What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2026-05-08 compared with 2025-11-12 · 1126 added, 1904 removed, 269 unchanged (92% of the section changed)

FINANCIAL STATEMENTS

CONSOLIDATED BALANCE SHEETS

September 30, 2025

thousands, except share and per share data)

March 31, 2026

December 31, 2025

1 unchanged sentence

USDC stablecoin

Accounts receivable, net of allowance for credit losses of $ 0

Other receivables

Accounts receivable, net of allowance for credit losses of $ 0 both periods presented

Prepaid expenses and other current assets

Due from RSports Interactive, Inc.

Current assets from discontinued operations

1 unchanged sentence

Crypto assets at fair value

2,409,797,249

Crypto assets at cost

Investment, cost

Equipment, net

Intangible assets, net

$ 3,072,974,028

Liabilities and Stockholders’ Equity

1 unchanged sentence

Accounts payable and accrued expenses

Accounts payable and accrued expenses - related party

Accounts payable and accrued expenses

Current liabilities from discontinued operations

3 unchanged sentences

Stockholders’ Equity

Series A-1 preferred stock, $ 0.0001 par value;

authorized shares:

issued and outstanding shares:

liquidation preference:

Series B preferred stock, $ 0.0001

authorized shares:

issued and outstanding shares:

liquidation preference:

Preferred stock value

Common stock, $ 0.0001

Common stock, $ 0.0001 par value;

authorized shares 2,500,000,000 ;

and 100,000,000 ;

issued 194,131,641

and 407,295 , respectively;

issued 201,063,967 and 200,584,713 , respectively;

outstanding shares:

192,193,183 and 407,287 ,

Treasury stock, 1,938,458

and 8 shares, respectively, of common stock

( 31,721,488 )

199,125,509 and 198,646,255 respectively

Treasury stock, 1,938,458 of common stock at cost

Additional paid-in capital

3,178,040,218

Accumulated deficit

( 1,497,957 )

( 77,808,959 )

Total stockholders’ equity

3,068,401,762

Total liabilities and stockholders’ equity

$ 3,072,974,028

accompanying notes to these condensed consolidated financial statements.

SHARPLINK, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

For the Three Months Ended

September 30,

For the Nine Months Ended

September 30,

thousands, except share and per share data)

For the Three Months Ended March 31,

Revenue from staking

Revenue from affiliate marketing

Revenues and gains from operations

Other operating income

Realized gain on crypto assets at fair value, net

Unrealized gain on crypto assets at fair value, net

Total operating income

Total revenue

Gains and (losses) from operations

Realized gain on crypto assets, net

Unrealized loss on crypto assets at fair value, net

Total losses from operations, net

Operating expenses

1 unchanged sentence

Selling, general, and administrative expenses

Stock-based compensation, related party

Impairment of crypto assets at cost

Total operating expenses

Operating income (loss)

( 3,686,848 )

Other income and expense

Interest income

Interest expense

Operating loss

Other income (expense)

Change in fair value of convertible debenture and warrant liabilities

Total other income

Net income (loss) before income taxes

( 3,409,954 )

Interest income

Other expense

Total other income, net

Net loss before income taxes

Income tax expense

Net income (loss) from continuing operations

( 3,465,467 )

Net income (loss) from discontinued operations, net of tax

Net income (loss)

$ 104,270,205

$ ( 885,131 )

$ ( 127,423 )

Numerator for basic and diluted net income (loss) per share:

Net income (loss) from continuing operations

Net loss from continuing operations

Net loss from discontinued operations, net of tax

$ ( 685,561 )

Numerator for net loss per share - basic and diluted:

Net loss from continuing operations

$ ( 685,561 )

Net loss from discontinued operations

$ ( 685,561 )

Net income (loss) from discontinued operations

Net income (loss)

Denominator for net loss per share:

Basic weighted average shares for continuing and discontinued operations

Diluted weighted average shares for continuing and discontinued operations

Net earnings (loss) per share:

Net income (loss) from continuing operations per share - basic

Net income (loss) from discontinued operations per share – basic

Net income (loss) per share - basic

Net income (loss) from continuing operations per share - diluted

Net income (loss) from discontinued operations per share – diluted

Net income (loss) per share - diluted

Denominator for net loss per share - basic and diluted:

Basic and diluted weighted average shares for continuing and discontinued operations

Net loss per share - basic and diluted

Net loss from continuing operations per share - basic and diluted

Net loss from discontinued operations per share – basic and diluted

Net loss per share - basic and diluted

accompanying notes to these condensed consolidated financial statements.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS ’ EQUITY (DEFICIT)

THE three and nine months ended September 30, 2025 and 2024

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

THE THREE MONTHS ENDED MARCH 31, 2026 AND 2025

thousands, except share data)

preferred stock

Treasury stock

shareholders’

Balance, December 31, 2023

$ ( 87,857,456 )

( 9,399,769 )

Domestication equity adjustment - Note 1

Stock-based compensation expense

Shares issued for vested restricted stock

Issuance of common stock for exercise of warrants

Warrant settlement agreement - Note 8

Issuance of common stock for exchange of warrants - Note 8

Warrant exchange agreement - deemed dividend - Note 8

Warrant exchange agreement, issuance of pre-funded warrants - Note 8

Balance at March 31, 2024

$ ( 75,558,222 )

Stock-based compensation expense

Shares issued for vested restricted stock

Shares sold for cash

Warrant exchange amendment - Note 8

Balance at June 30, 2024

$ ( 76,021,181 )

Stock-based compensation expense

Shares issued for vested restricted stock

Issuance of common stock for exercise of warrants

Balance at September 30, 2024

$ ( 76,906,312 )

Balance at December 31, 2024

$ ( 77,808,959 )

Stock-based compensation expense

Issuance of common stock from exercise of warrants

Issuance of common stock sold in at-the-market offering

Balance at March 31, 2025

$ ( 78,783,860 )

( 103,422,727 )

Stock-based compensation expense

Shares issued for vested restricted stock

Issuance of common stock for exchange agreement

Issuance of common stock for exercise of warrants

Issuance of common stock sold in private placement May 20, 2025

Issuance of common stock sold in a private placement May 26, 2025

Issuance of common stock sold in at-the-market offering

Balance at June 30, 2025

$ 634,748,320

$ ( 182,206,587 )

$ 452,519,350

$ 634,748,320

$ ( 182,206,587 )

$ 452,519,350

Stock-based compensation expense

Shares issued for vested restricted stock

Issuance of common stock sold in private placement August 8, 2025

Issuance of common stock sold in a private placement August 12, 2025

Issuance of common stock sold in at-the-market offering

1,960,520,119

1,960,530,043

Stock repurchased (treasury stock)

( 1,938,450 )

( 31,692,488 )

Balance at September 30, 2025

$ 3,178,040,218

( 1,938,458 )

December 31, 2024

compensation expense

of common stock for exercise of warrants

sold for cash

as of March 31, 2025

preferred stock

shareholders’

at December 31, 2025

( 1,938,458 )

2 unchanged sentences

$ ( 812,396 )

compensation expense

issued for vested restricted stock

of accrued bonuses in shares (gross) of common stock

of common stock withheld for taxes for net share settlement

as of March 31, 2026

( 1,938,458 )

4 unchanged sentences

CONSOLIDATED STATEMENTS OF CASH FLOWS

Includes cash flow activities from both continuing and discontinued operations

Nine Months Ended September 30,

Three Months Ended March 31,

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income (loss)

Net income (loss) from discontinued operations, net of tax

$ ( 685,561 )

Net loss from discontinued operations, net of tax

Net loss from continuing operations

$ ( 685,561 )

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation and amortization

Amortization of debt discount

Change in fair value of convertible debenture and warrant liabilities

Deferred tax expense

Stock-based compensation expense

Stock-based compensation expense, related party

Impairment on crypto assets at cost

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

Unrealized loss on crypto assets received at fair value, net

Realized gain on crypto assets, net

Rewards on native staking

Rewards on liquid staking

Rewards from protocol incentives and rebates

Changes in assets and liabilities

Accounts receivable

Other receivable

Due from Rsports Interactive, Inc.

1 unchanged sentence

Accounts payable and accrued expenses

( 1,048,944 )

Accounts payable and accrued expenses - related party

Net cash used in operating activities – continuing operations

( 8,183,743 )

( 4,434,002 )

Net cash used in operating activities - discontinued operations

( 17,112,182 )

Net cash used in operating activities

( 8,409,724 )

( 21,546,184 )

CASH FLOWS FROM INVESTING ACTIVITIES:

Capital expenditures for equipment

Purchases of other assets

Investment in Armchair Enterprises, Inc.

Crypto assets purchased

( 2,539,611,653 )

USDC stablecoin purchased

( 445,096,653 )

USDC stablecoin redemptions

Proceeds from sale of intellectual property

Net cash provided by (used in) investing activities – continuing operations

( 2,904,521,792 )

Net cash used in investing activities - discontinued operations

( 18,857,834 )

Net cash used for investing activities

( 2,904,521,792 )

( 18,709,553 )

Net cash provided by (used in) investing activities

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

Issuance costs paid related to sale of common stock

( 56,654,131 )

Issuance of common stock from exchange agreement

Issuance of common stock from exercise of warrants

Gross proceeds from shares sold in capital raise

Issuance costs related to shares sold in capital raise

Gross proceeds from private placement

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

Repayment of line of credit

( 6,900,000 )

Principal payments on long-term debt

( 2,070,479 )

Proceeds from exercise of warrants

Net cash generated by (used in) financing activities – continuing operations

2,922,567,907

( 12,337,694 )

Taxes paid related to net share settlement of equity awards

Net cash generated by financing activities – continuing operations

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 cash (used in) provided by financing activities

Net change in cash

( 58,428,783 )

Cash and restricted cash, beginning of period including discontinued operations

Cash and restricted cash, end of period including discontinued operations

Cash, beginning of period including discontinued operations

Cash, end of period including discontinued operations

Less cash from discontinued operations

4 unchanged sentences

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

Crypto assets purchased with USDC stablecoin

Receipt of LsETH rebate receivable

Deposits of crypto assets (ETH) at fair value for liquid staking activities

Receipt of crypto assets (weETH) at cost for liquid restaking activities

$ ( 205,844 )

Placement agent warrants

Settlement agreement, liability issued for warrants

Issuance of common stock in exchange of warrants

Issuance of common stock for vested restricted stock

USDC stablecoin rewards

Deemed dividend

Warrant exchange agreement, issuance of pre-funded warrants

Warrant exchange amendment, revalue of strike price and removal of repurchase requirement

Receipt of crypto assets (ETH) at fair value for redemption of crypto assets (LsETH at cost)

Redemption of crypto assets (LsETH) at impaired cost

Stock-based bonus accrual settled with shares of common stock

accompanying notes to these condensed consolidated financial statements.

TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

and nine months ended September 30, 2025 and 2024

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

THREE MONTHS ENDED MARCH 31, 2026 AND 2025

(dollar amounts in

thousands, except share, per share data, and crypto asset tokens)

1 – Organization

1 unchanged sentence

Headquartered

in Minneapolis, SharpLink Gaming, Inc.

(the “Company” of “Sharplink”), a Delaware corporation, undertook a significant

in Miami, Florida, Sharplink, Inc.

(the “Company” or “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

2 unchanged sentences

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.

The Company seeks to benefit from ETH accumulation, derived utilizing

proceeds from multiple financings, by (i) potential ETH price appreciation and (ii) yield and other returns generated from staking and

related treasury activities.

We delegate our ETH to third-party validators (directly or via asset managers) and participate in both native

and liquid staking and restaking programs.

See Note 3 – Crypto Asset Holdings .

The Company also operates an online affiliate

marketing business 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.

the launch of its ETH Treasury Management strategy, the Company has raised capital through private investment in public equity (“PIPE”)

1 unchanged sentence

The Company has deployed the majority of the proceeds

to acquire ETH.

Additional details regarding these equity offerings are included in Note 9 – Equity .

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.

date of this filing, the Company has not tokenized any of its common stock.

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

of 10% Equity Stake in Armchair Enterprises

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

Domestication

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.

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.

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.

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

Par value for common stock at $ 0.0001 at February 13, 2024

Par value for common stock

Net change in par value — reflected in additional paid-in capital

Preferred Shares

Par value for Series A-1 preferred stock at $ 0.20 par value as reported at February 13, 2024

Par value for Series A-1 preferred stock at $ 0.0001 par value as reported at February 13, 2024

Net change in par value — will be reflected in additional paid-in capital

Par value for Series B preferred stock at $ 0.20 par value as reported at February 13, 2024

Par value for Series B preferred stock at $ 0.0001 par value at February 13, 2024

Par value for Series preferred stock

Net change in par value — reflected in additional paid-in capital

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 .

to acquire ETH (see Note 3-Crypto Asset Holdings ).

Additional details regarding these equity offerings are included in Note

February 2, 2026, the Company formally changed its corporate name to “Sharplink, Inc.” from “SharpLink Gaming, Inc.”

in connection with a corporate rebranding initiative.

May 5, 2025, the Company effected a one-for-twelve (1:12) reverse stock split of all the Company’s Common Stock, par value $ 0.0001

per share (the “Common Stock”), whereby the Company decreased the number of issued and outstanding Common Stock from 7,916,206

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.

2 – Summary of Significant Accounting Policies

Basis of Presentation

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

Due to the inherent uncertainty involved in making estimates, actual results in future periods may differ from the estimates.

accompanying unaudited condensed consolidated financial statements have been prepared by Sharplink, Inc.

pursuant to the rules and regulations

of the Securities and Exchange Commission (“SEC”).

In the opinion of Company management, the foregoing statements contain

all adjustments, consisting only of normal recurring adjustments necessary to present fairly the financial position of the Company as

of March 31, 2026 and December 31, 2025, as well as its results of operations for the three months ended March 31, 2026 and 2025.

condensed consolidated balance sheet as of December 31, 2025 has been derived from the audited consolidated financial statements as of

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.

inherent uncertainty involved in making estimates, actual results in future periods may differ from the estimates.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

THREE MONTHS ENDED MARCH 31, 2026 AND 2025

(dollar amounts in

thousands, except share, per share data, and crypto asset tokens)

information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or

4 unchanged sentences

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.

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.

December 31, 2025, which are included in the Company’s Annual Report on Form 10-K filed with the SEC on March 9, 2026.

Reclassifications

made certain reclassifications to prior period amounts presented on our condensed consolidated statements of operations to conform to

the current period presentation.

Specifically, costs of revenue from affiliate marketing have been reclassified into Operating expenses.

Principles of Consolidation

2 unchanged sentences

accounts and transactions between consolidated subsidiaries have been eliminated in consolidation.

Functional Currency

Company’s functional and reporting currency is the U.S.

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.

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.

Use of Estimates

preparation of financial statements in conformity with 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.

On an on-going basis, the Company evaluates its estimates, including, but not limited to, those related to measurement of crypto assets

at fair value;

impairment of crypto assets at cost;

stock-based compensation;

income taxes, including the carrying value of deferred

and litigation and contingencies, including liabilities that the Company deems not probable of assertion.

The Company bases

its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the

results of which form the basis for making judgments about the carrying value of assets, and equity that is not readily apparent from

other sources.

Crypto Assets

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

These custodians provide secure storage and safeguarding of the Company’s crypto assets, including both ETH and LsETH.

assets at fair value

Company’s crypto assets primarily consist of ETH, the native token of the Ethereum blockchain, liquid staking tokens (“LST”)

and liquid restaking tokens (“LRT”).

The Company’s LST and LRT holdings are comprised of both Liquid Collective’s

LST (“LsETH”) and etherFi’s LRT (“weETH”).

is a token received when ETH is staked through Liquid Collective, a third-party liquid staking protocol.

weETH is a token received when

ETH is staked through etherFi, a third party liquid restaking protocol.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

THREE MONTHS ENDED MARCH 31, 2026 AND 2025

(dollar amounts in

thousands, except share, per share data, and crypto asset tokens)

is presented on the Condensed Consolidated Balance Sheet under the caption “Crypto assets at fair value” and LsETH and weETH

are presented separately on the Condensed Consolidated Balance Sheet under the caption “Crypto assets at cost.” The Company

has ownership of and control over its crypto assets which are held through custodial arrangements with third-party qualified custodians.

These qualified custodians provide secure storage and safeguarding of the Company’s crypto assets, including ETH, LsETH and weETH.

assets at fair value (ETH)

assets acquired are initially recorded at cost, which represents the cash, cash equivalents or other financial assets paid to acquire

2 unchanged sentences

shares, are recognized at their fair value on the date received, which becomes their cost basis.

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.

applies a first-in, first-out methodology to assign costs for purposes of determining crypto assets held and realized gains and losses.

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.

assets at cost

assets within the scope of ASC 350-60, Intangibles—Goodwill and Other—Accounting for and Disclosure of Crypto Assets (“ASC

350-60”), are subsequently measured at fair value in the statement of financial position with unrealized gains and losses resulting

from changes in fair value recognized in net income (loss).

The Company determines and records for each reporting period the fair value

of its crypto assets in accordance with ASC 820, Fair Value Measurement (“ASC 820”) , 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 (loss) within “Unrealized loss on crypto assets at fair value, net,”

while realized gains and losses from the de-recognition 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.

and sales of crypto assets are reflected as cash flows from investing activities in the condensed consolidated statements of cash flows.

Deposits of ETH into liquid staking and restaking protocols, receipt of ETH from unstaking and redemption of receipt tokens, are presented

as within non-cash investing activities in the condensed consolidated statements of cash flows.

Receipt of ETH as staking rewards and

incentives are presented as non-cash operating activities in the condensed consolidated statements of cash flows.

assets at cost (LsETH and weETH)

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 .

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.

received in connection with staking of ETH into a liquid staking protocol are presented as non-cash investing activities.

Staking activities

and weETH, do not fall in the scope of ASC 350-60 for subsequent measurement.

LsETH and weETH represent 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 ( “ASC 350-30 ” ) .

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 of LsETH.

Because weETH trades on multiple decentralized and centralized exchanges and no

single market represents the principal market, we determine fair value using observable prices across multiple active exchanges,

specifically utilizing the pricing data aggregator CoinGecko.

The Company continuously monitors available data sources.

determining if an impairment has occurred, the Company considers the lowest price of one LsETH, as quoted on Coinbase, and one

weETH, as determined by using observable prices across multiple active exchanges, respectively, at any time since acquiring the

specific LsETH and weETH held by the Company.

If the carrying value of a LsETH or weETH exceeds that lowest intraday price, an

impairment loss has occurred with respect to that LsETH and weETH 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.

impaired crypto assets are written down to their fair value at the time of impairment and this becomes the new cost basis for those

The cost basis of LsETH and weETH will not be adjusted upward for any subsequent increase in fair value.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

THREE MONTHS ENDED MARCH 31, 2026 AND 2025

(dollar amounts in

thousands, except share, per share data, and crypto asset tokens)

of LsETH and weETH in connection with the staking and restaking of ETH into a liquid staking protocols are presented as non-cash investing

activities in the condensed consolidated statements of cash flows.

