Signing Day Sports, Inc. (NYSE American: SGN), a company specializing in computer processing and data preparation services, disclosed a material definitive agreement and an issuance of equity securities in an 8-K filing with the Securities and Exchange Commission today.
On Monday, the Delaware-incorporated firm entered into a letter agreement with its outside securities counsel, Bevilacqua PLLC (BPLLC). This agreement amends a previous engagement between the two parties, outlining that Signing Day Sports owes BPLLC $684,350.98 for services rendered up to June 30, 2024.
Payment of these outstanding fees is deferred until the company's next significant financial transaction or a business combination. If the proceeds from such a transaction are under $2 million, the company will pay 20% of the net proceeds towards the outstanding fees. Should proceeds exceed $2 million, the full outstanding amount will be paid.
Furthermore, as part of the agreement for deferring the fees, Signing Day Sports has issued BPLLC a pre-funded warrant to purchase 2.5 million shares of common stock at $0.01 per share. This warrant comes with piggyback registration rights and a beneficial ownership limitation of 4.99%, which can be adjusted with a 61-day notice period. The warrant becomes exercisable upon approval from the NYSE American or if Signing Day Sports is no longer listed on this exchange.
The issuance of the BPLLC Warrant is exempt from registration under the Securities Act of 1933, pursuant to Section 4(a)(2) and/or Rule 506(b) of Regulation D, as it constitutes a private offering to a single accredited investor.
In other recent news, Signing Day Sports, Inc. has announced an amendment to the employment agreement with its CEO, Daniel Nelson. The updated terms, effective as of July 9, 2024, revise the severance payment conditions for Nelson.
If Nelson is terminated without cause, he will receive severance payments equivalent to his base salary at the time of termination, distributed over 12 monthly installments. In the event of a termination coinciding with a Change of Control, Nelson is to be compensated with half of his base salary in effect at the time of such change, paid over six months.
This adjustment to the executive compensation package is aimed at clarifying the conditions under which severance is paid, potentially smoothing transitions in executive leadership. The severance payments are subject to Nelson providing a release of any claims against the company. The full details of the amendment are outlined in Exhibit 10.1 of the 8-K filing by Signing Day Sports, Inc.
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