SharpLink Gaming, Inc.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

** three and six months ended June 30, 2025 and 2024**

Note 1–Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared by SharpLink Gaming, Inc. (the “Company” or “SharpLink”), pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). In the opinion of the Company, the foregoing statements contain all adjustments, consisting only of normal recurring adjustments necessary to present fairly the financial position of the Company as of June 30, 2025 and December 31, 2024, as well as its results of operations for the three and six months ended June 30, 2025 and 2024. The condensed consolidated balance sheet as of December 31, 2024 has been derived from the audited consolidated financial statements as of that date. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts therein. Due to the inherent uncertainty involved in making estimates, actual results in future periods may differ from the estimates.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted from this report, as is permitted by rules and regulations of the SEC. Accordingly, the condensed consolidated financial statements do not include all information and footnotes required by GAAP for a complete financial statement presentation. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto for the year ended December 31, 2024, which are included in the Company’s Annual Report on Form 10-K filed with the SEC on March 14, 2025 and Form 10-K/A filed with the SEC on March 17, 2025.

Background and Nature of Business

Headquartered in Minneapolis, SharpLink, a Delaware corporation, recently undertook a significant strategic shift by adopting Ether (“ETH”), the native cryptocurrency of the Ethereum blockchain (“Ether” or “ETH”) as its primary treasury asset. This strategy reflects the Company’s commitment to align the corporate treasury with the future of programmable finance, digital capital markets and decentralized infrastructure. The Company also operates an online performance marketing company that delivers unique fan activation solutions to its sportsbook and online casino gaming partners. Through its global affiliate iGaming marketing network, known as PAS.net, SharpLink drives qualified traffic and player acquisitions, retention and conversions to U.S. regulated sportsbooks and global casino gaming partners worldwide. In addition, SharpLink owns a performance marketing platform through which the Company owns and operates U.S. state-specific web domains designed to attract, acquire and drive local sports betting and casino traffic directly to its sportsbook and casino partners which are licensed to operate in each respective state.

On May 26, 2025, the Company entered into a securities purchase agreement for a private placement in public equity (“PIPE”), offering an aggregate of (i)58,699,760 shares of common stock of the Company, par value $0.0001 per share, at an offering price of $6.15 per share, and (ii) pre-funded warrants (the “Pre-Funded Warrants”) to purchase up to an aggregate of 10,400,553 shares of Common Stock at an offering price of $6.1499 per Pre-Funded Warrant. Each of the Pre-Funded Warrants is exercisable for one share of Common Stock at the exercise price of $0.0001 per Pre-Funded Warrant Share, immediately exercisable, and may be exercised at any time until all of the Pre-Funded Warrants issued in the Offering are exercised in full. The gross proceeds from the PIPE, before deduction the placement agents fees and offering expenses, were approximately $425,000,000 funded in a combination of cash and Ether. On June 2, 2025, SharpLink launched its treasury reserve strategy with the commencement of its purchasing of ETH, serving as the Company’s primary treasury reserve asset. Consensys Software Inc. acted as the lead investor in the PIPE, along with prominent crypto venture capital firms and infrastructure providers, with an intent to assist the Company in earning distinction as one of the largest ETH-focused treasury strategies in the public markets. The Company also implemented native and liquid staking activities in the second quarter of 2025 to earn staking rewards from the Company’s digital assets held.See Note 2 - Digital Asset Holdings and Note6 - Warrants.

On May 20, 2025, the Company entered into a securities purchase agreement (the “Purchase Agreement”) for an offering of 34,000 shares (the “Shares”) of common stock, $0.0001 par value per share, and Pre-Funded Warrants (the “Pre-Funded Warrants”) to purchase up to 1,496,612 shares of common stock . The Shares were offered at an offering price of $2.94 per share. The gross proceeds from the Purchase Agreement, before deducting the placement agent fees and offering expenses, were approximately $4,500,000.See Note 6 - Warrants.

Issue of shares and pre-funded warrants were recorded at the offering price in equity in accordance with ASC 505,Equity, with any amounts above the par value of shares were recorded in Additional paid-in capital.

Prior to the sale of SharpLink’s Sports Gaming Client Services and SportsHub Gaming Network (“SHGN”) business units in January 2024 (the “Sale of Business”) to RSports Interactive, Inc. (“RSports”), a Minnesota corporation, the SHGN unit owned and operated an online gaming business that primarily facilitated daily and seasonal peer-to-peer fantasy contests for its end users. The SHGN business unit also operated a website that provided a variety of services to private fantasy league commissioners, including secure online payment options, transparent tracking and reporting of transactions, payment reminders, in-season security of league funds and facilitation of prize payouts.

On January 18, 2024*,* the Company entered into a Purchase Agreement (the “PA”) with RSports to sell the Company’s fantasy sports and sports game development business units to RSports. All of the membership interests of Sports Technologies, LLC, a Minnesota limited liability company, SHGN and Holdings Quinn, LLC, a Delaware limited liability company (collectively referred to as the “Divested Operations”) were sold for $22,500,000 in an all cash transaction. The transaction resulted in SharpLink selling a majority of its assets and the classification of the Divested Operation’s financial results as discontinued operations. All prior periods presented have been restated to present the Divested Operations financial results as discontinued operations. All explanations and amounts relating to discontinued operations are referred throughout the consolidated financial statements toNote 12 - Discontinued Operations.

On February 13, 2024, SharpLink Gaming Ltd. (“SharpLink Israel” and former parent company) completed its previously announced domestication merger (“Domestication Merger”), pursuant to the terms and conditions set forth in an Agreement and Plan of Merger (the “Domestication Merger Agreement”), dated June 14, 2023 and amended July 24, 2023, among SharpLink Gaming, Inc. (“SharpLink US”), SharpLink Israel, SharpLink Merger Sub Ltd., an Israeli company and a wholly owned subsidiary of subsidiary of SharpLink US (“Domestication Merger Sub”) . The Domestication Merger was achieved through a merger of Domestication Merger Sub Ltd. with and into SharpLink Israel, with SharpLink Israel surviving the merger and becoming a wholly owned subsidiary of SharpLink US. The Domestication Merger was approved by the shareholders of SharpLink Israel at an extraordinary special meeting of shareholders held on December 6, 2023. SharpLink US’s Common Stock commenced trading on the Nasdaq Capital Market under the same ticker symbol, SBET, on February 14, 2024.

As a result of the Domestication Merger, all SharpLink Israel ordinary shares outstanding immediately prior to the Domestication Merger automatically converted, on a one-for-one basis, into the right to receive, and become exchangeable for, shares of SharpLink US common stock, par value $0.0001 per share (“Common Stock”) and all preferred shares, options and warrants of SharpLink Israel outstanding immediately prior to the Domestication Merger converted into or exchanged for equivalent securities of SharpLink US on a one-for-one basis.

The following represents the change in the par value based on the outstanding ordinary and preferred shares to common and preferred stock after the Domestication Merger on February 13, 2024:

Exchange of Series A-1 Preferred Stock and Series B Preferred Stock for Common Stock and Prefunded Warrants

On April 2, 2025, SharpLink entered into an exchange agreement (“Exchange Agreement”) with Alpha Capital Anstalt (“Alpha”), whereby, pursuant to the terms and conditions set forth in the Exchange Agreement and in reliance on Section 3(a)(9) of the Securities Act of 1933, as amended (the “Securities Act”),600 shares of the Company’s Series A-1 Preferred Stock and 1,040 shares of the Company’s Series B Preferred Stock (collectively, the “Existing Securities”) held by Alpha were exchanged for 38,683 shares of SharpLink’s common stock (“Common Stock”) and 44,650 prefunded warrants to purchase shares of SharpLink’s common stock (“Alpha Prefunded Warrants”) at an exercise price of $0.012. With the exchange of Alpha’s Existing Securities for Common Stock and Alpha Prefunded Warrants, SharpLink no longer has any Series A-1 Preferred Stock or Series B Preferred Stock issued and outstanding.

Principles of Consolidation

The accompanying condensed consolidated financial statements include the accounts of SharpLink Gaming, Inc. and its wholly owned subsidiaries. All intercompany accounts and transactions between consolidated subsidiaries have been eliminated in consolidation.

Functional Currency

The Company’s functional and reporting currency is the U.S. dollar. Transactions in foreign currencies are recorded at the exchange rate prevailing on the date of the transaction. The resulting monetary assets and liabilities are translated into U.S. dollars at exchange rates prevailing on the balance sheet date. Revenue and expense components are translated to U.S. dollars at weighted-average exchange rates in effect during the period. Foreign currency translation adjustments, which arise from the remeasurement of foreign-denominated monetary assets and liabilities, are typically recorded in Other Comprehensive Income (OCI) in accordance with U.S. GAAP, however, the Company does not have material operations in a foreign currency which require a translation into U.S dollar. Foreign currency transaction gains and losses resulting from remeasurement are recognized in selling, general and administrative expenses within the condensed consolidated statements of operations.

Reverse Share Split

On May 5, 2025, the Company effected aone-for-twelve (1:12) reverse stock split of all the Company’s share capital, whereby the Company decreased the number of issued and outstanding common shares from 7,916,206 to 659,684. Proportional adjustments for the reverse stock split were made to the Company’s outstanding stock options, warrants and equity incentive plans. All share and per-share data and amounts have been retrospectively adjusted as of the earliest period presented in the financial statements to reflect the reverse stock split.

At-The-Market (“ATM”) Offerings

On May 2, 2024, Company entered into an ATM Sales Agreement (the “ATM Sales Agreement”) with A.G.P./Alliance Global Partners (“AGP” or the “Agent”) pursuant to which the Company may offer and sell, from time to time, through the Agent, as sales agent and/or principal, shares of the Company’s Common Stock, having an aggregate offering price of up to $1,676,366, subject to certain limitations on the amount of Common Stock that may be offered and sold by the Company set forth in the ATM Sales Agreement (the “Offering”). On February 4, 2025, the Company, under the terms of the ATM Sales Agreement, filed a prospectus supplement that amended the number shares of Common Stock having an aggregate offering price of up to $1,835,052.

On May 30, 2025, SharpLink entered into a second ATM Sales Agreement with the Agent relating to the sale of shares of our Common Stock from time to time, having an aggregate offering price of up to $1,000,000,000.

As of June 30, 2025, SharpLink raised total net proceeds of $126,045,108 from sales of Shares under our ATM Sales Agreements. The proceeds were used to further the Company’s ETH treasury reserve strategy as well as provide for working capital.

Acquisition of 10% Equity Stake in Armchair Enterprises

On February 24, 2025, SharpLink entered into a subscription agreement (“Subscription Agreement”) with U.K-based Armchair Enterprises Limited (“Armchair”), which owns and operates CryptoCasino.com. The acquisition of a 10% equity stake in Armchair was made for $500,000 in cash, along with a right of first refusal to acquire a controlling interest in Armchair. The investment was recorded at cost and will be measured at cost less impairment, adjusted for any observable price changes. There was no impairment as of June 30, 2025.

Significant Accounting Policies

Digital Assets

The Company’s digital assets primarily include ETH and Liquid Staked ETH (“LsETH”). The Company distinguishes between digital assets which fall within the scope of ASC 350-60 and those which do not. The Company refers to digital assets which fall within the scope of ASC 350-60 (e.g., ETH) as “crypto assets.” Digital assets which do not fall within the scope of ASC 350-60,Accounting for and Disclosure of Crypto Assets, are referred to as “digital intangible assets.”

As of June 30, 2025, the Company held $61.5 million of crypto assets comprised of ETH that are in the scope of ASC 350-60 at fair value. The Company reflects crypto assets held at fair value on the consolidated balance sheets within the Crypto assets line item. In determining the fair value of the crypto assets in accordance with ASC 820, the Company utilizes Coinbase as the principal market. The activity from remeasurement of crypto assets at fair value is reflected in the consolidated statements of operations within Unrealized loss on crypto assets. Realized gains and losses from the derecognition of crypto assets are included in Realized gain on crypto assets, net in the consolidated statements of operations. The Company uses a first-in, first-out methodology to assign costs to crypto assets for purposes of the crypto assets held and realized gains and losses disclosures in Note 2, Digital Asset Holdings. Sales and purchases of crypto assets are reflected as cash flows from investing activities in the consolidated statements of cash flows. Contributions of crypto assets received as part of the consideration received in the PIPE and deposits of ETH into liquid staking protocol are presented as noncash investing and financing activities in the consolidated statements of cash flows.

As of June 30, 2025, the Company held $382.4 million of digital intangible assets comprised of LsETH that are intangible assets outside the scope of ASC 350-60. A receipt token, in general and by design, entitles the holder to redeem the crypto intangible asset(s) for which it was exchanged. Therefore, it fails the ‘other goods and services criterion’ in paragraph 350-60-15-1(b), and thus is outside the scope of Subtopic 350-60.

These digital intangible assets are recorded at cost, less impairment within digital intangible assets on the consolidated balance sheets in accordance with ASC 350-30. The Company tests digital intangible assets for impairment annually and more frequently if events or changes in circumstances indicate that it is more likely than not that the asset is impaired. The test for impairment consists of a comparison of the fair value of the digital intangible assets with their carrying amounts. Refer toNote 2, Digital Asset Holdings, for additional information.

ETH Staking

Beginning in June 2025, the Company used the proceeds from its capital raising activities to acquire and deploy ETH in staking activities, which can include native staking, liquid staking and restaking. The Company has entered into separate contractual agreements with various third-party entities to facilitate its ETH staking activities. The Company commenced both native staking and liquid staking in June of 2025. The Company intends for staking to become a primary yield generation strategy of the Company within the current fiscal year.

Native Staking

The Company utilized two third-party asset managers to manage and stake ETH on its behalf as of June 30, 2025. Through its agreements with these asset managers, the Company’s ETH is held by qualified custodians, staked in the Ethereum protocol, and the stake is delegated to third party validators. When chosen as validators by the Ethereum network, these validators earn staking rewards and transaction fees proportional to the amount of stake delegated to them. The Company recognizes rewards from native staking as revenue in accordance with ASC 606. However, since the amount of rewards are not known by the Company until a validation activity is completed and the Company receives rewards in their custodial account, the staking rewards are constrained under the Topic 606 guidance on variable consideration, until such time.

Because the Company is not the principal to the block validation service, it does not control the full output of the reward-generating activity, and instead receives net staking rewards, after validator commissions are deducted. As such, the Company presents staking revenue on a net basis, reflecting only the portion of protocol rewards to which it is entitled. Asset manager fees are presented as separate operating expenses.

Liquid Staking

The Company participates in liquid staking, which is similar to native staking. One key difference and intended benefit of liquid staking is that it provides for liquidity by allowing the Company to earn staking rewards while still maintaining the ability, provided through the receipt token, to enter into to other transactions. When the Company’s ETH is staked, the Company is provided with a digital intangible asset (i.e., LsETH) which represents the crypto asset (i.e., ETH) which has been staked. LsETH is a non-rebasing liquid staking receipt token. It uses a floating redemption rate between LsETH and the underlying staked ETH. The redemption rate is determined by the underlying staked ETH and the current value of accumulated staking rewards, penalties, and fees associated with the underlying staked ETH. As a result, staking rewards earned from the Company’s liquid staking activities are not recognized as revenue.

These staking rewards will be recognized as gains or losses upon redemption or sale of the LsETH in accordance with ASC 610-20Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets as the Company is unable to determine the staking rewards to which is entitled at the time of the initial staking such that the staking rewards are constrained under the ASC 606 guidance on variable consideration which also applies to transfers of non-financial assets under ASC 610-20. No LsETH was redeemed or sold in the quarter ended June 30, 2025.

Recently Issued Accounting Pronouncements Not Yet Adopted

In November 2024, the FASB issued ASU 2024-04,Debt - Debt with Conversions and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments(“ASU 2024-04”). ASU 2024-04 is intended to clarify requirements for determining whether certain settlements of convertible debt instruments, including convertible debt instruments with cash conversion features or convertible debt instruments that are not currently convertible, should be accounted for as an induced conversion. This ASU is effective for all entities for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods, with early adoption permitted. The Company is currently evaluating the potential impact of this guidance on its disclosures.

In November 2024, the FASB issued ASU 2024-03,Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”), and in January 2025, the FASB issued Accounting Standards Update No. 2025-01,Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date (“ASU 2025-01”). ASU 2024-03 requires additional disclosure of the nature of expenses included in the income statement as well as disclosures about specific types of expenses included in the expense captions presented in the income statement. ASU 2024-03, as clarified by ASU 2025-01, is effective for us for our annual reporting for fiscal 2028 and for interim period reporting beginning in fiscal 2029 on a prospective basis. Both early adoption and retrospective application are permitted. The Company is currently evaluating the impact that the adoption of these standards will have on its consolidated financial statements and disclosures.

In December 2023, the FASB issued Accounting Standards Update No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”). ASU 2023-09 requires enhanced disclosures surrounding income taxes, particularly related to rate reconciliation and income taxes paid information. In particular, on an annual basis, companies will be required to disclose specific categories in the rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold. Companies will also be required to disclose, on an annual basis, the amount of income taxes paid, disaggregated by federal, state, and foreign taxes, and also disaggregated by individual jurisdictions above a quantitative threshold. The standard is effective for the Company for annual periods beginning January 1, 2025 on a prospective basis, with retrospective application permitted for all prior periods presented. The Company will adopt ASU 2023-09 for the annual period ending December 31, 2025 and is currently evaluating the impact of this guidance on its disclosures.

Note 2–Digital Asset Holdings

Crypto Assets

The following table sets forth the units held, cost basis, and fair value of crypto assets held, as shown on the consolidated balance sheet as of June 30, 2025:

Cost basis is equal to the cost of the crypto assets net of any transaction fees, if any, at the time of purchase or upon receipt. Fair value represents the quoted crypto asset prices within the Company’s principal market at the time of measurement (midnight UTC).

As of December 31, 2024 and March 31, 2025, the Company did not hold any crypto assets.

The following table represents a reconciliation of crypto assets held:

Additions are the result of purchases and receipts of ETH in connection with the PIPE,see Note 1- Basis of Presentation. The receipts of ETH from native staking represent the rewards earned from native staking. During the three and six months ended June 30, 2025, the Company recognized cumulative realized gains of $9.8 million, and cumulative realized losses of $4.4 million upon the deposit of ETH into liquid staking.

Digital Intangible Assets

The following table sets forth the cost basis, impairment amount, and carrying amount of digital assets held, as shown on the consolidated balance sheet as of June 30, 2025:

The cost of LsETH was initially recorded at fair value of LsETH on the date of receipt. Following the receipt of LsETH in early June of 2025, the price of LsETH decreased; and it was determined that the carrying amount of the LsETH exceeded its fair value during the period ending June 30, 2025. The Company performs an analysis each quarter to identify whether events or changes in circumstances, principally decreases in the quoted prices on the Company’s principal market, indicate that it is more likely than not that the assets are impaired. In determining if an impairment has occurred, the Company considers the lowest price of one LsETH quoted on the principal market at any time since acquiring the specific LsETH held by the Company. For the period ending June 30, 2025, the Company recorded an impairment loss of $87.8 million in the condensed consolidated statement of operations within impairment of digital intangible assets.

The fair value of the LsETH is determined in accordance with ASC 820,Fair Value Measurement. For valuation purposes, the Company utilizes Coinbase as the principal market for LsETH.

Note 3–Additional Balance Sheet Information

Equipment, net

Equipment consists of computers, furniture and fixtures and is presented net of accumulated depreciation from continuing operations for a net book value of $3,935 and $3,359 as of June 30, 2025 and December 31, 2024, respectively. Depreciation expense from continuing operations for the six months ended June 30, 2025 and 2024 was $1,630 and $4,343, respectively.

Intangible assets, net

Intangible assets, net of accumulated amortization as of June 30, 2025 and December 31, 2024 consisted of the following:

Amortization expense from continuing operations on intangible assets for the six months ended June 30, 2025 and 2024 was $2,448 and $2,461, respectively.

Note 4 -Convertible Debenture and Warrant

Convertible Debenture at Fair Value

The Company accounts for convertible debentures using the fair value method. The discount for warrants, the Original Issuance Discount (“OID”) and the initial allocation of fair value of compound derivatives reduce the initial carrying amount of the convertible notes. The carrying value is the stated principal amount at contractual maturity using the effective-interest method with a corresponding charge to interest expense. Debt discounts are presented on the condensed consolidated balance sheets as a direct deduction from the carrying amount of that related debt.

The Company made an irrevocable election at the time of issuance of the Debenture to record the Debenture at its fair value (the “Fair Value Option”) with changes in fair value recorded through the Company’s condensed consolidated statements of operations within other income (expense) at each reporting period. The Fair Value Option provides the Company with a measurement basis election for financial instruments on an instrument-by-instrument basis.

On February 14, 2023, the Company entered into the Securities Purchase Agreement (the “SPA”) with Alpha, a current shareholder of the Company, pursuant to which the Company issued to Alpha an 8% Interest Rate,10% Original Issue Discount, Senior Convertible Debenture (the “Debenture”) in the aggregate principal amount of $4,400,000 for a purchase price of $4,000,000 on February 15, 2023. The Debenture is convertible, at any time, and from time to time, at Alpha’s option, into shares of Common Stock of the Company (the “Conversion Shares”), at an initial conversion price equal to $84.00 per share, subject to adjustment as described in the debenture agreement. A registration statement on Form S-1 (File No.: 333-271396) was filed with the SEC on April 21, 2023, and as a result, the reset price was set to $50.13.

Pursuant to Section 8(a)(vi) of the Debenture, it is an event of default if the Company is party to a Fundamental Transaction or agrees to sell or dispose of all or in excess of 33% of its assets in one transaction or a series of related transactions. On January 19, 2024, SharpLink and Alpha entered into a settlement agreement (the “Settlement Agreement”) whereby Alpha agreed to waive (i) the event of default under Section 8(a)(vi) of the Debenture in connection with the Sale of Business; and (ii) payment of the Mandatory Default Amount; and the parties agreed that the Company would pay 110% of the outstanding principal amount of the Debenture, plus accrued and unpaid interest, in the aggregate total amount of $4,484,230 (the “Debenture Redemption Amount”).

On January 19, 2024, the Company paid Alpha the Debenture Redemption Amount. As a result, the Company’s obligations under the Debenture have been satisfied.

Purchase Warrant

On February 15, 2023, the Company also issued to Alpha a warrant (the “Warrant”) to purchase 73,333 common shares of the Company at an initial exercise price of $105.01 (the “Warrant Shares,” and, together with the Conversion Shares, and any other common shares of the Company that may otherwise become issuable pursuant to the terms of the Debenture and Warrant, the “Underlying Shares”). The Warrant is exercisable in whole or in part, at any time on or after February 15, 2023 and before February 15, 2028.

At the time of execution, the Company classified the Warrant as an equity contract and performed an initial fair value measurement. As the Warrant was issued with the assumption of the Debenture, the value assigned to the Warrant was based on an allocation of proceeds, subject to the allocation to the Debenture. The Company recorded a debt discount for the Warrant of $1,174,229, based on the Black Scholes option-pricing model which was calculated independently of the fair value of the Debenture, and recorded the Warrant as additional paid-in capital.

The Warrant provided that in the event of a Fundamental Transaction (as defined in the Debenture), SharpLink, at Alpha’s option, would repurchase the Warrant from Alpha on the terms set forth in Section 3(e)(ii) of the 2023 Warrant (the “Warrant Repurchase”). On January 19, 2024, SharpLink and Alpha entered into a settlement agreement (the “Settlement Agreement”) whereby Alpha agreed to waive (i) the event of default under Section 3(e)(ii) of the Warrant in connection with the Sale of Business.

Pursuant to Section 5(1) of the Warrant, Alpha further agreed to waive its right to elect that, in connection with and at the closing of the Sale of Business, the Warrant shall be repurchased by the Company as set forth in Section 3(e) of the 2023 Warrant. The parties agreed in the Settlement Agreement that the Warrant Repurchase for its Black Scholes value shall take place upon the earlier of (a) June 30, 2024; (b) the Company raising a gross amount of not less than $3,000,000 whether by equity or debt; and (c) the Company entering into a Fundamental Transaction as defined in the 2023 Warrant. The parties further agreed in the Settlement Agreement value of the 2023 Warrant for purposes of the Warrant Repurchase at $900,000, which was based on a Black Scholes model.

On March 6, 2024, SharpLink entered into an Exchange Agreement (the “Exchange Agreement”) with Alpha to change the Warrant Repurchase of $900,000. Pursuant to the terms and conditions set forth in the Exchange Agreement, the Company agreed to exchange the 2023 Warrant to purchase 73,333 shares of common stock for (i)13,017 shares of Common Stock (the “Shares”), (ii) a pre-funded warrant in the amount of 39,130 shares of Common Stock (the “Pre-Funded Warrant”) and (iii) the unexchanged balance of the 2023 Warrant Repurchase (the “Warrant Repurchase Balance”). The Warrant Repurchase Balance of 21,186 warrants was valued at $170,636 and shall be subject to the repurchase terms set forth in the Settlement Agreement. The Pre-Funded Warrant and the Warrant Repurchase Balance were valued using Black Scholes option-pricing model. As part of this transaction, the Company recorded a deemed dividend of $44,619 as presented in the statement of stockholders’ equity for the six months ended June 30 , 2024.

The fair value of the Warrant Repurchase balance and the Pre-Funded Warrant are estimated on the following dates using the Black Scholes option pricing model with the following assumptions:

On June 30, 2024*,* SharpLink negotiated an Amendment to the Exchange Agreement (the “Amendment”) to reduce the strike price per warrant of the unexchanged balance of the 2023 Warrants Repurchase Balance from $48.85 to $0.0012 and to remove the re-purchase option.

Note 5 -Fair Value

In accordance with fair value accounting guidance, the Company determines fair value based on the exchange price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants.

As disclosed inNote 4, SharpLink entered into a Settlement Agreement on January 19, 2024 for the 2023 Warrant for purposes of the Warrant Repurchase at $900,000. On March 6, 2024, SharpLink entered into an Exchange Agreement with Alpha to change the Warrant Repurchase of $900,000. Pursuant to the terms set forth in the Exchange Agreement, the Company agreed to exchange the 2023 Warrant for (i)13,107 shares of Common Stock (the “Shares”), (ii) a pre-funded warrant in the amount of 39,130 shares of Common Stock (the “Pre-Funded Warrant”) and (iii) the remaining unexchanged balance of the 2023 Warrant Repurchase (the “Warrant Repurchase Balance”).

On June 30, 2024*,* SharpLink negotiated an Amendment to the Exchange Agreement (the “Amendment”) to reduce the strike price per warrant of the unexchanged balance of the 2023 Warrants Repurchase Balance from $4.07 to $0.0001 and to remove the re-purchase option. The fair value of the warrant liability was zero as of June 30, 2024.

The following table presents a reconciliation of the beginning and ending balances of the Debenture measured at fair value on a recurring basis that uses significant unobservable inputs (Level 3) and the related expenses and losses recorded in the consolidated statement of operations during the six months ended June 30, 2024:

The fair value of the Debenture was determined using a Monte Carlo Simulation (“MCS”), which incorporates the probability and timing of the consummation of a Fundamental Transaction event and conversion of the Debenture as of the valuation date.

As disclosed inNote 1, the Company purchased crypto assets held at fair value in June of 2025. The fair value of the Company’s crypto assets is disclosed inNote 2. The crypto assets are measured at fair value on a recurring basis using observable prices (Level 1).

Note 6 -Warrants

Following is a summary of the Company’s warrant activity for the six months ended June 30, 2025:

The Company recognized $16,379,368 of stock-based compensation expense for 3,455,019 of Strategic Advisor Warrants to purchase shares of common stock issued to Consensys in conjunction with the Strategic Advisory Agreement. The Strategic Advisor Warrants have various exercise prices as follows:(i) 1,382,007 shares of Common Stock at an exercise price of $6.15 per share of common stock; (ii) 691,004 shares of common stock at an exercise price of $6.765 per share of common stock; (iii) 691,004 shares of common stock at an exercise price of $7.38 per share of common stock; and (iv) 691,004 shares of common stock at an exercise price of $7.995 per share of common stock.See Note 13 - Related Party Transactions.

The Company recognized $12,864,153 of stock-based compensation expense recognized as contra-equity for the 2,764,013 Placement Agent Warrants to purchase shares of common stock issued to the Agent in conjunction with the PIPE Offering. The warrants have an exercise price of $7.68 per share of common stock.

The strategic advisor and placement agent warrants are accounted for under ASC 718, Compensation—Stock Compensation. Both warrants are fully vested, nonforfeitable and not subject to any clawback provisions on the grant date. Accordingly, the grant-date fair value of the strategic advisor warrants is recognized in full as compensation in the income statement upfront. The grant date fair value of the placement agent warrants is recorded as contra-equity as the warrants represent noncash consideration for costs of placement agent services which are directly attributable costs to raise capital in the PIPE.

The Company issued 1,496,612 Pre-Funded Warrants to purchase shares of common stock to Consensys in conjunction with the $4.5 Million Registered Offering. The warrants have an exercise price of $0.0001 per share of common stock.

The Company issued 3,966,340 Pre-Funded Warrants to purchase shares of common stock to Consensys in conjunction with the PIPE Offering. The warrants have an exercise price of $0.0001 per share of common stock.

The Company issued 6,434,213 Pre-Funded Warrants to purchase shares of common stock to Joseph Lubin in conjunction with the PIPE Offering. The warrants have an exercise price of $0.0001 per share of common stock.

The Company issued 44,650 Pre-Funded Warrants to purchase shares of common stock to Alpha in conjunction with the April 2, 2025 Exchange Agreement. The warrants have an exercise price of $0.0001 per share of common stock and were exercised during the period ended June 30, 2025.

The Pre-Funded Warrants met the criteria for classification within stockholders’ equity as permanent equity, with no subsequent remeasurement required. The fair value of each warrant awarded for compensation is estimated on the date of grant using a Black Scholes option-pricing model. The Company uses historical option exercise and termination data to estimate the term the options are expected to be outstanding. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant. The expected dividend yield is calculated using historical dividend amounts and the stock price at the option issue date. The expected volatility is determined using the volatility of peer companies.

The fair value of each warrant grant is estimated on the date of grant using the Black Scholes option pricing model with the following assumptions:

Following is a summary of the Company’s warrant activity for the six months ended June 30, 2024:

Note 7 -Stock Compensation

Stock Options

Option awards are generally granted with an exercise price equal to the market price of the Company’s Common Stock at the date of grant; those options generally vest based on three years of continuous service and have ten-year contractual terms. Certain option and share awards provide for accelerated vesting if there is a change in control, as defined in the plans. For the six months ended June 30, 2025the Company managed the following equity plans: SharpLink Gaming Ltd. 2021 Equity Incentive Plan, SharpLink, Inc. 2020 Stock Incentive Plan, SharpLink Gaming, Inc. 2023 Equity Incentive Plan and SHGN 2018 Stock Incentive Plan.

The Company grantedno options for the three and six months ended June 30, 2025 and 2024, respectively. The Company recognized stock compensation expense for stock options of $72,898 and $85,204 for the six months ended June 30, 2025 and 2024, respectively, of which $0 and $12,041 of expense are recorded in discontinued operations. The Company recognized stock compensation expense for stock options of $36,534 and $43,052 for the three months ended June 30, 2025 and 2024, respectively, of which $0 and $0 of expense are recorded in discontinued operations.

The summary of activity under the plans as of June 30, 2025, and change during the six months ended June 30, 2025, is as follows:

The summary of activity under the plans as of June 30, 2024, and change during the six months ended June 30, 2024, is as follows:

Unamortized stock compensation expense of $36,223 will be recognized through 2026 for 1,808 of unvested options which have a weighted average recognition period of seven (7) years.

Restricted Stock Units

The Company’s Compensation Committee recommended to the Board of Directors and the Board approved the granting of certain restricted stock units (“RSU”) to members of the senior leadership team and the Board of Directors that vest over the passage of time. The Company recognized stock compensation expense for RSU awards of $294,133 and $212,800 for the six months ended June 30, 2025 and 2024, respectively. The Company recognized stock compensation expense for RSU’s of $261,038 and $212,800 for the three months ended June 30, 2025 and 2024, respectively.

The following is a summary of RSU activity for the six months ended June 30, 2025:

The total unrecognized compensation cost related to unvested RSUs as of June 30, 2025 was $36,646.

The following is a summary of RSU activity for the six months ended June 30, 2024:

Note 8 -Operating Segments

The Company’s Chief Executive Officer serves as the Chief Operating Decision Maker (“CODM”) and evaluates the financial performance of the business and makes resource allocation decisions on the basis of its two different revenue sources. Our Affiliate Marketing segment is focused on performance-based customer acquisition services for leading sportsbooks and online casino gaming operators worldwide. Our Ethereum Staking (“ETH Staking”) segment captures ETH-based yield generated by participating in the Ethereum network’s staking protocol which is currently comprised of rewards received from native staking.

As a result, the Company operates two reportable segments under ASC 280,*Segment Reporting,*Affiliate Marketing and ETH Staking.

Total Affiliate Marketing net loss from continuing operations before income taxes was $(1,492,219) and $(2,406,143) million for the three- and six-month periods ending June 30, 2025. Total ETH Staking net loss from continuing operations before income taxes was $(101,851,030) for the three- and six-month periods ending June 30, 2025.

Affiliate Marketing

The Company’s Affiliate Marketing operations include performance marketing services, lead generation, and data analytics. The Company focuses on delivering quality traffic and player acquisitions, retention and conversions to global casino gaming partners worldwide in exchange for a commission (cost per acquisition or portion of net gaming revenues) paid to the Company by the partners for the new players referred to them. The CODM assesses financial performance based on consolidated revenue, operating profit, and key operating expenses as detailed below.

The following table presents significant segment expenses regularly provided to and reviewed by the CODM for the Affiliated Marketing Segment:

ETH Staking

Beginning in June 2025, the Company used the proceeds from its capital raising activities to acquire and deploy ETH in staking activities, which can include native staking, liquid staking and restaking. The Company has entered into separate contractual agreements with various third-party entities to facilitate its ETH staking activities. The Company commenced both native staking and liquid staking in June of 2025. The Company intends for staking to become a primary revenue generation strategy of the Company within the current fiscal year.

Native Staking

The Company utilized two third-party asset managers to manage and stake ETH on its behalf as of June 30, 2025.

Through its agreements with these asset managers, the Company’s ETH is held by qualified custodians, staked in the Ethereum protocol, and the stake is delegated to third party validators. When chosen as validators by the Ethereum network, these validators earn staking rewards and transaction fees proportional to the amount of stake delegated to them. The Company recognizes rewards from native staking as revenue in accordance with ASC 606.

All native staking revenue is earned within the United States as the validators are domiciled within the United States.

Liquid Staking

The Company participates in liquid staking, which is similar to native staking. One key difference and intended benefit of liquid staking is that it provides for liquidity by allowing the Company to earn staking rewards while still maintaining the ability, provided through the receipt token, to enter into to other transactions. When the Company’s ETH is staked, the Company is provided with a digital intangible asset (i.e., LsETH) which represents the crypto asset (i.e., ETH) which has been staked. Liquid staking rewards will be recognized as gains or losses within other income upon redemption or sale of the LsETH in accordance with ASC 610-20. No LsETH was redeemed or sold in the period ended June 30, 2025.

The CODM assesses financial performance based on consolidated revenue, operating profit and key operating expenses as detailed below.

The following table presents significant segment expenses regularly provided to and reviewed by the CODM for the ETH Staking segment:

These expenses represent the key cost components reviewed by the CODM in assessing the Company’s performance.

The CODM evaluates income generated from the Company’s assets using net income (loss) as a key metric. The CODM utilizes this measure to assess return on assets when making strategic decisions, including whether to reinvest profits into the affiliate marketing platform or ETH staking business, enhance technology and data analytics capabilities, or expand partnerships with advertisers and publishers.

Summarized revenues by country in which the Company operated for the three and six months ended June 30, 2025 and 2024 are shown below. All ETH staking revenue occurred within the United States.

For the three months ended June 30, 2025:

For the six months ended June 30, 2025:

For the three months ended June 30, 2025:

For the six months ended June 30, 2024:

The Company does not have material assets in foreign jurisdictions.

The Company’s Affiliate Marketing Services segment derives a significant portion of its revenues from several large customers. The table below presents the percentage of consolidated revenues derived from large customers:

Note 9 -Revenue Recognition

The Company recognizes revenue in accordance with ASC 606,Revenue from Contracts with Customers(“ASC 606”).

To determine revenue recognition for contracts with customers, the Company performs the following five steps: (i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, including variable consideration to the extent that it is probable that a significant future reversal will not occur, (iv) allocate the transaction price to the respective performance obligations in the contract, and (v) recognize revenue when (or as) the Company satisfies the performance obligation.

The Company recognizes revenue when it transfers its goods and services to customers in an amount that reflects the consideration to which the Company expects to be entitled in such exchange.

For the six months ended June 30, 2025 and 2024, the Company has recognized its revenue at a point in time. The Company is currently engaged in the provision of Affiliate Marketing services and Ethereum Staking activities.

The Company’s assets and liabilities related to its contracts with customers were as follows:

Affiliate Marketing

The timing of revenue recognition may differ from the timing of invoicing to customers and these timing differences result in contract advanced billings on the Company’s condensed consolidated balance sheet. The Company recognized unbilled revenue when revenue is recognized prior to invoicing.

Payment terms and conditions vary by contract type, although terms generally include a requirement of payment within 30 days. In instances where the timing of revenue recognition differs from the timing of invoicing, the Company has determined that its contracts generally do not include a significant financing component. The primary purpose of invoicing terms is to provide customers with simplified and predictable ways of purchasing the Company’s services, and not to facilitate financing arrangements.

ETH Staking

In native staking, the Company retains the right and ability to direct the use of the underlying ETH, subject to a bonding period. As such, the Company does not derecognize the ETH when participating in native staking. The Company recognizes rewards from native staking as revenue in accordance with ASC 606. The Company acts as an agent in native staking transactions as it delegates ETH to third-party validator operators who perform the technical validation responsibilities. Native staking rewards are recognized as revenue at the end of each epoch, or block processing time, or when earned and measurable and when the Company’s share of rewards is known. The amount of revenue recognized is measured at fair value and is presented net of validator or other protocol fees.

The Company also participates in liquid staking, which is similar to native staking; however, one key difference and intended benefit of this method is the ability to provide the Company with tokens representing digital assets in exchange for its ETH. Liquid staking rewards are accumulated through the protocol conversion rate for the LsETH and will be recognized as gains or losses within other income upon redemption or sale of the LsETH in accordance with ASC 610-20. No LsETH was redeemed or sold in the period ended June 30, 2025.

As of June 30, 2025, the Company had native staked 23,200 ETH on the Ethereum blockchain. For the period ended June 30, 2025, the Company earned 11.5 ETH and recognized revenue from native staking rewards of $28,534.

Note 10–Income Taxes

On a quarterly basis, we estimate our annual effective tax rate and record a quarterly income tax provision based on the anticipated rate. As the year progresses, we refine our estimate based on the facts and circumstances, including discrete events, by each tax jurisdiction. The effective tax rate for the six-month ended June 30, 2025 was (0.0%). The Company has NOLs available to offset 80% of the current year taxable income and the gain, net of tax is classified as discontinued operations in the financial statements. The Company is in the process of dissolving certain legal entities to simplify its legal structure. The tax impact of these legal entities being dissolved is not expected to be significant. The launch of the treasury reserve strategy during the second quarter of 2025 increased the Company’s deferred tax asset by approximately $20 million for a deferred tax asset of approximately $27 million for the period ended June 30, 2025. The Company has a full valuation allowance for its deferred tax assets as of the period ended June 30, 2025

We follow the authoritative guidance on accounting for and disclosure of uncertainty in tax positions which requires us to determine whether a tax position of the Company is more likely than not to be sustained upon examination, including resolution of any related appeals of litigation processes, based on the technical merits of the position. For tax positions meeting the more likely than not threshold, the uncertain tax benefit amount recognized in the financial statements is reduced to the largest benefit that has a greater than 50% likelihood of being realized upon the ultimate settlement with the relevant taxing authority. Interest and penalties related to uncertain tax positions are included in the provision for income taxes in the condensed consolidated statements of operations. In accordance with the Sale of Business (See Note 3), management performed an evaluation of the technical merits of the Israeli Controlled Foreign Corporate Rules to determine the taxability of the gain from the Sale of Business from an Israeli tax perspective. This analysis also considered the results of the U.S. income tax. Management determined that the technical merits for uncertain tax exposure resulting from the gain for Israeli tax purposes did not exceed the more-likely-than-not threshold and has not recorded any income tax liability at June 30, 2025. Management’s determination is based on known facts and circumstances and requires judgment of a complex set of rules and regulations. If facts and circumstances change, such as closing, liquidating or selling of the businesses’ equity that is remaining, including events outside the Company’s control, this could have a material impact on the management’s determination.

On July 4, 2025, subsequent to the end of the reporting period, the U.S. federal government enacted theOne Big Beautiful Bill Act (“OBBBA”), which includes significant amendments to the Internal Revenue Code. The Company is currently evaluating the impact of the legislation on its consolidated financial statements, including deferred tax assets and liabilities.

Note 11–Net Income (Loss) Per Share

Basic net income (loss) per share is calculated by dividing net income (loss) available to common shareholders, adjusted for preferred stock discount accretion and dividends accrued on preferred stock, by the weighted-average number of common stock outstanding during the period excluding the effects of any potentially dilutive securities. Diluted net loss per share is computed similar to basic loss per share, except that the denominator is increased to include the number of additional common stock that would have been outstanding if potential shares of common stock had been issued if such additional common stock were dilutive.

As the Company had a net loss from continuing operations and net income from discontinued operations for the three and six months ended June 30, 2024, the following presents dilutive and anti-dilutive securities.

For continuing operations, since there was a net loss, all securities presented below were excluded from weighted average shares outstanding. For discontinued operations, dilutive securities presented below were included in the net income per share calculation and the anti-dilutive securities were excluded in weighted average shares outstanding:

As the Company had a net loss from continuing operations and net income from discontinued operations for the three months ended March 31, 2024, the following presents dilutive and anti-dilutive securities. For continuing operations, since there was a net loss, all securities presented below were excluded from weighted average shares outstanding. For discontinued operations, dilutive securities presented below were included in the net income per share calculation and the anti-dilutive securities were excluded in weighted average shares outstanding:

The calculation of the net income (loss) per share and weighted-average shares of the Company’s common stock outstanding for the periods presented are as follows:

Note 12–Discontinued Operations

In accordance with ASC205-20 Presentation of Financial Statements: Discontinued Operations, a disposal of a component of an entity or a group of components of an entity is required to be reported as discontinued operations if the disposal represents a strategic shift that has (or will have) a major impact on an entity’s operations and financial results when the components of an entity meets the criteria in ASC paragraph205-20-45-10. In the period in which the component meets the held for sale or discontinued operations criteria the major assets, other assets, current liabilities and non-current liabilities shall be reported as a component of total assets and liabilities separate from those balances of the continuing operations. At the same time, the results of all discontinued operations, less applicable income taxes (benefit), shall be reported as components of net income (loss) separate from the income (loss) of continuing operations.

Sale of SHGN and Sports Gaming Client Services

On January 18, 2024*,* SharpLink Israel (“Parent Seller”) and SLG1 Holdings, LLC, a Delaware limited liability company and wholly owned subsidiary of SharpLink (“Subsidiary Seller”), SHGN Acquisition Corp. (“SHGN,” and together with Parent Seller and Subsidiary Seller, the “Seller”), a Delaware corporation and wholly owned subsidiary of SharpLink, entered into a Purchase Agreement (the “PA”) with RSports Interactive, Inc., a Minnesota corporation (“Buyer”). The Subsidiary Seller owns all of the issued and outstanding membership interests of Sports Technologies, LLC, a Minnesota limited liability company, SHGN and Holdings Quinn, LLC, a Delaware limited liability company (collectively referred to as the “Targets”). The PA contemplated the sale of the Company’s Sports Gaming Client Services and SportsHub Gaming Network business units to the Buyer, by selling all of the issued and outstanding membership interests of the Targets and the Acquired Subsidiaries for $22,500,000 in an all cash transaction. SHGN owns all of the membership interests in Virtual Fantasy Games Acquisitions, LLC , a Minnesota limited liability company; LeagueSafe Management, LLC, a Minnesota limited liability company; SportsHub Reserve, LLC, a Minnesota limited liability company; SportsHub PA, LLC, a Pennsylvania limited liability company; SportsHub Operations, LLC, a Minnesota limited liability company; SportsHub Holdings, LLC, a Minnesota limited liability company; SportsHub Regulatory, LLC, a Minnesota limited liability company; and SportsHub Player Reserve, LLC, a Minnesota limited liability company (collectively, the “Acquired Subsidiaries”).

As a result of the Sale of Business, we ceased our Sports Game Client Services and SportsHub Gaming Network segments. The historical results of these business segments have been reflected as discontinued operations in our consolidated financial statements for all periods prior to the closing date of the Sale of Business on January 18, 2024.

In connection with the Sale of Business, the Company entered into with the Buyer a Transition Services Agreement to provide for an orderly transfer and the continuity of business services. The Parent Seller would be able to use certain Buyer employees at an agreed upon hourly rate. The Buyer would be charged monthly amounts for business services such as accounting software, insurance and data services.

On May 8, 2024, SharpLink entered into an amended and fully restated Post Closing Assignment Agreement with RSports, whereby SharpLink and RSports agreed to amend the PA to exclude the transfer/sale of SHGN and agreed to the assignment/sale of the Acquired Subsidiaries membership interests in SHReserve and SHPA to be made directly to RSports upon and subsequent to the approval of a petition by the Pennsylvania Gaming Control Board. Based on this amended agreement, the Sale of Business is an asset sale for legal and tax purposes instead of an equity sale.

The $14.6 million gain was calculated by measuring the difference between the fair value of consideration received less the carrying amount of assets and liabilities sold in accordance with ASC 810.

In the statement of cashflows for the six months ended June 30 2024, the net cash used in investing activities - discontinued operations is due to cash received from the sale of business of $22,500,000, net of the cash transferred of $41,357,834. The majority of the cash transferred of $41,357,834 was reflected in discontinued operations customer deposits liability and deferred revenue of $36,959,573 and $4,888,704, respectively.

During the six months ended June 30, 2025 and 2024, SharpLink paid RSports $2,287 and $70,420, respectively, for use of accounting service personnel under the Post Closing Covenant Agreement (the “PCCA”); and RSports paid SharpLink $2,175 and $21,588 under the PCCA for the six months ended June 30, 2025 and 2024, respectively.

Sale of MTS

The Company negotiated a Share and Asset Purchase Agreement which was closed on December 31, 2022. The majority of the assets of the primary reporting unit within MTS were sold. Accordingly, the assets and liabilities of the MTS business were separately reported as assets and liabilities from discontinued operations as of June 30, 2025 and June 30, 2024. The results of operations and cash flows of MTS for all periods are separately reported as discontinued operations.

Summary Reconciliation of Discontinued Operations

The following table presents a reconciliation of the carrying amounts of major classes of assets and liabilities of the Company classified as discontinued operations as of June 30, 2025 and December 31, 2024:

Note 13 -Related Parties

Strategic Advisory Agreement with Consensys Software Inc.

In connection with the PIPE transaction, the Company entered into a Strategic Advisor Agreement with Consensys Software Inc. (“Consensys”), a Delaware corporation, and a related party. Consensys is a global blockchain technology company that provides decentralized applications and enterprise solutions, focusing on building and scaling blockchain-based systems primarily on the Ethereum blockchain. Under the terms of the agreement, Consensys will provide a broad range of advisory services related to the Company’s ETH treasury strategy to the Company for three years. As consideration for these services, Consensys received warrants to purchase up to 3,455,019 shares of the Company’s common stock (the “Strategic Advisor Warrants”). The Strategic Advisor Warrants have various exercise prices as follows: (i) 1,382,007 shares of Common Stock at an exercise price of $6.15 per share of common stock; (ii) 691,004 shares of common stock at an exercise price of $6.765 per share of common stock; (iii) 691,004 shares of common stock at an exercise price of $7.38 per share of common stock; and (iv) 691,004 shares of common stock at an exercise price of $7.995 per share of common stock. The Company recorded $16,379,368 as stock-based compensation expense, related party, determined using a Black Scholes model, on the statement of operations for the period ended June 30, 2025.

