DEF: Signing Day Sports Seeks Shareholder Approval for Key Capital & Equity Plans

Signing Day Sports, Inc. calls for its Annual Meeting to vote on director elections, auditor ratification, a substantial increase in its equity incentive plan, and a potentially dilutive $10 million stock issuance agreement.

Summary

• The Annual Meeting of Stockholders will be held on November 17, 2025, at 10:00 a.m. Pacific Time, at the company's principal executive offices.
• Stockholders will vote on the election of five director nominees: Daniel Nelson, Jeffry Hecklinski, Roger Mason Jr., Greg Economou, and Peter Borish.
• The appointment of BARTON CPA PLLC as the independent registered public accounting firm for the fiscal year ending December 31, 2025, requires ratification.
• A proposed amendment to the 2022 Equity Incentive Plan seeks to increase the share reserve from 93,750 to 1,000,000 shares of common stock, an increase of 906,250 shares.
• Approval is sought for the issuance of 20% or more of the company's outstanding common stock as of July 21, 2025, under a Purchase Agreement with Helena Global Investment Opportunities 1 Ltd. to raise up to $10,000,000.
• The company may also seek approval to adjourn the Annual Meeting if necessary to solicit additional proxies for quorum or for Proposals No. 3 or No. 4.
• As of the Record Date (September 18, 2025), there were 3,947,781 shares of common stock outstanding.
• The company effected a 1-for-5 reverse stock split on April 14, 2023, and a 1-for-48 reverse stock split on November 16, 2024.

Sentiment

Score: 3

Explanation: The sentiment is negative due to the significant potential for shareholder dilution from both a large capital raise and a substantial increase in the equity incentive plan. The history of reverse stock splits and past 'going concern' warnings, coupled with reliance on related-party financing, indicates ongoing financial challenges and a precarious position, despite efforts to secure funding and retain talent.

Positives

• The company is actively seeking capital to finance operations and pursue business growth through the Purchase Agreement with Helena Global Investment Opportunities 1 Ltd.
• The proposed increase in the equity incentive plan aims to attract, motivate, and retain key personnel, aligning their interests with long-term stockholder value.
• The Board of Directors has established a robust governance structure with independent directors on key committees (Audit, Compensation, Nominating, Disclosure Controls and Procedures).
• The company maintains a Code of Ethics and Business Conduct and a Hedging and Pledging Prohibition policy for directors, officers, and key employees.

Negatives

• The proposed issuance of 20% or more of outstanding common stock under the Purchase Agreement with Helena Global Investment Opportunities 1 Ltd. carries a significant risk of dilution for existing stockholders.
• The substantial increase in the share reserve for the equity incentive plan (from 93,750 to 1,000,000 shares) also presents a significant potential for future dilution.
• The company's former auditor, Marcum LLP, included an explanatory paragraph in its 2021 audit report indicating 'substantial doubt as to the Company's ability to continue as a going concern'.
• Material weaknesses in internal control over financial reporting were identified for the fiscal year ended December 31, 2021, related to period-end financial disclosures and revenue recognition.
• The company has undergone two reverse stock splits (1-for-5 in April 2023 and 1-for-48 in November 2024), which often indicates a declining stock price and efforts to meet listing requirements.
• The company has relied heavily on related-party financing, including multiple promissory notes from Daniel Nelson and Daniel Nelson Financial Services, and a secured revolving line of credit guaranteed by Daniel Nelson and his trust.

Risks

• Significant dilution to existing stockholders if Proposal No. 4 (issuance of 20% or more of common stock) is approved and the company issues the maximum number of shares under the Purchase Agreement.
• Potential decline in the market price of common stock due to the sale or resale of shares issued in connection with the Purchase Agreement by Helena Global Investment Opportunities 1 Ltd.
• Inability to raise sufficient funds for operations and growth if Proposal No. 4 is not approved, limiting the company to the Exchange Cap (779,166 shares as of July 21, 2025) under the Purchase Agreement.
• Risk of not attracting or retaining key personnel if the equity incentive plan (Proposal No. 3) is not approved, as the current share reserve is nearly exhausted.
• Ongoing financial reporting risks due to previously identified material weaknesses in internal control over financial reporting (ineffective controls over period-end financial disclosures and revenue recognition documentation issues).
• Reliance on related-party financing could pose conflicts of interest or indicate difficulty securing traditional funding.

Future Outlook

The company aims to secure up to $10,000,000 in capital through a Purchase Agreement with Helena Global Investment Opportunities 1 Ltd. to finance operations and support business growth. It also seeks to significantly expand its equity incentive plan to attract and retain talent, which is deemed critical for long-term success. The company anticipates filing a registration statement for the resale of shares under the Purchase Agreement by September 3, 2025, and maintaining its effectiveness.

Management Comments

• The Board of Directors believes that having a combined Chief Executive Officer and Chairman (Daniel Nelson) is the appropriate leadership structure for the company at this time, promoting clearer leadership and direction.
• Management believes the long-term incentive compensation program aligns the interests of management, employees, and stockholders to create long-term stockholder value.
• Management believes the current amount of shares available for grant under the equity incentive plan is insufficient and that the proposed increase will ensure a sufficient number of shares for future awards.

Industry Context

This proxy statement primarily focuses on corporate governance and financing proposals rather than operational performance or specific industry trends. However, the need for a significant capital raise and a large increase in the equity incentive plan suggests the company is in a growth phase requiring substantial investment, or facing ongoing operational funding needs. The company operates in the sports technology/recruitment sector, as indicated by the backgrounds of its directors (e.g., Jeffry Hecklinski's coaching experience, Roger Mason Jr.'s NBA and sports entertainment background). The dilutive nature of the proposed capital raise is a common challenge for smaller, growth-oriented companies seeking to scale in competitive markets.

Management Changes

Corporate Governance

Legal Proceedings

• Settlement of a private lawsuit (Dorsey/Gile Lawsuit) between Dennis Gile (former CEO) and John Dorsey (former CEO), which involved the company repurchasing 12,500 shares from Mr. Gile for $800,000, with $695,000 paid to Mr. Dorsey's attorneys.
• Settlement of an alleged $50,000 loan dispute between the company and John Dorsey, resulting in a $10,000 cash payment and a $40,000 promissory note from the company to Mr. Dorsey.

Related Party Transactions

• Daniel Nelson (CEO, Chairman, Director) provided multiple loans to the company: a $100,000 promissory note (September 2024 Note) with 20% monthly interest, fully repaid $197,745 on January 8, 2025; and a $100,000 base principal promissory note (April 2024 Note) with additional advances totaling $77,500 and 3.5% monthly interest, fully repaid $239,662 on January 10/13, 2025.
• Daniel Nelson Financial Services Inc. (owned by Daniel Nelson) provided a $14,000 non-interest bearing loan (September 2023 Loan), with a remaining balance of $3,530 repaid on March 7, 2025. It also provided a $95,000 promissory note (March 8, 2023) and a $75,000 promissory note (March 1, 2023), both with 6% interest, which were fully repaid.
• Daniel Nelson, his wife Jodi B. Nelson, and the Nelson Revocable Living Trust guaranteed a $350,000 secured revolving line of credit from Southwest Heritage Bank.
• The Nelson Trust (co-trustees Daniel Nelson and Jodi B. Nelson) purchased 417 shares of common stock for $100,000 in the company's initial public offering on November 16, 2023.
• The Nelson Trust's $1,500,000 6% convertible unsecured promissory note automatically converted into 13,750 shares of common stock upon the IPO on November 16, 2023.
• Daniel Nelson Financial Services Inc. serves as the company's insurance agent for group benefits, receiving payments of $4,537 in 2024 and $4,771 in 2023.
• Clayton Adams (former director and 5% beneficial owner) received 2,664 shares under a consulting agreement and 13,935 shares (via Birddog Capital, LLC) as a private placement. He also paid $100,000 for a pre-funded warrant to purchase 6,945 shares and purchased 1,042 shares for $250,000 in the IPO.
• John Dorsey (former CEO, director, and 5% beneficial owner) purchased 417 shares for $100,000 in the IPO.
• Zone Right, LLC (beneficially owned by former director Glen Kim) purchased 417 shares for $100,000 in the IPO. Its $565,000 6% convertible unsecured promissory note converted into 5,180 shares upon the IPO.
• Dennis Gile (former CEO, President, Secretary, Chairman, and director) had 12,500 shares repurchased by the company for $800,000, with $695,000 directed to John Dorsey's attorneys as part of a settlement.

Stakeholder Impact

• Shareholders face significant potential dilution from the proposed capital raise (up to $10,000,000) and the substantial increase in the equity incentive plan (from 93,750 to 1,000,000 shares), which could negatively impact their ownership percentage and the per-share value of their investment.
• Employees, officers, and directors stand to benefit from the expanded equity incentive plan, which aims to attract, motivate, and retain talent through stock options and awards.
• The company's ability to finance its operations and pursue growth initiatives is directly tied to the approval of the capital raise, impacting its long-term viability and strategic execution.
• The appointment of BARTON CPA PLLC as the independent auditor and the disclosure of past internal control weaknesses highlight the company's commitment to financial reporting integrity, which benefits all stakeholders by providing more reliable financial information.

Next Steps

• Stockholders to vote on the election of five director nominees at the Annual Meeting on November 17, 2025.
• Stockholders to vote on the ratification of BARTON CPA PLLC as the independent registered public accounting firm for fiscal year ending December 31, 2025.
• Stockholders to vote on the approval of Amendment No. 1 to the 2022 Equity Incentive Plan to increase the share reserve to 1,000,000 shares.
• Stockholders to vote on the approval of the issuance of 20% or more of outstanding common stock under the Purchase Agreement with Helena Global Investment Opportunities 1 Ltd.
• Stockholders to vote on the approval of adjournment of the Annual Meeting if necessary to solicit additional proxies.
• Company to file a registration statement for the resale of shares under the Purchase Agreement by September 3, 2025.

Key Dates

Recommendation

The company is seeking approval for highly dilutive actions, including a potential $10 million capital raise that could issue 20% or more of its outstanding stock at a discount, and a more than tenfold increase in its equity incentive plan. This comes after two recent reverse stock splits and a past 'going concern' warning from its former auditor, indicating severe financial distress and a desperate need for capital. The heavy reliance on related-party financing further underscores the company's inability to secure traditional funding. While these measures are presented as necessary for growth, the immediate and substantial dilution risk, coupled with a history of value destruction (reverse splits), makes this a high-risk investment with significant downside for existing shareholders. A seasoned investor would likely view these proposals as a last resort to keep the company afloat, with little upside for current equity holders.

Keywords

Equity Incentive Plan, Capital Raise, Dilution, Proxy Statement, Corporate Governance, SEC Filing, Stock Issuance, NYSE American, Financial Reporting, Risk Management, Shareholder Meeting, Reverse Stock Split