SkyAI, Inc. 10-Q

Item 1. Financial Statements: SHARPS TECHNOLOGY, INC. CONDENSED CONSOLIDATED BALANCE SHEETS March 31, December 31, 2026 2025 (Unaudited) (Audited) Assets: Current Assets Cash $ 12,320,547 $ 10,382,745 Accounts receivable – product trade 396,900 204,120 Accounts receivable – digital currency, net 321,571 507,842 Accounts receivable 321,571 507,842 Prepaid expenses – related party 4,166,667 6,666,667 Prepaid expenses and other current assets 716,790 475,869 Inventories, net 457,709 645,268 Total Current Assets 18,380,184 18,882,511 Digital commodities, at fair value 162,490,274 250,111,125 Fixed assets, net 58,833 81,167 Other assets 73,319 370 Total Assets $ 181,002,610 $ 269,075,173 Liabilities: Current Liabilities Accounts payable $ 1,581,488 $ 590,692 Accrued expenses and other 556,990 921,954 Margin loan - 3,084,931 Warrant liability 80,742 97,450 Total Current Liabilities 2,219,220 4,695,027 Total Liabilities 2,219,220 4,695,027 Commitments and Contingencies - - Stockholders’ Equity: Preferred stock, $ 0.0001 par value; 1,000,000 shares authorized; 0 shares issued and outstanding (2025: 0 ) - - Common stock, $ 0.0001 par value; 500,000,000 shares authorized; 40,290,005 issued, 39,422,326 outstanding at March 31, 2026 and 28,995,403 issued and outstanding at December 31, 2025 4,028 2,899 Additional paid-in capital 583,554,787 581,324,579 Treasury stock, at cost, 867,678 and 0 shares, respectively at March 31, 2026 and December 31, 2025 ( 1,588,861 ) - Accumulated deficit ( 403,186,564 ) ( 316,947,332 ) Total Stockholders’ Equity 178,783,390 264,380,146 Total Liabilities and Stockholders’ Equity $ 181,002,610 $ 269,075,173 The accompanying notes are an integral part of these financial statements. F- 1 SHARPS TECHNOLOGY, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31 (UNAUDITED) 2026 2025 Net Revenue $ 192,780 $ - Cost of goods sold 202,578 - Gross Margin (Loss) ( 9,798 ) - Staking Revenue, net 3,134,109 - Operating expenses: Consulting fees – related party 2,500,000 - Selling, general and administrative 5,053,320 1,364,295 Research and development 137,097 - Unrealized loss on digital commodities 70,846,202 - Realized loss on digital commodities 10,789,841 - Digital commodity transaction expenses 63,821 - Total Operating Expenses 89,390,281 1,364,295 Loss from Operations ( 86,265,970 ) ( 1,364,295 ) Other Income (Expense): Interest income (expense), net 10,038 ( 626,991 ) Fair market value adjustment on warrants 16,708 4,618,889 Foreign currency loss ( 8 ) - Other Income, net 26,738 3,991,898 Income (Loss) Before Provision for Taxes ( 86,239,232 ) 2,627,603 Tax Provision - - Income (Loss) from Continuing Operations ( 86,239,232 ) 2,627,603 Discontinued Operations: Loss from discontinued operations - ( 830,769 ) Income tax benefit - 132,000 Loss from Discontinued Operations - ( 698,769 ) Net Income (Loss) $ ( 86,239,232 ) $ 1,928,834 Income (loss) per share from Continuing Operations, basic and diluted $ ( 1.19 ) $ 52.62 Loss per share from Discontinued Operations, basic and diluted - ( 13.99 ) Net income (loss) per share, basic and diluted $ ( 1.19 ) $ 38.63 Weighted average shares used to compute net income (loss) per share, basic and diluted 72,570,807 49,938 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 MONTHS ENDED MARCH 31 (UNAUDITED) 2026 2025 Net Income (Loss) $ ( 86,239,232 ) $ 1,928,834 Other comprehensive income: Foreign currency translation adjustments - 292,573 Comprehensive Income (Loss) $ ( 86,239,232 ) $ 2,221,407 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 MONTHS ENDED MARCH 31, 2025 (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, 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 SHARPS TECHNOLOGY, INC. CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY FOR THE THREE MONTHS ENDED MARCH 31, 2026 (Unaudited)   Shares Amount Shares Amount Shares Amount APIC OCI Deficit Equity Preferred Stock Common Stock Treasury Stock Additional Paid-in Accumulated Other Comprehensive Accumulated Total Stockholders’   Shares Amount Shares Amount Shares Amount Capital Income Deficit Equity Balance – December 31, 2025 - $ - 28,995,403 $ 2,899 - $ - $ 581,324,579 $ - $ ( 316,947,332 ) $ 264,380,146 Balance - $ - 28,995,403 2,899 - - 581,324,579 - ( 316,947,332 ) 264,380,146 Net loss for the three months ended March 31, 2026 - - - - - - - - ( 86,239,232 ) ( 86,239,232 ) Net income (loss) - - - - - - - - ( 86,239,232 ) ( 86,239,232 ) Share-based compensation charges - - - - - - 2,230,208 - - 2,230,208 Share repurchase for treasury stock - - - - ( 867,678 ) ( 1,588,861 ) - - - ( 1,588,861 ) Exercise of prefunded warrants - - 9,401,702 940 - - - - - 940 Exercise of warrants - related party - - 1,892,900 189 - - - - - 188 Balance – March 31, 2026 - $ - 40,290,005 $ 4,028 ( 867,678 ) $ ( 1,588,861 ) $ 583,554,787 $ - $ ( 403,186,564 ) $ 178,783,390 Balance - - 40,290,005 4,028 ( 867,678 ) ( 1,588,861 ) 583,554,787 - ( 403,186,564 ) 178,783,390 The accompanying notes are an integral part of these financial statements. F- 4 SHARPS TECHNOLOGY, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED MARCH 31 (UNAUDITED) For the quarter ended March 31, 2026 For the quarter ended March 31, 2025 CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) $ ( 86,239,232 ) $ 1,928,834 Add: Loss from discontinued operations - 698,769 Income (loss) from continuing operations ( 86,239,232 ) 2,627,603 Adjustments to reconcile net income (loss) to net cash used in operating activities: Depreciation and amortization 22,334 55,103 Stock-based compensation 2,230,208 44,383 Accretion of debt discount - 708,390 Fair market value adjustment for warrants ( 16,708 ) ( 4,618,889 ) Digital commodities received as staking revenues, net ( 3,134,109 ) - Realized loss on digital commodities 10,789,841 - Unrealized loss on digital commodities 70,846,202 - Foreign exchange impact - ( 41,295 ) Changes in operating assets: Accounts receivable - trade & digital ( 192,780 ) 68,573 