Delaware
(State or other jurisdiction of
incorporation or organization)
|
| |
7370
(Primary Standard Industrial
Classification Code Number)
|
| |
92-1079067
(I.R.S. Employer
Identification No.)
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William Shafton
|
| |
David Peinsipp
|
VP, Business & Legal Affairs and Secretary
|
| |
Kristin VanderPas
|
Grindr Inc.
|
| |
Cooley LLP
|
750 N. San Vicente Blvd., Suite RE 1400
|
| |
3 Embarcadero Center, 20th Floor
|
West Hollywood, CA 90069
|
| |
San Francisco, CA 94111
|
(310) 776-6680
|
| |
(415) 693-2000
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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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Emerging growth company
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☒
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•
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the success in retaining or recruiting, or changes required in, our directors, officers or key employees;
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•
|
the impact of the regulatory environment and complexities with compliance related to such environment, including maintaining
compliance with privacy and data protection laws and regulations;
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•
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the ability to respond to general economic conditions;
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•
|
factors relating to our and our subsidiaries’ business, operations and financial performance, including:
|
○
|
competition in the dating and social networking products and services industry;
|
○
|
the ability to maintain and attract users;
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○
|
fluctuation in quarterly and yearly results;
|
○
|
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 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; and
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○
|
The ability to protect our intellectual property rights from unauthorized use by third parties;
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•
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the ability to recognize the anticipated benefits of the Business Combination, which may be affected by, among other things,
competition, and our ability to manage growth and expand business operations effectively following the Closing;
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•
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whether the concentration of our stock ownership and voting power limits our stockholders’ ability to influence corporate
matters;
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•
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the effects of the ongoing coronavirus (COVID-19) pandemic, the 2022 mpox outbreak, or other infectious diseases, health
epidemics, pandemics and natural disasters on our business;
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•
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the ability to maintain the listing of Common Stock and Public Warrants on the NYSE; and
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•
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the increasingly competitive environment in which we operate.
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•
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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 its base of users may be impaired, and our business could be materially and adversely affected.
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•
|
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.
|
•
|
If we fail to retain existing users or add new users, or if our users decrease their level of engagement with its products
and services or do not convert to paying users, our revenue, financial results and business may be significantly harmed.
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•
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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 its business.
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•
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Unfavorable media coverage could materially and adversely affect our business, brand, or reputation.
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•
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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.
|
•
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Our quarterly operating results and other operating metrics may fluctuate from quarter to quarter, which makes these metrics
difficult to predict.
|
•
|
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, 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.
|
•
|
Privacy concerns relating to our 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 our business, financial condition, and results of 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 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 our relationship with Apple, Google or other such third parties may negatively impact our business.
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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 our geographic reach, business expansion, and user growth, any of which could materially and adversely affect our business, financial condition, and results of operation.
|
•
|
We have identified material weaknesses in its internal control over financial reporting which, if not corrected, could affect
the reliability of our consolidated financial statements, and have other adverse consequences.
|
•
|
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 its reputation, generate
negative publicity, and materially and adversely affect our business.
|
•
|
Our success depends, in part, on the integrity of its 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 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.
|
•
|
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.
|
•
|
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 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.
|
•
|
Activities of our users or content made available by such users could subject us to liability.
|
•
|
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 its industry, meet our obligations under our outstanding indebtedness, including significant operating and financial restrictions imposed on Grindr by our debt
agreements, and we could divert our cash flow from operations for debt payments.
|
•
|
The Business Combination remains subject to review by CFIUS and we are not certain how the outcome of the review will impact
the Business Combination or our business.
|
•
|
up to 6,900,000 Founder Shares;
|
•
|
up to 144,214,804 shares of Common Stock owned by certain equityholders of Legacy Grindr, pursuant to the A&R
Registration Rights Agreement;
|
•
|
up to 5,000,000 shares of Common Stock are issuable upon the exercise of the FPA Warrants;
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•
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up to 297,157 shares of Common Stock acquirable upon the exercise of certain options; and
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•
|
up to 18,560,000 shares of Common Stock issuable upon the exercise of the Private Placement Warrants.
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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;
|
•
|
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;
|
•
|
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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•
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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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•
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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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•
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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;
|
•
|
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;
|
•
|
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;
|
•
|
we are unable to combat inappropriate or abusive use of our platform;
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•
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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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•
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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;
|
•
|
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;
|
•
|
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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•
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there are changes mandated by legislation, regulations, or government actions.
|
•
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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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•
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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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•
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our ability to acquire efficiently new users for our products and services;
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•
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the timing and market acceptance of our products and services;
|
•
|
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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•
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our customer service and support efforts;
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•
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the reputation of our brand for trust and safety and privacy and data protection, among other things;
|
•
|
adverse media reports or other negative publicity;
|
•
|
the effectiveness of our advertising and sales teams;
|
•
|
continued growth in internet access and smartphone adoption in certain regions of the world, particularly emerging markets;
|
•
|
changes mandated by legislation, regulatory authorities, or litigation, including settlements and consent decrees, some of
which may have a disproportionate effect on us;
|
•
|
acquisitions or consolidations within our industry, which may result in more formidable competitors;
|
•
|
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 App;
|
•
|
our ability to cost-effectively manage and grow our operations; and
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•
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our ability to maintain the value and reputation of our brand relative to our competitors.
|
•
|
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;
|
•
|
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;
|
•
|
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;
|
•
|
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;
|
•
|
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;
|
•
|
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;
|
•
|
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;
|
•
|
adverse litigation judgments, settlements, or other litigation-related costs;
|
•
|
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
|
•
|
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.
|
•
|
decreases in monthly active users and user growth and engagement, including time spent on our products and services;
|
•
|
decreased user access to and engagement with us through our mobile products and services;
|
•
|
the degree to which our users cease or reduce the number of times they engage with ads placed through our products and
services;
|
•
|
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;
|
•
|
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;
|
•
|
adverse legal developments relating to advertising, including legislative action, regulatory developments, and litigation;
|
•
|
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;
|
•
|
adverse media reports or other negative publicity involving us or other companies in our industry;
|
•
|
our inability to create new products and services that sustain or increase the value of our ads and other commercial content;
|
•
|
changes in the pricing of online advertising;
|
•
|
difficulty and frustration from advertisers who may need to reformat or change their advertisements to comply with our
guidelines;
|
•
|
the impact of new technologies that could block or obscure the display of our ads and other commercial content; and
|
•
|
the impact of macroeconomic conditions and conditions in the advertising industry in general.
|
•
|
operational and compliance challenges caused by distance, language, and cultural differences;
|
•
|
political tensions, social unrests, or economic instability, particularly in the countries in which we operate;
|
•
|
differing levels of social and technological acceptance of our products and services, or lack of acceptance of them generally;
|
•
|
low usage and/or penetration of internet-connected consumer electronic devices;
|
•
|
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;
|
•
|
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;
|
•
|
our lack of a critical mass of users in certain markets;
|
•
|
fluctuations in currency exchange rates;
|
•
|
higher levels of credit risk and payment fraud;
|
•
|
enhanced difficulties of integrating any foreign acquisitions;
|
•
|
burdens of complying with a variety of foreign laws, including multiple tax jurisdictions;
|
•
|
competitive environments that favor local businesses;
|
•
|
reduced protection for intellectual property rights in some countries;
|
•
|
difficulties in staffing and managing global operations and the increased travel, infrastructure, and legal compliance costs
associated with multiple international locations;
|
•
|
regulations that might add difficulties in repatriating cash earned outside the U.S. and otherwise preventing us from freely
moving cash;
|
•
|
import and export restrictions and changes in trade regulations;
|
•
|
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 mpox outbreak) or the threat of any of these events;
|
•
|
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;
|
•
|
compliance with the U.S. Foreign Corrupt Practices Act, the U.K. Bribery Act, and similar anti-corruption laws in other
jurisdictions; and
|
•
|
compliance with statutory equity requirements and management of tax consequences.
|
•
|
hiring additional technical personnel to bolster our accounting capabilities and capacity, including the evaluation of
technical and reporting accounting materials;
|
•
|
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;
|
•
|
designing and implementing appropriate modules in our financial systems to automate manual reconciliations and calculations;
and
|
•
|
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.
|
•
|
incur or guarantee additional debt;
|
•
|
incur certain liens;
|
•
|
effect change of control events;
|
•
|
make certain investments;
|
•
|
make certain payments or other distributions;
|
•
|
declare or pay dividends;
|
•
|
enter into transactions with affiliates;
|
•
|
prepay, redeem or repurchase any subordinated indebtedness or enter into amendments to certain subordinated indebtedness in a
manner materially adverse to the lenders; and
|
•
|
transfer or sell assets.
|
•
|
a limited availability of market quotations for our securities;
|
•
|
reduced liquidity for our securities;
|
•
|
a determination that our Common Stock is a “penny stock” which will require brokers trading our Common Stock to adhere to more
stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities;
|
•
|
a limited amount of news and analyst coverage; and
|
•
|
a decreased ability to issue additional securities or obtain additional financing in the future.
|
•
|
changes in the industry in which we operate;
|
•
|
the success of competitive services or technologies;
|
•
|
developments involving our competitors;
|
•
|
regulatory or legal developments in the United States and other countries;
|
•
|
developments or disputes concerning our intellectual property or other proprietary rights;
|
•
|
the recruitment or departure of key personnel;
|
•
|
actual or anticipated changes in estimates as to financial results, development timelines or recommendations by securities
analysts;
|
•
|
variations in our financial results or those of companies that are perceived to be similar to us;
|
•
|
general economic, industry and market conditions, such as the effects of the COVID-19 pandemic, the 2022 mpox outbreak,
recissions, interest rates, inflation, international currency fluctuations, political instability and acts of war or terrorism; and
|
•
|
the other factors described in this “Risk Factors” section.
|
•
|
Global Social Networking Applications Industry, Independent Market Research by Frost & Sullivan, March 2022, which was
commissioned by Legacy Grindr in 2021 and 2022 (the “Frost & Sullivan Study”).
|
•
|
ILGA World, State-Sponsored Homophobia Global Legislation Overview Update Report, 2022 (the “ILGA
World Report”).
|
•
|
Morning Consult April–May 2022 Q1 Survey of 1000 GBTQ US Adults, commissioned by Legacy Grindr (the “Morning Consult Survey”).
|
•
|
Revenues of $50.4 million and $38.2 million, respectively. The increase was $12.2 million, or 31.9%.
|
•
|
Net Income (Loss) of $(4.7) million and $1.9 million, respectively. The decrease was $6.6 million, or (347.4)%.
|
•
|
Adjusted EBITDA of $24.0 million and $20.5 million, respectively. The increase was $3.5 million, or 17.1%.
|
•
|
Revenue of $140.5 million and $100.8 million, respectively. The increase was $39.7 million, or 39.4%.
|
•
|
Net Income (Loss) of $(4.3) million and $(1.4) million, respectively. The decrease was $2.9 million, or (207.1)%.
|
•
|
Adjusted EBITDA of $65.8 million and $53.7 million, respectively. The increase was $12.1 million, or 22.5%.
|
•
|
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 the section titled “Non-GAAP Financial Measures—Adjusted EBITDA” for more details
on the calculations.
|
(in thousands, except Adjusted ARPPU, ARPPU and ARPU)
|
| |
Three Months
Ended
September 30,
2022
|
| |
Three Months
Ended
September 30,
2021
|
| |
Nine Months
Ended
September 30,
2022
|
| |
Nine Months
Ended
September 30,
2021
|
Key Operating Metrics
|
| |
|
| |
|
| |
|
| |
|
Paying Users
|
| |
815
|
| |
611
|
| |
768
|
| |
577
|
Adjusted Average Direct Revenue per Paying User
|
| |
$17.67
|
| |
$16.66
|
| |
$17.12
|
| |
$15.72
|
Average Direct Revenue per Paying User
|
| |
$17.67
|
| |
$16.66
|
| |
$17.12
|
| |
$15.55
|
Average Total Revenue per User
|
| |
$1.35
|
| |
$1.15
|
| |
$1.29
|
| |
$1.06
|
|
| |
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
|
| |
$1.13
|
| |
N/A
|
| |
N/A
|
| |
N/A
|
($ in thousands)
|
| |
Three Months
Ended
September 30,
2022
|
| |
Three Months
Ended
September 30,
2021
|
| |
Nine Months
Ended
September 30,
2022
|
| |
Nine Months
Ended
September 30,
2021
|
Key Financial and Non-GAAP Metrics(1)
|
| |
|
| |
|
| |
|
| |
|
Revenue
|
| |
$50,402
|
| |
$38,249
|
| |
$140,487
|
| |
$100,812
|
Adjusted Direct Revenue
|
| |
$43,209
|
| |
$30,537
|
| |
$118,364
|
| |
$81,625
|
Indirect Revenue
|
| |
7,193
|
| |
7,712
|
| |
22,123
|
| |
20,079
|
Net income (loss)
|
| |
$(4,663)
|
| |
$1,894
|
| |
$(4,343)
|
| |
$(1,433)
|
Net income (loss) margin
|
| |
-9.3%
|
| |
5.0%
|
| |
-3.1%
|
| |
-1.4%
|
Adjusted EBITDA
|
| |
$24,034
|
| |
$20,492
|
| |
$65,778
|
| |
$53,698
|
Adjusted EBITDA Margin
|
| |
47.7%
|
| |
53.6%
|
| |
46.8%
|
| |
53.3%
|
Net cash provided by operating activities
|
| |
|
| |
|
| |
$36,794
|
| |
$18,852
|
|
| |
Successor
|
| |
Predecessor
|
||||||
($ 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. We also exclude 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.
|
•
|
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.
|
•
|
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 Legacy Grindr’s audited consolidated financial statements beginning on page F-86 of this
prospectus for additional information).
|
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
|
| |
|