SkyAI, Inc. 10-Q

Item 1. Financial Statements: SHARPS TECHNOLOGY, INC. CONDENSED CONSOLIDATED BALANCE SHEETS September 30, 2025 December 31, 2024 (Unaudited) (Audited) Assets: Current Assets Cash $ 10,521,706 $ 864,041 USDC (Note 6) 14,696,002 - Account Receivable –product trade, net 211,435 - Accounts Receivable - digital 778,811 - Accounts Receivable 778,811 - Tax Receivable - VAT 478,883 102,493 Escrow Deposit 500,000 250,000 Prepaid expenses and other current assets (Note 3) 10,672,187 89,735 Derivative assets, net ( Note 8 ) 1,054,626 - Inventories, net ( Note 4 ) 745,261 1,867,671 Current Assets 39,658,911 3,173,940 Fixed Assets, net of accumulated depreciation (Note 5) 103,501 4,035,110 Digital assets, at fair value, (Note 6) 404,197,261 - Other Assets, including deposits on fixed assets (Note 7) 370 104,698 TOTAL ASSETS $ 443,960,043 $ 7,313,748 Liabilities: Current Liabilities Accounts payable $ 1,825,118 $ 976,548 Accrued expenses and other 608,298 346,536 Notes Payable, net of discount (Note 9) - 3,763,622 Derivative liability, net (Note 8 ) 446,876 - Margin loan (Note 8) 7,628,888 - Warrant liability (Notes 10 and 12) 104,706 98,913 Total Current Liabilities 10,613,886 5,185,619 Deferred Tax Liability ( Note 14 ) 132,000 132,000 Total Liabilities 10,745,886 5,317,619 Commitments and Contingencies (Note 17) - - Subsequent Events ( Note 19 ) - - Stockholders’ Equity: Preferred stock, 0.0001 par value; 1,000,000 shares authorized; 0 shares issued and outstanding (2024: 0 ) - - Common stock, par value; $ 0.0001 and 500,000,000 ( 1,666,667 : 2024) shares authorized; 27,626,498 shares issued and outstanding (2024: 6,827 ) 2,761 1 Additional paid-in capital 567,110,600 36,418,041 Accumulated other comprehensive income 391,154 23,293 Accumulated deficit ( 134,290,358 ) ( 34,445,206 ) Total Stockholders’ Equity 433,214,157 1,996,129 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 443,960,043 $ 7,313,748 The accompanying notes are an integral part of these financial statements. F- 1 SHARPS TECHNOLOGY, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30 (UNAUDITED) 2025 2024 2025 2024 THREE MONTHS ENDED SEPTEMBER 30, NINE MONTHS ENDED SEPTEMBER 30, 2025 2024 2025 2024 Product Revenue, net $ 83,622 $ - $ 306,344 $ - Cost of goods manufactured 329,268 - 853,931 - Cost of goods – inventory reserve 924,010 - 1,654,096 - Total cost of goods manufactured 1,253,278 - 2,508,027 - Gross Margin (Loss) ( 1,169,656 ) - ( 2,201,683 ) - Staking Revenue - net 2,205,423 2,205,423 Operations: Transaction expense - digital assets 810,861 810,861 Research and development 152,109 145,611 295,579 523,347 Selling, General and administrative – (Note 10(a)) 110,719,156 1,869,598 114,571,809 5,257,015 Realized and unrealized (gains) loss on digital assets ( 15,499,742 ) - ( 15,499,742 ) - Impairment of long lived fixed assets 7,497,669 - 7,497,669 - Total operating expenses 103,680,053 2,015,209 107,676,176 5,780,362 Loss from Operations ( 102,644,286 ) ( 2,015,209 ) ( 107,672,436 ) ( 5,780,362 ) Other income (expense) Interest income (expense) 68,488 ( 70,905 ) ( 461,551 ) ( 46,503 ) FMV adjustment on warrants 1,208,142 416,560 12,295,842 2,088,747 Other (expense) (Note 15) - - ( 1,000,090 ) Derivative gain/(loss), net ( 4,378,749 ) ( 4,378,749 ) Foreign currency 413,112 ( 15,506 ) 371,741 ( 31,566 ) Total Other income (expense) ( 2,689,007 ) 330,149 7,827,283 1,010,588 Net loss Before Provision for Taxes $ ( 105,333,293 ) $ ( 1,685,060 ) $ ( 99,845,153 ) $ ( 4,769,774 ) Deferred Tax Benefit - - - - Net Loss ( 105,333,293 ) ( 1,685,060 ) ( 99,845,153 ) ( 4,769,774 ) Net loss per share, basic and diluted $ ( 4.33 ) $ ( 379.55 ) $ ( 11.79 ) $ ( 1,358.58 ) Weighted average shares used to compute net loss per share, basic and diluted 24,341,005 4,440 8,465,616 3,511 The accompanying notes are an integral part of these financial statements. F- 2 SHARPS TECHNOLOGY, INC. CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024 (UNAUDITED) 2025 2024 2025 2024 THREE MONTHS ENDED SEPTEMBER 30, NINE MONTHS ENDED SEPTEMBER 30, 2025 2024 2025 2024 Net Income (loss) $ ( 105,333,293 ) $ ( 1,685,060 ) $ ( 99,845,153 ) $ ( 4,769,774 ) Other comprehensive income: Foreign currency translation adjustments 481,638 130,723 367,861 ( 109,241 ) Comprehensive Income (loss) $ ( 104,851,655 ) $ ( 1,554,337 ) $ ( 99,477,292 ) $ ( 4,879,015 ) The accompanying notes are an integral part of these financial statements. F- 3 SHARPS TECHNOLOGY, INC. CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2024 (Unaudited) Shares Amount Shares Amount Capital Income Deficit Equity Preferred Stock Common Stock Additional Paid in Accumulated Other Comprehensive Accumulated Total Stockholders Shares Amount Shares Amount Capital Income Deficit Equity Balance -December 31, 2023 1 $ - 2,314 $ - $ 32,491,478 $ 591,812 $ ( 25,149,004 ) $ 7,934,286 Net loss for the three months ended March 31, 2024 - - - - - - ( 982,386 ) ( 982,386 ) Share-based compensation charges - - - - 126,387 - - 126,387 Exercise of Pre-Funded Warrants - - 60 396 - - 396 Foreign Currency Translation - - - - - ( 218,053 ) - ( 218,053 ) Balance - March 31, 2024 1 $ - 2,374 $ - $ 32,618,261 $ 373,759 $ ( 26,131,390 ) $ 6,860,630 Net loss for the three months ended June 30, 2024 - - - - - - ( 2,102,327 ) ( 2,102,327 ) Share-based compensation charges - - - - 201,918 - - 201,918 Exercise of Pre-Funded Warrants - - 452 - 2,985 - - 2,985 Registration A Offering - - 636 - 1,296,922 - - 1,296,922 Warrant Inducements 869 - 978,981 - - 978,981 Foreign Currency Translation - - - - - ( 21,911 ) - ( 21,911 ) Balance - June 30, 2024 1 $ - 4,331 $ - $ 35,099,067 $ 351,848 $ ( 28,233,717 ) $ 7,217,198 Net loss for the three months ended September 30, 2024 - - - - - - ( 1,685,060 ) ( 1,685,060 ) Cancellation of Preferred Share ( 1 ) - - - - - - - Share-based compensation charges - - - - 116,193 - - 116,193 Issuance of Common Stock – see Note 7 , - 865 726,350 - - 726,350 Warrant exercise - - 451 298 - - 298 Foreign Currency Translation - - - - - 130,724 - 130,724 Balance - September 30, 2024 - $ - 5,647 $ - $ 35,941,908 $ 482,572 $ ( 29,918,777 ) $ 6,505,703 F- 4 SHARPS TECHNOLOGY, INC. CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025 (Unaudited) Preferred Stock Common Stock Additional Paid-in Accumulated Other Comprehensive Accumulated Total Stockholders’ Shares Amount Shares Amount Capital Income Deficit Equity Balance – December 31, 2024 - $ - 6,827 $ 1 $ 36,418,041 $ 23,293 $ ( 34,445,206 ) $ 1,996,129 Net income for the three months ended March 31, 2025 - - - - - 1,928,834 1,928,834 Share-based compensation charges - - - - 44,383 - - 44,383 Equity Offering - January 2025 - - 47,619 4 5,873,405 - - 5,873,409 Warrant Exercise – Series B Cashless – - - 431,395 43 ( 43 ) - - - Foreign currency translation - - - - - 292,573 - 292,573 Balance – March 31, 2025 - $ - 485,841 $ 48 $ 42,335,786 $ 315,866 $ ( 32,516,372 ) $ 10,135,328 Net income for the three months ended June 30, 2025 - - - - - - 3,559,307 3,559,307 Share-based compensation charges - - - - 288,109 - - 288,109 Warrant Exercise – Series B Cashless – - - 537,373 53 ( 53 ) - - - Warrant Exercise - - 537,373 53 ( 53 ) - - - Foreign currency translation - - - - - 556,926 - 556,927 Balance – June 30, 2025 - 1,023,214 101 42,623,842 872,792 ( 28,957,065 ) 14,539,670 Balance - 1,023,214 101 42,623,842 872,792 ( 28,957,065 ) 14,539,670 Net loss for the three months ended September 30, 2025 - - - - - - ( 105,333,293 ) ( 105,333,293 ) Net income (loss) - - - - - - ( 105,333,293 ) ( 105,333,293 ) Share-based compensation charges - - - 104,634,010 - - 104,634,010 Equity Offering - August 2025 -- -- 24,338,649 2,433 403,232,255 - - 403,234,688 Exercise of Series A warrants - - 315,805 32 1,954,515 - - 1,954,547 Exercise of Prefunded Warrants - - 388,462 39 - - - 39 Shelf Offering – shares issued - - 1,560,368 156 14,665,978 - - 14,666,134 Foreign currency translation - - - - - ( 481,638 ) - ( 481,638 ) Balance – September 30, 2025 - - 27,626,498 $ 2,761 $ 567,110,600 $ 391,154 $ ( 134,290,358 ) $ 433,214,157 Balance - - 27,626,498 2,761 567,110,600 391,154 ( 134,290,358 ) 433,214,157 The accompanying notes are an integral part of these financial statements. F- 5 SHARPS TECHNOLOGY, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30 (UNAUDITED) 2025 2024 CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) $ ( 99,845,153 ) $ ( 4,769,774 ) Adjustments to reconcile net (loss) to net cash used in operating activities: Digital assets received as staking revenues ( 2,205,423 ) - Realized (gain)/loss on digital assets ( 635,000 ) - Realized (gain)/loss on derivatives 2,845,000 - Unrealized (gain)/loss on digital assets ( 14,864,742 ) - Unrealized (gain)/loss on derivatives 1,533,749 - Depreciation and amortization 416,963 583,006 Stock-based compensation 104,966,502 444,498 Accretion of debt discount 708,390 75,192 FMV adjustment for warrants ( 12,295,842 ) ( 2,088,747 ) Escrow forfeited - 1,000,000 Inventory reserve adjustment 1,654,096 - Loss on impairment of fixed assets 7,497,669 - Foreign exchange (income) loss ( 413,112 ) 31,566 Changes in operating assets: Accounts receivable – trade & digital ( 982,931 ) - VAT receivable, prepaid expenses and other current assets ( 819,930 ) ( 47,233 ) Inventory ( 450,260 ) ( 349,317 ) Accounts payable and accrued liabilities 1,146,496 ( 51,326 ) Net cash used in operating activities ( 11,743,528 ) ( 5,172,135 ) CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of digital assets ( 186,104,214 ) - Purchase of and deposits paid for fixed assets ( 3,401,811 ) ( 69,659 ) Escrow payment under agreement - ( 1,000,000 ) Net cash used in investing activities ( 189,506,025 ) ( 1,069,659 ) CASH FLOWS FROM FINANCING ACTIVITIES: Net proceeds from offerings and warrant exercises 207,320,039 2,972,646 Proceeds from margin loan 7,628,888 - Net proceeds from Debt financing - 2,735,300 Repayment of Debt ( 4,222,012 ) - Net cash provided by financing activities 210,726,915 5,707,946 Effect of exchange rate changes on cash 180,303 ( 5,863 ) NET INCREASE (DECREASE) IN CASH 9,657,665 ( 539,711 ) CASH — BEGINNING OF PERIOD 864,041 3,012,908 CASH — END OF PERIOD $ 10,521,706 $ 2,473,197 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Digital assets received from common stock issuance 144,035,589 - USDC received from common stock issuance 86,104,501 - Cash Interest (OID) paid, attributed to Note (see Note 9) $ 875,000 - Cash paid for taxes - - The accompanying notes are an integral part of these financial statements. F- 6 SHARPS TECHNOLOGY, INC. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024 Note 1. Description of Business 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 systems. 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. The 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 31. 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). Note 2. Summary of Significant Accounting Policies 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. dollars. 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. As of and 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 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. F- 7 SHARPS TECHNOLOGY, INC. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024 Note 2. 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. Cash 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. The Company holds USDC, a stablecoin redeemable on a one-to-one basis for U.S. dollars and issued by Circle Internet Financial, LLC. (“Circle”). 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. As 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. Inventories 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 4). 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. Digital Assets Pursuant 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”). A 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. While 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. Once 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. 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 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 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. F- 8 SHARPS TECHNOLOGY, INC. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024 Note 2. Summary of Significant Accounting Policies (continued) Level 2 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; 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. 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; and determining whether a market is considered active requires management judgment. Level 3 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. Fixed Assets 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: Building – 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 (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 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 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). F- 9 SHARPS TECHNOLOGY, INC. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024 Note 2. 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. The Company enters into derivative contracts to manage its exposure to fluctuations in the price of SOL and not for any other purpose. In 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. The 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. While 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. Market Risk 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. F- 10 SHARPS TECHNOLOGY, INC. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024 Note 2. 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. As of 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. Revenue Medical Device Packaging Products The 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. 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. Digital 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 price. With the purchase of locked SOL, we recognize the cost basis as the actual price paid including the discount applied from the SOL price. 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. F- 11 SHARPS TECHNOLOGY, INC. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024 Note 2. Summary of Significant Accounting Policies (continued) 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. 