Receipt of LsETH and weETH as rewards and incentives are presented

as non-cash operating activities in the condensed consolidated statements of cash flows.

Revenue from Staking activities

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.

To date, the Company’s staking activities comprise of (i) native staking activities,

(ii) liquid staking and restaking activities, and (iii) protocol incentive generating activities tied to maintaining total value locked

(“TVL”) within certain blockchain ecosystems.

Company participates in native staking exclusively as a delegator through third-party validators.

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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.

to the Company’s custodian, who, as described in Note 2(e) , 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

As a delegator, the Company has concluded it is not the principal to the block validation service provided to the Ethereum

from native staking activities are recognized as revenue in accordance with ASC 606, Revenue from Contracts with Customers (“ ASC

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.

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.

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.

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.

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.

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.

For the three months ended March 31, 2026, fees paid to third-party asset managers of approximately $ 1,254

and custodians of approximately $ 327

are recognized separately as operating expenses.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

THREE MONTHS ENDED MARCH 31, 2026 AND 2025

(dollar amounts in

thousands, except share, per share data, and crypto asset tokens)

Staking and Liquid Restaking Activities

also participate in liquid staking and restaking arrangements, whereby ETH is deployed into third-party protocols in exchange for LST

and LRTs, such as LsETH and weETH, respectively.

Staking with Liquid Collective represents the Company’s liquid staking activities,

under which ETH is contributed to the Liquid Collective staking pool and LsETH is minted and received in return.

Staking with etherFi

represents the Company’s liquid restaking activities, under which ETH is deposited with etherFi and weETH is received in return.

weETH is the wrapped, non-rebasing form of eETH, the token minted upon staking of ETH, and is designed for DeFi compatibility.

LsETH and weETH are accounted for under ASC 350-30 ( see Note 2(e) ), increases in LsETH and weETH fair value while the Company

remains staked with the liquid staking and restaking protocols, are not recognized.

There is no ongoing performance obligation following

the staking of ETH through the liquid staking and restaking protocol.

Additionally, LsETH and weETH are non-rebasing token, meaning its

quantity remains fixed over time.

Staking rewards are not continuously reflected in token balances but are instead realized separately.

Staking rewards are therefore recognized only when the LsETH or weETH are redeemed, measured at the fair value of ETH at contract inception,

which is when the ETH were staked.

Staking rewards received or receivable upon redemption of LsETH or weETH are presented in “Revenues

from staking, net” in the Company’s condensed consolidated statements of operations.

staking ETH through the liquid staking and restaking protocols, the ETH is derecognized because the protocols obtain the ability to deploy

and direct its use, and the LsETH and weETH token received concurrently are 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 and weETH received;

and included in “Realized gain on crypto assets, net” in the Company’s condensed consolidated statements of operations.

For the three months ended March 31, 2026, the Company staked ETH and received weETH and recognized a realized gain of $ 8,389 .

the Company initiates a redemption of LsETH or weETH, the Company derecognizes the LsETH and weETH at its carrying amount on the

date the redemption request is accepted by the applicable protocol.

At that time, the Company recognizes a receivable for the

underlying ETH expected to be received upon completion of the protocol’s withdrawal process and additional staking rewards no

longer accrue.

The ETH receivable is initially measured at the fair value of the ETH expected to be received, including staking

rewards, determined by the protocol’s exchange rate at the time of redemption.

Any gain or loss on redemption is recognized in

accordance with ASC 610-20 based on the difference between the ETH receivable and the cost basis of the LsETH or weETH at the time

of redemption with such differences included in “Realized gain on crypto assets, net” in the Company’s condensed

consolidated statements of operations.

Rebates earned from the liquid staking activities are received in non-cash consideration in

the form of LsETH and are reflected as revenue.

LsETH and weETH redemption transactions, the Company is exposed to changes in the market price of ETH between the date the redemption

request is initiated and the date ETH is received.

The Company evaluates whether such ETH receivables contain embedded derivatives that

require bifurcation and separate accounting under applicable accounting guidance, ASC 815, Derivatives and Hedging .

Any identified

embedded derivative is measured at fair value, with changes in fair value recognized in earnings until settlement of the receivable.

As of March 31, 2026, we did not have any receivables outstanding from such transactions.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

THREE MONTHS ENDED MARCH 31, 2026 AND 2025

(dollar amounts in

thousands, except share, per share data, and crypto asset tokens)

the three months ended March 31, 2026, the Company redeemed 15,182

LsETH and recognized the changes in the market price from the date of redemption to the date the ETH was received of $ 3,826 ,

which is included in “Realized gain on crypto assets, net” in the Company’s condensed consolidated statements of

weETH was redeemed for the three months ended March 31, 2026.

December 20, 2025, the Company executed a Strategic Partnership Agreement (“SPA”) with ether.fi, EigenCloud, Linea Consortium

(a related party), and Consensys Software, Inc.

(“Consensys”), (a related party), to bridge a minimum of $200,000 of weETH

from its treasury onto Linea, a zkEVM Layer 2 network, over an initial 24-month period.

The execution of the deliverables of the SPA

was performed with our qualified custodian Anchorage Digital Bank N.A.

as the intermediary.

For the three months ended March 31, 2026,

we have restaked $205,844 in weETH onto Linea.

from staking rewards from weETH, at redemption, as denoted above in Liquid Staking and Liquid Restaking Activities , we are

entitled to monthly protocol incentives from ether.fi, Linea, and EigenCloud under the SPA.

We have concluded that ether.fi, Linea, and

EigenCloud are each customers under ASC 606, as they provide consideration in exchange for our service of providing and maintaining TVL

on Linea, which is an output of our ongoing treasury operations.

incentives, paid in the form of ETH and weETH, are based on month-end TVL metrics and subject to contractual caps.

The q uantity

of incentives earned is not known or calculable by the Company until the end of the month and, until such time, is considered

a variable consideration

under ASC 606.

Revenue from incentives are recognized over time as the Company satisfies its

performance obligation of maintaining TVL, as customers simultaneously receive and consume the benefits of the service.

recognized on a monthly basis as the performance period is completed and the amount of consideration becomes determinable and no

longer constrained, measured at the fair value of ETH and weETH at contract inception.

We apply the variable consideration

allocation exception in ASC 606-10-32-40, allocating each month’s variable consideration to the distinct monthly service

period to which it relates.

In accordance with ASC 606-10-32-21, such noncash consideration is measured at fair value at contract

Subsequent changes in the fair value of the underlying digital assets attributable solely to the form of consideration

are not included in revenue and are recognized separately in earnings in accordance with applicable guidance as realized gains

(losses) until the settlement date.

Note 4 - Revenue Recognition for further disclosures

Crypto Assets Receivable

redemptions of LsETH or weETH are initiated and protocol incentives are recognized, the Company is exposed to changes in the market price

of crypto assets between the date the redemption request is initiated or the incentive is recognized and the date the underlying assets

are received.

settlement occurs in the form of crypto assets whose fair value fluctuates between recognition and settlement, and after evaluating

the criteria in ASC 815-10-15-83, Derivatives and Hedging, the Company concluded that the receivable contains an embedded

derivative that is not clearly and closely related to the host contract and therefore requires bifurcation.

The embedded derivative

is measured at fair value, with changes in fair value recognized in earnings in “Realized gain (loss) on crypto assets,

net” until settlement.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

THREE MONTHS ENDED MARCH 31, 2026 AND 2025

(dollar amounts in

thousands, except share, per share data, and crypto asset tokens)

embedded derivative component is measured at fair value at each reporting date, using observable prices in the principal market in accordance

with ASC 815-15 and ASC 820.

Where quoted prices are directly available in active markets, the embedded derivatives are classified as

Level 1 within the fair value hierarchy;

if observable market prices are not available, management utilizes other relevant inputs and

valuation techniques, which may result in Level 2 or Level 3 classification.

receipt, the Company derecognizes both the receivable and the embedded derivative, recognizing the crypto asset received at fair value.

Any difference between the carrying amount and the fair value of ETH or weETH received is recognized as an unrealized gain or loss and

included in “Unrealized loss on crypto assets at fair value, net” in the Company’s condensed consolidated statements

of operations.

the three months ended March 31, 2026, we recognized realized losses on incentive tokens earned, due to changes in fair value, of $ 210

and unrealized losses upon the receipt of rebate and incentive tokens of $ 18 .

As of March 31, 2026, non-monetary receivables from liquid

restaking activities were $ 214 and are included in accounts receivable on the condensed consolidated balance sheet.

For the three

months ended March 31, 2025, we did not have any liquid staking or liquid restaking activities.

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.

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.

While not accounted for as cash or cash equivalents, the Company treats its USDC holdings as a

liquidity resource.

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

therefore we continue to recognize USDC as our own for accounting purposes.

For the three months ended March 31, 2026, we redeemed

all of our USDC for U.S.

Affiliate Marketing Revenue Recognition

Company recognizes revenue in accordance with ASC 606.

To determine revenue recognition for contracts with customers, the Company

performs the following five steps:

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

(iii) determine the transaction price, including variable consideration to the extent that it is probable that a significant

future reversal will not occur;

(ii) identify the performance obligations in the contract;

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;

(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

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.

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.

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

months ended March 31, 2026, the Company has recognized its revenue at a point in time for certain contracts and over time for other

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.

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.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

THREE MONTHS ENDED MARCH 31, 2026 AND 2025

(dollar amounts in

thousands, except share, per share data, and crypto asset tokens)

Fair Value Measurements

Company measures certain assets and liabilities at fair value on a recurring or nonrecurring basis.

Fair value is defined as the price

that is expected to be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants

at the measurement date.

The Company uses a three-level hierarchy that prioritizes fair value measurements based on the types of inputs

used for the various valuation techniques.

The three levels of the fair value hierarchy are described below:

Quoted (unadjusted) prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

Inputs other than quoted prices that are either directly or indirectly observable, such as quoted prices in active markets for similar

assets or liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable

or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Inputs that are generally unobservable, supported by little or no market activity, and typically reflect management’s estimates

of assumptions that market participants would use in pricing the asset or liability.

categorization of an asset or liability within the fair value hierarchy is based on the lowest level of input that is significant to

the fair value measurement.

The valuation techniques used by the Company when measuring fair value maximize the use of observable inputs

and minimize the use of unobservable inputs.

Company also estimates the fair value of cash and cash equivalents, accounts receivable, accounts payable and accrued expenses, and accrued

compensation and employee benefits.

The Company considers the carrying value of these instruments in the Condensed Consolidated Financial

Statements to approximate fair value due to their short maturities.

Acquisition and Sale of 10% Equity Stake in Armchair Enterprise

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 in cash, along with a right of first refusal to acquire a controlling interest in Armchair.

The investment was recorded at cost

and was measured at cost minus impairment, adjusted for any observable price changes.

The investment was sold in December 2025 for $ 500 .

Recently Issued Accounting Pronouncements Not Yet Adopted

9 unchanged sentences

The Company is currently evaluating the potential impact of this guidance on its disclosures.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

THREE MONTHS ENDED MARCH 31, 2026 AND 2025

(dollar amounts in

thousands, except share, per share data, and crypto asset tokens)

November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures

12 unchanged sentences

The Company is currently evaluating the impact that the adoption of these standards will have on its disclosures.

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.

will adopt ASU 2023-09 for the annual period ending December 31, 2025 and is currently evaluating the impact of this guidance on its

3 – Digital Asset Holdings

3 – Crypto Asset Holdings

Assets at fair value

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:

of Units Held, Cost Basis, and Fair Value of Assets Held

Balance, September 30, 2025

$ 2,304,908,135

$ 2,409,797,249

$ 2,304,908,135

$ 2,409,797,249

following table sets forth the units held, cost basis and fair value of crypto assets held at fair value, as shown on the condensed consolidated

balance sheet as of March 31, 2026:

of Crypto Assets At Fair Value

in thousands, except number of ETH

following table sets forth the units held, cost basis and fair value of crypto assets held at fair value, as shown on the condensed consolidated

balance sheet as of December 31, 2025:

in thousands, except number of ETH

value represents the quoted (unadjusted) prices on the Coinbase exchange as of midnight UTC on the measurement date.

of December 31, 2024, the Company did not hold any crypto assets.

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

Deposits of ETH into liquid staking activities

( 465,343,468 )

Receipt and accrual of ETH from native staking activities

Unrealized loss

( 2,437,026 )

Fair Value, June 30, 2025

2,471,679,887

Deposits of ETH into liquid staking activities

( 240,944,790 )

Receipt and accrual of ETH from native staking activities

Unrealized gain

Fair Value, September 30, 2025

2,409,797,249

Crypto Assets at cost

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

$ 717,419,123

$ ( 94,763,484 )

$ 622,655,639

$ 717,419,123

$ ( 94,763,484 )

$ 622,655,639

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”.

4 – Operating Segments

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.

a result, the Company operates two reportable segments under ASC 280, Segment Reporting, ETH Treasury Management and Affiliate

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 )

for the three and nine months ended September 30, 2025, respectively.

Treasury Management

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

following table presents significant segment expenses regularly provided to and reviewed by the CODM for the ETH Treasury Management

Schedule of Companies Reportable Segments

ETH Treasury Management Segment

For the Three

September 30, 2025

Revenue from staking

Other operating income

Realized gain on crypto assets at fair value, net

Unrealized gain on crypto assets at fair value, net

Total operating income

Salaries and benefits

Contractors and consulting expense

Asset manager fees

Accounting and Legal expenses

Impairment of crypto assets at cost

Other segment expenses (1)

Segment net income from continuing operations before income taxes

$ 105,041,395

(1) - other segment items included in Segment net loss include:

stock-based compensation - related

party, bank fees, other income and expenses

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

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

Company’s Affiliate Marketing operations include performance marketing services, lead generation and data analytics.

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.

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

Affiliate Marketing Segment

For the Three

September 30,

For the Three

September 30,

Cost of revenues

Salaries and benefits

Contractors and consulting expense

Marketing expense

Other segment expenses (1)

Segment net income (loss) from continuing operations before income taxes

$ ( 781,257 )

$ ( 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

Affiliate Marketing segment net income (loss) from continuing operations before income taxes

( 3,409,954 )

Consolidated net income (loss) before income taxes

March 31, 2026

Fair Value, Year Ended December 31, 2025

Deposits of ETH into liquid staking activities

Receipt of ETH upon redemption in liquid staking activities

Receipt and accrual of ETH rewards from native staking activities

Protocol incentive rewards received in ETH from liquid restaking activities

Receipt and accrual of ETH rewards from liquid staking activities

Unrealized loss on crypto assets held

Fair Value, March 31, 2026

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

THREE MONTHS ENDED MARCH 31, 2026 AND 2025

(dollar amounts in

thousands, except share, per share data, and crypto asset tokens)

the three months ended March 31, 2025, the Company did not have any liquid or native staking activities.

Assets at cost

following table sets forth the units held, the cost basis less prior year impairment, the current year impairment amount, and

carrying amount of crypto assets held at cost, for LsETH and weETH as shown on the condensed consolidated balance sheet as of March

Crypto Assets Crypto Assets at Cost

in thousands, except number of LsETH and weETH

$ ( 114,944 )

$ ( 191,670 )

following table sets forth the units held, cost basis less year end impairment, as shown on the condensed consolidated balance

sheet as of December 31, 2025:

in thousands, except number of LsETH

$ ( 140,208 )

by Geographic Location

revenues by country in which the Company operated for the three and nine months ended September 30, 2025 and 2024 are shown below.

ETH Treasury Management revenue occurred within the United States.

Schedule of Revenues by Country

the Three Months Ended September 30, 2025:

United States

Rest of the World

the Nine Months Ended September 30, 2025:

United States

Rest of the World

the Three Months Ended September 30, 2024:

United States

Rest of the World

the Nine Months Ended September 30, 2024:

United States

Rest of the World

Company does not have material assets in foreign jurisdictions.

Company’s Affiliate Marketing Services segment derives a significant portion of its revenues from several large customers.

table below presents the percentage of consolidated revenues derived from large customers:

of Percentage of Consolidated Revenues Derived from Large Customers

September 30, 2025

September 30, 2024

Percentage of consolidated

following table represents a reconciliation of crypto assets held at cost, for LsETH and weETH, and activity for the

three months ended March 31, 2026:

of Reconciliation of Crypto Assets

Balance, December 31, 2025

Beginning balance

Receipt of weETH upon deposits of ETH into liquid restaking activities

Redemptions of LsETH from liquid staking activities at cost less impairment

Receipt of LsETH for rebate rewards

Receipt of weETH for protocol incentive rewards

Impairment loss

Balance, March 31, 2026

Ending balance

the three months ended March 31, 2026 and March 31, 2025, the Company recorded an impairment loss $ 191,670

respectively, related to its holdings of LsETH and weETH in accordance with ASC 350-30 see Note 2(e) Crypto Assets.

The impairment

is presented on “Impairment of crypto assets at cost” in the condensed consolidated statements of operations.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

THREE MONTHS ENDED MARCH 31, 2026 AND 2025

(dollar amounts in

thousands, except share, per share data, and crypto asset tokens)

For the three months ended March 31, 2026, the Company redeemed 15,182 LsETH for 16,740 ETH and recognized a net gain of $ 3,826

which is included in “Realized gain on crypto assets

at fair value, net” in the Company’s condensed consolidated statements of operations.

Company also recognized $ 9,387 of cumulative realized gains and $( 999 ) of cumulative losses from liquid restaking activities of ETH to

weETH, which is included in “Realized gain from crypto assets, net”, in the Company’s condensed consolidated statements

of operations.

For the three months ended March 31, 2025, the Company did not have any native or liquid staking activities.

4 – Revenue Recognition

Company is currently engaged in ETH Treasury Management activities and the provision of Affiliate Marketing services.

Company is currently engaged in ETH Treasury Management activities and Affiliate Marketing services.

Treasury Management

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.

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.

the three and nine months ended September 30, 2025, the Company has recognized its revenue at a point in time.

following table provides additional breakdown of the Company’s revenue from staking activities:

of Revenue Recognition

March 31, 2026

Revenue from contracts with customers

Native staking rewards

Native staking fees

Protocol incentives earned in ETH and weETH

Rewards from native staking and liquid restaking, net

Revenue from contracts with non-customers

Liquid staking rewards

Rebates earned in LsETH

Rewards from liquid staking

Total revenue from staking, net

Company participates in the following revenue generating transactions:

staking and restaking activities on the Ethereum blockchain;

rewards for securing and validating transactions;

earned protocol incentives for providing and maintaining TVL on Linea.

For the three

months ended March 31, 2026, the Company earned total staking rewards of $ 11,501 , of which $ 806 relates to liquid staking rewards received

upon redemption of 15,182 LsETH, rebates earned of $ 228 , $ 753 in protocol incentives, and $ 10,117 of rewards received from native staking,

net of cash paid for staking fees $( 403 ).

has evaluated the nature of rewards received from liquid and restaking activities in accordance with the guidance in ASC 610-20 and 606-10-50-4

Revenue from Contracts with Customers .

Management applies the noncash consideration guidance in ASC 606-10-32-21 and measures

the revenue at the fair value of ETH at contract inception.

While included within the same line item, management has disclosed separately

the amount of revenue attributable to liquid staking and liquid restaking versus native staking, and evaluated the associated risks and

timing of reward recognition.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

THREE MONTHS ENDED MARCH 31, 2026 AND 2025

(dollar amounts in

thousands, except share, per share data, and crypto asset tokens)

following is a summary of crypto assets staked (in units) as of March 31, 2026 and December 31, 2025:

of Crypto Assets

March 31, 2026

December 31, 2025

Native staked ETH

Total crypto assets

following is a summary of total rewards earned from staking activities (in units) for the three months ended March 31, 2026:

of Rewards Earned

March 31, 2026

Native staked ETH

Redeemed liquid staked ETH

Total staking rewards

following is a summary of accounts receivable from rebates and incentive rewards earned but not yet received as of March 31, 2026 and

December 31, 2025:

of Accounts Receivable from Rebates and Incentive rewards

March 31, 2026

December 31, 2025

Rebates receivable in LsETH

Protocol incentive receivables in ETH

Protocol incentive receivables in weETH

Accounts receivable from rebate and protocol incentive rewards

the three months ended March 31, 2025, the Company did not have any native, liquid staking or restaking activities.

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.

the three months ended March 31, 2026 and 2025, the Company has recognized its revenue at a point in time.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

THREE MONTHS ENDED MARCH 31, 2026 AND 2025

(dollar amounts in

thousands, except share, per share data, and crypto asset tokens)

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

The Company recognizes unbilled revenue when revenue is recognized

prior to invoicing.

5 unchanged sentences

ways of purchasing the Company’s services, and not to facilitate financing arrangements.

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

of Contract Assets and Liabilities

September 30, 2025

December 31, 2024

Accounts receivable

Company did not have any major customers for the period ended March 31, 2026 or December 31, 2025.

5 – Additional Balance Sheet Information

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.

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

of Intangible Assets

Weighted Average

Period (Years)

Balance, September 30, 2025

Acquired technology

Balance, December 31, 2024

Acquired technology

expense from continuing operations on intangible assets for the nine months ended September 30, 2025 and 2024 was $ 3,693 and $ 3,706 ,

respectively.

is a summary of the Company’s warrant activity for the nine months ended September 30, 2025:

payable and accrued expenses

December 15, 2025, the Company effected the separation of its former Co-Chief Executive Officer and entered into a severance agreement

providing for cash payments to be made in installments beginning January 7, 2026 through December 15, 2026 and the acceleration of unvested

RSUs ( See Note 8 - Stock Compensation ).

As of March 31, 2026 and December 31, 2025, the Company recorded an accrued severance

liability of $ 981 and $ 2,125 , respectively, which was included in accounts payable and accrued expenses on the condensed consolidated

balance sheets.

As of December 31, 2025, also included in accounts payable and accrued expenses were cash bonuses of $ 3,183 and $ 5,040

of equity bonuses to be settled in Common Stock.

cash bonuses were paid on February 5, 2026.

For the three months ended March 31, 2026, the Company net share settled the accrued bonuses

by issuing an aggregate of 490,273 shares of Common Stock to the employees and withholding a total of 351,404 shares of Common Stock

for tax withholding purposes.

For the three months ended March 31, 2026, the Company paid the relevant taxing authorities $ 2,896 related

to issuances of shares of vested restricted stock (s ee Note 8 - Stock Compensation ).

Company has 15,000,000 shares of undesignated preferred stock authorized, par value of $ 0.0001 .

There is no undesignated preferred stock

issued or outstanding as of March 31, 2026 and December 31, 2025.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

THREE MONTHS ENDED MARCH 31, 2026 AND 2025

(dollar amounts in

thousands, except share, per share data, and crypto asset tokens)

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

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.

At-The-Market

(“ATM”) Offerings

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 $ 1,700 , 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.

4, 2025, the Company, under the terms of the ATM Sales Agreement, filed a prospectus supplement that amended the number of shares of

Common Stock having an aggregate offering price of up to $ 1,800 .

May 30, 2025, the Company entered into a second ATM Sales Agreement (the “May 2025 ATM Sales Agreement”) with A.G.P.

to the sale of shares of the Company’s Common Stock from time to time, having an aggregate offering price of up to $ 1,000,000 (the

“ATM Offering”).

July 17, 2025, the Company 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 $ 1,000,000 to $ 6,000,000 ;

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.

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 6,800,000 shares for $ 201,100 .

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 Offering.

August 19, 2025, the Company entered into an Amended and Restated Sales Agreement (“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.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

THREE MONTHS ENDED MARCH 31, 2026 AND 2025

(dollar amounts in

thousands, except share, per share data, and crypto asset tokens)

of March 31, 2026, the Company has raised total gross proceeds of $ 2,147,073 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.

Million Offering

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 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 .

See Note 7 – Warrants.

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.

Million Offering

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 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, are 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 deducting

the placement agents fees and offering expenses, were approximately $ 425,000 funded in a combination of cash and Ether.

On June 2, 2025,

Sharplink launched its treasury reserve strategy with the commencement of its purchasing of ETH, serving as the Company’s primary

treasury reserve asset.

Consensys 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 12 - Related Parties.

Million Offering

August 6, 2025, the Company 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 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 $ 200,000 .

In addition, 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 (“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

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 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.

2025 Offering closed on August 8, 2025.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

THREE MONTHS ENDED MARCH 31, 2026 AND 2025

(dollar amounts in

thousands, except share, per share data, and crypto asset tokens)

Million Offering

August 10, 2025, the Company entered into a securities purchase agreement (the “Second August 2025 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 $ 400,000 .

In addition, on August

10, 2025, the Company entered into a placement agency agreement (the “Second August 2025 Placement Agency Agreement”) with

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 to 2.5% of the aggregate gross proceeds raised from the sale of the shares sold in the Second August

The Second August 2025 Offering closed on August 12, 2025.

Million Offering

October 15, 2025, the Company 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 Shares 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 used 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 Contract was classified as an equity instrument, valued at $ 8,586 and recorded in additional

paid in capital.

The remaining $ 67,914 of the $ 76,500 proceeds were allocated to Common Stock and also recorded in additional paid in

capital, see Note 7 - Warrants .

The premium purchase contracts were not executed prior to the January 15, 2026 expiration date.

Repurchase Program

August 21, 2025, the Board approved a share repurchase program (the “2025 Repurchase Program”) providing for the repurchase

of up to $ 1,500,000 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.

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.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

THREE MONTHS ENDED MARCH 31, 2026 AND 2025

(dollar amounts in

thousands, except share, per share data, and crypto asset tokens)

the year ended December 31, 2025, the Company repurchased 1,938,450 shares of its Common Stock for $ 31,692 .

All repurchased shares are

recorded as treasury stock.

For the three months ended March 31, 2026, the Company did no t repurchase any shares of its Common Stock.

July 24, 2025, the Company held a special meeting of the stockholders and received approval for two proposals:

(i) the adoption of 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) the adoption of 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.

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 of authorized and outstanding Common Stock from 500,000,000 to 2,500,000,000 .

amendment was effective on September 25, 2025.

The increase in authorized shares provides additional flexibility to support the Inducement

Award Plan (as defined below), among other initiatives.

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 on the Ethereum blockchain.

As of the date of this filing, the Company has not tokenized any of its

common stock.

is a summary of the Company’s warrant activity for the three months ended March 31, 2026 and 2025:

Schedule of Warrant Activity

Exercise Price

Remaining Life

Number of Common Stock Underlying the Warrants

Weighted Average

Exercise Price Per Share

Weighted Average

Remaining Life (Years)

Outstanding as of December 31, 2025

Outstanding as of September 30, 2025

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

(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.

14 — Related Party Transactions .

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

per share of common stock.

strategic advisor and placement agent warrants are accounted for under ASC 718, Compensation—Stock Compensation.

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.

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

Expected dividends

Expected term (years)

Risk-free rate

Fair value per share of underlying Common Stock on grant date

Company issued 1,496,612 pre-funded warrants to purchase shares of common stock to Consensys in conjunction with the $ 4.5 Million Registered

The warrants have an exercise price of $ 0.0001 per share of common stock.

Company issued 3,966,340 pre-funded warrants to purchase shares of common stock to Consensys in conjunction with the PIPE Offering.

warrants have an exercise price of $ 0.0001 per share of common stock.

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.

Company issued 44,650 pre-funded warrants to purchase shares of common stock to Alpha in conjunction with the April 2, 2025 Exchange

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.

pre-funded warrants met the criteria for classification within stockholders’ equity as permanent equity, with no subsequent remeasurement

The fair value of each warrant awarded for compensation is estimated on the date of grant using a Black Scholes option-pricing

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.

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.

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.

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.

following is a summary of the Company’s warrant activity for the nine months ended September 30, 2024:

Underlying the

Exercise Price

Remaining Life

( 4,500,000 )

Outstanding as of March 31, 2026

Company issued a Premium Purchase Contract (“PPC”) to an institutional investor for the right to purchase up to 4,500,000

shares of Common Stock in conjunction with the October 2025 Offering.

The PPC was economically equivalent to a warrant and had an exercise

price of $ 17.50 per share of Common Stock.

The PPC expired on January 15, 2026 and was not exercised.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

THREE MONTHS ENDED MARCH 31, 2026 AND 2025

(dollar amounts in

thousands, except share, per share data, and crypto asset tokens)

of March 31, 2026, our total issued and outstanding warrants include 11,897,165 prefunded warrants of which 6,434,213 are held by the

Company’s Chairman of the Board and 5,462,952 are held by Consensys, a related party.

The prefunded warrants have an exercise price

of $ 0.0001 and expire in May 2030 and were issued as part of the Equity Offerings discussed in Note 6 – Equity .

Consensys also holds 3,455,019 warrants to purchase the Company’s Common Stock with exercise prices ranging from $ 6.1500 - $ 7.995

and expire in May 2030 that were issued in connection with a Strategic Advisory Agreement entered into May 2025.

See Note 15 - Subsequent

Events for the exercise of pre-funded warrants in April 2026.

The pre-funded warrants met the criteria for classification within

stockholders’ equity as permanent equity, with no subsequent remeasurement required.

Number of Common Stock Underlying the Warrants

Weighted Average

Exercise Price Per Share

Weighted Average

Remaining Life (Years)

Outstanding as of December 31, 2024

Previously issued regular warrants

Revalued regular warrants

Outstanding as of September 30, 2024

Outstanding as of March 31, 2025

8 – Stock Compensation

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.

August 19, 2025, the board of directors (the “Board”) of the Company adopted the Sharplink, 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.

terms of the Inducement Award Plan are substantially similar to the terms of the Company’s Amended and Restated 2023 Equity Incentive

7 unchanged sentences

295,590 service based awards, under the Inducement Award Plan (see Restricted Stock Units - Performance Based below).

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

THREE MONTHS ENDED MARCH 31, 2026 AND 2025

(dollar amounts in

thousands, except share, per share data, and crypto asset tokens)

awards are generally granted with an exercise price equal to the market price of the Company’s Common Stock at the date of grant;

2 unchanged sentences

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.

Incentive Plan, and SharpLink Gaming, Inc.

The Company has the following equity

Sharplink Ltd.

2021 Equity Incentive Plan and Sharplink, Inc.

2023 Equity Incentive Plan

Company granted no options for the three and nine months ended September 30, 2025 and 2024, respectively.

Company did not grant any stock options for the three months ended March 31, 2026 and 2025, 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.

summary of activity under the plans as of September 30, 2025, and change during the nine months ended September 30, 2025, is as follows:

compensation expense for stock options of $ 1 and $ 36 for the three months ended March 31, 2026 and 2025.

summary of activity under the plans as of March 31, 2026, and change for the three months ended March 31, 2026, is as follows:

Schedule of Stock Option Activity

Outstanding as of December 31, 2025

Outstanding as of September 30, 2025

Exercisable as of September 30, 2025

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 .

summary of activity under the plans as of September 30, 2024, and change during the nine months ended September 30, 2024, is as follows:

Outstanding as of March 31, 2026

Exercisable as of March 31, 2026

summary of activity under the plans as of March 31, 2025, and change for the three months ended March 31, 2025, is as follows:

Outstanding as of December 31, 2024

Outstanding as of September 30, 2024

Exercisable as of September 30, 2024

Outstanding as of March 31, 2025

Exercisable as of March 31, 2025

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

THREE MONTHS ENDED MARCH 31, 2026 AND 2025

(dollar amounts in

thousands, except share, per share data, and crypto asset tokens)

Stock Units- Service Based

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.

following is a summary of service based RSU activity for the nine months ended September 30, 2025:

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 $ 2,934 and $ 33 for the three months ended March 31, 2026 and 2025, respectively.

following is a summary of service based RSU activity for the three months ended March 31, 2026:

Schedule of Restricted Stock Units

2 unchanged sentences

Outstanding as of December 31, 2025

Vested and released

Outstanding and unvested as of September 30, 2025

total unrecognized compensation cost related to unvested service based RSUs as of September 30, 2025 was $ 25,209,182 .

following is a summary of RSU activity for the nine months ended September 30, 2024:

Outstanding and unvested as of March 31, 2026

total unrecognized compensation cost related to unvested service based RSUs as of March 31, 2026 was $ 18,410 .

For the three months

ended March 31, 2026, the grant date fair value of the vested and issued restricted stock was $ 12,731 .

following is a summary of RSU activity for the three months ended March 31, 2025:

Average Grant

1 unchanged sentence

Outstanding as of December 31, 2024

Vested and released

Outstanding and unvested as of September 30, 2024

Outstanding and unvested as of March 31, 2025

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

THREE MONTHS ENDED MARCH 31, 2026 AND 2025

(dollar amounts in

thousands, except share, per share data, and crypto asset tokens)

Stock Units- Performance Based

6 unchanged sentences

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

As of March 31, 2026, a

grant date had not yet been established for 89,029 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 months ended March 31, 2026, the Company

recognized $ 66 in stock compensation expense.

Unamortized stock compensation expense of $ 618 will be recognized through 2028 for 89,029

unvested options.

were no Performance RSU’s issued during 2024.

Company has 15,000,000 preferred stock authorized, par value of $ 0.0001 .

There is no preferred stock issued or outstanding as of September

At-The-Market

( “ ATM ” ) Offerings

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

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

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

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 .

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

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.

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.

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.

Million Offering

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

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 .

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.

Million Offering

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.

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.

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 .

Million Offering

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

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.

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.

Million Offering

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

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.

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.

August Offering closed on August 12, 2025.

of Share Repurchase Program

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.

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.

the three and nine months ended September 30, 2025, the Company repurchased 1,938,450 shares of its Common Stock for $ 31.6 million.

repurchased shares are recorded as treasury stock.

of Special Meetings of Stockholders

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.

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.

Share Settlement of Restricted Stock Units

vesting of certain restricted stock units, the Company withholds a portion of the shares otherwise issuable to satisfy the employees’

statutory tax withholding obligation.

As a result, the number of shares ultimately issued is less than the number of restricted stock

units vested.

During the period ended March 31, 2026, RSUs representing 830,658

shares vested on a gross basis, of which 351,404

shares were withheld to satisfy tax withholding obligations,

resulting in 479,254

net shares issued to employees, executives and our former CEO.

The shares withheld are treated as a repurchase of Common Stock and recorded as a reduction of $ ( 2,896 ) .

9 – Income Taxes

a quarterly basis, we estimate our annual effective tax rate and record a quarterly income tax provision based on the anticipated

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

The tax impact of those legal entities being dissolved is not expected to be significant.

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.

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.

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.

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 three months ended March 31, 2026 was 0.17 % primarily due to the full valuation allowance for the Company’s

deferred tax assets as of March 31, 2026, as well as the current tax expense of $ ( 1,183 ) for the period ended March 31, 2026.

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.

On March 31, 2026, 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.

10 - Commitments and Contingencies

5 unchanged sentences

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.

12 – Net Income (Loss) Per Share

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.

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.

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:

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

THREE MONTHS ENDED MARCH 31, 2026 AND 2025

(dollar amounts in

thousands, except share, per share data, and crypto asset tokens)

Company has entered into certain capital markets arrangements in connection with its Amended and Restated May 2025 ATM Sales Agreement

(see Note 7-Equity ) that include broker compensation provisions contingent upon future sales activity.

Certain of these arrangements

provide for a minimum broker fee over a specified period, which would be payable only in the event that aggregate fees generated under

the ATM Offering do not meet the specified minimum threshold over a one-year period ending August 2026.

The Company’s obligation,

if any, under such provisions is contingent upon future ATM sales activity, which is discretionary and subject to prevailing market conditions,

including volatility in the Company’s stock price and digital asset markets.

As of March 31, 2026 and December 31, 2025, management

concluded that it is not probable that the Company will incur a minimum broker fee shortfall.

Accordingly, no liability has been accrued

related to these arrangements.

and Uncertainties

Company holds ETH and ETH-related crypto assets with regulated custodians that safeguard the Company’s private keys.

ETH and ETH-related

crypto assets are controllable only by the possessor of both the unique public key and private key(s).

The custodial services contracts

do not restrict the Company’s ability to reallocate ETH and ETH-related crypto assets among custodians.

The Company’s ability

to access, transfer, or withdraw its crypto assets is therefore not contractually restricted, and the Company is able to convert or reallocate

crypto assets as needed to meet operating requirements or settle obligations.

portion of the Company’s ETH is deployed in liquid staking protocols.

Staked ETH and LsETH remain accessible to the Company, subject

to the applicable unbonding or withdrawal periods of the underlying protocol.

The Ethereum network permits withdrawals of staked ETH,

and the Company has the ability to request and receive withdrawals in the normal course of business.

The Company also assesses whether

staking-related lock-ups or protocol-level withdrawal queues create any restrictions that would affect liquidity or the timing of settlement

of obligations.

Company’s crypto assets are subject to fair value volatility.

Changes in market prices directly affect the carrying value of crypto

assets measured at fair value and may result in unrealized gains or losses.

For crypto assets measured at cost less impairment, declines

in observable market prices may result in impairment charges.

The Company recognized a net fair value unrealized loss of ($ 506,664 ) and

an impairment loss on its LsETH and weETH of $ 191,670 for the three months ended March 31, 2026, reflecting the decline in ETH prices

during the period.

Further, for the three months ended March 31, 2026, we recognized realizes losses and unrealized losses related

to rebates and incentives received in the form of digital assets of $ 210 and $ 18 , respectively.

Company’s custodial arrangements with Anchorage Digital Bank N.A.

and Coinbase Inc.

include operational controls designed to mitigate

risks of loss, including multi-user approval quorums and internal controls requiring face-to-face authorization for non-recurring transactions.

These quorums are unalterable by the users and provide safeguards for both the misappropriation of assets as well as mitigating the risk

of a misstatement.

While these controls reduce operational risk, the Company continues to evaluate counterparty, concentration, and operational

risks associated with custodial relationships and considers these factors in assessing credit risk, fair value measurement inputs, and

impairment indicators.

Company also deploys ETH using decentralized finance and liquid-style protocols.

All trading and investment activity involves risk, which

is heightened in the case of decentralized finance due to the irrevocable nature of blockchain transactions and the possibility of errors

in smart contracts.

These risks may affect the recoverability, valuation, or liquidity of crypto assets.

Smart-contract vulnerabilities,

protocol failures, or validator-level issues could result in partial or total loss of staked or deployed assets.

The Company evaluates

these risks when determining fair value hierarchy levels, impairment indicators, and whether any restrictions on use or withdrawal require

separate disclosure.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

THREE MONTHS ENDED MARCH 31, 2026 AND 2025

(dollar amounts in

thousands, except share, per share data, and crypto asset tokens)

Ethereum protocol enforces ownership and withdrawal rights for staked assets.

The safeguarding of staked digital assets is enforced at

the base protocol level and is protected by security mechanisms that are trusted globally across the Ethereum network.

These protocol-level

assurances support the Company’s conclusion that staked ETH remains accessible and under the Company’s control for financial-statement

Company performs monthly and quarterly reconciliations of all wallet activity and staking revenue.

The Company verifies the existence

of a staking pipeline utilizing open-source smart contracts in the expected manner and in-line with on-chain protocols.

These procedures

support the Company’s assessment of existence, rights and obligations, and completeness of digital-asset balances and related revenue.

November 26, 2025, the Company entered into a Master Lender Agreement (“Master Lender Agreement”) with FalconX Charlie Inc.

(“FalconX”), whereas the Company may borrow U.S.

dollars or specified digital assets under individually negotiated term sheets.

Borrowings under the Master Lender Agreement are secured by collateral in the form of U.S.

dollars, digital assets or eligible securities

and are subject to initial collateral ratio and ongoing margin maintenance requirements.

There is no defined minimum or maximum loan

amount and FalconX has no obligation to approve a lending request.

A monthly Loan Fee is calculated by the Lender and agreed on between

FalconX and the Company.

The Master Lender Agreement also contains normal representations and warranties and includes provisions on hard

forks and a termination event tied to specific valuation thresholds.

The Master Lender Agreement remains in effect until terminated by

either party, provided any outstanding borrowings are repaid in full.

There were no borrowings under the Master Lender Agreement for

the three months ended March 31, 2026.

11 – Net Loss Per Share

net loss per share is calculated by dividing net loss available to Common Stockholders by the weighted-average number of Common Stock

outstanding during the period excluding the effects of any potentially dilutive securities.

As of March 31, 2026, the Company has issued

and outstanding prefunded warrants that are exercisable at a nominal price and exercisable at any time by the holder (see Note 7 -

As such, the prefunded warrants have been determined to be equivalent to Common Stock and included in basic weighted-average

Common Stock outstanding.

As of March 31, 2025, there were no issued and outstanding prefunded warrants.

net loss per share is computed similarly 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

the Company had net loss from operations for the three months ended March 31, 2026 and a net loss from both continuing and discontinued

operations for the three months ended March 31, 2025, the following presents anti-dilutive securities excluded from basic and diluted

net loss per share calculated on the statement of operations as their inclusion would have been anti-dilutive.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

THREE MONTHS ENDED MARCH 31, 2026 AND 2025

(dollar amounts in

thousands, except share, per share data, and crypto asset tokens)

Schedule of Computation of Diluted Shares Outstanding

September 30,

Prefunded warrants

Strategic advisor and placement agent warrants

Total Dilutive

Anti-Dilutive:

Stock options

SportsHub warrants

Restricted Stock Units

Total Anti-dilutive

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:

September 30,

Prefunded warrants

Total Dilutive

Three Months Ended

March 31, 2026

Three Months Ended

March 31, 2025

Anti-Dilutive:

2 unchanged sentences

Series B preferred stock

SportsHub warrants

Restricted Stock Units

Unvested restricted stock Units

Total Anti-dilutive

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

For the Three Months Ended

September 30,

For the Nine Months Ended

September 30,

Net income (loss) from continuing operations

$ 104,247,275

$ ( 787,992 )

$ ( 3,465,467 )

deemed dividends on series B preferred stock

Net income (loss) from continuing operations available to common stockholders

( 3,510,086 )

Net income (loss) from discontinued operations, net of tax, available to common stockholders

Net income (loss) available to common stockholders

$ 104,270,205

12 – Related Parties

Issued and Outstanding

Note 7 - Warrant s for warrants issued and outstanding held by the Company’s Chairman of the Board, who is also the CEO of Consensys,

and warrants issued and outstanding held by Consensys, both considered to be related parties.

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.

13 – Operating Segments

Company’s Chief Executive Officer serves as the Chief Operating Decision Maker (“CODM”) and evaluates the financial

performance of the business and makes resource allocation decisions on the basis of its two different revenue sources.

The ETH Treasury

Management segment captures ETH-based yield generated by participating in Ethereum network’s staking protocol which is currently

comprised of rewards received from native and liquid staking.

The Affiliate Marketing segment is focused on performance-based customer

acquisition services for leading sportsbooks and online casino gaming operators throughout the world.

The CODM assesses financial performance

by segment for revenue, operating profit (loss) and key operating expenses, as well as significant segments assets, as detailed below.

a result, the Company operates two

reportable segments under ASC 280, Segment Reporting ,

ETH Treasury Management and Affiliate Marketing.

Treasury Management

June 2025, the Company launched an ETH-centered treasury strategy and established ETH Treasury Management as a dedicated operating segment,

delivering recurring, yield-based revenue and returns.

The staking revenues are derived from the rewards the Company earns by actively

participating in the Ethereum network’s proof-of-stake consensus mechanism.

The Company delegates ETH holdings to validators that

process and verify transactions on the blockchain.

In return, the Company receives 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 and restaking activities.

In addition to the staking and restaking activities, the ETH Treasury Management segment

receives monthly protocol incentives from Ether.fi, Linea, and Eigen Cloud under the SPA in exchange for providing and maintaining TVL

Total ETH Treasury Management net loss from continuing operations before income taxes was $ ( 684,331 ) for the three months ended

March 31, 2026.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

THREE MONTHS ENDED MARCH 31, 2026 AND 2025

(dollar amounts in

thousands, except share, per share data, and crypto asset tokens)

Company’s Affiliate Marketing operations include performance marketing services, lead generation and data analytics.

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.

Affiliate Marketing net loss from continuing operations before income taxes was $ ( 47 ) for the three months ended March 31, 2026 and $ ( 914 )

for the period ended March 31, 2025.

following table presents significant segment assets regularly provided to and reviewed by the CODM for each operating segment as of the

period ended March 31, 2026:

Schedule of Companies Reportable Segments

ETH Treasury Management

Affiliate Marketing

Total Consolidated

Crypto assets at fair value

Crypto assets at cost

Total consolidated assets

following table presents significant segment revenues and expenses regularly provided to and reviewed by the CODM for each operating

segment for the three months ended March 31, 2026:

ETH Treasury Management

Affiliate Marketing

Total Consolidated

Revenue from staking, net

Revenue from affiliate marketing

Total revenue

Gains and (losses) from operations

Realized gain on crypto assets, net

Unrealized loss on crypto assets at fair value, net

Total losses from operations

Cost of revenues

Salaries and benefits

Stock-based compensation

Asset manager fees

Accounting and Legal expenses

Impairment of crypto assets at cost

Other segment expenses (1)

Segment net loss from continuing operations before income taxes

$ ( 684,331 )

$ ( 684,378 )

Basic weighted-average shares for continuing and discontinued operations

Diluted weighted average shares

Net income (loss) from continuing operations per share

Net income (loss) from discontinued operations per share

Net income (loss) per share

Fully Diluted:

Net income (loss) from continuing operations per share

Net income (loss) from discontinued operations per share

Net income (loss) per share

(1) - other segment

items included in Segment net loss include:

consulting and compliance fees, general and administrative, insurance, other income and expenses.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

THREE MONTHS ENDED MARCH 31, 2026 AND 2025

(dollar amounts in

thousands, except share, per share data, and crypto asset tokens)

following table presents significant segment assets regularly provided to and reviewed by the CODM for each operating segment for the

year ended December 31, 2025:

ETH Treasury Management

Affiliate Marketing

Total Consolidated

USDC stablecoin

Crypto assets at fair value

Crypto assets at cost

Total consolidated assets

following table presents significant segment expenses regularly provided to and reviewed by the CODM for each operating segment for the

three months ended March 31, 2025:

ETH Treasury Management

Affiliate Marketing

Total Consolidated

Revenue from affiliate marketing

Total revenue

Gains and (losses) from operations

Realized gain on crypto assets, net

Total losses from operations

Cost of revenues

Salaries and benefits

Contractors and consulting expense

Marketing expenses

Other segment expenses (1)

Segment net loss from continuing operations before income taxes

(1) - other segment

items included in Segment net loss include:

stock-based compensation, professional fees, general and administrative, insurance, other

income and expenses.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

THREE MONTHS ENDED MARCH 31, 2026 AND 2025

(dollar amounts in

thousands, except share, per share data, and crypto asset tokens)

by Geographic Location

revenues by country in which the Company operated for the three months ended March 31, 2026 and 2025 are shown below.

All ETH Treasury

Management revenue occurred within the United States.

Schedule of Revenues by Country

the three months ended March 31, 2026:

United States

Rest of the World

the three months ended March 31, 2025:

United States

Rest of the World

Company does not have material assets in foreign jurisdictions.

14 – Discontinued Operations

3 unchanged sentences

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 .

of an entity meet the criteria in paragraph 205-20-45-10.

In the period in which the component meets the held-for-sale or discontinued

4 unchanged sentences

of continuing operations.

