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Item 1. Financial Statements

2025-05-15 compared with 2024-11-14 · 1007 added, 819 removed, 257 unchanged (88% of the section changed)

FINANCIAL STATEMENTS

SHARPLINK GAMING, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

September 30, 2024

December 31, 2023

CONSOLIDATED BALANCE SHEETS

Current Assets

$ 1,850,206 $ 2,487,481

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

457,077 415,119

Unbilled receivables

Other Receivables

Prepaid expenses and other current assets

328,992 383,295

Due from Rsports Interactive, Inc.

Current assets from discontinued operations

243,141 67,805,379

Total current assets

2,896,126 71,103,274

Investment, cost

Equipment, net

Intangible assets, net

14,406 168,112

$ 2,915,156 $ 71,280,178

Liabilities and Stockholders’ Equity

1 unchanged sentence

Accounts payable and accrued expenses

$ 743,585 $ 1,463,699

Line of credit

Current portion of long-term debt

Current portion of convertible debenture, net of discount of $ 0 and $ 283,335 , respectively, warrant discount of $ 0 and $ 831,746 , respectively, accrued interest of $ 0 and $ 299,648 , respectively

Current liabilities from discontinued operations

151,428 66,396,883

Total current liabilities

895,013 79,247,884

Long-Term Liabilities

Deferred tax liability

Debt, less current portion

Total liabilities

895,013 80,679,947

Commitments and Contingencies

8 unchanged sentences

liquidation preference:

Preferred stock

Common stock, $ 0.0001 par value;

3 unchanged sentences

Treasury stock, 8 common shares at cost

( 29,000 ) ( 29,000 )

Additional paid-in capital

78,955,110 77,909,981

Accumulated deficit

( 78,783,860 )

Total stockholders’ equity (deficit)

( 77,808,959 )

Total stockholders’ equity

Total liabilities and stockholders’ equity

$ 2,915,156 $ 71,280,178

See accompanying notes to these condensed consolidated financial statements

SHARPLINK GAMING, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

For the Three Months Ended September 30,

For the Nine Months Ended September 30,

$ 881,690 $ 1,349,331 $ 2,838,908 $ 3,925,618

accompanying notes to these condensed consolidated financial statements

CONSOLIDATED STATEMENTS OF OPERATIONS

For the Three Months Ended

Cost of revenues

709,045 958,665 2,098,921 2,743,551

172,645 390,666 739,987 1,182,067

Operating expenses

Selling, general, and administrative expenses

970,080 1,795,057 4,426,835 5,977,327

Operating loss

2 unchanged sentences

Interest income

16,178 20,440 48,206 31,682

Interest expense

- ( 318,977 ) ( 324,518 ) ( 789,842 )

- - 297,387 -

Other expense

Change in fair value of convertible debenture and warrant liabilities

- ( 324,205 ) 255,819 ( 1,002,242 )

Total other income (expense)

16,178 ( 622,742 ) 276,894 ( 1,760,402 )

Net loss before income taxes

1 unchanged sentence

Income tax (expense)

( 6,735 ) ( 314 ) ( 55,513 ) ( 35,027 )

Net loss from continuing operations

1 unchanged sentence

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

( 97,139 ) ( 822,100 ) 14,467,733 ( 2,523,754 )

Net income (loss)

3 unchanged sentences

$ ( 916,732 )

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

$ ( 1,805,430 )

( 885,131 ) ( 2,849,760 ) 10,957,647 ( 9,164,937 )

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

Net income (loss)

Denominator for net loss per share:

Basic weighted average shares for continuing and discontinued operations

3,510,319 2,863,607 3,338,549 2,736,583

Diluted weighted average shares for discontinued operations

4,234,112 2,863,607 4,062,342 2,736,583

Net earnings (loss) per share:

Net loss from continuing operations per share - basic

$ ( 0.22 ) $ ( 0.71 ) $ ( 1.05 ) $ ( 2.43 )

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

$ ( 0.03 ) $ ( 0.29 ) $ 4.33 $ ( 0.92 )

Net income (loss) per share - basic

$ ( 0.25 ) $ ( 1.00 ) $ 3.28 $ ( 3.35 )

Net loss from continuing operations per share - diluted

$ ( 0.22 ) $ ( 0.71 ) $ ( 1.05 ) $ ( 2.43 )

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

$ ( 0.03 ) $ ( 0.29 ) $ 3.56 $ ( 0.92 )

Net income (loss) per share - diluted

$ ( 0.25 ) $ ( 1.00 ) $ 2.51 $ ( 3.35 )

See accompanying notes to these condensed consolidated financial statements

SHARPLINK GAMING, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS ’ EQUITY (DEFICIT)

FOR THE three and nine months ended September 30, 2024 and 2023

accompanying notes to these condensed consolidated financial statements

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS ’ EQUITY (DEFICIT)

THE three months ended March 31, 2025 and 2024

Common/Ordinary shares

1 unchanged sentence

Series B preferred stock

shareholders'

Balance, December 31, 2022

Stock-based compensation expense

Warrants issued in conjunction with convertible debenture

Dividends on Series B preferred stock in Series A-1 preferred stock

Balance, March 31, 2023

Stock-based compensation expense

Deemed dividends on Series B preferred stock anti-dilutive provision

Dividends on Series B preferred stock in Series A-1 preferred stock

Balance, June 30, 2023

Stock-based compensation expense

Issuance of ordinary shares for cashless exercised warrants

Issuance of ordinary shares to SportsHub shareholders which were previously reserved for future issuance

Deemed dividend on Series B preferred stock anti-dilutive provision

Dividends on Series B preferred stock in Series A-1 preferred stock

Balance, September 30, 2023

Additional Paid-In

Total shareholders’

Balance, December 31, 2023

$ ( 87,857,456 )

( 9,399,769 )

Domestication equity adjustment - Note 1

6 unchanged sentences

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

Balance, March 31, 2024

Balance at March 31, 2024

$ ( 75,558,222 )

Balance at December 31, 2024

$ ( 77,808,959 )

Net Income (Loss)

Stock-based compensation expense

Shares issued for vested restricted stock

Issuance of common stock for exchange of warrants

Shares sold for cash

Warrant exchange amendment - Note 8

Balance, June 30, 2024

Shares issued for vested restricted stock

Stock-based compensation expense

Issuance of common stock for exercise of warrants

Balance, September 30, 2024

See accompanying notes to these condensed consolidated financial statements.

SHARPLINK GAMING, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Balance at March 31, 2025

$ ( 78,783,860 )

accompanying notes to these condensed consolidated financial statements.

CONSOLIDATED STATEMENTS OF CASH FLOWS

Includes cash flow activities from both continuing and discontinued operations

Nine Months Ended September 30,

Three Months Ended

CASH FLOWS FROM OPERATING ACTIVITIES:

2 unchanged sentences

Net loss from continuing operations

$ ( 916,732 )

$ ( 1,760,811 )

Net income (loss)

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

Depreciation and amortization

Amortization of loan costs

Amortization of debt discount

Amortization of prepaid stock issued for services

Change in fair value

Accrued interest on convertible debenture

Deferred tax expense

Stock-based compensation expense

Loss on disposal of equipment

Changes in assets and liabilities

Accounts receivable

Unbilled receivables

Other receivable

Due from Rsports Interactive, Inc.

1 unchanged sentence

Accounts payable and accrued expenses

Contract liabilities

Customer deposits and other current liabilities

Net cash used in operating activities – continuing operations

( 2,848,643 )

Net cash (used in) provided by operating activities - discontinued operations

( 16,446,314 )

Net cash used in operating activities

( 19,294,957 )

CASH FLOWS FROM INVESTING ACTIVITIES:

Capital expenditures for equipment

Proceeds from sale of intellectual property

Capital expenditures for internally developed software

Investment in Crypto Casino

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

Net cash used in investing activities - discontinued operations

( 18,707,834 )

Net cash used for investing activities

( 18,709,553 )

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from convertible debenture and purchase warrants

Repayment of convertible debenture

( 4,148,571 )

Proceeds from sale of common stock

1 unchanged sentence

Repayment of line of credit

Payments on long-term debt

( 6,900,000 )

Principal payments on long-term debt

( 2,070,479 )

Proceeds from exercise of warrants

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

( 12,409,050 )

Net cash (used in) generated by financing activities - discontinued operations

( 5,835,352 )

Net cash generated by (used in) financing activities

( 18,244,402 )

Net change in cash

( 56,248,912 )

Cash and restricted cash, beginning of period including discontinued operations

1 unchanged sentence

Less cash from discontinued operations

Cash and restricted cash, end of period

Cash, end of period

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

1 unchanged sentence

Cash paid for taxes

Extension of maturity of operating lease liability

NON-CASH FINANCING ACTIVITIES:

1 unchanged sentence

Issuance of common stock in exchange of warrants

Issuance of common stock for vested restricted stock

Issuance of common stock for vested RSUs

Deemed Dividend

Warrant exchange agreement, issuance of pre-funded warrants

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

Discount on convertible debenture and purchase warrant

Dividends on Series B preferred stock in Series A-1 preferred stock

See accompanying notes to these condensed consolidated financial statements.

SHARPLINK GAMING, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE three and nine months ended September 30, 2024 and 2023

Note 1 – Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared by SharpLink Gaming, Inc.

(the “Company,” “SharpLink,” “we” or “our”), pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”).

In the opinion of the Company, the foregoing statements contain all adjustments, consisting only of normal recurring adjustments necessary to present fairly the financial position of the Company as of September 30, 2024 and December 31, 2023 , as well as its results of operations for the three and nine months ended September 30, 2024 and 2023 .

The condensed consolidated balance sheet as of December 31, 2023 has been derived from the audited consolidated financial statements as of that date.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts therein.

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

Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been omitted pursuant to rules and regulations of the SEC.

Accordingly, the condensed consolidated financial statements do not include all information and footnotes required by GAAP for a complete financial statement presentation.

These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto for the year ended December 31, 2023 , which are included in the Company’s Annual Report on Form 10 -K filed with the SEC on March 29, 2024.

Nature of Business

SharpLink, a Delaware corporation, is an online performance marketing company that delivers unique fan activation solutions to its sportsbook and casino partners.

Through its global affiliate marketing network, known as PAS.net, SharpLink drives qualified traffic and player acquisitions, retention and conversions to U.S.

accompanying notes to these condensed consolidated financial statements.

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

THE three months ended March 31, 2025 and 2024

1 – Basis of Presentation

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

(the “Company,”

“SharpLink,” “we” or “our”), pursuant to the rules and regulations of the Securities and Exchange

Commission (“SEC”).

In the opinion of the Company, the foregoing statements contain all adjustments, consisting only of normal

recurring adjustments necessary to present fairly the financial position of the Company as of March 31, 2025 and December 31, 2024, as

well as its results of operations for the three months ended March 31, 2025 and 2024.

The condensed consolidated balance sheet as of

December 31, 2024 has been derived from the audited consolidated financial statements as of that date.

The preparation of financial statements

in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management

to make estimates and assumptions that affect the reported amounts therein.

Due to the inherent uncertainty involved in making estimates,

actual results in future periods may differ from the estimates.

information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been omitted pursuant

to rules and regulations of the SEC.

Accordingly, the condensed consolidated financial statements do not include all information and

footnotes required by GAAP for a complete financial statement presentation.

These condensed consolidated financial statements should

be read in conjunction with the consolidated financial statements and the notes thereto for the year ended December 31, 2024, which are

included in the Company’s Annual Report on Form 10-K filed with the SEC on March 14, 2025 and Form 10-K/A filed with the SEC on

March 17, 2025.

a Delaware corporation, is an online performance marketing company that delivers unique fan activation solutions to its sportsbook and

casino partners.

Through its global affiliate marketing network, known as PAS.net, SharpLink drives qualified traffic and player acquisitions,

retention and conversions to U.S.

regulated sportsbooks and global casino gaming partners worldwide.

In addition, SharpLink owns a performance marketing platform through which the Company owns and operates U.S.

state-specific web domains designed to attract, acquire and drive local sports betting and casino traffic directly to its sportsbook and casino partners which are licensed to operate in each respective state.

Prior to the sale of SharpLink’s Sports Gaming Client Services and SportsHub Gaming Network (“SHGN”) business units in January 2024 to RSports Interactive, Inc.

(“RSports”), a Minnesota corporation, (the “Sale of Business”), the SHGN unit owned and operated an online gaming business that primarily facilitated daily and seasonal peer-to-peer fantasy contests for its end users.

The SHGN business unit also operated a website that provided a variety of services to private fantasy league commissioners, including secure online payment options, transparent tracking and reporting of transactions, payment reminders, in-season security of league funds and facilitation of prize payouts.

SharpLink’s Sports Gaming Client Services game development business was engaged in the provision of fantasy and free-to-play sports game and mobile app development services to a marquis list of customers, which included several of the biggest names in sports and sports betting, including Turner Sports, NBA, NFL, PGA TOUR, NASCAR and BetMGM, among others.

On January 18, 2024, the Company entered into a Purchase Agreement (the “PA”) with RSports to sell the Company’s Sports Gaming Client Services and SHGN business units.

See Note 3 for further information regarding the sale of Sports Gaming Client Services and SHGN business units.

On February 13, 2024, SharpLink Gaming Ltd.

(“SharpLink Israel” and former parent company) completed its previously announced domestication merger (“Domestication Merger”), pursuant to the terms and conditions set forth in an Agreement and Plan of Merger (the “Domestication Merger Agreement”), dated June 14, 2023 and amended July 24, 2023, among SharpLink Gaming, Inc.

(“SharpLink US”), SharpLink Israel, SharpLink Merger Sub Ltd., an Israeli company and a wholly owned subsidiary of subsidiary of SharpLink US (Domestication Merger Sub) .

In addition, SharpLink owns a performance

marketing platform through which the Company owns and operates U.S.

state-specific web domains designed to attract, acquire and drive

local sports betting and casino traffic directly to its sportsbook and casino partners which are licensed to operate in each respective

to the sale of SharpLink’s Sports Gaming Client Services and SportsHub Gaming Network (“SHGN”) business units in January

2024 to RSports Interactive, Inc.

(“RSports”), a Minnesota corporation, (the “Sale of Business”), the SHGN unit

owned and operated an online gaming business that primarily facilitated daily and seasonal peer-to-peer fantasy contests for its end

The SHGN business unit also operated a website that provided a variety of services to private fantasy league commissioners, including

secure online payment options, transparent tracking and reporting of transactions, payment reminders, in-season security of league funds

and facilitation of prize payouts.

SharpLink’s Sports Gaming Client Services game development business was engaged in the provision

of fantasy and free-to-play sports game and mobile app development services to a marquis list of customers, which included several of

the biggest names in sports and sports betting, including Turner Sports, NBA, NFL, PGA TOUR, NASCAR and BetMGM, among others.

January 18, 2024 , the Company entered into a Purchase Agreement (the “PA”) with RSports to sell the Company’s

fantasy sports and sports game development business units to RSports.

All of the membership interests of Sports Technologies, LLC, a

Minnesota limited liability company, SHGN and Holdings Quinn, LLC, a Delaware limited liability company (collectively referred to as

the “Divested Operations”) were sold for $ 22,500,000 in an all cash transaction.

The transaction resulted in SharpLink selling

a majority of its assets and the classification of the Divested Operation’s financial results as discontinued operations.

periods presented have been restated to present the Divested Operations financial results as discontinued operations.

All explanations

and amounts relating to discontinued operations are referred throughout the consolidated financial statements to Note 3 - Discontinued

February 13, 2024, SharpLink Gaming Ltd.

(“SharpLink Israel” and former parent company) completed its previously announced

domestication merger (“Domestication Merger”), pursuant to the terms and conditions set forth in an Agreement and Plan of

Merger (the “Domestication Merger Agreement”), dated June 14, 2023 and amended July 24, 2023, among SharpLink Gaming, Inc.

(“SharpLink US”), SharpLink Israel, SharpLink Merger Sub Ltd., an Israeli company and a wholly owned subsidiary of subsidiary

of SharpLink US (Domestication Merger Sub).

The Domestication Merger was achieved through a merger of Domestication Merger Sub Ltd.

with and into SharpLink Israel, with SharpLink Israel surviving the merger and becoming a wholly owned subsidiary of SharpLink US.

The Domestication Merger was approved by the shareholders of SharpLink Israel at an extraordinary special meeting of shareholders held on December 6, 2023.

SharpLink US’s Common Stock commenced trading on the Nasdaq Capital Market under the same ticker symbol, SBET, on February 14, 2024.

As a result of the Domestication Merger, all SharpLink Israel ordinary shares outstanding immediately prior to the Domestication Merger automatically converted, on a one -for- one basis, into the right to receive, and become exchangeable for, shares of SharpLink US common stock, par value $ 0.0001 per share (“Common Stock”) and all preferred shares, options and warrants of SharpLink Israel outstanding immediately prior to the Domestication Merger converted into or exchanged for equivalent securities of SharpLink US on a one -for- one basis.

The following represents the change in the par value based on the outstanding ordinary and preferred shares to common and preferred stock after the Domestication Merger on February 13, 2024:

Domestication Merger was approved by the shareholders of SharpLink Israel at an extraordinary special meeting of shareholders held on

December 6, 2023.

SharpLink US’s Common Stock commenced trading on the Nasdaq Capital Market under the same ticker symbol, SBET,

on February 14, 2024.

a result of the Domestication Merger, all SharpLink Israel ordinary shares outstanding immediately prior to the Domestication Merger

automatically converted, on a one-for-one basis, into the right to receive, and become exchangeable for, shares of SharpLink US common

stock, par value $ 0.0001 per share (“Common Stock”) and all preferred shares, options and warrants of SharpLink Israel outstanding

immediately prior to the Domestication Merger converted into or exchanged for equivalent securities of SharpLink US on a one-for-one

following represents the change in the par value based on the outstanding ordinary and preferred shares to common and preferred stock

after the Domestication Merger on February 13, 2024:

Schedule of Change in Par Value of Outstanding Ordinary and Preferred Shares to Common and Preferred Stock

Ordinary Shares

1 unchanged sentence

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

Par value for common stock

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

5 unchanged sentences

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

Par value for preferred stock

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

Principles of Consolidation

The accompanying condensed consolidated financial statements include the accounts of SharpLink Gaming, Inc.

of Consolidation

accompanying condensed consolidated financial statements include the accounts of SharpLink Gaming, Inc.

and its wholly owned subsidiaries.

1 unchanged sentence

Reclassifications

Certain amounts in prior periods have been reclassified to reflect the impact of the discontinued operations treatment in order to conform to the current period presentation.

During the nine months ended September 30, 2024 , we realigned our organizational structure and resources to more closely align with our strategic priorities.

As a result of the change, we have one reportable segment, consisting of Affiliate Marketing, for the purpose of making operational and resource decisions and assessing financial performance.

See Note 12 for operating segment.

Functional Currency

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

Transactions in foreign currencies are recorded at the exchange rate prevailing on the date of the transaction.

During the year ended December 31, 2024,

we realigned our organizational structure and resources to more closely align with our strategic priorities.

As a result of the change,

we have one reportable segment, consisting of Affiliate Marketing, for the purpose of making operational and resource decisions and assessing

financial performance.

