Grindr Inc.GRND
Grindr Inc. Stock Compensation Disclosure
Stock-based Compensation
Stock-based compensation expense that was capitalized as an asset was $281 and $202 for the years ended December 31, 2024 and 2023, respectively, the amounts were capitalized in “Capitalized software development costs, net” in the consolidated balance sheets.
2022 Plan
On November 15, 2022, the stockholders of the Company approved the adoption of the 2022 Equity Incentive Plan, which permits the grant of incentive awards, nonstatutory stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, performance awards, and other awards. There were 13,764,400 shares of common stock authorized under the 2022 Equity Incentive Plan. On July 19, 2024, the Company stockholders approved the amendment and restatement of the 2022 Equity Incentive Plan to increase the number of shares reserved for issuance thereunder by 2,860,300 shares from 13,764,400 shares to 16,624,700 shares. The Amended and Restated 2022 Equity Incentive Plan became effective immediately upon stockholder approval at the Company's 2024 annual meeting of stockholders held on July 19, 2024 (collectively, the “2022 Plan”). As of December 31, 2024, there were 8,520,012 shares of common stock available for grant under the 2022 Plan.
Executive and Key Employees Awards
From time to time, the Company awards incentive awards to executives in the form of restricted stock units (“RSUs”).
Time-Based Awards
Generally, RSUs will vest 20% on each anniversary of the vesting commencement date, subject to continued service with the Company, or pursuant to another vesting schedule as approved by the Board, or committee of the Board, and set forth in the award agreement.
In connection with the grant of the CEO time-based awards, a downside protection provision (“Downside Protection”) is to be granted to the CEO. The Downside Protection may be settled in cash or shares at the sole discretion by the Company’s Board of Directors. As of December 31, 2024 and December 31, 2023, the Downside Protection has not been granted for accounting purposes in accordance with ASC 718.
Market Condition Awards
Liability-classified Awards
The Market Condition Awards are issued upon the achievement (at varying levels) of certain market capitalization thresholds. The Company has an obligation to issue a variable number of shares based on a fixed dollar value divided by the volume weighted-average price per share of the Company’s common stock for a 90-day period preceding each market capitalization achievement date. These awards are liability-classified and require fair value remeasurement at the end of
each reporting period. As of December 31, 2024 and 2023, the aggregate fair value of the market condition awards is $27,210 and $14,078, respectively, of which $10,878 and $1,960, respectively is recorded in “Other non-current liabilities” in the consolidated balance sheets.
During the fourth quarter of 2024, certain market capitalization thresholds were achieved. Awards of fully-vested RSUs representing a total of 314,101 shares were issued in the fourth quarter of 2024 with a total fair value of $4,203, with the amount reclassified to “Additional paid-in capital” in the consolidated balance sheets.
During the year ended December 31, 2024, no liability-classified executive market condition awards were modified. During the year ended December 31, 2023, a liability-classified executive market condition award was modified to lower the market capitalization thresholds and to increase the dollar value allocated to each target. This award was remeasured to its fair value at the end of each financial reporting period.
The Company used the Monte Carlo simulation model to value the liability-classified award. The key inputs into the Monte Carlo simulation as of December 31, 2024 and 2023 were as follows:
| December 31, | |||||||||||
| 2024 | 2023 | ||||||||||
| Expected term (in years) | 10.0 | 10.0 | |||||||||
Expected stock price volatility (1) | 60.0 | % | 65.0 | % | |||||||
Risk-free interest rate (2) | 4.6 | % | 3.8 | % | |||||||
Expected dividend yield (3) | — | % | — | % | |||||||
(1)Expected volatility is based on a blend of historical volatility observed for a publicly traded peer group and the Company’s specific volatility over a period equivalent to the expected term of the awards.
(2)The risk-free interest rate is based on the U.S. Treasury yield of treasury bonds with a maturity that approximates the expected term of the awards.
(3)The Company did not historically pay any cash dividends on its common stock.
Equity-classified Award
For the year ended December 31, 2024, the Company granted a Market Condition Award of 200,000 RSUs that vests in its entirety upon the achievement of a certain market capitalization threshold. This award is equity-classified. The grant date fair value of this award was $2,554. The Company recognizes the stock-based compensation of this equity-classified Market Condition Award over the derived service period.
KPI Awards
KPI Awards will be issued upon the satisfaction of certain KPIs determined by the Company’s Board of Directors and provision of service to the issue date. The Company has an obligation to issue a variable number of shares based on a fixed dollar value divided by the volume weighted-average price per share of the Company’s common stock for a 90-day period preceding the issue date. The issue date shall occur no later than 120 days after the end of the applicable year. These awards are liability-classified and require fair value remeasurement at the end of each reporting period. The measurement of the KPI awards’ fair value is based on the fixed dollar amount that is probable of being paid.
During the fourth quarter of 2023, the KPIs and measurement framework related to 2023 KPI awards were approved and granted by the Company's Compensation Committee as it relates to the year ending December 31, 2023. As of December 31, 2023, such KPIs were achieved. Awards of fully-vested RSUs representing a total of 247,898 shares were issued in the first quarter of 2024 with a total fair value of $2,350. During the years ended December 31, 2024 and 2023, stock-based compensation expense of $2,062 and $288 related to the service provided through December 31, 2023 and issuance date, respectively, was recorded in “Selling, general and administrative expense” on the consolidated statements of operations and comprehensive loss. As of December 31, 2023, $288 was accrued in “Accrued expenses and other current liabilities” in the consolidated balance sheets.
During the first quarter of 2024, the KPIs and measurement framework related to 2024 KPI awards were approved and granted by the Company’s Compensation Committee as it relates to the year ending December 31, 2024. As of December 31, 2024, such KPIs were achieved. For the year ended December 31, 2024, stock-based compensation expense of $3,084 related to the service provided through December 31, 2024 was recorded in “Selling, general and administrative expense” on the consolidated statements of operations and comprehensive loss. As of December 31, 2024, $3,084 was accrued in “Accrued expenses and other current liabilities” in the consolidated balance sheets.
Non-Employee Director and Employee Awards
The Company granted timed-based RSUs to certain non-employee directors and employees (“Employee RSUs”). The Employee RSUs generally vest 25% on the first anniversary of the vesting commencement date and in twelve quarterly installments thereafter, 50% on the first anniversary of the vesting commencement date and in four quarterly installments thereafter, or pursuant to another vesting schedule as approved by the Board, or a committee of the Board, and set forth in the Employee RSUs agreement. Non-employee directors receive annual grants that vest generally 25% quarterly after the vesting commencement date.
Other information
A summary of the unvested time-based RSU activity during the years ended December 31, 2024 and 2023 are as follows:
| Number of Shares | Weighted Average Grant Date Fair Value | ||||||||||
| Outstanding at December 31, 2022 | 4,555,256 | $ | 10.10 | ||||||||
| Granted | 2,901,233 | $ | 6.40 | ||||||||
| Vested | (1,096,319) | $ | 9.50 | ||||||||
| Forfeited | (412,683) | $ | 7.35 | ||||||||
| Outstanding at December 31, 2023 | 5,947,487 | $ | 8.61 | ||||||||
| Granted | 2,384,125 | $ | 10.99 | ||||||||
| Vested | (1,709,620) | $ | 8.36 | ||||||||
| Forfeited | (511,506) | $ | 7.90 | ||||||||
Outstanding at December 31, 2024 | 6,110,486 | $ | 9.66 | ||||||||
The total fair value of shares vested during the years ended December 31, 2024 and 2023 was $20,344 and $6,687, respectively.
A summary of unrecognized stock-based compensation expenses in the 2022 Plan as of December 31, 2024 is as follows:
| Unrecognized stock-based compensation expenses | Weighted-average period expected to be recognized | ||||||||||
| Time-Based Awards | $ | 51,872 | 2.8 years | ||||||||
Market Condition Awards - liability-classified awards | $ | 16,332 | 2.8 years | ||||||||
Market Condition Awards - equity-classified award | $ | 2,384 | 3.5 years | ||||||||
2024 KPI Awards | $ | 811 | 0.2 years | ||||||||
2020 Plan
In August 13, 2020, the Board of Managers of Legacy Grindr, 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 Legacy Grindr.
There were 6,522,685 shares of common stock authorized in the 2020 Plan. There were no changes to the authorized number of shares for the years ended December 31, 2024 and 2023. There were no shares of common stock available for grant under the 2020 Plan upon the consummation of the Business Combination.
Stock options
Employees, consultants, and nonemployee directors who provide substantial services to Legacy Grindr were eligible to be granted unit option awards under the 2020 Plan.
In connection with the Business Combination, each Legacy Grindr unit option that was outstanding immediate prior to the consummation of the Business Combination, whether vested or unvested, was converted into a stock option to acquire a number of shares of the Company’s common stock equal to the product of (i) the number of unit of Legacy Grindr common unit subject to such Legacy Grindr unit option immediately prior to the consummation of the Business Combination and (ii) the exchange ratio, at an exercise price per share equal to (A) the exercise price per share of such Legacy Grindr unit option immediately prior to the consummation of the Business Combination, divided by (B) the exchange ratio (the “Exchanged Option”). Following the Business Combination, each Exchanged Option will continue to be governed by the same terms and conditions (including vesting and exercisability terms) as were applicable to the corresponding Legacy Grindr unit option immediately prior to the consummation of the Business Combination. Unvested Legacy Grindr unit options did not accelerate nor vest on the consummation of the Business Combination.
Generally, stock 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. Stock options have a maximum term of seven years from the date of grant.
The following table summarizes the stock option activity for the years ended December 31, 2024 and 2023:
| Number of Options | Weighted Average Exercise Price | Weighted Average Remaining Contractual Life (Years) | Aggregate Intrinsic Value (in thousands) | ||||||||||||||||||||
| Outstanding at December 31, 2022 | 4,705,765 | $ | 5.15 | 5.7 | $ | 2,967 | |||||||||||||||||
| Exercised | (757,032) | $ | 3.60 | ||||||||||||||||||||
| Forfeited or expired | (2,180,106) | $ | 6.05 | ||||||||||||||||||||
| Outstanding at December 31, 2023 | 1,768,627 | $ | 4.71 | 4.6 | $ | 7,196 | |||||||||||||||||
| Exercised | (917,910) | $ | 4.38 | ||||||||||||||||||||
| Forfeited or expired | (145,601) | $ | 5.41 | ||||||||||||||||||||
Outstanding at December 31, 2024 | 705,116 | $ | 5.00 | 3.6 | $ | 9,055 | |||||||||||||||||
| Exercisable at December 31, 2023 | 964,031 | $ | 4.25 | 4.3 | $ | 4,365 | |||||||||||||||||
Exercisable at December 31, 2024 | 408,832 | $ | 4.40 | 3.3 | $ | 5,495 | |||||||||||||||||
The intrinsic value of options exercised during the years ended December 31, 2024 and 2023 was $8,351 and $2,081, respectively. This intrinsic value represents the difference between the fair value of the Company’s common stock on the date of exercise and the exercise price of each option. Unrecognized compensation expense relating to options in the 2020 Plan was $763 as of December 31, 2024, which is expected to be recognized over a weighted-average period of 0.8 years.
Stock-based compensation information
The following table summarizes stock-based compensation expense for the years ended December 31, 2024 and 2023, respectively:
| Year Ended December 31, | |||||||||||
| 2024 | 2023 | ||||||||||
| Selling, general and administrative expense | $ | 33,626 | $ | 14,763 | |||||||
| Product development expense | 3,646 | 1,061 | |||||||||
| $ | 37,272 | $ | 15,824 | ||||||||
About Stock Compensation Disclosures
Stock-based compensation disclosures detail the equity awards granted to employees and executives — including stock options, restricted stock units (RSUs), and performance shares — along with the valuation methods and assumptions used to expense them. This section reveals the true cost of talent retention and the alignment between management incentives and shareholder interests.
Key signals: total unrecognized compensation expense and its expected recognition period signal future earnings headwinds from already-granted awards. For stock options, examine Black-Scholes assumptions — expected volatility, risk-free rate, and expected term — as understating any of these reduces reported compensation expense. Compare stock compensation expense as a percentage of revenue against peers to assess dilution cost. Watch vesting schedules for acceleration clauses tied to change-of-control events. Performance-based awards with undemanding targets may indicate weak governance. Add back stock compensation to operating cash flow to calculate a more conservative free cash flow figure.