Sharplink, Inc. 10-Q

ITEM 1. FINANCIAL STATEMENTS SHARPLINK, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except share and per share data) March 31, 2026 December 31, 2025 (unaudited) Assets Current Assets Cash $ 16,875 $ 28,539 USDC stablecoin - 1,882 Accounts receivable, net of allowance for credit losses of $ 0 both periods presented 461 221 Prepaid expenses and other current assets 689 329 Current assets from discontinued operations - 182 Total current assets 18,025 31,153 Crypto assets at fair value 1,239,140 1,899,683 Crypto assets at cost 486,852 500,912 Other assets 21 18 Total assets $ 1,744,038 $ 2,431,766 Liabilities and Stockholders’ Equity Current Liabilities Accounts payable and accrued expenses 5,437 12,748 Current liabilities from discontinued operations - 1 Total current liabilities 5,437 12,749 Total liabilities 5,437 12,749 Commitments and Contingencies (Note 10) - Stockholders’ Equity Common stock, $ 0.0001 par value; authorized shares 2,500,000,000 ; issued 201,063,967 and 200,584,713 , respectively; outstanding shares: 199,125,509 and 198,646,255 respectively 20 20 Treasury stock, 1,938,458 of common stock at cost ( 31,721 ) ( 31,721 ) Additional paid-in capital 3,268,259 3,263,114 Accumulated deficit ( 1,497,957 ) ( 812,396 ) Total stockholders’ equity 1,738,601 2,419,017 Total liabilities and stockholders’ equity $ 1,744,038 $ 2,431,766 See accompanying notes to these condensed consolidated financial statements. 3 SHARPLINK, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (In thousands, except share and per share data) 2026 2025 For the Three Months Ended March 31, 2026 2025 Revenue from staking $ 11,501 $ - Revenue from affiliate marketing 557 742 Total revenue 12,058 742 Gains and (losses) from operations Realized gain on crypto assets, net 12,005 - Unrealized loss on crypto assets at fair value, net ( 506,664 ) - Total losses from operations, net ( 494,659 ) - Operating expenses Cost of revenues from affiliate marketing 432 610 Selling, general, and administrative expenses 9,876 1,058 Impairment of crypto assets at cost 191,670 - Total operating expenses 201,978 1,668 Operating loss ( 684,579 ) ( 926 ) Other income (expense) Interest income 203 12 Other expense ( 2 ) - Total other income, net 201 12 Net loss before income taxes ( 684,378 ) ( 914 ) Income tax expense ( 1,183 ) ( 3 ) Net loss from continuing operations ( 685,561 ) ( 917 ) Net loss from discontinued operations, net of tax - ( 58 ) Net loss $ ( 685,561 ) $ ( 975 ) Numerator for net loss per share - basic and diluted: Net loss from continuing operations $ ( 685,561 ) $ ( 917 ) Net loss from discontinued operations - ( 58 ) Net loss $ ( 685,561 ) $ ( 975 ) Denominator for net loss per share - basic and diluted: Basic and diluted weighted average shares for continuing and discontinued operations 210,865,894 531,226 Net loss per share - basic and diluted Net loss from continuing operations per share - basic and diluted $ ( 3.25 ) $ ( 1.73 ) Net loss from discontinued operations per share – basic and diluted - ( 0.11 ) Net loss per share - basic and diluted $ ( 3.25 ) $ ( 1.84 ) See accompanying notes to these condensed consolidated financial statements. 4 SHARPLINK, INC. CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY FOR THE THREE MONTHS ENDED MARCH 31, 2026 AND 2025 (UNAUDITED) (In thousands, except share data) Shares Amount Shares Amount Shares Amount Capital Shares Amount deficit equity Series A-1 preferred stock Series B preferred stock Common stock Additional Paid-In Treasury stock Accumulated Total shareholders’ Shares Amount Shares Amount Shares Amount Capital Shares Amount deficit equity Balance, December 31, 2024 601 $ 1 1,040 $ 1 407,295 $ - $ 79,920 ( 8 ) $ ( 29 ) $ ( 77,809 ) $ 2,084 Net loss - - - - - - - - - ( 975 ) ( 975 ) Stock-based compensation expense - - - - - - 69 - - - 69 Issuance of common stock for exercise of warrants - - - - 25,000 - - - - - - Shares sold for cash - - - - 142,960 - 907 - - - 907 Balance as of March 31, 2025 601 $ 1 1,040 $ 1 575,255 $ - $ 80,896 ( 8 ) $ ( 29 ) $ ( 78,784 ) $ 2,085 Series A-1 preferred stock Series B preferred stock Common stock Additional Paid-In Treasury stock Accumulated Total shareholders’ Shares Amount Shares Amount Shares Amount Capital Shares Amount deficit equity Balance at December 31, 2025 - $ - - $ - 198,646,255 $ 20 $ 3,263,114 ( 1,938,458 ) $ ( 31,721 ) $ ( 812,396 ) $ 2,419,017 Balance - $ - - $ - 198,646,255 $ 20 $ 3,263,114 ( 1,938,458 ) $ ( 31,721 ) $ ( 812,396 ) $ 2,419,017 Net loss - - - - - - - - - ( 685,561 ) ( 685,561 ) Stock-based compensation expense - - - - - - 3,001 - - - 3,001 Shares issued for vested restricted stock - - - 340,385 - - - - - - Settlement of accrued bonuses in shares (gross) of common stock - - - - 490,273 - 5,040 - - - 5,040 Shares of common stock withheld for taxes for net share settlement - - - - ( 351,404 ) - ( 2,896 ) - - - ( 2,896 ) Balance as of March 31, 2026 - $ - - $ - 199,125,509 $ 20 $ 3,268,259 ( 1,938,458 ) $ ( 31,721 ) $ ( 1,497,957 ) $ 1,738,601 Balance - $ - - $ - 199,125,509 $ 20 $ 3,268,259 ( 1,938,458 ) $ ( 31,721 ) $ ( 1,497,957 ) $ 1,738,601 See accompanying notes to these condensed consolidated financial statements. 