reports Signature Day Sports Launches its $100 Million IPO Recruitment App with a Hail Mary.

Four years ago, former professional football player Dennis Gile entered the crowded college sports recruiting industry after launching a quarterback training service in Arizona. He struck a deal with Day Sports (SDS), a paid app that matches high school candidates with college coaches, which was a big move for Guile. SDS recently filed papers with the Securities and Exchange Commission for an initial public offering valued at about $100 million. But while IPOs typically mark a milestone on a company’s path to strong, solid growth, the SDS filing, which is expected to raise $22.5 million, according to SDS’s SEC prospectus, is a significant step forward in the company’s growth.

Current and former SDS accountants “expressed significant doubts about the viability of the company as a going concern,” according to the filing. This subscription service charges customers $25/month or $250/year for players to upload their movies, transcripts, verified vital stats, and connect with NCAA football, baseball, and softball coaches. The main selling point of SDS is to eliminate the travel required for children to go to camp, a traditional way of getting college attention. The company grew from eight to 15 employees last year and recently hired two Division 1 offensive coordinators: Jeff Heclinski, former San Diego State University, and Luke Meadows, a recent coach at Troy University. SDS announced a data-sharing partnership with Chicago-based Zcruit, a recruitment database service serving more than 100 Division I schools.

SDS takes the opposite approach to competitors such as Hudl, which counts 6 million active athlete users. While Hudl offers athletes a free platform, SDS charges membership fees to promote themselves and present verified statistics. It’s debatable how much it’s worth. SDS said in its SEC filing that the sports recruiting industry continues to “ignore the world’s best athletes” and that its technology is “equal opportunity” to bring together applicants at all levels.

The SEC prospectus submitted last week listed John Dorsey’s cell phone number as Signing Day Sports’ primary legal entity number, an error that will be corrected in the amended filing. Dorsey is SDS’s second-largest shareholder. He secured a $700,000 loan from Arizona businessman John Dorsey in April 2021. The parties entered into a security agreement under which Gile pledges his 3% interest in his SDS and related earnings. The loan was due to be paid off in full last spring. Later that year, Guile stepped down and Dorsey took over as CEO. In September, after Guile failed to repay all but $100,000, Dorsey and his family’s holding company filed a lawsuit in Maricopa County Superior Court, accusing Guile of breach of contract.

In a counterclaim, Jair accused Dorsey of tricking Dorsey into giving up the CEO job by failing to keep his promise of $6 million in startup funding. The parties eventually settled. Dorsey was paid a base salary of $240,000 but resigned from the company last June, after which Jair was re-elected as CEO. He served until November, after which he resigned to become chairman of the board.

SDS faces financial difficulties – the company does not have cash on hand to pay its bills next year. Over the past two years, the company’s annual revenue has plummeted from $341,000 in 2021 to just $78,336 in 2022. SDS says it has $7.2 million in long-term debt and will be worth less than zero when liquidated. Signing Day Sports is one of many online recruiting ventures looking to contribute to the $29 billion youth sports industry. Given the availability of free services like Hudl, and the number of scouting lists and recruitment tools used by college athletic departments, certain high school prospectives (or their families) pay their own fees. It’s unclear how much it’s worth.

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