UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A Information
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant ☒
Filed by a Party other than the Registrant ☐
Check the appropriate box:
| ☐ | Preliminary Proxy Statement |
| ☐ | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
| ☒ | Definitive Proxy Statement |
| ☐ | Definitive Additional Materials |
| ☐ | Soliciting Material Pursuant to 240.14a-12 |
SIGNING DAY SPORTS, INC.
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check all boxes that apply):
| ☒ | No fee required |
| ☐ | Fee paid previously with preliminary materials |
| ☐ | Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11. |
SIGNING DAY SPORTS, INC.
8355 East Hartford Rd., Suite 100
Scottsdale, AZ 85255
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
to be held on October 10, 2024
TO THE STOCKHOLDERS OF SIGNING DAY SPORTS, INC.:
Dear Stockholder:
The board of directors (the Board) of Signing Day Sports, Inc. (the Company, we, us, or our) is soliciting proxies to be used at a special meeting of stockholders (the Special Meeting), which will be held on Thursday, October 10, 2024 at 10:00 a.m., Pacific Daylight Time, at our principal executive offices at 8355 East Hartford Rd., Suite 100, Scottsdale, Arizona 85255, for the following purposes:
(1) To approve one or more amendments of the Companys Second Amended and Restated Certificate of Incorporation to effect one or more reverse stock splits of the Companys common stock, at a ratio ranging from any whole number between 1-for-2 and 1-for-100 and in the aggregate not more than 1-for-100, inclusive, as determined by the Board in its discretion, subject to the Boards authority to abandon such amendments; and
(2) To approve an adjournment of the Special Meeting from time to time, to a later date or dates, if necessary or appropriate, under certain circumstances, including for the purpose of soliciting additional proxies in favor of the foregoing proposal in the event the Company does not receive the requisite stockholder vote to approve such proposal or to establish a quorum.
The foregoing items of business are more fully described in the proxy statement accompanying this notice or made available over the Internet. We are not aware of any other business to come before the Special Meeting.
Your attention is directed to the attached proxy statement accompanying this Notice for a more complete statement of matters to be considered at the Special Meeting.
The Board has fixed the close of business on September 16, 2024 as the record date (the Record Date) for a determination of stockholders entitled to notice of, and to vote at, the Special Meeting or any adjournment or postponement thereof. Only stockholders of record at the close of business on September 16, 2024 are entitled to notice and to vote at the Special Meeting and any adjournment or postponement thereof.
It is important that your shares are represented at the Special Meeting. We urge you to review the attached proxy statement and, whether or not you plan to attend the Special Meeting, please vote your shares promptly by casting your vote via the Internet or any other provided voting option, or, if you receive a full set of proxy materials by mail or request one be mailed to you, and prefer to mail your proxy, please complete, sign, date, and return your proxy in the pre-addressed envelope provided, which requires no additional postage if mailed in the United States. You may revoke your vote by submitting a subsequent vote over the Internet, by mail or by any other option provided for voting before the Special Meeting, or by voting in person at the Special Meeting.
If you plan to attend the Special Meeting, please notify us of your intentions. This will assist us with meeting preparations. If your shares are not registered in your own name and you would like to attend the Special Meeting, please follow the instructions contained in the Notice of Internet Availability of Proxy Materials that has been mailed to you, the attached proxy statement, and any other information forwarded to you by your broker, trust, bank, or other holder of record to obtain a valid proxy from it. Your proxy will be needed to gain admission to the Special Meeting and vote in person.
We look forward to seeing you at the Special Meeting.
| By Order of the Board of Directors, | |
| /s/ Daniel Nelson | |
| Daniel Nelson | |
| Chairman and Chief Executive Officer | |
|
Scottsdale, AZ Dated: September 20, 2024 |
Important
Notice Regarding the Availability of Proxy Materials for the Special Meeting to Be Held on October 10, 2024:
Our proxy statement is available at https://www.iproxydirect.com/SGN.
SIGNING DAY SPORTS, INC.
8355 East Hartford Rd., Suite 100
Scottsdale, AZ 85255
PROXY
STATEMENT
This
proxy statement and the accompanying proxy are being furnished with respect to the solicitation
of proxies by the Board for the Special Meeting. The Special Meeting is to be held at 10:00
a.m., Pacific Daylight Time, on Thursday, October 10, 2024, and at any adjournment(s) or
postponement(s) thereof, at the principal executive offices of the Company, located at 8355
East Hartford Rd., Suite 100, Scottsdale, Arizona 85255.
