDA
|
| |
$77,054
|
| |
$35,733
|
| |
$14,924
|
| |
$50,453
|
|
Adjusted EBITDA Margin
|
| |
52.8%
|
| |
58.5%
|
| |
34.4%
|
| |
46.4%
|
|
Net cash provided by operating activities
|
| |
$34,430
|
| |
$9,602
|
| |
$16,456
|
| |
$37,973
|
|
(1)
|
See “Management’s Discussion and Analysis of Financial Condition and Results of
Operations of Grindr—Non-GAAP Financial Measures” for additional information and a reconciliation of net income (loss) to Adjusted EBITDA and Adjusted EBITDA Margin and reconciliation of Direct
Revenue to Adjusted Direct Revenue.
|
|
•
|
Paying Users. A Paying User is a user that has purchased or renewed a Grindr subscription and/or purchased a premium add-on on
the Grindr App. We calculate Paying Users as a monthly average, by counting the number of Paying Users in each month and then dividing by the number of months in the relevant measurement period. Paying Users is a primary metric that we
use to judge the health of our business and our ability to convert users to purchasers of our premium features. We are focused on building new products and services and improving on existing products and services, as well as launching new
pricing tiers and subscription plans, to drive payer conversion.
|
|
•
|
ARPPU. We calculate ARPPU based on Direct Revenue in any measurement period, divided by Paying Users in such a period divided
by the number of months in the period.
|
|
•
|
Adjusted ARPPU. We calculate adjusted ARPPU based on Adjusted Direct Revenue (excluding purchase accounting adjustments) in any
measurement period, divided by Paying Users in such a period divided by the number of months in the period.
|
|
•
|
MAUs. A MAU, or Monthly Active User, is a unique device that demonstrated activity on the Grindr App over the course of the
specified period. Activity on the app is defined as opening the app, chatting with another user, or viewing the cascade of other users. Grindr also excludes devices where all linked profiles have been banned for spam. We calculate MAUs as
a monthly average, by counting the number of MAUs in each month and then dividing by the number of months in the relevant period. We use MAUs to measure the number of active users on our platform on a monthly basis and to understand the
pool of users we can potentially convert to Paying Users. We revised our MAU calculation method in November 2020. For periods prior to this, our ability to accurately validate the newly defined metric is restricted by privacy related data
retention policies; therefore, MAU is not presented for any periods prior to 2021.
|
251
|
•
|
ARPU. We calculate ARPU based on Total Revenue in any measurement period, divided by our MAUs in such a period divided by the
number of months in the period. As we expand our monetization product offerings, develop new verticals, and grow our community of users, we believe we can continue to increase our ARPU.
|
Non-GAAP Profitability
We use net income (loss) and net cash provided by operating
activities to assess our profitability and liquidity, respectively. In addition to net income (loss) and net cash provided by operating activities, we also use the following measure:
|
•
|
Adjusted EBITDA. We define Adjusted EBITDA as net income (loss) excluding income tax provision, interest expense, depreciation
and amortization, stock-based compensation expense, non-core expenses/losses (gains). Non-core expenses/losses (gains) include purchase accounting adjustments related to deferred revenue, transaction-related costs, asset impairments,
management fees, and interest income from the related party loan to Catapult GP II. Adjusted EBITDA Margin represents Adjusted EBITDA as a percentage of revenue.
|
|
•
|
Adjusted Direct Revenue. We define Adjusted Direct Revenue as Direct Revenue adjusted for the release of the fair value
adjustment of deferred revenue into revenue of the acquired deferred revenue due to the June 10, 2020, acquisition (See Note 3 to Grindr’s audited consolidated financial statements included elsewhere in this proxy statement/prospectus
for additional information).
|
Adjusted EBITDA, Adjusted EBITDA Margin and Adjusted Direct
Revenue are key measures we use to assess our financial performance and are also used for internal planning and forecasting purposes. We believe Adjusted EBITDA, Adjusted EBITDA Margin and Adjusted Direct Revenue are helpful to investors,
analysts, and other interested parties because they can assist in providing a more consistent and comparable overview of our operations across our historical financial periods. In addition, these measures are frequently used by analysts,
investors, and other interested parties to evaluate and assess performance.
See “Management’s
Discussion and Analysis of Financial Condition and Results of Operations of Grindr Non-GAAP Financial Measures” for additional information and a reconciliation of net income (loss) to Adjusted EBITDA and Adjusted EBITDA
Margin and reconciliation of Direct Revenue to Adjusted Direct Revenue.
Key Factors Affecting our Performance
Our results of operations and financial condition have been, and
will continue to be, affected by a number of factors that present significant opportunities for us but also pose risks and challenges, including those discussed below and in the section of this prospectus titled “Risk Factors.”
Growth in User Base and Paying Users
We acquire new users through investments in marketing and brand as
well as through word of mouth from existing users and others. We convert these users to Paying Users by introducing premium features which maximize the probability of developing meaningful connections, improve the experience, and provide more
control. For the three months ended June 30, 2022 and 2021, we had over 765 thousand and 569 thousand Paying Users, respectively, representing an increase of 34.4% period over period and for the six months ended June 30, 2022 and 2021, we had
over 744 thousand and 559 thousand Paying Users, respectively, representing an increase of 33.1% period over period. We grow Paying Users by acquiring new users and converting new and existing users to purchasers of one of our subscription plans
or in-app offerings. As we scale and our community grows larger, we are able to facilitate more meaningful interactions as a result of the wider selection of potential connections. This in turn increases our brand awareness and increases
conversion to one of our premium products and services. Our revenue growth primarily depends on growth in Paying Users. While we believe we are in the early days of our opportunity, at some point we may face challenges increasing our Paying
Users, including competition from alternative products and services and lower adoption of certain product features.
Expansion into New Geographic Markets
We are focused on growing our platform globally, including through
entering new markets and investing in under-penetrated markets. Expanding into new geographies will require increased costs related to marketing, as well as localization of product features and services. Potential risks to our expansion into new
geographies will include
252
competition and compliance with foreign laws and regulations. As we expand into
certain new geographies, we may see an increase in users who prefer to access premium features through our add-on options rather than through our subscription packages, which could impact our ARPPU. We may also see a lower propensity to pay as we
enter certain new markets with additional competitors and cost and revenue profiles.
Growth in ARPPU
We have developed a sophisticated understanding of the value our
users derive from becoming Paying Users on our platform. We continually develop new monetization features and improve existing features in order to increase adoption of premium add-ons and our subscription programs. Many variables will impact our
ARPPU, including the number of Paying Users, mix of monetization offerings on our platform, effect of demographic shifts, geographic differences on all of these variables, and changes in mobile app store policies. Our pricing is in local currency
and may vary between markets. As foreign currency exchange rates change, translation of the statements of operations into U.S. dollars could negatively impact revenue and distort year-over-year comparability of operating results. To the extent
our ARPPU growth slows, our revenue growth will become increasingly dependent on our ability to increase our Paying Users.
Investing in Growth While Driving Long-Term
Profitability
Key investment areas for our platform include machine learning
capabilities, including continually improving our technology; features that prioritize security and privacy; and new premium offerings that add incremental value to Paying Users.
Attracting and Retaining Talent
Our business relies on our ability to attract and retain our talent,
including engineers, data scientists, product designers and product developers. As of June 30, 2022, we had over 173 full-time employees; of which employees, approximately 56.6% work in engineering and product development. We believe that people
want to work at a company that has purpose and aligns with their personal values, and therefore our ability to recruit talent is aided by our mission and brand reputation. We compete for talent within the technology industry.
Impact of COVID-19
In March 2020, the World Health Organization declared the
Coronavirus Disease 2019 (“COVID-19”) a global pandemic. The COVID-19 outbreak has reached across the globe, resulting in the implementation of significant governmental measures, including lockdowns,
closures, quarantines, and travel bans intended to control the spread of the virus. While some of these measures have been relaxed over the past few months in certain parts of the world, ongoing social distancing measures, and future prevention
and mitigation measures, as well as the potential for some of these measures to be reinstituted in the event of repeat waves of the virus, are likely to have an adverse impact on global economic conditions and consumer confidence and spending,
and could materially adversely affect demand, or users’ ability to pay, for our products and services. In response to the COVID-19 outbreak, we have taken several precautions that may adversely impact employee productivity, such as requiring
employees to work remotely, imposing travel restrictions, and temporarily closing office locations. We continue to monitor the rapidly-evolving situation and guidance from international and domestic authorities, including federal, state and local
public health authorities, and there may be developments outside our control requiring us to adjust our operating plan. As such, given the unprecedented uncertainty around the duration and severity of the impact on market conditions and the
business environment, we cannot reasonably estimate the full impacts of the COVID-19 pandemic on our operating results in the future. We believe the COVID-19 pandemic was a factor that suppressed user activity, particularly between March 2020 to
July 2020, when in-person engagement across the markets in which we operate was severely impacted, and caused some users to be less active or cancel their subscriptions. For additional information, see “Risk
Factors—Risks Related to Grindr’s Business—Risks Related to Grindr’s Brand, Products and Services, and Operations—Our business and results of operations may be materially adversely affected by the recent COVID-19 outbreak or other similar
outbreaks.”
Factors Affecting the Comparability of Our Results
General economic trends. General economic trends and conditions, including demographic changes, employment rates, job growth, user confidence, and disposable income, have a substantial effect on both our users’ ability
and desire to purchase premium subscriptions and advertisers’ ability and willingness to advertise on our network, thereby affecting both of our major revenue streams and our financial results over time and the year-over-year comparability of
operating results.
253
Governmental regulations. New governmental policies and regulations can affect our business in meaningful ways, even when such policies and regulations are not specifically related to the LGBTQ+ community. For example,
the implementation of GDPR in Europe has given end-users more control over how their data and personal information are utilized and has thereby adversely affected our European advertisers’ ability to specifically target these users. This new
regulation has had a stagnating effect on our indirect revenue growth trajectory in Europe. The implementation of similar regulations in other regions of the world, or new regulations that affect our ability to monetize the data received from
our users, could have a significant impact on our operating results and ability to grow our business.
Temporary variability in
general advertising spend. Our ability to maintain consistently high advertiser demand for our platform can be affected by seasonal or temporary trends in advertisers’ appetites to engage
with our users or our brand. For example, events that result in temporary positive or negative publicity for our company (even if unfounded) may play a significant role in our advertisers’ desire to continue to advertise on our platform.
Further, general economic conditions may lead to changes in advertising spending in general, which could have a significant impact on our results of operations. Such fluctuations in advertising demand are often unpredictable and likely
temporary, but could have a significant impact on the financial condition of our business.
International market pricing
and changes in foreign exchange rates. The Grindr App has MAUs in over 190 countries and territories. Our international revenues represented 37.8%, 37.0%, 35.8%, 42.7%, and 36.7% of total
revenue for the three and six months ended June 30, 2022, the year ended December 31, 2021, combined Successor 2020 Period and Predecessor 2020 Period, and the year ended December 31, 2019, respectively. We vary our pricing to align with local
market conditions and our international businesses typically earn revenues in local currencies. In addition, some of the parties we work with utilize internally generated foreign exchange rates that may differ from other foreign exchange rates,
which could impact our results of operations.
Key Components of Our Results of Operations
Revenues
We currently generate revenue from two revenue streams—Direct
Revenue and Indirect Revenue. Direct Revenue is revenue generated by our users who pay for subscriptions or premium add-ons to access premium features. Indirect Revenue is generated by third parties who pay us for access to our users, such as
advertising and partnerships. As we continue to expand and diversify our revenue streams, we anticipate increasing monetization from premium add-ons, contributing to increase in revenues over time.
Direct Revenues. Direct Revenues are reported gross of fees for subscriptions and premium add-ons as we are the primary party obligated in our transactions with customers and therefore, we act as the principal. Our subscription revenues are generated
through the sale of monthly subscriptions that are currently offered in one, three, six and twelve-month subscription periods. Subscribers pay in advance, primarily through third party partners, including iTunes, Google Play, and Stripe,
according to our terms and conditions. Subscription revenues, net of taxes and chargebacks, are recognized on a monthly basis over the term of the subscription.
Indirect Revenues. Indirect Revenues primarily consists of revenue generated by third parties who pay us for access to our users, including advertising, partnerships, and merchandise.
Our advertising business provides advertisers with the unique
opportunity to directly target and reach the LGBTQ+ community, which generally consists of well-educated individuals with significant global purchasing power. We have attracted advertisers from a diverse array of industries, including healthcare,
gaming, travel, automotive, and consumer goods. We offer a diverse range of advertising initiatives to advertisers, such as in-app banners, full-screen interstitials, rewarded video, and other customized units, typically on a CPM basis. We
contract with a variety of third-party ad platforms to market and sell digital and mobile advertising inventory on our Grindr App. In exchange for facilitating the advertising process, we pay the relevant third-party ad platform a share of the
revenue derived from the advertisements they place on the Grindr App.
Cost of Revenue and Operating Expenses
Cost of Revenue.
Cost of revenue consists primarily of the distribution fees which we pay to Apple and Google, infrastructure costs associated with supporting the Grindr App and our advertising efforts, which stem largely from our use of Amazon Web Services,
and costs associated with content moderation, which involve our outsourced teams in Honduras and the Philippines ensuring that users are complying with our community standards.
254
Selling, General, and Administrative
Expenses. Selling, general and administrative expenses consists primarily of sales and marketing expenditures, compensation and other employee-related costs for our employees, costs related to outside
consultants and general administrative expenses, including for our facilities, information technology and infrastructure support. We plan to continue to expand sales and marketing efforts to attract new users, retain existing users and increase
monetization of both our new and existing users. It also includes the expense from settlement of vested incentive units consisting of cash payments associated with closing out prior incentive plans and transitioning to new incentive plans in
connection with Kunlun’s acquisition of our equity interests in 2016 and 2018. Such cash payments were based upon the value of the vested incentive units at the time of settlement.
Product Development Expense. Product development expense consists primarily of employee-related and contractor costs for personnel engaged in the design, development, testing and enhancement of product offerings, features, and related
technology.
Depreciation and Amortization. Depreciation is primarily related to computers, equipment, furniture, fixtures, and leasehold improvements. Amortization is primarily related to capitalized software, acquired intangible assets (customer
relationships, technology, etc.) as well as trademarks, patents, and copyrights.
Other (Expense) Income
Interest (Expense) Income, Net. Interest (expense) income, net consists of interest income received on related party loans and interest expense incurred in connection with our long-term debt.
Other Income (Expense), Net. Other income (expense), net consists of realized exchange rate gains or losses, unrealized exchange rate gains or losses, charitable contributions.
Income Tax Provision (Benefit). Income tax provision (benefit) represents the income tax expense associated with our operations based on the tax laws of the jurisdictions in which we operate. Foreign jurisdictions have different statutory tax
rates than the United States. Our effective tax rates will vary depending on the relative proportion of foreign to domestic income, changes in the valuation of our deferred tax assets and liabilities, and changes in tax laws.
255
Results of Operations
Year Ended December 31, 2021
Compared to the Period from June 11, 2020 to December 31, 2020 (Successor) and the Period from January 1, 2020 to June 10, 2020 Compared to the Year Ended December 31, 2019 (Predecessor)
|
Results of Operations
|
| |
Successor
|
| |
Predecessor
|
||||||||||||||||||
|
($ in thousands)
|
| |
Year ended
December 31,
2021
|
| |
% of
Total
Revenue
|
| |
Period
from
June 11,
2020 to
December 31,
2020
|
| |
% of
Total
Revenue
|
| |
Period
from
January 1,
2020 to
June 10,
2020
|
| |
% of
Total
Revenue
|
| |
Year
ended
December 31,
2019
|
| |
% of
Total
Revenue
|
|
Consolidated
Statements of Operations and Comprehensive Income (Loss)
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
Revenues
|
| |
$145,833
|
| |
100.0%
|
| |
$61,078
|
| |
100.0%
|
| |
$43,385
|
| |
100.0%
|
| |
$108,698
|
| |
100.0%
|
|
Operating costs and expenses
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
Cost of revenue (exclusive of depreciation and
amortization shown separately below)
|
| |
37,358
|
| |
25.6%
|
| |
18,467
|
| |
30.2%
|
| |
12,954
|
| |
29.9%
|
| |
27,545
|
| |
25.3%
|
|
Selling, general and administrative expenses
|
| |
30,618
|
| |
21.0%
|
| |
15,671
|
| |
25.7%
|
| |
15,583
|
| |
36.0%
|
| |
32,573
|
| |
30.0%
|
|
Product development expense
|
| |
10,913
|
| |
7.5%
|
| |
7,278
|
| |
11.9%
|
| |
7,136
|
| |
16.4%
|
| |
11,059
|
| |
10.2%
|
|
Depreciation and amortization
|
| |
43,234
|
| |
29.6%
|
| |
17,639
|
| |
28.9%
|
| |
10,642
|
| |
24.5%
|
| |
27,412
|
| |
25.2%
|
|
Total operating costs and expenses
|
| |
122,123
|
| |
83.7%
|
| |
59,055
|
| |
96.7%
|
| |
46,315
|
| |
106.8%
|
| |
98,589
|
| |
90.7%
|
|
Income (loss) from operations
|
| |
23,710
|
| |
16.3%
|
| |
2,023
|
| |
3.3%
|
| |
(2,930)
|
| |
-6.8%
|
| |
10,109
|
| |
9.3%
|
|
Other (expense) income
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
Interest (expense) income, net
|
| |
(18,698)
|
| |
-12.8%
|
| |
(15,082)
|
| |
-24.7%
|
| |
277
|
| |
0.6%
|
| |
386
|
| |
0.3%
|
|
Other income (expense), net
|
| |
1,288
|
| |
0.9%
|
| |
142
|
| |
0.2%
|
| |
(76)
|
| |
-0.2%
|
| |
(348)
|
| |
-0.3%
|
|
Total other (expense) income
|
| |
(17,410)
|
| |
-11.9%
|
| |
(14,940)
|
| |
-24.5%
|
| |
201
|
| |
0.4%
|
| |
38
|
| |
—%
|
|
Net income (loss) before income tax
|
| |
6,300
|
| |
4.3%
|
| |
(12,917)
|
| |
-21.1%
|
| |
(2,729)
|
| |
-6.3%
|
| |
10,147
|
| |
9.3%
|
|
Income tax provision (benefit)
|
| |
1,236
|
| |
0.8%
|
| |
(1,958)
|
| |
-3.2%
|
| |
(615)
|
| |
-1.4%
|
| |
2,441
|
| |
2.2%
|
|
Net income (loss) and comprehensive
income (loss)
|
| |
$5,064
|
| |
3.5%
|
| |
$(10,959)
|
| |
-17.9%
|
| |
$(2,114)
|
| |
-4.9%
|
| |
$7,706
|
| |
7.1%
|
|
Net income (loss) per share
|
| |
$0.05
|
| |
|
| |
$(0.11)
|
| |
|
| |
$(0.02)
|
| |
|
| |
$0.08
|
| |
|
Revenues
Revenues for the year ended December 31, 2021, Successor 2020
Period, and Predecessor 2020 Period were $145.8 million, $61.1 million, and $43.4 million, respectively. The $41.3 million increase, or 39.5% growth rate, for the year ended December 31, 2021 compared to the combined Successor 2020 Period and
Predecessor 2020 Period was due to an increase in Direct Revenue of $26.9 million, or 30.2%, to $116.0 million and an increase in Indirect Revenue of $14.4 million, or 94.1%, to $29.8 million. The increase in Direct Revenue was driven by both
an increase in ARPPU and Paying Users. ARPPU increased by 27.3%, or $3.46, to $16.08 in 2021 from $12.63 in the combined Successor 2020 Period and Predecessor 2020 Period. Our ARPPU increased as we improved product mix with growth in our
Unlimited tier and optimized pricing on legacy plans during the year ended December 31, 2021. Adjusted Direct Revenue was $116.9 million and Adjusted ARPPU was $16.21 for the year ended December 31, 2021. In 2021, Paying Users increased by 13
thousand to 601 thousand, from 588 thousand in the combined Successor 2020 Period and Predecessor 2020 Period, as we released new monetization features for our subscription plans. The increase in Indirect Revenue was primarily drive by
year-over-year growth in advertising revenue. In January 2020, one of our third-party advertising partners, MoPub (recently acquired by Applovin), temporarily suspended our partnership due to a negative report concerning Grindr’s data policies.
In response to this, Grindr worked with MoPub to address these concerns and the partnership was reinstated in mid-2020. Since then, Grindr’s Indirect Revenue has rebounded, contributing to the year-over-year increase in 2021. COVID-19 adversely
affected our business for part of 2021 and most of 2020. Given the 2020 acquisition by San Vicente and the impact of COVID-19, we took the opportunity to
256
focus our efforts internally by reassessing strategic priorities, updating our
technology infrastructure, upgrading our data systems, stabilizing our product, and optimizing our cost structure. The result was to position the company for significant revenue growth in 2021 and a business better positioned for future growth.
