SKYA 10-K & 10-Q changes, risk factors and insider trading
SkyAI, Inc. (also SKYAW) · Nasdaq · Finance Services · CIK 1737995 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “Summary of Significant Risks Affecting Our Company”
New heading “We may not succeed in selling and distributing syringes.”
New heading “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.”
New heading “Our financial results and the market price of our Common Stock may be affected by the prices of SOL.”
New heading “If securities analysts do not publish research or reports about our business or if they publish negative, or inaccurate, evaluations of our Common Stock, the price of our stock and trading volume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.”
New heading “Risks Related to Our Digital Asset Trading Strategy and Cryptocurrencies”
New heading “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.”
New heading “The digital asset trading platforms on which cryptocurrency trades are relatively new and largely unregulated or may not be complying with existing regulations.”
New heading “We may be unable to successfully implement our digital asset treasury strategy with a focus on SOL.”
New heading “Our shift towards a SOL-focused strategy requires substantial changes in our day-to-day operations and exposes us to significant operational risks.”
New heading “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.”
New heading “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.”
New heading “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.”
New heading “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.”
New heading “If validators exit the Solana network, it could increase the likelihood of a malicious actor obtaining control.”
New heading “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.”
New heading “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.”
New heading “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.”
New heading “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.”
New heading “Conflicts of interest may arise with our Consultant and Strategic Advisor that may adversely affect our operations.”
New heading “If we are unable to raise additional capital on acceptable terms, our ability to implement and sustain our Treasury Policy may be compromised.”
New heading “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.”
New heading “Our Staking Program involves a temporary loss of Transferability of Staked SOL during the “deactivation” or Cooldown Period.”
New heading “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.”
New heading “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.”
New heading “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.”
New heading “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.”
New heading “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.”
New heading “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.”
New heading “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.”
New heading “We face other risks related to our SOL treasury reserve business model.”
New heading “Risks Related to Our Use of Derivatives on SOL”
Removed heading “We may not succeed in commercializing Sharps Provensa products or any future product.”
Removed heading “We are vulnerable to new technologies.”
Removed heading “The approval process for medical device products outside the United States varies among countries and may limit our ability to develop, manufacture and sell our products internationally. Failure to obtain marketing and regulatory approval in international jurisdictions would prevent our products from being marketed abroad.”
Removed heading “Ongoing regulation of our products may limit how we market our products, which could materially impair our ability to generate revenue.”
Removed heading “Health care crises could have an adverse effect on our business.”
Removed heading “Our business may be adversely affected by uncertainties in obtaining and enforcing intellectual property rights.”
Removed heading “Our patent pending applications may not issue as patents, which may have a material adverse effect on our ability to prevent others from commercially exploiting products similar to ours.”
Removed heading “Illegal distribution and sale by third parties of counterfeit versions of our products could have a negative impact on us.”
Removed heading “Our common stock could be subject to extreme volatility.”
Removed heading “Additional stock offerings in the future may dilute then-existing shareholders’ percentage ownership of the Company.”
Largest changes
“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. …”see in full comparison
“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. …”see in full comparison
“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.”see in full comparison
“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.”see in full comparison
“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.”see in full comparison
“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.”see in full comparison
Full comparison: every changed paragraph (130)
Summary of Significant Risks Affecting Our Company
Our significant risks may be summarized as follows:
We
incurred net losses of $9,296,202$282.5 million and $9,841,638$9.3 million for the yearyears ended December 31, 20242025 and 2023,2024, respectively. We have not generated any revenue
to date, and we had an
accumulated deficit of $34,445,206$316.9 million as of December 31, 2024.2025. We have developed our Sharps product line but thereThere can be no
assurance that itwe will be commercially successful.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.
We
have a limited operating history, and we may not succeed. We haveformerly manufactured and commercialized our Securgard syringe products inand midnow 2023solely yet no revenues
have occurredsell and havedistribute notthem, yetwith
only commercializedlimited our Sharps Provensa products.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 not succeed in commercializing Sharps Provensa products or any future product.
We
may face difficulties or delays in theselling commercializationand ofdistributing Sharps Provensa or other future products,syringes, which could result in our
inability to timely offer such
products or services. We may, for example, encounter difficulties due to:
In addition, to increase our production capacity, we will need to build
inventory, which will require that we purchase certain additional equipment, including molding machines and molds. We have had no revenues
to date.
We have recently entered into supply and sales agreements for our Securegard
and Sologard products. Even if we succeed in building inventory and increasing our production capacity, there is no assurance as to the
timing of orders for our products or any future products.
There
are many medical device companies offering safety syringes,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 commercializesell Sharps disposable syringe products or otherwise fail to successfully compete. We
anticipate that our major domestic competitors will include Retractable Technologies, Inc., Becton, Dickinson & Company,
Medtronic Minimally Invasive Therapies, (“Medtronic,” formerly known as Covidien), Terumo Medical Corp., Smiths Medical,
and Bdistribute Braun.syringes. There can be no assurances that we will be able to compete
successfully in this environment.
We
are vulnerable to new technologies.
Because
we have a narrow focus on particular product lines and technology (currently, safety needle products), we are vulnerable to the development
of superior or similar competing products and to changes in technology which could eliminate or reduce the need for our products. If
a superior or similar technology is created, the demand for our products could be adversely affected.
As
a manufacturer and provider of safety needle products,products and potentially other medical devices in the future, we willmay 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 (which is currently
$5 million, and which we may increase as we commence and increase sales of our products),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.
In
the U.S. and internationally, government authorities may enact changes in regulatory requirements, reform existing reimbursement
programs, programs,
and/or make changes to patient access to health care, all of which could adversely affect the demand for oursyringes productsand
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.
The
approval process for medical device products outside the United States varies among countries and may limit our ability to develop, manufacture
and sell our products internationally. Failure to obtain marketing and regulatory approval in international jurisdictions would prevent
our products from being marketed abroad.
In
order to market and sell products, other than Securgard or Sologard, and any additional medical device products we may develop in the future in the European
Union and many other jurisdictions, we, and our collaborators, must obtain separate marketing approvals and comply with numerous and
varying regulatory requirements. We have not yet received approval or clearance to sell our products in any jurisdiction outside the
United States. The approval procedure varies among countries and may involve additional testing. We may conduct clinical trials for,
and seek regulatory approval to market, our product candidates in countries other than the United States. If we or our collaborators
seek marketing approval for a product candidate outside the United States, we will be subject to the regulatory requirements of health
authorities in each country in which we seek approval. With respect to marketing authorizations in Europe, we will be required to submit
a European Marketing Authorization Application, or MAA, to the European Medicines Agency, or EMA, which conducts a validation and scientific
approval process in evaluating a product for safety and efficacy. The approval procedure varies among regions and countries and may involve
additional testing, and the time required to obtain approval may differ from that required to obtain FDA approval or clearance. In addition,
marketing approval or clearance by the FDA does not ensure approval or clearance by the health authorities of any other country.
Ongoing
regulation of our products may limit how we market our products, which could materially impair our ability to generate revenue.
Approval
or clearance of a medical device product may carry conditions that limit the market for the product or put the product at a competitive
disadvantage relative to alternative products. For instance, a regulatory approval or clearance may limit the indicated uses for which
we can market a product or the patient population that may utilize the product. These restrictions could make it more difficult to market
any product effectively. Accordingly, we expect to continue to expend time, money and effort in all areas of regulatory compliance.
Health
care crises could have an adverse effect on our business.
Particularly
during 2020, several states and local jurisdictions imposed, and others in the future may impose, “shelter-in-place” orders,
quarantines, executive orders and similar government orders and restrictions for their residents to control the spread of COVID-19. Although
the manufacturing facility we operate continued to operate during the 2020-2021 COVID-19 pandemic due to its status as an essential business,
we cannot guarantee that the situation would be the same for any future pandemic. In the future, we may elect or be required to close
temporarily which would result in a disruption in our activities and operations. Our supply chain, including transportation channels,
may be impacted by any such restrictions as well. Any such disruption could impact our sales and operating results.
Widespread
health crises also negatively affect economies which could affect demand for our products. While we plan to market our Sharps smart safety
syringe products for use for injecting medicines as well as Covid-19 and other vaccines, in the event of a resurgence of COVID-19 or
in the case of any future pandemic, there is no guarantee that revenues from syringes needed for vaccines would offset the effects to
our business in a global economic decline.
Health
systems and other healthcare providers in our markets that provide procedures that may use our products have suffered financially and
operationally and may not be able to return to pre-pandemic levels of operations. Travel and import restrictions may also disrupt our
ability to manufacture or distribute our devices. Any import or export or other cargo restrictions related to our products, or the raw
materials used to manufacture our products could restrict our ability to manufacture and ship products and harm our business, financial
condition, and results of operations.
Our
key personnel and other employees could still be affected by any future pandemic, which could affect our ability to operate efficiently.
Our
business may be adversely affected by uncertainties in obtaining and enforcing intellectual property rights.
We
believe our main competitive strength is our technology, including patent protection and trade secrets relating to the manufacture and
design of our products. We are dependent on patent rights to prevent unlawful copying of our products, and if the patent rights are invalidated
or circumvented, our business would be adversely affected. We consider patent protection to be of material importance in the design,
development, and marketing of our products.
Our
patent pending applications may not issue as patents, which may have a material adverse effect on our ability to prevent others from
commercially exploiting products similar to ours.
We
have four issued utility patents, two pending patent applications in the United States, and four PCT (Patent Cooperation Treaty)
patent application. We cannot be certain that we are the first inventor of the subject matter to which we have filed a particular
patent application, or if we are the first party to file such a patent application. If another party has filed a patent application
to the same subject matter as we have, we may not be entitled to the protection sought by the patent application. Further, the scope
of protection of issued patent claims is often difficult to determine. As a result, we cannot be certain that the patent
applications that we file will issue, or that our issued patents will be broad enough to protect our proprietary rights or otherwise
afford protection against competitors with similar technology. In addition, the issuance of a patent is not conclusive as to its
inventorship, scope, validity or enforceability. Our competitors may challenge or seek to invalidate our issued patents, or design
around our issued patents, which may adversely affect our business, prospects, financial condition or operating results. Also, the
costs associated with enforcing patents, confidentiality and invention agreements, or other intellectual property rights may make
aggressive enforcement impracticable.
Illegal
distribution and sale by third parties of counterfeit versions of our products could have a negative impact on us.
Third
parties may illegally distribute and sell counterfeit versions of our products which do not meet our rigorous manufacturing and testing
standards. Our reputation and business could suffer harm as a result.
Risks
Related to Ownership of Our SecuritiesCommon 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 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.
Our
common stock could be subject to extreme volatility.
The
trading price of our common stock may be affected by a number of factors, including events described in the risk factors set forth in
this annual report, as well as our operating results, financial condition and other events or factors. In addition to the uncertainties
relating to future operating performance and the profitability of operations, factors such as variations in interim financial results
or various, as yet unpredictable, factors, many of which are beyond our control, may have a negative effect on the market price of our
common stock. In recent years, broad stock market indices, in general, and smaller capitalization companies, in particular, have experienced
substantial price fluctuations. In a volatile market, we may experience wide fluctuations in the market price of our common stock and
wide bid-ask spreads. These fluctuations may have a negative effect on the market price of our common stock. In addition, the securities
market has, from time to time, experienced significant price and volume fluctuations that are not related to the operating performance
of particular companies. These market fluctuations may also materially and adversely affect the market price of our common stock.
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.
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. Specifically, as disclosed in
a Current Report filed on Form 8-K on July 16, 2023, the Company had received a notice (the “Notice”) from the staff of the
Listing Qualifications Department (the “Staff”) of The Nasdaq Stock Market LLC (“Nasdaq”) notifying the Company
that it was not in compliance with Nasdaq Listing Rule 5550(a)(2) (the “Rule”) because it failed to maintain a minimum bid
price of $1.00 over the previous 30 consecutive business days dated May 26, 2023 to July 11, 2023. The Rules provide the Company a compliance
period of 180 calendar days in which to regain compliance. If at any time during this 180 day period the closing bid price of the Company’s
security is at least $1 for a minimum of ten (10) consecutive business days, the Staff will provide written confirmation of compliance
and this matter will be closed.
On
January 16, 2024, the Staff determined that the Company is eligible for an additional 180 calendar day period, or until July 8, 2024,
to regain compliance. On October 7, 2024, the Company held a Special Meeting of its stockholders. The Company’s stockholders approved
a proposal to authorize the Company’s Board in its discretion at any time within one year after stockholder approval is obtained,
to amend the Company’s Articles of Incorporation to effect a reverse stock split of shares of the Company’s common stock,
at a ratio with a range of 1-for-8 to 1 for 22, with the exact ratio to be determined by the Company’s Board. The Board approved
the 1 for 22 reverse stock split on October 7, 2024 which went into effect on October 16, 2024. Nasdaq notified the Company on November
13, 2024 that the Company regained compliance on November 5, 2024 with Listing Rule 5550(a)(2), (the “Bid Price Rule”).
On March 12, 2025, Sharps
Technology, Inc. (the “Company”), was notified by the staff (the “Staff”) of The Nasdaq Stock Market,
LLC (“Nasdaq”) that it was not in compliance with the minimum bid price requirement set forth in Nasdaq Listing Rule
5550(a)(2) for continued listing on The Nasdaq Capital Market as the bid price of its securities had closed at less than $1.00 per share
over the previous 30 consecutive business days. Normally, a company would be afforded a 180-calendar day period to demonstrate compliance
with the rule. However, pursuant to Nasdaq Listing Rule 5810(c)(3)(A)(iv), the Company is not eligible for any compliance period due to
the fact that the Company has effected a reverse stock split over the prior one-year period or has effected one or more reverse stock
splits over the prior two-year period with a cumulative ratio of 250 shares or more to one.
The Company’s
securities will be delisted from the Nasdaq Capital Market unless the Company requests a hearing and appeals Nasdaq’s determination.
Accordingly, the Company filed a hearing request before the deadline which will automatically stay the delisting and suspension
of the Company’s securities pending the decision of the Nasdaq Hearings Panel (the “Panel”). At the hearing,
the Company intends to present its views and its plans to regain compliance with the minimum bid price rule to the Panel. There can be
no assurance that the Company will be able to evidence compliance with the minimum bid price rules or any other applicable requirements
for continued listing on The Nasdaq Capital Market prior to the hearing. In the interim, the Company expects its common stock and warrants
will remain listed on Nasdaq under its existing symbols, “STSS” and “STSSW” while it awaits the hearing The
Staff’s determination is based on the Company meeting the continued listing requirement for market value of publicly held
shares and all other applicable requirements for initial listing on the Capital Market with the exception of the bid price
requirement, and the Company’s written notice of its intention to cure the deficiency by effecting a reverse stock split, if
necessary. However, if it appears to the Staff that the Company will not be able to cure the deficiency, the Staff will provide
notice that its securities will be subject to delisting. The Company will continue to monitor the closing bid price of its Common
Stock and will consider its available options to resolve the deficiency and regain compliance with the Minimum Bid Price Requirement
within the allotted compliance period. There can be no assurance that the Company will regain compliance with the Minimum Bid Price
Requirement.
We
will incur increased costs as a result of operating as a public company, and our management will beis required to devote substantial time
to compliance
with our public company responsibilities and corporate governance practices.
As
a public company, we will incur significant legal, accounting and other expenses, which we expect to further increase after we are no longer
longer an “emerging growth company.” The Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, the
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.
We
are required for 2023 and after,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.
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 ActAct. We have also registered shares of our common stock for sale into the public
marketmarket, ,whichwhich are issuable upon the exercise of warrants, by certain selling stockholders named therein.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
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. 1 share of preferred stock
is designated Series A Preferred Stock and is outstanding. 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.
Additional
stock offerings in the future may dilute then-existing shareholders’ percentage ownership of the Company.
Given
our plans and expectations that we will need additional capital and personnel, we anticipate that we will need to issue additional shares
of common stock or securities convertible or exercisable for shares of common stock, including convertible preferred stock, convertible
notes, stock options or warrants. The issuance of additional securities in the future will dilute the percentage ownership of then current
stockholders.
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:
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.
Management's Discussion & Analysis (MD&A)
New heading “Products, Marketing and Sales”
New heading “Formation of Treasury Oversight Committee”
New heading “Settlement of Outstanding Litigations and Spinoff of Hungarian Subsidiary”
New heading “Share Repurchase Program”
New heading “Amended and Restated Bylaws”
New heading “Product Net Revenue/Gross Margin”
New heading “Transaction expense – digital assets”
New heading “Unrealized and realized loss on digital assets”
New heading “Warrant issuance – related party”
New heading “Consulting fees – related parties”
New heading “Impairment of long-lived fixed assets”
New heading “Other income (expense)”
New heading “Payment Stablecoin Activities”
Removed heading “Initial Public Offering”
Removed heading “Nature of Business”
Removed heading “Basis of Presentation”
Removed heading “Segment Reporting”
Removed heading “Use of Estimates”
Removed heading “Cash and Cash Equivalents”
Removed heading “Fair Value Measurements”
Removed heading “Impairment of Long-Lived Assets”
Removed heading “Identified Intangible Assets”
Removed heading “Identified Intangible Assets”
Removed heading “Stock-based Compensation Expense”
Removed heading “Derivative Instruments”
Removed heading “Basic and Diluted Loss Per Share”
Largest changes
“Settlement of Outstanding Litigations and Spinoff of Hungarian Subsidiary”see in full comparison
“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”). …”see in full comparison
“On March 12, 2025, the Company received a notification letter from The Nasdaq Stock Market advising that, for 30 consecutive business days preceding the notification letter, the Company did not meet the minimum $1.00 per share bid price requirement for continued inclusion on The Nasdaq Capital Market pursuant to Nasdaq Marketplace Listing Rule 5550(a)(2). Normally, a company would be afforded a 180-calendar day period to demonstrate compliance with the Minimum Bid Price Requirement. …”see in full comparison
“For the year ended December 31, 2024, Research and Development (“R&D”) expenses increased decreased to $2,471,762 compared to $1,605,547 for the year ended December 31, 2023. The increase of $866,215 was due to a) an increase in asset machinery impairments in 2024 of $1,210,000, representing an impairment of machinery of $1,770,000 in 2024 as compared to an asset impairment of $560,000 in 2023 b) lower depreciation expense of $178,100 and d.) lower R&D labor, consulting and materials of $165,600 given the shift from R&D activities to manufacturing.”see in full comparison
Full comparison: every changed paragraph (127)
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.
Since
our inception in 2017 and through the fourth quarter of 2022, we have devoted substantially all of our resources to the research and
development of our safety syringe products Commencing in the fourth quarter of 2022 we started building inventory of syringe products.
To date, we have generated no revenue. We have incurred net losses of $9,296,202 and $9,841,638 for the years ended December 31, 2024 and 2023,
respectively. Substantially all of our net losses resulted from costs incurred in connection with our research and development efforts,
payroll and consulting fees, stock compensation and general and administrative costs associated with our operations, including costs
incurred for being a public company since April 14, 2022. See below Initial Public Offering, Liquidity and Capital Resources and Notes
to Consolidated Financial Statements We
classify our operating expenses as research and development, and general and administrative expenses. We maintain a corporate office
located in Melville, New York, but employees and consultants in the US work remotely and will continue to do so indefinitely. In June
2020, in connection with the agreement to acquire Safegard, a syringe manufacturing facility in Hungary, which was completed on July
6, 2022, we were contractually provided the exclusive use of the facility for research and development and testing in exchange for payment
of the seller’s operating costs, including among others, use of Safegard’s work force, utility costs and other services.
To remain competitive, we must build inventory. We began this process in
the 4th Quarter of 2022. To secure orders we require commercial quantities of inventory with delivery expected shortly after
ordwer are.
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.
Research and development expense consists of expenses incurred while performing
research and development activities for our various syringe products. We recognize research and development expenses as they are incurred
Substantially all of our research and development expenses to date have been incurred in connection with our syringe products. We expect
our research and development expenses to increase for the foreseeable future as we continue to enhance our products to meet the market
requirements for our Sharps syringe product line for its various intended uses throughout the world.
Initial
Public Offering
On
April 13, 2022, our registration statement on Form S-1 (File No. 333-263715), as amended, related to our IPO was declared effective by
the SEC, and our common stock and warrants began trading on the Nasdaq Capital Market, or Nasdaq, on April 14, 2022. Our IPO closed on
April 19, 2022. Net proceeds from the IPO were approximately $14.2 million. In connection with the closing of the IPO, the Company used
net proceeds to repay the Note Payable of $2 million.
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”):
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.
Offering
On
January 29, 2025, the Company closed on an offering the (“2025 Offering”) and received gross proceeds of approximately $20.0
million, before deducting underwriting fees and other offering expenses payable by the Company. The net proceeds were approximately $18.2M,
of which $4.2M was used to repay the outstanding Notes.
The
2025 Offering consisted of 14,285,714 units consisting of 9,029,814 Common Units with gross proceeds of $12.6M and 5,255,900 Pre-Funded
Units with gross proceeds of $7.4M, with each unit consisting of one share of Common Stock. In addition, each unit includes; (i) one
Series A Registered Common Warrant to purchase one share of Common Stock per warrant at an exercise price of $1.75 (“2025 Series
A Warrant”) and (ii) one Series B Registered Common Warrant to purchase one share of Common Stock per warrant at an exercise price
of $1.75 or pursuant to an alternative cashless exercise option (“2025 Series B Warrant”), collectively, the 2025 Warrants.
The public offering price per Common Unit was $1.40 or $1.3999 for each Pre-Funded Unit, which is equal to the public offering price
per Common Unit sold in the offering minus an exercise price of $0.0001 per Pre-Funded Warrant. The Pre-Funded Warrants are immediately
exercisable and may be exercised at any time until exercised in full. Immediately after closing 4,980,900 of the Pre-funded units were
exercised and the Company received $498 in proceeds. The 2025 Series A Warrants are exercisable immediately and expire 60 months after
stockholder approval. The number of securities issuable under the 2025 Series A Warrants is subject to adjustment. The 2025 Series B
Warrants are exercisable immediately and expire 30 months after stockholder approval. The number of securities issuable under the 2025
Series B Warrants is subject to adjustment.
The
Company granted Aegis Capital Corp. (“Aegis”) an overallotment, being a 45-day option to purchase additional shares of Common
Stock and/or Warrants of (i) up to 15.0% of the number of shares of Common Stock sold in the offering, (ii) up to 15.0% of the number
of 2025 Series A Warrants sold in the offering and (iii) up to 15.0% of the number of 2025 Series B Warrants sold in the offering. The
purchase price per additional share of Common Stock is equal to the public offering price of one Common Unit (less $0.00001 allocated
to each full Warrant), less the underwriting discount. The purchase price per additional 2025 Warrant is $0.00001. On January 29, 2025,
Aegis exercised its over-allotment option with respect to 2,142,857, 2025 Series A Warrants and 2,142,857, 2025 Series B Warrants and
the Company received net proceeds of approximately $43.
The
2025 Offering was made pursuant to an effective registration statement on Form S-1 (No. 333-284237) previously filed with the U.S. Securities
and Exchange Commission (SEC) and declared effective by the SEC on January 27, 2025.
Regulation
A Offering
On
December 5, 2024, the Company, entered into subscription agreements with certain institutional investors, pursuant to which the Company
agreed to issue and sell to the investors 248,430 shares (the “Shares”) of Common Stock, par value $0.0001 per share of the
Company at a price of $1.95 per share for gross proceeds to the Company of $484,438 before deducting placement agent fees and commissions
of $84,671 with net proceeds, after reflecting par value, have been recorded in Additional Paid in Captial of $399,742. The Shares issued
in the offering were offered at-the-market under Nasdaq rules and pursuant to the Company’s Form 1-A (the “Offering Statement”),
initially filed by the Company with the Securities and Exchange Commission (the “SEC”) under the Securities Act of 1933 (the
“Securities Act”), as most recently amended on November 18, 2024, and qualified on December 3, 2024.
Private
Placement
On
September 20, 2024, the Company entered into a securities purchase agreement (the “Securities Purchase Agreement”) and a
Senior Secured Note (the “Note”) for an aggregate principal amount of $4,375,000, including OID interest of $875,000 maturing
on January 31, 2025, with certain purchasers (the “Purchasers”), and the issuance of approximately 259,091 (pre reverse -
5,700,006 ) unregistered shares of the Company’s Common Stock. The aggregate gross proceeds to the Company were approximately $3.5
million, before deducting fees to the placement agent and other offering expenses payable by the Company of $514,700 and an escrow deposit
of $250,000 required until certain security liens are filed. The Note and the common stock were recorded at the relative fair values
of $2.6M and $852,000, respectively, in accordance with ASC 470-20-25-2. The aforementioned expenses were allocated based on the aforementioned
fair values as a reduction to the carrying amount of the debt and a reduction of the equity in accordance with ASC 505-10. For the year
ended December 31, 2024, the Company recorded accreted interest and fees of 1,705,014 In connection
with the Securities Purchase Agreement and Note, the Company entered into a Registration Rights Agreement with the Purchasers (the “Registration
Rights Agreement”), requiring the Company to file a resale registration statement (the “Registration Statement”) with
the U.S. Securities and Exchange Commission (the “Commission”) to register the unregistered shares of Common Stock. within
forty-five (45) calendar days following the filing date, which is thirty (30) days after the closing date. The Company filed the required
resale registration statement on October 23, 2024.
Distribution
Agreement
On
March 4, 2024 (the “Effective Date”) the Company entered into a cooperative sales and distribution agreement (the “Agreement)
with Roncadelle Operations s.r.l.. The Agreement was effective as of the Effective Date for the initial period of one (1) year (the “Initial
Term”). Upon expiration of the Initial Term, the term of the Agreement shall automatically renew for additional successive one
year terms, unless either party provides written notice of non-renewal at least ninety (90) days prior to the end of the then-current
term, unless any renewal term is terminated earlier pursuant to the terms of the Agreement or applicable law. On February 5, 2025, the
parties reassessed the Agreement and mutually agreed to terminate the Agreement. The Company obtained no economic benefit with the Agreement
and has other distribution efforts. The Company incurred no liability on terminationof the Agreement.
Nasdaq
Compliance
On
March 12, 2025, the Company received a notification letter from The Nasdaq Stock Market advising that, for 30 consecutive business days
preceding the notification letter, the Company did not meet the minimum $1.00 per share bid price requirement for continued inclusion
on The Nasdaq Capital Market pursuant to Nasdaq Marketplace Listing Rule 5550(a)(2). Normally, a company would be afforded a 180-calendar
day period to demonstrate compliance with the Minimum Bid Price Requirement. However, pursuant to Listing Rule 5810(c)(3)(A)(iv) the
Company is not eligible for any compliance period specified in Rule 5810(c)(3)(A) because the Company has effected a reverse stock split
over the prior one-year period or has effected one or more reverse stock splits over the prior two-year period with a cumulative ratio
of 250 shares or more to one. Accordingly, the Company’s securities are subject to delisting from Nasdaq. The Company timely requested
an appeal of the determination and is awaiting the notice of the hearing date.
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 FMVfair market value adjustments, based on either the trading price or fair market
value of outstanding warrantswarrants, 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.
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.
Nature
of Business
Sharps
Technology, Inc. (“Sharps” or the “Company”) is a medical device company that has designed and patented various
safety syringes and has note safety syringe products that were acquired and is seeking commercialization by manufacturing and distribution
of its products.
The
accompanying consolidated financial statements include the accounts of Sharps Technology, Inc. and its wholly owned subsidiary, Safegard
Medical, Inc, collectively referred to as the “Company.” All intercompany transactions and balances have been eliminated.
The
Company’s fiscal year ends on December 31.
On
April 13, 2022, the Company’s Initial Public Offering was deemed effective with trading commencing on April 14, 2022. The Company
received net proceeds of $14.2 million on April 19, 2022. (See Capital Structure and Note 8 to the Consolidated Financial Statements)
Our significant accounting policies are described in Note 2 of the accompanying annual financial statements.
Basis
of Presentation
The
accompanying consolidated financial statements have been prepared by the Company in accordance with generally accepted accounting principles
(“GAAP”) in the United States (“U.S.”) and are expressed in U.S. dollars.
Segment
Reporting
The
Company operates as one operating segment. The Company’s chief operating decision maker (“CODM”) is its Chief Executive
Officer and Chief Financial Officer. The CODM manages operations and business as one operating segment for the purposes of allocating
resources, making operating decisions and evaluating financial performance.
Use
of Estimates
The
preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements
and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.
Cash
and Cash Equivalents
The
Company considers all highly liquid investments purchased with an original or remaining maturity of three months or less at the date
of purchase to be cash equivalents. Cash and cash equivalents are maintained with various financial institutions. At December 31, 2024
and 2023, the Company had no cash equivalents.
Inventories
The
Company values inventory at the lower of cost (average cost) or net realizable value. Work-in-process and finished goods inventories
consist of material, labor, and manufacturing overhead. Net realizable value is the estimated selling price in the ordinary course of
business, less reasonably predictable costs of completion, disposal, and transportation. A reserve is established for any excess or obsolete
inventories, or they may be written off. At December 31, 2024 and 2023, inventory is comprised of raw materials, components and finished
goods.
Fair
Value Measurements
Fair
Value Measurements and Disclosures, require an entity to maximize the use of observable inputs and minimize the use of unobservable inputs
when measuring fair value. ASC 820 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding
the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the
lowest level of input that is significant to the fair value measurement. ASC 820 prioritizes the inputs into three levels that may be
used to measure fair value.
Level
1
Level
1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities. Valuations
are based on quoted prices that are readily and regularly available in an active market and do no entail a significant degree of judgment.
Level
2
Level
2 applied to assets or liabilities for which there are other than Level 1 observable inputs such as quoted prices for similar assets
or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent
transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally
from, or corroborated by, observable market date.
What changed in the latest 10-Q
Risk Factors
New heading “We have recently undergone a fundamental transformation of our business and strategic direction, and there can be no assurance that our new strategy will be successful.”
New heading “Our use and integration of AI, including generative AI, in connection with our Solana treasury strategy and broader business operations expose us to operational, legal, regulatory, reputational, and competitive risks.”
New heading “Evolving laws, regulations, and regulatory interpretations relating to artificial intelligence may adversely affect our business, including our ability to use AI in connection with our Solana treasury strategy.”
New heading “Sales, or the perception of sales, of our shares of common stock by us or our existing stockholders in the public market could cause the market price for our common stock to decline.”
Largest changes
“Evolving laws, regulations, and regulatory interpretations relating to artificial intelligence may adversely affect our business, including our ability to use AI in connection with our Solana treasury strategy.”see in full comparison
“The legal and intellectual property landscape surrounding generative AI is uncertain and evolving. Content generated using AI tools may not be eligible for copyright protection, which could limit our ability to commercialize such content or assert ownership rights. Furthermore, AI-generated outputs may inadvertently infringe upon third-party intellectual property, privacy, or publicity rights, including where such outputs are derived from or resemble protected materials used in training underlying models. …”see in full comparison
“Our use and integration of AI, including generative AI, in connection with our Solana treasury strategy and broader business operations expose us to operational, legal, regulatory, reputational, and competitive risks.”see in full comparison
“Sales, or the perception of sales, of our shares of common stock by us or our existing stockholders in the public market could cause the market price for our common stock to decline.”see in full comparison
“We have recently undergone a fundamental transformation of our business and strategic direction, and there can be no assurance that our new strategy will be successful.”see in full comparison
“Our use of AI may also increase our exposure to cybersecurity risks, including potential data breaches or unauthorized access to sensitive information processed through AI systems. Any such incidents could result in legal liability, regulatory enforcement, reputational harm, and increased costs associated with remediation and compliance.”see in full comparison
Full comparison: every changed paragraph (17)
FactorsExcept
for the additional risk factors set forth below, factors that could cause our actual results to differ materially from those in this
Quarterly Report are any of the risks described in the Form
10-K for the year ended December 31, 2025, any of these factors could result in a significant
or material adverse effect on our results
of operations or financial condition. Additional risk factors not presently known to us or
that we currently deem immaterial may also
impair our business or results of operations. AsExcept as described below, as of the date of
this Quarterly Report, there have been no material changes to the risk
factors disclosed in the Form 10-K for the year ended December
31, 2025. We may disclose changes to such factors or disclose additional
factors from time to time in our future filings with the SEC.
We have recently undergone a fundamental transformation of our business and strategic direction, and there can be no assurance that our new strategy will be successful.
Beginning in the second quarter of 2026, we discontinued our legacy business of marketing and distribution of syringe products and related drug-delivery systems, and adopted a new business strategy focused on building an agentic finance platform serving the global south. We have limited operating history in the agentic finance platform markets, and our ability to execute our new strategy is unproven. Our management team, while experienced in corporate strategy, mergers and acquisitions and capital markets, has not previously managed a publicly traded finance platform company. There can be no assurance that our strategic pivot will result in successful acquisitions, revenue growth or profitability, and the failure to execute our strategy could have a material adverse effect on our business, financial condition and results of operations.
Our use and integration of AI, including generative AI, in connection with our Solana treasury strategy and broader business operations expose us to operational, legal, regulatory, reputational, and competitive risks.
AI technologies, particularly generative AI, remain in relatively early stages of commercial deployment and are inherently complex and rapidly evolving. These technologies may produce inaccurate, incomplete, misleading, or “hallucinatory” outputs and may embed unintended biases or discriminatory or otherwise flawed results that may not be readily detectable. To the extent that AI-driven analyses, forecasts, or decision-making tools are used in connection with our treasury management, digital asset strategies, or related services, any deficiencies, inaccuracies or perceived flaws in such outputs could adversely affect our decision-making, financial performance, reputation, and competitive position.
In addition, our reliance on AI-powered tools may increase the risk of inadvertent disclosure or misuse of confidential or proprietary information. If our employees, contractors, or service providers input sensitive information into third-party AI systems, such information could become part of external training datasets or otherwise be exposed to third parties, potentially impairing our ability to protect our intellectual property or maintain the confidentiality of our strategic or financial data. Our ability to mitigate these risks depends in large part on the effectiveness of our internal controls, policies, and safeguards governing the use of AI technologies.
The legal and intellectual property landscape surrounding generative AI is uncertain and evolving. Content generated using AI tools may not be eligible for copyright protection, which could limit our ability to commercialize such content or assert ownership rights. Furthermore, AI-generated outputs may inadvertently infringe upon third-party intellectual property, privacy, or publicity rights, including where such outputs are derived from or resemble protected materials used in training underlying models. Any such claims could result in litigation, liability, regulatory scrutiny, or restrictions on our use of AI technologies.
Our use of AI may also increase our exposure to cybersecurity risks, including potential data breaches or unauthorized access to sensitive information processed through AI systems. Any such incidents could result in legal liability, regulatory enforcement, reputational harm, and increased costs associated with remediation and compliance.
Additionally, competitors or other market participants may adopt AI technologies more effectively or more rapidly than we do, which could impair our ability to compete, particularly in the context of digital asset treasury management and analytics. As AI adoption continues to expand, we expect to incur additional costs and devote significant resources to developing, maintaining, and monitoring our AI capabilities, as well as addressing associated ethical, operational, and compliance challenges.
As a result of the foregoing, our use of AI technologies could materially and adversely affect our business, financial condition and results of operations.
Evolving laws, regulations, and regulatory interpretations relating to artificial intelligence may adversely affect our business, including our ability to use AI in connection with our Solana treasury strategy.
The regulatory environment governing AI, machine learning, and automated decision-making is rapidly developing and remains uncertain across jurisdictions. New laws and regulations may be adopted, and existing laws may be interpreted or applied in ways that restrict or impose additional requirements on our use of AI technologies. We may be required to modify our operations, limit certain uses of AI, or incur significant costs to achieve compliance, any of which could adversely affect our business, financial condition and results of operations.
For example, the European Union’s Artificial Intelligence Act (the “AI Act”), which entered into force on August 1, 2024 and is expected to become fully applicable by August 2, 2026, establishes a risk-based framework governing the development and deployment of AI systems. The AI Act imposes varying levels of obligations depending on the classification of AI systems, including prohibitions on certain uses and stringent requirements for systems deemed “high-risk.” To the extent our current or future AI applications fall within the scope of the AI Act or similar regulatory regimes, we may be subject to increased compliance burdens, operational constraints, and potential liability.
Similarly, in the United States and other jurisdictions, regulatory authorities have begun adopting and enforcing laws and guidance relating to AI, data privacy, and consumer protection. These developments may require us to obtain additional consents, implement enhanced governance frameworks, or modify our use of AI technologies. Regulatory authorities, including the Federal Trade Commission, have also taken enforcement actions requiring companies to disgorge data or models derived from allegedly non-compliant AI practices. Any such actions directed or expected to be directed against us could have a material impact on our operations.
If we are unable to effectively anticipate, manage, and comply with evolving AI-related legal and regulatory requirements, or if our use of AI technologies becomes restricted or economically impractical, our business may become less efficient, we may face increased costs or liability, our financial condition or results of operations could suffer, and our competitive position could be adversely affected.
Sales, or the perception of sales, of our shares of common stock by us or our existing stockholders in the public market could cause the market price for our common stock to decline.
The sale of substantial amounts of shares of common stock in the public market or the perception that such sales could occur, could harm the prevailing market price of our common stock. These sales, by us or our existing stockholders, or the possibility that these sales may occur, also might make it more difficult for us to sell equity securities in the future at a time and at a price that we deem appropriate.
Management's Discussion & Analysis (MD&A)
New heading “Consulting fees – related parties”
New heading “Net Interest expense (income)”
New heading “FMV Adjustment for Warrants”
New heading “Comparison of the Three Months Ended June 30, 2026 and 2025.”
New heading “Product Net Revenue/Gross Margin”
New heading “Staking Revenue – net”
New heading “Transaction expense – digital commodities”
New heading “Unrealized loss on digital commodities”
New heading “Realized loss on digital commodities”
New heading “Selling, General and Administrative”
Removed heading “Products, Marketing and Sales”
Removed heading “Nature of Business”
Largest changes
Full comparison: every changed paragraph (61)
The
following discussion and analysis summarizes the significant factors affecting the condensed consolidated operating results, financial
financial condition, liquidity and cash flows of our Company as of and for the periods presented below. The following discussion and
analysis of
our financial condition and results of operations should be read in conjunction with our audited financial statements
and notes included
in this Quarterly Report on Form 10-Q. Unless the context requires otherwise, references in this Annual Report on
Form 10-K to “we,”
“us,” and “our” refer to Sharps Technology,SkyAI, Inc.
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 20222022,` 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 willfrom bethat date was sourced from third-party manufacturers. In August 2025 we adopted a digital commodity treasury strategy focused on accumulating Solana (“SOL”),
the native digital commodity of the Solana blockchain. For the three months ended March 31, 2026, we reported a net
loss of approximately $86 million, primarily resulting from unrealized and realized losses on our Solana holdings of approximately $71
million and $11 million, respectively.
In August 2025, we adopted a digital commodity treasury strategy focused on accumulating Solana (“SOL”), the native digital commodity of the Solana blockchain. The Company earns staking rewards by delegating our digital commodities to third-party validators on proof-of-stake blockchain networks.
For the three and six months ended June 30, 2026, we reported a net loss of approximately $23.3 million and $109.5 million, primarily resulting from unrealized and realized losses on our Solana holdings of approximately $84.3 million and $14.7 million, respectively.
WeOur
classifyMedical ourDevice revenuessegment ashas net revenues, cost of goods sold and gross margin/lossloss. fromWe ouralso Medical Device segment andhave staking revenue from our Digital Commodities
digital commodities segment. Operating expenses include transaction expenses relating to digital commodity activities, research and development for our software
fromunder medical device packagingdevelopment 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.
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.
Substantially
all of our research and development expenses to date have been incurred in connection with our syringe products. Following the transfer
by the Company of certain assets, and a contract for the transfer of business share providing for the assignment by the Company of all
of the Company’s right, title and interest in and to the issued and outstanding shares of Safegard Medical Kft, the Hungarian subsidiary
in October 2025, the Company is no longer engagingengaged in medical device related research and development activities and
is limiting its
medical device activity to sales and distribution. The Company is now engagingengaged in research and development for certain
new potentialproducts newrelated to building an agentic finance platform. (see Recent Developments). We continue to prioritize long-term growth of
products.the Company’s business, using cash and proceeds from the sale of SOL to fund operating expenses and our expansion plans.
We maintain a corporate office located in Melville, New York. As of August 3, 2026, we had approximately 30 employees worldwide.
On May 27, 2026, the Company announced its name change, the change in its ticker symbols, and a strategic transformation of its business, reflecting a shift from its legacy operations to the development of a technology-driven financial platform.
The Company is now focused on building an agentic finance platform designed to serve emerging markets across Asia, Latin America, and Africa (the “Global South”). By leveraging AI to aggregate and analyze on-chain financial data, the platform is being designed to enable users to better manage their assets and access global markets.
As part of its strategic transformation, the Company has established an international operational headquarters in Hong Kong to support strategic acquisitions, talent acquisition, and expansion efforts. The Company intends to utilize blockchain infrastructure, including the Solana network, as a foundational layer for its platform and treasury strategy.
On
January 10, 2026, we executed a short-term lease for a 3,116 square foot office facility in Shenzhen, China to serve as the temporary
headquarters of our Asia-based operations. On May 2, 2026 we were able to lease a 1,467 square foot office in Hong Kong to serve as the
permanent headquarters for our Asia-based operations.
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,adjustments basedrelated onto eitherinvestments thein tradingdigital priceassets orand fair marketwarrants
value of outstanding warrants, for those classified as liabilities, as well as inventory related adjustments, could impact the operating results in the reporting periods. Further,
the market volatility of our investments in digital commodities could impact the operating results in the reporting periods.
Nature
of Business
The
Company is a medical device sales and distribution enterprise focused on the marketing and distribution of syringe products,
including the Securgard syringe product line and related drug-delivery systems. The Company commenced generating revenue in the
quarter ended June 30 2025. As of October 6, 2025, with the ownership transfer of Safegard Medical Kft complete, the Company
discontinued all design and manufacturing endeavors to focus instead solely on marketing and distribution. The Company intends to
continue its distribution platform with established third-party manufacturers. Sharps Technology is committed to maintaining
compliance with all applicable regulatory and quality standards governing the marketing and distribution of medical devices,
including those established by the U.S. Food and Drug Administration (FDA) and comparable international authorities.
On
August 24, 2025, the Company adopted a digital commodity treasury strategy focused on SOL, the native digital commodity
of the Solana blockchain. The Company has recently begun to explore strategic acquisitions and/or investments globally. To this goal,
our treasury strategy and engineering teams continue to analyze these opportunities and develop our own digital products. We have been
and continue to prioritize long-term growth of the Company’s business, using proceeds from the sale of SOL to fund
operating expenses and our expansion plans.
Comparison
of the ThreeSix Months Ended MarchJune 31,30, 2026 and 2025.
For
the threesix months ended MarchJune 31,30, 2026,2026 weand recognizedJune revenues30, of2025, revenue increased by $56,700 to $192,780 from $136,080 driven by the sale of the
Sologard product line of syringes. There
was no product revenuesyringes in the three months ended March 31, 2025.2026.
The inventory reserve increased by $284,228 for the six month period ended June 30, 2026, with the prior period ended June 30, 2025 reserve of $0.
For
the threesix months ended MarchJune 31,30, 2026, the Company recognized net staking revenue of $3,134,109$5,457,656 resulting from the digital treasury strategy
implemented during the third quarter of 2025. AsNo staking revenue was recognized in the same period of March 31, 2026, approximately 95% of the Company’s SOL holdings were staked.2025.
For
the threesix months ended MarchJune 31,30, 2026, $63,821$128,508 in transaction expenses relate to custodian and exchange for digital commodity investments.
No digital commodity transaction expenses were incurred in the same period of 2025.
During
the threesix months ended MarchJune 31,30, 2026, the Company recognized $70,846,202$84,336,553 in unrealized loss on investments in digital commodities.
The unrealized loss resulted from a decrease of the average fair market value per unit of our investments net of the reduction in the discount on our Locked SOL. No digital commodities were held in the same period of 2025.
During
the threesix months ended MarchJune 31,30, 2026, the Company recognized $10,789,841$14,716,799 in realized losses on investments in digital commodities.
The
realized loss reflected the difference between the average price of $92.89 per SOL$92.09 received for the sale of 100,000135,399 SOL and the cost
basis of
$200.79. $200.79No fromdigital commodities were held in the same period followingof the August 2025 PIPE.2025.
For
the threesix months ended MarchJune 31,30, 2026, Research and Development (“R&D”) expenses increased to $137,097$420,255 compared to none
in continuing operations for the threesix months ended MarchJune 31,30, 2025. This increase resulted from new R&D activities basedrelated atto the Company’s
Hongsoftware Kongdevelopment. operation.Prior period R&D was related to the Company’s manufacturing activities that are now included in the Loss
from discontinued operations.
For
the threesix months ended MarchJune 31,30, 2026, General and Administrative (“G&A”) expenses were $5,053,320$10,216,580 as compared to $1,364,295$2,775,456
for the threesix months ended MarchJune 31,30, 2025. The increase of $3,689,025$7,441,124 was primarily attributable to the following factors
Consulting fees – related parties
This amount of $5,000,000 represents consulting fees to Sol Edge. See Note 13 to the Condensed Consolidated Financial Statements.
Net Interest expense (income)
Net interest income was $86,784 for the six months ended June 30, 2026, compared to interest expense of $ 530,038 for the six months ended June 30, 2025. Net interest changed by $616,822 due to a) interest earned on cash in 2026 of $117,884 as compared to $178,351 in 2025 b) interest expense of $708,390 for the accreted interest on the debt financing that originated in the third quarter of 2024 as compared to $19,229 in interest expense during 2026.
FMV Adjustment for Warrants
The value of the Warrants recorded as a liability requires the Fair Market Value (“FMV”) to be recorded at the date warrants are issued and then be remeasured at each reporting date while outstanding with recognition of the changes in fair value to other income or expense in the Condensed Consolidated Statement of Operations. For the six months ended June 30, 2026, and 2025 the Company recorded a FMV gain adjustment of $47,919 and $11,087,700, respectively.
Comparison of the Three Months Ended June 30, 2026 and 2025.
Product Net Revenue/Gross Margin
For the three months ended June 30, 2026 and June 30, 2025, we recognized revenues of $0 and $136,080 from the sale of the Sologard product line of syringes.
Staking Revenue – net
For the three months ended June 30, 2026, the Company recognized net staking revenue of $2,323,547 resulting from the digital treasury strategy implemented during the third quarter of 2025.
Transaction expense – digital commodities
For the three months ended June 30, 2026, $64,686 in transaction expenses relate to custodian and exchange for digital commodity investments.
Unrealized loss on digital commodities
During the three months ended June 30, 2026, the Company recognized $13,490,351 in unrealized loss on investments in digital commodities.
The unrealized loss resulted from a decrease of the average fair market value per unit of our investments net of the reduction in the discount on our Locked SOL. No digital commodities were held in the same period of 2025.
Realized loss on digital commodities
During the three months ended June 30, 2026, the Company recognized $3,926,958 in losses on investments in digital commodities.
The realized loss reflected the difference between the average price of $89.85 received for the sale of 35,399 SOL and the cost basis of $200.79.
For the three months ended June 30, 2026, R&D expenses increased to $283,158 compared to none in continuing operations for the three months ended June 30, 2025. This increase resulted from new R&D activities based at the Company’s Hong Kong operation.
Selling, General and Administrative
For the three months ended June 30, 2026, G&A expenses were $5,163,257 as compared to $1,411,161 for the three months ended June 30, 2025. The increase of $3,752,096 was primarily attributable to the following factors
Net Interest income was $76,746 for the three months ended June 30, 2026, compared to $ 96,953 for the three months ended June 30, 2025.
Net
Interest income was $10,038 for the three months ended March 31, 2026, compared to interest expense of $626,991 for the three months
ended March 31, 2025. Net interest changed by $637,029 due to a) interest earned on invested cash in 2026 of $29,268 as compared to
$81,399 in 2025 b) interest expense of $708,390 for the accreted interest on the debt financing that originated in the third quarter
of 2024 as compared to $19,229 in interest expense during first quarter of 2026.
For the three months ended June 30, 2026, and 2025 the Company recorded a FMV gain adjustment of $31,211 and $6,468,811, respectively.
The
value of the Warrants recorded as a liability requires the Fair Market Value (“FMV”) to be recorded at the date warrants
are issued and then be remeasured at each reporting date while outstanding with recognition of the changes in fair value to other
income or expense in the Condensed Consolidated Statement of Operations. For the three months ended March 31, 2026, and 2025 the
Company recorded a FMV gain adjustment of $16,708 and $4,618,889, respectively.
At
MarchJune 31,30, 2026, and December 31, 2025, we had a cash balance of $12,320,547$12,071,008 and $10,382,745, respectively. The Company had working capital
of $16,160,964$12,627,942 at MarchJune 31,30, 2026 as compared to a working capital of $ 14,187,484$14,187,484 as of December 31, 2025. The increasedecrease in our working
capital of $1,973,480,$1,559,542, after net proceeds from the sale of Solana in 2026 of $9,288,716,$12,469,465, was primarily related to theincreases use of cash
of of
$2,677,122$5,672,370 in operations, and cash used to repay the margin loan of $3,084,931. The Company intends to finance its future development
and commercialization activities$3,084,931 and itsthe workingshare capitalrepurchase needs with a combinationprogram of the sale of a portion of its Solana holdings, the
sale of equity securities and/or with additional funding from other traditional financing sources until such time that funds provided
by operations are sufficient to fund working capital requirements. The Company is debt free and intends to maintain sufficient cash and
other immediately liquid resources on hand to satisfy current obligations.$2,011,573.
The Company intends to finance its future development and commercialization activities and its working capital needs with a combination of the sale of a portion of its Solana holdings, the sale of equity securities and/or with additional funding from other traditional financing sources until such time that funds provided by operations are sufficient to fund working capital requirements. The Company is debt free and intends to maintain sufficient cash and other immediately liquid resources on hand to satisfy current obligations.
The
Company used cash of $2,677,122$5,672,370 and $1,417,691$2,276,940 in operating activities for the threesix months ended MarchJune 31,30, 2026 and 2025, respectively.
The change in cash used was principally due to the Company incurring higher G&A expenses and new R&D activities, as described
above, during the threesix months ended MarchJune 31,30, 2026.
Net
Cash UsedProvided inBy Investing Activities
For the six months ended June 30, 2026, the Company provided cash from investing activities of $12,457,526. For the six months ended June 30, 2025, the Company had no cash provided by or used for continuing operations. The increase in net cash provided by investing activities was indicative of the changing nature of the business driven by the sale of Solana and the decrease in fixed asset additions.
For
the three months ended March 31, 2026 and 2025, the Company provided cash from investing activities of $9,288,716 and none, respectively.
In the first quarter of 2026, 100,000 SOL were sold at an average price of $92.89 per SOL, generating a realized loss on digital commodities
of $10,789,841.
SKYA insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 0 Form 4 filings and open-market sales in 0 filings. Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
No Form 4 stock transactions in this period.
Well-known investors holding SKYA (13F)
| Investor | Quarter | Shares | Reported value | % of their 13F | Change vs prior quarter |
|---|---|---|---|---|---|
| Citadel Advisors (Ken Griffin) | 2026-06-30 | 989,153 | $1.1M | 0.0% | Added 13% |