Financial Performance - For the nine months ended September 30, 2024, the net loss was approximately $5.413 million, compared to a net loss of approximately $2.676 million for the same period in 2023, representing an increase of 102.4%[184] - As of September 30, 2024, the accumulated deficit was approximately $22.372 million, up from $16.959 million as of December 31, 2023, indicating a significant increase in financial strain[184] - The company had total current liabilities of approximately $2.605 million, with only approximately $1,000 in cash and cash equivalents as of September 30, 2024, highlighting liquidity challenges[184] - The company incurred net cash used in operating activities of approximately $3.489 million for the nine months ended September 30, 2024, compared to approximately $1.497 million for the same period in 2023, reflecting increased operational costs[184] - The company reported a net loss from operations of approximately $1.437 million for the three months ended September 30, 2024, compared to a net loss of approximately $598,113 for the same period in 2023, indicating worsening operational performance[192] - Net revenues for the nine months ended September 30, 2024, were approximately $0.495 million, a 119.0% increase from $0.226 million in the same period of 2023[203] - Cost of revenues for the nine months ended September 30, 2024, rose to approximately $0.161 million, an increase of 345.1% from $0.036 million in 2023[205] - General and administrative expenses for the nine months ended September 30, 2024, were approximately $4.775 million, up 159.8% from $1.838 million in 2023[207] Revenue Sources - Net revenues for the three months ended September 30, 2024, were approximately $55,363, unchanged from approximately $55,212 for the same period in 2023[192] - Subscription revenue increased by approximately $0.017 million, while event fee payments decreased by approximately $0.017 million, indicating a shift in revenue sources[193] User Engagement - Total users on the platform increased to 1,936 for the three months ended September 30, 2024, up from 1,202 in the same period of 2023, representing a growth of 60.9%[196] Funding and Acquisitions - The company is actively seeking additional funding primarily to pay off existing liabilities, which is critical for its ongoing operations and potential growth[185] - The company entered into a Binding Term Sheet to acquire 99.13% of Dear Cashmere Group Holding Company, which could enhance revenue generation and technical capabilities if successful[185] - The company entered into a Binding Term Sheet to acquire 99.13% of DRCR, which could enhance revenue generation and technical capabilities if successful[213] - The Company plans to acquire between 95% and 99% of DRCR's outstanding shares, issuing approximately 91.76% of the post-transaction shares to DRCR's sellers[241] - The Company and DRCR aim to secure at least $2.0 million in funding, which will be split equally for operations and debt repayment[242] Stock and Compensation - The Compensation Committee granted 1,000,000 shares of common stock to the CEO on October 16, 2024, under the standard restricted stock award agreement[224] - The Company issued a Convertible Promissory Note to DRCR on October 7, 2024, for a principal amount of $150,000 with an annual interest rate of 35%[231] - Daniel Nelson's annual base salary was set at $425,000 from November 22, 2023, to February 29, 2024, and will be reduced to $200,000 effective March 1, 2024[279] - Mr. Nelson was granted a stock option to purchase 100,000 shares at an exercise price of $2.25 per share, with half exercisable immediately and the remainder vesting over six months[278] - The Company will pay Mr. Nelson severance payments equal to his base salary for 12 months if terminated without cause, and half of his base salary for six months if terminated upon a Change of Control[282] Legal and Settlement Agreements - The Company entered into a Settlement Agreement with Goat Farm Sports on October 16, 2024, which included a restricted stock award of 200,000 shares to McGuinness[223] - The Company agreed to pay Midwestern Interactive, LLC a total of $600,000 under a Settlement Agreement, with $300,000 due within three business days of December 12, 2023, and the remaining amount payable with interest[266] Debt and Obligations - Total contractual obligations amount to $446.785 million, with short-term obligations of $369.024 million and long-term obligations of $77.761 million[240] - The Company is obligated to pay Bevilacqua PLLC $684,350.98 for services rendered through June 30, 2024, with payment deferred until the next financing transaction or business combination[264] - The Company must inform the holder of the June 2024 FF Note of any cash proceeds received, which may require immediate repayment of outstanding amounts[346] - The Company is prohibited from incurring any senior indebtedness or paying dividends while obligations under the June 2024 FF Note remain outstanding[347] Stockholder Approvals and Agreements - The Company is required to file a registration statement for stockholder approval regarding the Exchange Cap Stockholder Approval[234] - The Company obtained stockholder approval on September 18, 2024, for the issuance of shares under the May 2024 FF Purchase Agreement, allowing for the issuance of up to 3,074,792 shares[313] - The Company agreed to register the resale of the June 2024 FF Commitment Shares and related shares within 90 days of the June 2024 FF Purchase Agreement[341] Miscellaneous - The Company has no off-balance sheet arrangements that could affect its financial condition or operations[371] - The Company maintains directors' and officers' liability insurance to cover claims arising from wrongful acts[302] - The Company has established comprehensive benefits plans for its executives, including medical, dental, and life insurance options[280]
Signing Day Sports(SGN) - 2024 Q3 - Quarterly Report