The
approximate date on which this proxy statement and the accompanying notice and form of proxy are intended to be sent or made available
to stockholders is on or about September 20, 2024. A proxy is your legal designation of another person to vote the stock you own. That
designee is referred to as a proxy holder. Designation of a particular proxy holder can be effected by completion of a written proxy,
or by voting via the Internet or by another provided voting option. If you return a proxy or vote by the Internet or other provided voting
option, Daniel Nelson, our Chief Executive Officer, Chairman and director, and Craig Smith, our Chief Operating Officer, will act as
your designated proxy holders for the Special Meeting and will vote your shares at the Special Meeting as you have instructed them on
the proxy. This way, your shares will be voted whether or not you attend the Special Meeting. Even if you plan to attend the Special
Meeting, we urge you to vote in one of the ways described below so that your vote will be counted even if you are unable or decide not
to attend the Special Meeting.
IMPORTANT
:
Please mark, date, and sign the enclosed proxy card and promptly return it in the accompanying postage-paid envelope or vote by fax,
telephone or the Internet to assure that your shares are represented at the Special Meeting.
TABLE
OF CONTENTS
i
QUESTIONS
AND ANSWERS ABOUT THIS PROXY MATERIAL AND VOTING
What
is a proxy statement?
A
proxy statement is a document that we are required by regulations of the Securities and Exchange Commission (the SEC) to
give you when we ask you to provide a proxy to vote your shares at the Special Meeting. Among other things, this proxy statement describes
the proposals on which stockholders will be voting and provides information about us.
We
are soliciting your proxy to vote at the Special Meeting and at any adjournment or postponement of the Special Meeting. We will use the
proxies received in connection with the following proposals:
As
a stockholder, you are invited to attend the Special Meeting, and are requested to vote on the proposals described in this proxy statement.
This proxy statement includes information that we are required to provide to you under SEC rules and is designed to assist you in voting
your shares.
How
do I attend the Special Meeting?
The
meeting will be held at the principal executive offices of the Company, located at 8355 East Hartford Rd., Suite 100, Scottsdale, Arizona
85255. If you plan to attend the Special Meeting, please notify us of your intentions. This will assist us with meeting preparations.
In
order to enter and attend the Special Meeting and vote in person, you will be required to bring your legal proxy and government-issued
photo identification. If your shares are registered in your own name, bring the proxy card delivered to you or request your proxy card
in advance of the Special Meeting by following the instructions contained in the Notice of Internet Availability of Proxy Materials that
was delivered to you. If your shares are not registered in your own name and you would like to attend the Special Meeting, please follow
the instructions contained in the Notice of Internet Availability of Proxy Materials that was delivered to you and any other information
forwarded to you by your broker, trust, bank, or other holder of record to obtain a valid proxy from it.
Who
mayattend the Special Meeting?
Only
record holders and beneficial owners of our common stock, par value $0.0001 per share (common stock), who owned common
stock on the Record Date are entitled to vote at the Special Meeting, or their duly authorized proxies, may attend the Special Meeting.
Who
is entitled to vote?
The
Board has fixed the close of business on September 16, 2024 as the Record Date for the determination of stockholders entitled to notice
of, and to vote at, the Special Meeting or any adjournment or postponement thereof. Only stockholders who owned common stock on the Record
Date are entitled to vote at the Special Meeting. Each stockholder who owned common stock on the Record Date is entitled to one vote
per share owned on that date. On the Record Date, there were 18,117,686 shares of common stock outstanding, and which were entitled to
a total of 18,117,686 votes.
1
What
is the difference between holding shares as a record holder and as a beneficial owner (holding shares in street name)?
If
your shares are registered in your name with our transfer agent, Securities Transfer Corporation, you are the record holder
of those shares. If you are a record holder, these proxy materials have been or may be provided directly to you by the Company or its
proxy delivery service.
If
your shares are held in a stock brokerage account, a bank or other holder of record, you are considered the beneficial owner
of those shares in street name. If your shares are held in street name, these proxy materials have been or may be forwarded
to you by that organization. The organization holding your account is considered to be the stockholder of record for purposes of voting
at the Special Meeting. As the beneficial owner, you have the right to instruct this organization on how to vote your shares. The majority
of our stockholders hold their shares in street name.
What
am I voting on?
There
are two (2) matters scheduled for a vote:
What
if another matter is properly brought before the Special Meeting?
The
Board knows of no other matters that will be presented for consideration at the Special Meeting. If any other matters are properly brought
before the Special Meeting, your proxy gives authority to the designated proxy holders to vote on such matters according to their best
judgment.
How
do I vote?
Stockholders
of Record
Record
holders of common stock have four methods of voting. If you are a record holder:
Beneficial
Owners of Shares Held in Street Name
Beneficial
owners of common stock also have four methods of voting. If you are a beneficial owner:
2
When
must my votes be received by?
