Sharplink, Inc. 10-K

ITEM 5. MARKET FOR REGISTRANT ’ S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our Common Stock is currently quoted on The Nasdaq Capital Market under the symbol “SBET.” The following table sets forth, for the period indicated, the quarterly high and low closing sales prices per share of our Common Stock for each quarter during our last two fiscal years, as well as the first quarter in 2026 through March 6, 2026, as reported by Nasdaq. 2026 High Low First Quarter $ 11.00 $ 6.07 2025 High Low First Quarter $ 8.08 $ 3.24 Second Quarter $ 79.21 $ 2.57 Third Quarter $ 37.38 $ 9.35 Fourth Quarter $ 19.24 $ 8.79 2024 High Low First Quarter $ 21.96 $ 13.20 Second Quarter $ 16.92 $ 7.20 Third Quarter $ 9.96 $ 5.52 Fourth Quarter $ 11.28 $ 6.24 As of March 6, 2026, we had approximately 66 individual stockholders of record of our Common Stock. We believe that the number of beneficial owners of our Common Stock is greater than the number of record holders, because a number of our shares of Common Stock are held through brokerage firms in “street name.” Dividend Policy We do not intend to pay cash dividends to our stockholders in the foreseeable future. We currently intend to retain all our available funds and future earnings, if any, to finance the growth and development of our business. Any future determination related to our dividend policy will be made at the discretion of our Board of Directors and will depend upon, among other factors, our results of operations, financial condition, capital requirements, contractual restrictions, business prospects and other factors our Board of Directors may deem relevant. 54 Table of Contents Recent Sales of Unregistered Securities None. Purchases of Equity Securities by Issuer and Its Affiliates On August 21, 2025, the Board authorized a share repurchase program under which the Company may repurchase up to $1.5 billion of its outstanding Common Stock. As of December 31, 2025, the Company has repurchased 1,938,450 shares of its outstanding Common Stock for $31,692,488. Total number of shares purchased Average price paid per share Total number of shares purchased as part of the publicly announced program Approximate dollar value of shares that may yet to be purchased under program January 2025 - - - - February 2025 - - - - March 2025 - - - - April 2025 - - - - May 2025 - - - - June 2025 - - - - July 2025 - - - - August 2025 - - - - September 2025 1,938,450 16.35 1,938,450 1,468,307,512 October 2025 - - - - November 2025 - - - - December 2025 - - - - Total 1,938,450 $ 16.35 1,938,450 $ 1,468,307,512 (1) The share repurchase program does not have an expiration date and may be adjusted or terminated by the Company at any time. ITEM 6. [RESERVED] 55 Table of Contents ITEM 7. MANAGEMENT ’ S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Cautionary Note Regarding Forward-Looking Statements This Annual Report on Form 10-K contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on management ’ s current expectations, assumptions, and beliefs regarding future events and involve risks, uncertainties, and other factors that could cause actual results to differ materially from those expressed or implied by such statements. Forward-looking statements are not guarantees of future performance. Forward-looking statements in this Annual Report include, but are not limited to, statements regarding our business strategy; digital asset treasury activities; capital allocation and liquidity management; potential mergers, acquisitions, or other strategic transactions; regulatory developments affecting digital assets; market trends; competition; future financial position and results of operations; and plans, objectives, and expectations of management. Words such as “ 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 include such words. Actual results may differ materially from those contemplated by forward-looking statements due to a variety of risks and uncertainties, including those described under Part I, Item 1A, “ Risk Factors, ” in this Annual Report on Form 10-K, as well as risks described in our other filings with the SEC. The discussion of risks herein is not an indication that any such risks have occurred at the time of this filing. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law. Unless otherwise indicated or the context requires otherwise, all numbers presented in this Item 7 are in thousands. Industry and Market Data This Annual Report on Form 10-K includes market and industry data obtained from third-party sources, industry publications, and publicly available information that we believe to be reliable, as well as estimates derived from our own internal analyses and assumptions. In particular, certain market estimates reflect our assumptions regarding digital asset markets, including the Ethereum ecosystem and broader blockchain-based financial infrastructure. While we believe such information is reasonable, market and industry data involve risks and uncertainties and are subject to change based on a variety of factors, including regulatory developments, market conditions, technological changes, and other factors discussed under “ Cautionary Note Regarding Forward-Looking Statements ” and Part I, Item 1A, “ Risk Factors, ” in this Annual Report on Form 10-K. We have not independently verified and do not undertake to update any such market or industry data. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis of our financial condition, results of operations, liquidity, and capital resources should be read together with our consolidated financial statements and the related notes included elsewhere in this Annual Report on Form 10-K. This discussion also should be read in conjunction with the information contained in Part I, Item 1, “ Business, ” and Part I, Item 1A, “ Risk Factors. ” This Management ’ s Discussion and Analysis reflects management ’ s perspective on the key factors that have affected, and are expected to affect, our operating results, financial condition and cash flows. As discussed in Part I, Item 1, “ Business, ” the Company has undergone a strategic shift, with an increased focus on digital asset treasury activities while continuing to operate a legacy affiliate marketing business. As a result, period-to-period comparisons may be affected by changes in business mix, capital allocation priorities and prevailing market conditions. 56 Table of Contents This discussion contains forward-looking statements that involve risks, uncertainties and assumptions. Actual results could differ materially from those expressed or implied by such forward-looking statements. Unless the context indicates otherwise, references in this Annual Report on Form 10-K to “ Sharplink Gaming, ” “ Sharplink, ” “ Sharplink US, ” the “ 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 Sharplink, Inc. is a publicly traded company that, in June 2025, undertook a significant strategic shift by adopting Ether (“ETH”), the native token of the Ethereum blockchain, as its primary treasury asset. Through this strategy, Sharplink seeks to align its capital allocation and treasury management with the growth of blockchain-based financial infrastructure, programmable finance, and decentralized protocols on Ethereum. As part of this transition, the Company became one of the largest publicly traded companies to pursue an ETH-centered digital asset treasury strategy. Sharplink operates through two reportable segments: ETH Treasury Management and Affiliate Marketing. The Company’s ETH Treasury Management focuses on the accumulation and active management of ETH as a long-term treasury asset. Sharplink seeks to benefit from potential ETH price appreciation and from protocol-level rewards earned by participating in Ethereum’s proof-of-stake consensus mechanism through staking activities. These activities include both native staking and liquid staking arrangements, executed within a governance, custody, and risk management framework designed to meet public company standards. The Company is not registered as an investment company under the Investment Company Act of 1940. In addition, Sharplink continues to operate a legacy Affiliate Marketing segment that provides performance-based customer acquisition services to sportsbook and online casino gaming operators in regulated jurisdictions. Through its international affiliate network, PAS.net, and a portfolio of U.S. state-specific digital properties, the Company drives user traffic and player acquisition for licensed gaming operators. While this business remains operational, management’s strategic focus has shifted toward digital asset treasury activities. Sharplink’s business model emphasizes balance sheet deployment, disciplined capital allocation and internal treasury management rather than traditional operating leverage. Management believes this approach positions the Company to participate in the evolving digital asset ecosystem while maintaining public company governance, transparency, and regulatory compliance. 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, par value $0.0001 per share (the “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 $4,500. A.G.P./Alliance Global Partners (“A.G.P.”) acted as the sole placement agent for the May 20, 2025 Offering. 57 Table of Contents $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 $425,000 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 2025 PIPE 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 $1,700, 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 December 31, 2025, we had raised total gross proceeds of $2,147,072 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 2025 Purchase Agreement”) with certain institutional investors to sell in a registered direct offering (the “August 2025 Offering”) an aggregate of 10,256,411 shares of the Company’s Common Stock (the “August 2025 Shares”). The price per share was $19.50, and the gross proceeds from the August 2025 Offering, before deducting the placement agent fees, financial advisor fees, and offering expenses, were approximately $200,000. The Company used the net proceeds received from the August 2025 Offering to acquire ETH and for general working capital purposes. The August 2025 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 2025 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 2025 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. 58 Table of Contents On August 6, 2025, the Company entered into a placement agency agreement (the “August 2025 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 2025 Offering. Cantor Fitzgerald & Co., (“Cantor”) acted as financial advisor to the Company pursuant to an engagement letter with the Company. Pursuant to the August 2025 Placement Agency Agreement, the Company paid the August 2025 Placement Agents a cash fee equal to 5.0% of the aggregate gross proceeds raised from the sale of the shares sold in the August 2025 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 August 2025 Placement Agents or Cantor was credited back to the Company. The August 2025 Placement Agency Agreement also contains representations, warranties, indemnification and other provisions customary for transactions of this nature. The August 2025 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 2025 August Purchase Agreement”) with certain institutional investors to sell in a registered direct offering (the “Second 2025 August Offering”) an aggregate