Sharplink, Inc. 10-Q

ITEM 1. FINANCIAL STATEMENTS SHARPLINK GAMING, INC. CONDENSED CONSOLIDATED BALANCE SHEETS September 30, 2025 December 31, 2024 (unaudited) Assets Current Assets Cash $ 11,128,231 $ 1,436,729 USDC stablecoin 26,707,482 - Accounts receivable, net of allowance for credit losses of $ 0 338,984 264,831 Other receivables - 272,813 Prepaid expenses and other current assets 1,484,887 310,180 Due from RSports Interactive, Inc. - 307 Current assets from discontinued operations 344,227 269,788 Total current assets 40,003,811 2,554,648 Crypto assets at fair value 2,409,797,249 - Crypto assets at cost 622,655,639 - Investment, cost 500,000 - Equipment, net 7,860 3,359 Intangible assets, net 9,469 13,162 Total assets $ 3,072,974,028 $ 2,571,169 Liabilities and Stockholders’ Equity Current Liabilities Accounts payable and accrued expenses $ 4,503,147 $ 478,280 Accounts payable and accrued expenses - related party 68,099 - Accounts payable and accrued expenses 68,099 - Current liabilities from discontinued operations 1,020 10,020 Total current liabilities 4,572,266 488,300 Total liabilities 4,572,266 488,300 Commitments and Contingencies (Note 11) - - Stockholders’ Equity Series A-1 preferred stock, $ 0.0001 par value; authorized shares: 260,000 ; issued and outstanding shares: 0 and 601 ; liquidation preference: $ 116,997 - 1 Series B preferred stock, $ 0.0001 par value; authorized shares: 370,000 ; issued and outstanding shares: 0 and 1,040 ; liquidation preference: $ 529,122 - 1 Preferred stock value - 1 Common stock, $ 0.0001 par value; authorized shares 2,500,000,000 and 100,000,000 ; issued 194,131,641 and 407,295 , respectively; outstanding shares: 192,193,183 and 407,287 , respectively 19,414 41 Treasury stock, 1,938,458 and 8 shares, respectively, of common stock at cost ( 31,721,488 ) ( 29,000 ) Additional paid-in capital 3,178,040,218 79,920,785 Accumulated deficit ( 77,936,382 ) ( 77,808,959 ) Total stockholders’ equity 3,068,401,762 2,082,869 Total liabilities and stockholders’ equity $ 3,072,974,028 $ 2,571,169 See accompanying notes to these condensed consolidated financial statements 3 Table of Contents SHARPLINK GAMING, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED ) 2025 2024 2025 2024 For the Three Months Ended September 30, For the Nine Months Ended September 30, 2025 2024 2025 2024 Revenue from staking $ 10,273,809 $ - $ 10,302,343 $ - Revenue from affiliate marketing 569,758 881,690 1,980,246 2,838,908 Revenues and gains from operations 10,843,567 881,690 12,282,589 2,838,908 Other operating income Realized gain on crypto assets at fair value, net 6,307,776 - 11,681,359 - Unrealized gain on crypto assets at fair value, net 107,326,140 - 104,889,114 - Total operating income 113,633,916 - 116,570,473 - Operating expenses Cost of revenues from affiliate marketing 430,569 709,045 1,528,707 2,098,921 Selling, general, and administrative expenses 12,045,432 970,080 15,435,938 4,426,835 Stock-based compensation, related party 130,620 - 16,509,988 - Impairment of crypto assets at cost 6,950,189 - 94,763,484 - Total operating expenses 19,556,810 1,679,125 128,238,117 6,525,756 Operating income (loss) 104,920,673 ( 797,435 ) 614,945 ( 3,686,848 ) Other income and expense Interest income 118,948 16,178 167,815 48,206 Interest expense - - - ( 324,518 ) Other income (expense) - - ( 312 ) 297,387 Change in fair value of convertible debenture and warrant liabilities - - - 255,819 Total other income 118,948 16,178 167,503 276,894 Net income (loss) before income taxes 105,039,621 ( 781,257 ) 782,448 ( 3,409,954 ) Income tax expense ( 792,346 ) ( 6,735 ) ( 822,440 ) ( 55,513 ) Net income (loss) from continuing operations 104,247,275 ( 787,992 ) ( 39,992 ) ( 3,465,467 ) Net income (loss) from discontinued operations, net of tax 22,930 ( 97,139 ) ( 87,431 ) 14,467,733 Net income (loss) $ 104,270,205 $ ( 885,131 ) $ ( 127,423 ) $ 11,002,266 Numerator for basic and diluted net income (loss) per share: Net income (loss) from continuing operations $ 104,247,275 $ ( 787,992 ) $ ( 39,992 ) $ ( 3,510,086 ) Net income (loss) from discontinued operations 22,930 ( 97,139 ) ( 87,431 ) 14,467,733 Net income (loss) 104,270,205 ( 885,131 ) ( 127,423 ) 10,957,647 Denominator for net loss per share: Basic weighted average shares for continuing and discontinued operations 149,056,400 292,528 63,214,826 278,213 Diluted weighted average shares for continuing and discontinued operations 167,172,597 292,528 81,331,023 338,530 Net earnings (loss) per share: Net income (loss) from continuing operations per share - basic $ 0.70 $ ( 2.69 ) $ - $ ( 12.62 ) Net income (loss) from discontinued operations per share – basic $ - $ ( 0.33 ) - 52.00 Net income (loss) per share - basic $ 0.70 $ ( 3.02 ) $ - $ 39.38 Net income (loss) from continuing operations per share - diluted $ 0.62 $ ( 2.69 ) $ - $ ( 12.62 ) Net income (loss) from discontinued operations per share – diluted $ - $ ( 0.33 ) - 42.74 Net income (loss) per share - diluted $ 0.62 $ ( 3.02 ) $ - $ 30.12 See accompanying notes to these condensed consolidated financial statements 4 Table of Contents SHARPLINK GAMING, INC. CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS ’ EQUITY (DEFICIT) FOR THE three and nine months ended September 30, 2025 and 2024 (UNAUDITED) Shares Amount Shares Amount Shares Amount Capital Shares Amount deficit equity Series A-1 preferred stock Series B preferred stock Common stock Additional Paid-In Treasury stock Accumulated Total shareholders’ Shares Amount Shares Amount Shares Amount Capital Shares Amount deficit equity Balance, December 31, 2023 601 $ 120 1,040 $ 208 238,645 $ 47,729 $ 78,438,630 ( 8 ) $ ( 29,000 ) $ ( 87,857,456 ) ( 9,399,769 ) Net loss - - - - - - - - - 12,350,356 12,350,356 Domestication equity adjustment - Note 1 - ( 119 ) - ( 207 ) - ( 47,704 ) 48,030 - - - - Stock-based compensation expense - - - - - - 42,152 - - - 42,152 Shares issued for vested restricted stock - - - - 6,250 - 108,000 - - - 108,000 Issuance of common stock for exercise of warrants - - - - 22,222 2 159,998 - - - 160,000 Warrant settlement agreement - Note 8 - - - - - - ( 900,000 ) - - - ( 900,000 ) Issuance of common stock for exchange of warrants - Note 8 - - - - 13,017 1 210,893 - - ( 6,503 ) 204,391 Warrant exchange agreement - deemed dividend - Note 8 - - - - - - 44,619 - - ( 44,619 ) - Warrant exchange agreement, issuance of pre-funded warrants - Note 8 - - - - - - 287,150 - - - 287,150 Balance at March 31, 2024 601 $ 1 1,040 $ 1 280,134 $ 28 $ 78,439,472 ( 8 ) $ ( 29,000 ) $ ( 75,558,222 ) $ 2,852,280 Net loss - - - - - - - - - ( 462,959 ) ( 462,959 ) Stock-based compensation expense - - - - - - 43,052 - - - 43,052 Shares issued for vested restricted stock - - - - 6,250 - 104,800 - - - 104,800 Shares sold for cash - - - - 5,934 1 71,349 - - - 71,350 Warrant exchange amendment - Note 8 - - - - - - 152,386 - - - 152,386 Balance at June 30, 2024 601 $ 1 1,040 $ 1 292,318 $ 29 $ 78,811,059 ( 8 ) $ ( 29,000 ) $ ( 76,021,181 ) $ 2,760,909 Net loss - - - - - - - - - ( 885,131 ) ( 885,131 ) Stock-based compensation expense - - - - - - 39,559 - - - 39,559 Shares issued for vested restricted stock - - - - 6,250 - 104,800 - - - 104,800 Issuance of common stock for exercise of warrants - - - - 213 - - - - - - Balance at September 30, 2024 601 $ 1 1,040 $ 1 298,781 $ 29 $ 78,955,418 ( 8 ) $ ( 29,000 ) $ ( 76,906,312 ) $ 2,020,137 Balance at December 31, 2024 601 $ 1 1,040 $ 1 407,295 $ 41 $ 79,920,785 ( 8 ) $ ( 29,000 ) $ ( 77,808,959 ) $ 2,082,869 Net loss - - - - - - - - - ( 974,901 ) ( 974,901 ) Stock-based compensation expense - - - - - - 69,460 - - - 69,460 Issuance of common stock from exercise of warrants - - - - 25,000 3 - - - - 3 Issuance of common stock sold in at-the-market offering - - - - 142,960 14 907,171 - - - 907,185 Balance at March 31, 2025 601 $ 1 1,040 $ 1 575,255 $ 58 $ 80,897,416 ( 8 ) $ ( 29,000 ) $ ( 78,783,860 ) $ 2,084,616 Net loss - - - - - - - - - ( 103,422,727 ) ( 103,422,727 ) Stock-based compensation expense - - - - - - 16,676,944 - - - 16,676,944 Shares issued for vested restricted stock - - - - 37,502 4 ( 4 ) - - - - Issuance of common stock for exchange agreement ( 601 ) ( 1 ) ( 1,040 ) ( 1 ) 38,683 4 2 - - - 4 Issuance of common stock for exercise of warrants - - - - 69,842 7 - - - - 7 Issuance of common stock sold in private placement May 20, 2025 - - - - 34,000 3 3,847,997 - - - 3,848,000 Issuance of common stock sold in a private placement May 26, 2025 - - - - 58,704,673 5,871 404,618,078 - - - 404,623,949 Issuance of common stock sold in at-the-market offering - - - - 6,694,837 670 128,707,887 - - - 128,708,557 Balance at June 30, 2025 - $ - - $ - 66,154,792 $ 6,617 $ 634,748,320 ( 8 ) $ ( 29,000 ) $ ( 182,206,587 ) $ 452,519,350 Balance - $ - - $ - 66,154,792 $ 6,617 $ 634,748,320 ( 8 ) $ ( 29,000 ) $ ( 182,206,587 ) $ 452,519,350 Net income - - - - - - - - - 104,270,205 104,270,205 Stock-based compensation expense - - - - - - 3,352,521 - - - 3,352,521 Shares issued for vested restricted stock - - - - 99,162 10 ( 10 ) - - - - Issuance of common stock sold in private placement August 8, 2025 - - - - 10,256,411 1,025 189,835,490 - - - 189,836,515 Issuance of common stock sold in a private placement August 12, 2025 - - - - 18,382,353 1,838 389,583,778 - - - 389,585,616 Issuance of common stock sold in at-the-market offering - - - - 99,238,923 9,924 1,960,520,119 - - - 1,960,530,043 Stock repurchased (treasury stock) - - - - - - - ( 1,938,450 ) ( 31,692,488 ) - ( 31,692,488 ) Balance at September 30, 2025 - $ - - $ - 194,131,641 $ 19,414 $ 3,178,040,218 ( 1,938,458 ) $ ( 31,721,488 ) $ ( 77,936,382 ) $ 3,068,401,762 Balance - $ - - $ - 194,131,641 $ 19,414 $ 3,178,040,218 ( 1,938,458 ) $ ( 31,721,488 ) $ ( 77,936,382 ) $ 3,068,401,762 See accompanying notes to these condensed consolidated financial statements. 5 Table of Contents SHARPLINK GAMING, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) 2025 2024 Includes cash flow activities from both continuing and discontinued operations Nine Months Ended September 30, 2025 2024 CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) ( 127,423 ) 11,002,266 Net income (loss) from discontinued operations, net of tax ( 87,431 ) 14,467,733 Net loss from continuing operations $ ( 39,992 ) $ ( 3,465,467 ) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Depreciation and amortization 6,161 9,592 Amortization of debt discount - 71,781 Change in fair value of convertible debenture and warrant liabilities - ( 255,819 ) Deferred tax expense - ( 7,155 ) Stock-based compensation expense 3,588,937 112,721 Stock-based compensation expense, related party 16,509,988 - Impairment on crypto assets at cost 94,763,484 - Unrealized gain on crypto assets at fair value, net ( 104,889,114 ) - Realized gain on crypto assets at fair value, net ( 11,681,359 ) - Crypto rewards on native staking, net ( 10,302,343 ) - Loss on disposal of equipment 312 - Changes in assets and liabilities Accounts receivable ( 194,324 ) ( 29,958 ) Due from Rsports Interactive, Inc. 307 ( 16,710 ) Prepaid expenses and other current assets ( 38,770 ) 195,957 Accounts payable and accrued expenses 4,024,871 ( 1,048,944 ) Accounts payable and accrued expenses - related party 68,099 - Net cash used in operating activities – continuing operations ( 8,183,743 ) ( 4,434,002 ) Net cash used in operating activities - discontinued operations ( 225,981 ) ( 17,112,182 ) Net cash used in operating activities ( 8,409,724 ) ( 21,546,184 ) CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures for equipment ( 7,282 ) ( 1,719 ) Investment in Armchair Enterprises, Inc. ( 500,000 ) - Crypto assets purchased ( 2,539,611,653 ) - USDC stablecoin purchased ( 445,096,653 ) - USDC stablecoin redemptions 80,693,796 Proceeds from sale of intellectual property - 150,000 Net cash provided by (used in) investing activities – continuing operations ( 2,904,521,792 ) 148,281 Net cash used in investing activities - discontinued operations - ( 18,857,834 ) Net cash used for investing activities ( 2,904,521,792 ) ( 18,709,553 ) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from convertible debenture and purchase warrants - ( 4,148,571 ) Gross proceeds from sale of common stock 2,147,072,919 71,356 Issuance costs paid related to sale of common stock ( 56,654,131 ) - Issuance of common stock from exchange agreement 4 - Issuance of common stock from exercise of warrants 10 - Gross proceeds from shares sold in capital raise 4,500,000 - Issuance costs related to shares sold in capital raise ( 652,000 ) - Gross proceeds from private placement 902,086,156 - Issuance costs paid related to private placements ( 40,956,626 ) - Repurchases of common stock (treasury cost) ( 31,692,488 ) - Deferred financing costs ( 1,135,937 ) Proceeds from line of credit - 550,000 Repayment of line of credit - ( 6,900,000 ) Principal payments on long-term debt - ( 2,070,479 ) Proceeds from exercise of warrants - 160,000 Net cash generated by (used in) financing activities – continuing operations 2,922,567,907 ( 12,337,694 ) Net cash used in financing activities - discontinued operations - ( 5,835,352 ) Net cash generated by (used in) financing activities 2,922,567,907 ( 18,173,046 ) Net change in cash 9,636,391 ( 58,428,783 ) Cash and restricted cash, beginning of period including discontinued operations 1,541,856 60,441,130 Cash and restricted cash, end of period including discontinued operations 11,178,247 2,012,347 Less cash from discontinued operations ( 50,016 ) ( 162,141 ) Cash, end of period $ 11,128,231 $ 1,850,206 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid for interest - 485,531 Cash paid for taxes 140,814 504,755 NON-CASH OPERATING, INVESTING AND FINANCING ACTIVITIES: Crypto assets received as equity contributions $ 123,397,477 $ - Crypto assets staked on liquid staking protocol ( 718,382,803 ) - Receipt of crypto assets at fair value 717,419,123 Crypto assets purchased with USDC stablecoin ( 337,884,920 ) - Placement agent warrants 12,864,153 - Settlement agreement, liability issued for warrants - ( 900,000 ) Issuance of common stock in exchange of warrants 4 210,879 Issuance of common stock for vested restricted stock 2,507,974 317,600 USDC stablecoin rewards 138,767 - Deemed dividend - 44,619 Warrant exchange agreement, issuance of pre-funded warrants - 287,150 Warrant exchange amendment, revalue of strike price and removal of repurchase requirement - 152,386 See accompanying notes to these condensed consolidated financial statements. 6 Table of Contents SHARPLINK GAMING, INC. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS three and nine months ended September 30, 2025 and 2024 Note 1 – Organization Background and Nature of Business Headquartered in Minneapolis, SharpLink Gaming, Inc. (the “Company” of “Sharplink”), a Delaware corporation, undertook a significant strategic shift in June 2025 by adopting Ether (“ETH”), the native cryptocurrency of the Ethereum blockchain, 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 uses proceeds from financings to accumulate ETH, which is then deployed in staking to generate rewards. Staking rewards earned from staking are also staked to generate additional rewards. See Note 3 – Digital Asset Holdings . The Company also operates an online affiliate marketing company that delivers unique fan activation solutions to its sportsbook and online casino gaming partners. The Company’s ETH Treasury Management strategy is now its predominant operational focus. Since the launch of its ETH Treasury Management strategy, the Company has raised capital through private investment in public equity (“PIPE”) transactions, follow-on offerings, and at-the-market (“ATM”) sales. The Company has deployed the majority of the proceeds to acquire ETH. Additional details regarding these equity offerings are included in Note 9 – Equity . Tokenization of Stock On September 24, 2025, the Company entered into a digital transfer agent agreement with Superstate Services LLC with the intent to tokenize the Company’s common stock, par value $ 0.0001 per share (the “Common Stock”) on the Ethereum blockchain. As of the date of this filing, the Company has not tokenized any of its common stock. Reverse Stock Split On May 5, 2025, the Company effected a one-for-twelve (1:12) reverse stock split of all the Company’s Common Stock, whereby the Company decreased the number of issued and outstanding Common Stock 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. 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 September 30, 2025. Domestication 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. The Common Stock of SharpLink 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 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. 7 Table of Contents 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: Schedule of Change in Par Value of Outstanding Ordinary and Preferred Shares to Common and Preferred Stock Ordinary Shares Par value for ordinary shares at $ 0.20 as reported at February 13, 2024 $ 572,770 Par value for common stock at $ 0.0001 at February 13, 2024 294 Par value for common stock 294 Net change in par value — reflected in additional paid-in capital $ 572,476 Preferred Shares Par value for Series A-1 preferred stock at $ 0.20 par value as reported at February 13, 2024 $ 1,440 Par value for Series A-1 preferred stock at $ 0.0001 par value as reported at February 13, 2024 1 Net change in par value — will be reflected in additional paid-in capital $ 1,439 Par value for Series B preferred stock at $ 0.20 par value as reported at February 13, 2024 2,496 Par value for Series B preferred stock at $ 0.0001 par value at February 13, 2024 1 Par value for Series preferred stock 1 Net change in par value — reflected in additional paid-in capital $ 2,495 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 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. See Note 9 - Equity . Note 2 – Summary of Significant Accounting Policies (a) Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared by SharpLink Gaming, Inc., 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 September 30, 2025 and December 31, 2024, as well as its results of operations for the three and nine months ended September 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. There have been no significant changes in the Company’s accounting policies since December 31, 2024, except as discussed below in Note 3(d) - Crypto Assets and 3(e) Staking activities , related to the Company’s ETH Treasury Management Strategy. During the three months ended September 30, 2025, the Company revised its presentation of the condensed consolidated statements of operations to align with its current view of operations. Specifically, other operating income now reflects to Company’s ETH Treasury Management results, including realized gains and losses on crypto assets at fair value and unrealized gains and losses on changes in the fair value of crypto assets held. In addition, cost of revenue from affiliate marketing has been reclassified into operating expenses. 8 Table of Contents (b) Principles of Consolidation The accompanying condensed consolidated financial statements include the accounts of SharpLink and its wholly owned subsidiaries. All intercompany accounts and transactions between consolidated subsidiaries have been eliminated in consolidation. (c) 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 translation into U.S dollars. Foreign currency transaction gains and losses resulting from remeasurement are recognized in selling, general and administrative expenses within the condensed consolidated statements of operations. (d) Crypto Assets The Company’s crypto assets primarily consist of ETH, the native token of the Ethereum blockchain, and Liquid Staked Ether (“LsETH”), a token received when ETH is staked through a third-party liquid staking protocol. ETH and LsETH are presented separately on the Condensed Consolidated Balance Sheet under the captions “Crypto assets at fair value” and “Crypto assets at cost” respectively. The Company has ownership of and control over its crypto assets which are held through custodial arrangements with qualified third-party custodians. These custodians provide secure storage and safeguarding of the Company’s crypto assets, including both ETH and LsETH. Crypto assets at fair value Crypto assets acquired are initially recorded at cost, which represents the cash, cash equivalents, or other financial assets paid to acquire the asset, including transaction fees. Crypto assets received in exchange for goods or services, or in connection with the issuance of shares, are recognized at their fair value on the date received, which becomes their cost basis. Crypto assets are subsequently measured in accordance with ASC 350-60, Intangibles—Goodwill and Other—Accounting for and Disclosure of Crypto Assets , at fair value in the statement of financial position with unrealized gains and losses resulting from changes in fair value recognized in net income. The Company determines and records at each reporting period the fair value of its crypto assets in accordance with ASC 820, Fair Value Measurement , based on quoted (unadjusted) prices on the Coinbase exchange, the active exchange that the Company has determined is its principal market for ETH (Level 1 inputs). Changes in the fair value are recognized in net income within “Unrealized gain on crypto assets”, while realized gains and losses from the derecognition of crypto assets are included in “Realized gain on crypto assets, net” in the Company’s condensed consolidated statements of operations. The Company applies a first-in, first-out methodology to assign costs for purposes of determining crypto assets held and realized gains and losses. Purchases and sales of crypto assets are reflected as cash flows from investing activities in the consolidated statements of cash flows. Contributions of crypto assets received in connection with the issuance of shares and deposits of ETH into a liquid staking protocol are presented as non-cash investing and financing activities. Crypto assets at cost Crypto assets at cost are recognized at fair value on the date received, which becomes their cost basis. Crypto assets at cost, such as LsETH, do not fall in the scope of ASC 350-60 for subsequent measurement. LsETH represents a receipt token, which in general and by design, grants the holder an enforceable right to redeem ETH for which it was exchanged. Therefore, it fails the ‘other goods and services criterion’ in ASC 350-60-15-1(b) and is outside the scope of ASC 350-60. Crypto assets at cost are therefore subsequently measured at cost, net of any impairment losses incurred since acquisition, in accordance with ASC 350-30, Intangibles—Goodwill and Other—General Intangibles Other Than Goodwill . 9 Table of Contents The Company performs an analysis each quarter to identify whether events or changes in circumstances, principally decreases in the quoted (unadjusted) prices in the Company’s principal market, indicates that it is more likely than not that any of the assets are impaired. The quoted (unadjusted) prices on the Coinbase exchange, the active exchange that the Company has determined as its principal market, are used in the analysis. In determining if an impairment has occurred, the Company considers the lowest price of one LsETH quoted on the Coinbase exchange, at any time since acquiring the specific LsETH held by the Company. If the carrying value of a LsETH exceeds that lowest intraday price, an impairment loss has occurred with respect to that LsETH in the amount equal to the difference between its carrying value and such lowest price. Impairment losses are recognized in the period in which the impairment occurs and are reflected within “Impairment of crypto assets at cost” in the Company’s condensed consolidated statements of operations. The impaired crypto assets are written down to their fair value at the time of impairment and this becomes the new cost basis for those assets. The cost basis of LsETH will not be adjusted upward for any subsequent increase in fair value. LsETH received in connection with staking of ETH into a liquid staking protocol are presented as non-cash investing activities. (e) Staking activities Beginning in June 2025, the Company began staking its ETH. To date, this has included both native staking and liquid staking. The Company initiated both native staking and liquid staking in June 2025, and intends for staking to become a primary yield generation strategy of the Company during the current fiscal year. Native Staking The Company participates in native staking exclusively as a delegator through third-party validators. The Company delegates ETH to validators, either directly or through third party asset managers, who operate nodes on the Ethereum network to validate transactions and add blocks to the blockchain. In return for delegating ETH to validators, the Company is entitled to a portion of the block rewards and transaction fees earned by the validators, in the form of ETH tokens, calculated approximately based on the Company’s proportion of the total ETH staked. When the Company stakes ETH natively, the ETH does not remain in the Company’s custodial wallet, but is instead deposited into Ethereum’s staking deposit smart contract, which is required for participation in ETH staking as a delegator. Native staked ETH are not derecognized because their deposit into the smart contract does not give any other entity the right or ability to direct their use (for example, sell, lend, pledge or otherwise use those ETH). The withdrawal credentials in the smart contract are designated to the Company’s custodian, who, as described in Note 2(d), holds the Company’s ETH solely for the Company’s benefit and does not obtain control of the Company’s ETH via their custodial services. Native staked ETH are therefore not derecognized. Rewards from native staking activities are recognized as revenue in accordance with ASC 606, Revenue from Contracts with Customers . The delegation of the Company's ETH to validators represents an output of the Company’s ordinary activities. In this case our performance obligation is the provision of our validation rights to the validators, from which we earn variable consideration, in the form of ETH, which is non-cash consideration, measured at the fair value of ETH as of contract inception based on the quoted (unadjusted) prices on the Coinbase exchange, the active exchange that the Company has determined is its principal market. Revenue is recognized at the point in time when the Ethereum network confirms that the validation is complete. As a delegator, the Company has concluded it is not the principal to the block validation service provided to the Ethereum Network; it is the validators that control the service. Instead, the Company's service is one of providing the use of its ETH by the validators to increase their validation opportunities. Consequently, the Company records staking revenue on a net basis, reflecting only the portion of protocol rewards to which it is entitled after validator commissions are deducted. Fees paid to third-party asset managers of approximately $3.5M and custodians of approximately $657,000 are recognized separately as operating expenses. 10 Table of Contents Liquid Staking The Company also participates in liquid staking through a liquid staking protocol. One key difference and intended benefit of liquid staking versus native staking is that it allows the Company to earn staking rewards, like native staking, but provides liquidity and the ability to enter into other transactions through the receipt token. Instead of directly locking ETH into the Ethereum staking deposit contract, the Company deposits ETH through its custodian into the liquid staking protocol’s smart contract. The liquid staking protocol then controls the ETH for deposit into the Ethereum’s staking deposit contract and further delegation to its chosen validators. In exchange for staking its ETH, the Company receives LsETH, a freely transferable ERC-20 liquid staking receipt token, which enables participation in decentralized finance (DeFi) and other crypto markets while the underlying ETH remains staked. Upon staking ETH through the liquid staking protocol, the ETH is derecognized because the liquid staking protocol obtains the ability to deploy and direct its use, and the LsETH token received concurrently is then recognized. Any gain or loss on the staking transaction is recognized in accordance with ASC 610-20, Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets (“ASC 610-20”) based on the difference between the carrying amount of the ETH staked and the fair value of the LsETH received; and included in “Realized gain on crypto assets, net” in the Company’s Condensed Consolidated Statements of Operations. The liquid staking protocol uses a floating conversion rate, or protocol conversion rate, between the receipt token and staked tokens, reflecting the value of accrued network rewards, penalties, and fees associated with the staked ETH. The conversion rate between LsETH and ETH increases over time as staking rewards accrue to the protocol; no new LsETH are received. Staking rewards in the form of ETH are only received upon redemption of LsETH. Because LsETH is accounted for under ASC 350-30 (see Note 2(d)), increases in LsETH fair value while the Company remains staked with the liquid staking protocols, are not recognized. Staking rewards are therefore recognized when the LsETH is redeemed, measured at the fair value of ETH at contract inception, which is when the ETH were staked. Staking rewards will be included in other revenues in the Company’s Condensed Consolidated Statements of Operations. Gain or loss resulting from the difference between the carrying amount of the LsETH redeemed and the fair value of ETH received at redemption, other than staking rewards, will be included in operating income (expense) in the Company’s Condensed Consolidated Statements of Operations. No LsETH was redeemed or sold in the three and nine-month periods ended September 30, 2025. (f) USDC stablecoin USD stablecoin (“USDC”) is accounted for as a financial asset that can be redeemed on the basis of one USDC for one U.S. dollar on demand from the issuer. While not accounted for as cash or cash equivalents, the Company treats its USDC holdings as a liquidity resource. The USDC received rewards from Coinbase on USDC held with Coinbase, for which approximately $ 138,000 was recorded during the three months ended September 30, 2025, and netted against custodial fees in operating expenses in accordance with ASC 705-20 Accounting for Considerations Received from a Vendor . The Company's USDC are held with qualified third-party custodians who provide secure storage and safeguarding of the Company's USDC. The Company's custodians do not obtain control over the Company's USDC; therefore we continue to recognize USDC as our own for accounting purposes. (g) Affiliate Marketing Revenue Recognition The Company recognizes revenue in accordance with 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 three and nine months ended September 30, 2025, the Company has recognized its revenue at a point in time for certain contracts and over time for other contracts. 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. The Company acts as an agent and records revenue net of commissions retained. 11 Table of Contents (h) 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 the Company for annual reporting periods beginning in fiscal 2027 and for interim reporting periods beginning in fiscal 2028 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 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. 12 Table of Contents Note 3 – Digital Asset Holdings Crypto Assets at fair value The following table sets forth the units held, cost basis and fair value of crypto assets held, as shown on the condensed consolidated balance sheet as of September 30, 2025: Schedule of Units Held, Cost Basis, and Fair Value of Assets Held Units Cost Basis Fair Value Balance, September 30, 2025 ETH 580,841 $ 2,304,908,135 $ 2,409,797,249 Total 580,841 $ 2,304,908,135 $ 2,409,797,249 Fair value represents the quoted (unadjusted) prices on the Coinbase exchange as of midnight UTC on the measurement date. As of December 31, 2024, the Company did not hold any crypto assets. The following table represents a reconciliation of crypto assets held at fair value: Schedule of Reconciliation of Crypto Assets For the Three and Nine Months Ended September 30, 2025 Fair Value, December 31, 2024 $ - Fair Value, March 31, 2025 - Additions 529,214,163 Deposits of ETH into liquid staking activities ( 465,343,468 ) Receipt and accrual of ETH from native staking activities 28,534 Unrealized loss ( 2,437,026 ) Fair Value, June 30, 2025 61,462,203 Additions 2,471,679,887 Deposits of ETH into liquid staking activities ( 240,944,790 ) Receipt and accrual of ETH from native staking activities 10,273,809 Unrealized gain 107,326,140 Fair Value, September 30, 2025 2,409,797,249 Crypto Assets at cost The following table sets forth the cost basis, impairment amount, and carrying amount of crypto assets held at cost, as shown on the condensed consolidated balance sheet as of September 30, 2025: Schedule of Impairment Amount and, and Carrying Amount of Digital Assets Held Units Cost Impairment Net LsETH 236,906 $ 717,419,123 $ ( 94,763,484 ) $ 622,655,639 Total 236,906 $ 717,419,123 $ ( 94,763,484 ) $ 622,655,639 For the nine months ended September 30, 2025, the Company recorded an impairment loss of $ 94.7 million related to the ETH Treasury Management segment, See Note 4 - Operating Segments , in the condensed consolidated statement of operations within “Impairment of crypto assets at cost”. Note 4 – Operating Segments The Company’s Co-Chief Executive Officers serve 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. The ETH Treasury Management 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. The Affiliate Marketing segment is focused on performance-based customer acquisition services for leading sportsbooks and online casino gaming operators throughout the world. 13 Table of Contents As a result, the Company operates two reportable segments under ASC 280, Segment Reporting, ETH Treasury Management and Affiliate Marketing. Total ETH Treasury Management net income from continuing operations before income taxes was $ 105.0 million and $ 0.7 million for the three and nine months ended September 30, 2025. Total Affiliate Marketing net income (loss) from continuing operations before income taxes was $ ( 1,774 ) and $ 42,865 for the three and nine months ended September 30, 2025, respectively. ETH Treasury Management 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 Treasury Management segment: Schedule of Companies Reportable Segments ETH Treasury Management Segment For the Three Months Ended September 30, 2025 For the Nine Months Ended September 30, 2025 Revenue from staking $ 10,273,809 $ 10,302,343 Other operating income Realized gain on crypto assets at fair value, net 6,307,776 11,681,359 Unrealized gain on crypto assets at fair value, net 107,326,140 104,889,114 Total operating income 113,633,916 116,570,473 Less: Salaries and benefits 1,591,858 2,549,631 Contractors and consulting expense 377,713 535,136 Asset manager fees 3,145,826 3,523,667 Accounting and Legal expenses 1,795,081 2,535,304 Impairment of crypto assets at cost 6,950,189 94,763,484 Other segment expenses (1) 5,005,662 22,226,012 Segment net income from continuing operations before income taxes $ 105,041,395 $ 739,583 (1) - other segment items included in Segment net loss include: stock-based compensation - related party, bank fees, other income and expenses 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 Treasury Management business, enhance technology and data analytics capabilities, or expand partnerships with advertisers and publishers. 14 Table of Contents 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 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: Affiliate Marketing Segment Affiliate Marketing Segment For the Three Months Ended September 30, 2025 For the Three Months Ended September 30, 2024 For the Nine Months Ended September 30, 2025 For the Nine Months Ended September 30, 2024 Revenue $ 569,758 $ 881,690 $ 1,980,246 $ 2,838,908 Less: Cost of revenues 430,569 709,045 1,528,707 2,098,921 Salaries and benefits 102,444 249,908 307,442 958,706 Contractors and consulting expense 5,700 58,599 17,100 197,229 Marketing expense 15,935 44,968 56,071 181,228 Other segment expenses (1) 16,885 600,427 28,062 2,812,778 Segment net income (loss) from continuing operations before income taxes $ ( 1,774 ) $ ( 781,257 ) $ 42,865 $ ( 3,409,954 ) (1) - other segment items included in Segment net loss include: professional fees, insurance, general and administrative expenses, depreciation and amortization, foreign currency exchange gains and losses, other income and interest expense. The following table provides reconciliation to consolidated net income (loss) from continuing operations before income taxes: Schedule of Net Income (loss) From Continuing Operations Before Income Tax For the Three Months Ended September 30, 2025 For the Three Months Ended September 30, 2024 For the Nine Months Ended September 30, 2025 For the Nine Months Ended September 30, 2024 ETH Treasury Management segment net income from continuing operations before income taxes $ 105,041,395 $ - $ 739,583 $ - Affiliate Marketing segment net income (loss) from continuing operations before income taxes ( 1,774 ) ( 781,257 ) 42,865 ( 3,409,954 ) Consolidated net income (loss) before income taxes $ 105,039,621 $ ( 781,257 ) $ 782,448 $ ( 3,409,954 ) Revenue by Geographic Location Summarized revenues by country in which the Company operated for the three and nine months ended September 30, 2025 and 2024 are shown below. All ETH Treasury Management revenue occurred within the United States. Schedule of Revenues by Country For the Three Months Ended September 30, 2025: United States $ 10,369,432 Rest of the World $ 474,135 Revenue $ 10,843,567 For the Nine Months Ended September 30, 2025: United States $ 10,777,864 Rest of the World $ 1,504,725 Revenue $ 12,282,589 For the Three Months Ended September 30, 2024: United States $ 227,815 Rest of the World $ 653,875 Revenue $ 881,690 For the Nine Months Ended September 30, 2024: United States $ 666,541 Rest of the World $ 2,172,367 Revenue $ 2,838,908 15 Table of Contents 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: Schedule of Percentage of Consolidated Revenues Derived from Large Customers September 30, 2025 September 30, 2024 Customer A 16 % 21 % Customer B 47 % 37 % Customer C 20 % 0 % Percentage of consolidated revenues 20 % 0 % Note 5 – Revenue Recognition The Company is currently engaged in ETH Treasury Management activities and the provision of Affiliate Marketing services. ETH Treasury Management As of September 30, 2025, the Company had natively staked 580,192 ETH on the Ethereum blockchain and 649 ETH unstaked for a total of 580,841 ETH held at quarter end. For the nine-month period ended September 30, 2025, the Company earned 2,391 ETH and recognized revenue from native staking rewards of $ 10,302,343 . No LsETH was redeemed or sold in the nine-month period ended September 30, 2025. Affiliate Marketing 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 three and nine months ended September 30, 2025, the Company has recognized its revenue at a point in time. 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. The Company’s assets and liabilities related to its contracts with customers were as follows: Schedule of Contract Assets and Liabilities September 30, 2025 December 31, 2024 Accounts receivable $ 338,984 $ 264,831 16 Table of Contents Note 6 – 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 $ 7,860 and $ 3,359 as of September 30, 2025 and December 31, 2024, respectively. Depreciation expense from continuing operations for the nine months ended September 30, 2025 and 2024 was $ 2,468 and $ 5,887 , respectively. Intangible assets, net Intangible assets, net of accumulated amortization as of September 30, 2025 and December 31, 2024 consisted of the following: Schedule of Intangible Assets Weighted Average Amortization Period (Years) Cost, Net of Impairment Accumulated Amortization Net Balance, September 30, 2025 Acquired technology 5 $ 24,700 $ 15,231 $ 9,469 $ 24,700 $ 15,231 $ 9,469 Balance, December 31, 2024 Acquired technology 5 $ 24,700 $ 11,538 $ 13,162 $ 24,700 $ 11,538 $ 13,162 Amortization expense from continuing operations on intangible assets for the nine months ended September 30, 2025 and 2024 was $ 3,693 and $ 3,706 , respectively. 17 Table of Contents Note 7 – Warrants Following is a summary of the Company’s warrant activity for the nine months ended September 30, 2025: Schedule of Warrant Activity Number of Common Stock Underlying the Warrants Weighted Average Exercise Price Per Share Weighted Average Remaining Life (Years) Outstanding as of December 31, 2024 50,569 $ 1.07 7.71 Exercised ( 94,967 ) - - Issued 18,160,847 2.49 4.68 Expired - - - Outstanding as of September 30, 2025 18,116,449 $ 2.49 4.66 The Company recognized $ 16.3 million of stock-based compensation expense for 3,455,019 warrants to purchase the Company’s Common Stock (“Strategic Advisor Warrants”) issued to Consensys Software Inc. (“Consensys”) in conjunction with the Strategic Advisory Agreement ( Refer to Note 14 – Related Parties) . 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 14 — Related Party Transactions . The Company recognized $ 12.9 million 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 May 2025 PIPE Offering (as defined below). 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 the Strategic Advisor Warrants and the placement agent 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 non-cash consideration for costs of placement agent services, which are directly attributable costs to raise capital in the May 2025 PIPE Offering. 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: Schedule of Fair Values of warrant Granted Using Black-scholes Valuation Model Assumptions September 30, 2025 Expected volatility 105 % Expected dividends 0 % Expected term (years) 5 Risk-free rate 4.08 % Fair value per share of underlying Common Stock on grant date $ 6.15 Pre-funded warrants 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 in full during the period ended June 30, 2025. 18 Table of Contents 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. 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, pre-funded warrants, Strategic Advisor Warrants and placement agent 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. Pursuant to the Letter Agreements, the Company may reserve for issuance under the ATM sales agreement between the Company and A.G.P./Alliance Global Partners (“A.G.P.”) any of the authorized shares of common stock that would otherwise be reserved for issuance under the Strategic Advisor Warrants (as defined in Note 14 – Related Parties) , placement agent warrants, private placement pre-funded warrants and best efforts pre-funded warrants, 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, and (ii) following the receipt of the Stockholder Approval with respect to the authorized share increase, the Company shall reserve the shares underlying the various warrants. Following receipt of Stockholder Approval on July 24, 2025 at the Special Meeting of Stockholders, the authorized share capital was increased and the Letter Agreements were terminated. The termination of these Letter Agreements had no impact on the Company’s accounting or financial statement presentation, as no new rights or obligations were created or extinguished upon termination. 19 Table of Contents The following is a summary of the Company’s warrant activity for the nine months ended September 30, 2024: Number of Common Stock Underlying the Warrants Weighted Average Exercise Price Per Share Weighted Average Remaining Life (Years) Outstanding as of December 31, 2023 96,502 $ 41.16 3.58 Previously issued regular warrants ( 60,324 ) 49.20 - Revalued regular warrants 60,324 - 7.19 Exercised ( 35,448 ) 22.68 - Expired ( 486 ) 317.04 Outstanding as of September 30, 2024 60,568 $ 0.84 7.20 Note 8 – Stock Compensation Inducement Award Plan On August 19, 2025, the board of directors (the “Board”) of the Company adopted the SharpLink Gaming, Inc. Inducement Award Plan (the “Inducement Award Plan”). The Board reserved 3,000,000 shares of the Company’s Common Stock for issuance under the Inducement Award Plan, including restricted stock units (time-based and performance-based), subject to adjustment as provided in the plan document. The terms of the Inducement Award Plan are substantially similar to the terms of the Company’s Amended and Restated 2023 Equity Incentive Plan, with the exception that incentive stock options may not be issued under the Inducement Award Plan, and equity awards under the Inducement Award Plan (including nonqualified stock options, restricted stock, restricted stock units, and other stock-based awards) may be issued only to an employee who is commencing employment with the Company or any subsidiary or who is being rehired following a bona fide interruption of employment by the Company or any subsidiary, in either case if he or she is granted such award in connection with his or her commencement of employment and such grant is an inducement material to his or her entering into employment with the Company or such subsidiary. In August, the Company granted 443,385 restricted stock units to the newly appointed Co-CEO with 147,795 performance based awards and 295,590 service based awards, under the Inducement Award Plan (see Restricted Stock Units - Performance Based below). 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 nine months ended September 30, 2025, the Company managed the following equity plans: SharpLink Gaming Ltd. 2021 Equity Incentive Plan, SharpLink, Inc. 2020 Stock Incentive Plan, and SharpLink Gaming, Inc. 2023 Equity Incentive Plan. The Company granted no options for the three and nine months ended September 30, 2025 and 2024, respectively. The Company recognized stock compensation expense for stock options of $ 100,688 and $ 124,763 for the nine months ended September 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 $ 27,839 and $ 39,559 for the three months ended September 30, 2025 and 2024, respectively. The summary of activity under the plans as of September 30, 2025, and change during the nine months ended September 30, 2025, is as follows: Schedule of Stock Option Activity Weighted Weighted average Shares of average remaining Aggregate Common exercise contractual intrinsic Options Stock price term value Outstanding as of December 31, 2024 9,022 $ 91.06 7.6 $ - Granted - - Exercised - - Forfeited - - Expired - - Outstanding as of September 30, 2025 9,022 $ 91.06 6.9 $ - Exercisable as of September 30, 2025 8,719 $ 92.40 6.9 $ - 20 Table of Contents Unamortized stock compensation expense of $ 8,385 will be recognized through 2026 for 303 unvested options which have a weighted average recognition period of seven years . The summary of activity under the plans as of September 30, 2024, and change during the nine months ended September 30, 2024, is as follows: Weighted Weighted average Shares of average remaining Aggregate Common exercise contractual intrinsic Options Stock price term value Outstanding as of December 31, 2023 34,568 $ 105.48 7.7 $ 3,750 Granted - Exercised ( 208 ) 7.44 Forfeited ( 8,721 ) $ 68.40 Expired ( 16,618 ) $ 133.20 Outstanding as of September 30, 2024 9,022 $ 91.08 7.9 $ - Exercisable as of September 30, 2024 6,331 $ 96.60 7.8 $ - Restricted Stock Units - Service Based The Company’s Compensation Committee recommended to the Board and the Board approved the granting of certain restricted stock units (“RSUs”) to employees and the Board that vest over the passage of time. The Company recognized stock compensation expense for service based RSU awards of $ 3,545,855 and $ 317,600 for the nine months ended September 30, 2025 and 2024, respectively. The Company recognized stock compensation expense for service based RSU’s of $ 3,251,673 and $ 317,600 for the three months ended September 30, 2025 and 2024, respectively. The following is a summary of service based RSU activity for the nine months ended September 30, 2025: Schedule of Restricted Stock Units Weighted Average Grant Weighted Average Remaining Aggregate Number of RSU Shares Date Fair Value Contractual Term Intrinsic Value Outstanding as of December 31, 2024 12,501 $ 8.89 - $ - Granted 1,393,771 20.55 - - Cancelled - - - - Vested and released ( 124,321 ) 17.81 - 2,276,919 Outstanding and unvested as of September 30, 2025 1,281,951 $ 20.71 2.84 $ - The total unrecognized compensation cost related to unvested service based RSUs as of September 30, 2025 was $ 25,209,182 . The following is a summary of RSU activity for the nine months ended September 30, 2024: Weighted Average Grant Weighted Average Remaining Aggregate Number of RSU Shares Date Fair Value Contractual Term Intrinsic Value Outstanding as of December 31, 2023 - $ - - $ - Granted 41,667 13.68 - - Cancelled - - - - Vested and released ( 18,750 ) 16.80 - 3,200 Outstanding and unvested as of September 30, 2024 22,917 $ 11.04 10.63 $ - 21 Table of Contents Restricted Stock Units - Performance Based The Company’s Compensation Committee recommended to the Board of Directors and the Board approved the design of performance based restricted stock units (“Performance RSU”) for certain executive officers. The awards are intended to vest based on the achievement of specified financial and operational performance metrics over a three-year performance period, subject to continued service through the end of the performance period. The Company recognizes the stock-based compensation expense in connection with the Performance RSUs when they are granted or at the service inception date if the service inception date precedes the grant date. As of September 30, 2025, a grant date had not yet been established for 115,069 Performance RSUs because certain performance conditions and award parameters remained subject to the final determination by the Compensation Committee. The Company remeasures the fair value of the award at each reporting date, as the service date preceded the grant date. In the period in which the grant date occurs, cumulative compensation cost will be adjusted to reflect the cumulative effect of measuring compensation cost based on the fair value at the grant date rather than the fair value previously used at the service inception date or subsequent reporting dates. For the three and nine months ended September 30, 2025, the Company recognized $ 64,447 in stock compensation expense. Unamortized stock compensation expense of $ 2,144,370 will be recognized through 2028 for 115,069 unvested options. There were no Performance RSU’s issued during 2024. Note 9 – Equity Preferred Stock The Company has 15,000,000 preferred stock authorized, par value of $ 0.0001 . There is no preferred stock issued or outstanding as of September 30, 2025. At-The-Market ( “ ATM ” ) Offerings On May 2, 2024, Company entered into an ATM Sales Agreement (the “May 2024 ATM Sales Agreement”) with A.G.P./Alliance Global Partners (“A.G.P.”) pursuant to which the Company may offer and sell, from time to time, through A.G.P., as sales agent and/or principal, shares of the Company’s Common Stock, having an aggregate offering price of up to $ 1.7 million, subject to certain limitations on the amount of Common Stock that may be offered and sold by the Company set forth in the May 2024 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 $ 1.8 million. On May 30, 2025, SharpLink entered into a second ATM Sales Agreement (the “May 2025 ATM Sales Agreement”) with A.G.P. relating to the sale of shares of the Company’s Common Stock from time to time, having an aggregate offering price of up to $ 1.0 billion. On July 17, 2025, SharpLink entered into an amendment to the May 2025 ATM Sales Agreement (the “Amendment”) with A.G.P to increase the number of shares that may be sold from time to time in connection with the ATM facility from $ 1.0 billion to $ 6.0 billion; and to permit the forward sale of shares to be sold in the ATM offering to master forward confirmation letter agreements. On July 17, 2025, the Company filed a supplement to the prospectus supplement with the SEC to address the Amendment and the forward sales agreements . On July 17, 2025, the Company entered into a forward sales agreement to permit the forward sale of shares of the Company’s Common Stock to A.G.P. The forward sales agreement was outstanding for one week and was settled with the purchase of 6.8 million shares for $ 201.1 million. The Company accounted for the forward sales agreement as an equity instrument as the agreement required for physical settlement in shares of the Company’s Common Stock and did not require or permit net cash settlement. Accordingly, the contract was recorded in equity, and no gains or losses were recognized in earnings during the period. Upon settlement of the forward sales agreement, the proceeds were recorded as an increase to Common Stock and additional paid in capital as part of the ATM offerings. On August 19, 2025, the Company entered into an amended and restated sales agreement (which amended and restated the May 2025 ATM Sales Agreement) to add additional sales agents to the ATM offering and to make certain conforming changes. As of September 30, 2025, SharpLink has raised total gross proceeds of $ 2,147,072,919 from sales of shares under the amended and restated May 2025 ATM Sales Agreement. The proceeds were used to further the Company’s ETH Treasury Management strategy as well as provide for working capital. Equity Offerings $4.5 Million Offering On May 20, 2025, the Company entered into a securities purchase agreement (the “May 20, 2025 Purchase Agreement”) for an offering of 34,000 shares of Common Stock, $ 0.0001 par value per share, and 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 May 20, 2025 Purchase Agreement, before deducting the placement agent fees and offering expenses, were approximately $ 4,500,000 . See Note 7 – Warrants . 22 Table of Contents The issuance of shares and pre-funded warrants were recorded at the offering price within equity in accordance with ASC 505, Equity . Any amounts in excess of the par value of the shares were recorded in additional paid-in capital. $425 Million Offering On May 26, 2025, the Company entered into a securities purchase agreement for a private placement in public equity (“PIPE”), offering (the “May 2025 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 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 May 2025 PIPE Offering are exercised in full. The gross proceeds from the May 2025 PIPE Offering, before deduction the placement agents fees and offering expenses, were approximately $ 425.0 million 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 May 2025 PIPE Offering, 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 3 – Digital Asset Holdings, Note 7 – Warrants and Note 14 - Related Parties . $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. In addition, on August 6, 2025, the Company entered into a placement agency agreement (the “August Placement Agency Agreement”) with A.G.P. A.G.P., 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. Pursuant to the August 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 August 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. In addition, on August 10, 2025, the Company entered into a placement agency agreement (the “Second August Placement Agency Agreement”) with A.G.P. as the sole placement agent, in connection with the Second August Offering. Pursuant to the Second August Placement Agency Agreement, the Company paid A.G.P. a cash fee equal 2.5% of the aggregate gross proceeds raised from the sale of the shares sold in the Second August Offering. The Second August Offering closed on August 12, 2025. 23 Table of Contents Approval of Share Repurchase Program On August 21, 2025, the Board approved a share repurchase program (the “2025 Repurchase Program”) providing for the repurchase of up to $ 1.5 billion of the Company’s outstanding shares of Common Stock. Under the 2025 Repurchase Program, the Company is authorized to repurchase shares of Common Stock through open market purchases, privately-negotiated transactions, or otherwise in accordance with applicable federal securities laws. The 2025 Repurchase Program does not obligate the Company to repurchase shares of Common Stock, and the specific timing and amount of repurchases will vary based on available capital resources and other financial and operational performance metrics, market conditions, securities law limitations and other factors. In connection with the 2025 Repurchase Program, on August 21, 2025, the Company entered into an open market share repurchase agreement (the “Repurchase Agreement”) with a broker whereby the broker has agreed to act as a non-exclusive agent on behalf of the Company to repurchase shares of Common Stock in the open market. The Repurchase Agreement will continue in effect until terminated by either the Company or the broker, with or without cause, upon written notice to the other party. We will pay the broker a commission at a rate of $ 0.01 for each share of common stock repurchased pursuant to the Repurchase Agreement. During the three and nine months ended September 30, 2025, the Company repurchased 1,938,450 shares of its Common Stock for $ 31.6 million. All repurchased shares are recorded as treasury stock. Results of Special Meetings of Stockholders On July 24, 2025, the Company held a special meeting of the stockholders and received approval for two proposals: (i) adopt an amendment to the Company’s Amended and Restated Certificate of Incorporation, as amended, to increase the number of authorized shares of Common Stock of the Company from 100 million to 500 million; and (ii) to adopt the Company’s Amended and Restated 2023 Equity Incentive Plan to increase the number of shares of Common Stock reserved for issuance thereunder by 8,000,000 to 8,034,166 shares. On September 25, 2025, the Company held a special meeting of stockholders and received approval for an amendment to the Company’s Certificate of Incorporation to increase the number authorized and outstanding Common Stock from 500,000,000 to 2,500,000,000 . The amendment was effective on September 25, 2025. The increase in authorized shares provides additional flexibility to support the Inducement Award Plan, among other initiatives. 24 Table of Contents 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 nine months ended September 30, 2025 was 105 %, primarily due to the full valuation allowance for its deferred tax assets as of September 30, 2025, and the Company recorded a tax provision of $ 822,000 related to current tax expense for the period ended September 30, 2025. The Company has NOLs available to offset a portion of the current year taxable income, subject to certain limitations. At each reporting period, management considers new evidence, both positive and negative, that could affect its view of the future realization of deferred tax assets. At September 30, 2025, management has determined that there is not sufficient positive evidence to conclude that it is more likely than not that the Company’s net deferred tax asset will be fully realized. The Company is in the process of dissolving certain legal entities to simplify its legal structure. The tax impact of those legal entities being dissolved is not expected to be significant. 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 13 – Discontinued Operations ), 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 September 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 the One Big Beautiful Bill Act ( “ OBBBA ” ) , which includes significant amendments to the Internal Revenue Code. The Company evaluated the impact of the legislation, and it did not have a material effect on its consolidated financial statements, including deferred tax assets and liabilities. Note 11 - Commitments and Contingencies From time to time, the Company may enter into certain types of contracts that require it to indemnify parties against third-party claims. The conditions of these obligations vary. In addition, legal claims may be made against the Company in the ordinary course of business, which could result in legal proceedings. Claims and associated litigation are subject to inherent uncertainties and unfavorable outcomes could occur, which could have a material adverse effect on the Company’s results of operations for that period or future periods. Historically, the Company has not been obligated to make significant payments for these obligations and does not currently expect to incur any material obligations in the future. Accordingly, the Company has not recorded a contingency liability on its Condensed Balance Sheets as of September 30, 2025 or December 31, 2024. Note 12 – Net Income (Loss) Per Share Basic net income (loss) per share is calculated by dividing net income (loss) available to common stockholders, adjusted for preferred stock discount accretion and dividends accrued on preferred stock, by the weighted-average number of common shares 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 net income from continuing operations and discontinued operations for the three months ended September 30, 2025 and a net income from continuing operations and net loss from discontinued operations for the nine months ended September 30, 2025, the following presents dilutive and anti-dilutive securities. 25 Table of Contents For discontinued operations for the nine months ended September 30, 2025, since there was a net loss, all securities presented below were excluded from weighted average shares outstanding. For continuing operations for the three and nine months ended September 30, 2025 and discontinued operations for the three months ended September 30, 2025, 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: Schedule of Computation of Diluted Shares Outstanding Three Months Ended September 30, 2025 Nine Months Ended September 30, 2025 Dilutive: Prefunded warrants 11,897,165 11,897,165 Strategic advisor and placement agent warrants 6,219,032 6,219,032 Total Dilutive 18,116,197 18,116,197 Anti-Dilutive: Stock options 9,022 9,022 SportsHub warrants 252 252 Restricted Stock Units 1,281,951 1,281,951 Total Anti-dilutive 1,291,225 1,291,225 As the Company had a net loss from continuing operations and discontinued operations for the three months ended September 30, 2024 and a net loss from continuing operations and net income from discontinued operations for the nine months ended September 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: Three Months Ended September 30, 2024 Nine Months Ended September 30, 2024 Dilutive: Prefunded warrants 39,130 39,130 Warrants 21,187 21,187 Total Dilutive 60,317 60,317 Anti-Dilutive: Stock options 9,022 9,022 Series A-1 preferred stock 601 601 Series B preferred stock 1,040 1,040 SportsHub warrants 252 252 Restricted Stock Units 22,917 22,917 Total Anti-dilutive 33,832 33,832 26 Table of Contents 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: Schedule of Loss Per Share and Weighted-average 2025 2024 2025 2024 For the Three Months Ended September 30, For the Nine Months Ended September 30, 2025 2024 2025 2024 Net income (loss) from continuing operations $ 104,247,275 $ ( 787,992 ) $ ( 39,992 ) $ ( 3,465,467 ) Less: deemed dividends on series B preferred stock - - - ( 44,619 ) Net income (loss) from continuing operations available to common stockholders 104,247,275 ( 787,992 ) ( 39,992 ) ( 3,510,086 ) Net income (loss) from discontinued operations, net of tax, available to common stockholders 22,930 ( 97,139 ) ( 87,431 ) 14,467,733 Net income (loss) available to common stockholders $ 104,270,205 $ ( 885,131 ) $ ( 127,423 ) $ 10,957,647 Basic weighted-average shares for continuing and discontinued operations 149,056,400 292,528 63,214,826 278,213 Diluted weighted average shares 167,172,597 292,528 81,331,023 338,530 Basic: Net income (loss) from continuing operations per share $ 0.70 $ ( 2.69 ) $ - $ ( 12.62 ) Net income (loss) from discontinued operations per share - ( 0.33 ) - 52.00 Net income (loss) per share $ 0.70 $ ( 3.02 ) $ - $ 39.38 Fully Diluted: Net income (loss) from continuing operations per share $ 0.62 $ ( 2.69 ) $ - $ ( 12.62 ) Net income (loss) from discontinued operations per share - ( 0.33 ) - 42.74 Net income (loss) per share $ 0.62 $ ( 3.02 ) $ - $ 30.12 Note 13 – Discontinued Operations In accordance with ASC 205-20, Presentation of Financial Statements: Discontinued Operations (“ASC 205-20”), 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 paragraph 205-20-45-10 . 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. The Company is in the process of winding down the operations classified as discontinued and anticipates completing the full dissolution by the end of the first quarter of 2026. 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 $ 22.5 million 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, the Company ceased its Sports Game Client Services and SportsHub Gaming Network segments. The historical results of these business segments have been reflected as discontinued operations in the consolidated financial statements for all periods prior to the closing date of the Sale of Business on January 18, 2024. 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. 27 Table of Contents In the statement of cash flows for the nine months ended September 30 2024, the net cash used in investing activities - discontinued operations is due to cash received from the sale of business of $ 22.5 million, net of the cash transferred of $ 41.4 million. The majority of the cash transferred of $ 41.4 million was reflected in discontinued operations customer deposits liability and deferred revenue of $ 37.0 million and $ 4.9 million, respectively. During the nine months ended September 30, 2025 and 2024, SharpLink paid RSports $ 8,857 and $ 132,413 , respectively, for use of accounting service personnel under the Post Closing Covenant Agreement (the “PCCA”); and RSports paid SharpLink $ 1,191 and $ 75,083 under the PCCA for the nine months ended September 30, 2025 and 2024, respectively. During the three months ended September 30, 2025 and 2024, SharpLink paid RSports $ 3,000 and $ 38,816 , respectively, for use of accounting service personnel under the PCCA; and RSports paid SharpLink $ 0 and $ 21,929 under the PCCA for the three months ended September 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 September 30, 2025 and 2024. The results of operations and cash flows of MTS for all periods are separately reported as discontinued operations. Summary Reconciliation of Discontinued Operations Schedule of Reconciliation of Discontinued Operations For the Three Months Ended For the Three Months Ended For the Nine Months Ended For the Nine Months Ended September 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024 Revenues $ - $ 17,621 $ - $ 431,199 Cost of Revenues - 4,680 ( 8,173 ) 163,249 Gross Profit - 12,941 8,173 267,950 Operating Expenses Selling, general, and administrative expenses 26,000 121,054 130,504 476,228 Operating Loss ( 26,000 ) ( 108,113 ) ( 122,331 ) ( 208,278 ) Interest income 13,000 1,001 ( 26,000 ) 89,511 Other (expense) income 36,930 - 64,900 501,320 Gain on sale of business - - - 14,670,811 Interest expense - - - ( 9,027 ) Total other income and expense 49,930 1,001 38,900 15,252,615 Income (loss) before income taxes 23,930 ( 107,112 ) ( 83,431 ) 15,044,337 Income tax expense 1,000 ( 9,973 ) 4,000 576,604 Income (loss) from discontinued operations, net $ 22,930 $ ( 97,139 ) $ ( 87,431 ) $ 14,467,733 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 September 30, 2025 and December 31, 2024: Schedule of Major Classes of Assets and Liabilities September 30, December 31, 2025 2024 Carrying amounts of major classes of assets included as part of discontinued operations: Current assets Cash $ 50,000 $ 105,127 Restricted cash 16 - Prepaid expenses and other current assets 294,211 164,661 Total current assets $ 344,227 $ 269,788 September 30, December 31, 2025 2024 Carrying amounts of major classes of liability included as part of discontinued operations: Current Liabilities Accounts payable and accrued expenses 1,020 $ 10,020 Total current liabilities $ 1,020 $ 10,020 28 Table of Contents Note 14 – Related Parties Strategic Advisory Agreement with Consensys Software Inc. In connection with the May 2025 PIPE Offering, the Company entered into a Strategic Advisor Agreement with 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 Management strategy 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”). See Note 7 - Warrants . The Company’s Chairman of the Board, Joseph Lubin, is CEO of Consensys. Secondment Agreements with Consensys Employees As part of the collaboration between the Company and Consensys, three employees of Consensys were seconded to SharpLink under secondment agreements. These employees provided 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 terminated September 30, 2025, total monthly compensation of approximately $ 80,000 payable to Consensys and stock-based compensation of a total of approximately $ 130,000 for RSU’s awarded in September 2025, and the allocation of responsibilities between the parties. The seconded employees remain employees of Consensys, but they performed their duties for the Company during the secondment period and report to the Company’s Co-Chief Executive Officers and Chief Financial Officer. In exchange for these services, the Company compensated Consensys for the associated costs on a monthly basis, including the employees’ salaries, benefits and other related expenses. For the period ended September 30, 2025, approximately $ 283,000 was expensed in selling, general and administrative expenses and $ 130,620 was expensed as stock-based compensation in relation to these agreements. Linea Consortium The Company is a founding member of the Linea Consortium, along with Consensys, a leading governance body supporting the development of Ethereum's most aligned Layer 2 blockchain network. Note 15 – Subsequent Events October 2025 Registered Direct Offering On October 15, 2025, the Company entered into a securities purchase agreement (“October 2025 Purchase Agreement”) with an institutional investor to sell in a registered direct offering (the “October 2025 Offering”) an aggregate of 4,500,000 shares of the Company’s Common Stock. The price per share was $ 17.00 and the gross proceeds from the October 2025 Offering, before deducting placement agent fees and offering expenses, were approximately $ 76.5 million. The Company intends to use the net proceeds from the October 2025 Offering to acquire ETH as well as for general working capital purposes. Under the October 2025 Purchase Agreement, the Company also granted the investor 90-day premium purchase contracts, expiring on January 15, 2026, to purchase up to an additional 4,500,000 shares of Common Stock at an exercise price of $ 17.50 (the “Premium Purchase Contract”). If the Premium Purchase Contracts are fully exercised, the Company will receive an additional $ 78.8 million in approximate gross proceeds. On October 15, 2025, the Company entered into a placement agent agreement (the “October 2025 Placement Agent Agreement”) with AGP as sole placement agent, pursuant to which the Company engaged AGP as the exclusive placement agent in connection with the October 2025 Offering. Pursuant to the October 2025 Placement Agent Agreement, the Company paid the AGP a cash fee equal to 2.0% of the aggregate gross proceeds raised from the sale of the securities sold in the October 2025 Offering. Linea Deployment On October 28, 2025, the Company announced a collaboration to deploy ETH from its corporate treasury onto Linea, a zkEVM Layer 2 network. Based on current negotiations, the Company plans to allocate $ 200 million in ETH for deployment on Linea in a risk-managed manner over a multi-year commitment period. The Company expects to leverage Linea’s institutional-grade infrastructure to optimize onchain yield to capture differentiated ETH-denominated returns. This differentiated yield is expected to combine native Ethereum yield, restaking rewards from securing EigenCloud Autonomous Verifiable Services (AVSs), and direct Linea and ether.fi partner incentives, all within a compliant Layer 2 infrastructure. LsETH Redemption On November 8, 2025, SharpLink unstaked 32,573.83 LsETH, redeeming 35,626.73 ETH at price of $ 3,400.40 per ETH, totaling approximately $ 121.1 million. Of the 35,626.73 ETH, 35,330 ETH is a return of ETH originally staked in a liquid staking protocol and 296.72 ETH represents accrued staking rewards earned while staked; All of the redeemed ETH will be returned to the Company’s custodian, Anchorage Digital Bank once the withdrawal process has been completed. 29 Table of Contents ITEM 2. MANAGEMENT ’ S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION Cautionary Note Regarding Forward-Looking Statements The discussions in this Quarterly Report on Form 10-Q contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on assumptions with respect to the future and management’s current expectations, involve certain risks and uncertainties and are not guarantees. These forward-looking statements include, but are not limited to, statements concerning our strategy, competition, future operations, future financial position, future revenues, projected costs, profitability, expected cost reductions, capital adequacy, expectations regarding demand and acceptance for our technologies, growth opportunities and trends in the markets in which we operate, prospects and plans and objectives of management. The words “anticipates,” “believes,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “projects,” “will,” “would,” “predicts” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. Future results may differ materially from the plans, intentions and expectations disclosed in the forward-looking statements that we make. These forward-looking statements involve risks and uncertainties that could cause our actual results to differ materially from those in the forward-looking statements, including, without limitation, the risks set forth in Part I, Item 1A, “Risk Factors” of this Quarterly Report on Form 10-Q for the quarter ended September 30, 2024, as amended, and that are otherwise described or updated from time to time in our other filings with the Securities and Exchange Commission (the “SEC”). The discussion of such risks is not an indication that any such risks have occurred at the time of this filing. We do not assume any obligation to update any forward-looking statements. Industry and Market Data We are responsible for all information contained in this Quarterly Report on Form 10-Q. In some cases, we have relied on market and industry data from third-party sources we believe to be reliable. These market estimates combine independent industry publications with our own assumptions about the Ethereum industry and broader market. Although we are not aware of any material inaccuracies in this data, it involves risks, uncertainties, and is subject to change based on various factors. These factors include those discussed under “ Cautionary Note Regarding Forward-Looking Statements, ” Part I, Item 1A, “ Risk Factors ” in our Annual Report on Form 10-K for the year ended December 31, 2024, as amended, and Part II, Item 1A, “ Risk Factors ” in this Quarterly Report on Form 10-Q. This section discusses the key factors that have shaped the financial condition, results of operations, liquidity and capital resources of SharpLink Gaming, Inc. and its wholly owned subsidiaries (collectively, “ SharpLink Gaming, ” “ SharpLink, ” the “ Company, ” “ we, ” “ our, ” or “ us ” ). You should read this discussion together with our condensed consolidated financial statements and related notes included in this Quarterly Report on Form 10-Q, as well as our audited consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the U.S. Securities and Exchange Commission on March 14, 2025, and the Form 10-K/A filed on March 17, 2025. As noted under “ Cautionary Note Regarding Forward-Looking Statements, ” this discussion includes forward-looking statements that involve risks, uncertainties, and assumptions. Actual results could differ materially from those expressed or implied by these statements. Unless the context indicates otherwise, references in this Quarterly Report on Form 10-Q to “ SharpLink Gaming, ” “ SharpLink, ” “ SharpLink US, ” “ our Company, ” “ we, ” “ our, ” and “ us ” refer to SharpLink Gaming, Inc., a Delaware corporation, and its wholly owned subsidiaries. References to “ SharpLink Israel ” refer to SharpLink Gaming, Ltd., an Israeli limited liability company with which SharpLink US completed a domestication merger in February 2024. Business Overview Headquartered in Minneapolis, SharpLink, a Delaware corporation, undertook a significant strategic shift in June 2025 by becoming one of the world’s largest publicly traded companies to adopt Ether (“ETH”), the native token of the Ethereum blockchain, as its primary treasury asset. This strategy reflects the Company’s commitment to align our corporate treasury with the future of programmable finance, digital capital markets and decentralized infrastructure. The Company also operates an online affiliate marketing company that delivers unique fan activation solutions to its sportsbook and online casino gaming partners. In tandem with this transformation, SharpLink has streamlined its business-building operations around two distinct reportable segments: 1) ETH Treasury Management . We seek to benefit from our ETH accumulation strategy by (i) potential ETH price appreciation and (ii) protocol-level rewards earned by participating in Ethereum’s proof-of-stake (“PoS”) consensus mechanism. We delegate our ETH to third-party validators (directly or via asset managers) and participate in both native and liquid staking programs. Our staking infrastructure and custody arrangements are designed to meet the governance, security and control standards expected of a public company. 2) Affiliate Marketing. Our Affiliate Marketing segment is focused on performance-based customer acquisition services for leading sportsbooks and online casino gaming operators worldwide. Through our iGaming affiliate marketing network, known as PAS.net, SharpLink focuses on driving qualified traffic and player acquisitions, retention and conversions to U.S. regulated and global iGaming operator partners worldwide. In addition, we own and operate a portfolio of direct-to-player, state-specific, affiliate marketing websites designed to attract, acquire and drive local sports betting and online casino gaming traffic to its valued partners which are licensed to operate in each respective state. ETH Treasury Management Strategy WE ARE NOT REGISTERED AS AN INVESTMENT COMPANY UNDER THE INVESTMENT COMPANY ACT OF 1940, AND STOCKHOLDERS DO NOT HAVE THE PROTECTIONS ASSOCIATED WITH OWNERSHIP OF SHARES IN A REGISTERED INVESTMENT COMPANY NOR THE PROTECTIONS AFFORDED BY THE COMMODITIES EXCHANGE ACT. 30 Table of Contents Our decision to accumulate ETH as a core treasury asset is grounded in a forward-looking view of the evolving global financial ecosystem. We believe Ethereum’s unparalleled programmability, security and active developer ecosystem position it as a foundational layer for decentralized finance and Web3 applications. With Ethereum’s transition to a proof-of-stake consensus mechanism and the growth of highly scalable Layer 2 networks, ETH has evolved into a yield-bearing, productive crypto asset with increasing institutional adoption and intrinsic network value. We view ETH as a digital asset trust commodity, offering the potential for long-term appreciation and yield generation as more stablecoins and tokenized real-world assets leverage the Ethereum ecosystem. A key aspect of our ETH Treasury Management strategy is to raise capital to be used to increase our ETH holdings and generate yield opportunities in a manner which is accretive to shareholders. This can come in the form of equity, equity-linked debt, debt of any kind or any other contract or arrangement intended to fund the purchase of ETH, whether or not such financing is formally classified as debt or equity or other forms of offerings or arrangements (“Financings”), designed to maximize stockholder exposure to ETH within a prudent risk management framework. We maintain the flexibility to buy back stock where it is accretive to stockholders. We have not set a specific target for the maximum amount of ETH we seek to hold. We diligently track and routinely report key performance indicators designed to offer investors transparency and insight into the execution and effectiveness of our ETH Treasury Management strategies. Among these metrics, our ETH concentration (“ETH Concentration”), and growing it over time, has emerged as a central performance benchmark and “north star” metric by which we gauge our progress. ETH Concentration, which is calculated by dividing our total ETH holdings by every 1,000 Assumed Diluted Shares outstanding, reflects both the scale of our ETH accumulation efforts and the capital efficiency of our treasury operations. By prioritizing this metric, we underscore our commitment to driving long-term shareholder value, rather than short-term fluctuations in asset prices or market capitalization. Assumed Diluted Shares Outstanding represents the sum of (i) our actual shares of common stock issued and outstanding as of the end of each reporting period, plus (ii) the additional shares that would be issued upon the assumed exercise or settlement of all outstanding warrants, pre-funded warrants, stock option awards, and restricted stock units (“Assumed Diluted Shares Outstanding”). Assumed Diluted Shares Outstanding is not calculated using the treasury stock method. It does not account for equity award vesting conditions, stock option exercise prices, or contractual restrictions limiting the convertibility of debt instruments. Additionally, it excludes any assumed share repurchases that would ordinarily be considered under the treasury stock method. We currently utilize native staking and liquid staking. In native staking, ETH remains onchain with withdrawal credentials controlled by our custodian and rewards are recognized as revenue when earned. In liquid staking, we deposit ETH and receive liquid staking ETH (“LsETH”), a redeemable receipt token; the ETH is derecognized and the LsETH is recorded as an indefinite-lived intangible asset subject to impairment. Importantly, our ETH Treasury Management strategy is complemented by our active participation in the Ethereum ecosystem. We are a founding member of the Linea Consortium, along with Consensys, see Note 14 - Related Partie s, a leading governance body supporting the development of Ethereum’s most aligned Layer 2 blockchain network. Our participation in the consortium enables us to help steer capital allocation toward high-impact infrastructure, public goods and innovation pipelines that are intended to strengthen the long-term utility and defensibility of the Ethereum network, reinforcing the intrinsic value of our own ETH treasury assets. Continuing Operations – ETH Treasury Management In June 2025, we formally launched our ETH-centered treasury strategy and established staking as a dedicated operating segment, recognizing its potential to deliver recurring, yield-based revenue. Our staking revenues are derived from the rewards we earn by actively participating in the Ethereum network’s proof-of-stake consensus mechanism. Specifically, we delegate our ETH holdings to validators that process and verify transactions on the blockchain. In return, we receive protocol-level rewards in ETH, typically proportional to the amount staked and the network’s overall activity and performance. Our ETH Treasury Management segment includes both native and liquid staking activities. Since initiating our ETH Treasury Management operations on June 2, 2025, we have accumulated approximately 861,251 in total ETH holdings, comprised of 637,752 in native ETH and 223,499 in ETH on an as if redeemed basis from LsETH, as of November 9, 2025. The ETH holdings were derived through purchases of ETH, receipts of ETH from investors and ETH rewards. For the nine months ended September 30, 2025, revenues generated from native staking rewards totaled $10,302,343, as staking only commenced two-thirds of the way through the second quarter of this year. These native staking rewards represent the ETH-based rewards accumulated through the delegation of ETH to staking validators, which we expect to scale materially in future quarters in correlation with growth in our treasury balance and broader ETH market performance. The foregoing revenue does not include staking rewards generated from our LsETH holdings, see Liquid Staking Protocol disclosure below. We view our ETH Treasury Management operations as a core strategic pillar of its broader alignment with the Ethereum ecosystem. Our participation not only yields economic return but also contributes directly to Ethereum’s decentralization, scalability, and security. Moreover, we believe staking is foundational to a new generation of blockchain-native capital structures that enable corporations to earn yield without relying on traditional debt instruments, equities, or centralized intermediaries. Our staking efforts are focused on maximizing yield, managing risk and ensuring that our operations meet institutional standards for transparency and efficiency. On October 28, 2025, we announced our plans to allocate $200 million in ETH from our corporate treasury for deployment on Linea, a zkEVM Layer 2 network bootstrapped by Consensys, in a risk-managed manner over a multi-year period. As a public entity operating at the forefront of Digital Asset Treasury (“DAT”) innovation, upon execution of definitive documentation, SharpLink will leverage Linea’s institutional-grade infrastructure to make its ETH even more productive by unlocking scalable, secure and composable ways to optimize onchain yield. This deployment on Linea will bring together leading ecosystem participants in an innovative collaboration that allows SharpLink to capture highly competitive, risk-adjusted, ETH-denominated returns. The strategy is supported by institutional-grade risk management, leveraging the scale of our digital asset treasury with the custodian protections of Anchorage Digital Bank, SharpLink’s qualified custodian. The yield will combine native Ethereum yield, restaking rewards from securing EigenCloud Autonomous Verifiable Services (AVSs), and direct Linea and ether.fi partner incentives, all within a compliant Layer 2 infrastructure. Liquid Staking Protocol As part of our ETH Treasury Management strategy, we participate in liquid staking through the Liquid Collective protocol. In a liquid staking arrangement, we transfer ETH to the protocol and receive LsETH, a fungible ERC-20 receipt token, that represents a proportional interest in the protocol’s pool of staked ETH. LsETH is accounted for as an indefinite-lived intangible asset under ASC 350-30, and recorded at cost, less any impairment losses. The Liquid Collective protocol establishes a daily Protocol Conversion Rate (“PCR”), which reflects the amount of ETH into which a unit of LsETH is redeemable. The PCR is calculated by dividing the total ETH held by the protocol, including accumulated staking rewards (net of penalties or slashing fees), by the total number of LsETH tokens in circulation. The PCR is updated daily through the protocol’s on-chain infrastructure and is publicly accessible. 31 Table of Contents The PCR is not a market trading price. The process of redeeming LsETH for ETH is subject to the validator exit queue, bonding periods and other mechanics that may affect the timing and execution of redemption. As a result, we may not be able to redeem our holdings immediately. As of September 30, 2025, we held 236,906 LsETH tokens. The following table presents a roll-forward of our LsETH holdings, including relevant details related to LsETH purchases and impairment losses within the periods presented. We have not sold or redeemed any LsETH as of September 30, 2025 Source of capital used to purchase LsETH LsETH original cost basis LsETH impairment losses LsETH carrying value Number of LsETH held Approx. average purchase price per LsETH Weighted Average LsETH PCR at Acquisition LsETH PCR at End of Period Balance at March 31, 2025 $ - $ - $ - - $ LsETH acquisitions (a), (b) 470,171,541 - 470,171,541 164,731 2,854 LsETH impairment losses - (87,813,295 ) (87,813,295 ) - Balance at June 30, 2025 470,171,541 (87,813,295 ) 382,358,246 164,731 2,854 1.081800756 1.083328763 LsETH acquisitions (b) 247,247,582 - 247,247,582 72,176 3,426 LsETH impairment losses - (6,950,189 ) (6,950,189 ) - - Balance at September 30, 2025 717,419,123 (94,763,484 ) 622,655,639 236,906 3,426 1.087684560 1.090462571 (a) A private-investment-in-public-equity financing executed under Securities Purchase Agreements dated May 26, 2025. (b) At-the-Market Sales Agreement to offer and sell shares of its Common Stock with an aggregate offering price of up to $6 billion, in conjunction with registered direct offerings of $600 million. The following table shows the number of LsETH held at the end of each respective period, as well as market value calculations of our LsETH holdings based on the lowest, highest, and ending market prices of one LsETH on the Coinbase exchange (our principal market) for each respective period: Period End Date Number of LsETH Held at End of Quarter Lowest Market Price of LsETH During the Quarter (c) Market Value of LsETH held using Lowest Market Price (d) Highest Market Price of LsETH During the Quarter (e) Market Value of LsETH held using Highest Market Price (f) Market Price of LsETH at End of Quarter (g) Market Value of LsETH Held at End of Quarter (h) March 31, 2025 - n/a n/a n/a n/a n/a n/a June 30, 2025 164,731 $ 1,542 $ 254,084,660 $ 3,097 $ 510,114,386 $ 2,727 $ 449,288,671 September 30, 2025 236,906 2,606 617,401,281 5,339 1,264,842,270 4,471 1,059,148,451 (c) The “Lowest Market Price of LsETH During the Quarter” represents the lowest market price for one LsETH reported on the Coinbase exchange during the respective quarter, without regard to when we purchased any of our LsETH. (d) The “Market Value of LsETH Held Using Lowest Market Price” represents a mathematical calculation consisting of the lowest market price for one LsETH reported on the Coinbase exchange during the respective quarter multiplied by the number of LsETH held by us at the end of the applicable period. (e) The “Highest Market Price of LsETH During the Quarter” represents the highest market price for one LsETH reported on the Coinbase exchange during the respective quarter, without regard to when we purchased any of our LsETH. (f) The “Market Value of LsETH Held Using Highest Market Price” represents a mathematical calculation consisting of the highest market price for one LsETH reported on the Coinbase exchange during the respective quarter multiplied by the number of LsETH held by us at the end of the applicable period. (g) The “Market Price of LsETH at End of Quarter” represents the market price of one LsETH on the Coinbase exchange at midnight UTC on the last day of the respective quarter. (h) The “Market Value of LsETH Held at End of Quarter” represents a mathematical calculation consisting of the market price of one LsETH on the Coinbase exchange at midnight UTC on the last day of the respective quarter multiplied by the number of LsETH held by us at the end of the applicable period. The amounts reported as “Market Value” in the table above represent only a mathematical calculation consisting of the number of LsETH tokens held by us at the end of the applicable period multiplied by the market price of LsETH as reported on the Coinbase Exchange. The LsETH token is relatively new and the market for LsETH may be subject to manipulation, limited transparency, inconsistent pricing sources, and episodic illiquidity. The price information referenced may not reflect actionable market depth or executable prices, and there is no assurance that we would be able to sell our LsETH holdings at the Market Value amounts indicated above, at the quoted market price, or at all. The market infrastructure supporting LsETH remains nascent, and future developments in protocol mechanics, exchange support, or regulatory oversight may materially impact pricing, liquidity, and valuation methodologies. Accordingly, the Market Value amounts reported above may not accurately reflect the fair market value of LsETH, and the actual realizable value of our holdings could differ materially from the calculated figures. Affiliate Marketing In December 2021, we acquired certain assets of FourCubed, including FourCubed’s online casino gaming-focused affiliate marketing network, known as PAS.net (“PAS”). For more than 18 years, PAS has focused on delivering quality traffic and player acquisitions, retention and conversions to regulated and global casino gaming operator partners worldwide. In fact, PAS won industry recognition as the European online gambling industry’s Top Affiliate Manager, Top Affiliate Website and Top Affiliate Program for four consecutive years by both igamingbusiness.com and igamingaffiliate.com. The strategic acquisition of FourCubed brought us talent with proven experience in affiliate marketing services and recurring net gaming revenue (“NGR”) contracts with many of the world’s leading online casino gambling companies, including Party Poker, bwin, UNIBET, GG Poker, 888 poker, betfair, World Poker Tour and others. As part of our strategy to expand our affiliate marketing services to the emerging American sports betting market, in November 2022, we began a systematic roll-out of our U.S.-focused performance-based marketing business with the launch of 15 state-specific, content-rich affiliate marketing websites. Our user-friendly, state-specific domains are designed to attract, acquire and drive local sports betting and casino traffic directly to our sportsbook and casino partners, which are licensed to operate in each respective state. As of January 2024, we are licensed to operate in 18 jurisdictions and own and operate sites serving 17 U.S. states (Arizona, Colorado, Iowa, Illinois, Indiana, Kansas, Louisiana, Maryland, Michigan, New Jersey, New York, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia and Wyoming). As more states legalize sports betting, our portfolio of state-specific affiliate marketing properties may expand to include them. We largely utilize search engine optimization and programmatic advertising campaigns to drive traffic to our direct-to-player (“D2P”) sites. 