See “Risk Factors—Risks Related to Grindr’s Business—Risks Related to Grindr’s Brand, Products and Services, and Operations—Privacy concerns relating to our products and services and the use of user information
could negatively impact our user base or user engagement, which could have a material and adverse effect on our business, financial condition, and results of operations.”
Revenues for the Successor 2020 Period, Predecessor 2020 Period,
and year ended December 31, 2019 were $61.1 million, $43.4 million, and $108.7 million, respectively. The decrease for the combined Successor 2020 Period and Predecessor 2020 Period compared to the year ended December 31, 2019 of $4.2 million,
or (3.9)%, was due to an increase of $5.1 million, or 6.1%, in Direct Revenue to $89.1 million and a decrease of $9.3 million, or 37.8%, in Indirect Revenue to $15.4 million. The increase in Direct Revenue was primarily due to an increase in
ARPPU, associated with a favorable shift in mix of premium tier Paying Users. In the combined Successor 2020 Period and Predecessor 2020 Period, ARPPU increased by 11.5%, or $1.30, to $12.63 from $11.33 in 2019. Adjusted Direct Revenue was
$97.3 million and Adjusted ARPPU was $13.79 for the combined Successor 2020 Period and Predecessor 2020 Period. The increases in Adjusted ARPPU and in ARPPU were partially offset by a decrease in Paying Users of 30 thousand to 588 thousand in
the combined Successor 2020 Period and Predecessor 2020 Period. COVID-19 had a much larger impact on our lower priced tier, XTRA, user base. The decrease in Indirect Revenue was primarily driven by year-over-year decline in advertising revenue,
which was due to the MoPub suspension discussed in the previous paragraph.
Revenues from operations in the United States increased by
$33.7 million, or 56.3%, in the year ended December 31, 2021 as compared to the combined Successor 2020 Period and Predecessor 2020 Period. During this same period, revenues from operations in the United Kingdom increased by $1.4 million, or
15.6%, and revenues from operations in the remainder of the world increased by $6.2 million, or 17.6%. These changes are consistent with revenue changes previously noted.
Revenues from operations in the United States decreased by
$8.9 million, or (12.9)%, in the combined Successor 2020 Period and Predecessor 2020 Period as compared to the year ended December 31, 2019. During this same period, revenues from operations in the United Kingdom increased by $0.3 million, or
3.6%, and revenues from operations in the remainder of the world increased by $4.3 million, or 13.9%. These changes are consistent with revenue changes previously noted.
Cost of revenue
Cost of revenue for the year ended December 31, 2021, Successor 2020
Period, and Predecessor 2020 Period were $37.4 million, $18.5 million, and $13.0 million, respectively. Cost of revenue increased by $5.9 million, or 18.7%, in the year ended December 31, 2021 as compared to the combined Successor 2020 Period and
Predecessor 2020 Period. This increase was primarily due to growth in distribution fees (consistent with direct revenue growth) and increased infrastructure costs associated with our primary information systems vendors.
Cost of revenue for the Successor 2020 Period, Predecessor 2020
Period, and year ended December 31, 2019 were $18.5 million, $13.0 million, and $27.5 million, respectively. Cost of revenue increased by $4.0 million, or 14.5%, in the combined Successor 2020 Period and Predecessor 2020 Period as compared to the
year ended December 31, 2019. This increase was primarily due to growth in distribution fees and infrastructure costs.
Selling, general and administrative expense
Selling, general and administrative expense for the year ended
December 31, 2021, Successor 2020 Period, and Predecessor 2020 Period were $30.6 million, $15.7 million, and $15.6 million respectively. Selling, general and administrative expenses decreased $0.7 million, or (2.2)%, in the year ended
December 31, 2021 as compared to the combined Successor 2020 Period and Predecessor 2020 Period, primarily due to lower user acquisition spend and decreased contractor expenses. These decreases were partially offset by increased full-time
employee-related expenses associated with headcount growth.
Selling, general and administrative expense for the Successor 2020
Period, Predecessor 2020 Period, and year ended December 31, 2019 were $15.7 million, $15.6 million, and $32.6 million respectively. Selling, general and administrative expense decreased $1.3 million, or (4.0)%, in the combined Successor 2020
Period and Predecessor
257
2020 Period, as compared to the year ended December 31, 2019 primarily due to lower
office, travel, and other general administrative expenses, as a result of the COVID-19 lockdown.
Product development expense
Product development expense for the year ended December 31, 2021,
Successor 2020 Period, and Predecessor 2020 Period were $10.9 million, $7.3 million, and $7.1 million, respectively. Product development expense decreased $3.5 million, or (24.3)%, in the year ended December 31, 2021 as compared to the combined
Successor 2020 Period and Predecessor 2020 Period, due to lower contractor expenses, partially offset by increased full-time employee-related expenses.
Product development expense for the Successor 2020 Period,
Predecessor 2020 Period, and year ended December 31, 2019, were $7.3 million, $7.1 million, and $11.1 million, respectively. Product development expense increased $3.3 million, or 29.7%, in the combined Successor 2020 Period and Predecessor 2020
Period, as compared to the year ended December 31, 2019, due to higher employee and contractor related expenses.
Depreciation and amortization
Depreciation and amortization for the year ended December 31, 2021,
Successor 2020 Period, and Predecessor 2020 Period were $43.2 million, $17.6 million, and $10.6 million, respectively. Depreciation and amortization increased $15.0 million, or 53.2%, in the year ended December 31, 2021 as compared to the
Successor 2020 Period and Predecessor 2020 Period, primarily due to an increase in acquired intangibles amortization due to the acquisition in June 2020, as certain customer related intangible assets were amortized under an accelerated
amortization schedule, with higher amounts expensed in 2021 compared to the Successor 2020 Period and Predecessor 2020 Period combined. This increase was partially offset by a decrease in intangible impairment expense.
Depreciation and amortization for the Successor 2020 Period,
Predecessor 2020 Period, and year ended December 31, 2019 were $17.6 million, $10.6 million, and $27.4 million respectively. Depreciation and amortization increased $0.8 million, or 2.9%, in the combined Successor 2020 Period and Predecessor 2020
Period, as compared to the year ended December 31, 2019, primarily due an increase in intangible asset impairment expense which resulted in less amortization for the year ended December 31, 2019. This decrease was partially offset by an increase
in acquired intangible amortization expense.
Interest (expense) income, net
Interest income for the year ended 2021 primarily relates to a $30
million promissory note from Catapult GP II in conjunction with the common units purchased on April 27, 2021. Total promissory note bears interest at 10.0% per annum. Total amount of interest income related to the note for the successor year
ended December 31, 2021 was $2.0 million. Interest income during the Predecessor period 2020 and year ended December 31, 2019 was $0.3 million, and $0.4 million, respectively, primarily related to interest earned on a $14.0 million loan to Kunlun
bearing an interest rate of 2.0% per annum. See Note 9 and Note 17 to Grindr’s audited consolidated financial statements included elsewhere in this proxy statement/prospectus for additional information.
Interest expense relates primarily to the $192.0 million credit
agreement entered into in the Successor 2020 Period. Total amount of interest expense related to the credit agreement for the successor year ended December 31, 2021 and Successor 2020 Period was $20.7 million and $15.1 million respectively. See
Note 1 to Grindr’s audited consolidated financial statements for additional information included elsewhere in this proxy statement/prospectus for additional information.
Interest (expense) income, net for the year ended December 31, 2021,
Successor 2020 Period, and Predecessor 2020 Period were $(18.7) million, $(15.1) million, and $0.3 million, respectively.
Interest (expense) income, net increased by $3.9 million in the year
ended December 31, 2021 as compared to the combined Successor 2020 Period and Predecessor 2020 Period, primarily due to the additional interest expense associated with raising $192.0 million in debt June 2020. The higher interest expense was
partially offset by an increase in interest income associated with a loan arrangement.
Interest (expense) income, net for the Successor 2020 Period,
Predecessor 2020 Period, and year ended December 31, 2019 were $(15.1) million, $0.3 million, and $0.4 million, respectively. Interest (expense) income, net changed by $15.2 million from interest expense, net in the combined Successor 2020 Period
and Predecessor 2020 Period to interest income, net during the year ended December 31, 2019, primarily due to greater interest expense associated with raising $192.0 million in debt June 2020.
258
Other income (expense), net
Other income includes primarily the forgiveness of the Paycheck
Protection Program Loan (“PPP loan”). See Note 11 to Grindr’s audited consolidated financial statements included elsewhere in this proxy statement/prospectus for additional information. Other expenses
include primarily expenses such as charitable contributions, exchange rate gains or losses.
Other income (expense), net for the year ended December 31, 2021,
Successor 2020 Period, and Predecessor 2020 Period were $1.3 million, $0.1 million, and $(0.1) million, respectively. Other income (expense), net increased by $1.3 million in the year ended December 31, 2021 as compared to the combined Successor
2020 Period and Predecessor 2020 Period, primarily due to forgiveness received on our $1.5 million PPP Loan in October 2021.
Other income (expense), net for the Successor 2020 Period,
Predecessor 2020 Period, and year ended December 31, 2019 were $0.1 million, $(0.1) million, and $(0.3) million, respectively. Other income (expense), net increased by $0.4 million in the combined Successor 2020 Period and Predecessor 2020
Period, as compared to the year ended December 31, 2019, primarily due to exchange rate gain/loss changes and a decrease in charitable contributions.
Income tax provision (benefit)
We recorded income tax provision (benefit) as follows:
|
|
| |
Successor
|
| |
Predecessor
|
||||||
|
|
| |
Year ended
December 31,
2021
|
| |
From June 11,
2020 through
December 31,
2020
|
| |
From January 1,
2020 through
June 10,
2020
|
| |
Year ended
December 31,
2019
|
|
Current income tax provision (benefit):
|
| |
|
| |
|
| |
|
| |
|
|
Federal
|
| |
$4,828
|
| |
$1,461
|
| |
$760
|
| |
$341
|
|
State
|
| |
711
|
| |
521
|
| |
193
|
| |
(73)
|
|
International
|
| |
9
|
| |
—
|
| |
—
|
| |
—
|
|
Total current tax provision (benefit):
|
| |
5,548
|
| |
1,982
|
| |
953
|
| |
268
|
|
Deferred income tax provision (benefit):
|
| |
|
| |
|
| |
|
| |
|
|
Federal
|
| |
(4,436)
|
| |
(3,552)
|
| |
(1,304)
|
| |
2,170
|
|
State
|
| |
124
|
| |
(388)
|
| |
(264)
|
| |
3
|
|
International
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
|
Total deferred tax provision (benefit)
|
| |
(4,312)
|
| |
(3,940)
|
| |
(1,568)
|
| |
2,173
|
|
Total income tax provision (benefit)
|
| |
$1,236
|
| |
$(1,958)
|
| |
$(615)
|
| |
$2,441
|
Our effective tax rates in fiscal 2022 and future periods may
fluctuate, as a result of changes in our forecasts where losses cannot be benefited due to the existence of valuation allowances on our deferred tax assets, changes in actual results versus our estimates, or changes in tax laws, regulations,
accounting principles, or interpretations thereof.
Net income (loss)
Net income (loss) for the year ended December 31, 2021, Successor
2020 Period, and Predecessor 2020 Period was $5.1 million, $(11.0) million, and $(2.1) million, respectively. Net income increased by $18.2 million to $5.1 million net income in the year ended December 31, 2021 from a $13.1 million net loss in
the combined Successor 2020 Period and Predecessor 2020 Period.
Net income (loss) for the Successor 2020 Period, Predecessor 2020
Period, and year ended December 31, 2019 was $(11.0) million, $(2.1) million, and $7.7 million, respectively. Net income decreased by $20.8 million to $13.1 million net loss in the combined Successor 2020 Period and Predecessor 2020 Period from
$7.7 million net income in the year ended December 31, 2019.
259
Three Months Ended June 30, 2022 Compared to the
Three Months Ended June 30, 2021 and Six Months Ended June 30, 2022 Compared to the Six Months Ended June 30, 2021
|
Results of Operations
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
($ in thousands)
|
| |
Three
Months
Ended
June 30,
2022
|
| |
% of
Total
Revenue
|
| |
Three
Months
Ended
June 30,
2021
|
| |
% of
Total
Revenue
|
| |
Six
Months
Ended
June 30,
2022
|
| |
% of
Total
Revenue
|
| |
Six
Months
Ended
June 30,
2021
|
| |
% of
Total
Revenue
|
|
Consolidated
Statements of Operations and Comprehensive Income (Loss)
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
Revenues
|
| |
$46,555
|
| |
100.0%
|
| |
$34,779
|
| |
100.0%
|
| |
$90,085
|
| |
100.0%
|
| |
$62,563
|
| |
100.0%
|
|
Operating costs and expenses
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
Cost of revenue (exclusive of depreciation and amortization
shown separately below)
|
| |
12,102
|
| |
26.0%
|
| |
8,588
|
| |
24.7%
|
| |
23,803
|
| |
26.4%
|
| |
16,102
|
| |
25.8%
|
|
Selling, general and administrative expenses
|
| |
23,241
|
| |
49.9%
|
| |
6,549
|
| |
18.8%
|
| |
33,491
|
| |
37.2%
|
| |
13,463
|
| |
21.5%
|
|
Product development expense
|
| |
4,175
|
| |
9.0%
|
| |
2,206
|
| |
6.4%
|
| |
7,822
|
| |
8.7%
|
| |
4,581
|
| |
7.3%
|
|
Depreciation and amortization
|
| |
9,092
|
| |
19.5%
|
| |
10,721
|
| |
30.8%
|
| |
18,118
|
| |
20.1%
|
| |
21,826
|
| |
34.9%
|
|
Total operating costs and expenses
|
| |
48,610
|
| |
104.4%
|
| |
28,064
|
| |
80.7%
|
| |
83,234
|
| |
92.4%
|
| |
55,972
|
| |
89.5%
|
|
Income (loss) from operations
|
| |
(2,055)
|
| |
(4.4)%
|
| |
6,715
|
| |
19.3%
|
| |
6,851
|
| |
7.6%
|
| |
6,591
|
| |
10.5%
|
|
Other (expense) income
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
Interest (expense) income, net
|
| |
(3,256)
|
| |
(7.0)%
|
| |
(4,489)
|
| |
(12.9)%
|
| |
(6,212)
|
| |
(6.9)%
|
| |
(10,563)
|
| |
(16.9)%
|
|
Other income (expense), net
|
| |
2
|
| |
—%
|
| |
26
|
| |
0.1%
|
| |
(66)
|
| |
(0.1)%
|
| |
(30)
|
| |
—%
|
|
Total other (expense) income
|
| |
(3,254)
|
| |
(7.0)%
|
| |
(4,463)
|
| |
(12.8)%
|
| |
(6,278)
|
| |
(7.0)%
|
| |
(10,593)
|
| |
(16.9)%
|
|
Net income (loss) before income tax
|
| |
(5,309)
|
| |
(11.4)%
|
| |
2,252
|
| |
6.5%
|
| |
573
|
| |
0.6%
|
| |
(4,002)
|
| |
(6.4)%
|
|
Income tax provision (benefit)
|
| |
(1,000)
|
| |
(2.1)%
|
| |
458
|
| |
1.3%
|
| |
253
|
| |
0.2%
|
| |
(675)
|
| |
(1.1)%
|
|
Net income (loss) and comprehensive
income (loss)
|
| |
$(4,309)
|
| |
(9.3)%
|
| |
$1,794
|
| |
5.2%
|
| |
$320
|
| |
0.4%
|
| |
$(3,327)
|
| |
(5.3)%
|
|
Net income (loss) per share
|
| |
$(0.04)
|
| |
|
| |
$0.02
|
| |
|
| |
$—
|
| |
|
| |
$(0.03)
|
| |
|
Revenues
Revenues for the three months ended June 30, 2022 and 2021 were
$46.6 million and $34.8 million, respectively. The $11.8 million increase, or 33.9%, for the three months ended June 30, 2022 compared to the three months ended June 30, 2021 was due to an increase in Direct Revenue of $11.8 million, or 43.7%,
from $27.0 million to $38.8 million. The increase in Direct Revenue was driven by both an increase in ARPPU and Paying Users. ARPPU increased by 6.7%, or $1.06, to $16.90 for the three months ended June 30, 2022 from $15.84 for the three months
ended June 30, 2021. Our ARPPU increased as we improved product mix with growth in our Unlimited tier and optimized pricing on legacy plans in 2021. Adjusted Direct Revenue was $38.8 million and $27.2 million and Adjusted ARPPU was $16.90 and
$15.95 for the three months ended June 30, 2022 and 2021, respectively. For the three months ended June 30, 2022 and 2021, Paying Users increased by 196 thousand from over 569 thousand to over 765 thousand. We made various product changes and
released new monetization features for our subscription plans, which resulted in growth in our MAUs as well as higher conversion of those MAUs into Paying Users. The increase in Indirect Revenue was primarily driven by year-over-year growth in
advertising revenue. Advertising revenue increased for the three months ended June 30, 2022, as compared to the same time period in 2021, primarily because we sold a greater number of impressions to our direct advertisers via our brand sales
team as well as to our self-serve advertisers via our third-party partnership with Bucksense.
260
Revenues for the six months ended June 30, 2022 and 2021 were
$90.1 million and $62.6 million, respectively. The $27.5 million increase, or 43.9%, for the six months ended June 30, 2022 compared to the six months ended June 30, 2022 was due to an increase in Direct Revenue of $25.0 million, or 49.8%, from
$50.2 million to $75.2 million and an increase in Indirect Revenue of $2.5 million, or 20.2%, from $12.4 million to $14.9 million. The increase in Direct Revenue was driven by both an increase in ARPPU and Paying Users. ARPPU increased by
12.6%, or $1.88, to $16.83 for the six months ended June 30, 2022 from $14.95 for the six months ended June 30, 2021. Our ARPPU increased as we improved product mix with growth in our Unlimited tier and optimized pricing on legacy plans in
2021. Adjusted Direct Revenue was $75.2 million and $51.1 million and Adjusted ARPPU was $16.83 and $15.22 for the six months ended June 30, 2022 and 2021, respectively. For the six months ended June 30, 2022 and 2021, Paying Users increased by
185 thousand from over 559 thousand to over 744 thousand, as we made various product changes and released new monetization features for our subscription plans, which resulted in growth in our MAUs as well as higher conversion of those MAUs into
Paying Users. The increase in Indirect Revenue was primarily driven by year-over-year growth in advertising revenue. Advertising revenue increased, as we optimized our ad unit strategy throughout 2021, resulting in fewer ad impressions being
sold at a higher blended cost per ad impression to advertisers on our platform.
For the three months ended June 30, 2022 and 2021, revenues from
operations in the United States increased by $5.8 million, or 25.1%. During this same period, revenues from operations in the United Kingdom increased by $1.0 million, or 41.7%, and revenues from operations in the remainder of the world increased
by $5.0 million, or 54.3%. The reasons for these changes are consistent with revenue changes previously noted.
For the six months ended June 30, 2022 and 2021, revenues from
operations in the United States increased by $16.7 million, or 41.8%. During this same period, revenues from operations in the United Kingdom increased by $2.1 million, or 45.7%, and revenues from operations in the rest of the world increased by
$8.7 million, or 48.6%. The reasons for these changes are consistent with revenue changes previously noted.
Cost of revenue
Cost of revenue for the three months ended June 30, 2022 and 2021
were $12.1 million and $8.6 million, respectively. The $3.5 million increase, or 40.7%, was primarily due to a $2.0 million growth in distribution fees (consistent with direct revenue growth), $1.1 million in increased infrastructure costs
associated with our primary information systems vendors, and higher content moderation expenses required to support user growth.
Cost of revenue for the six months ended June 30, 2022 and 2021 were
$23.8 million and $16.1 million, respectively. The $7.7 million increase, or 47.8%, was primarily due to a $4.6 million growth in distribution fees (consistent with direct revenue growth), a $2.5 million increase infrastructure costs associated
with our primary information systems vendors, and higher content moderation expenses required to support user growth.
Selling, general and administrative expense
Selling, general and administrative expense for the three months
ended June 30, 2022 and 2021 were $23.2 million and $6.5 million, respectively. The $16.7 million increase, or 256.9%, was primarily due to greater equity compensation expense primarily due to a $12.2 million adjustment resulting from the
Series P unit modification that occurred in the second quarter of 2022, as well as higher personnel expenses associated with headcount growth in functional areas such as customer experience, recruiting and IT. The increase was also due to higher
outside service fees for recruiting, audit, tax, and other consulting services, branding and marketing costs, as well as other general and administrative expenses, such as general liability insurance, office software, and business travel and
entertainment.
Selling, general and administrative expense for the six months ended
June 30, 2022 and 2021 were $33.5 million and $13.5 million, respectively. The $20.0 million increase, or 148.1%, was primarily due to greater equity compensation expense primarily due to a $12.2 million adjustment resulting from the Series P
unit modification that occurred in the second quarter of 2022, as well as higher personnel expenses associated with headcount growth in functional areas such as customer experience, recruiting and IT. The increase was also due to higher outside
service fees for audit, tax, recruiting, and other consulting services, branding and marketing costs, as well as other general and administrative expenses, such as general liability insurance, office software, and business travel and
entertainment.
Product development expense
Product development expense for the three months ended June 30, 2022
and 2021 were $4.2 million and $2.2 million, respectively. The $2.0 million increase, or 90.9%, was due to increased full-time employee-related expenses primarily associated with headcount growth.
261
Product development expense for the six months ended June 30,
2022 and 2021 were $7.8 million and $4.6 million, respectively. The $3.2 million increase, or 69.6%, was due to increased full-time employee-related expenses primarily associated with headcount growth.
Depreciation and amortization
Depreciation and amortization for the three months ended June 30,
2022 and 2021 were $9.1 million and $10.7 million, respectively. The $1.6 million decrease, or (15.0)%, was primarily due to a decrease in acquired intangibles amortization. Certain customer related intangible assets arising from the acquisition
in June 2020 are amortized under an accelerated amortization schedule, with lower amounts expensed during the three months ended June 30, 2022 compared to the same period in 2021.
Depreciation and amortization for the six months ended June 30, 2022
and 2021 were $18.1 million and $21.8 million, respectively. The $3.7 million decrease, or (17.0)%, was primarily due to a decrease in acquired intangibles amortization. Certain customer related intangible assets arising from the acquisition in
June 2020 are amortized under an accelerated amortization schedule, with lower amounts expensed during the six months ended June 30, 2022 compared to the same period in 2021.
Interest (expense) income, net
Interest (expense) income, net for the three months ended June 30,
2022 and 2021 were $(3.3) million and $(4.5) million, respectively. The $1.2 million decrease, or (26.7)%, was primarily due to lower interest expense, as we made principal prepayments on our debt in 2021 and 2022. The decrease in interest
(expense) income, net was also due to an increase in interest income associated with a related party loan arrangement to Catapult GP II. See Note 5 to Grindr's unaudited condensed consolidated financial statements for the six months ended June
30, 2022 included elsewhere in this proxy statement/prospectus for additional information.
Interest (expense) income, net for the six months ended June 30,
2022 and 2021 were $(6.2) million and $(10.6) million, respectively. The $4.4 million decrease, or (41.5)%, was primarily due to lower interest expense, as we made principal prepayments on our debt in 2021 and 2022. The decrease in interest
(expense) income, net was also due to an increase in interest income associated with a related party loan arrangement to Catapult GP II. See Note 5 to Grindr's unaudited condensed consolidated financial statements for the six months ended June
30, 2022 included elsewhere in this proxy statement/prospectus for additional information.
Other income (expense), net
Other income (expenses), net include primarily expenses such as
charitable contributions and exchange rate gains or losses.
Other income (expense), net for the three months ended June 30, 2022
and 2021 were $2.0 thousand and $26.0 thousand, respectively.
Other income (expense), net for the six months ended June 30, 2022
and 2021 were $(66.0) thousand and $(30.0) thousand, respectively.
Income tax provision (benefit)
Our effective tax rates in fiscal 2022 and future periods may
fluctuate, as a result of changes in our forecasts where losses cannot be benefited due to the existence of valuation allowances on our deferred tax assets, changes in actual results versus our estimates, or changes in tax laws, regulations,
accounting principles, or interpretations thereof.
Income tax provision (benefit) for the three months ended June 30,
2022 decreased by $1.5 million, or (300.0)%, compared to the three months ended June 30, 2021.
Income tax provision (benefit) for the six months ended June 30,
2022 increased by $1.0 million, or 142.9%, compared to the six months ended June 30, 2021.
Income taxes changed from a provision of $0.5 million for the three
months ended June 30, 2021 to a benefit of $1.0 million for the three months ended June 30, 2022. The change is primarily due to the Company experiencing a pre-tax loss for the three months ended June 30, 2022 from a pre-tax income during the
same period in 2021, as well as an increase
262
in the projected annual effective tax rate. The increase in the effective tax rate
for the three months ended June 30, 2022 was impacted by the projected levels of annual taxable income, permanent items, of which 42.1% is related to the Series P units modification, partially offset by 14.2% related to the foreign derived
intangible income deduction.
Income taxes changed from a benefit of $0.7 million for the six
months ended June 30, 2021 to a provision of $0.3 million for the six months ended June 30, 2022. The change is primarily due to increased income for the six months ended June 30, 2022, as well as an increase in the projected annual effective tax
rate. The increase in the effective tax rate for the six months ended June 30, 2022 was impacted by the projected levels of annual taxable income, permanent items, of which 42.1% is related to the Series P units modification, partially offset by
14.2% related to the foreign derived intangible income deduction. Our effective tax rate for the year ending December 31, 2022 is currently expected to be approximately 56.3%.
Net income (loss)
Net income (loss) for the three months ended June 30, 2022, and
2021 was $(4.3) million and $1.8 million, respectively. Net income (loss), net for the six months ended June 30, 2022 and 2021 was $0.3 million and $(3.3) million, respectively.
Non-GAAP Financial Measures
To supplement our consolidated financial statements, which are
prepared and presented in accordance with GAAP, we use Adjusted Direct Revenue and Adjusted EBITDA, as described below, to understand and evaluate our core operating performance. These non-GAAP financial measures, which may differ from
similarly titled measures used by other companies, is presented to enhance investors’ overall understanding of our financial performance and should not be considered a substitute for, or superior to, the financial information prepared and
presented in accordance with GAAP.
Adjusted Direct Revenue
We define Adjusted Direct Revenue as Direct Revenue adjusted for
the release of the fair value adjustment of deferred revenue into revenue of the acquired deferred revenue due to the June 10, 2020 acquisition (See Note 3 to Grindr’s audited consolidated financial statements included elsewhere in this proxy
statement/prospectus for additional information).
The following table presents the reconciliation of direct revenue
to Adjusted Direct Revenue for the three months ended June 30, 2022 and 2021, six months ended June 30, 2022 and 2021, the year ended December 31, 2021, Successor 2020 Period, Predecessor 2020 Period, and the year ended December 31, 2019.
|
($ in thousands)
|
| |
Three Months
Ended June 30,
2022
|
| |
Three Months
Ended June 30,
2021
|
| |
Six Months
Ended June 30,
2022
|
| |
Six Months
Ended June 30,
2021
|
|
Reconciliation of
Direct Revenue to Adjusted Direct Revenue
|
| |
|
| |
|
| |
|
| |
|
|
Direct Revenue
|
| |
$38,757
|
| |
$27,019
|
| |
$75,155
|
| |
$50,196
|
|
Adjustments
|
| |
—
|
| |
178
|
| |
—
|
| |
892
|
|
Adjusted Direct Revenue
|
| |
$38,757
|
| |
$27,197
|
| |
$75,155
|
| |
$51,088
|
|
|
| |
Successor
|
| |
Predecessor
|
||||||
|
($ in thousands)
|
| |
Year ended
December 31,
2021
|
| |
Period from
June 11, 2020
to December 31,
2020
|
| |
Period from
January 1, 2020
to June 10,
2020
|
| |
Year ended
December 31,
2019
|
|
Reconciliation of
Direct Revenue to Adjusted Direct Revenue
|
| |
|
| |
|
| |
|
| |
|
|
Direct Revenue
|
| |
$116,031
|
| |
$49,268
|
| |
$39,840
|
| |
$84,000
|
|
Adjustments
|
| |
900
|
| |
8,194
|
| |
4
|
| |
46
|
|
Adjusted Direct Revenue
|
| |
$116,931
|
| |
$57,462
|
| |
$39,844
|
| |
$84,046
|
Adjusted EBITDA
The primary financial measure we use is Adjusted EBITDA. EBITDA is
defined as earnings before interest, taxes, depreciation, and amortization. We define Adjusted EBITDA as net income (loss) excluding income tax provision, interest expense, depreciation and amortization, stock-based compensation expense, non-core
263
expenses/losses (gains), including purchase accounting adjustments related to
deferred revenue, transaction-related costs, management fees, and interest income from the related party loan to Catapult GP II. Our management uses this measure internally to evaluate the performance of our business and this measure is one of
the primary metrics by which our internal budgets are based and by which management is compensated. We exclude the above items as some are non-cash in nature, and others are non-recurring that they may not be representative of normal operating
results. This non-GAAP financial measure adjusts for the impact of items that we do not consider indicative of the operational performance of our business. While we believe that this non-GAAP financial measure is useful in evaluating our
business, this information should be considered as supplemental in nature and is not meant as a substitute for the related financial information prepared and presented in accordance with GAAP.
The following table presents the reconciliation of net income
(loss) to Adjusted EBITDA for the three and six months ended June 30, 2022 and 2021, the year ended December 31, 2021, Successor 2020 Period, Predecessor 2020 Period, and the year ended December 31, 2019.
|
($ in thousands)
|
| |
Three Months
Ended
June 30, 2022
|
| |
Three Months
Ended
June 30, 2021
|
| |
Six Months
Ended
June 30, 2022
|
| |
Six Months
Ended
June 30, 2021
|
|
Reconciliation of
net income (loss) to adjusted EBITDA
|
| |
|
| |
|
| |
|
| |
|
|
Net income (loss)
|
| |
$(4,309)
|
| |
$1,794
|
| |
$320
|
| |
$(3,327)
|
|
Interest expense (income), net
|
| |
3,256
|
| |
4,489
|
| |
6,212
|
| |
10,563
|
|
Income tax provision (benefit)
|
| |
(1,000)
|
| |
458
|
| |
253
|
| |
(675)
|
|
Depreciation and amortization
|
| |
9,092
|
| |
10,721
|
| |
18,118
|
| |
21,826
|
|
Transaction-related costs (1)
|
| |
866
|
| |
403
|
| |
1,178
|
| |
1,143
|
|
Litigation related costs (2)
|
| |
54
|
| |
558
|
| |
1,082
|
| |
1,147
|
|
Stock-based compensation expense
|
| |
12,933
|
| |
623
|
| |
13,667
|
| |
1,142
|
|
Management fees (3)
|
| |
184
|
| |
181
|
| |
363
|
| |
362
|
|
Purchase accounting adjustment (4)
|
| |
—
|
| |
178
|
| |
—
|
| |
892
|
|
Other expenses (income) (5)
|
| |
379
|
| |
59
|
| |
551
|
| |
133
|
|
Adjusted EBITDA
|
| |
$21,455
|
| |
$19,464
|
| |
$41,744
|
| |
$33,206
|
|
(1)
|
Transaction related costs represent legal, tax, accounting, consulting, and other professional fees related to the Merger
with Tiga and other potential acquisitions, that are non-recurring in nature.
|
|
(2)
|
Litigation related costs primarily represent external legal fees associated with the outstanding litigation or regulatory
matters such as the potential Datatilsynet fine or the CFIUS review of the Business Combination, which are unrelated to Grindr’s core ongoing business operations.
|
|
(3)
|
Management fees represent administrative costs associated with SVH's administrative role in managing financial relationships
and providing directive on strategic and operational decisions, which will not continue after the closing of the Merger with Tiga.
|
|
(4)
|
Purchase accounting adjustment includes the effects of the purchase accounting adjustment related to deferred revenue
resulting from the June 10, 2020 acquisition.
|
|
(5)
|
Other expenses (income) primarily represents costs incurred from reorganization events that are unrelated to Grindr's core
ongoing business operations, including severance and employment related costs for the three months ended June 30, 2022 and 2021 of $0.4 million and $0.1 million, respectively, and for the six months ended June 30, 2022 and 2021 of $0.6
million and $0.1 million, respectively.
|
264
|
|
| |
Successor
|
| |
Predecessor
|
||||||
|
($ in thousands)
|
| |
Year ended
December 31,
2021
|
| |
Period from
June 11, 2020
to December 31,
2020
|
| |
Period from
January 1, 2020
to June 10,
2020
|
| |
Year ended
December 31,
2019
|
|
Reconciliation of
net income (loss) to adjusted EBITDA
|
| |
|
| |
|
| |
|
| |
|
|
Net income (loss)
|
| |
$5,064
|
| |
$(10,959)
|
| |
$(2,114)
|
| |
$7,706
|
|
Interest expense (income), net
|
| |
18,698
|
| |
15,082
|
| |
(277)
|
| |
(386)
|
|
Income tax provision (benefit)
|
| |
1,236
|
| |
(1,958)
|
| |
(615)
|
| |
2,441
|
|
Depreciation and amortization
|
| |
43,234
|
| |
17,639
|
| |
10,642
|
| |
27,412
|
|
Transaction-related costs (1)
|
| |
3,854
|
| |
6,453
|
| |
691
|
| |
—
|
|
Litigation related costs (2)
|
| |
1,913
|
| |
70
|
| |
902
|
| |
3,342
|
|
Stock-based compensation expense
|
| |
2,485
|
| |
916
|
| |
343
|
| |
6,780
|
|
Management fees (3)
|
| |
728
|
| |
444
|
| |
386
|
| |
662
|
|
Purchase accounting adjustment (4)
|
| |
900
|
| |
8,194
|
| |
—
|
| |
—
|
|
Other expenses (income) (5)
|
| |
(1,058)
|
| |
(148)
|
| |
4,966
|
| |
2,496
|
|
Adjusted EBITDA
|
| |
$77,054
|
| |
$35,733
|
| |
$14,924
|
| |
$50,453
|
|
(1)
|
Transaction related costs incurred during the year ended December 31, 2021 consist of legal, tax, accounting, consulting, and
other professional fees related to the Merger with Tiga and other potential acquisitions, that are non-recurring in nature. Transaction related costs incurred during the combined 2020 Successor and Predecessor period consist of legal,
tax, accounting, consulting, and other professional fees related to SVH's indirect acquisition of Grindr from Kunlun in June 2020.
|
|
(2)
|
For the year ended December 31, 2021, litigation related costs primarily represent external legal fees associated with the
outstanding litigation or regulatory matters such as the potential Datatilsynet fine or the CFIUS review of the Business Combination, which are unrelated to Grindr’s core ongoing business operations. For the combined 2020 Successor and
Predecessor period and year ended December 31, 2020, litigation related costs primarily represent external legal fees associated with the outstanding litigation or regulatory matters such as the potential Multistate fine or the CFIUS
review of SVH's indirect acquisition of Grindr, which are unrelated to Grindr’s core ongoing business operations.
|
|
(3)
|
Management fees represent administrative costs associated with SVH's administrative role in managing financial relationships
and providing directive on strategic and operational decisions, which will not continue after the closing of the Merger with Tiga.
|
|
(4)
|
Purchase accounting adjustment includes the effects of the purchase accounting adjustment related to deferred revenue
resulting from the June 10, 2020 acquisition.
|
|
(5)
|
For the year ended December 31, 2021, other expenses (income) primarily represents costs incurred from reorganization events
that are unrelated to Grindr's core ongoing business operations, including severance and employment related costs of $0.5 million offset by PPP loan forgiveness income of $1.5 million. For the combined 2020 Successor and Predecessor
period, other expenses (income) primarily represents a one-time settlement of $5.5 million related to the outstanding incentive units that were settled upon SVH's indirect acquisition of Grindr. For year ended December 31, 2019, other
expenses (income) primarily represents public readiness preparation costs of $1.4 million, as well as restructuring costs of $0.6 million that are unrelated to Grindr's core ongoing business operations.
|
For the three months ended June 30, 2022 and 2021, Adjusted EBITDA
increased by $2.0 million, or 10.3%, which was primarily due to an increase in revenue, which was partially offset by higher operating expenses (excluding one-time, non-recurring, and other expenses, as outlined in the Adjusted EBITDA
definition).
For the six months ended June 30, 2022 and 2021, Adjusted EBITDA
increased by $8.5 million, or 25.6%, which was primarily due to an increase in revenue, which was partially offset by higher operating expenses (excluding one-time, non-recurring, and other expenses, as outlined in the Adjusted EBITDA
definition).
Adjusted EBITDA increased by $26.5 million, or 52.4%, in the year
ended December 31, 2021 as compared to the combined Successor 2020 Period and Predecessor 2020 Period, primarily due to an increase in revenue, which was partially offset by higher operating expenses (excluding one-time, non-recurring, and other
expenses, as outlined in the Adjusted EBITDA definition). Adjusted EBITDA increased by $0.1 million, or 0.2%, in the combined Successor 2020 Period and Predecessor 2020 Period as compared to the year ended December 31, 2019, primarily due to a
decrease in total expenses (excluding one-time, non-recurring, and other expenses, as outlined in the Adjusted EBITDA definition).
265
Liquidity and Capital Resources
Cash Flows for the Year Ended December 31, 2021 and
the period from June 11, 2020 to December 31, 2020 (Successor), the period from January 1, 2020 to June 10, 2020 and the year ended December 31, 2019 (Predecessor)
The following table summarizes our total cash and cash equivalent:
|
|
| |
Successor
|
| |
Predecessor
|
||||||
|
($ in thousands)
|
| |
Year ended
December 31, 2021
|
| |
Period from
June 11, 2020 to
December 31, 2020
|
| |
Period from
January 1, 2020 to
June 10, 2020
|
| |
Year ended
December 31, 2019
|
|
Cash and cash equivalents, including restricted cash (as of
the end of period)
|
| |
$17,170
|
| |
$42,786
|
| |
$66,454
|
| |
$47,950
|
|
Net cash provided by (used in):
|
| |
|
| |
|
| |
|
| |
|
|
Operating activities
|
| |
34,430
|
| |
9,602
|
| |
16,456
|
| |
37,973
|
|
Investing activities
|
| |
(3,797)
|
| |
(264,991)
|
| |
534
|
| |
(4,684)
|
|
Financing activities
|
| |
(56,249)
|
| |
298,175
|
| |
1,514
|
| |
—
|
|
Net change in cash and cash equivalents
|
| |
$(25,616)
|
| |
$42,786
|
| |
$18,504
|
| |
$33,289
|
Cash flows provided by operating activities
Net cash provided by operating activities are primarily dependent on
our revenues affected by timing of receipts from subscription and advertising sales. It is also dependent on managing our operating expenses, such as salaries and employee-related costs, selling and marketing expenses, transaction costs, and
other general and administrative expenses. We expect to maintain strong operating cash flows given our historical performance. We will continue to invest in the right resources to support longer term profitable growth. Our operating cash flows
should continue to cover our operating and financing costs.
During the year ended December 31, 2021, our operations provided
$34.4 million of cash, which was primarily attributable to Net Income (Loss) of $5.1 million, increased by $43.2 million in depreciation and amortization and decreased by $2.9 million in other non-cash adjustments. Cash flows provided by
operating activities were further decreased by $10.9 million from changes in operating assets and liabilities.
During the combined Successor 2020 Period and Predecessor 2020
Period, our operations provided $26.1 million of cash, which was primarily attributable to Net Income (Loss) of ($13.1) million, increased by $28.4 million in depreciation and amortization and other non-cash add-backs. Cash flows provided by
operating activities were further increased by $10.7 million from changes in operating assets and liabilities.
During the year ended December 31, 2019, our operations provided
$38.0 million of cash, which was primarily attributable to Net Income (Loss) of $7.7 million, increased by $27.4 million in depreciation and amortization, and further increased by $9.3 million in share-based compensation and other non-cash
add-backs. Cash flows provided from operating activities were further decreased by $6.4 million in changes in operating assets and liabilities.
Cash flows used in investing activities
Net cash used in investing activities in the year ended December 31,
2021 consisted of additions to capitalized software of $3.5 million as well as purchases of property and equipment of $0.3 million. We expect our capital investments to increase over time as we further enhance our platform and product. However,
historically this has not been significant, as it has primarily comprised capitalized engineering labor costs and computer hardware costs for employees. Other increases could come from potential acquisitions or other platform extensions.
Net cash used in investing activities for the Successor 2020 Period
consisted of $263.8 million in cash used to acquire the Predecessor, additions to capitalized software of $1.0 million and purchases of property and equipment of $0.2 million. Net cash used in investing activities for the Predecessor 2020 Period
consisted of additions to capitalized software of $1.4 million and purchases of property and equipment of $0.3 million, as well as $2.2 million in proceeds from repayment of promissory notes provided to employees during the year ended
December 31, 2019.