5 SHARPLINK, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (In thousands) 2026 2025 Three Months Ended March 31, 2026 2025 CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ ( 685,561 ) $ ( 975 ) Net loss from discontinued operations, net of tax - ( 58 ) Net loss from continuing operations $ ( 685,561 ) $ ( 917 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 1 2 Stock-based compensation expense 3,001 69 Impairment on crypto assets at cost 191,670 - Unrealized loss on crypto assets received at fair value, net 506,664 - Realized gain on crypto assets, net ( 12,005 ) - Rewards on native staking ( 10,117 ) - Rewards on liquid staking ( 806 ) - Rewards from protocol incentives and rebates ( 981 ) - Changes in assets and liabilities Accounts receivable ( 62 ) ( 58 ) Other receivable - 273 Due from Rsports Interactive, Inc. - ( 1 ) Prepaid expenses and other current assets ( 360 ) ( 35 ) Accounts payable and accrued expenses ( 2,090 ) 214 Net cash used in operating activities – continuing operations ( 10,646 ) ( 453 ) Net cash used in operating activities - discontinued operations - ( 61 ) Net cash used in operating activities ( 10,646 ) ( 514 ) CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of other assets ( 4 ) - Investment in Armchair Enterprises, Inc. - ( 500 ) USDC stablecoin redemptions 1,882 - Net cash provided by (used in) investing activities – continuing operations 1,878 ( 500 ) Net cash used in investing activities - discontinued operations - - Net cash provided by (used in) investing activities 1,878 ( 500 ) CASH FLOWS FROM FINANCING ACTIVITIES: Gross proceeds from sale of common stock - 907 Taxes paid related to net share settlement of equity awards ( 2,896 ) - Net cash generated by financing activities – continuing operations ( 2,896 ) 907 Net cash used in financing activities - discontinued operations - - Net cash (used in) provided by financing activities ( 2,896 ) 907 Net change in cash ( 11,664 ) ( 107 ) Cash, beginning of period including discontinued operations 28,539 1,542 Cash, end of period including discontinued operations 16,875 1,435 Less cash from discontinued operations - ( 60 ) Cash, end of period 16,875 1,375 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid for interest $ - $ - Cash paid for taxes $ - $ - NON-CASH OPERATING, INVESTING AND FINANCING ACTIVITIES: Receipt of LsETH rebate receivable $ 106 $ - Deposits of crypto assets (ETH) at fair value for liquid staking activities $ 197,455 $ - Receipt of crypto assets (weETH) at cost for liquid restaking activities $ ( 205,844 ) $ - Receipt of crypto assets (ETH) at fair value for redemption of crypto assets (LsETH at cost) $ ( 32,497 ) $ - Redemption of crypto assets (LsETH) at impaired cost $ 28,671 $ - Stock-based bonus accrual settled with shares of common stock $ 5,040 $ - See accompanying notes to these condensed consolidated financial statements. 6 SHARPLINK, INC. 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) Note 1 – Organization Background and Nature of Business Headquartered 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 treasury asset. This strategy reflects the Company’s commitment to align the corporate treasury with the future of programmable finance, digital capital markets and decentralized infrastructure. The Company 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. Since the launch of its ETH Treasury Management strategy, the Company has raised capital through private investment in public equity (“PIPE”) transactions, follow-on offerings and at-the-market (“ATM”) sales. The Company has deployed the majority of the proceeds to acquire ETH (see Note 3-Crypto Asset Holdings ). Additional details regarding these equity offerings are included in Note 6 – Equity. On February 2, 2026, the Company formally changed its corporate name to “Sharplink, Inc.” from “SharpLink Gaming, Inc.” in connection with a corporate rebranding initiative. Reverse Stock Split On May 5, 2025, the Company effected a one-for-twelve (1:12) reverse stock split of all the Company’s Common Stock, 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 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. Note 2 – Summary of Significant Accounting Policies (a) Basis of Presentation The 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. The condensed consolidated balance sheet as of December 31, 2025 has been derived from the audited consolidated financial statements as of that date. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts therein. Due to the inherent uncertainty involved in making estimates, actual results in future periods may differ from the estimates. 7 SHARPLINK, INC. 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) Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted from this report, as is permitted by rules and regulations of the SEC. Accordingly, the condensed consolidated financial statements do not include all information and footnotes required by GAAP for a complete financial statement presentation. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto for the year ended December 31, 2025, which are included in the Company’s Annual Report on Form 10-K filed with the SEC on March 9, 2026. (b) Reclassifications We 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. (c) Principles of Consolidation The accompanying condensed consolidated financial statements include the accounts of Sharplink and its wholly owned subsidiaries. All intercompany accounts and transactions between consolidated subsidiaries have been eliminated in consolidation. (d) Use of Estimates The 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 tax assets; 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. (e) Crypto Assets The 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”). LsETH 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. 8 SHARPLINK, INC. 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) ETH 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. Crypto assets at fair value (ETH) Crypto assets acquired are initially recorded at cost, which represents the cash, cash equivalents or other financial assets paid to acquire the asset, including transaction fees. Crypto assets received in exchange for goods or services, or in connection with the issuance of shares, are recognized at their fair value on the date received, which becomes their cost basis. Crypto assets 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. Purchases 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. Crypto assets at cost (LsETH and weETH) Crypto assets at cost are recognized at fair value on the date received, which becomes their cost basis. Crypto assets at cost, such as LsETH 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 ” ) . The Company performs an analysis each quarter to identify whether events or changes in circumstances, principally decreases in the quoted (unadjusted) prices in the Company’s principal market, indicates that it is more likely than not that any of the assets are impaired. The quoted (unadjusted) prices on the Coinbase exchange, the active exchange that the Company has determined as its principal market, are used in the analysis 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. In 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. 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 and weETH will not be adjusted upward for any subsequent increase in fair value. 9 SHARPLINK, INC. 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) Receipt 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. (f) Revenue from Staking activities Beginning in June 2025, the Company began staking its ETH. 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. Native Staking The Company participates in native staking exclusively as a delegator through third-party validators. The Company delegates ETH to validators, either directly or through third party asset managers, who operate nodes on the Ethereum network to validate transactions and add blocks to the blockchain. In return for delegating ETH to validators, the Company is entitled to a portion of the block rewards and transaction fees earned by the validators, in the form of ETH tokens, calculated approximately based on the Company’s proportion of the total ETH staked. When the Company stakes ETH natively, the ETH does not remain in the Company’s custodial wallet, but is instead deposited into Ethereum’s staking deposit smart contract, which is required for participation in ETH staking as a delegator. Native staked ETH are not derecognized because their deposit into the smart contract does not give any other entity the right or ability to direct their use (for example, sell, lend, pledge or otherwise use those ETH). The withdrawal credentials in the smart contract are designated to the Company’s custodian, who, as described in Note 2(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 (“ ASC 606 ”). 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. 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. 10 SHARPLINK, INC. 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) Liquid Staking and Liquid Restaking Activities We 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. Since 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. Upon 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 . When 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. In 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. 11 SHARPLINK, INC. 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 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 operations. No weETH was redeemed for the three months ended March 31, 2026. Protocol Incentives On 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. Separate 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. Protocol 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. Revenue is 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 inception. 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. See Note 4 - Revenue Recognition for further disclosures (g) Crypto Assets Receivable When 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. Because 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. 12 SHARPLINK, INC. 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 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. Upon 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. For 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. (h) USDC stablecoin USD stablecoin (“USDC”) is accounted for as a financial asset that can be redeemed on the basis of one USDC for one U.S. dollar on demand from the issuer. While not accounted for as cash or cash equivalents, the Company treats its USDC holdings as a liquidity resource. The Company’s USDC are held with qualified third-party custodians who provide secure storage and safeguarding of the Company’s USDC. The Company’s custodians do not obtain control over the Company’s USDC; therefore we continue to recognize USDC as our own for accounting purposes. For the three months ended March 31, 2026, we redeemed all of our USDC for U.S. dollars. (i) Affiliate Marketing Revenue Recognition The Company recognizes revenue in accordance with ASC 606. To determine revenue recognition for contracts with customers, the Company performs the following five steps: (i) identify the contract with the customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price, including variable consideration to the extent that it is probable that a significant future reversal will not occur; (iv) allocate the transaction price to the respective performance obligations in the contract; and (v) recognize revenue when (or as) the Company satisfies the performance obligation. The Company recognizes revenue when it transfers its goods and services to customers in an amount that reflects the consideration to which the Company expects to be entitled in such exchange. For the three months ended March 31, 2026, the Company has recognized its revenue at a point in time for certain contracts and over time for other contracts. The timing of revenue recognition may differ from the timing of invoicing to customers, and these timing differences result in contract advanced billings on the Company’s condensed consolidated balance sheet. The Company recognized unbilled revenue when revenue is recognized prior to invoicing. Payment terms and conditions vary by contract type, although terms generally include a requirement of payment within 30 days. In instances where the timing of revenue recognition differs from the timing of invoicing, the Company has determined that its contracts generally do not include a significant financing component. The primary purpose of invoicing terms is to provide customers with simplified and predictable ways of purchasing the Company’s services, and not to facilitate financing arrangements. The Company acts as an agent and records revenue net of commissions retained. 13 SHARPLINK, INC. 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) (j) Fair Value Measurements The 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: Level 1: Quoted (unadjusted) prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. Level 2: 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. Level 3: 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. The 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. The 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. (k) Acquisition and Sale of 10% Equity Stake in Armchair Enterprise On February 24, 2025, Sharplink entered into a subscription agreement (“Subscription Agreement”) with U.K-based Armchair Enterprises Limited (“Armchair”), which owns and operates CryptoCasino.com. The acquisition of a 10% equity stake in Armchair was made for $ 500 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 . (l) Recently Issued Accounting Pronouncements Not Yet Adopted In November 2024, the FASB issued ASU 2024-04, Debt - Debt with Conversions and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments (“ASU 2024-04”). ASU 2024-04 is intended to clarify requirements for determining whether certain settlements of convertible debt instruments, including convertible debt instruments with cash conversion features or convertible debt instruments that are not currently convertible, should be accounted for as an induced conversion. This ASU is effective for all entities for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods, with early adoption permitted. The Company is currently evaluating the potential impact of this guidance on its disclosures. 14 SHARPLINK, INC. 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) In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”), and in January 2025, the FASB issued Accounting Standards Update No. 2025-01, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date (“ASU 2025-01”). ASU 2024-03 requires additional disclosure of the nature of expenses included in the income statement as well as disclosures about specific types of expenses included in the expense captions presented in the income statement. ASU 2024-03, as clarified by ASU 2025-01, is effective for the Company for annual reporting periods beginning in fiscal 2027 and for interim reporting periods beginning in fiscal 2028 on a prospective basis. Both early adoption and retrospective application are permitted. The Company is currently evaluating the impact that the adoption of these standards will have on its disclosures. Note 3 – Crypto Asset Holdings Crypto Assets at fair value The 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: Schedule of Crypto Assets At Fair Value in thousands, except number of ETH Units Cost Basis Fair Value ETH 589,305 $ 2,361,942 $ 1,239,140 The 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 Units Cost Basis Fair Value ETH 640,026 $ 2,515,856 $ 1,899,683 Fair value represents the quoted (unadjusted) prices on the Coinbase exchange as of midnight UTC on the measurement date. The following table represents a reconciliation of crypto assets held at fair value: Schedule of Reconciliation of Crypto Assets For the Three Months Ended March 31, 2026 Fair Value, Year Ended December 31, 2025 $ 1,899,683 Deposits of ETH into liquid staking activities ( 197,455 ) Receipt of ETH upon redemption in liquid staking activities 32,497 Receipt and accrual of ETH rewards from native staking activities 10,117 Protocol incentive rewards received in ETH from liquid restaking activities 138 Receipt and accrual of ETH rewards from liquid staking activities 806 Unrealized loss on crypto assets held ( 506,646 ) Fair Value, March 31, 2026 $ 1,239,140 15 SHARPLINK, INC. 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, 2025, the Company did not have any liquid or native staking activities. Crypto Assets at cost The 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 31, 2026: Schedule of Crypto Assets Crypto Assets at Cost in thousands, except number of LsETH and weETH Units Cost Impairment Net LsETH 189,327 $ 472,498 $ ( 114,944 ) $ 357,554 weETH 66,102 206,024 ( 76,726 ) 129,298 Total 255,429 $ 678,522 $ ( 191,670 ) $ 486,852 The 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 Units Cost Impairment Net LsETH 204,409 $ 641,120 $ ( 140,208 ) $ 500,912 The 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: Schedule of Reconciliation of Crypto Assets Balance, December 31, 2025 $ 500,912 Beginning balance $ 500,912 Receipt of weETH upon deposits of ETH into liquid restaking activities 205,844 Redemptions of LsETH from liquid staking activities at cost less impairment ( 28,671 ) Receipt of LsETH for rebate rewards 257 Receipt of weETH for protocol incentive rewards 180 Impairment loss ( 191,670 ) Balance, March 31, 2026 $ 486,852 Ending balance $ 486,852 For the three months ended March 31, 2026 and March 31, 2025, the Company recorded an impairment loss $ 191,670 and $ 0 , 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. 16 SHARPLINK, INC. 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. The 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. Note 4 – Revenue Recognition The Company is currently engaged in ETH Treasury Management activities and Affiliate Marketing services. ETH Treasury Management The following table provides additional breakdown of the Company’s revenue from staking activities: Schedule of Revenue Recognition March 31, 2026 Revenue from contracts with customers Native staking rewards $ 10,117 Native staking fees ( 403 ) Protocol incentives earned in ETH and weETH 753 Rewards from native staking and liquid restaking, net $ 10,467 Revenue from contracts with non-customers Liquid staking rewards 806 Rebates earned in LsETH 228 Rewards from liquid staking 1,034 Total revenue from staking, net $ 11,501 The Company participates in the following revenue generating transactions: staking and restaking activities on the Ethereum blockchain; earned 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 ). Management 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. 17 SHARPLINK, INC. 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 following is a summary of crypto assets staked (in units) as of March 31, 2026 and December 31, 2025: Schedule of Crypto Assets March 31, 2026 December 31, 2025 Unstaked ETH 378 55,582 Native staked ETH 588,927 584,443 Total LsETH 189,327 204,409 Total weETH 66,102 - Total crypto assets 844,734 844,434 The following is a summary of total rewards earned from staking activities (in units) for the three months ended March 31, 2026: Schedule of Rewards Earned March 31, 2026 Native staked ETH 4,201 Redeemed liquid staked ETH 283 Total staking rewards 4,484 The 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: Schedule of Accounts Receivable from Rebates and Incentive rewards March 31, 2026 December 31, 2025 Rebates receivable in LsETH $ 70 $ 106 Protocol incentive receivables in ETH 92 - Protocol incentive receivables in weETH 122 - Accounts receivable from rebate and protocol incentive rewards $ 284 $ 106 For the three months ended March 31, 2025, the Company did not have any native, liquid staking or restaking activities. Affiliate Marketing The Company recognizes revenue when it transfers its goods and services to customers in an amount that reflects the consideration to which the Company expects to be entitled in such exchange. For the three months ended March 31, 2026 and 2025, the Company has recognized its revenue at a point in time. 18 SHARPLINK, INC. 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 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 recognizes unbilled revenue when revenue is recognized prior to invoicing. Payment terms and conditions vary by contract type, although terms generally include a requirement of payment within 30 days. In instances where the timing of revenue recognition differs from the timing of invoicing, the Company has determined that its contracts generally do not include a significant financing component. The primary purpose of invoicing terms is to provide customers with simplified and predictable ways of purchasing the Company’s services, and not to facilitate financing arrangements. The Company did not have any major customers for the period ended March 31, 2026 or December 31, 2025. Note 5 – Additional Balance Sheet Information Accounts payable and accrued expenses On 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. The 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 ). Note 6 – Equity Preferred Stock The 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. 19 SHARPLINK, INC. 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) Exchange of Series A-1 Preferred Stock and Series B Preferred Stock for Common Stock and Prefunded Warrants On April 2, 2025, Sharplink entered into an exchange agreement (“Exchange Agreement”) with Alpha Capital Anstalt (“Alpha”), whereby, pursuant to the terms and conditions set forth in the Exchange Agreement and in reliance on Section 3(a)(9) of the Securities Act of 1933, as amended (the “Securities Act”), 600 shares of the Company’s Series A-1 Preferred Stock and 1,040 shares of the Company’s Series B Preferred Stock (collectively, the “Existing Securities”) held by Alpha were exchanged for 38,683 shares of Sharplink’s Common Stock and 44,650 prefunded warrants to purchase shares of Sharplink’s Common Stock (“Alpha Prefunded Warrants”) at an exercise price of $ 0.012 . With the exchange of Alpha’s Existing Securities for Common Stock and Alpha Prefunded Warrants, Sharplink no longer has any Series A-1 Preferred Stock or Series B Preferred Stock issued and outstanding. At-The-Market (“ATM”) Offerings On May 2, 2024, Company entered into an ATM Sales Agreement (the “May 2024 ATM Sales Agreement”) with A.G.P./Alliance Global Partners (“A.G.P.”) pursuant to which the Company may offer and sell, from time to time, through A.G.P., as sales agent and/or principal, shares of the Company’s Common Stock, having an aggregate offering price of up to $ 1,700 , 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. On February 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 . On May 30, 2025, the Company entered into a second ATM Sales Agreement (the “May 2025 ATM Sales Agreement”) with A.G.P. relating to the sale of shares of the Company’s Common Stock from time to time, having an aggregate offering price of up to $ 1,000,000 (the “ATM Offering”). On 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 ; and to permit the forward sale of shares to be sold in the ATM Offering to master forward confirmation letter agreements. On July 17, 2025, the Company filed a supplement to the prospectus supplement with the SEC to address the Amendment and the forward sales agreements. On July 17, 2025, the Company entered into a forward sales agreement to permit the forward sale of shares of the Company’s Common Stock to A.G.P. The forward sales agreement was outstanding for one week and was settled with the purchase of 6,800,000 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. On 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. 20 SHARPLINK, INC. 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) As 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. Equity Offerings $4.5 Million Offering On May 20, 2025, the Company entered into a securities purchase agreement (the “May 20, 2025 Purchase Agreement”) for an offering of 34,000 shares of Common Stock 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. The issuance of shares and pre-funded warrants were recorded at the offering price within equity in accordance with ASC 505, Equity . Any amounts in excess of the par value of the shares were recorded in additional paid-in capital. $425 Million Offering On May 26, 2025, the Company entered into a securities purchase agreement for a private placement in public equity (“PIPE”), offering (the “May 2025 PIPE Offering”) an aggregate of (i) 58,699,760 shares of Common Stock of the Company 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. $200 Million Offering On 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 Offering. Cantor Fitzgerald & Co. (“Cantor”) acted as financial advisor to the Company pursuant to an engagement letter with the Company. Pursuant to the August 2025 Placement Agency Agreement, the Company paid the 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 2025 Offering closed on August 8, 2025. 21 SHARPLINK, INC. 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) $400 Million Offering On 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 A.G.P. as the sole placement agent, in connection with the Second August Offering. Pursuant to the Second August Placement Agency Agreement, the Company paid A.G.P. a cash fee equal to 2.5% of the aggregate gross proceeds raised from the sale of the shares sold in the Second August Offering. The Second August 2025 Offering closed on August 12, 2025. $76.5 Million Offering On 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. Share Repurchase Program On August 21, 2025, the Board approved a share repurchase program (the “2025 Repurchase Program”) providing for the repurchase of up to $ 1,500,000 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. In connection with the 2025 Repurchase Program, on August 21, 2025, the Company entered into an open market share repurchase agreement (the “Repurchase Agreement”) with a broker whereby the broker has agreed to act as a non-exclusive agent on behalf of the Company to repurchase shares of Common Stock in the open market. The Repurchase Agreement will continue in effect until terminated by either the Company or the broker, with or without cause, upon written notice to the other party. We will pay the broker a commission at a rate of $ 0.01 for each share of Common Stock repurchased pursuant to the Repurchase Agreement. 22 SHARPLINK, INC. 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) During 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. Common Stock On 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. On September 25, 2025, the Company held a special meeting of stockholders and received approval for an amendment to the Company’s Certificate of Incorporation to increase the number of 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 (as defined below), among other initiatives. Tokenization of Stock On September 24, 2025, the Company entered into a digital transfer agent agreement with Superstate Services LLC with the intent to tokenize the Company’s Common Stock on the Ethereum blockchain. As of the date of this filing, the Company has not tokenized any of its common stock. Note 7 – Warrants Following is a summary of the Company’s warrant activity for the three months ended March 31, 2026 and 2025: Schedule of Warrant Activity Number of Common Stock Underlying the Warrants Weighted Average Exercise Price Per Share Weighted Average Remaining Life (Years) Outstanding as of December 31, 2025 22,616,449 $ 5.48 3.54 Exercised - - - Issued - - - Expired ( 4,500,000 ) 17.50 - Outstanding as of March 31, 2026 18,116,449 $ 2.49 4.16 The 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. 23 SHARPLINK, INC. 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) As 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 . Further, 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 50,569 $ 1.07 7.71 Exercised ( 25,000 ) - - Issued - - - Expired - - - Outstanding as of March 31, 2025 25,569 $ 2.12 8.74 Note 8 – Stock Compensation Inducement Award Plan On 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. The terms of the Inducement Award Plan are substantially similar to the terms of the Company’s Amended and Restated 2023 Equity Incentive Plan, with the exception that incentive stock options may not be issued under the Inducement Award Plan, and equity awards under the Inducement Award Plan (including nonqualified stock options, restricted stock, restricted stock units, and other stock-based awards) may be issued only to an employee who is commencing employment with the Company or any subsidiary or who is being rehired following a bona fide interruption of employment by the Company or any subsidiary, in either case if he or she is granted such award in connection with his or her commencement of employment and such grant is an inducement material to his or her entering into employment with the Company or such subsidiary. In August 2025, the Company granted 443,385 restricted stock units to the newly appointed Co-CEO with 147,795 performance based awards and 295,590 service based awards, under the Inducement Award Plan (see Restricted Stock Units - Performance Based below). 24 SHARPLINK, INC. 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 Options Option awards are generally granted with an exercise price equal to the market price of the Company’s Common Stock at the date of grant; those options generally vest based on three years of continuous service and have ten-year contractual terms. Certain option and share awards provide for accelerated vesting if there is a change in control, as defined in the plans. The Company has the following equity plans: Sharplink Ltd. 2021 Equity Incentive Plan and Sharplink, Inc. 2023 Equity Incentive Plan The 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 $ 1 and $ 36 for the three months ended March 31, 2026 and 2025. The 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 Weighted Weighted average average remaining Aggregate Shares of exercise contractual intrinsic Common Stock price term value Outstanding as of December 31, 2025 $ 8,906 $ 91.56 $ 2.5 $ - Granted - - Exercised - - Forfeited - - Expired ( 5,760 ) - Outstanding as of March 31, 2026 3,146 122.88 6.4 - Exercisable as of March 31, 2026 $ 3,146 $ 122.88 $ 6.4 $ - The summary of activity under the plans as of March 31, 2025, and change for the three months ended March 31, 2025, is as follows: Weighted Weighted average average remaining Aggregate Shares of exercise contractual intrinsic Common Stock price term value Outstanding as of December 31, 2024 9,022 $ 91.08 7.6 $ - Granted - - Exercised - - Forfeited - - Expired - - Outstanding as of March 31, 2025 9,022 $ 91.06 7.4 $ - Exercisable as of March 31, 2025 6,924 $ 96.28 7.4 $ - 25 SHARPLINK, INC. 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) Restricted Stock Units- Service Based The Company’s Compensation Committee recommended to the Board and the Board approved the granting of certain restricted stock units (“RSUs”) to employees and the Board that vest over the passage of time. The Company recognized stock compensation expense for service based RSU awards of $ 2,934 and $ 33 for the three months ended March 31, 2026 and 2025, respectively. The following is a summary of service based RSU activity for the three months ended March 31, 2026: Schedule of Restricted Stock Units Weighted Number of Average Grant RSU Shares Date Fair Value Outstanding as of December 31, 2025 1,594,205 $ 14.26 Granted 632,932 10.36 Cancelled ( 78,120 ) 19.27 Vested ( 830,658 ) 15.33 Outstanding and unvested as of March 31, 2026 1,318,359 $ 17.78 The 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 . The following is a summary of RSU activity for the three months ended March 31, 2025: Weighted Number of Average Grant RSU Shares Date Fair Value Outstanding as of December 31, 2024 12,501 $ 7.74 Granted - - Cancelled - - Vested - - Outstanding and unvested as of March 31, 2025 12,501 $ 7.74 26 SHARPLINK, INC. 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) Restricted Stock Units- Performance Based The Company’s Compensation Committee recommended to the Board of Directors and the Board approved the design of performance based restricted stock units (“Performance RSU”) for certain executive officers. The awards are intended to vest based on the achievement of specified financial and operational performance metrics over a three-year performance period, subject to continued service through the end of the performance period. The Company recognizes the stock-based compensation expense in connection with the Performance RSUs when they are granted or at the service inception date if the service inception date precedes the grant date. As of 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. Net Share Settlement of Restricted Stock Units Upon 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 ) . Note 9 – Income Taxes On a quarterly basis, we estimate our annual effective tax rate and record a quarterly income tax provision based on the anticipated rate. As the year progresses, we refine our estimate based on the facts and circumstances, including discrete events, by each tax jurisdiction. The effective tax rate for the 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. 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. 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. Note 10 - Commitments and Contingencies From time to time, the Company may enter into certain types of contracts that require it to indemnify parties against third-party claims. The conditions of these obligations vary. In addition, legal claims may be made against the Company in the ordinary course of business, which could result in legal proceedings. Claims and associated litigation are subject to inherent uncertainties and unfavorable outcomes could occur, which could have a material adverse effect on the Company’s results of operations for that period or future periods. 27 SHARPLINK, INC. 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 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. Risks and Uncertainties The 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. A 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. The 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. The 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. The 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. 28 SHARPLINK, INC. 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 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 purposes. The 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. Loan Agreement On 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. Note 11 – Net Loss Per Share Basic 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 - Warrants ). 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. Diluted 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 dilutive. As 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. 29 SHARPLINK, INC. 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 Three Months Ended March 31, 2026 Three Months Ended March 31, 2025 Anti-Dilutive: Warrants 6,219,284 25,568 Stock options 3,146 6,924 Series A-1 preferred stock - 601 Series B preferred stock - 1,040 Unvested restricted stock Units 1,318,359 12,501 Total Anti-dilutive 7,540,789 46,634 Note 12 – Related Parties Warrants Issued and Outstanding S ee 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. Linea Consortium The Company is a founding member of the Linea Consortium, along with Consensys, a leading governance body supporting the development of Ethereum’s most aligned Layer 2 blockchain network. Note 13 – Operating Segments The Company’s Chief Executive Officer serves as the Chief Operating Decision Maker (“CODM”) and evaluates the financial performance of the business and makes resource allocation decisions on the basis of its two different revenue sources. 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. As a result, the Company operates two reportable segments under ASC 280, Segment Reporting , ETH Treasury Management and Affiliate Marketing. ETH Treasury Management In 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 on Linea. Total ETH Treasury Management net loss from continuing operations before income taxes was $ ( 684,331 ) for the three months ended March 31, 2026. 30 SHARPLINK, INC. 