Signing Day Sports CEO Receives $100K High-Interest Note
Signing Day Sports Issues High-Interest Promissory Note
In a recent filing, Signing Day Sports, Inc., a Delaware company known for its expertise in computer processing and data preparation, announced a significant financial move. The company issued a promissory note worth up to $100,000 to its CEO, Daniel D. Nelson. This high-interest note, which is dated as of a recent Monday, features a notable monthly interest rate of 20%, compounded monthly.
Understanding the Terms of the Agreement
The specifics of the agreement detail that interest on this note will accumulate quickly, with total interest potentially reaching $20,000 by the conclusion of the first month. This rate will continue to increase in subsequent months. The principal amount, alongside any advances taken and the accumulated interest, is set to be repaid by a specified date in December 2024, or when the company secures at least $1,000,000 in funding.
CEO's Rights on Repayment
According to the note, Nelson, who also holds the positions of Chairman and director at Signing Day Sports, has the right to request full repayment within two business days following the note's maturity date. Importantly, the company retains the flexibility to prepay the note without facing any penalties, which can provide significant financial relief as it aligns its resources.
The Context of this Financial Move
This financial arrangement is part of a larger strategic plan for Signing Day Sports as it navigates its path as an emerging growth company. The implications of the high-interest note represent a substantial cost of capital, reflecting the company's ongoing exploration of viable financial strategies. More details regarding the terms of the promissory note are outlined in Exhibit 4.1 of the recent SEC filing.
Conclusion: What This Means for Signing Day Sports
In summary, the issuance of this promissory note signifies a crucial step for Signing Day Sports in managing its financial obligations and corporate governance. As it pursues its growth objectives and aims for funding milestones, how the company handles this financial obligation will be pivotal in shaping its future. Investors and stakeholders will undoubtedly be watching this situation closely.
Frequently Asked Questions
What is the purpose of the promissory note issued to the CEO?
The promissory note serves as a financial resource for the CEO, allowing access to capital up to $100,000 under specific terms, while impacting the company's cost of capital.
What are the interest rates associated with the note?
The note carries a monthly interest rate of 20%, which compounds monthly and can lead to significant interest accumulation over time.
When is the repayment due for the promissory note?
The principal and any accrued interest on the note are due by December 2024, or upon the company securing a minimum of $1,000,000 in funding.
Can Signing Day Sports prepay the note?
Yes, the company has the option to prepay the promissory note without incurring any penalties.
What does this mean for the company's financial strategy?
This note indicates a strategic effort by Signing Day Sports to manage its capital structure as it positions itself for growth amidst its emerging status.
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