Amortization of related party prepaid 2,500,000 - Prepaid expenses and other ( 240,922 ) 294,217 Inventory 187,559 196,654 Other assets ( 72,949 ) ( 383,253 ) Accounts payable and accrued liabilities 643,434 ( 369,177 ) Net cash used in operating activities ( 2,677,122 ) ( 1,417,691 )   CASH FLOWS FROM INVESTING ACTIVITIES: Sale of digital commodities 9,288,716 - Net cash provided by investing activities 9,288,716 -   CASH FLOWS FROM FINANCING ACTIVITIES: Net proceeds from offerings and warrant exercises - 18,175,043 Share repurchase program ( 1,588,861 ) - Repayment of debt financing - ( 4,222,012 ) Repayment of margin loan ( 3,084,931 ) - Net cash provided by (used in) financing activities ( 4,673,792 ) 13,953,031   Effect of exchange rate changes on cash - ( 187,915 ) NET INCREASE IN CASH - CONTINUING OPERATIONS 1,937,802 12,347,425 CASH FLOWS FROM DISCONTINUED OPERATIONS Net cash used in operating activities - discontinued operations - ( 1,226,124 ) Net cash used in investing activities - discontinued operations - ( 90,405 ) NET DECREASE IN CASH - DISCONTINUED OPERATIONS - ( 1,316,529 ) CASH — BEGINNING OF PERIOD 10,382,745 864,042 CASH — END OF PERIOD $ 12,320,547 $ 11,894,938 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid for taxes - - Cash paid for interest $ 19,229 - Par value waived on warrant exercise $ 1,129 - OID interest - $ 875,000 The accompanying notes are an integral part of these financial statements. F- 5 SHARPS TECHNOLOGY, INC. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED MARCH 31, 2026 AND 2025 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. Previously, 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 commodity treasury strategy focused on accumulating Solana (“SOL”), the native digital commodity of the Solana blockchain. On October 6, 2025, the Company entered into definitive agreements, including a bill of sale, assignment and assumption agreement providing for the transfer by the Company of certain assets, and a contract for the transfer of business share providing for the assignment by the Company of all of the Company’s right, title and interest in and to the issued and outstanding shares of Safegard Medical Kft, the Hungarian subsidiary, which is reflected in the accompanying financial statements as a discontinued operation. As of October 6, 2025, with the ownership transfer of Safegard Medical Kft complete, the Company discontinued all design and manufacturing endeavors to focus instead solely on marketing and distribution. The accompanying condensed consolidated financial statements include the accounts of Sharps Technology, Inc. and its wholly owned subsidiaries, SOL Equity Limited and Sol Equity HK Limited, collectively referred to as the “Company.” All intercompany transactions and balances have been eliminated. 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. Note 2. Summary of Significant Accounting Policies 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. Significant accounting policies are described in the Company’s Form 10-K for the year ended December 31, 2025. 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. Significant accounting policies are described in the Company’s Form 10-K for the year ended December 31, 2025. These unaudited Condensed Consolidated Financial Statements do not include all disclosures that are normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) and should be read in conjunction with the audited Condensed Consolidated Financial Statements and the related notes included in the 2025 Annual Report. The condensed consolidated financial information as of December 31, 2025 included herein has been derived from the audited Condensed Consolidated Financial Statements in the 2025 Annual Report. In the opinion of management, these Condensed Consolidated Financial Statements contain all adjustments (consisting of normal recurring adjustments, including eliminations of material intercompany accounts and transactions) considered necessary for a fair statement of the results presented herein. Operating results for the three months ended March 31, 2026 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2026. Cash and Cash Equivalents The Company considers all highly liquid investments purchased with an original or remaining maturity of three months or less at the date of purchase to be cash equivalents. Cash and cash equivalents are maintained with various financial institutions. At March 31, 2026 and December 31, 2025, the Company had cash of $ 12,320,547 and $ 10,382,745 , respectively, and no cash equivalents. F- 6 Concentration of Credit Risk The Company’s cash, USDC, certain digital commodities 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 periodically as a liquidity resource facilitating transactions such as purchases, dispositions and payments. USDC is a payment stablecoin redeemable on a one-to-one basis for U.S. dollars and issued by Circle Internet Financial, LLC. (“Circle”). Circle’s 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. USDC is a current financial asset in the Condensed Consolidated Financial Statements. The Company holds SOL, a digital commodity, as part of its Treasury Strategy. SOL is a digital commodity in the Condensed Consolidated Financial Statements. Our concentration in a single digital commodity exposes the Company to unique liquidity risks that may prevent the conversion of SOL into fiat currency or other assets when desired, particularly during periods of market stress. Classification of Digital Commodities & Payment Stablecoin Management assessed SOL, USDC, & USDT under ASU 2023-08. For new asset classes that are out of ASU 2023-08’s scope, the Company considered the assets underlying characteristics within the GENIUS Act, ASC 825, and ASC 350 for assignment as a cash equivalent, financial or intangible asset respectively. The Company also evaluated if each new asset type should be presented as long-term or current under ASC 210. SOL meets the criteria