See Note 9 - Operating

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

Transactions in foreign currencies are recorded at the exchange

rate prevailing on the date of the transaction.

The resulting monetary assets and liabilities are translated into U.S.

dollars at exchange rates prevailing on the balance sheet date.

dollars at exchange

rates prevailing on the balance sheet date.

Revenue and expense components are translated to U.S.

dollars at weighted-average exchange rates in effect during the period.

Foreign currency transaction gains and losses resulting from remeasurement are recognized in other income and expenses within the condensed consolidated statements of operations.

Reverse Share Split

On April 23, 2023, SharpLink Israel effected a one -for- ten ( 1:10 ) reverse share split of all the Company’s share capital and adopted amendments to its Memorandum of Association and Second Amended and Restated Articles of Association (“M&AA”), whereby the Company (i) decreased the number of issued and outstanding ordinary shares, nominal value NIS 0.60 per share, from 26,881,244 to 2,688,541;

(ii) reduced the total number of the Company’s authorized shares under its M&AA from 92,900,000 shares of ordinary shares, nominal value NIS 0.06 (USD 0.02 ) per share, to 9,290,000 shares of ordinary shares, nominal value NIS 0.60 (USD 0.20 ) per share;

and (ii) decreased by a ratio of one -for- ten ( 1:10 ) the number of retrospectively issued and outstanding shares of ordinary shares.

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

All share and per-share data and amounts have been retrospectively adjusted as of the earliest period presented in the financial statements to reflect the reverse stock split.

Discontinued Operations

In June 2022, SharpLink Israel's Board of Directors approved management to enter into negotiations to sell Israel-based Mer Telemanagement Solutions Ltd.

(“MTS” or “Enterprise TEM”).

The Company completed the sale of MTS on December 31, 2022.

Accordingly, the assets and liabilities of the MTS business are separately reported as assets and liabilities from discontinued operations as of September 30, 2024 and December 31, 2023 .

The results of operations and cash flows of MTS for all periods are separately reported as discontinued operations.

In December 2023, SharpLink Israel's Board of Directors approved management to enter into a Letter of Intent with RSports to purchase the Company’s Sports Gaming Client Services and SHGN businesses.

In December 2023, SharpLink Israel discontinued its C4 technology due to the lack of market acceptance.

C4 technology centered on monetizing our own online audience and our customers’ respective online audiences of U.S.

fantasy sports and casual sports fans and casino gaming enthusiasts by converting them into loyal online sports and iGaming bettors.

On January 18, 2024, the Company entered into a PA with RSports to sell the Company’s Sports Gaming Client Services and SHGN business units to RSports.

All of the membership interests of Sports Technologies, LLC, a Minnesota limited liability company, Holdings Quinn, LLC, a Delaware limited liability company and SHGN who owns all of the issued membership interests in SportsHub Reserve, LLC, (“SHReserve”), a Minnesota limited liability company;

SportsHub PA, LLC, (“SHPA”), a Pennsylvania limited liability company, and SportsHub Holdings, LLC, (“SHHoldings”), a Minnesota limited liability company, and SportsHub Operations, LLC, (“SHOperations”), a Minnesota limited liability company (SHReserve, SHPA, SHHoldings and SHOperations, collectively, the “SHGN Subsidiaries”) were sold for $ 22,500,000 in an all-cash transaction.

The amount of cash received from sale of business, net of cash transferred of $ 18,857,834 , as reflected on the statement of cash flows, reflects the receipt of cash of $ 22,500,000 , net of the cash transferred of $ 41,357,834 .

The majority of cash transferred of $ 41,357,834 was reflected in discontinued operations customer deposits liability and deferred revenue of $ 36,959,573 and $ 4,888,704 , respectively.

See Note 3 for an amendment to the PA agreement and Note 4.

The Company has discontinued operations for the Sports Gaming Client Services and SHGN businesses.

The Company is in the process of closing its legal entities in MTS in order to simplify its legal structure.

Nasdaq Notice

On July 11, 2024 , SharpLink received a letter from Nasdaq Listing Qualifications (the "Letter") indicating that the Company is no longer in compliance with the minimum bid price requirement for continued listing set forth in Listing Rule 5550 (a)( 2 ), which requires listed securities to maintain a minimum bid price of $1.00 per share.

The rules also provide SharpLink a compliance period of 180 calendar days to regain compliance.

According to the Letter, the Company has until January 7, 2025 to regain compliance with the minimum bid price requirement.

SharpLink can regain compliance if at any time during this 180 -day period, the closing bid price of its Common Stock is at least $1.00 for a minimum of ten consecutive business days, in which case SharpLink will be provided with written confirmation of compliance by Nasdaq and this matter will be closed.

In the event that the Company fails to regain compliance after the initial 180 -day period, SharpLink may then be eligible for additional time if it meets the continued listing requirements for market value of publicly held shares and all other initial listing standards for The Nasdaq Capital Market, with the exception of the bid price requirement, and will be required to provide written notice of its intention to cure the deficiency during the second compliance period equal to an additional 180 calendar days.

If SharpLink cannot demonstrate compliance by the end of the second compliance period, Nasdaq will notify SharpLink that its Common Stock is subject to delisting.

The Letter has no immediate effect on SharpLink’s listing or the trading of its Common Stock, and during the grace period, as may be extended, the Company’s Common Stock will continue to trade on The Nasdaq Capital Market under the symbol “SBET.”

Evaluation of Strategic Alternatives

On July 18, 2024 , SharpLink announced that its Board of Directors (“Board”) has initiated a formal review process to evaluate strategic alternatives for the Company.

The Board and management team are taking a measured approach to considering multiple proposals that have been received by the Company and other proposals it expects to receive.

SharpLink has been exploring strategic alternatives that include, but are not limited to, a sale, merger, strategic business combination or other transactions.

SharpLink has not set a deadline or definitive timetable for completion of the strategic alternatives review process and there can be no assurance that this process will result in the Company pursuing a transaction or any other strategic outcome.

Recently Issued Accounting Pronouncements Not Yet Adopted

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update 2023 - 07 – Segment Reporting (Topic ASC 280 ) Improvements to Reportable Segment Disclosures.

This Accounting Standards Update improves reportable segment disclosure requirements, primarily through enhanced disclosure about significant segment expenses.

The enhancements under this update require disclosure of significant segment expenses that are regularly provided to the CODM and included within each reported measure of segment profit or loss, require disclosure of other segment items by reportable segment and a description of the composition of other segment items , require annual disclosures under ASC 280 to be provided in interim periods, clarify use of more than one measure of segment profit or loss by the CODM, require that the title of the CODM be disclosed with an explanation of how the CODM uses the reported measures of segment profit or loss to make decisions, and require that entities with a single reportable segment provide all disclosures required by this update and required under ASC 280.

ASU 2023 - 07 is effective for public business entities for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted.

The Company anticipates the adoption of ASC 280 will not have a material impact on its condensed consolidated financial statements.

In December 2023, the FASB issued Accounting Standards Update 2023 - 09 – Income Taxes (Topic ASC 740 ) Income Taxes.

This Accounting Standards Update improves the transparency of income tax disclosures by requiring ( 1 ) consistent categories and greater disaggregation of information in the rate reconciliation and ( 2 ) income taxes paid disaggregated by jurisdiction.

It also includes certain other amendments to improve the effectiveness of income tax disclosures.

The amendments in ASU 2023 - 09 will become effective at the beginning of our 2025 fiscal year.

Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance.

We do not expect that this guidance will have a material impact upon our financial position and results of operations.

Note 2 – Going Concern

For the three and nine months ended September 30, 2024 and 2023 , the Company had a net loss from continuing operations of $( 787,992 ) and $( 2,027,447 ), respectively, and for the nine months ended September 30, 2024 and 2023, the net loss from continuing operations totaled $( 3,465,467 ) and $( 6,590,689 ) respectively.

The Company used cash for operating activities from continuing operations of $( 4,434,002 ) and $( 3,820,153 ) for the nine months ended September 30, 2024 and 2023 , respectively.

In January 2024, the Company completed the Sale of our Sports Gaming Client Services and SHGN business units for $ 22.5 million in an all cash transaction.

In connection with the closing of the Sale of Business, SharpLink repaid in full all outstanding term loans and lines of credit with Platinum Bank, together with accrued but unpaid interest and all other amounts due in connection with such repayment under existing credit agreements, totaling an aggregate $ 14,836,625 , and thereby terminated all existing credit facilities with Platinum Bank and discharged the debt on the Company’s balance sheet.

In addition, the Company redeemed the outstanding convertible debenture issued to Alpha Capital Anstalt (“Alpha”) for 110 % of the outstanding balance, plus accrued and unpaid interest, for $ 4,484,230 in aggregate, thereby satisfying all obligations under the debenture and discharging the debt on the balance sheet.

On May 1, 2024, Company entered into an ATM Sales Agreement (the “ATM Sales Agreement”) with A.G.P./Alliance Global Partners (the “Agent”) pursuant to which the Company may offer and sell, from time to time, through the Agent, as sales agent and/or principal, shares of its common stock, par value $ 0.0001 per share (the “Common Stock”), having an aggregate offering price of up to $ 1,676,366 , subject to certain limitations on the amount of Common Stock that may be offered and sold by the Company set forth in the ATM Sales Agreement (the “Offering”).

The Company is not obligated to make any sales of Shares under the ATM Sales Agreement and any determination by the Company to do so will be dependent, among other things, on market conditions and the Company’s capital raising needs.

As of November 14, 2024, SharpLink has raised gross proceeds of $ 71,343 from sales of Shares under the ATM Sales Agreement.

In addition to funds that may be raised through the ATM Sales Agreement, we may need to raise additional capital to fund the Company’s growth and future business operations.

dollars at weighted-average exchange

rates in effect during the period.

Foreign currency transaction gains and losses resulting from remeasurement are recognized in other

income and expenses within the condensed consolidated statements of operations.

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

decreased the number of issued and outstanding common shares 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

Compliance with Nasdaq Continued Listing Standards

previously reported on Form 10-K filed by the Company on March 14, 2025 and 10-K/A filed by the Company on March 17, 2025, the Company

received a letter on July 17, 2024 from Nasdaq notifying the Company that, because of the closing bid price for its common stock had

been below $1.00 per share for 30 consecutive trading days, it was not compliant with the Minimum Bid Price Requirement (the “Bid

Price Deficiency Notice”).

In accordance with Nasdaq Marketplace Rule 5810 (c)(3)(A), the Company had a period of 180 calendar

days, or until January 7, 2025, to regain compliance with the Minimum Bid Price Requirement.

Further, as previously reported on our Current

Report on Form 8-K filed on November 22, 2024, the Nasdaq Staff notified the Company that it did not comply with the $2.5 million minimum

stockholders’ equity requirement, as set forth in Nasdaq Listing Rule 5550(a)(2).

The Company had 45 calendar days to submit a

plan to regain compliance or until January 6, 2025.

Company had a hearing with the Nasdaq Hearing Panel (the “Panel”)on February 25, 2025 .

The Company’s Common

Stock will remain listed and eligible for trading on Nasdaq pending the ultimate conclusion of the hearing process.

SharpLink worked

to evidence compliance with the Minimum Bid Price Requirement and Minimum Stockholder’s Equity Requirement for continued

listing on the Nasdaq Capital Market and submitted a plan to that effect to the Panel as

part of the hearing process on February 25, 2025.

March 21, 2025, SharpLink received notice (the “Notice”)

from the Panel of The Nasdaq Stock Market, LLC (“Nasdaq”) stating that

the Panel has granted the Company’s request for additional time to achieve compliance with Nasdaq’s continued listing

rules and demonstrate long-term compliance with the minimum bid price requirement as set forth in Rule 5550(a)(2) (the “Bid Price

Rule”), which requires issuers to maintain a minimum bid price of $1.00 per share on the Nasdaq, and with Listing Rule 5550(b)(1),

which requires listed issuers to maintain minimum stockholders’ equity of $2.5 million (the “Equity Rule”).

Specifically,

the Panel has agreed to provide the Company until May 23, 2025 to regain compliance with both the Bid Price Rule and the Equity

must satisfy Nasdaq’s continued listing requirements, including, among other things, the Bid Price Rule and the Equity Rule, or

risk delisting, which could have a material adverse effect on our business.

If our common stock is delisted from Nasdaq, it could materially

reduce the liquidity of our common stock and result in a corresponding material reduction in the price of our common stock as a result

of the loss of market efficiencies associated with Nasdaq and the loss of federal preemption of state securities laws.

In addition, delisting

could harm our ability to raise capital through alternative financing sources on terms acceptable to us, or at all, and may result in

the potential loss of confidence by investors, suppliers, customers and employees and fewer business development opportunities.

common stock is delisted, it could be more difficult to buy or sell our common stock or to obtain accurate quotations, and the price

of our common stock could suffer a material decline.

Delisting could also impair our ability to raise capital on acceptable terms, if

Company is currently attempting to raise equity in public offerings in order to achieve compliance with the Equity Rule.

We may not be

able to comply with the Equity Rule even after these offerings due to our cash burn rate, operating expenses, and payment obligations.

As a result, we may be required to raise additional funds after these offerings in order to achieve compliance.

of 10% Equity Stake in Armchair Enterprises

February 24, 2025, SharpLink entered into a subscription agreement (“Subscription Agreement”) with U.K-based Armchair Enterprises

Limited (“Armchair”), which owns and operates CryptoCasino.com.

The acquisition of a 10 %

equity stake in Armchair was made for $ 500,000

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

interest in Armchair.

The investment was recorded at cost and will be measured at cost minus impairment, adjusted for any observable price changes.

There was no impairment

as of March 31, 2025.

of Strategic Alternatives

July 18, 2024, SharpLink announced that its Board of Directors (“Board”) has initiated a formal review process to evaluate

strategic alternatives for the Company.

The Board and management team are taking a measured approach to considering multiple proposals

that have been received by the Company and other proposals it expects to receive.

SharpLink has been exploring strategic alternatives

that include, but are not limited to, a sale, merger, strategic business combination or other transactions.

SharpLink has not set a deadline

or definitive timetable for completion of the strategic alternatives review process and there can be no assurance that this process will

result in the Company pursuing a transaction or any other strategic outcome.

Issued Accounting Pronouncements Not Yet Adopted

December 2023 , the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”)2023-09 – Income Taxes (Topic ASC 740) Income Taxes.

improves the transparency of income tax disclosures by requiring (1) consistent categories and greater disaggregation of information

in the rate reconciliation and (2) income taxes paid disaggregated by jurisdiction.

It also includes certain other amendments to improve

the effectiveness of income tax disclosures.

The amendments in ASU 2023-09 became effective beginning with our 2025 fiscal year.

not expect that this guidance will have a material impact upon our financial position and results of operations.

November 2024, the FASB issued ASU 2024-04, Debt-Debt with Conversions

and Other Option.

ASU 2024-04 is intended to clarify requirements for determining whether certain settlements of convertible debt instruments,

including convertible debt instruments with cash conversion features or convertible debt instruments that are not currently convertible,

should be accounted for as an induced conversion.

This ASU is effective for all entities for annual reporting periods beginning after

December 15, 2025, and interim reporting periods within those annual reporting periods, with early adoption permitted.

The Company is

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

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

Disclosures (Subtopic 220-40):

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

issued Accounting Standards Update No.

2025-01, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures

(Subtopic 220-40):

Clarifying the Effective Date (“ASU 2025-01”).

ASU 2024-03 requires additional disclosure of the nature

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

presented in the income statement.

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

2028 and for interim period reporting beginning in fiscal 2029 on a prospective basis.

Both early adoption and retrospective application

are permitted.

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

statements and disclosures.

2 – Going Concern and Liquidity

the three months ended March 31, 2025 and 2024, the Company had a net loss from continuing operations of $ ( 916,732 )

and $ ( 1,760,811 ) .

The Company used cash for operating activities from continuing operations of $ ( 452,827 )

and $ ( 2,848,643 )

for the three months ended March 31, 2025 and 2024, respectively.

May 2, 2024, Company entered into an ATM Sales Agreement (the “ATM Sales Agreement”) with A.G.P./Alliance Global

Partners (“AGP” or the “Agent”) pursuant to which the Company may offer and sell, from time to time, through

the Agent, as sales agent and/or principal, shares of its common stock, par value $ 0.0001 per

share (the “Common Stock”), having an aggregate offering price of up to $ 1,676,366 ,

subject to certain limitations on the amount of Common Stock that may be offered and sold by the Company set forth in the ATM Sales

Agreement (the “Offering”).

The Company is not obligated to make any sales of Shares under the ATM Sales Agreement and

any determination by the Company to do so will be dependent, among other things, on market conditions and the Company’s

capital raising needs.

On February 4, 2025, the Company, under the terms of the ATM Sales Agreement, filed a prospectus

supplement that amended the number shares of Common Stock having an aggregate offering price of up to $ 1,835,052 .

As of March 31,

2025, SharpLink has raised total gross proceeds of $ 1,834,925 .

On May 5, 2025 and May 6, 2025, SharpLink

filed a registration statement on Form S-1 and Form S-1/A, respectively, in connection with a potential public offering to raise up to

million (the “Offering”) in gross proceeds through the offering of i) shares of common stock or prefunded warrants, in lieu

thereof, ii) Series A-1 Common Stock Warrants, and iii) Series A-2 Common Stock Warrants (collectively, the Series A-1 Common Stock Warrants

and Series A-2 Common Stock Warrants, the “Common Warrants.” Pursuant to the registration statement, as amended, SharpLink

has engaged AGP to use its reasonable best efforts to solicit offers to purchase our securities in this offering.

The Agent has no obligation

to purchase any of the securities from us or to arrange for the purchase or sale of any specific number or dollar amount of the securities.

Because there is no minimum offering amount required as a condition to closing in this offering the actual public offering amount, Agent’s

fee, and proceeds to us, if any, are not presently determinable and may be substantially less than the total maximum offering amounts

set forth in the registration statement, as amended, and related preliminary prospectus.

In addition to funds that may be raised through the ATM Sales Agreement or the potential Offering, we may need to raise additional capital to fund the Company’s

growth and future business operations.

We cannot be certain that additional funding will be available on acceptable terms, or at all.

If we are not able to secure additional funding when needed to support our business and to respond to business challenges, track and comply with applicable laws and regulations, develop new technology and services or enhance our existing offering, improve our operating infrastructure, enhance our information security systems to combat changing cyber threats and expand personnel to support our business, we may have to delay or reduce the scope of our planned strategic initiatives.

Moreover, any additional equity financing that we obtain may dilute the ownership held by our existing shareholders.

The economic dilution to our shareholders will be significant if our stock price does not materially increase, or if the effective price of any sale is below the price paid by a particular shareholder.

Any debt financing could involve substantial restrictions on activities and creditors could seek additional pledges of some or all of our assets.

If we fail to obtain additional funding as needed, we may be forced to cease or scale back operations, and our results, financial conditions and stock price would be adversely affected.

As such, these factors, among others, raise substantial doubt about the ability of the Company to continue as a going concern for a reasonable period.

Note 3 – Sale of Sports Gaming Client Services and SHGN

On January 18, 2024, SharpLink Israel (“Parent Seller”) and SLG1 Holdings, LLC, a Delaware limited liability company and wholly owned subsidiary of SharpLink (“Subsidiary Seller”), SHGN (“SHGN,” and together with Parent Seller and Subsidiary Seller, the “Seller”), a Delaware corporation and wholly owned subsidiary of SharpLink, entered into a Purchase Agreement (the “PA”) with RSports Interactive, Inc., a Minnesota corporation (“Buyer”).

The Subsidiary Seller owns all of the outstanding membership interests of Sports Technologies, LLC, a Minnesota limited liability company, Holdings Quinn, LLC, a Delaware limited liability company and SHGN owns all of the issued membership interests in SHReserve, a Minnesota limited liability company;

SHPA, a Pennsylvania limited liability company, and SHHoldings LLC, a Minnesota limited liability company, and SHOperations, a Minnesota limited liability company (collectively referred to as the “Targets”).

SHHoldings LLC owns all of the membership interests in Virtual Fantasy Games Acquisitions, LLC, a Minnesota limited liability company;

LeagueSafe Management, LLC, a Minnesota limited liability company and SportsHub Regulatory, LLC, a Minnesota limited liability company.

The PA contemplated the sale of the Company’s Sports Gaming Client Services and SHGN business units to the Buyer, by selling all of the issued and outstanding membership interests of the Targets and the Acquired Subsidiaries for $ 22,500,000 in an all cash transaction.

On May 8, 2024, SharpLink entered into an amended and fully restated Post Closing Assignment Agreement with RSports, whereby SharpLink and RSports have agreed to amend the PA to exclude the transfer/sale of SHGN and have agreed to the assignment/sale of the Acquired Subsidiaries membership interests in SHReserve and SHPA to be made directly to RSports upon and subsequent to the approval of a petition by the Pennsylvania Gaming Control Board.

Based on this amended agreement, the sale of the business is an asset sale for legal and tax purposes instead of an equity sale.

Further, in connection with the Sale of Business, SharpLink entered into a Post Closing Covenant Agreement (the “PCCA”) with the Buyer defining the post-closing terms and conditions relating to certain transfers and assignments of assets subsequent to the closing of the Sale of Business, including:

Transferring control of all bank accounts held by the Targets to the Buyer;

Transferring or cooperating with the application process for all state gaming licenses held by the Targets in connection with the change of control to the Buyer;

Providing the Buyer with an accounting of all funds due to and from and any deferred revenue between Sports Technologies, LLC, SHGN and SharpLink, Inc.;

Assigning to Buyer or its affiliates, or cause the counterparty to consent to, all contracts assumed by the Buyer or its affiliates on or subsequent to the closing based upon change of control provisions;

Assigning to Buyer or its affiliates all of its intellectual property rights purchased in the PA for the Acquired Subsidiaries or Targets.

In accordance with the terms of the PCCA, SharpLink will complete all post-closing covenants following the closing as reasonably possible, with the exception of Seller covenants that are dependent on governmental authorities or governmental orders for completion, in which case it will use diligent, good faith efforts to cause the same to be completed as soon as practical.

The $ 14.6 million gain was calculated by measuring the difference between the fair value of consideration received less the carrying amount of assets and liabilities sold in accordance with ASC 810.

The gain is preliminary and subject to finalization of post-closing adjustments pursuant to the PA, the Post Closing Assignment Agreement and PCCA Agreement.

In the statement of cashflows for the nine months ended September 30, 2024 , the net cash used in investing activities - discontinued operations is due to cash received from the sale of business of $ 22,500,000 , net of the cash transferred of $ 41,357,834 .

The majority of the cash transferred of $ 41,357,834 was reflected in discontinued operations customer deposits liability and deferred revenue of $ 36,959,573 and $ 4,888,704 , respectively.

During the three and nine months ended September 30, 2024 , SharpLink paid RSports $ 38,816 and $ 132,413 , respectively, for use of accounting service personnel under the PCCA agreement.

RSports paid SharpLink $ 21,929 and $ 75,083 under the PCCA agreement for the three and nine months ended September 30, 2024 , respectively.

Note 4 – Discontinued Operations

In accordance with ASC 205 - 20 Presentation of Financial Statements:

Discontinued Operations, a disposal of a component of an entity or a group of components of an entity is required to be reported as discontinued operations if the disposal represents a strategic shift that has (or will have) a major impact on an entity’s operations and financial results when the components of an entity meets the criteria in ASC paragraph 205 - 20 - 45 - 10.

In the period in which the component meets the held for sale or discontinued operations criteria the major assets, other assets, current liabilities and non-current liabilities shall be reported as a component of total assets and liabilities separate from those balances of the continuing operations.

At the same time, the results of all discontinued operations, less applicable income taxes (benefit), shall be reported as components of net income (loss) separate from the income (loss) of continuing operations.

Sale of Sports Gaming Client Services and SHGN

As disclosed in Note 3, due to the Sale of Business in January 2024, we ceased our Sports Game Client Services and SHGN segments.

The historical results of these business segments have been reflected as discontinued operations in our consolidated financial statements for all periods prior to the closing date of the Sale of Business on January 18, 2024.

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

The majority of the assets of the primary reporting unit within MTS were sold.

The assets and liabilities remaining post transaction are in the process of winding down subsequent to the year ended December 31, 2022.

Accordingly, the assets and liabilities of the MTS business were separately reported as assets and liabilities from discontinued operations as of September 30, 2024 and September 30, 2023 .

The results of operations and cash flows of MTS for all periods are separately reported as discontinued operations.

During the second quarter of 2024, the Company was notified by the Buyer of an earn-out payment due to SharpLink in connection with the sale and recorded $ 297,387 in an earn-out receivable to be received from the Buyer.

Payment was received by the Company in July 2024.

No further earn-out payment is expected.

During the second quarter of 2024, in accordance with the dissolution of certain MTS entities, the Company wrote-off $ 400,669 of aged liabilities in the statement of operations for discontinued operations.

This write-off was recorded in the Other (expense) income line item below.

C4 Technology

In December 2023, the Company discontinued its C4 technology due to the lack of market acceptance.

C4 technology centered on monetizing our own online audience and our customers’ respective online audiences of U.S.

fantasy sports and casual sports fans and casino gaming enthusiasts by converting them into loyal online sports and iGaming bettors.

Summary Reconciliation of Discontinued Operations

If we are not able to secure additional funding when needed to support our business and to respond to business challenges, track and

comply with applicable laws and regulations, develop new technology and services or enhance our existing offering, improve our operating

infrastructure, enhance our information security systems to combat changing cyber threats and expand personnel to support our business,

we may have to delay or reduce the scope of our planned strategic initiatives.

Moreover, any additional equity financing that we obtain

may dilute the ownership held by our existing shareholders.

The economic dilution to our shareholders will be significant if our stock

price does not materially increase, or if the effective price of any sale is below the price paid by a particular shareholder.

financing could involve substantial restrictions on activities and creditors could seek additional pledges of some or all of our assets.

If we fail to obtain additional funding as needed, we may be forced to cease or scale back operations, and our results, financial conditions

and stock price would be adversely affected.

As such, these factors, among others, raise substantial doubt about the ability of the Company

to continue as a going concern for a reasonable period.

3 – Discontinued Operations

accordance with ASC 205 - 20 Presentation of Financial Statements:

Discontinued Operations, a disposal of a component of

an entity or a group of components of an entity is required to be reported as discontinued operations if the disposal represents a strategic

shift that has (or will have) a major impact on an entity’s operations and financial results when the components of an entity meets

the criteria in ASC paragraph 205 - 20 - 45 - 10.

In the period in which the component meets the held for sale

or discontinued operations criteria the major assets, other assets, current liabilities and non-current liabilities shall be reported

as a component of total assets and liabilities separate from those balances of the continuing operations.

At the same time, the results

of all discontinued operations, less applicable income taxes (benefit), shall be reported as components of net income (loss) separate

from the income (loss) of continuing operations.

of SHGN and Sports Gaming Client Services

January 18, 2024 , SharpLink Israel (“Parent Seller”) and SLG1 Holdings, LLC, a Delaware limited liability company

and wholly owned subsidiary of SharpLink (“Subsidiary Seller”), SHGN Acquisition Corp.

(“SHGN,” and together

with Parent Seller and Subsidiary Seller, the “Seller”), a Delaware corporation and wholly owned subsidiary of SharpLink,

entered into a Purchase Agreement (the “PA”) with RSports Interactive, Inc., a Minnesota corporation (“Buyer”).

The Subsidiary Seller owns all of the issued and outstanding membership interests of Sports Technologies, LLC, a Minnesota limited liability

company, SHGN and Holdings Quinn, LLC, a Delaware limited liability company (collectively referred to as the “Targets”).

The PA contemplated the sale of the Company’s Sports Gaming Client Services and SportsHub Gaming Network business units to the

Buyer, by selling all of the issued and outstanding membership interests of the Targets and the Acquired Subsidiaries for $ 22,500,000

in an all cash transaction.

SHGN owns all of the membership interests in Virtual Fantasy Games Acquisitions, LLC, a Minnesota limited

liability company;

LeagueSafe Management, LLC, a Minnesota limited liability company;

SportsHub Reserve, LLC, a Minnesota limited liability

SportsHub PA, LLC, a Pennsylvania limited liability company;

SportsHub Operations, LLC, a Minnesota limited liability company;

SportsHub Holdings, LLC, a Minnesota limited liability company;

SportsHub Regulatory, LLC, a Minnesota limited liability company;

SportsHub Player Reserve, LLC, a Minnesota limited liability company (collectively, the “Acquired Subsidiaries”).

a result of the Sale of Business, we ceased our Sports Game Client Services and SportsHub Gaming Network segments.

The historical results

of these business segments have been reflected as discontinued operations in our consolidated financial statements for all periods prior

to the closing date of the Sale of Business on January 18, 2024 .

connection with the Sale of Business, the Company entered into with the Buyer a Transition Services Agreement to provide for an orderly

transfer and the continuity of business services.

The Parent Seller would be able to use certain Buyer employees at an agreed upon hourly

The Buyer would be charged monthly amounts for business services such as accounting software, insurance and data services.

May 8, 2024, SharpLink entered into an amended and fully restated Post Closing Assignment Agreement with RSports, whereby SharpLink

and RSports agreed to amend the PA to exclude the transfer/sale of SHGN and agreed to the assignment/sale of the Acquired

Subsidiaries membership interests in SHReserve and SHPA to be made directly to RSports upon and subsequent to the approval of a

petition by the Pennsylvania Gaming Control Board.

Based on this amended agreement, the S ale

of Business is an asset sale for legal and tax purposes instead of an equity sale.

in connection with the Sale of Business, SharpLink entered into a Post Closing Covenant Agreement (the “PCCA”) with the Buyer

defining the post-closing terms and conditions relating to certain transfers and assignments of assets subsequent to the closing of the

Sale of Business, including:

control of all bank accounts held by the Targets to the Buyer;

or cooperating with the application process for all state gaming licenses held by the Targets in connection with the change of control

to the Buyer;

the Buyer with an accounting of all funds due to and from and any deferred revenue between Sports Technologies, LLC, SHGN and SharpLink,

to Buyer or its affiliates, or cause the counterparty to consent to, all contracts assumed by the Buyer or its affiliates on or subsequent

to the closing based upon change of control provisions;

to Buyer or its affiliates all of its intellectual property rights purchased in the PA for the Acquired Subsidiaries or Targets.

accordance with the terms of the PCCA, SharpLink will complete all post-closing covenants following the closing as reasonably possible,

with the exception of Seller covenants that are dependent on governmental authorities or governmental orders for completion, in which

case it will use diligent, good faith efforts to cause the same to be completed as soon as practical.

The $ 14.6 million gain was calculated

by measuring the difference between the fair value of consideration received less the carrying amount of assets and liabilities sold

in accordance with ASC 810.

the statement of cashflows for the three months ended March 31 2024, the net cash used in investing activities - discontinued operations

is due to cash received from the sale of business of $ 22,500,000 , net of the cash transferred of $ 41,357,834 .

The majority of the cash

transferred of $ 41,357,834 was reflected in discontinued operations customer deposits liability and deferred revenue of $ 36,959,573 and

$ 4,888,704 , respectively.

the three months ended March 31, 2025 and 2024, SharpLink paid RSports $ 0 and $ 34,059 , respectively, for use of accounting service personnel

under the PCCA agreement;

and RSports paid SharpLink $ 0 and $ 39,957 under the PCCA agreement for the three months ended March 31, 2025 and

2024, respectively.

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

The majority of the assets of the primary

reporting unit within MTS were sold.

Accordingly, the assets and liabilities of the MTS business were separately reported as assets and

liabilities from discontinued operations as of March 31, 2025 and March 31, 2024.

The results of operations and cash flows of MTS for

all periods are separately reported as discontinued operations.

Reconciliation of Discontinued Operations

For the Three Months Ended

For the Nine Months Ended

September 30, 2024

September 30, 2023

September 30, 2024

September 30, 2023

$ 17,621 $ 1,920,592 $ 431,199 $ 5,992,053

March 31, 2025

March 31, 2024

Cost of Revenues

4,680 1,178,439 163,249 3,739,348

12,941 742,153 267,950 2,252,705

Operating Expenses

Selling, general, and administrative expenses

121,054 1,939,005 476,228 5,454,661

Operating Loss

( 108,113 ) ( 1,196,852 ) ( 208,278 ) ( 3,201,956 )

Interest income

1,001 521,343 89,511 1,152,364

Other (expense) income

- ( 3,855 ) 501,320 ( 77,491 )

Gain on sale of business

- - 14,670,811 -

Interest expense

- ( 136,599 ) ( 9,027 ) ( 386,098 )

Total other income and expense

1,001 380,889 15,252,615 688,775

Income (loss) before income taxes

( 107,112 ) ( 815,963 ) 15,044,337 ( 2,513,181 )

Income tax (benefit) expense

( 9,973 ) 6,137 576,604 10,573

Income (loss) from discontinued operations

$ ( 97,139 ) $ ( 822,100 ) $ 14,467,733 $ ( 2,523,754 )

The following table presents a reconciliation of the carrying amounts of major classes of assets and liabilities of the Company classified as discontinued operations as of September 30, 2024 and December 31, 2023 :

September 30,

Income tax expense

Income (loss) from discontinued operations, net

following table presents a reconciliation of the carrying amounts of major classes of assets and liabilities of the Company classified

as discontinued operations as of March 31, 2025 and December 31, 2024:

of Major Classes of Assets and Liabilities

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

Current assets

$ 162,141 $ 46,369,229

Restricted cash

Accounts receivable, net of $0 allowance for credit losses

Unbilled receivables

Contract assets

Deferred prize expense

Prepaid expenses and other current assets

81,000 439,697

Investment, cost

Equipment, net

Right-of-use asset – operating lease

Intangible assets, net

Total current assets

$ 243,141 $ 67,805,379

September 30,

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

1 unchanged sentence

Accounts payable and accrued expenses

151,674 $ 1,123,105

Contract liabilities

Prize liability

Customer obligations

( 246 ) 50,249,095

Line of credit

Current portion of long-term debt

Current portion of lease liability

Deferred tax liability

Total current liabilities

$ 151,428 $ 66,396,883

Note 5 – Additional Balance Sheet Information

Equipment, net

Equipment consists of computers, furniture and fixtures and is presented net of accumulated depreciation from continuing operations for a net book value of $ 4,624 and $ 8,792 as of September 30, 2024 and December 31, 2023 , respectively.

Depreciation expense from continuing operations for the three months ended September 30, 2024 and 2023 was $ 1,544 and $ 3,459 , respectively, and $5,88 7 and $ 9,366 respectively, for the nine months ended September 30, 2024 and 2023 .

Depreciation expense for discontinued operations for the three months ended September 30, 2024 and 2023 was $ 0 and $ 5,399 , respectively and was $ 1,044 and $ 14,906 , respectively, for the nine months ended September 30, 2024 and 2023 .

Intangible assets, net

Intangible assets, net of accumulated amortization as of September 30, 2024 and December 31, 2023 consisted of the following:

Weighted Average Amortization Period (Years)

Cost, Net of Impairment

Accumulated Amortization

Balance, September 30, 2024

Acquired technology

3 $ 24,700 $ 10,294 $ 14,406

$ 24,700 $ 10,294 $ 14,406

Balance, December 31, 2023

Customer relationships

5 - 10 $ 208,124 $ 208,124 $ -

Acquired technology

3 - 5 808,700 790,588 18,112

Software in development

N/A 150,000 - 150,000

$ 1,166,824 $ 998,712 $ 168,112

Amortization expense from continuing operations on intangible assets for the three and nine months ended September 30, 2024 was $ 1,245 and $ 3,706 , respectively.

Amortization expense from discontinued operations was $ 0 and $ 23,469 for the three and nine months ended September 30, 2024 , respectively.

For the three and nine months ended September 30, 2023 , amortization expense from continuing operations was $ 28,158 and $ 78,267 respectively.

Amortization expense for the discontinued operations was $ 172,968 and $ 501,647 for the three and nine months ended September 30, 2023 , respectively.

As of December 31, 2023 , the Company impaired, net $ 849,565 for the customer relationship and internally developed software in Affiliate Marketing Services due to the loss of future revenue by the exit of Affiliate Marketing Services' largest customer from the European market.

The Company sold $ 150,000 of software in development to a third party during the first quarter of 2024.

Note 6 – Line of Credit

On February 13, 2023, the Company entered into a Revolving Credit Agreement with Platinum Bank (the “Lender”) and executed a variable rate ( 9.0 % as of December 31, 2023 ) revolving promissory note of $ 7,000,000 , expiring February 26, 2025.

As collateral, the Company granted a security interest in and to all of the Company’s right, title and interest in certain assets on account at Platinum Bank, together with all financial assets, security entitlements with respect to such financial assets, investment property, securities and other property, to secure the payment and performance of the Revolving Credit Agreement.

There was $ 6,350,000 outstanding as of December 31, 2023 .

In connection with the Sale of Business in January 2024, the revolving credit line was paid off in its entirety.

Note 7 – Debt

On January 31, 2022, FourCubed Acquisition Company, LLC (“FCAC”), a wholly owned subsidiary of the Company, entered into a $ 3,250,000 term loan agreement with Platinum Bank (the “Term Loan Agreement”).

The Term Loan Agreement bears annual interest at a rate of 4.0 % and requires a fixed monthly payment of $ 59,854 , consisting of principal and interest, through the term loan’s maturity, which is January 31, 2027.

The Company capitalized $ 25,431 of loan initiation fees associated with the Term Loan Agreement which are presented net within debt on the condensed consolidated balance sheet and amortized on a method which approximates the effective interest method to interest expense on the condensed consolidated statement of operations.

On January 18, 2024, in conjunction with the Sale of Business, the term loan was paid off.

Note 8 - Convertible Debenture and Warrant

Convertible Debenture at Fair Value

The Company accounts for convertible debentures using an amortized cost model.

The discount for warrants, the Original Issuance Discount (“OID”) and the initial allocation of fair value of compound derivatives reduce the initial carrying amount of the convertible notes.

The carrying value is the stated principal amount at contractual maturity using the effective-interest method with a corresponding charge to interest expense.

Debt discounts are presented on the condensed consolidated balance sheets as a direct deduction from the carrying amount of that related debt.

The Company made an irrevocable election at the time of issuance of the Debenture to record the Debenture at its fair value (the “Fair Value Option”) with changes in fair value recorded through the Company’s condensed consolidated statements of operations within other income (expense) at each reporting period.

The Fair Value Option provides the Company with a measurement basis election for financial instruments on an instrument-by-instrument basis.

On February 14, 2023, the Company entered into the Securities Purchase Agreement (the “SPA”) with Alpha, a current shareholder of the Company, pursuant to which the Company issued to Alpha, an 8 % Interest Rate, 10 % Original Issue Discount, Senior Convertible Debenture (the “Debenture”) in the aggregate principal amount of $ 4,400,000 for a purchase price of $ 4,000,000 on February 15, 2023.

The Debenture is convertible, at any time, and from time to time, at Alpha’s option, into shares of Common Stock of the Company (the “Conversion Shares”), at an initial conversion price equal to $ 7.00 per share, subject to adjustment as described below and, in the Debenture, (the “Conversion Price”).

In addition, the Conversion Price of the Debenture was subject to an initial reset immediately prior to the Company’s filing of a registration statement covering the resale of the underlying shares to the lower of $ 7.00 and the average of the five Nasdaq Official Closing Prices immediately preceding such date (the “Reset Price”).

The registration statement on Form S- 1 (file No.:

333 - 271396 ) was filed on April 21, 2023, and as a result, the Reset Price is now $ 4.1772 .

The initial adjustment of the Conversion Price to the Reset Price had a floor price of $ 3.00 (the “Floor Price”).

Commencing November 1, 2023 and continuing on the first day of each month thereafter until the earlier of (i) February 15, 2026 ( the “Maturity Date”) and (ii) the full redemption of the Debenture (each such date, a “Monthly Redemption Date”), the Company will redeem $ 209,524 plus accrued but unpaid interest, and any amounts then owing under the Debenture (the “Monthly Redemption Amount”).

The Monthly Redemption Amount will be paid in cash;

provided, that the Company may elect to pay all or a portion of a Monthly Redemption Amount in ordinary shares of the Company, based on a conversion price equal to the lesser of (i) the then Conversion Price of the Debenture and (ii) 80% of the average of the VWAPs (as defined in the Debenture) for the five consecutive trading days ending on the trading day that is immediately prior to the applicable Monthly Redemption Date.

The Company may also redeem some or all of the then outstanding principal amount of the Debenture at any time for cash in an amount equal to the then outstanding principal amount of the Debenture being redeemed plus accrued but unpaid interest, liquidated damages and any amounts then owing under the Debenture.

These monthly redemption and optional redemptions are subject to the satisfaction of the Equity Conditions (as defined in the Debenture).

The Debenture initially accrues interest at the rate of 8 % per annum for the first 12 months from the February 15, 2023, at the rate of 10 % per annum for the ensuing 12 months, and thereafter until maturity, at the rate of 12 %, Interest may be paid in cash or ordinary shares of the Company or a combination thereof at the option of the Company;

provided that interest may only be paid in shares if the Equity Conditions (as defined in the Debenture) have been satisfied.

The Debenture includes a beneficial ownership blocker of 9.99 %.

The Debenture provides for adjustments to the Conversion Price in connection with stock dividends and splits, subsequent equity sales and rights offerings, pro rata distributions, and certain Fundamental Transactions.

In the event the Company, at any time while the Debentures is outstanding, issues or grants any right to re-price, ordinary shares or any type of securities giving rights to obtain ordinary shares at a price below the Conversion Price, Alpha shall be extended full-ratchet anti-dilution protection (subject to customary Exempt Transaction issuances), and such reset shall not be limited by the Floor Price.

At the time of execution, on February 14, 2023, the Company recorded an initial debt discount of $ 400,000 based on the allocation of fair value for the Debenture, which will be amortized into interest expense over the term of the Debenture.

For the period from February 14, 2023 through December 31, 2023, the Company recognized $( 255,229 ) change in fair value of the convertible Debenture, which is reflected in other income and expense in the condensed consolidated statement of operations, and $ 16,667 for the amortization of the OID, which is included in interest expense on the condensed consolidated statement of operations.

Pursuant to Section 8 (a)(vi) of the Debenture, it is an event of default if the Company is party to a Fundamental Transaction or agrees to sell or dispose of all or in excess of 33 % of its assets in one transaction or a series of related transactions.

On January 19, 2024, SharpLink and Alpha entered into a settlement agreement (the “Settlement Agreement”) whereby Alpha agreed to waive (i) the event of default under Section 8 (a)(vi) of the Debenture in connection with the Sale of Business;

4 – Additional Balance Sheet Information

consists of computers, furniture and fixtures and is presented net of accumulated depreciation from continuing operations for a net book

value of $ 2,153 and $ 3,359 as of March 31, 2025 and December 31, 2024, respectively.

Depreciation expense from continuing operations

for the three months ended March 31, 2025 and 2024 was $ 894 and $ 2,202 , respectively.

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

of Intangible Assets

Average Amortization Period (Years)

Net of Impairment

March 31, 2025

December 31, 2024

expense from continuing operations on intangible assets for the three months ended March 31, 2025 and 2024 was $ 1,218

and $ 1,231 ,

respectively.

The Company sold $ 150,000

of software in development to a third party during the first quarter of 2024.

5 - Convertible Debenture and Warrant

Debenture at Fair Value

Company accounts for convertible debentures using an amortized cost model.

The discount for warrants, the Original Issuance Discount

(“OID”) and the initial allocation of fair value of compound derivatives reduce the initial carrying amount of the convertible

The carrying value is the stated principal amount at contractual maturity using the effective-interest method with a corresponding

charge to interest expense.

Debt discounts are presented on the condensed consolidated balance sheets as a direct deduction from the

carrying amount of that related debt.

Company made an irrevocable election at the time of issuance of the Debenture to record the Debenture at its fair value (the “Fair

Value Option”) with changes in fair value recorded through the Company’s condensed consolidated statements of operations

within other income (expense) at each reporting period.

The Fair Value Option provides the Company with a measurement basis election

for financial instruments on an instrument-by-instrument basis.

February 14, 2023, the Company entered into the Securities Purchase Agreement (the “SPA”) with Alpha, a current shareholder

of the Company, pursuant to which the Company issued to Alpha an 8 % Interest Rate, 10 % Original Issue Discount, Senior Convertible Debenture

(the “Debenture”) in the aggregate principal amount of $ 4,400,000 for a purchase price of $ 4,000,000 on February 15, 2023.

The Debenture is convertible, at any time, and from time to time, at Alpha’s option, into shares of Common Stock of the Company

(the “Conversion Shares”), at an initial conversion price equal to $ 84.00 per share, subject to adjustment as described in

the debenture agreement.

A registration statement on Form S-1 (file No.:

333-271396) was filed on April 21, 2023, and as a result, the

reset price was set to $ 50.13 .

to Section 8(a)(vi) of the Debenture, it is an event of default if the Company is party to a Fundamental Transaction or agrees to sell

or dispose of all or in excess of 33 % of its assets in one transaction or a series of related transactions.

On January 19, 2024, SharpLink

and Alpha entered into a settlement agreement (the “Settlement Agreement”) whereby Alpha agreed to waive (i) the event of

default under Section 8(a)(vi) of the Debenture in connection with the Sale of Business;

and (ii) payment of the Mandatory Default Amount;

and the parties agreed that the Company would pay 110 % of the outstanding principal amount of the Debenture, plus accrued and unpaid interest, in the aggregate total amount of $ 4,484,230 (the “Debenture Redemption Amount”).

On January 19, 2024, the Company paid Alpha the Debenture Redemption Amount.

As a result, the Company’s obligations under the Debenture have been satisfied.

Purchase Warrant

On February 15, 2023, the Company also issued to Alpha a warrant (the “Warrant”) to purchase 880,000 ordinary shares of the Company at an initial exercise price of $ 8.75 (the “Warrant Shares”, and, together with the Conversion Shares, and any other ordinary shares of the Company that may otherwise become issuable pursuant to the terms of the Debenture and Warrant, the “Underlying Shares”).

and the parties agreed that the Company would pay 110 % of the outstanding principal amount of the Debenture, plus accrued and unpaid

interest, in the aggregate total amount of $ 4,484,230 (the “Debenture Redemption Amount”).

January 19, 2024, the Company paid Alpha the Debenture Redemption Amount.

As a result, the Company’s obligations under the Debenture

have been satisfied.

February 15, 2023, the Company also issued to Alpha a warrant (the “Warrant”) to purchase 73,333 common shares of the Company

at an initial exercise price of $ 105.01 (the “Warrant Shares,” and, together with the Conversion Shares, and any other common

shares of the Company that may otherwise become issuable pursuant to the terms of the Debenture and Warrant, the “Underlying Shares”).

The Warrant is exercisable in whole or in part, at any time on or after February 15, 2023 and before February 15, 2028.

The exercise price of the Warrant was subject to an initial reset immediately prior to the Company’s filing of a proxy statement that included a shareholder proposal to approve the issuance of Underlying Share in excess of 19.99 % of the issued and outstanding ordinary shares on the Closing Date (the “Shareholder Proposal”) to the lower of $ 8.75 and the average of the five Nasdaq Official Closing Prices immediately preceding such date.

As a result, the exercise price has been reset to $ 4.0704 , the average of the five Nasdaq Official Closing Prices immediately preceding April 14, 2023, the date the Company filed its preliminary proxy statement which included the Shareholder Proposal.

The Warrant includes a beneficial ownership blocker of 9.99 %.

The Warrant provides for adjustments to the exercise price, in connection with stock dividends and splits, subsequent equity sales and rights offerings, pro rata distributions, and certain Fundamental Transactions.

In the event the Company, at any time while the Warrant is still outstanding, issues or grants any right to re-price ordinary shares or any type of securities giving rights to obtain ordinary shares at a price below exercise price, Alpha shall be extended full-ratchet anti-dilution protection on the Warrant (reduction in price, only, no increase in number of Warrant Shares, and subject to customary Exempt Transaction issuances), and such reset shall not be limited by the Floor Price.

At the time of execution, the Company classified the Warrant as an equity contract and performed an initial fair value measurement.

As the Warrant was issued with the assumption of the Debenture, the value assigned to the Warrant was based on an allocation of proceeds, subject to the allocation to the Debenture.

The Company recorded a debt discount for the Warrant of $ 1,174,229 , based on the Black Scholes option-pricing model which was calculated independently of the fair value of the Debenture, and recorded the Warrant as additional paid-in capital in the condensed consolidated balance sheet as of December 31, 2023 .

The Warrant provides that in the event of a Fundamental Transaction, SharpLink, at Alpha’s option, would repurchase the Warrant from Alpha on the terms set forth in Section 3 (e)(ii) of the 2023 Warrant (the “Warrant Repurchase”).

On January 19, 2024, SharpLink and Alpha entered into a settlement agreement (the “Settlement Agreement”) whereby Alpha agreed to waive (i) the event of default under Section 3 (e)(ii) of the Warrant in connection with the Sale of Business.

Pursuant to Section 5 ( 1 ) of the Warrant, Alpha further agreed to waive its right to elect that, in connection with and at the closing of the Sale of Business, the Warrant shall be repurchased by the Company as set forth in Section 3 (e) of the 2023 Warrant.

The parties agreed in the Settlement Agreement that the Warrant Repurchase for its Black Scholes value shall take place upon the earlier of (a) June 30, 2024;

the time of execution, the Company classified the Warrant as an equity contract and performed an initial fair value measurement.

Warrant was issued with the assumption of the Debenture, the value assigned to the Warrant was based on an allocation of proceeds, subject

to the allocation to the Debenture.

The Company recorded a debt discount for the Warrant of $ 1,174,229 , based on the Black Scholes option-pricing

model which was calculated independently of the fair value of the Debenture, and recorded the Warrant as additional paid-in capital.

Warrant provides that in the event of a Fundamental Transaction (as defined in the Debenture), SharpLink, at Alpha’s option, would

repurchase the Warrant from Alpha on the terms set forth in Section 3(e)(ii) of the 2023 Warrant (the “Warrant Repurchase”).

On January 19, 2024, SharpLink and Alpha entered into a settlement agreement (the “Settlement Agreement”) whereby Alpha agreed

to waive (i) the event of default under Section 3(e)(ii) of the Warrant in connection with the Sale of Business.

to Section 5(1) of the Warrant, Alpha further agreed to waive its right to elect that, in connection with and at the closing of the Sale

of Business, the Warrant shall be repurchased by the Company as set forth in Section 3(e) of the 2023 Warrant.

The parties agreed in

the Settlement Agreement that the Warrant Repurchase for its Black Scholes value shall take place upon the earlier of (a) June 30, 2024;

(b) the Company raising a gross amount of not less than $ 3,000,000 whether by equity or debt;

and (c) the Company entering into a “Fundamental Transaction” as defined in the 2023 Warrant.

The parties further agree in the Settlement Agreement value of the 2023 Warrant for purposes of the Warrant Repurchase at $ 900,000 , which was based on a Black Scholes model.

On March 6, 2024, SharpLink entered into an Exchange Agreement (the “Exchange Agreement”) with Alpha to change the Warrant Repurchase of $ 900,000 .

Pursuant to the terms and conditions set forth in the Exchange Agreement, the Company agreed to exchange the 2023 Warrant to purchase 880,000 ordinary shares of common stock for (i) 156,207 shares of Common Stock (the “Shares”), (ii) a pre-funded warrant in the amount of 469,560 shares of Common Stock (the “Pre-Funded Warrant”) and (iii) the unexchanged balance of the 2023 Warrant Repurchase (the “Warrant Repurchase Balance”).

The Warrant Repurchase Balance of 254,233 warrants is valued at $ 170,636 and shall be subject to the repurchase terms set forth in the Settlement Agreement.

The Pre-Funded Warrant and the Warrant Repurchase Balance were valued using Black Scholes option-pricing model.

As part of this transaction, the Company recorded a deemed dividend of $ 44,619 as presented in the statement of stockholders’ equity for the nine months ended September 30, 2024 .

On June 30, 2024, SharpLink negotiated an Amendment to the Exchange Agreement (the "Amendment") to reduce the strike price per warrant of the unexchanged balance of the 2023 Warrants Repurchase Balance from $ 4.07 to $ 0.0001 and to remove the re-purchase option.

The modification to the Exchange Agreement was valued on June 29, 2024, the day before the modification, using the Black Scholes option-pricing model.

The Company recorded a fair value adjustment of $17,996 on the condensed consolidated statements of operations during the second quarter of 2024 and removed the remaining accrued warrant liability of $ 152,386 through an adjustment to additional paid in capital.

The fair value of the Warrant Repurchase balance and the Pre-Funded Warrant are estimated on the following dates using the Black Scholes option pricing model with the following assumptions:

and (c) the Company entering into a Fundamental

Transaction as defined in the 2023 Warrant.

The parties further agree in the Settlement Agreement value of the 2023 Warrant for purposes

of the Warrant Repurchase at $ 900,000 , which was based on a Black Scholes model.

March 6, 2024, SharpLink entered into an Exchange Agreement (the “Exchange Agreement”) with Alpha to change the Warrant Repurchase

of $ 900,000 .

Pursuant to the terms and conditions set forth in the Exchange Agreement, the Company agreed to exchange the 2023 Warrant

to purchase 73,333 shares of common stock for (i) 13,017 shares of Common Stock (the “Shares”), (ii) a pre-funded warrant

in the amount of 39,130 shares of Common Stock (the “Pre-Funded Warrant”) and (iii) the unexchanged balance of the 2023 Warrant

Repurchase (the “Warrant Repurchase Balance”).

The Warrant Repurchase Balance of 21,186 warrants is valued at $ 170,636 and

shall be subject to the repurchase terms set forth in the Settlement Agreement.

The Pre-Funded Warrant and the Warrant Repurchase Balance

were valued using Black Scholes option-pricing model.

As part of this transaction, the Company recorded a deemed dividend of $ 44,619

as presented in the statement of stockholders’ equity for the three months ended March 31, 2024.

fair value of the Warrant Repurchase balance and the Pre-Funded Warrant are estimated on the following dates using the Black Scholes

option pricing model with the following assumptions:

Schedule of Fair Value Assumptions of Warrants

January 19, 2024

1 unchanged sentence

March 31, 2024

June 30, 2024

Expected volatility

112.98 % 90.90 % 87.36 % 88.06 %

Expected dividends

0.00 % 0.00 % 0.00 % 0.00 %

Expected term (years)

4.08 3.92 3.90 3.63

Risk-free rate

3.75 % 4.12 % 4.21 % 4.33 %

Note 9 - Fair Value

In accordance with fair value accounting guidance, the Company determines fair value based on the exchange price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants.

As disclosed in Note 8 , SharpLink entered into a Settlement Agreement on January 19, 2024 for the 2023 Warrant for purposes of the Warrant Repurchase at $ 900,000 .

On March 6, 2024, SharpLink entered into an Exchange Agreement (the “Exchange Agreement”) with Alpha to change the Warrant Repurchase of $ 900,000 .

Pursuant to the terms set forth in the Exchange Agreement, the Company agreed to exchange the 2023 Warrant for (i) 156,207 shares of Common Stock (the “Shares”), (ii) a pre-funded warrant in the amount of 469,560 shares of Common Stock (the “Pre-Funded Warrant”) and (iii) the remaining unexchanged balance of the 2023 Warrant Repurchase (the “Warrant Repurchase Balance”).

June 30, 2024, SharpLink negotiated an Amendment to the Exchange Agreement (the "Amendment") to reduce the strike price per warrant of the unexchanged balance of the

2023 Warrants Repurchase Balance from

$ 0.0001 and to remove the re-purchase option.

The fair value of the warrant liability was

September 30, 2024 .

measurement input

June 30, 2024 , SharpLink negotiated an Amendment to the Exchange Agreement (the “Amendment”) to reduce the strike

price per warrant of the unexchanged balance of the 2023 Warrants Repurchase Balance from $ 48.85 to $ 0.0012 and to remove the re-purchase

6 - Fair Value

accordance with fair value accounting guidance, the Company determines fair value based on the exchange price that would be received

to sell an asset or paid to transfer a liability in an orderly transaction between market participants.

disclosed in Note 5 , SharpLink entered into a Settlement Agreement on January 19, 2024 for the 2023 Warrant for purposes of the

Warrant Repurchase at $ 900,000 .

On March 6, 2024, SharpLink entered into an Exchange Agreement with Alpha to change the Warrant Repurchase

of $ 900,000 .

Pursuant to the terms set forth in the Exchange Agreement, the Company agreed to exchange the 2023 Warrant for (i) 13,107

shares of Common Stock (the “Shares”), (ii) a pre-funded warrant in the amount of 39,130 shares of Common Stock (the “Pre-Funded

Warrant”) and (iii) the remaining unexchanged balance of the 2023 Warrant Repurchase (the “Warrant Repurchase Balance”).

disclosed in Note 5 , the Debenture and the Warrant were reported at fair value at issuance.

following table presents a reconciliation of the beginning and ending balances of the Debenture measured at fair value on a recurring

basis that uses significant unobservable inputs (Level 3) and the related expenses and losses recorded in the consolidated statement

of operations during the three months ended March 31, 2024:

of Significant Unobservable Inputs (level 3) and Related Expenses and Losses

Fair Value, December 31, 2023

4 unchanged sentences

Change in fair value of warrant repurchase balance

Change in fair value of warrant amendment

Settlement of warrant liability due to amendment

Fair Value, September 30, 2024

As disclosed in Note 8 , the Debenture and the Warrant were reported at fair value at issuance.

The following table sets forth the Company’s consolidated financial assets and liabilities measured at fair value by level within the fair value hierarchy on December 31, 2023

Convertible Debenture

The following table presents a reconciliation of the beginning and ending balances of the Debenture measured at fair value on a recurring basis that uses significant unobservable inputs (Level 3 ) and the related expenses and losses recorded in the consolidated statement of operations during the twelve months ended December 31, 2023 :

Fair Value, December 31, 2022

Issuance of convertible debenture

Accretion for discount for warrants

Accretion for discount for OID

Interest expense

Principle repayments

Change in fair value

Fair Value, December 31, 2023

The fair value of the Debenture was determined using a Monte Carlo Simulation (“MCS”), which incorporates the probability and timing of the consummation of a Fundamental Transaction event and conversion of the Debenture as of the valuation date.

The MCS implied a discount rate at issuance that resulted in a total value to the debenture and warrants that equated to the transaction proceeds.

This discount rate was 50.0 % at issuance and was calibrated to the December 31, 2023 valuation date by comparing the B rated commercial paper credit spread at both dates.

B spreads are as follows:

Issuance - February 14, 2023

Fair Value - December 31, 2023

At inception, the Company valued the Debenture using a MCS model using the value of the underlying stock price of $ 3.50 , exercise price of $ 8.75 , expected dividend rate of 0 %, risk-free interest rate of 3.96 % and volatility of 40.0 %.

The Company estimated the term of the warrant to be 2.9 years.

On December 31, 2023 , the Company valued the Debenture using a MCS model using the expected dividend rate of 0 % and the risk-free interest rate of 5.60 %.

Fair value determinations require considerable judgment and are sensitive to changes in underlying assumptions, estimates and market factors.

Note 10 - Warrants

In conjunction with the Convertible Debenture and Warrant issuance on February 14, 2023, 266,667 warrants that were previously issued to Alpha on November 19, 2021 were revalued on February 14, 2023, reducing the exercise price from $ 45.00 per warrant share to $ 0.60 per warrant share.

The Company performed a Black Scholes model for the re-pricing of the warrants using the value of the underlying stock price of $ 5.10 stock price, exercise price of $ 0.60 , expected dividend rate of 0 %, risk-free interest rate of 4.04 % and volatility of 52.57 % and remaining term of 2.9 years.

These same assumptions were applied to the 880,000 warrants.

The value allocated to the warrants on November 19, 2021 was $ 11,435 and was recorded in additional paid-in capital.

The fair value of the re-priced warrants on February 15, 2023 was $ 1,218,205 , an increase of $ 1,206,771 .

The incremental value of the warrants was recorded in additional paid-in capital as of December 31, 2023 as a deemed dividend.

On June 14, 2023, the Company filed a registration statement on Form S- 1 (file number:

333 - 272652 ) with the SEC to register 266,667 ordinary shares issuable upon exercise of the purchase warrants issued to Alpha in November 2021.

The registration statement on Form S- 1 was deemed effective on September 29, 2023.

On January 19, 2024, Alpha exercised the purchase warrants in full for 266,667 ordinary shares with the Company receiving $ 160,000 .

In conjunction with the Amendment to the Exchange Agreement on June 30, 2024, 254,233 warrants that were previously issued to Alpha on February 14, 2023 were revalued on June 29, 2024, reducing the exercise price from $ 4.07 per warrant share to $ 0.0001 per warrant share.

The Company performed a Black Scholes model for the re-pricing of the warrants using the value of the underlying stock price of $ 0.60 stock price, exercise price of $ 0.0001 , expected dividend rate of 0 %, risk-free interest rate of 4.33 % and volatility of 88.06 % and remaining term of 3.63 years.

The fair value of the re-priced warrants on June 29, 2023 was $ 152,386 , a decrease of $ 17,996 .

The incremental value of the warrants was recorded as change in fair value on the condensed consolidated statements of operations during the second quarter of 2024.

As a result of the removal of the repurchase option, the remaining warrant liability of $ 152,386 was removed as an adjustment to additional paid in capital as of June 30, 2024.

On July 21, 2024, 5,833 warrants expired at an exercised price of $ 26.42 .

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

Fair Value, March 31, 2024

fair value of the Debenture was determined using a Monte Carlo Simulation (“MCS”), which incorporates the probability and

timing of the consummation of a Fundamental Transaction event and conversion of the Debenture as of the valuation date.

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

of Warrant Activity

Weighted Average

Exercise Price Per Share

Remaining Life (Years)

Exercise Price Per

Remaining Life

Outstanding as of December 31, 2024

1,158,015 $ 3.43 3.58

Previously issued regular warrants exchanged

( 723,793 ) 4.10 -

Exchanged revalued warrants issued

723,793 - 7.19

( 425,374 ) $ 1.88 -

( 5,833 ) $ 26.42 -

Outstanding as of September 30, 2024

726,808 $ 0.07 7.20

Following is a summary of the Company’s warrant activity for the nine months ended September 30, 2023 :

Outstanding as of March 31, 2025

is a summary of the Company’s warrant activity for the three months ended March 31, 2024:

Weighted Average

Exercise Price Per Share

Remaining Life (Years)

Exercise Price Per

Remaining Life

Outstanding as of December 31, 2023

400,359 $ 0.82 2.83

Previously issued regular warrants

( 266,667 ) ( 45.00 ) 0.49

Revalued regular warrants

266,667 0.60 0.49

( 125,359 ) ( 0.01 ) -

Issued and vested

883,015 4.15 3.34

Outstanding as of September 30, 2023

1,158,015 $ 3.43 3.84

Note 11 - Stock Compensation

Stock Options

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

Outstanding as of March 31, 2024

8 - Stock Compensation

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

those options generally vest based on three years of continuous service and have ten-year contractual terms.

Certain option and share awards provide for accelerated vesting if there is a change in control, as defined in the plans.

The Company granted 0 and 169,309 options for the nine months ended September 30, 2024 and 2023 , respectively.

The Company recognized stock compensation expense for stock options of $ 124,763 and $ 489,780 for the nine months ended September 30, 2024 and 2023 , respectively, of which $ 12,041 and $ 285,479 of expense are recorded in discontinued operations.

The Company recognized stock compensation expense for stock options of $ 39,559 and $ 170,116 for the three months ended September 30, 2024 and 2023 , respectively, of which $ 0 and $ 102,293 of expense are recorded in discontinued operations.

The fair value of each option award is estimated on the date of grant using a Black Scholes option-pricing model.

The Company uses historical option exercise and termination data to estimate the term the options are expected to be outstanding.

The risk-free rate is based on the U.S.

Certain option and share

awards provide for accelerated vesting if there is a change in control, as defined in the plans.

Company granted no options for the three months ended March 31, 2025 and 2024, respectively.

The Company recognized stock compensation

expense for stock options of $ 36,365 and $ 42,152 for the three months ended March 31, 2025 and 2024, respectively, of which $ 0 and

$ 12,041 of expense are recorded in discontinued operations.

fair value of each option award is estimated on the date of grant using a Black Scholes option-pricing model.

The Company uses historical

option exercise and termination data to estimate the term the options are expected to be outstanding.

The risk-free rate is based on

Treasury yield curve in effect at the time of grant.

The expected dividend yield is calculated using historical dividend amounts and the stock price at the option issue date.

The expected dividend yield is calculated using historical dividend amounts

and the stock price at the option issue date.

The expected volatility is determined using the volatility of peer companies.

The Company’s underlying stock has been publicly traded since the date of the MTS Merger on July 26, 2021.

Subsequent to the MTS Merger, option grants made under the SharpLink, Inc.

2021 Plan utilized the publicly traded stock price of the Company on the day of the option award.

All option grants made under the SharpLink, Inc.

2020 Stock Incentive Plan were prior to the MTS Merger.

The underlying SharpLink, Inc.

stock under that plan was not publicly traded, but was estimated on the date of the grants using valuation methods that consider valuations from recent equity financings as well as future planned transactions.

All option grants made under the SportsHub Games Network Inc.

2018 Incentive Plan were prior to the SHGN Acquisition by SharpLink.

The underlying SportsHub stock under that plan was not publicly traded, but was estimated on the date of the grants using valuation methods that consider valuations from recent equity financings as well as future planned transactions.

On July 21, 2024, 2,500 warrants were exercised at an exercise price of $ 0.00 .

The fair value of each stock option grant is estimated on the date of grant using the Black Scholes option pricing model with the following assumptions:

September 30, 2024

September 30, 2023

fair value of each stock option grant is estimated on the date of grant using the Black Scholes option pricing model with the following

Schedule of Fair Values of Stock Options Granted Using Black-scholes Valuation Model Assumptions

March 31, 2024

Expected volatility

2 unchanged sentences

Expected term (years)

5.0 - 6.0 5.7

Risk-free rate

0.40 - 4.33 % 3.4 - 4.3 %

Fair value of Ordinary Shares on grant date

Fair value of common shares on grant date

$ 20.40 - $ 394.56

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

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

Schedule of Stock Option Activity

Outstanding as of December 31, 2024

414,819 $ 8.79 7.7 $ 3,750

( 2,500 ) 0.62

( 104,648 ) 5.71

( 199,410 ) 11.10

Outstanding as of September 30, 2024

108,261 $ 7.59 7.9 $ -

Exercisable as of September 30, 2024

75,966 $ 8.05 7.8 $ -

The summary of activity under the plans as of September 30, 2023 , and change during the nine months ended September 30, 2023 , is as follows:

Outstanding as of March 31, 2025

Exercisable as of March 31, 2025

summary of activity under the plans as of March 31, 2024, and change during the three months ended March 31, 2024, is as follows:

Outstanding as of December 31, 2023

288,914 $ 11.40 7,750

( 7,112 ) 5.70

( 1,413 ) 8.84

Outstanding as of September 30, 2023

450,696 $ 9.21 8.9 4,000

Exercisable as of September 30, 2023

211,949 $ 11.47 8.5 4,000

Unamortized stock compensation expense of $ 159,896 will be amortized through 2026 for 33,615 of unvested options and has a weighted average recognition period of 8.1 years.

Restricted Stock Units

For the nine months ended September 30, 2024 , the Company’s Compensation Committee recommended to the Board of Directors and the Board approved the granting of certain restricted stock units (“RSU”) to members of the senior leadership team and the Board of Directors.

The aggregate fair value of RSU awards was $ 567,203 and valued at the closing price of the Company’s Common Stock on the date of grant.

The RSUs vest at quarterly intervals through September 30, 2025.

There were no RSU's granted in 2023.

The following is a summary of RSU activity:

Average Grant

Date Fair Value

Outstanding as of March 31, 2024

Exercisable as of March 31, 2024

stock compensation expense of $ 72,715 will be amortized through 2026 for 2,099 of unvested options and has a weighted average recognition

period of 2.0 years.

Company’s Compensation Committee recommended to the Board of Directors and the Board approved the granting of certain restricted

stock units (“RSU”) to members of the senior leadership team and the Board of Directors.

For the three months ended

March 31, 2025, the RSUs vest at quarterly intervals through September 30, 2025.

The following is a summary of RSU activity for the three

months ended March 31, 2025:

Schedule of Restricted Stock Units

Outstanding as of December 31, 2024

500,004 1.14 - -

Vested and released

Outstanding and unvested as of March 31, 2025

Company recognized $ 33,095 as part of the total stock compensation expense related to RSU awards for the three months ended March

The total unrecognized compensation cost related to unvested RSUs as of March 31, 2025 was $ 73,699 .

the three months ended March 31, 2024, the RSUs vest at quarterly intervals through December 31, 2024.

The following is a summary of

RSU activity for the three months ended March 31, 2024:

Outstanding as of December 31, 2023

Vested and released

Outstanding and unvested as of March 31, 2024

Company recognized $ 108,000 as part of the total stock compensation expense related to RSU awards for the three months ended March 31,

The total unrecognized compensation cost related to unvested RSUs as of March 31, 2024 was $ 311,200 .

9 - Operating Segments

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

performance of the business and makes resource allocation decisions on a consolidated basis.

As a result, the Company operates as a single

reportable segment under ASC 280, Segment Reporting.

The Company’s operations include performance marketing services,

lead generation, and data analytics, all of which are managed centrally.

The Company focuses on delivering quality traffic and player

acquisitions, retention and conversions to global casino gaming partners worldwide in exchange for a commission (cost per acquisition

or portion of net gaming revenues) paid to the Company by the partners for the new players referred to them.

The CODM assesses financial

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

following table presents significant segment expenses regularly provided to and reviewed by the CODM:

Schedule of Companies Reportable Segments

Affiliate Marketing Segment

March 31, 2025

March 31, 2024

Cost of revenues

Segment gross profit

Salaries and benefits

Contractors and consulting expense

Marketing expense

Other segment expenses (1)

Segment net loss from continuing operations before income taxes

( 1,755,137 )

Outstanding and unvested as of September 30, 2024

Reconciliation of profit or loss

Adjustments and reconciling items

Consolidated net loss from continuing operations before income taxes

( 1,755,137 )

The Company recognized $ 317,600 as part of the total stock compensation expense related to RSU awards for the nine months ended September 30, 2024 .

The total unrecognized compensation cost related to unvested RSUs as of September 30, 2024 was $ 249,603 .

Note 12 - Operating Segments

As of June 30, 2024, the Company has one reportable operating segment:

Affiliate Marketing Services.

nine months ended September 30, 2024 , we realigned our organizational structure and resources to more closely align with our strategic priorities.

As a result of the change, we have

one reportable segment, consisting of Affiliate Marketing, for the purpose of making operational and resource decisions and assessing financial performance.

The Chief Operating Decision Maker is the Company's CEO.

The Affiliate Marketing Services segment operates a global affiliate network and performance marketing platform which owns and operates web domains designed to attract, acquire and retain sports betting and casino traffic directly to the Company’s licensed sportsbook and casino partners.

The Company earns a commission from sportsbooks and casino operators (cost per acquisition or a portion of net gaming revenues) on new depositors referred to them.

Summarized revenues by country in which the Company operated for the three and nine months ended September 30, 2024 and 2023 are shown below:

For the three months ended September 30, 2024 :

Affiliate Marketing

United States

Rest of the World

For the nine months ended September 30, 2024 :

Affiliate Marketing

United States

Rest of the World

For the three months ended September 30, 2023 :

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

professional fees, insurance,

general and administrative expenses, depreciation and amortization, foreign currency exchange gains and losses, other income and interest

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

CODM evaluates income generated from the Company’s assets using net income (loss) as a key metric.

The CODM utilizes this measure

to assess return on assets when making strategic decisions, including whether to reinvest profits into the affiliate marketing platform,

enhance technology and data analytics capabilities, or expand partnerships with advertisers and publishers.

revenues by country in which the Company operated for the three months ended March 31, 2025 and 2024 are shown below:

Schedule of Revenues by Country

the three months ended March 31, 2025:

Affiliate Marketing

1 unchanged sentence

Rest of the World

For the nine months ended September 30, 2023 :

Total Revenue

the three months ended March 31, 2024:

Affiliate Marketing

1 unchanged sentence

Rest of the World

The Company does not have material tangible long-lived assets in foreign jurisdictions.

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

Total Revenue

Company does not have material assets in foreign jurisdictions.

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

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

September 30, 2024

September 30, 2023

Note 13 - Revenue Recognition

For the nine months ended September 30, 2024 and 2023 , the Company has recognized its revenue at a point in time.

The Company’s only revenue stream is services.

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

September 30, 2024

of Percentage of Consolidated Revenues Derived from Large Customers

March 31, 2025

March 31, 2024

Percentage of consolidated

10 - Revenue Recognition

the three months ended March 31, 2025 and 2024, the Company has recognized its revenue at a point in time.

The Company’s only revenue

stream is from the provision of Affiliate Marketing services.

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

of Contract Assets and Liabilities

March 31, 2025

December 31, 2024

Accounts receivable

$ 457,077 $ 415,119

Unbilled revenue

The timing of revenue recognition may differ from the timing of invoicing to customers and these timing differences result in contract advanced billings on the Company’s condensed consolidated balance sheet.

The Company recognized unbilled revenue when revenue is recognized prior to invoicing.

Payment terms and conditions vary by contract type, although terms generally include a requirement of payment within 30 days.

In instances where the timing of revenue recognition differs from the timing of invoicing, the Company has determined that its contracts generally do not include a significant financing component.

The primary purpose of invoicing terms is to provide customers with simplified and predictable ways of purchasing the Company’s products and services, and not to facilitate financing arrangements.

Note 14 – Income Taxes

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

timing of revenue recognition may differ from the timing of invoicing to customers and these timing differences result in contract advanced

billings on the Company’s condensed consolidated balance sheet.

The Company recognized unbilled revenue when revenue is recognized

prior to invoicing.

terms and conditions vary by contract type, although terms generally include a requirement of payment within 30 days.

In instances where

the timing of revenue recognition differs from the timing of invoicing, the Company has determined that its contracts generally do not

include a significant financing component.

The primary purpose of invoicing terms is to provide customers with simplified and predictable

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

11 – Income Taxes

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

As the year progresses, we refine our estimate based on the facts and circumstances, including discrete events, by each tax jurisdiction.

The effective tax rate for the nine -month ended September 30, 2024 was ( 0.43 %), respectively.

The Company has NOLs available to offset 80% of the current year taxable income and the gain, net of tax is classified as discontinued operations in the financial statements.

The Company is in the process of dissolving certain legal entities to simply its legal structure.

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

We follow the authoritative guidance on accounting for and disclosure of uncertainty in tax positions which requires us to determine whether a tax position of the Company is more likely than not to be sustained upon examination, including resolution of any related appeals of litigation processes, based on the technical merits of the position.

For tax positions meeting the more likely than not threshold, the uncertain tax benefit amount recognized in the financial statements is reduced to the largest benefit that has a greater than 50% likelihood of being realized upon the ultimate settlement with the relevant taxing authority.

Interest and penalties related to uncertain tax positions are included in the provision for income taxes in the condensed consolidated statements of operations.

In accordance with the Sale of Business ( See Note 3 ), management performed an evaluation of the technical merits of the Israeli Controlled Foreign Corporate Rules to determine the taxability of the gain from the Sale of Business from an Israeli tax perspective.

This analysis also considered the results of the U.S.

Management determined that the technical merits for uncertain tax exposure resulting from the gain for Israeli tax purposes did not exceed the more-likely-than- not threshold and has not recorded any income tax liability at September 30, 2024 .

Management’s determination is based on known facts and circumstances and requires judgment of a complex set of rules and regulations.

If facts and circumstances change, such as closing, liquidating or selling of the businesses’ equity that is remaining, including events outside the Company’s control, this could have a material impact on the management’s determination.

Note 15 – Net Income (Loss) Per Share

Basic net income (loss) per share is calculated by dividing net income (loss) available to common shareholders, adjusted for preferred stock discount accretion and dividends accrued on preferred stock, by the weighted-average number of common stock outstanding during the period excluding the effects of any potentially dilutive securities.

Diluted net loss per share is computed similar to basic loss per share, except that the denominator is increased to include the number of additional common stock that would have been outstanding if potential shares of common stock had been issued if such additional common stock were dilutive.

As the Company had a net loss from continuing operations and net income from discontinued operations for the three and nine months ended September 30, 2024 , the following presents dilutive and anti-dilutive securities.

For continuing operations, since there was a net loss, all securities presented below were excluded from weighted average shares outstanding.

For discontinued operations, dilutive securities presented below were included in the net income per share calculation and the anti-dilutive securities were excluded in weighted average shares outstanding:

Three Months Ended September 30, 2024

Nine Months Ended September 30, 2024

Prefunded warrants

469,560 469,560

Regular warrants

254,233 254,233

Total Dilutive

723,793 723,793

The effective tax rate for the three-month ended March 31, 2025 was ( 0.17 %).

The Company has NOLs available to

offset 80% of the current year taxable income and the gain, net of tax is classified as discontinued operations in the financial statements.

Company is in the process of dissolving certain legal entities to simplify its legal structure.

The tax impact of these legal entities

being dissolved is not expected to be significant.

follow the authoritative guidance on accounting for and disclosure of uncertainty in tax positions which requires us to determine whether

a tax position of the Company is more likely than not to be sustained upon examination, including resolution of any related appeals of

litigation processes, based on the technical merits of the position.

For tax positions meeting the more likely than not threshold, the

uncertain tax benefit amount recognized in the financial statements is reduced to the largest benefit that has a greater than 50% likelihood

of being realized upon the ultimate settlement with the relevant taxing authority.

Interest and penalties related to uncertain tax positions

are included in the provision for income taxes in the condensed consolidated statements of operations.

In accordance with the Sale of

Business ( See Note 3 ), management performed an evaluation of the technical merits of the Israeli Controlled Foreign Corporate

Rules to determine the taxability of the gain from the Sale of Business from an Israeli tax perspective.

This analysis also considered

the results of the U.S.

Management determined that the technical merits for uncertain tax exposure resulting from the gain

for Israeli tax purposes did not exceed the more-likely-than-not threshold and has not recorded any income tax liability at March 31,

Management’s determination is based on known facts and circumstances and requires judgment of a complex set of rules and

If facts and circumstances change, such as closing, liquidating or selling of the businesses’ equity that is remaining,

including events outside the Company’s control, this could have a material impact on the management’s determination.

12 – Net Income (Loss) Per Share

net income (loss) per share is calculated by dividing net income (loss) available to common shareholders, adjusted for preferred stock

discount accretion and dividends accrued on preferred stock, by the weighted-average number of common stock outstanding during the period

excluding the effects of any potentially dilutive securities.

Diluted net loss per share is computed similar to basic loss per share,

except that the denominator is increased to include the number of additional common stock that would have been outstanding if potential

shares of common stock had been issued if such additional common stock were dilutive.

the Company had a net loss from continuing operations and discontinued operations for the three months ended March 31, 2025, the following

presents dilutive and anti-dilutive securities.

For continuing and discontinued operations, since there was a net loss, all securities

presented below were excluded from weighted average shares outstanding.

Schedule of Computation of Diluted Shares Outstanding

Three Months Ended

March 31, 2025

Anti-Dilutive:

Regular warrants

Stock options

108,261 108,261

Series A-1 preferred stock

Series B preferred stock

12,481 12,481

SportsHub warrants

Restricted Stock Units

275,004 275,004

Total Anti-dilutive

405,963 405,963

As the Company had net loss from continuing operations and discontinued operations for the three and nine months ended September 30, 2023 , the following anti-dilutive securities outstanding as of September 30, 2023 were excluded in weighted average shares outstanding:

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

2024, the following presents dilutive and anti-dilutive securities.

For continuing operations, since there was a net loss, all securities

presented below were excluded from weighted average shares outstanding.

For discontinued operations, dilutive securities presented below

were included in the net income per share calculation and the anti-dilutive securities were excluded in weighted average shares outstanding:

Three Months Ended

March 31, 2024

Prefunded warrants

Total Dilutive

Anti-Dilutive:

Three Months Ended September 30, 2023

Nine Months Ended September 30, 2023

Stock options

448,196 448,196

Series A-1 preferred stock

Series B preferred stock

12,481 12,481

Purchase warrants

880,000 880,000

Regular warrants

266,667 266,667

Restricted Stock Units

SportsHub warrants

Total Anti-dilutive

1,628,394 1,628,394

The calculation of the net income (loss) per share and weighted-average shares of the Company’s common stock outstanding for the periods presented are as follows:

For the Three Months Ended September 30,

For the Nine Months Ended September 30,

calculation of the net income (loss) per share and weighted-average shares of the Company’s common stock outstanding for the periods

presented are as follows:

Schedule of Loss Per Share and Weighted-average

For the Three Months Ended

Net loss from continuing operations

$ ( 916,732 )

deemed dividend on warrant exchange agreement

$ ( 1,760,811 )

deemed dividends on series B preferred stock

- - - ( 48,633 )

dividends on series B preferred stock

- ( 213 ) - ( 1,861 )

deemed dividends on warrant exchange

Net loss from continuing operations available to common stockholders

1 unchanged sentence

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

( 97,139 ) ( 822,100 ) 14,467,733 ( 2,523,754 )

Net income (loss) available to common stockholders

1 unchanged sentence

Basic weighted-average shares for continuing and discontinued operations

3,510,319 2,863,607 3,338,549 2,736,583

Diluted weighted average shares for discontinued operations

4,234,112 2,863,607 4,062,342 2,736,583

Net (loss) from continuing operations per share

$ ( 0.22 ) $ ( 0.71 ) $ ( 1.05 ) $ ( 2.43 )

Net income (loss) from discontinued operations per share

( 0.03 ) ( 0.29 ) 4.33 ( 0.92 )

Net income (loss) per share

$ ( 0.25 ) $ ( 1.00 ) $ 3.28 $ ( 3.35 )

Fully Diluted:

Net (loss) from continuing operations per share

$ ( 0.22 ) $ ( 0.71 ) $ ( 1.05 ) $ ( 2.43 )

Net income (loss) from discontinued operations per share

( 0.03 ) ( 0.29 ) 3.56 ( 0.92 )

Net income (loss) per share

$ ( 0.25 ) $ ( 1.00 ) $ 2.51 $ ( 3.35 )

Note 16 – Related Party Transactions

The Company uses Brown & Brown (“Brown”), which acquired Hays Companies, as an insurance broker.

Brown is considered a related party as an executive of Brown previously served on the Board of Directors of SharpLink Israel.

The Company paid $ 328,940 and $ 700,975 for the nine months ended September 30, 2024 and 2023 , respectively, for insurance coverage brokered by Brown.

SharpLink Israel’s former director earned no commissions for the placement of these policies.

The Company leased office space in Canton, Connecticut from CJEM, LLC (CJEM), which is owned by a former executive of the Company.

The Company paid rent expense of $ 3,200 and $ 28,800 for the nine months ended September 30, 2024 and 2023 , respectively.

For the three month period September 30, 2024 and 2023 , the Company paid rent expense of $ 0 and $ 9,600 , respectively,

Note 17 – Subsequent Events

MANAGEMENT ’ S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion of SharpLink Gaming, Inc.

and its wholly owned subsidiaries (collectively, “ SharpLink Gaming, ” “ SharpLink, ” “ our Company, ” the “ Company, ” “ we, ” “ our, ” and “ us ” ), highlights the principal factors that have affected our financial condition and results of operations as well as our liquidity and capital resources for the periods described.

This discussion should be read in conjunction with our condensed consolidated financial statements and the related notes included in this Quarterly Report on Form 10-Q and with our audited consolidated financial statements included in our 2023 Annual Report on Form 10-K, filed with the U.S.

Securities and Exchange Commission on March 29, 2024.

As discussed in the section titled “ Note Regarding Forward-Looking Statements, ” the following discussion and analysis contains forward-looking statements that involve risks and uncertainties, as well as assumptions that, if they never materialize or prove incorrect, could cause our results to differ materially from those expressed or implied by such forward-looking statements.

In this Quarterly Report on Form 10-Q, unless the context indicates otherwise, references to “ SharpLink Gaming, ” “ SharpLink, ” “ SharpLink US, ” “ our Company, ” “ the Company, ” “ we, ” “ our, ” “ ours ” and “ us ” refer to SharpLink Gaming, Inc., a Delaware corporation, and its wholly owned subsidiaries .

References to “ SharpLink Israel ” refer to SharpLink Gaming, Ltd., an Israel limited liability company, with which SharpLink US completed a domestication merger in February 2024.

Headquartered in Minneapolis, Minnesota, SharpLink Gaming is an online performance-based marketing company that leverages our unique fan activation solutions to generate and deliver high quality leads to our U.S.

13 – Subsequent Events

Potential Public Offering

On May 5, 2025 and May 6, 2025,

SharpLink filed a registration statement on Form S-1 and Form S-1/A, respectively, in connection with a potential public offering to

raise up to $ 5 million (the “Offering”) in gross proceeds through the offering of i) shares of common stock or prefunded

warrants, in lieu thereof, ii) Series A-1 Common Stock Warrants, and iii) Series A-2 Common Stock Warrants (collectively, the Series

A-1 Common Stock Warrants and Series A-2 Common Stock Warrants, the “Common Warrants”).

Pursuant to the registration

statement, as amended, SharpLink has engaged AGP to use its reasonable best efforts to solicit offers to purchase our securities in

this Offering.

The Agent has no obligation to purchase any of the securities from us or to arrange for the purchase or sale of any

specific number or dollar amount of the securities.

Because there is no minimum offering amount required as a condition to closing

in this offering the actual public offering amount, Agent’s fee, and proceeds to us, if any, are not presently determinable

and may be substantially less than the total maximum offering amounts set forth in the registration statement, as amended, and

related preliminary prospectus.

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

decreased the number of issued and outstanding common shares 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

May 2, 2025, the Company filed a Certificate of Amendment to its Amended and Restated Certificate of Incorporation with the Secretary

of State of the State of Delaware (the “Amendment”), providing for the aforementioned reverse stock split.

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

April 2, 2025, SharpLink entered into an exchange agreement (“Exchange Agreement”) with Alpha Capital Anstalt (“Alpha”),

whereby, pursuant to the terms and conditions set forth in the Exchange Agreement and in reliance on Section 3(a)(9) of the Securities

Act of 1933, as amended (the “Securities Act”), 600 shares of the Company’s Series A-1 Preferred Stock and 12,481 shares

of the Company’s Series B Preferred Stock (collectively, the “Existing Securities”) held by Alpha were exchanged for

38,683 shares of SharpLink’s common stock (“Common Stock”) and 44,650 prefunded warrants to purchase shares of SharpLink’s

common stock (“Alpha Prefunded Warrants”) at an exercise price of $ 0.012 .

With the exchange of Alpha’s Existing Securities

for Common Stock and Alpha Prefunded Warrants, SharpLink no longer has any Series A-1 Preferred Stock or Series B Preferred Stock issued

and outstanding.

MANAGEMENT ’ S

DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

following discussion of SharpLink Gaming, Inc.

and its wholly owned subsidiaries (collectively, “ SharpLink

Gaming, ” “ SharpLink, ” “ our Company, ” the “ Company, ”

“ we, ” “ our, ” and “ us ” ), highlights the principal factors that

have affected our financial condition and results of operations as well as our liquidity and capital resources for the periods

This discussion should be read in conjunction with our condensed consolidated financial statements and the related

notes included in this Quarterly Report on Form 10-Q and with our audited consolidated financial statements included in our

2024 Annual Report on Form 10-K, filed with the U.S.

Securities and Exchange Commission on March 14, 2025 and Form 10-K/A filed

on March 17, 2025.

As discussed in the section titled “ Note Regarding Forward-Looking Statements, ” the

following discussion and analysis contains forward-looking statements that involve risks and uncertainties, as well as assumptions

that, if they never materialize or prove incorrect, could cause our results to differ materially from those expressed or implied by

such forward-looking statements.

this Quarterly Report on Form 10-Q, unless the context indicates otherwise, references to “ SharpLink Gaming, ”

“ SharpLink, ” “ SharpLink US, ” “ our Company, ” “ the Company, ”

“ we, ” “ our, ” “ ours ” and “ us ” refer to SharpLink

Gaming, Inc., a Delaware corporation, and its wholly owned subsidiaries .

References to “ SharpLink Israel ”

refer to SharpLink Gaming, Ltd., an Israel limited liability company, with which SharpLink US completed a domestication merger in

February 2024.

Headquartered

in Minneapolis, Minnesota, SharpLink Gaming is an online performance-based marketing company that leverages our unique fan activation

solutions to generate and deliver high quality leads to our U.S.

sportsbook and global casino gaming partners.

In December 2023, the Company discontinued investments into and operation of its C4 sports betting conversion technology (“C4”) due to the lack of market acceptance.

C4 centered on monetizing our own proprietary audiences and our customers’ audiences of U.S.

fantasy sports and casual sports fans and casino gaming enthusiasts by converting them into loyal online sports and iGaming bettors.

SharpLink also previously owned and operated an enterprise telecom expense management business (“Enterprise TEM”) acquired in July 2021 in connection with SharpLink’s go-public merger with Mer Telemanagement Solutions Ltd.

Beginning in 2022, we discontinued operations for this business unit and sought a buyer for the business.

On December 31, 2022, we completed the sale of this business to Israel-based Entrypoint South Ltd.

Continuing Operations

In December 2021, SharpLink acquired certain assets of FourCubed, including FourCubed’s online casino gaming-focused affiliate marketing network, known as PAS.net (“PAS”).

For more than 18 years, PAS has focused on delivering quality traffic and player acquisitions, retention and conversions to regulated and global casino gaming operator partners worldwide.

In fact, PAS won industry recognition as the European online gambling industry’s Top Affiliate Manager, Top Affiliate Website and Top Affiliate Program for four consecutive years by both igambingbusiness.com and igamingaffiliate.com.

The strategic acquisition of FourCubed brought SharpLink talent with proven experience in affiliate marketing services and recurring net gaming revenue (“NGR”) contracts with many of the world’s leading online casino gambling companies, including Party Poker, bwin, UNIBET, GG Poker, 888 poker, betfair, World Poker Tour and others.

As part of our strategy to expand our affiliate marketing services to the emerging American sports betting market, in November 2022, we began a systematic roll-out of our U.S.-focused performance-based marketing business with the launch of 15 state-specific, content-rich affiliate marketing websites.

Our user-friendly, state-specific domains are designed to attract, acquire and drive local sports betting and casino traffic directly to our sportsbook and casino partners’ which are licensed to operate in each respective state.

As of January 2024, we are licensed to operate in 18 jurisdictions and own and operate sites serving 17 U.S.

states (Arizona, Colorado, Iowa, Illinois, Indiana, Kansas, Louisiana, Maryland, Michigan, New Jersey, New York, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia and Wyoming).

As more states legalize sports betting, our portfolio of state-specific affiliate marketing properties may expand to include them.

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

Today, our vision is to power a targeted and personalized online sports betting and casino gaming environment that organically introduces fans to our operator partners through relevant tools and rich content – all in a safe, credible and responsible environment.

During the nine months ended September 30, 2024, we realigned our organizational structure and resources to more closely align with our strategic priorities.

As a result of the change in our organizational structure, we have one reportable segment, consisting of Affiliate Marketing, for the purpose of making operational and resource decisions and assessing financial performance.

During the three and nine months ended September 30, 2024 and 2023, our continuing operations generated revenues of $881,690 and $1,349,331, respectively, for the three months ended and $2,838,908and $3,925,618respectively, for the nine months ended representing a 34.7% decrease on a comparative quarter over quarter basis and a 27.7% decrease on a comparative year-over-year basis.

Sale of Legacy MTS Business

On December 31, 2022, SharpLink Israel closed on the sale of its legacy MTS business (“Legacy MTS”) to Israel-based Entrypoint South Ltd., a subsidiary of Entrypoint Systems 2004 Ltd.

In consideration of Entrypoint South Ltd.

acquiring all rights, title, interests and benefits to Legacy MTS, including 100% of the shares of MTS Integratrak Inc., one of the Company’s U.S.

subsidiaries, Entrypoint South Ltd.

will pay SharpLink an earn-out payment (an “Earn-Out Payment”) equal to three times Legacy MTS’ Earnings Before Interest, Taxes Depreciation and Amortization (“EBITDA”) for the year ending December 31, 2023, up to a maximum earn-out payment of $1 million (adjusted to reflect net working capital as of the closing date).

Within ten (10) calendar days of the approval by the board of directors of the Buyer of the audited annual financial statements of the business as at December 31, 2023, and for the 12-month period ending on such date (as applicable, the “Earn-Out Schedule Delivery Date”), which shall occur no later than May 31, 2024, Buyer shall deliver to the Seller a schedule certified by its Chief Executive Officer and Chief Financial Officer (an “Earn-Out Schedule”) setting forth the computation of the Earn-Out Payment (as applicable), if any, together with the calculation thereof in an agreed Excel table format (including, but not limiting to all relevant details of the EBITDA calculations for the year 2023).

During the 2nd quarter ended June 30, 2024, the Company was notified that the Earn-Out Payment amount was $297,387.

The Earn-Out Payment in full was received by the Company in July 2024.

No further earn-out is expected.

Discontinued Operations

SharpLink’s business-building platform previously included the provision of Free-To-Play (“F2P”) sports game and mobile app development services to a marquis list of customers, which included several of the biggest names in sports and sports betting, including Turner Sports, NBA, NFL, PGA TOUR, NASCAR and BetMGM, among others.

In addition, we previously owned and operated a variety of proprietary real-money fantasy sports and sports simulation games and mobile apps through our SHGN sports business unit, which also owned and operated LeagueSafe, one of the fantasy sports industry’s most trusted sources for collecting and protecting private fantasy league dues.

On January 18, 2024, SharpLink sold all of the issued and outstanding membership interests, as applicable, in our Sports Gaming Client Services and SHGN business units to RSports for $22.5 million in an all-cash transaction, pursuant to the signing of a purchase agreement and other related agreements.

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

network, known as PAS.net (“PAS”).

For more than 18 years, PAS has focused on delivering quality traffic and player acquisitions,

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

In fact, PAS won industry recognition as

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

years by both igambingbusiness.com and igamingaffiliate.com.

The strategic acquisition of FourCubed brought SharpLink talent with proven

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

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

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

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

affiliate marketing websites.

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

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

January 2024, we are licensed to operate in 18 jurisdictions and own and operate sites serving 17 U.S.

states (Arizona, Colorado, Iowa,

Illinois, Indiana, Kansas, Louisiana, Maryland, Michigan, New Jersey, New York, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia

and Wyoming).

As more states legalize sports betting, our portfolio of state-specific affiliate marketing properties may expand to include

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

our vision is to power a targeted and personalized online sports betting and casino gaming environment that organically introduces fans

to our operator partners through relevant tools and rich content – all in a safe, credible and responsible environment.

2024, we realigned our organizational structure and resources to more closely align with our strategic priorities.

As a result of

the change in our organizational structure, we have one reportable segment consisting of Affiliate Marketing for the purpose of

making operational and resource decisions and assessing financial performance.

the three months ended March 31, 2025 and 2024, our continuing operations generated revenues of $741,731 and $975,946 respectively,

for the three months ended representing a 24.0% decrease on a comparative quarter over quarter basis.

of Business - SHGN and Sports Gaming Client Services

business-building platform previously included the provision of Free-To-Play (“F2P”) sports game and mobile app development

services to a marquis list of customers, which included several of the biggest names in sports and sports betting, including Turner Sports,

NBA, NFL, PGA TOUR, NASCAR and BetMGM, among others.

In addition, we previously owned and operated a variety of proprietary real-money

fantasy sports and sports simulation games and mobile apps through our SHGN sports business unit, which also owned and operated LeagueSafe,

one of the fantasy sports industry’s most trusted sources for collecting and protecting private fantasy league dues.

January 18, 2024, SharpLink sold all of the issued and outstanding membership interests, as applicable, in our Sports Gaming Client Services

and SHGN business units to RSports for $22.5 million in an all-cash transaction, pursuant to the signing of a purchase agreement and

other related agreements.

Nearly all of the employees of these acquired business units moved to RSports to help ensure a seamless transition.

The historical results of our Sports Gaming Client Services and SHGN businesses have been reflected as discontinued operations in our condensed consolidated financial statements for all periods prior to the Sale of Business.

Nasdaq Notice

On May 23, 2023, SharpLink received a notice (the “Notice”) from the Listing Qualifications Department of The Nasdaq Stock Market (“Nasdaq”) stating that SharpLink did not comply with the equity standard for continued listing on The Nasdaq Capital Market.

Nasdaq Listing Rule 5550(b)(1) (the “Rule”) requires listed companies to maintain stockholders’ equity of at least $2.5 million under the net equity standard.

As of the Quarterly Report filed on Form 10-Q at September 30, 2023, SharpLink reported total stockholders’ deficit of $4,463,917.

SharpLink did not meet the alternative standards for market value of listed securities or net income from continuing operations, thus SharpLink was not in compliance with Nasdaq’s Listing Rule.

As reported on a Form 8-K filed with the Securities and Exchange Commission (the “SEC”) on December 12, 2023, SharpLink submitted a hearing request with the Nasdaq Hearings Panel (the “Panel”) on November 28, 2023, relating to the Staff’s determination to delist the Company’s securities from Nasdaq due to the Company’s failure to meet the minimum $2.5 million shareholders’ equity requirement for continued listing as defined by the Rule.

On November 28, 2023, the Company was notified by Nasdaq that an oral hearing (the “Hearing”) had been scheduled for February 20, 2024;

and, the delisting action referenced in the Staff’s determination letter, dated November 21, 2023, had been stayed, pending a final determination by the Panel.

On January 25, 2024, SharpLink filed a Current Report on Form 8-K with the SEC, disclosing details of the sale of its Sports Gaming Client Services and SportsHub Gaming Network business units to RSports for $22.5 million in an all-cash transaction.

As a result, the Company’s total stockholders’ equity exceeded $2.5 million as of the date of the above referenced Form 8-K filing and the Company believed that it had regained compliance with all applicable continued listing requirements and had requested that the Staff determine whether the Hearing should be cancelled.

On February 7, 2024, SharpLink received formal notification from Nasdaq that the Company’s previously announced deficiency under the Rule had been cured, and the Company had regained compliance with all applicable continued listing standards.

Therefore, the Hearing before the Nasdaq Hearings Panel, originally scheduled for February 20, 2024, was cancelled.

SharpLink’s Common Stock continues to be listed and traded on Nasdaq.

On July 11, 2024, SharpLink received a notice (the "Notice") from Nasdaq Listing Qualifications indicating that the Company is no longer in compliance with the minimum bid price requirement for continued listing set forth in Listing Rule 5550(a)(2), which requires listed securities to maintain a minimum bid price of $1.00 per share.

The rules also provide SharpLink a compliance period of 180 calendar days to regain compliance.

According to the Notice, the Company has until January 7, 2025 to regain compliance with the minimum bid price requirement.

SharpLink can regain compliance if at any time during this 180-day period, the closing bid price of its Common Stock is at least $1.00 for a minimum of ten consecutive business days, in which case SharpLink will be provided with written confirmation of compliance by Nasdaq and this matter will be closed.

In the event that the Company fails to regain compliance after the initial 180-day period, SharpLink may then be eligible for additional time if it meets the continued listing requirements for market value of publicly held shares and all other initial listing standards for The Nasdaq Capital Market, with the exception of the bid price requirement, and will be required to provide written notice of its intention to cure the deficiency during the second compliance period equal to an additional 180 calendar days.

If SharpLink cannot demonstrate compliance by the end of the second compliance period, Nasdaq will notify SharpLink that its Common Stock is subject to delisting.

The Notice has no immediate effect on SharpLink’s listing or the trading of its Common Stock, and during the grace period, as may be extended, the Company’s Common Stock will continue to trade on The Nasdaq Capital Market under the symbol “SBET.”

Redomestication from Israel to Delaware

On February 13, 2024, SharpLink Israel completed its previously announced domestication merger (“Domestication Merger”), pursuant to the terms and conditions set forth in an Agreement and Plan of Merger (the “Domestication Merger Agreement”), dated June 14, 2023 and amended July 24, 2023, among SharpLink Israel, SharpLink Merger Sub Ltd., an Israeli company and a wholly owned subsidiary of SharpLink US (“Domestication Merger Sub”) and SharpLink Gaming, Inc.

historical results of our Sports Gaming Client Services and SHGN businesses have been reflected as discontinued operations in our condensed

consolidated financial statements for all periods prior to the Sale of Business.

Compliance with Nasdaq Continued Listing Standards

previously reported on Form 10-K filed by the Company on March 14, 2025 and 10-K/A filed by the Company on March 17, 2025, the Company

received a letter on July 17, 2024 from Nasdaq notifying the Company that, because of the closing bid price for its common stock had

been below $1.00 per share for 30 consecutive trading days, it was not compliant with the Minimum Bid Price Requirement (the “Bid

Price Deficiency Notice”).

In accordance with Nasdaq Marketplace Rule 5810 (c)(3)(A), the Company had a period of 180 calendar

days, or until January 7, 2025, to regain compliance with the Minimum Bid Price Requirement.

Further, as previously reported on our Current

Report on Form 8-K filed on November 22, 2024, the Nasdaq Staff notified the Company that it did not comply with the $2.5 million minimum

stockholders’ equity requirement, as set forth in Nasdaq Listing Rule 5550(a)(2).

The Company had 45 calendar days to submit a

plan to regain compliance or until January 6, 2025.

Company had a hearing with the Nasdaq Hearing Panel on February 25, 2025 .

The Company’s Common Stock will

remain listed and eligible for trading on Nasdaq pending the ultimate conclusion of the hearing process.

SharpLink worked to evidence

compliance with Minimum Bid Price Requirement and Minimum Stockholder’s Equity Requirement for continued listing on the Nasdaq

Capital Market and submitted a plan to that effect to the Nasdaq Hearings Panel (the “Panel”) as part of the hearing process

on February 25, 2025.

March 21, 2025, SharpLink received notice (the “Notice”) from the Nasdaq Hearings Panel (the “Panel”) of The

Nasdaq Stock Market, LLC (“Nasdaq”) stating that the Panel has granted the Company’s request for additional time

to achieve compliance with Nasdaq’s continued listing rules and demonstrate long-term compliance with the minimum bid price

requirement as set forth in Rule 5550(a)(2) (the “Bid Price Rule”), which requires issuers to maintain a minimum bid

price of $1.00 per share on the Nasdaq, and with Listing Rule 5550(b)(1), which requires listed issuers to maintain minimum

stockholders’ equity of $2.5 million (the “Equity Rule”).

Specifically, the Panel has agreed to provide the

Company until May 23, 2025 to regain compliance with both the Bid Price Rule and the Equity Rule.

must satisfy Nasdaq’s continued listing requirements, including, among other things, the Bid Price Rule and the Equity Rule, or

risk delisting, which could have a material adverse effect on our business.

If our common stock is delisted from Nasdaq, it could materially

reduce the liquidity of our common stock and result in a corresponding material reduction in the price of our common stock as a result

of the loss of market efficiencies associated with Nasdaq and the loss of federal preemption of state securities laws.

In addition, delisting

could harm our ability to raise capital through alternative financing sources on terms acceptable to us, or at all, and may result in

the potential loss of confidence by investors, suppliers, customers and employees and fewer business development opportunities.

common stock is delisted, it could be more difficult to buy or sell our common stock or to obtain accurate quotations, and the price

of our common stock could suffer a material decline.

Delisting could also impair our ability to raise capital on acceptable terms, if

Company is currently attempting to raise equity in public offerings in order to achieve compliance with the Equity Rule.

We may not be

able to comply with the Equity Rule even after these offerings due to our cash burn rate, operating expenses and payment obligations.

As a result, we may be required to raise additional funds after these offerings in order to achieve compliance.

Redomestication

from Israel to Delaware

February 13, 2024, SharpLink Israel completed its previously announced domestication merger (“Domestication Merger”), pursuant

to the terms and conditions set forth in an Agreement and Plan of Merger (the “Domestication Merger Agreement”), dated June

14, 2023 and amended July 24, 2023, among SharpLink Israel, SharpLink Merger Sub Ltd., an Israeli company and a wholly owned subsidiary

of SharpLink US (“Domestication Merger Sub”) and SharpLink Gaming, Inc.

(“SharpLink US”).

The Domestication Merger was achieved through a merger of Domestication Merger Sub with and into SharpLink Israel, with SharpLink Israel surviving the merger and becoming a wholly owned subsidiary of SharpLink US.

The Domestication Merger was approved by the shareholders of SharpLink Israel at an extraordinary special meeting of shareholders held on December 6, 2023.

SharpLink US’s Common Stock commenced trading on the Nasdaq Capital Market under the same ticker symbol, SBET, on February 14, 2024.

At-The-Market ("ATM") Offering

On May 1, 2024, Company entered into an ATM Sales Agreement (the “ATM Sales Agreement”) with A.G.P./Alliance Global Partners (the “Agent”) pursuant to which the Company may offer and sell, from time to time, through the Agent, as sales agent and/or principal, shares of its common stock, par value $0.0001 per share (the “Common Stock”), having an aggregate offering price of up to $1,676,366, subject to certain limitations on the amount of Common Stock that may be offered and sold by the Company set forth in the ATM Sales Agreement (the “Offering”).

As of November 14, 2024, SharpLink has raised gross proceeds of $71,343 from sales of Shares under the ATM Sales Agreement.

Exchange Agreement with Alpha Capital Anstalt

As previously reported on a Current Report on Form 8-K, dated February 16, 2023, on February 15, 2023, SharpLink issued a warrant to Alpha Capital Anstalt ("Alpha”) to purchase 880,000 common shares (as adjusted for the 1-for-10 -reverse stock split) of the Company (the "2023 Warrant”).

The 2023 Warrant provided that in the event of a fundamental transaction, which included a sale of substantially all of the Company’s assets, at Alpha’s option, the Company would repurchase the 2023 Warrant from Alpha on the terms set forth in Section 3(e)(ii) of the 2023 Warrant (the "Warrant Repurchase”).

On January 18, 2024, SharpLink sold substantially all of its assets as was disclosed in a Current Report on Form 8-K, filed on January 24, 2024 (the "Asset Sale”).

On January 19, 2024, SharpLink and Alpha entered into a settlement agreement (the "Settlement Agreement”) whereby Alpha agreed to waive (i) the event of default under Section 3(e)(ii) of the 2023 Warrant in connection with the Asset Sale.

Pursuant to Section 5(1) of the 2023 Warrant, Alpha agreed to waive its right to the Warrant Repurchase at the time of the Asset Sale.

The Settlement Agreement provides that the Warrant Repurchase for its Black Scholes value would take place upon the earlier of (a) June 30, 2024;

(b) the Company raising a gross amount of not less than $3,000,000 whether by equity or debt;

and (c) the Company entering into a "fundamental transaction” as defined in the 2023 Warrant.

The Parties fixed the Black Scholes value of the 2023 Warrant for purposes of the Warrant Repurchase at $900,000.

On March 6, 2024, SharpLink entered into an Exchange Agreement (the "Exchange Agreement”) with Alpha.

Pursuant to the terms and conditions set forth in the Exchange Agreement, the Company agreed to exchange the 2023 Warrant for (i) 156,207 shares of Common Stock (the "Shares”), (ii) a pre-funded warrant in the amount of 469,560 shares of Common Stock (the "Pre-Funded Warrant”) and (iii) the unexchanged balance of the 2023 Warrant Repurchase (the "Warrant Repurchase Balance”).

The Warrant Repurchase Balance is valued at $260,111 on the date of the Exchange Agreement and shall be subject to the repurchase terms set forth in the Settlement Agreement.

On June 30, 2024, SharpLink negotiated an Amendment to the Exchange Agreement (the "Amendment") to reduce the strike price per warrant of the unexchanged balance of the 2023 Warrants Repurchase Balance from $4.07 to $0.0001 and to remove the re-purchase option.

The modification to the Exchange Agreement was valued on June 29, 2024, the day before the modification, using Black Scholes option-pricing model.

The Company recorded a fair value adjustment of $17,996 on the condensed consolidated statements of operations for the nine months ended September 30, 2024 and removed the remaining accrued warrant liability of $152,386 through an adjustment to additional paid-in capital.

Results of Operations

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

For the Three Months Ended September 30, 2024

For the Three Months Ended September 30, 2023

For the Nine Months Ended September 30, 2024

For the Nine Months Ended September 30, 2023

The Domestication Merger

was achieved through a merger of Domestication Merger Sub with and into SharpLink Israel, with SharpLink Israel surviving the merger

and becoming a wholly owned subsidiary of SharpLink US.

The Domestication Merger was approved by the shareholders of SharpLink Israel

at an extraordinary special meeting of shareholders held on December 6, 2023.

SharpLink US’s Common Stock commenced trading on

the Nasdaq Capital Market under the same ticker symbol, SBET, on February 14, 2024.

At-The-Market

(“ATM”) Offering

May 1, 2024, Company entered into an ATM Sales Agreement (the “ATM Sales Agreement”) with A.G.P./Alliance Global Partners

(the “Agent”) pursuant to which the Company may offer and sell, from time to time, through the Agent, as sales agent and/or

principal, shares of its common stock, par value $0.0001 per share (the “Common Stock”), having an aggregate offering price

of up to $1,676,366, subject to certain limitations on the amount of Common Stock that may be offered and sold by the Company set forth

in the ATM Sales Agreement (the “Offering”).

The Company is not obligated to make any sales of Shares under the ATM Sales

Agreement and any determination by the Company to do so will be dependent, among other things, on market conditions and the Company’s

capital raising needs.

As of March 31, 2025, through an increase in the aggregate offering price by a prospectus supplement, SharpLink

has raised gross proceeds of $1,834,925 from sales of Shares under the ATM Sales Agreement.

of 10% Equity Stake in Armchair Enterprises

February 24, 2025, SharpLink entered into a subscription agreement (“Subscription Agreement”) with U.K.-based Armchair

Enterprises Limited (“Armchair”), which owns and operates CryptoCasino.com.

The acquisition of a 10% equity stake

in Armchair was made for $500,000 in cash, along with a right of first refusal to acquire a controlling interest in

The investment was recorded at cost and will be measured at cost minus impairment, adjusted for any observable price

There was no impairment as of March 31, 2025.

in October 2024 , CryptoCasino.com is an innovative online gaming platform that partners with some of the world’s leading

gaming studios.

It utilizes blockchain technology to provide users with a secure, transparent and engaging next-generation gaming experience.

The platform plans to offer over 6,000 online slots and table games, a live dealer casino, a premium sportsbook, an eSports betting

hub and a racebook, among other features.

CryptoCasino.com accepts a wide range of cryptocurrencies, including Bitcoin, Ethereum, Litecoin

and more, catering to various user preferences globally while ensuring enhanced security, transparency and anonymity for players.

addition, CryptoCasino.com offers both traditional registration and Web3 connectivity.

By connecting instantly with wallets

like MetaMask and Trust Wallet, players can easily deposit and withdraw funds within seconds.

In addition, CryptoCasino.com serves over

one billion unique Telegram users by providing a Telegram Casino integration, which allows anyone to join and start playing with

just one click.

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

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

Proportional adjustments for the reverse stock split were made to the Company’s outstanding stock options, warrants and equity

incentive plans.

All share and per-share data and amounts have been retrospectively adjusted as of the earliest period presented in

the financial statements to reflect the reverse stock split.

of Operations

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

March 31, 2025

March 31, 2024

Cost of Revenues

7 unchanged sentences

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

Net income (loss)

For the Three Months Ended September 30, 2024 Compared to the Three Months Ended September 30, 2023

For the three months ended September 30, 2024, revenues declined 34.7% to $881,690 compared to $1,349,331 reported for the same three-month period in the prior year.

The decrease is largely due to the market conditions softening and the loss of customers.

For the three months ended September 30, 2024, gross profit totaled $172,645, reflecting a 55.8% decrease from a gross profit of $390,666 for the three months ended September 30, 2023.

Our gross profit margin declined to 19.6% % from 29.0% for the three months ended September 30, 2024 and 2023, respectively.

The decline represents highercasino payouts due to large winnings by individuals during the three months ended September 30, 2024.

For the casino business, as greater payouts are made to winners, this has the impact of reducing gross profit.

Total Operating Expenses

For the three months ended September 30, 2024, total operating expenses decreased 46.0% to $970,080 from $1,795,057 reported for the same three-month period in the prior year.

The decrease was attributable to lower payroll, audit and legal, insurance, marketing and travel-related costs in the third quarter of 2024 compared to the 3rd quarter in 2023.

The 3rd quarter of 2023 also included expenses in connection with the expansion initiatives associated with our Affiliate Marketing Services.

Net Income (Loss) from Continuing Operations

Largely attributable to the Company’s concerted effort to lower payroll and other discretionary costs, net loss from continuing operations decreased 61.1% to $(787,992) for the three months ended September 30, 2024, compared to a net loss from continuing operations of $(2,027,447)reported for the same three months in 2023.

Net Income (Loss) from Discontinued Operations, Net of Tax

For the three months ended September 30, 2024, net loss from discontinued operations, net of tax decreased 88.2% to $(97,139), which compared to a net loss from discontinued operations, net of tax of $(822,100) for the three months ended September 30, 2023.

The decrease in net loss is due to the gain on the wind down of MTS business operations.

Net Income (Loss)

As a result of the aforementioned reasons, net loss for the three months ended September 30, 2024 totaled $(885,131), which was an 68.9% improvement from a net loss of $(2,849,547) reported for three months ended September 30, 2023.

For the Nine Months Ended September 30, 2024 Compared to the Nine Months Ended September 30, 2023

For the nine months ended September 30, 2024, revenues declined 27.7% to $2,838,908 compared to $3,925,618 reported for the same nine-month period in the prior year.

The decrease is largely due to the market conditions softening and the loss of customers.

For the nine months ended September 30, 2024, gross profit totaled $739,987, reflecting a 37.4% decrease from a gross profit of $1,182,067 for the nine months ended September 30, 2023.

Our gross profit margin decreased to 26.1% from 30.1% for the nine months ended September 30, 2024 and 2023, respectively.

As mentioned previously, during the three months ended September 30, 2024, we experienced higher casino payouts due to large individual winnings, resulting in a decrease in our gross profit.

For the casino business, as greater payouts are made to winners, this has the impact of reducing gross profit.

Total Operating Expenses

For the nine months ended September 30, 2024, total operating expenses decreased 25.9% to $4,426,835 from $5,977,327 reported for the same nine-month period in the prior year.

The decrease was primarily due to primarily due to higher business insurance and payroll expenses, audit and legal, marketing and travel related costs in the nine months ended September 30, 2023 associated with the Company’s expansion initiatives of our Affiliate Marketing Services at that time.

Net Income (Loss) from Continuing Operations

Largely attributable to the Company’s concerted effort to lower payroll and other discretionary costs, net loss from continuing operations decreased 47.4% to $(3,465,467) for the nine months ended September 30, 2024, compared to a net loss from continuing operations of $(6,590,689) reported for the same nine months in 2023.

Net Income (Loss) from Discontinued Operations, Net of Tax

For the nine months ended September 30, 2024, net income from discontinued operations, net of tax increased 673.3% to $14,467,733, which compared to a net loss from discontinued operations, net of tax of $(2,523,754) for the nine months ended September 30, 2023.

The increase is due to the gain on the sale of SHGN and Sports Gaming Client Services in January 2024 for $22.5 million.

(14,169,336 )

Net income (loss)

As a result of the aforementioned reasons, net income for the nine months ended September 30, 2024 totaled $11,002,266, which was a 220.7% improvement from a net loss of $(9,114,443) reported for nine months ended September 30, 2023.

Nine Months Ended September 30, 2024 Compared to Nine Months Ended September 30, 2023

As of September 30, 2024, cash on hand was $1,850,206, a 25.6%decrease when compared to cash on hand of $2,487,481 as of December 31, 2023.

For the nine months ended September 30, 2024, net cash used in operating activities from continuing operations totaled $(4,434,002) compared to net cash used for operating activities from continuing operations of $(3,820,153) in the prior year.

Net cash used in operating activities from discontinued operations was $(17,112,182), which compared to net cash provided by operating activities of $10,033,364 from discontinued operations for the same nine-month period in 2023.

Overall, net cash (used in) provided by operating activities was $(21,546,184) and $6,213,211for the nine months ended September 30, 2024 and 2023, respectively.

The change in the operating cashflows was largely attributable to the gain on the sales of assets in connection with the Sale of the Company’s SHGN and Sports Gaming Client Services businesses in January 2024.

Additionally, in 2023, SHGN's division, LeagueSafe, a secure online payment and league dues management website, received cash coinciding with the start of the NFL season.

For the nine months ended September 30, 2024, net cash provided by the Company’s investing activities from continuing operations totaled $148,281, an increase of 169.3% when compared to cash used for investing activities from continuing operations of $(214,093) for the same nine-month period in 2023.

For the nine months ended September 30, 2024 and 2023, net cash used for investing activities from discontinued operations was $(18,857,834) and $(630,257), respectively.

The increase in total cash used in investing activities is due to cash received from the sale of business of $22,500,000, net of the cash transferred of $41,357,834.

The majority of the cash transferred of $41,357,834 was reflected in discontinued operations customer deposits liability and deferred revenue of $36,959,573 and $4,888,704, respectively.

For the nine months ended September 30, 2024, net cash used for financing from continuing operations was $(12,337,694), a 269.5% decrease when compared to net cash provided by financing activities from continuing operations of $7,279,771 for the same nine-month period in 2023.

For the nine months ended September 30, 2024 net cash used in financing activities from discontinued operations was $5,835,352 compared to net cash provided by financing activities of $583,135 for the nine months ended September 30, 2023.

The decline was largely due to the issuance of a $4,000,000 convertible debenture to an institutional investor and proceeds from a line of credit secured from our commercial lender in February 2023, offset primarily by repayments of $19,205,606 in debt in the first quarter of 2024, including the repayment of the convertible debenture for $4,395,753.

Liquidity and Capital Resources

As of September 30, 2024, we had working capital of $2,001,113.

For the three and nine months ended September 30, 2024, we had a net loss from continuing operations of $(787,992) and $(3,465,467), respectively, compared to a net loss from continuing operations of $(2,027,447) and $(6,590,689), respectively, reported for the same three and nine months in 2023.

SharpLink Israel completed the Sale of our Sports Gaming Client Services and SHGN business units for $22.5 million in an all-cash transaction in January 2024.

In connection with the closing of the Sale of Business, SharpLink Israel repaid in full all outstanding term loans and lines of credit with Platinum Bank, together with accrued but unpaid interest and all other amounts due in connection with such repayment under existing credit agreements, totaling an aggregate $14,836,625, and thereby terminating all existing credit facilities with Platinum Bank and discharging the debt on the Company’s balance sheet.

In addition, SharpLink Israel redeemed the outstanding convertible debenture issued to Alpha for 110% of the outstanding balance, plus accrued and unpaid interest, for or $4,484,230, thereby satisfying all obligations under the debenture and discharging the debt on the balance sheet.

On May 1, 2024, Company entered into an ATM Sales Agreement (the “ATM Sales Agreement”) with A.G.P./Alliance Global Partners (the “Agent”) pursuant to which the Company may offer and sell, from time to time, through the Agent, as sales agent and/or principal, shares of its common stock, par value $0.0001 per share (the “Common Stock”), having an aggregate offering price of up to $1,676,366 (“Shares”), subject to certain limitations on the amount of Common Stock that may be offered and sold by the Company set forth in the ATM Sales Agreement (the “Offering”).

As of November 14, 2024, SharpLink has raised gross proceeds of $71,343 from sales of Shares under the ATM Sales Agreement.

In addition to funds that may be raised through the ATM Sales Agreement, we may need to raise additional capital to fund the Company’s growth and future business operations.

We cannot be certain that additional funding will be available on acceptable terms or at all.

If we are not able to secure additional funding when needed to support our business and to respond to business challenges, develop new technology and services or enhance our existing offering, track and comply with applicable laws and regulations, improve our operating infrastructure, enhance our information security systems to combat changing cyber threats and expand personnel to support our business, we may have to delay or reduce the scope of planned strategic initiatives.

Moreover, any additional equity financing that we obtain may dilute the ownership held by our existing shareholders.

Any debt financing could involve substantial restrictions on activities and creditors could seek additional pledges of some or all of our assets.

If we fail to obtain additional funding as needed, we may be forced to cease or scale back operations, and our results, financial conditions and stock price would be adversely affected.

As such, these factors, among others, raise substantial doubt about the ability of the Company to continue as a going concern for a reasonable period.

Off-Balance Sheet Arrangements

On September 30, 2024, we did not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenue or expenses, results of operations, liquidity, capital expenditures or capital resources.

Since our inception, except for standard operating leases accounted for prior to January 1, 2022, we have not engaged in any off-balance sheet arrangements, including the use of structured finance, special purpose entities or variable interest entities.

Our opinion is that inflation did not have a material effect on our operations for the nine months ended September 30, 2024.

Climate Change

Our opinion is that neither climate change, nor governmental regulations related to climate change, have had, or are expected to have, any material effect on our operations.

New Accounting Pronouncements

Recently Issued Accounting Pronouncements Not Yet Adopted

In November 2023, the FASB issued Accounting Standards Update 2023-07 – Segment Reporting (Topic ASC 280) Improvements to Reportable Segment Disclosures.

This Accounting Standards Update improves reportable segment disclosure requirements, primarily through enhanced disclosure about significant segment expenses.

The enhancements under this update require disclosure of significant segment expenses that are regularly provided to the Chief Operating Decision Maker (“CODM”) and included within each reported measure of segment profit or loss, require disclosure of other segment items by reportable segment and a description of the composition of other segment items , require annual disclosures under Topic ASC 280 to be provided in interim periods, clarify use of more than one measure of segment profit or loss by the CODM, require that the title of the CODM be disclosed with an explanation of how the CODM uses the reported measures of segment profit or loss to make decisions, and require that entities with a single reportable segment provide all disclosures required by this update and required under Topic ASC 280.

ASU 2023-07 is effective for public business entities for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted.

The Company believes the adoption of ASC 280 will not have a material impact on its condensed consolidated financial statements.

In December 2023, the FASB issued Accounting Standards Update 2023-09 – Income Taxes (Topic ASC 740) Income Taxes.

This Accounting Standards Update improves the transparency of income tax disclosures by requiring (1) consistent categories and greater disaggregation of information in the rate reconciliation and (2) income taxes paid disaggregated by jurisdiction.

$ (13,325,257 )

the Three Months Ended March 31, 2025 Compared to the Three Months Ended March 31, 2024

the three months ended March 31, 2025, revenues declined 24.0% to $741,731 compared to $975,946 reported for the same

three-month period in the prior year.

The decrease is primarily due to the market conditions softening, changes in

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

the three months ended March 31, 2025, gross profit totaled $131,795, reflecting a 54.1% decrease from a gross profit of

$287,212 for the three months ended March 31, 2024.

Our gross profit margin declined to 17.8% from 29.4% for the

three months ended March 31, 2025 and 2024, respectively.

The decline represents higher casino payouts due to large winnings by

players, coupled with the aforementioned changes to customer pricing structures during the three months ended March 31, 2025.

the online casino business, as greater payouts are made to winners, this has the impact of reducing gross

Operating Expenses

the three months ended March 31, 2025, total operating expenses decreased 46.4% to $1,057,339 from $1,972,075 reported for the

same three-month period in the prior year.

The decrease was attributable to lower payroll, audit and legal, insurance,

marketing and travel-related costs in the first quarter of 2025 compared to the first quarter in 2024.

quarter of 2024 also included expenses related to SHGN and Sports Gaming Client Services for the period from January 1, 2024

through January 18, 2024.

Income (Loss) from Continuing Operations

attributable to the Company’s concerted effort to lower payroll and other discretionary costs, net loss from continuing operations

decreased 47.9% to $(916,732) for the three months ended March 31, 2025, compared to a net loss from continuing operations

of $(1,760,811) reported for the same three month period in 2024.

Income (Loss) from Discontinued Operations, Net of Tax

the three months ended March 31, 2025, net loss from discontinued operations, net of tax decreased 100.4% to $(58,169), which compared

to a net income from discontinued operations, net of tax of $14,111,167 for the three months ended March 31, 2024.

The decrease to a

net loss in discontinued operations is due to the gain on the sale of the SHGN and Sports Gaming Client Services business operations

in the first quarter March 31, 2024.

Income (Loss)

a result of the aforementioned reasons, net loss for the three months ended March 31, 2025 totaled $(974,901), declining

107.9% when compared to net income of $12,350,356 reported for three months ended March 31, 2024.

Months Ended March 31, 2025 Compared to Three Months Ended March 31, 2024

of March 31, 2025, cash on hand was $1,374,943, a -4.3%decrease when compared to cash on hand of $1,436,729 as of December 31, 2024.

the three months ended March 31, 2025, net cash used in operating activities from continuing operations totaled $(452,827) compared

to net cash used in operating activities from continuing operations of $(2,848,643) in the prior year.

Net cash used in

operating activities from discontinued operations was $(61,258), which compared to net cash used in operating activities

of $(16,446,314) from discontinued operations for the same three-month period in 2024.

Overall, net cash used in operating

activities was $(514,085) and $(19,294,957) for the three months ended March 31, 2025 and 2024, respectively.

The change in the

operating cashflows was largely attributable to the sale of the Company’s SHGN and Sports Gaming Client Services

businesses in January 2024.

the three months ended March 31, 2025, net cash used in the Company’s investing activities from continuing

operations totaled $(500,000), an increase of 28986.7% when compared to cash used in investing activities from continuing

operations of $(1,719) for the same three-month period in 2024.

For the three months ended March 31, 2025 and 2024, net cash used

in investing activities from discontinued operations was $- and $(18,707,834), respectively.

The increase in net cash used in

investing activities for three month period March 31, 2025 versus 2024 was due to the Company’s $500,000 investment in

Armchair Enterprises.

The decrease in total cash used in investing activities for discontinued operations is due to cash

received from the sale of business of $22,500,000, net of the cash transferred of $41,357,834.

The majority of the cash transferred

of $41,357,834 was reflected in discontinued operations customer deposits liability and deferred revenue of $36,959,573 and

$4,888,704, respectively.

the three months ended March 31, 2025, net cash provided by financing from continuing operations was $907,188 a 107.3% increase

when compared to net cash used by financing activities from continuing operations of $(12,409,050) for the same three-month period in

For the three months ended March 31, 2025 net cash used in financing activities from discontinued operations was $- compared

to net cash used by financing activities of $(5,835,352) for the three months ended March 31, 2024.

The change was largely

due to the repayments of $19,205,606 in debt in the first quarter of 2024, including the repayment of the convertible debenture for $4,395,753.

and Capital Resources

of March 31, 2025, we had working capital of $1,570,519.

For the three months ended March 31, 2025, we had a net loss from continuing

operations of $(916,732) compared to a net loss from continuing operations of $(1,760,811) respectively, reported for the same three

months in 2024.

May 1, 2024, Company entered into an ATM Sales Agreement (the “ATM Sales Agreement”) with A.G.P./Alliance Global Partners

(the “Agent”) pursuant to which the Company may offer and sell, from time to time, through the Agent, as sales agent and/or

principal, shares of its common stock, par value $0.0001 per share (the “Common Stock”), having an aggregate offering price

of up to $1,676,366 (“Shares”), subject to certain limitations on the amount of Common Stock that may be offered and sold

by the Company set forth in the ATM Sales Agreement (the “Offering”).

The Company is not obligated to make any sales of Shares

under the ATM Sales Agreement and any determination by the Company to do so will be dependent, among other things, on market conditions

and the Company’s capital raising needs.

On February 4, 2025, the Company, under the terms of the ATM Sales Agreement, filed a

prospectus supplement that amended the number shares of Common Stock having an aggregate offering price of up to $1,835,052.

31, 2025, SharpLink has raised total gross proceeds of $1,834,925.

May 5, 2025 and May 6, 2025, SharpLink filed a registration statement on Form S-1 and Form S-1/A, respectively, in connection with a

potential public offering to raise up to $5 million (the “Offering”) in gross proceeds through the offering of i) shares of

common stock or prefunded warrants, in lieu thereof, ii) Series A-1 Common Stock Warrants, and iii) Series A-2 Common Stock Warrants

(collectively, the Series A-1 Common Stock Warrants and Series A-2 Common Stock Warrants, the “Common Warrants.” Pursuant

to the registration statement, as amended, SharpLink has engaged AGP to use its reasonable best efforts to solicit offers to purchase

our securities in this Offering.

The Agent has no obligation to purchase any of the securities from us or to arrange for the purchase

or sale of any specific number or dollar amount of the securities.

Because there is no minimum offering amount required as a condition

to closing in this offering the actual public offering amount, Agent’s fee, and proceeds to us, if any, are not presently determinable

and may be substantially less than the total maximum offering amounts set forth in the registration statement, as amended, and related

preliminary prospectus.

addition to funds that may be raised through the ATM Sales Agreement and/or the Offering, we may need to raise additional capital to

fund the Company’s growth and future business operations.

We cannot be certain that additional funding will be available on acceptable

terms or at all.

If we are not able to secure additional funding when needed to support our business and to respond to business challenges,

develop new technology and services or enhance our existing offering, track and comply with applicable laws and regulations, improve

our operating infrastructure, enhance our information security systems to combat changing cyber threats and expand personnel to support

our business, we may have to delay or reduce the scope of planned strategic initiatives.

Moreover, any additional equity financing that

we obtain may dilute the ownership held by our existing shareholders.

The economic dilution to our shareholders will be significant if

our stock price does not materially increase, or if the effective price of any sale is below the price paid by a particular shareholder.

Any debt financing could involve substantial restrictions on activities and creditors could seek additional pledges of some or all of

If we fail to obtain additional funding as needed, we may be forced to cease or scale back operations, and our results, financial

conditions and stock price would be adversely affected.

As such, these factors, among others, raise substantial doubt about the ability

of the Company to continue as a going concern for a reasonable period.

Sheet Arrangements

March 31, 2025, we did not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect

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

or capital resources.

Since our inception, except for standard operating leases accounted for prior to January 1, 2022, we have not engaged

in any off-balance sheet arrangements, including the use of structured finance, special purpose entities or variable interest entities.

opinion is that inflation did not have a material effect on our operations for the three months ended March 31, 2025.

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

material effect on our operations.

Accounting Pronouncements

Issued Accounting Pronouncements Not Yet Adopted

2023 , the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”)

2023-09 – Income Taxes (Topic ASC 740) Income Taxes.

The ASU improves the transparency of income tax disclosures by

requiring (1) consistent categories and greater disaggregation of information in the rate reconciliation and (2) income taxes paid

disaggregated by jurisdiction.

It also includes certain other amendments to improve the effectiveness of income tax disclosures.

The amendments in ASU 2023-09 will become effective at the beginning of our 2025 fiscal year.

Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance.

We do not expect that this guidance will have a material impact upon our financial position and results of operations.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, we are not required to provide the information required by this Item.

amendments in ASU 2023-09 became effective beginning with our 2025 fiscal year.

We do not expect that

this guidance will have a material impact upon our financial position and results of operations.

2024, the FASB issued ASU 2024-04, Debt-Debt with Conversions

and Other Option.

ASU 2024-04 is intended to clarify requirements for determining whether certain settlements of convertible

debt instruments, including convertible debt instruments with cash conversion features or convertible debt instruments that are not currently

convertible, should be accounted for as an induced conversion.

This ASU is effective for all entities for annual reporting periods beginning

after December 15, 2025, and interim reporting periods within those annual reporting periods, with early adoption permitted.

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

2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income

- Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses (“ASU 2024-03”),

and in January 2025, the FASB issued Accounting Standards Update No.

2025-01, Income Statement - Reporting Comprehensive

Income - Expense Disaggregation Disclosures (Subtopic 220-40):

Clarifying the Effective Date (“ASU 2025-01”).

ASU 2024-03 requires additional disclosure of the nature of expenses included in the income statement as well as disclosures

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

ASU 2024-03, as clarified

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

beginning in fiscal 2029 on a prospective basis.

Both early adoption and retrospective application are permitted.

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

AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

a “smaller reporting company” as defined by Item 10 of Regulation S-K, we are not required to provide the information required

by this Item.

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

What changed 10-Q

Item 1. Financial Statements