UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2025

☐	TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 001-41355

Sharps Technology, Inc.

(Exact name of registrant as specified in its charter)

Nevada

82-3751728

State or other jurisdiction

of incorporation or organization

(I.R.S. Employer

Identification No.)

105 Maxess Road, Melville, New York 11747

(Address of principal executive offices) (Zip Code)

(631) 574 -4436

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.0001 par value	STSS	NASDAQ Capital Market
Common Stock Purchase Warrants	STSSW	NASDAQ Capital Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of May 15, 2025, 1,019,078 shares of the registrant’s common stock, par value $.0001 per share, were issued and outstanding.

TABLE OF CONTENTS

PART I FINANCIAL INFORMATION
ITEM 1.	FINANCIAL STATEMENTS (Unaudited)
	Condensed Consolidated Balance Sheets	F-1
	Condensed Consolidated Statements of Operations	F-2
	Condensed Consolidated Statement of Comprehensive Income (Loss)	F-3
	Condensed Consolidated Statements of Stockholders’ Equity	F-4
	Condensed Consolidated Statements of Cash Flows	F-5
	Notes to the Condensed Consolidated Financial Statements	F-6
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	3
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	10
ITEM 4.	CONTROLS AND PROCEDURES	10
PART II OTHER INFORMATION
ITEM 1.	LEGAL PROCEEDINGS	10
ITEM 1A.	RISK FACTORS	11
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	11
ITEM 6.	EXHIBITS	12
SIGNATURES		13

Item 1. Financial Statements:

SHARPS TECHNOLOGY, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

	March 31, 2025		December 31, 2024
	(Unaudited)		(Audited)
Assets:
Current Assets
Cash	$	11,894,937	$	864,041
Tax Receivable - VAT		160,194		102,493
Escrow Deposit (Note 7)		-		250,000
Prepaid expenses and other current assets		134,861		89,735
Inventories, Net (Note 3)		2,056,998		1,867,671
Current Assets		14,246,990		3,173,940

Fixed Assets, net of accumulated depreciation (Notes 4 and 5)		4,182,159		4,035,110
Other Assets (Notes 5 and 6)		486,947		104,698
TOTAL ASSETS	$	18,916,096	$	7,313,748

Liabilities:
Current Liabilities
Accounts payable	$	649,525	$	976,548
Accrued expenses and other		217,585		346,536
Notes Payable, net of discount (Note 7)		-		3,763,622
Warrant liability (Notes 8 and 10)		7,781,658		98,913
Total Current Liabilities		8,648,768		5,185,619

Deferred Tax Liability (Note 12)		132,000		132,000
Total Liabilities		8,780,768		5,317,619

Commitments and Contingencies (Note 15)		-		-

Stockholders’ Equity:
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; 0 shares issued and outstanding (2024: 0)		-		-
Common stock, $0.0001 par value; 1,666,667 shares authorized; 485,841 shares issued and outstanding in (2024: 6,827)		48		1

Additional paid-in capital		42,335,786		36,418,041
Accumulated other comprehensive income		315,866		23,293
Accumulated deficit		(32,516,372)		(34,445,206	)
Total Stockholders’ Equity		10,135,328		1,996,129
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	18,916,096	$	7,313,748

The accompanying notes are an integral part of these financial statements.

F-1

SHARPS TECHNOLOGY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE MONTHS ENDED MARCH 31

(UNAUDITED)

	2025			2024

Revenue, net	$	-		$	-

Operating expenses:
Research and development		(82,016	)		(197,439	)
General and administrative		(1,939,753	)		(1,646,613	)
Total operating expenses		(2,021,769	)		(1,844,052	)
Loss from operations		(2,021,769	)		(1,844,052	)

Other income (expense)
Interest income (expense)		(626,991	)		19,023
FMV adjustment on warrants		4,618,889			850,057
Foreign currency and other		(41,295)			(7,414	)
Net Income (loss) Before Provision for Taxes	$	1,928,834		$	(982,386	)
Deferred Tax Benefit		-			-
Net Income (Loss)		1,928,834			(982,386	)
Net income (loss) per share, basic and diluted	$	38.62		$	(347.50	)
Weighted average shares used to compute net income (loss) per share, basic and diluted		49,938			2,827

The accompanying notes are an integral part of these financial statements.

