What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-08-07 compared with 2026-05-08 · 707 added, 401 removed, 293 unchanged (79% of the section changed)

6 unchanged sentences

These forward-looking statements include, but are not limited to, statements

concerning our strategy, competition, future operations, future financial position, future revenues, projected costs, profitability,

expected cost reductions, capital adequacy, expectations regarding demand and acceptance for our technologies, growth opportunities and

trends in the markets in which we operate, prospects and plans and objectives of management.

concerning our treasury strategy, capital allocation, expectations for the Ethereum network and the broader digital asset market, competition,

future operations, future financial position, staking and yield activity, future revenues, projected costs, profitability, expected cost

reductions, capital adequacy, expectations regarding demand and acceptance for our technologies, growth opportunities and trends in the

markets in which we operate, prospects and plans and objectives of management.

The words “anticipates,” “believes,”

9 unchanged sentences

statements, including, without limitation, the risks set forth in Part II, Item 1A, “Risk Factors” of this Quarterly Report

on Form 10-Q for the quarter ended March 31, 2026, as amended, and that are otherwise described or updated from time to time in our other

on Form 10-Q for the quarter ended June 30, 2026, as amended, and that are otherwise described or updated from time to time in our other

filings with the Securities and Exchange Commission (the “SEC”), including our Annual Report on Form 10-K for the year ended

28 unchanged sentences

Headquartered

in Miami, Florida, Sharplink, a Delaware corporation, undertook a significant strategic shift in June 2025 by becoming one of the world’s

largest publicly traded companies to adopt Ether (“ETH”), the native token of the Ethereum blockchain, as its primary treasury

This strategy reflects the Company’s commitment to align our corporate treasury with the future of programmable finance,

digital capital markets and decentralized infrastructure.

The Company also operates an online affiliate marketing company that delivers

unique fan activation solutions to its sportsbook and online casino gaming partners.

tandem with this transformation, Sharplink has streamlined its operations around two distinct reportable segments:

in Miami, Florida, Sharplink undertook a significant strategic shift in June 2025 by becoming one of the world’s largest publicly

traded companies to adopt Ether (“ETH”), the native token of the Ethereum blockchain, as its primary treasury asset.

strategy is designed to combine disciplined public-market capital allocation with active, risk-managed treasury operations to increase

ETH held per share over time and support long-term shareholder value.

The Company also operates an online affiliate marketing company

that delivers fan activation solutions to sportsbook and online casino gaming partners.

has concurrently realigned its corporate structure to support this strategic transition by organizing its activities into two distinct

reportable segments.

This segmentation is intended to enhance transparency into the Company’s operating performance and provide

investors with clearer insight into the underlying drivers of revenue, expenses and capital allocation priorities across the business.

As the ETH treasury and related revenue platform scale, management also expects this structure to support disciplined capital deployment

and greater operating leverage across the Company’s corporate infrastructure.

ETH Treasury Management

We seek to benefit from our ETH accumulation strategy through (i) potential ETH price appreciation and (ii)

yield and other returns generated from staking and related treasury activities.

Through our qualified custodians, we participate in native

staking by delegating ETH to third-party validators in Ethereum’s proof-of-stake (“PoS”) network, earning protocol-level

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

for liquid staking tokens (“LSTs”) and liquid restaking tokens (“LRTs”), such as LsETH and weETH.

we generate incentive-based revenue from third-party arrangements tied to maintaining total value locked (“TVL”) within certain

blockchain ecosystems.

Our staking infrastructure and custody arrangements are designed to meet the governance, security and control

standards expected of a public company.

Company seeks to benefit from its ETH-focused treasury strategy through two primary drivers:

(i) yield and other returns generated from

staking and related on-chain treasury activities and (ii) through potential appreciation in the market value of ETH.

Through qualified

custodians, the Company participates in native staking by delegating ETH to third-party validators operating on Ethereum’s proof-of-stake

(“PoS”) network, earning protocol-level rewards in accordance with prevailing network conditions.

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

staking tokens (“LSTs”) and liquid restaking tokens (“LRTs”), including instruments such as LsETH and weETH.

These arrangements allow the Company to maintain exposure to underlying staked ETH while accessing additional on-chain liquidity and

yield opportunities.

In certain cases, the Company earns incentive-based revenue from third-party programs designed to promote ecosystem

participation, including rewards tied to maintaining total value locked (“TVL”) within specific blockchain environments.

December 18, 2025, the Company entered into a Strategic Partnership Agreement (the “SPA”) with ether.fi, EigenCloud,

Linea Consortium (“Linea”), a related party, and Consensys Software, Inc.

(“Consensys”), a related party,

pursuant to which the Company agreed to bridge and maintain weETH from its treasury on Linea, a zero-knowledge Ethereum Virtual

Machine (“zkEVM”) Layer 2 network, over an initial 24-month period through Anchorage Digital Bank N.A., its qualified

Consensys will not receive any fees or commission on the Company’s deployment of ETH on Linea.

In addition to the

staking and restaking rewards reflected in the weETH conversion rate, the Company is entitled under the SPA to monthly protocol

incentives funded by ether.fi, Linea and EigenCloud based on month-end TVL metrics, subject to contractual caps and payable in the

form of ETH and weETH.

The Company accounts for the protocol incentives as revenue under ASC 606 because ether.fi, Linea and

EigenCloud provide consideration in exchange for the Company’s service of providing and maintaining TVL on Linea.

recognized over each monthly service period as the Company satisfies its performance obligation and the amount of consideration

becomes determinable and is no longer constrained;

subsequent changes in the fair value of the digital assets attributable solely to

the form of consideration are recognized separately in earnings.

Company’s staking infrastructure, custody relationships and operational controls are structured to meet the governance, security

and oversight standards expected of a public company.

These arrangements are intended to support safe participation in Ethereum’s

PoS network and related protocols while maintaining compliance with applicable regulatory, risk-management and financial-reporting requirements.

Affiliate Marketing

Our Affiliate Marketing segment is focused on performance-based customer acquisition services for leading sportsbooks

and online casino gaming operators worldwide.

Through our iGaming affiliate marketing network, known as PAS.net, Sharplink focuses on

driving qualified traffic and player acquisitions, retention and conversions to U.S.

Affiliate Marketing segment is focused on performance-based customer acquisition services for leading sportsbooks and online casino gaming

operators worldwide.

Through our iGaming affiliate marketing network, known as PAS.net, Sharplink focuses on driving qualified traffic

and player acquisitions, retention and conversions to U.S.

regulated and global iGaming operator partners worldwide.

In addition, we own and operate a portfolio of direct-to-player, state-specific, affiliate marketing websites designed to attract, acquire

and drive local sports betting and online casino gaming traffic to its valued partners which are licensed to operate in each respective

In addition, we

own and operate a portfolio of direct-to-player, state-specific, affiliate marketing websites designed to attract, acquire and drive

local sports betting and online casino gaming traffic to its valued partners which are licensed to operate in each respective state.

Growth Strategies

growth strategy is focused on disciplined capital allocation, compounding ETH Concentration, increasing the productivity of its ETH

treasury and leveraging its scale while preserving strategic flexibility as the Ethereum ecosystem and digital asset treasury segment

The Company seeks to support long-term shareholder value through the following key initiatives:

Treasury Management and ETH-Denominated Return Generation.

Sharplink seeks to make its

ETH productive through native staking, liquid staking and restaking, protocol incentives

and selected on-chain treasury activities, where appropriate and consistent with our risk-management

We may pursue these activities internally and through select third-party protocols,

qualified custodians and other partners.

Staking provides a foundational return, while selected

treasury activities are intended to generate incremental, risk-adjusted ETH-denominated rewards

or other returns above that baseline while maintaining liquidity, security and operational

These activities are subject to market, protocol, counterparty, smart-contract,

liquidity and other risks and may not generate returns above the native-staking baseline.

● Institutional-Grade

ETH Staking and Asset Utilization.

Sharplink has developed processes and oversight frameworks

for participating in Ethereum’s PoS network through qualified custodians and third-party

validators and for evaluating liquid staking, restaking and related asset-utilization opportunities.

We seek to enhance the productivity of our ETH holdings while maintaining institutional standards

for custody, liquidity, risk management, compliance and financial reporting.

We believe the

operating experience developed through these activities may improve our ability to evaluate

and execute future treasury opportunities.

Sheet Optimization and Capital Formation.

Our balance sheet and access to public capital

markets provide flexibility to pursue growth through equity issuances, equity-linked or other

financings and other capital-allocation actions, subject to market conditions.

elect to pledge a portion of our ETH as collateral in select loan transactions when management

determines that the terms are appropriate and consistent with our treasury strategy.

raised may be used to acquire ETH, support treasury or strategic initiatives or meet other

corporate needs, and we may repurchase shares when management believes doing so is accretive,

subject to available capital, applicable law and other considerations.

We evaluate these

decisions based on their expected long-term impact on ETH Concentration, liquidity, risk and

shareholder value.

Any ETH-secured borrowing would expose us to collateral-maintenance, repayment

and liquidation risks.

Expansion of ETH Holdings.

We intend to grow our ETH treasury through disciplined deployment

of capital and, where appropriate, capital formation, subject to market conditions, risk-management

parameters, liquidity needs and internal governance policies.

We evaluate ETH acquisitions,

treasury deployment and share repurchases based on their expected long-term effect on ETH

Concentration and shareholder value.

● Positioning

Within Expanding Institutional Use of Ethereum.

The Company manages its ETH treasury

with an awareness of broader institutional and enterprise adoption of Ethereum-based infrastructure,

including for stablecoin settlement, tokenization of real-world assets, institutional decentralized

finance and emerging agentic finance.