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.

of SHGN and Sports Gaming Client Services

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.

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”).

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.

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

$ 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.

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.

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

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

THREE MONTHS ENDED MARCH 31, 2026 AND 2025

(dollar amounts in

thousands, except share, per share data, and crypto asset tokens)

Company negotiated a Share and Asset Purchase Agreement which was closed on December 31, 2022.

2 unchanged sentences

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.

liabilities from discontinued operations as of December 31, 2025.

For the three months ended March 31, 2025, the results of operations

and cash flows of MTS are separately reported as discontinued operations.

As of March 31, 2026, the Company did not have significant

assets and liabilities related to discontinued operations or significant results of operations or cash flows for the three months

ended March 31, 2026.

Therefore, the disclosures on discontinued operations is only relevant as of and for the three months ended March

Reconciliation of Discontinued Operations

Schedule of Reconciliation of Discontinued Operations

For the Three Months Ended

For the Nine Months Ended

September 30, 2025

September 30, 2024

September 30, 2025

September 30, 2024

March 31, 2025

Cost of Revenues

2 unchanged sentences

Operating Loss

Interest income

Other (expense) income

Gain on sale of business

Interest expense

Total other income and expense

Income (loss) before income taxes

Total other income

Loss before income taxes

Income tax expense

Income (loss) from discontinued operations, net

Loss from discontinued operations, net

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

THREE MONTHS ENDED MARCH 31, 2026 AND 2025

(dollar amounts in

thousands, except share, per share data, and crypto asset tokens)

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:

as discontinued operations as of December 31, 2025:

of Major Classes of Assets and Liabilities

September 30,

December 31, 2025

Carrying amounts of major classes of assets included as part of discontinued operations:

Current assets

Restricted cash

Prepaid expenses and other current assets

Total current assets

September 30,

December 31, 2025

Carrying amounts of major classes of liability included as part of discontinued operations:

2 unchanged sentences

Total current liabilities

14 – Related Parties

Advisory Agreement with Consensys Software Inc.

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.

Agreements with Consensys Employees

part of the collaboration between the Company and Consensys, three employees of Consensys were seconded to SharpLink under secondment

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 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.

15 – Subsequent Events

2025 Registered Direct Offering

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.

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

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.

MANAGEMENT ’ S

DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION

Note Regarding Forward-Looking Statements

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.

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.

and Market Data

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.

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 ” ).

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.

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.

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.

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

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.

tandem with this transformation, SharpLink has streamlined its business-building operations around two distinct reportable segments:

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.

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

Treasury Management Strategy

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.

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.

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.

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.

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.

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.

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.

Treasury Management

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.

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.

Staking Protocol

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.

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.

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.

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

Source of capital used to purchase LsETH

LsETH original cost basis

LsETH impairment losses

LsETH carrying value

Number of LsETH held

average purchase price per LsETH

Weighted Average LsETH PCR at Acquisition

LsETH PCR at End of Period

Balance at March 31, 2025

LsETH acquisitions

LsETH impairment losses

(87,813,295 )

Balance at June 30, 2025

(87,813,295 )

LsETH acquisitions

LsETH impairment losses

Balance at September 30, 2025

(94,763,484 )

private-investment-in-public-equity financing executed under Securities Purchase Agreements dated May 26, 2025.

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.

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)

Warrant Exercises

April 14, 2026, the Company issued 5,462,952 shares of its Common Stock upon the exercise of 5,462,952 pre-funded common stock warrants

with an exercise price of $ 0.0001 , which were held by Consensys.

April 15, 2026, the Company issued 6,354,213 shares of its Common Stock upon exercise of 6,354,213 pre-funded common stock warrants with

an exercise price of $ 0.0001 , which were held by our chairman of our Board.

of Asset Manager Agreements

April 3, 2026, the Company entered into a mutual termination agreement with its two external asset managers, ParaFi Capital LP and Galaxy

Digital Capital Management LP (the “Termination Agreements”).

Pursuant to the Termination Agreements, each asset management

agreement that was previously entered into on May 30, 2025 (the “Asset Management Agreements”) will be terminated effective

May 31, 2026.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

THREE MONTHS ENDED MARCH 31, 2026 AND 2025

(dollar amounts in

thousands, except share, per share data, and crypto asset tokens)

the Company nor the asset managers have any remaining or future obligations or commitments to the other party under the Asset Management

Agreements other than those amounts pursuant to the Termination Agreements.

Further, the Company is not required to pay any termination

fees or penalties in connection with the mutual termination of the Asset Management Agreements.

Accounting Officer

May 6, 2026, the Board appointed Dana Perez, 48, the former Senior Vice President of Accounting as the Chief Accounting Officer, effective

March 1, 2026.

June 30, 2025

$ 254,084,660

$ 510,114,386

$ 449,288,671

September 30, 2025

1,264,842,270

1,059,148,451

“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.

“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.

“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.

“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.

“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.

“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.

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.

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,

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.

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.

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.

largely utilize search engine optimization and programmatic advertising campaigns to drive traffic to our direct-to-player (“D2P”)

Markets Funds Raising -

Million Offering

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

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.

Million Offering

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.

acted as the sole placement agent in connection with the May 2025 PIPE Offering.

At-The-Market

(“ATM”) Offerings

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”).

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

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 .

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.

6, 2025 Registered Direct Offering

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.

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

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.

Offering closed on August 8, 2025.

10, 2025 Registered Direct Offering

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.

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.

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

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 -

2025 Special Meeting of Stockholders

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:

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.

2025 Special Meeting of Stockholders

September 24, 2025, the Company convened a special meeting (the “September 2025 Special Meeting”) virtually via live

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.

of Sales Agents to ATM Offering

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.

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.

of Inducement Award Plan

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.

Share Repurchase Plan

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”).

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

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.

of Superstate as Digital Transfer Agent

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

This initiative aligns with the SEC’s broader Project Crypto innovation agenda aimed at modernizing U.S.

regulation to better enable digital assets, blockchain and onchain markets.

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.

of 10% Equity Stake in Armchair Enterprises

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

of Operations

following table provides certain selected financial information for the periods presented:

September 30,

Revenue from staking

Revenue from affiliate marketing

Revenues and gains from operations

Other operating income

Realized gain on crypto assets at fair value,

Unrealized gain on crypto assets at fair value,

Total operating income

Operating expenses

Cost of revenues from affiliate marketing

Selling, general, and administrative expenses

Stock-based compensation, related party

Impairment of crypto assets at cost

Total operating expenses

Operating income (loss)

Total other income

Net income (loss) before income taxes

Income tax expense

Net income (loss) from

continuing operations

Net income (loss) from

discontinued operations, net of tax

(14,555,164 )

Net income (loss)

$ 104,270,205

$ 105,155,336

$ (11,129,689 )

the Three Months Ended September 30, 2025 Compared to the Three Months Ended September 30, 2024

and gains (loss) from operations

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.

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.

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.

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.

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.

Income (Loss)

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.

Income (Loss) from Discontinued Operations, Net of Tax

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.

Income (Loss)

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.

the Nine Months Ended September 30, 2025 Compared to the Nine Months Ended September 30, 2024

and gains (loss) from operations

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.

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.

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.

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.

Income (Loss)

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.

Income (Loss) from Discontinued Operations, Net of Tax

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.

Income (Loss)

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.

Months Ended September 30, 2025 Compared to Nine Months Ended September 30, 2024

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,

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.

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.

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.

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.

and Capital Resources

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.

Sources of Liquidity

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.

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

and Long-Term Liquidity

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.

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.

Factors” for additional information.

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.

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.

Sheet Arrangements

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.

opinion is that inflation did not have a material effect on our operations for the nine months ended September 30, 2025.

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.

Accounting Pronouncements

Issued Accounting Pronouncements Not Yet Adopted

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.

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.

November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic

Disaggregation of Income Statement Expenses (“ASU 2024-03”), and in January 2025, the FASB issued Accounting Standards

2025-01, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40):

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.

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.

will adopt ASU 2023-09 for the annual period ending December 31, 2025 and is currently evaluating the impact of this guidance on its

AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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.

Perez has served as the Company’s Senior Vice President of Accounting since September 15, 2025.

The foregoing description is qualified in its entirety by reference to

the full text of the employment letter, which will be filed in the Company’s Form 10-Q for the quarter ended June 30, 2026.

Perez is a Florida-licensed Certified Public Accountant with over 25 years of experience in SEC compliance and reporting, audit management,

technical accounting, and financial statement preparation.

Since 2020, she has served as the principal of Eschenburg Perez CPA, LLC,

a financial consulting firm providing fractional CFO and controller services to public and private companies.

Concurrently, she has served

as Chief Financial Officer of Jupiter Neurosciences, Inc.

(June 2021 to December 2022), MGO Global, Inc.

(January 2024 to February 2025),

and as Interim Chief Financial Officer of Capstone Companies, Inc.

(January 2023 to present).

From 2013 to 2021, Ms.

Perez served as

Chief Financial Officer of Adopt-A-Family of the Palm Beaches, Inc.

Earlier in her career, she served as Manager, National Office of

Risk Management, and Audit Manager at RSM US LLP.

Perez holds a Master of Science in Accountancy and a Bachelor of Science in Accountancy

from the University of North Carolina at Wilmington and is a member of the American Institute of Certified Public Accountants.

are no family relationships between Ms.

Perez and any director or other executive officer, nor are there any transactions to which the

Company was or is a participant and in which Ms.

Perez has a material interest subject to disclosure under Item 404(a) of Regulation

There are no arrangements or understandings between Ms.

Perez and any other persons pursuant to which she was selected as an officer.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements