SGN Signing Day Sports Inc

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported) September 18, 2024

 

SIGNING DAY SPORTS, INC.

(Exact name of registrant as specified in its charter)

 

Delaware		001-41863		87-2792157
(State or other jurisdiction of incorporation)		(Commission File Number)		(IRS Employer Identification No.)

 

8355 East Hartford Rd., Suite 100, Scottsdale, AZ		85255
(Address of principal executive offices)		(Zip Code)

 

Registrant’s telephone number, including area code (480) 220-6814

 

 

(Former name or former address, if changed since last report.)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, par value $0.0001 per share		SGN		NYSE American LLC

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.

 

Emerging Growth Company ☒

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 

Item 1.01 Entry into a Material Definitive Agreement.

 

Binding Term Sheet

 

On September 18, 2024, Signing Day Sports, Inc., a Delaware corporation (the “Company”), entered into a binding term sheet (the “Term Sheet”) with Dear Cashmere Group Holding Company, a Nevada corporation whose common stock is traded on the Pink Current Information tier of OTC Markets Group, Inc. under the symbol DRCR (“DRCR”), James Gibbons (“Gibbons”), and Nicholas Link (together with Gibbons, the “Sellers”), pursuant to which, subject to the terms and conditions set forth therein and in one or more stock purchase agreements to be entered into among the Company, DRCR, the Sellers and any additional stockholders of DRCR, the Company will acquire from the Sellers and any such additional stockholders of DRCR shares of DRCR common stock and preferred stock constituting between 95% and 99% of the issued and outstanding shares of DRCR’s share capital. In consideration for the acquired shares, the Sellers and the other stockholders of DRCR whose shares are acquired by the Company will be issued shares of the Company’s common stock constituting approximately 91.76% of the post-transaction shares of the Company’s common stock on an as-converted and fully-diluted basis, and the pre-transaction stockholders of the Company will hold approximately 8.24% of the Company’s post-transaction shares of common stock on an as-converted and fully-diluted basis, subject to certain assumptions and adjustments. 19.99% of the shares that the Company will issue to the Sellers and other stockholders of DRCR will be common stock and the remainder will be shares of Company preferred stock that will have no voting or dividend rights and that, upon approval by the Company’s stockholders, will automatically convert into such number of shares of Company common stock as is applicable based upon the percentage of the post-transaction shares of Company common stock that they are entitled to on an as-converted basis minus the shares of Company common stock issued to them by the Company upon the closing of the transaction contemplated by the Term Sheet (the “Closing”).

 

The Term Sheet also provides that the Company and DRCR will use commercially reasonable efforts to secure funding of at least $2.0 million as soon as possible, the net proceeds of which will be equally split between the Company and DRCR and are to be used for operations and, in the case of the Company, to pay down its indebtedness and other liabilities. Such division of the net proceeds of any such funding will be effected by the Company loaning one-half of such proceeds to DRCR, which loans will be forgiven (i) upon the Closing or (ii) upon DRCR’s payment of the break-up fee as described below.

 

The Term Sheet also provides that the assets of each of the Company and DRCR will be separately held in newly-formed subsidiaries of the Company, and contains provisions relating to certain changes to the Company’s management and board of directors, including that Gibbons will be appointed the chief executive officer of the Company at the Closing, that two members of the board of directors of the Company will be replaced by nominees of DRCR at the Closing, and that, subject to stockholder approval, three of the Company’s post-Closing board of directors will be nominees of DRCR’s board of directors, one nominee will be of the Company’s board of directors, and one will be a joint nominee of DRCR’s and the Company’s boards of directors.

 

Although the Closing will not be subject to stockholder approval, the conversion of the preferred stock issuable to the Sellers and other sellers at the Closing and the related change in control that will occur upon such conversion will be subject to stockholder approval. Stockholder approval will also be required for the election of the parties’ nominees to the Company’s board of directors. Prior to the conversion of the preferred stock or appointment of each party’s nominees to the Company’s board of directors, the Company will seek and must obtain the approval of a new listing application from the NYSE American LLC (“NYSE American”).

 

The Term Sheet provides that the Closing will occur as soon as reasonably practicable and that the parties will use commercially reasonable efforts to effect the Closing on or before October 31, 2024.

 

The Term Sheet also provides that the Company, DRCR, and the Sellers will be subject to a non-solicitation period and a no-shop provision for 30 days following the date of the Term Sheet. The Term Sheet further provides for a $500,000 break-up fee upon termination of the Term Sheet due to an undisputable uncured material breach by the Company, on the one hand, or DRCR or a Seller, on the other hand, upon demand by the other.

 

All of the foregoing terms are subject to change upon the negotiation and execution of definitive stock purchase agreement(s). The Closing will be subject to the terms and conditions of the definitive stock purchase agreement(s), including completion of due diligence and satisfaction or waiver of closing conditions. There can be no assurance that definitive stock purchase agreement(s) will be entered into or that the proposed transactions will be consummated.

 

The Term Sheet is filed as Exhibit 10.1 to this Current Report on Form 8-K, and the description above is qualified in its entirety by reference to the full text of such exhibit.

 

 

Termination Agreement

 

On September 18, 2024, the Company entered into a Termination Agreement, dated as of September 18, 2024 (the “Termination Agreement”), with Boustead Securities, LLC, a California limited liability company and a registered broker-dealer (“Boustead”). The parties entered into the Termination Agreement in order to terminate the engagement letter, dated as of August 9, 2021, as amended by letter agreements entered into by Boustead and the Company dated as of November 4, 2023, November 8, 2023, and November 13, 2023 (as amended, the “Engagement Letter”), pursuant to which Boustead had certain rights to act as a financial advisor to the Company. The Termination Agreement also provides for the termination of the right of first refusal (the “Right of First Refusal”) provided under the Underwriting Agreement, dated as of November 13, 2023, between the Company and Boustead, as representative of the underwriters in connection with the Company’s firm commitment underwritten initial public offering (the “Underwriting Agreement”), in exchange for the issuance of the Termination Shares (as defined below).

 

The Termination Agreement provides that the Company will issue to Boustead 3,000,000 shares (the “Initial Termination Shares”) of the Company’s common stock by the later of the date that is (i) five business days after the date of the Termination Agreement and (ii) the date that the NYSE American authorizes the issuance of the Initial Termination Shares (the “Termination Date”). On the Termination Date, the Engagement Letter and the Right of First Refusal and rights and obligations pursuant to the Engagement Letter and the Right of First Refusal will be terminated except with respect to certain customary surviving provisions.

 

The Termination Agreement provides that upon issuance of common stock or other securities that are exercisable or exchangeable for, or convertible into, common stock of the Company to any third party (other than Boustead or any affiliate of Boustead), the Company will issue to Boustead a number of shares of common stock equal to 10.35% of the shares of common stock (or other securities) so issued by the Company in any such transaction other than a Change in Control (as defined in the Termination Agreement) (the “Additional Termination Shares,” and, together with the Initial Termination Shares, the “Termination Shares”), by the later of (i) five business days after the date of such issuance and (ii) the date that the NYSE American authorizes the issuance of the Additional Termination Shares. The Company’s obligation to issue Additional Termination Shares will cease immediately prior to the effective date of a Change in Control and, for the avoidance of doubt, Boustead will not be entitled to any percentage of the securities issued by the Company in connection with the Change in Control.

 

The Termination Shares have piggyback registration rights. The Termination Agreement provides that Boustead will not sell more than 10% of the total trading volume on any trading day, provided that the Termination Shares are registered for resale under an effective registration statement. Boustead will also agree to any leak-out provisions requested by the Company, which will be consistent with any leak-out agreement signed by other parties in connection with a Change in Control.

 

In addition, the Termination Agreement requires that if the Company raises at least $1 million in gross proceeds from a financing, the Company will pay Boustead $100,000 as partial consideration under the Termination Agreement and $68,467.43 to pay an existing account payable owed by the Company to Boustead.

 

The Termination Agreement was entered into due to the interest of each party to the Termination Agreement to end all material remaining obligations to the other party in an amicable manner. In addition, the execution of the Termination Agreement was determined to be necessary in order for the Company and DRCR to enter into the Term Sheet.

 

Except as otherwise disclosed above, there have been no material relationships between Boustead and the Company or any of the Company’s affiliates.

 

The Termination Agreement is filed as Exhibit 10.2 to this Current Report on Form 8-K, and the description above is qualified in its entirety by reference to the full text of such exhibit.

 

 

Item 1.02 Termination of a Material Definitive Agreement.

 

The information set forth under the section “Termination Agreement” of Item 1.01 of this Current Report on Form 8-K is incorporated by reference herein.

 

Item 3.02 Unregistered Sales of Equity Securities.

 

The information set forth under the section “Termination Agreement” of Item 1.01 of this Current Report on Form 8-K is incorporated by reference herein.

 

The Termination Shares are being offered and sold to Boustead by the Company in a transaction that is exempt from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), in reliance on Section 4(a)(2) of the Securities Act and/or Rule 506(b) of Regulation D thereunder.

 

Item 7.01 Regulation FD Disclosure.

 

On September 19, 2024, the Company issued a press release (the “Press Release”) to announce that it had entered into the Term Sheet. A copy of the Press Release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

 

The information furnished pursuant to this Item 7.01 (including Exhibit 99.1) shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any filing under the Exchange Act or the Securities Act, except as expressly set forth by specific reference in such a filing.

 

Forward-Looking Statements

 

The Press Release and the statements contained therein may include “forward-looking” statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act, which statements involve substantial risks and uncertainties. Forward-looking statements generally relate to future events or the Company’s future financial or operating performance. In some cases, you can identify these statements because they contain words such as “may,” “will,” “believes,” “expects,” “anticipates,” “estimates,” “projects,” “intends,” “should,” “seeks,” “future,” “continue,” “plan,” “target,” “predict,” “potential,” or the negative of such terms, or other comparable terminology that concern the Company’s expectations, strategy, plans, or intentions. Forward-looking statements relating to expectations about future results or events are based upon information available to the Company as of today’s date and are not guarantees of the future performance of the Company, and actual results may vary materially from the results and expectations discussed. The Company’s expectations and beliefs regarding these matters may not materialize, and actual results in future periods are subject to risks, uncertainties and other factors that could cause actual results to differ materially from those projected, including, without limitation, the Company’s ability to complete the acquisition of DRCR and integrate its business, the ability of the Company, the Sellers and DRCR to enter into definitive stock purchase agreement(s), obtain all necessary consents and approvals in connection with the acquisition, obtain clearance from the NYSE American of a new initial listing application in connection with the acquisition, obtain stockholder approval of the matters described herein and in the Press Release and provided for by the Term Sheet, obtain sufficient funding to maintain operations and develop additional services and offerings, market acceptance of the Company’s current products and services and planned offerings, competition from existing online and retail offerings or new offerings that may emerge, impacts from strategic changes to the Company’s business on its net sales, revenues, income from continuing operations, or other results of operations, the Company’s ability to attract new users and customers, increase the rate of subscription renewals, and slow the rate of user attrition, the Company’s ability to retain or obtain intellectual property rights, the Company’s ability to adequately support future growth, the Company’s ability to comply with user data privacy laws and other current or anticipated legal requirements, and the Company’s ability to attract and retain key personnel to manage its business effectively, and other risks and uncertainties described in the Company’s Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, and other filings with the Securities and Exchange Commission. All subsequent written and oral forward-looking statements concerning the Company or other matters and attributable to the Company or any person acting on its behalf are expressly qualified in their entirety by the cautionary statements above. The Company does not undertake any obligation to publicly update any of these forward-looking statements to reflect events or circumstances that may arise after the date hereof, except as required by law.

 

 

Item 9.01 Financial Statements and Exhibits.

 

(d) Exhibits

 

Exhibit No.		Description
10.1		Binding Term Sheet, dated September 18, 2024, between Dear Cashmere Group Holding Company, James Gibbons, Nicolas Link, and Signing Day Sports, Inc.
10.2		Termination Agreement, dated September 18, 2024, between Signing Day Sports, Inc. and Boustead Securities, LLC
99.1		Press release dated September 19, 2024
104		Cover Page Interactive Data File (embedded with the Inline XBRL document).

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Date: September 19, 2024	Signing Day Sports, Inc.
	/s/ Daniel Nelson
	Name: Daniel Nelson
	Title: Chief Executive Officer

 

 

Exhibit 10.1

 

 

 

BINDING TERM SHEET

September 18, 2024

 

This binding term sheet (“Term Sheet”) sets forth material terms and conditions for the potential transactions described below (collectively, the “Transaction”). This Term Sheet creates a binding obligation on all parties hereto to use commercially reasonable efforts to negotiate the Transaction and creates an obligation to execute and deliver a mutually agreed upon Stock Purchase Agreement (as defined below) in respect of the Transaction, which includes the terms set forth in this Term Sheet and the terms, conditions and other provisions customary in these types of transactions.

 

Parties	Dear Cashmere Group Holding Co, a Nevada corporation (OTC: “DRCR”), James Gibbons and Nicolas Link (each a “Seller” and collectively, the “Sellers”), and Signing Day Sports, Inc., a Delaware corporation (NYSE American: “SGN”).
Transaction	On and subject to the Closing (as defined below) and the terms and conditions set forth herein and in one or more stock purchase agreements (each a “Stock Purchase Agreement”) to be entered into among SGN, DRCR, the Sellers and any additional sellers who are existing shareholders of DRCR (the “Additional Sellers”), SGN will acquire from the Sellers and the Additional Sellers shares of common stock and preferred stock of DRCR constituting at least 95% and up to 99% of the issued and outstanding shares of DRCR’s share capital on a fully diluted and as-converted (to common stock) basis (the “Purchased Shares”), free and clear from any third party rights, promise, lien or encumbrance, in consideration for the SGN Consideration (as defined below). DRCR undertakes to use commercially reasonable efforts to cause the Additional Sellers to sign their respective Share Purchase Agreements.
Valuation	The consideration for the Purchased Shares will be payable in shares of common stock of SGN (the “SGN Common Consideration”) and shares of preferred stock of SGN (the “SGN Preferred Consideration” and, together with the SGN Common Consideration, the “SGN Consideration”). The closing of the Transaction (the “Closing”) will be subject to the due diligence investigation by each of SGN and DRCR with respect to the other.   It is expected that the legacy SGN shareholders will retain 8.24% (assuming an SGN equity value of $14.0 million) of the total post-Transaction shares of common stock of SGN on an as-converted and fully diluted basis and that the SGN Consideration issued to the Sellers and the Additional Sellers will constitute approximately 91.76% of the total post-Transaction shares of common stock of SGN on an as-converted and fully diluted basis (assuming a DRCR equity value of $156.0 million). It is hypothetically assumed for this purpose that SGN will acquire 100% of the outstanding shares of DRCR. An adjustment will be made to such percentages based upon the lower percentage of the outstanding shares of DRCR common stock (on an as-converted and fully diluted basis) actually acquired by SGN, which DRCR and SGN expect will be less than 100%.

 

 

 

 

For the avoidance of doubt, SGN agrees not to seek to renegotiate the $14.0 million equity value stated above as the result of any increase in the value of SGN’s stock price as the result of the announcement of this Term Sheet, the execution of the Stock Purchase Agreement or any other matter relating to the Transaction.   To support SGN’s valuation SGN agrees to select and hire a third-party valuation expert that is reasonably acceptable to DRCR. The valuation of SGN is subject to the receipt of a fairness opinion from SGN’s financial advisor prior to entry into the Stock Purchase Agreement.   The valuation and relative ownership percentages of SGN post-Closing assumes that SGN is debt-free and cash free at the time of the Closing. If any indebtedness of SGN exists at the Closing or if SGN has net cash at Closing in excess of its liabilities, the valuation and relative ownership percentages will be adjusted accordingly to favor the Sellers and Additional Sellers or SGN, as applicable, through a mutually agreed upon true-up process.

Purchase Price

At the Closing, in consideration of the transfer of the Purchased Shares to SGN, SGN will issue to the Sellers and the Additional Sellers the SGN Consideration in the manner described below.   In order to comply with NYSE American rules, the SGN Common Consideration shall be equal to no more than 19.99% of the outstanding shares of common stock of SGN as of the Closing and the balance of the SGN Consideration shall be in the form of the SGN Preferred Consideration.   The SGN Preferred Consideration shall automatically convert into shares of the common stock of SGN (the “Underlying Shares”) only after the stockholders of SGN have approved the issuance of the Underlying Shares and the SGN Preferred Consideration shall otherwise be structured to comply with NYSE American requirements. The SGN Common Consideration, in accordance with NYSE American requirements, shall not be able to vote on issuance of the Underlying Shares.   The Underlying Shares shall be in a number that is equal to the balance of the SGN Consideration to be issued to the Sellers and the Additional Sellers according to the valuation agreed to herein and in the Stock Purchase Agreement(s). The SGN Preferred Consideration shall have no voting rights and no dividend rights, and shall be convertible into shares of common stock.   The SGN Preferred Consideration shall be structured so as to be treated as equity from an accounting perspective and not as debt.   In addition, immediately following the Closing, a number of shares of SGN preferred stock of the same series as the SGN Preferred Consideration that is equal to 3.0% of the enterprise value of the combined post-Transaction entity on an as converted to common stock basis will be issued to DRCR’s financial advisor as consideration for its services provided in connection with the Transaction (the “Advisor Shares”).   Following the completion of the Transaction, DRCR will function as an operating subsidiary of SGN, with SGN consolidating the financials of DRCR. As soon as practical following the Closing, SGN shall contribute all of its legacy assets to a newly-formed, wholly-owned subsidiary of SGN (the “SGN Operating Subsidiary”), and SGN’s current operations will be conducted through the SGN Operating Subsidiary after its establishment.

 

 

 

 

Derivative Securities	All outstanding restricted stock, restricted stock units and options of SGN that are outstanding shall immediately become fully vested at the Closing.
Finance	DRCR and SGN shall each use commercially reasonable efforts to secure adequate funding prior to Closing. Specifically, DRCR and SGN shall seek to raise at least $2.0 million of funding (the “Financing”) as soon as possible after the date hereof.   The net proceeds of the Financing will be equally split between DRCR and SGN and each of them shall use such proceeds for its operations and, in the case of SGN, to pay down its indebtedness and other liabilities. In order to split the net proceeds of the Financing as described above, SGN will make loans of one-half of the net proceeds (or such lesser amount as agreed to by the parties) to DRCR, which loans shall be forgiven (i) upon the Closing or (ii) upon payment by SGN to DRCR of the break-up fee as described under the caption “Break-Up Fee” below.   SGN and DRCR will cooperate to structure such allocation of proceeds and the use of such proceeds on a mutually agreeable basis.
Relative Ownership	Immediately following the Closing (and prior to the issuance of the Advisor Shares), subject to any adjustments to the valuations set forth in the Stock Purchase Agreement(s) and any purchase price adjustments:

		●	The legacy shareholders of SGN as exist at the Closing date will hold 80.01% of the common shares of SGN.
		●	The Sellers will hold 19.99% of the common shares of SGN.
		●	The Sellers and the Additional Sellers will hold shares of SGN Preferred Consideration that convert into such number of shares of common stock of SGN as is applicable based upon the percentage of the post-Transaction SGN that they are entitled to minus the SGN Common Consideration.
		●	SGN will hold shares of DRCR constituting at least 95% of the DRCR common stock on a fully diluted and as-converted basis.

 

 

 

 

Lockup	Securities of SGN that are issued to the Sellers, the Additional Sellers, and DRCR’s financial advisor in the Transaction will constitute “restricted securities” as defined in Rule 144 promulgated under the Securities Act of 1933 and, in addition, will be subject to a lockup period of 3 months after the Closing.   Shares of SGN held by Directors and Officers shall be subject to a lockup period of 3 months after the Closing.   SGN, DRCR and the Sellers may include reasonable leak out provisions in the lock up agreements if mutually agreed upon.
Due Diligence	Each of SGN and DRCR will reasonably cooperate with each other, and their auditors and advisors, to support their respective due diligence efforts. Each of DRCR and SGN acknowledge that their initial due diligence investigation on the other has been completed.
Consents and Approvals	Each of SGN and DRCR will work diligently to obtain any necessary consents and approvals relating to the Transaction, and the obtaining of such consents shall be a condition to Closing.
Further Assurance	Each of the SGN, DRCR and the Sellers agrees (a) to furnish upon request to each other parties such further information, (b) to execute and deliver to each other parties such other documents, and (c) to do such other acts and things, all as one or more other parties may reasonably request for the purpose of consummating the Transaction.
Modifications, Amendments and Waivers	This Term Sheet cannot be amended or changed, nor any performance, term, or condition waived in whole or in part, except by a writing signed by the holders of a majority in number of Purchased Shares (assuming for this purpose the conversion of any preferred stock of DRCR) held by the Sellers and Additional Sellers, DRCR and SGN.
Shareholders’ Meeting	As soon as practicable following the Closing, SGN shall hold a special meeting of its shareholders (the “Shareholders’ Meeting”) to vote upon (i) the conversion of the SGN Preferred Consideration into shares of SGN common stock, (ii) an amended and restated certificate of incorporation of SGN, (iii) the election of directors in accordance with the caption “Board and Governance” below and (iv) such other matters as the parties to this Term Sheet may agree upon.
Initial Listing Application with NYSE American	Prior to the conversion of the SGN Preferred Consideration, which will result in a change in control of SGN, SGN will file an initial listing application with NYSE American.  SGN, the Sellers and DRCR will use their commercially reasonable efforts to respond to any questions or comments of the staff of NYSE American.  The clearance of such application is a condition to the conversion of the SGN Preferred Consideration.

 

 

 

 

Board and Governance

At the Closing, Daniel Nelson will resign as Chief Executive Officer of SGN and become the Chief Executive Officer of the SGN Operating Subsidiary and James Gibbons will become the Chief Executive Officer of SGN and remain the Chief Executive Officer of DRCR.   The post-Closing board of SGN shall consist of 5 members, including at least 3 directors that qualify as independent under NYSE American rules. At the Closing, two SGN board members will resign, and DRCR will appoint two directors to fill the vacancies. DRCR’s appointees will be independent or executive directors, depending on the type of director who resigns.   Accordingly, the legacy directors of SGN will continue to control the board of directors of SGN from and after the Closing until the Shareholders’ Meeting is held. SGN shall cause a slate of directors to be nominated as follows in connection with the Shareholders’ Meeting:   1 board member will be nominated by the SGN board of directors that is in place before the Closing.   1 board member will be nominated by DRCR’s board of directors that is in place before the Closing.   2 of the independent directors will be nominated by DRCR’s board of directors that is in place before the Closing.   1 independent director will be nominated jointly by DRCR’s and SGN’s board of directors that are in place before the Closing.   Each of SGN and DRCR shall present their shortlisted candidates as soon as possible following the entry into the Stock Purchase Agreement.   Each of SGN and DRCR shall also take such action as may be necessary to ensure that the board of directors of DRCR and the SGN Operating Subsidiary mirror the post-Transaction board of directors of SGN.

Stock Purchase Agreement

The obligations of the parties to this Term Sheet to consummate the Transaction is subject to the execution of a Stock Purchase Agreement and other customary and related documents.   The Stock Purchase Agreement(s) will contain customary terms for a transaction of this nature, including without limitation (i) closing conditions (as specified below under “Closing Conditions”), (ii) termination rights, (iii) representations and warranties, indemnification and interim operating covenants with respect to DRCR and SGN and (iv) customary provisions regarding further assurances to cause the Closing to occur, including SGN’s and DRCR’s obligation to obtain any necessary stockholder approvals and to make all necessary filings with the Securities and Exchange Commission, OTC Markets Group, FINRA and NYSE American.   The parties to this Term Sheet will use commercially reasonable efforts to effect the Closing as soon as practicable following the entry by the applicable parties into the Stock Purchase Agreement(s).

 

 

 

 

Non-Solicitation	SGN, DRCR and the Sellers will be subject to a non-solicitation period for 30 days following the signing of this binding Term Sheet.   SGN, DRCR and the Sellers will be further subject to a no-shop provision for 30 days.
Specific Performance	Each of the parties to the Stock Purchase Agreement(s) will be entitled to specific performance to enforce the covenants and other agreements of the other parties to the Stock Purchase Agreement(s).
Closing Conditions	The obligations of any party to a Stock Purchase Agreement to consummate the Transaction will be subject to standard closing conditions for a transaction of this nature, including without limitation:

		●	SGN must maintain its listing on NYSE American
		●	Completion of due diligence
		●	DRCR’s and SGN’s provision of cash flow forecasts and working budgets for the next 12 months
		●	SGN fairness opinion
		●	Execution of lock-up agreements by the Sellers and the Officers and Directors of SGN
		●	Settlement arrangements for all lenders and service providers, including financial advisors
		●	Agreed removal of any rights of first refusal with respect to SGN
		●	SGN to provide an up to date NOBO list on the date of Closing
		●	Completion of any required stock exchange and regulatory reviews
		●	Completion of (or irrevocable commitments to complete) any applicable financings
		●	Customary bringdown of representations and warranties and covenants
		●	Receipt of any required regulatory approvals and expiration of any waiting periods under HSR or other applicable antitrust laws
		●	Absence of a “material adverse effect” or “material finding” (to be defined in the Stock Purchase Agreement(s)) following the date of signing the Stock Purchase Agreement
		●	Key personnel role definition, engagement, employment and retention instruments executed by the parties thereto
	The parties expect that the Closing will occur as soon as reasonably practicable and will use commercially reasobable efforts to effect the Closing on or before October 31, 2024.

 

 

 

 

 

 

 

 

Representations and Indemnifications	Each of the parties to the Stock Purchase Agreement(s) will provide representations and warranties to the other parties to the Stock Purchase Agreement(s) (collectively, the “Representations”), which Representations shall be true and correct as of the date of the Stock Purchase Agreement(s) and, as a condition to Closing, as of the date of the Closing. Each of the parties to the Stock Purchase Agreement(s) will undertake in the applicable Stock Purchase Agreement(s) to indemnify the other parties to the Stock Purchase Agreement(s) (and its affiliates, officers, stockholders, agent, advisors, employees and successors) (“Indemnified Parties”) against, and hold them harmless from, any loss suffered or incurred by any such Indemnified Parties arising or resulting from or based upon, without duplication: (a) any inaccuracy in or breach of any of the Representations; or (b) any breach or non-fulfillment of any covenant, agreement or obligation set forth therein.
Confidentiality	The existence and terms of this Term Sheet and any discussions related to the Transaction are “Confidential Information” subject to the Confidentiality Agreement between SGN and DRCR dated April 9th, 2024 until the same are announced publicly.
Expenses	Each party to this Term Sheet will bear its own expenses and any fundraising costs shall be shared by DRCR and SGN.
Arbitration	Any dispute or claim arising to or in any way related to this Term Sheet shall be settled by binding arbitration in accordance with Judicial Arbitration and Mediation Services, before a single arbitrator. The arbitrator shall have the power to decide any motions brought by any party to the arbitration, including without limitation motions for summary judgment and/or adjudication, and motions to dismiss and demurrers, prior to any arbitration hearing. The arbitrator shall issue a written decision on the merits. Each party shall pay its own expenses associated with such arbitration. A demand for arbitration shall be made within a reasonable time after the claim, dispute or other matter has arisen and in no event shall such demand be made after the date when institution of legal or equitable proceedings based on such claim, dispute or other matter in question would be balanced by the applicable statutes of limitations. The decision of the arbitrator shall be binding upon the parties to such arbitration and judgment in accordance with that decision may be entered in any court having jurisdiction thereof.
Termination	In the event that any party to this Term Sheet fails to meet any of its obligations in this Term Sheet, the other parties shall have the right, but not the obligation, to give a 30-day notice of their intention to terminate this Term Sheet. Should the parties to this Term Sheet not succeed in resolving the reason for notice of termination during the 30-day notice period, any party that has provided notice of their intention to terminate in accordance with this section shall have the right, but not the obligation, to terminate this Term Sheet.

 

 

 

 

Break-up Fee	If SGN, on the one hand, or DRCR or a Seller, on the other hand, terminates this Term Sheet due to an undisputable uncured material breach by DRCR or a Seller, in the case of SGN, or SGN, in the case of DRCR or a Seller (such defaulting party being referred to in this Term Sheet as the “Defaulting Party”), then the Defaulting Party shall be liable to the non-Defaulting Party to an agreed upon break-up fee of $500,000, payable in cash upon first written demand by the non-Defaulting Party.   It is understood that the DRCR, SGN and the Sellers will use commercially reasonable efforts to support SGN in its efforts to raise capital in the Financing. If this Term Sheet is terminated by SGN for any reason other than an udisputable uncured material breach by DRCR or a Seller, then one-half of all net funds (after expenses) raised in any capital raising transaction by SGN will be paid to DRCR (to the extent not already loaned to DRCR) as an additional break-up fee and any loans by SGN to DRCR of amounts of net proceeds already made to DRCR shall be forgiven. For the avoidance of doubt, DRCR shall not be entitled to any more than one-half of the total net proceeds from a Financing.
Governing Law	This Term Sheet and the applicable Stock Purchase Agreements shall be governed by New York law.
Third-Party Beneficiaries	Nothing herein is intended or shall be construed to confer upon any person or entity other than the parties to this Term Sheet and their successors or assigns, any rights, or remedies under or by reason of this Term Sheet.

 

 

 

 

If you are in agreement with the terms set forth above and desire to proceed with the Transaction on that basis, please sign this Term Sheet in the space provided below and return an executed copy to SGN.

 

Dear Cashmere Group Holding Co (DRCR)
By:	/s/ James Gibbons
Name:	James Gibbons
Title:	Chief Executive Officer
Seller: James Gibbons
/s/ James Gibbons
Name:	James Gibbons
Seller: Nicholas Link
/s/ Nicolas Link
Name:	Nicolas Link
Accepted and agreed:
Signing Day Sports, Inc. (SGN)
By:	/s/ Daniel Nelson
Name:	Daniel Nelson
Title:	Chief Executive Officer

 

 

9

 

Exhibit 10.2

 

TERMINATION AGREEMENT

 

TERMINATION AGREEMENT, dated September 18, 2024 (this “Agreement”), by and between Signing Day Sports, Inc., a Delaware corporation (the “Company”), and Boustead Securities, LLC, a California limited liability company (the “Boustead”). Each of the Company and Boustead are sometimes referred to in this Agreement individually as a “Party” and, collectively, as the “Parties.”

 

RECITALS

 

A. On August 9, 2021, Boustead and the Company entered into that certain engagement letter, as amended by letter agreements entered into by Boustead and the Company on each of November 4, 2023, November 8, 2023, and November 13, 2023 (as amended, the “Engagement Letter”), pursuant to which Boustead agreed to act as the Company’s exclusive financial advisor in connection with the Company’s intention to pursue the activities described in Section 2 of the Engagement Letter or any combination thereof.

 

B. Pursuant to the Engagement Letter, Boustead and the Company entered into that certain Underwriting Agreement, dated as of November 13, 2023 (the “Underwriting Agreement”), pursuant to which Boustead acted as representative of the underwriters in connection with the Company’s firm commitment underwritten initial public offering of 1,200,000 shares of common stock of the Company, par value $0.0001 per share (“common stock”). The Parties acknowledge that the Closing Date (as defined in the Underwriting Agreement) with respect to the purchase of the Firm Shares (as defined in the Underwriting Agreement) occurred on November 16, 2023.

 

C. The Parties are entering into this Agreement in order to terminate the Engagement Letter pursuant to Section 6 thereof and to terminate the right of first refusal provided under Section 7 of the Underwriting Agreement (the “Right of First Refusal”) in exchange for the issuance of the cash consideration described below and the Termination Shares (as defined below) in accordance with the terms and conditions of this Agreement.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the mutual promises herein contained, the Parties, intending to be legally bound, hereby agree as follows:

 

1.  Recitals Incorporated. The Recitals set forth above are hereby incorporated into this Agreement as though fully restated herein.

 

 

2. Change in Control. A “Change in Control” shall be deemed to have occurred if any of the following occurs (through one or a series of related transactions): (a) the sale, disposition or transfer to an unrelated third party of all or substantially all of the consolidated assets of the Company and its consolidated subsidiary or subsidiaries, if any, (b) a sale, disposition or transfer resulting in no less than a majority of the voting power or equity interests of the Company and its consolidated subsidiary or subsidiaries, if any, on a fully diluted basis being held by a person (as defined below) or persons acting as a group who prior to such sale, disposition or transfer did not have a majority of such voting power, (c) a merger, consolidation, recapitalization or reorganization of the Company or its consolidated subsidiary or subsidiaries, if any, with or into one or more entities such that “control” (as defined below) of the resulting entity is held, directly or indirectly, by a person or persons acting as a group who did not have control of the Company and its consolidated subsidiary or subsidiaries prior to such merger, consolidation, recapitalization or reorganization, or (d) the liquidation or dissolution of the Company or its consolidated subsidiary or subsidiaries. For purposes of the foregoing, “control” means the power to direct or cause the direction of the management and policies, or the power to appoint directors, whether through the ownership of voting interests, by contract or otherwise, and “person” shall have the meaning such term has as is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended. For the avoidance of doubt any restructuring of the Company into a holding company structure, re-domestication of the Company into a different jurisdiction or other reorganization of the Company where the persons who prior to such restructuring, re-domestication or reorganization held a majority of the voting power continue to hold a majority of the voting power thereafter shall not be deemed to be a Change in Control.

 

3.  Termination of Engagement Letter and Right of First Refusal. As soon as practicable following the date hereof, and in any event by the later of (i) five (5) business days after the date hereof and (ii) the date that the NYSE American LLC (the “Exchange”) authorizes the issuance of the Initial Termination Shares (as defined below), the Company shall issue to Boustead the Initial Termination Shares and upon receipt of the Initial Termination Shares, the Engagement Letter shall be terminated, the Right of First Refusal will be terminated, the Parties’ obligations set forth with respect thereto shall be terminated, and neither Party shall have any further right, duty, or obligation pursuant to the Engagement Letter or the Right of First Refusal (the date of the issuance of the Initial Termination Shares being the “Termination Date”). For the avoidance of doubt, from and after the Termination Date, the Company shall no longer be bound to use Boustead as its broker-dealer, financial advisor or intermediary, Boustead shall have no right of first refusal or “tail” rights of any kind, and, except with respect to its right to receive the Additional Termination Shares (as defined below), Boustead shall not be entitled to any compensation whatsoever from the Company with respect to any past financings or other transactions of any nature whatsoever or any future financings, business combinations, or other transactions of any nature whatsoever.

 

4. Cash Consideration. Upon the consummation of a financing transaction in which the Company raises at least $1 million in gross proceeds, the Company shall pay to Boustead out of the net proceeds of such financing transaction (i) $100,000, as partial consideration hereunder and (ii) $68,467.43 constituting an existing account payable owed by the Company to Boustead.

 

5  Termination Shares. As provided in Section 3 above, by the later of (i) five (5) business days after the date hereof and (ii) the date that the Exchange authorizes the issuance of the Initial Termination Shares, the Company shall issue to Boustead 3,000,000 shares of common stock, constituting 10.35% of the issued and outstanding common stock of the Company on the date hereof on a post issuance and fully-diluted basis (the “Initial Termination Shares”). In addition, upon the issuance by the Company of common stock or other securities that are exercisable or exchangeable for, or convertible into, common stock to any third party (other than Boustead or any affiliate of Boustead), the Company shall, by the later of (i) five (5) business days after the date of such issuance and (ii) the date that the Exchange authorizes the issuance of the Additional Termination Shares (as defined below), issue to Boustead a number of shares of common stock that is equal to 10.35% of the shares of common stock (or other securities) so issued by the Company in any such transaction other than a Change in Control (the “Additional Termination Shares,” and, together with the Initial Termination Shares, the “Termination Shares”). The Company’s obligation to issue Additional Termination Shares shall cease immediately prior to the effective date of a Change in Control and, for the avoidance of doubt, Boustead shall not be entitled to any percentage of the securities issued by the Company in connection with the Change in Control. The issuance of Additional Termination Shares shall be subject to compliance with applicable law, including federal securities rules and the applicable rules of any national securities exchange.

 

 

6.  No Lock-UP; Leak-Out; Piggyback Registration Rights. The Termination Shares shall not be subject to any lock up agreement; provide, however, Boustead agree that once the Termination Shares are registered for resale by Boustead under an effective registration statement, it shall not sell on any trading day more than ten percent of the total trading volume of the common stock on such day. The Company shall give Boustead at least 5 days’ prior written notice of each filing by the Company of a registration statement under the Securities Act of 1933 (other than a registration statement on Form S-4 or Form S-8 or on any successor forms thereto) with the U.S. Securities and Exchange Commission. If requested by Boustead in writing within 3 days after receipt of any such notice, the Company shall, at the Company’s sole expense (other than the underwriting discounts, if any, payable in respect of the shares sold by the Boustead), register for resale all or, at Boustead’s option, any portion of the Termination Shares concurrently with the registration of the offer and sale of such other securities, all to the extent requisite to permit the public offering and resale of the Termination Shares through the Exchange or such other market as the common stock may trade at the time, and will use its reasonable best efforts through its officers, directors, auditors, and counsel to cause such registration statement to become effective as promptly as practicable. Boustead shall sign such other agreement further evidencing the leak out provision contained in this Section 5 as the Company may request. Any such agreement shall be consistent with the leak out agreement signed by other parties in connection with a Change in Control transaction.

 

7. Mutual Releases. In consideration for the promises, terms and conditions identified in this Agreement, each of the Parties and all of their agents, parent companies, subsidiaries, stockholders, members, directors, governors, officers, spouses, heirs, insurers, reinsurers, related companies, and past and present employees and contractors (as to each Party, such Party and such listed persons and entities, collectively, the “Releasing Parties”), hereby release and forever discharge the other Party and all of its agents, parent companies, subsidiaries, stockholders, members, directors, governors, officers, spouses, heirs, insurers, reinsurers, related companies, and past and present employees and contractors (as to each Party, such Party and such listed persons and entities, collectively, the “Released Parties”) from any and all actions, causes of actions, and claims including, without limitation, claims that could have been set forth by any Releasing Party against any Released Party, whether based upon statute, regulation, rule, contract, tort, or common law, to the extent arising prior to the date hereof, and excluding any actions, causes of actions, and claims arising pursuant to this Agreement.

 

 

8. California Civil Code Section 1542. The Parties acknowledge that they understand the provisions of California Civil Code section 1542, which provides:

 

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT THE CREDITOR OR RELEASING PARTY DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE AND THAT, IF KNOWN BY HIM OR HER, WOULD HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY.

 

Unless indicated otherwise by this Agreement, the Parties waive and relinquish every right or benefit that they had, have, or may have under California Civil Code section 1542. In connection with the releases being granted herein, the Parties acknowledge that they are aware that they may discover facts in addition to or different from those that they may now know or believe to be true with respect to the facts concerning the matters released herein, or the subject matter of this Agreement (the “Released Matters”), and that such facts may give rise to claims which are presently unknown, unanticipated, and unsuspected. It is the Parties’ intention to hereby fully, finally, and forever settle and release all Released Matters and that, in furtherance of such intention, the releases given herein will be and remain full and complete releases, notwithstanding the discovery or existence of any such additional or different facts. Each Party, on behalf of itself and its related Releasing Party, agrees not to file for itself or on behalf of any Releasing Party, any claim, charge, complaint, action, or cause of action against any Released Party related to the Released Matters, and in the event that any Releasing Party brings a suit against any Released Party in violation of this covenant, the Releasing Party agrees to pay any and all costs of the Released Party, including attorneys’ fees, incurred by such Released Parties in challenging such action. Any Released Party is an intended third-party beneficiary of this Agreement

 

9. Non-Disparagement. The Parties agree not to disparage the other Party, or the other Party’s directors, officers, managers, owners, counsel, clients, stockholders, present or former employees, independent contractors, agents, or other associated individuals, or otherwise take any action which could reasonably be expected to adversely affect the other Party’s personal or professional reputation or the general business interests or endeavors of the other Party, provided that the provisions herein shall not restrict any Party from complying with any applicable laws or regulations or providing truthful testimony or other information as may be required by any court of governmental authority. For purposes of this Agreement, “disparage” shall mean any negative statement, whether written or oral, about either Party, or either Party’s directors, officers, managers, owners, counsel, clients, stockholders, present or former employees, independent contractors, agents, or other associated individuals.

 

10. Surviving Provisions of the Engagement Letter. Sections 4, 5, 11, 13, 21 and 22 of the Engagement Letter shall survive this Agreement and the termination of the Engagement Letter pursuant hereto.

 

11. Miscellaneous.

 

(a) Entire Agreement. This Agreement represents the only agreement between the Parties concerning the subject matter hereof and supersedes all prior agreements, whether written or oral, relating hereto.

 

 

(b) Modification and Waiver. No purported amendment, modification, or waiver of any provision of this Agreement shall be binding on the Parties unless set forth in a written document signed by all Parties (in the case of amendments or modifications), or by the Party to be charged thereby (in the case of waivers). Any waiver shall be limited to the circumstances or events specifically referenced in the written waiver document and shall not be deemed to be a waiver of any other provision of this Agreement or of the same circumstances or events upon any recurrence thereof.

 

(c) Notices. Any notices given hereunder shall be in writing and may be delivered by hand, e-mail, fax, or first-class mail to the following addresses (or at such other email, fax number, or address as shall hereafter be specified by such party by like notice):

 

If to the Company:

 

Singing Day Sports, Inc.

Attn: Daniel Nelson, Chief Executive Officer

8355 East Hartford Rd., Ste. 100

Scottsdale, AZ, 85255

Email: [Redacted]

 

with a copy (which shall not constitute notice) to:

Bevilacqua PLLC 1050 Connecticut Avenue, NW Washington, DC 20036 Attention: Louis A. Bevilacqua Email: [Redacted]

 

If to Boustead:

 

Boustead Securities, LLC

Attn: Lincoln Smith, CEO

6 Venture, Suite 395

Irvine, CA 92618

Email: [Redacted]

 

with a copy (which shall not constitute notice) to:

 

Christopher P. Parrington, Esq.

Boustead & Company Limited

P.O. Box 118

Chaska, MN 55318

Email: [Redacted]

 

 

(d) Assignment. This Agreement shall be binding upon and inure to the benefit of the Parties and their successors and assigns, and the rights and obligations of the Parties under this Agreement may not be assigned, sold, or otherwise transferred by any Party, by operation of law or otherwise, without the prior written consent of the other Party.

 

(e) Execution. The Parties understand and agree that this Agreement may be executed in counterparts and transmitted electronically, both of which shall be deemed to be an original, but when taken together, shall constitute one and the same agreement.

 

(f) Severability. If any term of this Agreement is deemed unenforceable, void, voidable or illegal, such term shall be deemed severable from all other terms of this Agreement, and this Agreement, as amended, shall otherwise continue in full force and effect.

 

(g) Governing Law; Dispute Resolution. This Agreement shall be deemed to have been made in the State of Delaware, United States of America, and shall be construed, and the rights and liabilities determined, in accordance with the laws of the State of Delaware, without regard to the conflicts of laws rules of such jurisdiction. Any controversy or claim relating to or arising from this Agreement (a “Dispute”) shall be settled, as applicable, in federal court located in Scottsdale, Arizona. Should a Dispute not rise to meet the qualifications of filing in federal court in Scottsdale, Arizona, then the Dispute shall be resolved by arbitration in accordance with the Arbitration Rules of FINRA as such rules may be modified herein or as otherwise agreed by the Parties in controversy. The forum for arbitration shall be Maricopa County, Arizona. Following thirty (30) days’ notice by any Party of intention to invoke arbitration, any Dispute arising under this Agreement and not mutually resolved within such thirty (30) day period shall be determined by the arbitrators upon which the parties agree. In the event a suit, action, arbitration, or other proceeding of any nature whatsoever, including, without limitation, any proceeding under the U.S. Bankruptcy Code, is instituted by any part to interpret or enforce any provision of this Agreement, then the prevailing Party shall be entitled to recover from the other Party its reasonably attorneys’, paralegals’, accountants’, or other experts’ fees, and all other fees, costs, and expenses actually incurred and reasonably necessary in connection herewith.

 

(h) TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH OF THE PARTIES HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTY HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

 

[Signature page follows]

 

 

IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed and delivered as of the date first set forth above.

 

	Signing Day Sports, Inc.
	By:	/s/ Daniel Nelson
	Name:	Daniel Nelson
	Title:	Chief Executive Officer
	Boustead Securities, LLC
	By:	/s/ Lincoln Smith
	Name:	Lincoln Smith
	Title:	Chief Executive Officer

 

 

 

 

Exhibit 99.1

 

Signing Day Sports Signs Binding Term Sheet to Acquire Majority Equity Interest in High Growth Sports Gaming Technology Company Swifty Global

 

Acquisition Expected to Mark New Growth Strategy

 

SCOTTSDALE, Arizona, September 19, 2024 (NewMediaWire)- Signing Day Sports, Inc. (“Signing Day Sports” or the “Company”) (NYSE American: SGN), the developer of the Signing Day Sports app and platform to aid high school athletes in the recruitment process, today announced the signing of a binding term sheet to acquire 95-99% of the issued and outstanding shares of Dear Cashmere Group Holding Company, doing business as Swifty Global (“Swifty”), a global sports and casino technologies company, and that this acquisition is expected to be the first transaction of its newly initiated growth strategy to buy and build companies in the sports and casino technology industry and other synergistic companies. The transaction is structured as an all equity deal meaning that Signing Day Sports will acquire such percentage of Swifty through the issuance of its securities to the controlling stockholders of Swifty. Signing Day Sports is not required to make any cash payment to Swifty in connection with the acquisition of the Swifty equity securities.

 

Swifty is led by British CEO and technology entrepreneur James Gibbons. Swifty’s technology is scalable and GLI-certified and it holds gaming licenses in the UK, Ireland, South Africa, Curacao, and is expected to obtain a gaming license in Malta in the near future. Swifty's in-house development team has developed GLI-certified software for the sports gaming sector. This acquisition will enable Signing Day Sports to reduce development costs while accelerating its product development and rollout plans.

 

In addition to its SaaS-based gaming software, which Swifty offers to online gambling operators under a revenue-sharing model, Swifty also serves its own licensed clients in online sports betting and casino gaming in a limited number of jurisdictions. Swifty, which is debt-free, achieved revenue of over $128 million and net profit of approximately $2.44 million in the fiscal year ended December 31, 2023, despite significant investments of nearly $3.1 million in software development and licensing.

 

Swifty’s growth strategy is built on three key pillars: (i) consumer-focused online sportsbook and casino operations (B2C), (ii) SaaS gaming software licensing, and (iii) the acquisition of smaller operators, which will be migrated onto Swifty’s proprietary platform.

 

Swifty CEO James Gibbons has over 20 years of experience in building and creating robust, secure and easy to use software solutions. James is a serial entrepreneur who created his first company at age 23, a mobile voucher app across Apple, Android and Blackberry devices, eventually selling it to a company based in the US. Prior to joining Swifty as CEO, James led the Digital Visitor Experience team at Expo 2020 Dubai. James is supported by a team of more than 30 staff including a strong in-house development, trading and operational team. Swifty Chairman Nicolas Link is also a serial entrepreneur and seasoned in global mergers, acquisitions and capital markets.

 

 

Swifty’s common stock trades on the Pink market tier of OTC Markets Group under the ticker DRCR, and had been preparing to uplist to a national securities exchange in order to unlock its true value. The acquisition of Swifty by Signing Day Sports is intended to result in the combined company being traded on NYSE American. Swifty will continue to operate under the Swifty management team led by James Gibbons, while Signing Day Sports will become a subsidiary of the publicly listed company. This acquisition is expected to provide Swifty with the necessary capital to fuel accelerated growth.

 

Signing Day Sports, a software company that went public less than a year ago on the NYSE American, has launched a sports SAAS model application designed to help aspiring athletes gain exposure to college and professional organizations, increasing their chances of securing athletic scholarships, roster opportunities, contracts, and NIL endorsements. Since relaunching in December 2022, the platform had more than 10,000 registered users as of August 15, 2024,   with most registered for football recruitment and a significant number for men’s and women’s soccer. Signing Day Sports plans to continue to add new proprietary features to its app. The company is now planning to expand into other sports while developing integrated revenue streams to monetize its growing user base. Signing Day Sports expects that the acquisition of Swifty will allow it to leverage Swifty’s in-house development team to reduce costs and accelerate product development and rollout plans.

 

Swifty CEO James Gibbons commented: “We are delighted to have signed a binding term sheet with Signing Day Sports, following months of close collaboration. The term sheet establishes the deal framework and valuation. Our team has worked tirelessly over the past four years to develop and grow the business organically in a profitable and cash positive manner with no debt and minimal dilution, in a highly regulated sector, obtaining numerous licenses and regulatory approvals globally which we believe demonstrates our ability to successfully execute a dynamic business plan in multiple jurisdictions. After three years of software development and millions of dollars of investment, the company is now perfectly positioned for rapid growth and our acquisition by Signing Day Sports provides Swifty the platform to execute its growth plans”.

 

Signing Day Sports CEO Daniel Nelson commented: “It is with great excitement that we can announce the signing of a binding term sheet with Swifty Global to be the start of our new growth strategy of buying and building sports technology and casino gaming companies and other companies that are synergistic with our business.  I want to thank Nick, James and their team for their vision and insights that led to this agreement.  It was clear from the beginning that both Signing Day Sports and Swifty had great alignment and synergy and I believe we can build an exciting global sports technology platform together.  We both recognize there is a lot of hard work and important decisions still to be made, but we are confident that together, we will make powerful decisions that will build Signing Day Sports into a leading global sports technology company”.

 

Terms of the Transaction

 

At the closing of the expected acquisition, Signing Day Sports will acquire from James Gibbons and Nicolas Link, being the sellers, the common stock and preferred stock of Swifty held by them constituting at least 95% of the voting power of Swifty and at least 95% of the economic value of Swifty. Additional sellers holding Swifty common stock or preferred stock may enter into substantially identical agreements with Signing Day Sports and also sell their Swifty capital stock to Signing Day Sports, which would increase the aggregate percentage of Swifty acquired.  

 

 

The sellers will receive a number of shares of Signing Day Sports common stock that is equal to 19.99% of the issued and outstanding common stock of Signing Day Sports. The balance of the shares that Signing Day Sports must issue to the sellers will be in the form of convertible preferred stock that has no voting or dividend rights. The preferred stock will convert into common stock following shareholder approval and the clearance of a new initial listing application with NYSE American, ensuring compliance with NYSE American regulations. Signing Day Sports legacy shareholders are expected to retain 8.24% of the post-transaction company’s shares, with the remaining 91.76% being issued to the sellers and the other stockholders of DRCR.

 

The transaction is based on an assumed equity value of $14 million for Signing Day Sports and $156 million for Swifty. To support the transaction, both companies will collectively seek to raise at least $2 million in financing, with the proceeds split equally. These funds will be used for working capital, including the payment of outstanding liabilities of Signing Day Sports. Any additional financing required for the transaction will be mutually agreed upon.

 

At the closing, James Gibbons will become the Chief Executive Officer of Signing Day Sports and remain the Chief Executive Officer of Swifty. Signing Day Sports management will remain the management of the Signing Day Sports subsidiary that will be established in connection with the acquisition.

 

The post-Closing board of Signing Day Sports will consist of five members, including at least three directors that qualify as independent under NYSE American rules. At the closing, two Signing Day Sports board members will resign, and Swifty will appoint two directors to fill the vacancies. Swifty’s appointees will be independent or executive directors, depending on the type of director who resigns.

 

Signing Day Sports will hold a shareholder meeting post-closing to, among other things, approve the conversion of the preferred stock issued to the sellers into common stock and elect a new board of directors of Signing Day Sports. The Signing Day Sports board will continue to have five members. Signing Day Sports’ pre-closing board will nominate one board member. Swifty’s pre-closing board will nominate two independent directors. Swifty’s pre-closing board will also nominate one additional executive director. One independent director will be jointly nominated by both Signing Day Sports and Swifty jointly.

 

After the transaction, Signing Day Sports will consolidate Swifty’s financial statements and operate Swifty as a subsidiary. Signing Day Sports’ existing assets will be contributed into a newly formed subsidiary, allowing the combined company to focus on the integrated business.

 

Both Signing Day Sports and Swifty will complete due diligence before the transaction closes. The closing is anticipated by October 31, 2024. The closing is subject to the entry into definitive stock purchase agreement(s) and customary closing conditions and no assurance can be given that the closing will occur.

 

The sellers and the officers and directors of Signing Day Sports will be subject to a three-month lock-up period following the closing.

 

 

If the term sheet is terminated due to a material breach, the defaulting party will be liable for a $500,000 break-up fee. Additionally, if the binding term sheet is terminated by Signing Day Sports for any reason other than an undisputable uncured material breach by Swifty or a seller, then one-half of all net funds (after expenses) raised in any capital raising transaction by Signing Day Sports will be paid to Swifty (to the extent not already loaned to Swifty) as an additional break-up fee and any loans by Signing Day Sports of amounts raised to Swifty will be forgiven.

 

Advisors to the transaction include Maxim Group LLC, which is serving as exclusive financial advisor to Swifty. Lucosky Brookman LLP is serving as counsel to Swifty. Bevilacqua PLLC is serving as counsel to Signing Day Sports. 

 

A copy of the Term Sheet will be filed as an exhibit to a current report on Form 8-K to be filed by Signing Day Sports with the U.S. Securities and Exchange Commission (“SEC”) on or about the date of this press release. All parties desiring details regarding the terms and conditions of the proposed business combination are urged to review that Form 8-K and the exhibits attached thereto, which will be available at the SEC’s website at www.sec.gov. 

 

For further information about Signing Day Sports and Swifty, please see their communication channels listed below:

 

Website: https://swifty.global

X: @swiftyglobal

Telegram: @swiftyglobal

Email: hello@swifty.global

 

Website: https://signingdaysports.com

Ecommerce Website: https://signingdayshop.com

Investor Relations Website: https://ir.signingdaysports.com

X: @sdsports

Email: support@signingdaysports.com

 

Forward-Looking Statements

 

This press release contains “forward-looking statements” that are subject to substantial risks and uncertainties. All statements, other than statements of historical fact, contained in this press release are forward-looking statements. Forward-looking statements contained in this press release may be identified by the use of words such as “may,” “could,” “will,” “should,” “would,” “expect,” “plan,” “intend,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “project” or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions. You should not place undue reliance on forward-looking statements because they involve known and unknown risks, uncertainties and other factors, including without limitation, the Company’s ability to complete the acquisition of Swifty and integrate its business, the ability of the Company, the sellers and Swifty to enter into definitive stock purchase agreement(s), obtain all necessary consents and approvals in connection with the acquisition, obtain NYSE American clearance of a new initial listing application in connection with the acquisition, obtain shareholder approval of the matters to be voted on at the shareholders’ meeting described in the press release, obtain sufficient funding to maintain operations and develop additional services and offerings, market acceptance of the Company’s current products and services and planned offerings, competition from existing online and retail offerings or new offerings that may emerge, impacts from strategic changes to the Company’s business on its net sales, revenues, income from continuing operations, or other results of operations, the Company’s ability to attract new users and customers, increase the rate of subscription renewals, and slow the rate of user attrition, the Company’s ability to retain or obtain intellectual property rights, the Company’s ability to adequately support future growth, the Company’s ability to comply with user data privacy laws and other current or anticipated legal requirements, and the Company’s ability to attract and retain key personnel to manage its business effectively. These risks, uncertainties and other factors are described more fully in the section titled “Risk Factors” in the Company’s periodic reports which are filed with the Securities and Exchange Commission. These risks, uncertainties and other factors are, in some cases, beyond our control and could materially affect results. If one or more of these risks, uncertainties or other factors become applicable, or if our underlying assumptions prove to be incorrect, actual events or results may vary significantly from those implied or projected by the forward-looking statements. No forward-looking statement is a guarantee of future performance. Forward-looking statements contained in this announcement are made as of this date, and the Company undertakes no duty to update such information except as required under applicable law.

 

 

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v3.24.3

Cover	Sep. 18, 2024
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Sep. 18, 2024
Entity File Number	001-41863
Entity Registrant Name	SIGNING DAY SPORTS, INC.
Entity Central Index Key	0001898474
Entity Tax Identification Number	87-2792157
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	8355 East Hartford Rd.
Entity Address, Address Line Two	Suite 100
Entity Address, City or Town	Scottsdale
Entity Address, State or Province	AZ
Entity Address, Postal Zip Code	85255
City Area Code	480
Local Phone Number	220-6814
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, par value $0.0001 per share
Trading Symbol	SGN
Security Exchange Name	NYSEAMER
Entity Emerging Growth Company	true
Elected Not To Use the Extended Transition Period	false

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