While Sharplink does not operate Ethereum or control

its adoption, we believe an ETH-focused treasury aligns our balance sheet with a network

that is increasingly used within institutional and commercial ecosystems.

We may also selectively

support independent organizations and strategic partnerships when management believes doing

so may strengthen Ethereum’s utility, resilience or institutional readiness and provide

potential long-term benefits to our treasury;

such organizations operate independently of

Mergers, Acquisitions and Consolidation Opportunities.

As the digital asset treasury

segment matures, we may evaluate mergers, acquisitions, investments or other business combinations

that could increase scale, add complementary assets or treasury capabilities, acquire operating

businesses that may benefit from our ETH holdings and balance sheet, or consolidate participants

in a fragmented market.

Our balance sheet scale, internal treasury capabilities and access

to liquidity may provide flexibility to pursue such opportunities;

however, there can be

no assurance that any transaction will be identified or completed or that any completed transaction

will achieve its anticipated benefits.

● Operational

and Governance Differentiation.

We seek to strengthen our competitive position through

disciplined treasury policies, qualified custody, transparent disclosure, internal controls

and governance practices tailored to digital asset treasury management.

As investor and regulatory

scrutiny of digital asset exposure evolves, we believe consistent execution, risk-management

discipline and institutional-grade controls may support broader market acceptance and long-term

shareholder value.

As the treasury and related revenue platform grow, we also seek to leverage

our corporate infrastructure across a larger asset and revenue base.

to Market, Technology and Regulatory Developments.

Sharplink regularly monitors digital

asset markets, Ethereum protocol developments and applicable laws and regulations and intends

to adjust its strategy as appropriate.

Such adjustments may include changes to treasury deployment,

staking and restaking activities, protocol participation, custody arrangements, collateral

practices, liquidity management or capital allocation to reflect evolving technology, market

structure, risk and regulatory requirements.

Growth Areas for the Ethereum Ecosystem

track four areas of growth for the Ethereum ecosystem that we believe may support long-term demand for ETH:

stablecoins, tokenization

of RWAs, institutional decentralized finance and agentic finance.

During the second quarter, stablecoin settlement volume expanded;

market infrastructure providers continued moving tokenized securities toward production;

institutional participation in on-chain strategies

and agent-initiated payment activity increased.

Management views these four areas as complementary sources of potential network

activity rather than independent or guaranteed drivers of demand.

finance refers to activity in which software agents transact, pay for data and services, and coordinate with other agents using programmable

wallets, stablecoins, identity tools and verifiable settlement.

Management believes Ethereum and its Layer 2 networks are positioned

to provide elements of this infrastructure.

During the first half of 2026, third parties reported continued growth in agent-initiated

stablecoin micropayment activity on Ethereum Layer 2 networks.

According to Crypto Briefing, Coinbase’s x402 went from near zero

in mid-2025 to more than 100 million cumulative transactions by the first quarter of 2026.

By late April 2026, Coinbase reported approximately

69,000 active agents, 165 million transactions and approximately $50 million in cumulative volume.

Separately, the Ethereum network reached

record levels of daily active addresses and transactions during the first half of 2026, including 3.6 million daily transfers across

approximately 600,000 daily active wallets.

Much of the reported x402 activity occurred on Base, an Ethereum Layer 2 network rather than

Ethereum mainnet, and some third-party analysts have indicated that early volume may include testing or speculative activity.

management views agentic finance as an emerging, not yet mature, contributor to on-chain activity.

Currently the Company is not actively participating in agentic finance either within its operations or as part of

our ETH Treasury Management Strategy.

Treasury Management Strategy

2 unchanged sentences

decision to accumulate ETH as a core treasury asset is grounded in a forward-looking view of the evolving global financial ecosystem.

We believe Ethereum’s unparalleled programmability, security and active developer ecosystem position it as a foundational layer

for decentralized finance and Web3 applications.

With Ethereum’s proof-of-stake consensus mechanism and the growth of highly scalable

Layer 2 networks, ETH has evolved into a yield-bearing, productive crypto asset with increasing institutional adoption and intrinsic

network value.

We view ETH as a digital asset trust commodity, offering the potential for long-term appreciation and yield generation

as more stablecoins and tokenized real-world assets leverage the Ethereum ecosystem.

key strategy of our ETH Treasury Management strategy is to raise capital to be used to increase our ETH holdings and generate yield opportunities

in a manner which is accretive to shareholders.

This can come in the form of equity, equity-linked debt, debt of any kind or any other

contract or arrangement intended to fund the purchase of ETH, whether or not such financing is formally classified as debt or equity

or other forms of offerings or arrangements (“Financings”), designed to maximize stockholder exposure to ETH within a prudent

risk management framework.

We also maintain the flexibility to buy back stock when it is accretive to stockholders.

We have not set a

specific target for the maximum amount of ETH we seek to hold.

diligently track and routinely report key performance indicators (“KPIs”) designed to offer investors transparency and insight

into the execution and effectiveness of our ETH Treasury Management strategies.

Among these metrics, our ETH concentration (“ETH

Concentration”), and growing it over time, has emerged as a central performance benchmark metric by which we gauge our progress.

ETH Concentration or ETH per Share, which is calculated by dividing our total ETH holdings by every 1,000 Assumed Diluted Shares outstanding,

reflects both the scale of our ETH accumulation efforts and the capital efficiency of our treasury operations.

By prioritizing this metric,

we underscore our commitment to driving long-term shareholder value, rather than short-term fluctuations in asset prices or market capitalization.

Diluted Shares Outstanding (as defined below) represents the sum of (i) our actual shares of common stock, par value $0.0001 per share

(the “Common Stock”) issued and outstanding as of the end of each reporting period, plus (ii) the additional shares that

would be issued upon the assumed exercise or settlement of all outstanding warrants, pre-funded warrants, stock option awards, and restricted

stock units (“Assumed Diluted Shares Outstanding”).

Assumed Diluted Shares Outstanding is not calculated using the treasury

stock method.

It does not account for equity award vesting conditions, stock option exercise prices, or contractual restrictions limiting

the convertibility of debt instruments.

Additionally, it excludes any assumed share repurchases that would ordinarily be considered under

the treasury stock method.

currently generate yield on our ETH holdings through native staking and liquid staking and restaking arrangements, which include participation

in protocols that issue liquid staking tokens (“LSTs”) such as LsETH and liquid restaking tokens (“LRTs”) such

In native staking, our ETH is deposited into the Ethereum smart contract while withdrawal credentials remain controlled by

our custodian, and the underlying ETH is not derecognized.

Rewards earned from native staking are recognized as revenue as earned.

We believe Ethereum’s programmability, security and active developer ecosystem position it as foundational infrastructure for programmable

financial activity.

With Ethereum’s PoS consensus mechanism and the growth of scalable Layer 2 networks, ETH can be deployed

productively through staking and related activities while retaining exposure to network growth.

Management believes Ethereum entered

a more mature phase of institutional adoption during the period.

We seek to participate in that adoption cycle as a disciplined, long-term

holder and productive steward of ETH, with an objective of compounding ETH Concentration over time.

view ETH Treasury Management as a core operating business.

Our strategy combines a foundational staking layer with selective treasury

activities intended to generate incremental, risk-adjusted ETH-denominated rewards and other returns above the staking baseline.

treasury grows, scale is expected to improve our ability to access institutional capital, negotiate deployment opportunities and leverage

our corporate infrastructure across a larger asset and revenue base.

Our staking and treasury activities are designed to support Ethereum’s

decentralization, scalability and security while meeting institutional standards for custody, transparency, risk management and governance.

capital allocation framework is designed to increase shareholder exposure to ETH within a prudent risk-management framework.

capital issuance, ETH accumulation, treasury deployment and share repurchases dynamically based on market conditions and the expected

long-term effect on ETH Concentration and shareholder value.

Capital may be raised through equity, equity-linked debt, debt or other contracts

or arrangements intended to fund the purchase of ETH, whether or not classified as a liability, debt or equity (collectively, “Financings”).

We may seek to access capital when terms are attractive, acquire ETH at prices management considers attractive, and repurchase shares

when management believes they trade below its assessment of underlying value, subject in each case to available capital, applicable law

and other considerations.

We have not set a specific target for the maximum amount of ETH we seek to hold.

track and report key performance indicators (“KPIs”) designed to provide transparency into the execution and effectiveness

of our ETH Treasury Management strategy.

Among these, ETH Concentration and its growth over time are central measures by which we evaluate

ETH Concentration is calculated by dividing total ETH holdings by Basic-Equivalent Shares Outstanding and expressing the result

per 1,000 shares.

The metric reflects both the scale of our ETH accumulation and the capital efficiency of our treasury operations.

prioritizing this metric, we focus on long-term shareholder value rather than short-term fluctuations in asset prices or market capitalization.

view disciplined capital allocation and treasury productivity as complementary sources of potential compounding.

Capital allocation can

expand the ETH base, while native staking, liquid staking, restaking and selected on-chain treasury activities can generate additional

ETH-denominated rewards or other returns on that base.

We evaluate such activities on a risk-adjusted basis, with emphasis on liquidity,

qualified custody, operational controls and institutional governance.

Basic-equivalent

shares outstanding consist of common shares outstanding plus shares issuable upon exercise of pre-funded warrants, which carry a nominal

exercise price.

We currently generate yield on our ETH holdings through native staking and liquid staking and restaking arrangements,

which include participation in protocols that issue LSTs, such as LsETH, and LRTs, such as weETH.

In native staking, our ETH is deposited

into the Ethereum smart contract while withdrawal credentials remain controlled by our custodian, and the underlying ETH is not derecognized.

Rewards earned from native staking are recognized as revenue is earned.

