SkyAI, Inc.: Form 10-K for the period ended Dec 31, 2025

Company Overview

Sharps Technology, Inc. is a medical device sales and distribution enterprise focused on the marketing and distribution of syringe products and related drug-delivery systems. We 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. We plan 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.

On August 23, 2025, we adopted a digital asset treasury strategy focused on accumulating Solana (“SOL”), the native digital asset of the Solana blockchain.

Our Solana Treasury Strategy

On August 28, 2025, upon the closing of our Private Investment in Public Equity Offering (“PIPE”) of approximately $400 million, our Board has adopted a treasury policy (the “Treasury Policy”), the material terms of which are set forth below, under which the principal holding in our treasury reserve on the balance sheet will be allocated to SOL. Although we reserve the right to accumulate other forms of digital assets in the future, we currently only own SOL, USDC and USDT, with the vast majority of such digital assets being SOL. Upon the closing of the PIPE, we purchased and continue to hold over 2,000,000 SOL, including staking rewards, representing almost all of the capital raised in that offering. Where we refer to digital assets herein, we are referring to cryptocurrencies and stablecoins. The Board has also established a Board committee comprised of our Executive Chairman, our Chief Investment Officer and our Principal Financial Officer, to oversee the implementation of our Treasury Policy (the “Treasury Oversight Committee”).

On August 28, 2025, we entered into (i) a consulting agreement (the “Agreement”) with Sol Edge Limited (the “Consultant”) pursuant to which the Consultant provides consulting and related services with respect to our Treasury Policy and (ii) a strategic advisor agreement (the “Strategic Advisor Agreement”) with Sol Markets, a Cayman Islands exempt company (the “Strategic Advisor”) pursuant to which the Strategic Advisor provides strategic advice and guidance relating to our business, operations, growth initiatives and industry trends in the crypto technology sector. 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. Ms. Zhang’s husband Jason Hu was until recently a senior employee of the Consultant. The Consultant has entered into and intends to enter into additional agreements with registered investment advisors and registered commodity pool operators, with the first agreement entered into with Parafi Capital LP. We currently stake our treasury assets with several SOL validator service providers, see Validator Agreements below.

For the period of August 28, 2025 through August 27, 2026, we paid the Consultant an upfront $10 million annual fee equal to 2.5% of the Company’s total digital assets of $400 million on the date we executed the Consulting Agreement. For all future periods, we have agreed to pay the Consultant a monthly fee equal to 2% in the aggregate on amounts up to and including $1,000,000,000 in Account value, 1.75% in the aggregate on amounts above $1,000,000,000 up to and including $1,500,000,000 in Account value, and 1.5% in the aggregate on amounts above $1,500,000,000 in Account value as of such measurement date divided by 12, beginning on August 27, 2026. We have agreed to pay to the Consultant such fee, at its option, in the form of USDC, USDT, SOL, or some combination thereof.

This Agreement shall commence on the Effective Date and shall continue in full force and effect for a term of 20 years (the “Term”), unless earlier terminated in accordance with Section 13(c). Thereafter, the Agreement may be renewed for additional periods as mutually agreed in writing by the Parties. If this Agreement is terminated by the Company for any reason during the Term, or if the Consultant terminates this Agreement due to a material breach by the Company, the Company shall pay to the Consultant, as liquidated damages and not as a penalty, an amount equal to all fees and other compensation that would have accrued to the Consultant under this Agreement from the date of termination through the end of the Term, paid monthly throughout the Term in accordance with the payment provisions herein.

In addition to the payment terms described above, we have provided the Consultant with our Investment Guidelines, as described below, related to the managing of our digital assets. The Consultant is subject to certain Investment Guidelines, as approved by the Board and overseen by the Treasury Oversight Committee and are included in our Treasury Policy, the material terms of which are set forth below.

Treasury Policy and Investment Guidelines

We manage our Treasury Policy under the oversight of our Treasury Oversight Committee. The Treasury Policy establishes the parameters, allocation ranges, permitted instruments, and risk controls applicable to all treasury activity. The primary objective of the Treasury Strategy is to maintain controlled long exposure to the SOL ecosystem, which comprises the vast majority of our digital assets, while generating yield through staking and selective use of derivative instruments to manage market risk and/or enhance returns. Profit generation is expected primarily through (i) potential price appreciation of SOL and (ii) protocol-native staking rewards, which are accrued in SOL. We currently utilize native staking platforms that meet internal counterparty and smart-contract risk criteria. No single validator, liquid staking protocol, or staking counterparty may exceed 49% of total staked assets, and we will not employ leverage without explicit Board approval. The Treasury Policy provides that the Board has ultimate oversight of our Treasury Policy, but has delegated authority to the Treasury Oversight Committee to oversee the day-to-day operations of the Treasury Policy carried out by our CIO, subject to certain dollar amounts and percentage restrictions. If the CIO wishes to exceed the thresholds set for the CIO, they need the approval of the Treasury Oversight Committee and if the Treasury Oversight Committee wishes to exceed the thresholds set for the Treasury Oversight Committee, they need the approval of the Board. Similarly, the Treasury Oversight Committee has oversight of the Consultant and the Investment Guidelines set forth in the Consulting Agreement provide for certain dollar amounts and percentage restrictions on actions permitted to be taken by the Consultant, and if the Consultant wishes to exceed such thresholds, they need the approval of the Treasury Oversight Committee.

The Treasury Policy and Investment Guidelines, amongst other provisions, provide for the following:

• Limiting derivative usage through qualified custodians or regulated counterparties. Derivative instruments (including SOL calls, puts, or total return swaps) to be utilized solely for two permitted purposes: (i) portfolio hedging of SOL market risk and (ii) strategic exposure management where such instruments enhance yield or liquidity efficiency.
• Limiting derivative transactions to pre-approved instruments and counterparties.
• Limiting our total investible assets (a) the combined exposure to SOL and SOL-related instruments (including native and liquid staking), (b) the amount of cash or USD stablecoin reserves for settlement and liquidity management (outside of operating cash needs of any operating businesses under the company), (c) the derivative exposure (hedging or yield enhancement)
• Limiting the acceptance of in-kind SOL investments and any funding other than U.S. dollars, stablecoins or liquid SOL.
• Ensuring that only SOL pairs with sufficient daily trading volume are permitted.
• Ensuring that the aggregate exposure to any single validator, liquid staking platform, or protocol smart contract shall not exceed a certain percentage of total staked assets.
• Ensuring the daily net purchases or sales capped at a certain percentage of SOL average daily volume (ADV).
• Ensuring amount of margin exposure.
• Ensuring that the aggregate exposure to any single counterparty, custodian, or protocol shall not exceed a certain percentage of NAV (excluding SOL staking diversification described above).

Currently our Treasury Policy is primarily dedicated to SOL, and other than our holdings in USDT and USDC described above, we do not intend to allocate a significant portion of our treasury assets to other digital assets in the near term. As a result, our assets are highly concentrated in a single digital asset. Adverse developments specific to SOL, its protocol, or its ecosystem could have a disproportionate impact on our financial condition and results of operations.

In addition to our medical device sales and distribution enterprise and management of its SOL treasury, we have recently begun to explore strategic acquisitions and/or investments globally. To this goal, our treasury strategy and engineering teams continue to analyze these opportunities and develop our own digital products. We have been and continue to prioritize long term growth of the Company’s business, potentially using proceeds from the sale of SOL to fund our expansion plans described above.

From time to time we may utilize a mix of call options, put options as well as other derivatives.

Our Treasury Policy is intended to bring value to our stockholders through the following:

• utilizing intelligent capital markets issuances, including the issuance of both equity and convertible debt, where we may issue capital for the benefit of stockholders to purchase and hold more SOL;
• staking the majority of the SOL in our treasury to earn a staking yield and turn the treasury into a productive asset;
• purchasing locked SOL at a discount to the current spot price; and
• selling our SOL holdings, whether on the open market, through block trades, or other negotiated transactions, for various reasons and at various times, including, in order to repurchase shares of our Common Stock when our Board believes such repurchases will result in accretive value creation for our stockholders and at such times when it is legally permissible to do so. We may also from time to time repurchase shares of our Common Stock when our Board believes such repurchases will result in accretive value creation for our stockholders, including when our Common Stock is trading at a discount to the net asset value of our SOL holdings on a per-share basis. Any such repurchases may be funded from the proceeds of SOL sales, operating cash flow, or other available funds, and would be subject to applicable securities laws and regulations, including Rule 10b-18 under the Securities Exchange Act of 1934, as amended.

There can be no assurance that the value of SOL will increase, and investors should carefully consider the risks associated with digital assets.

Cryptocurrencies that are part of Blockchain economies

A cryptocurrency is a type of digital asset that exists on a particular blockchain and can be moved from one party to another party on that blockchain. Cryptocurrencies that comprise part of a blockchain economy or blockchain platform, typically have more functionality than a payment currency. Blockchain economies or platforms permit the use of the cryptocurrency to create other digital assets or tokens, run decentralized applications on the blockchain platform, and build various types of functionality and features on the blockchain platform. Examples of cryptocurrencies that are part of blockchain economies include SOL and Ether. Cryptocurrencies that are part of a blockchain are inherently riskier than stablecoins, but still relatively safer than other newer and untested forms of cryptocurrencies. Risks of cryptocurrencies such as SOL involve numerous factors such as market risks and technological risks, see “Risks Related to Our Digital Asset Trading Strategy and Cryptocurrencies.”

Stablecoins

Many of the blockchain applications on large blockchain networks involve the use of “stablecoins,” which are designed to maintain a constant price related to or based on some other asset or traditional currency because of, for instance, their issuers’ promise to hold high-quality liquid assets (such as U.S. dollar deposits and short-term U.S. treasury securities) equal to the total value of stablecoins in circulation. In July 2025, the U.S. President signed into law the “GENIUS Act,” which establishes a federal framework for “payment stablecoins,” treating them as payment systems, not securities, and mandating fiat-backed reserves, monthly disclosures, anti-money laundering safeguards, and similar measures. Stablecoins have grown rapidly as a medium of exchange and store of value, particularly on digital asset trading platforms, and their use as an alternative to digital assets such as bitcoin and SOL could expand further as rules are promulgated under the GENIUS Act. Given that stablecoins, such as the type we own, USDT and USDC, are pegged to the U.S. dollar, they are typically a safer and less volatile cryptocurrency than other types, such as SOL. However, as with all forms of cryptocurrencies there still remains risk with respect to stablecoins,

The GENIUS Act may also create new opportunities for stablecoin-based yield strategies within our Treasury Policy framework. As the regulatory framework established by the GENIUS Act matures and rules are promulgated thereunder, the increased legal clarity around stablecoin reserves, disclosures, and permissible uses may facilitate institutional adoption of stablecoins and expand the range of yield-generating instruments available to treasury operators such as us. We may explore allocating a portion of our treasury to stablecoin-denominated lending, liquidity provision, or other yield-generating activities that become permissible under the GENIUS Act framework. However, the rules implementing the GENIUS Act are still being promulgated, and there remains significant uncertainty regarding the final requirements, implementation timelines, and the scope of permissible activities for stablecoin holders and issuers. Changes in the final rules or their interpretation could limit or eliminate anticipated opportunities or impose compliance costs that render such strategies uneconomical. Furthermore, the broader regulatory landscape for digital assets continues to evolve rapidly, and legislative or enforcement actions at the federal or state level could adversely affect the stablecoin market and our ability to utilize stablecoins as part of our Treasury Strategy.

Treasury Strategy

Our Treasury Strategy is currently anchored in maintaining strategic long exposure to SOL, which may comprise up the vast majority of our of treasury assets under the approved allocation ranges. Profit generation is expected primarily through (i) potential price appreciation of SOL and (ii) protocol-native staking rewards, which are accrued in SOL. We utilize both native staking and liquid staking platforms that meet internal counterparty and smart-contract risk criteria. No single validator, liquid staking protocol, or staking counterparty may exceed 49% of total staked assets. The key components of our Treasury Strategy include the following:

• Staking Income - Staking rewards are a recurring source of yield and represent a significant component of expected treasury income. We delegate SOL to a diversified set of approved validators and liquid staking protocols, emphasizing operator quality, geographic dispersion, and infrastructure resiliency. Staking rewards may increase our SOL holdings and therefore compound the long-term exposure to the underlying asset.
• Use of Derivative Instruments - Although we utilized derivatives during 2025, as of December 31, we did not have any open derivative positions. In the future, we may utilize SOL-related derivative instruments, including exchange-traded or over-the-counter call options, put options, and total return swaps, solely for (i) hedging SOL market risk and (ii) strategic yield enhancement or exposure management. Derivative exposure is generally limited to 10% of the portfolio, and no single derivative transaction or counterparty exposure may exceed established notional thresholds without Treasury Oversight Committee approval. All derivative transactions are executed only through regulated or otherwise qualified custodians and counterparties and require documented trade rationales, including their expected economic and risk impact. Our treasury management guidelines currently approved by the Board limits derivative exposure to 10% of the total treasury. We do not use derivatives for speculative purposes or to obtain synthetic leverage.
• Liquidity and Portfolio Construction - We may hold up to 20% of our treasury assets in cash or USD-denominated stablecoins to support liquidity, settlement requirements, and volatility management. All trading activity is executed only through approved venues that meet internal compliance standards, and daily net purchase or sale activity is limited to no more than 20% of SOL average daily trading volume to mitigate market-impact risk. We may reallocate to cash or other highly liquid instruments, including U.S. Treasury securities or certain other types of vehicles, at the discretion of the Chief Investment Officer when warranted by market conditions.
• Risk Management and Operational Controls – Risk management is embedded throughout our Treasury Strategy. We impose strict concentration limits on counterparties, custodians, derivative exposures, and staking platforms, with no single exposure generally permitted to exceed 49% of net asset value. All custody relationships are structured to provide read-only data access, dual-authorization withdrawal controls, and whitelisted addresses for outbound transfers. We receive daily or monthly holdings data from our custodians, and these reports are reconciled through internal net asset value systems to ensure completeness and accuracy.
• Expected Profit Generation - We expect to generate profit from a combination of (i) long-term appreciation of SOL held in the treasury, (ii) ongoing staking rewards earned through native and liquid staking, and (iii) incremental yield and risk mitigation achieved through permitted derivative strategies. We believe that these activities, conducted within the prescribed governance and risk limits, support its objective of producing sustainable, risk-adjusted returns while maintaining a conservative operational posture.

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How We Earn Staking Rewards

We intend to stake up to 95% of our total SOL holdings, and will utilize the remaining unstaked SOL primarily for liquidity management, potential validator operations and as collateral for any margin loans or future lending agreements To earn staking rewards, we intend to delegate our SOL to third parties via Solana’s in-protocol delegation system while keeping the SOL held by third party custodians. This means we deposit our SOL into a stake account, which is then delegated to a validator’s vote account. We stake to validators who are integrated into our qualified custodians’ platforms, allowing us to stake SOL to validators directly from our custody accounts. This also permits us to maintain that the keys that can move our SOL are still controlled by the custodians we have engaged. See “Use of Custodians and Storage of Sol.” Of the validators integrated into our qualified custodians, our team is staking to those who, in our opinion, have demonstrated a track record of high performance, high yield generation, and attractive delegator economics. We use multiple validators to seek to maximize the return on our SOL treasury and to mitigate the risk of having only one or two validators for our treasury staking. All of our locked SOL is staked with BitGo’s validator, which is one of our qualified custodians (see Use of Custodians and Storage of SOL). We mitigate concentration risk by ensuring that no validator has over 49% of our SOL holdings staked with them with the caveat that should our total SOL holdings decrease our locked SOL staked with BitGo’s validator may go above this threshold given that the locked SOL cannot be unstaked or moved until it is unlocked. Locked SOL unlocks are released to us on a monthly basis by BitGo based on a pre-determined release schedule. The agreements with our staking providers provide that we will pay a fee equal to between 0%-4% of the rewards generated by the SOL staked to such provider. The agreements direct the staking providers to include our SOL, once received, in their delegated staking pool, with the providers having no discretion as to movement or re-hypothecation of our SOL. We maintain possession and control of the staked SOL at all times and can choose when to exit the staking amount. We have the ability to terminate the agreement with the staking providers at any time. We recently entered into an agreement with one staking provider to create an STSS-branded validator. This provider is charging a 4% commission on staking rewards earned by the validator and charged on a per-epoch basis. The STSS-branded validator was set up by the Coinbase team and is physically managed by a Coinbase sub-service provider. Coinbase has provided performance guidelines and assurances that it will adhere to certain operational standards in order to ensure that the validator performs at a high level and maximizes yield for our delegated SOL. Although we do not directly own or operate the validator infrastructure, the branding arrangement allows us to maintain a branded presence within the Solana validator ecosystem while leveraging Coinbase’s institutional-grade infrastructure, operational expertise, and security controls. Our reliance on Coinbase and its sub-service provider for the operation of the STSS-branded validator introduces counterparty risk, as any underperformance, downtime, or operational failure by Coinbase or its sub-service provider could result in reduced staking rewards or reputational harm to us. We do not control the selection of Coinbase’s sub-service provider or the specific operational procedures employed by such sub-service provider.

How We Manage Liquidity

We acknowledge that during the deactivation period, staked SOL is not earning rewards and is not yet liquid. We factor this into our liquidity and risk management framework.

Our staking program involves a temporary loss of transferability of staked SOL during the “deactivation” or cooldown period. Under normal conditions, we expect to regain complete control over un-staked SOL within approximately 48 hours; however, network conditions could extend this period. To mitigate liquidity risk, we intend to maintain a portion of our treasury in un-staked SOL and cash to meet short-term obligations. Our use of SOL options may involve margin requirements or collateral posting, which could reduce available liquidity. Option premiums paid or received may also create volatility in our near-term cash flows. A certain portion of our holdings is comprised of SOL that is programmatically locked by the FTX estate. As such the release of such locked SOL is outside our control.

Use of Custodians and Storage of SOL

If a custodian were to become insolvent, it is possible that we face delays or difficulties obtaining our digital assets. We solely utilize third-party qualified custodians to hold our SOL, other than the portion of our SOL held through a single non-qualified custodian, as set forth below. As of the date hereof, we utilize BitGo Bank & Trust, National Association (N.A.). (“BitGo”), Anchorage Digital Bank N.A. (“Anchorage”) and Coinbase, Inc. (“Coinbase”), as the custodians of our digital assets, none of which hold over 40% of such assets. We do not self-custody our SOL. We use qualified custodians that utilize risk management and operational best practices related to hot vs. cold storage, access controls, custody technology and insurance, among other practices. We are in the process of onboarding with other qualified custodians to ensure that we mitigate our SOL treasury risk through the use of additional qualified custodians.

If any of our custodians were to become insolvent or enter bankruptcy or receivership proceedings, we may face significant delays or difficulties in recovering our digital assets held by such custodian. The treatment of digital assets held in custodial accounts in the event of a custodian’s insolvency is an evolving area of law, and it is unclear whether our digital assets would be treated as our property or as part of the custodian’s bankruptcy estate. The failure of FTX Trading Ltd. and its affiliates in November 2022, in which customers holding digital assets on the FTX platform faced prolonged delays and significant losses in recovering their assets, demonstrated the material risks associated with custodian insolvency. While we have sought to mitigate this risk by diversifying our custody arrangements across multiple custodians and ensuring that no single custodian holds more than 40% of our digital assets, there can be no assurance that we would be able to recover some or all of our digital assets in a timely manner, or at all, in the event of a custodian insolvency. Of our qualified custodians, Anchorage Digital Bank N.A. is a federally chartered digital asset bank regulated by the Office of the Comptroller of the Currency (“OCC”) and BitGo Bank & Trust, National Association (N.A.). is a federally chartered national trust bank for digital assets, which provides certain regulatory protections, including requirements for minimum capital, segregation of client assets, and examinations by federal bank regulators. However, even with respect to a federally regulated custodian, there is no equivalent of Federal Deposit Insurance Corporation (“FDIC”) insurance for digital assets, and the specific protections available to depositors of digital assets at a federally chartered bank in the event of insolvency remain untested.

Our primary custodians generally maintain the majority of their custodied SOL holdings in cold storage (>95%), with hot wallets used only for limited operational purposes. Custodians employ SOC 2–audited security controls, geographic redundancy, multi-person approval processes, and conduct key-generation ceremonies in offline, secure facilities. Private keys are never exposed to networked devices. Custodians maintain insurance coverage with respect to the custodial accounts. Our custody agreements typically have terms of one to three years, may be terminated on 30 days’ notice, and include fees for storage and transactions. Our qualified custodians do not rehypothecate or otherwise use our SOL.

On August 19, 2025, our wholly-owned subsidiary, Sol Equity Limited, a Cayman Islands exempt company (“Sol Equity”) entered into a Custodial Services Agreement with BitGo (the “BitGo Agreement”) to hold our digital assets. The term of the BitGo Agreement is for one year with successive one-year renewals unless prior notice of non-renewal is given by either party. We pay BitGo a monthly digital asset storage fee based upon the market value of the assets in storage. The BitGo Agreement is terminable by either us or BitGo on thirty days’ notice as a result of a breach of the BitGo Agreement and may be suspended by BitGo if we violate the intended use of the account or due to a change in the applicable law, litigation or bankruptcy. The BitGo Agreement provides that BitGo shall obtain and maintain, at its sole expense, insurance coverage in such types and amounts as shall be commercially reasonable for the custodial services provided thereunder.

On August 21, 2025, Sol Equity entered into a Master Custody Services Agreement with Anchorage (the “Anchorage Agreement”) to hold our digital assets. The term of the Anchorage Agreement is for one year with a one-year renewal. We pay Anchorage a monthly custody fee based upon the market value of the assets in custody. The Anchorage Agreement is silent with respect to insurance coverage of the custodial assets.

On August 19, 2025, Sol Equity entered into a Custody Agreement with FalconX (the “FalconX Agreement”) to hold our digital assets. The FalconX Agreement terminable at will by either us or FalconX upon 90 days notice. We pay FalconX an annual custody fee based upon the market value of the assets in custody and a percentage of staking rewards. The FalconX Agreement is terminable by FalconX if we violate the intended use of the account or a material breach. The FalconX Agreement provides that FalconX’s compensation framework for the custodial assets is supported by insurance policies and that the insurance covers specific incidents and claims are processed in accordance with the insurer’s terms. As of February 17, 2026, all assets at FalconX were moved to other custodians.

On September 24, 2025, Sol Equity entered into a Prime Broker Agreement with Coinbase (the “Coinbase Agreement”). The Coinbase Agreement is terminable at will by either us or Coinbase upon 30 days notice. We pay Coinbase a fixed rate, inclusive of Coinbase’s commission for each executed order Coinbase may terminate, restrict or suspend the Coinbase Agreement upon an event of default by us. Coinbase may also close the Company’s account if it has been inactive for more than one year. The Coinbase Agreement provides that Coinbase shall obtain and maintain, at its sole expense, insurance coverage in such types and amounts as shall be commercially reasonable for the custodial services provided thereunder. As these custodial agreements do not set forth the specific amounts of insurance coverage, some of our digital assets may not be subject to coverage if any of the custodian’s coverage is too low. See “If we or our third-party service providers experience a security breach or cyberattack and unauthorized parties obtain access to our SOL, or if our private keys are lost or destroyed, or other similar circumstances or events occur, we may lose some or all of our SOL and our financial condition and results of operations could be materially adversely affected.”

Use of DeFi Protocols

We may from time to time interact with decentralized finance (“DeFi”) protocols, either directly or indirectly through staking, validator operations, custody arrangements, or liquidity management activities. DeFi protocols generally rely on open-source smart contracts deployed on public blockchains, including SOL. While these smart contracts are intended to operate automatically according to their code, they may contain coding errors, vulnerabilities, or design flaws that can be exploited.

Accounting Treatment of Digital Assets

Effective with the adoption of Accounting Standards Update No. 2023-08, “Accounting for and Disclosure of Crypto Assets” (“ASU 2023-08”), we measure our SOL at fair value in our consolidated balance sheet, with changes in fair value recognized in net income each reporting period in accordance with ASC 350-60. We determine the fair value of our SOL holdings using the closing price on our principal market as of the reporting date, in accordance with ASC 820, Fair Value Measurement. This mark-to-market accounting treatment may result in significant volatility in our reported net income and comprehensive income from period to period, driven primarily by fluctuations in the market price of SOL rather than changes in our underlying business operations. Staking rewards received in SOL are recognized as revenue at fair value on the date received. We believe that fair value measurement provides the most relevant and transparent information about our digital asset holdings to investors, but investors should be aware that reported earnings may fluctuate significantly as a result.

SOL - The Token of the Solana Blockchain

SOL is the native token of the Solana blockchain. SOL was created with an initial supply of 500 million SOL, though much of the initial supply was locked or earmarked for various use cases including the community, the foundation and investors. New SOL are brought into existence primarily through inflationary rewards distributed to validators and delegators. The SOL staking yield is made up of three primary components: inflationary rewards, transaction/priority fees, and maximal extractable value. Inflationary rewards started out at 8.0%, and are currently 4.3%, and will fall 15% every epoch-year until they reach a long-term floor of 1.5%. Unlock schedules applicable to these allocations may periodically increase circulating supply, creating potential selling pressure and adversely affecting the price of SOL. Historically, 50% of all transaction fees were burned (with the other 50% going to the validator), but now all transaction fees go to the validator after the passage and adoption of the Solana Improvement Document 96.

How SOL is Used

SOL is used as part of Solana’s proof-of-stake consensus mechanism. In general, proof-of-stake blockchains have block producers called validators that run nodes, bond or stake the protocol’s native token, propose blocks when chosen to do so, and validate/sign the transactions and blocks of others when not. Validators are chosen to produce a block in proportion to their stake, which makes it extremely costly for bad actors to attempt to control the network and add invalid transactions to the blockchain. Validators receive staking rewards for the work they perform, which further incentivizes validators to behave properly, as they would otherwise miss out on such rewards. Other proof-of-stake networks often “slash” some or all of a validator’s stake if it intentionally or unintentionally performs its duties poorly, for example, by double-signing a transaction, though Solana has not implemented slashing at this time. In addition to its use within consensus, SOL is also a “gas token”, meaning that users of the Solana blockchain pay SOL to validators (and delegators) as compensation for processing their transactions.

Although Solana has not implemented slashing at this time, there can be no assurance that slashing will not be introduced in the future through a protocol upgrade or governance proposal. The introduction of slashing on the Solana network could result in a partial or total loss of SOL staked with a validator that is found to have engaged in malicious behavior or experienced significant downtime. If slashing is implemented and any of our validators are subject to slashing penalties, we could lose a portion of our staked SOL, which could have a material adverse effect on our financial condition. We monitor Solana governance proposals and protocol development activity to assess the likelihood of slashing implementation and its potential impact on our staking operations.

SOL validators may also earn income through maximal extractable value (“MEV”), which refers to the value that validators can capture by strategically ordering, including, or excluding transactions within a block. MEV activity on the Solana network has grown significantly and represents an additional component of validator economics. While MEV may increase the total yield available to validators and their delegators, it also introduces risks, including the potential for transaction censorship, front-running of user transactions, and network congestion caused by MEV-seeking bots. Regulatory scrutiny of MEV practices could result in restrictions that reduce validator revenue or increase compliance costs. Changes to MEV distribution mechanisms, such as modifications to the Jito-Solana client or similar infrastructure, could adversely affect staking yields available to us.

We see three particularly notable items giving Solana a technical advantage compared to many smart contract blockchain peers. Solana’s proof-of-history gives validators a notion of time and allows them to produce blocks without requiring the network to first agree upon the current block, resulting in speed advantages. Further, unlike peer blockchains that often use single-threaded virtual machines, Solana enables parallel transaction execution to increase throughput and take advantage of future hardware improvements resulting from increased CPU core counts. In addition, Solana is optimized for speed and security, and is naturally growing into decentralization as hardware and bandwidth costs fall over time, positioning it well along the Blockchain Trilemma.

While Solana Labs and the Solana Foundation have played important roles in the development of the Solana ecosystem, no single entity owns or controls the Solana network. However, concentration of influence in these entities, particularly in early-stage protocol governance, presents risks that investors should consider.

The Solana Ecosystem

Solana’s performance and technical capabilities enable many use cases from DeFi to decentralized physical infrastructure networks, AI agents, social media, gaming, stablecoins, real-world assets, among others. We believe Solana is advantaged by best-in-class technology and strong network effects that have attracted a large, growing, and vibrant ecosystem of users, developers, and decentralized applications.

Regulations

Depending on the regulatory characterization of Solana, the markets for cryptocurrency in general, and our activities in particular, our business and our Solana acquisition strategy may be subject to regulation by one or more regulators in the United States and globally. Ongoing and future regulatory actions may alter, to a materially adverse extent, the nature of digital assets markets, the participation of industry participants, including service providers and financial institutions in these markets, and our ability to pursue our SOL strategy. Additionally, U.S. state and federal and foreign regulators and legislatures have taken action against industry participants, including digital assets businesses, and enacted restrictive regimes in response to adverse publicity arising from hacks, consumer harm, or criminal activity stemming from digital assets activity. U.S. federal and state energy regulatory authorities are also monitoring the total electricity consumption of cryptocurrency mining, and the potential impacts of cryptocurrency mining to the supply and dispatch functionality of the wholesale grid and retail distribution systems. Many state legislative bodies have passed, or are actively considering, legislation to address the impact of cryptocurrency mining in their respective states.

The SEC recognizes that some digital assets fall within the definition of a “commodity” under the Commodities Exchange Act of 1936, as amended (the “CEA”). Under the CEA, the Commodities Futures Trading Commission (the “CFTC”) has broad enforcement authority to police market manipulation and fraud in spot digital assets markets in which we may transact. Pursuant to SEC Interpretive Release No. 33-11412, the SEC has established a functional taxonomy that classifies certain crypto assets, including SOL, as digital commodities rather than securities. These assets are deemed to derive their value from the programmatic operation of a functional crypto system and market dynamics, rather than from a reasonable expectation of profits derived from the essential managerial efforts of others. Beyond instances of fraud or manipulation, the CFTC generally does not oversee cash or spot market exchanges or transactions involving digital asset commodities that do not utilize margin, leverage, or financing. In addition, CFTC regulations and CFTC oversight and enforcement authority apply with respect to futures, swaps, other derivative products and certain retail leveraged commodity transactions involving digital asset commodities, including the markets on which these products trade. While an asset itself may be classified as a digital commodity, the SEC maintains that the specific manner in which it is offered or sold could still constitute an investment contract transaction subject to federal securities laws.

In addition, because transactions in SOL provide a degree of anonymity, they are susceptible to misuse for criminal activities, such as money laundering. This misuse, or the perception of such misuse, could lead to greater regulatory oversight of SOL and SOL platforms, and there is the possibility that law enforcement agencies could close SOL platforms or other SOL-related infrastructure with little or no notice and prevent users from accessing or retrieving SOL held via such platforms or infrastructure.

As noted above, activities involving SOL and other digital assets may fall within the jurisdiction of more than one financial regulator and various courts and such laws and regulations are rapidly evolving and increasing in scope. The laws and regulations applicable to SOL and digital assets are evolving and subject to interpretation and change.

Governments around the world have reacted differently to digital assets; certain governments have deemed them illegal, and others have allowed their use and trade without restriction, while in some jurisdictions, such as the U.S., digital assets are subject to overlapping, uncertain and evolving regulatory requirements.

As digital assets have grown in both popularity and market size, the U.S. Executive Branch, Congress and a number of U.S. federal and state agencies, including the Financial Crimes Enforcement Network, the CFTC, the SEC, the Financial Industry Regulatory Authority, the Consumer Financial Protection Bureau, the Department of Justice, the Department of Homeland Security, the Federal Bureau of Investigation, the Internal Revenue Service and state financial regulators, have been examining the operations of digital asset networks, digital asset users and digital asset exchanges, with particular focus on the extent to which digital assets can be used to violate state or federal laws, including to facilitate the laundering of proceeds of illegal activities or the funding of criminal or terrorist enterprises, and the safety and soundness and consumer-protective safeguards of exchanges or other service-providers that hold, transfer, trade or exchange digital assets for users. Many of these state and federal agencies have issued consumer advisories regarding the risks posed by digital assets to investors. In addition, federal and state agencies, and other countries have issued rules or guidance regarding the treatment of digital asset transactions and requirements for businesses engaged in activities related to digital assets.

Controlled Equity Offering

On September 2, 2025, we 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 we, from time to time, at its option may offer and sell shares (the “ATM Shares”) of its Common Stock, to or through Cantor, acting as principal and/or the sole designated sales agent having an aggregate sales price of up to $236,605,575 (the “ATM Offering”). Subject to the terms and conditions of the Sales Agreement, Cantor will use its commercially reasonable efforts consistent with its normal trading and sales practices to sell the ATM Shares from time to time, based upon our instructions. We have provided the Agents with customary indemnification and contribution rights in favor of the Agents, and the Agents will be entitled to a commission of 3.0% of the gross proceeds from each sale of the ATM Shares pursuant to the Sales Agreement. Sales of the ATM Shares, if any, under the Agreement may be made in transactions that are deemed to be “at the market offerings” as defined in Rule 415 under the Securities Act or by any other method permitted by law. We have no obligation to sell any of the ATM Shares and may at any time suspend offers under the Sales Agreement or terminate the Sales Agreement.

The Common Stock to be sold under the Sales Agreement, if any, will be issued and sold pursuant to our 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 2025, the Company sold 2,160,023 shares under the ATM Offering for net proceeds of $19,278,502 after brokerage fees.

Share Repurchase Program

On October 2, 2025, our Board approved a share repurchase program (the “2025 Repurchase Program”) providing for the repurchase of up to $100,000,000 of our outstanding shares of common stock. The 2025 Repurchase Program enables us to repurchase its shares in the open market and in negotiated transactions. The Repurchase Program does not obligate us 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, we entered into an Open Market Share Repurchase Agreement (the “Repurchase Agreement”) with Cantor Fitzgerald & Co. (the “Broker”) whereby the Broker has agreed to act as a non-exclusive agent on behalf of us to repurchase shares of Common Stock in the open market pursuant to Rule 10b-18 of the Securities Exchange Act of 1934. The Repurchase Agreement will continue in effect until terminated by either us or the Broker, with or without cause, upon written notice to the other party. We will pay Broker a commission at a rate of $0.02 for each share of Common Stock repurchased pursuant to the Repurchase Agreement. Through the date of this filing, $1,588,861in funds have been used for the repurchase of 867,678 shares under the Repurchase Agreement, including fees.

Settlement of Outstanding Litigations and Spinoff of Hungarian Subsidiary

On October 6, 2025, we 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, we entered into definitive agreements, including a bill of sale, assignment and assumption agreement providing for the transfer by us to Plasto Technology of certain assets, and a contract for the transfer of business share providing for the assignment by us to Plasto Technology of all of our right, title and interest in and to the issued and outstanding shares of Safegard Medical Kft, our Hungarian subsidiary. In addition, we executed agreements for the transfer of patents and registered trademarks, along with the related goodwill associated therewith.

Corporate Information

We were incorporated in the State of Wyoming on December 16, 2017. On March 22, 2022, we reincorporated as a Nevada corporation. Our principal business address is 105 Maxess Road, Suite 124, Melville, New York 11747.

Available Information

The address of our principal executive office is 105 Maxess Road, Suite 124, Melville, New York 11747.

Our common stock and warrants are quoted on the Nasdaq under the symbol “STSS” and “STSSW”. We file annual, quarterly, and current reports, proxy statements and other information with the U.S. Securities Exchange Commission (the “SEC”). These filings are available to the public on the Internet at the SEC’s website at http://www.sec.gov.

Our corporate website is located at www.sharpstechnology.com (http://www.sharpstechnology.com) (this website address is not intended to function as a hyperlink and the information contained on our website is not intended to be a part of this Report). We make available free of charge on https://www.sharpstechnology.com/investors/all-sec-filings for our annual, quarterly, and current reports, and amendments to those reports if any, as soon as reasonably practical after we electronically file such material with, or furnish it to, the SEC. We may from time to time provide important disclosures to investors by posting them in the Investor Relations section of our website.

You should carefully consider the following risk factors and the other information included herein as well as the information included in other reports and filings made with the SEC before investing in our common stock. The following factors, as well as other factors affecting our operating results and financial condition, could cause our actual future results and financial condition to differ materially from those projected. The trading price of our common stock could decline due to any of these risks, should they materialize, and you may lose part or all of your investment.

Summary of Significant Risks Affecting Our Company

Our significant risks may be summarized as follows:

• We have a limited operating history on which to judge our performance and assess our prospects for future success.
• We may not succeed in selling and distributing syringes.
• Our business may be affected by changes in the health care regulatory environment.
• We are dependent on our management; without whose services our business operations could cease.
• We have recently adopted a digital asset treasury strategy with a focus on SOL, and we may be unable to successfully implement this new strategy.
• The further development and acceptance of Solana and other cryptocurrency networks, which represent a relatively new and rapidly changing industry, are subject to a variety of factors that are difficult to evaluate.
• The slowing or stopping of the development or acceptance of Solana and other cryptocurrency networks may adversely affect an investment in us.
• The digital asset trading platforms on which cryptocurrency trades are relatively new and largely unregulated or may not be complying with existing regulations.
• Our shift towards a SOL-focused strategy requires substantial changes in our day-to-day operations and exposes us to significant operational risks.
• Blockchain technologies are based on theoretical conjectures as to the impossibility of solving certain cryptographical puzzles quickly. These premises may be incorrect or may become incorrect due to technological advances.
• Conflicts of interest may arise with our Consultant and Strategic Advisor that may adversely affect our operations.
• If we or our third-party service providers experience a security breach or cyberattack and unauthorized parties obtain access to our SOL, or if our private keys are lost or destroyed, or other similar circumstances or events occur, we may lose some or all of our SOL and our financial condition and results of operations could be materially adversely affected.
• Our stock price may be volatile, and the value of our common stock may decline.
• Our shares will be subject to potential delisting if we do not maintain the listing requirements of the Nasdaq Capital Market.
• We are an “emerging growth company,” and we cannot be certain if the reduced reporting and disclosure requirements applicable to emerging growth companies will make our common stock less attractive to investors.

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Risks Related to Our Technology, Business, and Industry

We are an early-stage company with a history of losses.

We incurred net losses of $282.5 million and $9.3 million for the years ended December 31, 2025 and 2024, respectively. We had an accumulated deficit of $316.9 million as of December 31, 2025. There can be no assurance that we will be commercially successful in selling and distributing syringes. Our shift towards a SOL-focused strategy requires substantial changes in our day-to-day operations and exposes us to significant operational risks. Our potential profitability is dependent upon a number of factors, many of which are beyond our control.

If we are unable to achieve and sustain profitability, the value of our business and common stock may significantly decrease.

We have a limited operating history and we may not succeed.

We have a limited operating history, and we may not succeed. We formerly manufactured and commercialized syringe products and now solely sell and distribute them, with only limited revenues. You should consider, among other factors, our prospects for success in light of the risks and uncertainties encountered by companies that, like us, are in their early stages. For example, unanticipated expenses, problems, and technical difficulties may occur and they may result in material challenges to our business. We may not be able to successfully address these risks and uncertainties or successfully implement our operating strategies. If we fail to do so, such failure could have a material adverse effect on our business, financial conditions and results of operation. We may never generate significant revenues or achieve profitability.

We may not succeed in selling and distributing syringes.

We may face difficulties or delays in selling and distributing syringes, which could result in our inability to timely offer such products or services. We may, for example, encounter difficulties due to:

• our inability to adequately market syringes or other medical devices and our inability to enter into one or more agreements on commercially reasonable terms to act as a third-party sales agent for medical device manufacturers; and
• our inability to attract and retain skilled support team, marketing staff and sales force necessary to sell and distribute syringes.

We may encounter significant competition and may not be able to successfully compete.

There are many medical device companies offering safety syringes and other medical devices, and more competitors are likely to arrive. Some of our competitors have considerably more financial resources than us. As a result, we may not be able to successfully compete in our market, which could result in our failure to successfully sell and distribute syringes. There can be no assurances that we will be able to compete successfully in this environment.

We are subject to product liability risk.

As a provider of safety needle products and potentially other medical devices in the future, we may face an inherent business risk of exposure to product liability claims. Additionally, our success will depend on the quality, reliability, and safety of our products and defects in our products could damage our reputation. If a product liability claim is made and damages are in excess of our product liability coverage, our competitive position could be weakened by the amount of money we could be required to pay to compensate those injured by our products. In the event of a recall, we have recall insurance.

Our business may be affected by changes in the health care regulatory environment.

In the U.S. and internationally, government authorities may enact changes in regulatory requirements, reform existing reimbursement programs, and/or make changes to patient access to health care, all of which could adversely affect the demand for syringes and medical devices and/or put downward pressure on our prices. Future healthcare rulemaking could affect our business. We cannot predict the timing or impact of any future rulemaking or changes in the law.

We are dependent on our management; without whose services our business operations could cease.

At this time, our management is wholly responsible for the development and execution of our business plan. If our management should choose to leave us for any reason before we have hired additional personnel, our operations may fail. Even if we are able to find additional personnel, it is uncertain whether we could find qualified management who could develop our business along the lines described herein or who would be willing to work for compensation the Company could afford. Without such management, the Company could be forced to cease operations and investors in our common stock or other securities could lose their entire investment.

We may not be able to raise capital as needed to develop our products or maintain our operations.

We expect that we will need to raise additional funds to execute our business plan and expand our operations. Additional financing may not be available to us on favorable terms, or at all. If we cannot raise needed funds on acceptable terms, the Company’s business and prospects may be materially adversely affected.

Risks Related to Ownership of Our Common Stock

The price of our Common Stock has been and may continue to be volatile and fluctuate substantially, which could result in substantial losses for purchasers of our Common Stock.

Our stock price has been and is likely to continue to be volatile. The stock market in general has experienced extreme volatility that has often been unrelated to the operating performance of particular companies. With the adoption of our new SOL Treasury Policy, we expect to see additional volatility.

As a result of this volatility, you may not be able to sell your Common Stock. The market price for our Common Stock may be influenced by many factors, including:

• our SOL Treasury Policy;
• the success of competitive products, services or technologies;
• regulatory or legal developments in the United States and other countries;
• the recruitment or departure of key personnel;
• actual or anticipated changes in estimates as to financial results, development timelines or recommendations by securities analysts;
• variations in our financial results or those of companies that are perceived to be similar to us; and
• general economic, industry and market conditions.

Our financial results and the market price of our Common Stock may be affected by the prices of SOL.

As part of our capital allocation strategy for assets that are not required to provide working capital for our ongoing operations, we have invested and will continue to invest in SOL. As of the date of this filing, we hold approximately 2,000,000 SOL, including staking rewards. The prices of SOL have historically been subject to dramatic price fluctuations and are highly volatile. Moreover, digital assets, such as SOL, are relatively novel and the application of securities laws and other regulations to such assets is unclear in many respects. It is possible that regulators may interpret laws in a manner that adversely affects the liquidity or value of SOL. In addition, because our Treasury Policy is currently primarily concentrated in SOL, adverse developments specific to Solana, including protocol-level failures, governance decisions, validator network instability, or ecosystem contraction, could disproportionately impact our financial condition.

Any decrease in the fair value of SOL below our carrying value for such assets could require us to incur a loss due to the decrease in fair market value, and such charge could be material to our financial results for the applicable reporting period, which may create significant volatility in our reported earnings. Any decrease in reported earnings or increased volatility of such earnings could have a material adverse effect on the market price of our Common Stock. In addition, the application of generally accepted accounting principles in the United States, with respect to SOL, may change in the future and could have a material adverse effect on our financial results and the market price of our Common Stock.

In addition, if investors view the value of our Common Stock as dependent upon or linked to the value or change in the value of our SOL holdings, the price of SOL may significantly influence the market price of our Common Stock.

If securities analysts do not publish research or reports about our business or if they publish negative, or inaccurate, evaluations of our Common Stock, the price of our stock and trading volume could decline.

The trading market for our Common Stock may be impacted, in part, by the research and reports that securities or industry analysts publish about us or our business, including our SOL Treasury Policy. There can be no assurance that analysts will cover us, continue to cover us or provide favorable coverage. If one or more analysts downgrade our Common Stock or change their opinion of our Common Stock, our share price may decline. In addition, if one or more analysts cease coverage of us or fail to regularly publish reports on us, we could lose visibility in the financial markets, which could cause our share price or trading volume to decline.

We have never paid common stock dividends and have no plans to pay dividends in the future, as a result our common stock may be less valuable because a return on an investor’s investment will only occur if our stock price appreciates.

Holders of shares of our common stock are entitled to receive such dividends as may be declared by our Board of Directors. To date, we have paid no cash dividends on our shares of common stock, and we do not expect to pay cash dividends on our common stock in the foreseeable future. We intend to retain future earnings, if any, to provide funds for operations of our business. Therefore, any return investors in our common stock will be in the form of appreciation, if any, in the market value of our shares of common stock. There can be no assurance that shares of our common stock will appreciate in value or even maintain the price at which our stockholders have purchased their shares.

Our shares will be subject to potential delisting if we do not maintain the listing requirements of the Nasdaq Capital Market.

The shares of our common stock are listed on the Nasdaq Capital Market, or Nasdaq. Nasdaq has rules for continued listing, including, without limitation, minimum market capitalization and other requirements. Failure to maintain our listing, or de-listing from Nasdaq, would make it more difficult for shareholders to dispose of our common stock and more difficult to obtain accurate price quotations on our common stock. This could have an adverse effect on the price of our common stock. Our ability to issue additional securities for financing or other purposes, or otherwise to arrange for any financing we may need in the future, may also be materially and adversely affected if our common stock is not traded on a national securities exchange.

If we fail to comply with the continued listing requirements of NASDAQ, we may face possible delisting, which would result in a limited public market for our shares and make obtaining future debt or equity financing more difficult for us. If our stock price falls below $1.00 for 30 consecutive days it may be difficult for us to regain compliance with the minimum bid price as we may not be eligible for an extended compliance period as a result of either effecting a reverse stock split within the last year or multiple reverse stock splits over the prior two-year period with a cumulative ratio of at least 250 shares to one.

We incur increased costs as a result of operating as a public company, and our management is required to devote substantial time to compliance with our public company responsibilities and corporate governance practices.

As a public company, we incur significant legal, accounting and other expenses, which we expect to further increase after we are no longer an “emerging growth company.” The Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, the listing requirements of the Nasdaq Capital Market, and other applicable securities rules and regulations impose various requirements on public companies. Our management and other personnel will devote a substantial amount of time to compliance with these requirements. Moreover, these rules and regulations will increase our legal and financial compliance costs and will make some activities more time-consuming and costly. We cannot predict or estimate the amount of additional costs we will incur as a public company or the specific timing of such costs.

As a result of being a public company, we are obligated to develop and maintain proper and effective internal controls over financial reporting, and any failure to maintain the adequacy of these internal controls may adversely affect investor confidence in our company and, as a result, the value of our common stock.

We are required, pursuant to Section 404 of the Sarbanes-Oxley Act, to furnish a report by management on, among other things, the effectiveness of our internal control over financial reporting as of the end of the fiscal year that coincides with the filing of our annual report on Form 10-K. This assessment will need to include disclosure of any material weaknesses identified by our management in our internal control over financial reporting. In addition, our independent registered public accounting firm may be required to attest to the effectiveness of our internal control over financial reporting in our first annual report required to be filed with the SEC following the date we are no longer an “emerging growth company.” We have commenced the costly and time-consuming process of compiling the system and processing documentation necessary to perform the evaluation needed to comply with Section 404, and we expect to be able to complete our evaluation, testing and any required remediation in a timely fashion. Our compliance with Section 404 will require that we incur substantial expenses and expend significant management efforts. We currently do not have an internal audit group, and we in the future we may need to hire additional accounting and financial staff with appropriate public company experience and technical accounting knowledge and compile the system and process documentation necessary to perform the evaluation needed to comply with Section 404.

Our current controls and any new controls that we develop may become inadequate because of changes in conditions in our business. In addition, changes in accounting principles or interpretations could also challenge our internal controls and require that we establish new business processes, systems and controls to accommodate such changes. Additionally, if these new systems, controls or standards and the associated process changes do not give rise to the benefits that we expect or do not operate as intended, it could adversely affect our financial reporting systems and processes, our ability to produce timely and accurate financial reports or the effectiveness of internal control over financial reporting. Moreover, our business may be harmed if we experience problems with any new systems and controls that result in delays in their implementation or increased costs to correct any post-implementation issues that may arise.

Any failure to maintain internal control over financial reporting could severely inhibit our ability to accurately report our financial condition or results of operations. If we are unable to conclude that our internal control over financial reporting is effective, we could lose investor confidence in the accuracy and completeness of our financial reports, the market price of our common stock could decline, and we could be subject to sanctions or investigations by the SEC or other regulatory authorities. Failure to remedy any material weakness in our internal control over financial reporting, or to implement or maintain other effective control systems required of public companies, could also restrict our future access to the capital markets.

A sale of a substantial number of shares of our common stock may cause the price of the common stock to decline.

If our stockholders sell substantial amounts of our common stock in the public market, the market price of our common stock could fall. These sales also may make it more difficult for us to sell equity or equity-related securities in the future at a time and price that we deem reasonable or appropriate. Stockholders who have held their shares for at least six months are able to sell their shares pursuant to Rule 144 under the Securities Act. Almost all of our outstanding shares are available to be sold in the open market under Rule 144 or because they have been registered under the Securities Act. We have also registered shares of our common stock for sale into the public market, which are issuable upon the exercise of warrants. These shares represent a large number of shares of our common stock, and if sold in the market all at once or at about the same time, could depress the market price of our common stock during the period the registration statement remains effective and could also affect our ability to raise equity capital.

Our stock price may be volatile, and the value of our common stock may decline.

The market price of our common stock is likely to be highly volatile and could fluctuate widely in price in response to various factors, many of which are beyond our control, including the following:

• actual or anticipated fluctuations in our financial condition or results of operations;
• variance in our financial performance from expectations of securities analysts;
• changes in our projected operating and financial results;
• changes in laws or regulations applicable to our products;
• announcements by us or our competitors of significant business developments, acquisitions or new products;
• sales of shares of our common stock by us or our shareholders, as well as the anticipation of lock-up releases;

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• our involvement in litigation;
• future sales of our common stock by us or our stockholders;
• changes in senior management or key personnel;
• the trading volume of our common stock;
• changes in the anticipated future size and growth rate of our market;
• general economic and market conditions; and
• other events or factors, including those resulting from war, incidents of terrorism, global pandemics or responses to these events.

Broad market and industry fluctuations, as well as general economic, political, regulatory and market conditions, may also negatively impact the market price of our common stock. In the past, companies who have experienced volatility in the market price of their securities have been subject to securities class action litigation. We may be the target of this type of litigation in the future, which could result in substantial expenses and divert our management’s attention.

We do not intend to pay dividends on our common stock for the foreseeable future.

We have paid no dividends on our common stock to date and we do not anticipate paying any dividends to holders of our common stock in the foreseeable future. While our future dividend policy will be based on the operating results and capital needs of the business, we currently anticipate that we will retain any earnings to finance our future expansion and for the implementation of our business plan. Investors should take note of the fact that a lack of a dividend can further affect the market value of our common stock and could significantly affect the value of any investment in the Company.

Our articles of incorporation allow for our board to create new series of preferred stock without further approval by our stockholders, which could adversely affect the rights of the holders of our common stock.

Our board of directors has the authority to fix and determine the relative rights and preferences of preferred stock. Our board of directors has the authority to issue up to 1,000,000 shares of our preferred stock without further stockholder approval. Our board of directors could authorize the creation of additional series of preferred stock that would grant to holders of preferred stock the right to our assets upon liquidation, or the right to receive dividend payments before dividends are distributed to the holders of common stock. In addition, subject to the rules of any securities exchange on which our stock is then listed, our board of directors could authorize the creation of additional series of preferred stock that has greater voting power than our common stock or that is convertible into our common stock, which could decrease the relative voting power of our common stock or result in dilution to our existing stockholders.

Future securities issuances could result in significant dilution to our stockholders and impair the market price of our common stock.

Future issuances of shares of our common stock could depress the market price of our common stock and result in dilution to existing holders of our common stock. Also, to the extent outstanding options and warrants to purchase our shares of our common stock are exercised or options or other equity-based awards are issued or become vested, there will be further dilution. The amount of dilution could be substantial depending upon the size of the issuances or exercises. Furthermore, we may issue additional equity securities that could have rights senior to those of our common stock.

We are an “emerging growth company,” and we cannot be certain if the reduced reporting and disclosure requirements applicable to emerging growth companies will make our common stock less attractive to investors.

We are an “emerging-growth company,” as defined in the JOBS Act, and we have elected to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies,” including the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, or Section 404, 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. Pursuant to Section 107 of the JOBS Act, as an emerging growth company, we have elected to use the extended transition period for complying with new or revised accounting standards until those standards would otherwise apply to private companies. As a result, our consolidated financial statements will not be comparable to the financial statements of issuers who are required to comply with the effective dates for new or revised accounting standards that are applicable to public companies, which may make our common stock less attractive to investors. In addition, if we cease to be an emerging growth company, we will no longer be able to use the extended transition period for complying with new or revised accounting standards.

We will remain an emerging-growth company until the earliest of: (1) the last day of the fiscal year following the fifth anniversary of our IPO; (2) the last day of the first fiscal year in which our annual gross revenue is $1.07 billion or more; (3) the date on which we have, during the previous rolling three-year period, issued more than $1 billion in non-convertible debt securities; and (4) the date we qualify as a “large accelerated filer,” with at least $700 million of equity securities held by non-affiliates.

We cannot predict if investors will find our common stock less attractive as a result of choosing to rely on these exemptions. For example, if we do not adopt a new or revised accounting standard, our future results of operations will not be as comparable to the results of operations of certain other companies in our industry that adopted such standards. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock, and our stock price may be more volatile.

Risks Related to Our Digital Asset Trading Strategy and Cryptocurrencies

The further development and acceptance of Solana and other cryptocurrency networks, which represent a relatively new and rapidly changing industry, are subject to a variety of factors that are difficult to evaluate. The slowing or stopping of the development or acceptance of Solana and other cryptocurrency networks may adversely affect an investment in us.

Cryptocurrency networks and chains are a new and rapidly evolving industry of which Solana is a prominent, but not unique, part. The growth of Solana and the cryptocurrency industry is subject to a high degree of uncertainty. The factors affecting the further development of Solana and the cryptocurrency industry include:

• continued worldwide growth in the adoption and use of SOL and other cryptocurrencies, including those competitive with SOL;
• government and quasi-government regulation of SOL and other cryptocurrencies and their use, or restrictions on or regulation of access to and operation of Solana or similar cryptocurrency systems;
• the maintenance and development of the open-source software protocol of Solana;
• changes in consumer demographics and public tastes and preferences;
• the availability and popularity of other forms or methods of buying and selling goods and services, including new means of using fiat currencies; and
• general economic conditions and the regulatory environment relating to cryptocurrencies and cryptocurrency service providers.

A decline in the popularity or acceptance of Solana and other cryptocurrency networks may harm the price of our Common Stock. There is no assurance that Solana or the service providers necessary to accommodate it will continue in existence or grow. Furthermore, there is no assurance that the availability of and access to cryptocurrency service providers will not be negatively affected by government regulation or supply and demand of Solana.

The digital asset trading platforms on which cryptocurrency trades are relatively new and largely unregulated or may not be complying with existing regulations.

The digital asset trading platforms through which SOL and other cryptocurrencies trade are new and largely unregulated or may not be complying with existing regulations. These markets are local, national and international and include a broadening range of cryptocurrencies and participants. Significant trading may occur on systems and platforms with minimum predictability. Spot markets may impose daily, weekly, monthly or customer-specific transaction or withdrawal limits or suspend withdrawals entirely, rendering the exchange of SOL for fiat currency difficult or impossible. Participation in spot markets requires users to take on credit risk by transferring SOL from a personal account to a third-party’s account.

Digital asset trading platforms do not appear to be subject to, or may not comply with, regulation in a manner similar to other regulated trading platforms, such as national securities exchanges or designated contract markets. Many digital asset trading platforms are unlicensed, are unregulated, operate without extensive supervision by governmental authorities, and do not provide the public with significant information regarding their ownership structure, management team, corporate practices, cybersecurity, and regulatory compliance. In particular, those located outside the United States may be subject to significantly less stringent regulatory and compliance requirements in their local jurisdictions. Digital asset trading platforms may be out of compliance with existing regulations.

Tools to detect and deter fraudulent or manipulative trading activities (such as market manipulation, front-running of trades, and wash-trading) may not be available to or employed by digital asset trading platforms or may not exist at all. As a result, the marketplace may lose confidence in, or may experience problems relating to, these venues and the digital assets that trade on these venues.

No digital asset trading platform on which cryptocurrency trades is immune from these risks. The closure or temporary shutdown of digital asset trading platforms due to fraud, business failure, hackers or malware, or government-mandated regulation may reduce confidence in cryptocurrency and can slow down the mass adoption of it. Further, digital asset trading platform failures can have an adverse effect on cryptocurrency markets and the price of cryptocurrency and could therefore have a negative impact on the performance of the Common Stock.

Negative perception, a lack of stability in the digital asset trading platforms, manipulation of cryptocurrency trading platforms by customers and/or the closure or temporary shutdown of such trading platforms due to fraud, business failure, hackers or malware, or government-mandated regulation may reduce confidence in cryptocurrency generally and result in greater volatility in the market price of SOL and other cryptocurrency and the Common Stock. Furthermore, the closure or temporary shutdown of a cryptocurrency trading platform may impact our ability to determine the value of our cryptocurrency holdings.

We may be unable to successfully implement our digital asset treasury strategy with a focus on SOL.

We have adopted our Treasury Policy primarily dedicated to SOL, including potential investments in SOL, including through staking and other decentralized finance activities. There is no assurance that we will be able to successfully implement this strategy or operate SOL-related activities at the scale or profitability currently anticipated. Solana operates with a proof-of-stake consensus mechanism, which differs significantly from bitcoin’s Proof-of-Work mining mechanism. This strategic shift requires specialized employee skillsets and operational, technical and compliance infrastructure to support SOL and related staking activities. This also requires that we implement different security protocols, and treasury management practices. Further, there is ongoing scrutiny and limited formal guidance from regulatory agencies, including Nasdaq and the SEC, with respect to the treatment of public company cryptocurrency strategies. There is no assurance that we will be able to execute this strategy by building out the needed infrastructure within the timeframe that we currently anticipate. Errors by key management could result in significant loss of funds and reduced rewards. As a result, our shift towards SOL could have a material adverse effect on our business and financial condition.

Our shift towards a SOL-focused strategy requires substantial changes in our day-to-day operations and exposes us to significant operational risks.

Our shift towards a SOL-focused strategy, including staking and other decentralized finance activities, exposes us to significant operational risks. SOL’s proof-of-stake consensus mechanism requires that we operate validator nodes, delegate SOL to other validator service operators and employ secure key management to generate yield from our SOL. It also requires that we maintain constant up time to ensure that we are eligible for staking rewards and to avoid penalties. In addition, the SOL ecosystem rapidly evolves, with frequent upgrades and protocol changes that may require significant adjustments to our operational setup. The upgrades and protocol changes may require that we incur unanticipated costs and could cause temporary service disruptions. We may also need to employ third-party service providers in our operations, which may introduce risks outside of our control, including significant cybersecurity risks. Any of these operational risks could materially and adversely affect our ability to execute our SOL strategy, prevent us from realizing positive returns and severely hurt our financial condition.

Our concentration in a single digital asset exposes us to unique liquidity risks that may prevent us from converting SOL into fiat currency or other assets when desired, particularly during periods of market stress.

Liquidity in digital asset markets can quickly deteriorate in response to negative news, regulatory scrutiny, or systemic events affecting exchanges or stablecoins. In the event of a market-wide liquidity crunch, we may be unable to sell, stake, or otherwise monetize our SOL holdings at prevailing quoted prices—or at all—without significantly affecting the market price of SOL. Limited liquidity may also impair our ability to fund working-capital needs, repay indebtedness, or pursue acquisition opportunities, any of which could have a material adverse effect on our business, financial condition, and prospects.

A disruption of the Internet may affect the operation of the cryptocurrency networks, which may adversely affect the cryptocurrency industry and an investment in us.

Cryptocurrency networks rely on the Internet. A significant disruption of Internet connectivity could disrupt cryptocurrency networks’ functionality until such disruption is resolved. A disruption in the Internet could adversely affect an investment in us. In particular, some variants of cryptocurrencies have experienced a number of denial-of-service attacks, which have led to temporary delays in block creation and cryptocurrency transfers.

Cryptocurrencies are also susceptible to border gateway protocol hijacking (“BGP hijacking”). Such an attack can be a very effective way for an attacker to intercept traffic en route to a legitimate destination. BGP hijacking impacts the way different nodes are connected to one another to isolate portions of them from the remainder of the network, which could lead to a risk of the network allowing double-spending and other security issues. If BGP hijacking occurs on any cryptocurrency network, participants may lose faith in the security of cryptocurrency, which could affect cryptocurrency’s value and consequently the value of the Common Stock.

Any Internet failures or Internet connectivity-related attacks that impact the ability to transfer cryptocurrency could have a material adverse effect on the price of cryptocurrency and the value of an investment in us.

Blockchain technologies are based on theoretical conjectures as to the impossibility of solving certain cryptographical puzzles quickly. These premises may be incorrect or may become incorrect due to technological advances.

Blockchain technologies are premised on theoretical conjectures as to the impossibility, in practice, of solving certain mathematical problems quickly. Those conjectures remain unproven, however, and mathematical or technological advances could conceivably prove them to be incorrect. Blockchain technology companies may also be negatively affected by cryptography or other technological or mathematical advances, such as the development of quantum computers with significantly more power than computers presently available, that undermine or vitiate the cryptographic consensus mechanism underpinning the Solana network and other distributed ledger protocols. If either of these events were to happen, markets that rely on blockchain technologies could quickly collapse, and an investment in our Common Stock may be adversely affected.

Technical shortcomings or defects in the Solana network, including changes to its validator structure, governance model, or core software, could diminish the utility and value of SOL and harm our business.

The Solana network is a public, open-source blockchain protocol that is not under our control. Its ongoing viability depends on the continued consensus and cooperation of independent developers, validators, node operators, and other ecosystem participants. If the Solana network experiences a successful cyber-attack, a material software bug, a “hard fork” that fragments the network, or a prolonged outage, market confidence in SOL could be severely undermined. Similarly, decisions by influential validators to adopt protocol changes, modify transaction-fee structures, or alter burn practices or network governance could adversely affect SOL’s economics and, therefore, the value of our holdings.

If validators exit the Solana network, it could increase the likelihood of a malicious actor obtaining control.

Validators exiting the network could make Solana more vulnerable to a malicious actor obtaining control other network, which might enable them to manipulate the Solana network by censoring or manipulating specific transactions. If the Solana network suffers such an attack, the price of SOL could be negatively affected, and a loss of confidence in the Solana network could result. Any reduction in confidence in the transaction confirmation process or staking power of the Solana network may adversely affect an investment in the Common Stock.

We face risks relating to the potential compromise of the Solana network and other cryptocurrencies’ network security by emerging technologies, including artificial intelligence and quantum computing, which may materially and adversely impact our operations and financial condition.

The security and integrity of Solana and other cryptocurrencies’ network are fundamentally dependent on the robustness of its cryptographic algorithms. SOL and other cryptocurrencies’ protocol relies heavily on public key cryptography and hashing algorithms to secure transactions, safeguard private keys, and prevent double-spending. Advances in emerging technologies, particularly artificial intelligence (“AI”) and quantum computing may pose significant risks to Solana and other cryptocurrencies’ network’s security and operational stability.

Quantum computing, in particular, presents a long-term threat to the cryptographic assumptions underpinning SOL and other cryptocurrencies. Should quantum computing achieve sufficient maturity, it could undermine the effectiveness of the cryptographic algorithms used to secure the blockchain, such as elliptic curve digital signature algorithms (ECDSA). A sufficiently powerful quantum computer could potentially reverse-engineer private keys from public addresses or compromise the blockchain’s consensus mechanism, leading to the theft of digital assets, double-spending, and other forms of fraud. Although current quantum computing capabilities are not yet at this level, advancements in quantum technologies could materialize more rapidly than anticipated, creating significant systemic risks for the Solana network.

AI may also pose security risks. AI-driven cyberattacks, including advanced phishing schemes, autonomous malware, and intelligent blockchain analysis tools, could increase the sophistication and success rate of attacks targeting SOL and other cryptocurrencies’ users, exchanges, custodians, and node operators. The use of AI to exploit vulnerabilities in software, mining hardware, or network protocols could threaten the stability and reliability of the Solana and other cryptocurrencies’ ecosystems.

There can be no assurance that SOL and other cryptocurrencies’ current cryptographic safeguards will be sufficient to protect against future technological advances. While research and development efforts are ongoing to develop quantum-resistant cryptographic protocols, the Solana and other cryptocurrencies’ networks may face challenges in adopting such technologies at scale, particularly given their decentralized governance structure. Any successful attack or perceived vulnerability arising from AI or quantum computing could materially and adversely affect the price, liquidity, and adoption of SOL and other cryptocurrencies and could negatively impact our business, financial condition and results of operations.

The trading prices of many digital assets, including SOL, have experienced extreme volatility in recent periods and may continue to do so. Extreme volatility in the future, including further declines in the trading prices of SOL, could have a material adverse effect on the value of the Common Stock.

The trading prices of many digital assets, including SOL, have experienced extreme volatility in recent periods and may continue to do so, including as a result of shifts in market sentiment, speculative trading, macroeconomic trends, technology-related disruptions, and regulatory announcements. Digital asset trading markets, including the Solana network, are relatively new, largely unregulated, and, at times, subject to limited liquidity. As a result, trading activity on or reported by these digital asset trading platforms, including SOL, is generally significantly less regulated than trading in regulated U.S. securities and commodities markets and may reflect behavior that would be prohibited in regulated U.S. trading venues. Furthermore, many digital asset trading platforms lack certain safeguards put in place by more traditional exchanges to enhance the stability of trading on the platform. The digital asset markets may also be experiencing a bubble or may experience a bubble in the future, which may undermine confidence and affect liquidity of the digital asset markets. A rapid decrease in the price of SOL—whether as a result of negative perception, a lack of stability in the digital asset trading platforms, market manipulation of cryptocurrency trading platforms by customers, a cyber-security incident, regulatory action, or other factors—could materially reduce the value of any SOL we hold, force us to recognize impairment charges, trigger defaults or covenant breaches in any future financing arrangements, and could have a material adverse effect on the value of our Common Stock that may result in the loss of all or substantially all of its value.

Our management may invest or otherwise use the proceeds of any offering by us in ways with which you may not agree or in ways that may not yield a return.

Our management will have broad discretion in the application of the net proceeds from any offering by us and could use the proceeds in ways that do not improve our results of operations or enhance the value of our Common Stock. The failure by our management to apply these funds effectively could result in financial losses that could cause the price of our Common Stock to decline.

If we lose key personnel, including our Chief Investment Officer, Consultant and Strategic Advisor, or if we fail to recruit additional highly skilled personnel, our ability to operate and manage our digital asset treasury strategy will be impaired.

Our ability to operate and manage our digital asset treasury strategy depends upon our ability to attract and retain highly qualified personnel, including our Chief Investment Officer and members of our executive team, and other key personnel, including the Consultant and Strategic Advisor. The loss of the services of any of our executive officers, key employees, and the Consultant and Strategic Advisor, and our inability to find suitable replacements, could result in significant disruption in our operations and management of our digital assets.

Despite our efforts to retain valuable members of our management, employees and consultants, such key personnel may terminate their employment with us on short notice. Although we have agreements with our key employees and consultants, these agreements provide for at-will employment, which means that any of our employees or consultants could leave our employment at any time, with or without notice. We do not currently maintain “key man” insurance policies on any of our employees or consultants.

Conflicts of interest may arise with our Consultant and Strategic Advisor that may adversely affect our operations.

Sol Edge Limited, our Consultant, and Sol Markets, our Strategic Advisor, are each a related party and both wholly-owned and controlled by James Zhang, the brother of Alice Zhang, our Chief Investment Officer and director. Ms. Zhang’s husband Jason Hu was until recently a senior member of the team at the Consultant that manages our digital assets. Additionally, each of Ms. Zhang, Paul Danner, our Executive Chairman, and our Principal Financial Officer, sit on our Treasury Oversight Committee. The Treasury Oversight Committee has direct oversight over the Consultant and Strategic Advisor. The Consultant will have a material influence on the operation and management of our digital asset treasury strategy by providing consulting and related services to us with respect to our Treasury Policy. The Strategic Advisor will have a material influence on the future partnerships, marketing and general business activities of the Company by providing strategic advice and guidance relating to our business, operations, growth initiatives and industry trends in the crypto technology sector.

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.

If we are unable to raise additional capital on acceptable terms, our ability to implement and sustain our Treasury Policy may be compromised.

Our strategy contemplates the discretionary purchase of SOL and related yield-generating instruments. The capital required to acquire, stake, and actively manage SOL may exceed our existing cash resources and cash flows from operations. Market conditions, our share price performance, the volatility of digital assets, and regulatory uncertainties could impair our ability to access debt or equity capital on terms acceptable to us, or at all. Failure to obtain necessary financing could force us to curtail or abandon our digital asset strategy, which could materially harm our growth prospects and the value of our securities.

Our SOL holdings are less liquid than our existing cash and cash equivalents and may not be able to serve as a source of liquidity for us to the same extent as cash and cash equivalents.

Historically, the crypto markets have been characterized by significant volatility in price, limited liquidity and trading volumes compared to sovereign currencies markets, relative anonymity, a developing regulatory landscape, potential susceptibility to market abuse and manipulation, compliance and internal control failures at exchanges, and various other risks inherent in its entirely electronic, virtual form and decentralized network. During times of market instability, we may not be able to sell our SOL at favorable prices or at all. Further, SOL we hold with our custodians and transact with our trade execution partners does not enjoy the same protections as are available to cash or securities deposited with or transacted by institutions subject to regulation by the Federal Deposit Insurance Corporation or the Securities Investor Protection Corporation. Although our qualified custodians segregate our assets and do not rehypothecate client holdings, SOL maintained at non-qualified venues may be subject to rehypothecation or counterparty credit risk. The failure of such venues could result in partial or total loss of assets held there. Additionally, we may be unable to enter into term loans or other capital raising transactions collateralized by our SOL or otherwise generate funds using our SOL holdings, including in particular during times of market instability or when the price of SOL has declined significantly. In addition, a certain portion of our SOL are under a programmatic lockup from the FTX estate (“locked SOL”), and we may continue to acquire locked SOL at a discount to market prices of unlocked SOL in order to generate value for stockholders. These locked SOL are significantly less liquid than cash and our unlocked SOL holdings. If we are unable to sell our locked or unlocked SOL, enter into additional capital raising transactions using locked or unlocked SOL as collateral, or otherwise generate funds using our locked or unlocked SOL holdings, or if we are forced to sell our locked or unlocked SOL at a significant loss, in order to meet our working capital requirements, our business and financial condition could be negatively impacted.

Our Staking Program involves a temporary loss of Transferability of Staked SOL during the “deactivation” or Cooldown Period.

We acknowledge that during the deactivation period, as described below, staked SOL is not earning rewards and is not yet liquid. The “deactivation” or cooldown period is such period when we chose to stop staking our SOL and during such period there is a loss of transferability of staked SOL. Under normal conditions, we expect to regain complete control over un-staked SOL within approximately 48 hours; however, network conditions could extend this period. As such, we may be unable to adjust to market conditions, including being able to sell such SOL during such period. To mitigate liquidity risk, we intend to maintain a portion of our treasury in un-staked SOL and cash to meet short-term obligations.

We may be subject to regulatory developments related to crypto assets and crypto asset markets, which could adversely affect our business, financial condition, and results of operations.

As SOL and other digital assets are relatively novel and the application of state and federal securities laws and other laws and regulations to digital assets is unclear in certain respects, it is possible that regulators in the United States or foreign countries may interpret or apply existing laws and regulations in a manner that adversely affects the price of SOL. While the SEC issued interpretive guidance in March 2026 (Release No. 33-11412) classifying SOL as a digital commodity rather than a security, this interpretation is not a statutory designation and could be challenged in court or superseded by future legislation. The U.S. federal government, states, regulatory agencies, and foreign countries may also enact new laws and regulations, or pursue regulatory, legislative, enforcement or judicial actions, that could materially impact the price of SOL or the ability of individuals or institutions such as us to own or transfer SOL.

Although SOL itself is currently classified as a digital commodity, if the manner in which SOL is offered or sold is determined to constitute a security or an investment contract for purposes of the federal securities laws, the additional regulatory restrictions imposed by such a determination could adversely affect the market price of SOL and in turn adversely affect the market price of our Common Stock. Moreover, the risks of us engaging in a SOL Treasury Policy have created, and could continue to create complications due to the lack of experience that third parties have with companies engaging in such a strategy, such as increased costs of director and officer liability insurance or the potential inability to obtain such coverage on acceptable terms in the future.

Future regulatory developments regarding the treatment of digital assets, including the SEC’s 2026 clarification that certain protocol staking activities do not involve securities transactions, staking rewards, or digital asset treasury strategies for U.S. federal, state, or international tax purposes could materially affect the way we account for, recognize, and report our SOL holdings and related income.

Future tax legislation or regulatory guidance regarding digital assets, including the treatment of staking rewards, could materially affect our financial condition and results of operations.

The U.S. federal income tax treatment of digital assets, including SOL and staking rewards, remains subject to significant uncertainty and evolving guidance. The Internal Revenue Service (“IRS”) has issued limited guidance on the treatment of digital assets and staking rewards for U.S. federal income tax purposes. Under current IRS guidance, staking rewards may be treated as ordinary income at the time of receipt, valued at fair market value. However, this position is subject to ongoing litigation and may change. Future legislative or regulatory developments could alter the timing, character, or amount of income recognized from our SOL holdings and staking activities. Additionally, the tax treatment of transactions involving locked SOL, derivative instruments on SOL, and transfers between custodians or staking validators remains unclear. Changes in tax law or guidance could result in increased tax liability, require changes to our Treasury Strategy, or adversely affect our financial condition and results of operations. We may also face tax obligations in foreign jurisdictions where our subsidiaries hold or transact in digital assets.

Regulatory change reclassifying SOL as a security could lead to our falling within the definition of “investment company” under the Investment Company Act of 1940, as amended (the “1940 Act”), and could adversely affect the market price of SOL and the market price of our Common Stock.

Under Sections 3(a)(1)(A) and (C) of the 1940 Act, a company generally will be deemed to be an “investment company” for purposes of the 1940 Act if (1) it is, or holds itself out as being, engaged primarily, or proposes to engage primarily, in the business of investing, reinvesting or trading in securities or (2) it is engaged, or proposes to engage, in the business of investing, reinvesting, owning, holding or trading in securities and it owns or proposes to acquire investment securities having a value exceeding 40% of the value of its total assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis. We do not believe that we are an “investment company,” as such term is defined in the 1940 Act, and are not registered as an “investment company” under the 1940 Act as of the date of this filing.

We monitor our assets and income in order to conduct our business activities in a manner such that we do not fall within the definition of “investment company” under the 1940 Act or would qualify under one of the exemptions or exclusions provided by the 1940 Act and corresponding SEC rules. If SOL is determined to be a security for purposes of the federal securities laws, we would take steps to reduce our holdings of SOL as a percentage of our total assets. These steps may include, among others, selling SOL that we might otherwise hold for the long term and deploying our cash in assets that are not considered to be investment securities under the 1940 Act, in which case we may be forced to sell our SOL at unattractive prices. We may also seek to acquire additional assets that are not considered to be investment securities under the 1940 Act, and we may need to incur debt, issue additional equity or enter into other financing arrangements that are not otherwise attractive to our business. Any of these actions could have a material adverse effect on our results of operations and financial condition. Moreover, we can make no assurance that we would successfully be able to take the necessary steps to avoid meeting the definition of “investment company” under the 1940 Act and becoming subject to its requirements. If SOL is determined to constitute a security for purposes of the federal securities laws, and if we are not able to come within an available exemption or exclusion under the 1940 Act, then we would have to register as an investment company and require us to change the manner in which we conduct our business. In addition, such a determination could adversely affect the market price of SOL and in turn adversely affect the market price of our Common Stock.

We are not subject to legal and regulatory obligations that apply to investment companies such as mutual funds and exchange-traded funds, or to obligations applicable to investment advisers.

Mutual funds, exchange-traded funds and their directors and management are subject to extensive regulation as “investment companies” and “investment advisers” under U.S. federal and state law; this regulation is intended for the benefit and protection of investors. We are not subject to, and do not otherwise voluntarily comply with, these laws and regulations. This means, among other things, that the execution of or changes to our Treasury Reserve Policy or our SOL strategy, our use of leverage, the manner in which our SOL is custodied, our ability to engage in transactions with affiliated parties and our operating and investment activities generally are not subject to the extensive legal and regulatory requirements and prohibitions that apply to investment companies and investment advisers. For example, although a significant change to our Treasury Policy would require the approval of our Board, no stockholder or regulatory approval would be necessary. Consequently, our Board has broad discretion over the investment, leverage and cash management policies it authorizes, whether in respect of our SOL holdings or other activities we may pursue, and has the power to change our current policies, including our strategy of acquiring and holding SOL, See “Use of Proceeds.”

Our classification as a digital asset treasury company may affect our eligibility for inclusion in stock indices and exchange-traded funds, which could adversely affect the trading price and liquidity of our Common Stock.

Index providers such as MSCI, S&P, and FTSE Russell have discretion to classify companies and determine index eligibility based on their assessment of a company’s primary business activities. Our transition to a digital asset treasury strategy may result in our reclassification by index providers from our prior industry classification to a financial or alternative asset classification or may result in our exclusion from certain indices altogether. Index providers may determine that companies whose primary treasury reserve asset is a digital asset do not meet the criteria for inclusion in broad market indices. Exclusion from or reclassification within stock indices could reduce demand for our Common Stock from index-tracking funds and other institutional investors, which could adversely affect the trading price, liquidity, and volatility of our Common Stock.

We rely on third-party custodians, trading platforms, and other counterparties to acquire, secure, stake, and dispose of SOL. Any failure or malfeasance by these counterparties could result in total or partial loss of our digital assets.

Our ability to implement our Treasury Policy depends on the performance, solvency, and information-technology infrastructure of third-party exchanges, custodians, blockchain validators, and decentralized finance protocols. These counterparties may experience cyber-attacks, internal control failures, fraud, insolvency, or regulatory enforcement that could freeze, delay, or permanently impair access to our SOL holdings or the yield we expect to generate from staking or other on-chain activities. In addition, concentrated holdings of SOL by a limited number of counterparties heighten our exposure to counterparty and systemic risk. Any loss or inaccessibility of SOL held on our behalf could have a material adverse effect on our financial condition and results of operations.

If we or our third-party service providers experience a security breach or cyberattack and unauthorized parties obtain access to our SOL, or if our private keys are lost or destroyed, or other similar circumstances or events occur, we may lose some or all of our SOL and our financial condition and results of operations could be materially adversely affected.

Substantially all of the SOL we own is held in custody accounts at U.S.-based institutional-grade digital asset custodians. Security breaches and cyberattacks are of particular concern with respect to our SOL. SOL and other blockchain-based cryptocurrencies and the entities that provide services to participants in the Solana ecosystem have been, and may in the future be, subject to security breaches, cyberattacks, or other malicious activities. For example, in October 2021 it was reported that hackers exploited a flaw in the account recovery process and stole from the accounts of at least 6,000 customers of the Coinbase exchange, although the flaw was subsequently fixed and Coinbase reimbursed affected customers. Similarly, in November 2022, hackers exploited weaknesses in the security architecture of the FTX Trading digital asset exchange and reportedly stole over $400 million in digital assets from customers. A successful security breach or cyberattack could result in:

• a partial or total loss of our SOL in a manner that may not be covered by insurance or the liability provisions of the custody agreements with the custodians who hold our SOL;
• harm to our reputation and brand;
• improper disclosure of data and violations of applicable data privacy and other laws; or
• significant regulatory scrutiny, investigations, fines, penalties, and other legal, regulatory, contractual and financial exposure.

Further, any actual or perceived data security breach or cybersecurity attack directed at other companies with digital assets or companies that operate digital asset networks, regardless of whether we are directly impacted, could lead to a general loss of confidence in the broader Solana ecosystem or in the use of the Solana network to conduct financial transactions, which could negatively impact us.

Attacks upon systems across a variety of industries, including industries related to Solana, are increasing in frequency, persistence, and sophistication, and, in many cases, are being conducted by sophisticated, well-funded and organized groups and individuals, including state actors. The techniques used to obtain unauthorized, improper or illegal access to systems and information (including personal data and digital assets), disable or degrade services, or sabotage systems are constantly evolving, may be difficult to detect quickly, and often are not recognized or detected until after they have been launched against a target. These attacks may occur on our systems or those of our third-party service providers or partners. We may experience breaches of our security measures due to human error, malfeasance, insider threats, system errors or vulnerabilities or other irregularities. In particular, we expect that unauthorized parties will attempt to gain access to our systems and facilities, as well as those of our partners and third-party service providers, through various means, such as hacking, social engineering, phishing and fraud. Threats can come from a variety of sources, including criminal hackers, hacktivists, state-sponsored intrusions, industrial espionage, and insiders. In addition, certain types of attacks could harm us even if our systems are left undisturbed. For example, certain threats are designed to remain dormant or undetectable, sometimes for extended periods of time, or until launched against a target and we may not be able to implement adequate preventative measures. Further, there has been an increase in such activities due to the increase in work-from-home arrangements. The risk of cyberattacks could also be increased by cyberwarfare in connection with the ongoing Russia-Ukraine and Israel-Hamas conflicts, or other future conflicts, including potential proliferation of malware into systems unrelated to such conflicts. Any future breach of our operations or those of others in the Solana industry, including third-party services on which we rely, could materially and adversely affect our financial condition and results of operations.

Our custodians currently maintain insurance coverage over the digital assets that they are custodying, including our digital asset holdings, however those insurance coverages may not cover losses arising from cyberattacks, operational failures, or insolvencies at custodians or execution venues or may not have enough coverage to cover the amount of our digital assets held by them. We do not independently maintain our own insurance coverage over our digital asset holdings.

We do not independently maintain our own insurance coverage specifically for our digital asset holdings separate from the coverage maintained by our custodians. The insurance policies maintained by our custodians are for the custodians’ benefit and may not directly protect us in the event of a loss. The scope, terms, and coverage limits of our custodians’ insurance policies may be insufficient to cover the full value of our digital asset holdings, and there can be no assurance that our custodians will maintain adequate insurance coverage in the future. The digital asset insurance market remains nascent, and comprehensive insurance products covering the full range of risks associated with digital asset custody, including but not limited to theft, fraud, hacking, and loss of private keys, may not be available on commercially reasonable terms or at all.

Our Treasury Policy also contemplates the use of DeFi protocols which exposes us to unique risks, including:

• Vulnerabilities or flaws in a smart contract could allow attackers to drain assets, prevent us from accessing our holdings, or manipulate protocol operations. Once deployed, smart contracts are difficult to amend, and in many cases cannot be modified at all without widespread validator or governance consensus.
• DeFi protocols, wallets, and bridges have been frequent targets of sophisticated cyberattacks, including flash-loan attacks, cross-chain bridge exploits, and private key compromises. Losses from such incidents are often immediate, irreversible, and may not be covered by insurance or contractual recourse.
• The legal and regulatory treatment of DeFi remains highly uncertain. Regulators could impose restrictions or obligations on participants or on protocols themselves, which could adversely affect our ability to use such platforms or the value of assets held in them.
• DeFi protocols are governed by decentralized communities through on-chain voting mechanisms, which may be subject to capture by a small number of participants. Protocol governance decisions could adversely affect our ability to use or recover assets. Additionally, protocols may change rules, fees, or parameters without advance notice.

If we or our counterparties suffer losses as a result of DeFi protocol failures, hacks, or exploits, we may be unable to recover some or all of our assets. Such an event could materially and adversely affect our business, financial condition, and the market price of our Common Stock.

As of the date of this filing, we have not yet engaged a significant portion of our assets with DeFi protocols.

We face other risks related to our SOL treasury reserve business model.

Our SOL treasury reserve business model exposes us to various risks, including the following:

• SOL and other digital assets are subject to significant legal, commercial, regulatory, and technical uncertainty, and our SOL strategy subjects us to enhanced regulatory oversight;
• regulatory changes could impact our ability to stake on validators or receive rewards;
• regulatory scrutiny of our activities may increase, potentially limiting our operations;
• potential litigation risks exist related to smart contract vulnerabilities, or our business activities;
• uncertainty around SOL’s regulatory status may impact our ability to list on certain exchanges;
• changes in political administration may not guarantee a favorable regulatory environment for SOL;
• future SEC actions or court decisions could retroactively classify SOL as a security, potentially leading to penalties or forced unwinding of transactions;
• increased regulatory focus on Layer-1 blockchains beyond Bitcoin and Ethereum could result in new compliance requirements;
• our use of call and put options on SOL exposes us to derivative-specific risks, including potential leverage effects, counterparty default risk, valuation and liquidity challenges, and the possibility that option strategies may not effectively hedge downside risk or may limit upside participation;
• our SOL staking rewards depend on validator selection and performance; poor validator performance could reduce rewards;
• concentration of influence by the Solana Foundation, Solana Labs or other significant holders of Solana tokens could impact protocol governance in ways that are adverse to us.
• market instability or liquidity freezes could prevent us from liquidating SOL or using it as collateral when needed.

Risks Related to Our Use of Derivatives on SOL

From time to time, we utilize call options and put options on SOL as part of our treasury reserve strategy. These derivatives are intended to (i) hedge downside exposure to SOL price volatility and (ii) accelerate our accumulation of SOL in a capital-efficient manner. While these option strategies may enhance our risk-adjusted returns, they expose us to additional risks, including the following:

• Most SOL options are traded over-the-counter or on non-qualified crypto venues. If a counterparty fails to perform on its obligations, we may be unable to realize gains, recover premiums, or receive delivery of SOL, potentially resulting in a total loss of value associated with the position.
• Options can introduce effective leverage, amplifying gains but also magnifying losses. We may be required to post collateral or margin, which could reduce liquidity available for our operations. Option contracts may also be illiquid, particularly during periods of market stress, making it difficult to exit or adjust positions.
• While put options may provide downside protection and call options may accelerate accumulation, there is no guarantee these strategies will be effective. Options may expire worthless, may not move in correlation with SOL spot prices, or may limit upside gains.
• Option valuations are sensitive to assumptions about implied volatility, time to maturity, and counterparty pricing. These variables may fluctuate significantly, resulting in mark-to-market losses or earnings volatility.
• The regulatory treatment of SOL derivatives remains uncertain. Future guidance could limit our ability to continue using derivatives or require us to account for them in a manner that increases earnings volatility.

Any of these risks could materially and adversely affect the value of our SOL treasury, our financial condition, and the market price of our Common Stock.

Risk Management and Strategy

We recognize the critical importance of developing, implementing, and maintaining robust cybersecurity measures to safeguard our information systems and protect the confidentiality, integrity, and availability of our data.

Managing Material Risks & Integrated Overall Risk Management

We have strategically integrated cybersecurity risk management into our broader risk management framework to promote a company-wide culture of cybersecurity risk management. This integration ensures that cybersecurity considerations are an integral part of our decision-making processes at every level. Our management team continuously evaluates and addresses cybersecurity risks in alignment with our business objectives and operational needs. In the past year we have implemented more stringent email monitoring and contracted with managed services companies.

We face risks from cybersecurity threats that could have a material adverse effect on our business, financial condition, results of operations, cash flows or reputation. We acknowledge that the risk of cyber incidents is prevalent in the current threat landscape and that a future cyber incident may occur in the normal course of business. The Company has not identified risks from known cybersecurity threats, including as a result of any prior cybersecurity incidents that have materially affected or are reasonably likely to materially affect us, including our operations, business strategy, financial condition, results of operations, or cash flows. We proactively seek to detect and investigate unauthorized attempts and attacks against IT assets, data, and services, and to prevent their occurrence and recurrence where practicable; however, potential vulnerabilities to known or unknown threats will still remain. Further, there is increasing regulation regarding responses to cybersecurity incidents, including reporting to regulators, investors, and additional stakeholders, which could subject the Company to additional liability and reputational harm. In response to such risks, we have implemented initiatives such as implementation of the cybersecurity risk assessment process and development of an incident response plan.

Storage of our digital assets in our Solana Treasury Strategy

The Company utilizes independent third-party custodians for the safekeeping of its digital assets held in treasury. The Company maintains relationships with multiple custodians in order to mitigate operational, counterparty, and concentration risk and may expand these relationships as its treasury holdings increase. Custodial accounts are established in the name of the Company, and assets are segregated in accounts owned by the Company. Access to these accounts is monitored and controlled by the Company, and authorized asset management personnel are granted access subject to established internal controls. Transfers of assets between wallets require multi-person authorization, and additional controls apply to any movement of assets outside of custodial control.

The custodians generally operate through regulated trust entities subject to oversight by applicable state regulatory authorities and maintain their own insurance coverage. In addition to long-term custody arrangements, the Company utilizes institutional custodial platforms to facilitate the acquisition and trading of digital assets. These arrangements are governed by standard institutional agreements and are generally terminable by either party in accordance with their terms. Fees are typically based on assets under custody, trading volume, and services utilized. Custodial relationships may be suspended or terminated under certain circumstances, including breach of applicable agreements, violations of account use policies, changes in applicable law or regulation, governmental proceedings, insolvency events, or prolonged account inactivity.

The custodians generally maintain insurance policies covering certain risks, including loss, theft, and misuse of assets, subject to policy limits and conditions. Such insurance coverage may not be sufficient to cover the total loss of all digital assets held in custody. The Company may also maintain additional insurance coverage; however, there can be no assurance that any insurance coverage will be adequate to protect against all potential losses.

Digital assets are subject to significant market volatility. Management regularly reviews account balances and the total value held with each custodian and may reallocate holdings among multiple custodians and accounts as part of its risk management strategy. The Company does not utilize self-custody solutions for its treasury assets.

Private keys are generally generated and maintained by the custodians through formalized key generation procedures conducted in secure, offline environments designed to mitigate the risk of unauthorized access, technical error, or external compromise. These processes incorporate segregation of duties, multi-person controls, oversight, validation procedures, and documented approvals. A substantial majority of the Company’s digital assets are maintained in cold storage. The Company may manage allocations between cold and hot wallets through custodial interfaces; however, substantially all treasury assets are maintained in cold storage.

Cold storage facilities are generally geographically distributed and secured through multiple layers of physical and operational safeguards, including continuous on-site security, video surveillance, alarm systems, hardened infrastructure, and strict access controls requiring multi-person authorization and multi-factor authentication. The locations of such facilities are confidential and may change at the custodian’s discretion. Transfers from cold to hot storage require physical access to secure facilities, multiple levels of approval, and integrity verification procedures. Private keys are not removed from secure devices or cold storage environments during transaction processing. Custodians also maintain geographically dispersed, cryptographically segmented backups of private keys, such that reconstruction of any single key requires access to multiple secure locations.

The custodians generally maintain independent third-party audit reports, including SOC examinations, which the Company reviews, and the Company receives periodic bridge reports to confirm that relevant control environments remain in place. As part of its ongoing risk management process, the Company periodically evaluates and approves qualified custodians for treasury use and may onboard additional custodians. The Company incurs custody, storage, staking, and transaction fees in connection with these services. Custodial agreements generally have multi-year terms and may be terminated upon advance notice, subject to payment of outstanding fees and, in certain cases, additional notice-period fees.

Oversee Third-party Risk

Because we are aware of the risks associated with third-party service providers, we have implemented stringent processes to oversee and manage these risks. We conduct thorough security assessments of all third-party providers before engagement and maintain ongoing monitoring to ensure compliance with our cybersecurity standards. The monitoring includes annual assessments of the SOC reports of our providers and implementing complementary controls. This approach is designed to mitigate risks related to data breaches or other security incidents originating from third-parties but may not successfully prevent all potential incidents or mitigate all risk from such incidents.

Risks from Cybersecurity Threats

We have not encountered cybersecurity challenges that have materially impaired our operations or financial standing. However, as discussed under “Risk Factors” in Part I, Item 1A of this report, cybersecurity threats pose multiple and potentially material risks to the Company, including potentially to the Company’s results of operations and financial condition. The Company relies extensively on information technology systems and could face cybersecurity risk. As cybersecurity threats become more frequent, sophisticated, and coordinated, it is reasonably likely that the Company may expend greater resources to continue to modify and enhance protective measures against such security risks.

Description of Property

We lease office space, on a month-to-month basis, at 105 Maxess Road, Melville, New York 11747. Our monthly rent is $233.

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.

The following discussion and analysis summarizes the significant factors affecting the consolidated operating results, financial condition, liquidity and cash flows of our Company as of and for the periods presented below. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our audited financial statements and notes included in this Annual Report on Form 10-K as of and for the years ended December 31, 2025 and 2024. Unless the context requires otherwise, references in this Annual Report on Form 10-K 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 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 2025. In October 2025, we discontinued R&D and the manufacture of syringe products, and any future inventory to be marketed will be sourced from third-party manufacturers. For the year 2025, we reported a net loss of $282.5M, primarily resulting from stock compensation charges, unrealized losses on our Solana holdings and asset impairments.

For the year ending December 31, 2025, the Company used cash in operations of $10.7M. The Company’s addition of the business strategy with digital assets resulted in an investment in Digital Assets at a fair market value of $250.1M and current cash of $10.4M at December 31, 2025.

We classify our revenues as net revenues, cost of goods sold and gross margin/loss from our Medical Device segment and staking revenue from Digital Assets segment. Operating expenses include transaction expenses 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.

Products, Marketing and Sales

We continue to be in discussions with healthcare companies and distributors for sales of our existing inventory of disposable syringe products. We continue to market these products to prospective customers, which include foreign governments, hospitals and healthcare groups as opportunities present themselves.

Research and Development

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

Formation of Treasury Oversight Committee

We have adopted a treasury policy (the “Treasury Policy”) under which the principal holding in our treasury reserve on the balance sheet is allocated to digital assets, starting with Solana (“SOL”). Our Board of Directors (the “Board”) approved updates to our Treasury Policy on December 20, 2025, authorizing the formation of the Treasury Oversight Committee. As of December 31, 2025, the Company held over 2.0M SOL.

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 other medical devices 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.

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.

Amended and Restated Bylaws

On January 15, 2026, the Board approved and adopted the Amended and Restated Bylaws of the Company (the “Bylaws”) to update certain procedures and make various technical and conforming changes. The Bylaws were effective immediately and include, among other things, the following changes (the “Amendments”):

• Clarify and update provisions to require that stockholder actions be taken at duly called meetings;
• Adopt advance notice requirements for stockholder proposals and director nominations; and
• Adopt a Nevada exclusive forum provision for certain actions.

The foregoing description of the Bylaws and the Amendments does not purport to be complete and is qualified in its entirety by the terms and conditions of the Bylaws, a copy of which is attached hereto as Exhibit 3.5 and is incorporated herein by reference.

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 fair market value adjustments, based on either the trading price or fair market value of outstanding warrants, for those classified as liabilities, could impact the operating results in the reporting periods. Further, the market volatility of our Investments in digital assets 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 commenced generating initial revenue in the quarter ended June 30 2025. The Company intends to continue its distribution platform with established third-party manufacturers. Sharps Technology is committed to maintaining compliance with all applicable regulatory and quality standards governing the marketing and distribution of medical devices, including those established by the U.S. Food and Drug Administration (FDA) and comparable international authorities.

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 has recently begun to explore strategic acquisitions and/or investments globally. To this goal, our treasury strategy and engineering teams continue to analyze these opportunities and develop our own digital products. We have been and continue to prioritize long-term growth of the Company’s business, potentially using proceeds from the sale of SOL to fund our expansion plans described above.

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.

Summary of Significant Accounting Policies

Our significant accounting policies are described in Note 2 of the accompanying annual financial statements.

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).

Results of Operations

Comparison of the Years Ended December 31, 2025 and, 2024.

Product Net Revenue/Gross Margin

For the year ended December 31, 2025, we recognized revenues of $204,120 related to the Sologard syringes sold under a customer agreement. There was no product revenue in 2024.

For the year ended December 31, 2025, an inventory reserve of $418,869 was recorded to reduce the carrying value of the inventory of continuing operations to its net realizable value. The gross margin was $5,544 before this reserve. The net realizable value adjustment related to the inventory at our Hungarian subsidiary that was sold is included in the results of discontinued operations.

Staking Revenue – net

For the year ended December 31, 2025, the Company recognized net staking revenue of $6,805,009 resulting from the digital treasury strategy implemented during the third quarter. As of December 31, 2025, approximately 95% of the Company’s SOL holdings were staked.

Transaction expense – digital assets

For the year ended December 31, 2025, $872,934 in transaction expenses relate to custodian and exchange for digital asset investments, including a significant fee in connection with the transfer of locked SOL contributed in-kind as part of the August 2025 PIPE transaction.

Unrealized and realized loss on digital assets

During the year ended December 31, 2025 the Company recognized $152,952,163 in unrealized and $1,286,284 in realized losses on investments in digital assets. The unrealized loss resulted from the decrease from an average cost basis of our SOL investments of approximately $198 to the market value of $124 at December 31, 2025.

Research and Development

For the year ended December 31, 2025, research and development expenses, which relate to the Medical Device segment, decreased to $198,762 compared to $531,233 for the year ended December 31, 2024. Substantially all of our R&D expenses to date have been incurred in connection with our syringe products. The Company curtailed its Medical Device activities in 2025 and does not intend to engage in R&D and manufacturing activities going forward related to medical devices.

Selling, General and Administrative

For the year ended December 31, 2025, Selling, General and Administrative expenses were $16,052,069 as compared to $5,036,366 for the year ended December 31, 2024. The increase of $11,015,703 was primarily related to (a) stock compensation increased by $5.6 million (b) payroll and consulting fees increased by approximately $3 million, primarily due to increased staffing levels for the Digital Asset Treasury build out and severance paid to for the former Chief Executive Officer and increased public company expenses following our adoption of the digital asset strategy.

Warrant issuance – related party

This amount of $101,331,513 relates to warrants issued to our Strategic Advisor. See Note 15 to the Consolidated Financial Statements.

Consulting fees – related parties

This amount of $3,433,333 includes consulting fees of $3,333,333 to Sol Edge and marketing fees of $100,000 to Sol Markets. See Note 15 to the Consolidated Financial Statements.

Impairment of long-lived fixed assets

During the years ended December 31, 2025 and December 31, 2024, the Company recorded no asset impairment on fixed assets related to our continuing medical device operations.

Asset impairment adjustments of approximately $7.5 million and $1.8 million respectively were recorded related to the Company’s manufacturing operations. These are included in the results of discontinued operations.

Interest expense, net

Net interest expense was $416,660 for the year ended December 31, 2025, compared to $1,664,712 for the year ended December 31, 2024. Net interest expense decreased due to higher average cash balances in the current period directly related to the net proceeds from the 2025 offerings and repayment of the Company’s debt at the beginning of 2025

FMV Adjustment for Warrants

For certain warrants classified as liabilities, the Fair Market Value (“FMV”) is required to be recorded at the date the warrants are issued and then be remeasured at each reporting date while outstanding. If the terms of the warrants are modified, the changes in fair value are recognized to other income or expense in the Consolidated Statement of Operations. For the years ended December 31, 2025 and December 31, 2024, the Company recorded FMV gain adjustments of approximately $4.8 million and $3 million respectively. (See Notes 10 and 12 to the Consolidated Financial Statements).

Other income (expense)

Other expense in 2024 was primarily due to the forfeiture of an escrow deposit of $1M.

Liquidity and Capital Resources

The Company identifies cash and equivalents, payment stablecoins, and unlocked SOL as liquidity resources.

As of December 31, 2025, the Company had a cash balance of $10,382,744. As of December 31, 2024, the Company held $754,802 in cash. The Company had working capital of $14,187,484 at December 31, 2025, as compared to a working capital deficiency of $2,011,679 as of December 31, 2024. The increase in our working capital of $16,199,163 was directly impacted by the cash provided by the August 2025 PIPE. As of December 31, 2025, the Company held $250,111,125 in Digital Assets with a large portion unlocked and readily available for sale.

During the year ended December 31, 2025, the Company completed offerings that provided liquidity and capital:

a) Gross proceeds from the Cash Securities Purchase Agreements and Cryptocurrency Securities Purchase Agreements in August 2025 aggregated $411M, which investors paid using the following currency: USD cash of $181M, locked SOL of $137M, unlocked SOL of $7M, USDC of $62M, and USDT of $24M. The net proceeds of $403M, reported in Additional Paid in Capital, reflect placement agent fees, legal fees, and expenses of $7.5M.

b) The Company issued 2.2M shares of common stock under the Sales Agreement and received net proceeds from the Sales Agreement of approximately $18.9M after fees paid to the Agents and other offering expenses totaling approximately $1 million, reflected in Additional Paid in Capital.

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

In 2024, the Company completed various offerings and private placements. The proceeds from such financings were used to fund working capital, to build inventory, and to fund capital expenditures and operating costs.

Cash Flows

Net Cash Used in Operating Activities

The Company used cash of $10,990,651 and $4,401,392 in operating activities for the years ended December 31, 2025 and 2024, respectively. The increase in change in cash used in operations was principally due to the Company incurring transaction fees relating to digital assets, and higher G&A expenses primarily due to the initiation of the digital asset strategy, partially offset by lower R&D activities.

Net loss from continuing operations for the year ended December 31, 2025 was $270,335,436 with approximately $260M in net non-cash adjustments. For the year ended December 31, 2024 net loss was $5,225,266 with less than $1 million in net non-cash adjustments.

• In 2025, stock-based compensation totaled $107,468,174, with $101,331,513 to a related party, a significant increase from $520,830 in 2024
• Unrealized and realized losses on digital assets were $152,952,163 in 2025, with no digital asset activity in 2024
• Realized losses on derivatives totaled $4,986,500 in 2025, with no such derivative activity in 2024
• Gains on fair market value adjustments on warrants were $4,803,098 and $3,016,936 in 2025 and 2024, respectively
• 2025 had gains from non-cash net staking rewards less validator operating expenses of $6,801,179, with no such activity in 2024

Net Cash Used in Investing Activities

For the year ended December 31, 2025 and 2024, the Company used cash in investing activities of $187,522,741 and $1,000,000, respectively. In 2025, the primary increase related to the purchase of digital assets of $170,519,290 and purchase of stablecoin of $17,003,451 following the August 2025 offering.

Net Cash Provided by Financing Activities

For the year ended December 31, 2025 and 2024, the Company provided cash from financing activities of $215,509,777 and $5,907,407, respectively. In 2025, the net proceeds of $212,102,902, were mainly from the Offering in August and the ATM Sales Agreement. This also included a repayment of the Company’s debt financing in the first quarter of 2025 of $4,222,012 as well as the proceeds from the margin loan of $7,628,888. The margin loan was paid down using approximately $4,620,000 worth of USDC during 2025.

Payment Stablecoin Activities

The Company first utilized payment stablecoins as part of the August PIPE, with a direct inflow of $86,104,502 between USDC and USDT contributed in-kind and an additional $17,003,451 purchased with cash from the same offering as a component of the overall deployment of these funds to digital asset custodians and ultimately the purchase of SOL.

During 2025, the full amount of USDT and USDC was utilized to purchase SOL, repay the margin loan and for a payment to a related party for consulting services. Therefore, payment stablecoin balances are not part of the Company’s liquidity reserve as of December 31, 2025.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements as defined in 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.

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms, and that such information is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

As required by Rules 13a-15(b) and 15d-15(b) of the Exchange Act, an evaluation as of December 31, 2025 was conducted under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures, as of December 31, 2025, were effective at the reasonable assurance level.

Management’s Report on Internal Control over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) and 15d-15(f) promulgated under the Exchange Act, as a process designed by, or under the supervision of, a company’s Principal Executive Officer and Principal Financial Officer and effected by our Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with generally accepted accounting principles (GAAP). Our internal control over financial reporting includes those policies and procedure that:

• Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the issuer;
• Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures of the issuer are being made only in accordance with the authorization of management of the issuer; and
• Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisitions, use or disposition of the issuer’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.

In the course of preparing this Report and the Consolidated Financial Statements included herein, our management conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2025 using the criteria issued by the Committee of Sponsoring Organizations of the Treadway Commissions (COSO) in the Internal Control-Integrated Framework (2013). Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that as of December 31, 2025 our internal control over financial reporting was effective. Management has reviewed its assessment with the Audit Committee.

Changes in Internal Control over Financial Reporting

The following are changes in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the period covered by this Annual Report on Form 10-K:

During the year covered by this Annual Report on Form 10-K, as a result of the adoption of the Digital Assets platform, additional controls around safeguarding of assets, the evaluation of the completeness and accuracy of the data and management’s review procedures over proper accounting and disclosures have been implemented.

The Company’s former CFO resigned effective December 31, 2025 and the Company’s VP Finance resigned effective February 17, 2026. On February 17, 2026, the Company engaged a consultant with significant experience in public company financial reporting to serve as its Interim CFO.

Except as noted above, there have been no changes in our internal control procedures over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the year ended December 31, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.