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) Affiliate Marketing The Company’s Affiliate Marketing operations include performance marketing services, lead generation and data analytics. The Company focuses on delivering quality traffic and player acquisitions, retention and conversions to global casino gaming partners worldwide in exchange for a commission (cost per acquisition or portion of net gaming revenues) paid to the Company by the partners for the new players referred to them. Total 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. The 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 Cash $ 16,334 $ 541 $ 16,875 Crypto assets at fair value 1,239,140 - 1,239,140 Crypto assets at cost 486,852 - 486,852 Other assets 985 186 1,171 Total consolidated assets $ 1,743,311 $ 727 $ 1,744,038 The 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 $ 11,501 $ - $ 11,501 Revenue from affiliate marketing - 557 557 Total revenue 11,501 557 12,058 Gains and (losses) from operations Realized gain on crypto assets, net 12,005 - 12,005 Unrealized loss on crypto assets at fair value, net ( 506,664 ) - ( 506,664 ) Total losses from operations ( 494,659 ) - ( 494,659 ) Less: Cost of revenues - 432 432 Salaries and benefits 2,429 141 2,570 Stock-based compensation 3,001 - 3,001 Bank fees 327 - 327 Asset manager fees 1,254 - 1,254 Accounting and Legal expenses 1,251 - 1,251 Impairment of crypto assets at cost 191,670 - 191,670 Other segment expenses (1) 1,241 31 1,272 Segment net loss from continuing operations before income taxes $ ( 684,331 ) $ ( 47 ) $ ( 684,378 ) (1) - other segment items included in Segment net loss include: consulting and compliance fees, general and administrative, insurance, other income and expenses. 31 SHARPLINK, INC. 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 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 Cash $ 28,021 $ 518 $ 28,539 USDC stablecoin 1,882 - 1,882 Crypto assets at fair value 1,899,683 - 1,899,683 Crypto assets at cost 500,912 - 500,912 Other assets 650 100 750 Total consolidated assets $ 2,431,148 $ 618 $ 2,431,766 The 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 $ - $ 742 $ 742 Total revenue - 742 742 Gains and (losses) from operations - - - Realized gain on crypto assets, net - - - Total losses from operations - - - Less: Cost of revenues - 610 610 Salaries and benefits - 303 303 Contractors and consulting expense - 71 71 Marketing expenses - 20 20 Other segment expenses (1) - 652 652 Segment net loss from continuing operations before income taxes $ - $ ( 914 ) $ ( 914 ) (1) - other segment items included in Segment net loss include: stock-based compensation, professional fees, general and administrative, insurance, other income and expenses. 32 SHARPLINK, INC. 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) Revenue by Geographic Location Summarized 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 For the three months ended March 31, 2026: United States $ 11,559 Rest of the World 499 Revenue $ 12,058 For the three months ended March 31, 2025: United States $ 231 Rest of the World 511 Revenue $ 742 The Company does not have material assets in foreign jurisdictions. Note 14 – Discontinued Operations In accordance with ASC 205-20, Presentation of Financial Statements: Discontinued Operations (“ASC 205-20”), a disposal of a component of an entity or a group of components of an entity is required to be reported as discontinued operations if the disposal represents a strategic shift that has (or will have) a major impact on an entity’s operations and financial results when the components of an entity meet the criteria in paragraph 205-20-45-10. In the period in which the component meets the held-for-sale or discontinued operations criteria, the major assets, other assets, current liabilities and non-current liabilities shall be reported as a component of total assets and liabilities separate from those balances of the continuing operations. At the same time, the results of all discontinued operations, less applicable income taxes (benefit), shall be reported as components of net income (loss) separate from the income (loss) of continuing operations. 33 SHARPLINK, INC. 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) Sale of MTS The Company negotiated a Share and Asset Purchase Agreement which was closed on December 31, 2022. The majority of the assets of the primary reporting unit within MTS were sold. Accordingly, the assets and liabilities of the MTS business were separately reported as assets and liabilities from discontinued operations as of 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 31, 2025. Summary Reconciliation of Discontinued Operations Schedule of Reconciliation of Discontinued Operations March 31, 2025 Revenues $ - Cost of Revenues ( 9 ) Gross Profit 9 Operating Expenses Selling, general, and administrative expenses 69 Operating Loss ( 60 ) Other income 3 Total other income 3 Loss before income taxes ( 57 ) Income tax expense 1 Loss from discontinued operations, net $ ( 58 ) 34 SHARPLINK, INC. 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 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 December 31, 2025: Schedule of Major Classes of Assets and Liabilities December 31, 2025 Carrying amounts of major classes of assets included as part of discontinued operations: Current assets Cash $ 37 Prepaid expenses and other current assets 145 Total current assets $ 182 December 31, 2025 Carrying amounts of major classes of liability included as part of discontinued operations: Current Liabilities Accounts payable and accrued expenses $ 1 Total current liabilities $ 1 Note 15 – Subsequent Events Pre-Funded Warrant Exercises On 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. On 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. Termination of Asset Manager Agreements On 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. 35 SHARPLINK, INC. 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) Neither 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. Chief Accounting Officer On 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. Ms. 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. Ms. 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. Ms. 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. There 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 S-K. There are no arrangements or understandings between Ms. Perez and any other persons pursuant to which she was selected as an officer. 36