United States securities and exchange commission logo
December 7, 2022
Daniel Nelson
Chief Executive Officer
Signing Day Sports, Inc.
8355 E Hartford Dr. Suite 100
Scottsdale, AZ 85255
Re: Signing Day Sports,
Inc.
Draft Registration
Statement on Form S-1
Submitted November
8, 2022
CIK No. 0001898474
Dear Daniel Nelson:
We have reviewed your draft registration statement and have the
following comments. In
some of our comments, we may ask you to provide us with information so
we may better
understand your disclosure.
Please respond to this letter by providing the requested
information and either submitting
an amended draft registration statement or publicly filing your
registration statement on
EDGAR. If you do not believe our comments apply to your facts and
circumstances or do not
believe an amendment is appropriate, please tell us why in your
response.
After reviewing the information you provide in response to these
comments and your
amended draft registration statement or filed registration statement, we
may have additional
comments.
Draft Registration Statement on Form S-1 submitted November 8, 2022
Prospectus Summary
Our Historical Performance, page 1
1. Please disclose that
your auditors have expressed substantial doubt about your ability to
continue as a going
concern.
2. Please disclose that
upon the consummation of this offering, you will grant options to
certain employees and
officers to purchase shares of common stock. State the number of
options and the persons
to whom you will grant options.
Daniel Nelson
Signing Day Sports, Inc.
December 7, 2022
Page 2
Our Corporate History and Structure, page 6
3. Tell us and disclose in your financial statements how you accounted
for the July 11, 2022
Agreement and Plan of Merger between SDS LLC - AZ, SDSF LLC, SDSB LLC,
and
SDS Inc. - DE (the Merger Agreement ).
4. In your discussion regarding the July 11, 2022 Merger Agreement you
mention "claims
related to certain simple agreements for future equity and convertible
notes." Please
disclose detailed information about these simple agreements for future
equity and
convertible notes.
Summary of Risk Factors, page 9
5. We note that your officers and directors currently hold 59.2% of the
outstanding shares,
including your Chief Executive Officer who holds 35% of the
outstanding shares. Clearly
disclose in the prospectus summary and risk factor section that that
your executive officers
and directors will be able to exercise significant influence over all
matters requiring
shareholder approval following the offering and disclose their
percentage of voting power.
Risk Factors, page 11
6. We note recent instances of extreme stock price run-ups followed by
rapid price declines
and stock price volatility seemingly unrelated to company performance
following a
number of recent initial public offerings, particularly among
companies with relatively
smaller public floats. Revise to include a separate risk factor
addressing the potential for
rapid and substantial price volatility and any known factors
particular to your offering that
may add to this risk and discuss the risks to investors when investing
in stock where the
price is changing rapidly. Clearly state that such volatility,
including any stock-run up,
may be unrelated to your actual or expected operating performance and
financial
condition or prospects, making it difficult for prospective investors
to assess the rapidly
changing value of your stock.
7. Please revise your disclosure that your business, financial condition
and results of
operations could be materially adversely affected by the evolving
situation related to
COVID-19. Revise to specifically discuss the impact that the COVID-19
pandemic has
FirstName LastNameDaniel Nelson
had on your business to date, rather than presenting the impacts as
hypothetical. Please
Comapany NameSigning
quantify the impactDay Sports,
on your Inc. and any COVID-related costs
incurred.
revenues
December 7, 2022 Page 2
FirstName LastName
Daniel Nelson
FirstName LastNameDaniel Nelson
Signing Day Sports, Inc.
Comapany7,
December NameSigning
2022 Day Sports, Inc.
December
Page 3 7, 2022 Page 3
FirstName LastName
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Results of Operations, page 34
8. You state that the increase in revenues in 2021 was due to an increase
in customers and
the increase in general and administrative expenses was due to an
increase in operations.
Please discuss the underlying factors that caused the increase in each
of these line items.
To the extent material, disclose the total number of customers for
each period presented
and separately disclose the number of customers who use the free trial
model versus the
number of paying customers. Refer to Item 303(a)(3) of Regulation S-K
and SEC Release
33-8350.
Business
Marketing and Sponsorship Agreements, page 56
9. We note that under your sponsorship agreement with Goat Farm Sports,
you indicate that
you will have access to athlete data. Please explain the nature of the
data collected under
this agreement or other agreements and how athlete data is used or
intended to be used in
your business. Include appropriate risk factor disclosure detailing
the risks and challenges
of managing and safeguarding information regarding minors.
Report of Independent Registered Public Accounting Firm, page F-2
10. We note that your independent accounting firm issued an audit report
after it withdrew
registration from the PCAOB. Please provide an audit report issued by
a firm registered
with the PCAOB at the time of issuance.
Consolidated Balance Sheets as of December 31, 2021 and 2020, page F-4
11. Please disclose the name of the company audited at the top of each
financial statement
included in the filing. As currently presented, it is not clear if the
audit report relates to
the correct financial statements. We refer to guidance in Item 3 of
Regulation S-X.
Consolidated Statements of Operations, page F-5
12. Please present cost of revenue in accordance with Item 5-03 of
Regulation S-X.
Note 1 - Principal Business Activity and Significant Accounting Policies
Internally Developed Software, page F-9
13. Please explain in more detail your statement that, "It is at least
reasonably possible that the
estimate of recoverability will change in the near term." Disclose in
your critical account
estimates if internally developed software is at risk of impairment.
Daniel Nelson
FirstName LastNameDaniel Nelson
Signing Day Sports, Inc.
Comapany7,
December NameSigning
2022 Day Sports, Inc.
December
Page 4 7, 2022 Page 4
FirstName LastName
Note 12 - Subsequent Events, page F-17
14. We note that in September 2022, 1,385,500 stock options were granted.
Please provide us
an analysis that includes the date and amount of each stock option
granted along with
estimated fair value of the underlying shares of common stock.
Reconcile and explain the
differences between the fair values determined on each grant date,
including the difference
between the most recent grant date fair value and the midpoint of your
offering range.
This reconciliation should describe significant intervening events
within the company and
changes in assumptions with the valuation methodologies employed that
explain the
changes in fair value of your common stock up to the filing of the
registration statement.
Continue to provide us with updates to the above analysis for all
equity related
transactions through the effectiveness date of the registration
statement.
General
15. Please supplementally provide us with copies of all written
communications, as defined in
Rule 405 under the Securities Act, that you, or anyone authorized to
do so on your behalf,
present to potential investors in reliance on Section 5(d) of the
Securities Act, whether or
not they retain copies of the communications.
You may contact Inessa Kessman, Senior Staff Accountant, at
202-551-3371 or Robert
Littlepage, Accounting Branch Chief, at 202-551-3361 if you have questions
regarding
comments on the financial statements and related matters. Please contact Charli
Gibbs-Tabler,
Staff Attorney, at 202-551-6388, or Jan Woo, Legal Branch Chief, at
202-551-3453 with any
other questions.
Sincerely,
Division of
Corporation Finance
Office of
Technology
cc: Louis Bevilacqua