All
shares entitled to vote and represented by a properly completed and executed proxy received before the Special Meeting and not revoked
will be voted at the Special Meeting as instructed in a proxy delivered before the Special Meeting. If you do not indicate how your shares
should be voted on a matter, the shares represented by your properly completed and executed proxy will be voted as the Board recommends
on each of the enumerated proposals, with regard to any other matters that may be properly presented at the Special Meeting and on all
matters incident to the conduct of the Special Meeting. If you wish to vote at the Special Meeting, see How do I attend the Special
Meeting? above. All votes will be tabulated by the inspector of election appointed for the Special Meeting, who will separately
tabulate affirmative and negative votes, abstentions and broker non-votes.
We
are providing Internet as well as telephone and fax proxy voting options to all stockholders. However, please be aware that you must
bear any third-party costs, such as usage charges from Internet access providers and telephone companies.
How
many votes do I have?
Each
share of common stock that you own as of the Record Date entitles you to one vote.
Is
my vote confidential?
Yes,
your vote is confidential. Only the proxy tabulator, inspector of election, designated proxies, and other persons who need access for
legal reasons will have access to your vote. This information will not be disclosed, except as required by law.
How
will my shares be voted if I give no specific instruction?
We
must vote your shares as you have instructed. If there is a matter on which a stockholder of record has given no specific instruction
but has authorized us generally to vote the shares, they will be voted as follows:
This
authorization would exist, for example, if a stockholder of record merely signs, dates and returns a proxy card but does not indicate
how the shares are to be voted on one or more proposals. If other matters properly come before the Special Meeting and you do not provide
specific voting instructions, your shares will be voted at the discretion of the proxies.
3
How
are votes counted?
Votes
will be counted by the inspector of election appointed for the Special Meeting, who will separately count, for Proposal 1 and Proposal
2, votes FOR, AGAINST, ABSTAIN, and broker non-votes.
What
is a broker non-vote?
If
you are a beneficial owner of shares held by a broker, bank, trust or other nominee and you do not provide your broker, bank, trustee
or other nominee with voting instructions, your shares may constitute broker non-votes. Broker non-votes occur on a matter
when the broker, bank, trustee or other nominee is not permitted under applicable stock exchange rules to vote on that matter without
instructions from the beneficial owner and instructions are not given. These matters are referred to as non-routine matters.
Any
broker non-votes will be counted as shares present for purposes of determining a quorum to the extent that the brokers, banks, trustees
or other nominees may use their discretionary authority to vote such shares on Proposal 1 and Proposal 2.
Each
of Proposal 1 and Proposal 2 is considered a routine matter. A broker, bank, trustee or other nominee may be permitted
to exercise its discretion with respect to a routine matter, which means there may be no broker non-votes in connection
with either matter.
What
is an abstention?
An
abstention (or an ABSTAIN vote) is a stockholders affirmative choice to decline to vote on a proposal. Abstentions
will be counted as shares present and entitled to vote at the Special Meeting, and therefore will be counted for purposes of determining
a quorum. Generally, unless otherwise provided by applicable law or the Companys Second Amended and Restated Certificate of Incorporation,
the Second Amended and Restated Bylaws, as amended, of Signing Day Sports, Inc. (the Bylaws), provide that an action of
our stockholders (other than the election of directors) is approved by the affirmative vote of a majority of the number of shares of
stock entitled to vote thereon and present in person, by remote communication, if applicable, or represented by proxy duly authorized
at the meeting and entitled to vote generally on the subject matter. With respect to Proposal 1, under applicable law, the votes cast
for such proposal must exceed the votes cast against such proposal by the stockholders entitled to vote at the Special Meeting for approval.
Abstentions and broker non-votes (if any) will have no effect on the approval of Proposal 1. No broker non-votes are expected to exist
in connection with Proposal 1 since brokers will be entitled to vote on this routine proposal. With respect to Proposal
2, if a quorum is represented at the Special Meeting, the affirmative vote of a majority of the number of shares of stock entitled to
vote thereon and present in person, by remote communication, if applicable, or represented by proxy duly authorized at the Special Meeting
and entitled to vote generally on the subject matter is required for approval; if a quorum is not represented at the Special Meeting,
the affirmative vote of the holders of a majority of the shares of stock entitled to vote thereof by the stockholders entitled to vote
at the meeting, present in person or represented by proxy is required for approval. Abstentions will have the same effect as votes AGAINST
Proposal 2. A broker non-vote will have no effect on the outcome of the vote for Proposal 2.
How
many shares must be present or represented to conduct business at the Special Meeting?
With
the exception of the approval of the Adjournment Proposal, a quorum is necessary to conduct business at the Special Meeting.
A quorum is established if one-third of the shares outstanding and entitled to vote at the Special Meeting are represented at such meeting,
either in person or by proxy, and entitled to vote thereat. Shares owned by the Company are not considered outstanding or considered
to be present at the Special Meeting. Abstentions will be counted as present for purposes of determining a quorum at the Special Meeting.
Similarly, broker non-votes will be counted as present for purposes of determining a quorum at the Special Meeting to the extent that
the brokers, banks, trustees or other nominees use their discretionary authority to vote such shares on Proposal 1 and Proposal 2. If
a quorum is not present, the Bylaws provide authority to adjourn the Special Meeting until a quorum is obtained to the chair of the Special
Meeting or the affirmative vote of the holders of a majority of the shares of stock entitled to vote thereof by the stockholders entitled
to vote at the meeting, present in person or represented by proxy.
4
How
many votes are needed for each proposal to pass?
If
a quorum is represented at the Special Meeting, the votes cast FOR must be by a majority
of the number of shares of stock entitled to vote thereon and present in person, by remote communication,
if applicable, or represented by proxy duly authorized at the Special Meeting and entitled to vote
generally on the subject matter.
If
a quorum is not represented at the Special Meeting, the votes cast FOR must be by the holders of a majority of the
shares of stock entitled to vote thereof by the stockholders entitled to vote at the meeting, present in person or represented by
proxy.
What
are the voting procedures?
You
may vote FOR, AGAINST or ABSTAIN on each of the proposals. You should specify your respective
choices on the proxy card or vote instruction form that was delivered to you or that you may request by following the information in
your Notice of Internet Availability of Proxy Materials.
Can
I change my vote or revoke my proxy?
If
you are a stockholder of record, you may revoke your proxy at any time prior to the vote at the Special Meeting. If you submitted your
proxy by mail, you must file with our Secretary a written notice of revocation or deliver, prior to the vote at the Special Meeting,
a valid, later-dated proxy. If you submitted your proxy by the Internet, you may revoke your proxy with a later Internet proxy. Attendance
at the Special Meeting will not have the effect of revoking a proxy unless you give written notice of revocation to the Companys
Secretary before the proxy is exercised or you vote in person at the Special Meeting. If you are a beneficial owner, you may vote by
submitting new voting instructions to your broker, bank or nominee, or, if you have obtained a legal proxy from your broker, bank or
nominee giving you the right to vote your shares, by attending the meeting and voting in person.
Who
is paying for the expenses involved in preparing and mailing this proxy statement?
All
of the expenses involved in preparing, assembling and mailing these proxy materials and all costs of soliciting proxies will be paid
by us. In addition to the solicitation by mail, proxies may be solicited by our officers and other employees by telephone or in person.
Such persons will receive no compensation for their services other than their regular salaries. Arrangements will also be made with brokerage
houses and other custodians, nominees and fiduciaries to forward solicitation materials to the beneficial owners of the shares held of
record by such persons, and we may reimburse such persons for reasonable out of pocket expenses incurred by them in forwarding solicitation
materials.
How
can I find out the results of the voting at the Special Meeting?
Preliminary
voting results will be announced at the Special Meeting. In addition, final voting results will be disclosed in a Current Report on Form
8-K that we expect to file with the SEC within four business days after the Special Meeting. If final voting results are not available
to us in time to file a Form 8-K with the SEC within four business days after the Special Meeting, we intend to file a Form 8-K to publish
preliminary results and, within four business days after the final results are known to us, file an additional Form 8-K to publish the
final results.
5
Do
the Companys officers and directors have an interest in any of the matters to be acted upon at the Special Meeting?
Certain
of our officers and directors have an interest in the Reverse Stock Split Proposal as a result of their ownership of shares of common
stock. See
Securities Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
. However,
we do not believe that our officers or directors have interests in the Reverse Stock Split Proposal that are different from or greater
than those of any of our other stockholders. Our officers and directors do not have an interest in Proposal 2.
I
share an address with another stockholder, and we received only one paper copy of the proxy materials. How may I obtain an additional
copy of the proxy materials?
The
Company has adopted a procedure called householding, which the SEC has approved. Under this procedure, if requested to
deliver proxy materials, we deliver a single copy of the proxy materials to multiple stockholders who share the same address unless we
have received contrary instructions from one or more of the stockholders. This procedure reduces our printing and mailing costs, and
the environmental impact of our stockholder meetings. Stockholders who participate in householding will continue to be able to access
and receive separate proxy cards. Upon written or oral request, we will deliver promptly a separate copy of the proxy materials to any
stockholder at a shared address to which we delivered a single copy of any of these documents.
