SkyAI, Inc 10-Q for FY2025 Q3
SkyAI, Inc. (SKYA)
About this 10-Q
SkyAI, Inc filed this 10-Q on November 14, 2025, covering the quarter ended September 30, 2025 (FY2025 Q3).
Headline figures
Quarter ended September 30, 2025, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $83.62K
- Net loss
- $105.33M
- compared with a net loss of $1.69M a year earlier
- Diluted EPS
- -$4.33
- compared with -$379.55 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
| TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Commission file number
| (Exact name of registrant as specified in its charter) |
State or other jurisdiction of incorporation or organization |
(I.R.S. Employer Identification No.) |
(Address of principal executive offices) (Zip Code)
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Indicate by check mark whether the registrant
(1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements
for the past 90 days.
Indicate by check mark whether the registrant
has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405
of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| ☒ | Smaller reporting company | ||
| Emerging growth company |
If an emerging growth company, indicate by check
mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
As of November 14, 2025, shares of the registrant’s common stock, par value $ per share, were issued and outstanding.
TABLE OF CONTENTS
| 2 |
Item 1. Financial Statements:
SHARPS TECHNOLOGY, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
September 30, 2025 | December 31, 2024 | |||||||
| (Unaudited) | (Audited) | |||||||
| Assets: | ||||||||
| Current Assets | ||||||||
| Cash | $ | $ | ||||||
| USDC (Note 6) | ||||||||
| Account Receivable –product trade, net | ||||||||
| Accounts Receivable - digital | ||||||||
| Accounts Receivable | ||||||||
| Tax Receivable - VAT | ||||||||
| Escrow Deposit | ||||||||
| Prepaid expenses and other current assets (Note 3) | ||||||||
| Derivative assets, net (Note 8) | ||||||||
| Inventories, net (Note 4) | ||||||||
| Current Assets | ||||||||
| Fixed Assets, net of accumulated depreciation (Note 5) | ||||||||
| Digital assets, at fair value, (Note 6) | ||||||||
| Other Assets, including deposits on fixed assets (Note 7) | ||||||||
| TOTAL ASSETS | $ | $ | ||||||
| Liabilities: | ||||||||
| Current Liabilities | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued expenses and other | ||||||||
| Notes Payable, net of discount (Note 9) | ||||||||
Derivative liability, net (Note 8) | ||||||||
| Margin loan (Note 8) | ||||||||
| Warrant liability (Notes 10 and 12) | ||||||||
| Total Current Liabilities | ||||||||
| Deferred Tax Liability (Note 14) | ||||||||
| Total Liabilities | ||||||||
| Commitments and Contingencies (Note 17) | ||||||||
| Subsequent Events (Note 19) | ||||||||
| Stockholders’ Equity: | ||||||||
| Preferred stock, par value; shares authorized; shares issued and outstanding (2024: ) | ||||||||
| Common stock, par value; $and (: 2024) shares authorized; shares issued and outstanding (2024: ) | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated other comprehensive income | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total Stockholders’ Equity | ||||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | $ | ||||||
The accompanying notes are an integral part of these financial statements.
| F-1 |
SHARPS TECHNOLOGY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30
(UNAUDITED)
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
THREE MONTHS ENDED SEPTEMBER 30, | NINE MONTHS ENDED SEPTEMBER 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Product Revenue, net | $ | $ | $ | $ | ||||||||||||
| Cost of goods manufactured | ||||||||||||||||
| Cost of goods – inventory reserve | ||||||||||||||||
| Total cost of goods manufactured | ||||||||||||||||
| Gross Margin (Loss) | ( | ) | ( | ) | ||||||||||||
| Staking Revenue - net | ||||||||||||||||
| Operations: | ||||||||||||||||
| Transaction expense - digital assets | ||||||||||||||||
| Research and development | ||||||||||||||||
| Selling, General and administrative – (Note 10(a)) | ||||||||||||||||
| Realized and unrealized (gains) loss on digital assets | ( | ) | ( | ) | ||||||||||||
| Impairment of long lived fixed assets | ||||||||||||||||
| Total operating expenses | ||||||||||||||||
| Loss from Operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other income (expense) | ||||||||||||||||
| Interest income (expense) | ( | ) | ( | ) | ( | ) | ||||||||||
| FMV adjustment on warrants | ||||||||||||||||
| Other (expense) (Note 15) | ( | ) | ||||||||||||||
| Derivative gain/(loss), net | ( | ) | ( | ) | ||||||||||||
| Foreign currency | ( | ) | ( | ) | ||||||||||||
| Total Other income (expense) | ( | ) | ||||||||||||||
| Net loss Before Provision for Taxes | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Deferred Tax Benefit | ||||||||||||||||
| Net Loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net loss per share, basic and diluted | $ | ) | $ | ) | $ | ) | $ | ) | ||||||||
| Weighted average shares used to compute net loss per share, basic and diluted |
| |||||||||||||||
The accompanying notes are an integral part of these financial statements.
| F-2 |
SHARPS TECHNOLOGY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024
(UNAUDITED)
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
THREE MONTHS ENDED SEPTEMBER 30, | NINE MONTHS ENDED SEPTEMBER 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Net Income (loss) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Other comprehensive income: | ||||||||||||||||
| Foreign currency translation adjustments | ( | ) | ||||||||||||||
| Comprehensive Income (loss) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
The accompanying notes are an integral part of these financial statements.
| F-3 |
SHARPS TECHNOLOGY, INC.
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2024
(Unaudited)
| Shares | Amount | Shares | Amount | Capital | Income | Deficit | Equity | |||||||||||||||||||||||||
| Preferred Stock | Common Stock | Additional Paid in | Accumulated Other Comprehensive | Accumulated | Total Stockholders | |||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Income | Deficit | Equity | |||||||||||||||||||||||||
| Balance -December 31, 2023 | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||||
| Net loss for the three months ended March 31, 2024 | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Share-based compensation charges | - | - | ||||||||||||||||||||||||||||||
| Exercise of Pre-Funded Warrants | - | |||||||||||||||||||||||||||||||
| Foreign Currency Translation | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Balance - March 31, 2024 | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||||
| Net loss for the three months ended June 30, 2024 | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Share-based compensation charges | - | - | ||||||||||||||||||||||||||||||
| Exercise of Pre-Funded Warrants | - | |||||||||||||||||||||||||||||||
| Registration A Offering | - | |||||||||||||||||||||||||||||||
| Warrant Inducements | ||||||||||||||||||||||||||||||||
| Foreign Currency Translation | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Balance - June 30, 2024 | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||||
| Net loss for the three months ended September 30, 2024 | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Cancellation of Preferred Share | ( | ) | - | |||||||||||||||||||||||||||||
| Share-based compensation charges | - | - | ||||||||||||||||||||||||||||||
| Issuance of Common Stock – see Note 7 | , | |||||||||||||||||||||||||||||||
| Warrant exercise | - | |||||||||||||||||||||||||||||||
| Foreign Currency Translation | - | - | ||||||||||||||||||||||||||||||
| Balance - September 30, 2024 | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||||
| F-4 |
SHARPS TECHNOLOGY, INC.
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025
(Unaudited)
| Preferred Stock | Common Stock | Additional Paid-in | Accumulated Other Comprehensive | Accumulated | Total Stockholders’ | |||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Income | Deficit | Equity | |||||||||||||||||||||||||
| Balance – December 31, 2024 | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||||
| Net income for the three months ended March 31, 2025 | - | - | ||||||||||||||||||||||||||||||
| Share-based compensation charges | - | - | ||||||||||||||||||||||||||||||
| Equity Offering - January 2025 | - | |||||||||||||||||||||||||||||||
| Warrant Exercise – Series B Cashless – | - | ( | ) | |||||||||||||||||||||||||||||
| Foreign currency translation | - | - | ||||||||||||||||||||||||||||||
| Balance – March 31, 2025 | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||||
| Net income for the three months ended June 30, 2025 | - | - | ||||||||||||||||||||||||||||||
| Share-based compensation charges | - | - | ||||||||||||||||||||||||||||||
| Warrant Exercise – Series B Cashless – | - | ( | ) | |||||||||||||||||||||||||||||
| Warrant Exercise | - | ( | ) | |||||||||||||||||||||||||||||
| Foreign currency translation | - | - | ||||||||||||||||||||||||||||||
| Balance – June 30, 2025 | ( | ) | ||||||||||||||||||||||||||||||
| Balance | ( | ) | ||||||||||||||||||||||||||||||
| Net loss for the three months ended September 30, 2025 | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Net income (loss) | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Share-based compensation charges | - | - | ||||||||||||||||||||||||||||||
| Equity Offering - August 2025 | -- | |||||||||||||||||||||||||||||||
| Exercise of Series A warrants | - | |||||||||||||||||||||||||||||||
| Exercise of Prefunded Warrants | - | |||||||||||||||||||||||||||||||
| Shelf Offering – shares issued | - | |||||||||||||||||||||||||||||||
| Foreign currency translation | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Balance – September 30, 2025 | $ | $ | $ | $ | ( | ) | $ |
| ||||||||||||||||||||||||
| Balance | ( | ) |
| |||||||||||||||||||||||||||||
The accompanying notes are an integral part of these financial statements.
| F-5 |
SHARPS TECHNOLOGY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30
(UNAUDITED)
| 2025 | 2024 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net income (loss) | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net (loss) to net cash used in operating activities: | ||||||||
| Digital assets received as staking revenues | ( | ) | ||||||
| Realized (gain)/loss on digital assets | ( | ) | ||||||
Realized (gain)/loss on derivatives | ||||||||
| Unrealized (gain)/loss on digital assets | ( | ) | ||||||
Unrealized (gain)/loss on derivatives | ||||||||
| Depreciation and amortization | ||||||||
| Stock-based compensation | ||||||||
| Accretion of debt discount | ||||||||
| FMV adjustment for warrants | ( | ) | ( | ) | ||||
| Escrow forfeited | ||||||||
| Inventory reserve adjustment | ||||||||
| Loss on impairment of fixed assets | ||||||||
| Foreign exchange (income) loss | ( | ) | ||||||
| Changes in operating assets: | ||||||||
| Accounts receivable – trade & digital | ( | ) | ||||||
| VAT receivable, prepaid expenses and other current assets | ( | ) | ( | ) | ||||
| Inventory | ( | ) | ( | ) | ||||
| Accounts payable and accrued liabilities | ( | ) | ||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
| Purchase of digital assets | ( | ) | ||||||
| Purchase of and deposits paid for fixed assets | ( | ) | ( | ) | ||||
| Escrow payment under agreement | ( | ) | ||||||
| Net cash used in investing activities | ( | ) | ( | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Net proceeds from offerings and warrant exercises | ||||||||
| Proceeds from margin loan | ||||||||
| Net proceeds from Debt financing | ||||||||
| Repayment of Debt | ( | ) | ||||||
| Net cash provided by financing activities | ||||||||
| Effect of exchange rate changes on cash | ( | ) | ||||||
| NET INCREASE (DECREASE) IN CASH | ( | ) | ||||||
| CASH — BEGINNING OF PERIOD | ||||||||
| CASH — END OF PERIOD | $ | $ | ||||||
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||||||||
| Digital assets received from common stock issuance | ||||||||
USDC received from common stock issuance | ||||||||
| Cash Interest (OID) paid, attributed to Note (see Note 9) | $ | |||||||
| Cash paid for taxes | ||||||||
The accompanying notes are an integral part of these financial statements.
| F-6 |
SHARPS TECHNOLOGY, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024
Note 1. Description of Business
Nature of Business
Sharps Technology, Inc. (“Sharps” or the “Company”) is a medical device sales and distribution enterprise engaged in the marketing and distribution of syringe products and related drug-delivery systems. Prior to August 24, 2025, the Company was also focused on design and manufacture of a portfolio of conventional and safety syringes.
On August 24, 2025, the Company adopted a digital asset treasury strategy focused on accumulating Solana (“SOL”), the native digital asset of the Solana blockchain.
On August 28, 2025, the Company (“Buyer”) acquired the shares of SOL Equity Limited, a Cayman Islands exempt company from Catan Holdings LP, a Cayman Islands corporation (“Seller”) which was a non-operating company. The Seller, assigned, transferred and conveyed to Buyer, and Buyer hereby purchased and accepted from Seller, all of the issued and outstanding shares free and clear of all liens, claims and encumbrances, for nominal consideration of $1.00. The assets acquired, included a custodian account with no balance and a ticker reservation account. The Seller further represented that, as of August 28, 2025 no other Assets and no liabilities of any kind existed. The purposes of the SOL Equity Limited will be the entity that operates the digital asset treasury segment.
The accompanying consolidated financial statements include the accounts of Sharps Technology, Inc. and its wholly owned subsidiaries, Safegard Medical (Hungary) KFT, and SOL Equity Limited, collectively referred to as the “Company.” All intercompany transactions and balances have been eliminated.
The Company’s fiscal year ends on December 31.
On April 13, 2022, the Company’s Initial
Public Offering was deemed effective with trading commencing on April 14, 2022. The Company received net proceeds of $
Note 2. Summary of Significant Accounting Policies
Basis of Presentation
The accompanying condensed consolidated financial statements have been prepared by the Company in accordance with generally accepted accounting principles (“GAAP”) in the United States (“U.S.”) and are expressed in U.S. dollars. These financial statements should be read in conjunction with the audited financial statements for the year ended December 31, 2024.
The accompanying condensed consolidated
financial statements have been prepared assuming that the Company will continue as a going concern. The Company has not generated
any cash flow from operations since inception but commenced generating syringe revenues in the second quarter of 2025 and staking revenue in the third quarter of 2025. As of and
for the nine months ended September 30, 2025, the Company used cash in operations of $
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of digital assets and derivative liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. As of September 30, 2025, the most significant estimates relate to inventory reserves, digital assets, derivative liabilities, stock-based compensation, and derivatives.
Cash and Cash Equivalents
The Company considers all highly liquid investments purchased with an original
or remaining maturity of nine months or less at the date of purchase to be cash equivalents. Cash and cash equivalents are maintained
with various financial institutions. At September 30, 2025 and December 31, 2024, the Company had $
| F-7 |
SHARPS TECHNOLOGY, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024
Note 2. Summary of Significant Accounting Policies (continued)
Concentration of Credit Risk
The Company’s cash, USDC, certain digital assets held, accounts receivable, and deposits are potentially subject to concentration of credit risk.
Cash
is primarily placed with financial institutions which are of high credit quality. The Company does have corporate deposit balances with
financial institutions which exceed the Federal Deposit Insurance Corporation insurance limit of $
The Company holds USDC, a stablecoin redeemable on a one-to-one basis for U.S. dollars and issued by Circle Internet Financial, LLC. (“Circle”). USDC is a short-term digital asset in the Condensed Consolidated Financial Statements and as of September 30, 2025, the underlying reserves were held in cash, short-duration U.S. Treasuries, and overnight U.S. Treasury repurchase agreements within segregated accounts for the benefit of USDC holders.
As
of September 30, 2025, $
Inventories
The Company values inventory at the lower of cost (average cost) or net realizable value. Work-in-process and finished goods inventories consisted of material, labor, and manufacturing overhead. Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. A reserve is established for any excess or obsolete inventories or they may be written off. At December 31, 2024, inventory is comprised of raw materials, components, and finished goods. At September 30, 2025, inventory is comprised of finished goods (See Note 4).
During the three months ended September 30,
2025, a reserve for the net realizable value of inventory was established of $
Digital Assets
Pursuant to ASU 2023-08, Intangibles — Goodwill and Other — Crypto Assets: Accounting for and Disclosure of Crypto Assets, codified into ASC subtopic 350-60, in-scope crypto assets are required to be measured at fair value in the statement of condensed consolidated balance sheet, with gains and losses from changes in the fair value of such digital assets recognized in the condensed consolidated statement of operations each reporting period. ASU 2023-08 also requires certain interim and annual disclosures for digital assets within the scope of the standard. Sales and purchases of SOL, USDC, and USDT are reflected as cash flows from investing activities in the condensed consolidated statements of cash flows.
The Company adopted this guidance effective August 25, 2025, as this was the start of the Company first holding in digital assets. SOL and USDC, is measured using Level 1 inputs under ASC 820, based on quoted prices from the principal market. ASC 820 defines “principal market” as the market with the greatest volume and level of activity for the asset or liability. The determination of the principal market (and, as a result, the market participants in the principal market) is made from the perspective of the reporting entity. The digital assets held by the Company are traded on a number of active markets globally. The Company determines Coinbase as its principal market, The Company recognizes staking revenue by utilizing daily prices obtained from Coinbase at the end of the treasury operations day at 5pm ET (“Spot Price”).
A portion of the in-kind SOL invested as part of the August 2025 Offering includes restrictions. These locked SOL will unlock over a period of time and once unlocked can be sold on several SOL exchanges.
While the tokens remain restricted, the locked SOL fair value will include a discount to the Spot price for SOL with which the unrealized gain or loss is recognized. After reviewing the changes in the market price for these and similar locked Sol between August 25th and September 30, 2025 and the discount for in-kind SOL invested at the August 25, 2025 offering, the Company has elected to use the 10% as the discount.
Once the SOL is unlocked, the fair value is measured at the end of the period at the market value without a discount.
Fair Value Measurements
ASC 820, Fair Value Measurements and Disclosures, require an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 820 prioritizes the inputs into three levels that may be used to measure fair value.
Certain assets and liabilities of the Company’s including digital assets and warrants are fair valued on a recurring basis with the trading price or FMV using Black Scholes which could cause fluctuations in operating results at the reporting periods.
Level 1
Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities. Valuations are based on quoted prices that are readily and regularly available in an active market and do not entail a significant degree of judgment.
| F-8 |
SHARPS TECHNOLOGY, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024
Note 2. Summary of Significant Accounting Policies (continued)
Level 2
Level 2 applied to assets or liabilities for which there are other than Level 1 observable inputs such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.
Level 2 instruments require more management judgment and subjectivity as compared to Level 1 instruments. For instance: determining which instruments are most similar to the instrument being priced requires management to identify a sample of similar securities based on the coupon rates, maturity, issuer credit rating and instrument type, and subjectively select an individual security or multiple securities that are deemed most similar to the security being priced; and determining whether a market is considered active requires management judgment.
Level 3
Level 3 applied to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. The determination for Level 3 instruments requires the most management judgment and subjectivity.
Fixed Assets
Fixed assets are stated at cost.
Expenditures for maintenance and repairs are charged to operations as incurred. The Company’s fixed assets consist of land,
building, machinery and equipment, molds, computer system and website. Depreciation is calculated using the straight-line method
commencing on the date the asset is operating in the way intended by management over the following useful lives: Building –
Impairment of Long-Lived Assets
Long-lived assets are reviewed annually for impairment
or whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability is
measured by comparison of the carrying amount of an asset group to the future net undiscounted cash flows that the assets are expected
to generate. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying
amount of the assets exceeds the projected discounted future net cash flows arising from the asset. The Company recognized an impairment
on its fixed assets, including land, building, equipment, and deposits paid on equipment orders of $
Purchased Identified Intangible Assets
The Company’s identified intangible assets
are amortized on a straight-line basis over their estimated useful lives of
| F-9 |
SHARPS TECHNOLOGY, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024
Note 2. Summary of Significant Accounting Policies (continued)
Stock-based Compensation Expense
The Company measures its stock-based awards made to employees based on the estimated fair values of the awards as of the grant date. For stock option awards, the Company uses the Black-Scholes option-pricing model. For restricted stock awards, the estimated fair value is generally the fair market value of the underlying stock on the grant date. Stock-based compensation expense is recognized over the requisite service period and is based on the value of the portion of stock-based payment awards that is ultimately expected to vest. The Company recognizes forfeitures of stock-based awards as they occur on a prospective basis.
Stock-based compensation expense for awards granted to non-employees as consideration for services received is measured on the date of performance at the fair value of the consideration received or the fair value of the equity instruments issued, whichever can be more reliably measured.
Derivative Instruments
The Company accounts for common stock warrants as either equity-classified or liability-classified instruments based on an assessment of the specific terms of the warrants and applicable authoritative guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC 480”), Distinguishing Liabilities from Equity (“ASC 480”), treated as level 2 assets, and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own stock and whether the holders of the warrants could potentially require net cash settlement in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.
At their issuance date and as of September 30, 2025, certain warrants (see Notes 10 and 12) are accounted for as liabilities as these instruments did not meet all of the requirements for equity classification under ASC 815-40 based on the terms of the aforementioned warrants. The resulting warrant liabilities are re-measured at each balance sheet date until their exercise or expiration, and any change in fair value is recognized in the Company’s consolidated statements of operations.
The Company enters into derivative contracts to manage its exposure to fluctuations in the price of SOL and not for any other purpose. In addition, the Company evaluates its financing and service arrangements to determine whether certain arrangements contain features that qualify as embedded derivatives requiring bifurcation in accordance with ASC 815 - Derivatives and Hedging. Embedded derivatives that are required to be bifurcated from the host instrument or arrangement are accounted for and valued as separate financial instruments. There were no embedded derivatives requiring separation from the host instrument as of September 30, 2025 and December 31, 2024.
The Company does not elect to designate derivatives as hedges for accounting purposes and, as such, records derivatives at fair value, with subsequent changes in fair value and settlements recognized in earnings. The Company classifies derivative assets or liabilities on the Condensed Consolidated Balance Sheets as current or non-current based on whether settlement of the instrument could be required within 12 months of the balance sheet date and for derivatives with multiple settlements, based on the term of the contract.
While the option positions have SOL as the underlying asset, none of the Company’s SOL holdings are transacted as part of settlement. Realized and unrealized gains for purchased and written derivative positions are valued using their closing premium, at the earlier of their maturity date or September 30, 2025 respectively, as the basis for a fair value adjustment.
Market Risk
The Company is exposed to SOL market risk related to our digital asset
holdings, which are impacted by the market value of the respective digital asset held. We performed a sensitivity analysis assuming a
hypothetical 10% change in the fair value of these digital assets to demonstrate the potential impact on our financial results. A hypothetical
10% increase or decrease in market prices would have positively or negatively impacted our Income (loss) before income taxes by approximately
$
The Company is also exposed to this SOL market risk with respect to derivative positions which SOL is the underlying digital asset.
Foreign Currency Translation/Transactions
The Company has determined that the functional currency for its foreign subsidiary is the local currency. For financial reporting purposes, assets and liabilities denominated in foreign currencies are translated at current exchange rates and profit and loss accounts are translated at weighted average exchange rates. Resulting translation gains and losses are included as a separate component of stockholders’ equity as accumulated other comprehensive income or loss. Gains or losses resulting from transactions entered into other than the functional currency are recorded as foreign exchange gains and losses in the condensed consolidated statements of operations.
Comprehensive income (loss)
Comprehensive income (loss) consists of the Company’s condensed consolidated net income (loss) and foreign currency translation adjustments related to its subsidiaries. Foreign currency translation adjustments included in comprehensive income (loss) were not tax effected as the Company has a full valuation allowance at September 30, 2025 and December 31, 2024. Accumulated other comprehensive income (loss) is a separate component of stockholders’ equity and consists of the cumulative foreign currency translation adjustments.
| F-10 |
SHARPS TECHNOLOGY, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024
Note 2. Summary of Significant Accounting Policies (continued)
The Company computes net income (loss) per share in accordance with ASC 260, Earnings per Share. ASC 260 requires presentation of both basic and diluted earnings per share (EPS) on the face of the consolidated statements of operations. Basic EPS is computed by dividing net income (loss) available to common stockholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Basic EPS in the three and nine months ended September 30, 2025 included and in pre-funded warrants, respectively. Basic EPS in the three and nine months ended September 30, 2024 included and (reverse effected) pre-funded warrants, respectively (see Note 10). Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive. As of September 30, 2025 and 2024, there were (reverse effected) and , respectively of stock options and warrants that could potentially dilute basic EPS in the future that were not included in the computation of diluted EPS because to do so would have been anti-dilutive for the periods presented.
Revenue
Medical Device Packaging Products
The Company generates revenue from the sale of single use medical device packaging products, primarily syringe or as packaging components for a customer’s product. Revenue is recorded, net of sales tax, if applicable. The Company considers revenue to be earned when all the following criteria are met: the Company has a contract with a customer that creates enforceable rights and obligations, promised products are identified, the transaction price is determinable and the Company has transferred control of the promised items to the customer. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account in the contract. The transaction price for the contract is measured as the amount of consideration the Company expects to receive in exchange for the goods expected to be transferred. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as control of the distinct good or service is transferred. The Company’s products typically have one performance obligation, which is the sale of a single product. Transfer of control for the Company’s products is generally at shipment or delivery, depending on contractual terms, but occurs when title and risk of loss transfers to the customer. As such, the Company’s performance obligation related to product sales is satisfied at a point in time. The Company recognizes a receivable when it has an unconditional right to payment, which represents the amount the Company expects to collect in a transaction and is most often equal to the transaction price in the contract. Payment terms for shipments to end-user and distributor customers may range from 30 to 90 days. Amounts billed to customers for shipping and handling are included in revenue, while the related shipping and handling costs are reflected in cost of goods manufactured.
Digital Assets Revenue, Realized and Unrealized Gains and Losses
Acquisition of Digital Assets
We acquire liquid SOL tokens through purchases and delegated staking. In the case of liquid bulk purchases, we recognize for cost basis the actual price paid. In the case of liquid TWAP (time-weighted average price) over multiple hour or days, we recognize for cost basis the average price paid for all tokens purchases.
The Company is able to acquire additional locked SOL through direct negotiations with the owner or third-party custodians at a discounted price from the SOL market value price. With the purchase of locked SOL, we recognize the cost basis as the actual price paid including the discount applied from the SOL price. The unlocking newly purchased locked Sol occurs over a series of dates as prescribed by the purchase agreement.
We acquire other digital assets through purchases and record the average price paid as the cost basis.
| F-11 |
SHARPS TECHNOLOGY, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024
Note 2. Summary of Significant Accounting Policies (continued)
Per ASC 350-60-45-2, gains and losses from the remeasurement of digital assets shall be included in net income and presented separately from changes in the carrying value of other intangible assets. Pursuant to this guidance, changes in fair value are reflected on the income statement in the line item “Realized and unrealized (gain) loss on digital assets” in the operations section of the condensed consolidated statements of operations. We measure changes in fair value as the difference between the cost basis and the prevailing market price of the digital asset at the date of measurement, multiplied by the quantity held of the digital asset.
These prices are independently analyzed, including comparisons to other exchanges and potential cut-off times.
For the derivative positions, the Custodians provide a period-end spot price for the open positions based on valuation models applied based on various inputs.
Remeasurement on a recurring basis
Subsequent to the acquisitions of SOL, remeasurement of change in fair value is done by taking the spot price as defined above on the last day of the period. Tokens are bifurcated between liquid and locked tokens. In the case of liquid tokens, the aggregate fair value is computed by taking the number of liquid and locked tokens and multiplying by the period-end spot price. As locked tokens become unlocked over time, they will be added to the count of liquid tokens and accordingly, make up less of that discount percentage over time when computing aggregate fair value on locked tokens. In the case of locked tokens, the aggregate fair value is computed by taking the number of locked tokens, discounted by 10%.
The 10% discount for September 30, 2025 used by management is based on the initial investor discount in the August 2025 Offering and other quoted data and in the future will be historical purchases of locked SOL management has made on behalf of the Company. Management monitors this discount percentage and adjusts when appropriate Per ASC 350-60-45-2, gains and losses from the remeasurement of digital assets shall be included in net income and presented separately from changes in the carrying value of other intangible assets. Pursuant to this guidance, changes in fair value are reflected on the income statement in the line item “Realized and unrealized (gain) loss on digital assets” in the operations section of the condensed consolidated statements of operations.
Subsequent to the acquisition of other digital assets, remeasurement of change in fair value is done by taking the spot as defined above on the last day of the period.
Staking revenue
We earn staking rewards by delegating our digital assets to third-party validators on proof-of-stake blockchain networks. These tokens remain under the Company’s control and are not derecognized, as the delegation does not constitute a transfer of control under ASC 610-20 or ASC 350-60.
While there is no explicit guidance under U.S. GAAP for staking activities, the Company applies the principles of ASC 606, Revenue from Contracts with Customers, by analogy. Management evaluates whether a contract exists, identifies the performance obligations, and determines whether the Company acts as a principal or agent in the transaction. The transaction price is measured at the fair value of the digital assets received at the time control is obtained. Due to the evolving nature of blockchain protocols and limited regulatory guidance, management exercises significant judgment in evaluating validator reliability and the risk of slashing or forfeiture. Changes in protocol rules or accounting interpretations may materially impact how staking revenue is recognized and measured. SOL tokens held by the Company, whether liquid or locked, are eligible for staking. The Company evaluation has determined that it is the delegator and the Custodians, via agreements with validators, are the validators. Therefore, the Company should recognize the staking rewards on a net basis. The Company believes that the Staking rewards variable revenue should be recognized when the staking rewards are received from the validator in the Company’s staking account.
Rewards are recognized as revenue as is earned at the end of each epoch (just under two day periods for SOL). The FMV of the revenue is calculated using the spot price of SOL at the end of the epoch. For locked SOL where the staking rewards inherit the maturity of their underlying token, the 10% discount is applied. This revenue is reported on the Statements of condensed consolidated statement of operations under the line item “Staking Revenue.” Changes in fair market value of the staking revenue after the initial staking revenue is recognized are reflected on the condensed consolidated statement of operations as “realized and unrealized (gain) loss on digital assets”.
Realized disposition of the digital assets
To the extent such digital assets may be disposed, unrealized gain or (losses) shall be reversed and realized gains or (losses) shall be recorded for the difference between FMV price at disposition and its cost. For sales of digital assets, this would be the net transaction price. In the case of transfers of custody to third parties this is the spot price of the asset on the day of the transfer.
| F-12 |
SHARPS TECHNOLOGY, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024
Note 2. Summary of Significant Accounting Policies (continued)
Product Warranties
The Company provides product warranties that: i) the products meet the terms of the customer order, ii) the products are not defective and iii) the products will conform to the descriptions set forth in their respective labeling, provided that they are used in accordance with such labeling and the Company’s written directions for use. The Company has not incurred warranty claims.
The Company’s return policy provides that a customer may return incorrect shipments or defective products within specified days following arrival at the customer’s facility. In all such cases, the customer must obtain an prior authorization from the Company. The Company has not incurred returns.
Shipping and Handling Costs
Shipping and handling costs associated with the distribution of finished goods to customers are recorded in cost of goods manufactured.
Income Taxes
The Company must make certain estimates and judgments in determining income tax expense for financial statement purposes. These estimates and judgments are used in the calculation of tax credits, tax benefits, tax deductions, and in the calculation of certain deferred taxes and tax liabilities. Significant changes to these estimates may result in an increase or decrease to the Company’s tax provision in a subsequent period.
The provision for income taxes was comprised of the Company’s current tax liability and changes in deferred income tax assets and liabilities. The calculation of the current tax liability involves dealing with uncertainties in the application of complex tax laws and regulations and in determining the liability for tax positions, if any, taken on the Company’s tax returns in accordance with authoritative guidance on accounting for uncertainty in income taxes. Deferred income taxes are determined based on the differences between the financial reporting and tax basis of assets and liabilities. The Company must assess the likelihood that it will be able to recover the Company’s deferred tax assets. If recovery is not likely on a more-likely-than-not basis, the Company must increase its provision for income taxes by recording a valuation allowance against the deferred tax assets that it estimates will not ultimately be recoverable. However, should there be a change in the Company’s ability to recover its deferred tax assets, the provision for income taxes would fluctuate in the period of such change.
Research and Development Costs
Research and development costs are expensed as incurred.
Segment Reporting
In the third quarter of 2025, as a result of the previously mentioned treasury policy, management re-evaluated our segment reporting structure and determined that we now operate in two reportable segments. Historically, we operated as a single operating segment focused on our medical device packaging platform. The change in reportable segments had no effect on previously reported results. The Company’s chief operating decision makers (“CODM”) are its Principal Executive Officer, Chief Investment Officer and Chief Financial Officer. The CODM manage operations and business as two operating segments for the purposes of allocating resources, making operating decisions and evaluating financial performance (See Note 18).
Contingencies
Liabilities for loss contingencies arising from claims, assessments, litigations, fines and penalties and other sources are recognized when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated. Gain contingencies are evaluated and not recognized until the gain is realizable or realized.
| F-13 |
SHARPS TECHNOLOGY, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024
Note 2. Summary of Significant Accounting Policies (continued)
Recent Accounting Pronouncements
In December 2023, the FASB issued ASU 2023-08, Intangibles - Goodwill and Other - Crypto Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets (“ASU 2023-08”), which establishes accounting guidance for crypto assets meeting certain criteria. SOL meets these criteria. The amendments require crypto assets meeting the criteria to be recognized at fair value with changes recognized in net income each reporting period. Upon adoption, a cumulative-effect adjustment was made to the opening balance of retained earnings as of the beginning of the annual reporting period of adoption. ASU 2023-08 is effective for fiscal years beginning after December 15, 2024, including interim periods within those fiscal years, with early adoption permitted. The Company elected to early adopt ASU 2023-08 for the year ended December 31, 2025, effective as of August 25, 2025. As a result of the adoption, the Company did not have a cumulative-effect adjustment as the Company did not have any Crypto Assets prior to August 25, 2025. Effective with the quarter ended September 30, 2025, SOL, the token of Solana blockchain, is recognized at fair value.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The new guidance requires disaggregated information about the effective tax rate reconciliation and additional information on taxes paid that meet a quantitative threshold. The new guidance is effective for public companies for annual reporting periods beginning after December 15, 2024, and for non-public companies for annual reporting periods beginning after December 15, 2025, with early adoption permitted for both. The Company will adopt the new standard in the annual reporting period beginning after December 15, 2025 and is currently evaluating the impacts of the new guidance on its disclosures within the consolidated financial statements.
In November 2024, the FASB issued ASU 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40). The new guidance requires disaggregated information about the entity’s type of expenses into certain categories. The Company will adopt the new standard in the annual reporting period beginning after December 15, 2026 and is evaluating the impacts of the new guidance on its disclosures within the consolidated financial statements.
In July 2025, the FASB issued ASU 2025-05, Financial Instruments—Credit Losses, which provides for all entities with the option to elect a practical expedient that assumes that current conditions as of the balance sheet do not change for the remaining life of an asset, with respect to estimates of expected credit losses. This guidance is effective for annual reporting periods beginning after December 15, 2025 and interim periods within those annual reporting periods, with early adoption permitted and application of guidance prospectively. We are currently evaluating the effect of this pronouncement.
Reclassification of Prior Period Presentation
Certain prior period amounts have been reclassified to conform to the current period presentation. These reclassifications had no impact on previously reported total revenues, operating income (loss), net income (loss), or stockholders’ equity.
Note 3. Prepaid Expenses and Current Assets
Prepaid expenses and other current assets consisted of the following at September 30, 2025 and December 31, 2024:
Schedule of Prepaid Expenses and Other Current Assets
| 2025 |
2024 | |||||||
| Insurance | $ | $ | ||||||
| Consulting agreement — Note 15 | ||||||||
| Other | ||||||||
| Total | $ | $ | ||||||
Note 4. Inventories
Inventories, net consisted of the following at September 30, 2025 and December 31, 2024:
Schedule of Inventories
| 2025 | 2024 | |||||||
| Raw materials | $ | $ | ||||||
| Work in process | ||||||||
| Finished goods | ||||||||
| Total | $ | $ | ||||||
During the three and nine months ended
September 30, 2025, lower of cost or market reserves of $
| F-14 |
SHARPS TECHNOLOGY, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024
Note 5. Fixed Assets
Fixed asset, net, as of September 30, 2025 and December 31, 2024, are summarized as follows:
Schedule of Fixed Assets, Net
| 2025 | 2024 | |||||||
| Land | $ | $ | ||||||
| Building | ||||||||
| Machinery and Equipment | ||||||||
| Computer Systems, Website and Other | ||||||||
| Total Fixed Assets | ||||||||
| Less: accumulated depreciation | ( | ) | ( | ) | ||||
| Fixed asset, net | $ | $ | ||||||
Depreciation expense of fixed assets for the
nine months ended September 30, 2025 and 2024 was $
During the quarter ended September 30, 2025
the Company recorded an asset impairment for assets specific to the Safegard operation, of $
Note 6. - Investments in Digital Assets
The following table summarizes Digital Assets held for investment:
Schedule of Digital Assets Held for Investment
| September 30, 2025 | ||||||||||||
| Units | Cost Basis | Fair Value | ||||||||||
| SOL | $ | $ | ||||||||||
| USDC | $ | $ | ||||||||||
| Total | $ | $ | ||||||||||
The Company recognizes digital assets at fair value. The Company’s
holdings in USDC valued at the spot price of $
The following table summarizes the Company’s digital asset purchases, losses (gains) on digital assets, and revenue from staking received for the three months ended September 30, 2025. The three months ended September 30, 2025 represents the initial period digital asset transactions that occurred.
Schedule of Losses (Gains) On Digital Assets and Revenue from Staking
| Digital Asset Units | SOL | USDC / USDT | $ USD | Realized Gain / (Loss) | ||||||||||||
| Beginning Digital Assets | $ | |||||||||||||||
| In-Kind Digital Assets (PIPE) | $ | |||||||||||||||
| Dispositions of Digital Assets | ( | ) | ( |
) | $ | ) | $ | |||||||||
| Digital Asset Purchases | $ | |||||||||||||||
| Staking Rewards Received | $ | |||||||||||||||
| Ending Digital Assets | $ | |||||||||||||||
| Unrealized Gain / Loss | $ | |||||||||||||||
| Ending Digital Assets | $ | |||||||||||||||
The following table summarizes the composition of SOL held broken out by liquid and locked as of September 30, 2025:
Schedule of Solana Tokens Held Broken Out by Liquid and Locked
| Approximate number of SOL units. | ||||
| Liquid SOL | ||||
| Locked SOL | ||||
| Total | ||||
| F-15 |
SHARPS TECHNOLOGY, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024
Note 6. - Investments in Digital Assets (continued)
The Company has approximately
The following table summarizes the unlocking schedule of SOL tokens currently locked as of September 30, 2025:
Schedule of Crypto Asset Fiscal Year Maturity
| Through Year End 2025 | ||||
| Through Year End 2026 | ||||
| Through Year End 2027 | ||||
| Through Year End 2028 | ||||
| Total |
The Company did not sell any SOL in its
Digital Asset Treasury during the quarter ended September 30, 2025.
For the three and nine months ended September
30, 2025, the Company incurred $
Note 7. Other Assets
Other assets as of September 30, 2025 and December 31, 2024 are summarized as follows:
Schedule of Other Assets
| 2025 | 2024 | |||||||
| Intangibles, net | $ | $ | ||||||
| Fixed asset deposits | ||||||||
| Other | ||||||||
| Total | $ | $ | ||||||
Intangibles were related to the Asset
Acquisition in 2022 and consisted of an acquired workforce and permits. Fixed asset deposits, primarily related to machinery and
molds of approximately $
Note 8. Derivatives
During the periods presented, the Company’s derivatives were all embedded forward contracts to receive or deliver a fixed amount of crypto assets in the future and none were designated as hedging instruments.
SCHEDULE OF DERIVATIVE INSTRUMENT
The following table summarizes information on derivative instruments by their location in the Condensed Consolidated Balance Sheets, as measured in U.S. dollar equivalents:
| Derivative Impact (Assets) | Derivative Impact (Liabilities) | |||||||
| September 30, 2025 | ||||||||
| Derivative Impact (Assets) | Derivative Impact (Liabilities) | |||||||
| FMV of Open Derivatives (Long) | $ | |||||||
| FMV of Open Derivatives (Short) | $ | |||||||
| USDC Collateral, included in USDC | $ | |||||||
| Margin Loan | $ | |||||||
The Margin Loan is with a custodian bank and
is included in the related custodian agreement and provides for maximum borrowing of $
The following table summarizes information on derivative instruments by their location in the Condensed Consolidated Statement of Operations, as measured in U.S. dollar equivalents:
| Purchased Derivatives | Written Derivatives | Total | ||||||||||
| September 30, 2025 | ||||||||||||
| Purchased Derivatives | Written Derivatives | Total | ||||||||||
| Realized Gain / (Loss) | $ | ( | ) | $ | $ | ( | ) | |||||
| Unrealized Gain / (Loss) | $ | ( | ) | $ | $ | ( | ) | |||||
| Total | $ | ( | ) | $ | $ | ( | ) | |||||
| F-16 |
SHARPS TECHNOLOGY, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024
Note 9. Debt Financing
On September 20, 2024, the Company entered into
a securities purchase agreement (the “Securities Purchase Agreement”) and a Senior Secured Note (the “Note”)
for an aggregate principal amount of $
Note 10. Stockholders’ Equity
Capital Structure
On December 11, 2017, the Company was incorporated in Wyoming with shares of common stock authorized with a $par value. Effective, April 18, 2019, the Company’s authorized common stock was increased to shares of common stock. The articles of incorporation also authorized preferred shares with a $ par value.
Effective March 22, 2022, the Company completed
a plan and agreement of merger with Sharps Technology, Inc., a Nevada corporation (“Sharps Nevada”).
In July 2024, the shareholders approved the increase of the authorized common stock from to 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
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 to . The reduction in authorized shares, which was effective April 27, 2025, also effectuated a reverse
stock split of the outstanding common shares at a ratio of one for three hundred (
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 shares to shares.
Common Stock
Securities Purchase Agreements
On August 25, 2025, Sharps Technology, Inc. (the “Company”) entered into securities purchase agreements (the “Cash Securities Purchase Agreements”) with certain accredited investors (the “Cash Purchasers”) pursuant to which the Company sold to the Cash Purchasers in a private placement offering (the “Cash Offering”) an aggregate offering of (i)“Cash Shares”) of common stock of the Company, par value $ per share (the “Common Stock”), at an offering price of $ per share (ii) and 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 $ 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 shares of Common Stock (the “Cash Stapled Warrant Shares,”) at an exercise price of $ per Cash Stapled Warrant. In the Cash Offering, the Cash Purchasers will tender any of U.S. dollars, USDC or USDT (or a combination thereof) to the Company as consideration for the Cash Shares, Cash Stapled Warrants and Cash Pre-Funded Warrants.
| F-17 |
SHARPS TECHNOLOGY, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024
Note 10. Stockholders’ Equity (continued)
Each of the Cash Pre-Funded
Warrants is immediately exercisable for one share of Common Stock at the exercise price of $
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) 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 $ per Pre-Funded Warrant, and (ii) 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 $ per Cryptocurrency Stapled Warrant. In the Cryptocurrency Offering, the Cryptocurrency Purchasers will tender either Unlocked SOL tokens or Locked SOL tokens to the Company as consideration for the Cryptocurrency Pre-Funded Warrants and Cryptocurrency Stapled Warrants.
The exercise of the Cryptocurrency Pre-Funded
Warrants and Cryptocurrency Stapled Warrants into Cryptocurrency Pre-Funded Warrant Shares and Cryptocurrency Stapled Warrant Shares,
respectively, is subject to stockholder approval (“Stockholder Approval”) which was approved at the Special Shareholder meeting
on October 14, 2025. Each of the Cryptocurrency Pre-Funded Warrants is exercisable for one share of Common Stock at the exercise price of
$
The gross proceeds from the Cash Securities
Purchase Agreements and Cryptocurrency Securities Purchase Agreements aggregated $
During the quarter
ended September 30 2025, Cash Prefunded warrants were exercised and proceeds of $
On September 26, 2025, the Company entered into Waiver and Consent (the “Waiver and Consent”) with certain holders of the Company’s securities (who collectively beneficially own at least 50.1% of the then outstanding Registrable Securities, as defined in the Registration Rights Agreement dated August 25, 2025 (the “Registration Rights Agreement”). The Waiver and Consent waived the compliance of the September 29, 2025 filing date and extended the deadline for the Company to file the initial resale registration statement with the Securities and Exchange Commission to the 60th calendar day following the Closing Date, as defined in the Registration Rights Agreement. The initial resale registration statement was filed on October 23, 2025.
Controlled Equity Offering
On September 2, 2025,
the Company entered into a Controlled Equity Offering Sales Agreement (the “Sales Agreement”) with each of Cantor Fitzgerald
& Co. (“Cantor”) and Aegis Capital Corp. (“Aegis”) (each, an “Agent” and together, the “Agents”),
pursuant to which the Company, from time to time, at its option may offer and sell shares (the “ATM Shares”) of its Common
Stock, to or through Cantor, acting as principal and/or the sole designated sales agent having an aggregate sales price of up to $
The Common Stock to be sold under the Sales Agreement, if any, will be issued and sold pursuant to the Company’s shelf registration statement on Form S-3 (File No. 333-274146), which was filed with the SEC on August 22, 2023, as amended on August 29, 2023 and declared effective by the SEC on September 5, 2023 and a registration statement on Form S-3 (File No. 333-289980) filed pursuant to Rule 462(b) under the Securities Act for the purpose of registering additional securities available to be sold under the registration statement on Form S-3 (File No. 333-274146) (collectively, the “Registration Statement”), including a base prospectus as part of the Registration Statement, and a prospectus supplement dated September 2, 2025 relating to the offer and sale of the ATM Shares pursuant to the Sales Agreement.
During the period September
2, 2025 through September 30, 2025, the Company issued M shares of common stock under the Sales Agreement and received net proceeds
from the Sales Offering of $
January 2025 Offering
On January 29,
2025, the Company closed on an offering (the “2025 Offering”) and received gross proceeds of approximately $
| F-18 |
SHARPS TECHNOLOGY, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024
Note 10. Stockholders’ Equity (continued)
The
2025 Offering consisted of (pre-reverse – ) units consisting of (pre-reverse – ) Common
Units with gross proceeds of $
The Pre-Funded Warrants were immediately
exercisable and could be exercised at any time until exercised in full. Immediately after closing
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 $
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
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 $
| F-19 |
SHARPS TECHNOLOGY, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024
Note 10. Stockholders’ Equity (continued)
On December 5, 2024, the Company, entered into
subscription agreements with certain institutional investors, pursuant to which the Company agreed to issue and sell to the investors
(pre-reverse – ) shares (the “Shares”) of Common Stock, par value $ per share of the Company at a
price of $ per share (pre-reverse -$) for gross proceeds to the Company of $
On September 23, 2024, as noted in Note 9, in connection with the Securities Purchase Agreement and Note, the Company issued 864 (pre-reverses – 259,091) shares of unregistered common stock. The shares were subsequently registered by the Company with the Security and Exchange Commission.
On May 31 and June 13, 2024, the Company entered
into subscription agreements with certain institutional investors, pursuant to which the Company agreed to issue and sell to the investors
(pre-reverse - ) shares (the “Shares”) of Common Stock, par value $ per share of the Company at a price
of $ (pre-reverse -$) and received gross proceeds to the Company of $
On May 30, 2024, the Company offered warrant
inducements (the “Inducement Agreement”) to certain warrant holders (the “Warrant Holders”) which references
the warrants registered for sale under both the registration statements on Form S-1 (file No. 333-263715) and/or the registration statement
on Form S-1 (File No. 333-275011) (collectively, the “Registration Statements”) for up to a total of
On September 29, 2023, the Company completed
two simultaneous offerings and received aggregate gross proceeds of approximately $
| a. | The first offering, the securities purchase agreement offering (the
“Shelf Offering”) with institutional investors and the Company resulted in the Company receiving net proceeds from the
Shelf Offering and the sale of pre-funded warrants of approximately $ | |
| b. | The second offering, the securities purchase agreement offering (“Private
Placement”) with institutional investors and the Company received net proceeds from the Private Placement of approximately
$ |
| F-20 |
SHARPS TECHNOLOGY, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024
Note 10. Stockholders’ Equity (continued)
On February 3, 2023, the Company completed a
securities purchase agreement (“Offering”) with institutional investors and received net proceeds from the Offering of approximately
$
On April 13, 2022, the Company’s initial
public offering (“IPO”) was declared effective by the SEC pursuant to which the Company issued and sold an aggregate of
(pre-reverses -) units (“Units”),
The Company’s common stock and warrants
began trading on the Nasdaq Capital Market or Nasdaq on April 14, 2022. The net proceeds from the IPO, prior to payments of certain listing
and professional fees were approximately $
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 |
| b) | The Company allocated the proceeds of the January 2025 Offering based
on the fair values for the Series A, Series B warrants and Prefunded Warrants. The Company determined the fair value of the Series A
and Series B warrants at the Offering date using the Monte Carlo pricing model and treated the valuation as a liability in
consideration of the variable number of the issuer’s equity shares in the warrant agreements. The fair value of the Prefunded
warrants, also recorded as liability, was based on market price of the common shares. The aggregate fair value at the Offering date
was $ | |
| The remaining | ||
| Since the initial issuance of |
| F-21 |
SHARPS TECHNOLOGY, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024
Note 10. Stockholders’ Equity (continued)
| c) | In September 2024, the Company reduced the exercise price
of the | |
| d) | In connection with the Inducement Warrants in the second quarter of
2024, the Company issued | |
| e) | In connection with an advisory agreement
dated February 27, 2025, whereby the advisor and the Company agreed
In connection with an one-year advisory
services arrangement with the above third-party entered into in April 2023, the Company issued an aggregate of | |
| f) ) | In connection with the Private Placement in September 2023, the
Company issued | |
| g) | In connection with the Offering in February 2023, the Company issued
| |
| h) | In connection with the IPO in April 2022, the Company issued |
| F-22 |
SHARPS TECHNOLOGY, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024
Note 10. Stockholders’ Equity (continued)
| i) | The Company has issued | |
| j) | The underwriter received | |
Note 11. Preferred Stock
In February 2018, the Company Board of Directors
issued one share of Series A Preferred Stock to Alan Blackman, the Company’s co-founder and Director.
In connection with final settlement with Mr. Blackman on August 2024, the Series A Preferred Stock were cancelled and forfeited without any further consideration. The Series A Preferred was returned to the status of an authorized but unissued share of preferred stock of the Company (See Note 15).
On July 15, 2025, the Company executed a Subscription
and Investment Agreement (the “Subscription Agreement”) with Paul Danner (“Subscriber”),
Note 12. Warrants
The following denotes, as of September 30, 2025, the Warrants outstanding and related Warrant Liability for warrants accounted for under ASC 480 “Distinguishing Liabilities from Equity.
As noted above, the 2025 Series A and 2025 Series B Warrants issued in connection with the 2025 Offering were accounted for as liabilities in accordance with ASC 815-40 and are presented as a Warrant liability in the accompanying condensed consolidated balance sheet. The 2025 Series A and B warrants, were measured at fair value at inception. As of March 31, 2025, and thereafter, the Series A will be remeasured based on the Black Scholes method, with changes in fair value presented within the condensed consolidated statement of operations. The Black Scholes Option-Pricing model, which was required through August 25, 2025 the date of the Series A Amendment agreement, used the following assumptions for the 2025 period outstanding (See Note 10).
Schedule of Fair Value of Warrant
| Expected term (years) | ||||
| Expected volatility | % | |||
| Risk-free interest rate | % | |||
| Dividend rate | ||||
| F-23 |
SHARPS TECHNOLOGY, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024
Note 12. Warrants (continued)
The Warrants, arising prior to 2025, accounted for as liabilities in accordance with ASC 815-40 are presented as a Warrant liability in the accompanying September 30, 2025 condensed consolidated balance sheet. The warrant liabilities are measured at fair value at inception and on a recurring basis, with changes in fair value presented within the consolidated statement of operations, The non-trading warrants, related to the May 2024 offering, were valued using the Black-Scholes pricing model. The assumptions as of the nine months ended September 30, 2025, relate to the May 2024 warrants were as follows (See Note 10):
September 30, 2025 | September 30, 2024 | |||||||
| Expected term (years) | ||||||||
| Expected volatility | % | % | ||||||
| Risk-free interest rate | % | % | ||||||
| Dividend rate | ||||||||
The Warrant liability at September 30, 2025 and December 31, 2024 consists of the following:
Schedule of Warrant Liability
| 2025 | 2024 | |||||||
| Trading and Overallotment Warrants | $ | $ | ||||||
| Note Warrants | ||||||||
| Offering Warrants – May 2024 | ||||||||
| Offering Warrants – January 2025 – Series B | ||||||||
| Total Warrant Liability | $ | $ | ||||||
The Warrants outstanding at September 30, 2025 and December 31, 2024, reflective of the reverse split that occurred on April 28, 2025, were as follows:
Schedule of Warrant Outstanding
September 30, 2025 | December 31, 2024 | |||||||
| Trading and Overallotment Warrants | ||||||||
| Note Warrants | ||||||||
| Offering Warrants – May 2024 | ||||||||
| Offering Warrants -Series A | ||||||||
| Offering Warrants – January 2025 – Series B | ||||||||
| Prefunded – cash and in kind | ||||||||
| Cash and stapled warrants | ||||||||
| Warrants issued to strategic advisors | ||||||||
| Warrants issued for services arrangement | ||||||||
| Total Warrants Outstanding | ||||||||
For the three and nine months ended September
30, 2025 the FMV gain adjustment, which is reflected in the FMV adjustment on Warrants in the Condensed Consolidated Statements of Operations
was $
For the three and nine months ended
September 30, 2024, the FMV gain adjustment, which is reflected in the FMV adjustment on Warrants in the Condensed Consolidated
Statements of Operations was $
| F-24 |
SHARPS TECHNOLOGY, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024
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 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 (pre-reverse – ) 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 (pre -reverse - ) 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 (pre-reverse – ) options and/or shares of restricted stock. The 2023 Plan was approved by shareholders at the annual meeting
Schedule of Stock Options Granted and Outstanding
September 30, 2025 | ||||||||
| Options | Weighted Average Exercise Price | |||||||
| Outstanding at Beginning of year | $ | |||||||
| Granted | ||||||||
| Forfeited/cancelled | ( | ) | ||||||
| Outstanding at end of period | $ | |||||||
| Exercisable at end of period | $ | |||||||
As of September 30, 2025 and December 31, 2024, there was $ and $, respectively, of unrecognized stock-based compensation related to unvested stock options with a weighted average fair value of $ and $ per share, respectively, which is expected to be recognized over a weighted-average period of nine months as of September 30, 2025.
| F-25 |
SHARPS TECHNOLOGY, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024
Note 13. Stock Options (continued)
Schedule of Information about Options Outstanding
| Exercise Prices | Options Outstanding | Aggregate Intrinsic Value | Weighted Average Remaining Contractual Life | Options Exercisable | Aggregate Intrinsic Value on Exercisable Shares | |||||||||||||||||
| $ | ||||||||||||||||||||||
| $ | to | |||||||||||||||||||||
| $ | to | |||||||||||||||||||||
| $ | to | |||||||||||||||||||||
| $ | ||||||||||||||||||||||
| $ | ||||||||||||||||||||||
| $ | - | |||||||||||||||||||||
| $ | ||||||||||||||||||||||
For the three and nine months ended September 30, 2025, the Company recognized stock-based compensation expense of $ and $ which was recorded in selling, general and administrative expense.
For the three and nine months ended September 30, 2024, the Company recognized stock-based compensation expense of $ and $ respectively, of which $ and $ was recorded in selling, general and administrative and research and development expenses, respectively.
Note 14. Income Taxes
At the end of each interim reporting period,
the Company estimates its effective tax rate expected to be applied for the full year. This estimate is used to determine the income
tax provision or benefit on a year-to-date basis and may change in subsequent interim periods. Accordingly, the Company’s effective
tax rate for the three and nine months ended September 30, 2025 and 2024 was
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. We are currently assessing its impact on our consolidated financial statements.
Note 15. Related Party Transactions and Balances
As of September 30, 2025 and December 31, 2024,
accounts payable and accrued liabilities include $
Consulting services provided by Sol Edge
Limited (“Consultant”) during the three and nine months ended September 30, 2025 was $
In connection with a strategic advisory
consulting agreement entered into on August 28, 2025, with Sol Markets, (the “Strategic Advisor”) a related party, the
Company issued warrants to purchase
Both the Consultant and the Strategic Advisor are wholly-owned and controlled by James Zhang, the brother of Alice Zhang, our Chief Investment Officer and director.
Note 16. Fair Value Measurements
The Company’s financial instruments include cash, digital assets, accounts payable, loans and notes payable and warrant liability. Cash, digital assets and warrant liability are measured at fair value. Accounts payable and loans and notes payable are measured at amortized cost and approximate fair value due to their short duration and market rate for similar instruments, respectively.
| F-26 |
SHARPS TECHNOLOGY, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024
Note 16. Fair Value Measurements (continued)
As of September 30, 2025, the following financial assets and liabilities were measured at fair value on a recurring basis presented on the Company’s condensed consolidated balance sheet:
Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| Fair Value Measurements Using | ||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| Assets | ||||||||||||||||
| Cash | $ | $ | $ | |||||||||||||
| USDC | ||||||||||||||||
| Derivative assets, net | ||||||||||||||||
| Digital assets | ||||||||||||||||
| Total assets measured at fair value | $ | $ | $ | |||||||||||||
| Liabilities | ||||||||||||||||
| Derivative liability, net | $ | $ | ||||||||||||||
| Warrant liability | $ | |||||||||||||||
| Total liabilities measured at fair value | $ | $ | $ | |||||||||||||
As of December 31, 2024, the following financial assets and liabilities were measured at fair value on a recurring basis presented on the Company’s condensed consolidated balance sheet:
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| Fair Value Measurements Using | ||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| Assets | ||||||||||||||||
| Cash | $ | $ | ||||||||||||||
| Total assets measured at fair value | $ | $ | ||||||||||||||
| Liabilities | ||||||||||||||||
| Warrant liability | $ | $ | $ | |||||||||||||
| Total liabilities measured at fair value | $ | $ | $ | |||||||||||||
Note 17. Commitments and Contingencies
Fixed Assets and Other
At September 30, 2025, the Company had outstanding orders to purchase manufacturing
equipment, including injection molds, with a total remaining balance of $
Contingencies
At each reporting period, the Company evaluates whether or not a potential loss amount or a potential range of loss is probable and reasonably estimable under the provisions of the authoritative guidance that addresses accounting for contingencies.
| F-27 |
SHARPS TECHNOLOGY, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024
Note 17. Commitments and Contingencies (continued)
On July 10, 2024, Barry Berler
(“Berler”), a co-founder and former Chief Technology Officer of the Company, commenced a lawsuit in the United States District
Court for the Eastern District of New York, Barry Berler v. Sharps Technology, Inc. and Alan Blackman, Case No. 2:24-cv-04787. In this
case, Berler asserts (i) claims for damages of an aggregate of $
On June l7, 2024, Berler
filed a demand for arbitration and statement of claim under the commercial arbitration rules of the American Arbitration Association
(“AAA”) against the Company asserting claims for payment of $
On April 3, 2024,
Plastomold commenced a lawsuit against the Company in the United States District Court for the Eastern District of New York,
Plastomold Industries Ltd v. Sharps Technology, Inc., Case No. 2:24-CV-02580, asserting claims for damages in the amount of $
On August 21, 2025, the Company entered into a settlement term sheet (the “Settlement Term Sheet”) with Barry Berler and Plastomold Industries Ltd (“Plastomold”), collectively, the Parties, to settle the outstanding litigation as referenced in the Company’s latest quarterly report on Form 10-Q for the quarterly period ended June 30, 2025, and other SEC filings (See Note 19 - Settlement of Outstanding Litigations and Spinoff of Hungarian Subsidiary).
Royalty Agreement
In connection with the purchase of certain
intellectual property in July 2017, Barry Berler and Alan Blackman entered into a royalty agreement which provides that Barry Berler
will be entitled to a royalty of four percent (
| F-28 |
SHARPS TECHNOLOGY, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024
Note 17. Commitments and Contingencies (continued)
Employment Agreements
On November 10, 2023, the
Company executed an Employment Agreement with Robert Hayes, its Chief Executive Officer amending the employment letter dated September
6, 2021. The agreement term automatically renews for successive one-year terms as of the commencement date unless prior written notice
by either party within ninety days prior to end of the current term. The agreement provides for termination of employment and severance
benefits under stated conditions and restrictive covenants. The agreement provided for annual compensation retroactive to June 1, 2023
of $
Effective August 23,
2025, Robert Hayes resigned from the Board of Directors (the “Board”) and as Chief Executive Officer of the Company. Pursuant
to mutual agreement (the “Separation Agreement”), Mr. Hayes received a lump sum cash payment of $
On August 25, 2025, the Company
entered into a formal employment agreement with Yuwen (Alice) Zhang, who has been appointed as the Company’s Chief Investment Officer
and a Director of the Company, as of the date hereof. Effective as of the Effective Date, Ms. Zhang will receive a base salary (the “Base
Salary”) of $
On August 25, 2025, the Company
entered into a formal employment agreement with Paul K. Danner who has been serving as the Company’s Executive Chairman since June
30, 2025. Mr. Danner will also act as the Company’s Principal Executive Officer. Mr. Danner’s term as the Company’s
Executive Chairman and Principal Executive Officer began on August 24, 2025, and continue until terminated by either party, subject to
the terms of the employment agreement, Mr. Danner will be paid $
On September 30, 2022, the
Company entered into a formal employment agreement, effective on such date and will continue until terminated by either party, subject
to the terms of the agreement, with Andrew R. Crescenzo who has been serving as the Company’s Chief Financial Officer on a contract
services basis for the last three years. The agreement provided for annual compensation of $
On August 1, 2022, the Company
cancelled the consulting agreement with Alan Blackman, Co- Chairman and Chief Operating Officer and entered into an Employment Agreement.
The Company terminated Mr. Blackman’s Employment Agreement effective May 1, 2023. Mr. Blackman continued to serve as the Co-Chairman
and a member of the Board of Directors. Subsequent to June 30, 2023, the Company and Mr. Blackman entered into a separation agreement
whereby, Mr. Blackman would be paid severance payments of approximately $
| F-29 |
SHARPS TECHNOLOGY, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024
Note 17. Commitments and Contingencies (continued)
Consulting Agreement
On August 28, 2025, we
entered into
Other Agreement
On May 20, 2024, the Company entered into an
Amendment to the Asset Purchase Agreement dated September 22, 2023, with Nephron and Nephron’s InjectEZ, LLC, (collectively, the
“Seller”). The September 22, 2023 agreement superseded the manufacturing and supply agreement entered into in connection
with the NPC Agreement on September 29, 2022, and the Nephron Agreement entered into on September 29, 2022. The Amended Asset Purchase
Agreement includes the purchase of certain assets. In connection with the Asset Purchase agreement, the Company paid a non-refundable
deposit of $
Note 18.– Segment Reporting
We
determine operating segments based on metrics that our Chief Operating Decision Makers (“CODM”) review internally to
manage our business, including resource allocation and performance assessment. In the third quarter of 2025, as a result of the
previously mentioned treasury policy, management re-evaluated our segment reporting structure and determined that we now operate in
Medical Device Packaging: This segment is responsible for executing and managing the Company’s medical device sales and distribution business.
Digital Asset Treasury: This segment is responsible for executing and managing the Company’s treasury platform.
The CODM uses segment operating income (loss) to evaluate operating segment performance and allocate resources The CODM also EBITDA, to decide the level of investment in various operating activities and other capital allocation activities.
Segment income (loss) excludes the impact of income taxes, interest expense, and certain other income (expense) items, as these are managed at the corporate level. We do not prepare separate balance sheets by operating segment, for the CODM, as such, assets are not evaluated as part of operating segment performance and resource allocation. We provide the CODM depreciation and amortization expense and impairment charges that are generated from operating segment-specific assets, as these are included in segment net (loss).
The accounting policies for the segment information are the same as described in Note 2- Summary of Significant Accounting Transactions between segments are reported as if each were a stand-alone business and are eliminated in consolidation.
| F-30 |
SHARPS TECHNOLOGY, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024
Note 18– Segment Reporting (continued)
The following table presents the Company’s segment results for the nine months ended:
Schedule of Company’s Segment
| Medical Device Packaging | Digital Assets | Corporate | Consolidated | Medical Device Packaging | Corporate | Consolidated | ||||||||||||||||||||||
| NINE MONTHS ENDED SEPTEMBER 30, | NINE MONTHS ENDED SEPTEMBER 30, | |||||||||||||||||||||||||||
| 2025 | 2025 | 2025 | 2025 | 2024 | 2024 | 2024 | ||||||||||||||||||||||
| Medical Device Packaging | Digital Assets | Corporate | Consolidated | Medical Device Packaging | Corporate | Consolidated | ||||||||||||||||||||||
| Net Revenue | $ | |||||||||||||||||||||||||||
| Total cost of goods manufactured | ||||||||||||||||||||||||||||
| Gross Margin (Loss) | ( | ) | ( | ) | ||||||||||||||||||||||||
| Staking Revenue | ||||||||||||||||||||||||||||
| Operations: | ||||||||||||||||||||||||||||
| Transaction expenses | ||||||||||||||||||||||||||||
| Research and development | ||||||||||||||||||||||||||||
| Digital asset (gain)/loss, net | ( | ) | ( | ) | ||||||||||||||||||||||||
| Fixed asset impairment | ||||||||||||||||||||||||||||
| Selling, general and administrative | ||||||||||||||||||||||||||||
| Total operating | ( | ) | ||||||||||||||||||||||||||
| Loss from operations | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||
| Other income (expense): | ||||||||||||||||||||||||||||
| Interest income (expense) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||
| FMV adjustment on warrants | ||||||||||||||||||||||||||||
| Foreign currency and other | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||
| Derivative gain/(loss), net | ( | ) | ( | ) | ||||||||||||||||||||||||
| Other income (expense): | ( | ) | ( | ) | ||||||||||||||||||||||||
| Total Other income (expense) | ( | ) | ( | ) | ||||||||||||||||||||||||
| Net Loss by Segment -(Note A) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||
| Total Consolidated Assets | ||||||||||||||||||||||||||||
Note: A -Net Loss by Segment includes Corporate, although not a reportable segment, only for reconciliation to the condensed consolidated statement of operations.
| F-31 |
The following table presents the Company’s segment results for the three months ended:
| Medical Device Packaging | Digital Assets | Corporate | Consolidated | Medical Device Packaging | Corporate | Consolidated | ||||||||||||||||||||||
| THREE MONTHS ENDED SEPTEMBER 30, | THREE MONTHS ENDED SEPTEMBER 30, | |||||||||||||||||||||||||||
| 2025 | 2025 | 2025 | 2025 | 2024 | 2024 | 2024 | ||||||||||||||||||||||
| Medical Device Packaging | Digital Assets | Corporate | Consolidated | Medical Device Packaging | Corporate | Consolidated | ||||||||||||||||||||||
| Net Revenue | $ | |||||||||||||||||||||||||||
| Total cost of goods manufactured | ( | ) | ||||||||||||||||||||||||||
| Gross Margin (Loss) | ( | ) | ( | ) | ||||||||||||||||||||||||
| Staking Revenue | $ | |||||||||||||||||||||||||||
| Operations: | ||||||||||||||||||||||||||||
| Transaction expenses | ||||||||||||||||||||||||||||
| Research and development | ||||||||||||||||||||||||||||
| Digital asset (gain)/loss, net | ( | ) | ( | ) | ||||||||||||||||||||||||
| Fixed asset impairment | ||||||||||||||||||||||||||||
| Selling, general and administrative | ||||||||||||||||||||||||||||
| Total operating | ( | ) | ||||||||||||||||||||||||||
| Loss from operations | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||
| Other income (expense): | ||||||||||||||||||||||||||||
| Interest income (expense) | ( | ) | ( | ) | ||||||||||||||||||||||||
| FMV adjustment on warrants | ||||||||||||||||||||||||||||
| Foreign currency and other | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||
| Derivative gain/(loss), net | ( | ) | ( | ) | ||||||||||||||||||||||||
| Other income (expense): | ( | ) | ( | ) | ||||||||||||||||||||||||
| Total Other income (expense) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||
| Net Loss by Segment – Note A | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||
Note A - Net Loss by Segment includes Corporate, although not a reportable segment, only for reconciliation to the condensed consolidated statement of operations.
| F-32 |
Note 19. -Subsequent Events
Settlement of Outstanding Litigations and Spinoff of Hungarian Subsidiary
On October 6, 2025, the Company entered into a confidential settlement agreement and release (the “Settlement Agreement”) with Barry Berler, Plastomold Industries Ltd (“Plastomold”), Plasto Design Solutions (“PDS”), Plasto Design Ltd. (“Plasto Design,” and together with Plastomold and PDS as the “Plasto”) and Plasto Technology Group LLC (“Plasto Technology”), whereby the Company, Mr. Berler, Plasto and Plasto Technology have agreed to unconditionally and irrevocably release and discharge each other and their respective representatives from and against any and all claims alleged in the Litigation (the “Settlement”). The Settlement Agreement also provides that neither party’s entry into the Settlement Agreement shall be deemed an admission of fault, responsibility, or liability for any claim alleged in the Litigation. Pursuant to the Settlement Agreement, the Company entered into definitive agreements, including a bill of sale, assignment and assumption agreement providing for the transfer by the Company to Plasto Technology of certain assets, and a contract for the transfer of business share providing for the assignment by the Company to Plasto Technology of all of the Company’s right, title and interest in and to the issued and outstanding shares of Safegard Medical Kft, our Hungarian subsidiary. In addition, the Company executed agreements for the transfer of certain patents and registered trademarks, along with the related goodwill associated therewith (See Note 17).
Share Repurchase Program
On October 2, 2025, the Board
approved a share repurchase program (the “2025 Repurchase Program”) providing for the repurchase of up to $
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 $ for each share of Common Stock repurchased pursuant to the Repurchase Agreement.
On
October 2, 2025, the Board of Directors of the Company approved a share repurchase program (the “2025 Repurchase Program”)
providing for the repurchase of up to $
| F-33 |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The 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 condensed consolidated financial statements and the accompanying notes thereto included elsewhere in this Quarterly Report on Form 10-Q. Unless the context requires otherwise, references in this Quarterly Report on Form 10-Q to “we,” “us,” and “our” refer to Sharps Technology, Inc.
Forward-Looking Statements
The information in this discussion contains forward-looking statements and information within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, which are subject to the “safe harbor” created by those sections. These forward-looking statements include, but are not limited to, statements concerning our strategy, future operations, future financial position, future revenues, projected costs, prospects and plans and objectives of management. The words “anticipates,” “believes,” “estimates,” “expects,” “intends,” “may,” “plans,” “projects,” “will,” “would” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements that we make. These forward-looking statements involve risks and uncertainties that could cause our actual results to differ materially from those in the forward-looking statements, including, without limitation, the risks set forth in our filings with the SEC. The forward-looking statements are applicable only as of the date on which they are made, and we do not assume any obligation to update any forward-looking statements.
Overview
Since our inception in 2017 and through the fourth quarter of 2022, we have 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. We commenced generating syringe revenues in the second quarter of 2025 and staking revenue in the third quarter of 2025. We have reported net loss of $105.3M, primarily related to stock compensation charges and asset impairments for the three months ended September 30, 2025, and incurred a net loss of $99.8M and $4.8M for the period nine months ended September 30, 2025 and 2024, respectively. During the three months ended September 30, 2025 we recognized the results from our Digital Assets platform. See Liquidity and Capital Resources and Notes to Condensed Consolidated Financial Statements.
The accompanying consolidated financial statements had been prepared assuming that the Company will continue as a going concern. The Company has not generated any cash flow from operations since inception but commenced generating revenues in the second quarter of 2025. As of and for the nine months ended September 30, 2025, the Company used cash in operations of $11.7M. The Company’s addition of the business strategy with digital assets resulting in current investment in Digital Assets of $404.2M primarily from August 2025 and current cash of $10.5M and USDC of $14.7M the Company determined it had sufficient liquidity to fund the Company’s planned operations for the next twelve months. The current liquidity no longer raises substantial doubt regarding the Company’s ability to continue as a going concern.
We classify our revenues as 1) net revenues, cost of goods manufactured and gross margin/loss from our Medical Device packaging segment and 2) Staking revenue from Digital Assets segment. Operating expenses include a) transaction costs relating to digital asset 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, US and foreign employees and consultants work remotely and will continue to do so indefinitely.
| 3 |
Products, Marketing and Sales
We continue to be in discussions with healthcare companies and distributors for sales of our existing inventory of disposable syringe and prefillable syringe products. We continue to market these products to the customers and foreign governments, as well as, to hospitals and healthcare groups as opportunities present themselves. We have received an initial purchase order under a supply agreement (See Supply Agreement in Recent Developments).
Pursuant to the Settlement Agreement, the Company entered into certain definitive agreements, (See Recent Developments),under which the Company will no longer own the Provensa product line and the related intellectual property relating to the Provensa technology.
Research and Development
Research and development expense through September 30, 2025 consisted of expenses incurred while performing research and development activities for our various syringe products. We had recognized research and development expenses as they are incurred. Substantially all of our research and development expenses to date have been incurred in connection with our syringe products. As a result of the Settlement Agreement (See Recent Developments), the Company will no longer be engaging in research and development activities.
Recent Developments
Our Solana Treasury Strategy
We have adopted a treasury policy (the “Treasury Policy”) under which the principal holding in our treasury reserve on the balance sheet will be allocated to digital assets, starting with Solana (“SOL”). Our Board of Directors (the “Board”) approved our new Treasury Policy on August 23, 2025, authorizing long-term accumulation of SOL. As of October 31, 2025, the Company holds over 2.0M SOL.
Other
In addition to the Company’s medical device sales and distribution enterprise and management of its SOL treasury, the Company has recently begun to explore strategic acquisitions and/or investments globally. To this goal, the Company has hired a Head of Innovation and the first members of its engineering team to help analyze these opportunities and develop its own digital products. The Company has been and will continue to prioritize long term growth with regards to its treasury management strategy, potentially using proceeds from the sale of SOL to fund its expansion plans described above.”
Settlement of Outstanding Litigations and Spinoff of Hungarian Subsidiary
Subsequent to the announcement of the Settlement Agreement terms on August 21, 2025, the Company adopted a new strategy as a medical device sales and distribution enterprise engaged in the marketing and distribution of syringe products and related drug-delivery systems and would no longer be performing research, design, and manufacturing activities.
On October 6, 2025, the Company entered into a confidential settlement agreement and release (the “Settlement Agreement”) whereby the Company and the Parties have agreed to unconditionally and irrevocably release and discharge each other and their respective representatives from and against any and all claims alleged in the Litigation (the “Settlement”). Pursuant to the Settlement Agreement, the Company entered into definitive agreements, including a bill of sale, assignment and assumption agreement providing for the transfer by the Company to the other party 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, our Hungarian subsidiary. In addition, the Company executed agreements for the transfer of certain patents and registered trademarks, along with the related goodwill associated therewith. The Settlement Agreement and other definitive agreements closed on October 14, 2025 (see Note 19- Subsequent Events).
Share Repurchase Program
On October 2, 2025, the Board approved a share repurchase program (the “2025 Repurchase Program”) providing for the repurchase of up to $100,000,000 of the Company’s outstanding shares of Common Stock. The 2025 Repurchase Program enables the Company to repurchase its shares in the open market and in negotiated transactions. The Repurchase Program does not obligate the Company to repurchase shares of Common Stock and the specific timing and amount of repurchases will vary based on available capital resources and other financial and operational performance metrics, market conditions, securities law limitations, and other factors.
In connection with the 2025 Repurchase Program, on October 6, 2025, the Company entered into an Open Market Share Repurchase Agreement (the “Repurchase Agreement”) with Cantor (the “Broker”) whereby the Broker has agreed to act as a non-exclusive agent on behalf of the Company to repurchase shares of Common Stock in the open market pursuant to Rule 10b-18 of the Securities Exchange Act of 1934, as amended. The Repurchase Agreement will continue in effect until terminated by either the Company or the Broker, with or without cause, upon written notice to the other party. The Company will pay Broker a commission at a rate of $0.02 for each share of Common Stock repurchased pursuant to the Repurchase Agreement.
August 2025 Offering
On August 25, 2025, Sharps Technology, Inc. (the “Company”) entered into securities purchase agreements (the “Cash Securities Purchase Agreements”) with certain accredited investors (the “Cash Purchasers”) pursuant to which the Company sold to the Cash Purchasers in a private placement offering (the “Cash Offering”) an aggregate offering of (i) 24,338,649 “Cash Shares”) of common stock of the Company, par value $0.0001 per share (the “Common Stock”), at an offering price of $6.50 per share (ii) and 14,038,463 pre-funded warrants (the “Cash Pre-Funded Warrants”) to purchase shares of Common Stock (the “Cash Pre-Funded Warrant Shares,”) at an offering price of $6.4999 per Pre-Funded Warrant, and (ii) stapled warrants (the “Cash Stapled Warrants,” and together with the Common Stock and Cash Pre-Funded Warrants, the “Cash Securities”) to purchase 41,054,034 shares of Common Stock (the “Cash Stapled Warrant Shares,”) at an exercise price of $9.75 per Cash Stapled Warrant. In the Cash Offering, the Cash Purchasers will tender any of U.S. dollars, USDC or USDT (or a combination thereof) to the Company as consideration for the Cash Shares, Cash Stapled Warrants and Cash Pre-Funded Warrants.
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 gross proceeds from the Cash Securities Purchase Agreements and Cryptocurrency Securities Purchase Agreements aggregated $4110M, which investors paid using the following currency: cash of $181M, locked SOL of $137M, unlocked SOL of $7M and stable coin of $86M. The net proceeds of $403M reflect placement agent fees, legal fees, and expenses of $7.5M with net proceeds, after reflecting par value, have been recorded in Additional Paid in Capital of $403M.
The exercise of the Cryptocurrency Pre-Funded Warrants and Cryptocurrency Stapled Warrants into Cryptocurrency Pre-Funded Warrant Shares and Cryptocurrency Stapled Warrant Shares, respectively, is subject to stockholder approval (“Stockholder Approval”) which was approved at the Special Shareholder meeting on October 14, 20 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.
At the Market Offering
On September 2, 2025, the Company entered into a Controlled Equity Offering Sales Agreement (the “Sales Agreement”) with each of Cantor and Aegis Capital Corp. and 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”). During the period September 2, 2025 through September 30, 2025, the Company issued 1.5M shares of common stock under the Sales Agreement and received net proceeds from the Sales Agreement of $14.7M after fees paid to the Agents and other offering expenses of $711,000.
| 4 |
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 $18.2M, of which $4.2M was used to repay the outstanding Notes (see Note 7).
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 $12.6M and 17,520 (pre-reverse – 5,255,900) Pre-Funded Units with gross proceeds of $7.4M. 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 (See Note 10 to the Condensed Consolidated Financial Statements).
The Pre-Funded Warrants are immediately exercisable and may 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.
Asset Purchase Agreement
On May 20, 2024, the Company entered into an Amendment to the Asset Purchase Agreement dated September 22, 2023, with Nephron and Nephron’s InjectEZ, LLC, (collectively, the “Seller”). The September 22, 2023 agreement superseded the manufacturing and supply agreement entered into in connection with the NPC Agreement on September 29, 2022, and the Nephron Agreement entered into on September 29, 2022. The Amended Asset Purchase Agreement includes the purchase of certain assets. In connection with the Asset Purchase agreement, the Company paid a non-refundable deposit of $1M to be held in escrow as a deposit on the purchase price. The Asset Purchase agreement stipulated that the $1M deposit would be maintained until July 19, 2024, at which date, if the contemplated transaction was not consummated, through no fault of the Seller, the escrow would be released to the Seller by the escrow agent. The escrow deposit of $1M was released to the Seller and recorded in Other Expense as a forfeited agreement cost in the three months ended September 30, 2024. The Company and Seller are no longer engaged in any further discussions relating to the Asset Purchase Agreement.
Supply Agreement
On July 24, 2024, the Company entered into a Supply Agreement (the “Agreement”) with Stericare Solutions, LLC, a Texas limited liability company (“Stericare”), pursuant to which Stericare agreed to purchase 520 million units of 10ml polypropylene (“PP”) Sologard syringes from the Company. The specific purchase price is confidential, but revenues are expected to exceed $50 million. Under the terms of the Agreement, Stericare has committed to purchasing 520 million units of 10ml PP Sologard syringes in the following increments: 40 million units in the first year, and 120 million units each year for the remainder of the Agreement’s term. The Agreement has an initial five (5)-year term, targeted to commence in November 2024 (the “Initial Term”). Upon expiration of the Initial Term, the Agreement will automatically renew for successive one (1)-year periods (each, a “Renewal Term”), unless either party provides written notice of termination at least ninety (90) days prior to the end of the Initial Term or any Renewal Term. To date, Sharps has used pilot tooling for initial material qualifications and concept product approvals. As part of the proceeds from the recent $20 million financing, the Company has placed orders for advanced production technology for Sologard and will soon begin installation and operational qualification for the next phase of the project with Stericare. On April 30, 2025, the Company received the initial purchase order under the Agreement for $400,000. During the quarter ended June 30, 2025, the Company commenced shipments and recorded revenues under the Agreement.
On August 8, 2025, the Company assigned the Agreement to Safegard Medical to fulfill the remaining requirements of the outstanding purchase order from Stericare, as the Company is no longer manufacturing products.
| 5 |
Critical Accounting Policies and Significant Judgments and Estimates
This management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which we have prepared in accordance with accounting principles generally accepted in the United States. The preparation of our financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of our financial statements, as well as the reported revenues and expenses during the reported periods. We evaluate these estimates and judgments on an ongoing basis. We base our estimates on historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. The FMV adjustments, based on either the trading price or FMV of outstanding warrants, for those classified as liabilities, could impact the operating results in the reporting periods. Further, the market volatility of our Investments could impact the operating results in the reporting periods
Nature of Business
Sharps Technology, Inc. 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 previously designed and manufactured a portfolio of conventional and safety syringes for clinical, pharmaceutical, and specialty applications and continues to market certain remaining inventory to hospitals, clinics, healthcare providers, and medical supply organizations in both domestic and international markets. The Company commenced generating initial revenue in the quarter ended June 30 2025.
The Company intends to explore plans to expand its distribution platform by representing established third-party manufacturers of complementary and synergistic medical products serving a common customer base. 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.
Further, on August 24, 2025, the Company adopted a digital asset treasury strategy focused on accumulating SOL, the native digital asset of the Solana blockchain.
The Company’s fiscal year ends on December 31.
On April 13, 2022, the Company’s Initial Public Offering was deemed effective with trading commencing on April 14, 2022. The Company received net proceeds of $14.2 million on April 19, 2022. (See Capital Structure and Note 10 to the Consolidated Financial Statements)
Summary of Significant Accounting Policies
Our significant accounting policies are described in Note 2 of the accompanying condensed consolidated financial statements including additional accounting policies relating to our Digital Asset platform and other accounting policies further discussed in our annual financial statements included in our annual report on Form 10-K for the year ended December 31, 2024.
| 6 |
Results of Operations
Comparison of the Three Months Ended September 30, 2025 and 2024.
| Three Months Ended | ||||||||||||||||
| September 30, 2025 | September 30, 2024 | Change | Change % | |||||||||||||
| Product Revenue - net | $ | 83,622 | - | $ | 83,622 | 100 | % | |||||||||
| Total cost of goods manufactured and inventory reserve | (1,253,278 | ) | - | (1,253,278 | ) | 100 | % | |||||||||
| Gross Margin (Loss) | (1,169,656 | ) | - | (1,169,656 | ) | 100 | % | |||||||||
| Staking Revenue - net | 2,205,423 | - | 2,205,423 | 100 | % | |||||||||||
| Operations: | ||||||||||||||||
| Transaction costs – digital asset related | (810,861 | ) | - | (810,861 | ) | 100 | % | |||||||||
| Research and development | (152,109 | ) | (145,611 | ) | (6,498 | ) | 4 | % | ||||||||
| Selling, General and administrative | (110,719,156 | ) | (1,869,598 | ) | (108,849,558 | ) | 5,822 | % | ||||||||
| Realized and unrealized gain (loss) on digital assets | 15,499,742 | - | 15,499,742 | 100 | % | |||||||||||
| Impairment of long-lived fixed assets | (7,497,669 | ) | - | (7,497,669 | ) | 100 | % | |||||||||
| Net Interest income (expense) | 68,488 | (70,815 | ) | 139,393 | 100 | % | ||||||||||
| FMV gain / (loss) adjustment on warrants | 1,208,142 | 416,560 | 791,582 | 190 | % | |||||||||||
| Derivative gain (loss), net | (4,378,749 | ) | - | (4,378,749 | ) | 100 | % | |||||||||
| Other income (expense) | - | (90 | ) | 90 | 100 | % | ||||||||||
| Foreign currency gain / (loss) | 413,112 | (15,506 | ) | 428,618 | 2,764 | % | ||||||||||
| Net gain (loss) | $ | (105,333,293 | ) | $ | (1,685,060 | ) | $ | (103,648,233 | ) | 6,151 | % | |||||
Product Net Revenue/Gross Margin
For the three months ended September 30, 2025, we recognized revenues of $83,622 principally related to the Sologard syringes sold under the supply agreement with Stericare (See Recent Developments – Supply Agreement).
During the three months ended September 30, 2025, an inventory reserve for the net realizable value was recorded of $924,010 based on a current corporate strategy to operate as a distributor and terminate manufacturing operations. The remaining negative gross margin of $245,646 is principally reflective of excess manufacturing costs incurred.
Staking Revenue – net
For the three months ended September 30, 2025, the Company recognized net staking revenue of $2,205,423 resulting from the digital treasury platform implemented during the quarter.
Transaction expense – digital assets
For the three months ended September 30, 2025, $810,861 in transaction expenses relate to exchange and custodian fees for digital asset investments.
Research and Development
For the three months ended September 30, 2025, Research and Development (“R&D”) expenses, which relate to the Medical Device packaging segment, increased to $152,109 compared to $145,611 for the three months ended September 30, 2024. The increase of $6,498 was due to various changes.
Selling, General and Administrative
For the three months ended September 30, 2025, Selling, General and Administrative expenses were $110,719,156 as compared to $1,869,598 for the three months ended September 30, 2024.
The increase of $108,849,558 was primarily related to:
| a) | Stock compensation of $104,518,000 from $116,000 in 2024 to $104,634,000 in 2025 primarily due to a charge of $101,331,000 relating to warrants issued to the strategic advisor and the balance relating to options vesting; |
| b) | Payroll and consulting increased $2,876,600 from $847,645 to $3,724,272 primarily due to increased staffing levels for the Digital Asset Treasury build out, severance paid to for the former Chief Executive Officer ($1.2M), increased consulting fees related to the August 2025 Offering ($1.0M) and bonus payments; |
| c) | Professional services increased $1,074,700 from $178,971 to $1,253,730 primarily due to $892,000 in fees paid to a Digital Asset Treasury advisor. |
Realized and unrealized gain (loss) on digital assets
During the three months ended September 30, 2025 the Company recognized $15,499,742 in realized and unrealized gains in investments in digital assets.
Impairment of long-lived fixed assets
During the three months ended September 30, 2025 the Company recorded an net asset impairment of $7,497,669 based on the fair market value of the fixed assets related to the pending sale of the Safegard subsidiary completed on October 14, 2025 (See Notes 4 and 19 to the Condensed Consolidated Financial Statements).
Net Interest income (expense)
Net Interest income, was $68,488 for the three months ended September 30, 2025, compared to interest income of $0 for the three months ended September 30, 2024. Net interest increased due to higher average cash balances in the current period directly related to the net proceeds from the August 2025 and the January 2025 offering.
| 7 |
FMV Adjustment for Warrants
The value of certain Warrants 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 or it terms of the warrants are modified, with recognition of the changes in fair value to other income or expense in the Unaudited Condensed Consolidated Statement of Operations. For the three months ended September 30, 2025, the Company recorded a FMV gain adjustment of $1,208,142, which is net of a modification charge of $642,805 related to a warrant inducement, to reflect the net effect of the remeasurement adjustment based on the change in market value and the decrease in number of Warrants outstanding as of September 30, 2025 (See Notes 10 and 12 to the Condensed Consolidated Financial Statements).
Results of Operations – Nine Months Ended September 30, 2025 and 2024.
| September 30, 2025 | September 30, 2024 | Change | Change % | |||||||||||||
| Net revenue | $ | 306,344 | - | $ | 306,344 | 100 | % | |||||||||
| Total cost of goods manufactured and inventory reserve | (2,508,027 | ) | - | (2,508,027 | ) | 100 | % | |||||||||
| Gross margin (loss) | (2,201,683 | ) | - | (2,201,683 | ) | 100 | % | |||||||||
| Staking Revenue - net | 2,205,423 | 2,205,423 |
100 |
% | ||||||||||||
| Operations: | ||||||||||||||||
| Transaction expense – digital assets | (810,861 | ) | - | (810,861 | ) | 100 | % | |||||||||
| Research and development | (295,579 | ) | (523,347 | ) | 227,768 | 44 | % | |||||||||
| Selling, general and administrative | (114,571,809 | ) | (5,257,015 | ) | (109,314,794 | ) | 2,079 | % | ||||||||
| Realized and Unrealized gains on digital assets | 15,499,742 | - | 15,499,742 | 100 | % | |||||||||||
Impairment of long-lived fixed assets |
(7,497,669 | ) | - | (7,497,669 | ) | 100 | % | |||||||||
| Net interest income (expense) | (461,551 | ) | (46,503 | ) | (415,048) | 8,925 | % | |||||||||
| Other income (expense) | - | (1,000,090 | ) | 1,046,593 | 100 | % | ||||||||||
| FMV gain / (loss) adjustment for warrants | 12,295,842 | 2,088,747 | 10,207,095 | 489 | % | |||||||||||
| Derivate gain (loss), net | (4,378,749) | - | (4,378,749) | 100 |
% | |||||||||||
| Foreign currency gain / (loss) | 371,741 | (31,566 | ) | 403,307 | 1,278 | % | ||||||||||
| Net gain (loss) | $ | (99,845,153 | ) | (4,769,774 | ) | (95,075,379 | ) | 1,993 | % | |||||||
Net Revenue / Gross Margin
For the nine months ended September 30, 2025, Sharps Technology recognized sale of Securegard and Sologard syringes for $306,344, principally related to the supply agreement with Stericare (See Recent Developments – Supply Agreement).
During the nine months ended September 30, 2025, inventory reserves for the net realizable value was recorded of $1,654,096 based on a current corporate strategy to operate as a distributor and terminate manufacturing operations and recent market factors, including the uncertainty of the global tariffs. The remaining negative gross margin of $853,930 is principally reflective of excess manufacturing costs incurred.
Staking Revenue – net
For the nine months ended September 30, 2025, the Company recognized net staking revenue of $2,205,423 resulting from the digital treasury platform implemented.
Transaction expense-digital assets
For the nine months ended September 30, 2025, $810,861 in transaction expenses relate to exchange and custodian fees for digital asset transactions.
Research and Development
For the nine months ended September 30, 2025, Research and Development (“R&D”) expenses, which relate to the Medical Device packaging segment decreased to $295,479 compared to $523,347 for the nine months ended September 30, 2024. The decrease of $227,768 was primarily due to a shift to increased manufacturing and reduced R&D activities in 2025 as compared to the 2024 period, which amounted to lower expenses.
| 8 |
Selling, General and Administrative
For the nine months ended September 30, 2025, Selling, General and Administrative (“G&A”) expenses were $114,571,809 as compared to $5,257,015 for the nine months ended September 30, 2024.
The increase of $109,314,795 was primarily related to:
| a) | Stock compensation of $104,559,000 from $441,000 in 2024 to $105,000,000 in 2025 primarily due to a charge of $101,331,000 relating to warrants issued to strategic advisor and the balance relating to options vesting; |
| b) | Payroll and consulting increased $2,980,000 from $2,514,502 to $5,301,862 primarily due to increased staffing levels for the Digital Asset Treasury build out, severance paid tothe former Chief Executive Officer ($1.2M), increased consulting fees related to the August 2025 Offering ($1.0M) and bonus payments.($0.7M) |
| c) | Professional services increased $1,438,000 from $456,866 to $1,895,261 primarily due to $892,000 in fees paid to a Digital Asset Treasury advisor and increased legal fees. |
Realized and unrealized gain (loss) on digital assets
During the nine months ended September 30, 2025 the Company recognized $15,499,742 in realized and unrealized gains in investments in digital assets.
Impairment of long-lived fixed assets
During the nine months ended September 30, 2025, the Company recorded a net asset impairment of $7,497,669 based on the fair market value of the fixed assets related to the pending sale of the Safegard subsidiary completed on October 14, 2025 (See Notes 4 and 19 to the Condensed Consolidated Financial Statements).
Net Interest income (expense)
Net Interest expense, was an expense of $461,551 for the nine months ended September 30, 2025, compared to interest expense of $46,503 for the nine months ended September 30, 2024. Net interest changed, by $415,048 due to the interest on debt.
Other income (expense)
Other was an expense of $0 for the nine months ended September 30, 2025, and $1,000,090 for the nine months ended September 30, 2024. In 2024, the expense was primarily due to an escrow deposit of $1M, relating to the Asset Purchase Agreement with Nephron, which was released to the Seller on July 19, 2024, under the terms of the agreement and recorded as a forfeited agreement cost (See Note 15 to the Condensed Consolidated Financial Statements).
FMV Adjustment for Warrants
Certain Warrants require the Fair Market Value (“FMV”) to be remeasured at each reporting date while outstanding with recognition of the changes in fair value to other income or expense in the unaudited condensed consolidated statement of operations. For the nine months ended September 30, 2025, and 2024, the Company recorded a $12,295,842 and $2,088,747, respectively as an FMV gain to reflect adjustments required for outstanding Warrants liabilities. (See Notes 10 and 12 to the Condensed Consolidated Financial Statements)
Liquidity and Capital Resources
As of September 30, 2025, the Company had a cash balance of $10,521,706 and USDC of $8,996,002, net of restricted USDC of $5,700,000 as collateral. As of December 31, 2024, the Company held $864,041 in cash. The Company had working capital of $29,045,025 at September 30, 2025, as compared to a working capital deficiency of $2,011,679 as of December 31, 2024. The increase in our working capital of $31,056,703, was directly impacted by the cash provided by investment financing proceeds and cash used for investing and operations (See below).
The following offering details during the third quarter of 2025 provided liquidity and capital to the Company:
| a) | Gross proceeds from the Cash Securities Purchase Agreements and Cryptocurrency Securities Purchase Agreements in August 2025 aggregated $411.0M, which investors paid using the following currency: USD cash of $181.0M, locked SOL of $137.0M, unlocked SOL of $7.0M and USDC of $86.0M. The net proceeds of $403.0M, reported in Additional Paid in Capital, reflect placement agent fees, legal fees, and expenses of $7.5M. |
| b) | the Company issued 1.5M shares of common stock under the Sales Agreement and received net proceeds from the Sales Agreement of $14.7M after fees paid to the Agents and other offering expenses of $711,000, reflected in Additional Paid in Capital. |
In 2024, the Company completed various offerings and private placements. (“Financings”) The proceeds from such Financings were used to fund working capital to build inventory, fund capital expenditure and operating costs.
Cash Flows
Net Cash Used in Operating Activities
The Company used cash of $11,743,528 and $5,172,135 in operating activities for the nine months ended September 30, 2025 and 2024, respectively. The change in cash used was principally due to the Company incurring transaction fees relating to digital assets, higher G&A expenses primarily due to the initiation of the digital asset strategy and an increase in manufacturing costs partially offset by lower R&D activities, excluding non-cash items, as described above during the nine months ended September 30, 2025.
Net Cash Used in Investing Activities
For the nine months ended September 30, 2025 and 2024, the Company used cash in investing activities of $189,506,025 and $1,069,659, respectively. In 2025, the primary increase related to the purchase of digital assets of $186,104,214 because of the August 2025 offering. In both periods, cash was used to acquire or pay deposits for fixed assets.
| 9 |
Net Cash Provided by Financing Activities
For the nine months ended September 30, 2025, and 2024, the Company provided cash from financing activities of $210,726,915 and $5,707,946, respectively. In the 2025 period, the net proceeds of $207,320,039, was from the Offerings in August and January 2025 and the proceeds from the margin loan of $7,628,888 offset by the debt repayment of $4,222,012. In the 2024 period, the cash provided was from the exercise of warrants for $2,972,646 and the debt offering of $2,735,300.
Off-Balance Sheet Arrangements
During the periods presented, we did not have any off-balance sheet arrangements as defined under Regulation S-K Item 303(a)(4).
Emerging Growth Company Status
We are an “emerging-growth company”, as defined in the JOBS Act, and, for as long as we continue to be an emerging growth company, we may choose to take advantage of exemptions from various reporting requirements applicable to other public companies but not to emerging growth companies, including, but not limited to, not being required to have our independent registered public accounting firm audit our internal control over financial reporting under Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. As an emerging growth company, we can also delay adopting new or revised accounting standards until such time as those standards apply to private companies. We intend to avail ourselves of these options. Once adopted, we must continue to report on that basis until we no longer qualify as an emerging growth company.
We will cease to be an emerging growth company upon the earliest of: (i) the end of the fiscal year following the fifth anniversary of the initial public offering; (ii) the first fiscal year after our annual gross revenue are $1.07 billion or more; (iii) the date on which we have, during the previous three-year period, issued more than $1.0 billion in non-convertible debt securities; or (iv) the end of any fiscal year in which the market value of our common stock held by non-affiliates exceeded $700 million as of the end of the second quarter of that fiscal year. We cannot predict if investors will find our common stock less attractive if we choose to rely on these exemptions. If, as a result of our decision to reduce future disclosure, investors find our common shares less attractive, there may be a less active trading market for our common shares and the price of our common shares may be more volatile.
We are also a “smaller reporting company,” meaning that the market value of our stock held by non-affiliates plus the aggregate amount of gross proceeds to us as a result of the IPO is less than $700 million and our annual revenue was less than $100 million during the most recently completed fiscal year. We may continue to be a smaller reporting company if either (i) the market value of our stock held by non-affiliates is less than $250 million or (ii) our annual revenue was less than $100 million during the most recently completed fiscal year and the market value of our stock held by non-affiliates is less than $700 million. If we are a smaller reporting company at the time, we cease to be an emerging growth company, we may continue to rely on exemptions from certain disclosure requirements that are available to smaller reporting companies. Specifically, as a smaller reporting company we may choose to present only the two most recent fiscal years of audited financial statements in our Annual Report on Form 10-K and, similar to emerging growth companies, smaller reporting companies have reduced disclosure obligations regarding executive compensation.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are exposed to market risks in the ordinary course of our business. These risks include, but are not limited to, interest-rate risk, inflation risk and risks associated with our digital-asset treasury strategy.
Inflation Risk
Inflation generally affects our business by increasing the cost of labor, research and development contracts and other overhead expenses. To date, we do not believe inflation has had a material effect on our results of operations for the periods presented; however, we monitor inflation trends as part of our ongoing risk assessment.
Digital Asset Treasury Risk
As part of our capital-allocation strategy for assets not required to provide immediate working capital for our ongoing operations, we have adopted a treasury policy focused primarily on accumulation of the SOL.
| 10 |
The price of SOL has historically been subject to dramatic fluctuations and is highly volatile. Moreover, digital assets such as SOL are relatively novel and the regulatory and accounting treatments applicable to them remain uncertain. It is possible that regulators may interpret existing laws or issue new regulations in a manner that adversely affects the liquidity or value of SOL.
Any decline in the fair value of our SOL holdings below our carrying value could require us to recognize an unrealized loss, which could be material to our financial results for the applicable reporting period and cause significant volatility in our reported earnings. Any such volatility or decline in reported earnings could materially adversely affect the market price of our common stock. In addition, changes in accounting standards or interpretations relating to digital-asset holdings could have a material adverse effect on our financial results and the market price of our common stock.
Because our treasury policy is highly concentrated in a single digital asset (SOL), adverse developments specific to the Solana protocol, validator network, ecosystem, or regulatory environment could disproportionately impact our financial condition and results of operations.
Historically, cryptocurrency markets (including SOL) have been characterized by significant price volatility, relatively limited liquidity compared to traditional currency/commodity markets, evolving regulatory oversight, susceptibility to exchange or custody failures, cyber-security risks, protocol or network disruptions, and other risks inherent in decentralized, electronic systems.
During times of market or network instability, we may not be able to liquidate our SOL holdings at favorable prices or at all or we may be unable to use our SOL holdings to raise capital (e.g., via collateralized term loans) or meet working-capital needs. If we are unable to sell our SOL or otherwise monetize our SOL holdings in a timely manner, or if we are forced to sell at a significant loss, our business and financial condition could suffer materially.
Further, unlike cash or securities deposited with institutions subject to Federal Deposit Insurance Corporation (FDIC) or Securities Investor Protection Corporation (SIPC) protections, digital assets held through custodians and trading counterparties do not generally enjoy the same regulatory protections. We depend on third-party qualified custodians for our SOL holdings and expect them to employ industry-standard controls (such as cold-storage, multi-person approvals, insurance coverage, etc.). Nonetheless, the frameworks for custody of digital assets are less mature and the failure of a custodian or validator partner or protocol disruption could adversely impact our holdings.
We also stake a portion of our SOL holdings through selected validators to earn staking rewards. Such staking involves a “cool-down” or un-staking period (under normal conditions we expect to regain control of unstaked SOL within approximately 48 hours, though network conditions could extend this period) which may limit our liquidity.
In addition, our use of derivatives such as call and put options and total-return swaps in connection with our SOL holdings may require margin or collateral posting and could reduce available liquidity or introduce additional volatility in our cash flows.
In summary, our exposure to SOL as part of our treasury strategy introduces a number of risks — market risk (price volatility), liquidity risk, operational risk (custody, staking, validator interruptions), regulatory risk, accounting risk and concentration risk — any of which could have a material adverse effect on our business, financial condition, results of operations and the market price of our common stock.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
As required by Rule 13a-15(b) under the Exchange Act, our management, including our Executive Chairman and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this Quarterly Report on Form 10-Q. Based upon that evaluation, our Executive Chairman and Chief Financial Officer concluded that, as of the end of the period covered by this Quarterly Report on Form 10-Q, our disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms and to provide reasonable assurance that such information is accumulated and communicated to our management, including our Executive Chairman and Chief Financial Officer.
Changes in Internal Control over Financial Reporting
During the period covered by this Quarterly Report on Form 10-Q, as a result of the adoption of the Digital Assets platform, additional controls around safeguarding of assets, evaluating the completeness and accuracy of the data and managements review procedures over proper accounting and disclosures have been implemented.
There were no other changes in our internal control over financial reporting identified in connection with the evaluation of internal controls that occurred during the period covered by this Quarterly Report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
| 11 |
PART II — OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
On October 6, 2025, the Company entered into a confidential settlement agreement and release (the “Settlement Agreement”) with Barry Berler, Plastomold Industries Ltd (“Plastomold”), Plasto Design Solutions (“PDS”), Plasto Design Ltd. (“Plasto Design,” and together with Plastomold and PDS as the “Plasto”) and Plasto Technology Group LLC (“Plasto Technology”), whereby the Company, Mr. Berler, Plasto and Plasto Technology dismissed unconditionally and irrevocably release and discharge each other and their respective representatives from and against any and all claims alleged in the Litigation (the “Settlement”). The Settlement Agreement also provides that neither party’s entry into the Settlement Agreement shall be deemed an admission of fault, responsibility, or liability for any claim alleged in the Litigation. Pursuant to the Settlement Agreement, the Company entered into definitive agreements, including a bill of sale, assignment and assumption agreement providing for the transfer by the Company to Plasto Technology of certain assets, and a contract for the transfer of business share providing for the assignment by the Company to Plasto Technology of all of the Company’s right, title and interest in and to the issued and outstanding shares of Safegard Medical Kft, our Hungarian subsidiary. In addition, the Company executed agreements for the transfer of certain patents and registered trademarks, along with the related goodwill associated therewith.
ITEM 1A. RISK FACTORS
Factors that could cause our actual results to differ materially from those in this Quarterly Report are any of the risks described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 filed with the SEC on March 27, 2025 and as amended on April 15, 2025, and the registration statement under Form S-3 filed with SEC on October 23, 2025, any of these factors could result in a significant or material adverse effect on our results of operations or financial condition. Additional risk factors not presently known to us or that we currently deem immaterial may also impair our business or results of operations. As of the date of this Quarterly Report, there have been no material changes to the risk factors disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 filed with the SEC on March 27, 2025 and as amended on April 15, 2025, and the registration statement under Form S-3 filed with SEC on October 23, 2025.
Our Treasury Policy and strategic advice and guidance relating to our business, operations, growth initiatives, and industry trends in the crypto technology sector, respectively.
| 12 |
We may not negotiate or enforce contractual terms as aggressively with our Consultant and our Strategic Advisor as we might with an unrelated party, and the commercial terms of our agreements may be less favorable than we might obtain in negotiations with third parties. If our business dealings with our Consultant and our Strategic Advisor are not as favorable to us as arms-length transactions, our results of operations may be harmed.
Furthermore, our Strategic Advisor has received warrants to purchase shares of our Common Stock. This equity interest may also create actual or potential conflicts of interest, as their decisions could be influenced by their ownership interests rather than solely by the best interests of us or our stockholders. There is no assurance that such conflicts will be resolved in our favor, and any failure to manage these conflicts could adversely affect our business, financial condition, and reputation.
We may disclose changes to such factors or disclose additional factors from time to time in our future filings with the SEC.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Recent Sale of Unregistered Equity Securities
On July 15, 2025, the Company entered into a Subscription and Investment Representation Agreement (the “Subscription Agreement”) with Paul K. Danner, its Executive Chairman, who is an accredited investor, pursuant to which the Company agreed to issue and sell five (5) shares of the Company’s Series B Preferred Stock, par value $0.001 per share (the “Series B Preferred Stock”), to Mr. Danner for an aggregate purchase price of $100.00. The sale closed on July 17, 2025. 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.
On August 25, 2025, the Company entered into securities purchase agreements (the “Cash Securities Purchase Agreements”) with certain accredited investors (the “Cash Purchasers”) pursuant to which the Company agreed to sell and issue to the Cash Purchasers in a private placement offering (the “Cash Offering”) of (i) either shares (the “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) or 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 shares of Common Stock (the “Cash Stapled Warrant Shares,”) at an exercise price of $9.75 per Cash Stapled Warrant. In the Cash Offering, the Cash Purchasers will tender any of U.S. dollars, USDC or USDT (or a combination thereof) to the Company as consideration for the Cash Shares, Cash Stapled Warrants and Cash Pre-Funded Warrants.
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 for an aggregate proceeds of $[ ] the Company agreed to sell and issue to the Cryptocurrency Purchasers in a private placement offering (the “Cryptocurrency Offering” and together with the Cash Offering, the “Offerings”) of (i) 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) 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.
The gross proceeds from the Cash Securities Purchase Agreements and Cryptocurrency Securities Purchase Agreements aggregated $411M, which investors paid using the following currency: cash of $181M, locked SOL of $137M, unlocked SOL of $7M and stable coin of $86M. The net proceeds of $403M reflect placement agent fees, legal fees, and expenses of $7.5M with net proceeds, after reflecting par value, have been recorded in Additional Paid in Capital of $403M.
On August 28, 2025, the Company entered into a Strategic Advisor Agreement (the “Strategic Advisor Agreement”) with Sol Markets, a Cayman Islands exempt company (the “Strategic Advisor”), pursuant to which the Company engaged the Strategic Advisor to provide strategic advice and guidance relating to the Company’s business, operations, growth initiatives and industry trends in the crypto technology sector for an initial term of two (2) years, which may be extended by mutual written agreement of the Company and the Strategic Advisor. Either the Company or the Strategic Advisor may terminate the Strategic Advisor Agreement upon one hundred eighty (180) days’ prior written notice or for cause, as such term is defined in the Strategic Advisor Agreement. Pursuant to the terms of the Strategic Advisor Agreement, the Company issued to the Strategic Advisor, the Strategic Advisor warrants (the “Strategic Advisor Warrants”) to purchase 6,321,367 shares of the Company’s Common Stock (the “Strategic Advisor Warrants”) which is equal to 10% of the aggregate number of shares of Cash Shares and the Pre-Funded Warrant Shares. Upon the exercise of each Stapled Warrant, the Strategic Advisor shall receive an additional grant of Strategic Advisor Warrants to purchase an amount of shares of Common Stock equal to 10% of the Stapled Warrant Shares underlying such exercised Stapled Warrant (such shares of Common Stock underlying the Strategic Advisor Warrants, the “Strategic Advisor Warrant Shares”).
| 13 |
Item 3. Default Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
During the quarterly period
ended September 30, 2025, none of our directors or officers (as defined in Rule 16a-1(f) promulgated under the Exchange Act)
On November 11, 2025, Andrew R. Crescenzo, the Company’s Chief Financial Officer, notified the Company of his intent to retire from his positions as Chief Financial Officer, effective December 31, 2025.
The Board of Directors has commenced a process to identify and appoint a successor to serve as the Company’s next Chief Financial Officer. In connection with this transition, management, in consultation with the Board, is evaluating qualified candidates to ensure an orderly and effective succession.
OTHER ITEMS
ITEM 6. EXHIBITS
| * | Filed herewith. |
| ** | Furnished herewith. |
| + | Indicates management contract or compensatory plan. |
| 14 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized, on this 14th day of November 2025.
| SHARPS TECHNOLOGY, INC. | |
| November 14, 2025 | /s/ Paul K. Danner |
| Paul K. Danner | |
| Executive Chairman and Principal Executive Officer (Principal Executive Officer) | |
| November 14, 2025 | /s/ Andrew R. Crescenzo |
| Andrew R. Crescenzo | |
| Chief Financial Officer | |
| (Principal Financial Officer) |
| 15 |
Exhibit 31.1
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
I, Paul K. Danner, certify that:
| 1. | I have reviewed this Quarterly Report on Form 10-Q of Sharps Technology, Inc. (the Registrant); |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Registrant and have: |
| a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiary, is made known to me by others within those entities, particularly during the period in which this report is being prepared; | |
| b) | Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |
| c) | Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and |
| 5. | The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent function): |
| a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and | |
| b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting. |
| /s/ Paul K. Danner | |
| Paul K. Danner | |
| Executive Chairman (Principal Executive Officer) | |
| Date: November 14, 2025 |
Exhibit 31.2
CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
I, Andrew R. Crescenzo, certify that:
| 1. | I have reviewed this Quarterly Report on Form 10-Q of Sharps Technology, Inc. (the Registrant); |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Registrant and we have: |
| a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiary, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |
| b) | Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |
| c) | Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and |
| 5. | The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent function): |
| a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and | |
| b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting. |
| /s/ Andrew R. Crescenzo | |
| Andrew R. Crescenzo | |
| Chief Financial Officer (Principal Financial Officer) | |
| Date: November 14, 2025 |
Exhibit 32.1
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350
In connection with the accompanying Quarterly Report on Form 10-Q of Sharps Technology, Inc. for the period ended September 30, 2025, I, Paul K. Danner, Executive Chairman of Sharps Technology, Inc., hereby certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to my knowledge, that:
| (1) | Such Quarterly Report on Form 10-Q of Sharps Technology, Inc. for the period ended September 30, 2025, fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and | |
| (2) | The information contained in such Quarterly Report on Form 10-Q of Sharps Technology, Inc. for the period ended September 30, 2025, fairly presents, in all material respects, the financial condition and results of operations of Sharps Technology, Inc. |
| /s/ Paul K. Danner | |
| Paul K. Danner | |
| Executive Chairman (Principal Executive Officer) | |
| Date: November 14, 2025 |
A signed original of the certification required by Section 906 has been provided to Sharps Technology, Inc. and will be retained by Sharps Technology, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.
Exhibit 32.2
CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350
In connection with the accompanying Quarterly Report on Form 10-Q of Sharps Technology, Inc. for the period ended September 30, 2025, I, Andrew R. Crescenzo, Chief Financial Officer of Sharps Technology, Inc., hereby certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to my knowledge, that:
| (1) | Such Quarterly Report on Form 10-Q of Sharps Technology, Inc. for the period ended September 30, 2025, fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and | |
| (2) | The information contained in such Quarterly Report on Form 10-Q of Sharps Technology, Inc. for the period ended September 30, 2025, fairly presents, in all material respects, the financial condition and results of operations of Sharps Technology, Inc. |
| /s/ Andrew R. Crescenzo | |
| Andrew R. Crescenzo | |
| Chief Financial Officer (Principal Financial Officer) | |
| Date: November 14, 2025 |
A signed original of the certification required by Section 906 has been provided to Sharps Technology, Inc. and will be retained by Sharps Technology, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.