DEF 14A: Signing Day Sports Seeks Stockholder Approval for Key Proposals at Upcoming Annual Meeting

Signing Day Sports is holding its annual meeting on September 18, 2024, to vote on director elections, auditor ratification, stock issuance approvals, and an equity incentive plan amendment.

Summary

• Signing Day Sports, Inc. will hold its annual meeting of stockholders on September 18, 2024, at its principal executive offices in Scottsdale, Arizona.
• Stockholders will vote on four proposals: electing five directors, ratifying the appointment of BARTON CPA as the independent auditor, approving the issuance of common stock related to agreements with FirstFire Global Opportunities Fund and Boustead Securities, and approving an amended equity incentive plan.
• The board has fixed July 22, 2024, as the record date for determining stockholders eligible to vote.
• The company urges stockholders to review the proxy statement and vote promptly via the Internet, mail, or other provided options.
• The proxy statement and annual report for the year ended December 31, 2023, are available online.

Sentiment

Score: 6

Explanation: The document is primarily informational, outlining the proposals for the annual meeting. The sentiment is neutral, with some positive aspects related to corporate governance and employee incentives, but also negative aspects related to potential dilution and past financial reporting issues.

Positives

• The company is taking steps to ensure good corporate governance by seeking stockholder ratification of the auditor appointment.
• The amended equity incentive plan aims to attract, retain, and reward employees, aligning their interests with those of the stockholders.

Negatives

• The company is seeking approval for the issuance of shares related to agreements with FirstFire, which could lead to potential dilution for existing stockholders.
• The company had a prior auditor resignation (Marcum LLP) and identified material weaknesses in internal control over financial reporting in 2021.

Risks

• Failure to obtain stockholder approval for the stock issuance could impact the company's ability to fulfill its obligations under the agreements with FirstFire and Boustead.
• The company's reliance on external funding sources, such as FirstFire, may indicate financial challenges.
• The potential dilution from the proposed stock issuance could negatively impact the share price.

Future Outlook

The company is seeking stockholder approval to issue shares related to agreements with FirstFire, which could provide additional working capital.

Management Comments

• Daniel Nelson, Chairman and Chief Executive Officer: 'We are pleased to invite you to attend the annual meeting of stockholders.'

Industry Context

The document does not provide specific industry context beyond the company's business activities.

Related Party Transactions

• The document discloses several related party transactions, including loans from officers and entities affiliated with officers, and payments to entities affiliated with officers.
• Under a Consulting Agreement, dated as of July 23, 2024, between the Company and Clayton Adams, a former director and a former beneficial owner of more than 5% of the common stock of the Company (the Adams Consulting Agreement), Mr. Adams will provide certain consulting services to the Company on mergers, acquisitions, financing sources, public company and governance matters, building market awareness, and other duties as may reasonably be requested by the Company.
• In consideration for these services, the Company agreed to grant Mr. Adams 127,826 shares of common stock under the Plan.
• In addition, the Adams Consulting Agreement provided that the Company will grant Adams 668,841 shares of common stock (the Adams Deferred Shares), as a private placement not subject to the terms of the Plan, under a separate Non-Plan Restricted Stock Award Agreement entered into between the Company and Mr. Adams on July 23, 2024, dated as of July 23, 2024 (the Adams Deferred Award Agreement), within one (1) business day of the date of the later of the authorization of the grant of the Adams Deferred Shares by (i) the NYSE American and (ii) the Board or the Compensation Committee.
• Under the Amendment No. 1 to Consulting Agreement between the Company and Mr. Adams, dated July 25, 2024 (the Adams Consulting Agreement Amendment), the Company will grant Birddog Capital, LLC, a Nebraska limited liability company (Birddog Capital), an entity beneficially owned by Mr. Adams, 668,841 shares of common stock (the Birddog Deferred Shares), as a private placement not subject to the terms of the Plan, under a separate Non-Plan Restricted Stock Award Agreement, dated as of July 25, 2024, between the Company and Birddog Capital (the Birddog Deferred Award Agreement), within one (1) business day of the date of the later of the authorization of the grant of the Birddog Deferred Shares by (i) the NYSE American and (ii) the Board or the Compensation Committee.
• Pursuant to the terms of the Adams Consulting Agreement Amendment, the Company will not grant the Adams Deferred Shares.
• Under a Subscription Agreement, dated as of July 23, 2024, between the Company and Clayton Adams, a former director and a former beneficial owner of more than 5% of the common stock of the Company (the Adams Subscription Agreement), Mr. Adams paid $100,000 to the Company and the Company issued a pre-funded warrant to purchase 333,333 shares of common stock of the Company to Mr. Adams at an exercise price of $0.01 per share (the Adams Warrant).
• On April 11, 2024, Daniel Nelson, the Chief Executive Officer, Chairman and a director of the Company, advanced $100,000 to the Company, without repayment terms.
• On April 25, 2024, the Company issued a promissory note to Mr. Nelson, dated April 25, 2024, in the base principal amount of $100,000 (the April 2024 Note).
• Under a Business Loan Agreement, dated October 6, 2023 (the First CBAZ Loan Agreement), between the Company and Commerce Bank of Arizona (CBAZ), the Company and CBAZ entered into a $350,000 secured revolving line of credit (the First CBAZ LOC).
• On July 23, 2023, the Company issued a promissory note in the amount of $130,000 to Daniel Nelson.
• On March 17, 2023, the Company issued a promissory note in the amount of $10,000 to Daniel Nelson.
• On March 8, 2023, the Company issued a promissory note in the amount of $95,000 to Nelson Financial Services.
• On March 1, 2023, the Company issued a promissory note in the amount of $75,000 to Nelson Financial Services
• On July 11, 2022, the Company issued a promissory note in the amount of $35,000 to Dennis Gile.
• On July 11, 2022, the Company issued a promissory note in the amount of $35,000 to Daniel Nelson.
• Under a Settlement Agreement and Release between Signing Day Sports, LLC, an Arizona limited liability company (SDS LLC AZ), Signing Day Sports Baseball, LLC, an Arizona limited liability company (SDSB LLC), Signing Day Sports Football, LLC, an Arizona limited liability company (SDSF LLC), the Company, and Dennis Gile, our largest stockholder and a former Chief Executive Officer, President, Secretary, Chairman, and director of the Company, dated as of May 12, 2022 (the 2022 Giles Settlement Agreement), the parties agreed, among other things, to a general release and discharge of claims against us, our officers and directors, certain other affiliates and related parties, and our stockholders as listed on an exhibit to the 2022 Giles Settlement Agreement, including without limitation, claims relating to Mr. Giles direct or indirect ownership of shares of the Companys capital stock, or Mr. Giles direct or indirect ownership of membership interests of SDS LLC AZ, Signing Day Sports, LLC, a Delaware limited liability company (SDS LLC DE), SDSF LLC, or SDSB LLC, as applicable, provided, however, that nothing in the 2022 Giles Settlement Agreement was intended to release any rights that any party or Mr. Gile may have under the terms of a certain Severance Agreement (the Giles Severance Agreement), including the releases of any and all claims against the Company and certain related parties as contained therein, Mr. Giles agreement to be terminated effective on January 1, 2022 and receive a severance payment of $53,500 pursuant to Section 1 of the Giles Severance Agreement, paid in March 2022, all of which terms were to remain in force notwithstanding the provisions of the 2022 Giles Settlement Agreement.
• Under a Settlement Agreement and Release between SDS LLC AZ, SDSB LLC, SDSF LLC, the Company, Dorsey LLC, an entity controlled by John Dorsey, a former Chief Executive Officer and director and a former beneficial owner of more than 5% of the common stock of the Company, Mr. Dorsey, in his individual capacity, and his spouse, Elena Dorsey, to the extent of such spouses community property interest, if any (together with John Dorsey, Dorsey), dated as of April 25, 2022 (the 2022 Dorsey Settlement Agreement), the parties agreed, among other things (1) that Dorsey had held 959,940 shares of the Companys common stock at that time, (2) that prior to the anticipated redomestication of SDS LLC AZ to Delaware as a Delaware limited liability company and conversion to a Delaware corporation, Dorsey was a member of SDS LLC AZ and was a party to SDS LLC AZs Fourth Amended Limited Liability Company Operating Agreement dated July 16, 2021 (the SDS LLC AZ Operating Agreement), (3) that the SDS LLC AZ Operating Agreement provided Dorsey, among other things, certain anti-dilution protections whereby SDS LLC AZ would have been required to issue additional equity to Dorsey if SDS LLC AZ were to have issued additional equity which would have the effect of reducing Dorseys ownership below 11% of SDS LLC AZs outstanding equity (the Dorsey Anti-Dilution Provision), (4) that on April 25, 2022, Dorsey LLC would receive a total of 350,000 shares of common stock of the Company in exchange for Dorseys cancellation, waiver, and release of all of Dorseys rights under the Dorsey Anti-Dilution Provision in the SDS LLC AZ Operating Agreement, (5) to a general release and discharge of claims against us, our officers and directors, certain other affiliates and related parties, and our stockholders as listed on an exhibit to the 2022 Dorsey Settlement Agreement, including without limitation, claims relating to the Dorsey Anti-Dilution Provision, Dorseys direct or indirect ownership of shares of the Companys capital stock, or Dorseys direct or indirect ownership of membership interests of SDS LLC AZ, SDS LLC DE, SDSF LLC, or SDSB LLC, as applicable, provided, however, that nothing in the 2022 Dorsey Settlement Agreement was intended to release any rights that any party or Dorsey may have under the terms of that certain Offer of Employment between John Dorsey and SDS LLC AZ, dated January 13, 2022, or that certain Simple Agreement for Future Equity and/or Convertible Note, as applicable.
• Under a Settlement Agreement and Release between SDS LLC AZ, SDSB LLC, SDSF LLC, the Company, Dorsey LLC, an entity controlled by John Dorsey, a former Chief Executive Officer and director and a former beneficial owner of more than 5% of the common stock of the Company, Noah (Jed) Smith, a former director and a former beneficial owner of more than 5% of the outstanding common stock of the Company, and his spouse, Glory Smith, to the extent of such spouses community property interest, if any (together with Noah (Jed) Smith, Smith), dated as of May 13, 2022 (the 2022 Smith Settlement Agreement), the parties agreed, among other things (1) that Dennis Gile, the founder of SDS LLC AZ, our largest stockholder, and a former Chief Executive Officer, President, Secretary, and Chairman of the Company, agreed and contracted to fulfill certain obligations to Smith, including, but not limited to, granting a profits interest that was intended to be a membership interest in SDS LLC AZ as well as a percentage of future profits from the operations or sale of SDS LLC AZ, pursuant to that certain Contribution and Profit-Sharing Agreement between Mr. Gile and Smith, dated April 5, 2019, as amended by that certain First Amendment to Contribution and Profit-Sharing Agreement dated December 9, 2019, and that certain Second Amendment to Contribution and Profit-Sharing Agreement dated August 21, 2020, all attached as an exhibit to the 2022 Smith Settlement Agreement (collectively, the Smith Contribution and Profit-Sharing Agreement), (2) that Mr. Smith held 300,000 shares of common stock in the Company in exchange for Smiths previous contributions to SDS LLC AZ, (3) that on May 13, 2022, Mr. Smith would receive an additional 100,000 shares of common stock of the Company in exchange for the termination of Smiths rights under the Smith Contribution and Profit-Sharing Agreement, (4) that following such receipt of such additional shares, Mr. Smith would have a total of 400,000 shares of common stock, and (5) to a general release and discharge of claims against us, our officers and directors, certain other affiliates and related parties, and our stockholders as listed on an exhibit to the 2022 Smith Settlement Agreement, including without limitation, claims relating to the Smith Contribution and Profit-Sharing Agreement, Smiths direct or indirect ownership of shares of the Companys capital stock, or Smiths direct or indirect ownership of membership interests of SDS LLC AZ, SDS LLC DE, SDSF LLC, or SDSB LLC, as applicable, provided, however, that nothing in the 2022 Smith Settlement Agreement was intended to release any rights that any party or Smith may have under that certain Simple Agreement for Future Equity and/or Convertible Note, as applicable.
• Under a Settlement Agreement and Release between SDS LLC AZ, SDSB LLC, SDSF LLC, the Company, Virginia Byrd, an individual beneficial owner of more than 5% of the outstanding common stock of the Company, and Byrd Enterprises, a former beneficial owner of more than 5% of the outstanding common stock of the Company (together with Viginia Byrd, Byrd), dated as of May 13, 2022 (the 2022 Byrd Settlement Agreement), the parties agreed, among other things, to a general release and discharge of claims against us, our officers and directors, certain other affiliates and related parties, and our stockholders as listed on an exhibit to the 2022 Byrd Settlement Agreement, including without limitation, claims relating to Byrds direct or indirect ownership of shares of the Companys capital stock, or Byrds direct or indirect ownership of membership interests of SDS LLC AZ, SDS LLC DE, SDSF LLC, or SDSB LLC, as applicable, provided, however, that nothing in the 2022 Byrd Settlement Agreement was intended to release any rights that any party or Byrd may have under that certain Simple Agreement for Future Equity and/or Convertible Note, as applicable.
• Under a Settlement Agreement and Release between SDS LLC AZ, SDSB LLC, SDSF LLC, the Company, and 35sNextChapters, LLC (35sNextChapters), dated as of May 13, 2022 (the 2022 35sNextChapters Settlement Agreement), the parties agreed, among other things, to a general release and discharge of claims against us, our officers and directors, certain other affiliates and related parties, and our stockholders as listed on an exhibit to the 2022 35sNextChapters Settlement Agreement, including without limitation, claims relating to 35sNextChapters direct or indirect ownership of shares of the Companys capital stock, or 35sNextChapters direct or indirect ownership of membership interests of SDS LLC AZ, SDS LLC DE, SDSF LLC, or SDSB LLC, as applicable, provided, however, that nothing in the 2022 35sNextChapters Settlement Agreement was intended to release any rights that any party or 35sNextChapters may have under the terms of that certain Invitation to Join the Board of Directors between Ronald Saslow and the Company or that certain Simple Agreement for Future Equity and/or Convertible Note, as applicable.
• In April 2022, Nelson Financial Services became the insurance agent providing group benefits for the Company.

Stakeholder Impact

• Approval of the stock issuance could dilute existing stockholders' ownership.
• The amended equity incentive plan could benefit employees, officers, and directors through potential future awards.
• The company's ability to secure financing and maintain operations is crucial for all stakeholders, including employees, customers, and suppliers.

Next Steps

• Stockholders to vote on the proposals at the Annual Meeting on September 18, 2024.
• The company will file a Current Report on Form 8-K with the SEC within four business days after the Annual Meeting to disclose the final voting results.

Key Dates

Keywords

Annual Meeting, Proxy Statement, Stockholders, Board of Directors, Equity Incentive Plan, Auditor Ratification, FirstFire Global Opportunities Fund, Boustead Securities, Director Election, Common Stock Issuance