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. These prices are independently analyzed, including comparisons to other exchanges and potential cut-off times. For 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. Tokens are 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. While 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. The Company 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. For locked 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 assets 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. F- 12 SHARPS TECHNOLOGY, INC. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024 Note 2. Summary of Significant Accounting Policies (continued) Product Warranties The Company provides product warranties that: 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 customer’s facility. In all such cases, the customer must obtain an prior authorization from the Company. The Company has not incurred returns. Shipping and Handling Costs Shipping and handling costs associated with the distribution of finished goods to customers are recorded in cost of goods manufactured. Income Taxes 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. 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. Research and Development Costs Research and development costs are expensed as incurred. 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 Officer. 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 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. F- 13 SHARPS TECHNOLOGY, INC. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024 Note 2. 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 of adoption. 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 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). 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. 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 losses. 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 . Note 3. Prepaid Expenses and Current Assets Prepaid expenses and other current assets consisted of the following at September 30, 2025 and December 31, 2024: Schedule of Prepaid Expenses and Other Current Assets 2025 2024 Insurance $ 700,463 $ 35,000 Consulting agreement — Note 15 9,816,826 - Other 154,898 54,735 Total $ 10,672,187 $ 89,735 Note 4. Inventories Inventories, net consisted of the following at September 30, 2025 and December 31, 2024: Schedule of Inventories 2025 2024 Raw materials $ - $ 326,068 Work in process - 81,075 Finished goods 745,261 1,460,528 Total $ 745,261 $ 1,867,671 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. F- 14 SHARPS TECHNOLOGY, INC. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024 Note 5. Fixed Assets Fixed asset, net, as of September 30, 2025 and December 31, 2024, are summarized as follows: Schedule of Fixed Assets, Net 2025 2024 Land $ - $ 227,575 Building - 2,665,117 Machinery and Equipment - 2,143,895 Computer Systems, Website and Other 290,661 290,661 Total Fixed Assets 290,661 5,327,248 Less: accumulated depreciation ( 187,160 ) ( 1,292,138 ) Fixed asset, net $ 103,501 $ 4,035,110 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. 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). Note 6. - Investments in Digital Assets The following table summarizes Digital Assets held for investment: Schedule of Digital Assets Held for Investment September 30, 2025 Units Cost Basis Fair Value SOL 1,997,796 $ 389,332,519 $ 404,197,261 USDC 14,696,002 $ 14,696,002 $ 14,696,002 Total $ 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, 2025. 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 SOL USDC / USDT $ USD Realized Gain / (Loss) Beginning Digital Assets - - $ - In-Kind Digital Assets (PIPE) 792,176 86,104,501 $ 230,139,950 Dispositions of Digital Assets ( 50,000 ) ( 88,411,950 ) $ (98,486,234 ) $ 635,000 Digital Asset Purchases 1,249,091 17,003,451 $ 270,948,193 Staking Rewards Received 6,529 $ 1,426,612 Ending Digital Assets 1,997,796 14,696,002 $ 404,028,521 Unrealized Gain / Loss $ 14,864,742 Ending Digital Assets 1,997,796 14,696,002 $ 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. Liquid SOL 1,281,084 Locked SOL 716,712 Total 1,997,796 F- 15 SHARPS TECHNOLOGY, INC. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024 Note 6. - 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 period. 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. During 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 72,883 Through Year End 2026 304,832 Through Year End 2027 311,554 Through Year End 2028 27,443 Total 716,712 The Company did not sell any SOL in its Digital Asset Treasury during the quarter ended September 30, 2025. The 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. Note 7. Other Assets Other assets as of September 30, 2025 and December 31, 2024 are summarized as follows: Schedule of Other Assets 2025 2024 Intangibles, net $ - $ 32,503 Fixed asset deposits 370 370 Other - 321,825 Total $ 370 $ 354,698 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). Note 8. Derivatives 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) $ 1,054,626 FMV of Open Derivatives (Short) $ 446,876 USDC Collateral, included in USDC $ 5,700,000 Margin Loan $ 7,628,888 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 Total September 30, 2025 Purchased Derivatives Written Derivatives Total Realized Gain / (Loss) $ ( 4,017,000 ) $ 1,172,000 $ ( 2,845,000 ) Unrealized Gain / (Loss) $ ( 2,321,873 ) $ 788,124 $ ( 1,533,749 ) Total $ ( 6,338,873 ) $ 1,960,124 $ ( 4,378,749 ) F- 16 SHARPS TECHNOLOGY, INC. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024 Note 9. 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 were filed. 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). Note 10. Stockholders’ Equity 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 per share. 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. Common Stock Securities Purchase Agreements 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. F- 17 SHARPS TECHNOLOGY, INC. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024 Note 10. Stockholders’ Equity (continued) 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 full. 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 Warrants. 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 Agreement. 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 & Co. (“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 (File No. 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. 333-274146) (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 9). F- 18 SHARPS TECHNOLOGY, INC. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024 Note 10. Stockholders’ Equity (continued) The 2025 Offering consisted of 47,619 (pre-reverse – 14,285,714 ) units consisting of 30,089 (pre-reverse – 9,029,814 ) Common Units with gross proceeds of $ 12.6 M and 17,520 (pre-reverse – 5,255,900 ) Pre-Funded Units with gross proceeds of $ 7.4 M. The public offering price per Common Unit was $ 420 (pre-reverse $ 1.40 ) or $ 419.97 (pre-reverse $ 1.3999 ) for each Pre-Funded Unit, which is equal to the public offering price per Common Unit sold in the offering minus an exercise price of $ 0.0001 per Pre-Funded Warrant. Each Common Unit consisted of one share of Common Stock and each Pre-Funded Unit consisted of one pre-funded warrant to purchase one share of Common Stock. In addition, each Common Unit and Pre-Funded Unit included: (i) one Series A Registered Common Warrant to purchase one share of Common Stock per warrant at an exercise price of $ 87.60 (pre-reverse - $ 1.75 and after floor price adjustment upon stockholder approval to $ 0.292 ), (“2025 Series A Warrant”) and (ii) one Series B Registered Common Warrant to purchase one share of Common Stock per warrant at an exercise price of $ 87.60 (pre-reverse - $ 1.75 and after floor price adjustment upon stockholder approval to $ 0.292 ) (“2025 Series B Warrant”), collectively, the “2025 Warrants”. The 2025 Series B Warrant provides the holders with an alternative cashless exercise option, which if elected, each holder will receive three shares of Common Stock for each 2025 Series B Warrant cashless exercised. The 2025 Warrants provided for an adjustment of the original exercise price of $ 525 (pre-reverse - $ 1.75 ) per warrant, down to an amount no less than a floor price of $ 87.60 ( pre-reverse - $ 0.292 ) per warrant upon stockholder approval. On March 28, 2025, the stockholders approved a reset and the exercise price of the 2025 Warrants was reduced to $ 87.60 (pre-reverse - $ 0.292 ) per warrant and the number of warrants was increased so that the aggregate exercise price payable remains the same as the Offering date. The Pre-Funded Warrants were immediately exercisable and could be exercised at any time until exercised in full. Immediately after closing 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. 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 approval. The exercise price of the 2025 Series A and B Warrants, were adjusted down to $ 87.60 (pre-reverse - $ 0.292 ) after Shareholder approval. 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 per share. 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). F- 19 SHARPS TECHNOLOGY, INC. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024 Note 10. 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 . 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. 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 . a. 