of 18,382,353 shares of the Company’s Common Stock (the “Second 2025 August Shares”). The price per Second 2025August Share was $21.76, and the gross proceeds from the Second August 2025 Offering, before deducting the placement agent fees, financial advisor fees, and offering expenses, were approximately $400,000. The Company used the net proceeds received from the Second 2025 August Offering to acquire ETH as well and for general working capital purposes. The Second August 2025 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 2025 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 2025 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 2025 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 2025 Offering. Cantor acted as financial advisor to the Company pursuant to an engagement letter with the Company. Pursuant to the Second 2025 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 2025 Offering less the fees to be paid to Cantor as financial advisor. The Second August 2025 Placement Agent Agreement also contains representations, warranties, indemnification and other provisions customary for transactions of this nature. The Second August 2025 Offering closed on August 12, 2025. October 15, 2025 Registered Direct Offering On October 15, 2025, we entered into a securities purchase agreement (the “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 “October 2025 Shares”). The price per October 2025 Share was $17.00, and the gross proceeds from the October 2025 Offering, before deducting the placement agent fees and offering expenses, were approximately $76,500. The Company intends to use the net proceeds received 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, which expired 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” and the shares of Common Stock issuable upon exercise of the Premium Purchase Contracts, the “Premium Purchase Shares”). The premium purchase contracts were not executed prior to the January 15, 2026 expirations date. The October 2025 Shares, Premium Purchase Contracts, and Premium Purchase Shares (collectively, the “October 2025 Securities”) were offered and sold pursuant to a prospectus, dated May 30, 2025, and a prospectus supplement, dated October 15, 2025, in connection with a takedown from the Company’s effective shelf registration statement on Form S-3ASR (File No. 333-287708). The October 2025 Purchase Agreement contains 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 October 2025 Purchase Agreement also contains customary conditions to closing, termination rights of the parties, certain indemnification obligations of the Company and ongoing covenants for the Company. 59 Table of Contents On October 15, 2025, the Company entered into a placement agent agreement (the “October 2025 Placement Agent Agreement”) with A.G.P. as sole placement agent (the “October 2025 Placement Agent”), pursuant to which the Company engaged the October 2025 Placement Agent as the exclusive placement agent in connection with the October 2025 Offering. Pursuant to the October 2025 Placement Agent Agreement, the Company paid the October 2025 Placement Agent 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. The October 2025 Placement Agent Agreement also contains representations, warranties, indemnification and other provisions customary for transactions of this nature. The Offering closed on October 17, 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 100,000,000 to 500,000,000; 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. 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 500,000,000 to 2,500,000,000. 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. 60 Table of Contents Adoption of Inducement Award Plan On August 19, 2025, the Board adopted the Sharplink, 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 December 31, 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. We believe 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. 61 Table of Contents 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 and Sale 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. In December 2025, the Company entered into a Share Purchase Agreement with Streak VC, Inc., a Minnesota business corporation, pursuant to which the Company sold its 22 ordinary shares of Armchair, representing approximately 10% of Armchair’s outstanding equity, for $500,000 in cash. As the carrying value of the investment equaled the proceeds received, no gain or loss was recognized on the transaction. The buyer is an unrelated third party. Results of Operations ( in thousands, except for percentages ) The following table provides certain selected financial information for the periods presented: For the Year Ended December 31, 2025 For the Year Ended December 31, 2024 Change % Change Revenue from staking, net $ 25,594 $ - $ 25,594 100.0 % Revenue from affiliate marketing 2,461 3,662 $ (1,201 ) -32.8 % Total revenue 28,055 3,662 24,393 666.1 % Gains and (losses) from operations Realized gain on crypto assets, net 55,213 - 55,213 100.0 % Unrealized loss on crypto assets at fair value, net (616,173 ) - (616,173 ) 100.0 % Total losses from operations (560,960 ) - (560,960 ) 100.0 % Operating expenses Cost of revenues from affiliate marketing 1,902 2,756 (854 ) -31.0 % Selling, general, and administrative expenses 42,392 5,669 36,723 647.8 % Stock-based compensation, related party 16,510 - 16,510 100.0 % Impairment of crypto assets at cost 140,208 - 140,208 100.0 % Total operating expenses 201,012 8,425 192,587 2,286 % Operating loss (733,917 ) (4,763 ) (729,154 ) 15,309 % Total other income 447 289 158 54.7 % Net loss before income taxes (733,470 ) (4,474 ) (728,996 ) 16,294 % Income tax expense (1,046 ) - (1,046 ) - 100.0 % Net loss from continuing operations (734,516 ) (4,474 ) (730,042 ) 16,317 % Net income (loss) from discontinued operations, net of tax (71 ) 14,573 (14,644 ) -100.5 % Net income (loss) $ (734,587 ) $ 10,099 $ (744,686 ) -7,374 % For the Twelve Months Ended December 31, 2025 Compared to the Twelve Months Ended December 31, 2024 (in thousands, except for percentages) Revenue and gains (loss) from operations For the year ended December 31, 2025, revenues rose 666.1% to $28,055 compared to $3,662 reported for the same period in the prior year. The increase was due to staking revenues generated by our ETH Treasury Management segment, launched on June 2, 2025, which was $25,594, or 91% of our total revenues for the year ended December 31, 2025. The revenues from staking have approximately $944 of certain staking reward fees and gas fees netted against the staking revenue recognized. The increase in revenues was offset by a 32.8% decline in revenues generated in our Affiliate Marketing Segment, which generated $2,461 in revenues compared to $3,662 for the twelve months ended December 31, 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 regulatory environments in certain foreign markets in which our affiliate marketing business operates. 62 Table of Contents Total Losses From Operations We recognized a net realized gain on crypto assets of $55,213 for the year ended December 31, 2025 as compared to $0 for the same period in the prior year. The realized gain was due to the conversion of LsETH into ETH upon entry into the liquid staking protocol and the redemption of LsETH in December 2025. We recognized an unrealized loss on crypto assets at fair value of $(616,173) and an impairment loss on LsETH, crypto assets at cost, of $(140,208), recorded in Total losses from operations, for the year ended December 31, 2025, compared to $0 and $0, respectively, in the prior year. These losses primarily reflect the decline in the market price of ETH during the second half of 2025. The decrease in ETH prices over the relevant reporting period was driven by a combination of macro-level risk aversion and ecosystem-specific activity declines. Macroeconomic conditions reduced liquidity and risk appetite across digital asset markets. In addition, Ethereum-specific activity indicators, such as on-chain transaction volumes, fee generation, and developer engagement, softened relative to prior periods, contributing to weaker fundamental support for ETH valuations. We also believe that a significant portion of the volatility observed during the period was attributable to the industry-wide deleveraging event on October 10, 2025, which resulted in the largest single-day liquidation of leveraged crypto positions in the industry’s history. This event triggered substantial forced selling across both centralized and decentralized derivatives venues, reduced open interest, and contributed to a sustained period of elevated volatility and price disruption. Total Operating Expenses For the year ended December 31, 2025, Cost of revenues from affiliate marketing decreased to $1,902 from $2,756 for the same period in the prior year. This decrease is reflective of the decrease in revenues from Affiliate Marketing Segment. For the year ended December 31, 2025, total selling, general, and administrative expenses increased 647.8% to $42,392 from $5,669 for the same period in the prior year. The increase was directly attributable to the following - $5,629 in asset manager fees, $13,760 in compensation costs, $5,163 in accounting, legal and compliance fees, $811 in custodial and banking fees each incurred to establish and support our ETH Treasury Management strategy. The increase in these expenses was directly attributable to our strategic shift to our ETH Treasury Management strategy in June 2025. Operating Income (Loss) Net loss from continuing operations decreased -16,317.4% to $(734,516) for the period ended December 31, 2025, compared to a net loss from continuing operations of $(4,474) for the same period in 2024. This is attributable to a $55,213 net realized gains on crypto assets, due to the conversion of ETH into LsETH and the redemption of LsETH in the fourth quarter. The realized gains were offset by an unrealized loss on crypto assets at fair value of $(616,173) due to ETH market conditions that deteriorated during the second half of 2025. In addition, an impairment of $140,208 on crypto assets at cost of was recorded related to recognizing the lowest price of LsETH seen during the year ended December 31, 2025. Net Income (Loss) from Discontinued Operations, Net of Tax For the period ended December 31, 2025, net loss from discontinued operations, net of tax increased 100.5% to $(71), which compared to a net income from discontinued operations, net of tax of $14,573 for the period ended December 31, 2024. The decrease to the net loss from discontinued operations is due to the gain on the sale of the discontinued operations of SHGN and Sports Gaming Client Services businesses in the first quarter of 2024. Net Income (Loss) As a result of the aforementioned reasons, net loss for the period ended December 31, 2025 totaled $(734,587) increasing 7,373.9% when compared to net income of $10,099 reported for period ended December 31, 2024. Cash Flows Year Ended December 31, 2025 Compared to Year Ended December 31, 2024 (in thousands, except for percentages) As of December 31, 2025, cash on hand was $28,539, a 1,886.0% increase when compared to cash on hand of $1,437 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 half of 2025. 63 Table of Contents For the twelve months ended December 31, 2025, net cash used in operating activities from continuing operations totaled $(17,481) compared to net cash used in operating activities from continuing operations of $(5,856) in the prior year. Net cash used in operating activities from discontinued operations was $(61), which compared to net cash used in operating activities of $(16,958) from discontinued operations for the same twelve-month period in 2024. Overall, net cash used in operating activities was $(17,542) and $(22,814) for the twelve months ended December 31, 2025 and 2024, respectively. The change in the operating cash flows was largely attributable to cash used in discontinued operations during year ended December 31, 2024. For the twelve months ended December 31, 2025, net cash used in our investing activities from continuing operations totaled $(2,954,139), an increase of $(2,954,287) when compared to cash provided by investing activities from continuing operations of $148 for the same twelve-month period in 2024. For the twelve months ended December 31, 2025 and 2024, net cash used in investing activities from discontinued operations was $0 and $(18,858), respectively. The increase in net cash used in investing activities for the twelve months ended December 31, 2025 versus 2024 was due to our new ETH Treasury Management strategy and the related purchases of $2,614,612 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, net of the cash transferred of $41,358. The majority of the cash transferred of $41,358 was reflected in discontinued operations customer deposits liability and deferred revenue of $36,960 and $4,889, respectively. For the twelve months ended December 31, 2025, net cash generated by financing activities from continuing operations was $2,998,715, a 26,085.4% increase when compared to net cash used by financing activities from continuing operations of $(11,540) for the same twelve-month period in 2024. Cash generated by financing activities related to gross cash proceeds from the sale of our Common Stock of $2,147,073, gross cash proceeds from private placements of $983,095 offset by equity issuance costs of $(99,761) and repurchases of Common Stock of $(31,692). For the twelve months ended December 31, 2025 net cash used in financing activities from discontinued operations was $0 compared to net cash used by financing activities of $(5,835) for the twelve months ended December 31, 2024. Liquidity and Capital Resources As of December 31, 2025, we had working capital of $18,404. For the twelve months ended December 31, 2025, we had net loss from continuing operations of $(734,516) compared to a net loss from continuing operations of $(4,474) reported for the same twelve-month periods in 2024. We had $1,899,683 of crypto assets at fair value and $500,912 of crypto assets at cost classified as a non-current assets, which represent readily accessible sources of liquidity, as denoted further below. Principal Sources of Liquidity Our principal sources of liquidity are our cash and cash equivalents balances, USDC stablecoins, 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. 64 Table of Contents 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 December 31, 2025, we held approximately 640,026 ETH in crypto assets at fair value ETH, and 204,409 LsETH in crypto assets at cost, all of which are unencumbered. As of March 6, 2026 we held approximately 868,699 in total ETH, comprised of 604,618 in native ETH and 208,893 in ETH as if redeemed from LsETH, and 55,188 in ETH as if redeemed from WeETH, all of which are unencumbered. As discussed further below, although our crypto assets are classified as non-current assets due to our long-term treasury strategy, they represent a significant and readily accessible source of liquidity. Based on current Ethereum network conditions, including a near-zero validator exit queue of nine days as of March 6, 2026, we estimate that a material portion of our staked ETH could be withdrawn and converted to cash within approximately 30 days, and our entire staking portfolio within approximately 90 days. We believe this provides meaningful additional liquidity support beyond our cash and cash equivalents. 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. To meet our short term liquidity needs, we expect that our cash and cash equivalents and USDC stablecoins as of December 31, 2025, coupled with the use of a portion of proceeds earned from staking activities and redeemed for cash, and equity financings will be sufficient to meet these needs. Although we do not anticipate needing to use our ETH and/or LsETH to meet our short-term liquidity needs, to the extent necessary, we may seek to use proceeds from the sale of our ETH and redeemed LsETH 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 twelve months, our long-term cash needs are primarily for obligations related to working capital requirements. We expect our cash and cash equivalents and USDC stablecoins as of December 31, 2025, and the use of a portion of proceeds earned from staking activities and redeemed for cash, and equity financings 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 — Although we may from time to time sell or engage in other transactions with respect to our ETH and LsETH 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, 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 or LsETH, 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 December 31, 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. New Accounting Pronouncements Recently Issued Accounting Pronouncements Not Yet Adopted In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“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 consolidated financial statements and disclosures. 