F-2

SHARPS TECHNOLOGY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

FOR THE THREE MONTHS ENDED MARCH 31

(UNAUDITED)

	2025		2024
Net Income (Loss)	$	1,928,834	$	(982,386	)

Other comprehensive income:

Foreign currency translation adjustments		292,573		(218,053	)

Comprehensive Income (loss)	$	2,221,407	$	(1,200,439	)

The accompanying notes are an integral part of these financial statements.

F-3

SHARPS TECHNOLOGY, INC.

CONDENSED STATEMENT OF STOCKHOLDERS’ EQUITY

FOR THE THREE MONTHS ENDED MARCH 31, 2024

(Unaudited)

	Shares		Amount		Shares		Amount		Capital		Income			Deficit			Equity
	Preferred Stock				Common Stock				Additional Paid in		Accumulated Other Comprehensive			Accumulated			Total Stockholders
	Shares		Amount		Shares		Amount		Capital		Income			Deficit			Equity

Balance -December 31, 2023		1	$	-		2,314	$	-	$	32,491,478	$	591,812		$	(25,149,004	)	$	7,934,286

Net loss for the three months ended March 31, 2024		-		-		-		-		-		-			(982,386	)		(982,386	)

Share-based compensation charges		-		-		-		-		126,387		-			-			126,387

Exercise of Pre-Funded Warrants		-		-		60				396		-			-			396

Foreign Currency Translation		-		-		-		-		-		(218,053	)		-			(218,053	)

Balance - March 31, 2024		1	$	-		2,374	$	-	$	32,618,261	$	373,759		$	(26,131,390	)	$	6,860,630

SHARPS TECHNOLOGY, INC.

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

FOR THE THREE MONTHS ENDED MARCH 31, 2025

(Unaudited)

	Shares		Amount		Shares		Amount		Capital			Income		Deficit			Equity
	Preferred Stock				Common Stock				Additional Paid-in			Accumulated Other Comprehensive		Accumulated			Total Stockholders’
	Shares		Amount		Shares		Amount		Capital			Income		Deficit			Equity
Balance – December 31, 2024		-	$	-		6,827	$	1	$	36,418,041		$	23,293	$	(34,445,206	)	$	1,996,129
Balance		-	$	-		6,827	$	1	$	36,418,041		$	23,293	$	(34,445,206	)	$	1,996,129

Net income for the three months ended March 31, 2025		-				-		-		-			-		1,928,834			1,928,834
Net income (loss)		-				-		-							1,928,834			1,928,834

Share-based compensation charges		-		-		-		-		44,383			-		-			44,383
Equity Offering - January 2025 – see Note 8		-		-		47,619		4		5,873,405			-		-			5,873,409
Warrant Exercise – Series B Cashless – see Note 8				-		431,395		43		(43	)		-		-			-
Foreign currency translation		-		-		-		-		-			292,573					292,573

Balance – March 31, 2025		-	$	-		485,841	$	48	$	42,335,786		$	315,866	$	(32,516,372	)	$	10,135,328
Balance		-	$	-		485,841	$	48	$	42,335,786		$	315,866	$	(32,516,372	)	$	10,135,328

The accompanying notes are an integral part of these financial statements.

F-4

SHARPS TECHNOLOGY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE THREE MONTHS ENDED MARCH 31

(UNAUDITED)

	2025			2024
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	1,928,834		$	(982,386	)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and amortization		130,921			195,411
Stock-based compensation		44,383			126,387
Accretion of debt discount		708,390			-
FMV adjustment for warrants		(4,618,889	)		(850,057	)
Foreign exchange loss		(41,295	)		(7,414	)
Changes in operating assets:
Prepaid expenses and other current assets		(65,811	)		(91,158	)
Inventory		(91,000	)		(202,446	)
Accounts payable and accrued liabilities		(446,097	)		(77,652	)
Net cash used in operating activities		(2,450,564	)		(1,889,315	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of fixed assets		(90,405	)		(2,852	)
Other Assets		(383,253	)		-
Net cash used in investing activities		(473,658	)		(2,852	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from offerings and warrant exercises		18,175,043			-
Repayment of Debt		(4,222,012	)		-
Exercise of Pre-Funded warrants		-			396
Net cash provided by financing activities		13,953,031			396

Effect of exchange rate changes on cash		2,087			44,776

NET INCREASE (DECREASE) IN CASH		11,030,896			(1,846,995	)
CASH — BEGINNING OF PERIOD		864,041			3,012,908
CASH — END OF PERIOD	$	11,894,937		$	1,165,913

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash Interest (OID) paid, attributed to Note (see Note 7)	$	875,000			-
Cash paid for taxes		-			-

The accompanying notes are an integral part of these financial statements.

F-5

SHARPS TECHNOLOGY, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2025 AND 2024

Note 1. Description of Business

Nature of Business

Sharps Technology, Inc. (“Sharps” or the “Company”) is a pre-revenue medical device and pharmaceutical packaging company that has acquired and designed and patented various safety syringes 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 subsidiaries, Safegard Medical (Hungary) KFT, 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 Note 8).

Note 2. Summary of Significant Accounting Policies

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.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. The Company has not generated revenue or cash flow from operations since inception. As of March 31, 2025, the Company used cash in operations of $2,450,564 and has cash of $11,894,937 which may not be sufficient to fund the Company’s planned operations for the next twelve months. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. The Company’s ability to continue as a going concern is dependent upon the Company’s ability to raise sufficient financing to acquire or commercialize its products into a profitable business. The Company intends to finance its future development and commercialization activities and its working capital needs largely from 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 financial statements of the Company do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classifications of liabilities that might be necessary should the Company be unable to continue as a going concern.

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 derivative liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. As of March 31, 2025, the most significant estimates relate to derivative liabilities and stock-based compensation.

Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with an original or remaining maturity of three months or less at the date of purchase to be cash equivalents. Cash and cash equivalents are maintained with various financial institutions. At March 31, 2025 and December 31, 2024, the Company had no cash equivalents.

F-6

SHARPS TECHNOLOGY, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2025 AND 2024

Note 2. Summary of Significant Accounting Policies (continued)

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash, which is placed with high-credit-quality financial institutions and at times exceeds federally insured limits. To date, the Company has not experienced any losses on its deposits of cash.

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 March 31, 2025 and December 31, 2024, inventory is comprised of raw materials, components and finished goods.

Fair Value Measurements

ASC 820, Fair Value Measurements and Disclosures, require an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 820 prioritizes the inputs into three levels that may be used to measure fair value.

The Company’s outstanding warrants are fair valued on a recurring basis with the trading price or FMV using Black Sholes which could cause fluctuations in operating results at the reporting periods.

Level 1

Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities. Valuations are based on quoted prices that are readily and regularly available in an active market and do not entail a significant degree of judgment.

Level 2

Level 2 applied to assets or liabilities for which there are other than Level 1 observable inputs such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.

Level 2 instruments require more management judgment and subjectivity as compared to Level 1 instruments. For instance: determining which instruments are most similar to the instrument being priced requires management to identify a sample of similar securities based on the coupon rates, maturity, issuer credit rating and instrument type, and subjectively select an individual security or multiple securities that are deemed most similar to the security being priced; and determining whether a market is considered active requires management judgment.

Level 3

Level 3 applied to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. The determination for Level 3 instruments requires the most management judgment and subjectivity.

F-7

SHARPS TECHNOLOGY, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2025 AND 2024

Note 2. Summary of Significant Accounting Policies (continued)

Fixed Assets

Fixed assets are stated at cost. Expenditures for maintenance and repairs are charged to operations as incurred. The Company’s fixed assets consist of land, building, machinery and equipment, molds, computer system and website. Depreciation is calculated using the straight-line method commencing on the date the asset is operating in the way intended by management over the following useful lives: Building – 20 years, Machinery and Equipment – 3 -10 years and Computer systems and Website – 3 years. The expected life for Molds is based lesser of the number of parts that will be produced based on the expected mold capability or 5 years.

Impairment of Long-Lived Assets

Long-lived assets are reviewed annually for impairment or whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability is measured by comparison of the carrying amount of an asset group to the future net undiscounted cash flows that the assets are expected to generate. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the projected discounted future net cash flows arising from the asset.

Purchased Identified Intangible Assets

The Company’s identified intangible assets are amortized on a straight-line basis over their estimated useful lives of 5 years. The Company makes judgments about the recoverability of finite-lived intangible assets whenever facts and circumstances indicate that the useful life is shorter than originally estimated or that the carrying amount of assets may not be recoverable. If such facts and circumstances exist, the Company assesses recoverability by comparing the projected undiscounted net cash flows associated with the related asset or group of assets over their remaining lives against their respective carrying amounts. Impairments, if any, are based on the excess of the carrying amount over the fair value of those assets. If the useful life is shorter than originally estimated, the Company would accelerate the rate of amortization and amortize the remaining carrying value over the new shorter useful life. The Company evaluates the carrying value of finite-lived intangible assets on an annual basis, and an impairment charge would be recognized to the extent that the carrying amount of such assets exceeds their estimated fair value.

Stock-based Compensation Expense

The Company measures its stock-based awards made to employees based on the estimated fair values of the awards as of the grant date. For stock option awards, the Company uses the Black-Scholes option-pricing model. For restricted stock awards, the estimated fair value is generally the fair market value of the underlying stock on the grant date. Stock-based compensation expense is recognized over the requisite service period and is based on the value of the portion of stock-based payment awards that is ultimately expected to vest. The Company recognizes forfeitures of stock-based awards as they occur on a prospective basis.

Stock-based compensation expense for awards granted to non-employees as consideration for services received is measured on the date of performance at the fair value of the consideration received or the fair value of the equity instruments issued, whichever can be more reliably measured.

F-8

SHARPS TECHNOLOGY, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2025 AND 2024

Note 2. Summary of Significant Accounting Policies (continued)

Derivative Instruments

The Company accounts for common stock warrants as either equity-classified or liability-classified instruments based on an assessment of the specific terms of the warrants and applicable authoritative guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC 480”), Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own stock and whether the holders of the warrants could potentially require net cash settlement in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.

At their issuance date and as of March 31, 2025, certain warrants (see Notes 8 and 10) are accounted for as liabilities as these instruments did not meet all of the requirements for equity classification under ASC 815-40 based on the terms of the aforementioned warrants. The resulting warrant liabilities are re-measured at each balance sheet date until their exercise or expiration, and any change in fair value is recognized in the Company’s consolidated statements of operations.

Foreign Currency Translation/Transactions

The Company has determined that the functional currency for its foreign subsidiary is the local currency. For financial reporting purposes, assets and liabilities denominated in foreign currencies are translated at current exchange rates and profit and loss accounts are translated at weighted average exchange rates. Resulting translation gains and losses are included as a separate component of stockholders’ equity as accumulated other comprehensive income or loss. Gains or losses resulting from transactions entered into in other than the functional currency are recorded as foreign exchange gains and losses in the consolidated statements of operations.

Comprehensive income (loss)

Comprehensive income (loss) consists of the Company’s consolidated net income (loss) and foreign currency translation adjustments related to its subsidiary. Foreign currency translation adjustments included in comprehensive loss were not tax effected as the Company has a full valuation allowance at March 31, 2025 and December 31, 2024. Accumulated other comprehensive income (loss) is a separate component of stockholders’ equity and consists of the cumulative foreign currency translation adjustments.

Basic and Diluted Loss Per Share

The Company computes net income (loss) per share in accordance with ASC 260, Earnings per Share. ASC 260 requires presentation of both basic and diluted earnings per share (EPS) on the face of the consolidated statements of operations. Basic EPS is computed by dividing net income (loss) available to common stockholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Basic EPS in March 2024 included 407 pre-funded warrants (reverse effected) (see Note 8). Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive. As of March 31, 2025, there were 515,437 stock options and warrants that could potentially dilute basic EPS in the future that were not included in the computation of diluted EPS because to do so would have been anti-dilutive for the periods presented.

F-9

SHARPS TECHNOLOGY, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2025 AND 2024

Note 2. Summary of Significant Accounting Policies (continued)

Income Taxes

The Company must make certain estimates and judgments in determining income tax expense for financial statement purposes. These estimates and judgments are used in the calculation of tax credits, tax benefits, tax deductions, and in the calculation of certain deferred taxes and tax liabilities. Significant changes to these estimates may result in an increase or decrease to the Company’s tax provision in a subsequent period.

The provision for income taxes was comprised of the Company’s current tax liability and changes in deferred income tax assets and liabilities. The calculation of the current tax liability involves dealing with uncertainties in the application of complex tax laws and regulations and in determining the liability for tax positions, if any, taken on the Company’s tax returns in accordance with authoritative guidance on accounting for uncertainty in income taxes. Deferred income taxes are determined based on the differences between the financial reporting and tax basis of assets and liabilities. The Company must assess the likelihood that it will be able to recover the Company’s deferred tax assets. If recovery is not likely on a more-likely-than-not basis, the Company must increase its provision for income taxes by recording a valuation allowance against the deferred tax assets that it estimates will not ultimately be recoverable. However, should there be a change in the Company’s ability to recover its deferred tax assets, the provision for income taxes would fluctuate in the period of such change.

Research and Development Costs

Research and development costs are expensed as incurred.

Advance payments for goods or services that will be used or rendered for future research and development activities are deferred and capitalized. Such amounts are recognized as an expense as the related goods are delivered or the services are performed.

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.

Contingencies

Liabilities for loss contingencies arising from claims, assessments, litigations, fines and penalties and other sources are recognized when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated. Gain contingencies are evaluated and not recognized until the gain is realizable or realized.

Recent Accounting Pronouncements

On August 5, 2020, the FASB issued ASU 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40), which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity. The ASU is part of the FASB’s simplification initiative, which aims to reduce unnecessary complexity in U.S. GAAP. ASU 2020-06 simplifies the guidance in U.S. GAAP on the issuer’s accounting for convertible debt instruments, requires entities to provide expanded disclosures about “the terms and features of convertible instruments” and how the instruments have been reported in the entity’s financial statements. It also removes from ASC 815-40-25-10 certain conditions for equity classification and amends certain guidance in ASC 260, Earnings per Share, on the computation of EPS for convertible instruments and contracts on an entity’s own equity. An entity can use either a full or modified retrospective approach to adopt the ASU’s guidance. The ASU’s amendments are effective for smaller public business entities fiscal years beginning after December 15, 2023. The Company does not expect the adoption of this amended guidance to have a material impact on the Company’s consolidated financial statements when applicable.

F-10

SHARPS TECHNOLOGY, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2025 AND 2024

Note 2. Summary of Significant Accounting Policies (continued)

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which expands disclosures about a public entity’s reportable segments and requires more enhanced information about a reportable segment’s expenses, interim segment profit or loss, and how a public entity’s chief operating decision maker uses reported segment profit or loss information in assessing segment performance and allocating resources. The standard is effective for annual reporting periods beginning after December 15, 2023, and interim periods within years beginning after December 15, 2024. The Company adopted the standard.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The new guidance requires disaggregated information about the effective tax rate reconciliation and additional information on taxes paid that meet a quantitative threshold. The new guidance is effective for public companies for annual reporting periods beginning after December 15, 2024, and for non-public companies for annual reporting periods beginning after December 15, 2025, with early adoption permitted for both. The Company will adopt the new standard in the annual reporting period beginning after December 15, 2025 and is currently evaluating the impacts of the new guidance on its disclosures within the consolidated financial statements.

In November 2024, the FASB issued ASU 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40). The new guidance requires disaggregated information about the entity’s type of expenses into certain categories. The Company will adopt the new standard in the annual reporting period beginning after December 15, 2026 and is will evaluate the impacts of the new guidance on its disclosures within the consolidated financial statements.

The Company does not expect the adoption of any accounting pronouncements to have a material impact on the consolidated financial statements.

The Company reviewed all other recently issued accounting pronouncements and have concluded they are not applicable or not expected to be significant to the accounting for our operations.

Note 3. Inventories

Inventories, net consisted of the following at March 31, 2025 and December 31, 2024:

Schedule of Inventories

	March 31, 2025		December 31, 2024
Raw materials	$	390,489	$	326,068
Work in process		77,154		81,075
Finished goods		1,589,355		1,460,528
Total	$	2,056,998	$	1,867,671

F-11

SHARPS TECHNOLOGY, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2025 AND 2024

Note 4. Fixed Assets

Fixed asset, net, as of March 31, 2025 and December 31, 2024, are summarized as follows:

Schedule of Fixed Assets, Net

	March 31, 2025			December 31, 2024

Land	$	243,335		$	227,575
Building		2,836,386			2,665,117
Machinery and Equipment		2,275,297			2,143,895
Computer Systems and Website & Other		290,661			290,661
Total Fixed Assets		5,645,679			5,327,248
Less: accumulated depreciation		(1,463,520	)		(1,292,138	)
Fixed asset, net	$	4,182,159		$	4,035,110

Depreciation expense of fixed assets for the three months ended March 31, 2025 and 2024 was $127,594 and $190,121, respectively. Substantially, all of the Company’s fixed assets are located at the Company’s Hungary location. During the quarter ended March 31, 2025, the Company fully adjusted the value of the machinery and equipment impaired at December 31, 2024 resulting in a decrease in both the gross cost basis and accumulated depreciation by $823,617.

Note 5. Asset Acquisition

In June 2020, the Company entered into a Share Purchase Agreement (“Agreement”) with Safegard Medical (“Safegard”) and amendments to the Agreement, collectively, the Agreements, to purchase either the stock or certain assets of a manufacturing facility for $2.5M in cash, plus additional consideration of common stock and options with fair market values of $200,000 and $183,135, respectively. Through the Closing Date, the Agreements provided the Company with the exclusive use of the facility in exchange for payment of the facility’s operating costs. The monthly fee (“Operating Costs”), which primarily covered the facility’s operating costs, was mainly comprised of the seller’s workforce costs, materials and other recurring monthly operating cost.

The acquisition of Safegard, which closed on July 6, 2022, did not meet the definition of a business pursuant to ASC 805-10, and accordingly was accounted for as an asset acquisition in accordance with ASC 805-50. The cost of the acquisition was $2,936,712, including transaction costs of $53,576, with the allocation to the assets acquired on a relative fair value basis. The intangibles relate to permits and a limited workforce acquired. Under ASC 805-50, no goodwill is recognized. The operating results for Safegard are included in the consolidated balance sheet and consolidated statements of operations for the period beginning after the closing on July 6, 2022.

F-12

SHARPS TECHNOLOGY, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2025 AND 2024

Note 5. Asset Acquisition (continued)

The relative fair value of the assets acquired and related deferred tax liability is as follows:


Land	$	226,000
Building and affixed assets		2,648,000
Machinery		158,000
Inventory		32,000
Intangibles		64,712
Deferred tax liability		(192,000	)

Total	$	2,936,712

The useful lives for the acquired assets is Building - 20 years; Machinery – 5 to 10 years; Intangibles – 5 years. The related depreciation and amortization is being recorded on a straight-line basis.

Note 6. Other Assets

Other assets as of March 31, 2025 and December 31, 2024 are summarized as follows:

Schedule of Other Assets

	March 31,		December 31,
	2025		2024

Intangibles, net	$	31,500	$	32,503
Other		455,447		72,195
Total Other assets	$	486,947	$	104,698

Intangibles are related to the Asset Acquisition (see Note 5) and consist of an acquired workforce and permits. Amortization for the three months ended March 31, 2025 and 2024 was $3,327 and $5,290, respectively. The remaining life of the unamortized intangibles is approximately 1.5 years. Other assets increased $383,252 primarily due to deposits on machinery, molds and other capital assets (see Note 15).

Note 7. Debt Financing

On September 20, 2024, the Company entered into a securities purchase agreement (the “Securities Purchase Agreement”) and a Senior Secured Note (the “Note”) for an aggregate principal amount of $4,375,000, including OID interest of $875,000 maturing on January 31, 2025, with certain purchasers (the “Purchasers”), and the issuance of approximately 864 (pre reverse - 259,091 ) unregistered shares of the Company’s Common Stock. The aggregate gross proceeds to the Company were approximately $3.5 million, before deducting fees to the placement agent and other offering expenses payable by the Company of $514,700 and an escrow deposit of $250,000 required until certain security liens were filed. The Note and the common stock were recorded at the relative fair values of $2.6M 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 three months ended March 31, 2025, the Company recorded accreted interest and fees of $708,390 In connection with the Securities Purchase Agreement and Note, the Company entered into a Registration Rights Agreement with the Purchasers (the “Registration Rights Agreement”), requiring the Company to file a resale registration statement (the “Registration Statement”) with the U.S. Securities and Exchange Commission (the “Commission”) to register the unregistered shares of Common Stock. within forty-five (45) calendar days following the filing date, which is thirty (30) days after the closing date. The Company filed the required resale registration statement on October 23, 2024. The Note was repaid upon maturity (See Note 8).

F-13

SHARPS TECHNOLOGY, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2025 AND 2024

Note 8. Stockholders’ Equity

Capital Structure

On December 11, 2017, the Company was incorporated in Wyoming with 20,000,000 shares of common stock authorized with a $0.0001 par value. Effective, April 18, 2019, the Company’s authorized common stock was increased to 50,000,000 shares of common stock. The articles of incorporation also authorized 10,000 preferred shares with a $0.001 par value.