Secondment Agreements with Consensys Employees

As part of the ongoing collaboration between the Company and Consensys, three employees of Consensys have been seconded to SharpLink under secondment agreements. These employees provide key services in areas including strategic planning, treasury management, technology integration and business development. The secondment agreements outline the terms of the assignment, the duration, which began during the month of June 2025 and terminate September 30, 2025, total monthly compensation of approximately $80,000 payable to Consensys and stock-based compensation of a total of approximately $75,000 for RSU’s to be awarded in July, and the allocation of responsibilities between the parties. The seconded employees remain employees of Consensys, but perform their duties for the Company during the secondment period and report to the Company’s Chief Executive Office and Chief Financial Officer. In exchange for these services, the Company compensates Consensys for the associated costs on a monthly basis, including the employees’ salaries, benefits and other related expenses. For the period ended June 30, 2025, approximately $43,000 was accrued in selling, general and administrative expenses in relation to these agreements and their applicable start date.

Note 14–Subsequent Events

Letter Agreements

Between July 8, 2025 and July 10, 2025, the Company entered into letter agreements (“Letter Agreements”) with the holders of the Company’s common stock and pre-funded warrants which were issued in connection with the Company’s private placement pursuant to the two Securities Purchase Agreements dated May 20, 2025 and May 26, 2025, respectively. Pursuant to section 4.9 of each Securities Purchase Agreements, the Company agreed to reserve and keep available at all times a sufficient number of shares of Common Stock for the purpose of enabling the Company to issue shares in accordance with each of the Securities Purchase Agreements and the shares underlying the exercise of any Strategic Advisor Warrants, Placement Agent Warrants, Private Placement Pre-Funded Warrants, and Best Efforts Pre-Funded Warrants.

Pursuant to the Letter Agreements, the Holders waive the SPA Share Reserve Provision such that the Company may reserve for issuance under the ATM Sales Agreement between the Company and A.G.P/Alliance Global Partners, entered into on May 30, 2025, any of the authorized shares of Common Stock that would otherwise be reserved for issuance under the Strategic Advisor Warrants, Placement Agent Warrants, Private Placement Pre-Funded Warrants, and Best Efforts Pre-Funded Warrant, with the understanding that (i) the Company may issue such shares pursuant to the ATM Facility at any time after the execution of the Letter Agreements and before the date on which the Company receives the requisite stockholder approval (the “Stockholder Approval”) to increase the Company’s authorized shares (the “Permitted ATM Sales”), and (ii) following the receipt of the Stockholder Approval with respect to the authorized share increase, the Company shall reserve the shares underlying the Placement Agent Warrants, Strategic Advisor Warrants, Private Placement Pre-Funded Warrants, and Best Efforts Pre-Funded Warrants. Following the increase in authorized share capital on July 24, 2025, the Letter Agreements were terminated.

Amendment to ATM Sales Agreement

On July 17, 2025, SharpLink entered into an Amendment to its ATM Sales Agreement (the “Amendment”) with AGP, dated May 30, 2025, to increase the number of shares that may be sold from time to time in connection with the ATM facility from $1,000,000,000 to $6,000,000,000; and to permit the forward sale of shares to be sold in the ATM Offering pursuant to Master Forward Confirmation Letter Agreements. We filed a supplement to the Prospectus Supplement, dated May 30, 2025, with the SEC to address the Amendment and the Forward Sales Agreements on July 17, 2025.

Results of Special Meeting of Stockholders

At a Special Meeting of Stockholders held on July 24, 2025, the Company’s stockholders approved an amendment and restatement of the Company’s 2023 Equity Incentive Plan (the “Plan”) to increase the number of shares of common stock reserved for issuance under the Plan by 8,000,000 shares to 8,034,166 shares. In addition, the stockholders approved an amendment to the Company’s Amended and Restated Certificate of Incorporation, as amended, to increase the number of authorized shares of common stock, par value $0.0001, of the Company from 100,000,000 to 500,000,000. In connection with the increase in the authorized shares of common stock of the Company, we filed a Second Certificate of Amendment to the Company’s Amended and Restated Certificate of Incorporation, as amended, with the Secretary of State of the State of Delaware, which became effective at 5:10 p.m. Eastern Time on July 24, 2025.

Appointment of Co-Chief Executive Officers and Entry into New Employment Agreements

On July 24, 2025 (the “Effective Date”), the Board appointed Joseph Chalom as Co-Chief Executive Officer of the Company, to serve with Rob Phythian as the Co-Chief Executive Officer of the Company. Mr. Phythian will remain the Company’s principal executive officer. It is anticipated that Mr. Phythian will transition to the role of President over the next quarter and remain a member of the Board.

Mr. Chalom, age 54, has served in senior leadership roles over the course of his 20 year career at BlackRock, Inc. (“BlackRock”). Most recently, from October 2021 to June 2025 he was the Head of Strategic Ecosystem Partnerships at BlackRock and was responsible for executing BlackRock’s strategy in the digital assets, data and technology innovation ecosystems. This included product innovation and strategic partnerships to drive digital asset ecosystem innovation and institutional client adoption. Under Mr. Chalom’s leadership, in 2024, BlackRock launched its IBIT and ETHA exchange traded products and the BUIDL tokenized treasury fund, making it the largest manager of digital assets. Prior to this role, he served as BlackRock’s Deputy Chief Operating Officer on an interim basis from March 2021 to October 2021; and, for over a decade, was the Chief Operating Officer of BlackRock Solutions, which delivers the firm’s Aladdin financial technology capabilities clients globally. Mr. Chalom served on the boards of Securitize, Inc., a leading provider in the tokenized assets and digital transfer agency space for real world assets, from May 2004 until June 2025; and Clarity AI, Inc., a leading AI-powered sustainability platform and data provider, from January 2021 to June 2025. Prior to joining BlackRock, Mr. Chalom worked as a corporate and technology attorney at Skadden Arps and at Arnold & Porter. Mr. Chalom earned a B.A. degree, with honors, in International Studies from Johns Hopkins University and a J.D. degree from Columbia University School of Law.

Chalom Employment Agreement

In connection with his appointment as the Company’s Co-Chief Executive Officer, Mr. Chalom entered into an employment agreement with the Company effective as of the Effective Date, which provides for (i) an annual base salary of $750,000; (ii) a target short-term incentive opportunity equal to 100% of his base salary, with a maximum opportunity of up to 150% of his base salary; (iii) a sign-on restricted stock unit award, to be granted within 30 days after the Effective Date, with an award value of $7,000,000, which value will be converted to a number of shares (rounded down to the nearest whole share) by dividing (x) the award value, by (y) the average closing per-share price of the Company’s common stock for the seventy five (75) trading days immediately preceding the Effective Date, and which will be allocated two-thirds (2/3) to time-based vesting conditions, with one-third (1/3) of such time-based vesting units vesting on the first (1st) anniversary of the Effective Date and the remaining time-based vesting units vesting in equal quarterly installments thereafter, in each case subject to Executive’s continued employment with the Company, and one-third (1/3) to performance-based vesting conditions, which will vest based on the extent that certain annual performance goals, selected by the Board or a committee thereof, are achieved over a three-year performance cycle; (iv) a long-term incentive opportunity for the 2026 fiscal year commencing July 1, 2026 with a “target” value of not less than $4,000,000; and (v) payment for an annual executive physical. Mr. Chalom’s employment agreement also provides for certain severance benefits if his employment were terminated by the Company without cause, death or disability, or upon his resignation for good reason, including an amount equal to two (2) times his base salary and target bonus, any short-term incentive earned for the prior fiscal year but not yet paid, a pro-rated short-term incentive for the year of termination, based on actual results, subsidized health insurance premiums for eighteen (18) months, full vesting of any time-based equity awards and pro-rated vesting of any performance-based equity awards, based on actual results for the entire performance period. Moreover, upon a change in control, all of his equity awards will vest in full (with performance-based awards vesting based on performance through the date of the transaction). In exchange for the severance benefits, Mr. Chalom must sign a release of claims in favor of the Company. Mr. Chalom’s employment agreement also includes standard confidentiality, non-competition, non-solicitation and non-disparagement covenants.

Phythian Employment Agreement

In connection with his appointment as the Company’s Co-Chief Executive Officer, Mr. Phythian entered into a new employment agreement with the Company, which replaces and supersedes his prior employment agreement with the Company dated as of February 14, 2024, as amended on March 19, 2025, and as amended on June 29, 2025. The employment agreement provides for (i) an annual base salary of $660,000, (ii) a target short-term incentive opportunity equal to 100% of his base salary, with a maximum opportunity of up to 150% of his base salary, (iii) a sign-on restricted stock unit award, to be granted within 30 days after the Effective Date, with an award value of $3,700,000, which value will be converted to a number of shares (rounded down to the nearest whole share) by dividing (x) the award value, by (y) the average closing per-share price of the Company’s common stock for the seventy five (75) trading days immediately preceding the Effective Date, and which will be allocated two-thirds (2/3) to time-based vesting conditions, with one-third (1/3) of such time-based vesting units vesting on the first (1st) anniversary of the Effective Date and the remaining time-based vesting units vesting in equal quarterly installments thereafter, in each case subject to Executive’s continued employment with the Company, and one-third (1/3) to performance-based vesting conditions, which will vest based on the extent that certain annual performance goals, selected by the Board or a committee thereof, are achieved over a three-year performance cycle; (iv) a long-term incentive opportunity for the 2026 fiscal year commencing July 1, 2026 with a “target” value of not less than $3,700,000; and (v) payment for an annual executive physical. Mr. Phythian’s employment agreement also provides for certain severance benefits if his employment were terminated by the Company without cause, death or disability, or upon his resignation for good reason, including an amount equal to two (2) times his base salary and target bonus, any short-term incentive earned for the prior fiscal year but not yet paid, a pro-rated short-term incentive for the year of termination, based on actual results, subsidized health insurance premiums for eighteen (18) months, full vesting of any time-based equity awards and pro-rated vesting of any performance-based equity awards, based on actual results for the entire performance period. Moreover, upon a change in control, all of his equity awards will vest in full (with performance-based awards vesting based on performance through the date of the transaction). In exchange for the severance benefits, Mr. Phythian must sign a release of claims in favor of the Company. Mr. Phythian’s employment agreement also includes standard confidentiality, non-solicitation and non-disparagement covenants.

DeLucia Employment Agreement

In connection with these appointments, Mr. Robert DeLucia, our Chief Financial Officer, entered into a new employment agreement with the Company, which replaces and supersedes his prior employment agreement with the Company dated as of February 14, 2024, as amended on March 19, 2025, and as amended on June 29, 2025. The employment agreement provides for (i) an annual base salary of $450,000, (ii) a target short-term incentive opportunity equal to 100% of his base salary, with a maximum opportunity of up to 150% of his base salary, (iii) a sign-on restricted stock unit award, to be granted within 30 days after the Effective Date, with an award value of $1,150,000, which value will be converted to a number of shares (rounded down to the nearest whole share) by dividing (x) the award value, by (y) the average closing per-share price of the Company’s common stock for the seventy five (75) trading days immediately preceding the Effective Date, and which will be allocated two-thirds (2/3) to time-based vesting conditions, with one-third (1/3) of such time-based vesting units vesting on the first (1st) anniversary of the Effective Date and the remaining time-based vesting units vesting in equal quarterly installments thereafter, in each case subject to Executive’s continued employment with the Company, and one-third (1/3) to performance-based vesting conditions, which will vest based on the extent that certain annual performance goals, selected by the Board or a committee thereof, are achieved over a three-year performance cycle; and (iv) a long-term incentive opportunity for the 2026 fiscal year commencing July 1, 2026 with a “target” value of not less than $1,150,000. Mr. DeLucia’s employment agreement also provides for certain severance benefits if his employment were terminated by the Company without cause, death or disability, or upon his resignation for good reason, including an amount equal to two (2) times his base salary and target bonus, any short-term incentive earned for the prior fiscal year but not yet paid, a pro-rated short-term incentive for the year of termination, based on actual results, subsidized health insurance premiums for eighteen (18) months, full vesting of any time-based equity awards and pro-rated vesting of any performance-based equity awards, based on actual results for the entire performance period. Moreover, upon a change in control, all of his equity awards will vest in full (with performance-based awards vesting based on performance through the date of the transaction). In exchange for the severance benefits, Mr. DeLucia must sign a release of claims in favor of the Company. Mr. DeLucia’s employment agreement also includes standard confidentiality, non-competition, non-solicitation and non-disparagement covenants.

Registered Direct Offerings

$200 Million Offering

On August 6, 2025, the Company entered into a securities purchase agreement (the “August Purchase Agreement”) with certain institutional investors to sell in a registered direct offering (the “August Offering”) an aggregate of 10,256,411 shares of the Company’s common stock. The price per share was $19.50, and the gross proceeds from the August Offering, before deducting the placement agent fees, financial advisor fees, and offering expenses, were approximately $200 million. The shares were offered and sold pursuant to a prospectus, dated May 30, 2025, and a prospectus supplement, dated August 6, 2025, in connection with a takedown from the Company’s effective shelf registration statement on Form S-3ASR (File No. 333-287708). In addition, on August 6, 2025, the Company entered into a placement agency agreement (the “Placement Agency Agreement”) with A.G.P./Alliance Global Partners (“AGP”). AGP, as lead placement agent and SG Americas Securities, LLC, as co-placement agent (“SocGen,” and together with AGP, the “Placement Agents”), pursuant to which the Company engaged the Placement Agents as the exclusive placement agents in connection with the August Offering. Cantor Fitzgerald & Co. (“Cantor”) acted as financial advisor to the Company pursuant to an engagement letter with the Company (the “Engagement Letter”). Pursuant to the Placement Agency Agreement, the Company paid the Placement Agents a cash fee equal to their pro rata allocation of 5.0% of the aggregate gross proceeds raised from the sale of the shares sold in the August Offering (the “Cash Fee”). The Cash Fee was allocated 45.0% to AGP and 10.0% to SocGen. In addition, pursuant to the Engagement Letter, Cantor was paid a cash fee equal to 45.0% of the aggregate amount of the Cash Fee. Notwithstanding the foregoing, the Cash Fee paid to AGP did not exceed 2.0% of the aggregate gross proceeds raised from the sale of the securities sold in the offering. The balance of the Cash Fee not payable to the Placement Agents or Cantor was credited back to the Company. The Offering closed on August 8, 2025.

$400 Million Offering

On August 10, 2025, the Company entered into a securities purchase agreement (the “Second August Purchase Agreement”) with certain institutional investors to sell in a registered direct offering (the “Second August Offering”) an aggregate of 18,382,353 shares of the Company’s common stock. The price per share was $21.76, and the gross proceeds from the Second August Offering, before deducting the placement agent fees, financial advisor fees, and offering expenses, were approximately $400 million. The shares were offered and sold pursuant to a prospectus, dated May 30, 2025, and a prospectus supplement, dated August 10, 2025, in connection with a takedown from the Company’s effective shelf registration statement on Form S-3ASR (File No. 333-287708). In addition, on August 10, 2025, the Company entered into a placement agency agreement (the “Placement Agency Agreement”) with AGP. AGP, as lead placement agent and SocGen, and together with AGP, the “Placement Agents”), pursuant to which the Company engaged the Placement Agents as the exclusive placement agents in connection with the August Offering. Cantor Fitzgerald & Co. (“Cantor”) acted as financial advisor to the Company pursuant to an engagement letter with the Company (the “Engagement Letter”). Pursuant to the Placement Agency Agreement, the Company paid the Placement Agents a cash fee equal to their pro rata allocation of 5.0% of the aggregate gross proceeds raised from the sale of the shares sold in the August Offering (the “Cash Fee”). The Cash Fee was allocated 45.0% to AGP and 10.0% to SocGen. In addition, pursuant to the Engagement Letter, Cantor was paid a cash fee equal to 45.0% of the aggregate amount of the Cash Fee. Notwithstanding the foregoing, the Cash Fee paid to AGP did not exceed 2.0% of the aggregate gross proceeds raised from the sale of the securities sold in the offering. The balance of the cash fee not payable to the Placement Agents or Cantor was credited back to the Company. The Offering closed on August 12, 2025.