65 Table of Contents 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 ASU 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. Critical Accounting Policies and Estimates The preparation of our consolidated financial statements in conformity with U.S. GAAP requires management to make estimates, assumptions and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and the related disclosures. Our most critical estimates include those related to use of accounting for valuation and classification of crypto assets, revenue recognition, stock-based compensation, and warrants. On an ongoing basis, we evaluate our estimates and assumptions. We base our estimates on historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Our actual results may differ from these estimates under different assumptions or conditions. We believe the following accounting estimates and judgments are critical because they involve a high degree of subjectivity, are inherently uncertain, and could materially impact our financial condition and results of operations. Revenue Recognition The Company follows a five-step model to assess each sale to a customer; identify the legally binding contract, identify the performance obligations, determine the transaction price, allocate the transaction price, and determine whether revenue will be recognized at a point in time or over time. Revenue is recognized upon transfer of control of promised products or services (i.e., performance obligations) to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for promised goods or services. Management judgment is required in determining whether the performance obligations will be recognized at a point in time or overtime and when the transfer of control of goods and services are made to entitle the Company to receive payment. The exercise of management judgment has a material impact on when revenue is recognized. 66 Table of Contents We earn rewards from staking activities, including native staking and liquid staking arrangements. Determining the appropriate timing and measurement of staking revenue requires judgment in identifying when control of the service has been provided, whether the rewards represent consideration from a customer under ASC 606 Revenue from Contracts with Customers or ASC 610-20 Gains and Losses from Derecognition of Nonfinancial Assets , and how to measure non-cash consideration. Staking rewards denominated in ETH are measured at the fair value of the non-cash consideration at contract inception. Subsequent changes in the market price of ETH are not reflected in revenue and are instead recognized as gains or losses. These judgments affect both the amount and timing of revenue recognized and the comparability of our results across reporting periods. The Affiliate Marketing Services operating segment generates revenue by earning commissions from sportsbooks and casino operators when a new depositor is directed to them by our affiliate marketing websites and our PAS network Valuation and Classification of Crypto Assets Adoption of ASU 2023-08 and Fair Value Measurement (Native ETH) Effective January 1, 2025, we adopted ASU 2023-08, Accounting for and Disclosure of Crypto Assets (ASC 350-60). Under this guidance, we measure our holdings of native Ether (“ETH”) at fair value, with changes in fair value recognized in net income in the period of change. The most critical estimate inherent in the valuation of our ETH is the determination of the principal market under ASC 820, Fair Value Measurement . We evaluate the liquidity, trading volume, and regulatory viability of various exchanges to identify the principal market—the market with the greatest volume and level of activity for the asset that we can access. We have determined that the Coinbase exchange represents our principal market for ETH. We calculate the fair value of our ETH holdings using the quoted price on the Coinbase exchange as of midnight UTC on the measurement date. The digital asset market is characterized by significant volatility and fragmented liquidity. A change in our determination of the principal market, or the use of a different data source (such as a composite index versus a specific exchange), could result in materially different fair value measurements. Classification and Impairment of Crypto Assets Held at Cost (LsETH) We hold Liquid Staked Ether (“LsETH”), which are receipt tokens received in exchange for staking ETH via liquid staking protocols. We exercise significant judgment in determining whether specific digital assets fall within the scope of ASC 350-60. We have determined that LsETH does not meet the scope criteria of ASC 350-60 because the token represents a contract that provides the holder with enforceable rights to residual assets (redeemable ETH), thereby failing the “other goods and services” criterion of the standard. Consequently, we account for LsETH as an indefinite-lived intangible asset under ASC 350-30, measured at cost less impairment. We evaluate LsETH for impairment quarterly. This requires tracking the lowest intraday quoted price of LsETH on our principal market since the acquisition of the specific asset lot. If the carrying value exceeds the lowest intraday price, an impairment loss is recognized immediately. This methodology differs significantly from the fair value treatment of our native ETH and creates a disparity in how gains (recognized only upon sale/redemption) and losses (recognized immediately upon price decline) are reported for LsETH. 67 Table of Contents ITEM 7A. 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. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Our financial statements are contained in pages F-1 through F-34, which appear at the end of this Annual Report on Form 10-K. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None.