SCHEDULE 13D/A: Grindr Insider J. Michael Gearon Jr. Consolidates Holdings Amidst Warrant Redemption

An amended Schedule 13D filing reveals J. Michael Gearon Jr.'s significant share distributions from 28th Street Ventures LLC to family trusts, alongside the company's warrant redemption and sales by 28th Street.

Summary

• J. Michael Gearon Jr. and related entities filed an Amendment No. 1 to their Schedule 13D, updating their beneficial ownership in Grindr Inc.
• Between January 10 and January 14, 2025, 28th Street Ventures LLC distributed its entire holding of Grindr Common Stock to its members, including 7,090,959 shares to The 1997 Gearon Family Trust, 7,090,958 shares to the J. Michael Gearon, Jr. Revocable Trust, and 766,417 shares to additional members.
• Following these distributions, both 28th Street Ventures LLC and The 1997 Gearon Family Trust ceased to be beneficial owners of more than 5% of Grindr's Common Stock as of January 14, 2025.
• 28th Street Ventures LLC sold a total of 439,459 warrants in the open market between January 29 and January 31, 2025, at weighted average prices ranging from $6.44 to $6.52 per warrant.
• Mr. Gearon received 12,670 shares of Common Stock (10,480 shares on January 16, 2025, and 2,190 shares on January 19, 2025) from the settlement of vested restricted stock units for his service as a non-employee director.
• Grindr Inc. announced on January 23, 2025, the redemption of its outstanding warrants at $0.10 per warrant, effective by February 24, 2025, 5:00 p.m. New York City time, with holders having the option to exercise warrants prior to this deadline.
• 28th Street Ventures LLC currently intends to exercise its remaining 255,941 warrants on a cashless basis before the redemption deadline, though this plan is subject to change.
• An administrative error in the original Schedule 13D led to an understatement of 175,625 warrants held by 28th Street Ventures LLC.
• As of the filing date, Mr. Gearon beneficially owns 14,465,068 shares, representing 8.2% of the class, with shared voting and dispositive power over 7,346,900 shares and sole power over 7,118,168 shares.

Sentiment

Score: 5

Explanation: The document is a factual update on beneficial ownership and warrant activities, presenting neutral information without explicit positive or negative operational news. The warrant redemption by the company at a low price is financially beneficial for the company but negative for warrant holders, balancing out the sentiment.

Positives

• Mr. Gearon continues to receive equity awards (restricted stock units) for his service as a non-employee director, indicating ongoing alignment with company performance.
• The cashless exercise option for warrants allows holders to convert them into shares without additional cash outlay, which can be beneficial for warrant holders.

Negatives

• 28th Street Ventures LLC sold a significant number of warrants (439,459) in the open market at prices between $6.34 and $6.72, which is below the warrant exercise price of $11.50, indicating a decision to realize value from the warrants rather than exercise them at a loss or hold them.
• The company's redemption of warrants at a low price of $0.10 per warrant significantly devalues unexercised warrants for holders who do not convert them, especially compared to the $11.50 exercise price.
• The administrative error in the original Schedule 13D regarding warrant count indicates a potential for inaccuracies in previous filings.

Risks

• There is no guarantee that 28th Street Ventures LLC's plan to exercise its 255,941 warrants on a cashless basis prior to the February 24, 2025 redemption time will not change.

Future Outlook

28th Street Ventures LLC currently intends to exercise its remaining 255,941 warrants on a cashless basis prior to the February 24, 2025 redemption deadline, although this plan is subject to change. Mr. Gearon also holds 4,378 restricted stock units scheduled to vest in two equal quarterly installments on April 17, 2025, and July 17, 2025.

Management Comments

• "Mr. Gearon's spouse is a co-trustee of the 1997 Gearon Family Trust and Mr. Gearon is the sole trustee of the J. Michael Gearon Jr. Revocable Trust."
• "28th Street presently intends to exercise its 255,941 warrants on a cashless basis prior to the Redemption Time... however, there can be no guarantee that 28th Street's plans for such warrant exercise will not change prior to the Redemption Time."
• "As an outside director of the Company, from time to time, Mr. Gearon has received, and may in the future receive, restricted stock units or other awards of equity-based compensation pursuant to the Company's compensation arrangements for non-employee directors."

Industry Context

This filing primarily details changes in beneficial ownership and warrant-related activities of a significant insider and related entities. It does not provide information directly related to broader industry trends or competitive landscape, but rather reflects internal financial and ownership restructuring within the context of a publicly traded technology company.

Related Party Transactions

• 28th Street Ventures LLC distributed shares to The 1997 Gearon Family Trust and the J. Michael Gearon, Jr. Revocable Trust, both of which are controlled or co-controlled by J. Michael Gearon, Jr. or his spouse.

Stakeholder Impact

• Shareholders: The significant shift in beneficial ownership from 28th Street Ventures LLC to family trusts of J. Michael Gearon Jr. consolidates control under Mr. Gearon, potentially impacting governance dynamics.
• Warrant Holders: The company's decision to redeem warrants at $0.10 per warrant by February 24, 2025, significantly impacts warrant holders, forcing them to either exercise at an $11.50 strike price (likely out-of-the-money given the warrant sales prices) or accept a minimal redemption value.
• Company: The warrant redemption at a low price is financially beneficial for Grindr Inc. as it reduces potential dilution from warrants being exercised at a higher value and removes a liability from its books at minimal cost.

Next Steps

• 28th Street Ventures LLC intends to exercise its 255,941 warrants on a cashless basis prior to the February 24, 2025 redemption deadline.
• Grindr Inc. will redeem outstanding warrants at $0.10 per warrant by February 24, 2025.
• Mr. Gearon's remaining 4,378 restricted stock units are scheduled to vest in two equal quarterly installments on April 17, 2025, and July 17, 2025.

Key Dates

Keywords

Grindr Inc., GRND, Schedule 13D/A, Beneficial Ownership, J. Michael Gearon Jr., 28th Street Ventures LLC, Warrant Redemption, Restricted Stock Units, Equity Awards, Insider Trading, SEC Filing, Share Distribution, Family Trust