Revenue is also recognized for amounts earned under third-party

arrangements to provide and maintain TVL or similar protocol services (“protocol incentives”), which are accounted for separately

under applicable revenue recognition guidance.

liquid staking and restaking arrangements, we deposit ETH into third-party protocols and receive LsETH or weETH, respectively, which

12 unchanged sentences

revenue recognition guidance.

our ETH Treasury Management strategy is complemented by our active participation in the Ethereum ecosystem.

We are a founding member

of the Linea Consortium, along with Consensys, see Note 12 - Related Parties, a leading governance body supporting the development of

Ethereum’s most aligned Layer 2 blockchain network.

Our participation in the consortium enables us to help steer capital allocation

toward high-impact infrastructure, public goods and innovation pipelines that are intended to strengthen the long-term utility and defensibility

of the Ethereum network, reinforcing the intrinsic value of our own ETH treasury assets.

Treasury Management

June 2025, we formally launched our ETH-centered treasury strategy and established staking as a dedicated operating segment, reflecting

its role in generating yield-based returns on our digital asset holdings.

Our ETH Treasury Management segment includes both native staking

and liquid staking and restaking activities.

native staking, we delegate ETH to third-party validators that participate in the Ethereum network’s proof-of-stake consensus mechanism.

In return, we earn protocol-level rewards in ETH, which are recognized as revenue as earned and are generally based on the amount of

ETH staked and overall network activity.

also participate in liquid staking and restaking arrangements, whereby we deposit ETH into third-party protocols and receive liquid staking

tokens (“LSTs”), such as LsETH, and liquid restaking tokens (“LRTs”), such as weETH.

These tokens represent a

redeemable claim on the underlying staked ETH and are accounted for as indefinite-lived intangible assets measured at cost less impairment.

addition to staking and restaking rewards, we earn incentive-based revenue from third-party arrangements related to maintaining TVL within

certain blockchain ecosystems.

These incentives are typically paid in digital assets and are recognized as revenue in accordance with

applicable revenue recognition guidance.

Changes in the value of LSTs and LRTs arising from protocol-based reward mechanisms are reflected

in exchange rate movements relative to ETH and do not constitute revenue until realized through redemption or sale.

initiating our ETH Treasury Management operations in June of 2025, we have accumulated approximately 872,984 in total ETH holdings,

comprised of 590,823 in native ETH and 209,789 and 72,372 ETH on an as if redeemed basis from LsETH and weETH, respectively, as of May 4, 2026.

holdings were derived through purchases of ETH, receipts of ETH from investors and ETH rewards.

For the three months ended March 31,

2026, revenues generated from native staking rewards totaled $10,467.

These native staking rewards represent the ETH-based rewards

accumulated through the delegation of ETH to staking validators, which we expect to scale materially in future quarters in

correlation with growth in our treasury balance and broader ETH market performance.

The foregoing revenue does not include staking

rewards generated from our LsETH or weETH holdings.

These receipt tokens increase in value over time due to protocol-based reward

mechanisms reflected in changes in exchange rates relative to ETH;

however, such increases do not represent revenue and are not

recognized in our financial statements until realized through redemption or sale.

See Liquid Staking and Wrapped Ether Protocol

disclosure below.

view our ETH Treasury Management operations as a core strategic pillar and its broader alignment with the Ethereum ecosystem.

and future strategy includes pursuing yield and performance through staking and other treasury activities designed to generate yield

and other returns, while contributing directly to Ethereum’s decentralization, scalability, and security.

Moreover, we believe

staking is foundational to a new generation of blockchain-native capital structures that enable corporations to earn yield without relying

on traditional debt instruments, equities, or centralized intermediaries.

Our staking and treasury efforts are focused on maximizing

risk-adjusted yield, managing operational and market risks, and ensuring our operations meet institutional standards for transparency,

efficiency and governance.

December 20, 2025, the Company executed the definitive agreement providing for allocation of at least $200 million in ETH for deployment

on Linea over the following six months in a risk-managed manner over a multi-year commitment period.

The Company expects to leverage

Linea’s institutional-grade infrastructure to optimize onchain yield to capture differentiated ETH denominated returns.

This differentiated

yield is expected to combine native ETH yield, restaking rewards from securing EigenCloud Autonomous Verifiable Services (AVSs), and

direct Linea and ether.fi protocol incentives, all within a compliant Layer 2 infrastructure.

Consensys will not receive any fees or

commission on the Company’s deployment of ETH on Linea.

As of March 17, 2026, the Company had completed deployment of $200 million

of ETH assets to Linea, converting 71,726 ETH into 66,102 units of weETH in connection with the deployment.

accounting models applicable to ETH, LsETH and weETH may cause period-to-period results to include unrealized fair-value changes or impairment

charges that do not represent realized cash gains or losses and do not, by themselves, change the number of digital asset units held.

Accordingly, management evaluates reported results together with the quantity and composition of digital assets held, ETH-denominated

rewards and protocol incentives earned, and related cash flows.

the quarter and shortly thereafter, several independent organizations focused on protocol research, institutional adoption and privacy

and compliance infrastructure were launched or advanced, as described under “Ecosystem Stewardship.” At the same time, we

observed continued development across four areas that management believes may support long-term demand for ETH:

stablecoin settlement,

tokenization of real-world assets (“RWAs”), institutional decentralized finance and agentic finance.

We view these developments

as part of a broader, increasingly specialized institutional ecosystem around Ethereum.

initiating our ETH Treasury Management operations, we have accumulated approximately 888,938 in total ETH holdings, comprised of

634,255 in native ETH and 181,748 and 72,935 in ETH on an as if redeemed basis from LsETH and weETH, respectively, as

of August 3, 2026.

The ETH holdings were derived through purchases of ETH, receipts of ETH from investors and ETH rewards.

three and six months ended June 30, 2026, revenues generated from native staking rewards totaled $8,575 and $18,693 (in thousands).

These native staking rewards represent the ETH-based rewards accumulated through the delegation of ETH to staking validators, which

we expect to scale in future quarters in correlation with growth in our treasury balance and broader ETH market performance.

revenue does not include staking rewards generated from our LsETH or weETH holdings.

These receipt tokens increase in value over

time due to protocol-based reward mechanisms reflected in changes in exchange rates relative to ETH;

however, such increases do not

represent revenue and are not recognized in our financial statements until realized through redemption or sale.

Staking Protocol” disclosure below.

ETH Treasury Management segment includes native staking, liquid staking, restaking activities and protocol incentives.

Staking Protocol

5 unchanged sentences

LsETH is accounted for as an

indefinite-lived intangible asset under ASC 350-30, and recorded at cost, less any impairment losses.

indefinite-lived intangible asset under ASC 350-30, and recorded at historical cost, less any impairment losses.

Liquid Collective protocol establishes a daily Protocol Conversion Rate (“PCR”), which reflects the amount of ETH into which

8 unchanged sentences

As a result, we may not be able to redeem our holdings immediately.

of March 31, 2026, we held 189,327 LsETH tokens.

of June 30, 2026, we held 163,083 LsETH tokens.

The following table presents a roll-forward of our LsETH holdings, including relevant

details related to LsETH purchases, redemptions and impairment losses within the periods presented.

thousands, except number of LsETH and price of LsETH

of capital used to purchase LsETH

original cost basis

impairment losses

carrying value

of LsETH held

average purchase price per LsETH

Average LsETH Conversion Rate at Acquisition

Conversion Rate at End of Period

at December 31, 2025

impairment losses

as of March 31, 2026

Amounts are presented in thousands of U.S.

dollars, except for shares, units, and per-share and per-unit amounts,

and except where amounts are specifically denoted in millions or billions.

Certain amounts presented in thousands may not sum precisely

due to rounding;

per-share and per-unit amounts are calculated from underlying unrounded figures.

Balance as of December 31, 2025

LsETH acquisitions

LsETH redemptions

LsETH impairment losses

Balance as of March 31, 2026

LsETH acquisitions

LsETH redemptions

LsETH impairment losses

Balance as of June 30, 2026

Earned through rebates offered by protocol provider.

following table shows the number of LsETH held at the end this period, as well as market value calculations of our LsETH holdings based

on the lowest, highest, and ending market prices of one LsETH on the Coinbase exchange (our principal market):

Period End Date

Number of LsETH Held at End of Quarter

Lowest Market Price of LsETH Held During the Quarter (b)

Market Value of LsETH held using Lowest Market Price (c)

Highest Market Price of LsETH Held During the Quarter (d)

Market Value of LsETH held using Highest Market Price (e)

Market Price of LsETH Held at End of Quarter (f)

Market Value of LsETH Held at End of Quarter (g)

March 31, 2026

following table shows the number of LsETH held at the end of these periods, as well as market value calculations of our LsETH holdings

based on the lowest, highest, and ending market prices of one LsETH on the Coinbase exchange (our principal market):

June 30, 2026

The “Lowest Market Price of LsETH During the Quarter” represents the lowest market

8 unchanged sentences

without regard to when we purchased any of our LsETH.

Due to the illiquidity and volatility

of LsETH, the highest market price shown reflects a brief intraday dislocation on a de minimis

quantity of fractional tokens.

The “Market Value of LsETH Held Using Highest Market Price” represents a mathematical

16 unchanged sentences

or regulatory oversight may materially impact pricing, liquidity and valuation methodologies.

Accordingly, the Market Value amounts

reported above may not accurately reflect the fair market value of LsETH, and the actual realizable value of our holdings could differ

materially from the calculated figures.

Accordingly, the Market Value amounts reported

above may not accurately reflect the fair market value of LsETH, and the actual realizable value of our holdings could differ materially

from the calculated figures.

Restaking Protocol

noted previously, on December 18, 2025, the Company executed the definitive agreement providing for allocation of at least $200 million

in ETH for deployment on Linea over the following six months in a risk-managed manner over a multi-year commitment period.

expects to leverage Linea’s institutional-grade infrastructure to optimize onchain yield to capture differentiated ETH denominated

This differentiated yield is expected to combine native ETH yield, restaking rewards from securing EigenCloud Autonomous Verifiable

Services (AVSs), and direct Linea and Ether.fi protocol incentives, all within a compliant Layer 2 infrastructure.

Consensys will not

receive any fees or commission on the Company’s deployment of ETH on Linea.

Our digital assets, including ETH and weETH, are held

in our name by Anchorage Digital Bank N.A., our qualified custodian, on both Ethereum and Linea.

in ETH for deployment on Linea.

assets, including ETH and weETH, are held in our name by Anchorage Digital Bank N.A., our qualified custodian, on both Ethereum and Linea.

depositing ETH into the ether.fi protocol and minting weETH, we derecognize the ETH transferred and recognize weETH as a new unit of

account at its fair value on the mint date.

Derecognition reflects the difference between the fair value of weETH received and the carrying

amount of the ETH transferred is recognized as a realized gain (loss) on the condensed consolidated statement of operations.

provides the holder with an enforceable, pro-rata claim on ETH and accumulated rewards held by the ether.fi protocol, weETH fails the

scope criterion in ASC 350-60-15-1(b), which requires that a crypto asset not provide the holder with enforceable rights to or claims

on underlying goods, services, or other assets.

Accordingly, weETH is outside the scope of ASC 350-60 and is accounted for as an indefinite-lived

intangible asset under ASC 350-30.

liquid restaking protocol uses a floating conversion rate, or PCR, between the receipt token and staked tokens, reflecting the value

of accrued network rewards, penalties, and fees associated with the staked ETH.

The conversion rate between weETH and ETH increases over

time as staking rewards accrue to the protocol;

The difference between the fair value of weETH received and the carrying amount of the ETH

transferred is recognized as a realized gain or loss in the condensed consolidated statement of operations.

Because weETH provides the

holder with an enforceable, pro rata claim on ETH and accumulated rewards held by the ether.fi protocol, weETH does not meet the scope

criterion in ASC 350-60-15-1(b), which requires that a crypto asset not provide the holder with enforceable rights to or claims on underlying

goods, services or other assets.

Accordingly, weETH is outside the scope of ASC 350-60 and is accounted for as an indefinite-lived intangible

asset under ASC 350-30.

liquid restaking protocol uses a floating conversion rate, or PCR, between the receipt token and staked tokens, reflecting accrued network

rewards, penalties and fees associated with the staked ETH.

The conversion rate between weETH and ETH increases over time as staking

rewards accrue to the protocol;

no new or additional tokens are received.

In addition to the core weETH accretion, we

are entitled to monthly incentive payments funded by ether.fi, Linea, and EigenCloud under a SPA, with Consensys acting as program administrator.

We have concluded that ether.fi, Linea, and Eigen 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.

Consensys is a conduit and

is not considered a customer.

consider each incentive stream as variable (based on month-end TVL metrics and subject to contractual caps) and is paid in a noncash

We estimate variable consideration using the expected value method and the noncash consideration is measured at fair value at contract

inception in accordance with ASC 606-10-32-21;

subsequent changes in the fair value of the underlying tokens attributable solely to the

form of consideration do not adjust the transaction price.

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.

At each month-end, we

recognize a receivable for the incentives earned for that period, measured at the fair value of the tokens to be received.

In addition to the core weETH accretion, we are entitled to

monthly protocol incentives funded by ether.fi, Linea and EigenCloud under a strategic partnership agreement (“SPA”), with

Consensys acting as program administrator.

We have concluded that ether.fi, Linea and EigenCloud are each customers under ASC 606 because

they provide consideration in exchange for our service of providing and maintaining TVL on Linea, which is an output of our ongoing treasury

Consensys is a conduit and is not considered a customer.

protocol incentive is variable consideration based on month-end TVL metrics, subject to contractual caps and payable in noncash form.

We estimate variable consideration using the expected-value method, and noncash consideration is measured at fair value at contract inception

in accordance with ASC 606-10-32-21;

subsequent changes in the fair value of the underlying tokens attributable solely to the form of

consideration do not adjust the transaction price.

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.

At each month-end, we recognize

a receivable for the protocol incentives earned for that period, measured at the fair value of the tokens to be received.

Because settlement

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Upon receipt of the tokens, we reclassify the receivable and embedded derivative to the applicable crypto asset account.

of March 31, 2026, we held 66,102 weETH tokens.

of June 30, 2026, we held 66,267 weETH tokens.

The following table presents a roll-forward of our weETH holdings, including relevant

details related to weETH purchases and impairment losses within the periods presented.

thousands, except number of weETH and price of weETH

of capital used to purchase weETH

original cost basis

impairment losses

carrying value

of weETH held

average purchase price per weETH

Average weETH Conversion Rate at Acquisition

Conversion Rate at End of Period

at December 31, 2025

impairment losses

as of March 31, 2026

Earned through rebates offered by protocol provider.

Amounts are presented in thousands of U.S.

dollars, except for shares,

units, and per-share and per-unit amounts, and except where amounts are specifically denoted in millions or billions.

Certain amounts

presented in thousands may not sum precisely due to rounding;

per-share and per-unit amounts are calculated from underlying unrounded

Balance as of December 31, 2025

weETH acquisitions

weETH redemptions

weETH impairment losses

Balance as of March 31, 2026

weETH acquisitions

weETH redemptions

weETH impairment losses

Balance as of June 30, 2026

Value of initial staked ETH into ether.fi and earned incentives.

following table shows the number of weETH held at the end of this period, as well as market value calculations of our weETH holdings

based on the lowest, highest, and ending market prices of one weETH using observable prices across multiple active exchange, utilizing

the pricing data aggregator CoinGecko:

Period End Date

Number of weETH Held at End of Quarter

Lowest Market Price of weETH Held During the Quarter (b)

Market Value of weETH held using Lowest Market Price (c)

Highest Market Price of weETH Held During the Quarter (d)

Market Value of weETH held using Highest Market Price (e)

Market Price of weETH Held at End of Quarter (f)

Market Value of weETH Held at End of Quarter (g)

March 31, 2026

based on the lowest, highest, and ending market prices of one weETH using observable prices across multiple active exchanges.

As the volume of weETH trades can significantly fluctuate between multiple decentralized and centralized exchanges,

the Company periodically assesses the principal market for weETH.

June 30, 2026

The “Lowest Market Price of weETH During the Quarter” represents the lowest market

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calculation consisting of the lowest market price for one weETH reported during the respective

quarter multiplied by the number of weETH held by us at the end of the applicable period.

quarters multiplied by the number of weETH held by us at the end of the applicable periods.

The “Highest Market Price of weETH During the Quarter” represents the highest

market price for one weETH reported during the respective quarter, without regard to when

market price for one weETH reported during the respective quarters, without regard to when

we purchased any of our weETH.

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calculation consisting of the highest market price for one weETH reported during the respective

quarter multiplied by the number of weETH held by us at the end of the applicable period.

quarters multiplied by the number of weETH held by us at the end of the applicable periods.

The “Market Price of weETH at End of Quarter” represents the market price of

one weETH at midnight UTC on the last day of the respective quarter.

one weETH at midnight UTC on the last day of the respective quarters.

The “Market Value of weETH Held at End of Quarter” represents a mathematical

calculation consisting of the market price of one weETH at midnight UTC on the last day of

the respective quarter multiplied by the number of weETH held by us at the end of the applicable

Developments — SEC/CFTC Joint Interpretation on Digital Assets (March 17, 2026)

March 17, 2026, the SEC and the Commodity Futures Trading Commission (“CFTC”) issued a joint interpretation addressing the

application of federal securities and commodities laws to certain digital assets and related transactions.

The interpretation is intended

to provide market participants with greater clarity regarding the regulatory treatment of digital assets and to support ongoing Congressional

efforts to establish a comprehensive digital asset market structure framework.

joint interpretation introduces a functional taxonomy distinguishing among digital commodities, digital collectibles, digital tools,

stablecoins, and digital securities.

It further explains how a digital asset that itself is not a security may nonetheless be sold as

part of an “investment contract,” and how such an asset may cease to be subject to an investment contract over time as the

underlying facts and circumstances evolve.

SEC and CFTC also clarified the application of federal securities laws to airdrops, protocol mining, protocol staking, and the wrapping

of non-security digital assets.

The agencies stated that the CFTC will administer the Commodity Exchange Act in a manner consistent with

the SEC’s interpretation.

is evaluating the potential implications of this interpretation on the Company’s digital asset activities, including the classification,

measurement, and disclosure of digital assets held in treasury and any activities involving protocol staking or other network participation.

Based on the Company’s current operations and information available as of the date of this filing, the Company does not expect

the interpretation to have a material impact on its condensed consolidated financial statements.

The Company will continue to monitor

regulatory developments and update its disclosures as appropriate.

the respective quarters multiplied by the number of weETH held by us at the end of the applicable

Value versus Market Value

described in our condensed consolidated financial statements, our LsETH and weETH are outside the scope of ASC 350-60, Intangibles—Goodwill

and Other—Accounting for and Disclosure of Crypto Assets, and are accounted for as indefinite-lived intangible assets under

ASC 350-30, Intangibles—Goodwill and Other—General Intangibles Other Than Goodwill, recorded at cost, less any impairment

recognized since acquisition.

this cost-less-impairment model, we recognize an impairment loss whenever the observable market price of an LsETH or weETH token falls

below its carrying value at any time since we acquired that token, and the reduced amount becomes the token’s new cost basis.

asset has been impaired, its carrying value is not adjusted for any subsequent recovery or appreciation in market price.

the carrying amounts of these assets on our condensed consolidated balance sheet may be less than their current market value, and our

financial statements do not reflect any unrealized appreciation on these holdings.

Appreciation, if any, would only be recognized in

earnings upon a derecognition event, such as the redemption of the receipt token for ETH, a sale, or an exchange measured as the difference

between the consideration received and the asset’s carrying amount, in accordance with ASC 610-20, Other Income - Gains and Losses

from the Derecognition of Nonfinancial Assets .

following table compares the carrying value of our crypto assets accounted for at historical cost less impairment to the calculated market

value of those assets as of June 30, 2026.

The market-value amounts are determined using the mathematical calculations described

in the LsETH and weETH tables above (see footnotes (f) and (g)) — the number of tokens held at period end multiplied by the applicable

end-of-period market price.

These amounts do not represent fair value for purposes of financial-statement recognition and do not represent

amounts we would realize upon sale or redemption.

These calculations are presented solely as supplemental information.

They are not a

substitute for the amounts presented in our financial statements that are stated in conformity with accounting principles generally accepted

in the United States of America (“GAAP”).

As of June 30, 2026 (in thousands)

Carrying Value

Excess of Market Value over Carrying Value

Total Crypto Assets at cost

Sharplink Onchain Yield Fund

May 11, 2026, Sharplink announced a non-binding memorandum of understanding with Galaxy Digital to establish the Galaxy Sharplink

Onchain Yield Fund.

On August 7, 2026, the Company and Galaxy Digital executed definitive agreements establishing the Galaxy

Sharplink Onchain Yield Fund, LP, a $125.0 million institutional investment vehicle designed to deploy ETH into professionally

managed onchain yield strategies.

The Fund launched with $125.0 million in committed capital, including a $100.0 million commitment

from the Company’s staked ETH treasury and a $25.0 million commitment from Galaxy.

Galaxy serves as the Fund’s

investment manager and is responsible for opportunity sourcing, risk management and capital deployment.

The Fund is designed to

maintain exposure to ETH and underlying staking rewards while deploying capital into targeted onchain yield strategies.

also intends to leverage the Fund’s institutional investment process and risk management framework as a framework for

evaluating additional external treasury strategies.

The launch of the Fund represents an important milestone in the Company’s

broader ETH treasury management strategy by expanding beyond passive ownership of ETH into institutional-grade onchain capital

deployment designed to generate additional risk-managed returns.

See Note 14 – Subsequent Events.

the quarter and shortly thereafter, the Company selectively allocated capital to independent organizations addressing three complementary

areas of Ethereum’s institutional development:

protocol research through Ethlabs, institutional adoption through Ethereum Institutional,

and privacy and compliance infrastructure through EthSystems.

Management views these as strategic capital allocations because strengthening

Ethereum’s utility and institutional readiness may support long-term demand for ETH, the Company’s primary reserve asset.

Each organization operates independently of Sharplink, and the Company does not direct its research agenda, operations or day-to-day

All contributions and the investment described below were funded from the Company’s balance sheet, including capital

raised during the period, as further detailed under “Liquidity and Capital Resources.”

is an independent nonprofit research and development organization formed in June 2026 to advance the Ethereum protocol for the next phase

of institutional adoption.

Co-founded by former senior Ethereum Foundation researchers, its work focuses on settlement speed, interoperability,

mainnet capacity and research into the monetary properties of ETH.

Sharplink is one of several funders, alongside Bitmine Immersion Technologies,

Sharplink Chairman Joseph Lubin and more than 50 other participants.

The funding structure is intended to preserve the organization’s

independence.

Contributions flow through an independent grants administrator that handles screening, valuation and disbursement.

receive quarterly reporting and an independent annual audit but do not direct the research agenda;

final decisions on research priorities

and technical direction rest with Ethlabs leadership.

Research is published openly.

Institutional

Institutional is an independent nonprofit launched in July 2026 to serve as a dedicated, neutral point of entry for institutions adopting

It builds on institutional engagement work previously led by the Ethereum Foundation’s go-to-market team and maintains

relationships across banks, asset managers, custodians and market infrastructure providers.

Sharplink is one of the anchoring funders,

alongside Bitmine Immersion Technologies, Sharplink Chairman Joseph Lubin and dozens of other contributors.

The organization operates

under a stated mandate of credible neutrality and does not favor any single scaling path or deployment.

Its board of directors is comprised

of Sharplink Chief Executive Officer Joseph Chalom and Bitmine Chairman Thomas Lee, along with the founding assembly members David Walsh,

who will serve as Executive Director and President of the Board of Directors, Marius Smith and Matthew Dawson.

is a for-profit engineering and research company building privacy and compliance technology intended to allow banks, asset managers and

other regulated institutions to transact on Ethereum at scale without exposing sensitive information such as trade details or client

Its approach uses cryptographic methods, including zero-knowledge proofs, encrypted computation and privacy-focused networks

built on Ethereum.

It was founded by the team that built and led the Ethereum Foundation’s Institutional Privacy Task Force, whose

members have worked directly with central banks, regulators and financial institutions and whose backgrounds span the Ethereum Foundation,

Goldman Sachs and Status.

The company launched with a year of open-source work already published.

Together with Ethlabs and Ethereum

Institutional, EthSystems addresses the privacy and compliance layer of the emerging institutional ecosystem around Ethereum.

to the close of the quarter, in July 2026, the Company participated as an investor in the launch financing of EthSystems, alongside Bitmine

Immersion Technologies and Sharplink Chairman Joseph Lubin.

Management views the investment as consistent with its belief that increased

institutional activity on Ethereum may support demand for ETH and that institutional-grade privacy is an important prerequisite for that

the second quarter of 2026, the SEC advanced its regulatory posture toward digital assets by adding three crypto-specific rulemaking

initiatives to its July 7, 2026 regulatory agenda.

These initiatives – which are focused on crypto asset offerings, broker-dealer

custody and financial responsibility requirements, and digital asset market structure – represent a shift toward more formalized

and comprehensive oversight of U.S.

digital asset markets.

Management believes this development marks a meaningful evolution from the

historically enforcement-driven approach toward one that may provide clearer expectations for market participants, including issuers,

custodians, trading venues and institutional investors.

companies that maintain digital asset treasuries, including those that hold ETH as a primary reserve asset, the SEC’s agenda may

provide additional clarity regarding the regulatory environment in which treasury operations evolve.

The proposed broker-dealer amendments

and market-structure rules may influence how custodial partners manage digital assets, how liquidity is accessed across regulated venues,

and how digital asset holdings are integrated into traditional financial-reporting and risk-management frameworks.

While the rulemaking

process remains ongoing, management views the SEC’s agenda as consistent with the continued maturation of regulated digital asset

markets and the Company’s strategy to align its treasury practices with institutional standards.

March 17, 2026, the U.S.

Securities and Exchange Commission (“SEC”) and the Commodity Futures Trading Commission (“CFTC”)

issued a joint interpretation addressing the application of federal securities and commodities laws to certain digital assets and related

transactions.

The guidance establishes a functional taxonomy for digital assets, distinguishes among various categories of digital assets,

and provides additional clarity regarding the application of the federal securities laws to matters such as investment contracts involving

digital assets, airdrops, protocol mining, protocol staking and the wrapping of non-security digital assets.

The agencies also stated

that the CFTC intends to administer the Commodity Exchange Act in a manner consistent with the SEC’s interpretation, where applicable.

the second quarter of 2026, Congress also continued to advance legislation intended to establish a comprehensive federal regulatory framework

for digital assets, including proposed legislation that would allocate regulatory authority between the SEC and the CFTC and establish

a statutory framework for digital asset market structure.

Although such legislation had not been enacted as of June 30, 2026, these developments

reflect continued progress toward greater regulatory clarity for the digital asset industry.

continues to evaluate the impact of these regulatory developments on our business, including our digital asset treasury activities and

protocol staking operations.

Based on Sharplink’s operations and information available as of the date of this Quarterly Report,

management does not believe these developments have had, or are reasonably likely to have, a material effect on the Company’s business,

results of operations, financial condition or condensed consolidated financial statements.

The Company will continue to monitor regulatory

and legislative developments and will update its disclosures, as appropriate.

December 2021, we acquired certain assets of FourCubed, including FourCubed’s online casino gaming-focused affiliate marketing

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retention and conversions to regulated and global casino gaming operator partners worldwide.

In fact, PAS won industry recognition as

the European online gambling industry’s Top Affiliate Manager, Top Affiliate Website and Top Affiliate Program for four consecutive

years by both igamingbusiness.com and igamingaffiliate.com.

The strategic acquisition of FourCubed brought us talent with proven experience

in affiliate marketing services and recurring net gaming revenue (“NGR”) contracts with many of the world’s leading

online casino gambling companies, including Party Poker, bwin, UNIBET, GGPoker, 888 poker, betfair, World Poker Tour and others.

part of our strategy to expand our affiliate marketing services to the emerging American sports betting market, in November 2022, we

began a systematic roll-out of our U.S.-focused performance-based marketing business with the launch of 15 state-specific, content-rich

affiliate marketing websites.

Our user-friendly, state-specific domains are designed to attract, acquire and drive local sports betting

and casino traffic directly to our sportsbook and casino partners, which are licensed to operate in each respective state.

2026, we are licensed to operate in 18 jurisdictions and own and operate sites serving 17 U.S.

states (Arizona, Colorado, Iowa, Illinois,

Indiana, Kansas, Louisiana, Maryland, Michigan, New Jersey, New York, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia and Wyoming).

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

Markets Funds Raised -

part of our strategy to expand our affiliate marketing services to the emerging American sports betting market, we rolled-out of our

U.S.-focused performance-based marketing business with content-rich affiliate marketing websites.

As of July 2026, we are licensed to

operate in 18 jurisdictions and own and operate sites serving 17 U.S.

states (Arizona, Colorado, Iowa, Illinois, Indiana, Kansas, Louisiana,

Maryland, Michigan, New Jersey, New York, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia and Wyoming).

We largely utilize search

engine optimization and programmatic advertising campaigns to drive traffic to our direct-to-player (“D2P”) sites.

Markets and Public Market Developments

Million Registered Direct Offering

June 22, 2026, the Company entered into a securities purchase agreement (the “Purchase Agreement”) with an institutional

investor (the “Investor”) to sell in a registered direct offering (the “June 2026 Offering”) an aggregate of

10,013,351 shares (the “Shares”) of the Company’s Common Stock, par value $0.0001 per share (the “Common

Under the Purchase Agreement, the Company also issued the Investor 10,013,351 warrants to purchase up to 10,013,351

shares of Common Stock (the “Warrants” and the shares underlying the Warrants, the “Warrant Shares”).

Warrant has an exercise price of $8.15 per share, is immediately exercisable and will expire four years from the date of issuance.

If the Warrants are fully exercised, the Company will receive approximately $81.6 million in additional aggregate gross proceeds.

The price per unit was $7.49, and the gross proceeds from the June 2026 Offering, before deducting the placement agent fees and

offering expenses, were approximately $75.0 million, with net proceeds of $73.3 million after deducting placement agent fees and

offering expenses of $1.7 million, which were recorded in additional paid in capital.

The Offering closed on June 23, 2026.

Company intends to use the net proceeds received from the June 2026 Offering to acquire ETH, repurchase shares of Common Stock and

general working capital purposes.

The Warrants Shares issued in the June 2026 Offering were classified as an equity instrument,

valued at $28.5 million using the relative fair value method and recorded in additional paid in capital.

The remaining $46.5 million

of the $75.0 million proceeds were allocated to Common Stock and also recorded in additional paid in capital, see Note 7 -

connection with the Offering, on June 22, 2026, the Company entered into a placement agent agreement (the “Placement Agent Agreement”)

with A.G.P./Alliance Global Partners (“A.G.P.”), as sole placement agent (the “Placement Agent”), pursuant to

which the Company engaged the Placement Agent as exclusive placement agent in connection with the Offering.

Under the Placement Agent

Agreement, the Company paid the Placement Agent a cash fee equal to 2.0% of the aggregate gross proceeds from the Securities sold in

the Offering.

At-The-Market

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Riley, and Citizens as additional sales agents and to make certain conforming changes.

elected not to conduct any sales under our ATM programs for the three months ended March 31, 2026.

See Note 6 - Equity for

results from recently closed capital market offerings.

line with management’s efforts to dynamically implement prudent capital markets strategy, we elected not to conduct any sales under

our ATM programs during the three and six months ended June 30, 2026.

See Note 6 - Equity for results from recently closed capital

market offerings.

of Stockholders

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of the Company’s named executive officers.

Index Inclusion

June 29, 2026, Sharplink was added to the Russell 2000 and Russell 3000 indexes as part of FTSE Russell’s semi-annual reconstitution.

Management views the inclusion as an external marker of the Company’s increased public-market scale and expects it may broaden

institutional visibility and index-linked participation;

however, index inclusion does not assure any level of investment demand, trading

liquidity or future performance.

of Asset Management Agreements

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Agreement”, and, together with the Galaxy Asset Management Agreement, the “Asset Management Agreements”).

to the ParaFi Termination Agreement, the Galaxy/ParaFi Asset Management Agreement will be terminated effective May 31, 2026.

the Company nor Galaxy or ParaFi shall 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 Galaxy or ParaFi

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

The decision to enter

into the Termination Agreements reflects the Company’s continued evolution, including the addition of internal asset management

personnel, and was not the result of any disagreement with either Galaxy or ParaFi.

to the ParaFi Termination Agreement, the ParaFi Asset Management Agreement will be terminated effective May 31, 2026.

Neither the Company

nor Galaxy or ParaFi shall 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 Galaxy or ParaFi any termination

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

The decision to enter into the Termination

Agreements reflects the Company’s continued evolution, including the addition of internal asset management personnel, and was not

the result of any disagreement with either Galaxy or ParaFi.

of Inducement Award Plan

August 19, 2025, the Board of Directors of the Company (the “Board”) adopted the Sharplink Gaming, Inc.

Inducement Award

Plan (the “Inducement Award Plan”).

The Inducement Award Plan was adopted without stockholder approval pursuant to Nasdaq

Listing Rule 5635(c)(4) and will be administered by the Compensation Committee of the Board or the independent members of the Board.

The Board reserved 3,000,000 shares of the Company’s common stock for issuance under the Inducement Award Plan, subject to adjustment

as provided in the plan document.

The terms of the Inducement Award Plan are substantially similar to the terms of the Company’s

Amended and Restated 2023 Equity Incentive Plan, with the exception that incentive stock options may not be issued under the Inducement

Award Plan and equity awards under the Inducement Award Plan (including nonqualified stock options, restricted stock, restricted stock

units, and other stock-based awards) may be issued only 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.

The Board also adopted a form of Restricted Stock Unit Agreement Notice

of Restricted Stock Unit Grant (Time-Based Grant) (the “Inducement Time-Based RSU Grant Package”) and a form of Restricted

Stock Unit Agreement Notice of Restricted Stock Unit Grant (Performance-Based Grant) (the “Inducement Performance-Based RSU Grant

Package”) for use under the Inducement Award Plan.

August 19, 2025, the Board of Directors (the “Board”) of the Company, then known as SharpLink Gaming, Inc., adopted the Sharplink

Inducement Award Plan (the “Inducement Award Plan”).

The Inducement Award Plan was adopted without stockholder

approval pursuant to Nasdaq Listing Rule 5635(c)(4) and will be administered by the Compensation Committee of the Board or the independent

members of the Board.

The Board reserved 3,000,000 shares of the Company’s Common Stock for issuance under the Inducement Award

Plan, subject to adjustment as provided in the plan document.

The terms of the Inducement Award Plan are substantially similar to the

terms of the Company’s Amended and Restated 2023 Equity Incentive Plan, with the exception that incentive stock options may not

be issued under the Inducement Award Plan and equity awards under the Inducement Award Plan (including nonqualified stock options, restricted

stock, restricted stock units, and other stock-based awards) may be issued only 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.

The Board also adopted a form of Restricted Stock

Unit Agreement Notice of Restricted Stock Unit Grant (Time-Based Grant) (the “Inducement Time-Based RSU Grant Package”) and

a form of Restricted Stock Unit Agreement Notice of Restricted Stock Unit Grant (Performance-Based Grant) (the “Inducement Performance-Based

RSU Grant Package”) for use under the Inducement Award Plan.

Share Repurchase Plan

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repurchased pursuant to the Repurchase Agreement.

For the three months ended March 31, 2026, the Company did not repurchase any shares

of its Common Stock.

May 5, 2025, we effected a one-for-twelve (1:12) reverse stock split of all the Company’s common stock, whereby the Company decreased

the number of issued and outstanding shares of common stock from 7,916,206 to 659,684.

Proportional adjustments for the reverse stock

split were made to the Company’s outstanding stock options, warrants and equity incentive plans.

All share and per-share data and

amounts have been retrospectively adjusted as of the earliest period presented in the financial statements to reflect the reverse stock

During the three months ended June 30, 2026, the Company repurchased 2,132,773 shares

of its Common Stock for $10.0 million.

There were no repurchases during the first quarter of 2026.

All repurchased shares are recorded as treasury

of Operations (in thousands, except for percentages)

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

For the Three Months Ended

March 31, 2026

March 31, 2025

For the Three Months Ended June 30, 2026

For the Three Months Ended June 30, 2025

For the Six Months Ended June 30, 2026

For the Six Months Ended June 30, 2025

Revenue from staking

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Unrealized loss on crypto assets at fair value, net

Total losses from operations

Total gains (losses) from operations, net

Operating expenses

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Selling, general, and administrative expenses

of crypto assets at cost

Stock-based compensation, related party

Impairment of crypto assets at cost

Total operating expenses

Operating loss

Total other income, net

Total other income

Net loss before income taxes

Income tax expense

Net loss from continuing operations

Net loss from discontinued operations, net of tax

the Three Months Ended March 31, 2026 Compared to the Three Months Ended March 31, 2025

the three months ended March 31, 2026, total revenue increased 1,525.1% to $12,058 compared to $742 reported for the same three-month

period in the prior year.

The notable increase was due to revenues from staking generated by our ETH Treasury Management segment, launched

in June 2025, which was $11,501, or 95.4% of our total revenues for the quarter ended March 31, 2026.

The revenues from staking have

immaterial costs and therefore nearly 100% gross margin.

The increase in revenues was offset by a -24.9% decline in revenues generated

in our Affiliate Marketing Segment, which generated $557 in revenues compared to $742 for the three months ended March 31, 2026 and 2025,

respectively.

The decrease in affiliate marketing revenues was primarily due to softening market conditions in the global iGaming industry,

changes in customer pricing structures and the loss of customers due primarily to evolving regulatory environments in certain foreign

markets in which our affiliate marketing business operates.

$ (1,079,835 )

the Three Months Ended June 30, 2026 Compared to the Three Months Ended June 30, 2025

the three months ended June 30, 2026, total revenue increased 1,554% to $11,528 compared to $697 reported for the same three-month period

in the prior year, respectively.

The increase was due to revenues from staking generated by our ETH Treasury Management segment, launched

in June 2025, which was $11,161, or 97% of our total revenues for the quarter ended June 30, 2026.

The increase in revenues was offset

by a -45.1% decline in revenues generated in our Affiliate Marketing Segment, which generated $367 in revenues compared to $668 for the

three months ended June 30, 2026 and 2025, respectively.

The decrease in affiliate marketing revenues was primarily due to continuing

softening market conditions in the global iGaming industry, seasonality in which the summer months post lower activity and the loss of

customers due primarily to evolving regulatory environments in certain foreign markets in which our affiliate marketing business operates.

Losses from Operations

recognized a gain on crypto assets at fair value of $12,005 and recorded an unrealized loss on crypto assets at fair value, net of $(506,664)

resulting from the sum of fair value accounting adjustments of ($506,464), due to the volatility in the price of ETH, and $(18) of unrealized

losses on rebate and incentive rewards earned for the three months ended March 31, 2026 as compared to zero for the same three month

period in the prior year.

the three months ended June 30, 2026, we recognized a realized gain on crypto assets at fair value of $1,433 and recorded an

unrealized loss on crypto assets at fair value, net of $(321,003) resulting from fair value accounting adjustments of $(320,921) due

to the volatility in the price of ETH, and $(82) of unrealized losses on rebate and incentive rewards earned for the three month

period ended June 30, 2026.

The majority of the unrealized losses is due to the ETH pricing during the period.

For the same three

month period in the prior year, we recognized a gain on crypto assets at fair value of $5,374 and recorded an unrealized loss on

crypto assets at fair value, net of $(2,437) resulting from fair value accounting adjustments due to the volatility in the price of

Operating Expenses

the three months ended March 31, 2026, cost of revenues - affiliate marketing decreased $(178) to $432 from $610 compared to the same

the three months ended June 30, 2026, cost of revenues - affiliate marketing decreased $(230) to $258 from $488 compared to the same

three-month period in the prior year.

This decrease is reflective of the decrease in revenues from Affiliate Marketing Segment.

three months ended March 31, 2026, total selling, general and administrative expenses increased 833.5% to $9,876 from $1,058 reported

This decrease is directly tied to the decrease in revenues from the Affiliate Marketing Segment.

For the three months ended June 30, 2026, total selling, general and administrative expenses increased 279.6% to $9,060 from $2,387 reported

for the same three-month period in the prior year.

The increase was primarily attributable to the following:

$1,254 in asset manager

fees, $2,570 in compensation costs, $1,251 in accounting, legal and compliance fees, $327 in custodial and banking fees.

These expenses

were incurred to establish and support our ETH Treasury Management strategy.

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

recognized an impairment loss on LsETH and weETH crypto assets of $191,670.

The increase was primarily attributable to higher costs for the full second quarter

of 2026 compared to the second quarter of 2025 as the ETH Treasury Management Strategy began at the end of May 2025.

The Company experienced

higher costs related to increased personnel headcount of $2,666, increased accounting, legal and compliance fees to $906 and increased

custodial and banking fees to $299 during the three months ended June 30, 2026 as compared to the same period for June 30, 2025.

the three months ended June 30, 2026, we also recognized an impairment loss on LsETH and weETH crypto assets of $76,093, a decrease of

$(11,720) from the prior year three month impairment loss of $87,813.

These crypto assets do not meet the scope criteria of ASC 350-60.

Accordingly, these crypto assets continue to be accounted for as indefinite-lived intangible assets under ASC 350-30 and are

measured at historical cost less cumulative impairment, rather than at fair value.

We did not incur any such impairment losses for the

same three month period in the prior year.

loss from operations increased 73,829% to $(684,579) for the three months ended March 31, 2026, compared to a net loss from operations

of $(926) reported for the same three-month period in 2025.

This is attributable to the impairment on crypto assets of LsETH and weETH

of $191,670 and an unrealized loss on our crypto assets at fair value, net which totaled $(506,664), offset by a $12,005 net realized

gains on our crypto assets, for the three months ended March 31, 2026.

Income (Loss) from Discontinued Operations, Net of Tax

the three months ended March 31, 2026, net income from discontinued operations, net of tax was zero compared to $(58), for the three

months ended March 31, 2025.

The prior period discontinued operations were associated with the wind down of certain MTS business amounts,

which are immaterial in the current period.

a result of the aforementioned reasons, net loss for the three months ended March 31, 2026 totaled $(685,561), climbing 70,214% when

compared to net loss of $(975) reported for the three months ended March 31, 2025.

Flows (in thousands, except for percentages)

Months Ended March 31, 2026 Compared to Three Months Ended March 31, 2025

of March 31, 2026, cash on hand was $16,875, a 1,127% increase when compared to cash on hand of $1,375 as of March 31, 2025.

was due to net proceeds raised from the PIPE, ATM and registered direct offerings completed from May through year end 2025, which increased

cash on hand at the end of 2025, compared to cash on hand at the end of March 31, 2025.

the three months ended March 31, 2026, net cash used in operating activities from continuing operations totaled $(10,646) compared to

net cash used in operating activities from continuing operations of $(453) in the prior year.

Net cash used in operating activities from

discontinued operations was zero, compared to net cash used in operating activities of $(61) from discontinued operations for the same

three-month period in 2025.

Overall, net cash used in operating activities was $(10,646) and $(514) for the three months ended March

31, 2026 and 2025, respectively.

The change in the operating cash flows was largely attributable to cash used in payments of accounts

payable and accrued expenses and prepaid expenses in the first quarter of 2026 as compared to the prior period.

the three months ended March 31, 2026, net cash provided by our investing activities from operations totaled $1,878, an increase of 476%

when compared to cash used in investing activities from operations of $(500) for the same three-month period in 2025.

Accordingly, these crypto assets continue to be accounted for as indefinite-lived intangible assets under ASC 350-30 and are measured

at historical cost less cumulative impairment, rather than at fair value.

Stock-based compensation, related party decreased 100% from

the prior year three month expense of $16,379 as the Company did not have any related party stock-based compensation during the second

quarter of the current year.

loss from operations increased 280.4% to $(393,453) for the three months ended June 30, 2026, compared to a net loss from operations

of $(103,433) reported for the same three-month period in the prior year.

This is attributable to unrealized loss on crypto assets at

fair value, net of $(321,003) compared to $(2,437) for the same three-month period in 2025 due to a decline in the price of ETH during

the second quarter of the current year.

a result of the aforementioned reasons, net loss for the three months ended June 30, 2026 totaled $(394,274), climbing 281.2% when compared

to net loss of $(103,423) reported for the three months ended June 30, 2025.

the Six Months Ended June 30, 2026 Compared to the Six Months Ended June 30, 2025

the six months ended June 30, 2026, total revenue increased 1,539.1% to $23,586 compared to $1,439 reported for the same six-month period

in the prior year, respectively.

The notable increase was due to revenues from staking generated by our ETH Treasury Management segment,

launched in June 2025, which was $22,662, or 96% of our total revenues for the six-month period ended June 30, 2026.

The increase in

net cash used in investing activities for the three months ended March 31, 2026 versus 2025 was due to our ETH Treasury Management strategy

and the related redemptions of USDC stablecoins in the first quarter of 2026.

the three months ended March 31, 2026, net cash used for financing activities from operations was $(2,896), a -419% increase when compared

to net cash provided by financing activities from operations of $907 for the same three-month period in 2025.

Cash used in financing

activities during the first quarter of 2026 related to cash payments of taxes for net share settlement of stock issued for previously

accrued severance and bonus awards.

Cash generated by financing activities during the first quarter of 2025 related to gross cash proceeds

from the sale of our Common Stock.

revenues was offset by a -34.5% decline in revenues generated in our Affiliate Marketing Segment, which generated $924 in revenues compared

to $1,410 for the six months ended June 30, 2026 and 2025, respectively.

The decrease in affiliate marketing revenues was primarily due

to continuing softening market conditions in the global iGaming industry, seasonality in which the summer months post lower activity

and the loss of customers due primarily to evolving regulatory environments in certain foreign markets in which our affiliate marketing

business operates.

Losses from Operations

the six months ended June 30, 2026, we recognized a realized gain on crypto assets at fair value of $13,438 and recorded an

unrealized loss on crypto assets at fair value, net of $(827,667) resulting from fair value accounting adjustments of $(827,567) due

to the volatility in the price of ETH, and $(100) of unrealized losses on rebate and incentive rewards earned for the six month

period ended June 30, 2026.

The majority of the unrealized losses is due to the ETH pricing during the period.

For the same six

month period in the prior year, we recognized a gain on crypto assets at fair value of $5,374 and recorded an unrealized loss on

crypto assets at fair value, net of $(2,437) resulting from fair value accounting adjustments due to the volatility in the price of

Operating Expenses

the six months ended June 30, 2026, cost of revenues - affiliate marketing decreased $(408) to $690 from $1,098 compared to the same

six-month period in the prior year.

This decrease is the result of the decrease in revenues from the Affiliate Marketing Segment.

For the six months ended June 30, 2026, total selling, general and administrative expenses increased $15,436 to $18,939 from $3,503

reported for the same six-month period in the prior year.

The increase was primarily attributable to higher costs for the first half

of 2026 compared to the first half of 2025 as the ETH Treasury Management Strategy began at the end of May 2025.

experienced higher costs related to increased personnel headcount of $5,238, increased accounting, legal and compliance fees to

$2,157 and increased custodial and banking fees to $627 during the six months ended June 30, 2026 as compared to the same period for

June 30, 2025.

For the six months ended June 30, 2026, we also recognized an impairment loss on LsETH and weETH crypto assets of

$267,763, an increase of $179,950 from the prior year six month period impairment loss of $87,813.

These crypto assets do not meet

the scope criteria of ASC 350-60.

Accordingly, these crypto assets continue to be accounted for as indefinite-lived intangible

assets under ASC 350-30 and are measured at historical cost less cumulative impairment, rather than at fair value.

compensation, related party decreased 100% from the prior year six month expense of $16,379 as the Company did not have related

party stock-based compensation during the six months ended June 30, 2026.

loss from operations increased 932.4% to $(1,078,035) for the six months ended June 30, 2026, compared to a net loss from operations

of $(104,417) reported for the same six-month period in 2025.

This is attributable to unrealized loss on crypto assets at fair value,

net of $(827,667) compared to $(2,437) for the same six-month period in 2025 due to a decline in the price of ETH during the second quarter

of the current year.

a result of the aforementioned reasons, net loss for the six months ended June 30, 2026 totaled $(1,079,835), climbing 934.3% when compared

to net loss of $(104,398) reported for the six months ended June 30, 2025.

Flows (in thousands, except for percentages)

Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025

of June 30, 2026, cash on hand was $56,195, a $27,656 increase when compared to cash on hand of $28,539 as of December 31, 2025.

increase was due to net proceeds of $73,331 raised from the registered direct offering completed in June 2026, netted against normal operating expenses, as well as ETH purchases of $16,110 and repurchases of our common stock of $10,022 which

both occurred in June 2026.

the six months ended June 30, 2026, net cash used in operating activities from operations totaled $(17,796) compared to net cash used

in operating activities from operations of $(2,138) in the prior year.

The change in the operating cash flows was largely attributable

to cash used for normal operating expenses and payments of accounts payable, accrued expenses and prepaid expenses for the six months

ended June 30, 2026 as compared to the prior period.

the six months ended June 30, 2026, net cash used in our investing activities from operations totaled $(14,961), a decrease of -96%

when compared to cash used in investing activities from operations of $(406,319) for the same six-month period in 2025.

in net cash used in investing activities for the six months ended June 30, 2026 versus 2025 was due primarily to our initial investment

from the May 2025 PIPE and certain ATM proceeds of $405,817 in crypto assets purchased through June of last year compared to $16,110

purchased during the six months ended June 30, 2026.

the six months ended June 30, 2026, net cash provided by financing activities from operations was $60,413, a -85% decrease when compared

to net cash provided by financing activities from operations of $412,018 for the same six-month period in 2025.

Cash provided by financing

activities during the first six months of 2026 related to cash payments of taxes for net share settlement of stock and repurchases of

Common Stock of $10,022 offset by the net proceeds of $73,331 from the registered direct offering completed in June 2026.

financing activities during the first six months of 2025 related to proceeds from our ATM offering and the initial May 2025 PIPE investment.

and Capital Resources (in thousands)

of March 31, 2026, we had working capital of $12,589.

For the three months ended March 31, 2026, we had net loss from continuing operations

of $(685,561) compared to a net loss from continuing operations of $(917) reported for the same three-month period in 2025.

from continuing operations was primarily driven by the net unrealized loss on our crypto assets of $(506,664) and impairment of crypto

assets at cost of $(191,670) due to price decreases in ETH during the first quarter of 2026.

of June 30, 2026, we had working capital of $51,869.

For the three and six months ended June 30, 2026, we had net loss from operations

of $(393,453) and $(1,078,035) compared to a net loss from operations of $(103,433) and $(104,417) reported for the same three- and six-month

periods in 2025.

Sources of Liquidity

principal sources of liquidity are our cash and cash equivalents balances and proceeds from equity financing transactions, including

pursuant to our at-the-market offering facility under the Amended and Restated ATM Sales Agreement with A.G.P.

pursuant to our offering facility under the Amended and Restated ATM Sales Agreement with A.G.P.

our internal Treasury Reserve Policy, we use the vast majority of our cash, including cash generated from capital raising transactions,

to acquire ETH, some of which are classified as indefinite-lived intangible assets.

As of March 31, 2026 and December 31, 2025, we held

approximately $1,239,140 and $1,899,683 ETH in crypto assets at fair value, respectively, all of which are unencumbered.

31, 2026 and December 31, 2025, we held approximately $486,852 and $500,912 LsETH and weETH in crypto assets at cost, respectively.

As of May 4, 2026, we held approximately 872,984 in total ETH holdings, comprised of 590,823 in native ETH, 209,789

in ETH as if redeemed from LsETH and 72,372 in ETH as if redeemed from weETH, all of which are unencumbered.

As discussed further below, although

our crypto assets are classified as non-current assets due to our long-term treasury strategy, they represent a significant and readily

accessible source of liquidity.

Based on current Ethereum network conditions, we estimate that a material portion of our staked ETH could

be withdrawn and converted to cash within approximately 30 days, and our entire staking portfolio within approximately 90 days.

this provides meaningful additional liquidity support beyond our cash and cash equivalents.

As of June 30, 2026 we held approximately $988,838

worth of ETH in crypto assets at fair value, all of which are unencumbered.

As of June 30, 2026 we held approximately $369,148

worth of LsETH and weETH in crypto assets at cost.

As of August 3, 2026, we held approximately 888,938 in total ETH

holdings, comprised of 634,255 in native ETH, 181,748 in ETH as if redeemed from LsETH and 72,935 in ETH as if redeemed from weETH, all of which

are unencumbered.

As discussed further below, although our crypto assets are classified as non-current assets due to our long-term treasury

management strategy, they represent a significant and readily accessible source of liquidity.

Based on current Ethereum network conditions,

we estimate that a material portion of our staked ETH could be withdrawn and converted to cash within approximately 30 days, and our

entire staking portfolio within approximately 90 days.

We believe this provides meaningful additional liquidity support beyond our cash

and cash equivalents.

and Long-Term Liquidity

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obligations due within the next 12 months.

We expect that our cash and cash equivalents as of March 31, 2026, together with cash and

cash equivalents generated by our operations, coupled with the use of a portion of proceeds earned from staking activities and redeemed

for cash, and equity financings will be sufficient to satisfy these needs over the twelve months.

Although we do not anticipate needing

to use our ETH to meet our short-term liquidity needs, to the extent necessary, we may seek to use proceeds from the sale of our ETH,

and other tokens earned and received as rewards and incentives, to meet such needs.

We expect that our cash and cash equivalents as of June 30, 2026, together with cash and cash

equivalents generated by our operations, coupled with the use of a portion of proceeds earned from staking activities and redeemed for

cash, and equity financings will be sufficient to satisfy these needs over the twelve months.

Although we do not anticipate needing to

use our ETH to meet our short-term liquidity needs, to the extent necessary, we may seek to use proceeds from the sale of our ETH, and

other tokens earned and received as rewards and incentives, to meet such needs.

See “ Availability of ETH for Liquidity ”

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Liquidity — Beyond the next 12 months, our long-term cash needs are primarily for obligations related to working capital needs.

We expect our cash and cash equivalents as of March 31, 2026, together with cash and cash equivalents, coupled with the use of a portion

of proceeds earned from staking activities and redeemed for cash, and equity financings will be sufficient to satisfy these needs over

the twelve months.

We expect our cash and cash equivalents as of June 30, 2026, together with cash and cash equivalents, coupled with the potential use

of a portion of proceeds earned from staking activities and redeemed for cash, and equity financings will be sufficient to satisfy these

needs over the twelve months.

See “ Availability of ETH for Liquidity ” below and “Item 1A.

Risk Factors” for additional

Risk Factors”

for additional information.

of ETH for Liquidity — We do not believe we will need to sell or engage in other transactions with respect to any of our ETH

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realized gains or we may incur capital losses as to which the tax deduction may be limited.

See “Item 1A.

Risk Factors” for

1 unchanged sentence

Sheet Arrangements

March 31, 2026, we did not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect

June 30, 2026, we did not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect

on our financial condition, changes in financial condition, revenue or expenses, results of operations, liquidity, capital expenditures

2 unchanged sentences

entities or variable interest entities.

opinion is that inflation did not have a material effect on our operations for the three months ended March 31, 2026.

opinion is that inflation did not have a material effect on our operations for the three and six months ended June 30, 2026.

opinion is that neither climate change, nor governmental regulations related to climate change, have had, or are expected to have, any

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annual reporting periods, with early adoption permitted.

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

its disclosures.

This ASU did not have an impact on the Company’s financial statements

or its related footnote disclosures.

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

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income statement as well as disclosures about specific types of expenses included in the expense captions presented in the income statement.

ASU 2024-03, as clarified by ASU 2025-01, is effective for us for our annual reporting for fiscal 2028 and for interim period reporting

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.

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evaluating the impact that the adoption of these standards will have on its condensed consolidated financial statements and disclosures.

In September 2025, the FASB issued Accounting Standards Update No.

Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606):

Derivatives Scope Refinements and Scope Clarification

for Share-Based Noncash Consideration from a Customer in a Revenue Contract.

The amendments are effective for the Company’s annual

and interim reporting periods beginning January 1, 2027, with early adoption permitted.

The Company is evaluating the amendments, including

their application to the Company’s staking, restaking and incentive arrangements.

Based on its current arrangements, the Company

does not expect adoption to have a material effect on its condensed consolidated financial statements or related disclosures.

December 2025, the FASB issued Accounting Standards Update No.

2025-11, Interim Reporting (Topic 270):

Narrow-Scope Improvements .

The amendments clarify the applicability of Topic 270, provide a comprehensive listing of interim disclosures required by generally accepted

accounting principles and establish a principle for disclosing events occurring since the end of the most recent annual reporting period

that have a material effect on an entity.

The amendments are effective for the Company’s interim reporting periods within the annual

reporting period beginning January 1, 2028, with early adoption permitted.

The Company is evaluating the effects of adoption and currently

expects the amendments to affect primarily its interim disclosure processes and related controls.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis