Signing Day Sports Enters into Common Stock Purchase Agreement with Tumim Stone Capital LLC to Support Strategic Opportunities and Future Growth Initiatives

Rhea-AI Summary

Signing Day Sports, Inc. (SGN) has entered into a Common Stock Purchase Agreement with Tumim Stone Capital LLC, providing the Company with the right to sell common stock over a 24-month term. The Company believes this transaction provides flexibility and capability to support future growth initiatives. The successful IPO resulted in gross proceeds of $6 million and net proceeds of approximately $4.8 million. The Company plans to use the net proceeds from any sales of common stock for working capital and general corporate purposes.

Insights

Financial Analyst

Signing Day Sports, Inc.'s recent Common Stock Purchase Agreement with Tumim Stone Capital LLC introduces a significant financing mechanism into the company's capital structure. This equity financing facility provides the company with a flexible option to raise capital over the next 24 months. It is crucial to assess the potential dilutive impact of such an agreement on current shareholders. By potentially increasing the number of shares outstanding, the earnings per share (EPS) could be diluted if the company opts to sell additional stock. However, the absence of a firm commitment to sell shares provides the company with the strategic discretion to raise funds as needed without immediate dilution.

From a financial perspective, this agreement suggests confidence from Tumim Stone Capital in the company's business model and future prospects. The fact that the company has no immediate plans to raise capital post-IPO indicates a stable financial position, with an IPO that brought in net proceeds of approximately $4.8 million. Investors should monitor the company's use of this facility, as strategic use of the funds could fuel growth initiatives and potentially enhance shareholder value in the long term.

Market Research Analyst

The partnership with Tumim Stone Capital could be interpreted as a positive signal in the market, reflecting investor confidence in Signing Day Sports' niche in aiding high school athletes with recruitment. The sports recruitment market has seen growth due to increasing digitalization and the use of analytics in scouting. The strategic use of the capital raised through this agreement could allow Signing Day Sports to invest in product development, marketing and possibly acquisitions to increase market share and competitive advantage.

It's important to analyze the company's market positioning and the competitive landscape. As Signing Day Sports continues to develop its platform, the company could potentially disrupt traditional recruitment processes. The additional capital flexibility may enable the company to respond rapidly to market opportunities or challenges, which is essential in the fast-evolving tech and sports sectors.

Legal Expert

The legal framework governing the Common Stock Purchase Agreement, particularly the reliance on Section 4(a)(2) of the Securities Act and Regulation D for the issuance of shares, is a key consideration for the company. This reliance indicates that the offering is aimed at accredited investors and is not subject to the same regulatory requirements as a public offering. The requirement of a Resale Registration Statement for the resale of the shares is a standard regulatory step to ensure compliance and transparency.

Investors should be aware that the issuance of unregistered securities carries certain restrictions and the company's adherence to these legal requirements is crucial to prevent potential legal issues that could affect its reputation and financial health. Furthermore, the statement that the press release does not constitute an offer to sell securities is a standard disclaimer to comply with securities laws regarding public communications about stock offerings.

SCOTTSDALE, Ariz, Jan. 05, 2024 (GLOBE NEWSWIRE) -- 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 that it has entered into a Common Stock Purchase Agreement (the “Purchase Agreement”) with Tumim Stone Capital LLC (“Tumim”).

Under the Purchase Agreement, the Company will have the right, under a committed equity financing facility, to sell to Tumim the Company’s common stock from time to time over the approximately 24-month term of the Purchase Agreement, subject to certain limitations and the satisfaction of certain conditions, including the filing and effectiveness of a registration statement relating to resale of the shares (the “Resale Registration Statement”) with the U.S. Securities and Exchange Commission (the “SEC”) as required under the Purchase Agreement and a Registration Rights Agreement between the Company and Tumim (the “Registration Rights Agreement”).

Sales of common stock, and the timing of any sales, are solely at the option of the Company and the Company is under no obligation to sell securities under this arrangement. The price, amount, and maximum number of shares sold per sale will be determined by the terms of the Purchase Agreement.

“We decided to enter into this agreement with Tumim as we believe they have a strong fundamental understanding of our business, and are an ideal strategic investor to support any financial needs that may arise,” said Daniel Nelson, Chief Executive Officer of Signing Day Sports. “We have no immediate plans to raise capital following our successful IPO, which resulted in gross proceeds of $6 million and net proceeds of approximately $4.8 million. However, we believe this transaction provides additional flexibility and capability to take advantage of strategic opportunities and future growth initiatives if and when they may arise.”

The Company expects to use net proceeds from any sales of common stock under the Purchase Agreement for working capital and general corporate purposes, including to support its future growth.

The issuance of the shares under the Purchase Agreement will not be registered under the Securities Act of 1933, as amended (the “Securities Act”), and will be issued in reliance on the exemption from registration requirements thereof provided by Section 4(a)(2) of the Securities Act and Regulation D promulgated thereunder. This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of any of the securities referred to in this press release in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or jurisdiction. Any offering of the Company’s common stock under the Resale Registration Statement referred to in this press release will be made only by means of a prospectus.

Additional information regarding the Purchase Agreement and the Registration Rights Agreement are available in the Company’s Current Report on Form 8-K, which will be filed with the SEC and made available at www.sec.gov and on the Company’s website.

About Signing Day Sports
Signing Day Sports' mission is to help student-athletes achieve their goal of playing college sports. Signing Day Sports' app allows student-athletes to build their Signing Day Sports' recruitment profile, which includes information college coaches need to evaluate and verify them through video technology. The Signing Day Sports app includes a platform to upload a comprehensive data set including video-verified measurables (such as height, weight, 40-yard dash, wingspan, and hand size), academic information (such as official transcripts and SAT/ACT scores), and technical skill videos (such as drills and mechanics that exemplify player mechanics, coordination, and development).  For more information on Signing Day Sports, go to https://ir.signingdaysports.com/overview/default.aspx.

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 inability to satisfy all of the conditions in the Purchase Agreement necessary to obligate Tumim to purchase the Company’s shares; the inability of the Company to access the full $25,000,000 committed equity financing facility, or a substantial portion thereof, due to the limitations in the Purchase Agreement, or otherwise; the risks that the trading volume and price limitations will limit the Company’s ability to access some or all of the committed equity financing facility; the inability of the Company to file the Resale Registration Statement with the SEC or the risk that such Resale Registration Statement is never declared effective, or it is declared effective later than expected, thereby impacting the Company’s ability to utilize the committed equity financing facility as desired; the Company's ability to obtain additional funding to develop additional services and offerings, market acceptance of the Company's offerings; competition from existing online offerings or new offerings that may emerge; impacts from strategic changes to our business on our 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 and third parties' abilities to protect 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 and uncertainties are, in some cases, beyond our control and could materially affect results. If one or more of these risks or uncertainties occur, 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.

Investor Contacts:
Crescendo Communications, LLC
212-671-1020
SGN@crescendo-ir.com

FAQ

What is the ticker symbol for Signing Day Sports, Inc.?

The ticker symbol for Signing Day Sports, Inc. is SGN.

What is the Common Stock Purchase Agreement with Tumim Stone Capital LLC?

The agreement provides the Company with the right to sell common stock over a 24-month term.

What were the gross and net proceeds from the successful IPO?

The successful IPO resulted in gross proceeds of $6 million and net proceeds of approximately $4.8 million.

How does the Company plan to use the net proceeds from any sales of common stock?

The Company plans to use the net proceeds for working capital and general corporate purposes.