What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-08-07 compared with 2026-05-14 · 152 added, 111 removed, 134 unchanged (66% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations

following discussion and analysis summarizes the significant factors affecting the condensed consolidated operating results,

financial condition, liquidity and cash flows of our Company as of and for the periods presented below.

The following discussion and

analysis of our financial condition and results of operations should be read in conjunction with our audited financial statements

and notes included in this Quarterly Report on Form 10-Q.

Unless the context requires otherwise, references in this Annual Report on

Form 10-K to “we,” “us,” and “our” refer to Sharps Technology, Inc.

following discussion and analysis summarizes the significant factors affecting the condensed consolidated operating results, financial

condition, liquidity and cash flows of our Company as of and for the periods presented below.

The following discussion and analysis of

our financial condition and results of operations should be read in conjunction with our audited financial statements and notes included

in this Quarterly Report on Form 10-Q.

Unless the context requires otherwise, references in this Annual Report on Form 10-K to “we,”

“us,” and “our” refer to SkyAI, Inc.

Forward-Looking

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made, and we do not assume any obligation to update any forward-looking statements .

our inception in 2017 and through the fourth quarter of 2022, we devoted substantially all of our resources to the research and development

our inception in 2017 and through 2022, we devoted substantially all of our resources to the research and development

of our safety syringe products.

Commencing in the fourth quarter of 2022 we started building inventory of syringe products.

Commencing in 2022,` we started building inventory of syringe products.

generating syringe revenues in 2025.

In October 2025, we discontinued R&D and the manufacture of syringe products, and any future

inventory to be marketed will be sourced from third-party manufacturers.

In October 2025, we discontinued R&D and the manufacture

of syringe products, and inventory marketed from that date was sourced from third-party manufacturers.

In August 2025, we adopted a digital commodity treasury strategy focused on accumulating Solana (“SOL”),

the native digital commodity of the Solana blockchain.

For the three months ended March 31, 2026, we reported a net

loss of approximately $86 million, primarily resulting from unrealized and realized losses on our Solana holdings of approximately $71

million and $11 million, respectively.

classify our revenues as net revenues, cost of goods sold and gross margin/loss from our Medical Device segment and staking revenue from

digital commodities segment.

Operating expenses include transaction expenses relating to digital commodity activities, research and development

from medical device packaging and selling, general and administrative expenses related to both of our segments and our corporate office.

We maintain a corporate office located in Melville, New York.

Marketing and Sales

continue to be in discussions with healthcare companies and distributors for sales of our existing inventory of disposable syringe products.

We continue to market these products to prospective customers, which include foreign governments, hospitals and healthcare groups as

opportunities present themselves.

and Development

The Company earns staking rewards by delegating our digital commodities to third-party validators on proof-of-stake

blockchain networks.

the three and six months ended June 30, 2026, we reported a net loss of approximately $23.3 million and $109.5 million, primarily

resulting from unrealized and realized losses on our Solana holdings of approximately $84.3 million and $14.7 million,

respectively.

Medical Device segment has net revenues, cost of goods sold and gross margin/loss.

We also have staking revenue from our Digital Commodities

Operating expenses include transaction expenses relating to digital commodity activities, research and development for our software

under development and selling, general and administrative expenses related to both of our segments and our corporate office.

Substantially

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Following 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

in October 2025, the Company is no longer engaging in medical device related research and development activities and is limiting its

medical device activity to sales and distribution.

The Company is now engaging in research and development for certain potential new

January 10, 2026, we 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.

On May 2, 2026 we were able to lease a 1,467 square foot office in Hong Kong to serve as the

permanent headquarters for our Asia-based operations.

by the Company of certain assets, the Company is no longer engaged in medical device related research and development activities and

is limiting its medical device activity to sales and distribution.

The Company is now engaged in research and development for certain

new products related to building an agentic finance platform.

(see Recent Developments).

We continue to prioritize long-term growth of

the Company’s business, using cash and proceeds from the sale of SOL to fund operating expenses and our expansion plans.

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.

maintain a corporate office located in Melville, New York.

As of August 3, 2026, we had approximately 30 employees worldwide.

May 27, 2026, the Company announced its name change, the change in its ticker symbols, and a strategic transformation

of its business, reflecting a shift from its legacy operations to the development of a technology-driven financial platform.

Company is now focused on building an agentic finance platform designed to serve emerging markets across Asia, Latin America, and

Africa (the “Global South”).

By leveraging AI to aggregate and analyze on-chain financial data, the platform is being

designed to enable users to better manage their assets and access global markets.

part of its strategic transformation, the Company has established an international operational headquarters in Hong Kong to support strategic acquisitions,

talent acquisition, and expansion efforts.

