Signing Day Sports Files Audited Financial Statements for 2023 and 2022, Along With Unaudited Financial Statements for the Nine Months Ending September 30, 2024 and 2023, for Dear Cashmere Group Holding Company (d/b/a Swifty Global), and Pro Forma Financial Statements Related to Its Planned Acquisition of Swifty Global

Rhea-AI Summary

Signing Day Sports (NYSE: SGN) has filed audited financial statements for Swifty Global's fiscal years 2023-2022 and unaudited statements for Q1-Q3 2024-2023, along with pro forma financials related to its planned acquisition of 99.13% of Swifty Global.

Swifty Global's performance shows net gaming revenues of $8.7M in 2023 (up from $2.4M in 2022) and net income of $2.4M (up from $0.4M). For the first nine months of 2024, revenue was $5.1M with net income of $0.6M.

The pro forma combined financials for 2023 show total net revenues of $9.0M with a net loss of $3.0M. For the first nine months of 2024, combined revenues were $5.6M with a net loss of $4.8M, primarily due to operating expenses of $9.4M against a gross profit of $5.5M.

Positive

• Swifty Global's net gaming revenues increased 262.5% from $2.4M in 2022 to $8.7M in 2023
• Swifty Global's net income grew significantly from $0.4M in 2022 to $2.4M in 2023
• Pro forma combined gross profit was $9.0M for fiscal year 2023

Negative

• Pro forma combined net loss of $3.0M for fiscal year 2023
• Pro forma combined net loss increased to $4.8M for first nine months of 2024
• Combined operating expenses of $9.4M significantly exceeded gross profit of $5.5M in first nine months of 2024
• Swifty Global's revenue declined from $6.9M to $5.1M in the first nine months of 2024 vs 2023

Insights

Financial Analyst

The financial statements reveal a complex picture of this strategic acquisition. Swifty Global's standalone performance shows impressive growth from 2022 to 2023, with net gaming revenues surging 262.5% to $8.7 million and maintaining healthy operating margins. However, the 26.1% revenue decline in the first nine months of 2024 ($5.1 million vs $6.9 million) raises concerns about growth sustainability.

The pro forma financials expose significant challenges in the combined entity. Despite $9.0 million in combined revenues for 2023, operating expenses of $10.9 million resulted in substantial losses. This pattern continued into 2024, with combined losses deepening to $4.8 million for the first nine months. The high operating expenses relative to revenue suggest potential integration challenges and raise questions about achieving operational efficiency.

Particularly noteworthy is the stark contrast between Swifty Global's profitable standalone operations and the combined entity's losses. This divergence indicates that Signing Day Sports' current cost structure may be diluting Swifty's profitability. The pro forma gross margins remain healthy at nearly 98%, but operating expenses are consuming approximately 168% of revenue in the latest period, highlighting a critical need for cost optimization post-merger.

SCOTTSDALE, Ariz., Feb. 21, 2025 (GLOBE NEWSWIRE) -- Signing Day Sports, Inc. (“Signing Day Sports” or the “Company”) (NYSE American: SGN), the developer of the Signing Day Sports app and platform to aid high school athletes in the recruitment process, today announced the filing of the audited financial statements of Dear Cashmere Group Holding Company (OTC: DRCR), doing business as Swifty Global (“Swifty Global”), as of and for the fiscal years ended December 31, 2023 and 2022, and the unaudited financial statements of Swifty Global as of and for the nine months ended September 30, 2024 and 2023, as exhibits to a Current Report on Form 8-K filed with the U.S. Securities and Exchange Commission (the “SEC”) on February 20, 2025 (the “Form 8-K”), in connection with the recently announced executed Stock Purchase Agreement (the “Purchase Agreement”) to acquire 99.13% of the issued and outstanding capital stock of Swifty Global.

In addition, the Company filed unaudited pro forma financial statements with the Form 8-K. The pro forma financial statements are intended to represent the combination of the financial position and results of Signing Day Sports and Swifty Global as of September 30, 2024 and for the year ended December 31, 2023 and the first nine months of 2024.

Highlights of Swifty Global for Fiscal Years 2023 and 2022:

• Net gaming revenues were approximately $8.7 million for the fiscal year ended December 31, 2023, compared to approximately $2.4 million for the comparable 2022 period.
  
  
• Operating expenses were approximately $5.9 million for the fiscal year ended December 31, 2023, compared to approximately $2.0 million for the comparable 2022 period.
  
  
• Income from operations was approximately $2.9 million for the fiscal year ended December 31, 2023, compared to approximately $0.4 million for the comparable 2022 period.
  
  
• Net income was approximately $2.4 million for the fiscal year ended December 31, 2023, compared to approximately $0.4 million for the comparable 2022 period.
  

Highlights of Swifty Global for the Nine Months Ended September 30, 2024 and 2023:

• Net gaming revenue was approximately $5.1 million for the nine months ended September 30, 2024, compared to approximately $6.9 million for the comparable 2023 period.
  
  
• Operating expenses were approximately $4.5 million for the nine months ended September 30, 2024, compared to approximately $6.4 million for the comparable 2023 period.
  
  
• Income from operations was approximately $0.6 million for the nine months ended September 30, 2024, compared to approximately $0.5 million for the comparable 2023 period.
  
  
• Net income was approximately $0.6 million for the nine months ended September 30, 2024, compared to approximately $0.4 million for the comparable 2023 period.
  

Pro Forma Combined Financial Highlights for Fiscal Year 2023:

• Pro forma combined total net revenues were approximately $9.0 million for the fiscal year ended December 31, 2023.
  
  
• Pro forma combined cost of revenues was approximately $0.04 million for the fiscal year ended December 31, 2023.
  
  
• Pro forma combined gross profit was approximately $9.0 million for the fiscal year ended December 31, 2023.
  
  
• Pro forma combined total operating expense was approximately $10.9 million for the fiscal year ended December 31, 2023.
  
  
• Pro forma combined net loss from operations was approximately $1.9 million for the fiscal year ended December 31, 2023.
  
  
• Pro forma combined net loss was approximately $3.0 million for the fiscal year ended December 31, 2023.
  

Pro Forma Combined Financial Highlights for the Nine Months Ended September 30, 2024:

• Pro forma combined total net revenues were approximately $5.6 million for the nine months ended September 30, 2024.
  
  
• Pro forma combined cost of revenues was approximately $0.2 million for the nine months ended September 30, 2024.
  
  
• Pro forma combined gross profit was approximately $5.5 million for the nine months ended September 30, 2024.
  
  
• Pro forma combined total operating expense was approximately $9.4 million for the nine months ended September 30, 2024.
  
  
• Pro forma combined net loss from operations was approximately $3.9 million for the nine months ended September 30, 2024.
  
  
• Pro forma combined net loss was approximately $4.8 million for the nine months ended September 30, 2024.
  
  

Swifty Group’s historical financial statements and the pro forma combined financial statements are filed as Exhibits 99.2 and 99.3 and Exhibit 99.4 to the Form 8-K, respectively. To review these financial statements, please refer to the Form 8-K, which is available at the SEC’s website at www.sec.gov.

The unaudited pro forma condensed combined financial statements of the Company and Swifty Global are not intended to represent or be indicative of the financial position or results of operations in future periods or the results that actually would have been realized had the Company and Swifty Global been a combined company during the specified periods. The pro forma adjustments are based on the information available at the date of the Form 8-K, with which they are filed, and reflect preliminary estimates of purchase consideration and fair value of the net assets acquired. The unaudited pro forma condensed combined financial statements, including the footnotes that accompany them, which are filed as Exhibit 99.1 to the Form 8-K, are qualified in their entirety by reference to and should be read in connection with the historical consolidated financial statements of Swifty Global included as Exhibits 99.2 and 99.3 to the Form 8-K, and the historical consolidated financial statements of the Company as set forth in its Annual Report on Form 10-K for the year ended December 31, 2023, as filed with the SEC on March 29, 2024, and its Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2024, as filed with the SEC on November 14, 2024.

Daniel Nelson, CEO of Signing Day Sports, commented: “Taking this step is important to the shared goal of bringing this acquisition together. Together, we expect to push the boundaries of innovation between Swifty Global and Signing Day Sports, extend our reach in established and emerging markets, and deliver greater value to our customers and stakeholders.”

About Signing Day Sports, Inc.

Signing Day Sports' mission is to help student-athletes achieve their goal of playing college sports. Signing Day Sports' app allows student-athletes to build their Signing Day Sports' recruitment profile, which includes information college coaches need to evaluate and verify them through video technology. For more information on Signing Day Sports, go to https://bit.ly/SigningDaySports.

Forward-Looking Statements

This press release contains "forward-looking statements" that are subject to substantial risks and uncertainties. All statements, other than statements of historical fact, contained in this press release are forward-looking statements. Forward-looking statements contained in this press release may be identified by the use of words such as "may," "could," "will," "should," "would," "expect," "plan," "intend," "anticipate," "believe," "estimate," "predict," "potential," "project" or "continue" or the negative of these terms or other comparable terminology. These statements are only predictions. You should not place undue reliance on forward-looking statements because they involve known and unknown risks, uncertainties and other factors, including without limitation, the Company's ability to complete the acquisition of Swifty Global and integrate its business, the ability of the parties to the Purchase Agreement to obtain all necessary consents and approvals in connection with the acquisition, including clearance from The Nasdaq Stock Market LLC of an initial listing application in connection with the acquisition, and stockholder approval of the matters to be voted on at a stockholders’ meeting to approve matters required to be approved in connection with the Purchase Agreement, the Company’s ability to obtain sufficient funding to maintain operations and develop additional services and offerings, market acceptance of the Company's current products and services and planned offerings, competition from existing online and retail offerings or new offerings that may emerge, impacts from strategic changes to the Company's business on its net sales, revenues, income from continuing operations, or other results of operations, the Company's ability to attract new users and customers, increase the rate of subscription renewals, and slow the rate of user attrition, the Company's ability to retain or obtain intellectual property rights, the Company's ability to adequately support future growth, the Company's ability to comply with user data privacy laws and other current or anticipated legal requirements, and the Company's ability to attract and retain key personnel to manage its business effectively. These risks, uncertainties and other factors are described more fully in the section titled “Risk Factors” in the Company’s periodic reports which are filed with the Securities and Exchange Commission. These risks, uncertainties and other factors are, in some cases, beyond our control and could materially affect results. If one or more of these risks, uncertainties or other factors become applicable, or if our underlying assumptions prove to be incorrect, actual events or results may vary significantly from those implied or projected by the forward-looking statements. No forward-looking statement is a guarantee of future performance. Forward-looking statements contained in this announcement are made as of this date, and the Company undertakes no duty to update such information except as required under applicable law.

Investor Contact:
Crescendo Communications, LLC
212-671-1020
SGN@crescendo-ir.com

FAQ

What are the key financial metrics from SGN's acquisition of Swifty Global?

The pro forma combined financials show 2023 revenues of $9.0M with a net loss of $3.0M, while the first nine months of 2024 showed revenues of $5.6M with a net loss of $4.8M.

How did Swifty Global perform financially in 2023 compared to 2022?

Swifty Global's net gaming revenues increased from $2.4M in 2022 to $8.7M in 2023, while net income grew from $0.4M to $2.4M.

What percentage of Swifty Global is SGN acquiring?

Signing Day Sports is acquiring 99.13% of the issued and outstanding capital stock of Swifty Global.

How much operating loss did the combined SGN-Swifty Global entity report in Q1-Q3 2024?

The pro forma combined net loss from operations was approximately $3.9M for the first nine months of 2024.

What were Swifty Global's revenue trends in the first nine months of 2024?

Swifty Global's net gaming revenue decreased from $6.9M in the first nine months of 2023 to $5.1M in the same period of 2024.