of ASU 2023-08 and would be considered an in-scope digital commodity. This is because it meets the definition of an intangible asset per the FASB codification, does not provide enforceable rights or claims to underlying goods, services, or other assets. Furthermore, SOL resides on a distributed ledger, is secured through cryptography, is fungible, and is not created or issued by the Company or its related parties. Both USDC and USDT (“payment stablecoins”) provide the holder with enforceable rights to or claims on underlying goods, services or other assets. Therefore, they would not be considered an in-scope crypto asset under ASU 2023-08, but instead the same factor meets the criteria as a financial asset under ASC 825. While both Circle (USDC) and Tether (USDT) have applied as payment stablecoins to be cash equivalent under the Genius Act since it came into effect, neither has achieved that designation. Therefore, management does not consider either to be cash equivalent but based on guidance under ASC 210, does classify payment stablecoins as current assets expected to be converted to cash within one year from the balance sheet date. The Company will report payment stablecoins as a current financial asset on the balance sheet adjusted to fair market value. Digital Commodities 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 condensed consolidated balance sheet, with gains and losses from changes in the fair value of such digital commodities recognized in the condensed consolidated statement of operations each reporting period. Under ASU 2023-08 in-scope crypto assets are considered to be indefinite-lived intangible assets. The in-scope crypto assets are initially measured at cost based on existing GAAP guidance per ASC 350-30. ASU 2023-08 also requires certain interim and annual disclosures for digital commodities within the scope of the standard. Sales and purchases of digital commodities are reflected as cash flows from investing activities in the condensed consolidated statements of cash flows. F- 7 The Company adopted this guidance effective August 25, 2025, the date of the Company’s first holding in digital commodities. SOL is measured using Level 1 inputs under ASC 820, based on quoted prices from the principal market unless otherwise restricted. 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 commodities 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 Company’s August 2025 equity 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 for which the unrealized gain or loss is recognized. After reviewing the changes in the market price for these and similar locked SOL transactions, and the discount for in-kind SOL invested at the August 25, 2025 offering, the Company has elected to use 9% as the discount at March 31, 2026 and considers this a Level 2 input. Once the SOL is unlocked, the fair value is measured at the end of the period at the market value without a discount. The reduction in discount applied to the locked SOL from 10% at December 31, 2025 to 9% at March 31, 2026 aligns with reducing the percentage as the locked SOL is closer to the maturity date. The Company’s Locked SOL averaged just under one year to maturity as of March 31, 2026. Market Risk The Company is exposed to SOL market risk related to our digital commodity holdings, which are impacted by the market value of the respective digital commodity held. We performed a sensitivity analysis assuming a hypothetical 10% change in the fair value of these digital commodities 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 $ 7.1 million for the quarter ended March 31, 2026. F- 8 Foreign Currency Translation/Transactions The Company has determined that the functional currency for its Hungarian subsidiary (included in discontinued operations) is the local currency. For financial reporting purposes, assets and liabilities denominated in foreign currencies were 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. For the Company’s Hong Kong subsidiary Sol Equity HK Limited, the functional currency has been determined to be the US dollar. Gains or losses resulting from transactions entered into in other than the functional currency are recorded as foreign exchange gains and losses in the condensed consolidated statements of operations. 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 condensed 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 during the quarter ended March 31, 2026 included 28,315,610 in outstanding pre-funded warrants and 4,428,467 in outstanding related party warrants exercisable at par value. 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 March 31, 2026 and December 31, 2025, there were 97,904,847 and 109,219,449 (reverse split effected), 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. Digital Commodities Revenue, Realized and Unrealized Gains and Losses Acquisition of Digital Commodities 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 after the discount applied from the SOL price. The unlocking of newly purchased locked SOL occurs over a series of dates as prescribed by the purchase agreement. We acquire other digital commodities through purchases and record the average price paid as the cost basis. Per ASC 350-60-45-2, gains and losses from the remeasurement of digital commodities 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 commodities” 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 commodity at the date of measurement, multiplied by the quantity held of the digital commodity. These prices are independently analyzed, including comparisons to other exchanges and potential cut-off times. F- 9 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 the appropriate percentage, which as of December 31, 2025 was 10% and as of March 31, 2026 was 9%. The 10% discount as of August 2025 was based on the initial investor discount in the August 2025 Offering and other quoted data, as well as historical purchases of locked SOL that management has made on behalf of the Company. The 9% discount as of March 31, 2026 is based on market quotations for locked SOL from brokers and interested purchasers. Management monitors this discount percentage and adjusts when appropriate. We performed a sensitivity analysis assuming a hypothetical 1% change in the discount to fair value of these digital commodities to demonstrate the potential impact on our financial results. A hypothetical 1% increase or decrease in the discount would have positively or negatively impacted our Income (loss) before income taxes by approximately $ 0.5 million for the quarter ended March 31, 2026. Staking revenue We earn staking rewards by delegating our digital commodities 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 commodities 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 recognizes the staking rewards on a net basis unless it is the validator. 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 appropriate discount percentage is applied. This revenue is reported on the Statements of 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 commodities”. F- 10 Realized disposition of the digital commodities To the extent such digital commodities 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 commodities, 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. 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 can be reasonably estimated. Legal fees related to contingencies are expensed as incurred. Gain contingencies are not recognized until the gain is realizable or realized. Discontinued Operations The Company accounts for discontinued operations in accordance with ASC 205-20. A discontinued operation is a component of the Company that has been disposed of or classified as held for sale and represents a strategic shift that has (or will have) a major effect on the Company’s operations and financial results. Discontinued operations are reported separately net of taxes for all periods presented from continuing operations in the condensed consolidated statements of income for all periods presented. Assets and liabilities of discontinued operations are presented separately for all periods presented in the condensed consolidated balance sheets. The Company provides additional disclosures in the notes, including major classes of assets and liabilities, results of operations, and cash flows related to discontinued operations. Unless otherwise indicated, the information in the notes to the condensed consolidated financial statements refers only to the Company’s continuing operations. Recent Accounting Pronouncements 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 condensed 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 adopted ASU 2025-05 during the first quarter of 2026 and the impact was not material. 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. F- 11 Note 3. Prepaid Expenses and Current Assets Prepaid expenses and other current assets consisted of the following at March 31, 2026 and December 31, 2025: Schedule of Prepaid Expenses and Other Current Assets March 31, 2026 December 31, 2025 Insurance $ 37,380 $ 394,854 Share repurchase escrow 411,289 - Other 268,121 81,015 Total $ 716,790 $ 475,869 Note 4. Inventories Inventories, net consisted of the following at March 31, 2026 and December 31, 2025: Schedule of Inventories March 31, 2026 December 31, 2025 Finished goods $ 457,709 $ 645,268 Note 5. Fixed Assets Fixed assets, net, as of March 31, 2026 and December 31, 2025, are summarized as follows: Schedule of Fixed Assets, Net March 31, 2026 December 31, 2025 Computer systems, website and other $ 290,661 $ 290,661 Less: accumulated depreciation ( 231,828 ) ( 209,494 ) Fixed assets, net $ 58,833 $ 81,167 Depreciation expense of fixed assets for the three months ended March 31, 2026 and 2025 was $ 22,334 and $ 22,334 , respectively. Note 6. - Investments in Digital Commodities The following table summarizes digital commodities held for investment: Schedule of Digital Commodities Held for Investment March 31, 2026 Units Cost Basis Fair Value SOL 2,009,494 $ 386,288,639 $ 162,490,273 December 31, 2025 Units Cost Basis Fair Value SOL 2,077,799 $ 403,063,288 $ 250,111,125 The Company recognizes digital commodities at fair value. 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 the appropriate percentage (10% at December 31, 2025 and 9% at March 31, 2026). The Company valued the SOL treasury at $83.02 per liquid token and $75.55 per locked token at March 31, 2026 and $124.26 per liquid token and $111.83 per locked token at December 31, 2025. F- 12 The following table summarizes the Company’s digital commodity purchases, losses (gains) on digital commodities, and revenue from staking received for the three months ended March 31, 2026. 100,000 SOL were sold during the three months ended March 31, 2026 to fund operations. Schedule of Losses (Gains) On Digital Commodities and Revenue from Staking Three months ended March 31, 2026 Digital Commodity Units SOL Cost Basis $ USD Realized Loss Beginning digital commodities 2,077,799 $ 403,063,288 Dispositions of digital commodities ( 100,000 ) ( 20,078,557 ) ( 10,789,841 ) Staking rewards received 31,695 3,303,908 Ending Digital Commodities 2,009,494 386,288,639 Unrealized loss - ( 223,798,365 ) Ending Digital Commodities 2,009,494 $ 162,490,274 The following table summarizes the composition of SOL held broken out by liquid and locked as of March 31, 2026 and December 31, 2025: Schedule of Solana Tokens Held Broken Out by Liquid and Locked Number of SOL units March 31, 2026 December 31, 2025 Liquid SOL 1,428,918 1,427,857 Locked SOL 580,576 649,942 Total 2,009,494 2,077,799 The Company had approximately 95 % of its SOL treasury staked during the quarters ended March 31, 2026 and December 31, 2025, respectively. 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 commodity holdings. The following table summarizes the unlocking schedule of SOL tokens currently locked as of March 31, 2026 and December 31, 2025: Schedule of Sol tokens Fiscal Year Maturity Locked SOL Maturity March 31, 2026 December 31, 2025 Through Year End 2026 233,622 307,728 Through Year End 2027 318,860 314,510 Through Year End 2028 28,094 27,704 Total 580,576 649,942 For the three months ended March 31, 2026, the Company incurred $ 63,821 in transaction costs relating to custodian and exchange fees. The margin loan at December 31, 2025 of $ 3,084,931 was repaid in February 2026 and the related collateral of 40,000 Solana was released. F- 13 Note 7. 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. 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 during the first quarter of 2025. Note 8. 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 shares, 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. 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 1-for-300 . All share amounts, share prices and earnings per share have been adjusted to reflect the approved reverse stock splits. 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. F- 14 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 tendered 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. 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, was 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 stablecoin of $ 86 M. The net proceeds of $ 403 M reflect placement agent fees, legal fees, and expenses of $ 7.5 M with the net proceeds, after reflecting par value, recorded in Additional Paid in Capital of $ 403 M. F- 15 During the three months ended March 31, 2026, 9,401,702 Cash & Crypto Prefunded and 1,892,900 Strategic Advisor (related party) warrants were exercised with proceeds of $ 1,129 waived and covered by the Company. 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 owned 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. The final prospectus was filed on January 8, 2026. 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 year ended December 31, 2025, the Company issued approximately 2.2 M shares of common stock under the Sales Agreement and received net proceeds from the Sales Offering of approximately $ 18.9 M after fees paid to the Agents and other offering expenses of $ 998,000 . During the three months ended March 31, 2026, there were no sales of shares under the Sales Agreement. 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. 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. F- 16 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 . 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. 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. As a result of the August 2025 Series A Amendment, the outstanding 12,391 Series A warrants no longer met the liability classification under accordance with ASC 480 “Distinguishing Liabilities from Equity”. For the quarter ended March 31, 2026, the fair value adjustments relating to the Series B warrants aggregated $ 16,708 . F- 17 Share Repurchase Program 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 (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. Pursuant to the 2025 Repurchase Program, from January to March 2026, the Company repurchased a total of 867,678 shares of its common stock at a cost of $ 1,571,507 , not including fees of $ 17,354 . Note 9. Preferred Stock On July 15, 2025, the Company executed a Subscription and Investment Agreement (the “Subscription Agreement”) with Paul Danner (“Subscriber”), the Company’s Principal Executive Officer, formally Executive Chairperson, whereby the Subscriber purchased five 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 . F- 18 Note 10. Warrants The warrants that are accounted for as liabilities in accordance with ASC 815-40, are presented as a Warrant liability in the accompanying 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 condensed consolidated statement of operations. The Warrant liability at March 31, 2026 and December 31, 2025 consists of the following: Schedule of Warrant Liability March 31, 2026 December 31, 2025 Trading and Overallotment Warrants $ 47 $ 37 Note Warrants 1 1 Offering Warrants – May 2024 453 453 Offering Warrants – January 2025 – Series B 80,241 96,952 Total Warrant Liability $ 80,742 $ 97,443 The Warrants outstanding at March 31, 2026 and December 31, 2025, reflective of the reverse split that occurred in on April 28, 2025, were as follows: Schedule of Warrant Outstanding March 31, 2026 December 31, 2025 Trading and Overallotment Warrants 1,335 1,335 Note Warrants 36 36 Offering Warrants – May 2024 453 453 Offering Warrants -January 2025 -Series A 12,391 12,391 Offering Warrants – January 2025 – Series B 5,307 5,307 Prefunded – cash and in kind 28,315,610 37,717,312 Cash and stapled warrants 63,213,672 63,213,672 Warrants issued to strategic advisor 4,428,467 6,321,367 Warrants issued for services arrangement 72,094 72,094 Total Warrants Outstanding 96,049,365 107,343,967 For the three months ended March 31, 2026 and 2025, the FMV gain adjustment, which is reflected in the FMV adjustment on Warrants in the Consolidated Statements of Operations was $ 16,708 and $ 4,618,889 , respectively. Note 11. 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. In August 2025, 1,585,000 stock options were granted to directors, executives and other employees and consultants with an exercise price of $ 6.41 , a term of 10 years and vesting 25% upon grant and the remainder 25% per quarter over the following nine months. Also in August 2025, 200,000 options were granted to former employees and directors with immediate vesting and a term of 10 years. In October 2025, an additional 150,000 options were granted to a director and certain employees with a term of 10 years and vesting 25% upon grant and the remainder 25% per quarter over the following nine months. The above options to purchase shares of the Company’s common stock, par value $ 0.0001 per share, which were granted pursuant to the Company’s 2025 Equity Inventive Plan, have grant prices based on the closing price on the respective grant dates. F- 19 During the year ended December 31, 2024, the Company granted five-year options to purchase a total of 211 shares of the Company’s common stock, par value $ 0.0001 per share to its directors, executive officers, employees and consultants pursuant to the Company’s 2023 Equity Incentive Plan. The options are exercisable at an average price of $ 6.27 per share which was based on the closing price on the respective grant dates. A summary of options for the three months ended March 31, 2026 is presented below: Schedule of Stock Options Options Weighted Average Exercise Price Weighted Average Remaining Life Outstanding at beginning of period 1,875,482 $ 9.76 9.65 Granted - - - Forfeited/cancelled ( 20,000 ) 6.60 9.75 Outstanding at end of period 1,855,482 $ 9.80 9.40 Exercisable at end of period 1,030,480 $ 10.80 9.40 For the three months ended March 31, 2026 and 2025, the Company recognized stock-based compensation expense of $ 2,230,208 and $ 44,383 , respectively, which was recorded in general and administrative expense. As of March 31, 2026 and December 31, 2025, there was $ 2,322,855 and $ 4,564,610 , respectively, of unrecognized stock-based compensation related to unvested stock options, which is expected to be recognized over a weighted-average period of six months as of March 31, 2026. At March 31, 2026, the stock options outstanding and the options exercisable have exercise prices that exceed the stock market price at March 31, 2026 and as such, no intrinsic value exists. Intrinsic value is defined as the difference between the exercise price of the options and the market price of the Company’s common stock. F- 20 Note 12. 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 months ended March 31, 2026 and 2025 was 0 % and 0 %. 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 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 taxes assets are fully offset by a valuation allowance. On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. The Company has concluded OBBBA will have an immaterial impact on its income tax provision. As of March 31, 2026 and December 31, 2025, the liability for uncertain tax positions is zero and the Company believes that no liability for unrecognized tax benefits is required in relation to the potential for additional assessments. Note 13. Related Party Transactions and Balances As of March 31, 2026 and December 31, 2025, accounts payable and accrued liabilities include $ 107,209 and $ 26,572 , respectively, payable to officers and directors of the Company. The amounts are unsecured, non-interest bearing and are due on demand, including both director fees and reimbursable expenses. Consulting services provided by Sol Edge Limited (the “Consultant”) during the three months ended March 31, 2026 and 2025 was $ 2,500,000 and $ 0 , respectively. At March 31, 2026 and December 31, 2025, the Company recorded a prepaid expense of $ 4,166,000 and $ 6,666,667 , respectively, relating to the annual payment under the Consulting Agreement (See Notes 3 and 15). The Consultant is wholly-owned and controlled by James Zhang, the brother of Alice Zhang, our Chief Investment Officer and director. Note 14. Fair Value Measurements The Company’s financial instruments include cash, accounts payable, notes payable and warrant liability. Cash and warrant liability are measured at fair value. Accounts payable and notes payable are measured at amortized cost and approximates fair value due to their short duration and market rate for similar instruments, respectively. As of March 31, 2026, 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 $ 12,320,547 $ - $ - $ 12,320,547 USDC 1 - - 1 USDT 1 - - 1 Digital commodities 118,628,818 - - 118,628,818 Digital commodities, Locked SOL - 43,861,455 - 43,861,455 Total assets measured at fair value $ 130,949,367 $ 43,861,455 $ - $ 174,810,822 Liabilities Warrant liability - 80,742 - 80,742 Total liabilities measured at fair value $ - $ 80,742 $ - $ 80,742 F- 21 As of December 31, 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: Level 1 Level 2 Level 3 Total Fair Value Measurements Using Level 1 Level 2 Level 3 Total Assets Cash $ 10,382,745 $ - $ - $ 10,382,745 USDC 1 - - 1 USDT 1 - - 1 Digital commodities 177,425,549 - - 177,425,549 Digital commodities, Locked SOL - 72,685,576 - 72,685,576 Total assets measured at fair value $ 187,808,296 $ 72,685,576 $ - $ 260,493,872 Liabilities Warrant liability - 97,450 - 97,450 Total liabilities measured at fair value $ - $ 97,450 $ - $ 97,450 Note 15. Commitments and Contingencies 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. Consulting Agreement On August 28, 2025 (the Effective Date”), the Company 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 transferred stablecoin valued at $10M for the initial annual period. For the three months ended March 31, 2026, the Company recorded an expense of $2.5 million for the services provided, as described above, with a remaining prepaid expense of $4.2 million. For all future periods, the Company has agreed under an amendment dated March 26, 2026 to the consulting agreement to pay the Consultant a monthly fee equal to 2% in the aggregate on amounts up to and including $1,000,000,000 in Account value, 1.75% in the aggregate on amounts above $1,000,000,000 up to and including $1,500,000,000 in Account value, and 1.5% in the aggregate on amounts above $1,500,000,000 in Account value as of such measurement date divided by 12, beginning on August 27, 2026. We have agreed to pay to the Consultant such fee, at its option, in the form of USDC, USDT, SOL, or some combination thereof. The Consultant is wholly-owned and controlled by James Zhang, the brother of Alice Zhang, our Chief Investment Officer and Director. F- 22 This Consulting Agreement commenced on the Effective Date and shall continue in full force and effect for a term of 20 years (the “Term”), unless earlier terminated in accordance with Section 13(c). Thereafter, the Consulting Agreement may be renewed for additional periods as mutually agreed in writing by the Parties. If this Consulting Agreement is terminated by the Company for any reason during the Term, or if the Consultant terminates this Consulting Agreement due to a material breach by the Company, the Company shall pay to the Consultant, as liquidated damages and not as a penalty, an amount equal to all fees and other compensation that would have accrued to the Consultant under this Agreement from the date of termination through the end of the Term, paid monthly throughout the Term in accordance with the payment provisions herein. Lease On January 10, 2026, the Company executed a short-term lease for a 3,116 square foot office facility in Shenzhen, China to serve as the temporary headquarters of our Asia-based operations. The minimum lease term was for approximately one year and will continue through January 31, 2027 at a monthly rent of 58,709 Chinese Yuan. Note 16. 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 August 2025, as a result of the new treasury policy, management re-evaluated the segment reporting structure and determined that the Company operates in two reportable segments other than our corporate activities. Our CODM regularly review financial results based on the two operating segments consisting of Medical Device and Digital Commodity Treasury. Medical Device: This segment is responsible for executing and managing the Company’s medical device sales and distribution business. Digital Commodity 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. We do not prepare separate balance sheets by operating segment for the CODM, as 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. Transactions between segments are reported as if each were a stand-alone business and are eliminated in consolidation. The Company ceased manufacturing operations in October 2025. Accordingly, for the three months ended March 31, 2026 no medical device segment expenses were included as part of discontinued operations. Certain payroll and consultant expenses were allocated among segments on the basis of the estimated percentage of time spent on each segment. F- 23 The following table presents the Company’s segment results (unaudited) for the three months ended March 31, 2026 and 2025: Schedule of Company’s Segment Medical Device Digital Commodities Corporate Consolidated Medical Device Corporate Consolidated THREE MONTHS ENDED MARCH 31, 2026 THREE MONTHS ENDED MARCH 31, 2025 Medical Device Digital Commodities Corporate Consolidated Medical Device Corporate Consolidated Net Revenue $ 192,780 $ - $ - $ 192,780 $ - $ - $ - Cost of goods sold 202,578 - - 202,578 - - - Total Cost of Goods Sold 202,578 - - 202,578 - - - Gross Margin (Loss) ( 9,798 ) - - ( 9,798 ) - - - Staking revenue, net - 3,134,109 - 3,134,109 - - - Operating expenses: Consulting fees – related parties - 2,500,000 - 2,500,000 - - Selling, general and administrative 175,488 438,209 4,439,622 5,053,320 427,082 937,214 1,364,296 Research and development - - 137,097 137,097 - - - Unrealized loss on digital commodities - 70,846,202 - 70,846,202 - - - Realized loss on digital commodities - 10,789,841 - 10,789,841 - - - Digital commodity transaction expenses - 63,821 - 63,821 - - - Total Operating Expenses 175,488 84,638,073 4,576,719 89,390,281 427,082 937,214 1,364,296 Loss from Operations ( 185,286 ) ( 81,503,964 ) ( 4,576,719 ) ( 86,265,970 ) ( 427,082 ) ( 937,214 ) ( 1,364,296 ) Other Income (Expense): Interest expense, net - ( 19,229 ) 29,267 10,038 - ( 626,991 ) ( 626,991 ) Fair market value adjustment on warrants - - 16,708 16,708 - 4,618,889 4,618,889 Foreign currency loss - - ( 8 ) ( 8 ) - - - Other Income (Expense), net - ( 19,229 ) 45,967 26,738 - 3,991,898 3,991,898 Income (Loss) Before Provision for Taxes ( 185,286 ) ( 81,523,193 ) ( 4,530,752 ) ( 86,239,232 ) ( 427,082 ) 3,054,684 2,627,602 Tax Provision - - - - - Income (Loss) from Continuing Operations ( 185,286 ) ( 81,523,193 ) ( 4,530,752 ) ( 86,239,232 ) ( 427,082 ) 3,054,684 2,627,602 Discontinued Operations: Loss from discontinued operations - - - - ( 830,769 ) - ( 830,769 ) Income tax benefit - - - - 132,000 - 132,000 Loss from Discontinued Operations - - - - ( 698,769 ) - ( 698,769 ) Net Income (Loss) $ ( 185,286 ) $ ( 81,523,193 ) $ ( 4,530,752 ) $ ( 86,239,232 ) $ ( 1,125,851 ) $ 3,054,684 $ 1,928,833 The following table presents the total assets by segment (unaudited) at March 31, 2026 and December 31, 2025: MARCH 31, 2026 DECEMBER 31, 2025 Medical Device Digital Commodities Corporate Consolidated Medical Device Digital Commodities Corporate Consolidated $ 516,543 $ 174,476,910 $ 6,009,157 $ 181,002,610 $ 849,388 $ 257,253,661 $ 10,972,124 $ 269,075,173 Note: Net Loss by Segment includes Corporate, although not a reportable segment, only for reconciliation to the condensed consolidated statement of operations. F- 24 Note 17. Discontinued Operations On October 6, 2025, the Company entered into definitive agreements, including a bill of sale, assignment and assumption agreement providing for the transfer by the Company of certain assets, and a contract for the transfer of business share providing for the assignment by the Company of all of the Company’s right, title and interest in and to the issued and outstanding shares of Safegard Medical Kft, the Hungarian subsidiary, which is reflected in the accompanying financial statements as a discontinued operation. Loss from discontinued operations for the three months ended March 31, 2025 was as follows: Schedule of Discontinued Operations March 31, 2025 OPERATING EXPENSES: Selling, general and administrative $ 707,458 Research and development 82,016 Total Operating Expenses 789,474 OTHER INCOME (EXPENSE): Foreign currency transaction loss and other ( 41,295 ) Other Income (Expense), net ( 41,295 ) Loss before income taxes (benefit) ( 830,769 ) Income tax benefit 132,000 Net Loss from Discontinued Operations $ ( 698,769 ) There