What changed in this filing

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Item 1. Financial Statements

2025-11-14 compared with 2025-08-13 · 1752 added, 946 removed, 306 unchanged (90% of the section changed)

Financial Statements:

TECHNOLOGY, INC.

CONSOLIDATED BALANCE SHEETS

SHARPS TECHNOLOGY, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

Current Assets

Account Receivable – trade, net

USDC (Note 6)

Account Receivable –product trade, net

Accounts Receivable - digital

Accounts Receivable

Tax Receivable - VAT

Escrow Deposit ( Note 7 )

Prepaid expenses and other current assets

Inventories, net ( Note 3 )

Escrow Deposit

Prepaid expenses and other current assets (Note 3)

Derivative assets, net ( Note 8 )

net ( Note 4 )

Current Assets

Fixed Assets, net of accumulated depreciation (Notes 4 and 5)

Other Assets, including deposits on fixed assets (Notes 5 and 6)

Fixed Assets, net of accumulated depreciation (Note

Digital assets, at fair value, (Note

Other Assets, including deposits

on fixed assets (Note 7)

$ 443,960,043

Current Liabilities

2 unchanged sentences

Notes Payable, net of discount (Note

Warrant liability (Notes 8 and 10)

Derivative liability, net (Note 8 )

Margin loan (Note 8)

Warrant liability

(Notes 10 and 12)

Total Current Liabilities

2 unchanged sentences

Commitments and Contingencies (Note 17)

Subsequent Events ( Note 19 )

Stockholders’ Equity:

3 unchanged sentences

Common stock, par value;

$ 0.0001 and 500,000,000 ( 1,666,667 :

shares authorized;

7 unchanged sentences

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

accompanying notes are an integral part of these financial statements.

TECHNOLOGY, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

THE THREE AND SIX MONTHS ENDED JUNE 30

ENDED JUNE 30,

$ 443,960,043

The accompanying notes are an integral part

of these financial statements.

SHARPS TECHNOLOGY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER

SEPTEMBER 30,

Product Revenue, net

Cost of goods manufactured

4 unchanged sentences

( 2,201,683 )

Operating expenses:

Staking Revenue - net

Transaction expense - digital assets

Research and development

Selling, General and administrative

Selling, General and administrative – (Note 10(a))

Realized and unrealized (gains) loss on digital assets

( 15,499,742 )

Impairment of long lived fixed assets

Total operating expenses

7 unchanged sentences

FMV adjustment on warrants

Other (expense) (see Note 15)

Other (expense) (Note 15)

( 1,000,090 )

Derivative gain/(loss), net

( 4,378,749 )

Foreign currency

Total Other income (expense)

Net Income (loss) Before Provision for Taxes

( 2,689,007 )

Net loss Before Provision for Taxes

$ ( 105,333,293 )

$ ( 1,685,060 )

$ ( 99,845,153 )

$ ( 4,769,774 )

Deferred Tax Benefit

Net Income (loss)

( 105,333,293 )

( 1,685,060 )

Net income (loss) per share, basic and diluted

( 99,845,153 )

Weighted average shares used to compute net income (loss) per share, basic and diluted

accompanying notes are an integral part of these financial statements.

TECHNOLOGY, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

THE THREE AND SIX MONTHS ENDED JUNE 30

ENDED JUNE 30,

( 4,769,774 )

Net loss per share, basic and diluted

$ ( 1,358.58 )

Weighted average shares used to compute net loss per

share, basic and diluted

The accompanying notes are an integral part

of these financial statements.

SHARPS TECHNOLOGY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER

30, 2025 AND 2024

SEPTEMBER 30,

Net Income (loss)

1 unchanged sentence

$ ( 1,685,060 )

$ ( 99,845,153 )

$ ( 4,769,774 )

Other comprehensive income:

3 unchanged sentences

$ ( 1,554,337 )

accompanying notes are an integral part of these financial statements.

TECHNOLOGY, INC.

STATEMENT OF STOCKHOLDERS’ EQUITY

THE THREE AND SIX MONTHS ENDED JUNE 30, 2024

$ ( 99,477,292

$ ( 4,879,015 )

The accompanying notes are an integral part

of these financial statements.

SHARPS TECHNOLOGY, INC.

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER

Preferred Stock

Accumulated Other

Comprehensive

18 unchanged sentences

$ ( 28,233,717 )

Net loss for the three months ended September 30, 2024

( 1,685,060 )

Cancellation of Preferred Share

Share-based compensation charges

Issuance of Common Stock – see Note 7

Warrant exercise

Foreign Currency Translation

Balance - September 30, 2024

$ ( 29,918,777 )

TECHNOLOGY, INC.

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

THE THREE AND SIX MONTHS ENDED JUNE 30, 2025

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER

Preferred Stock

6 unchanged sentences

Share-based compensation charges

Equity Offering - January 2025 – see Note 8

Warrant Exercise – Series B Cashless – see Note 8

Equity Offering - January 2025

Warrant Exercise – Series B Cashless –

Foreign currency translation

1 unchanged sentence

$ ( 32,516,372 )

Net income for the three months ended June 30, 2025

Net income (loss)

Share-based compensation charges

Warrant Exercise – Series B Cashless – see Note 8

Warrant Exercise – Series B Cashless –

Warrant Exercise

Foreign currency translation

2 unchanged sentences

( 28,957,065 )

accompanying notes are an integral part of these financial statements.

TECHNOLOGY, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

THE SIX MONTHS ENDED JUNE 30

Net loss for the three months ended September 30, 2025

( 105,333,293 )

Net income (loss)

( 105,333,293 )

Share-based compensation charges

Equity Offering - August 2025

Exercise of Series A warrants

Exercise of Prefunded Warrants

Shelf Offering – shares issued

Foreign currency translation

Balance – September 30, 2025

$ 567,110,600

$ ( 134,290,358 )

( 134,290,358 )

The accompanying notes are an integral part

of these financial statements.

SHARPS TECHNOLOGY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE NINE MONTHS ENDED SEPTEMBER 30

CASH FLOWS FROM OPERATING ACTIVITIES:

1 unchanged sentence

$ ( 99,845,153

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

$ ( 4,769,774 )

Adjustments to reconcile net (loss) to net cash used in

operating activities:

Digital assets received as staking revenues

Realized (gain)/loss on digital assets

Realized (gain)/loss on derivatives

Unrealized (gain)/loss on digital assets

( 14,864,742 )

Unrealized (gain)/loss on derivatives

Depreciation and amortization

3 unchanged sentences

( 2,088,747 )

( 1,672,187 )

Escrow forfeited

Inventory reserve adjustment

Loss on impairment of fixed assets

Foreign exchange (income) loss

Changes in operating assets:

Accounts receivable - trade

Accounts receivable – trade & digital

VAT receivable, prepaid expenses and other current assets

2 unchanged sentences

( 5,172,135 )

( 3,528,676 )

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchase of and deposits paid for fixed assets

Purchase of digital assets

( 186,104,214

Purchase of and deposits paid for fixed assets

Escrow payment under agreement

5 unchanged sentences

Net proceeds from offerings and warrant exercises

Proceeds from margin loan

Net proceeds from Debt financing

Repayment of Debt

( 4,222,012 )

Net cash provided by financing activities

1 unchanged sentence

NET INCREASE (DECREASE) IN CASH

( 1,529,615 )

CASH — BEGINNING OF PERIOD

1 unchanged sentence

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

Digital assets received from common stock issuance

USDC received from common stock issuance

Cash Interest (OID) paid, attributed to Note (see Note 9)

Cash paid for taxes

accompanying notes are an integral part of these financial statements.

TECHNOLOGY, INC.

TO THE CONSOLIDATED FINANCIAL STATEMENTS

THE THREE AND SIX MONTHS ENDED JUNE 30, 2025 AND 2024

The accompanying notes are an integral part

of these financial statements.

SHARPS TECHNOLOGY, INC.

NOTES TO THE CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER

30, 2025 AND 2024

Description of Business

Technology, Inc.

(“Sharps” or the “Company”) is a medical device and pharmaceutical packaging company that

has designed and patented various safety syringes and has safety syringe designs that were acquired and

commenced commercialization in the second quarter of 2025 by manufacturing and distribution of its products.

accompanying consolidated financial statements include the accounts of Sharps Technology, Inc.

and its wholly owned subsidiary, Safegard

Medical (Hungary) KFT, collectively referred to as the “Company.” All intercompany transactions and balances have been eliminated.

Company’s fiscal year ends on December 31.

April 13, 2022, the Company’s Initial Public Offering was deemed effective with trading commencing on April 14, 2022.

received net proceeds of $ 14.2 million on April 19, 2022 (See Note 8).

Summary of Significant Accounting Policies

of Presentation

accompanying consolidated financial statements have been prepared by the Company in accordance with generally accepted accounting principles

(“GAAP”) in the United States (“U.S.”) and are expressed in U.S.

accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.

Company has not generated any cash flow from operations since inception but commenced generating revenues in the second quarter

As of and for the six months ended June 30, 2025, the Company used cash in operations of $ 4,355,930

and has cash of $ 8,322,192

which may not be sufficient to fund the Company’s planned operations for the next twelve months.

These factors raise

substantial doubt regarding the Company’s ability to continue as a going concern.

The Company’s ability to continue as a

going concern is dependent upon the Company’s ability to raise sufficient financing to acquire products and continue to commercialize its products

into a profitable business.

The Company intends to finance its future development and commercialization activities and its working

capital needs largely from the sale of equity securities and/or with additional funding from other traditional financing sources

until such time that funds provided by operations are sufficient to fund working capital requirements.

The financial statements of

the Company do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and

classifications of liabilities that might be necessary should the Company be unable to continue as a going concern.

preparation of financial statements in conformity with U.S.

GAAP requires management to make estimates and assumptions that affect the

reported amounts of assets and liabilities and disclosure of derivative liabilities at the date of the financial statements and the reported

Nature of Business

Sharps Technology, Inc.

(“Sharps” or the “Company”)

is a medical device sales and distribution enterprise engaged in the marketing and distribution of syringe products and related drug-delivery

Prior to August 24, 2025, the Company was also focused on design and manufacture of a portfolio of conventional and safety syringes.

On August 24, 2025, the Company adopted a digital

asset treasury strategy focused on accumulating Solana (“SOL”), the native digital asset of the Solana blockchain.

On August 28, 2025, the Company (“Buyer”) acquired the shares

of SOL Equity Limited, a Cayman Islands exempt company from Catan Holdings LP, a Cayman Islands corporation (“Seller”) which

was a non-operating company.

The Seller, assigned, transferred and conveyed to Buyer, and Buyer hereby purchased and accepted from Seller,

all of the issued and outstanding shares free and clear of all liens, claims and encumbrances, for nominal consideration of $1.00.

assets acquired, included a custodian account with no balance and a ticker reservation account.

The Seller further represented that, as

of August 28, 2025 no other Assets and no liabilities of any kind existed.

The purposes of the SOL Equity Limited will be the entity that

operates the digital asset treasury segment.

The accompanying consolidated financial statements

include the accounts of Sharps Technology, Inc.

and its wholly owned subsidiaries, Safegard Medical (Hungary) KFT, and SOL Equity Limited,

collectively referred to as the “Company.” All intercompany transactions and balances have been eliminated.

The Company’s fiscal year ends on December

On April 13, 2022, the Company’s Initial

Public Offering was deemed effective with trading commencing on April 14, 2022.

The Company received net proceeds of $ 14.2 million on

April 19, 2022 (See Note 10).

Summary of Significant Accounting

Basis of Presentation

The accompanying condensed consolidated financial statements have been

prepared by the Company in accordance with generally accepted accounting principles (“GAAP”) in the United States (“U.S.”)

and are expressed in U.S.

These financial statements should be read in conjunction with the audited financial statements for

the year ended December 31, 2024.

The accompanying condensed consolidated

financial statements have been prepared assuming that the Company will continue as a going concern.

The Company has not generated

any cash flow from operations since inception but commenced generating syringe revenues in the second quarter of 2025 and staking revenue in the third quarter of 2025.

for the nine months ended September 30, 2025, the Company used cash in operations of $ 11.7 M.

The Company’s adoption of the business strategy with digital assets and the current investment in Digital Assets of $ 404.2 M, cash of $ 10.5 M and USDC of $ 14.7 M

is deemed sufficient to fund the Company’s planned operations for the next twelve months.

The current liquidity no longer

raises substantial doubt regarding the Company’s ability to continue as a going concern.

Use of Estimates

The preparation of financial statements in

conformity with U.S.

GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and

liabilities, disclosure of digital assets and derivative liabilities at the date of the financial statements and the reported

amounts of revenues and expenses during the reporting periods.

Actual results could differ from those estimates.

As of June 30, 2025,

the most significant estimates relate to inventory reserves, derivative liabilities and stock-based compensation.

and Cash Equivalents

Company considers all highly liquid investments purchased with an original or remaining maturity of six months or less at the date

of purchase to be cash equivalents.

Cash and cash equivalents are maintained with various financial institutions.

At June 30, 2025

and December 31, 2024, the Company had $ 8,322,192

and $ 864,041 , respectively and no

cash equivalents at either date.

TECHNOLOGY, INC.

TO THE CONSOLIDATED FINANCIAL STATEMENTS

THE THREE AND SIX MONTHS ENDED JUNE 30, 2025 AND 2024

Summary of Significant Accounting Policies (continued)

Concentration

of Credit Risk

instruments that potentially subject the Company to concentrations of credit risk consist of cash, which is placed with high-credit-quality

financial institutions and at times exceeds federally insured limits.

To date, the Company has not experienced any losses on its deposits

Company values inventory at the lower of cost (average cost) or net realizable value.

Work-in-process and finished goods inventories

consist of material, labor, and manufacturing overhead.

Net realizable value is the estimated selling price in the ordinary course

of business, less reasonably predictable costs of completion, disposal, and transportation.

A reserve is established for any excess

or obsolete inventories or they may be written off.

At June 30, 2025 and December 31, 2024, inventory is comprised of raw materials,

components and finished goods.

During the three months ended June 30, 2025, a reserve for the negative impacts of recent market

factors, including recent global tariff assessments, has been established in the amount of $ 730,086 .

Value Measurements

820, Fair Value Measurements and Disclosures, require an entity to maximize the use of observable inputs and minimize the use of unobservable

inputs when measuring fair value.

ASC 820 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding

the inputs used to measure fair value.

A financial instrument’s categorization within the fair value hierarchy is based upon the

lowest level of input that is significant to the fair value measurement.

ASC 820 prioritizes the inputs into three levels that may be

used to measure fair value.

Certain of the

Company’s outstanding warrants are fair valued on a recurring basis with the trading price or FMV using Black Sholes which could

cause fluctuations in operating results at the reporting periods.

1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.

are based on quoted prices that are readily and regularly available in an active market and do not entail a significant degree of judgment.

2 applied to assets or liabilities for which there are other than Level 1 observable inputs such as quoted prices for similar assets

or liabilities in active markets;

quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent

transactions (less active markets);

or model-derived valuations in which significant inputs are observable or can be derived principally

from, or corroborated by, observable market data.

2 instruments require more management judgment and subjectivity as compared to Level 1 instruments.

As of September 30,

2025, the most significant estimates relate to inventory reserves, digital assets, derivative liabilities, stock-based compensation,

and derivatives.

Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with an original

or remaining maturity of nine months or less at the date of purchase to be cash equivalents.

Cash and cash equivalents are maintained

with various financial institutions.

At September 30, 2025 and December 31, 2024, the Company had $ 10,521,706 and $ 864,041 , respectively

and no cash equivalents at either date.

SHARPS TECHNOLOGY, INC.

NOTES TO THE CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER

30, 2025 AND 2024

Summary of Significant Accounting

Policies (continued)

Concentration of Credit Risk

The Company’s cash, USDC, certain digital

assets held, accounts receivable, and deposits are potentially subject to concentration of credit risk.

is primarily placed with financial institutions which are of high credit quality.

The Company does have corporate deposit balances with

financial institutions which exceed the Federal Deposit Insurance Corporation insurance limit of $ 250,000 .

The Company has not experienced

losses on these accounts and does not believe it is exposed to any significant credit risk with respect to these accounts.

Company holds USDC, a stablecoin redeemable on a one-to-one basis for U.S.

dollars and issued by Circle Internet Financial, LLC.

USDC is a short-term digital asset in the Condensed Consolidated Financial Statements and as of September 30, 2025, the underlying reserves

were held in cash, short-duration U.S.

Treasuries, and overnight U.S.

Treasury repurchase agreements within segregated accounts for the

benefit of USDC holders.

of September 30, 2025, $ 5.7 M

of our USDC holdings of $ 14.7 M is restricted by one of our custodians, as collateral held for our derivative account activity.

The Company values inventory at the lower of cost (average cost) or net

realizable value.

Work-in-process and finished goods inventories consisted of material, labor, and manufacturing overhead.

Net realizable

value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and

transportation.

A reserve is established for any excess or obsolete inventories or they may be written off.

At December 31, 2024, inventory

is comprised of raw materials, components, and finished goods.

At September 30, 2025, inventory is comprised of finished goods (See Note

During the three months ended September 30,

2025, a reserve for the net realizable value of inventory was established of $ 924,010 based on a current corporate strategy to

operate as a distributor and terminate manufacturing operations.

During the three months ended June 30, 2025, a reserve for the

negative impacts of recent market factors, including recent global tariff assessments, was established in the amount of $ 730,086 .

The aforementioned reserves are included in the costs of goods manufactured.

to ASU 2023-08, Intangibles — Goodwill and Other — Crypto Assets:

Accounting for and Disclosure of Crypto

Assets, codified into ASC subtopic 350-60, in-scope crypto assets are required to be measured at fair value in the statement

of condensed consolidated balance sheet, with gains and losses from changes in the fair value of such digital assets recognized in the

condensed consolidated statement of operations each reporting period.

ASU 2023-08 also requires certain interim and annual disclosures

for digital assets within the scope of the standard.

Sales and purchases of SOL, USDC, and USDT are reflected as cash flows from investing

activities in the condensed consolidated statements of cash flows.

The Company adopted this guidance effective

August 25, 2025, as this was the start of the Company first holding in digital assets.

SOL and USDC, is measured using Level 1 inputs

under ASC 820, based on quoted prices from the principal market.

ASC 820 defines “principal market” as the market with the

greatest volume and level of activity for the asset or liability.

The determination of the principal market (and, as a result, the

market participants in the principal market) is made from the perspective of the reporting entity.

The digital assets held by the

Company are traded on a number of active markets globally.

The Company determines Coinbase as its principal market, The Company

recognizes staking revenue by utilizing daily prices obtained from Coinbase at the end of the treasury operations day at 5pm ET

(“Spot Price”).

portion of the in-kind SOL invested as part of the August 2025 Offering includes restrictions.

These locked SOL will unlock over a period

of time and once unlocked can be sold on several SOL exchanges.

the tokens remain restricted, the locked SOL fair value will include a discount to the Spot price for SOL with which the

unrealized gain or loss is recognized.

After reviewing the changes in the market price for these and similar locked Sol

between August 25th and September 30, 2025 and the discount for in-kind SOL invested at the August 25, 2025 offering, the Company has

elected to use the 10% as the discount.

the SOL is unlocked, the fair value is measured at the end of the period at the market value without a discount.

Fair Value Measurements

ASC 820, Fair Value Measurements and Disclosures,

require an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

820 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair

A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is

significant to the fair value measurement.

ASC 820 prioritizes the inputs into three levels that may be used to measure fair value.

Certain assets and liabilities of the Company’s including digital assets

and warrants are fair valued on a recurring basis with the trading price or FMV using Black Scholes which could cause fluctuations in operating

results at the reporting periods.

Level 1 applies to assets or liabilities

for which there are quoted prices in active markets for identical assets or liabilities.

Valuations are based on quoted prices that are

readily and regularly available in an active market and do not entail a significant degree of judgment.

SHARPS TECHNOLOGY, INC.

NOTES TO THE CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER

30, 2025 AND 2024

Summary of Significant Accounting

Policies (continued)

Level 2 applied to assets or liabilities for

which there are other than Level 1 observable inputs such as quoted prices for similar assets or liabilities in active markets;

prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets);

or model-derived

valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.

Level 2 instruments require more management judgment

and subjectivity as compared to Level 1 instruments.

For instance:

determining which instruments

are most similar to the instrument being priced requires management to identify a sample of similar securities based on the coupon rates,

maturity, issuer credit rating and instrument type, and subjectively select an individual security or multiple securities that are deemed

most similar to the security being priced;

determining which instruments are most similar to the instrument being

priced requires management to identify a sample of similar securities based on the coupon rates, maturity, issuer credit rating and instrument

type, and subjectively select an individual security or multiple securities that are deemed most similar to the security being priced;

and determining whether a market is considered active requires management judgment.

3 applied to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement

of the fair value of the assets or liabilities.

Level 3 applied to assets or liabilities for

which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets

or liabilities.

The determination for Level 3 instruments requires the most management judgment and subjectivity.

TECHNOLOGY, INC.

TO THE CONSOLIDATED FINANCIAL STATEMENTS

THE THREE AND SIX MONTHS ENDED JUNE 30, 2025 AND 2024

Summary of Significant Accounting Policies (continued)

assets are stated at cost.

Fixed assets are stated at cost.

Expenditures for maintenance and repairs are charged to operations as incurred.

The Company’s fixed

assets consist of land, building, machinery and equipment, molds, computer system and website.

Depreciation is calculated using the straight-line

method commencing on the date the asset is operating in the way intended by management over the following useful lives:

20 years, Machinery and Equipment – 3 - 10 years and Computer systems and Website – 3 years.

The expected life for Molds

is based on the lesser of the number of parts that will be produced based on the expected mold capability or 5 years.

of Long-Lived Assets

assets are reviewed annually for impairment or whenever events or changes in circumstances indicate that the carrying amount of an asset

may not be recoverable.

Recoverability is measured by comparison of the carrying amount of an asset group to the future net undiscounted

cash flows that the assets are expected to generate.

If such assets are considered to be impaired, the impairment to be recognized is

measured by the amount by which the carrying amount of the assets exceeds the projected discounted future net cash flows arising from

Identified Intangible Assets

Company’s identified intangible assets are amortized on a straight-line basis over their estimated useful lives of 5 years.

Company makes judgments about the recoverability of finite-lived intangible assets whenever facts and circumstances indicate that the

useful life is shorter than originally estimated or that the carrying amount of assets may not be recoverable.

If such facts and circumstances

exist, the Company assesses recoverability by comparing the projected undiscounted net cash flows associated with the related asset or

group of assets over their remaining lives against their respective carrying amounts.

Impairments, if any, are based on the excess of

the carrying amount over the fair value of those assets.

If the useful life is shorter than originally estimated, the Company would accelerate

the rate of amortization and amortize the remaining carrying value over the new shorter useful life.

The Company evaluates the carrying

value of finite-lived intangible assets on an annual basis, and an impairment charge would be recognized to the extent that the carrying

amount of such assets exceeds their estimated fair value.

Compensation Expense

Company measures its stock-based awards made to employees based on the estimated fair values of the awards as of the grant date.

stock option awards, the Company uses the Black-Scholes option-pricing model.

For restricted stock awards, the estimated fair value is

generally the fair market value of the underlying stock on the grant date.

Stock-based compensation expense is recognized over the requisite

service period and is based on the value of the portion of stock-based payment awards that is ultimately expected to vest.

recognizes forfeitures of stock-based awards as they occur on a prospective basis.

compensation expense for awards granted to non-employees as consideration for services received is measured on the date of performance

at the fair value of the consideration received or the fair value of the equity instruments issued, whichever can be more reliably measured.

TECHNOLOGY, INC.

TO THE CONSOLIDATED FINANCIAL STATEMENTS

THE THREE AND SIX MONTHS ENDED JUNE 30, 2025 AND 2024

Summary of Significant Accounting Policies (continued)

Company accounts for common stock warrants as either equity-classified or liability-classified instruments based on an assessment of

the specific terms of the warrants and applicable authoritative guidance in Financial Accounting Standards Board (“FASB”)

Accounting Standards Codification (“ASC 480”), Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815,

Derivatives and Hedging (“ASC 815”).

The assessment considers whether the warrants are freestanding financial instruments

pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and meet all of the requirements for equity classification

under ASC 815, including whether the warrants are indexed to the Company’s own stock and whether the holders of the warrants could

potentially require net cash settlement in a circumstance outside of the Company’s control, among other conditions for equity classification.

This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent

quarterly period end date while the warrants are outstanding.

their issuance date and as of June 30, 2025, certain warrants (see Notes 8 and 10) are accounted for as liabilities as these instruments

did not meet all of the requirements for equity classification under ASC 815-40 based on the terms of the aforementioned warrants.

resulting warrant liabilities are re-measured at each balance sheet date until their exercise or expiration, and any change in fair value

is recognized in the Company’s consolidated statements of operations.

Currency Translation/Transactions

Company has determined that the functional currency for its foreign subsidiary is the local currency.

For financial reporting purposes,

assets and liabilities denominated in foreign currencies are translated at current exchange rates and profit and loss accounts are translated

at weighted average exchange rates.

Resulting translation gains and losses are included as a separate component of stockholders’

equity as accumulated other comprehensive income or loss.

Gains or losses resulting from transactions entered into in other than the

functional currency are recorded as foreign exchange gains and losses in the consolidated statements of operations.

Comprehensive

income (loss)

Comprehensive

income (loss) consists of the Company’s consolidated net income (loss) and foreign currency translation adjustments related to

its subsidiary.

Foreign currency translation adjustments included in comprehensive income (loss) were not tax effected as the

Company has a full valuation allowance at June 30, 2025 and December 31, 2024.

Accumulated other comprehensive income (loss) is a

separate component of stockholders’ equity and consists of the cumulative foreign currency translation adjustments.

and Diluted Loss Per Share

Company computes net income (loss) per share in accordance with ASC 260, Earnings per Share.

ASC 260 requires presentation of both basic

and diluted earnings per share (EPS) on the face of the consolidated statements of operations.

Basic EPS is computed by dividing net

income (loss) available to common stockholders (numerator) by the weighted average number of shares outstanding (denominator) during

Basic EPS in March 2024 included 407 pre-funded warrants (reverse effected) (see Note 8).

Diluted EPS gives effect to all

dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using

the if-converted method.

In computing diluted EPS, the average stock price for the period is used in determining the number of shares

assumed to be purchased from the exercise of stock options or warrants.

Diluted EPS excludes all dilutive potential shares if their effect

is anti-dilutive.

As of June 30, 2025, there were 418,953 stock options and warrants that could potentially dilute basic EPS in the future

that were not included in the computation of diluted EPS because to do so would have been anti-dilutive for the periods presented.

TECHNOLOGY, INC.

TO THE CONSOLIDATED FINANCIAL STATEMENTS

THE THREE AND SIX MONTHS ENDED JUNE 30, 2025 AND 2024

Summary of Significant Accounting Policies (continued)

Company generates revenue from the sale of single use syringe products or as packaging components for a customer’s product.

is recorded net of sales tax, if applicable.

The Company considers revenue to be earned when all of the following criteria are met:

the Company has

a contract with a customer that creates enforceable rights and obligations, promised products are identified, the transaction price is

determinable and the Company has transferred control of the promised items to the customer.

A performance obligation is a promise in

a contract to transfer a distinct good or service to the customer and is the unit of account in the contract.

The transaction price for

the contract is measured as the amount of consideration the Company expects to receive in exchange for the goods expected to be transferred.

A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, control

of the distinct good or service is transferred.

The Company’s products typically have one performance obligation being the sale

of a single product.

Transfer of control for the Company’s products is generally at shipment or delivery, depending on contractual

terms, but occurs when title and risk of loss transfers to the customer.

As such, the Company’s performance obligation related

to product sales is satisfied at a point in time.

The Company recognizes a receivable when it has an unconditional right to payment,

which represents the amount the Company expects to collect in a transaction and is most often equal to the transaction price in the contract.

Payment terms for shipments to end-user and distributor customers may range from 30 to 90 days.

Amounts billed to customers for shipping

and handling are included in revenue, while the related shipping and handling costs are reflected in cost of goods manufactured.

The Company’s fixed assets consist of land,

building, machinery and equipment, molds, computer system and website.

Depreciation is calculated using the straight-line method

commencing on the date the asset is operating in the way intended by management over the following useful lives:

Building – 20

years, Machinery and Equipment – 3 - 10

years and Computer systems and Website – 3

The expected life for Molds is based on the lesser of the number of parts that will be produced based on the expected mold

capability or 5

years (See Note 5).

Impairment of Long-Lived Assets

Long-lived assets are reviewed annually for impairment

or whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

Recoverability is

measured by comparison of the carrying amount of an asset group to the future net undiscounted cash flows that the assets are expected

If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying

amount of the assets exceeds the projected discounted future net cash flows arising from the asset.

The Company recognized an impairment

on its fixed assets, including land, building, equipment, and deposits paid on equipment orders of $ 7,497,669 during the three months

ended September 30, 2025, based on the fair market value of the pending sale, completed on October 14, 2025 (See Note 5).

Purchased Identified Intangible Assets

The Company’s identified intangible assets

are amortized on a straight-line basis over their estimated useful lives of 5 years.

The Company makes judgments about the recoverability

of finite-lived intangible assets whenever facts and circumstances indicate that the useful life is shorter than originally estimated

or that the carrying amount of assets may not be recoverable.

If such facts and circumstances exist, the Company assesses recoverability

by comparing the projected undiscounted net cash flows associated with the related asset or group of assets over their remaining lives

against their respective carrying amounts.

Impairments, if any, are based on the excess of the carrying amount over the fair value of

those assets.

If the useful life is shorter than originally estimated, the Company would accelerate the rate of amortization and amortize

the remaining carrying value over the new shorter useful life.

The Company evaluates the carrying value of finite-lived intangible assets

on an annual basis, and an impairment charge would be recognized to the extent that the carrying amount of such assets exceeds their

estimated fair value (See Note 7).

SHARPS TECHNOLOGY, INC.

NOTES TO THE CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER

30, 2025 AND 2024

Summary of Significant Accounting

Policies (continued)

Stock-based Compensation Expense

The Company measures its stock-based awards made

to employees based on the estimated fair values of the awards as of the grant date.

For stock option awards, the Company uses the Black-Scholes

option-pricing model.

For restricted stock awards, the estimated fair value is generally the fair market value of the underlying stock

on the grant date.

Stock-based compensation expense is recognized over the requisite service period and is based on the value of the

portion of stock-based payment awards that is ultimately expected to vest.

The Company recognizes forfeitures of stock-based awards as

they occur on a prospective basis.

Stock-based compensation expense for awards granted

to non-employees as consideration for services received is measured on the date of performance at the fair value of the consideration

received or the fair value of the equity instruments issued, whichever can be more reliably measured.

Derivative Instruments

The Company accounts for common stock warrants

as either equity-classified or liability-classified instruments based on an assessment of the specific terms of the warrants and applicable

authoritative guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC 480”),

Distinguishing Liabilities from Equity (“ASC 480”), treated as level 2 assets, and ASC 815, Derivatives and Hedging (“ASC 815”).

The assessment

considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant

to ASC 480, and meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the

Company’s own stock and whether the holders of the warrants could potentially require net cash settlement in a circumstance outside

of the Company’s control, among other conditions for equity classification.

This assessment, which requires the use of professional

judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.

At their issuance date and as of September 30,

2025, certain warrants (see Notes 10 and 12) are accounted for as liabilities as these instruments did not meet all of the requirements

for equity classification under ASC 815-40 based on the terms of the aforementioned warrants.

The resulting warrant liabilities are re-measured

at each balance sheet date until their exercise or expi ration,

and any change in fair value is recognized in the Company’s consolidated statements of operations.

Company enters into derivative contracts to manage its exposure to fluctuations in the price of SOL and not for any other purpose.

addition, the Company evaluates its financing and service arrangements to determine whether certain arrangements contain features that

qualify as embedded derivatives requiring bifurcation in accordance with ASC 815 - Derivatives and Hedging.

Embedded derivatives that

are required to be bifurcated from the host instrument or arrangement are accounted for and valued as separate financial instruments.

There were no embedded derivatives requiring separation from the host instrument as of September 30, 2025 and December 31, 2024.

Company does not elect to designate derivatives as hedges for accounting purposes and, as such, records derivatives at fair value, with

subsequent changes in fair value and settlements recognized in earnings.

The Company classifies derivative assets or liabilities on the

Condensed Consolidated Balance Sheets as current or non-current based on whether settlement of the instrument could be required within

12 months of the balance sheet date and for derivatives with multiple settlements, based on the term of the contract.

the option positions have SOL as the underlying asset, none of the Company’s SOL holdings are transacted as part of settlement.

Realized and unrealized gains for purchased and written derivative positions are valued using their closing premium, at the earlier of

their maturity date or September 30, 2025 respectively, as the basis for a fair value adjustment.

The Company is exposed to SOL market risk related to our digital asset

holdings, which are impacted by the market value of the respective digital asset held.

We performed a sensitivity analysis assuming a

hypothetical 10% change in the fair value of these digital assets to demonstrate the potential impact on our financial results.

A hypothetical

10% increase or decrease in market prices would have positively or negatively impacted our Income (loss) before income taxes by approximately

$ 40.4 M for the three and nine months ended September 30, 2025.

The Company is also exposed to this SOL market

risk with respect to derivative positions which SOL is the underlying digital asset.

Foreign Currency Translation/Transactions

The Company has determined that the

functional currency for its foreign subsidiary is the local currency.

For financial reporting purposes, assets and liabilities

denominated in foreign currencies are translated at current exchange rates and profit and loss accounts are translated at weighted

average exchange rates.

Resulting translation gains and losses are included as a separate component of stockholders’ equity as

accumulated other comprehensive income or loss.

Gains or losses resulting from transactions entered into other than the

functional currency are recorded as foreign exchange gains and losses in the condensed consolidated statements of operations.

Comprehensive income (loss)

Comprehensive income (loss) consists of the

Company’s condensed consolidated net income (loss) and foreign currency translation adjustments related to its subsidiaries.

Foreign currency translation adjustments included in comprehensive income (loss) were not tax effected as the Company has a full

valuation allowance at September 30, 2025 and December 31, 2024.

Accumulated other comprehensive income (loss) is a separate

component of stockholders’ equity and consists of the cumulative foreign currency translation adjustments.

SHARPS TECHNOLOGY, INC.

NOTES TO THE CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER

30, 2025 AND 2024

Summary of Significant Accounting

Policies (continued)

Basic and Diluted Loss Per Share

The Company computes net income (loss) per share in accordance with ASC

260, Earnings per Share.

ASC 260 requires presentation of both basic and diluted earnings per share (EPS) on the face of the consolidated

statements of operations.

Basic EPS is computed by dividing net income (loss) available to common stockholders (numerator) by the weighted

average number of shares outstanding (denominator) during the period.

Basic EPS in the three and nine months ended September 30, 2025

included 38,875,023 and 38,486,561 in pre-funded warrants, respectively.

Basic EPS in the three and nine months ended September 30, 2024

included 0 and 407 (reverse effected) pre-funded warrants, respectively (see Note 10).

Diluted EPS gives effect to all dilutive potential

common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method.

In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from

the exercise of stock options or warrants.

Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive.

September 30, 2025 and 2024, there were 2,681 (reverse effected) and 71,423,180 , respectively of stock options and warrants that could potentially

dilute basic EPS in the future that were not included in the computation of diluted EPS because to do so would have been anti-dilutive

for the periods presented.

Device Packaging Products

Company generates revenue from the sale of single use medical device packaging products, primarily syringe or as packaging components

for a customer’s product.

Revenue is recorded, net of sales tax, if applicable.

The Company considers revenue to be earned when

all the following criteria are met:

the Company has a contract with a customer that creates enforceable rights and obligations, promised

products are identified, the transaction price is determinable and the Company has transferred control of the promised items to the customer.

A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account

in the contract.

The transaction price for the contract is measured as the amount of consideration the Company expects to receive in

exchange for the goods expected to be transferred.

A contract’s transaction price is allocated to each distinct performance obligation

and recognized as revenue when, or as control of the distinct good or service is transferred.

The Company’s products typically

have one performance obligation, which is the sale of a single product.

Transfer of control for the Company’s products is generally

at shipment or delivery, depending on contractual terms, but occurs when title and risk of loss transfers to the customer.

Company’s performance obligation related to product sales is satisfied at a point in time.

The Company recognizes a receivable

when it has an unconditional right to payment, which represents the amount the Company expects to collect in a transaction and is most

often equal to the transaction price in the contract.

Payment terms for shipments to end-user and distributor customers may range from

30 to 90 days.

Amounts billed to customers for shipping and handling are included in revenue, while the related shipping and handling

costs are reflected in cost of goods manufactured.

Assets Revenue, Realized and Unrealized Gains and Losses

Acquisition of Digital Assets

We acquire liquid SOL

tokens through purchases and delegated staking.

In the case of liquid bulk purchases, we recognize for cost basis the actual price paid.

In the case of

liquid TWAP (time-weighted average price) over multiple hour or days, we recognize for cost basis the average price paid for all

tokens purchases.

The Company is able to acquire additional

locked SOL through direct negotiations with the owner or third-party custodians at a discounted price from the SOL market value

With the purchase of locked SOL, we recognize the cost basis as the actual price paid including the discount applied from the

The unlocking newly purchased locked Sol occurs over a series of dates as prescribed by the purchase agreement.

We acquire other digital assets through purchases

and record the average price paid as the cost basis.

SHARPS TECHNOLOGY, INC.

NOTES TO THE CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER

30, 2025 AND 2024

Summary of Significant Accounting

Policies (continued)

ASC 350-60-45-2, gains and losses from the remeasurement of digital assets shall be included in net income and presented separately

from changes in the carrying value of other intangible assets.

Pursuant to this guidance, changes in fair value are reflected on the

income statement in the line item “Realized and unrealized (gain) loss on digital assets” in the operations section of

the condensed consolidated statements of operations.

We measure changes in fair value as the difference between the cost

basis and the prevailing market price of the digital asset at the date of measurement, multiplied by the quantity held of the

digital asset.

prices are independently analyzed, including comparisons to other exchanges and potential cut-off times.

the derivative positions, the Custodians provide a period-end spot price for the open positions based on valuation models applied

based on various inputs.

Remeasurement on a recurring basis

Subsequent to the acquisitions of SOL,

remeasurement of change in fair value is done by taking the spot price as defined above on the last day of the period.

bifurcated between liquid and locked tokens.

In the case of liquid tokens, the aggregate fair value is computed by taking the number

of liquid and locked tokens and multiplying by the period-end spot price.

As locked tokens become unlocked over time, they will be

added to the count of liquid tokens and accordingly, make up less of that discount percentage over time when computing aggregate

fair value on locked tokens.

In the case of locked tokens, the aggregate fair value is computed by taking the number of locked

tokens, discounted by 10%.

The 10% discount for September 30, 2025 used

by management is based on the initial investor discount in the August 2025 Offering and other quoted data and in the future will be

historical purchases of locked SOL management has made on behalf of the Company.

Management monitors this discount

percentage and adjusts when appropriate Per ASC 350-60-45-2, gains and losses from the remeasurement of digital assets shall be

included in net income and presented separately from changes in the carrying value of other intangible assets.

Pursuant to this

guidance, changes in fair value are reflected on the income statement in the line item “Realized and unrealized (gain) loss on

digital assets” in the operations section of the condensed consolidated statements of operations.

Subsequent to the acquisition of other digital assets,

remeasurement of change in fair value is done by taking the spot as defined above on the last day of the period.

Staking revenue

We earn staking rewards by delegating our digital

assets to third-party validators on proof-of-stake blockchain networks.

These tokens remain under the Company’s control and are

not derecognized, as the delegation does not constitute a transfer of control under ASC 610-20 or ASC 350-60.

there is no explicit guidance under U.S.

GAAP for staking activities, the Company applies the principles of ASC 606, Revenue from Contracts

with Customers, by analogy.

Management evaluates whether a contract exists, identifies the performance obligations, and determines whether

the Company acts as a principal or agent in the transaction.

The transaction price is measured at the fair value of the digital assets

received at the time control is obtained.

Due to the evolving nature of blockchain protocols and limited regulatory guidance, management

exercises significant judgment in evaluating validator reliability and the risk of slashing or forfeiture.

Changes in protocol rules

or accounting interpretations may materially impact how staking revenue is recognized and measured.

SOL tokens held by the Company,

whether liquid or locked, are eligible for staking.

The Company evaluation has determined that it is the delegator and the Custodians,

via agreements with validators, are the validators.

Therefore, the Company should recognize the staking rewards on a net basis.

believes that the Staking rewards variable revenue should be recognized when the staking rewards are received from the validator in the

Company’s staking account.

Rewards are recognized as revenue as is earned at the end of each epoch

(just under two day periods for SOL).

The FMV of the revenue is calculated using the spot price of SOL at the end of the epoch.

SOL where the staking rewards inherit the maturity of their underlying token, the 10% discount is applied.

This revenue is reported on

the Statements of condensed consolidated statement of operations under the line item “Staking Revenue.” Changes in fair

market value of the staking revenue after the initial staking revenue is recognized are reflected on the condensed consolidated statement of operations as “realized

and unrealized (gain) loss on digital assets”.

Realized disposition of the digital

To the extent such digital assets may be

disposed, unrealized gain or (losses) shall be reversed and realized gains or (losses) shall be recorded for the difference between FMV

price at disposition and its cost.

For sales of digital assets, this would be the

net transaction price.

In the case of transfers of custody to third parties this is the spot price of the asset on the day of

the transfer.

SHARPS TECHNOLOGY, INC.

NOTES TO THE CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER

30, 2025 AND 2024

Summary of Significant Accounting

Policies (continued)

Product Warranties

The Company provides product warranties that:

products meet the terms of the customer order, ii) the products are not defective and iii) the products will conform to the descriptions

set forth in their respective labeling, provided that they are used in accordance with such labeling and the Company’s written directions

i) the products meet the terms of the customer order, ii) the products are not defective and iii) the products will conform to the descriptions

set forth in their respective labeling, provided that they are used in accordance with such labeling and the Company’s written

directions for use.

The Company has not incurred warranty claims.

The Company’s return policy provides that a

customer may return incorrect shipments or defective products within specified days following arrival at the customers facility.

such cases, the customer must obtain an authorization from the Company.

The Company’s return policy provides that

a customer may return incorrect shipments or defective products within specified days following arrival at the customer’s facility.

all such cases, the customer must obtain an prior authorization from the Company.

The Company has not incurred returns.

and Handling Costs

and handling costs associated with the distribution of finished goods to customers are recorded in cost of goods manufactured.

Company must make certain estimates and judgments in determining income tax expense for financial statement purposes.

These estimates

and judgments are used in the calculation of tax credits, tax benefits, tax deductions, and in the calculation of certain deferred taxes

and tax liabilities.

Significant changes to these estimates may result in an increase or decrease to the Company’s tax provision

in a subsequent period.

provision for income taxes was comprised of the Company’s current tax liability and changes in deferred income tax assets and liabilities.

The calculation of the current tax liability involves dealing with uncertainties in the application of complex tax laws and regulations

and in determining the liability for tax positions, if any, taken on the Company’s tax returns in accordance with authoritative

guidance on accounting for uncertainty in income taxes.

Deferred income taxes are determined based on the differences between the financial

reporting and tax basis of assets and liabilities.

The Company must assess the likelihood that it will be able to recover the Company’s

deferred tax assets.

If recovery is not likely on a more-likely-than-not basis, the Company must increase its provision for income taxes

by recording a valuation allowance against the deferred tax assets that it estimates will not ultimately be recoverable.

However, should

there be a change in the Company’s ability to recover its deferred tax assets, the provision for income taxes would fluctuate in

the period of such change.

and Development Costs

and development costs are expensed as incurred.

payments for goods or services that will be used or rendered for future research and development activities are deferred and capitalized.

Such amounts are recognized as an expense as the related goods are delivered or the services are performed.

Company operates as one operating segment.

The Company’s chief operating decision maker (“CODM”) is its Chief Executive

Officer and Chief Financial Officer.

The CODM manages operations and business as one operating segment for the purposes of allocating

resources, making operating decisions and evaluating financial performance.

Shipping and Handling Costs

Shipping and handling costs associated with the

distribution of finished goods to customers are recorded in cost of goods manufactured.

The Company must make certain estimates and judgments

in determining income tax expense for financial statement purposes.

These estimates and judgments are used in the calculation of tax

credits, tax benefits, tax deductions, and in the calculation of certain deferred taxes and tax liabilities.

Significant changes to these

estimates may result in an increase or decrease to the Company’s tax provision in a subsequent period.

The provision for income taxes was comprised

of the Company’s current tax liability and changes in deferred income tax assets and liabilities.

The calculation of the current

tax liability involves dealing with uncertainties in the application of complex tax laws and regulations and in determining the liability

for tax positions, if any, taken on the Company’s tax returns in accordance with authoritative guidance on accounting for uncertainty

in income taxes.

Deferred income taxes are determined based on the differences between the financial reporting and tax basis of assets

and liabilities.

The Company must assess the likelihood that it will be able to recover the Company’s deferred tax assets.

is not likely on a more-likely-than-not basis, the Company must increase its provision for income taxes by recording a valuation allowance

against the deferred tax assets that it estimates will not ultimately be recoverable.

However, should there be a change in the Company’s

ability to recover its deferred tax assets, the provision for income taxes would fluctuate in the period of such change.

Research and Development Costs

Research and development costs are expensed as

Segment Reporting

In the third quarter of 2025, as a result of

the previously mentioned treasury policy, management re-evaluated our segment reporting structure and determined that we now operate

in two reportable segments.

Historically, we operated as a single operating segment focused on our medical

device packaging platform.

The change in reportable segments had no effect on previously reported results.

The Company’s

chief operating decision makers (“CODM”) are its Principal Executive Officer, Chief Investment Officer and Chief Financial

The CODM manage operations and business as two operating segments for the purposes of allocating resources, making operating

decisions and evaluating financial performance (See Note 18).

Contingencies

for loss contingencies arising from claims, assessments, litigations, fines and penalties and other sources are recognized when it is

probable that a liability has been incurred and the amount of the assessment can be reasonably estimated.

Gain contingencies are evaluated

and not recognized until the gain is realizable or realized.

TECHNOLOGY, INC.

TO THE CONSOLIDATED FINANCIAL STATEMENTS

THE THREE AND SIX MONTHS ENDED JUNE 30, 2025 AND 2024

Summary of Significant Accounting Policies (continued)

Accounting Pronouncements

November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures, which expands

disclosures about a public entity’s reportable segments and requires more enhanced information about a reportable segment’s

expenses, interim segment profit or loss, and how a public entity’s chief operating decision maker uses reported segment profit

or loss information in assessing segment performance and allocating resources.

The standard is effective for annual reporting periods

beginning after December 15, 2023, and interim periods within years beginning after December 15, 2024.

The Company adopted the standard.

December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) :

Liabilities for loss

contingencies arising from claims, assessments, litigations, fines and penalties and other sources are recognized when it is probable

that a liability has been incurred and the amount of the assessment can be reasonably estimated.

Gain contingencies are evaluated and

not recognized until the gain is realizable or realized.

SHARPS TECHNOLOGY, INC.

NOTES TO THE CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER

30, 2025 AND 2024

Summary of Significant Accounting

Policies (continued)

Recent Accounting Pronouncements

In December 2023, the FASB issued ASU 2023-08, Intangibles

- Goodwill and Other - Crypto Assets (Subtopic 350-60):

Accounting for and Disclosure of Crypto Assets (“ASU 2023-08”) , which

establishes accounting guidance for crypto assets meeting certain criteria.

SOL meets these criteria.

The amendments require crypto

assets meeting the criteria to be recognized at fair value with changes recognized in net income each reporting period.

Upon adoption,

a cumulative-effect adjustment was made to the opening balance of retained earnings as of the beginning of the annual reporting period

ASU 2023-08 is effective for fiscal years beginning after December 15, 2024, including interim periods within those fiscal

years, with early adoption permitted.

The Company elected to early adopt ASU 2023-08 for the year ended December 31, 2025, effective

as of August 25, 2025.

As a result of the adoption, the Company did not have a cumulative-effect adjustment as the Company did not have

any Crypto Assets prior to August 25, 2025.

Effective with the quarter ended September 30, 2025, SOL, the token of Solana blockchain,

is recognized at fair value.

In December 2023, the FASB issued ASU 2023-09,

Income Taxes (Topic 740) :

Improvements to Income Tax Disclosures .

The new guidance

requires disaggregated information about the effective tax rate reconciliation and additional information on taxes paid that meet a quantitative

The new guidance is effective for public companies for annual reporting periods beginning after December 15, 2024, and for

non-public companies for annual reporting periods beginning after December 15, 2025, with early adoption permitted for both.

will adopt the new standard in the annual reporting period beginning after December 15, 2025 and is currently evaluating the impacts

of the new guidance on its disclosures within the consolidated financial statements.

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

Disclosures (Subtopic 220-40).

The new guidance requires disaggregated information about the entity’s type of expenses into

certain categories.

The Company will adopt the new standard in the annual reporting period beginning after December 15, 2026 and is evaluating the impacts of the new guidance on its disclosures within the consolidated financial statements.

Company does not expect the adoption of any accounting pronouncements to have a material impact on the consolidated financial statements.

Company reviewed all other recently issued accounting pronouncements and have concluded they are not applicable or not expected to be

significant to the accounting for our operations.

net consisted of the following at June 30, 2025 and December 31, 2024:

The new guidance requires disaggregated information about

the effective tax rate reconciliation and additional information on taxes paid that meet a quantitative threshold.

The new guidance is

effective for public companies for annual reporting periods beginning after December 15, 2024, and for non-public companies for annual

reporting periods beginning after December 15, 2025, with early adoption permitted for both.

The Company will adopt the new standard

in the annual reporting period beginning after December 15, 2025 and is currently evaluating the impacts of the new guidance on its disclosures

within the consolidated financial statements.

In November 2024, the FASB issued ASU 2024-03,

Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40).

guidance requires disaggregated information about the entity’s type of expenses into certain categories.

The Company will adopt

the new standard in the annual reporting period beginning after December 15, 2026 and is evaluating the impacts of the new guidance on

its disclosures within the consolidated financial statements.

In July 2025, the FASB issued ASU 2025-05, Financial

Instruments—Credit Losses, which provides for all entities with the option to elect a practical expedient that assumes that

current conditions as of the balance sheet do not change for the remaining life of an asset, with respect to estimates of expected credit

This guidance is effective for annual reporting periods beginning after December 15, 2025 and interim periods within those annual

reporting periods, with early adoption permitted and application of guidance prospectively.

We are currently evaluating the effect of

this pronouncement.

Reclassification of

Prior Period Presentation

Certain prior period amounts

have been reclassified to conform to the current period presentation.

These reclassifications had no impact on previously reported total

revenues, operating income (loss), net income (loss), or stockholders’ equity .

Prepaid Expenses and Current Assets

Prepaid expenses and other current assets consisted

of the following at September 30, 2025 and December 31, 2024:

of Prepaid Expenses and Other Current Assets

Consulting agreement — Note 15

Inventories, net consisted of the following at

September 30, 2025 and December 31, 2024:

Schedule of Inventories

2 unchanged sentences

Finished goods

asset, net, as of June 30, 2025 and December 31, 2024, are summarized as follows:

During the three and nine months ended

September 30, 2025, lower of cost or market reserves of $ 924,010

and $ 1,654,096 ,

respectively were recorded affecting raw material, work in process and finished goods.

SHARPS TECHNOLOGY, INC.

NOTES TO THE CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER

30, 2025 AND 2024

Fixed asset, net, as of September 30, 2025 and

December 31, 2024, are summarized as follows:

Schedule of Fixed Assets, Net

4 unchanged sentences

( 1,292,138 )

Fixed asset, net

TECHNOLOGY, INC.

TO THE CONSOLIDATED FINANCIAL STATEMENTS

THE THREE AND SIX MONTHS ENDED JUNE 30, 2025 AND 2024

Fixed Assets (continued)

expense of fixed assets for the six months ended June 30, 2025 and 2024 was $ 264,866 and $ 378,636 ,

Depreciation expense of fixed assets for the

nine months ended September 30, 2025 and 2024 was $ 416,963 and $ 574,719 ,

respectively.

Substantially, all of the Company’s fixed assets are located at the Company’s Hungary location.

quarter ended March 31, 2025, the Company fully adjusted the value of the machinery and equipment impaired at December 31, 2024 resulting

in a decrease in both the gross cost basis and accumulated depreciation by $ 823,617 .

Asset Acquisition

June 2020, the Company entered into a Share Purchase Agreement (“Agreement”) with Safegard Medical (“Safegard”)

and amendments to the Agreement, collectively, the Agreements, to purchase either the stock or certain assets of a manufacturing facility

for $ 2.5 M in cash, plus additional consideration of common stock and options with fair market values of $ 200,000 and $ 183,135 , respectively.

Through the Closing Date, the Agreements provided the Company with the exclusive use of the facility in exchange for payment of the facility’s

operating costs.

The monthly fee (“Operating Costs”), which primarily covered the facility’s operating costs, was mainly

comprised of the seller’s workforce costs, materials and other recurring monthly operating cost.

acquisition of Safegard, which closed on July 6, 2022, did not meet the definition of a business pursuant to ASC 805-10, and accordingly

was accounted for as an asset acquisition in accordance with ASC 805-50.

The cost of the acquisition was $ 2,936,712 , including transaction

costs of $ 53,576 , with the allocation to the assets acquired on a relative fair value basis.

The intangibles relate to permits and a

limited workforce acquired.

Under ASC 805-50, no goodwill is recognized.

The operating results for Safegard are included in the consolidated

balance sheet and consolidated statements of operations for the period beginning after the closing on July 6, 2022.

relative fair value of the assets acquired and related deferred tax liability is as follows:

Schedule of Fair Value of Assets Acquisition

Building and affixed assets

Deferred tax liability

useful lives for the acquired assets is Building - 20 years;

Machinery – 5 to 10 years;

Intangibles – 5 years.

depreciation and amortization is being recorded on a straight-line basis.

assets as of June 30, 2025 and December 31, 2024 are summarized as follows:

During the quarter ended September 30, 2025

the Company recorded an asset impairment for assets specific to the Safegard operation, of $ 5,524,077 based on the fair value of the assets to be $ 0 on the pending

disposal of the assets (Note 19).

- Investments in Digital Assets

The following table summarizes Digital Assets held for investment:

Schedule of Digital Assets Held for Investment

September 30, 2025

$ 389,332,519

$ 404,197,261

$ 404,028,521

$ 418,893,263

The Company recognizes digital assets at fair value.

The Company’s

holdings in USDC valued at the spot price of $ 1.00 USD/USDC.

The following table summarizes the Company’s

digital asset purchases, losses (gains) on digital assets, and revenue from staking received for the three months ended September 30,

The three months ended September 30, 2025 represents the initial period digital asset transactions that occurred.

Schedule of Losses (Gains) On Digital Assets and Revenue from Staking

Digital Asset Units

Gain / (Loss)

Beginning Digital Assets

In-Kind Digital Assets (PIPE)

$ 230,139,950

Dispositions of Digital Assets

$ (98,486,234 )

Digital Asset Purchases

$ 270,948,193

Staking Rewards Received

Ending Digital Assets

$ 404,028,521

Unrealized Gain / Loss

Ending Digital Assets

$ 418,893,263

The following table summarizes the composition

of SOL held broken out by liquid and locked as of September 30, 2025:

Schedule of Solana Tokens Held Broken Out by Liquid and Locked

Approximate number of SOL units.

SHARPS TECHNOLOGY, INC.

NOTES TO THE CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER

30, 2025 AND 2024

- Investments in Digital Assets (continued)

The Company has approximately 90 %

of its SOL treasury staked at September 30, 2025.

The Company maintains control over the delegated SOL tokens throughout the staking

Although the tokens undergo a bonding process with validators, the Company retains the ability to initiate unbonding at any

time for liquid SOL.

Upon notification to the validator, the unbonding process begins, which typically takes up to two days.

this period, the tokens remain unavailable for transfer or sale on the open market.

Validators do not gain control over the tokens

in a manner that meets derecognition criteria.

They cannot sell, pledge, or otherwise dispose of the tokens.

As such, the Company

continues to recognize the delegated SOL tokens as part of its digital asset holdings.

The following table summarizes the unlocking

schedule of SOL tokens currently locked as of September 30, 2025:

Schedule of Crypto Asset Fiscal Year Maturity

Through Year End 2025

Through Year End 2026

Through Year End 2027

Through Year End 2028

The Company did not sell any SOL in its

Digital Asset Treasury during the quarter ended September 30, 2025.

Company valued the SOL treasury at $209.85 per liquid token and $188.87 per locked token.

The aggregate fair value of our locked

tokens is computed by taking the number of locked tokens and discounting the month-end spot price by 10%.

For the three and nine months ended September

30, 2025, the Company incurred $ 810,861 in transactions costs relating to custodian and exchange fees.

Other assets as of September 30, 2025 and December

31, 2024 are summarized as follows:

Schedule of Other Assets

1 unchanged sentence

Fixed asset deposits

Total Other assets

are related to the Asset Acquisition (see Note 5) and consist of an acquired workforce and permits.

Amortization for the six months

ended June 30, 2025 and 2024 was $ 6,954 and

respectively.

The remaining life of the unamortized intangibles is approximately 2.25 years.

Fixed asset deposits at June 30, 2025 relate primarily to machinery, molds and other capital assets (see Note 15).

TECHNOLOGY, INC.

TO THE CONSOLIDATED FINANCIAL STATEMENTS

THE THREE AND SIX MONTHS ENDED JUNE 30, 2025 AND 2024

Debt Financing

September 20, 2024, the Company entered into a securities purchase agreement (the “Securities Purchase Agreement”) and a

Senior Secured Note (the “Note”) for an aggregate principal amount of $ 4,375,000 ,

including OID interest of $ 875,000

maturing on January

31, 2025 , with certain purchasers (the “Purchasers”), and the issuance of approximately 864

(pre reverse - 259,091

) unregistered shares of the Company’s Common Stock.

The aggregate gross proceeds to the Company were approximately $ 3.5

million, before deducting fees to the placement agent and other offering expenses payable by the Company of $ 514,700

and an escrow deposit of $ 250,000

required until certain security liens were filed.

The Note and the common stock were recorded at the relative fair values of $ 2.6 M

Intangibles were related to the Asset

Acquisition in 2022 and consisted of an acquired workforce and permits.

Fixed asset deposits, primarily related to machinery and

molds of approximately $ 1,934,268

were impaired and written down to the fair value of $ 0

at September 30, 2025 and in the three months then ended, since the Company has no plans to utilize the aforementioned equipment and based on the fair value of the

assets to be $ 0

on the pending disposal of the assets.

Further, for the same reason in the three months ended September

30, 2025, the Company wrote off $ 39,324 representing the carrying value of the intangibles (see Note 19).

During the periods presented, the Company’s

derivatives were all embedded forward contracts to receive or deliver a fixed amount of crypto assets in the future and none were designated

as hedging instruments.

SCHEDULE OF DERIVATIVE INSTRUMENT

The following table summarizes information on derivative instruments

by their location in the Condensed Consolidated Balance Sheets, as measured in U.S.

dollar equivalents:

Derivative Impact (Assets)

Derivative Impact (Liabilities)

September 30, 2025

Derivative Impact (Assets)

Derivative Impact (Liabilities)

FMV of Open Derivatives (Long)

FMV of Open Derivatives (Short)

USDC Collateral, included in USDC

The Margin Loan is with a custodian bank and

is included in the related custodian agreement and provides for maximum borrowing of $ 25,000,000 .

The term of the agreement has no specific term and borrowings are at a variable interest rate of approximately 13 %.

As of September 30, 2025, $ 5.7 M of USDC holdings

are held as collateral against the derivative positions.

The following table summarizes information on

derivative instruments by their location in the Condensed Consolidated Statement of Operations, as measured in U.S.

dollar equivalents:

Purchased Derivatives

Written Derivatives

September 30, 2025

Purchased Derivatives

Written Derivatives

Realized Gain / (Loss)

$ ( 4,017,000 )

$ ( 2,845,000 )

Unrealized Gain / (Loss)

$ ( 2,321,873 )

$ ( 1,533,749 )

$ ( 6,338,873 )

$ ( 4,378,749 )

SHARPS TECHNOLOGY, INC.

NOTES TO THE CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER

30, 2025 AND 2024

respectively, in accordance with ASC 470-20-25-2.

The aforementioned expenses were allocated based on the aforementioned fair values

as a reduction to the carrying amount of the debt and a reduction of the equity in accordance with ASC 505-10.

For the three and six

months ended June 30, 2025, the Company recorded accreted interest and fees of $ 0 and $ 708,390 ,

respectively.

In connection with the Securities Purchase Agreement and Note, the Company entered into a Registration Rights

Agreement with the Purchasers (the “Registration Rights Agreement”), requiring the Company to file a resale registration

statement (the “Registration Statement”) with the U.S.

Securities and Exchange Commission (the “Commission”)

to register the unregistered shares of Common Stock.

within forty-five (45) calendar days following the filing date, which is thirty

(30) days after the closing date.

The Company filed the required resale registration statement on October 23, 2024.

repaid upon maturity (See Note 8).

Debt Financing

On September 20, 2024, the Company entered into

a securities purchase agreement (the “Securities Purchase Agreement”) and a Senior Secured Note (the “Note”)

for an aggregate principal amount of $ 4,375,000 , including OID interest of $ 875,000 maturing on January 31, 2025 , with certain purchasers

(the “Purchasers”), and the issuance of approximately 864 (pre-reverse- 259,091 ) unregistered shares of the Company’s

Common Stock.

The aggregate gross proceeds to the Company were approximately $ 3.5 million, before deducting fees to the placement agent

and other offering expenses payable by the Company of $ 514,700 and an escrow deposit of $ 250,000 required until certain security liens

The Note and the common stock were recorded at the relative fair values of $ 2.6 M and $ 852,000 , respectively, in accordance

with ASC 470-20-25-2.

The aforementioned expenses were allocated based on the aforementioned fair values as a reduction to the carrying

amount of the debt and a reduction of the equity in accordance with ASC 505-10.

For the three and nine months ended September 30, 2025,

the Company recorded accreted interest and fees of $ 0 and $ 708,390 , respectively.

In connection with the Securities Purchase Agreement

and Note, the Company entered into a Registration Rights Agreement with the Purchasers (the “Registration Rights Agreement”),

requiring the Company to file a resale registration statement (the “Registration Statement”) with the U.S.

Securities and

Exchange Commission (the “Commission”) to register the unregistered shares of Common Stock.

within forty-five (45) calendar

days following the filing date, which is thirty (30) days after the closing date.

The Company filed the required resale registration

statement on October 23, 2024.

The Note was repaid upon maturity (See Note 10).

Stockholders’ Equity

December 11, 2017, the Company was incorporated in Wyoming with 20,000,000 shares of common stock authorized with a $ 0.0001 par value.

Effective, April 18, 2019, the Company’s authorized common stock was increased to 50,000,000 shares of common stock.

of incorporation also authorized 10,000 preferred shares with a $ 0.001 par value.

March 22, 2022, the Company completed a plan and agreement of merger with Sharps Technology, Inc., a Nevada corporation (“Sharps

Pursuant to the merger agreement, (i) the Company merged with and into Sharps Nevada, (ii) each 3.5 shares of common

stock of the Company were converted into one share of common stock of Sharps Nevada and (iii) the articles of incorporation and bylaws

of Sharps Nevada, became the articles of incorporation and bylaws of the surviving corporation .

The Company’s authorized common

stock and preferred stock increased from 50,000,000 to 100,000,000 and 10,000 to 1,000,000 shares, respectively.

The par value of preferred

stock decreased from $ 0.001 to $ 0.0001 per share.

July 2024, the shareholders approved the increase of the authorized common stock from 100,000,000 to 500,000,000 which was subsequently

filed as an amendment to the articles of incorporation with the state of Nevada.

October 7, 2024, at a special meeting of shareholders, the shareholders approved a proposal to authorize Sharps’ Board of Directors

in its sole and absolute discretion, to file a certificate of amendment (the “Amendment”) to Sharps’ amended and restated

certificate of incorporation to effect the reverse split at a ratio to be determined by the Board, not to exceed a 1-for-22 reverse split.

A 1 for 22 reverse split was approved by the Board and was effective October 15, 2024.

All share amounts, share prices and earnings per

share had been adjusted to reflect the approved reverse stock split.

April 23, 2025, under the Nevada Revised Statutes, the Board approved an Amendment to the Company’s Certificate of Incorporation

with the State of Nevada to reduce the authorized shares from 500,000,000 to 1,666,667 .

The reduction in authorized shares, which was

effective April 27, 2025, also effectuated a reverse stock split of the outstanding common shares at a ratio of one for three hundred

All share amounts, share prices and earnings per share have been adjusted in the accompanying condensed consolidated financial

statement and footnotes.

TECHNOLOGY, INC.

TO THE CONSOLIDATED FINANCIAL STATEMENTS

THE THREE AND SIX MONTHS ENDED JUNE 30, 2025 AND 2024

Capital Structure

On December 11, 2017, the Company was incorporated

in Wyoming with 20,000,000 shares of common stock authorized with a $ 0.0001 par value.

Effective, April 18, 2019, the Company’s

authorized common stock was increased to 50,000,000 shares of common stock.

The articles of incorporation also authorized 10,000 preferred

shares with a $ 0.001 par value.

Effective March 22, 2022, the Company completed

a plan and agreement of merger with Sharps Technology, Inc., a Nevada corporation (“Sharps Nevada”).

Pursuant to the merger

agreement, (i) the Company merged with and into Sharps Nevada, (ii) each 3.5 shares of common stock of the Company were converted into

one share of common stock of Sharps Nevada and (iii) the articles of incorporation and bylaws of Sharps Nevada, became the articles of

incorporation and bylaws of the surviving corporation .

The Company’s authorized common stock and preferred stock increased from

50,000,000 to 100,000,000 and 10,000 to 1,000,000 shares, respectively.

The par value of preferred stock decreased from $ 0.001 to $ 0.0001

In July 2024, the shareholders approved the increase

of the authorized common stock from 100,000,000 to 500,000,000 which was subsequently filed as an amendment to the articles of incorporation

with the state of Nevada.

On October 7, 2024, at a special meeting of shareholders,

the shareholders approved a proposal to authorize Sharps’ Board of Directors in its sole and absolute discretion, to file a certificate

of amendment (the “Amendment”) to Sharps’ amended and restated certificate of incorporation to effect the reverse split

at a ratio to be determined by the Board, not to exceed a 1-for-22 reverse split .

A 1 for 22 reverse split was approved by the Board

and was effective October 15, 2024.

All share amounts, share prices and earnings per share had been adjusted to reflect the approved

reverse stock split.

On April 23, 2025, under the Nevada Revised Statutes,

the Board approved an Amendment to the Company’s Certificate of Incorporation with the State of Nevada to reduce the authorized

shares from 500,000,000 to 1,666,667 .

The reduction in authorized shares, which was effective April 27, 2025, also effectuated a reverse

stock split of the outstanding common shares at a ratio of one for three hundred ( 1-for-300 ).

All share amounts, share prices and earnings

per share have been adjusted in the accompanying condensed consolidated financial statement and footnotes.

On August 22, 2025, at the annual meeting of

shareholders, the shareholders approved a proposal to authorize Sharps’ Board of Directors in its sole and absolute discretion,

to file a certificate of amendment (the “Amendment”) to Sharps’ amended and restated certificate of incorporation to

increase the authorized shares of common stock from 1,666,667 shares to 500,000,000 shares.

Securities Purchase

On August 25,

2025, Sharps Technology, Inc.

(the “Company”) entered into securities purchase agreements (the “Cash Securities Purchase

Agreements”) with certain accredited investors (the “Cash Purchasers”) pursuant to which the Company sold to the Cash

Purchasers in a private placement offering (the “Cash Offering”) an aggregate offering of (i) 24,338,649 “Cash Shares”)

of common stock of the Company, par value $ 0.0001 per share (the “Common Stock”), at an offering price of $ 6.50 per share

(ii) and 14,038,463 pre-funded warrants (the “Cash Pre-Funded Warrants”) to purchase shares of Common Stock (the “Cash

Pre-Funded Warrant Shares,”) at an offering price of $ 6.4999 per Pre-Funded Warrant, and (ii) stapled warrants (the “Cash

Stapled Warrants,” and together with the Common Stock and Cash Pre-Funded Warrants, the “Cash Securities”) to purchase

41,054,034 shares of Common Stock (the “Cash Stapled Warrant Shares,”) at an exercise price of $ 9.75 per Cash Stapled Warrant.

In the Cash Offering, the Cash Purchasers will tender any of U.S.

dollars, USDC or USDT (or a combination thereof) to the Company as

consideration for the Cash Shares, Cash Stapled Warrants and Cash Pre-Funded Warrants.

SHARPS TECHNOLOGY, INC.

NOTES TO THE CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER

30, 2025 AND 2024

Stockholders’ Equity (continued)

January 29, 2025, the Company closed on an offering (the “2025 Offering”) and received gross proceeds of approximately $ 20.0

Each of the Cash Pre-Funded

Warrants is immediately exercisable for one share of Common Stock at the exercise price of $ 0.0001 per Cash Pre-Funded Warrant Share,

and may be exercised at any time until all of the Cash Pre-Funded Warrants issued in the Offerings (as defined below) are exercised in

Each Cash Purchaser’s ability to exercise its Cash Pre-Funded Warrants in exchange for shares of Common Stock is subject

to certain beneficial ownership limitations set forth therein.

Each of the Cash Stapled Warrants is immediately exercisable for one share

of Common Stock at the exercise price of $ 9.75 per Cash Stapled Warrant Share, and may be exercised at any time until the earlier of

(i) 36 months after the closing of the Offerings or (ii) all of the Cash Stapled Warrants issued in the Offerings are exercised in full.

On August 25, 2025,

the Company also entered into securities purchase agreements (the “Cryptocurrency Securities Purchase Agreements,” and together

with the Cash Securities Purchase Agreements, the “Securities Purchase Agreements”) with certain accredited investors (the

“Cryptocurrency Purchasers,” and together with the Cash Purchasers, the “Purchasers”) pursuant to which the Company

sold and issued to the Cryptocurrency Purchasers in a private placement offering (the “Cryptocurrency Offering” and together

with the Cash Offering, the “Offerings”) (i) 24,836,560 pre-funded warrants (the “Cryptocurrency Pre-Funded Warrants”

and together with the Cash Pre-Funded Warrants, the “Pre-Funded Warrants”) to purchase shares of Common Stock (the “Cryptocurrency

Pre-Funded Warrant Shares,” and together with the Cash Pre-Funded Warrant Share, the “Pre-Funded Warrant Shares”) at

an offering price of $ 6.4999 per Pre-Funded Warrant, and (ii) 24,836,560 stapled warrants (the “Cryptocurrency Stapled Warrants,”

and together with the Cash Stapled Warrants, the “Stapled Warrants” to purchase shares of Common Stock (the “Cryptocurrency

Stapled Warrant Shares,” and together with the Cash Stapled Warrant Share, the “Stapled Warrant Shares”) at an exercise

price of $ 9.75 per Cryptocurrency Stapled Warrant.

In the Cryptocurrency Offering, the Cryptocurrency Purchasers will tender either Unlocked

SOL tokens or Locked SOL tokens to the Company as consideration for the Cryptocurrency Pre-Funded Warrants and Cryptocurrency Stapled

The exercise of the Cryptocurrency Pre-Funded

Warrants and Cryptocurrency Stapled Warrants into Cryptocurrency Pre-Funded Warrant Shares and Cryptocurrency Stapled Warrant Shares,

respectively, is subject to stockholder approval (“Stockholder Approval”) which was approved at the Special Shareholder meeting

on October 14, 2025.

Each of the Cryptocurrency Pre-Funded Warrants is exercisable for one share of Common Stock at the exercise price of

$ 0.0001 per Cryptocurrency Pre-Funded Warrant Share, immediately exercisable following Stockholder Approval (the “Effective Date”),

and may be exercised at any time on or after the Effective Date until all of the Cryptocurrency Pre-Funded Warrants issued in the Offerings

are exercised in full.

Each Cryptocurrency Purchaser’s ability to exercise its Cryptocurrency Pre-Funded Warrants in exchange for

shares of Common Stock is subject to certain beneficial ownership limitations set forth therein.

Each of the Cryptocurrency Stapled Warrants

is exercisable for one share of Common Stock at the exercise price of $ 9.75 per Cryptocurrency Stapled Warrant Share, immediately exercisable

on or after the Effective Date, and may be exercised at any time on or after the Effective Date until the earlier of (i) 36 months after

the closing of the Offerings or (ii) all of the Cryptocurrency Stapled Warrants issued in the Offerings are exercised in full.

The gross proceeds from the Cash Securities

Purchase Agreements and Cryptocurrency Securities Purchase Agreements aggregated $ 411 M,

which investors paid using the following currency:

cash of $ 181 M,

locked SOL of $ 137 M,

unlocked SOL of $ 7 M

and stable coin of $ 86 M.

The net proceeds of $ 403 M

reflect placement agent fees, legal fees, and expenses of $ 7.5 M

with net proceeds, after reflecting par value, have been recorded in Additional Paid in Capital of $ 403.0 M.

During the quarter

ended September 30 2025, 388,462 Cash Prefunded warrants were exercised and proceeds of $ 39 were received.

On September 26, 2025, the Company entered

into Waiver and Consent (the “Waiver and Consent”) with certain holders of the Company’s securities (who

collectively beneficially own at least 50.1% of the then outstanding Registrable Securities, as defined in the Registration Rights

Agreement dated August 25, 2025 (the “Registration Rights Agreement”).

The Waiver and Consent waived the compliance of

the September 29, 2025 filing date and extended the deadline for the Company to file the initial resale registration statement with

the Securities and Exchange Commission to the 60th calendar day following the Closing Date, as defined in the Registration Rights

The initial resale registration statement was filed on October 23, 2025.

Controlled Equity Offering

On September 2, 2025,

the Company entered into a Controlled Equity Offering Sales Agreement (the “Sales Agreement”) with each of Cantor Fitzgerald

(“Cantor”) and Aegis Capital Corp.

(“Aegis”) (each, an “Agent” and together, the “Agents”),

pursuant to which the Company, from time to time, at its option may offer and sell shares (the “ATM Shares”) of its Common

Stock, to or through Cantor, acting as principal and/or the sole designated sales agent having an aggregate sales price of up to $ 236,605,575

(the “ATM Offering”).

Subject to the terms and conditions of the Sales Agreement, Cantor will use its commercially reasonable

efforts consistent with its normal trading and sales practices to sell the ATM Shares from time to time, based upon the Company’s

instructions.

The Company has provided the Agents with customary indemnification and contribution rights in favor of the Agents, and the

Agents will be entitled to a commission of 3.0% of the gross proceeds from each sale of the ATM Shares pursuant to the Sales Agreement.

Sales of the ATM Shares, if any, under the Agreement may be made in transactions that are deemed to be “at the market offerings”

as defined in Rule 415 under the Securities Act or by any other method permitted by law.

The Company has no obligation to sell any of

the ATM Shares and may at any time suspend offers under the Sales Agreement or terminate the Sales Agreement.

The Common Stock to be

sold under the Sales Agreement, if any, will be issued and sold pursuant to the Company’s shelf registration statement on Form S-3

333-274146), which was filed with the SEC on August 22, 2023, as amended on August 29, 2023 and declared effective by the SEC

on September 5, 2023 and a registration statement on Form S-3 (File No.

333-289980) filed pursuant to Rule 462(b) under the Securities

Act for the purpose of registering additional securities available to be sold under the registration statement on Form S-3 (File No.

(collectively, the “Registration Statement”), including a base prospectus as part of the Registration Statement, and a prospectus

supplement dated September 2, 2025 relating to the offer and sale of the ATM Shares pursuant to the Sales Agreement.

During the period September

2, 2025 through September 30, 2025, the Company issued 1.5 M shares of common stock under the Sales Agreement and received net proceeds

from the Sales Offering of $ 14.7 M after fees paid to the Agents and other offering expenses of $ 711,000 .

January 2025 Offering

On January 29,

2025, the Company closed on an offering (the “2025 Offering”) and received gross proceeds of approximately $ 20.0

million, before deducting underwriting fees and other offering expenses payable by the Company.

The net proceeds were approximately $ 18.2 M,

of which $ 4.2 M was used to repay the outstanding Notes (see Note 7).

The net proceeds were approximately

of which $ 4.2 M

was used to repay the outstanding Notes (see Note 9).

SHARPS TECHNOLOGY, INC.

NOTES TO THE CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER

30, 2025 AND 2024

Stockholders’ Equity (continued)

2025 Offering consisted of 47,619 (pre-reverse – 14,285,714 ) units consisting of 30,089 (pre-reverse – 9,029,814 ) Common

16 unchanged sentences

per warrant and the number of warrants was increased so that the aggregate exercise price payable remains the same as the Offering date.

Pre-Funded Warrants were immediately exercisable and could be exercised at any time until exercised in full.

The Pre-Funded Warrants were immediately

exercisable and could be exercised at any time until exercised in full.

Immediately after closing 16,603

16,603 (pre reverse – 4,980,900 ) of the Pre-Funded units were exercised and the Company received $ 498 in proceeds.

The underwriter,

under an over- allotment option, purchased 7,143 (pre reverse- 2,142,857 ) 2025 Series A Warrants and 7,143 (pre reverse- 2,142,857 ) 2025

Series B Warrants for $ 0.0001 per Warrant.

2025 Offering was made pursuant to an effective registration statement on Form S-1 (No.

333-284237) previously filed with the U.S.

and Exchange Commission (SEC) and declared effective by the SEC on January 27, 2025.

2025 Series A Warrants are exercisable immediately and expire 60 months after stockholder approval.

The 2025 Series B Warrants are

exercisable immediately and expire 30 months after stockholder approval.

The exercise price of the 2025 Series A and B Warrants,

were adjusted down to $ 87.60

(pre-reverse – 4,980,900 )

after Shareholder approval.

Shareholder approval was obtained on March 28, 2025 (see Note 10).

December 5, 2024, the Company, entered into subscription agreements with certain institutional investors, pursuant to which the Company

agreed to issue and sell to the investors 828 (pre reverse – 248,430 ) shares (the “Shares”) of Common Stock, par value

$ 0.0001 per share of the Company at a price of $ 585 per share (pre reverse -$ 1.95 ) for gross proceeds to the Company of $ 484,438 before

deducting placement agent fees and commissions of $ 84,671 with net proceeds, after reflecting par value, have been recorded in Additional

Paid in Capital of $ 399,793 .

The Shares issued in the offering were offered at-the-market under Nasdaq rules and pursuant to the Company’s

Form 1-A (the “Offering Statement”), initially filed by the Company with the Securities and Exchange Commission (the “SEC”)

under the Securities Act of 1933 (the “Securities Act”), as most recently amended on November 18, 2024, and qualified on

December 3, 2024.

TECHNOLOGY, INC.

TO THE CONSOLIDATED FINANCIAL STATEMENTS

THE THREE AND SIX MONTHS ENDED JUNE 30, 2025 AND 2024

Stockholders’ Equity (continued)

September 23, 2024, as noted in Note 7, in connection with the Securities Purchase Agreement and Note, the Company issued 864 (pre-reverses

– 259,091) shares of unregistered common stock.

The shares were subsequently registered by the Company with the Security and Exchange

May 31 and June 13, 2024, the Company entered into subscription agreements with certain institutional investors, pursuant to which the

Company agreed to issue and sell to the investors 636 (pre reverse - 190,773 ) shares (the “Shares”) of Common Stock, par

value $ 0.0001 per share of the Company at a price of $ 2,589 (pre reverse -$ 8.63 ) and received gross proceeds to the Company of $ 1.6 M,

before expenses to the placement agent and other offering expenses of $ 298,000 with net proceeds, after reflecting par value, have been

recorded in Additional Paid in Capital of $ 1,296,903 .

The shares issued in the offering were offered at-the-market under Nasdaq rules

and pursuant to the Company’s Form 1-A (the “Offering Statement”), initially filed by the Company with the Securities

and Exchange Commission under the Securities Act of 1933, as amended on May 21, 2024, and qualified on May 30, 2024.

May 30, 2024, the Company offered warrant inducements (the “Inducement Agreement”) to certain warrant holders (the “Warrant

Holders”) which references the warrants registered for sale under both the registration statements on Form S-1 (file No.

and/or the registration statement on Form S-1 (File No.

333-275011) (collectively, the “Registration Statements”) for up

to a total of 1,666 (pre reverses - 499,932 ) warrants to purchase shares of the Company’s common stock, par value $ 0.0001 per share.

Pursuant to the anti-dilution terms in the Inducement Agreement, the exercise price of the existing warrants was reduced from $ 4,224

(pre reverses -$ 14.08 ) per share to $ 2,178 (pre reverses -$ 7.26 ) per share.

In addition, for each warrant that was exercised, as a result

of the Inducement Agreement, the Company agreed to issue the Warrant Holders unregistered warrants with an exercise price of $ 2,970 (pre

reverse - $ 9.90 ) per share (“Inducement Warrants”).

In the aggregate, 869 (pre reverses - 260,799 ) warrants were exercised

as a result of the Inducement Agreement and accordingly, 869 shares were issued.

The Company received gross proceeds of $ 1.9 M before

expenses to the placement agent and other expenses of $ 285,000 .

The net proceeds, after reflecting par value, has been recorded in Additional

Paid in Capital of $ 978,955 and with respect to the Inducement Warrants, a liability under ASC 815 was recorded in the amount of $ 693,064 .

September 29, 2023, the Company completed two simultaneous offerings and received aggregate gross proceeds of approximately $ 5.6 million,

before expenses to the placement agent and other offering expenses of $ 716,000 .

first offering, the securities purchase agreement offering (the “Shelf Offering”) with institutional investors and the

Company resulted in the Company receiving net proceeds from the Shelf Offering and the sale of pre-funded warrants of approximately

$ 2.5 million, includes the value of the pre-funded warrants recorded in APIC, net of $ 362,000 in fees relating to the placement agent

and other offering expenses.

The Shelf Offering was priced at the market under Nasdaq rules.

second offering, the securities purchase agreement offering (“Private Placement”) with institutional investors and the Company

received net proceeds from the Private Placement of approximately $ 2.4

million, net of $ 354,000

in fees relating to the placement agent and other offering

In connection with the Private Placement, the Company issued:

(pre reverse – 117,340 )

PIPE Shares (or PIPE Pre-Funded Warrants in lieu thereof) and (ii) PIPE Warrants (non-trading) to purchase 1326

(pre reverse - 397,727 )

shares of our common stock, at a combined purchase price of $ 7,089

of the Pre-Funded units were exercised and the Company received $ 498

The underwriter, under an over- allotment option, purchased 7,143

(pre-reverse- 2,142,857 )

per unit or $ 7,082

2025 Series A Warrants and 7,143

(pre-reverse - 2,142,857 )

per pre-funded unit.

The PIPE Warrants had a term of five and one-half ( 5.5 )

years from the issuance date and were exercisable for one share of common stock at an exercise price, after effect of the April 2025

and October 2024 reverse split, of $ 4,224

adjusted to $ 2,178

at May 30, 2024, based on anti-dilution terms in the warrants.

2025 Series B Warrants for $ 0.0001

The 2025 Offering was made pursuant to an effective

registration statement on Form S-1 (No.

333-284237) previously filed with the U.S.

Securities and Exchange Commission (SEC) and declared

effective by the SEC on January 27, 2025.

The 2025 Series A Warrants are exercisable immediately

and expire 60 months after stockholder approval.

The 2025 Series B Warrants are exercisable immediately and expire 30 months after stockholder

The exercise price of the 2025 Series A and B Warrants, were adjusted down to $ 87.60 (pre-reverse - $ 0.292 ) after Shareholder

Shareholder approval was obtained on March 28, 2025.

On August 25, 2025,

the Company entered into an amendment (the “Series A Amendment”) with certain warrant holders which references the Series

A Warrants (the “Existing Warrants”) in the amount of 328,196

shares of Common Stock, reflective of the reverse stock split, underlying the Existing Warrants.

Pursuant to the Series A Amendment,

the holders of the Existing Warrants agreed to reduce the exercise price of their Existing Warrants from $ 87.60

per share to $ 6.50

Subsequent to the Series A Amendment, 315,805

of the Series A warrants were exercised and the Company received net proceeds of 1,954,547

(see Note 12).

SHARPS TECHNOLOGY, INC.

NOTES TO THE CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER

30, 2025 AND 2024

Stockholders’ Equity (continued)

On December 5, 2024, the Company, entered into

subscription agreements with certain institutional investors, pursuant to which the Company agreed to issue and sell to the investors

828 (pre-reverse – 248,430 ) shares (the “Shares”) of Common Stock, par value $ 0.0001 per share of the Company at a

price of $ 585 per share (pre-reverse -$ 1.95 ) for gross proceeds to the Company of $ 484,438 before deducting placement agent fees and

commissions of $ 84,671 with net proceeds, after reflecting par value, have been recorded in Additional Paid in Capital of $ 399,793 .

Shares issued in the offering were offered at-the-market under Nasdaq rules and pursuant to the Company’s Form 1-A (the “Offering

Statement”), initially filed by the Company with the Securities and Exchange Commission (the “SEC”) under the Securities

Act of 1933 (the “Securities Act”), as most recently amended on November 18, 2024, and qualified on December 3, 2024.

On September 23, 2024, as noted in Note 9, in

connection with the Securities Purchase Agreement and Note, the Company issued 864 (pre-reverses – 259,091) shares of unregistered

common stock.

The shares were subsequently registered by the Company with the Security and Exchange Commission.

On May 31 and June 13, 2024, the Company entered

into subscription agreements with certain institutional investors, pursuant to which the Company agreed to issue and sell to the investors

636 (pre-reverse - 190,773 ) shares (the “Shares”) of Common Stock, par value $ 0.0001 per share of the Company at a price

of $ 2,589 (pre-reverse -$ 8.63 ) and received gross proceeds to the Company of $ 1.6 M, before expenses to the placement agent and other

offering expenses of $ 298,000 with net proceeds, after reflecting par value, have been recorded in Additional Paid in Capital of $ 1,296,903 .

The shares issued in the offering were offered at-the-market under Nasdaq rules and pursuant to the Company’s Form 1-A (the “Offering

Statement”), initially filed by the Company with the Securities and Exchange Commission under the Securities Act of 1933, as amended

on May 21, 2024, and qualified on May 30, 2024.

On May 30, 2024, the Company offered warrant

inducements (the “Inducement Agreement”) to certain warrant holders (the “Warrant Holders”) which references

the warrants registered for sale under both the registration statements on Form S-1 (file No.

333-263715) and/or the registration statement

on Form S-1 (File No.

333-275011) (collectively, the “Registration Statements”) for up to a total of 1,666 (pre-reverses

- 499,932 ) warrants to purchase shares of the Company’s common stock, par value $ 0.0001 per share.

Pursuant to the anti-dilution

terms in the Inducement Agreement, the exercise price of the existing warrants was reduced from $ 4,224 (pre-reverse -$ 14.08 ) per share

to $ 2,178 (pre-reverse -$ 7.26 ) per share.

In addition, for each warrant that was exercised, as a result of the Inducement Agreement,

the Company agreed to issue the Warrant Holders unregistered warrants with an exercise price of $ 2,970 (pre-reverse - $ 9.90 ) per share

(“Inducement Warrants”).

In the aggregate, 869 (pre-reverses - 260,799 ) warrants were exercised as a result of the Inducement

Agreement and accordingly, 869 shares were issued.

The Company received gross proceeds of $ 1.9 M before expenses to the placement agent

and other expenses of $ 285,000 .

The net proceeds, after reflecting par value, has been recorded in Additional Paid in Capital of $ 978,955

and with respect to the Inducement Warrants, a liability under ASC 815 was recorded in the amount of $ 693,064 .

On September 29, 2023, the Company completed

two simultaneous offerings and received aggregate gross proceeds of approximately $ 5.6 million, before expenses to the placement agent

and other offering expenses of $ 716,000 .

The first offering, the securities purchase agreement offering (the

“Shelf Offering”) with institutional investors and the Company resulted in the Company receiving net proceeds from the

Shelf Offering and the sale of pre-funded warrants of approximately $ 2.5 million, includes the value of the pre-funded warrants recorded

in APIC, net of $ 362,000 in fees relating to the placement agent and other offering expenses.

The Shelf Offering was priced at the

market under Nasdaq rules.

The second offering, the securities purchase agreement offering (“Private

Placement”) with institutional investors and the Company received net proceeds from the Private Placement of approximately

$ 2.4 million, net of $ 354,000 in fees relating to the placement agent and other offering expense.

In connection with the Private

Placement, the Company issued:

(i) 391 (pre-reverse – 117,340 ) PIPE Shares (or PIPE Pre-Funded Warrants in lieu thereof) and

(ii) PIPE Warrants (non-trading) to purchase 1326 (pre-reverse - 397,727 ) shares of our common stock, at a combined purchase price

of $ 7,089 (pre-reverse -$ 23.63 ) per unit or $ 7,082 (pre-reverse - $ 23,606 ) per pre-funded unit.

The PIPE Warrants had a term of five

and one-half ( 5.5 ) years from the issuance date and were exercisable for one share of common stock at an exercise price, after effect

of the April 2025 and October 2024 reverse split, of $ 4,224 adjusted to $ 2,178 at May 30, 2024, based on anti-dilution terms in the

See Note 10 Warrants below for further adjustment.

The net proceeds, after reflecting par value, has been recorded in Additional

Paid in Capital of $ 1.6

million and with respect to the PIPE Warrants recorded as a

liability under ASC 815 of $ 985,204 .

The net proceeds, after reflecting par value, has been recorded

in Additional Paid in Capital of $ 1.6 million and with respect to the PIPE Warrants recorded as a liability under ASC 815 of $ 985,204 .

On October 16, 2023, the Company filed an S-1 (Resale) Registration Statement in connection with the Private Placement and on October

26, 2023 the S-1 went effective The PIPE Warrants were fully exercised in 2024.

TECHNOLOGY, INC.

TO THE CONSOLIDATED FINANCIAL STATEMENTS

THE THREE AND SIX MONTHS ENDED JUNE 30, 2025 AND 2024

SHARPS TECHNOLOGY, INC.

NOTES TO THE CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER

30, 2025 AND 2024

Stockholders’ Equity (continued)

February 3, 2023, the Company completed a securities purchase agreement (“Offering”) with institutional investors and received

net proceeds from the Offering of approximately $ 3.2 million, net of $ 600,000 in fees relating to the placement agent and other offering

The Offering was priced at the market under Nasdaq rules.

In connection with the Offering, the Company issued 341 (pre reverse

- 102,206 ) units at a purchase price of $ 11,154 (pre reverse - $ 37.18 ) per unit.

Each unit consisted of one share of common stock and

one non-tradable warrant (“Offering Warrants”) exercisable for one share of common stock at a price, after effect of the

reverse splits in April 2025 and October 2024, of $ 10,296 , adjusted to $ 4,224 at September 29, 2023 and to $ 2,178 at May 30, 2024, based

on anti-dilution terms in the warrants and a term of five years .

On February 3, 2023, the Company completed a

securities purchase agreement (“Offering”) with institutional investors and received net proceeds from the Offering of approximately

$ 3.2 million, net of $ 600,000 in fees relating to the placement agent and other offering expenses.

The Offering was priced at the market

under Nasdaq rules.

In connection with the Offering, the Company issued 341 (pre-reverse - 102,206 ) units at a purchase price of $ 11,154

(pre-reverse - $ 37.18 ) per unit.

Each unit consisted of one share of common stock and one non-tradable warrant (“Offering Warrants”)

exercisable for one share of common stock at a price, after effect of the reverse splits in April 2025 and October 2024, of $ 10,296 ,

adjusted to $ 4,224 at September 29, 2023 and to $ 2,178 at May 30, 2024, based on anti-dilution terms in the warrants and a term of five

See Note 10(f) for further adjustment.

The Offering Warrants have a term

of five years from the issuance date.

On February 13, 2023, the Company filed an S-1 (Resale) Registration Statement in connection with

the Offering and on April 14, 2023, an Amendment to the S-1 was filed and went effective.

April 13, 2022, the Company’s initial public offering (“IPO”) was declared effective by the SEC pursuant to which the

Company issued and sold an aggregate of 568 ( pre reverses - 170,454 ) units (“Units”), each consisting of one share of common

stock and two warrants, to purchase one share of common stock for each whole warrant , with an initial exercise price of $ 28,050 (pre

reverse -$ 93.50 ) per share, adjusted to and with the effect of reverse splits in April 2025 and October 2024, $ 10,296 at February 3,

2023 and to $ 4,224 at September 29, 2023 and to $ 2,178 at May 30, 2024, based on anti-dilution terms in the warrants, and a term of five

In addition, the Company granted Aegis Capital Corp., as underwriter a 45-day over-allotment option to purchase up to 15% of the

number of shares included in the units sold in the offering, and/or additional warrants equal to 15% of the number of Warrants included

in the units sold in the offering, in each case solely to cover over-allotments , which the Aegis Capital Corp.

partially exercised with

respect to 170 (pre reverse - 51,136 ) warrants on April 19, 2022.

Company’s common stock and warrants began trading on the Nasdaq Capital Market or Nasdaq on April 14, 2022.

The net proceeds from

the IPO, prior to payments of certain listing and professional fees were approximately $ 14.2 million.

The net proceeds, after reflecting

par value, has been recorded in Additional Paid in Capital of $ 9.0 million and with respect to the Warrants as a liability under ASC

815 of $ 5.2 M (See Note 10).

a) The Company allocated the proceeds of the January 2025 Offering based on the fair values for the Series A, Series B warrants and

Prefunded Warrants.

The Company determined the fair value of the Series A and Series B warrants at the Offering date using the Monte

Carlo pricing model and treated the valuation as a liability in consideration of the variable number of the issuer’s equity

shares in the warrant agreements.

The fair value of the Prefunded warrants, also recorded as liability, was based on market price of

the common shares.

The aggregate fair value at the Offering date was $ 110.0 M

and the excess of the fair value over the Offering proceeds of $ 18.2 M,

The Offering Warrants have a term of five years from the issuance date.

On February 13,

2023, the Company filed an S-1 (Resale) Registration Statement in connection with the Offering and on April 14, 2023, an Amendment to

the S-1 was filed and went effective.

On April 13, 2022, the Company’s initial

public offering (“IPO”) was declared effective by the SEC pursuant to which the Company issued and sold an aggregate of 568

(pre-reverses - 170,454 ) units (“Units”), each consisting of one share of common stock and two warrants, to purchase one

share of common stock for each whole warrant , with an initial exercise price of $ 28,050 (pre-reverse -$ 93.50 ) per share, adjusted to

and with the effect of reverse splits in April 2025 and October 2024, $ 10,296 at February 3, 2023 and to $ 4,224 at September 29, 2023

and to $ 2,178 at May 30, 2024, based on anti-dilution terms in the warrants, and a term of five years .

In addition, the Company granted

Aegis Capital Corp., as underwriter a 45-day over-allotment option to purchase up to 15% of the number of shares included in the units

sold in the offering, and/or additional warrants equal to 15% of the number of Warrants included in the units sold in the offering, in

each case solely to cover over-allotments , which the Aegis Capital Corp.

partially exercised with respect to 170 (pre-reverse - 51,136 )

warrants on April 19, 2022.

The Company’s common stock and warrants

began trading on the Nasdaq Capital Market or Nasdaq on April 14, 2022.

The net proceeds from the IPO, prior to payments of certain listing

and professional fees were approximately $ 14.2 million.

The net proceeds, after reflecting par value, has been recorded in Additional

Paid in Capital of $ 9.0 million and with respect to the Warrants as a liability under ASC 815 of $ 5.2 M (See Note 12).

a) In connection with the strategic advisory consulting agreement entered into on August 28, 2025, with

Sol Markets, a Cayman Islands exempt company, the Company issued warrants to purchase 6,321,367

shares of the Company’s Common Stock.

The warrants have an exercise price of $ 0.0001 ,

a ten-year term and were fully vested on issuance.

The FMV of the warrants recorded for the three and nine months ended September

30, 2025, which was computed based on the market value of the underlying common stock, was $ 101,331,513 (See Notes 12 and 15).

The Company allocated the proceeds of the January 2025 Offering based

on the fair values for the Series A, Series B warrants and Prefunded Warrants.

The Company determined the fair value of the Series A

and Series B warrants at the Offering date using the Monte Carlo pricing model and treated the valuation as a liability in

consideration of the variable number of the issuer’s equity shares in the warrant agreements.

The fair value of the Prefunded

warrants, also recorded as liability, was based on market price of the common shares.

The aggregate fair value at the Offering date

was $ 110.0 M and the excess

of the fair value over the Offering proceeds of $ 18.2 M,

in accordance with ASC 480 “Distinguishing Liabilities from Equity, was recorded as a FMV loss adjustment of $ 91.8 M

6 unchanged sentences

and increase to stockholders equity of $ 5.9 M.

During the three months ended June 30, 2025, 29,883 Series B warrants were exercised under the alternative cashless feature.

March 31, 2025, Fair Value was determined as follows:

During the three months and nine months ended September 30, 2025, 0

and 53,877 Series B warrants, respectively, were exercised under the alternative cashless feature.

At March 31, 2025, Fair Value was

determined as follows:

Series A at $ 8.52

( pre-reverse - $ 0.0284 )

using the Black Sholes valuation method and Series B at the contracted value for the alternative cashless value of $ 9.00

( pre – reverse - $ 0.03 ).

See Note 10 for the Black Sholes assumptions.

The remaining 916 (pre reverse - 275,000 ) Prefunded units were exercised prior to March 31, 2025 and the financial statement impact is included above.

Since the initial issuance of 54,762

(pre-reverse 16,428,571 )

Series B warrants, approximately 98% have been exercised under the alternative

cashless feature.

At June 30, 2025, 885

using the Black Scholes valuation method and Series B at the contracted value for the alternative cashless value of $ 9.00

( pre – reverse - $ 0.03 )

(See Note 12 for the Black Scholes assumptions)

The remaining 916 (pre-reverse - 275,000 ) Prefunded units were exercised

prior to March 31, 2025 and the financial statement impact is included above.

Since the initial issuance of 54,762 (pre-reverse 16,258,571 ) Series

B warrants, approximately 98% have been exercised under the alternative cashless feature.

At September 30, 2025, 5,307 (pre-reverse

265,650 ) Series B warrants remain outstanding.

TECHNOLOGY, INC.

TO THE CONSOLIDATED FINANCIAL STATEMENTS

THE THREE AND SIX MONTHS ENDED JUNE 30, 2025 AND 2024

As noted, as a result of the Series A Amendment, at September 30, 2025, the outstanding

12,391 Series A warrants no longer meet the liability classification under accordance with ASC 480 “Distinguishing Liabilities

from Equity”.

SHARPS TECHNOLOGY, INC.

NOTES TO THE CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER

30, 2025 AND 2024

Stockholders’ Equity (continued)

September 2024, the Company reduced the exercise price of the 767

(pre reverse – 230,091 )

outstanding warrants issued in February 2023 and September 2023 offerings (see below) to $ 2,178

In September 2024, the Company reduced the exercise price

of the 767 (pre-reverse – 230,091 ) outstanding warrants issued in February 2023 and September 2023 offerings (see below) to

$ 2,178 (pre-reverse - $ 7.26 ).

As noted below, all the February 2023 and September 2023 warrants are fully exercised.

connection with the Inducement Warrants in the second quarter of 2024, the Company issued 869 (pre reverse - 260,799 ) non-trading

Inducement Warrants as noted in Common Stock above.

The Inducement Warrants are classified as a liability based on ASC 815 and require

remeasurement at each reporting period.

The Inducement Warrants are recorded at the FMV, computed using the Black Scholes valuation

method and, recorded a FMV gain adjustment of $ 2,100 and $ 82,217 for the three and six months ended June 30, 2025.

For the three

and six months ended June 30, 2024, the Company recorded a FMV gain adjustment of $ 293,684 (See Note 10).

connection with an advisory agreement dated February 27, 2025, whereby the advisor and the Company agreed 72,094 warrants

would be issued May 5, 2025, for services rendered beyond a cash fee of $ 45,000 paid

at date of the agreement.

The warrants have an exercise price of $ 5.02 ,

a three-year term and were fully vested on issuance.

The FMV of the warrants recorded for the three and six months ended June 30,

2025, was computed using the Black Sholes valuation model was $ 260,566 .

In connection with the Inducement Warrants in the second quarter of

2024, the Company issued 869 (pre-reverse - 260,799 ) non-trading Inducement Warrants as noted in Common Stock above.

The Inducement

Warrants are classified as a liability based on ASC 815 and require remeasurement at each reporting period.

The Inducement Warrants

are recorded at the FMV, computed using the Black Scholes valuation method and, recorded a FMV gain adjustment of $ 496 and $ 82,525

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

For the three and nine months ended September 30, 2024, the Company recorded

a FMV gain adjustment of $ 293,684 (See Note 12).

In connection with an advisory agreement

dated February 27, 2025, whereby the advisor and the Company agreed 72,094 warrants would be issued May 5, 2025, for services rendered

beyond a cash fee of $ 45,000 paid at date of the agreement.

The warrants have an exercise price of $ 5.02 , a three-year term and were

fully vested on issuance.

The FMV of the warrants recorded for the three and nine months ended September 30, 2025, was computed using

the Black Scholes valuation model was $ 0 and $ 326,580 , respectively.

The assumptions for warrants were:

a) volatility of 139.593 %,

risk free interest rate of 3.71 %

dividend rate.

connection with an one-year advisory services arrangement with the above third-party entered into in April 2023, the Company issued

an aggregate of 95 (pre reverse - 28,636 ) warrants over the one-year term, at an exercise price of $ 10,296 (pre reverse -$ 34.32 )

risk free interest rate of 3.71 % and 0 % dividend rate.

In connection with an one-year advisory

services arrangement with the above third-party entered into in April 2023, the Company issued an aggregate of 95

(pre-reverse - 28,636 )

warrants over the one-year term, at an exercise price of $ 10,296

(pre-reverse -$ 34.32 )

The warrants had a three-year term and were fully vested on issuance.

The Company had issued zero warrants

during the three months ended June 30, 2024, and 20 (pre-reverse 6,136 ) during the six months ended June 30, 2024.

The FMV of the warrants recorded for the six months ended June 30, 2024, computed using the Black Sholes valuation model was $ 8,590 .

The assumptions for the six months ended June 30, 2024,

a) volatility of 33.46 % to 81.62 %, three-year term, risk free interest rate of 4.20 % to 4.21 % and 0 % dividend rate.

holder forfeited the warrants on June 1, 2025 for no further consideration.

connection with the Private Placement in September 2023, the Company issued 1,326 (pre-reverse - 397,727 ) non-trading PIPE Warrants

as a component of the Unit as noted in Common Stock above.

The PIPE Warrants were recorded at the FMV, computed using the Black Sholes

valuation method.

The PIPE Warrant’s liability required remeasurement at each reporting period.

The PIPE Warrants were classified

as a liability based on ASC 815.

For the three and six months ended June 30, 2024, the Company recorded a FMV gain adjustment of

The Company had issued zero

warrants during the three months ended September 30, 2024, and 5,909

(pre-reverse - 130,000 )

during the nine months ended September 30, 2024.

The FMV of the warrants recorded for the nine months ended September 30, 2024,

computed using the Black Scholes valuation model was $ 8,590 .

The assumptions for the nine months ended September 30, 2024, were:

a) volatility of 33.46 %

three-year term, risk free interest rate of 4.20 %

dividend rate.

The warrant holder forfeited the warrants on June 1, 2025 for no further consideration.

In connection with the Private Placement in September 2023, the

Company issued 1,326

(pre-reverse - 397,727 )

non-trading PIPE Warrants as a component of the Unit as noted in Common Stock above.

The PIPE Warrants were recorded at the FMV,

computed using the Black Scholes valuation method.

The PIPE Warrant’s liability required remeasurement at each reporting

The PIPE Warrants were classified as a liability based on ASC 815.

For the three and nine months ended September 30, 2024,

the Company recorded a FMV gain (loss) adjustment of $ ( 181,163 ) ,

including the modification charge of $ ( 148,091 ) and

The warrants were fully exercised in 2024.

connection with the Offering in February 2023, the Company issued 341 (pre-reverse - 102,206 ) non-trading warrants Offering Warrants

as a component of the Unit as noted in Common Stock above.

The Offering Warrant’s liability required remeasurement at each

reporting period.

The Offering Warrants were recorded at the FMV, computed using the Black Sholes valuation method.

Warrants are classified as a liability based on ASC 815.

For the three and six months ended June 30, 2024 the Company recorded FMV

gain adjustments of $ 139,844 , including the modification charge of 146,028 referred to in Note 10 and $ 221,582 , respectively.

warrants were fully exercised in 2024.

connection with the IPO in April 2022, the Company issued 1,136 (pre-reverse - 340,900 ) warrants (Trading Warrants) as a component

of the Units and 170 (pre-reverse- 51,136 ) warrants to the underwriter (Overallotment Warrants), as noted in Common Stock above.

The Trading and Overallotment Warrants were recorded at the FMV, being the trading price of the warrants, on the IPO effective date

and the Warrants are classified as a Liability based on ASC 815.

The Warrant liability requires remeasurement at each reporting period.

During the three and six months ended June 30, 2025, the Company recorded a FMV gain adjustment of $ 3,842 and $ 15,643 , respectively

(See Note 10).

During the three and six months ended June 30, 2024, the Company recorded an FMV gain adjustment of $ 60,375 and $ 491,625 ,

including a modification charge of $ ( 637,316 ) ,

respectively.

TECHNOLOGY, INC.

TO THE CONSOLIDATED FINANCIAL STATEMENTS

THE THREE AND SIX MONTHS ENDED JUNE 30, 2025 AND 2024

The warrants were fully exercised in 2024.

In connection with the Offering in February 2023, the Company issued

341 (pre-reverse - 102,206 ) non-trading warrants Offering Warrants as a component of the Unit as noted in Common Stock above.

Offering Warrant’s liability required remeasurement at each reporting period.

The Offering Warrants were recorded at the FMV,

computed using the Black Scholes valuation method.

The Offering Warrants are classified as a liability based on ASC 815.

For the three

and nine months ended September 30, 2024 the Company recorded FMV gain adjustments of $ 7,563 , including the modification charge of

7,612 referred to in Note 12 and $ 214,019 , respectively The warrants were fully exercised in 2024.

In connection with the IPO in April 2022, the Company issued 1,136

(pre-reverse - 340,900 ) warrants (Trading Warrants) as a component of the Units and 170 (pre-reverse- 51,136 ) warrants to the underwriter

(Overallotment Warrants), as noted in Common Stock above.

The Trading and Overallotment Warrants were recorded at the FMV, being

the trading price of the warrants, on the IPO effective date and the Warrants are classified as a Liability based on ASC 815.

Warrant liability requires remeasurement at each reporting period.

During the three and nine months ended September 30, 2025, the

Company recorded a FMV gain adjustment of $ 26 and FMV loss of $ 15,669 , respectively (See Note 12).

During the three and nine

months ended September 30, 2024, the Company recorded a FMV gain adjustment of $ 198,375 and $ 690,001 , respectively.

SHARPS TECHNOLOGY, INC.

NOTES TO THE CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER

30, 2025 AND 2024

Stockholders’ Equity (continued)

Company has issued 36 (pre-reverse – 10,695 ) Warrants (“Note Warrants”) to the Purchasers of the Notes on April

The Note Warrants have an exercise price of $ 28,050 ( pre-reverse - $ 93.50 ) and a term of five years.

During the three

and six months ended June 30, 2025, the Company recorded a FMV gain of $ 105 and $ 427 , respectively (See Note 10).

During the three

and six months ended June 30, 2024, the Company recorded a FMV gain of $ 1,647 and $ 13,412 , respectively.

The underwriter received 28 (pre reverse - 8,523 ) warrants in connection with the IPO for a nominal cost of $ 11,250 .

have an exercise price of $ 35,112 (Pre-reverse - $ 117.04 ) and are exercisable after October 9, 2022.

The FMV at the date of issuance

was $ 228,750 computed using the Black Sholes valuation model with the following assumptions:

a) volatility of 93.47 %, five-year term,

risk free interest rate 2.77 % and 0 % dividend rate.

These warrants were recorded in Equity at the estimated FMV and classified as

additional issuance costs.

The Company has issued 36 (pre-reverse – 10,695 ) Warrants (“Note

Warrants”) to the Purchasers of the Notes on April 19, 2022.

The Note Warrants have an exercise price of $ 28,050 (pre-reverse

- $ 93.50 ) and a term of five years.

During the three and nine months ended September 30, 2025, the Company recorded a FMV gain of

$ 1 and 427 , respectively (See Note 12).

During the three and nine months ended September 30, 2024, the Company recorded

a FMV gain of $ 5,411 and $ 18,822 , respectively.

The underwriter received 28 (pre-reverse - 8,523 ) warrants in connection

with the IPO for a nominal cost of $ 11,250 .

The Warrants have an exercise price of $ 35,112 (Pre-reverse - $ 117.04 ) and are exercisable

after October 9, 2022.

The FMV at the date of issuance was $ 228,750 computed using the Black Scholes valuation model with the following

a) volatility of 93.47 %, five-year term, risk free interest rate 2.77 % and 0 % dividend rate.

These warrants were recorded

in Equity at the estimated FMV and classified as additional issuance costs.

Preferred Stock

February 2018, the Company Board of Directors issued one share of Series A Preferred Stock to Alan Blackman, the Company’s co-founder

and Director.

The Series A Preferred Stock entitled the holder to vote on any matters related to the election of directors.

A Preferred Stock had no right to dividends, or distributions in the event of a liquidation and is not convertible into common stock.

The two year provision after the IPO that if the price per share was more than 500% of the initial offering price per Unit in the IPO,

the Series A Preferred Stock, as in effect upon completion of the IPO, will entitle the holder to 10 % of the total purchase price was

not met and no longer in effect as of April 2024.

connection with final settlement with Mr.

Blackman on August 2024, the Series A Preferred Stock were cancelled and forfeited without

any further consideration.

The Series A Preferred was returned to the status of an authorized but unissued share of preferred stock of

the Company (See Note 15).

Warrant Liability

noted above, the 2025 Series A and 2025 Series B Warrants issued in connection with the 2025 Offering were accounted for as liabilities

in accordance with ASC 815-40 and are presented as a Warrant liability in the accompanying consolidated balance sheet.

The 2025 Series

A and B warrants, were measured at fair value at inception.

As of March 31, 2025, and thereafter, the Series A will be remeasured based

on the Black Scholes method, with changes in fair value presented within the consolidated statement of operations.

In February 2018, the Company Board of Directors

issued one share of Series A Preferred Stock to Alan Blackman, the Company’s co-founder and Director.

The Series A Preferred Stock

entitled the holder to vote on any matters related to the election of directors.

The Series A Preferred Stock had no right to dividends,

or distributions in the event of a liquidation and is not convertible into common stock.

The two year provision after the IPO that if

the price per share was more than 500% of the initial offering price per Unit in the IPO, the Series A Preferred Stock, as in effect

upon completion of the IPO, will entitle the holder to 10 % of the total purchase price was not met and no longer in effect as of April

In connection with final settlement with Mr.

Blackman on August 2024, the Series A Preferred Stock were cancelled and forfeited without any further consideration.

The Series A Preferred

was returned to the status of an authorized but unissued share of preferred stock of the Company (See Note 15).

On July 15, 2025, the Company executed a Subscription

and Investment Agreement (the “Subscription Agreement”) with Paul Danner (“Subscriber”), the Company’s

Executive Chairperson, whereby the Subscriber purchased five (5) shares of the Company’s Series B Preferred Stock, par value $ .0001

per share (“Securities”), which Securities shall have the rights, preferences, privileges and restrictions set forth in the

Certificate of Designation.

Subscriber hereby acknowledged and agreed to the entire terms of the Certificate of Designation, including,

without limitation, the voting rights, the restrictions on transfer of the Securities and the redemption of the Securities pursuant of

the Certificate of Designation.

The purchase price paid by the Subscriber to the Company was $ 20.00 per share.

outstanding shares of Preferred Stock were redeemed in whole automatically upon the effectiveness of the amendment to the articles of

incorporation implementing an increase in the number of authorized shares of common stock of the Company.

The following denotes, as of September 30, 2025,

the Warrants outstanding and related Warrant Liability for warrants accounted for under ASC 480 “Distinguishing Liabilities from

As noted above, the 2025 Series A and 2025

Series B Warrants issued in connection with the 2025 Offering were accounted for as liabilities in accordance with ASC 815-40 and

are presented as a Warrant liability in the accompanying condensed consolidated balance sheet.

The 2025 Series A and B warrants,

were measured at fair value at inception.

As of March 31, 2025, and thereafter, the Series A will be remeasured based on the Black

Scholes method, with changes in fair value presented within the condensed consolidated statement of operations.

The Black Scholes

Option-Pricing model used the following assumptions for the six months ended June 30, 2025 (See Note 8).

Option-Pricing model, which was required through August 25, 2025 the date of the Series A Amendment agreement, used the following

assumptions for the 2025 period outstanding (See Note 10).

of Fair Value of Warrant

5 unchanged sentences

Dividend rate

The Warrants, arising prior to 2025,

accounted for as liabilities in accordance with ASC 815-40 are presented as a Warrant liability in the accompanying June 30, 2025 condensed

SHARPS TECHNOLOGY, INC.

NOTES TO THE CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER

30, 2025 AND 2024

Warrants (continued)

The Warrants, arising prior to 2025, accounted

for as liabilities in accordance with ASC 815-40 are presented as a Warrant liability in the accompanying September 30, 2025 condensed

consolidated balance sheet.

The warrant liabilities are measured at fair value at inception and on a recurring basis, with changes in

fair value presented within the consolidated statement of operations, The non-trading warrants, related to the February 2023, September

2023 and May 2024 offerings, were valued using the Black-Scholes pricing model.

The assumptions as of the six months ended June 30, 2025,

related to the May 2024 warrants only since the February and September 2023 warrants were fully exercised by December 31, 2024, and 2024

were as follows:

TECHNOLOGY, INC.

TO THE CONSOLIDATED FINANCIAL STATEMENTS

THE THREE AND SIX MONTHS ENDED JUNE 30, 2025 AND 2024

Warrant Liability (continued)

fair value presented within the consolidated statement of operations, The non-trading warrants, related to the May 2024 offering, were

valued using the Black-Scholes pricing model.

The assumptions as of the nine months ended September 30, 2025, relate to the May 2024

warrants were as follows (See Note 10):

September 30,

Expected term (years)

6 unchanged sentences

Dividend rate

Warrant liability at June 30, 2025 and December 31, 2024 consists of the following:

The Warrant liability at September 30, 2025 and

December 31, 2024 consists of the following:

Schedule of Warrant Liability

2 unchanged sentences

Offering Warrants – May 2024

Offering Warrants– January 2025 – Series A

Offering Warrants – January 2025 – Series B

Total Warrant Liability

Warrants outstanding at June 30, 2025 and December 31, 2024, reflective of the reverse split that occurred on April 28, 2025, were

The Warrants outstanding at September 30, 2025

and December 31, 2024, reflective of the reverse split that occurred on April 28, 2025, were as follows:

Schedule of Warrant Outstanding

September 30,

Trading and Overallotment Warrants

1 unchanged sentence

Offering Warrants – May 2024

Offering Warrants – January 2025 – Series A

Offering Warrants -Series A

Offering Warrants – January 2025 – Series B

Prefunded – cash and in kind

Cash and stapled warrants

Warrants issued to strategic advisors

Warrants issued for services arrangement

Total Warrants Outstanding

the three and six months ended June 30, 2025 the FMV gain adjustment, which is reflected in the FMV adjustment on Warrants in the

Condensed Consolidated Statements of Operations was $ 6,468,811

For the three and nine months ended September

30, 2025 the FMV gain adjustment, which is reflected in the FMV adjustment on Warrants in the Condensed Consolidated Statements of Operations

was $ 1,208,142 and $ 12,295,842 , respectively, including the net effect for the loss on the January 2025 Offering date (See Note 10) and

remeasurement adjustments based on the fair market values as of March 31, 2025, June 30, 2025, and September 30, 2025.

Further, in the

three months ended September 30, 2025 it includes a modification charge of $ 642,805 in connection with the Inducement Agreement relating

to the Series A warrants (See Note 10).

For the three and nine months ended

September 30, 2024, the FMV gain adjustment, which is reflected in the FMV adjustment on Warrants in the Condensed Consolidated

Statements of Operations was $ 416,560

and 2,088,747

respectively, including the net effect for the loss on the January 2025 Offering date (See Note 8) and remeasurement adjustments

based on the fair market values as of March 31, 2025 and June 30, 2025.

For the three and six ended June 30, 2024, the FMV

gain adjustment, which is reflected in the FMV adjustment on Warrants in the Condensed Consolidated Statements of Operations was $ 822,130 ,

which includes the modification charge of $ 635,253 for the warrants exercised in connection with the Inducement Agreements and $ 1,672,187

which includes the modification charge of $ 155,703

for the warrants exercised in connection with the Inducement Agreements and $ 790,956

respectively (See Note 10).

SHARPS TECHNOLOGY, INC.

NOTES TO THE CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER

30, 2025 AND 2024

Stock Options

December 19, 2024, the Company’s Shareholders approved and the Board of Directors adopted the 2024 Equity Incentive Plan (the “2024

Plan”), to provide for the issuance of up to 883 (pre reverse – 260,000 ) options and/or shares of restricted stock be available

for issuance to officers, directors, employees and consultants.

January 24, 2023, the Company’s Board of Directors initially adopted the 2023 Equity Incentive Plan (the “2023 Plan”),

to provide for the issuance of up to 212 (pre -reverse - 63,636 ) options and/or shares of restricted stock be available for issuance

to officers, directors, employees and consultants.

The 2023 Plan was subsequently updated to provide for the issuance of up to 530 (pre-reverse

– 159,090 ) options and/or shares of restricted stock.

On August 22, 2025, subsequent to the Board approval

on July 15, 2025, the shareholders approved the Sharps Technology, Inc.

2025 Equity Incentive Plan (the “2025 Plan”), to

provide for the issuance of up to 2,000,000 options and/or shares of restricted stock be available for issuance to officers, directors,

employees and consultants.

On December 19, 2024, the Company’s Shareholders

approved and the Board of Directors adopted the 2024 Equity Incentive Plan (the “2024 Plan”), to provide for the issuance

of up to 883 (pre-reverse – 260,000 ) options and/or shares of restricted stock be available for issuance to officers, directors,

employees and consultants.

On January 24, 2023, the Company’s Board

of Directors initially adopted the 2023 Equity Incentive Plan (the “2023 Plan”), to provide for the issuance of up to 212

(pre -reverse - 63,636 ) options and/or shares of restricted stock be available for issuance to officers, directors, employees and consultants.

The 2023 Plan was subsequently updated to provide for the issuance of up to 530 (pre-reverse – 159,090 ) options and/or shares of

restricted stock.

The 2023 Plan was approved by shareholders at the annual meeting

TECHNOLOGY, INC.

TO THE CONSOLIDATED FINANCIAL STATEMENTS

THE THREE AND SIX MONTHS ENDED JUNE 30, 2025 AND 2024

Stock Options (continued)

summary of options granted and outstanding is presented below and the table following reflecting effect of reverse split of 1 for 300

on April 28, 2025:

A summary of options granted and outstanding

is presented below and the table following reflecting effect of reverse split of 1 for 300 on April 28, 2025:

of Stock Options Granted and Outstanding

Weighted Average Exercise Price

September 30,

Weighted Average

Exercise Price

Outstanding at Beginning of year

2 unchanged sentences

Exercisable at end of period

of June 30, 2025 and December 31, 2024, there was $ 71,174 and $ 134,807 , respectively, of unrecognized stock-based compensation related

to unvested stock options with a weighted average fair value of $ 1,608 (pre reverse - $ 5.36 and $ 3,003 (pre reverse - $ 10.01 ) per share,

respectively, which is expected to be recognized over a weighted-average period of ten months as of June 30, 2025.

following table summarizes information about options outstanding at June 30, 2025:

As of September 30, 2025 and December 31, 2024,

there was $ 6,583,112 and $ 134,807 , respectively, of unrecognized stock-based compensation related to unvested stock options with a weighted

average fair value of $ 5.54 and $ 3,003 per share, respectively, which is expected to be recognized over a weighted-average period

of nine months as of September 30, 2025.

SHARPS TECHNOLOGY, INC.

NOTES TO THE CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER

30, 2025 AND 2024

Stock Options (continued)

The following table summarizes information about

options outstanding at September 30, 2025:

of Information about Options Outstanding

9 unchanged sentences

$ 7,986 to 9,174

June 30, 2025, the stock options outstanding and the options exercisable have exercise prices that exceed the stock market price at June

30, 2025 and as such, no intrinsic value exists.

Intrinsic value is defined as the difference between the exercise price of the options

and the market price of the Company’s common stock.

the three and six months ended June 30, 2025, the Company recognized stock-based compensation expense of $ 27,543 and $ 70,290 , which was

recorded in selling, general and administrative expense.

the three and six months ended June 30, 2024, the Company recognized stock-based compensation expense of $ 201,918

and $ 319,715

respectively, of which $ 316,374

For the three and nine months ended September

30, 2025, the Company recognized stock-based compensation expense of $ 3,302,497 and $ 3,372,787 which was recorded in selling, general

and administrative expense.

For the three and nine months ended September

30, 2024, the Company recognized stock-based compensation expense of $ 116,193 and $ 435,908 respectively, of which $ 432,567 and $ 3,341

was recorded in selling, general and administrative and research and development expenses, respectively.

TECHNOLOGY, INC.

TO THE CONSOLIDATED FINANCIAL STATEMENTS

THE THREE AND SIX MONTHS ENDED JUNE 30, 2025 AND 2024

the end of each interim reporting period, the Company estimates its effective tax rate expected to be applied for the full year.

This estimate is used to determine the income tax provision or benefit on a year-to-date basis and may change in subsequent interim

Accordingly, the Company’s effective tax rate for the three and six months ended June 30, 2025 and 2024 was 0 %

and 0 %, respectively.

The Company’s effective tax rates for both periods were affected primarily by permanent differences between financial

reporting and tax accounting for warrants, as well as a full valuation allowance on domestic net deferred tax assets.

utilization of the U.S.

net operating losses may be subject to substantial limitations in the event of a change of ownership under

the provisions of Section 382 of the Internal Revenue Code.

The Company has not performed an analysis, but the potential impact of

any limitation would not be material to the financial statements due to the fact that the respective deferred taxes assets are fully

offset by a valuation allowance.

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S.

The OBBBA includes

significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to

the international tax framework and the restoration of favorable tax treatment for certain business provisions.

The legislation has multiple

effective dates, with certain provisions effective in 2025 and others implemented through 2027.

We are currently assessing its impact

on our consolidated financial statements.

At the end of each interim reporting period,

the Company estimates its effective tax rate expected to be applied for the full year.

This estimate is used to determine the income

tax provision or benefit on a year-to-date basis and may change in subsequent interim periods.

Accordingly, the Company’s effective

tax rate for the three and nine months ended September 30, 2025 and 2024 was 0 % and 0 %, respectively.

The Company’s effective tax

rates for both periods were affected primarily by permanent differences between financial reporting and tax accounting for warrants,

as well as a full valuation allowance on domestic net deferred tax assets.

In addition, utilization of the U.S.

net operating losses

may be subject to substantial limitations in the event of a change of ownership under the provisions of Section 382 of the Internal Revenue

The Company has not performed an analysis, but the potential impact of any limitation would not be material to the financial statements

due to the fact that the respective deferred tax assets are fully offset by a valuation allowance.

On July 4, 2025, the One Big Beautiful Bill Act

(“OBBBA”) was enacted in the U.S.

The OBBBA includes significant provisions, such as the permanent extension of certain expiring

provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment

for certain business provisions.

The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented

through 2027.

We are currently assessing its impact on our consolidated financial statements.

Related Party Transactions and Balances

of June 30, 2025 and December 31, 2024, accounts payable and accrued liabilities include $ 22,000 and $ 99,500 , respectively, payable to

officers and directors of the Company.

The amounts are unsecured, non-interest bearing and are due on demand (See Note 15).

As of September 30, 2025 and December 31, 2024,

accounts payable and accrued liabilities include $ 106,798 and $ 99,500 , respectively, payable to officers and directors of the Company.

The amounts are unsecured, non-interest bearing and are due on demand.

Consulting services provided by Sol Edge

Limited (“Consultant”) during the three and nine months ended September 30, 2025 was $ 892,000 .

At September 30, 2025, the Company recorded a prepaid expense of $ 9.8 M

relating the annual payment under the Consulting Agreement (See Notes 3 and 17).

In connection with a strategic advisory

consulting agreement entered into on August 28, 2025, with Sol Markets, (the “Strategic Advisor”) a related party, the

Company issued warrants to purchase 6,321,367 shares of the Company’s Common Stock.

The FMV of the warrants recorded for the

three and nine months ended September 30, 2025, which was computed based on the market value of the underlying common stock, was

$ 101,331,513 (See Note 10).

Both the Consultant and the Strategic Advisor

are wholly-owned and controlled by James Zhang, the brother of Alice Zhang, our Chief Investment Officer and director.

Fair Value Measurements

Company’s financial instruments include cash, accounts payable, notes payable and warrant liability.

Cash and warrant liability

are measured at fair value.

Accounts payable and notes payable are measured at amortized cost and approximates fair value due to their

short duration and market rate for similar instruments, respectively.

of June 30, 2025, the following financial assets and liabilities were measured at fair value on a recurring basis presented on the Company’s

condensed consolidated balance sheet:

The Company’s financial instruments include

cash, digital assets, accounts payable, loans and notes payable and warrant liability.

Cash, digital assets and warrant liability are

measured at fair value.

Accounts payable and loans and notes payable are measured at amortized cost and approximate fair value due to

their short duration and market rate for similar instruments, respectively.

SHARPS TECHNOLOGY, INC.

NOTES TO THE CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER

30, 2025 AND 2024

Fair Value Measurements (continued)

As of September 30, 2025, the following financial

assets and liabilities were measured at fair value on a recurring basis presented on the Company’s condensed consolidated balance

of Assets and Liabilities Measured at Fair Value on Recurring Basis

Fair Value Measurements Using

Derivative assets, net

Digital assets

Total assets measured at fair value

Derivative liability, net

Warrant liability

Total liabilities measured at fair value

TECHNOLOGY, INC.

TO THE CONSOLIDATED FINANCIAL STATEMENTS

THE THREE AND SIX MONTHS ENDED JUNE 30, 2025 AND 2024

Fair Value Measurements (continued)

of December 31, 2024, the following financial assets and liabilities were measured at fair value on a recurring basis presented on the

Company’s condensed consolidated balance sheet:

As of December 31, 2024, the following financial

assets and liabilities were measured at fair value on a recurring basis presented on the Company’s condensed consolidated balance

Fair Value Measurements Using

3 unchanged sentences

Commitments and Contingencies

Assets and Other

June 30, 2025, the Company had outstanding orders to purchase equipment, molds and other assets for $ 4.7 M of which $ 1.7 M is within Other

Assets and the balance to be incurred and paid upon contract terms.

Fixed Assets and Other

At September 30, 2025, the Company had outstanding orders to purchase manufacturing

equipment, including injection molds, with a total remaining balance of $ 1.7 M.

The Company is in the process of negotiating either the transfer of the remaining

purchase obligations to a third party, or otherwise cancellation of such outstanding orders.

Contingencies

each reporting period, the Company evaluates whether or not a potential loss amount or a potential range of loss is probable and reasonably

estimable under the provisions of the authoritative guidance that addresses accounting for contingencies.

July 10, 2024, Barry Berler (“Berler”), a co-founder and former Chief Technology Officer of the Company, commenced a lawsuit

in the United States District Court for the Eastern District of New York, Barry Berler v.

At each reporting period,

the Company evaluates whether or not a potential loss amount or a potential range of loss is probable and reasonably estimable under

the provisions of the authoritative guidance that addresses accounting for contingencies.

SHARPS TECHNOLOGY, INC.

and Alan Blackman,

NOTES TO THE CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER

30, 2025 AND 2024

Commitments and Contingencies (continued)

On July 10, 2024, Barry Berler

(“Berler”), a co-founder and former Chief Technology Officer of the Company, commenced a lawsuit in the United States District

Court for the Eastern District of New York, Barry Berler v.

Sharps Technology, Inc.

and Alan Blackman, Case No.

2:24-cv-04787.

In this case, Berler asserts (i) claims for damages of an aggregate of $ 456,000

for defendants’ alleged (1)

breach of a consulting agreement with the Company (the “Consulting Agreement”) in the amount of $52,500, (2) failure to pay

a bonus with a target of $216,000 under the Consulting Agreement, (3) $187,500, representing 50% of the severance payment paid by the

Company to Mr.

Blackman, the Company’s co-founder and former Chief Operating Officer and Co-Chairman (ii) a declaration that Berler

is the rightful owner of 50% of the Company’s Series A Preferred Stock (which preferred stock is no longer outstanding)

and (iii) an injunction barring Blackman from voting the Preferred

case, Berler asserts (i) claims for damages of an aggregate of $ 456,000 for defendants’ alleged (1) breach of a consulting agreement

with the Company (the “Consulting Agreement”) in the amount of $52,500, (2) failure to pay a bonus with a target of $216,000

under the Consulting Agreement, (3) $187,500, representing 50% of the severance payment paid by the Company to Mr.

Blackman, the Company’s

co-founder and former Chief Operating Officer and Co-Chairman (ii) a declaration that Berler is the rightful owner of 50% of the Company’s

Series A Preferred Stock (which preferred stock is no longer outstanding) and (iii) an injunction barring Blackman from voting the Preferred

Stock and from transferring the Preferred Stock to the Company.

6 unchanged sentences

previously paid to Berler.

On February 27, 2025 the Company filed an amended answer, counterclaims and third-party claims against

Berler, Plastomold Industries Ltd.

On February 27, 2025 the Company filed an amended answer, counterclaims and third-party claims against Berler,

Plastomold Industries Ltd.

(“Plastomold”), Plasto Design Ltd and Plasto Design Solutions.

This case is in the discovery

TECHNOLOGY, INC.

TO THE CONSOLIDATED FINANCIAL STATEMENTS

THE THREE AND SIX MONTHS ENDED JUNE 30, 2025 AND 2024

Commitments and Contingencies (continued)

June l7, 2024, Berler filed a demand for arbitration and statement of claim under the commercial arbitration rules of the American

Arbitration Association (“AAA”) against the Company asserting claims for payment of $ 500,000

plus interest, under the Company’s royalty agreement with Berler, as amended, rescission thereof and reversion to Berler of

the intellectual property rights subject thereto.

The Company believes that Berler’s claims are without merit and intends to

defend itself vigorously in connection with these claims.

The Company filed an answer with counterclaims.

This proceeding is in the discovery stage.

April 3, 2024, Plastomold commenced a lawsuit against the Company in the United States District Court for the Eastern District of New

York, Plastomold Industries Ltd v.

On June l7, 2024, Berler

filed a demand for arbitration and statement of claim under the commercial arbitration rules of the American Arbitration Association

(“AAA”) against the Company asserting claims for payment of $ 500,000 plus interest, under the Company’s royalty agreement

with Berler, as amended, rescission thereof and reversion to Berler of the intellectual property rights subject thereto.

believes that Berler’s claims are without merit and intends to defend itself vigorously in connection with these claims.

filed an answer with counterclaims.

On April 3, 2024,

Plastomold commenced a lawsuit against the Company in the United States District Court for the Eastern District of New York,

Plastomold Industries Ltd v.

Sharps Technology, Inc., Case No.

2:24-CV-02580, asserting claims for damages in the amount of $ 1.762

million for alleged (1) failure to pay invoices, of which approximately $1 million would relate to a maintenance agreement for units

allegedly manufactured and sold using machinery that was defective and has never successfully produced any saleable products, (2) breach

of the implied covenant of good faith and fair dealing, (3) unjust enrichment, and (4) conversion.

Plastomold asserts it provided certain

products and services to the Company for which its invoices were not fully paid.

The Company believes that Plastomold’s claims

are without merit and intends to defend itself vigorously and no amounts have been reserved at this point .

On June 3, 2024, the Company

filed an answer and affirmative defenses and counterclaim, which counterclaim is for damages that the Company believes would exceed the

claims asserted by Plastomold, based on the insufficiency of Plastomold’s services and the results thereof, including the failure

to provide machinery capable of reliably manufacturing the designated products in compliance with design specifications and functionality

requirements, and with respect to which test results failed.

This proceeding is in the discovery stage.

connection with the purchase of certain intellectual property in July 2017, Barry Berler and Alan Blackman entered into a royalty agreement

which provides that Barry Berler will be entitled to a royalty of four percent ( 4 %) of net sales derived from the use, sale, lease, rent

and export of products related to the intellectual property.

The royalty continues until the patent expires or is no longer used in the

Company’s product.

The royalty agreement was assumed by the Company in December 2017.

September 2018, the Royalty Agreement was amended to reduce the royalty to 2 % and further provided for a single payment of $ 500,000 to

Barry Berler within three years in return for cancellation of all further royalty obligations of the Company.

In May 2019, the Royalty

Agreement was further amended to change the payment date to on or before May 31, 2021 or during the term of the amended Royalty Agreement

should the Company be acquired or a controlling interest be acquired.

The Company has not made the aforementioned payment or incur any

change in control as such the 2 % royalty remains in place.

August 1, 2022, the Company cancelled the consulting agreement with Alan Blackman, Co- Chairman and Chief Operating Officer and entered

into an Employment Agreement.

The Company terminated Mr.

Blackman’s Employment Agreement effective May 1, 2023.

Blackman continued

to serve as the Co-Chairman and a member of the Board of Directors.

Subsequent to June 30, 2023, the Company and Mr.

Blackman entered

into a separation agreement whereby, Mr.

Blackman would be paid severance payments of approximately $ 346,000 plus medical benefits over

thirteen months, which was recorded as an expense and an accrued expense as of June 30, 2023 The severance payments were fully paid by

August 31, 2024.

Further, all unvested options were fully vested and the Company recorded a charge of $ 60,000 in 2023.

In connection

with the separation agreement, Mr.

Blackman no longer served as Co-Chairman or Board member and had agreed to vote his Series A Preferred

Stock in favor of the election, reelection, and/or designation of each individual nominated to serve as a director on the Board of Director

as shall be identified in an applicable proxy statement filed by the Company for such election of directors.

Once the payments due Mr.

Blackman were fully paid, the Series A Preferred Stock were deemed immediately cancelled and forfeited and without further consideration.

The Series A Preferred has been returned to the status of an authorized but unissued share of preferred stock of the Company.

TECHNOLOGY, INC.

TO THE CONSOLIDATED FINANCIAL STATEMENTS

THE THREE AND SIX MONTHS ENDED JUNE 30, 2025 AND 2024

million for alleged (1)

failure to pay invoices, of which approximately $1 million would relate to a maintenance agreement for units allegedly manufactured

and sold using machinery that was defective and has never successfully produced any saleable products, (2) breach of the implied

covenant of good faith and fair dealing, (3) unjust enrichment, and (4) conversion.

Plastomold asserts it provided certain products

and services to the Company for which its invoices were not fully paid.

The Company believes that Plastomold’s claims are

without merit and intends to defend itself vigorously, and no amounts have been reserved at this point.

On June 3, 2024, the

Company filed an answer and affirmative defenses and counterclaim, which counterclaim is for damages that the Company believes would

exceed the claims asserted by Plastomold, based on the insufficiency of Plastomold’s services and the results thereof,

including the failure to provide machinery capable of reliably manufacturing the designated products in compliance with design

specifications and functionality requirements, and with respect to which test results failed.

21, 2025, the Company entered into a settlement term sheet (the “Settlement Term Sheet”) with Barry Berler and Plastomold

Industries Ltd (“Plastomold”), collectively, the Parties, to settle the outstanding litigation as referenced in the Company’s

latest quarterly report on Form 10-Q for the quarterly period ended June 30, 2025, and other SEC filings ( See Note 19 - Settlement

of Outstanding Litigations and Spinoff of Hungarian Subsidiary).

Royalty Agreement

In connection with the purchase of certain

intellectual property in July 2017, Barry Berler and Alan Blackman entered into a royalty agreement which provides that Barry Berler

will be entitled to a royalty of four percent ( 4 %)

of net sales derived from the use, sale, lease, rent and export of products related to the intellectual property.

continues until the patent expires or is no longer used in the Company’s product.

The royalty agreement was assumed by the

Company in December 2017.

In September 2018, the Royalty Agreement was amended to reduce the royalty to 2 %

and further provided for a single payment of $ 500,000

to Barry Berler within three years in return for cancellation of all further royalty obligations of the Company.

In May 2019, the

Royalty Agreement was further amended to change the payment date to on or before May 31, 2021 or during the term of the amended

Royalty Agreement should the Company be acquired or a controlling interest be acquired.

The Company has not made the aforementioned

payment or incur any change in control as such the 2 %

royalty remains in place (See Note 19 – Subsequent Events relating

to the termination of the Royalty Agreement).

SHARPS TECHNOLOGY, INC.

NOTES TO THE CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER

30, 2025 AND 2024

Commitments and Contingencies (continued)

September 30, 2022, the Company entered into a formal employment agreement, effective on such date and will continue until terminated

by either party, subject to the terms of the agreement, with Andrew R.

Crescenzo who has been serving as the Company’s Chief Financial

Officer on a contract services basis for the last three years.

The agreement provided for annual compensation of $ 225,000 and plus a

one-time $ 18,750 incentive payment upon the commencement of the agreement.

Employment Agreements

On November 10, 2023, the

Company executed an Employment Agreement with Robert Hayes, its Chief Executive Officer amending the employment letter dated September

The agreement term automatically renews for successive one-year terms as of the commencement date unless prior written notice

by either party within ninety days prior to end of the current term.

The agreement provides for termination of employment and severance

benefits under stated conditions and restrictive covenants.

The agreement provided for annual compensation retroactive to June 1, 2023

of $ 600,000 from $ 400,000 and a stated increase for meeting certain stated milestones.

The agreement provided for bonus compensation

for specified Company achievements.

Effective August 23,

2025, Robert Hayes resigned from the Board of Directors (the “Board”) and as Chief Executive Officer of the Company.

to mutual agreement (the “Separation Agreement”), Mr.

Hayes received a lump sum cash payment of $ 1,200,000 , together with

Company paid-for healthcare coverage benefits for up to 18 months.

The Company granted Mr.

Hayes stock options to purchase 100,000 shares

of Common Stock (the “Option Grant”).

The Option Grant has an exercise price equal to the “Fair Market Value”

Common Stock on the grant date and the options were fully vested as of the grant date.

On August 25, 2025, the Company

entered into a formal employment agreement with Yuwen (Alice) Zhang, who has been appointed as the Company’s Chief Investment Officer

and a Director of the Company, as of the date hereof.

Effective as of the Effective Date, Ms.

Zhang will receive a base salary (the “Base

Salary”) of $ 600,000 per annum.

The Base Salary shall be paid in accordance with the Company’s normal payroll practices for

executive salaries.

For each calendar year ending during the employment period beginning with calendar year 2025, Ms.

Zhang shall be

eligible to earn a cash performance bonus (an “Annual Bonus”) under the Company’s bonus plan or program applicable

to senior executives.

Zhang shall be eligible to receive equity-based compensation award(s), as determined by the Board (or a subcommittee

thereof), from time to time.

On August 25, 2025, the Company

entered into a formal employment agreement with Paul K.

Danner who has been serving as the Company’s Executive Chairman since June

Danner will also act as the Company’s Principal Executive Officer.

Danner’s term as the Company’s

Executive Chairman and Principal Executive Officer began on August 24, 2025, and continue until terminated by either party, subject to

the terms of the employment agreement, Mr.

Danner will be paid $ 600,000 a year.

During the course of the Term, Mr.

Crescenzo will be eligible

Danner will be eligible

for (i) performance bonuses to be granted at the discretion of the Company’s Compensation Committee and (ii) to participate in

the Company’s Equity Incentive Plans.

the Company’s 2025 Equity Incentive Plan.

The employment agreement contains a perpetual confidentiality covenant as well as non-competition

and employee and customer non-solicitation covenants that apply during the Term and for a period of one year following Mr.

On September 30, 2022, the

Company entered into a formal employment agreement, effective on such date and will continue until terminated by either party, subject

to the terms of the agreement, with Andrew R.

Crescenzo who has been serving as the Company’s Chief Financial Officer on a contract

services basis for the last three years.

The agreement provided for annual compensation of $ 225,000 and plus a one-time $ 18,750 incentive

payment upon the commencement of the agreement.

During the course of the term, Mr.

Crescenzo will be eligible for (i) performance bonuses

to be granted at the discretion of the Company’s Compensation Committee and (ii) to participate in the Company’s Equity Incentive

The agreement contains customary employment terms and conditions.

November 10, 2023, the Company executed an Employment Agreement with Robert Hayes, its Chief Executive Officer amending the employment

letter dated September 6, 2021.

The agreement term automatically renews for successive one-year terms as of the commencement date unless

prior written notice by either party within ninety days prior to end of the current term.

The agreement provides for termination of employment

and severance benefits under stated conditions and restrictive covenants.

The agreement provided for annual compensation retroactive

to June 1, 2023 of $ 600,000 from $ 400,000 and a stated increase with the successful acquisition of InjectEZ (see below) and other terms

of the acquisition agreement (See Note 5).

The agreement provides for bonus compensation for:

(i) closing the Nephron acquisition agreement

(see below), (ii) long-term incentives for achieving revenue targets and market caps for the Company’s stock and (iii) other Company

achievements.

In addition, the agreement provides for benefits and paid time off.

May 20, 2024, the Company entered into an Amendment to the Asset Purchase Agreement dated September 22, 2023, with Nephron and Nephron’s

InjectEZ, LLC, (collectively, the “Seller”).

The September 22, 2023 agreement superseded the manufacturing and supply agreement

entered into in connection with the NPC Agreement on September 29, 2022, and the Nephron Agreement entered into on September 29, 2022.

The Amended Asset Purchase Agreement includes the purchase of certain assets.

In connection with the Asset Purchase agreement, the Company

paid a non-refundable deposit of $ 1 M

to be held in escrow as a deposit on the purchase price.

The Asset Purchase agreement stipulated that the $ 1 M

deposit would be maintained until July 19, 2024, at which date, if the contemplated transaction was not consummated, through no fault

of the Seller, the escrow would be released to the Seller by the escrow agent.

The escrow deposit of $ 1,000,000

was released to the Seller and recorded in Other Expense as

a forfeited agreement cost in the three and six months ended June 30, 2024.

The Company and Seller are currently not actively

working towards a further amendment of the Asset Purchase Agreement.

If this changes in the future, the closing of the Asset Purchase

Agreement would be contingent on obtaining further amendments and the necessary financing, of which there can be no assurance.

The closing of the Asset

Purchase Agreement is contingent on obtaining further amendments and the necessary financing.

There can be no assurance that the closing

of the asset sale will occur.

On August 1, 2022, the Company

cancelled the consulting agreement with Alan Blackman, Co- Chairman and Chief Operating Officer and entered into an Employment Agreement.

The Company terminated Mr.

Blackman’s Employment Agreement effective May 1, 2023.

Blackman continued to serve as the Co-Chairman

and a member of the Board of Directors.

Subsequent to June 30, 2023, the Company and Mr.

Blackman entered into a separation agreement

Blackman would be paid severance payments of approximately $ 346,000 plus medical benefits over thirteen months, which was

recorded as an expense and an accrued expense as of June 30, 2023 The severance payments were fully paid by August 31, 2024

SHARPS TECHNOLOGY, INC.

NOTES TO THE CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER

30, 2025 AND 2024

Commitments and Contingencies (continued)

Consulting Agreement

On August 28, 2025, we

entered into (i) a consulting

agreement (the “Consulting Agreement”) with Sol Edge Limited (the “Consultant”) pursuant to which the

Consultant will provide consulting and related services to us with respect to our Treasury Policy and (ii) a strategic advisor

agreement (the “Strategic Advisor Agreement”) with Sol Markets, a Cayman Islands exempt company (“Strategic

Advisor”) pursuant to which the Strategic Advisor will provide strategic advice and guidance relating to our business,

operations, growth initiatives and industry trends in the crypto technology sector.

Based on terms of the Consulting Agreement the

Company paid 50K SOL or USD equivalent of approximately $10.7M for the initial annual period.

For the three months ended September

30, 2025, the Company recorded an expense of $892,000 for the services provided, as described above, from August 28, 2025 through

September 30, 2025 and recorded a prepaid expense of $9.8M.

Both the Consultant and the Strategic Advisor are wholly-owned and

controlled by James Zhang, the brother of Alice Zhang, our Chief Investment Officer and director.

(See Note 3).

Other Agreement

On May 20, 2024, the Company entered into an

Amendment to the Asset Purchase Agreement dated September 22, 2023, with Nephron and Nephron’s InjectEZ, LLC, (collectively, the

The September 22, 2023 agreement superseded the manufacturing and supply agreement entered into in connection

with the NPC Agreement on September 29, 2022, and the Nephron Agreement entered into on September 29, 2022.

The Amended Asset Purchase

Agreement includes the purchase of certain assets.

In connection with the Asset Purchase agreement, the Company paid a non-refundable

deposit of $ 1 M to be held in escrow as a deposit on the purchase price.

The Asset Purchase agreement stipulated that the $ 1 M deposit

would be maintained until July 19, 2024, at which date, if the contemplated transaction was not consummated, through no fault of the

Seller, the escrow would be released to the Seller by the escrow agent.

The escrow deposit of $ 1,000,000 was released to the Seller and

recorded in Other Expense as a forfeited agreement cost in the three and September months ended September 30, 2024.

The Company and Seller

are no longer engaged in any further discussions relating to the Asset Purchase Agreement.

18.– Segment Reporting

accounting policies for the segment information are the same as described in Note 2- Summary of Significant Accounting Policies.

Company commenced product revenue during the three months ended June 30, 2025.

CODM assesses the performance of and decides how to allocate resources for the one segment based on Consolidated Net Income (Loss) Further,

EBITDA (earnings before interest, taxes, depreciation and amortization), which is not presented on the face of the Consolidated Statements

of Operations, is used to assist with the measurement of segment performance and allocate resources.

The CODM also uses Net Income (loss)

and EBITDA, to decide the level of investment in various operating activities and other capital allocation activities.

measure of segment assets is reported on the Consolidated Balance Sheets as Consolidated Total assets.

TECHNOLOGY, INC.

TO THE CONSOLIDATED FINANCIAL STATEMENTS

THE THREE AND SIX MONTHS ENDED JUNE 30, 2025 AND 2024

16– Segment Reporting (continued)

following table presents the Company’s segment results for the six months ended:

determine operating segments based on metrics that our Chief Operating Decision Makers (“CODM”) review internally to

manage our business, including resource allocation and performance assessment.

In the third quarter of 2025, as a result of the

previously mentioned treasury policy, management re-evaluated our segment reporting structure and determined that we now operate in

two reportable segments Our CODM regularly review financial results based on the two

operating segments consisting of Medical Device Packaging and Digital Asset Treasury.

Device Packaging:

This segment is responsible for executing and managing the Company’s medical device sales and

distribution business.

Digital Asset Treasury:

This segment is responsible for executing and managing the Company’s treasury platform.

The CODM uses segment

operating income (loss) to evaluate operating segment performance and allocate resources The CODM also EBITDA, to decide the level

of investment in various operating activities and other capital allocation activities.

Segment income (loss)

excludes the impact of income taxes, interest expense, and certain other income (expense) items, as these are managed at the

corporate level.

We do not prepare separate balance sheets by operating segment, for the CODM, as such, assets are not evaluated as

part of operating segment performance and resource allocation.

We provide the CODM depreciation and amortization expense and

impairment charges that are generated from operating segment-specific assets, as these are included in segment net

The accounting policies for the segment information

are the same as described in Note 2- Summary of Significant Accounting Transactions between segments are

reported as if each were a stand-alone business and are eliminated in consolidation.

SHARPS TECHNOLOGY, INC.

NOTES TO THE CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER

30, 2025 AND 2024

Note 18– Segment

Reporting (continued)

following table presents the Company’s segment results for the nine months ended:

of Company’s Segment

Cost of Manufacturing

Margin (loss)

development – Note A

and administrative – Note A

and amortization

income (expense)

gain/ (loss) adjustment on warrants

Other income (expense) (see note 15)

currency and other

and Consolidated Net Income (loss)

Consolidated Assets

Expenditures and deposits paid (2025 – Six months ended;

2024 – Year Ended)

(A)-net of depreciation and amortization

following table presents the Company’s segment results for the three months ended:

June 30, 2025

June 30, 2024

Cost of Manufacturing

Medical Device Packaging

Digital Assets

Medical Device Packaging

ENDED SEPTEMBER 30,

Medical Device Packaging

Digital Assets

Medical Device Packaging

Total cost of goods manufactured

Gross Margin (Loss)

( 2,201,683 )

Research and development – Note A

General and administrative – Note A

( 2,201,683 )

Staking Revenue

Transaction expenses

Research and development

Digital asset (gain)/loss, net

( 15,499,742 )

Depreciation and amortization

( 15,499,742 )

Fixed asset impairment

Selling, general and administrative

Total operating

( 13,437,374 )

Loss from operations

( 10,287,317 )

( 113,027,916 )

( 107,672,436 )

( 1,684,417 )

( 4,095,945 )

( 5,780,362 )

Other income (expense):

Interest income (expense)

FMV gain/(loss) adjustment on warrants

Foreign currency

Other income (expense) (see note 15)

FMV adjustment on warrants

Foreign currency and other

Derivative gain/(loss), net

( 4,378,749 )

Segment and Consolidated Net Income (loss)

( 4,378,749 )

(A)-net of depreciation and amortization

Other income (expense):

( 1,000,090 )

Total Other income (expense)

( 4,375,264 )

Net Loss by Segment -(Note A)

( 9,915,522 )

( 101,197,164 )

( 99,845,153 )

( 1,716,042 )

( 3,053,732 )

( 4,769,774 )

Total Consolidated Assets

A -Net Loss by Segment includes Corporate,

although not a reportable segment, only for reconciliation to the condensed consolidated statement of operations.

The following table presents the Company’s

segment results for the three months ended:

Medical Device Packaging

Digital Assets

Medical Device Packaging

THREE MONTHS ENDED SEPTEMBER 30,

Medical Device Packaging

Digital Assets

Medical Device Packaging

Total cost of goods manufactured

Gross Margin (Loss)

( 1,169,656 )

Staking Revenue

Transaction expenses

Research and development

Digital asset (gain)/loss, net

( 15,499,742 )

Fixed asset impairment

Selling, general and administrative

Total operating

( 13,437,374 )

Loss from operations

( 8,180,791 )

( 110,106,292 )

( 102,644,286 )

( 1,434,302 )

( 2,015,209 )

Other income (expense):

Interest income (expense)

FMV adjustment on warrants

Foreign currency and other

Derivative gain/(loss), net

( 4,378,749 )

Other income (expense):

Total Other income (expense)

( 4,375,264 )

( 2,689,007 )

Net Loss by Segment – Note A

( 7,767,643 )

( 108,833,183 )

( 105,333,293 )

( 1,088,789 )

( 1,685,060 )

Note A - Net Loss by Segment includes Corporate,

although not a reportable segment, only for reconciliation to the condensed consolidated statement of operations.

- Subsequent Events

to June 30,2025, the Company executed a Subscription and Investment Agreement (the “Subscription Agreement”) with Paul Danner

(“Subscriber”), the Company’s Executive Chairperson, whereby the Subscriber purchased five ( 5 ) shares of the Company’s

Series B Preferred Stock, par value $.

0001 per share (“Securities”), which Securities shall have the rights, preferences,

privileges and restrictions set forth in the Certificate of Designation.

Subscriber hereby acknowledges and agrees to the entire terms

of the Certificate of Designation, including, without limitation, the voting rights, the restrictions on transfer of the Securities and

the redemption of the Securities pursuant of the Certificate of Designation.

The purchase price paid by the Subscriber to the Company

was $ 20.00 per share.

On August 11, 2025, the Company notified Mr.

of Non -Renewal of his Employment Agreement, as provided for under terms of the Employment Agreement (See Note 15).

On August 13, 2025, the

Company executed an Employment Agreement with Paul Danner, in connection with his appointment as the Company’s Executive

Chairperson effective July 1, 2025.

Danner previously served as a Director and Audit Committee Chairperson.

The agreement term automatically renews

for successive one-year terms as of the commencement date unless prior written notice by either party within ninety days prior to

end of the current term.

The agreement provided for annual compensation of $ 258,000 .

The agreement provides for bonus compensation for specified Company achievements.

In addition, the

agreement provides for benefits and paid time off and participation in the Company’s Equity Incentive Plans.

The agreement

contains customary employment terms and conditions.

Settlement of Outstanding Litigations and

Spinoff of Hungarian Subsidiary

On October 6, 2025, the Company

entered into a confidential settlement agreement and release (the “Settlement Agreement”) with Barry Berler, Plastomold Industries

Ltd (“Plastomold”), Plasto Design Solutions (“PDS”), Plasto Design Ltd.

(“Plasto Design,” and together

with Plastomold and PDS as the “Plasto”) and Plasto Technology Group LLC (“Plasto Technology”), whereby the Company,

Berler, Plasto and Plasto Technology have agreed to unconditionally and irrevocably release and discharge each other and their respective

representatives from and against any and all claims alleged in the Litigation (the “Settlement”).

The Settlement Agreement

also provides that neither party’s entry into the Settlement Agreement shall be deemed an admission of fault, responsibility, or

liability for any claim alleged in the Litigation.

Pursuant to the Settlement Agreement, the Company entered into definitive agreements,

including a bill of sale, assignment and assumption agreement providing for the transfer by the Company to Plasto Technology of certain

assets, and a contract for the transfer of business share providing for the assignment by the Company to Plasto Technology of all of

the Company’s right, title and interest in and to the issued and outstanding shares of Safegard Medical Kft, our Hungarian subsidiary.

In addition, the Company executed agreements for the transfer of certain patents and registered trademarks, along with the related goodwill

associated therewith (See Note 17).

Share Repurchase Program

On October 2, 2025, the Board

approved a share repurchase program (the “2025 Repurchase Program”) providing for the repurchase of up to $ 100,000,000 of

the Company’s outstanding shares of Common Stock.

The 2025 Repurchase Program enables the Company to repurchase its shares in the

open market and in negotiated transactions.

The Repurchase Program does not obligate the Company to repurchase shares of Common Stock

and the specific timing and amount of repurchases will vary based on available capital resources and other financial and operational performance

metrics, market conditions, securities law limitations, and other factors.

In connection with the 2025

Repurchase Program, on October 6, 2025, the Company entered into an Open Market Share Repurchase Agreement (the “Repurchase Agreement”)

with Cantor (the “Broker”) whereby the Broker has agreed to act as a non-exclusive agent on behalf of the Company to repurchase

shares of Common Stock in the open market pursuant to Rule 10b-18 of the Securities Exchange Act of 1934, as amended.

The Repurchase Agreement

will continue in effect until terminated by either the Company or the Broker, with or without cause, upon written notice to the other

The Company will pay Broker a commission at a rate of $ 0.02 for each share of Common Stock repurchased pursuant to the Repurchase

October 2, 2025, the Board of Directors of the Company approved a share repurchase program (the “ 2025 Repurchase Program ”)

providing for the repurchase of up to $ 100,000,000

of the Company’s outstanding shares of common stock.

The 2025 Repurchase Program enables the Company to repurchase its shares in

the open market and in negotiated transactions.

The Repurchase Program does not obligate the Company to repurchase shares of Common stock

and the specific timing and amount of repurchases will vary based on available capital resources and other financial and operational

performance metrics, market conditions, securities law limitations, and other factors.

In connection with the 2025 Repurchase Program,

on October 6, 2025, the Company entered into an Open Market Share Repurchase Agreement (the “ Repurchase Agreement ”)

with Cantor Fitzgerald & Co.

(the “ Broker ”) whereby the Broker has agreed to act as a non-exclusive agent on behalf

of the Company to repurchase shares of Common Stock in the open market pursuant to Rule 10b-18 of the Securities Exchange Act of 1934.

The Repurchase Agreement will continue in effect until terminated by either the Company or the Broker, with or without cause, upon written

notice to the other party.

The Company will pay Broker a commission at a rate of $ 0.02

for each share of Common Stock repurchased pursuant to the Repurchase Agreement.

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