To
receive a separate copy of the proxy statement and proxy card, you may contact us at the following address and phone number:
Office
of the Secretary
Signing
Day Sports, Inc.
8355
East Hartford Rd., Suite 100
Scottsdale,
AZ 85255
Telephone:
(480) 220-6814
Stockholders
sharing an address can also request delivery of a single copy of the proxy materials if they are receiving multiple copies by contacting
the address or telephone number above.
Stockholders
who hold shares in street name (as described below) may also contact their brokerage firm, bank, broker-dealer or other
similar organization to request information about householding.
Whom
should I contact with other questions?
If
you are a holder of the Companys shares and have any questions about how to vote or direct a vote in respect of your securities,
you may call our proxy service, Issuer Direct Corporation, by telephone at 919-481-4000 or email at proxy@issuerdirect.com.
6
TO
APPROVE ONE OR MORE AMENDMENTS OF THE COMPANYS SECOND AMENDED AND RESTATED CERTIFICATE OF INCORPORATION TO EFFECT ONE OR MORE
REVERSE STOCK SPLITS OF THE COMPANYS COMMON STOCK, AT A RATIO RANGING FROM ANY WHOLE NUMBER BETWEEN 1-FOR-2 AND 1-FOR-100 AND
IN THE AGGREGATE NOT MORE THAN 1-FOR-100, INCLUSIVE, AS DETERMINED BY THE BOARD IN ITS DISCRETION, SUBJECT TO THE BOARDS AUTHORITY
TO ABANDON SUCH AMENDMENTS
The
Board has adopted and is recommending that our stockholders approve one or more amendments of our Second Amended and Restated Certificate
of Incorporation (such amendments, the Amendments) to effect one or more reverse stock splits of the common stock at a
ratio of not less than one-for-two and not more than one-for-100 and in the aggregate at a ratio of not more than one-for-100, inclusive,
with the exact ratio for each reverse stock split within such range to be determined by the Board in its discretion (any such reverse
stock split, the Reverse Stock Split and any such ratio, the Reverse Split Ratio). In connection with any
Reverse Stock Split, the number of authorized shares of common stock will not be changed. Pursuant to the law of the State of Delaware,
our state of incorporation, the Board must adopt an Amendment and submit the Amendment to stockholders for their approval. The proposed
Amendment, one or more of which would be filed with the Secretary of State of the State of Delaware (the Secretary of State),
will be substantially in the form of
Annex A
to this proxy statement. Upon the effectiveness of any of such Amendments (the Reverse
Stock Split Effective Time), the issued and outstanding shares of common stock immediately prior to a Reverse Stock Split Effective
Time will be reclassified into a smaller number of shares such that a stockholder will own one new share of common stock for each two
(2) to 100 (or any number in between) and in the aggregate not more than 100, inclusive, shares of issued common stock held by such stockholder
immediately prior to a Reverse Stock Split Effective Time, as specified.
By
approving this proposal, stockholders will approve one or more Amendments and authorize the Board to file such Amendments and to abandon
such Amendments, as determined by the Board in its sole discretion. Upon receiving stockholder approval, the Board will have the authority,
but not the obligation, in its sole discretion, to elect, without further action on the part of the stockholders, whether to effect any
Reverse Stock Split and, if so, to determine the applicable Reverse Split Ratio from among the approved range described above and to
effect one or more Reverse Stock Splits by filing one or more Amendments with the Secretary of State. The Board reserves the right to
elect not to effect any Reverse Stock Split at any time prior to the effectiveness of the filing of any Amendment with the Secretary
of State, if it determines, in its sole discretion, and without further action on the part of the stockholders, that the proposal is
no longer in the best interests of the Company and its stockholders.
The
Boards decision as to whether and when to effect any Reverse Stock Split will be based on a number of factors, including market
conditions, the historical, existing and expected trading price of the common stock, the anticipated impact of such Reverse Stock Split
on the trading price and number of holders of the common stock, and the continued listing requirements of the NYSE American LLC (the
NYSE American).
Reasons
for Effecting One or More Reverse Stock Splits
To
avoid delisting from the NYSE American
.
The Companys common stock is listed on the NYSE American under the symbol
SGN. The NYSE Americans continued listing standard set forth in Section 1003(f)(v) of the NYSE American LLC Company
Guide (the Company Guide) provides that the NYSE American will normally consider suspending dealings in or delisting a
listed companys common stock selling for a substantial period of time at a low price per share, if the issuer shall fail to effect
a reverse split of such shares within a reasonable time after being notified that the NYSE American deems such action to be appropriate
under all the circumstances. In addition, Section 1003(f)(v) of the Company Guide provides that NYSE American may at any time, in view
of the circumstances in each case, suspend trading in or delist a listed security when in its opinion such security is unsuitable for
continued trading on the NYSE American.
7
NYSE
Regulation staff considers any company whose stock price falls below $0.30 over a 30-trading day average to raise concerns that the companys
common stock may not be suitable for auction market trading. In accordance with Section 1003(f)(v) of the Company Guide, NYSE Regulation
staff deems it may be appropriate for such a company to effect a reverse stock split. NYSE Regulation staff generally view trading at
or below a price of $0.10 to be abnormally low. As of May 14, 2024, the common stock price has been below $0.30 over a 30-trading
day average, and has therefore been subject to such concerns and it is therefore deemed by NYSE Regulation that it may be appropriate
for the Company to effect a reverse stock split.
Moreover,
NYSE Regulation staff generally views trading at or below a price of $0.10 to be abnormally low and no longer suitable for listing pursuant
to Section 1003(f)(v) of the Company Guide.Since August 30, 2024, the common stock has traded below $0.15 per share, therefore
raising concerns that the NYSE American will suspend trading in and delist the common stock.
Management
and the Board have considered the potential harm to us and our stockholders should the NYSE American delist the common stock from the
NYSE American. Delisting could adversely affect the liquidity of the common stock since alternatives, such as the over-the-counter markets
maintained by OTC Markets Group, Inc., are generally considered to provide for less efficient trading and access to investors. An investor
likely would find it less convenient to sell, or to obtain accurate quotations in seeking to buy, common stock on an over-the-counter
market. Many investors likely would not buy or sell common stock due to difficulty in accessing over-the-counter markets, policies preventing
them from trading in securities not listed on a national exchange or for other reasons. The Board believes that a Reverse Stock Split
is a potentially effective means for us to increase the per share market price of common stock and to avoid, or at least mitigate, the
likely adverse consequences of the common stock being delisted from the NYSE American by producing the immediate effect of increasing
the bid price of common stock.
As
of September 16, 2024, the common stock closed at $0.1278 per share on the NYSE American. A Reverse Stock Split, if effected, would likely
have the immediate effect of increasing the price of the common stock as reported on the NYSE American, therefore reducing the risk that
the common stock could be delisted from the NYSE American.
To
avoid defaulting under our senior secured promissory notes.
In addition, if we are unable to maintain the listing and trading
of the common stock on the NYSE American, an Event of Default (referred to herein as an FF Notes Event of Default),
as defined by the senior secured promissory note issued by the Company to FirstFire Global Opportunities Fund, LLC, a Delaware limited
liability company (FirstFire), on May 16, 2024, as amended by that certain Amendment to Senior Secured Promissory Note
and Warrants, dated as of May 20, 2024, between the Company and FirstFire, and the senior secured promissory note issued by the Company
to FirstFire on June 18, 2024 (collectively, the FF Notes), would occur, with an aggregate balance of $574,257 as of the
Record Date, resulting in a number of additional obligations to FirstFire, including acceleration of the FF Notes balance multiplied
by 125%; default interest at the rate of the lesser of (i) 15% per annum and (ii) the maximum amount permitted by law from the due date
thereof until the same is paid; and the increase of the principal balance of each of the FF Notes by $3,000 each calendar month until
the respective FF Notes are repaid in their entirety. In addition, subject to customary cure rights, we may be subject to foreclosure
on the collateral subject to the FF Notes, which consists of all of our assets, which could force us into bankruptcy or liquidation,
and the elimination of any remaining value in our shares of common stock.
In
addition, prior to an FF Notes Event of Default, the balance remaining under the FF Notes will be convertible into common stock at a
conversion price of $0.30 per share, subject to adjustment, including adjustment for reverse stock splits as described below. If an FF
Notes Event of Default occurs, then the balance remaining under the FF Notes will be convertible at the lower of $0.30 per share, the
closing price of the common stock on the date of the FF Notes Event of Default (or the next trading day if such date is not on a trading
day), and $0.195 per share. An FF Notes Event of Default as a result of our failure to maintain our listing on the NYSE American may
therefore cause the conversion price to be reduced significantly, increasing the potential for dilution to stockholders.
The
board strongly believes that one or more Reverse Stock Splits is necessary to maintain our listing on the NYSE American and avoid an
FF Notes Event of Default. Accordingly, the Board has approved resolutions proposing the Amendments to effect one or more Reverse Splits
and directed that it be submitted to our stockholders for adoption and approval at the Special Meeting.
8
Board
Discretion to Implement One or More Reverse Stock Splits
The
Board believes that stockholder approval of a range of ratios for the Reverse Split Ratio (as opposed to a single Reverse Split Ratio)
and to authorize one or more Amendments is in the best interests of the Company and stockholders because it is not possible to predict
market conditions at the time that any Reverse Stock Split would be effected. We believe that a range of Reverse Split Ratios provides
us with the most flexibility to achieve the desired results of any Reverse Stock Split through one or more Amendments. The Reverse Split
Ratio to be determined by the Board, in its sole discretion, will be a whole number in a range of one-for-two to one-for-100 and in the
aggregate not more than one-for-100, inclusive. The Board reserves the right to elect not to effect any Reverse Stock Split at any time
prior to the effectiveness of the filing of any Amendment with the Secretary of State, if it determines, in its sole discretion, and
without further action on the part of the stockholders, that a Reverse Stock Split is no longer in the best interests of the Company
and its stockholders.
In
determining any applicable Reverse Split Ratio and whether and when to effect any Reverse Stock Split pursuant to one or more Amendments
following the receipt of stockholder approval, the Board may consider a number of factors, including, without limitation:
We
believe that granting the Board the authority to elect to implement one or more Reverse Stock Splits through one or more Amendments at
various Reverse Split Ratios (subject to the aggregate one-for-100 limitation) is essential because it allows us to take these factors
into consideration and to react to changing market, legal and economic conditions. If the Board chooses to implement one or more Reverse
Stock Splits, we will make a public announcement regarding the determination of each such Reverse Stock Split and the applicable Reverse
Split Ratio.
Certain
Risks Associated with One or More Reverse Stock Splits
There
are risks associated with effecting one or more Reverse Stock Splits, including that any such Reverse Stock Splits may not result in
an increase in the per share price of common stock.
The
Company cannot predict whether one or more Reverse Stock Splits will increase the market price for the common stock. The history of similar
stock split combinations for companies in like circumstances is varied. There is no assurance that:
The
market price of the common stock will also be based on the performance of the Company, and other factors, some of which are unrelated
to the number of shares outstanding. If one or more Reverse Stock Splits are effected and the market price of the common stock declines,
the percentage decline as an absolute number and as a percentage of the overall market capitalization of the Company may be greater than
would occur in the absence of one or more Reverse Stock Splits. Furthermore, the liquidity of the common stock could be adversely affected
by the reduced number of shares that would be outstanding after one or more Reverse Stock Splits.
Effects
of One or More Reverse Stock Splits
Effects
on Stockholders
Any
Reverse Stock Split will be realized simultaneously for all shares of common stock outstanding immediately prior to the applicable Reverse
Stock Split Effective Time. Any Reverse Stock Split will affect all holders of shares of common stock outstanding immediately prior to
the Reverse Stock Split Effective Time uniformly and each such stockholder will hold the same percentage of common stock outstanding
immediately following any Reverse Stock Split as that stockholder held immediately prior to the Reverse Stock Split, except for immaterial
adjustments that may result from the treatment of fractional shares as described below. Any Reverse Stock Split will not change the par
value of the common stock and will not reduce the number of authorized shares of common stock. Common stock issued pursuant to any Reverse
Stock Split will remain fully paid and non-assessable. Voting rights and other rights of the holders of common stock will not be affected
by the Reverse Stock Split, other than as a result of the treatment of fractional shares as described below. Any Reverse Stock Split
will not affect the Company continuing to be subject to the periodic reporting requirements of the Securities Exchange Act of 1934, as
amended (the Exchange Act). After any Reverse Stock Split, the common stock would have a new Committee on Uniform Securities
Identification Procedures number, or CUSIP number, used to identify the common stock. Following any Reverse Stock Split, the common stock
will continue to be listed on the NYSE American under the symbol SGN.
One
of the effects of one or more Reverse Stock Splits will be to effectively increase the proportion of authorized shares which are unissued
relative to those which are issued. Any Reverse Stock Split will not affect the number of authorized shares of the Companys capital
stock that will continue to be authorized pursuant to the Companys Second Amended and Restated Certificate of Incorporation, as
amended by the Amendments. Up to 150,000,000 shares of common stock are authorized to be issued under the Companys Second Amended
and Restated Certificate of Incorporation.
9
The
table below shows, as of the Record Date, the number of shares outstanding and percentage of the authorized common stock prior to a Reverse
Stock Split and the number of outstanding shares of common stock that would result from a Reverse Stock Split at (a) a 1-for-5 Reverse
Split Ratio, (b) a 1-for-10 Reverse Split Ratio, (c) a 1-for-20 Reverse Split Ratio, (d) a 1-for-50 Reverse Split Ratio, and (e) a 1-for-100
Reverse Split Ratio, in each case without giving effect to the treatment of fractional shares:
for
2024 SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON
OCTOber 10, 202
4
1.
A
proposal to approve one or more amendments of the Companys Second Amended and Restated
Certificate of Incorporation to effect one or more reverse stock splits of the Companys
common stock, at a ratio ranging from any whole number between 1-for-2 and 1-for-100 and
in the aggregate not more than 1-for-100, inclusive, as determined by the Board in its discretion,
subject to the Boards authority to abandon such amendments. This proposal is referred
to as the Reverse Stock Split Proposal or Proposal 1.
2.
A
proposal to approve an adjournment of the Special Meeting from time to time, to a later date
or dates, if necessary or appropriate, under certain circumstances, including for the purpose
of soliciting additional proxies in favor of the foregoing proposal in the event the Company
does not receive the requisite stockholder vote to approve such proposal or to establish
a quorum. This proposal is referred to as the Adjournment Proposal or Proposal
2.
1.
To
approve the Reverse Stock Split Proposal; and
2.
To
approve the Adjournment Proposal.
1.
Vote
by Internet
. You may vote by using the Internet in accordance with the instructions provided
on your Notice of Internet Availability of Proxy Materials or proxy card.
2.
Vote
by Mail
. To vote by mail, please mark, date, sign and promptly mail your proxy card (a
postage-paid envelope is provided for mailing in the United States). If you only received
a Notice of Internet Availability of Proxy Materials, you may request a proxy card by following
the instructions provided.
3.
Vote
by Phone
. The telephone number for voting by phone is on your proxy card that you received
or may request by following the instructions provided in your Notice of Internet Availability
of Proxy Materials.
4.
Vote
by Fax
. The fax number for voting by fax is on your proxy card that you received or may
request by following the instructions provided in your Notice of Internet Availability of
Proxy Materials.
1.
Vote
by Internet
. You may vote by using the Internet in accordance with the instructions provided
on your Notice of Internet Availability of Proxy Materials or vote instruction form.
2.
Vote
by Mail
. Mark, date, sign and promptly mail your vote instruction form (a postage-paid
envelope is provided for mailing in the United States). If you only received a Notice of
Internet Availability of Proxy Materials, you may request a vote instruction form by following
the instructions provided in your Notice of Internet Availability of Proxy Materials.
3.
Vote
by Phone
. The telephone number for voting by phone is on your vote instruction form that
you received or may request by following the instructions provided in your Notice of Internet
Availability of Proxy Materials.
4.
Vote
by Fax
. The fax number for voting by fax is on your vote instruction form that you received
or may request by following the instructions provided in your Notice of Internet Availability
of Proxy Materials.
1.
FOR
the approval of the Reverse Stock Split Proposal; and
2.
FOR
the approval of the Adjournment Proposal.
Proposal
VoteRequired
for Approval by the Stockholders
No.
1 The Reverse Stock Split Proposal
The
votes cast FOR such proposal must exceed the votes cast AGAINST such proposal by the stockholders entitled
to vote at the Special Meeting.
No.
2 The Adjournment Proposal
●
our
ability to maintain the listing of the common stock on the NYSE American;
●
the
historical trading price and trading volume of the common stock;
●
the
number of shares of common stock outstanding immediately before and after the Reverse Stock
Split;
●
the
dilutive impact of any potential exercise of the Companys outstanding warrants or
conversion of the Companys outstanding convertible notes and the related impact on
the trading price of the common stock;
●
the
then-prevailing trading price and trading volume of the common stock and the anticipated
impact of a Reverse Stock Split on the trading price and trading volume of the common stock
in the short- and long-term;
●
the
anticipated impact of a particular Reverse Split Ratio on the Companys ability to
reduce administrative and transactional costs;
●
the
anticipated impact of a particular Reverse Split Ratio on the number of holders of the common
stock; and
●
prevailing
general market, legal and economic conditions.
●
the
market price per share of the common stock after one or more Reverse Stock Splits will rise
in proportion to the reduction in the number of shares of the common stock outstanding before
such Reverse Stock Splits;
●
one
or more Reverse Stock Splits will result in a per share price that will attract brokers and
investors who do not trade in lower-priced stocks;
●
one
or more Reverse Stock Splits will result in a per share price that will increase the ability
of the Company to attract and retain employees; or
●
the
market price per share will achieve and maintain the stock price required to not be considered
unsuitable for continued trading on the NYSE American.