Net cash used in investing activities in the year ended December 31,
2019 consisted of additions to capitalized software of $2.3 million, purchases of property and equipment of $0.1 million, as well as $2.2 million in promissory notes provided to employees.
266
Cash flows (used in) provided by financing
activities
Net cash used in financing activities in the year ended December 31,
2021 consisted of $1.4 million in proceeds from exercise of employee stock options, $56.6 million related to principal paydown of our long-term debt as well as $1.0 million in debt issuance costs.
Net cash used in financing activities for the Successor 2020 Period
consisted of $192.0 million in new long-term debt raised in June 2020 as well as $3.8 million debt issuance costs, offset by $110.0 million in contributions from members. Net cash provided by financing activities for the Predecessor 2020 Period
consisted of $1.5 million in proceeds received from our PPP Loan.
There was no cash provided by or used in financing activities in the
year ended December 31, 2019.
Cash Flows for the Six Months Ended June 30, 2022
and 2021
The following table summarizes our total cash and cash equivalents:
|
($ in thousands)
|
| |
Six Months
Ended
June 30, 2022
|
| |
Six Months
Ended
June 30, 2021
|
|
Cash, and cash equivalents, including restricted cash (as of the end of period)
|
| |
$26,940
|
| |
$42,190
|
|
Net cash provided by (used in):
|
| |
|
| |
|
|
Operating activities
|
| |
27,836
|
| |
3,579
|
|
Investing activities
|
| |
(2,176)
|
| |
(1,295)
|
|
Financing activities
|
| |
(15,890)
|
| |
(2,880)
|
|
Net change in cash and cash equivalents
|
| |
9,770
|
| |
(596)
|
Cash flows provided by (used in) operating
activities
Net cash provided by operating activities are primarily dependent on
our revenues affected by timing of receipts from subscription and advertising sales. It is also dependent on managing our operating expenses, such as salaries and employee-related costs, selling and marketing expenses, transaction costs, and
other general and administrative expenses. We expect to maintain strong operating cash flows given our historical performance. We will continue to invest in the right resources to support longer term profitable growth. Our operating cash flows
should continue to cover our operating and financing costs.
For the six months ended June 30, 2022, our operations provided
$27.8 million of cash, which was primarily attributable to the net income (loss) of $0.3 million, increased by $18.1 million in depreciation and amortization and increased by $10.4 million in other non-cash adjustments. Cash flows provided by
operating activities were further decreased by $1.0 million from changes in operating assets and liabilities.
For the six months ended June 30, 2021, our operations used $3.6
million of cash, which was primarily attributable to the net income (loss) of $(3.3) million, increased by $21.8 million in depreciation and amortization and increased by $87.0 thousand in other non-cash adjustments. Cash flows used in operating
activities were further decreased by $14.8 million from changes in operating assets and liabilities.
Cash flows used in investing activities
Net cash used in investing activities for the six months ended June
30, 2022 consisted of additions to capitalized software of $1.9 million and purchases of property and equipment of $0.3 million, which purchases were primarily related to computer hardware for employees. We expect our capital investments to
increase over time as we further enhance our platform and product. However, historically, this has not been significant, as it has primarily comprised capitalization of engineering labor costs and computer hardware costs for employees. Other
increases could come from potential acquisitions or other platform extensions.
Net cash used in investing activities for the six months ended June
30, 2021 consisted of additions to capitalized software of $1.2 million and purchases of property and equipment of $0.1 million.
267
Cash flows used in financing activities
Net cash used in financing activities for the six months ended June
30, 2022 consisted of $1.0 million in proceeds from exercise of employee stock options as well as $60.0 million proceeds from issuance of debt, offset by $75.0 million in cash dividends paid, $1.0 million in debt issuance costs, and $1.0 million
related to principal paydown of our long-term debt.
Net cash used in financing activities for the six months ended June
30, 2021 consisted of $1.0 million debt issuance costs and $1.9 million related to principal paydown of our long-term debt.
Financing Arrangements
Through June 30, 2022, Grindr completed the following transactions:
Deferred Payment
In June 2020, as part of SVH’s indirect acquisition of approximately
98.6% interest in Grindr (and its subsidiaries) from Kunlun, SV Acquisition agreed to pay what, after adjustments provided for in the acquisition agreement, amounted to a $230.0 million deferred consideration payment liability to Kunlun, payable
on the second and third anniversary of the closing date (the “Deferred Payment”). In connection with the acquisition, SV Acquisition assigned the obligations for the Deferred Payment to Grindr, and
subsequently, through a series of assumption agreements, SV Acquisition re-assumed the obligations for the Deferred Payment. In June 2022, Grindr declared and then paid a distribution of $83.3 million to its members, including an affiliate of SV
Acquisition, on a pro rata basis. Grindr paid this distribution in June and July 2022. SV Acquisition’s affiliate, SV Group Holdings, received its ratable share of this distribution, being $75.0 million, and distributed that amount through
intermediate holding companies to SV Acquisition, which then paid such amount to Kunlun in partial satisfaction of the Deferred Payment obligation, thereby reducing such obligation to $155.0 million. The cash transfer to Kunlun was effected by
Grindr at the instruction of SV Group Holdings. Substantially simultaneously with Closing, we expect the Deferred Payment obligation will be fully repaid. For further information on the Deferred Payment, refer to Note 3 of Grindr’s historical
audited financial statements for the year ended December 31, 2021 included elsewhere in this proxy statement/prospectus.
Fortress Credit Corp. Loan
On June 10, 2020, Grindr Gap LLC (f/k/a San Vicente Gap LLC),
Grindr Capital LLC (f/k/a San Vicente Capital LLC), the Successor and Fortress Credit Corp. (“Fortress”) entered into a credit agreement (the “Credit
Agreement”), which permitted the Successor to borrow up to $192.0 million through a senior secured credit facility. The Successor used such proceeds to pay part of the total purchase consideration for the acquisition. The
Successor and Fortress entered into Amendment No. 2 to the Credit Agreement on June 13, 2022, which permitted the Successor to borrow an additional $60.0 million through several supplemental term loans (the “Supplemental Term Loans”). The full amount of the Supplemental Term Loans was drawn on June 13, 2022. Amounts paid or repaid in respect of the Supplemental Term Loans may not be reborrowed. The proceeds of the
Supplemental Term Loans were used by the Successor to fund a restricted payment permitted under the Credit Agreement to Kunlun in partial satisfaction of the Deferred Payment and to pay fees and other transaction costs incurred in connection
with such payment (the “Supplemental Term Loan Payment”). New Grindr intends to refinance the senior secured credit facility prior to the consummation of the Business Combination.
Borrowings under the Credit Agreement are collateralized by the
capital stock and assets of certain wholly-owned subsidiaries of the Successor. The Successor’s obligation under the Credit Agreement is guaranteed by certain of the Successor’s wholly-owned subsidiaries. Borrowings under the Credit Agreement are
payable in full on June 10, 2025 with mandatory principal repayments beginning in the first quarter of 2021. Mandatory repayments are equal to 0.5% of the original principal amount of the Credit Agreement. The Successor is also required to make
mandatory prepayments of the Credit Agreement, commencing with the Successor 2020 Period, equal to a defined percentage rate (determined based on the Company’s leverage ratio) of excess cash flows. Borrowings under the Credit Agreement are index
rate loans or LIBOR loans, at the Successor’s discretion. Index rate loans bear interest at the index rate plus applicable margin based on the consolidated total leverage ratio, or 7.0%. LIBOR loans bear interest at LIBOR plus an applicable
margin based on the consolidated total leverage ratio, or 8.0%.
The Credit Agreement also required the Successor to make a lump-sum
principal repayment in the amount equal to $48.0 million plus related accrued interest on or before February 28, 2021. This repayment date was amended to
268
November 30, 2021 based on an amendment to the Credit Agreement entered into on
February 25, 2021. In addition to the mandatory repayment, the Successor was required to pay a premium of 10.0% of the principal repayment, or $4.8 million together with the mandatory lump-sum principal repayment. In addition, certain restricted
payments, including restricted payments made by the Successor and the Supplemental Term Loan, are permitted under the Credit Agreement.
The obligations under the Credit Agreement are subject to automatic
acceleration upon a voluntary or involuntary bankruptcy event of default, and are subject to acceleration at the election of the lenders upon the continuance of any other event of default, including a material adverse change in the business,
operations or conditions of the Company. Failure by SV Acquisition or its affiliates to pay any part of the Deferred Payment within ten (10) business days of Kunlun’s notice of default to SV Acquisition or its affiliates will be deemed an event
of default under the terms of the Credit Agreement. A default interest rate of an additional 2.0% per annum will apply on all outstanding obligations during the occurrence and continuance of an event of default. If an event of default occurs on
or prior to June 10, 2022, an additional premium will be charged equal to all unpaid interest that would have accrued until the date that is 24 months after the inception of the Credit Agreement. The Credit Agreement includes restrictive
non-financial and financial covenants, including the requirement to maintain a total leverage ratio no greater than 4.75:1.00 prior to and through March 31, 2022, and no greater than 3.25:1.00 thereafter.
The carrying value includes the outstanding principal amount and
accretion of prepayment premium, less unamortized debt issuance costs.
The fair values of the Successor’s Credit Agreement balances were
measured by the discounted cash flow method or comparing their prepayment values and observable market data consisting of interest rates of interest rates based on similar credit ratings, which the Company classifies as a Level 2 input within the
fair value hierarchy. The estimated fair value of the Credit Agreement balances as of June 30, 2022, December 31, 2021 and December 31, 2020 is $188,358, $142,963, and $200,640, respectively.
Contractual obligations and contingencies
Our principal commitments consist of obligations under operating
leases for equipment and office space. See Note 12 to Grindr's audited consolidated financial statements, included elsewhere in this proxy statement/prospectus for additional information.
Off-balance sheet arrangements
Other than the items described above, we have no significant
off-balance sheet arrangements.
Quantitative and qualitative disclosures about market risk
Foreign currency exchange risk
Foreign currency exchange gains and losses included in our income
for the three and six months ended June 30, 2022 and 2021 are losses of $29.9 thousand, gains of $18.1 thousand, losses of $28.1 thousand and gains of $34.4 thousand, respectively, and are included in “Other income (expense), net” on our
consolidated statements of operations. The impact of changes in foreign currency exchange rates on overall earnings has generally not been significant.
Historically, we have not hedged any foreign currency exposures. Our
continued international expansion increases our exposure to exchange rate fluctuations and as a result such fluctuations could have a significant impact on our future results of operations.
Interest rate risk
Our cash and cash equivalents consist primarily of bank deposits.
Changes in U.S. interest rates affect the interest earned on the cash and cash equivalents and marketable securities, and the market value of those securities. We had borrowings outstanding with a carrying value of $195.7 million, net of $3.5
million unamortized debt issuance costs as of June 30, 2022. Borrowings are Index Rate Loans or LIBOR Rate Loans, which accrue interest at a variable rate. The interest rates in effect were 9.5% for all periods, based on the LIBOR Rate plus 8.0%.
A hypothetical 100 basis point increase or decrease would not have a material effect on the interest expense for the periods presented.
269
Critical Accounting Policies and Estimates
The following disclosure is provided to supplement the descriptions
of our accounting policies contained in Note 2 to our audited consolidated financial statements in regard to significant areas of judgment. Our management is required to make certain estimates, judgments, and assumptions during the preparation of
its consolidated financial statements in accordance with GAAP. These estimates, judgments, and assumptions impact the reported amount of assets, liabilities, revenues, and expenses and the related disclosure of contingent assets and liabilities
as of the date of the consolidated financial statements. Actual results could differ from those estimates. Because of the size of the financial statement elements to which they relate, some of our accounting policies and estimates have a more
significant impact on our consolidated financial statements than others. What follows is a discussion of some of our more significant accounting policies and estimates.
Unit-based and Stock-based Compensation
We have granted unit options (Successor periods), restricted unit
awards (Successor periods), and restricted stock awards (“RSA”) (Predecessor periods) to employees that vest based solely on continued service, or service conditions. The fair value of each option award containing service conditions is estimated
on the grant date using the Black-Scholes option-pricing model. The fair value of each RSA containing service conditions is estimated at the grant date based on the fair value of our common stock.
On August 13, 2020, the Board of Managers of the Successor, approved
the adoption of the 2020 Equity Incentive Plan (the “2020 Plan”), which permits the grant of incentive and unit options, restricted units, stock appreciation rights and phantom units of the Successor.
There were 6,522,685 Series X ordinary units and 1,522,843 Series
Y preferred units authorized in the 2020 Plan. There were no changes to the authorized number of units in the Successor period. As of June 30, 2022, there were 3,195,618 Series X ordinary units and 1,522,843 Series Y preferred units available
for grant under the 2020 plan. As of December 31, 2021 and December 31, 2020, there were 2,780,223 and 3,998,480 Series X ordinary units, respectively, and 1,522,843 and 1,522,843 Series Y preferred units, respectively, available for grant
under the 2020 Plan. The Company accounts for unit-based compensation related to service-based and performance-based Series P Units issued by San Vicente Equity Joint Venture LLC (“SVEJV”),
a related party and an indirect subsidiary of SV Acquisition, to Catapult Goliath LLC.
Employees, consultants and non-employee directors who provide
substantial services to the Successor are eligible to be granted unit option awards under the 2020 Plan. Generally, unit options vest 25% on the first anniversary of the vesting commencement date and then quarterly thereafter for 12 quarters, or
pursuant to another vesting schedule as approved by the Board and set forth in the option agreement. Unit options have a maximum term of seven years from the date of grant.
The Predecessor also granted incentive unit awards that vest upon
both a specific period of continued employment and upon a triggering event (as defined in the 2016 Plan of the Predecessor as change of control, or an initial public offering. The Predecessor recognized stock-based compensation expense and the
liability related to the cash settlement of the incentive units when the service-based criteria was met and when the triggering event was deemed probable which was determined to be when it occurred.
Determining the fair value of service-based unit and stock-based
awards at the grant date requires judgment. Our use of the Black-Scholes option-pricing model requires the input of subjective assumptions, such as the fair value of the common stock, the expected term of the option, the expected volatility of
the price of our common stock, risk-free interest rates, the expected dividend yield of our common stock, and the expected term option holders will retain their vested awards before exercising them. The assumptions used in our valuation models
represent management’s best estimates. These estimates involve inherent uncertainties and the application of management’s judgment. If factors change and different assumptions are used, our stock-based compensation expense could be materially
different in the future.
The estimated fair value of the performance-based profit units
awards is determined using the Black-Scholes valuation model which approximated the option pricing model valuation model. Performance-based profit units require management to make assumptions regarding the likelihood of achieving the Successor’s
performance goals and the Successor recognizes compensation expense when the likelihood of the achievement of the performance-
270
based criteria is probable, using an accelerated attribution method. Forfeitures are
recognized as they occur. For further information on the modification of Series P units, refer to Note 10 of Grindr’s unaudited financial statements for each of the three and six months ended June 30, 2022 and 2021 included elsewhere in this
proxy statement/prospectus.
In addition, given the absence of a public trading market, the
Predecessor’s Board of Directors and the Successor’s Board of Managers, along with management, exercise reasonable judgment and considered numerous objective and subjective factors to determine the fair value of our common stock including, but
not limited to: (i) contemporaneous valuations performed by an independent valuation specialist (ii) our operating and financial performance (iii) issuances of preferred and ordinary units (iv) the valuation of comparable companies; (v) current
condition of capital markets and the likelihood of achieving a liquidity event, such as an initial public offering and (vi) the lack of marketability of its common stock.
Goodwill and Indefinite-lived Intangible Assets
Goodwill and indefinite-lived intangible assets have been recorded
in our consolidated financial statements as a result of the acquisition by SV Acquisition. Goodwill represents the excess of the purchase price in a business combination over the fair value of identifiable tangible and intangible assets acquired
and liabilities assumed.
We assess goodwill for impairment based on our one reporting unit
and indefinite-lived intangible assets on an annual basis in the fourth quarter, and if events or circumstances indicate that the reporting unit’s fair value or indefinite-lived intangible assets fair value may be less than their carrying value.
Goodwill and indefinite-lived intangible assets are tested for impairment by first performing a qualitative assessment to determine whether it is more likely than not that the fair value of the reporting unit and the indefinitely-lived intangible
assets is less than their carrying value. If the reporting unit and the indefinite-lived intangible assets do not pass the qualitative assessment or it is determined that it is more-likely-than-not that there may be an impairment, then a
quantitative assessment is performed to compare the carrying values to their fair value. An impairment exists when the carrying values exceed their fair values. Certain future events and circumstances, including deterioration of market
conditions, higher cost of capital, or a decline in actual and expected customer demands, could result in changes to the assumptions and judgments for the qualitative impairment assessment. No impairment was recorded for any of the periods
presented for both the Successor and the Predecessor.
Recently Issued and Adopted Accounting Pronouncements
For a discussion of recent accounting pronouncements, see Note 2 to
Grindr’s audited consolidated financial statements included elsewhere in this proxy statement/prospectus for additional information.
271
The following sets forth certain information concerning the persons
who are anticipated to be the directors and executive officers of New Grindr upon Closing as of , 2022.
|
Name
|
| |
Age
|
| |
Position
|
|
Executive Officers
|
| |
|
| |
|
|
George Arison
|
| |
44
|
| |
Chief Executive Officer, Director nominee
|
|
Vandana Mehta-Krantz
|
| |
54
|
| |
Chief Financial Officer
|
|
Austin “AJ” Balance
|
| |
35
|
| |
Chief Product Officer
|
|
Non-Employee Directors
|
| |
|
| |
|
|
G. Raymond Zage, III
|
| |
52
|
| |
Director nominee
|
|
James Fu Bin Lu
|
| |
40
|
| |
Chairperson, Director nominee
|
|
J. Michael Gearon, Jr.
|
| |
57
|
| |
Director nominee
|
|
Daniel Brooks Baer
|
| |
45
|
| |
Director nominee
|
|
Meghan Stabler
|
| |
58
|
| |
Director nominee
|
|
Gary I. Horowitz
|
| |
65
|
| |
Director nominee
|
|
Maggie Lower
|
| |
46
|
| |
Director nominee
|
|
Nathan Richardson
|
| |
51
|
| |
Director nominee
|
Executive Officers
George Arison. Upon consummation of the Business Combination, Mr. Arison will serve as the Chief Executive Officer and director of New Grindr. Mr. Arison will serve as the Chief Executive Officer of Grindr
from October 2022. Mr. Arison has served as Chief Executive Officer of Shift Technologies, Inc. (“Shift Technologies”) (Nasdaq: SFT), and its predecessor company, Shift Platform, Inc. (“Shift Platform”), from December 2013 to September 2022.
Mr. Arison has served as Founder, Chairman and Director of Shift Technologies since October 2020 and Founder and Director of Shift Platform from December 2013 to October 2020. Prior to co-founding Shift Platform, Inc., he served in various
positions at Google from 2010 to 2013, most recently as a product manager. From 2007 to 2010, he co-founded Taxi Magic (now known as Curb, acquired by Verifone). From 2005 to 2007 he worked for Boston Consulting Group. Mr. Arison has been an
investor in numerous startups, including Shipper, Carrot, Eden, Fathom, AutoLeap, Pulsar AI (acquired by Impel), Zero (acquired by Avant), TravelBank (acquired by U.S. Bank), Fyusion (acquired by Cox Automotive) and Omni (acquired by Coinbase).
He is a Co-Founder and member of the board of directors of Belong Acquisition Corp., a blank check company. Prior to his business career, Mr. Arison was a policy analyst and ran a political campaign in Georgia, the country of his birth, about
which he wrote Democracy and Autocracy in Eurasia: Georgia in Transition. Mr. Arison received a bachelor’s degree from Middlebury College. We believe that Mr. Arison’s extensive experiences in numerous startups and his corporate expertise as
the Chief Executive Officer of Shift Technologies, Inc. qualify him to serve as the Chief Executive Officer and a director of New Grindr.