were no assets or liabilities related to discontinued operations at March 31, 2026 or December 31, 2025 as the disposal occurred in October 2025. Note 18. Subsequent Events Office Lease Effective May 2, 2026, the Company leased a 1,467 square foot office in Hong Kong, the terms of which include an initial two-month rent free period. The lease term is three years and will continue through May 1, 2029 at a monthly rent of 82,331 Hong Kong dollars. Code of Business Conduct and Ethics On May 8, 2026, the Company’s board of directors approved and adopted the Code Of Business Conduct And Ethics (the “Code of Ethics”), which governs the conduct of all officers, directors, and employees of the Company and its affiliated entities. The Code of Ethics was adopted to, among other things, generally update for current governance, ethics, and compliance best practices; better align various Company policies, including the Code of Ethics, by eliminating certain redundant or overlapping provisions and consolidating similar topics in the appropriate policy; and make other non-substantive administrative, stylistic and typographical changes. Executive Employment Agreements On May 13, 2026, the Company entered into an employment agreement (the “Danner Employment Agreement”) with Paul Danner, which replaces and supersedes in its entirety that certain prior employment agreement, dated August 25, 2025, between the Company and Mr. Danner. Pursuant to the Employment Agreement, Mr. Danner will serve as the Company’s Principal Executive Officer and Executive Chairman for a term commencing immediately and continuing until third anniversary of the Danner Employment Agreement, unless earlier terminated in accordance with its terms, and subject to an auto renewal of 1 year. For his services, Mr. Danner will be paid $ 600,000 per annum. During the course of the employment, Mr. Danner will be eligible for (i) annual cash performance bonuses and (ii) eligible to receive equity-based compensation awards from time to time, as determined in the sole discretion of the Board or a committee thereof. The Danner 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 18 months following Mr. Danner’s termination. On May 13, 2026, the Company entered into an employment agreement (the “Zhang Employment Agreement”) with Yuwen Zhang, which replaces and supersedes in its entirety that certain prior employment agreement, dated August 25, 2025, between the Company and Ms. Zhang . Pursuant to the Employment Agreement, Ms. Zhang will serve as the Company’s Chief Investment Officer and Director for a term commencing immediately and continuing until third anniversary of the Zhang Employment Agreement, unless earlier terminated in accordance with its terms, and subject to an auto renewal of 1 year. For his services, Ms. Zhang will be paid $ 600,000 per annum. During the course of the employment, Ms. Zhang will be eligible for (i) annual cash performance bonuses and (ii) eligible to receive equity-based compensation awards from time to time, as determined in the sole discretion of the Board or a committee thereof. The Zhang 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 2 years following Ms. Zhang ’s termination. Stockholder Rights Plan On May 13, 2026, the Board of Directors (the “ Board ”) of Sharps Technology, Inc. (the “ Company ”): ● adopted a limited duration stockholder rights plan (the “ Rights Plan ”), the terms of which are set forth in a Rights Agreement entered into between the Company and VStock Transfer, LLC, as rights agent (the “ Rights Agent ”) dated May 14, 2026; and ● pursuant to the Rights Plan, authorized and declared a dividend to stockholders of record at the close of business on May 26, 2026 (the “ Record Date ”) of one preferred share purchase right (each, a “ Right ”) for each outstanding share of the Company’s common stock, par value $ 0.0001 (“ Common Stock ”), held by such stockholders. The Rights Plan is similar to other rights plans adopted by publicly held companies. Generally, under the Rights Plan, the Rights will become exercisable only if a person or group (including a group of persons acting in concert with each other) acquires beneficial ownership of 15% or more of the Company’s Common Stock in a transaction not approved by the Company’s Board of Directors. In such a situation, each holder of a Right (other than the acquiring person or group, whose Rights will become void and will not be exercisable) will have the right to purchase, upon payment of the exercise price of $10.00 per Right (both the exercise price and the number of shares for which a Right is exercisable being subject to adjustment from time to time as set forth in the Rights Plan) and in accordance with the terms of the Rights Plan, a number of shares of the Company’s common stock having a market value of twice such price. In addition, if the Company is acquired in a merger or other business combination after an acquiring person acquires 15% or more of the Company’s common stock, each holder of a Right would thereafter have the right to purchase, upon payment of the then-current exercise price and in accordance with the terms of the Rights Plan, a number of shares of common stock of the acquiring person having a market value of twice such price. The acquiring person or group will not be entitled to exercise Rights. Generally, the Rights Plan works by imposing a significant penalty upon any person or group (including a group of persons acting in concert with each other) that acquires 15% or more of the Company’s Common Stock without the approval of the Board. As a result, the overall effect of the Rights Plan and the dividend of the Rights may be to render more difficult, or discourage, a tender or exchange offer or other acquisition of the Company’s Common Stock that is not approved by the Board. The Rights Plan does not prevent the Board from considering any offer that it considers to be in the best interests of the Company’s stockholders. F- 25