The Company intends to utilize blockchain infrastructure, including the Solana

network, as a foundational layer for its platform and treasury strategy.

Accounting Policies and Significant Judgments and Estimates

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estimates under different assumptions or conditions.

The fair market value adjustments, based on either the trading price or fair market

value of outstanding warrants, for those classified as liabilities, could impact the operating results in the reporting periods.

the market volatility of our investments in digital commodities could impact the operating results in the reporting periods.

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

received net proceeds of $14.2 million on April 19, 2022.

Company is a medical device sales and distribution enterprise focused on the marketing and distribution of syringe products,

including the Securgard syringe product line and related drug-delivery systems.

The Company commenced generating revenue in the

quarter ended June 30 2025.

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 Company intends to

continue its distribution platform with established third-party manufacturers.

Sharps Technology is committed to maintaining

compliance with all applicable regulatory and quality standards governing the marketing and distribution of medical devices,

including those established by the U.S.

Food and Drug Administration (FDA) and comparable international authorities.

August 24, 2025, the Company adopted a digital commodity treasury strategy focused on SOL, the native digital commodity

of the Solana blockchain.

The Company has recently begun to explore strategic acquisitions and/or investments globally.

To this goal,

our treasury strategy and engineering teams continue to analyze these opportunities and develop our own digital products.

and continue to prioritize long-term growth of the Company’s business, using proceeds from the sale of SOL to fund

operating expenses and our expansion plans.

The fair market value adjustments related to investments in digital assets and warrants

classified as liabilities, as well as inventory related adjustments, could impact the operating results in the reporting periods.

of Significant Accounting Policies

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of Operations

of the Three Months Ended March 31, 2026 and 2025.

ENDED JUNE 30,

Cost of goods sold

Cost of goods – inventory reserve

Total cost of goods sold

Gross Margin (Loss)

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Consulting fees – related party

Selling, general and administrative

Research and development

Selling, general and administrative

Unrealized loss on digital commodities

4 unchanged sentences

(23,389,091 )

(109,655,065 )

Other income (expense)

1 unchanged sentence

Fair market value adjustment on warrants

Foreign currency loss

Other expense

Other Income, net

1 unchanged sentence

(23,280,798 )

(109,520,033 )

Tax Provision

1 unchanged sentence

(23,280,798 )

(109,520,033 )

Discontinued Operations:

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$ (23,280,798 )

$ (109,520,033 )

of the Six Months Ended June 30, 2026 and 2025.

Net Revenue/Gross Margin

the three months ended March 31, 2026, we recognized revenues of $192,780 from the sale of the Sologard product line of syringes.

was no product revenue in the three months ended March 31, 2025.

the six months ended June 30, 2026 and June 30, 2025, revenue increased by $56,700 to $192,780 from $136,080 driven by the sale of the

Sologard product line of syringes in 2026.

inventory reserve increased by $284,228 for the six month period ended June 30, 2026, with the prior period ended June 30, 2025

reserve of $0.

Revenue – net

the three months ended March 31, 2026, the Company recognized net staking revenue of $3,134,109 resulting from the digital treasury strategy

the six months ended June 30, 2026, the Company recognized net staking revenue of $5,457,656 resulting from the digital treasury strategy

implemented during the third quarter of 2025.

As of March 31, 2026, approximately 95% of the Company’s SOL holdings were staked.

No staking revenue was recognized in the same period of 2025.

expense – digital commodities

the three months ended March 31, 2026, $63,821 in transaction expenses relate to custodian and exchange for digital commodity investments.

the six months ended June 30, 2026, $128,508 in transaction expenses relate to custodian and exchange for digital commodity investments.

No digital commodity transaction expenses were incurred in the same period of 2025.

loss on digital commodities

the three months ended March 31, 2026, the Company recognized $70,846,202 in unrealized loss on investments in digital commodities.

unrealized loss resulted from a decrease of the average fair market value per unit of our investments net of

the reduction in the discount on our Locked SOL.

the six months ended June 30, 2026, the Company recognized $84,336,553 in unrealized loss on investments in digital commodities.

unrealized loss resulted from a decrease of the average fair market value per unit of our investments net of the reduction in the discount

on our Locked SOL.

No digital commodities were held in the same period of 2025.

loss on digital commodities

the three months ended March 31, 2026, the Company recognized $10,789,841 in realized losses on investments in digital commodities.

realized loss reflected the difference between the average price of $92.89 per SOL received for the sale of 100,000 SOL and the cost

basis of $200.79 from the period following the August 2025 PIPE.

the six months ended June 30, 2026, the Company recognized $14,716,799 in losses on investments in digital commodities.

realized loss reflected the difference between the average price of $92.09 received for the sale of 135,399 SOL and the cost basis of

No digital commodities were held in the same period of 2025.

and Development

the three months ended March 31, 2026, Research and Development (“R&D”) expenses increased to $137,097 compared to none

in continuing operations for the three months ended March 31, 2025.

This increase resulted from new R&D activities based at the Company’s

Hong Kong operation.

the six months ended June 30, 2026, Research and Development (“R&D”) expenses increased to $420,255 compared to none

in continuing operations for the six months ended June 30, 2025.

This increase resulted from new R&D activities related to the Company’s

software development.

Prior period R&D was related to the Company’s manufacturing activities that are now included in the Loss

from discontinued operations.

General and Administrative

the three months ended March 31, 2026, General and Administrative (“G&A”) expenses were $5,053,320 as compared to $1,364,295

for the three months ended March 31, 2025.

the six months ended June 30, 2026, General and Administrative (“G&A”) expenses were $10,216,580 as compared to $2,775,456

for the six months ended June 30, 2025.

The increase of $7,441,124 was primarily attributable to the following factors

increase of approximately $2.3 million in payroll and related costs of:

payroll of $88,319 from $423,438 in 2025 to $511,757 in 2026,

increase in stock compensation expense, due to timing of option awards and vesting, of $2,185,908 from $44,300 in 2025 to $2,230,208

other G&A expenses increased approximately $1.4 million primarily due to higher professional & legal fees $441,144, insurance

costs $319,128, and consulting fees $428,417.

increase of approximately $4.3 million in payroll and related costs of, primarily due to an increase of $4.1 million in stock

compensation expense due to the vesting of stock options.

The remaining $0.2 million increase was mainly due to payroll from new

increase of approximately $2.3 million in professional services:

$0.8 million related to audit, accounting and tax advisory services

$0.4 million increase in legal fees

$1.1 million increase in consulting and other professional services

other G&A expenses increased approximately $0.8 million primarily due to an increase of $0.6 million in insurance costs

fees – related parties

amount of $5,000,000 represents consulting fees to Sol Edge.

See Note 13 to the Condensed Consolidated Financial

See Note 13 to the Condensed Consolidated Financial Statements.

Interest expense (income)

Interest income was $10,038 for the three months ended March 31, 2026, compared to interest expense of $626,991 for the three months

ended March 31, 2025.

Net interest changed by $637,029 due to a) interest earned on invested cash in 2026 of $29,268 as compared to

$81,399 in 2025 b) interest expense of $708,390 for the accreted interest on the debt financing that originated in the third quarter

of 2024 as compared to $19,229 in interest expense during first quarter of 2026.

interest income was $86,784 for the six months ended June 30, 2026, compared to interest expense of $ 530,038 for the six months ended

June 30, 2025.

Net interest changed by $616,822 due to a) interest earned on cash in 2026 of $117,884 as compared to $178,351 in 2025

b) interest expense of $708,390 for the accreted interest on the debt financing that originated in the third quarter of 2024 as compared

to $19,229 in interest expense during 2026.

Adjustment for Warrants

value of the Warrants recorded as a liability requires the Fair Market Value (“FMV”) to be recorded at the date warrants

are issued and then be remeasured at each reporting date while outstanding with recognition of the changes in fair value to other

income or expense in the Condensed Consolidated Statement of Operations.

For the three months ended March 31, 2026, and 2025 the

Company recorded a FMV gain adjustment of $16,708 and $4,618,889, respectively.

are issued and then be remeasured at each reporting date while outstanding with recognition of the changes in fair value to other income

or expense in the Condensed Consolidated Statement of Operations.

For the six months ended June 30, 2026, and 2025 the Company recorded

a FMV gain adjustment of $47,919 and $11,087,700, respectively.

of the Three Months Ended June 30, 2026 and 2025.

Net Revenue/Gross Margin

the three months ended June 30, 2026 and June 30, 2025, we recognized revenues of $0 and $136,080 from the sale of the Sologard product

line of syringes.

Revenue – net

the three months ended June 30, 2026, the Company recognized net staking revenue of $2,323,547 resulting from the digital treasury strategy

implemented during the third quarter of 2025.

expense – digital commodities

the three months ended June 30, 2026, $64,686 in transaction expenses relate to custodian and exchange for digital commodity investments.

loss on digital commodities

the three months ended June 30, 2026, the Company recognized $13,490,351 in unrealized loss on investments in digital commodities.

unrealized loss resulted from a decrease of the average fair market value per unit of our investments net of the reduction in the discount

on our Locked SOL.

No digital commodities were held in the same period of 2025.

loss on digital commodities

the three months ended June 30, 2026, the Company recognized $3,926,958 in losses on investments in digital commodities.

realized loss reflected the difference between the average price of $89.85 received for the sale of 35,399 SOL and the cost basis of

and Development

the three months ended June 30, 2026, R&D expenses increased to $283,158 compared to none in continuing operations for the three

months ended June 30, 2025.

This increase resulted from new R&D activities based at the Company’s Hong Kong operation.

General and Administrative

the three months ended June 30, 2026, G&A expenses were $5,163,257 as compared to $1,411,161 for the three months ended June 30,

The increase of $3,752,096 was primarily attributable to the following factors

increase of approximately $2.2 million in payroll and related costs, consisting of $1.9 million increase in stock compensation expense

and $0.3 million payroll increase.

other G&A expenses increased approximately $ 1.5 million, primarily due to higher professional and legal fees $0.6 million, insurance

costs $0.2 million and consulting fees $0.7 million.

fees – related parties

amount of $2,500,000 represents consulting fees to Sol Edge.

See Note 13 to the Condensed Consolidated Financial Statements.

Interest expense (income)

Interest income was $76,746 for the three months ended June 30, 2026, compared to $ 96,953 for the three months ended June 30, 2025.

Adjustment for Warrants

the three months ended June 30, 2026, and 2025 the Company recorded a FMV gain adjustment of $31,211 and $6,468,811, respectively.

and Capital Resources

March 31, 2026, and December 31, 2025, we had a cash balance of $12,320,547 and $10,382,745, respectively.

June 30, 2026, and December 31, 2025, we had a cash balance of $12,071,008 and $10,382,745, respectively.

The Company had working capital

of $16,160,964 at March 31, 2026 as compared to a working capital of $ 14,187,484 as of December 31, 2025.

The increase in our working

capital of $1,973,480, after net proceeds from the sale of Solana in 2026 of $9,288,716, was primarily related to the use of cash of

$2,677,122 in operations, and cash used to repay the margin loan of $3,084,931.

The Company intends to finance its future development

and commercialization activities and its working capital needs with a combination of the sale of a portion of its Solana holdings, the

sale of equity securities and/or with additional funding from other traditional financing sources until such time that funds provided

by operations are sufficient to fund working capital requirements.

The Company is debt free and intends to maintain sufficient cash and

other immediately liquid resources on hand to satisfy current obligations.

of $12,627,942 at June 30, 2026 as compared to a working capital of $14,187,484 as of December 31, 2025.

The decrease in our working

capital of $1,559,542, after net proceeds from the sale of Solana in 2026 of $12,469,465, was primarily related to increases use of cash

of $5,672,370 in operations, cash used to repay the margin loan of $3,084,931 and the share repurchase program of $2,011,573.

Company intends to finance its future development and commercialization activities and its working capital needs with a combination of

the sale of a portion of its Solana holdings, the sale of equity securities and/or with additional funding from other traditional financing

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

The Company is debt free

and intends to maintain sufficient cash and other immediately liquid resources on hand to satisfy current obligations.

Cash Used in Operating Activities

Company used cash of $2,677,122 and $1,417,691 in operating activities for the three months ended March 31, 2026 and 2025, respectively.

Company used cash of $5,672,370 and $2,276,940 in operating activities for the six months ended June 30, 2026 and 2025, respectively.

The change in cash used was principally due to the Company incurring higher G&A expenses and new R&D activities, as described

above, during the three months ended March 31, 2026.

Cash Used in Investing Activities

the three months ended March 31, 2026 and 2025, the Company provided cash from investing activities of $9,288,716 and none, respectively.

In the first quarter of 2026, 100,000 SOL were sold at an average price of $92.89 per SOL, generating a realized loss on digital commodities

of $10,789,841.

above, during the six months ended June 30, 2026.

Cash Provided By Investing Activities

the six months ended June 30, 2026, the Company provided cash from investing activities of $12,457,526.

For the six months ended June 30, 2025, the Company had no cash provided

by or used for continuing operations.

The increase in net cash provided by investing activities was indicative of the changing nature of the business driven

by the sale of Solana and the decrease in fixed asset additions.

Cash Provided by Financing Activities

the three months ended March 31, 2026 and 2025, the Company used and provided cash from financing activities of $4,673,792 and $13,953,031

the six months ended June 30, 2026 and 2025, the Company used and provided cash from financing activities of $5,096,894 and $ 13,953,030

respectively.

In the 2025 period, the cash provided was from the $18.2 million in net proceeds from the Offerings in January 2025 offset

In the 2025 period, the cash provided was from the $18.2 million in net proceeds from the Offering in January 2025 offset

by the debt repayment of $4.2 million.

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis