What changed in this filing

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Item 1. Financial Statements

2025-08-14 compared with 2025-05-15 · 1637 added, 769 removed, 495 unchanged (83% of the section changed)

CONSOLIDATED BALANCE SHEETS

June 30, 2025

December 31, 2024

Current Assets

5 unchanged sentences

Total current assets

Crypto assets

Digital intangible assets

Investment, cost

1 unchanged sentence

Intangible assets, net

$ 453,912,306

Liabilities and Stockholders’ Equity

1 unchanged sentence

Accounts payable and accrued expenses

Accounts payable and accrued expenses - related party

Accounts payable and accrued expenses

Current liabilities from discontinued operations

10 unchanged sentences

issued and outstanding shares:

0 and 12,481 ;

liquidation preference:

Preferred stock

Preferred stock value

Common stock, $ 0.0001 par value;

2 unchanged sentences

66,154,792 and 407,295 , respectively

Treasury stock, 8 common shares at cost

Treasury stock, 90 shares of common stock at cost

Additional paid-in capital

4 unchanged sentences

Total liabilities and stockholders’ equity

$ 453,912,306

accompanying notes to these condensed consolidated financial statements

CONSOLIDATED STATEMENTS OF OPERATIONS

For the Three Months Ended

For the Three Months

Ended June 30,

For the Six Months

Ended June 30,

Cost of revenues

1 unchanged sentence

Selling, general, and administrative expenses

Stock-based compensation, related party

Impairment of digital intangible assets

Realized gains on crypto assets, net

( 5,373,583 )

Unrealized loss on crypto assets

Operating loss

( 103,380,184 )

( 1,204,550 )

( 104,305,728 )

( 2,889,413 )

Other income and expense

1 unchanged sentence

Interest expense

Other expense

Change in fair value of convertible debenture and warrant liabilities

Total other income (expense)

Total other income

Net loss before income taxes

( 103,343,249 )

( 104,257,173 )

( 2,628,697 )

Income tax (expense)

1 unchanged sentence

( 103,370,535 )

( 104,287,267 )

( 2,677,475 )

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

1 unchanged sentence

$ ( 103,422,727 )

$ ( 462,959 )

$ ( 104,397,628 )

Numerator for basic and diluted net loss per share:

Net loss from continuing operations available to common stockholders

Net loss from continuing operations

$ ( 103,370,535 )

$ ( 916,664 )

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

$ ( 104,287,267 )

$ ( 2,722,094 )

Net income (loss) from discontinued operations

Net income (loss)

( 103,422,727 )

( 104,397,628 )

Denominator for net loss per share:

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Net loss from continuing operations per share - basic

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

Net income (loss) per share - basic

Net income from discontinued operations per share – basic

Net loss per share - basic

Net loss from continuing operations per share - diluted

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

Net income (loss) per share - diluted

Net income from discontinued operations per share – diluted

Net loss per share - diluted

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

Series A-1 preferred stock

Series B preferred stock

Additional Paid-In

Total shareholders’

Balance, December 31, 2023

THE three and six months ended June 30, 2025 and 2024

Common/Ordinary

A-1 preferred stock

B preferred stock

shareholders’

December 31, 2023

$ ( 87,857,456 )

( 9,399,769 )

Domestication equity adjustment - Note 1

Stock-based compensation expense

Shares issued for vested restricted stock

Issuance of common stock for exercise of warrants

Warrant settlement agreement - Note 8

Issuance of common stock for exchange of warrants - Note 8

Warrant exchange agreement - deemed dividend - Note 8

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

Balance at March 31, 2024

Domestication

equity adjustment - Note 1

compensation expense

issued for vested restricted stock

of common stock for exercise of warrants

settlement agreement - Note 8

of common stock for exchange of warrants - Note 8

exchange agreement - deemed dividend - Note 8

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

at March 31, 2024

$ ( 75,558,222 )

Balance at December 31, 2024

compensation expense

issued for vested restricted stock

sold for cash

exchange amendment - Note 8

at June 30, 2024

$ ( 76,021,181 )

at December 31, 2024

$ ( 77,808,959 )

Net Income (Loss)

Stock-based compensation expense

Issuance of common stock for exchange of warrants

Shares sold for cash

Balance at March 31, 2025

compensation expense

of common stock from exercise of warrants

of common stock sold in at-the-market offering

at March 31, 2025

$ ( 78,783,860 )

( 103,422,727 )

compensation expense

issued for vested restricted stock

of common stock for exchange agreement

of common stock for exercise of warrants

of common stock sold in private placement May 20, 2025

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

of common stock sold in at-the-market offering

at June 30, 2025

$ 634,748,320

$ ( 182,206,587 )

$ 452,519,350

$ 634,748,320

$ ( 182,206,587 )

$ 452,519,350

accompanying notes to these condensed consolidated financial statements.

1 unchanged sentence

Includes cash flow activities from both continuing and discontinued operations

Three Months Ended

Six Months Ended June 30,

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income (loss)

( 104,397,628 )

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

2 unchanged sentences

$ ( 2,677,475 )

Net income (loss)

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

4 unchanged sentences

Stock-based compensation expense

Stock-based compensation expense, related party

Impairment on digital intangible assets

Unrealized loss on crypto assets

Realized gains on crypto assets, net

( 5,373,583 )

Crypto rewards on native staking

Loss on disposal of equipment

5 unchanged sentences

Accounts payable and accrued expenses

( 1,080,970 )

Accounts payable and accrued expenses - related party

Net cash used in operating activities – continuing operations

( 1,933,542 )

( 3,952,960 )

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

2 unchanged sentences

( 2,138,473 )

( 20,954,967 )

CASH FLOWS FROM INVESTING ACTIVITIES:

Capital expenditures for equipment

Investment in Crypto Casino

Investment in Armchair Enterprises, Inc.

Crypto assets purchased

( 405,816,679 )

Proceeds from sale of intellectual property

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

( 406,319,197 )

Net cash used in investing activities - discontinued operations

2 unchanged sentences

( 406,319,197 )

( 18,709,553 )

CASH FLOWS FROM FINANCING ACTIVITIES:

Repayment of convertible debenture

Proceeds from convertible debenture and purchase warrants

( 4,148,571 )

Proceeds from sale of common stock

Gross proceeds from sale of common stock

Issuance costs paid related to sale of common stock

Issuance of common stock from exchange agreement

Issuance of common stock from exercise of warrants

Gross proceeds from shares sold in capital raise

Issuance costs related to shares sold in capital raise

Gross proceeds from private placement

Issuance costs paid related to private placements

( 20,375,704 )

Shares issued for restricted stock

Proceeds from line of credit

19 unchanged sentences

Cash paid for taxes

NON-CASH FINANCING ACTIVITIES:

NON-CASH OPERATING, INVESTING AND FINANCING ACTIVITIES:

Crypto assets received as equity contributions

$ 123,397,477

Crypto assets staked on liquid staking protocol

( 469,930,234

Receipt of digital intangible assets

Settlement agreement, liability issued for warrants

Issuance of common stock in exchange of warrants

Issuance of common stock for vested RSUs

Issuance of common stock for vested restricted stock

Deemed Dividend

Warrant exchange agreement, issuance of pre-funded warrants

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

accompanying notes to these condensed consolidated financial statements.

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

THE three months ended March 31, 2025 and 2024

TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

three and six months ended June 30, 2025 and 2024

1 – Basis of Presentation

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(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.

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

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 June 30, 2025 and December 31, 2024, as well as its results of operations for

the three and six months ended June 30, 2025 and 2024.

The condensed consolidated balance sheet as of December 31, 2024 has been

derived from the audited consolidated financial statements as of that date.

The preparation of financial statements in conformity with

accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and

assumptions that affect the reported amounts 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 condensed

or omitted from this report, as is permitted by rules and regulations of the SEC.

Accordingly, the condensed consolidated financial statements do not include

all information and footnotes required by GAAP for a complete financial statement presentation.

These condensed consolidated

financial statements should be read in conjunction with the consolidated financial statements and the notes thereto for the year

ended December 31, 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.

and Nature of Business

Headquartered

in Minneapolis, SharpLink, a Delaware corporation, recently undertook a significant strategic shift by adopting Ether

(“ETH”), the native cryptocurrency of the Ethereum blockchain (“Ether” or “ETH”) as its primary

treasury asset.

This strategy reflects the Company’s commitment to align the corporate treasury with the future of

programmable finance, digital capital markets and decentralized infrastructure.

The Company also operates an online performance

marketing company that delivers unique fan activation solutions to its sportsbook and online casino gaming partners.

global affiliate iGaming 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.

1 unchanged sentence

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

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.

May 26, 2025, the Company entered into a securities purchase agreement for a private placement in public equity (“PIPE”),

offering an aggregate of (i) 58,699,760

shares of common stock of the Company, par value $ 0.0001

per share, at an offering price of $ 6.15

per share, and (ii) pre-funded warrants (the “Pre-Funded

Warrants”) to purchase up to an aggregate of 10,400,553

shares of Common Stock at an offering price of $ 6.1499

per Pre-Funded Warrant.

Each of the Pre-Funded Warrants is

exercisable for one share of Common Stock at the exercise price of $ 0.0001

per Pre-Funded Warrant Share, immediately exercisable, and

may be exercised at any time until all of the Pre-Funded Warrants issued in the Offering are exercised in full.

The gross proceeds from

the PIPE, before deduction the placement agents fees and offering expenses, were approximately $ 425,000,000

funded in a combination of cash and Ether.

On June 2, 2025,

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

Consensys Software Inc.

acted as the lead investor in the PIPE, along with prominent crypto venture capital firms and infrastructure

providers, with an intent to assist the Company in earning distinction as one of the largest ETH-focused treasury strategies in the public

The Company also implemented native and liquid staking activities in the second quarter of 2025 to earn staking rewards from

the Company’s digital assets held.

See Note 2 - Digital Asset Holdings and Note 6 - Warrants .

May 20, 2025, the Company entered into a securities purchase agreement (the “Purchase Agreement”) for an offering of 34,000

shares (the “Shares”) of common stock, $ 0.0001

par value per share, and Pre-Funded Warrants (the “Pre-Funded

Warrants”) to purchase up to 1,496,612

shares of common stock .

The Shares were offered at an offering

price of $ 2.94

The gross proceeds from the Purchase Agreement,

before deducting the placement agent fees and offering expenses, were approximately $ 4,500,000 .

See Note 6 - Warrants .

Issue of shares and pre-funded warrants were recorded at the offering price in equity in accordance with ASC 505, Equity ,

with any amounts above the par value of shares were recorded in Additional paid-in capital.

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

January 2024 (the “Sale of Business”) to RSports Interactive, Inc.

(“RSports”), a Minnesota corporation, 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.

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.

All prior 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 12 -

Discontinued Operations.

February 13, 2024, SharpLink Gaming Ltd.

21 unchanged sentences

Par value for common stock

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

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

Preferred Shares

4 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

Par value for Series preferred stock

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

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

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

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

Act of 1933, as amended (the “Securities Act”), 600 shares of the Company’s Series A-1 Preferred Stock and 1,040 shares

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

38,683 shares of SharpLink’s common stock (“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.

of Consolidation

2 unchanged sentences

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

Reclassifications

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.

7 unchanged sentences

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.

Foreign currency translation adjustments, which arise from the remeasurement of foreign-denominated monetary assets and liabilities, are typically recorded

in Other Comprehensive Income (OCI) in accordance with U.S.

GAAP, however, the Company does not have material operations in a foreign currency which require a translation into U.S dollar.

Foreign currency transaction gains and losses

resulting from remeasurement are recognized in selling,

general and administrative 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.

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

At-The-Market

(“ATM”) Offerings

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 the Company’s 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”).

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 .

May 30, 2025, SharpLink entered into a second ATM Sales Agreement with the Agent relating to the sale of shares of our Common Stock from

time to time, having an aggregate offering price of up to $ 1,000,000,000 .

of June 30, 2025, SharpLink raised total net proceeds of $ 126,045,108 from sales of Shares under our ATM Sales Agreements.

The proceeds were used to further the Company’s ETH treasury reserve strategy as well as provide for working capital.

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.

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

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

The acquisition of a 10 % equity stake in Armchair

was made for $ 500,000 in cash, along with a right of first refusal to acquire a controlling interest in Armchair.

The investment

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

There was no impairment

as of 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

as of June 30, 2025.

Accounting Policies

Company’s digital assets primarily include ETH and Liquid Staked ETH (“LsETH”).

The Company distinguishes between

digital assets which fall within the scope of ASC 350-60 and those which do not.

The Company refers to digital assets which fall

within the scope of ASC 350-60 (e.g., ETH) as “crypto assets.” Digital assets which do not fall within the scope of ASC

350-60, Accounting for and Disclosure of Crypto Assets , are referred to as “digital intangible

of June 30, 2025, the Company held $ 61.5 million of crypto assets comprised of ETH that are in the scope of ASC 350-60 at fair value.

The Company reflects crypto assets held at fair value on the consolidated balance sheets within the Crypto assets line item.

determining the fair value of the crypto assets in accordance with ASC 820, the Company utilizes Coinbase as the principal market.

activity from remeasurement of crypto assets at fair value is reflected in the consolidated statements of operations within Unrealized

loss on crypto assets.

Realized gains and losses from the derecognition of crypto assets are included in Realized gain on crypto assets,

net in the consolidated statements of operations.

The Company uses a first-in, first-out methodology to assign costs to crypto assets

for purposes of the crypto assets held and realized gains and losses disclosures in Note 2, Digital Asset Holdings.

S ales and purchases of crypto assets are

reflected as cash flows from investing activities in the

consolidated statements of cash flows.

Contributions of crypto assets received as part of the consideration received in the PIPE and deposits of ETH into liquid

staking protocol are presented as noncash investing and financing activities in the consolidated statements of cash flows.

of June 30, 2025, the Company held $ 382.4

million of digital intangible assets comprised of LsETH that are intangible assets outside the scope of ASC 350-60.

A receipt token, in general and by design, entitles the holder to redeem the crypto intangible asset(s) for which

it was exchanged.

Therefore, it fails the ‘other goods and services criterion’ in paragraph 350-60-15-1(b), and thus is outside

the scope of Subtopic 350-60.

digital intangible assets are recorded at cost, less impairment within digital intangible assets on the consolidated balance sheets in

accordance with ASC 350-30.

The Company tests digital intangible assets for impairment annually and more frequently if events or changes

in circumstances indicate that it is more likely than not that the asset is impaired.

The test for impairment consists of a comparison

of the fair value of the digital intangible assets with their carrying amounts.

Refer to Note 2, Digital Asset Holdings , for additional

in June 2025, the Company used the proceeds from its capital raising activities to acquire and deploy ETH in staking activities,

which can include native staking, liquid staking and restaking.

The Company has entered into separate contractual agreements with

various third-party entities to facilitate its ETH staking activities.

The Company commenced both native staking and liquid

staking in June of 2025.

The Company intends for staking to become a primary yield generation strategy of the Company within the

current fiscal year.

Company utilized two third-party asset managers to manage and stake ETH on its behalf as of June 30, 2025.

Through its agreements

with these asset managers, the Company’s ETH is held by qualified custodians, staked in the Ethereum protocol, and the stake is

delegated to third party validators.

When chosen as validators by the Ethereum network, these validators earn staking rewards and transaction

fees proportional to the amount of stake delegated to them.

The Company recognizes rewards from native staking as revenue in accordance

with ASC 606.

However, since the amount of rewards are not known by the Company until a validation activity is completed and the

Company receives rewards in their custodial account, the staking rewards are constrained under the Topic 606 guidance on variable

consideration, until such time.

the Company is not the principal to the block validation service, it does not control the full output of the reward-generating activity,

and instead receives net staking rewards, after validator commissions are deducted.

As such, the Company presents staking revenue on

a net basis, reflecting only the portion of protocol rewards to which it is entitled.

Asset manager fees

are presented as separate operating expenses.

Company participates in liquid staking, which is similar to native staking.

One key difference and intended benefit of liquid staking

is that it provides for liquidity by allowing the Company to earn staking rewards while still maintaining the ability, provided through

the receipt token, to enter into to other transactions.

When the Company’s ETH is staked, the Company is provided with a digital

intangible asset (i.e., LsETH) which represents the crypto asset (i.e., ETH) which has been staked.

LsETH is a non-rebasing liquid

staking receipt token.

It uses a floating redemption rate between LsETH and the underlying staked ETH.

The redemption rate is determined

by the underlying staked ETH and the current value of accumulated staking rewards, penalties, and fees associated with the underlying

As a result, staking rewards earned from the Company’s liquid staking activities are not recognized as revenue.

These staking rewards will be recognized as gains or losses upon redemption

or sale of the LsETH in accordance with ASC 610-20 Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets

as the Company is unable to determine the staking rewards to which is entitled at the time of the initial staking such that the staking

rewards are constrained under the ASC 606 guidance on variable consideration which also applies to transfers of non-financial assets under

No LsETH was redeemed or sold in the quarter ended June 30, 2025.

Recently Issued Accounting Pronouncements Not Yet Adopted

2024, the FASB issued ASU 2024-04, Debt - Debt with Conversions and Other Options (Subtopic 470-20):

Induced Conversions

of Convertible Debt Instruments (“ASU 2024-04”).

ASU 2024-04 is intended to clarify requirements for determining

whether certain settlements of convertible debt instruments, including convertible debt instruments with cash conversion features or

convertible debt instruments that are not currently convertible, should be accounted for as an induced conversion.

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.

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.

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

March 31, 2025

March 31, 2024

Cost of Revenues

Operating Expenses

Selling, general, and administrative expenses

Operating Loss

Interest income

Other (expense) income

Gain on sale of business

Interest expense

Total other income and expense

Income (loss) before income taxes

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

Prepaid expenses and other current assets

Total current assets

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

Current Liabilities

Accounts payable and accrued expenses

Total current liabilities

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.

In December 2023, the FASB issued Accounting Standards

2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures (“ASU 2023-09”).

ASU 2023-09 requires

enhanced disclosures surrounding income taxes, particularly related to rate reconciliation and income taxes paid information.

In particular,

on an annual basis, companies will be required to disclose specific categories in the rate reconciliation and provide additional information

for reconciling items that meet a quantitative threshold.

Companies will also be required to disclose, on an annual basis, the amount

of income taxes paid, disaggregated by federal, state, and foreign taxes, and also disaggregated by individual jurisdictions above a quantitative

The standard is effective for the Company for annual periods beginning January 1, 2025 on a prospective basis, with retrospective

application permitted for all prior periods presented.

The Company will adopt ASU 2023-09 for the annual period ending December 31, 2025

and is currently evaluating the impact of this guidance on its disclosures.

2 – Digital Asset Holdings

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

as of June 30, 2025:

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

Balance, June 30, 2025

basis is equal to the cost of the crypto assets net of any transaction fees, if any, at the time of purchase or upon receipt.

represents the quoted crypto asset prices within the Company’s principal market at the time of measurement (midnight UTC).

of December 31, 2024 and March 31, 2025, the Company did not hold any crypto assets.

following table represents a reconciliation of crypto assets held:

Schedule of Reconciliation of Crypto Assets

For the Three and

Six Months Ended

June 30, 2025

Fair Value, December 31, 2024

Fair Value, March 31, 2025

Deposits of ETH into liquid staking activities

( 465,343,468 )

Receipt and accrual of ETH from native staking activities

Unrealized loss

( 2,437,026 )

Fair Value, June 30, 2025

are the result of purchases and receipts of ETH in connection with the PIPE, see Note 1- Basis of Presentation .

of ETH from native staking represent the rewards earned from native staking.

During the three and six months ended June 30, 2025,

the Company recognized cumulative realized gains of $ 9.8

million, and cumulative realized losses of $ 4.4

million upon the deposit of ETH into liquid staking.

Intangible Assets

following table sets forth the cost basis, impairment amount, and carrying amount of digital assets held, as shown on the consolidated

balance sheet as of June 30, 2025:

Schedule of Impairment Amount and, and Carrying Amount of

Digital Assets Held

$ 470,235,927

$ ( 87,813,295 )

$ 382,422,632

$ 470,235,927

$ ( 87,813,295 )

$ 382,422,632

cost of LsETH was initially recorded at fair value of LsETH on the date of receipt.

Following the receipt of LsETH in early

June of 2025, the price of LsETH decreased;

and it was determined that the carrying amount of the LsETH exceeded its fair value

during the period ending June 30, 2025.

The Company performs an analysis each quarter to identify whether events or changes

in circumstances, principally decreases in the quoted prices on the Company’s principal market, indicate that it is more likely than not that

the assets are impaired.

In determining if an impairment has occurred, the Company considers the lowest price of one LsETH

quoted on the principal market at any time since acquiring the specific LsETH held by the Company.

F or the period ending

June 30, 2025, the Company recorded an impairment loss of $ 87.8 million in the condensed consolidated statement of operations within

impairment of digital intangible assets.

The fair value of the LsETH is determined in accordance with ASC 820, Fair Value Measurement .

For valuation purposes, the Company utilizes Coinbase as the principal market for LsETH.

3 – 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.

value of $ 3,935 and $ 3,359 as of June 30, 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:

for the six months ended June 30, 2025 and 2024 was $ 1,630 and $ 4,343 , respectively.

assets, net of accumulated amortization as of June 30, 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.

Weighted Average

Period (Years)

Balance, June 30, 2025

Acquired technology

Balance, December 31, 2024

Acquired technology

expense from continuing operations on intangible assets for the six months ended June 30, 2025 and 2024 was $ 2,448 and $ 2,461 , respectively.

4 - Convertible Debenture and Warrant

Debenture at Fair Value

Company accounts for convertible debentures using an amortized cost model.

Company accounts for convertible debentures using the fair value method.

The discount for warrants, the Original Issuance Discount

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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.

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

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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.

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 .

333-271396) was filed with the SEC 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

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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”).

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

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

4 unchanged sentences

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

Warrant provided 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”).

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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.

The parties further agreed 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

4 unchanged sentences

Repurchase (the “Warrant Repurchase Balance”).

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

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

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

2 unchanged sentences

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.

as presented in the statement of stockholders’ equity for the six months ended June 30 , 2024.

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

1 unchanged sentence

Schedule of Fair Value Assumptions of Warrants

January 19, 2024

March 6, 2024

March 31, 2024

Expected volatility

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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.

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 fair value of the warrant liability was zero as of June 30, 2024.

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 operations during the six months ended June 30, 2024:

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

5 unchanged sentences

Change in fair value of warrant repurchase balance

Fair Value, March 31, 2024

Change in fair value of warrant amendment

Settlement of warrant liability due to amendment

Fair Value, June 30, 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

in Note 1 , the Company purchased crypto assets held at fair value in June of 2025.

The fair value of the Company’s crypto assets

is disclosed in Note 2.

The crypto assets are measured at fair value on a recurring basis using observable prices (Level

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

Schedule of Warrant Activity

Number of Shares

Underlying the

Weighted Average

Exercise Price Per

Weighted Average

Remaining Life

Outstanding as of December 31, 2024

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

Outstanding as of June 30, 2025

Company recognized $ 16,379,368

of stock-based compensation expense for 3,455,019

of Strategic Advisor Warrants to purchase shares of common stock issued to Consensys in conjunction with the Strategic Advisory

The Strategic Advisor Warrants have various exercise prices as follows:

1,382,007 shares of Common Stock at an exercise price of $6.15 per share of common stock;

(ii) 691,004 shares of common stock at an

exercise price of $6.765 per share of common stock;

(iii) 691,004 shares of common stock at an exercise price of $7.38 per share of

common stock;

and (iv) 691,004 shares of common stock at an exercise price of $7.995 per share of common stock.

See Note 13 - Related Party Transactions .

Company recognized $ 12,864,153

of stock-based compensation expense recognized as contra-equity for the 2,764,013

Placement Agent Warrants to purchase shares of common stock issued to the Agent in conjunction with the PIPE Offering.

have an exercise price of $ 7.68

per share of common stock.

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

Both warrants are fully vested, nonforfeitable and not subject to any clawback provisions on the grant date.

Accordingly, the grant-date fair value of the strategic advisor warrants is recognized in full as compensation in the income statement upfront.

The grant date fair value of the placement agent warrants is recorded as contra-equity as the warrants represent noncash consideration for costs of placement agent services which are directly attributable costs to raise capital in the PIPE.

Company issued 1,496,612 Pre-Funded Warrants to purchase shares of common stock to Consensys in conjunction with the $ 4.5 Million Registered

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

Company issued 3,966,340 Pre-Funded Warrants to purchase shares of common stock to Consensys in conjunction with the PIPE Offering.

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

Company issued 6,434,213 Pre-Funded Warrants to purchase shares of common stock to Joseph Lubin in conjunction with the PIPE Offering.

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

Company issued 44,650 Pre-Funded Warrants to purchase shares of common stock to Alpha in conjunction with the April 2, 2025 Exchange

The warrants have an exercise price of $ 0.0001 per share of common stock and were exercised during the period ended June 30,

Pre-Funded Warrants met the criteria for classification within stockholders’ equity as permanent equity, with no subsequent

remeasurement required.

The fair value of each warrant awarded for compensation 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.

Treasury yield curve in effect at the time of grant.

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

volatility is determined using the volatility of peer companies.

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

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

June 30, 2025

Expected volatility

Expected dividends

Expected term (years)

Risk-free rate

Fair value of Ordinary Shares on grant date

is a summary of the Company’s warrant activity for the six months ended June 30, 2024:

Number of Shares

Underlying the

Weighted Average

Exercise Price Per

Weighted Average

Remaining Life

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Revalued regular warrants

Outstanding as of March 31, 2024

Outstanding as of June 30, 2024

7 - Stock Compensation

3 unchanged sentences

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.

For the six months ended June 30, 2025the

Company managed the following equity plans:

SharpLink Gaming Ltd.

2021 Equity Incentive Plan, SharpLink, Inc.

2020 Stock Incentive Plan,

SharpLink Gaming, Inc.

2023 Equity Incentive Plan and SHGN 2018 Stock Incentive Plan.

Company granted no

options for the three and six months ended June 30, 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

expense for stock options of $ 72,898 and

the six months ended June 30, 2025 and 2024, respectively, of which $ 0 and

expense are recorded in discontinued operations.

The Company recognized stock compensation expense for stock options of $ 36,534

and $ 43,052 for the three months ended June 30, 2025 and 2024, respectively, of which $ 0 and

$ 0 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 volatility is determined using the volatility of peer companies.

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

51.02 - 116.56 %

Expected dividends

Expected term (years)

Risk-free rate

Fair value of common shares on grant date

$ 20.40 - $ 394.56

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

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

Schedule of Stock Option Activity

Outstanding as of December 31, 2024

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 June 30, 2025

Exercisable as of June 30, 2025

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

Outstanding as of December 31, 2023

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.

Outstanding as of June 30, 2024

Exercisable as of June 30, 2024

stock compensation expense of $ 36,223 will be recognized through 2026 for 1,808 of unvested options which have a weighted average

recognition period of seven ( 7 ) 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:

stock units (“RSU”) to members of the senior leadership team and the Board of Directors that vest over the passage of time.

Company recognized stock compensation expense for RSU awards of $ 294,133 and $ 212,800 for the six months ended June 30, 2025

and 2024, respectively.

The Company recognized stock compensation expense for RSU’s of $ 261,038 and $ 212,800 for the three months

ended June 30, 2025 and 2024, respectively.

following is a summary of RSU activity for the six months ended June 30, 2025:

Schedule of Restricted Stock Units

Outstanding as of December 31, 2024

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:

as of December 31, 2024

and unvested as of June 30, 2025

total unrecognized compensation cost related to unvested RSUs as of June 30, 2025 was $ 36,646 .

following is a summary of RSU activity for the six months ended June 30, 2024:

Average Grant

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 .

Outstanding and unvested as of June 30, 2024

8 - 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:

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

Our Affiliate

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

Our Ethereum Staking (“ETH Staking”) segment captures ETH-based yield generated by participating in the Ethereum

network’s staking protocol which is currently comprised of rewards received from native staking.

a result, the Company operates two reportable segments under ASC 280, Segment Reporting, Affiliate Marketing and ETH Staking .

Affiliate Marketing net loss from continuing operations before income taxes was $( 1,492,219 ) and $( 2,406,143 ) million for the three-

and six-month periods ending June 30, 2025.

Total ETH Staking net loss from continuing operations before income taxes was $( 101,851,030 ) for

the three- and six-month periods ending June 30, 2025.

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

The Company focuses

on delivering quality traffic and player acquisitions, retention and conversions to global casino gaming partners worldwide in exchange

for a commission (cost per acquisition or portion of net gaming revenues) paid to the Company by the partners for the new players referred

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 for the Affiliated Marketing Segment:

Schedule of Companies Reportable Segments

Affiliate Marketing Segment

March 31, 2025

March 31, 2024

Affiliate Marketing Segment

Cost of revenues

6 unchanged sentences

( 1,492,219 )

( 2,406,143 )

( 2,628,697 )

Reconciliation of profit or loss

2 unchanged sentences

( 1,492,219 )

( 2,406,143 )

( 2,628,697 )

(1) - other segment

items included in Segment net loss include:

professional fees, insurance, general and administrative expenses, depreciation and amortization,

foreign currency exchange gains and losses, other income and interest expense.

in June 2025, the Company used the proceeds from its capital raising activities to acquire and deploy ETH in staking activities, which

can include native staking, liquid staking and restaking.

The Company has entered into separate contractual agreements with various

third-party entities to facilitate its ETH staking activities.

The Company commenced both native staking and liquid staking in

June of 2025.

The Company intends for staking to become a primary revenue generation strategy of the Company within the current fiscal

Native Staking

Company utilized two third-party asset managers to manage and stake ETH on its behalf as of June 30, 2025.

its agreements with these asset managers, the Company’s ETH is held by qualified custodians, staked in the Ethereum protocol,

and the stake is delegated to third party validators.

When chosen as validators by the Ethereum network, these validators earn staking

rewards and transaction fees proportional to the amount of stake delegated to them.

The Company recognizes rewards from native staking

as revenue in accordance with ASC 606.

native staking revenue is earned within the United States as the validators are domiciled within the United States.

Company participates in liquid staking, which is similar to native staking.

One key difference and intended benefit of liquid staking

is that it provides for liquidity by allowing the Company to earn staking rewards while still maintaining the ability, provided through

the receipt token, to enter into to other transactions.

When the Company’s ETH is staked, the Company is provided with a digital

intangible asset (i.e., LsETH) which represents the crypto asset (i.e., ETH) which has been staked.

Liquid staking rewards

will be recognized as gains or losses within other income upon redemption or sale of the LsETH in accordance with ASC 610-20.

was redeemed or sold in the period ended June 30, 2025.

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

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

ETH Staking Segment

Segment gross profit

Salaries and benefits

Contractors and consulting expense

Asset manager fees

Legal expenses

Realized gains on crypto assets, net

( 5,373,583 )

Unrealized loss on crypto assets

Impairment on digital intangible assets

Other segment expenses (1)

Segment net loss from continuing operations before income taxes

( 101,851,030 )

Reconciliation of profit or loss

Adjustments and reconciling items

Consolidated net loss from continuing operations before income taxes

( 101,851,030 )

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

stock-based compensation - related

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

2 unchanged sentences

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:

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

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

ETH staking revenue occurred within the United States.

Schedule of Revenues by Country

the three months ended March 31, 2025:

Affiliate Marketing

the three months ended June 30, 2025:

United States

Rest of the World

Total Revenue

the three months ended March 31, 2024:

Affiliate Marketing

the six months ended June 30, 2025:

United States

Rest of the World

Total Revenue

the three months ended June 30, 2025:

United States

Rest of the World

the six months ended June 30, 2024:

United States

Rest of the World

Company does not have material assets in foreign jurisdictions.

2 unchanged sentences

of Percentage of Consolidated Revenues Derived from Large Customers

March 31, 2025

March 31, 2024

June 30, 2025

June 30, 2024

Percentage of consolidated

9 - 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 recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers (“ASC 606”).

determine revenue recognition for contracts with customers, the Company performs the following five steps:

(i) identify the contract

with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, including variable

consideration to the extent that it is probable that a significant future reversal will not occur, (iv) allocate the transaction price

to the respective performance obligations in the contract, and (v) recognize revenue when (or as) the Company satisfies the performance

Company recognizes revenue when it transfers its goods and services to customers in an amount that reflects the consideration to which

the Company expects to be entitled in such exchange.

the six months ended June 30, 2025 and 2024, the Company has recognized its revenue at a point in time.

The Company is currently engaged

in the provision of Affiliate Marketing services and Ethereum Staking activities.

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

of Contract Assets and Liabilities

March 31, 2025

June 30, 2025

December 31, 2024

10 unchanged sentences

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

native staking, the Company retains the right and ability to direct the use of the underlying ETH, subject to a bonding period.

the Company does not derecognize the ETH when participating in native staking.

The Company recognizes rewards from native staking as

revenue in accordance with ASC 606.

The Company acts as an agent in native staking transactions as it delegates ETH to third-party validator

operators who perform the technical validation responsibilities.

Native staking rewards are recognized as revenue at the end of each

epoch, or block processing time, or when earned and measurable and when the Company’s share of rewards is known.

The amount of revenue

recognized is measured at fair value and is presented net of validator or other protocol fees.

Company also participates in liquid staking, which is similar to native staking;

however, one key difference and intended benefit of

this method is the ability to provide the Company with tokens representing digital assets in exchange for its ETH.

Liquid staking

rewards are accumulated through the protocol conversion rate for the LsETH and will be recognized as gains or losses within other

income upon redemption or sale of the LsETH in accordance with ASC 610-20.

No LsETH was redeemed or sold in the period ended June

of Jun e 30, 2025, the Company had native staked 23,200

ETH on the Ethereum blockchain.

For the period ended June 30, 2025, the Company earned 11.5

ETH and recognized revenue from native staking rewards of

10 – Income Taxes

1 unchanged sentence

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

The effective tax rate for the three-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.

The effective tax rate for the six-month ended June 30, 2025 was ( 0.0 %).

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 simplify its legal structure.

The tax impact of these legal entities being dissolved

is not expected to be significant.

The launch of the treasury reserve strategy during the second quarter of 2025 increased the Company’s deferred tax

asset by approximately $ 20 million for a deferred tax asset of approximately $ 27 million for the period ended June 30, 2025.

has a full valuation allowance for its deferred tax assets as of the period ended June 30, 2025

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

12 unchanged sentences

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,

for Israeli tax purposes did not exceed the more-likely-than-not threshold and has not recorded any income tax liability at June 30,

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

1 unchanged sentence

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

On July 4, 2025, subsequent to the end of the reporting

period, the U.S.

federal government enacted the One Big Beautiful Bill Act (“OBBBA”) , which includes significant amendments

to the Internal Revenue Code.

The Company is currently evaluating the impact of the legislation on its consolidated financial statements,

including deferred tax assets and liabilities.

11 – Net Income (Loss) Per Share

5 unchanged sentences

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.

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

June 30, 2024, the following presents dilutive and anti-dilutive securities.

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:

Schedule of Computation of Diluted Shares Outstanding

Three Months Ended

March 31, 2025

Anti-Dilutive:

Ended June 30,

Prefunded warrants

Regular warrants

Stock options

Series A-1 preferred stock

Series B preferred stock

Restricted Stock Units

Total Dilutive

Anti-Dilutive:

Stock options

SportsHub warrants

Total Anti-dilutive

5 unchanged sentences

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

Ended June 30,

Purchase warrants Alpha

Regular warrants Alpha

MTS stock options

Total Dilutive

3 unchanged sentences

Series B preferred stock

Regular warrants

Restricted Stock Units

SportsHub warrants

Restricted Stock Units

Total Anti-dilutive

2 unchanged sentences

Schedule of Loss Per Share and Weighted-average

For the Three Months Ended

For the Three Months

Ended June 30,

For the Six Months Ended

Net loss from continuing operations

1 unchanged sentence

$ ( 916,664 )

deemed dividends on warrant exchange

$ ( 104,287,267 )

$ ( 2,677,475 )

deemed dividends on series B preferred stock

Net loss from continuing operations available to common stockholders

( 103,370,535 )

( 104,287,267 )

( 2,722,094 )

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

1 unchanged sentence

$ ( 103,422,727 )

$ ( 462,959 )

$ ( 104,397,628 )

Basic weighted-average shares for continuing and discontinued operations

7 unchanged sentences

Net income (loss) per share

12 – 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.

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

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

LeagueSafe Management, LLC, a Minnesota limited liability company;

SportsHub Reserve, LLC, a Minnesota limited liability company;

SportsHub PA, LLC, a Pennsylvania limited liability company;

SportsHub Operations, LLC, a Minnesota limited liability company;

Holdings, LLC, a Minnesota limited liability company;

SportsHub Regulatory, LLC, a Minnesota limited liability company;

and SportsHub

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

a result of the Sale of Business, 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 Sale of Business is an asset sale for legal and tax purposes instead of an

$ 14.6 million gain was calculated by measuring the difference between the fair value of consideration received less the carrying amount

of assets and liabilities sold in accordance with ASC 810.

the statement of cashflows for the six months ended June 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.

the six months ended June 30, 2025 and 2024, SharpLink paid RSports $ 2,287 and $ 70,420 , respectively, for use of accounting service

personnel under the Post Closing Covenant Agreement (the “PCCA”);

and RSports paid SharpLink $ 2,175 and $ 21,588 under the

PCCA for the six months ended June 30, 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 June 30, 2025 and June 30, 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

June 30, 2025

June 30, 2024

June 30, 2025

June 30, 2024

Cost of Revenues

Operating Expenses

Selling, general, and administrative expenses

Operating Loss

Interest income

Other (expense) income

Gain on sale of business

Interest expense

Total other income and expense

Income (loss) before income taxes

Income tax expense

Income (loss) from discontinued operations, net

$ ( 110,361 )

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 June 30, 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

Restricted cash

Prepaid expenses and other current assets

Total current assets

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

Current Liabilities

Accounts payable and accrued expenses

Total current liabilities

13 - Related Parties

Advisory Agreement with Consensys Software Inc.

connection with the PIPE transaction, the Company entered into a Strategic Advisor Agreement with Consensys Software Inc.

(“Consensys”),

a Delaware corporation, and a related party.

Consensys is a global blockchain technology company that provides decentralized applications

and enterprise solutions, focusing on building and scaling blockchain-based systems primarily on the Ethereum blockchain.

Under the terms

of the agreement, Consensys will provide a broad range of advisory services related to the Company’s ETH treasury strategy

to the Company for three years.

As consideration for these services, Consensys received warrants to purchase up to 3,455,019

shares of the Company’s common stock (the “Strategic Advisor Warrants”).

Strategic Advisor Warrants have various exercise prices as follows:

(i) 1,382,007 shares of Common Stock at an exercise price of $6.15

per share of common stock;

(ii) 691,004 shares of common stock at an exercise price of $6.765 per share of common stock;

(iii) 691,004

shares of common stock at an exercise price of $7.38 per share of common stock;

and (iv) 691,004 shares of common stock at an exercise

price of $7.995 per share of common stock.

Company recorded $ 16,379,368

as stock-based compensation expense, related party, determined

using a Black Scholes model, on the statement of operations for the period ended June 30, 2025.

Agreements with Consensys Employees

part of the ongoing collaboration between the Company and Consensys, three employees of Consensys have been seconded to SharpLink

under secondment agreements.

These employees provide key services in areas including strategic planning, treasury management,

technology integration and business development.

The secondment agreements outline the terms of the assignment, the duration, which

began during the month of June 2025 and terminate September 30, 2025, total monthly compensation of approximately $ 80,000

payable to Consensys and stock-based compensation of a total of approximately $ 75,000 for RSU’s to be awarded in July, and

the allocation of responsibilities between the parties.

The seconded employees remain employees of Consensys, but perform their

duties for the Company during the secondment period and report to the Company’s Chief Executive Office and Chief Financial

In exchange for these services, the Company compensates Consensys for the associated costs on a monthly basis, including

the employees’ salaries, benefits and other related expenses.

For the period ended June 30, 2025, approximately $ 43,000 was

accrued in selling, general and administrative expenses in relation to these agreements and their applicable start date.

14 – 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.

July 8, 2025 and July 10, 2025, the Company entered into letter agreements (“Letter Agreements”) with the holders of the Company’s

common stock and pre-funded warrants which were issued in connection with the Company’s private placement pursuant to the two Securities

Purchase Agreements dated May 20, 2025 and May 26, 2025, respectively.

Pursuant to section 4.9 of each Securities Purchase Agreements,

the Company agreed to reserve and keep available at all times a sufficient number of shares of Common Stock for the purpose of enabling

the Company to issue shares in accordance with each of the Securities Purchase Agreements and the shares underlying the exercise of any

Strategic Advisor Warrants, Placement Agent Warrants, Private Placement Pre-Funded Warrants, and Best Efforts Pre-Funded Warrants.

to the Letter Agreements, the Holders waive the SPA Share Reserve Provision such that the Company may reserve for issuance under the

ATM Sales Agreement between the Company and A.G.P/Alliance Global Partners, entered into on May 30, 2025, any of the authorized shares

of Common Stock that would otherwise be reserved for issuance under the Strategic Advisor Warrants, Placement Agent Warrants, Private

Placement Pre-Funded Warrants, and Best Efforts Pre-Funded Warrant, with the understanding that (i) the Company may issue such shares

pursuant to the ATM Facility at any time after the execution of the Letter Agreements and before the date on which the Company receives

the requisite stockholder approval (the “Stockholder Approval”) to increase the Company’s authorized shares (the “Permitted

ATM Sales”), and (ii) following the receipt of the Stockholder Approval with respect to the authorized share increase, the Company

shall reserve the shares underlying the Placement Agent Warrants, Strategic Advisor Warrants, Private Placement Pre-Funded Warrants,

and Best Efforts Pre-Funded Warrants.

Following the increase in authorized share capital on July 24, 2025, the Letter Agreements

were terminated.

to ATM Sales Agreement

July 17, 2025, SharpLink entered into an Amendment to its ATM Sales Agreement (the “Amendment”) with AGP, dated May 30,

2025, to increase the number of shares that may be sold from time to time in connection with the ATM facility from $ 1,000,000,000

to $ 6,000,000,000 ;

and to permit the forward sale of shares to be sold in the ATM Offering pursuant to Master Forward Confirmation Letter

We filed a supplement to the Prospectus Supplement, dated May 30, 2025, with the SEC to address the Amendment and

the Forward Sales Agreements on July 17, 2025.

of Special Meeting of Stockholders

a Special Meeting of Stockholders held on July 24, 2025, the Company’s stockholders approved an amendment and restatement of the Company’s

2023 Equity Incentive Plan (the “Plan”) to increase the number of shares of common stock reserved for issuance under the

Plan by 8,000,000 shares to 8,034,166 shares.

In addition, the stockholders approved an amendment to the Company’s Amended

and Restated Certificate of Incorporation, as amended, to increase the number of authorized shares of common stock, par value $ 0.0001 ,

of the Company from 100,000,000 to 500,000,000 .

In connection with the increase in the authorized shares of common stock of the

Company, we filed a Second Certificate of Amendment to the Company’s Amended and Restated Certificate of Incorporation, as amended,

with the Secretary of State of the State of Delaware, which became effective at 5:10 p.m.

Eastern Time on July 24, 2025.

of Co-Chief Executive Officers and Entry into New Employment Agreements

July 24, 2025 (the “Effective Date”), the Board appointed Joseph Chalom as Co-Chief Executive Officer of the Company, to serve

with Rob Phythian as the Co-Chief Executive Officer of the Company.

Phythian will remain the Company’s principal executive

It is anticipated that Mr.

Phythian will transition to the role of President over the next quarter and remain a member of the

Chalom, age 54, has served in senior leadership roles over the course of his 20 year career at BlackRock, Inc.

(“BlackRock”).

Most recently, from October 2021 to June 2025 he was the Head of Strategic Ecosystem Partnerships at BlackRock and was responsible for

executing BlackRock’s strategy in the digital assets, data and technology innovation ecosystems.

This included product innovation

and strategic partnerships to drive digital asset ecosystem innovation and institutional client adoption.

Chalom’s leadership,

in 2024, BlackRock launched its IBIT and ETHA exchange traded products and the BUIDL tokenized treasury fund, making it the largest manager

of digital assets.

Prior to this role, he served as BlackRock’s Deputy Chief Operating Officer on an interim basis from March 2021

to October 2021;

and, for over a decade, was the Chief Operating Officer of BlackRock Solutions, which delivers the firm’s Aladdin

financial technology capabilities clients globally.

Chalom served on the boards of Securitize, Inc., a leading provider in the tokenized

assets and digital transfer agency space for real world assets, from May 2004 until June 2025;

and Clarity AI, Inc., a leading AI-powered

sustainability platform and data provider, from January 2021 to June 2025.

Prior to joining BlackRock, Mr.

Chalom worked as a corporate

and technology attorney at Skadden Arps and at Arnold & Porter.

Chalom earned a B.A.

degree, with honors, in International Studies

from Johns Hopkins University and a J.D.

degree from Columbia University School of Law.

Employment Agreement

connection with his appointment as the Company’s Co-Chief Executive Officer, Mr.

Chalom entered into an employment agreement with

the Company effective as of the Effective Date, which provides for (i) an annual base salary of $750,000;

(ii) a target short-term incentive

opportunity equal to 100% of his base salary, with a maximum opportunity of up to 150% of his base salary;

(iii) a sign-on restricted

stock unit award, to be granted within 30 days after the Effective Date, with an award value of $7,000,000, which value will be converted

to a number of shares (rounded down to the nearest whole share) by dividing (x) the award value, by (y) the average closing per-share

price of the Company’s common stock for the seventy five (75) trading days immediately preceding the Effective Date, and which

will be allocated two-thirds (2/3) to time-based vesting conditions, with one-third (1/3) of such time-based vesting units vesting on

the first (1st) anniversary of the Effective Date and the remaining time-based vesting units vesting in equal quarterly installments

thereafter, in each case subject to Executive’s continued employment with the Company, and one-third (1/3) to performance-based

vesting conditions, which will vest based on the extent that certain annual performance goals, selected by the Board or a committee thereof,

are achieved over a three-year performance cycle;

(iv) a long-term incentive opportunity for the 2026 fiscal year commencing July 1,

2026 with a “target” value of not less than $4,000,000;

and (v) payment for an annual executive physical.

employment agreement also provides for certain severance benefits if his employment were terminated by the Company without cause, death

or disability, or upon his resignation for good reason, including an amount equal to two (2) times his base salary and target bonus,

any short-term incentive earned for the prior fiscal year but not yet paid, a pro-rated short-term incentive for the year of termination,

based on actual results, subsidized health insurance premiums for eighteen (18) months, full vesting of any time-based equity awards

and pro-rated vesting of any performance-based equity awards, based on actual results for the entire performance period.

Moreover, upon

a change in control, all of his equity awards will vest in full (with performance-based awards vesting based on performance through the

date of the transaction).

In exchange for the severance benefits, Mr.

Chalom must sign a release of claims in favor of the Company.

Chalom’s employment agreement also includes standard confidentiality, non-competition, non-solicitation and non-disparagement covenants.

Employment Agreement

connection with his appointment as the Company’s Co-Chief Executive Officer, Mr.

Phythian entered into a new employment agreement

with the Company, which replaces and supersedes his prior employment agreement with the Company dated as of February 14, 2024, as amended

on March 19, 2025, and as amended on June 29, 2025.

The employment agreement provides for (i) an annual base salary of $660,000, (ii)

a target short-term incentive opportunity equal to 100% of his base salary, with a maximum opportunity of up to 150% of his base salary,

(iii) a sign-on restricted stock unit award, to be granted within 30 days after the Effective Date, with an award value of $3,700,000,

which value will be converted to a number of shares (rounded down to the nearest whole share) by dividing (x) the award value, by (y)

the average closing per-share price of the Company’s common stock for the seventy five (75) trading days immediately preceding

the Effective Date, and which will be allocated two-thirds (2/3) to time-based vesting conditions, with one-third (1/3) of such time-based

vesting units vesting on the first (1st) anniversary of the Effective Date and the remaining time-based vesting units vesting in equal

quarterly installments thereafter, in each case subject to Executive’s continued employment with the Company, and one-third (1/3)

to performance-based vesting conditions, which will vest based on the extent that certain annual performance goals, selected by the Board

or a committee thereof, are achieved over a three-year performance cycle;

(iv) a long-term incentive opportunity for the 2026 fiscal

year commencing July 1, 2026 with a “target” value of not less than $3,700,000;

and (v) payment for an annual executive physical.

Phythian’s employment agreement also provides for certain severance benefits if his employment were terminated by the Company

without cause, death or disability, or upon his resignation for good reason, including an amount equal to two (2) times his base salary

and target bonus, any short-term incentive earned for the prior fiscal year but not yet paid, a pro-rated short-term incentive for the

year of termination, based on actual results, subsidized health insurance premiums for eighteen (18) months, full vesting of any time-based

equity awards and pro-rated vesting of any performance-based equity awards, based on actual results for the entire performance period.

Moreover, upon a change in control, all of his equity awards will vest in full (with performance-based awards vesting based on performance

through the date of the transaction).

In exchange for the severance benefits, Mr.

Phythian must sign a release of claims in favor of

Phythian’s employment agreement also includes standard confidentiality, non-solicitation and non-disparagement

Employment Agreement

connection with these appointments, Mr.

Robert DeLucia, our Chief Financial Officer, entered into a new employment agreement with the

Company, which replaces and supersedes his prior employment agreement with the Company dated as of February 14, 2024, as amended on March

19, 2025, and as amended on June 29, 2025.

The employment agreement provides for (i) an annual base salary of $450,000, (ii) a target

short-term incentive opportunity equal to 100% of his base salary, with a maximum opportunity of up to 150% of his base salary, (iii)

a sign-on restricted stock unit award, to be granted within 30 days after the Effective Date, with an award value of $1,150,000, which

value will be converted to a number of shares (rounded down to the nearest whole share) by dividing (x) the award value, by (y) the average

closing per-share price of the Company’s common stock for the seventy five (75) trading days immediately preceding the Effective

Date, and which will be allocated two-thirds (2/3) to time-based vesting conditions, with one-third (1/3) of such time-based vesting

units vesting on the first (1st) anniversary of the Effective Date and the remaining time-based vesting units vesting in equal quarterly

installments thereafter, in each case subject to Executive’s continued employment with the Company, and one-third (1/3) to performance-based

vesting conditions, which will vest based on the extent that certain annual performance goals, selected by the Board or a committee thereof,

are achieved over a three-year performance cycle;

and (iv) a long-term incentive opportunity for the 2026 fiscal year commencing July

1, 2026 with a “target” value of not less than $1,150,000.

DeLucia’s employment agreement also provides for certain

severance benefits if his employment were terminated by the Company without cause, death or disability, or upon his resignation for good

reason, including an amount equal to two (2) times his base salary and target bonus, any short-term incentive earned for the prior fiscal

year but not yet paid, a pro-rated short-term incentive for the year of termination, based on actual results, subsidized health insurance

premiums for eighteen (18) months, full vesting of any time-based equity awards and pro-rated vesting of any performance-based equity

awards, based on actual results for the entire performance period.

Moreover, upon a change in control, all of his equity awards will

vest in full (with performance-based awards vesting based on performance through the date of the transaction).

In exchange for the severance

benefits, Mr.

DeLucia must sign a release of claims in favor of the Company.

DeLucia’s employment agreement also includes standard

confidentiality, non-competition, non-solicitation and non-disparagement covenants.

Direct Offerings

$200 Million Offering

August 6, 2025, the Company entered into a securities purchase agreement (the “August Purchase Agreement”) with certain

institutional investors to sell in a registered direct offering (the “August Offering”) an aggregate of 10,256,411

shares of the Company’s common stock.

The price per share was $ 19.50 , and the gross proceeds from the August Offering, before

deducting the placement agent fees, financial advisor fees, and offering expenses, were approximately $ 200 million.

The shares were

offered and sold pursuant to a prospectus, dated May 30, 2025, and a prospectus supplement, dated August 6, 2025, in connection with

a takedown from the Company’s effective shelf registration statement on Form S-3ASR (File No.

In addition, on

August 6, 2025, the Company entered into a placement agency agreement (the “Placement Agency Agreement”) with

A.G.P./Alliance Global Partners (“AGP”).

AGP, as lead placement agent and SG Americas Securities, LLC, as co-placement

agent (“SocGen,” and together with AGP, the “Placement Agents”), pursuant to which the Company engaged the

Placement Agents as the exclusive placement agents in connection with the August Offering.

Cantor Fitzgerald & Co.

(“Cantor”) acted as financial advisor to the Company pursuant to an engagement letter with the Company (the

“Engagement Letter”).

Pursuant to the Placement Agency Agreement, the Company paid the Placement Agents a cash fee equal

to their pro rata allocation of 5.0% of the aggregate gross proceeds raised from the sale of the shares sold in the August Offering

(the “Cash Fee”).

The Cash Fee was allocated 45.0% to AGP and 10.0% to SocGen.

In addition, pursuant to the Engagement

Letter, Cantor was paid a cash fee equal to 45.0% of the aggregate amount of the Cash Fee.

Notwithstanding the foregoing, the Cash

Fee paid to AGP did not exceed 2.0% of the aggregate gross proceeds raised from the sale of the securities sold in the offering.

balance of the Cash Fee not payable to the Placement Agents or Cantor was credited back to the Company.

The Offering closed on

August 8, 2025.

Million Offering

August 10, 2025, the Company entered into a securities purchase agreement (the “Second August Purchase Agreement”) with

certain institutional investors to sell in a registered direct offering (the “Second August Offering”) an aggregate of

18,382,353 shares of the Company’s common stock.

The price per share was $ 21.76 , and the gross proceeds from the Second August

Offering, before deducting the placement agent fees, financial advisor fees, and offering expenses, were approximately $ 400 million.

The shares were offered and sold pursuant to a prospectus, dated May 30, 2025, and a prospectus supplement, dated August 10, 2025,

in connection with a takedown from the Company’s effective shelf registration statement on Form S-3ASR (File No.

In addition, on August 10, 2025, the Company entered into a placement agency agreement (the “Placement Agency

Agreement”) with AGP.

AGP, as lead placement agent and SocGen, and together with AGP, the “Placement Agents”),

pursuant to which the Company engaged the Placement Agents as the exclusive placement agents in connection with the August Offering.

Cantor Fitzgerald & Co.

(“Cantor”) acted as financial advisor to the Company pursuant to an engagement letter with

the Company (the “Engagement Letter”).

Pursuant to the Placement Agency Agreement, the Company paid the Placement Agents

a cash fee equal to their pro rata allocation of 5.0% of the aggregate gross proceeds raised from the sale of the shares sold in the

August Offering (the “Cash Fee”).

The Cash Fee was allocated 45.0% to AGP and 10.0% to SocGen.

In addition, pursuant to

the Engagement Letter, Cantor was paid a cash fee equal to 45.0% of the aggregate amount of the Cash Fee.

Notwithstanding the

foregoing, the Cash Fee paid to AGP did not exceed 2.0% of the aggregate gross proceeds raised from the sale of the securities sold

in the offering.

The balance of the cash fee not payable to the Placement Agents or Cantor was credited back to the Company.

Offering closed on August 12, 2025.

MANAGEMENT ’ S

DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION

Note Regarding Forward-Looking Statements

discussions in this Quarterly Report on Form 10-Q contain forward-looking statements within the meaning of the Private Securities Litigation

Reform Act of 1995.

Forward-looking statements are based on assumptions with respect to the future and management’s current expectations,

involve certain risks and uncertainties and are not guarantees.

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

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

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

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

The words “anticipates,” “believes,”

“could,” “estimates,” “expects,” “intends,” “may,” “plans,” “projects,”

“will,” “would,” “predicts” and similar expressions are intended to identify forward-looking statements,

although not all forward-looking statements contain these identifying words.

We may not actually achieve the plans, intentions or expectations

disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements.

Future results

may differ materially from the plans, intentions and expectations disclosed in the forward-looking statements that we make.

These forward-looking

statements involve risks and uncertainties that could cause our actual results to differ materially from those in the forward-looking

statements, including, without limitation, the risks set forth in Part I, Item 1A, “Risk Factors” of the Annual Report on

Form 10-K for the fiscal year ended December 31, 2024, as amended, and that are otherwise described or updated from time to time in our

other filings with the Securities and Exchange Commission (the “SEC”).

The discussion of such risks is not an indication

that any such risks have occurred at the time of this filing.

We do not assume any obligation to update any forward-looking statements.

Industry and Market Data

we are responsible for all disclosure contained in this Quarterly Report on Form 10-Q, in some cases we have relied on certain market

and industry data obtained from third-party sources that we believe to be reliable.

Market estimates are calculated by using independent

industry publications in conjunction with our assumptions regarding the Ethereum industry and market.

While we are not aware of any misstatements

regarding any market, industry or similar data presented herein, such data involves risks and uncertainties and is subject to change

based on various factors, including those discussed under the headings “Cautionary Note Regarding Forward-Looking Statements,”

Part I, Item 1A, “Risk Factors” of the Annual Report on Form 10-K for the fiscal year ended December 31, 2024, as amended,

and Part II, Item 1A, “Risk Factors” in this Quarterly Report on Form 10-Q.

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.

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 Annual Report on Form 10-K for the year ended

December 31, 2024, filed with the U.S.

Securities and Exchange Commission on March 14, 2025 and the Form 10-K/A filed on March 17, 2025.

As discussed in the section titled “Cautionary 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.

“ 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 Minneapolis, SharpLink, a Delaware corporation, recently undertook a significant strategic shift by becoming one of the world’s largest

publicly traded companies to adopt Ether (“ETH”) as its primary treasury asset.

This strategy reflects the Company’s commitment

to align the corporate treasury with the future of programmable finance, digital capital markets and decentralized infrastructure.

Company also operates an online performance marketing company that delivers unique fan activation solutions to its sportsbook and online

casino gaming partners.

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

Ethereum Staking and Affiliate Marketing.

Ethereum Staking segment seeks to benefit from any price appreciation in the value of ETH and ETH-based yield generated by participating

in the Ethereum network’s staking protocol.

As part of Ethereum’s proof-of-stake consensus mechanism, staking enables network

participants to help validate transactions and secure the blockchain in exchange for staking rewards paid in ETH.

SharpLink delegates

our ETH holdings to validators in accordance with the protocol’s staking requirements, thereby earning consistent, protocol-level

These staking rewards represent an operationalized form of yield generation that is both blockchain-native and capital-efficient.

Our staking operations are designed to be transparent, compliant and institutionally scalable, with infrastructure and security protocols

built to meet the performance and custodial standards of a publicly traded company.

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

gaming operators worldwide.

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

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

regulated and global iGaming operator partners

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

attract, acquire and drive local sports betting and online casino gaming traffic to its valued partners which are licensed to

operate in each respective state.

Treasury Management Strategy

ARE NOT REGISTERED AS AN INVESTMENT COMPANY UNDER THE INVESTMENT COMPANY ACT OF 1940, AND STOCKHOLDERS DO NOT HAVE THE PROTECTIONS ASSOCIATED

WITH OWNERSHIP OF SHARES IN A REGISTERED INVESTMENT COMPANY NOR THE PROTECTIONS AFFORDED BY THE COMMODITIES EXCHANGE ACT.

May 2025, our Board adopted a Treasury Reserve Policy, with ETH serving as the primary treasury reserve asset on an ongoing basis, subject

to market conditions and anticipated needs of the business.

As a result of the Treasury Reserve Policy, in future periods, we may purchase

additional ETH and increase our overall holdings of ETH or sell our ETH and decrease our overall holdings of ETH.

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

We believe Ethereum’s unparalleled programmability, security and developer momentum will make it a foundational

layer for the next generation of decentralized financial applications.

Ethereum’s transition to a proof-of-stake consensus

mechanism and the rise of Layer 2 blockchain networks with high scalability have transformed ETH into a yield-bearing, productive

Crypto asset with increasing institutional adoption and intrinsic network value.

We believe that ETH’s value proposition at

its core is a digital trust commodity and that an investment in ETH represents an asymmetric long-term growth opportunity as more

stablecoins and other tokenized real-world assets are secured by the Ethereum ecosystem.

key aspect of our ETH treasury strategy is to raise capital to be used to increase our ETH position in a manner which is accretive to

shareholders.

This can come in the form of equity, equity-linked debt or other forms of offerings designed to maximize shareholder exposure

to ETH within a prudent risk management framework.

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

diligently tracks and routinely reports key performance indicators designed to offer investors transparency and insight into the execution

and effectiveness of our ETH treasury strategies.

Among these metrics, the Company’s ETH concentration (“ETH Concentration”)

has emerged as a central performance benchmark and “north star” metric by which we gauge our progress.

ETH Concentration,

which is calculated by dividing the Company’s total ETH holdings by every 1,000 Assumed Diluted Shares outstanding, reflects both

the scale of SharpLink’s ETH accumulation efforts and the capital efficiency of our treasury operations.

By prioritizing this metric,

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

capitalization.

Assumed Diluted Shares Outstanding represents the sum of (i) SharpLink’s actual shares of common stock issued

and outstanding as of the end of each reporting period, plus (ii) the additional shares that would be issued upon the assumed exercise

or settlement of all outstanding warrants, pre-funded warrants, stock option awards, and restricted stock units.

Assumed Diluted Shares

Outstanding is not calculated using the treasury stock method.

It does not account for equity award vesting conditions, stock option exercise

prices, or contractual restrictions limiting the convertibility of debt instruments.

Additionally, it excludes any assumed share repurchases

that would ordinarily be considered under the treasury stock method.

systematically acquiring and staking ETH, we are engaged in building a resilient, Ethereum-native treasury designed to generate sustainable

yield through staking rewards while maintaining significant upside exposure to any ETH price appreciation.

SharpLink’s ETH treasury strategy is complemented by our active participation in the Ethereum ecosystem.

We are a founding member

of the Linea Consortium, a leading governance body supporting the development of Ethereum’s most aligned Layer 2 blockchain network.

Our participation in the consortium enables us to help steer capital allocation toward high-impact infrastructure, public goods and innovation

pipelines that are intended to strengthen the long-term utility and defensibility of the Ethereum network, reinforcing the intrinsic

value of our own ETH treasury assets.

further institutionalize our ETH-centered strategy, SharpLink has bolstered its leadership team with executives who bring deep expertise

in both traditional and decentralized finance.

In July 2025, we appointed former BlackRock senior executive and digital asset leader

Joseph Chalom as Co-Chief Executive Officer, who greatly complements the May 2025 appointment of Joseph Lubin, Co-Founder of Ethereum

and Founder and CEO of Consensus, as SharpLink’s new Chairman of the Board.

This structure affirms our intent to build a deeply

experienced leadership team across global institutional finance and Ethereum ecosystems.

Operations – Affiliate Marketing

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

19 unchanged sentences

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.

Operations – Ethereum Staking

June 2025, SharpLink formally launched its ETH-centered treasury strategy and established staking as a dedicated operating segment, recognizing

its potential to deliver recurring, yield-based revenue.

Our staking revenues are derived from the rewards we earn by actively participating

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

Specifically, SharpLink delegates its ETH holdings to validators

that process and verify transactions on the blockchain.

In return, the Company receives protocol-level rewards in ETH, typically proportional

to the amount staked and the network’s overall activity and performance.

is noteworthy to mention that the Company’s ETH Staking segment includes both native and liquid staking activities.

staking, the Company utilized two third-party asset managers to manage and stake ETH on its behalf as of June 30, 2025.

strategy allows the Company, through its agreements with custodians and asset managers, to stake assets with third party validators.

Participants stake ETH through these validator nodes and, when chosen as validators by the network, earn staking rewards and

transaction fees proportional to their staked amount.

Liquid staking is similar to native staking;

however, one key difference and

intended benefit of this method is the ability to provide the Company with tokens representing digital assets in exchange for its

Liquid staking rewards are accumulated through the protocol conversion rate for the LsETH and will be recognized as gains or

losses within other income upon redemption or sale of the LsETH.

initiating our staking operations on June 2, 2025, we have accumulated approximately 598,800 ETH as of August 10, 2025.

For the three and six months ended June 30, 2025, revenues generated from native staking rewards totaled $28,534 for both reporting

periods, as staking only commenced two-thirds of the way through the second quarter of this year.

These figures represent the

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

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

views its staking operations as a core strategic pillar of its broader alignment with the Ethereum ecosystem.

Our participation not

only yields economic return but also contributes directly to Ethereum’s decentralization, scalability, and security.

we believe staking is foundational to a new generation of blockchain-native capital structures that enable corporations to earn

yield without relying on traditional debt instruments, equities, or centralized intermediaries.

Our staking efforts are

focused on maximizing yield, managing risk and ensuring that SharpLink’s operations meet institutional standards for

transparency and efficiency.

of Business - SHGN and Sports Gaming Client Services

12 unchanged sentences

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.

previously reported on Form 10-K in the Company’s Annual Report for the year ended December 31, 2024, filed with the SEC by the

Company on March 14, 2025 and 10-K/A filed with the SEC 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

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 the

Company’s Current Report on Form 8-K filed with SEC 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

The Company had 45 calendar days to submit a plan to regain compliance or until January 6, 2025.

June 4, 2025, the Company received formal notification from Nasdaq confirming the Company had regained compliance with the Nasdaq Listing

The Company will be subject to a mandatory panel monitor for a period of one year from June 4, 2025.

If, within that one-year

monitoring period, the Nasdaq Listing Qualifications staff (the “Staff”) finds the Company is again out of compliance with

the Equity Rule, then the Staff will issue a delist determination letter, and the Company will have an opportunity to request a new hearing

with the initial Nasdaq hearing panel (the “Panel”) or a newly convened hearing panel if the initial Panel is unavailable.

Notwithstanding Nasdaq Listing Rule 5810(c)(2), the Company will not be permitted to provide the Staff with a plan of compliance with

respect to a deficiency under the Equity Rule that arises during the one-year monitoring period, and the Staff will not be permitted

to grant additional time for the Company to regain compliance with respect to such deficiency.

Redomestication

12 unchanged sentences

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

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

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

Act of 1933, as amended (the “Securities Act”), 600 shares of the Company’s Series A-1 Preferred Stock and 1,040 shares

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

38,683 shares of SharpLink’s common stock (“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.

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.

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 June 30, 2025.

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.

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.

Million Registered Offering

May 20, 2025, SharpLink entered into a securities purchase agreement (the “May 20 Purchase Agreement”) pursuant to which

the Company agreed to sell and issue, in a reasonable best efforts registered offering (the “May 20 Offering”), an

aggregate of 34,000 shares (the “May 20 Shares”) of the Company’s common stock and Pre-Funded

Warrants (the “May 20 Pre-Funded Warrants”) to purchase up to 1,496,612 shares of Common Stock (the “May 20

Pre-Funded Warrant Shares”).

The May 20 Shares were offered at an offering price of $2.94 per May 20 Share.

proceeds from the May 20 Offering, before deducting the placement agent fees and offering expenses, were approximately $4.5 million.

A.G.P./Alliance Global Partners acted as the sole placement agent for the May 20 Offering.

Million Registered Offering

May 26, 2025, we entered into a securities purchase agreement for a private placement in public entity (the “May 26

PIPE”), raising gross proceeds of $425,000,000 funded in a combination of fiat and Ether.

On June 2, 2025, SharpLink

announced the closing of the May 26 PIPE was May 30, 2025, and launched our treasury reserve strategy to hold the native

cryptocurrency of the Ethereum blockchain, commonly referred to as “Ether” or “ETH,” as the Company’s

primary treasury reserve asset.

Consensys Software Inc.

acted as the lead investor in the May 26 PIPE, along with prominent

crypto venture capital firms and infrastructure providers, with an intent to assist the Company in earning distinction as one of the

largest ETH-focused treasury strategies in the public markets.

A.G.P./Alliance Global Partners acted as the sole placement agent in

connection with the May 26 PIPE.

Expansion and Election of New Chairman of the Board

May 26, 2025, the Board approved the increase of the size of the Company’s Board from four to five directors.

The Board elected

Joseph Lubin as a director to fill the newly created director position.

The Board also elected Mr.

Lubin as Chairman of the Board.

At-The-Market (“ATM”) Offerings

On May 1, 2024,

the Company entered into an ATM Sales Agreement (the “2024 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 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 “2024 ATM Offering”).

May 30, 2025, SharpLink entered into a second ATM Sales Agreement (the “Second ATM Agreement”) with the Agent relating

to the sale of shares of our Common Stock from time to time, having an aggregate offering price of up to $1,000,000,000.

July 17, 2025, the Company entered into an Amendment to the Second ATM Agreement (the “Amendment”) to (i) increase the

number of Shares that may be sold in the ATM Offering to $6,000,000,000 (the “ATM Sales Increase”);

and (ii) to permit

the forward sale of Shares to be sold in the ATM Offering pursuant to Master Forward Confirmation Letter Agreements (the

“Forward Sales Agreements,” and each a “Forward Sales Agreement”).

of June 30, 2025, SharpLink had raised total net proceeds of $126,045,108 from sales of Shares under our ATM Sales Agreements.

Liquid Staking

part of its ETH-based treasury strategy, the Company participates in liquid staking through the Liquid Collective protocol.

liquid staking arrangement, the Company transfers ETH to the protocol and receives LsETH, a fungible ERC-20 receipt token, that represents

a proportional interest in the protocol’s pool of staked ETH.

LsETH is accounted for as an indefinite-lived intangible

asset under ASC 350-30.

As such, LsETH is recorded at cost, less any impairment losses.

Company evaluates LsETH for impairment at least annually, or more frequently if events or changes in circumstances indicate that the

asset might be impaired.

When an indicator of impairment is present, an impairment loss is recognized by the amount the carrying amount

of LsETH exceeds its fair value.

Impairment losses are not reversible under U.S.

Increases in the fair value of LsETH are not recognized

until a redemption or sale of LsETH occurs.

For the period ending June 30, 2025, the Company recognized an impairment loss of $87,813,295 on

its LsETH holdings, reducing the carrying value of LsETH to $382,422,632.

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

a unit of LsETH is redeemable.

The PCR is calculated by dividing the total ETH held by the protocol, including accumulated staking rewards

(net of penalties or slashing fees), by the total number of LsETH tokens in circulation.

The PCR is updated daily through the protocol’s

on-chain infrastructure and is publicly accessible.

PCR is not a market trading price.

The process of redeeming LsETH for ETH is subject to the validator exit queue, bonding periods, and

other mechanics that may affect the timing and execution of redemption.

As a result, the Company may not be able to redeem its holdings

of June 30, 2025, the Company held 164,731 LsETH tokens.

The following table presents a rollforward of our LsETH holdings, including

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

We have not sold or redeemed any LsETH

as of June 30, 2025.

Source of capital used to purchase LsETH

LsETH original cost basis

LsETH impairment losses

LsETH carrying value

Number of LsETH held

average purchase price per LsETH

Weighted Average LsETH Conversion Rate at Acquisition

LsETH Conversion Rate at End of Period

Balance at March 31, 2025

LsETH acquisitions

LsETH impairment losses

(87,813,295 )

Balance at June 30, 2025

(87,813,295 )

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

At-the-Market

Sales Agreement to offer and sell shares of its common stock with an aggregate offering price of up to $1 billion.

following table shows the number of LsETH held at the end of each respective period, as well as market value calculations of our LsETH

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

respective period:

of LsETH Held at End of Quarter

Market Price of LsETH During the Quarter (c)

Value of LsETH held using Lowest Market Price (d)

Market Price of LsETH During the Quarter (e)

Value of LsETH held using Highest Market Price (f)

Price of LsETH at End of Quarter (g)

Value of LsETH Held at End of Quarter (h)

“Lowest Market Price of LsETH During the Quarter” represents the lowest market price for one LsETH reported on the

Coinbase exchange during the respective quarter, without regard to when we purchased any of our LsETH.

“Market Value of LsETH Held Using Lowest Market Price” represents a mathematical calculation consisting of the lowest

market price for one LsETH reported on the Coinbase exchange during the respective quarter multiplied by the number of LsETH held

by us at the end of the applicable period.

“Highest Market Price of LsETH During the Quarter” represents the highest market price for one LsETH reported on

the Coinbase exchange during the respective quarter, without regard to when we purchased any of our LsETH.

“Market Value of LsETH Held Using Highest Market Price” represents a mathematical calculation consisting of the

highest market price for one LsETH reported on the Coinbase exchange during the respective quarter multiplied by the number of LsETH

held by us at the end of the applicable period.

“Market Price of LsETH at End of Quarter” represents the market price of one LsETH on the Coinbase exchange at midnight

UTC on the last day of the respective quarter.

“Market Value of LsETH Held at End of Quarter” represents a mathematical calculation consisting of the market price

of one LsETH on the Coinbase exchange at midnight UTC on the last day of the respective quarter multiplied by the number

of LsETH held by us at the end of the applicable period.

amounts reported as “Market Value” in the table above represent only a mathematical calculation consisting of the number

of LsETH tokens held by the Company at the end of the applicable period multiplied by the market price of LsETH as reported on the

Coinbase Exchange.

LsETH token is relatively new and the market for LsETH may be subject to manipulation, limited transparency, inconsistent pricing sources,

and episodic illiquidity.

The price information referenced may not reflect actionable market depth or executable prices, and there is

no assurance that the Company would be able to sell its LsETH holdings at the Market Value amounts indicated above, at the quoted market

price, or at all.

The market infrastructure supporting LsETH remains nascent, and future developments in protocol mechanics, exchange

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

Accordingly, the Market Value

amounts reported above may not accurately reflect the fair market value of LsETH, and the actual realizable value of the Company’s

holdings could differ materially from the calculated figures.

of Operations

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

March 31, 2025

March 31, 2024

Months Ended June

June 30, 2024

Cost of Revenues

Gross profit percentage

Total operating expenses

Selling, general, and administrative expenses

Stock-based compensation, related party

Impairment on digital intangible assets

Realized gains on crypto assets, net

Unrealized loss on crypto assets

Operating loss

Total other income (expenses)

Net income (loss) before income taxes

Provision for income taxes

Net income (loss) from continuing operations

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

(103,380,184 )

(102,175,634 )

(104,305,728 )

(101,416,315 )

Total other income

Net loss before income taxes

(103,343,249 )

(102,469,689 )

(104,257,173 )

(101,628,476 )

Income tax (expense)

Net loss from continuing operations

(103,370,535 )

(102,453,871 )

(104,287,267 )

(101,609,792 )

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

(14,675,233 )

Net income (loss)

$ (103,422,727 )

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

$ (102,959,768 )

$ (104,397,628 )

$ (116,285,025 )

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

the three months ended June 30, 2025, revenues declined 28.9% to $697,291 compared to $981,272 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 which affected our affiliate marketing

segment, offset by new revenues of $28,534 generated through our ETH staking strategies which commenced on June 2, 2025.

the three months ended June 30, 2025, gross profit totaled $209,089, reflecting a 25.4% decrease from a gross profit of $280,130

for the three months ended June 30, 2024.

Our gross profit margin rose to 30.0% from 28.5% for the three months ended

June 30, 2025 and 2024, respectively.

These fluctuations represent changes in customer pricing structures during the three months ended June 30, 2025.

and Crypto Assets

the three months ended June 30, 2025, the Company recognized an impairment loss on LsETH digital intangible assets of $87,813,295

compared to $0 for the three months ended June 30, 2024.

The Company recognized a gain on crypto assets of $(5,373,583) and

recorded an unrealized loss on crypto assets of $2,437,026 for the three months ended June 30, 2025 as compared to $0,

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

The increase was generated through our ETH staking strategies which commenced on June 2, 2025.

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.

the three months ended June 30, 2025, total selling, general and administrative expenses increased 57.1% to $2,333,167 from $1,484,680

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

The increase was directly attributable to $ 16 ,379,368 asset manager

fees of $377,841 which related to our ETH treasury management strategy, higher compensation costs and additional expense incurred

to establish our ETH treasury management strategy.

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.

attributable to the impairment on digital intangible assets of LsETH of $87,813,295 and the stock-based compensation expense of

$16,379,368 for warrants issued in conjunction with the advisory agreement with Consensys, loss from continuing operations

increased -11176.8% to $(103,370,535) for the three months ended June 30, 2025, compared to a net loss from continuing

operations of $(916,664) 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.

the three months ended June 30, 2025, net loss from discontinued operations, net of tax decreased 111.5% to $(52,192), which compared

to a net income from discontinued operations, net of tax of $453,706 for the three months ended June 30, 2025.

The decrease to net loss

in discontinued operations is due to a gain on the wind down of certain MTS business expenses which occurred in the second quarter of

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.

a result of the aforementioned reasons, net loss for the three months ended June 30, 2025 totaled $(103,422,727), declining

22239.5% when compared to net loss of $(462,959) reported for three months ended June 30, 2024.

the Six Months Ended June 30, 2025 Compared to the Six Months Ended June 30, 2024

the six months ended June 30, 2025, revenues declined 26.5% to $1,439,022 compared to $1,957,218 reported for the same six-month

period in the prior year.

The decrease is primarily due to market conditions softening in our Affiliate Marketing segment, which was

driven by changes in customer pricing structures and the loss of customers caused by evolving regulatory environments

in certain foreign markets.

The decrease was offset by revenues of $28,534 generated from our ETH staking strategies

which commenced on June 2, 2025.

the six months ended June 30, 2025, gross profit totaled $340,884, reflecting a 39.9% decrease from a gross profit of $567,342 for the

six months ended June 30, 2024.

Our gross profit margin declined to 23.7% from 29.0% for the six months ended June 30, 2025

and 2024, respectively.

The decline represents changes in customer pricing structures and government regulations that have

unfavorably impacted gross margin in our Affiliate Marketing segment.

Further, SharpLink has been impacted by higher casino

payouts due to large winnings by players compared to the same six-month period for the period in the prior year.

For the online

casino business, as increasing payouts are made to winners, this has the impact of reducing gross profit.

Crypto Assets and Digital Intangible Assets

the six months ended June 30, 2025, the Company recognized an impairment loss on LsETH digital intangible assets of $87,813,295

compared to $0 for the six months ended June 30, 2024.

The Company recognized a gain on crypto assets of $(7,376,641) and recorded

an unrealized loss on crypto assets of $2,437,026 for the six months ended June 30, 2025 as compared to $0, respectively for the

same six-month period in the prior year.

Operating Expenses

the six months ended June 30, 2025, total selling, general and administrative expenses decreased 1.9% to $3,390,506 from $3,456,755 reported

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

The slight decrease was attributable due to certain costs incurred from the sale

of the SHGN and Sports Gaming Client Services business operations in the first quarter of 2024 and the Company’s redomestication in February

Income (Loss) from Continuing Operations

attributable to the impairment on digital intangible assets of LsETH of $87,813,295 and the aforementioned stock based compensation expense

for advisory warrants, net loss from continuing operations increased 3795.0% to $(104,287,267) for the six months ended June 30, 2025,

compared to a net loss from continuing operations of $(2,677,475) reported for the same six month period in 2024.

Income (Loss) from Discontinued Operations, Net of Tax

the six months ended June 30, 2025, net loss from discontinued operations, net of tax decreased -100.8% to $(110,361), which compared

to a net income from discontinued operations, net of tax of $14,564,872 for the six months ended June 30, 2025.

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 of 2024.

Income (Loss)

a result of the aforementioned reasons, net loss for the six months ended June 30, 2025 totaled $(104,397,628), declining 978.2%

when compared to net income of $11,887,397 reported for six months ended June 30, 2024.

Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024

of June 30, 2025, cash on hand was $5,071,744, a 253.0% increase when compared to cash on hand of $1,436,729 as of December 31,

The increase was due to net proceeds from the ATM offering in effect during June 2025.

the six months ended June 30, 2025, net cash used in operating activities from continuing operations totaled $(1,933,542) compared to

net cash used in operating activities from continuing operations of $(3,952,960) in the prior year.

Net cash used in operating activities

from discontinued operations was $(204,931), which compared to net cash used in operating activities of $(17,002,007) from

discontinued operations for the same six-month period in 2024.

Overall, net cash used in operating activities was $(2,138,473) and $(20,954,967)

for the six months ended June 30, 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 six months ended June 30, 2025, net cash used in the Company’s investing activities from continuing

operations totaled $(406,319,197), an increase of 274119.7% when compared to cash provided by investing activities from

continuing operations of $148,281 for the same six-month period in 2024.

For the six months ended June 30, 2025 and 2024, net cash

used in investing activities from discontinued operations was $- and $(18,857,834), respectively.

The increase in net cash used

in investing activities for the six months ended June 30, 2025 versus 2024 was due to the Company’s new ETH Treasury

Management Strategy and the related purchases of $405,816,679 of ETH crypto assets.

The decrease in total cash used in

investing activities for discontinued operations is due to cash received from the sale of business in January 2024 of $22,500,000,

net of the cash transferred of $41,357,834.

The majority of the cash transferred of $41,357,834 was reflected in discontinued

operations customer deposits liability and deferred revenue of $36,959,573 and $4,888,704, respectively.

the six months ended June 30, 2025, net cash generated by financing from continuing operations was $412,018,574 a 3439.5% increase

when compared to net cash used by financing activities from continuing operations of $(12,337,694) for the same six-month period

Net cash generated by financing activities related to cash proceeds from the ATM offering of $130,217,148, and net capital raise on May 20, 2025 of $3,848,000 and net cash proceeds

from the $425.0 million private placement offering of $281,707,589.

For the six months ended June 30, 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

six months ended June 30, 2024.

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.

of June 30, 2025, we had working capital of $8,119,867.

For the three and six months ended June 30, 2025, we had a net loss from

continuing operations of $(103,370,535) and $(104,287,267) compared to a net loss from continuing operations of $(916,664) and

$(2,677,475) respectively, reported for the same three and six months in 2024.

Sources of Liquidity

principal sources of liquidity are our cash and cash equivalents balances, cash flow from operations, and proceeds from equity financing

transactions, including pursuant to our at-the-market offering facility under the amended Second ATM Agreement with AGP.

May 2, 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.

(“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 (“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”).

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.

May 30, 2025, SharpLink entered into a second ATM Sales Agreement with the Agent relating to the sale of shares of our Common Stock from

time to time, having an aggregate offering price of up to $1,000,000,000.

of June 30, 2025, SharpLink raised total net proceeds of $126,045,108 from sales of Shares under our ATM Sales Agreements.

were used to further the Company’s ETH treasury reserve strategy as well as provide for working capital.

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

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

As of June 30, 2025 and December 31, 2024, we held

approximately 24,704 and 0 ETH in crypto assets, respectively, all of which are unencumbered.

As of June 30, 2025 and December 31,

2024, we held approximately 164,731 and 0 LsETH in digital intangible assets, respectively.

As of August 10th

we held approximately 598,800 ETH, all of which are unencumbered.

As discussed further

below, although we do not anticipate needing to use our ETH to meet our obligations in the next 12 months, we believe our

substantial ETH holdings can serve as a source of liquidity, if necessary.

and Long-Term Liquidity

Liquidity -- Our short-term liquidity needs include working capital requirements, anticipated capital expenditures, and contractual

obligations due within the next twelve months.

We expect that our cash and cash equivalents as of June 30, 2025, together with cash

and cash equivalents generated by our operations, may not be sufficient to satisfy these needs over the next months.

anticipate being able to use proceeds from equity or debt financings to meet these needs.

Our ability to obtain equity and debt

financing is subject to market conditions and other factors outside of our control, and we may not be able to obtain equity or debt

financing in a timely manner, on favorable terms, or at all.

Although we do not anticipate needing to use our ETH to meet our short-term

liquidity needs, to the extent necessary, we would seek to use proceeds from the sale of our ETH to meet such needs.

See “—Availability

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

Risk Factors” for additional information.

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

We expect our cash and cash equivalents as of June 30, 2025, together with cash and cash equivalents generated by our operations, will

not be sufficient to satisfy these needs.

As a result, we would seek to satisfy these needs through various options that we expect to

be available to us, such proceeds from equity or debt financings, or the sale of our ETH.

See “—Availability of ETH for Liquidity”

below and “Item 1A.

Risk Factors” for additional information.

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

the next 12 months to meet our liquidity needs, although we may from time to time sell or engage in other transactions with respect to

our ETH as part of treasury management operations, as noted above.

The ETH market historically has been characterized by significant

volatility in its price, limited liquidity and trading volumes compared to sovereign currencies markets, relative anonymity, a developing

regulatory landscape, susceptibility to market abuse and manipulation, compliance and internal control failures at exchanges, and various

other risks inherent in its entirely electronic, virtual form and decentralized network.

During times of instability in the ETH market,

we may not be able to sell our ETH at reasonable prices or at all.

As a result, our ETH are less liquid than our existing cash and cash

equivalents and may not be able to serve as a source of liquidity for us to the same extent as cash and cash equivalents.

upon sale of our ETH, we may incur additional taxes related to any realized gains or we may incur capital losses as to which the tax

deduction may be limited.

See “Item 1A.

Risk Factors” for additional information.

Sheet Arrangements

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

June 30, 2025, we did not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect

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

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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 inflation did not have a material effect on our operations for the six months ended June 30, 2025.

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

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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.

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):

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.

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.

The Company is currently evaluating the impact

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

In December 2023, the FASB issued Accounting Standards Update No.

2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures

(“ASU 2023-09”).

ASU 2023-09 requires enhanced disclosures surrounding income taxes, particularly related to rate reconciliation

and income taxes paid information.

In particular, on an annual basis, companies will be required to disclose specific categories in the

rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold.

Companies will also be

required to disclose, on an annual basis, the amount of income taxes paid, disaggregated by federal, state, and foreign taxes, and also

disaggregated by individual jurisdictions above a quantitative threshold.

The standard is effective for the Company for annual periods

beginning January 1, 2025 on a prospective basis, with retrospective application permitted for all prior periods presented.

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

AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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

What changed 10-Q

Item 1. Financial Statements