32 Table of Contents Capital Markets Funds Raising - $4.5 Million Offering On May 20, 2025, we entered into a securities purchase agreement (the “May 20, 2025 Purchase Agreement”) pursuant to which we agreed to sell and issue, in a reasonable best efforts registered offering (the “May 20, 2025 Offering”), an aggregate of 34,000 shares (the “May 20, 2025 Shares”) of our common stock and pre-funded warrants (the “May 20 Pre-Funded Warrants”) to purchase up to 1,496,612 shares of common stock (the “May 20, 2025 Pre-Funded Warrant Shares”). The May 20, 2025 Shares were offered at an offering price of $2.94 per May 20, 2025 Share. The gross proceeds from the May 20, 2025 Offering, before deducting the placement agent fees and offering expenses, were approximately $4.5 million. A.G.P./Alliance Global Partners (“A.G.P.”) acted as the sole placement agent for the May 20, 2025 Offering. $425 Million Offering On May 26, 2025, we entered into a securities purchase agreement for a private placement in public entity (the “May 2025 PIPE Offering”), raising gross proceeds of $425.0 million funded in a combination of fiat and Ether. On June 2, 2025, we announced the closing of the May 2025 PIPE Offering was May 30, 2025, and launched our treasury reserve strategy to hold the native cryptocurrency of the Ethereum blockchain, commonly referred to as “Ether” or “ETH,” as our primary treasury reserve asset. Consensys Software Inc. acted as the lead investor in the May 2025PIPE Offering, along with prominent crypto venture capital firms and infrastructure providers, with an intent to assist us in earning distinction as one of the largest ETH-focused treasury strategies in the public markets. A.G.P. acted as the sole placement agent in connection with the May 2025 PIPE Offering. At-The-Market (“ATM”) Offerings On May 1, 2024, we entered into an ATM Sales Agreement (the “2024 ATM Sales Agreement”) with A.G.P. pursuant to which we may offer and sell, from time to time, through A.G.P., as sales agent and/or principal, shares of our common stock having an aggregate offering price of up to $1.7 million, subject to certain limitations on the amount of common stock that may be offered and sold by us set forth in the ATM Sales Agreement (the “2024 ATM Offering”). On May 30, 2025, we entered into a second ATM Sales Agreement (the “May 2025 ATM Sales Agreement”) with A.G.P. relating to the sale of shares of our common stock from time to time, having an aggregate offering price of up to $1.0 billion (the “May 2025 ATM Offering”). On July 17, 2025, we entered into an Amendment to the May 2025 ATM Sales Agreement (the “Amendment”) to (i) increase the number of shares that may be sold in the May 2025 ATM Offering to $6.0 billion; and (ii) to permit the forward sale of shares to be sold in the May 2025 ATM Offering pursuant to Master Forward Confirmation Letter Agreements . As of September 30, 2025, we had raised total gross proceeds of $2,147,072,919 from sales of shares under our ATM Sales Agreements, before factoring related fees and expenses. August 6, 2025 Registered Direct Offering On August 6, 2025, SharpLink 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 “August Shares”). The price per August 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 Company to used the net proceeds received from the August Offering to acquire ETH as for general working capital purposes. The August 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). The August Purchase Agreement contained customary representations and warranties that the parties made to, and solely for the benefit of, each other in the context of all of the terms and conditions of that agreement and in the context of the specific relationship between the parties. The August Purchase Agreement also contained customary conditions to closing, termination rights of the parties, certain indemnification obligations of the Company and ongoing covenants for the Company. On August 6, 2025, the Company entered into a placement agency agreement (the “August Placement Agency Agreement”) with A.G.P., as lead placement agent and SG Americas Securities, LLC, as co-placement agent (“Societe Generale,” and together with A.G.P.., 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. Pursuant to the August Placement Agency Agreement, the Company paid the Placement Agents a cash fee equal to 5.0% of the aggregate gross proceeds raised from the sale of the shares sold in the Offering less the fees to be paid to Cantor as financial advisor. Notwithstanding the foregoing, the cash fee paid to A.G.P. 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 August Placement Agency Agreement also contains representations, warranties, indemnification and other provisions customary for transactions of this nature. The August Offering closed on August 8, 2025. August 10, 2025 Registered Direct Offering On August 10, 2025, we 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 “Second August Shares”). The price per Second August 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 Company used the net proceeds received from the Second August Offering to acquire ETH as well and for general working capital purposes. The Second August 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). The Second August Purchase Agreement contained customary representations and warranties that the parties made to, and solely for the benefit of, each other in the context of all of the terms and conditions of that agreement and in the context of the specific relationship between the parties. The Second August Purchase Agreement also contained customary conditions to closing, termination rights of the parties, certain indemnification obligations of the Company and ongoing covenants for the Company. On August 10, 2025, the Company entered into a placement agent agreement (the “Second August Placement Agent Agreement”) with AGP as sole placement agent, pursuant to which the Company engaged A.G.P. as the exclusive placement agent in connection with the Second August Offering. Cantor acted as financial advisor to the Company pursuant to an engagement letter with the Company. Pursuant to the Second August Placement Agent Agreement, the Company paid A.G.P. a cash fee equal to 2.5% of the aggregate gross proceeds raised from the sale of the shares sold in the Second August Offering less the fees to be paid to Cantor as financial advisor. The Second August Placement Agent Agreement also contains representations, warranties, indemnification and other provisions customary for transactions of this nature. The Second August Offering closed on August 12, 2025. Meetings of Stockholders - July 2025 Special Meeting of Stockholders On July 24, 2025, the Company convened a special meeting of stockholders (the “July 2025 Special Meeting”) virtually via live webcast. Only stockholders of record at the close of business on June 18, 2025, the record date for the July 2025 Special Meeting, were entitled to vote at the Special Meeting. As of the record date, 62,125,336 shares of the Company’s common stock were outstanding and entitled to vote at the July 2025 Special Meeting. Based on the estimated preliminary voting results present at the meeting or by proxy were holders of 35,076,578 shares of the Company’s common stock, which represented approximately 56% of the voting power of all shares of common stock as of the record date and constituted a quorum for the transaction of business at the July 2025 Special Meeting. During the July 2025 Special Meeting, our stockholders approved two proposals: (i) to adopt an amendment to the Company’s Amended and Restated Certificate of Incorporation, as amended, to increase the number of authorized shares of Common Stock of the Company from 100 million to 500 million; and (ii) to adopt the Company’s Amended and Restated 2023 Equity Incentive Plan to increase the number of shares of common stock reserved for issuance thereunder by 8,000,000 shares to 8,034,166 shares. 33 Table of Contents September 2025 Special Meeting of Stockholders On September 24, 2025, the Company convened a special meeting (the “September 2025 Special Meeting”) virtually via live webcast. Only stockholders of record at the close of business on August 22, 2025, the record date for the September 2025 Special Meeting, were entitled to vote at the September 2025 Special Meeting. As of the record date, 181,740,293 shares of the Company’s common stock were outstanding and entitled to vote at the September 2025 Special Meeting. Based on the estimated preliminary voting results present at the meeting or by proxy were holders of 81,092,892 shares of the Company’s common stock, which represented approximately 44.67% of the voting power of all shares of Common Stock as of the record date and constituted a quorum for the transaction of business at the September 2025 Special Meeting. Our stockholders voted on and approved one proposal: to adopt an amendment to the Company’s Amended and Restated Certificate of Incorporation, as amended, to increase the number of shares of common stock of the Company from 500 million to 2.5 billion. Other Matters - Addition of Sales Agents to ATM Offering On August 19, 2025, the Company entered into an Amended and Restated Sales Agreement (the “Amended and Restated ATM Sales Agreement”) (which amended and restated the May 2025 ATM Sales Agreement) by and among the Company, A.G.P., Canaccord Genuity LLC (“Canaccord Genuity”), Societe Generale, B. Riley Securities, Inc. (“B. Riley”), and Citizens JMP Securities, LLC (“Citizens”) to add Canaccord Genuity, Societe Generale, B. Riley, and Citizens as additional sales agents and to make certain conforming changes. Adoption of Inducement Award Plan On August 19, 2025, the Board adopted the SharpLink Gaming, Inc. Inducement Award Plan (the “Inducement Award Plan”). The Inducement Award Plan was adopted without stockholder approval pursuant to Nasdaq Listing Rule 5635(c)(4) and will be administered by the Compensation Committee of the Board or the independent members of the Board. The Board reserved 3,000,000 shares of the Company’s common stock for issuance under the Inducement Award Plan, subject to adjustment as provided in the plan document. The terms of the Inducement Award Plan are substantially similar to the terms of the Company’s Amended and Restated 2023 Equity Incentive Plan, with the exception that incentive stock options may not be issued under the Inducement Award Plan and equity awards under the Inducement Award Plan (including nonqualified stock options, restricted stock, restricted stock units, and other stock-based awards) may be issued only an employee who is commencing employment with the Company or any subsidiary or who is being rehired following a bona fide interruption of employment by the Company or any subsidiary, in either case if he or she is granted such award in connection with his or her commencement of employment and such grant is an inducement material to his or her entering into employment with the Company or such subsidiary. The Board also adopted a form of Restricted Stock Unit Agreement Notice of Restricted Stock Unit Grant (Time-Based Grant) (the “Inducement Time-Based RSU Grant Package”) and a form of Restricted Stock Unit Agreement Notice of Restricted Stock Unit Grant (Performance-Based Grant) (the “Inducement Performance-Based RSU Grant Package”) for use under the Inducement Award Plan. 2025 Share Repurchase Plan On August 21, 2025, the Board approved a share repurchase program (the “2025 Repurchase Program”) providing for the repurchase of up to $1.5 billion of the Company’s outstanding shares of common stock. Under the 2025 Repurchase Program, the Company is authorized to repurchase shares of common stock through open market purchases, privately-negotiated transactions, accelerated share repurchases, or otherwise in accordance with applicable federal securities laws, including through Rule 10b5-1 trading plans and under Rule 10b-18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The 2025 Repurchase Program does not obligate the Company to repurchase shares of common stock and the specific timing and amount of repurchases will vary based on available capital resources and other financial and operational performance metrics, market conditions, securities law limitations and other factors. In connection with the 2025 Repurchase Program, on August 21, 2025, the Company entered into an Open Market Share Repurchase Agreement (the “Repurchase Agreement”) with The Benchmark Company, LLC (the “Broker”) whereby the Broker has agreed to act as a non-exclusive agent on behalf of the Company to repurchase shares of the Company’s common stock in the open market pursuant to Rule 10b-18 of the Exchange Act. The Repurchase Agreement will continue in effect until terminated by either the Company or the Broker, with or without cause, upon written notice to the other party. The Company will pay Broker a commission at a rate of $0.01 for each share of common stock repurchased pursuant to the Repurchase Agreement. As of September 30, 2025, the Company has repurchased 1,938,450 shares of its Common Stock pursuant to the 2025 Repurchase Program at an average price of $16.33 per share. Appointment of Superstate as Digital Transfer Agent On September 25, 2025, we announced that financial technology firm, Superstate, was appointed by the Company as its Digital Transfer Agent in connection with our plans to tokenize our SEC-registered common stock directly on the Ethereum blockchain. By enabling its equity to be tokenized natively onchain, SharpLink aims to demonstrate how public companies can use blockchain infrastructure to create shareholder value, improve market efficiency and drive forward the next generation of capital markets. SharpLink intends to partner with Superstate to tokenize its equity on Ethereum through its Opening Bell platform, expanding Superstate’s multichain capital markets infrastructure. SharpLink and Superstate also intend to closely collaborate on advancing how tokenized public equities can ultimately trade on Automated Market Makers (“AMMs”) and other DeFi protocols in a fully compliant manner. This initiative aligns with the SEC’s broader Project Crypto innovation agenda aimed at modernizing U.S. securities regulation to better enable digital assets, blockchain and onchain markets. Reverse Stock Split On May 5, 2025, we effected a one-for-twelve (1:12) reverse stock split of all the Company’s common stock, whereby the Company decreased the number of issued and outstanding shares of common stock 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. Acquisition of 10% Equity Stake in Armchair Enterprises On February 24, 2025, we 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 minus impairment, adjusted for any observable price changes. There was no impairment as of September 30, 2025. 34 Table of Contents Results of Operations The following table provides certain selected financial information for the periods presented: For the Three Months Ended September 30, 2025 For the Three Months Ended September 30, 2024 Change % Change For the Nine Months Ended September 30, 2025 For the Nine Months Ended September 30, 2024 Change % Change Revenue from staking $ 10,273,809 $ - $ 10,273,809 100.0 % $ 10,302,343 $ - $ 10,302,343 100.0 % Revenue from affiliate marketing 569,758 881,690 $ (311,932 ) -35.4 % 1,980,246 2,838,908 $ (858,662 ) -30.2 % Revenues and gains from operations 10,843,567 881,690 9,961,877 1,129.9 % 12,282,589 2,838,908 9,443,681 332.7 % Other operating income Realized gain on crypto assets at fair value, net 6,307,776 - 6,307,776 100.0 % 11,681,359 - 11,681,359 100.0 % Unrealized gain on crypto assets at fair value, net 107,326,140 - 107,326,140 100.0 % 104,889,114 - 104,889,114 100.0 % Total operating income 113,633,916 - 113,633,916 116,570,473 - 116,570,473 Operating expenses Cost of revenues from affiliate marketing 430,569 709,045 (278,476 ) -39.3 % 1,528,707 2,098,921 (570,214 ) -27.2 % Selling, general, and administrative expenses 12,045,432 970,080 11,075,352 1141.7 % 15,435,938 4,426,835 11,009,103 248.7 % Stock-based compensation, related party 130,620 - 130,620 100.0 % 16,509,988 - 16,509,988 100.0 % Impairment of crypto assets at cost 6,950,189 - 6,950,189 100.0 % 94,763,484 - 94,763,484 100.0 % Total operating expenses 19,556,810 1,679,125 17,877,685 1064.7 % 128,238,117 6,525,756 121,712,361 1865.1 % Operating income (loss) 104,920,673 (797,435 ) 105,718,108 -13,257 % 614,945 (3,686,848 ) 4,301,793 100.0 % Total other income 118,948 16,178 102,770 635.2 % 167,503 276,894 (109,391 ) -39.5 % Net income (loss) before income taxes 105,039,621 (781,257 ) 105,820,878 -13,545 % 782,448 (3,409,954 ) 4,192,402 -122.9 % Income tax expense (792,346 ) (6,735 ) (785,611 ) 11,665 % (822,440 ) (55,513 ) (766,927 ) 1381.5 % Net income (loss) from continuing operations 104,247,275 (787,992 ) 105,035,267 -13,329 % (39,992 ) (3,465,467 ) 3,425,475 -98.8 % Net income (loss) from discontinued operations, net of tax 22,930 (97,139 ) 120,069 -123.6 % (87,431 ) 14,467,733 (14,555,164 ) -100.6 % Net income (loss) $ 104,270,205 $ (885,131 ) $ 105,155,336 -11,880 % $ (127,423 ) $ 11,002,266 $ (11,129,689 ) -101.2 % For the Three Months Ended September 30, 2025 Compared to the Three Months Ended September 30, 2024 Revenue and gains (loss) from operations For the three months ended September 30, 2025, revenues and gains (losses) from operations increased 1,129.9% to $10,843,567 compared to $881,690 reported for the same three-month period in the prior year. The notable increase was due to revenues from staking generated by our ETH Treasury Management segment, launched on June 2, 2025, which was $10,273,809, or 94.8% of our total revenues for the quarter ended September 30, 2025. The revenues from staking have immaterial costs and therefore nearly 100% gross margin. The increase in revenues was offset by a 35.4% decline in revenues generated in our Affiliate Marketing Segment, which generated $569,758 in revenues compared to $881,690 for the three months ended September 30, 2025 and 2024, respectively. The decrease in affiliate marketing revenues was primarily due to softening market conditions in the global iGaming industry, changes in customer pricing structures and the loss of customers due primarily to evolving regulatory environments in certain foreign markets in which our affiliate marketing business operates. Other Operating Income We recognized a gain on crypto assets at fair value of $6,307,776 and recorded an unrealized gain on crypto assets of $107,326,140 for the three months ended September 30, 2025 as compared to $0 and $0, respectively for the same three-month period in the prior year, resulting from fair value accounting adjustments. Total Operating Expenses For the three months ended September 30, 2025, cost of revenues - affiliate marketing decreased $278,476 to $430,569 compared to the same three-month period in the prior year. This decrease is reflective of the decrease in revenues from Affiliate Marketing Segment. For the three months ended September 30, 2025, total selling, general and administrative expenses increased 1,141.7% to $12,045,432 from $970,080 reported for the same three-month period in the prior year. The increase was directly attributable to the following: $3,145,826 in asset manager fees, $4,879,127 in higher compensation costs, $1,798,497 in accounting, legal and compliance fees, $657,114 in custodial and banking fees each incurred to establish and support our ETH Treasury Management strategy. We also recognized an impairment loss on LsETH, crypto assets of $6,950,189 compared to $0 for the three months ended September 30, 2024. 35 Table of Contents Operating Income (Loss) Net income from operations increased 13,329.5% to $104,247,275 for the three months ended September 30, 2025, compared to a net loss from operations of $(787,992) reported for the same three-month period in 2024. This is attributable to the impairment on crypto assets of LsETH of $6,950,189 offset by a $6,307,776 net realized gains on our crypto assets and an unrealized gain on our crypto assets which totaled $107,326,140 for the three months ended September 30, 2025. Net Income (Loss) from Discontinued Operations, Net of Tax For the three months ended September 30, 2025, net income from discontinued operations, net of tax climbed 123.6% to $22,930, which compared to a net loss from discontinued operations, net of tax of $(97,139) for the three months ended September 30, 2024. The increase in net income from discontinued operations is due to the wind down of certain MTS business amounts. Net Income (Loss) As a result of the aforementioned reasons, net income for the three months ended September 30, 2025 totaled $104,270,205, climbing 11,880.2% when compared to net loss of $(885,131) reported for the three months ended September 30, 2024. For the Nine Months Ended September 30, 2025 Compared to the Nine Months Ended September 30, 2024 Revenue and gains (loss) from operations For the nine months ended September 30, 2025, revenues rose 332.7% to $12,282,589 compared to $2,838,908 reported for the same nine-month period in the prior year. The increase was due to revenues generated by our ETH Treasury Management segment, launched on June 2, 2025, which was $10,302,343, or 84% of our total revenues for the quarter ended September 30, 2025. The revenues from staking have immaterial costs and therefore nearly 100% gross margin. The increase in revenues was offset by a 30.2% decline in revenues generated in our Affiliate Marketing Segment, which generated $1,980,246 in revenues compared to $2,838,908 for the nine months ended September 30, 2025 and 2024, respectively. The decrease in affiliate marketing revenues was primarily due to softening market conditions in the global iGaming industry, changes in customer pricing structures and the loss of customers due primarily to evolving regulatory environments in certain foreign markets in which our affiliate marketing business operates. Other Operating Income We recognized a net gain on crypto assets at fair value of $11,681,359 and recorded an unrealized gain on crypto assets of $104,889,114 for the nine months ended September 30, 2025 as compared to $0 and $0 for the same nine-month period in the prior year, resulting from fair value accounting adjustments. Total Operating Expenses For the nine months ended September 30, 2025, cost of revenues - affiliate marketing decreased $570,214 to $1,528,707 compared to the same period in the prior year. This decrease is reflective of the decrease in revenues from Affiliate Marketing Segment. For the nine months ended September 30, 2025, total selling, general and administrative expenses increased 248.7% to $15,435,938 from $4,426,835 reported for the same nine-month period in the prior year. The increase was directly attributable to the following: $3,523,667 in asset manager fees, $5,347,502 in higher compensation costs, $1,442,761 in accounting, legal and compliance fees, $734,635 in custodial and banking fees each incurred to establish and support our ETH Treasury Management strategy. We also recognized an impairment loss on LsETH, crypto assets at cost of $94,763,484 compared to $0 for the nine months ended September 30, 2024. 36 Table of Contents Operating Income (Loss) Net loss from continuing operations decreased 98.8% to $(39,992) for the nine months ended September 30, 2025, compared to a net loss from continuing operations of $(3,465,467) reported for the same nine-month period in 2024. This is attributable to the impairment on LsETH crypto assets at cost of $94,763,484 offset by a $11,681,359 net realized gains on crypto assets and unrealized gain on crypto assets of $104,889,114. Net Income (Loss) from Discontinued Operations, Net of Tax For the nine months ended September 30, 2025, net loss from discontinued operations, net of tax decreased 100.6% to $(87,431), which compared to a net income from discontinued operations, net of tax of $14,467,733 for the nine months ended September 30, 2024. The decrease to the net loss from discontinued operations is due to the gain on the sale of the SHGN and Sports Gaming Client Services business operations in the first quarter of 2024. Net Income (Loss) As a result of the aforementioned reasons, net loss for the nine months ended September 30, 2025 totaled $(127,423), declining 101.2% when compared to net income of $11,002,266 reported for nine months ended September 30, 2024. Cash Flows Nine Months Ended September 30, 2025 Compared to Nine Months Ended September 30, 2024 As of September 30, 2025, cash on hand was $11,128,231, a 674.6% increase when compared to cash on hand of $1,436,729 as of December 31, 2024. The increase was due to net proceeds raised from the PIPE, ATM and registered direct offerings completed in the second and third quarters of 2025. For the nine months ended September 30, 2025, net cash used in operating activities from continuing operations totaled $(8,183,743) compared to net cash used in operating activities from continuing operations of $(4,434,002) in the prior year. Net cash used in operating activities from discontinued operations was $(225,981), which compared to net cash used in operating activities of $(17,112,182) from discontinued operations for the same nine-month period in 2024. Overall, net cash used in operating activities was $(8,409,724) and $(21,546,184) for the nine months ended September 30, 2025 and 2024, respectively. The change in the operating cash flows was largely attributable to cash used in discontinued operations during the nine months ended September 30, 2024. For the nine months ended September 30, 2025, net cash used in our investing activities from continuing operations totaled $(2,904,521,792), an increase of 1,958,895.7% when compared to cash provided by investing activities from continuing operations of $148,281 for the same nine-month period in 2024. For the nine months ended September 30, 2025 and 2024, net cash used in investing activities from discontinued operations was $0 and $(18,857,834), respectively. The increase in net cash used in investing activities for the nine months ended September 30, 2025 versus 2024 was due to our new ETH Treasury Management strategy and the related purchases of $2,539,611,653 of ETH crypto assets. The decrease in total cash used in investing activities for discontinued operations is due to cash received from the sale of business in January 2024 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. For the nine months ended September 30, 2025, net cash generated by financing activities from continuing operations was $2,922,567,907, a 23,788.1% increase when compared to net cash used by financing activities from continuing operations of $(12,337,694) for the same nine-month period in 2024. Cash generated by financing activities related to gross cash proceeds from the sale of our Common Stock of $2,147,072,919, a registered offering with gross cash proceeds of $4,500,000 and $902,086,156 raised from private placements of our equity securities. For the nine months ended September 30, 2025 net cash used in financing activities from discontinued operations was $0 compared to net cash used by financing activities of $(5,835,352) for the nine months ended September 30, 2024. Liquidity and Capital Resources As of September 30, 2025, we had working capital of $35,431,545. For the three and nine months ended September 30, 2025, we had net income from continuing operations of $104,247,275 and $(39,992) compared to a net loss from continuing operations of $(787,992) and (3,465,467) reported for the same three- and nine-month periods in 2024. 37 Table of Contents Principal Sources of Liquidity Our principal sources of liquidity are our cash and cash equivalents balances, USDC stablecoins, cash flow from operations, and proceeds from equity financing transactions, including pursuant to our at-the-market offering facility under the Amended and Restated ATM Sales Agreement with A.G.P. Under our Treasury Reserve Policy, we use the vast majority of our cash, including cash generated from capital raising transactions, to acquire ETH, some of which are classified as indefinite-lived intangible assets. As of September 30, 2025 and December 31, 2024, we held approximately 580,841 and 0 ETH in crypto assets at fair value, respectively, all of which are unencumbered. As of September 30, 2025 and December 31, 2024, we held approximately 236,906 and 0 LsETH in crypto assets at cost, respectively. As of November 9, 2025, we held approximately 861,251 in total ETH holdings, comprised of 637,752 in native ETH and 223,499 in ETH as if redeemed from LsETH, all of which are unencumbered. As discussed further below, although we do not anticipate needing to use our ETH to meet our obligations in the next 12 months, we believe our substantial ETH holdings can serve as a source of liquidity, if necessary. Short-Term and Long-Term Liquidity Short-Term Liquidity — Our short-term liquidity needs include working capital requirements, anticipated capital expenditures, and contractual obligations due within the next 12 months. We expect that our cash and cash equivalents as of September 30, 2025, together with cash and cash equivalents generated by our operations, will be sufficient to satisfy these needs over the next nine months. We anticipate being able to use proceeds from financings to meet these needs. Although we do not anticipate needing to use our ETH to meet our short-term liquidity needs, to the extent necessary, we may seek to use proceeds from the sale of our ETH to meet such needs. See “ Availability of ETH for Liquidity ” below and “Item 1A. Risk Factors” for additional information. Long-Term Liquidity — Beyond the next 12 months, our long-term cash needs are primarily for obligations related to working capital needs. We expect our cash and cash equivalents as of September 30, 2025, together with cash and cash equivalents generated by our operations, will be sufficient to satisfy these needs. See “ Availability of ETH for Liquidity ” below and “Item 1A. Risk Factors” for additional information. Availability of ETH for Liquidity — We do not believe we will need to sell or engage in other transactions with respect to any of our ETH within the next 12 months to meet our liquidity needs, although we may from time to time sell or engage in other transactions with respect to our ETH as part of treasury management operations, as noted above. The ETH market historically has been characterized by significant volatility in its price, limited liquidity and trading volumes compared to sovereign currencies markets, relative anonymity, a developing regulatory landscape, susceptibility to market abuse and manipulation, compliance and internal control failures at exchanges, and various other risks inherent in its entirely electronic, virtual form and decentralized network. During times of instability in the ETH market, we may not be able to sell our ETH at reasonable prices or at all. As a result, our ETH are less liquid than our existing cash and cash equivalents and may not be able to serve as a source of liquidity for us to the same extent as cash and cash equivalents. In addition, upon sale of our ETH, we may incur additional taxes related to any realized gains or we may incur capital losses as to which the tax deduction may be limited. See “Item 1A. Risk Factors” for additional information. Off-Balance Sheet Arrangements On September 30, 2025, we did not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenue or expenses, results of operations, liquidity, capital expenditures or capital resources. Since our inception, except for standard operating leases accounted for prior to January 1, 2022, we have not engaged in any off-balance sheet arrangements, including the use of structured finance, special purpose entities or variable interest entities. Inflation Our opinion is that inflation did not have a material effect on our operations for the nine months ended September 30, 2025. Climate Change Our opinion is that neither climate change, nor governmental regulations related to climate change, have had, or are expected to have, any material effect on our operations. New Accounting Pronouncements Recently Issued Accounting Pronouncements Not Yet Adopted In November 2024, the FASB issued ASU 2024-04, Debt-Debt with Conversions and Other Option. 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. 38 Table of Contents ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK As a “smaller reporting company” as defined by Item 10 of Regulation S-K, we are not required to provide the information required by this Item.