425: Signing Day Sports Pivots to Digital Infrastructure with Definitive Merger Agreement, Targeting Crypto Mining, AI, and HPC Markets

Signing Day Sports, Inc. has signed a definitive business combination agreement to acquire One Blockchain LLC, a profitable data hosting company, creating a new publicly traded entity focused on crypto mining, artificial intelligence, and high-performance computing.

Summary

• Signing Day Sports, Inc. (SGN) has entered into a definitive Business Combination Agreement with BlockchAIn Digital Infrastructure, Inc. (Holdings), One Blockchain LLC, and two merger subsidiaries.
• The transaction will result in SGN and One Blockchain becoming wholly-owned subsidiaries of Holdings, which will be the new publicly traded entity (PubCo) on the NYSE American.
• At the effective time of the First Merger, each outstanding share of SGN common stock will be converted into the right to receive one registered common share of Holdings.
• Outstanding SGN options and warrants will be assumed by Holdings and converted into options and warrants to acquire Holdings shares, with all assumed options becoming fully vested.
• One Blockchain membership interests will be converted into Holdings shares, with the number of shares equal to the total SGN shares outstanding immediately prior to the First Merger (fully diluted, as-converted, excluding certain out-of-the-money derivatives) divided by 0.085, less the Holdings shares received by SGN shareholders.
• Holdings may adjust the conversion ratio for SGN shares and One Blockchain interests, provided SGN stockholders receive at least 8.5% of Holdings shares outstanding on a fully diluted basis post-closing (excluding out-of-the-money options/warrants) and the adjustment does not negatively impact NYSE American listing qualification.
• An earnout provision allows for the issuance of additional Holdings shares (11.628% of shares issued to One Blockchain securityholders at closing) if Holdings' net income plus interest, taxes, depreciation, and amortization (EBITDA) for the fiscal year ending December 31, 2026, equals or exceeds $25 million.
• Maxim Partners LLC (or its designees) will receive Holdings shares equal to 3.5% of the total transaction enterprise value at closing, and potentially 3.5% of any Earnout Shares, which will reduce the equity ownership otherwise allocable to One Blockchain members.
• The transaction is expected to close in late second half of 2025, subject to customary closing conditions including regulatory approvals, SGN shareholder approval, and NYSE American listing approval for Holdings shares.
• SGN's existing at-the-market (ATM) offering can continue for up to $4,000,000, with proceeds used solely for SGN's legacy business liabilities and working capital. Any remaining liabilities at closing will be the sole responsibility of the Legacy Business.

Sentiment

Score: 8

Explanation: The document presents a highly positive outlook on the business combination, emphasizing the significant premium for SGN shareholders, the profitability and growth potential of the acquired entity in high-demand sectors (AI, HPC, crypto mining), and the strategic positioning for future expansion. While risks inherent in any merger and market transition are acknowledged, the overall tone is strongly optimistic about value creation.

Positives

• One Blockchain Digital Infrastructure generated audited revenue of approximately $26.8 million and net income of approximately $5.7 million in 2024, indicating a profitable and cash-flowing business being acquired.
• The proposed business combination is expected to be completed at a significant premium to SGN's current stock price, suggesting immediate value creation for SGN shareholders.
• The combined company will be positioned in high-growth markets including Crypto Mining, Artificial Intelligence (AI), and High-Performance Computing (HPC) Data Hosting.
• BlockchAIn Digital Infrastructure has a current 40 MW crypto mining hosting facility in South Carolina with expansion capability to 50 MW, providing existing operational capacity.
• Plans for a new 150MW facility in Texas with favorable economics and 34.5kV interconnectivity offer significant future growth potential and flexibility for crypto mining and/or AI/HPC data hosting.
• The modular business model provides optionality to pursue different revenue mixes as the crypto mining, AI, and HPC markets evolve.
• The earnout provision incentivizes One Blockchain's former securityholders to contribute to the combined company's future financial performance, aligning interests.
• Key SGN principals and officers will transition to consulting roles with severance, ensuring a smooth leadership transition while retaining some expertise.

Negatives

• Existing Signing Day Sports shareholders will experience significant dilution, owning approximately 8.5% of the combined company post-transaction, compared to One Blockchain's securityholders owning 91.5% (before fees and commissions).
• The transaction represents a complete pivot from Signing Day Sports' original mission of aiding high school athletes in recruitment, which may not align with the investment thesis of all current SGN shareholders.
• The 'Legacy Business' (Signing Day Sports) will be solely responsible for its remaining liabilities at closing, and any leftover cash can only be used for its operations, potentially indicating a limited future investment or strategic focus on this segment by the combined entity.

Risks

• Ability of the parties to integrate their respective businesses into a combined publicly listed company post-merger.
• Ability of the parties to obtain all necessary consents and approvals in connection with the Transactions, including NYSE American clearance of a listing application.
• The Company's ability to obtain stockholder approval of the Transactions.
• Ability of the parties to obtain sufficient funding to maintain operations and develop additional services and offerings.
• Market acceptance of the parties' current products and services and planned offerings.
• Competition from existing or new offerings that may emerge in the crypto mining, AI, and HPC markets.
• Impacts from strategic changes to the parties' business on net sales, revenues, income from continuing operations, or other results of operations.
• Ability of the parties to attract new users and customers.
• Ability of the parties to retain or obtain intellectual property rights.
• Ability of the parties to adequately support future growth.
• Ability of the parties to comply with user data privacy laws and other current or anticipated legal requirements.
• Ability of the parties to attract and retain key personnel to manage their business effectively.

Future Outlook

The combined company, BlockchAIn Digital Infrastructure, Inc., aims to capitalize on the fast-growing high-performance computing (HPC) hosting market, including crypto mining and AI-related computing. It plans to transition its South Carolina facility to internally owned crypto mining operations in late 2025 or early 2026 and commission a new 150MW facility in Texas by late 2026, with the first 100MW focused on internal crypto mining and the remaining 50MW for AI and HPC data hosting. This flexible modular business model is expected to accelerate robust growth in the public markets.

Management Comments

• Danny Nelson, CEO of Signing Day Sports, stated: "This transaction marks an exciting new chapter for Signing Day Sports, which we are confident has potential to bring substantial value to the stakeholders of both parties. blockchAIn DIs scalable, cash-flowing bitcoin mining and AI data center platform positions the combined company to capitalize on the fast-growing HPC hosting market. With a 40 MW mining site in South Carolina with 10 MW expansion capacity and the significant upside potential resulting from the planned commissioning of a new facility in Texas, blockchAIn Digital Infrastructure is strategically positioned to meet the growing HPC workload demands, and we could not be more thrilled to deliver this unique growth opportunity to our shareholders."
• Jerry Tang, CEO of One Blockchain, added: "We are excited about the proposed transaction between blockchAIn Digital Infrastructure and Signing Day Sports, and the significant potential for value creation for both parties. In only a few short years since our inception, blockchAIn Digital Infrastructure has experienced rapid growth scaling to approximately $26.8 million in revenue and approximately $5.7 million in net income in 2024. Supported by our cash flow generation, we are positioned to become a leader in providing and operating sustainable, blockchain computing infrastructure and progress our significant growth goals forward. In the near term, blockchAIn Digital Infrastructure will look to bring bitcoin mining in-house, expand our South Carolina facility to 50MW, and build out our proposed 150MW facility in Texas to support the large demand for hosting services driven by various AI and mining applications. The business combination with Signing Day Sports will enable us to accelerate our robust growth in the public markets, and we look forward to executing on our business plan to drive value for all shareholders."

Industry Context

This announcement signifies a strategic pivot for Signing Day Sports into the rapidly evolving digital infrastructure market, specifically targeting crypto mining, AI, and high-performance computing (HPC) data hosting. This move aligns with broader industry trends of increasing demand for energy-efficient processing power and domestic infrastructure, driven by the growth of blockchain technologies and artificial intelligence. The acquisition of a profitable entity like One Blockchain, with existing operations and significant expansion plans, positions the combined company to compete in a sector characterized by high demand and potential for substantial growth, differentiating itself from its original sports recruitment technology focus.

Management Changes

Corporate Governance

Legal Proceedings

• No material claims, assessments, audits, examinations, investigations or other Actions pending, in progress or threatened against SGN in respect of any Tax.
• No material claims, assessments, audits, examinations, investigations or other Actions pending, in progress or threatened against One Blockchain in respect of any Tax.
• No material Action of any nature currently pending or, to SGN's Knowledge, threatened against SGN or any SGN Subsidiary or any of their respective properties, rights or assets.
• No material Action of any nature currently pending or, to One Blockchain's Knowledge, threatened against One Blockchain, its current or former managers, officers or equity holders in their capacity as such, its business, equity securities or assets.

Related Party Transactions

• SGN has a promissory note held by the Company (likely referring to a related party, though 'the Company' is ambiguous here, it's listed under SGN's capitalization disclosures).
• One Blockchain has no outstanding Contract or other arrangement or commitment with any Related Person, and no Related Person owns any real property or Personal Property, or right, tangible or intangible (including Intellectual Property) which is used in the business of One Blockchain, except as contemplated by or provided for in any Ancillary Document or any Contract pursuant to which a One Blockchain member subscribed for or purchased equity interests in One Blockchain.

Stakeholder Impact

• **Shareholders (Signing Day Sports)**: Expected to receive a significant premium to their current stock price, but will experience substantial dilution, owning approximately 8.5% of the combined company. Their investment focus will shift from sports recruitment technology to digital infrastructure (crypto mining, AI, HPC).
• **Shareholders (One Blockchain)**: Will become the majority owners of the combined public company (approximately 91.5% before fees and commissions) and are eligible for an earnout based on future EBITDA performance, indicating significant upside potential.
• **Employees (Signing Day Sports)**: Key executive officers (CEO, COO, President) will have their employment agreements terminated and transition to consulting roles, indicating a change in leadership structure for the legacy business.
• **Management (Combined Entity)**: The board of directors of the new Holdings company will be primarily designated by One Blockchain, with at least one director from Signing Day Sports, reflecting the new ownership and strategic direction.
• **Customers/Suppliers (Signing Day Sports Legacy Business)**: The document implies the Legacy Business will continue, but its strategic priority and future investment from the combined entity are unclear, as remaining cash is ring-fenced for its liabilities and working capital.

Next Steps

• Holdings plans to file a registration statement on Form S-4 with the SEC, which will include a proxy statement for Signing Day Sports shareholders.
• Signing Day Sports will hold a Special Shareholder Meeting to approve the Business Combination Agreement, the Mergers, and other related transactions.
• Holdings will seek approval for listing its common shares on the NYSE American.
• One Blockchain anticipates transitioning its South Carolina facility to internally owning and mining cryptocurrency in late 2025 or early 2026.
• One Blockchain is in the process of commissioning a new 150MW crypto mining, AI, and HPC data hosting facility in Texas for activation in late 2026.
• Holdings will adopt a new equity incentive plan no later than the Closing, with an initial share reserve of 15% of fully diluted shares and an evergreen provision of 2%.

Key Dates

Recommendation

Keywords

Business Combination Agreement, Merger, Acquisition, Digital Infrastructure, Crypto Mining, Artificial Intelligence, AI, High-Performance Computing, HPC, Data Hosting, SEC Filing, NYSE American, Earnout, Shareholder Approval, Corporate Governance, Technology, Blockchain