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. b. 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 warrants. 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 . 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. F- 20 SHARPS TECHNOLOGY, INC. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024 Note 10. Stockholders’ Equity (continued) 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 years . 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. 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). Warrants 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). b) 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 and a warrant liability of $ 110 M. Subsequent to Shareholder approval of the price adjustment on March 28, 2025 and through March 31, 2025 of 23,933 (pre-reverse – 7,198,124 ) Series B warrants were exercised, under the alternative cashless feature, at March 31, 2025 with the elimination of the variable feature in the Series A and B warrants and the complete exercise of the Prefunded warrants, a FMV gain adjustment was recorded of $ 96.3 M, decrease in the warrant liability of $ 102 M and increase to stockholders equity of $ 5.9 M. 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 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. 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”. F- 21 SHARPS TECHNOLOGY, INC. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024 Note 10. Stockholders’ Equity (continued) c) 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. d) 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). e) 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 % 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 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 % to 81.62 %, three-year term, risk free interest rate of 4.20 % to 4.25 % and 0 % dividend rate. The warrant holder forfeited the warrants on June 1, 2025 for no further consideration. f) ) 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 period. 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 $ 470,721 , including a modification charge of $ ( 637,316 ) , respectively. The warrants were fully exercised in 2024. g) 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. The 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. h) 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. The 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. F- 22 SHARPS TECHNOLOGY, INC. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024 Note 10. Stockholders’ Equity (continued) i) 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. j) 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 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. Note 11. Preferred Stock 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 2024. 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. The 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. Note 12. Warrants 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 Equity. 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, 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). Schedule of Fair Value of Warrant Expected term (years) 4.59 to 4.99 Expected volatility 146.58 % to 206.65 % Risk-free interest rate 3.71 % to 3.80 % Dividend rate 0 F- 23 SHARPS TECHNOLOGY, INC. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024 Note 12. 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 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, 2025 September 30, 2024 Expected term (years) 4.33 to 4.83 3.37 to 5.99 Expected volatility 148.11 % to 206.65 % 58.78 % to 121.32 % Risk-free interest rate 3.63 % to 3.88 % 3.41 % to 4.56 % Dividend rate 0 0 The Warrant liability at September 30, 2025 and December 31, 2024 consists of the following: Schedule of Warrant Liability 2025 2024 Trading and Overallotment Warrants $ 65 $ 15,681 Note Warrants 2 428 Offering Warrants – May 2024 835 82,804 Offering Warrants – January 2025 – Series B 103,804 - Total Warrant Liability $ 104,706 $ 98,913 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, 2025 December 31, 2024 Trading and Overallotment Warrants 1,335 1,335 Note Warrants 36 36 Offering Warrants – May 2024 869 869 Offering Warrants -Series A 12,391 - Offering Warrants – January 2025 – Series B 5,307 - Prefunded – cash and in kind 38,486,561 - Cash and stapled warrants 63,213,672 - Warrants issued to strategic advisors 6,321,367 - Warrants issued for services arrangement 72,094 95 Total Warrants Outstanding 108,113,632 2,335 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 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). F- 24 SHARPS TECHNOLOGY, INC. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024 Note 13. Stock Options 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 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: Schedule of Stock Options Granted and Outstanding September 30, 2025 Options Weighted Average Exercise Price Outstanding at Beginning of year 507 $ 12,565 Granted 1,785,000 6.41 Forfeited/cancelled ( 12 ) 1,881 Outstanding at end of period 1,785,495 $ 9.97 Exercisable at end of period 596,516 $ 14.74 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. F- 25 SHARPS TECHNOLOGY, INC. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024 Note 13. Stock Options (continued) The following table summarizes information about options outstanding at September 30, 2025: Schedule of Information about Options Outstanding Exercise Prices Options Outstanding Aggregate Intrinsic Value Weighted Average Remaining Contractual Life Options Exercisable Aggregate Intrinsic Value on Exercisable Shares $ 6.41 1,785,000 196,350 9.75 596,250 65,587 $ 1,782 to 1,881 196 - 3.70 168 - $ 5,412 to 6,072 6 - 2.33 6 - $ 7,986 to 9,174 172 - 2.08 155 - $ 11,550 8 - 1.0 8 - $ 18,480 22 - 1.0 21 - $ 25,875 31 - - 31 - $ 19,750 66 - .75 66 - 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. Note 14. Income Taxes 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 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 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. Note 15. Related Party Transactions and Balances 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. Note 16. Fair Value Measurements 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. F- 26 SHARPS TECHNOLOGY, INC. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024 Note 16. 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 sheet: Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis Level 1 Level 2 Level 3 Total Fair Value Measurements Using Level 1 Level 2 Level 3 Total Assets Cash $ 10,521,706 $ - - $ 10,521,706 USDC 14,696,002 - - 14,696,002 Derivative assets, net - 1,054,626 - 1,054,626 Digital assets - 10,672,187 - 10,672,187 Total assets measured at fair value $ 25,217,708 $ 11,726,813 - $ 36,944,521 Liabilities Derivative liability, net - $ 446,876 - $ 446,876 Warrant liability $ - 104,706 - 104,706 Total liabilities measured at fair value $ - $ 551,582 - $ 551,582 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 sheet: Level 1 Level 2 Level 3 Total Fair Value Measurements Using Level 1 Level 2 Level 3 Total Assets Cash $ 864,041 - - $ 864,041 Total assets measured at fair value $ 864,041 - - $ 864,041 Liabilities Warrant liability $ - $ 98,913 - $ 98,913 Total liabilities measured at fair value $ - $ 98,913 - $ 98,913 Note 17. Commitments and Contingencies 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 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. F- 27 SHARPS TECHNOLOGY, INC. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024 Note 17. 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 Stock and from transferring the Preferred Stock to the Company. The Company has assumed Blackman’s defense pursuant to indemnification obligations. The Company has accrued for the claim for unpaid monthly consulting fees. No amounts have been accrued for the bonus and severance claims. The Company believes that Berler’s claims are without merit and intends to defend itself vigorously. On September 17, 2024, the Company filed an answer and counterclaims with respect thereto, including for recoupment of certain compensation the Company previously paid to Berler. 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. 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. 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. 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. On August 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. 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. 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). F- 28 SHARPS TECHNOLOGY, INC. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024 Note 17. Commitments and Contingencies (continued) 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 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 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. Pursuant 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. Ms. 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 30, 2025. Mr. Danner will also act as the Company’s Principal Executive Officer. Mr. 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. 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 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. Danner’s termination. 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 Plans. The agreement contains customary employment terms and conditions. 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. Mr. 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 F- 29 SHARPS TECHNOLOGY, INC. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024 Note 17. 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 “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 September months ended September 30, 2024. The Company and Seller are no longer engaged in any further discussions relating to the Asset Purchase Agreement. Note 18.– Segment Reporting We 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. Medical 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 (loss). 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. F- 30 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) The following table presents the Company’s segment results for the nine months ended: Schedule of Company’s Segment Medical Device Packaging Digital Assets Corporate Consolidated Medical Device Packaging Corporate Consolidated NINE MONTHS ENDED SEPTEMBER 30, NINE MONTHS ENDED SEPTEMBER 30, 2025 2025 2025 2025 2024 2024 2024 Medical Device Packaging Digital Assets Corporate Consolidated Medical Device Packaging Corporate Consolidated Net Revenue $ 306,344 - - 306,344 - - - Total cost of goods manufactured 2,508,027 - - 2,508,027 - - - Gross Margin (Loss) ( 2,201,683 ) - - ( 2,201,683 ) - - - Staking Revenue - 2,205,423 - 2,205,423 - - - Operations: Transaction expenses - 810,861 - 810,861 - - - Research and development 295,579 - - 295,579 523,347 - 523,347 Digital asset (gain)/loss, net - ( 15,499,742 ) - ( 15,499,742 ) - - - Fixed asset impairment 6,591,141 - 906,528 7,497,669 - - - Selling, general and administrative 1,198,914 1,251,507 112,121,388 114,571,809 1,161,070 4,095,945 5,257,015 Total operating 8,085,634 ( 13,437,374 ) 113,027,916 107,676,176 1,684,417 4,095,945 5,780,362 Loss from operations ( 10,287,317 ) 15,642,797 ( 113,027,916 ) ( 107,672,436 ) ( 1,684,417 ) ( 4,095,945 ) ( 5,780,362 ) Other income (expense): Interest income (expense) - 3,485 ( 465,036 ) ( 461,551 ) - ( 46,503 ) ( 46,503 ) FMV adjustment on warrants - - 12,295,842 12,295,842 - 2,088,747 2,088,747 Foreign currency and other 371,795 - ( 54 ) 371,741 ( 31,625 ) 59 ( 31,566 ) Derivative gain/(loss), net - ( 4,378,749 ) - ( 4,378,749 ) - - - Other income (expense): - - - - - ( 1,000,090 ) ( 1,000,090 ) Total Other income (expense) 371,795 ( 4,375,264 ) 11,830,752 7,827,283 ( 31,626 ) 1,042,213 1,010,587 Net Loss by Segment -(Note A) ( 9,915,522 ) 11,267,533 ( 101,197,164 ) ( 99,845,153 ) ( 1,716,042 ) ( 3,053,732 ) ( 4,769,774 ) Total Consolidated Assets - - - 443,960,043 - - 11,253,898 Note: A -Net Loss by Segment includes Corporate, although not a reportable segment, only for reconciliation to the condensed consolidated statement of operations. F- 31 The following table presents the Company’s segment results for the three months ended: Medical Device Packaging Digital Assets Corporate Consolidated Medical Device Packaging Corporate Consolidated THREE MONTHS ENDED SEPTEMBER 30, THREE MONTHS ENDED SEPTEMBER 30, 2025 2025 2025 2025 2024 2024 2024 Medical Device Packaging Digital Assets Corporate Consolidated Medical Device Packaging Corporate Consolidated Net Revenue $ 83,622 - - 83,622 - - - Total cost of goods manufactured 1,253,278 - ( 0 ) 1,253,278 - - - Gross Margin (Loss) ( 1,169,656 ) - 0 ( 1,169,656 ) - - - Staking Revenue - $ 2,205,423 - 2,205,423 - - - Operations: Transaction expenses - 810,861 - 810,861 - - Research and development 152,109 - 0 152,109 145,611 145,611 Digital asset (gain)/loss, net - ( 15,499,742 ) - ( 15,499,742 ) - - - Fixed asset impairment 6,437,203 - 1,060,466 7,497,669 - - - Selling, general and administrative 421,823 1,251,507 109,045,826 110,719,156 435,296 1,434,302 1,869,598 Total operating 7,011,135 ( 13,437,374 ) 110,106,292 103,680,053 580,907 1,434,302 2,015,209 Loss from operations ( 8,180,791 ) 15,642,797 ( 110,106,292 ) ( 102,644,286 ) ( 580,907 ) ( 1,434,302 ) ( 2,015,209 ) Other income (expense): Interest income (expense) - 3,485 65,003 68,488 - ( 70,815 ) ( 70,815 ) FMV adjustment on warrants - - 1,208,142 1,208,142 - 416,560 416,560 Foreign currency and other 413,148 - ( 36 ) 413,112 ( 15,364 ) ( 142 ) ( 15,506 ) Derivative gain/(loss), net - ( 4,378,749 ) - ( 4,378,749 ) - - - Other income (expense): - - - - - ( 90 ) ( 90 ) Total Other income (expense) 413,148 ( 4,375,264 ) 1,273,109 ( 2,689,007 ) ( 15,364 ) 345,513 330,149 Net Loss by Segment – Note A ( 7,767,643 ) 11,267,533 ( 108,833,183 ) ( 105,333,293 ) ( 596,271 ) ( 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. F- 32 Note 19. - Subsequent Events 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, Mr. 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 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. On 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. F- 33