Vandana Mehta-Krantz. Upon consummation of the Business Combination, Ms. Mehta-Krantz will serve as the Chief Financial Officer of New Grindr. Ms. Mehta-Krantz will serve as the Chief Financial Officer of Grindr from
September 2022. Prior to joining Grindr, Ms. Mehta-Krantz was the Chief Financial Officer of Passport Labs, Inc., a transportation software and payments company, from August 2021 to August 2022. Ms. Mehta-Krantz served as the Chief Financial
Officer of Masterclass (Yanka Industries, Inc.), an e-learning streaming platform, from December 2020 to September 2021. From September 2017 to September 2020, Ms. Mehta-Krantz was the Chief Financial Officer of Disney Streaming Services, a
media company, during the preparation and successful launch of the highly anticipated Disney+ video streaming business. In that role, Ms. Mehta-Krantz was responsible for scaling the technology and business functions globally, implementing the
systems and processes to handle the new business line, planning and forecasting subscriber counts and financial results by country, as well as developing and publishing the operating metrics to run the business. Ms. Mehta-Krantz was also the
Chief Financial Officer and a board member for Bamtech Media, a media company, which launched ESPN+, from September 2017 to August 2020. Previously, Ms. Mehta-Krantz held three different divisional chief financial officer roles at Thomson
Reuters, a media company, from 2007 to 2016, including the Chief Financial Officer of Reuters Media, the Chief Financial Officer of Institutional Equities and the Chief Financial Officer of Wealth Management division. Prior to 2007,
Ms. Mehta-Krantz held positions at PricewaterhouseCoopers, Merrill Lynch, Morgan Stanley and Credit Suisse. Ms. Mehta-Krantz has been an independent director of Skillz Inc. since 2020. Ms. Mehta-Krantz qualified for the Chartered
272
Accountancy designation in Canada in 1990 and the Chartered Financial Analyst
designation in 1997. Ms. Mehta-Krantz received a bachelor’s degree in mathematics from the University of Waterloo in Canada.
Austin “AJ” Balance. Upon consummation of the Business Combination, Mr. Balance will serve as the Chief Product Officer of New Grindr. Mr. Balance has served as the Chief Product Officer of Grindr since December
2021. Prior to joining Grindr, Mr. Balance was the lead product manager of the Driving Team at Uber Technologies, Inc., a transportation technology company that offers services through mobile applications and websites, where he worked from
September 2016 to December 2019, and the co-Founder and Chief Executive Officer of Dispatcher, Inc., a logistics technology platform for long-haul truckers and freight shippers, from November 2013 to August 2016. Prior to that, Mr. Balance was
a product manager at Gigwalk, a software solutions company, from 2011 to 2013 and an analyst in corporate strategy and business development at The Walt Disney Company, a multinational entertainment and media conglomerate, from 2009 to 2011.
Mr. Balance received an MBA from the Stanford Graduate School of Business and a bachelor’s degree from Stanford University.
Non-Employee Director Nominees
G. Raymond Zage, III. Upon consummation of the Business Combination, Mr. Zage will serve as a member of the New Grindr Board. Mr. Zage is a Founder and has served as a director, CEO and Chairman of Tiga since July
2020 and as the CEO of Tiga Investments Pte. Ltd. since November 2017. Mr. Zage is also the Chairman and CEO of Tiga Acquisition Corp since July 2020. In April 2021, he also joined the board of directors of EDBI Pte Ltd, which is the fund
management company for EDB Investment Pte Ltd, the independent equity investment arm of Singapore’s Economic Development Board. Prior to August 2018, Mr. Zage was managing director and CEO of Farallon Capital Asia Pte Ltd, which invests capital
on behalf of Farallon Capital Management LLC, where he was a partner. Mr. Zage joined Farallon Capital Management LLC in March 2000 and in 2002 set up and ran Farallon Capital Asia Pte Ltd (also previously known as Noonday Asset Management Asia
Pte Ltd). Prior to joining Farallon, Mr. Zage was a Vice President at Goldman Sachs (Singapore) Pte Ltd in the Investment Banking Division having also worked for Goldman Sachs in New York and Los Angeles. Mr. Zage continues to serve as a
part-time senior advisor at Farallon and he is also a member of the board of directors of Toshiba Corporation and Whitehaven Coal Limited as well as a member of the Board of Commissioners of PT Lippo Karawaci Tbk. Mr. Zage received his bachelor
of science degree in Finance and Accounting from the University of Illinois, Urbana-Champaign in 1992. Mr. Zage’s qualifications to serve on our board include nearly three decades of investment experience in public and private debt, public and
private equity and real estate across a wide variety of industries and geographies, and his strategic vision and experience as a board member of public and private companies in a wide variety of industries. Mr. Zage provides high-value added
services to our board of directors and has sufficient time to focus on the Company.
James Fu Bin Lu. Upon consummation of the Business Combination, Mr. Lu will serve as a member of the New Grindr Board. Mr. Lu has served as Grindr’s Chairperson since June 2020. Mr. Lu has served as a Director,
the Chairman and the Chief Executive Officer of Life Concepts Holdings Limited, an investment company mainly engaged in restaurant operations, since October 2018. Mr. Lu has also served as a Director of Fusion Media Limited, an Internet
publishing company, since February 2021, and a Director of Global Commerce Technology Limited, a software development company, since February 2022.Mr. Lu previously served as the Global Head of Amazon Marketing Services (now Amazon
Advertising), the advertising branch of Amazon.com, Inc., a technology company that focuses on e-commerce, cloud computing and digital streaming company, from 2011 to 2015, and served as the Vice President of content ecosystems at Baidu, Inc.,
a technology company specializing in Internet-related services and products and artificial intelligence, from 2015 to 2017. In 2006, Mr. Lu founded Yoolin, a social network, and served as its Chief Executive Officer from 2006 to 2007. Mr. Lu
was a founding member and the director of product management at Chegg, Inc., a textbook rental company, from 2007 to 2011. Mr. Lu received a master’s degrees in Electrical Engineering and Computer Science, and graduated summa cum laude, from
the University of Michigan. We believe Mr. Lu’s business experience, technical knowledge and experience in the social network industry qualify him to serve as the Chairperson and a director of New Grindr.
J. Michael Gearon, Jr. Upon consummation of the Business Combination, Mr. Gearon will serve as a member of the New Grindr Board. Mr. Gearon has been the Founder, Chairman and the Chief Executive Officer of 28th Street
Ventures since March 2007. Mr. Gearon previously served as Chairman of Pan Asia Tower, a wireless communications and broadcast infrastructure company, from 2013 to November 2019. Mr. Gearon served as the Chairman Advisor at PT Serana Menara
Nusantara Tbk, the largest tower telecommunication company in the Republic of Indonesia, from 2007 to 2016, and as the Vice Chairman of American Tower Corp, an owner and operator of cell towers, from 2002 to 2007 and as a Director on the board
of directors of the same company from 1998 to 2003.
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Mr. Gearon also co-founded the American Tower Corp.’s international business in 1999
and served as a Director of TV Azteca S.A. de C.V., a television network, from 1999 to 2003. Mr. Gearon was named Ernst &Young USA Today Entrepreneur of the Year in 1997. He has been a part owner of the National Basketball Association’s
Atlanta Hawks since 2004 and the co-owner of the National Hockey League’s Atlanta Thrashers from 2003 to 2010. He served as the Governor of Atlanta Hawks from 2005 to 2009, and also acted as the Co-Managing Partner of, and a member of the board
of directors of, the Atlanta Hawks from 2004 to 2015. Mr. Gearon received a bachelor’s degree, cum laude, in Inter-Disciplinary Studies from Georgia State University. We believe Mr. Gearon’s extensive experience in the technology industry and his
experience as an executive and director qualify him to serve as a director of New Grindr.
Daniel Brooks Baer. Upon consummation of the Business Combination, Mr. Baer will serve as a member of the New Grindr Board. Mr. Baer is a senior vice president for policy research at the Carnegie Endowment for
International Peace. He was Executive Director of the Colorado Department of Higher Education from May 2018 to February 2019. He previously served as the United States Ambassador to the Organization for Security and Co-operation in Europe from
September 2013 to January 2017. Prior to that, he served as the Deputy Assistant Secretary of State for the Bureau of Democracy, Human Rights, and Labor from 2009 to 2013. Prior to that, he was an Assistant Professor of Strategy, Economics,
Ethics and Public Policy at the McDonough School of Business at Georgetown University from 2008 to 2009. He was also a Faculty Fellow at Harvard University’s Safra Center for Ethics. Prior to that, he was a project leader at Boston Consulting
Group, a management consulting firm, from 2004 to 2007. Mr. Baer received a bachelor of arts degree in Social Studies and African American Studies from Harvard University. He was also a Marshall Scholar at Oxford University, where he earned a
master’s degree and doctoral degree in International Relations. We believe Mr. Baer’s political and educational experiences qualify him to serve as a director of New Grindr.
Meghan Stabler. Upon consummation of the Business Combination, Ms. Stabler will serve as a member of the New Grindr Board. Ms. Stabler has been the Senior Vice President of BigCommerce Pty Ltd. (NASDAQ: BIGC),
a leading open source software-as-a-service (SaaS) ecommerce platform that empowers merchants of all sizes to build, innovate and grow their business online, since March 2022 and was previously the Vice President of Global Product Marketing,
Communications and International Marketing at BigCommerce, Inc. from December 2018 to March 2022. She was a board member of Lamba Legal, a civil rights organization, from March 2021 to December 2021, and she has been a board member of Kaleido
Health Solutions, Inc., a mHealth/Telehealth application development company, since January 2021. She has also been the Super Delegate Appointed Platform Committee member and Party Leader and Elected Official for the Democratic National
Committee since January 2020. Ms. Stabler has also been a member of the board of directors for the Democratic Majority for Israel, an advocacy group, since January 2019. She has been a member of the board of directors of Planned Parenthood
Federation of America, a nonprofit organization that provides reproductive healthcare, since May 2019. Ms. Stabler was also a member on the board of directors of Athlete Ally, a nonprofit LGBTQ+ athletic advocacy group, from 2015 to January
2017. Ms. Stabler previously served on the Board of Advisors of Segall Bryant & Hamill, an investment firm, from 2014 to February 2020. Prior to that, she was a Senior Advisor of Product Lifecycle Management and Product Management, Vice
President of Product Management and Marketing and Vice President of Strategic Solutions and Product Marketing at CA Technologies, a Broadcom company, from 2010 to November 2018. She was also a member on the board of directors for the Human
Rights Campaign, an LGBTQ+ advocacy group and political lobbying organization, from 2009 to October 2017. She was also an advisory member to President Obama’s National LGBT Policy Committee from 2008 to 2016, and served on the National Business
Advisory Council for the Human Rights Campaign from 2008 to April 2020. She was a member of the board of directors of the AIDS Foundation Houston, Inc., a nonprofit organization, from 2007 to 2011. She was also a Vice President of Product
Management and Marketing for BMC Software, Inc., an information technology services and consulting company, from 2003 to 2010. We believe Ms. Stabler’s business and marketing expertise, her LGBTQ+ advocacy experiences and her prior service as a
director qualify her to serve as a director of New Grindr.
Gary I. Horowitz. Upon consummation of the Business Combination, Mr. Horowitz will serve as a member of the New Grindr Board. Mr. Horowitz has been a partner in the corporate department at Simpson Thacher &
Bartlett LLP since 1989, and joined the firm in 1982. He was also the President of Miracle House, a nonprofit organization, from 2004 to 2007. Mr. Horowitz received his bachelor of science degree in Industrial and Labor Relations from Cornell
University. He also received his juris doctor degree from the Columbia Law School, where he was an editor on the Columbia Law Review. We believe Mr. Horowitz’s extensive legal experience qualify him to serve as a director of New Grindr.
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Maggie Lower. Upon consummation of the Business Combination, Ms. Lower will serve as a member of the New Grindr Board. Ms. Lower has been the Chief Marketing Officer of Hootsuite Media Inc., a social media
management platform, since July 2021. She has served as a Strategic Advisor to Clu, a recruitment software company, since March 2022. She has also served as a Senior Board Advisor to Scoperta, a digital wine and consumer business, and Simon
Data, Inc., a customer data platform, since February 2021. She has also served as a Senior Board Advisor to DealEngine, Inc., a startup analytics company, since September 2020. Prior to that, she was the Chief Marketing Officer of Cision US
Inc., a provider of media software and services, from July 2020 to June 2021, and the Senior Vice President and Chief Marketing Officer at TrueBlue Inc., a staffing and workforce management company, from January 2018 to July 2020. Prior to
that, she served as an Executive Vice President of Marketing at Alight Solutions, LLC, a cloud-based provider of integrated digital human capital and business solutions, which was previously part of Aon PLC and spun off to Blackstone Group LP,
from May 2017 to November 2017. Ms. Lower was also a Senior Vice President and Head of Global Marketing at Aon PLC, a professional services firm, from July 2012 to May 2017. She previously served as the Director and Senior Vice President and
Client and Business Management Executive at Bank of America, an investment bank and financial services company, from June 2011 to July 2012. She was a Director and Senior Vice President and Head of Investment Infrastructure, Analytics and
Client Reporting at Bank of America Merrill Lynch Retirement & Philanthropic Services from 2007 to 2011. Ms. Lower received her bachelor of arts degree in History and graduated cum laude from Hamilton College. She also holds an M.B.A. from
Northwestern University, Kellogg School of Management. We believe Ms. Lower’s extensive experience in the financial industry and her experience as an executive qualify her to serve as a director of New Grindr.
Nathan Richardson. Upon consummation of the Business Combination, Mr. Richardson will serve as a member of the New Grindr Board. Mr. Richardson was an Executive Vice President at Red Ventures from August 2019
until October 2021. Mr. Richardson is the co-Founder of Trading Ticket, Inc., a financial technology company, and served as its Chief Executive Officer from April 2014 to August 2019. He is also the co-Founder of Waywire, a video sharing
website, and served as its Chief Executive Officer from April 2012 to August 2013. Prior to that he was a Senior Vice President and General Manager at Dow Jones Online at Dow Jones & Company, Inc., a publishing firm, from 2005 to 2006.
Prior to that he was the President of Gilt City, Inc., a subsidiary of Gilt Groupe Inc., which is an online shopping and lifestyle website, from 2009 to 2012. Mr. Richardson worked at Yahoo Inc. from 2000 to 2005, most recently as a General
Manager in its finance division. Prior to that, he served as a Global Emerging Markets Management Associate at Citigroup Inc., an investment bank and financial services company, from1998 to 1999. Mr. Richardson also previously served as a
director of Caribe Media, Inc. from 2011to 2019. Mr. Richardson served as a director of Pyxus (NYSE: Pyx) from February 2019 to August 2020. Mr. Richardson received his bachelor of science degree in Business from Babson College. Mr. Richardson
holds an M.B.A. from Georgetown University. We believe Mr. Richardson’s extensive experience in the finance and commerce industries and his experience as an executive qualify him to serve as a director of New Grindr.
Family Relationship
There are no family relationships among our directors and executive
officers.
Corporate Governance
Composition of the Board of Directors
When considering whether directors and director nominees have the
experience, qualifications, attributes and skills, taken as a whole, to enable the New Grindr Board to satisfy its oversight responsibilities effectively in light of its business and structure, the New Grindr Board expects to focus primarily on
each person’s background and experience as reflected in the information discussed in each of the directors’ individual biographies set forth above in order to provide an appropriate mix of experience and skills relevant to the size and nature of
its business.
In accordance with the terms of the Proposed Bylaws, which will be
effective upon the consummation of the Business Combination, the New Grindr Board may establish the authorized number of directors from time to time by resolution. The New Grindr Board will consist of nine (9) members upon the consummation of the
Business Combination. Each director shall be nominated for a one (1) year term to be elected at the subsequent annual meeting of the shareholders following the effectiveness of the Proposed Certificate of Incorporation. At each succeeding annual
meeting of the shareholders of New Grindr, beginning with the first annual meeting of the shareholders of New Grindr following the effectiveness of the Proposed Certificate of Incorporation, each of the successors elected to replace the directors
whose term expires at that annual meeting shall be elected for a one-year term or until the election and qualification of their respective successors in office, subject to their earlier death, resignation or removal.
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Director Independence
As a result of New Grindr’s common stock being listed on NYSE
following consummation of the Business Combination, it will be required to comply with the applicable rules of such exchange in determining whether a director is independent. Prior to the completion of the Business Combination, the parties
undertook a review of the independence of the individuals named above and have determined that each of qualifies as “independent” as defined under the applicable NYSE rules. The listing standards of NYSE define an “independent director” as an
individual who the board of directors affirmatively determines has no material relationship with the company, either directly or as an officer, partner or shareholder of a company that has a relationship with the company. Further, the NYSE Listed
Company Manual warns that boards making independence determinations should “broadly consider all relevant facts and circumstances.” Additionally, audit committee members must meet certain criterion as defined for audit committee members under
NYSE listing standards and the rules and regulations of the SEC.
Committees of the Board of Directors
The New Grindr Board will direct the management of its business and
affairs, as provided by Delaware law, and will conduct its business through meetings of the board of directors and standing committees. New Grindr will have a standing audit committee, compensation committee and nominating and corporate
governance committee, each of which will operate under a written charter.
In addition, from time to time, special committees may be
established under the direction of the board of directors when the board deems it necessary or advisable to address specific issues. Following the Business Combination, current copies of New Grindr’s committee charters will be posted on its
website, , as required by applicable SEC and NYSE rules. The information on or available through any of such website is not deemed incorporated in this proxy statement/prospectus and does not form part of this proxy statement/prospectus.
Audit Committee
Upon the Closing, New Grindr’s audit committee will consist of ,
with serving as the chair of the committee. The New Grindr Board has determined that each of these individuals meets the independence requirements of the Sarbanes-Oxley Act of 2002, as amended, or the Sarbanes-Oxley Act, Rule 10A-3 under the
Exchange Act and the applicable listing standards of NYSE. Each member of New Grindr’s audit committee can read and understand fundamental financial statements in accordance with NYSE audit committee requirements. In arriving at this
determination, the board has examined each audit committee member’s scope of experience and the nature of their prior and/or current employment.
The New Grindr Board has determined that qualifies as an audit
committee financial expert within the meaning of SEC regulations and meets the financial literacy requirements of the NYSE rules. In making this determination, the New Grindr Board has considered . Both New Grindr’s independent registered
public accounting firm and management periodically will meet privately with New Grindr’s audit committee.
The audit committee’s responsibilities will include, among other
things:
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appointing, compensating, retaining, evaluating, terminating and overseeing New Grindr’s independent registered public
accounting firm;
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discussing with New Grindr’s independent registered public accounting firm their independence from management;
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reviewing with New Grindr’s independent registered public accounting firm the scope and results of their audit;
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pre-approving all audit and permissible non-audit services to be performed by New Grindr’s independent registered public
accounting firm;
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overseeing the financial reporting process and discussing with management and New Grindr’s independent registered public
accounting firm the interim and annual financial statements that New Grindr’s files with the SEC;
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reviewing and monitoring New Grindr’s accounting principles, accounting policies, financial and accounting controls and
compliance with legal and regulatory requirements; and
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establishing procedures for the confidential anonymous submission of concerns regarding questionable accounting, internal
controls or auditing matters.
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Compensation Committee
Upon the Closing, New Grindr’s compensation committee will consist
of , with serving as the chair of the committee. are non-employee directors, as defined in Rule 16b-3 promulgated under the Exchange Act. The New Grindr Board has determined that are “independent” as defined under the applicable
NYSE listing standards, including the standards specific to members of a compensation committee. The compensation committee’s responsibilities include, among other things:
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reviewing, overseeing, modifying and approving the overall compensation strategy and policies for New Grindr;
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reviewing and approving the compensation of the Chief Executive Officer;
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making recommendations to the New Grindr Board regarding the compensation of New Grindr’s senior management and directors;
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appointing and overseeing any compensation consultants;
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reviewing and approving or making recommendations to the New Grindr Board regarding New Grindr’s incentive compensation and
equity-based plans and arrangements; and
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reviewing and establishing appropriate insurance coverage for New Grindr’s directors and officers.
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We believe that the composition and functioning of New Grindr’s
compensation committee meets the requirements for independence under the current NYSE listing standards.
Nominating and Governance Committee
The primary purposes of the nominating and governance committee of
the New Grindr Board will be to assist the New Grindr Board in:
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identifying individuals qualified to become new board of directors members, consistent with criteria approved by the board of
directors;
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identifying members of the board of directors qualified to fill vacancies on any board of directors committee and recommending
that the board of directors appoint the identified member or members to the applicable committee;
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reviewing and recommending to the New Grindr Board the compensation program for the New Grindr Board’s non-executive directors;
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reviewing and recommending to the board of directors corporate governance principles applicable to New Grindr;
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overseeing the evaluation and performance of the New Grindr Board and management;
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reviewing and overseeing compliance with New Grindr’s policies applicable to directors, including, among other things, the Code
of Business Conduct and Ethics, Related Persons Transaction Policy, Non-Employee Director Compensation Policy;
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overseeing legal, regulatory and public policy matters material to New Grindr, particularly with respect to matters that could
have a significant reputational impact on New Grindr; and
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handling such other matters that are specifically delegated to the committee by the New Grindr Board from time to time.
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We anticipate the nominating and governance committee of the New
Grindr Board will consist of , each of whom qualifies as an independent director according to the rules and regulations of the SEC and NYSE with respect to nominating and governance committee membership. We anticipate that will serve as
chair of the nominating and governance committee.
Code of Ethics
New Grindr will have a code of ethics that applies to all of its
executive officers, directors and employees, including its principal executive officer, principal financial officer, principal accounting officer or controller or
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persons performing similar functions. The Code of Business Conduct and Ethics will
be available on New Grindr’s website, . New Grindr intends to make any legally required disclosures regarding amendments to, or waivers of, provisions of its Code of Business Conduct and Ethics on its website. In addition, New Grindr intends
to post on its website all disclosures that are required by law or the listing standards of NYSE concerning any amendments to, or waivers from, any provision of the code. The reference to the New Grindr website address does not constitute
incorporation by reference of the information contained at or available through New Grindr’s website, and you should not consider it to be part of this proxy statement/prospectus.
Compensation Committee Interlocks and Insider
Participation
None of New Grindr’s executive officers currently serves, or has
served during the last year, as a member of the board of directors or compensation committee of any entity, other than Grindr, that has one or more executive officers serving as a member of the New Grindr Board.
Non-Employee Director Compensation
The Nominating and Governance Committee of the Board of Directors
has the primary responsibility for approving and evaluating non-employee director compensation arrangements, which have been designed to provide competitive compensation necessary to attract and retain high quality non-employee directors and to
encourage ownership of New Grindr common stock to further align the interests of New Grindr’s non-employee directors with those of New Grindr’s shareholders.
The New Grindr Board expects to review director compensation
periodically to ensure that director compensation remains competitive such that New Grindr is able to recruit and retain qualified directors. Upon the consummation of the Business Combination, New Grindr will adopt a director compensation program
that is designed to align compensation with its business objectives and the creation of shareholder value, while enabling New Grindr to attract, retain, incentivize and reward directors who contribute to the long-term success of New Grindr.
Limitation on Liability and Indemnification of
Directors and Officers
The Proposed Certificate of Incorporation, which will be effective
upon consummation of the Business Combination, will limit a director’s liability to the fullest extent permitted under the DGCL. The DGCL provides that directors of a corporation will not be personally liable for monetary damages for breach of
their fiduciary duties as directors, except for liability:
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for any transaction from which the director derives an improper personal benefit;
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for any act or omission not in good faith or that involves intentional misconduct or a knowing violation of law;
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for any unlawful payment of dividends or redemption of shares; or
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for any breach of a director’s duty of loyalty to the corporation or its shareholders.
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If the DGCL is amended to authorize corporate action further
eliminating or limiting the personal liability of directors, then the liability of the directors will be eliminated or limited to the fullest extent permitted by the DGCL, as so amended.
Delaware law and the Proposed Bylaws provide that New Grindr will,
in certain situations, indemnify its directors and officers and may indemnify other employees and other agents, to the fullest extent permitted by law. Any indemnified person is also entitled, subject to certain limitations, to advancement,
direct payment, or reimbursement of reasonable expenses (including attorneys’ fees and disbursements) in advance of the final disposition of the proceeding.
In addition, New Grindr will enter into separate indemnification
agreements with its directors and officers. These agreements, among other things, require New Grindr to indemnify its directors and officers for certain expenses, including attorneys’ fees, judgments, fines, and settlement amounts incurred by a
director or officer in any action or proceeding arising out of their services as one of its directors or officers or any other company or enterprise to which the person provides services at its request.
New Grindr plans to maintain a directors’ and officers’ insurance
policy pursuant to which its directors and officers are insured against liability for actions taken in their capacities as directors and officers.
Grindr believes these provisions in the Proposed Certificate of
Incorporation, Proposed Bylaws and indemnification agreements are necessary to attract and retain qualified persons as directors and officers.
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Throughout this section, unless otherwise noted,
“we,” “us,” “our,” “the Company” and similar terms refer to Grindr and its subsidiaries prior to the consummation of the Business Combination, and to New Grindr and its subsidiaries after the Business Combination. This discussion may contain
forward-looking statements that are based on our current plans, considerations, expectations, and determinations regarding future compensation programs. Actual compensation programs that we adopt following the completion of the Business
Combination may differ materially from the currently planned programs summarized in this discussion.
Grindr’s named executive officers for the year ended December 31,
2021, consisting of its principal executive officer and its only other two executive officers who were serving in such capacity as of December 31, 2021, were:
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Jeffrey C. Bonforte, Chief Executive Officer;
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Gary C. Hsueh, Chief Financial Officer; and
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Austin “AJ” Balance, Chief Product Officer.
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Messrs. Bonforte and Hsueh will step down from their roles as Chief
Executive Officer and Chief Financial Officer effective October 19, 2022, and September 26, 2022, respectively, before transitioning to advisory roles with Grindr and they will be succeeded on such dates by George Arison and Vandana Mehta-Krantz,
respectively. For a summary of the material terms of the employment agreements entered into with Mr. Arison and Ms. Mehta-Krantz, please refer to “—Executive Compensation Arrangements—George Arison” and “—Executive Compensation
Arrangements—Vandana Mehta-Krantz” respectively.
2021 Summary Compensation Table
The table below shows compensation of Grindr’s named executive
officers for the year ended December 31, 2021.
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Name and Principal Position
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Year
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Salary ($)(1)
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Bonus ($)(2)
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Option Awards
($)(3)
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Total ($)
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Jeffrey C. Bonforte
Chief Executive Officer
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2021
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375,000
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—
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—
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375,000
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Gary C. Hsueh
Chief Financial Officer
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2021
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370,833
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—
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—
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370,833
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Austin “AJ” Balance
Chief Product Officer
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2021
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28,409
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25,000
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1,767,000
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1,820,409
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(1)
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Represent amounts earned during the year ended December 31, 2021, whether or not paid in 2021.
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(2)
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Represents the sign-on bonus Mr. Balance earned in 2021 pursuant to the terms of his offer letter from us, as described under
the subsection entitled “—Executive Compensation Arrangements—Austin “AJ” Balance.”
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(3)
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The amount reported in this column does not reflect the amount actually received by Mr. Balance. Instead, the amount reflects
the aggregate grant date fair value of the option award granted to Mr. Balance during 2021, as computed in accordance with Financial Accounting Standards Board Accounting Standards Codification 718. As required by SEC rules, the amount
shown excludes the impact of estimated forfeitures related to service-based vesting conditions. Please see Note 15 to Grindr’s audited financial statements for the year ended December 31, 2021 included elsewhere in the proxy
statement/prospectus for additional information.
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Narrative to Summary Compensation Table
Base Salaries
In 2021, the named executive officers received annual base salaries
to compensate them for services rendered to Grindr. The base salary payable to each named executive officer is intended to provide a fixed component of compensation reflecting the executive’s skill set, experience, role and responsibilities.
Cash Bonus
Grindr does not have a formal arrangement with its named executive
officers providing for annual cash bonus awards.
Equity Compensation
Our equity-based incentive awards are designed to align Grindr’s
interests and those of its unitholders with those of its employees and consultants, including its named executive officers. The Grindr board of managers or an authorized committee thereof is responsible for approving equity grants.
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We currently maintain the Grindr Group LLC Amended and Restated
2020 Equity Incentive Plan, or the 2020 Plan. See “—2020 Equity Incentive Plan” included below for additional information. Prior to the Business Combination, all of the equity compensation outstanding were
made pursuant to the 2020 Plan. Historically, we have used options as an incentive for long-term compensation to our executive officers because options allow our executive officers to realize value from this form of equity compensation only if
the value of the underlying Grindr Series X Ordinary Units increase relative to the option’s per-unit exercise price, which exercise price is set at the fair market value of the underlying Grindr Series X Ordinary Unit on the grant date.
Grindr executives are generally awarded an initial equity
compensation grant in the form of an option to purchase Grindr Series X Ordinary Units in connection with the commencement of their employment with us. Additional grants may occur periodically in order to specifically incentivize executives with
respect to achieving certain corporate goals or to reward executives for exceptional performance. All Grindr options were granted with an exercise price per unit that was no less than the fair market value of a Grindr Series X Ordinary Unit on
the grant date. Grindr options generally vest over a four-year period, with 25% of the number of units subject thereto vesting on the first anniversary of the vesting commencement date and 6.25% of the number of units subject thereto vesting in
equal quarterly installments thereafter, provided that the grantee remains in continuous service to us through each vesting date.
Neither of Messrs. Bonforte nor Hsueh received any Grindr equity
awards during 2021. All Grindr Options that are outstanding as of immediately prior to the First Merger, will be converted into New Grindr Options. For further details, see “Business Combination,
Proposal–Consideration–Treatment of Grindr Options.”
Other Elements of Compensation
Retirement Plans
In 2021, the named executive officers participated in a 401(k)
retirement savings plan maintained by Grindr. The Code allows eligible employees to defer a portion of their compensation, within prescribed limits, on a pre-tax basis through contributions to the 401(k) plan. In 2021, contributions made by
participants, including the named executive officers, in the 401(k) plan were matched by the Company up to a specified percentage of the employee contribution. These matching contributions are generally unvested as of the date on which the
contribution is made, and vest 20% over a five-year period, subject to continued service. We anticipate that, following consummation of the Business Combination, our named executive officers will continue to participate in the 401(k) plan on the
same terms as other full-time employees.
Employee Benefits
Grindr provides benefits to its named executive officers on the same
basis as provided to all of its employees, including health, dental and vision insurance; life insurance; accidental death insurance, and dismemberment insurance; and disability insurance. Grindr does not maintain any executive-specific benefit
or executive perquisite programs.
Outstanding Equity Awards at
Fiscal Year-End
The figures in the table below show outstanding equity awards as of
December 31, 2021.
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Name
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Grant
Date
|
| |
Vesting
Commencement
Date
|
| |
Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable
|
| |
Option
Exercise Price
($)
|
| |
Option
Expiration
Date
|
| |
Number of
Units That
Have Not
Vested
|
| |
Market
Value of
Units That
Have Not
Vested
|
|
Jeffrey C. Bonforte(1)
|
| |
6/10/2020
|
| |
12/31/2021
|
| |
—
|
| |
—
|
| |
—
|
| |
861,327
|
| |
$3,875,972
|
|
Gary C. Hsueh(1)
|
| |
6/10/2020
|
| |
12/31/2021
|
| |
—
|
| |
—
|
| |
—
|
| |
861,327
|
| |
$3,875,972
|
|
Austin “AJ” Balance(2)
|
| |
12/07/2021
|
| |
12/03/2022
|
| |
300,000
|
| |
5.89
|
| |
12/07/2028
|
| |
—
|
| |
—
|
|
(1)
|
Represents Series P profit units (“Series P Units”) granted by SVE to
Catapult Goliath LLC (“Catapult Goliath”) on June 10, 2020, and indirectly owned by Messrs. Bonforte and Hsueh through their respective ownership interests in Catapult Goliath, in
exchange for providing service to the Company under a consulting agreement between SVE and Catapult Goliath through December 31, 2023. The vesting requirements for the Series P Units consist of requisite service under the consulting
agreement through December 31, 2023 and four performance-based vesting targets as follows: (1) 20% will vest if SVE determines that Catapult Goliath has addressed certain critical issues as described in the grant agreement by December
31, 2020 (which SVE determined had been addressed by Catapult Goliath prior to such date), and (2) 20%, 30%, and 30% will vest if EBITDA for Grindr reached a certain level for the each of the years ending December 31,
|
280
2021, December 31, 2022 and December 31, 2023, respectively. On May 9, 2022, SVE
and Catapult Goliath entered into an agreement to amend the vesting requirement for the Series P Units. Under the amendment, the Series P Units performance-based vesting target was amended to time-based vesting from the date of the amendment
through December 31, 2022.
|
(2)
|
The option award was granted with a per share exercise price equal to the fair market value of one share of Grindr’s Series X
Ordinary Units on the date of grant, as determined in good faith by Grindr’s board of managers, and vests as to 25% of the Grindr Series X Ordinary Units subject thereto on the first anniversary of the grant date, and 6.25% of the Grindr
Series X Ordinary Units subject thereto will vest each quarter thereafter, subject to Mr. Balance’s continued service to us through each vesting date. The exercise price and number of our Series X Ordinary Units subject to Mr. Balance’s
option, reflect the actual exercise price and number of units, respectively, as of December 31, 2021. As described in the section entitled “Consideration – Treatment of Grindr Options” in the
Business Combination Proposal above, the exercise price and number of units subject to Mr. Balance’s option will be adjusted to reflect the Business Combination.
|
Executive Compensation Arrangements
Austin “AJ” Balance
In November 2021, Grindr entered into an offer letter with
Mr. Balance, or the Balance Offer Letter, which governs the current terms of his employment as our Chief Product Officer. Mr. Balance’s employment is at will and may be terminated at any time, with or without cause. The Balance Offer Letter
provides for an annual base salary of $375,000 per year and eligibility to participate in Grindr’s benefit programs. The Balance Offer Letter also provides for a $25,000 sign-on bonus, which was paid in 2022.
The Balance Offer Letter provides for an initial equity grant of an
option to purchase 300,000 shares of Grindr Series X Ordinary Units, or the Initial Balance Option. The Initial Balance Option was granted on December 3, 2021 and will vest as to 25% of the Grindr Series X Ordinary Units subject thereto on the
first anniversary of the December 3, 2021 grant date, and 6.25% of the Grindr Series X Ordinary Units subject thereto will vest each quarter thereafter on the same day of the month, subject to Mr. Balance’s continued service to us through each
vesting date.
The Balance Offer Letter also specifies that, subject to the
approval by the board of managers of Grindr, Mr. Balance will be eligible to receive two additional option awards to purchase 50,000 Grindr Series X Ordinary Units, with the first to be granted no later than 36 months after Mr. Balance’s start
date and the second to be granted no later than 48 months after Mr. Balance’s start date.
None of the other named executive officers are party to individual
compensation arrangements, employment agreements or offer letters.
We have entered into employment agreements with each of George
Arison and Vandana Mehta-Krantz for the roles of Chief Executive Officer and Chief Financial Officer, respectively. The material terms of these agreements are summarized below.
George Arison
Effective as of September 12, 2022, we entered into an employment
agreement with George Arison (the “Arison Employment Agreement”). Under the terms of the Arison Employment Agreement, Mr. Arison will hold the position of Chief Executive Officer and Executive Director of the Company beginning on October 15,
2022, or such earlier date as otherwise agreed to by Mr. Arison and the Company (such actual date Mr. Arison’s employment begins, the “Arison Start Date”) and will receive an initial annual base salary of $1 million per year, subject to annual
review and increase, but not decrease (unless pursuant to a salary reduction program applicable generally to the Company’s other C-level employees of no greater than 10% reduction), by the board of directors of the Company in its sole discretion.
In addition to his annual base salary, Mr. Arison will be eligible to receive an annual bonus with a target amount equal to one hundred percent (100%) of his annual base salary, based on the achievement of performance objectives and goals
established by the Company in consultation with Mr. Arison.
Pursuant to the terms of the Arison Employment Agreement and subject
to the approval of the Company’s board of directors, Mr. Arison will be eligible to receive certain incentive and equity-based awards, which such awards will be subject to the terms of a newly adopted equity incentive plan. Such awards are
comprised of (i) restricted stock units representing the right to receive a number of shares of New Grindr Common Stock determined by dividing $37.5 million by the Reference Price (as defined in the Arison Employment Agreement), subject to a
five-year vesting schedule, with one-fifth of the total number of restricted stock units vesting on the first anniversary of the Arison Start Date, and the remainder vesting in eight equal six-month installments thereafter (the “Arison Time-Based
Award”); (ii) in the event our average market capitalization over any 90-day period exceeds $5 billion (the “First CEO Hurdle”), a fully vested restricted stock unit award representing the right to receive a number of shares of New Grindr Common
Stock determined by dividing $20 million by the average volume-weighted trading average of New Grindr
281
Common Stock for the 90-trading day period preceding achievement of the First CEO
Hurdle; (iii) in the event our average market capitalization over any 90-day period exceeds $10 billion (the “Second CEO Hurdle”), a fully vested restricted stock unit award representing the right to receive a number of shares of New Grindr
Common Stock determined by dividing $30 million by the average volume-weighted trading average of New Grindr Common Stock for the 90-trading day period preceding achievement of the Second CEO Hurdle; and (iv) a combination of fully-vested
restricted stock units and cash, ranging in value from $1.5 million to $3 million, based upon the achievement of annual key performance indicators as established by the Company and Mr. Arison at the start of each calendar year. The Arison
Time-Based Awards shall accelerate and vest in full on a termination of Mr. Arison’s employment by the Company without Cause or if Mr. Arison terminates his employment for Good Reason, in either case, at any time within 12 months following a
change in control.
In the event that Mr. Arison’s previous employer does not pay him
his 2022 annual cash bonus (the “Previous Employer Bonus”), the Arison Employment Agreement provides that he will be eligible to receive a make-whole bonus from the Company equal to the shortfall, if any, between the Previous Employer Bonus and
the target annual bonus (pro-rated based on the number of days Mr. Arison was employed with his previous employer during the calendar year 2022), which such pro-rated target annual bonus shall not exceed $1.2 million.
Either the Company or Mr. Arison may terminate Mr. Arison’s
employment at any time, with or without cause or advance notice. If Mr. Arison’s employment is terminated by us without “Cause” (as defined below), or Mr. Arison terminates his employment for “Good Reason” (as defined below), he will be entitled
to receive (i) all of his accrued and unpaid wages earned through his last day of employment, any unreimbursed business expenses, the value of any accrued and unused vacation days, and any other amounts required by local law or the express terms
of any employee benefit plan to be paid to him; (ii) a lump sum cash payment equal to the sum of (A) his annual base salary in effect as of his last day of employment, (B) his annual target bonus in effect as of the effective date of the Arison
Employment Agreement and (iii) a payment in the form of cash or fully vested shares of New Grindr Common Stock equal to: (A) 100% of the “Annual Shift Value” (as defined below) if Mr. Arison’s employment is terminated prior to the first
anniversary of the Arison Start Date, and (B) 75% of the Annual Shift Value if Mr. Arison’s employment is terminated prior to the second anniversary of the Arison Start Date. Mr. Arison’s severance benefits (items (i) and (ii) in the immediately
preceding sentence) are conditioned on his execution and nonrevocation of a separation agreement and general release of claims in favor of the Company.
For the purposes of the Arison Employment Agreement, the following
definitions apply:
“Annual Shift Value” generally means 800,000 multiplied by (x) the
lesser of (a) the acquisition price per share of Mr. Arison’s Shift Technologies, Inc. (“Shift”) Class A common stock in the event that a “Change of Control,” within the meaning of Shift’s 2020 Omnibus Equity Compensation Plan (a “Transaction”),
is publicly announced prior to on or prior to the last day of Mr. Arison’s employment with us, inclusive of any contingent or illiquid consideration to be received in respect of such shares, and (b) $5.00, as applicable; or (y) if a Transaction
has not been publicly announced on or prior to the last day of Mr. Arison’s employment with us, the lesser of (a) the average volume-weighted average price of his Shift Class A common stock for the 30 trading days preceding the last day of his
employment with us, and (b) $5.00, as applicable.
“Cause” generally means any one or more of the following: (a) the
plea of guilty or nolo contendere to, or conviction for, a felony offense by Mr. Arison; provided, however, that (i) after indictment, the Company may suspend Mr. Arison from the rendition of services, but without limiting or modifying in any
other way the Company’s obligations under the Arison Employment Agreement, and (ii) Mr. Arison’s employment shall be immediately reinstated if the indictment is dismissed or otherwise dropped and there is not otherwise grounds to terminate his
employment for Cause; (b) a material breach by Mr. Arison of a fiduciary duty owed to the Company; (c) a material breach by Mr. Arison of certain covenants made by him in the Arison Employment Agreement or of his confidentiality agreement;
(d) Mr. Arison’s continued willful failure to perform or gross neglect of the material duties required by the Arison Employment Agreement (other than any such failure resulting from incapacity due to physical or mental illness); or (e) a knowing
and material violation by Mr. Arison of any material Company policy pertaining to ethics, wrongdoing or conflicts of interest, which policy had been provided to Mr. Arison in writing or otherwise made generally available prior to such violation;
provided, that in the case of conduct described in clauses (b), (c), (d) or (e) above, “Cause” shall only apply to conduct occurring after the date of the Arison Employment Agreement and, if such conduct is capable of being cured, Mr. Arison
shall have a period of no less than twenty (20) days after
282
he is provided with written notice (specifying in reasonable detail the acts or
omissions believed to constitute Cause and the steps necessary to remedy such condition, if curable) in which to cure, which such notice specifically identifies the breach or the violation that the Company believes constitutes Cause.
“Good Reason” generally means any of the following actions are taken
by the Company without Mr. Arison’s prior written consent: (a) a material reduction in Mr. Arison’s base salary (unless pursuant to a salary reduction program applicable generally to the Company’s other C-level employees of no greater than 10%
reduction); (b) a material diminution in Mr. Arison’s job duties, responsibilities, authorities or title, including, but not limited to, him not being the Chief Executive Officer of the Company (or ultimate parent company of the entity succeeding
to the Company’s business following a change in control), the appointment of a co-Chief Executive Officer of the Company, Mr. Arison becoming the chief executive officer of a division or subsidiary instead of the Chief Executive Officer of the
Company, or Mr. Arison no longer reporting directly to the board of directors of the Company; (c) the requirement that Mr. Arison regularly work from a primary physical work location other than his home office; (d) the failure of the Company’s
board of directors to nominate Mr. Arison for election or reelection as a director of the Company; (e) a material breach by the Company of the Arison Employment Agreement; or (f) the Company’s failure to grant Mr. Arison any of the incentive
awards contemplated by the Arison Employment Agreement. In order to resign for Good Reason, Mr. Arison must provide written notice to the disinterested members of the Company’s board of directors within 60 days after the first occurrence of the
event giving rise to Good Reason setting forth the basis for his resignation, allow the Company at least 60 days from receipt of such written notice to cure such event, if curable, and if such event is not reasonably cured within such period, he
must resign not later than 60 days after the expiration of the cure period.
The Arison Employment Agreement provides that if any payment or
distribution thereunder would constitute “excess parachute payments” within the meaning of Section 280G of the Code, then such payments will be reduced if such reduction will provide Mr. Arison with a greater net after-tax benefit than would no
reduction.
Vandana Mehta-Krantz
Effective as of August 26, 2022, we entered into an employment
agreement with Vandana Mehta-Krantz (the “Krantz Employment Agreement”). Under the terms of the Krantz Employment Agreement, Ms. Mehta-Krantz will hold the position of Chief Financial Officer of the Company beginning on or about September 26,
2022 (such actual date Ms. Mehta-Krantz’s employment starts, the “Krantz Start Date”), and will receive an initial annual base salary of $505,000 per year, subject to annual review and increase, but not decrease (unless pursuant to a salary
reduction program applicable generally to the Company’s other C-level employees of no greater than 10% reduction). Ms. Mehta-Krantz is also eligible to receive an annual bonus with a target amount equal to sixty percent (60%) of Ms. Mehta-Krantz
annual base salary, based upon the level of achievement of performance objectives and goals established annually by the Company’s board of directors or the compensation committee thereof. In addition, the Krantz Employment Agreement entitles Ms.
Mehta-Krantz to receive a one-time signing bonus of $225,000, fifty percent (50%) of which is payable within 30 days of the Krantz Start Date and the remaining fifty percent (50%) of which is payable on the first regularly scheduled payroll
occurring six months after Krantz Start Date.
Pursuant to the terms of the Krantz Employment Agreement and subject
to the approval of the Company’s board, Ms. Mehta-Krantz will be eligible to receive certain equity-based awards, which such awards will be subject to the terms of a newly adopted equity incentive plan. Such awards are comprised of (i) restricted
stock units representing the right to receive a number of shares of New Grindr Common Stock determined by dividing $4.86 million by the Reference Price (as defined in the Krantz Employment Agreement), vesting over five years in equal installments
on each anniversary of Krantz Start Date, subject to her continued employment in good standing through each such vesting date (the “Krantz Time-Based Award”); (ii) in the event our average market capitalization over any 90-day period exceeds $5
billion (the “First CFO Hurdle”), a fully vested restricted stock unit award representing the right to receive a number of shares of New Grindr Common Stock determined by dividing $1.62 million by the average volume-weighted trading average of
New Grindr Common Stock for the 90-trading day period preceding achievement of the First CFO Hurdle; (iii) in the event our average market capitalization over any 90-day period exceeds $7.5 billion (the “Second CFO Hurdle”), a fully vested
restricted stock unit award representing the right to receive a number of shares of New Grindr Common Stock determined by dividing $810,000 by the average volume-weighted trading average of New Grindr Common Stock for the 90-trading day period
preceding achievement of the Second CFO Hurdle; and (iv) in the event our average market capitalization over any 90-day period exceeds $10 billion (the “Third CFO Hurdle”), a fully vested restricted stock unit award representing the right to
receive a number of shares of New Grindr Common Stock determined by dividing $810,000 by the average
283
volume-weighted trading average of New Grindr Common Stock for the 90-trading day
period preceding achievement of the Third CFO Hurdle. The Krantz Time-Based Award shall accelerate and vest in full on a termination of Ms. Mehta-Krantz’s employment by the Company without “Cause” (as defined below) or if Ms. Mehta-Krantz
terminates her employment for “Good Reason” (as defined below), in either case, at any time within 12 months following a change in control. In the event the transactions contemplated by the Merger Agreement are not consummated for any reason (or
in the event the Merger Agreement is terminated in accordance with its terms), subject to approval by the Company’s then-current board of directors, the Company shall arrange for the grant of alternative equity or equity-based awards to Ms.
Mehta-Krantz in lieu of the in lieu of the forgoing awards.
Either the Company or Ms. Mehta-Krantz may terminate Ms.
Mehta-Krantz’s employment at any time, with or without Cause or advance notice. If Ms. Mehta-Krantz employment is terminated by us without Cause, or Ms. Mehta-Krantz terminates her employment for Good Reason, she will be entitled to receive
(i) all of her accrued and unpaid wages earned through the last day of her employment, any unreimbursed business expenses, the value of any accrued and unused vacation days, any annual bonus earned but unpaid with respect to the fiscal year
ending on or preceding the date of termination and any other amounts required by local law or the express terms of any employee benefit plan to be paid to her; (ii) a lump-sum cash payment, equal to the greater of (A) 12 months of
Ms. Mehta-Krantz’s annual base salary in effect as of the date of her termination, or (B) the amount of severance payment pursuant to the then-applicable company-wide severance policy as may be adopted by the Company from time to time; (iii) a
prorated portion of her annual bonus for the fiscal year in which her termination occurs based on actual results for such year, payable at the same time bonuses for such year are paid to other senior executives of the Company; and (iv) continued
participation in our group health plan for her and her eligible dependents for 12 months at our expense. Ms. Mehta-Krantz’s severance benefits (items (ii), (iii), and (iv) of the immediately preceding sentence) are conditioned on her execution
and nonrevocation of a separation agreement and general release of claims in favor of the Company.
For the purposes of the Krantz Employment Agreement, the following
definitions apply:
“Cause” generally means any of the following: (a) the plea of guilty
or nolo contendere to, or conviction for a crime involving dishonesty, intentional misconduct, or breach of trust; (b) gross negligence in the performance of Ms. Mehta-Krantz’s duties; (c) a material breach by Ms. Mehta-Krantz of a fiduciary duty
owed to the Company; (d) a material breach of any written agreement between Ms. Mehta-Krantz and the Company; or (e) a knowing and material violation by Ms. Mehta-Krantz of any material Company policy pertaining to ethics, wrongdoing or conflicts
of interest, which policy had been provided to Ms. Mehta-Krantz in writing or otherwise made generally available prior to such violation; provided, that in the case of conduct described in clauses (b), (c), (d) or (e) “Cause” shall only apply to
conduct occurring after the date hereof and, if such conduct is capable of being cured, Ms. Mehta-Krantz shall have a period of no less than twenty (20) days after she is provided with written notice (specifying in reasonable detail the acts or
omissions believed to constitute Cause and the steps necessary to remedy such condition, if curable) in which to cure, which such notice specifically identifies the breach or the violation that the Company believes constitutes Cause.
“Good Reason” generally means any of the following actions are taken
by the Company without Ms. Mehta-Krantz’s prior written consent: (a) a material reduction in Ms. Mehta-Krantz’s base salary (unless pursuant to a salary reduction program applicable generally to the Company’s other C-level employees of no greater
than 10% reduction); (b) a material diminution in Ms. Mehta-Krantz’s job duties, responsibilities, authorities or title, including, but not limited to, her not being the Chief Financial Officer of the Company (or ultimate parent company of the
entity succeeding to the Company’s business following a change in control); or (c) the Company requires Ms. Mehta-Krantz to relocate from her current residence in Scarsdale, New York. In order to resign for Good Reason, Ms. Mehta-Krantz must
provide written notice to our board of directors within sixty (60) days after the first occurrence of the event giving rise to Good Reason setting forth the basis for her resignation, allow the Company at least thirty (30) days from receipt of
such written notice to cure such event, if curable, and if such event is not reasonably cured within such period, Ms. Mehta-Krantz must resign no later than sixty (60) days after the expiration of the cure period.
2020 Equity Incentive Plan
The 2020 Plan was originally adopted by Grindr’s board of managers
and approved by the unitholders on August 13, 2020. The 2020 Plan provides for the discretionary grant of options, restricted units, unit appreciation rights, restricted equity award units and other unit-based awards to Grindr’s employees,
consultants and non-employee directors, and employees, consultants and non-employee directors of Grindr’s subsidiaries.
284
Immediately prior to the Business Combination, the 2020 Plan will be terminated, and
no further grants will be made under the 2020 Plan. Any Awards granted under the 2020 Plan will remain subject to the terms of the 2020 Plan and the applicable award agreement. As of July 20, 2022, 3,523,540 unit options of Grindr have been
granted under the 2020 Plan.
Authorized Units. Subject to adjustment as provided in the 2020 Plan, as of July 20, 2022, the maximum number of Grindr Series X Ordinary Units that may be issued under the 2020 Plan was 6,522,685 units and the maximum number Grindr Series Y Preferred
Units of Grindr that may be issued under the 2020 Plan is 1,522,843 units. Units to be granted under the 2020 Plan may be subject to various restrictions, including restrictions on transferability and forfeiture provisions, as determined by the
plan administrator (defined below) and consistent with the 2020 Plan terms.
Plan Administration. A committee designated by Grindr’s board of managers, or if no such committee is designated by the board of managers, the board of managers, referred to herein as the plan administrator, administers the 2020 Plan. The 2020 Plan
authorizes the plan administrator to (a) determine which eligible persons are to receive awards, (b) determine the number of units covered by each award, (c) determine the fair market value per share of Grindr’s common units, (d) approve the
forms of award agreements for use under the 2020 Plan, (e) determine the terms and conditions of the awards, (f) construe and interpret the terms of the 2020 Plan, and (g) amend and modify the 2020 Plan and awards granted thereunder.
Adjustments Upon Changes in Capitalization. The plan administrator has broad discretion to take action under the 2020 Plan, as well as to make adjustments to the terms and conditions of awards, to prevent the enlargement or dilution of rights in the event of a
reorganization, recapitalization, unit split involving Grindr Series X Ordinary Units or Grindr Series Y Preferred Units, spin-off, split-off, split-up, unit dividend involving Grindr Series X Ordinary Units or Grindr Series Y Preferred Units,
combination of units of the Grindr Series X Ordinary Units or Grindr Series Y Preferred Units, merger, consolidation or any other change in the corporate structure of the Company affecting Grindr Series X Ordinary Units, or any extraordinary
distribution to holders of Grindr Series X Ordinary Units or Grindr Series Y Preferred Units (other than an ordinary cash dividend).
Certain Corporate Transactions. In the event of certain transactions, our plan administrator may, in its sole discretion, take one or more of the following actions without the consent of any plan participant: (a) accelerate the vesting and/or the
exercisability of all or any portion of the outstanding award; (b) cancel some or all outstanding options or unit appreciation rights in exchange for a payment in an amount equal to the excess, if any, of the Fair Market Value (as defined in
the 2020 Plan) of the units underlying the unexercised portion of the award over the aggregate exercise price of such portion; (c) terminate (for no compensation, payment or other consideration) any award immediately prior to the transaction,
provided that the Company has provided the participant an opportunity to exercise such portion of the award that is vested and exercisable within a specified period following the participant’s receipt of a notice of such transaction and the
Company’s intent to terminate the award prior to such transaction; (d) require the successor or acquiring company (or any parent or affiliate thereof), following a transaction, to assume all outstanding awards or to substitute such awards with
similar awards involving the equity securities of such successor or acquiring company or its parent or affiliates; (e) cancel for no consideration any award that, after giving effect to the transaction, would not be vested; and (f) take any
other action the plan administrator deems appropriate in its discretion in connection with the transaction. Under the 2020 Plan, a transaction means (i) an “Approved Sale”, (ii) a “Drag-Along Sale” or (iii) a “Liquidation Event,” in each case,
as defined in the Amended and Restated Limited Liability Company Agreement of San Vicente Group LLC, as may be amended from time to time.
Transferability. Unless determined otherwise by the plan administrator, awards granted under the 2020 Plan may not be transferred, pledged or assigned for any reason during the participant’s lifetime other than to a successor, as defined in the 2020
Plan.
2021 Director Compensation Table
The table below summarizes the compensation paid to our non-employee
directors for 2021.
|
Name
|
| |
Fees Earned or Paid in Cash ($)
|
| |
All Other Compensation ($)
|
| |
Total ($)
|
|
James Lu(1)
|
| |
350,000
|
| |
—
|
| |
350,000
|
|
J. Michael Gearon, Jr
|
| |
—
|
| |
—
|
| |
—
|
|
Sam Yagan
|
| |
—
|
| |
—
|
| |
—
|
|
(1)
|
In June 2020, Grindr entered into a director services agreement with James Lu. The agreement entitles Mr. Lu to an annual fee of
$350,000, to be paid on a quarterly basis, for the services he provides as a director to Grindr.
|
285
New Grindr Executive Officer and Director Compensation Following the
Business Combination
Following the consummation of the Business Combination, New Grindr
intends to develop an executive compensation program that is designed to align compensation with New Grindr’s business objectives and the creation of shareholder value, while enabling New Grindr to attract, retain, incentivize and reward
individuals who contribute to the long-term success of New Grindr.
Executive Compensation. The policies of New Grindr with respect to the compensation of its executive officers following the Business Combination will be administered by the board of directors of New Grindr in consultation with the
Compensation Committee that the board of directors of New Grindr expects to establish. We expect that the compensation policies followed by New Grindr will be designed to provide for compensation that is sufficient to attract, motivate and
retain executives of New Grindr and to establish an appropriate relationship between executive compensation and the creation of shareholder value.
In addition to the guidance provided by its Compensation Committee,
the board of directors of New Grindr may utilize the services of third parties from time to time in connection with the recruiting, hiring and determination of compensation awarded to executive employees.
Director Compensation. It is anticipated that the Compensation Committee of the board of directors of New Grindr will determine the annual compensation to be paid to the members of the board of directors of New Grindr upon completion of the Business
Combination.
Emerging Growth Company Status
As an emerging growth company, New Grindr will be exempt from
certain requirements related to executive compensation, including the requirements to hold a nonbinding advisory vote on executive compensation and to provide information relating to the ratio of total compensation of New Grindr’s chief executive
officer to the median of the annual total compensation of all of New Grindr’s employees, each as required by the Investor Protection and Securities Reform Act of 2010, which is part of the Dodd-Frank Wall Street Reform and Consumer Protection
Act, and is entitled to take advantage of certain other “scaled” disclosure rules, such as only being required to report the compensation of three named executive officers rather than five.
286
Defined terms included below shall have the same
meaning as terms defined and included elsewhere in this proxy statement/prospectus.
Introduction
The unaudited pro forma combined financial information of Grindr,
Inc. has been prepared in accordance with Article 11 of Regulation S-X and presents the combination of the historical financial information of Tiga and Grindr adjusted to give effect to the Business Combination and the other related events
contemplated by the Merger Agreement. The unaudited pro forma combined financial information also gives effect to certain completed or probable transactions to be consummated by Tiga and Grindr that are not yet reflected in the historical
financial information of Tiga or Grindr and are considered material to investors. These material transactions are described below in the sections entitled “—Other Related Events in Connection
with the Business Combination” and “—SV Consolidation” sections below.
Tiga is a special-purpose acquisition company (“SPAC”), which was
incorporated as a Cayman Islands exempted company on July 27, 2020. Tiga was formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or engaging in any other similar business
combination with one or more businesses or entities. Grindr was organized as a Delaware LLC on June 10, 2020. Grindr is headquartered in Los Angeles, California and manages and operates the Grindr app, a mobile, location-based dating service for
gay, bisexual, transgender, queer and other men. The Grindr app is available through Apple’s App Store for iPhones and Google Play for Android. Grindr offers both a free ad-supported service and a premium subscription version and also manages a
dating service app called Blendr, for a broader market.
The unaudited pro forma combined balance sheet as of June 30, 2022
combines the historical unaudited balance sheet of Tiga as of June 30, 2022 with the historical unaudited condensed consolidated balance sheet of Grindr as of June 30, 2022 on a pro forma basis as if the Business Combination and the other events,
summarized below, had been consummated on June 30, 2022.
The unaudited pro forma combined statement of operations for the six
months ended June 30, 2022 combines the historical unaudited statement of operations of Tiga for the six months ended June 30, 2022 and the historical unaudited condensed consolidated statement of operations of Grindr for the six months ended
June 30, 2022 on a pro forma basis as if the Business Combination and the other events, summarized below, had been consummated on January 1, 2021, the beginning of the earliest period presented. The unaudited pro forma combined statement of
operations for the year ended December 31, 2021 combines the historical audited statement of operations of Tiga for the year ended December 31, 2021 and the historical audited consolidated statement of operations of Grindr for the year ended
December 31, 2021 on a pro forma basis as if the Business Combination and the other events, summarized below, had been consummated on January 1, 2021, the beginning of the earliest period presented.
The unaudited pro forma combined financial information was derived
from and should be read in conjunction with the following historical financial statements and the accompanying notes, which are included elsewhere in this proxy statement/prospectus:
|
•
|
the historical unaudited financial statements of Tiga as of and for the three and six months ended June 30, 2022 and the
historical audited financial statements of Tiga as of and for the year ended December 31, 2021;
|
|
•
|
the historical unaudited condensed consolidated financial statements of Grindr as of and for the three and six months ended
June 30, 2022 and the historical audited consolidated financial statements of Grindr as of and for the year ended December 31, 2021; and
|
|
•
|
other information relating to Tiga and Grindr included in this proxy statement/prospectus, including the Merger Agreement and
the description of certain terms thereof set forth under the section entitled “Proposal No. 1—The Business Combination Proposal.”
|
The unaudited pro forma combined financial information should also
be read together with the sections entitled “Tiga’s Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Grindr’s Management’s
Discussion and Analysis of Financial Condition and Results of Operations,” and other financial information included elsewhere in this proxy statement/prospectus.
287
Description of the Business Combination
Prior to the consummation of the Mergers described herein, Tiga
intends to effect a deregistration under Article 206 of the Companies Act and a domestication under Section 388 of the DGCL, pursuant to which Tiga’s jurisdiction of incorporation will be changed from the Cayman Islands to the State of Delaware.
As used herein, “New Grindr” refers to Tiga after the Domestication. Pursuant to the Merger Agreement, Merger Sub I will merge with and into Grindr, with Grindr surviving the First Merger; and as promptly as practicable and as part of the same
overall transaction as the First Merger, the Surviving Company will merge with and into Merger Sub II, with Merger Sub II surviving the Second Merger. Tiga will immediately be renamed “Grindr, Inc.” Upon the consummation of the Business
Combination, all holders of 111,087,545 issued and outstanding Grindr ordinary units will receive shares of New Grindr Common Stock at a deemed value of $10.00 per share after giving effect to the Exchange Ratio resulting in an estimated
200,723,962, 186,923,962 or 175,883,490 shares of New Grindr Common Stock to be immediately issued and outstanding as of the Closing in the no redemptions, 50% redemptions and maximum redemptions scenarios, respectively. The following events are
contemplated to occur within the Merger Agreement:
|
•
|
the cancellation and exchange of all 111,087,545 issued and outstanding Grindr ordinary units into 156,223,962 156,223,962 or
158,983,490 shares of New Grindr Common Stock in the no redemptions, 50% redemptions and maximum redemptions scenarios, respectively, as adjusted by the Exchange Ratio,
|
|
•
|
the capital distribution of $128.3 million, $128.3 million and $100.0 million to former Grindr unitholders in the no
redemptions, 50% redemptions and maximum redemptions scenarios, respectively, and
|
|
•
|
the cancellation and exchange of all 2,493,635 granted and outstanding vested and unvested Grindr Options into 3,947,439,
3,947,439, and 4,017,166 New Grindr Options exercisable for shares of New Grindr Common Stock with the same terms and vesting conditions, each of which adjusted by the Exchange Ratio in the no redemptions, 50% redemptions, and maximum
redemptions scenarios, respectively. Unvested Grindr Options will not accelerate nor vest upon the consummation of the Business Combination.
|
Other Related Events in Connection with the Business Combination
Other related events that are contemplated to occur in connection
with the Business Combination are summarized below:
|
•
|
the filing and effectiveness of our amended and restated certificate of incorporation and the effectiveness of our amended and
restated bylaws, each of which will occur immediately prior to the Effective Time;
|
|
•
|
the sale and issuance of 10,000,000 shares of New Grindr Common Stock to Tiga Sponsor or its assignee pursuant to the A&R
Forward Purchase Agreement at $10.00 per share.
|
|
•
|
For each share issued under the A&R Forward Purchase Agreement, the forward purchaser receives 0.50 redeemable warrants.
|
|
•
|
Upon the issuance of the 10,000,000 shares of New Grindr Common Stock in connection with the A&R Forward Purchase
Agreement, 5,000,000 redeemable warrants will be issued with the same terms and exercise prices as the existing public warrants.
|
|
•
|
The Forward Purchase Commitment is expected to be fully exercised under the minimum redemptions, 50% redemptions and maximum
redemptions scenarios;
|
|
•
|
the estimated $29.7 million cash settlement of the shareholder loan agreement with Catapult GP II, an investor in Grindr, which
is expected to occur subsequent to the latest balance sheet date and before the closing of the Business Combination;
|
|
•
|
The extinguishment of Grindr’s historical long-term debt with a principal balance of $199.2 million and a carrying value of
$195.7 million.
|
|
•
|
The issuance of new term loan facilities in connection with the Business Combination shown below (“New Debt”). New Debt
proceeds are estimated based on advanced discussions with lenders that are subject to change based on changes in redemptions or distributions.
|
|
•
|
In the minimum redemptions scenario, a $200.0 million facility, net of $1.5 million in fees, bearing interest at the secured
overnight financing rate (“SOFR”) plus 6.5% to mature in 5 years.
|
288
|
•
|
In the 50% redemptions scenario, a $250.0 million facility, net of $2.0 million in fees, bearing interest at SOFR + 6.5% to
mature in 5 years.
|
|
•
|
In the maximum redemptions scenario, a $250.0 million facility, net of $2.0 million in fees, bearing interest at SOFR + 6.5% to
mature in 5 years and an additional $120.0 million facility, net of $2.5 million in fees, bearing interest at SOFR + 4.2%, to mature in 18 months, with half of the principal being due within one year and the remaining principal becoming
due upon maturity.
|
SV Consolidation:
After the San Vicente Entities (as defined below) completed their
commercial, legal and tax analyses both to provide tax benefits to the San Vicente Entities and to simplify the ownership structure above Grindr in order for certain San Vicente Entities to receive New Grindr shares in connection with the
Business Combination, Grindr, the Company, and the San Vicente Entities have now determined that it may be desirable and probable for Grindr to undertake an internal reorganization (the “SV Consolidation”)
prior to the Business Combination. Prior to the consummation of the SV Consolidation, Grindr has no obligation or responsibility for the Deferred Payment. If the parties ultimately decide to undertake the SV Consolidation, the SV Consolidation
would involve the following steps: prior to the Closing, SVEJV will be liquidated and each of SV Group Holdings, SV Group TopCo, SV Acquisition, Parent and Offshore Holdings (collectively, the “San
Vicente Entities”) will merge with and into Grindr, with Grindr as the surviving entity, resulting in SV Investments and Catapult Goliath as direct equity holders in Grindr. SV Investments may incorporate a new subsidiary, San
Vicente Investments II, Inc. (“SV Investments II”), and contribute its shares in Cayman to SV Investments II prior to Closing, in which case SV Investments II would also merge with and into
Grindr. The SV Consolidation will begin one day following the extraordinary general meeting and will be completed within approximately six days. If for any reason Grindr, the Company, and the San Vicente Entities are unable to consummate the SV
Consolidation, the parties are still obligated to consummate the Business Combination if the conditions to the Business Combination in the Merger Agreement are met. The SV Consolidation is not a condition precedent to the Business Combination.
The Company has reflected the effects of the potential SV Consolidation as a contribution of assets and liabilities between entities under common control in the pro forma financial information as follows:
|
•
|
In connection with the acquisition of Grindr in 2020 the San Vicente Entities as of June 30, 2022, had or have a cash
obligation to pay $155.0 million on June 20, 2023 to Kunlun. This obligation is recorded by the San Vicente Entities at the present value of these payments due in the future (“Deferred Payment”).
The Deferred Payment is recorded as a liability by San Vicente Acquisition and in connection with the SV Consolidation would be contributed to Grindr as an adjustment to equity. For further information on the Deferred Payment refer to
Note 3 of Grindr’s historical audited financial statements for the year ended December 31, 2021, included elsewhere in this proxy statement/prospectus.
|
|
•
|
To reflect the effects of the SV Consolidation, the balance sheet presented in the Unaudited Pro Forma Combined Financial
Information reflects the Deferred Payment as a liability balance, as well as other asset and liability adjustments to reflect Grindr’s assumption of the San Vicente Entities’ historical bases of net assets as though the SV Consolidation
occurred on June 30, 2022. To reflect the effects of the SV Consolidation, the historical income statement periods presented in the Unaudited Pro Forma Combined Financial Information reflect the interest expense and related tax effects
associated with the Deferred Payment as though the SV Consolidation occurred on January 1, 2021.
|
|
•
|
In connection with the Business Combination, the Deferred Payment will be repaid and extinguished. The pro forma historical
interest expense of the Deferred Payment is then removed and a loss on extinguishment reflecting the difference in the carrying value as of the latest Balance Sheet Date versus the settlement value is recognized.
|
|
•
|
The period of time between the completion of the SV Consolidation and the Closing of the Business Combination is expected to
be within several days of each other.
|
Expected Accounting Treatment of the Business Combination
We expect the Business Combination to be accounted for as a reverse
recapitalization in accordance with GAAP.
Under this method of accounting, Tiga is expected to be treated as
the “acquired” company for financial reporting purposes. Accordingly, for accounting purposes, the financial statements of New Grindr will represent a
289
continuation of the financial statements of Grindr with the Business Combination
treated as the equivalent of Grindr issuing shares for the net assets of Tiga, accompanied by a recapitalization whereby no goodwill or other intangible assets are recorded. Operations prior to the Business Combination will be those of Grindr in
future reports of New Grindr. Grindr has been determined to be the accounting acquirer based on evaluation of the following facts and circumstances under each of the no redemptions, 50% redemptions and maximum redemptions scenarios:
|
•
|
Grindr unitholders will have a relative majority of the voting power of New Grindr;
|
|
•
|
Grindr unitholders will have the ability to nominate the majority of the members of the board of directors;
|
|
•
|
Grindr senior management will comprise the senior management roles of New Grindr and be responsible for the day-to-day
operations
|
|
•
|
The relative size of Grindr is significantly larger compared to Tiga;
|
|
•
|
New Grindr will assume the Grindr name; and
|
|
•
|
The intended strategy and operations of New Grindr will continue Grindr’s current strategy and operations in the
post-combination company.
|
We currently expect the warrants outstanding and the public warrants
issued under the Forward Purchase Commitment to remain liability classified instruments upon the Closing.
Basis of Pro Forma Presentation
The unaudited pro forma combined financial information has been
prepared in accordance with Article 11 of Regulation S-X. The adjustments in the unaudited pro forma combined financial information have been identified and presented to provide relevant information necessary for an illustrative understanding of
New Grindr upon consummation of the Business Combination. Assumptions and estimates underlying the unaudited pro forma adjustments set forth in the unaudited pro forma combined financial information are described in the accompanying notes.
The unaudited pro forma combined financial information has been
presented for illustrative purposes only and is not necessarily indicative of the operating results and financial position that would have been achieved had the Business Combination occurred on the dates indicated, and does not reflect
adjustments for any anticipated synergies, operating efficiencies, tax savings or cost savings. Any cash proceeds remaining after the consummation of the Business Combination and the other related events contemplated by the Merger Agreement are
expected to be used for general corporate purposes. The unaudited pro forma combined financial information does not purport to project the future operating results or financial position of New Grindr following the completion of the Business
Combination. The unaudited pro forma adjustments represent management’s estimates based on information available as of the date of these unaudited pro forma combined financial information and are subject to change as additional information
becomes available and analyses are performed. Tiga and Grindr have not had any historical operational relationship prior to the Business Combination. Accordingly, no pro forma adjustments were required to eliminate activities between the
companies.
The unaudited pro forma combined financial information contained
herein assumes that the Tiga shareholders approve the Business Combination. Pursuant to the current certificate of incorporation, Tiga’s public shareholders may elect to redeem their public shares for cash even if they approve the Business
Combination. Tiga cannot predict how many of its public shareholders will exercise their right to redeem their public shares of Tiga’s Class A ordinary shares for cash. The unaudited pro forma combined financial information has been prepared
assuming three redemption scenarios after giving effect to the Business Combination, as follows:
|
•
|
Assuming No Redemptions - Assuming that no public shareholders of Tiga exercise
redemption rights with respect to their public shares for a pro rata share of the funds in the trust account.
|
|
•
|
Assuming 50% Redemptions - Assuming that Tiga shareholders holding 13.8 million of the
public shares will exercise their redemption rights for their pro rata share (approximately $10.40 per share) of the funds in the trust account. This scenario gives effect to public share redemptions for aggregate redemption payments of
$143.5 million using a per share redemption price of $10.40 per share.
|
|
•
|
Assuming Maximum Redemptions - Assuming that Tiga shareholders holding 27.6 million of
the public shares will exercise their redemption rights for their pro rata share (approximately $10.40 per share) of the funds in the trust account. This scenario gives effect to public share redemptions for aggregate redemption payments
of $287.0 million using a per share redemption price of $10.40 per share. The Merger Agreement
|
290
includes as a condition to closing the Business Combination that, at the Closing,
Tiga will have (i) a minimum of $100,000,000 in Available Closing Tiga Cash and cash freely available in Grindr’s and its subsidiaries’ bank accounts and (ii) a minimum of $5,000,001 of net tangible assets. To determine the outcomes of the
maximum redemption scenario, the Available Closing Tiga Cash set forth in the Merger Agreement is considered. The Available Closing Tiga Cash is determined as the sum of (i) all amounts in the trust account (after reduction for the aggregate
amount of payments required to be made in connection with the Tiga Shareholder Redemption), plus (ii) the Forward Purchase Commitment Amount, the Backstop Subscription Amount and the PIPE Investment, if any (without, for the avoidance of doubt,
taking into account any transaction fees, costs and expenses paid or required to be paid in connection with the Business Combination, the Forward Purchase Commitment , the Backstop Commitment or the PIPE Investment). In the minimum redemptions,
50% redemptions and maximum redemptions scenarios, it is assumed that the Available Closing Tiga Cash condition shall be met through the Forward Purchase Commitment and the Backstop Commitment proceeds of $100.0 million.
The following summarizes the pro forma New Grindr Common Stock
issued and outstanding immediately after the Business Combination, presented under the three assumed redemption scenarios:
|
|
| |
Share Ownership in New Grindr
|
|||||||||||||||
|
|
| |
Pro Forma Combined
(Assuming No Redemptions)
|
| |
Pro Forma Combined
(Assuming 50% Redemptions)(7)
|
| |
Pro Forma Combined
(Assuming Maximum Redemptions)(7)
|
|||||||||
|
|
| |
Number of
Shares
|
| |
%
Ownership
|
| |
Number of
Shares
|
| |
%
Ownership
|
| |
Number of
Shares
|
| |
%
Ownership
|
|
Sponsor and certain affiliates(1)(2)
|
| |
6,900,000
|
| |
3.4%
|
| |
6,900,000
|
| |
3.7%
|
| |
6,900,000
|
| |
3.9%
|
|
Public Shareholders(3)
|
| |
27,600,000
|
| |
13.8%
|
| |
13,800,000
|
| |
7.4%
|
| |
—
|
| |
0.0%
|
|
Forward Purchase Investors(4)
|
| |
10,000,000
|
| |
5.0%
|
| |
10,000,000
|
| |
5.3%
|
| |
10,000,000
|
| |
5.7%
|
|
Former Grindr unitholders(5)(6)
|
| |
156,223,962
|
| |
77.8%
|
| |
156,223,962
|
| |
83.6%
|
| |
158,983,490
|
| |
90.4%
|
|
Total
|
| |
200,723,962
|
| |
100.0%
|
| |
186,923,962
|
| |
100.0%
|
| |
175,883,490
|
| |
100.0%
|
|
(1)
|
Reflects 6,840,000 of founder shares held by Tiga’s Sponsor and 60,000 founder shares held by independent directors that will
convert into New Grindr Common Stock.
|
|
(2)
|
Excludes 18,560,000 of private placement warrants as the warrants are not expected to be in the money at Closing. Excludes
1,680,000 of private placement warrants available to be issued in the event the $1.7 million related party note disclosed in Tiga’s historical financial statements is converted to warrants upon Closing. The loan is expected to be repaid
in cash in connection with the Closing as the conversion price is approximately 150% higher than the value of the warrants as of June 30, 2022.
|
|
(3)
|
Excludes 13,800,000 public warrants as the warrants are not expected to be in the money at Closing.
|
|
(4)
|
Reflects the sale and issuance of 10,000,000 shares of New Grindr Common Stock to certain investors (including the Sponsor
and its Affiliates) through the A&R Forward Purchase Agreement at $10.00 per share and excludes the additional 5,000,000 redeemable warrants that will be issued in connection with the 10,000,000 shares of New Grindr Common Stock. We
expect that prior to Closing, the Sponsor will assign its obligations under the Backstop Commitment and the Forward Purchase Commitment to San Vicente Parent LLC. We further expect that San Vicente Parent LLC will satisfy its
obligations under the A&R Forward Purchase Agreement. As part of the SV Consolidation, San Vicente Parent LLC will merge into Grindr and Grindr will assume the rights and all remaining obligations of San Vicente Parent LLC under the
A&R Forward Purchase Agreement, and be entitled to receive the shares of New Grindr Common Stock and redeemable warrants issuable thereunder.
|
|
(5)
|
Excludes 3,947,439, 3,947,439, and 4,017,166 shares of New Grindr Common Stock to be issued to the former Grindr unitholders for
their historical option awards which will be converted at the same Exchange Ratio in the no redemptions, 50% redemptions, and maximum redemptions scenarios, respectively. In the no redemptions, 50% redemptions and maximum redemptions
scenarios, respectively, the former Grindr unitholders figures include 6,514,692, 6,514,692 and 6,511,512 shares of New Grindr Common Stock associated with the Series P share based compensation units described in “Beneficial Ownership of Securities”.
|
|
(6)
|
Reflects distributions to former Grindr unitholders of $287.8 million, $287.8 million and $259.5 million in the no redemptions,
50% redemptions and maximum redemptions scenarios, respectively. Of that amount, $155.0 million is to be used to extinguish the remaining Deferred Payment as defined in “Unaudited Pro Forma Combined
Financial Information” These distributions in all of the redemption scenarios include $4.5 million of unpaid distribution accrued for on the Grindr historical balance sheet. These distributions combined with the $78.8 million
June 2022 distribution paid as disclosed in Note 9 of Grindr’s historical unaudited financial statements make up the total distribution as referenced in the Merger Agreement of $366.6 million, $366.6 million, and $338.3 million dividend
in the no redemptions, 50% redemptions and maximum redemptions scenarios, respectively.
|
|
(7)
|
Assumes 50% redemptions of 13,800,000 public Class A ordinary shares and maximum redemptions of 27,600,000 public Class A
ordinary shares in connection with the transaction at approximately $10.40 per share based on Trust Account figures as of June 30, 2022 in the 50% redemptions and maximum redemptions scenarios, respectively.
|
291
Unaudited Pro Forma Combined Balance Sheet
As of June 30, 2022
(in thousands)
|
|
| |
|
| |
|
| |
|
| |
|
| |
Assuming
No Redemptions
|
| |
Assuming
50% Redemptions
|
| |
Assuming
Maximum Redemptions
|
||||||||||||||||||
|
|
| |
Tiga
(Historical)
|
| |
Grindr
(Historical)
|
| |
SV
Consolidation
|
| |
|
| |
Transaction
Accounting
Adjustments
|
| |
|
| |
Pro Forma
Combined
|
| |
Transaction
Accounting
Adjustments
|
| |
|
| |
Pro Forma
Combined
|
| |
Transaction
Accounting
Adjustments
|
| |
|
| |
Pro Forma
Combined
|
|
Assets
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
Current assets:
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
Cash and cash equivalents
|
| |
$166
|
| |
$25,548
|
| |
$—
|
| |
|
| |
$201,500
|
| |
(2)
|
| |
$113,216
|
| |
$252,000
|
| |
(2)
|
| |
$19,696
|
| |
$374,500
|
| |
(2)
|
| |
$26,476
|
|
|
| |
|
| |
|
| |
—
|
| |
|
| |
(1,500)
|
| |
(3)
|
| |
|
| |
(2,000)
|
| |
(3)
|
| |
|
| |
(4,500)
|
| |
(3)
|
| |
|
|
|
| |
|
| |
|
| |
—
|
| |
|
| |
(203,184)
|
| |
(4)
|
| |
|
| |
(203,184)
|
| |
(4)
|
| |
|
| |
(203,184)
|
| |
(4)
|
| |
|
|
|
| |
|
| |
|
| |
—
|
| |
|
| |
287,543
|
| |
(5)
|
| |
|
| |
287,543
|
| |
(5)
|
| |
|
| |
287,543
|
| |
(5)
|
| |
|
|
|
| |
|
| |
|
| |
—
|
| |
|
| |
(29,097)
|
| |
(6)
|
| |
|
| |
(29,097)
|
| |
(6)
|
| |
|
| |
(27,097)
|
| |
(6)
|
| |
|
|
|
| |
|
| |
|
| |
—
|
| |
|
| |
(9,660)
|
| |
(7)
|
| |
|
| |
(9,660)
|
| |
(7)
|
| |
|
| |
(9,660)
|
| |
(7)
|
| |
|
|
|
| |
|
| |
|
| |
—
|
| |
|
| |
100,000
|
| |
(8)
|
| |
|
| |
100,000
|
| |
(8)
|
| |
|
| |
100,000
|
| |
(8)
|
| |
|
|
|
| |
|
| |
|
| |
—
|
| |
|
| |
(132,800)
|
| |
(9)
|
| |
|
| |
(132,800)
|
| |
(9)
|
| |
|
| |
(104,500)
|
| |
(9)
|
| |
|
|
|
| |
|
| |
|
| |
—
|
| |
|
| |
29,700
|
| |
(10)
|
| |
|
| |
29,700
|
| |
(10)
|
| |
|
| |
(287,040)
|
| |
(16)
|
| |
|
|
|
| |
|
| |
|
| |
—
|
| |
|
| |
(155,000)
|
| |
(11)
|
| |
|
| |
(155,000)
|
| |
(11)
|
| |
|
| |
(155,000)
|
| |
(11)
|
| |
|
|
|
| |
|
| |
|
| |
—
|
| |
|
| |
—
|
| |
|
| |
|
| |
(143,520)
|
| |
(16)
|
| |
|
| |
29,700
|
| |
(10)
|
| |
|
|
Accounts receivable, net of allowances
|
| |
—
|
| |
15,979
|
| |
—
|
| |
|
| |
—
|
| |
|
| |
15,979
|
| |
—
|
| |
|
| |
15,979
|
| |
—
|
| |
|
| |
15,979
|
|
Prepaid expenses
|
| |
107
|
| |
3,460
|
| |
—
|
| |
|
| |
—
|
| |
|
| |
3,567
|
| |
—
|
| |
|
| |
3,567
|
| |
—
|
| |
|
| |
3,567
|
|
Deferred charges
|
| |
—
|
| |
4,194
|
| |
—
|
| |
|
| |
—
|
| |
|
| |
4,194
|
| |
—
|
| |
|
| |
4,194
|
| |
—
|
| |
|
| |
4,194
|
|
Other current assets
|
| |
—
|
| |
6,919
|
| |
—
|
| |
|
| |
(6,215)
|
| |
(6)
|
| |
704
|
| |
(6,215)
|
| |
(6)
|
| |
704
|
| |
(6,215)
|
| |
(6)
|
| |
704
|
|
Total current assets
|
| |
273
|
| |
56,100
|
| |
—
|
| |
|
| |
81,287
|
| |
|
| |
137,660
|
| |
(12,233)
|
| |
|
| |
44,140
|
| |
(5,453)
|
| |
|
| |
50,920
|
|
Restricted cash
|
| |
—
|
| |
1,392
|
| | |||||||||||||||||||||||||||||||