Signing Day Sports, a platform that connects high school athletes with college coaches and recruiters, is looking to raise nearly $5 million in an initial public offering filed with the U.S. Securities and Exchange Commission.
The Scottsdale-based company plans to list its shares on the New York Stock Exchange and trade under the ticker symbol “SGN" with an initial public offering of 1.5 million shares priced between $4 and $6 a share.
At the low point of the proposed price range, Signing Day Sports' offering will raise $4.8 million after underwriting discounts, commissions and expenses, according to a September regulatory filing. The company would have a post-IPO market valuation of $36.9 million based on more than 9.2 million in outstanding shares of common stock.
Signing Day Sports’ IPO is downsized from its initial filing in May, consisting of 3.8 million shares at the same price range per share, which would have raised more than $15 million.
The company intends to use proceeds from the IPO for product and technology development, expansion of its sales team, marketing efforts and working capital, according to the regulatory filing.
Signing Day Sports did not respond to a request for comment on the timing for its IPO.
Signing Day Sports plans to recruit employees, boost subscriptions
Signing Day Sports was founded by former pro football player Dennis Gile in 2019. The company’s platform helps high school athletes get discovered by college coaches and recruiters nationwide for football, baseball, softball and soccer teams.
The company has a subscription-based business model, charging $25 a month or $250 a year. Players can upload their statistics, technical skill videos, academic information and more on the platform, while coaches can share information on their teams, sports clubs or programs as well as communicate with athletes.
Signing Day Sports has inked marketing and sponsorship agreements with the Louisville Slugger Hitting Science Center, the U.S. Army Bowl, the Texas High School Coaches Association and the Arizona Football Coaches Association.
As of Sept. 18, the company had 11 employees, the regulatory filing shows.
The company said it plans to recruit an offshore team to "improve efficiency and quality" of its platform as well as prioritize internal hires of engineers and developers to launch new features. It also expects to launch digital marketing campaigns to boost subscriptions and increase profitability, according to the regulatory filing.
Signing Day Sports reported 1,525 subscriptions in 2022, down from 3,810 a year prior.
Company has incurred net losses since inception
Despite its optimistic outlook to improve subscriptions and boost its technology, the company has incurred net losses since its inception.
In the regulatory filing, accountants expressed "substantial doubt about the company’s ability to continue as a going concern.”
Signing Day Sports generated $78,336 in revenue in 2022, compared with $340,984 in 2021. The company incurred a net loss of $6.7 million in 2022 and $8.8 million in 2021.
As of June 30, the company had cash and cash equivalents of $55,204.
The company’s executive officers and directors — including current CEO Daniel Nelson — will collectively own more than 12% of the company’s stock following its IPO.
Nelson will hold 841,851 shares, representing 5.5% of voting power. Gile will be company’s largest shareholder with 2.2 million shares, representing more than 15% of voting power.
Gile resigned as president of the company as part of a settlement agreement in a lawsuit with John Dorsey, the company’s former CEO. Signing Day Sports paid $800,000 to Gile to repurchase 600,000 shares of stock. Dorsey received $695,000 from that amount to satisfy the settlement with Gile, according to the regulatory filing.
Sportico reported that Gile received a $700,000 loan from Dorsey in April 2021 in exchange for 3% interest in the company plus proceeds. Later that year, Gile stepped down as CEO and Dorsey took the helm of the company. After Gile failed to pay the $600,000 remainder of the loan, Dorsey filed a lawsuit in Maricopa County Superior Court accusing Gile of breach of contract.
Gile filed a countersuit accusing Dorsey of deceiving him into giving up the CEO position and failing to facilitate $6 million in startup capital. Dorsey and Gile eventually settled the lawsuit in March.