Effective March 22, 2022, the Company completed a plan and agreement of merger with Sharps Technology, Inc., a Nevada corporation (“Sharps Nevada”). Pursuant to the merger agreement, (i) the Company merged with and into Sharps Nevada, (ii) each 3.5 shares of common stock of the Company were converted into one share of common stock of Sharps Nevada and (iii) the articles of incorporation and bylaws of Sharps Nevada, became the articles of incorporation and bylaws of the surviving corporation. The Company’s authorized common stock and preferred stock increased from 50,000,000 to 100,000,000 and 10,000 to 1,000,000 shares, respectively. The par value of preferred stock decreased from $0.001 to $0.0001 per share.

In July 2024, the shareholders approved the increase of the authorized common stock from 100,000,000 to 500,000,000 which was subsequently filed as an amendment to the articles of incorporation with the state of Nevada.

On October 7, 2024, at a special meeting of shareholders, the shareholders approved a proposal to authorize Sharps’ Board of Directors in its sole and absolute discretion, to file a certificate of amendment (the “Amendment”) to Sharps’ amended and restated certificate of incorporation to effect the reverse split at a ratio to be determined by the Board, not to exceed a 1-for-22 reverse split. A 1 for 22 reverse split was approved by the Board and was effective October 15, 2024. All share amounts, share prices and earnings per share had been adjusted to reflect the approved reverse stock split.

On April 23, 2025, under the Nevada Revised Statutes, the Board approved an Amendment to the Company’s Certificate of Incorporation with the State of Nevada to reduce the authorized shares from 500,000,000 to 1,666,667. The reduction in authorized shares, which was effective April 27, 2025, also effectuated a reverse stock split of the outstanding common shares at a ratio of one for three hundred (1-for-300). All share amounts, share prices and earnings per share have been adjusted in the accompanying condensed consolidated financial statement and footnotes.

Common Stock

On January 29, 2025, the Company closed on an offering (the “2025 Offering”) and received gross proceeds of approximately $20.0 million, before deducting underwriting fees and other offering expenses payable by the Company. The net proceeds were approximately $18.2M, of which $4.2M was used to repay the outstanding Notes (see Note 7).

The 2025 Offering consisted of 47,619 (pre reverse – 14,285,714) units consisting of 30,089 (pre reverse – 9,029,814) Common Units with gross proceeds of $12.6M and 17,520 (pre reverse – 5,255,900) Pre-Funded Units with gross proceeds of $7.4M. The public offering price per Common Unit was $420 (pre reverse $1.40) or $419.97 (pre reverse $1.3999) for each Pre-Funded Unit, which is equal to the public offering price per Common Unit sold in the offering minus an exercise price of $0.0001 per Pre-Funded Warrant. Each Common Unit consisted of one share of Common Stock and each Pre-Funded Unit consisted of one pre-funded warrant to purchase one share of Common Stock. In addition, each Common Unit and Pre-Funded Unit included: (i) one Series A Registered Common Warrant to purchase one share of Common Stock per warrant at an exercise price of $87.60 (pre reverse - $1.75 and after floor price adjustment upon stockholder approval to $0.292), (“2025 Series A Warrant”) and (ii) one Series B Registered Common Warrant to purchase one share of Common Stock per warrant at an exercise price of $87.60 (pre reverse - $1.75 and after floor price adjustment upon stockholder approval to $0.292) (“2025 Series B Warrant”), collectively, the “2025 Warrants”. The 2025 Series B Warrant provides the holders with an alternative cashless exercise option, which if elected, each holder will receive three shares of Common Stock for each 2025 Series B Warrant cashless exercised. The 2025 Warrants provided for an adjustment of the original exercise price of $525 (pre reverse - $1.75) per warrant, down to an amount no less than a floor price of $87.60 ( pre reverse - $0.292) per warrant upon stockholder approval. On March 28, 2025, the stockholders approved a reset and the exercise price of the 2025 Warrants was reduced to $87.60 (pre reverse - $0.292) per warrant and the number of warrants was increased so that the aggregate exercise price payable remains the same as the Offering date.

The Pre-Funded Warrants are immediately exercisable and may be exercised at any time until exercised in full. Immediately after closing 16,603 (pre reverse – 4,980,900) of the Pre-Funded units were exercised and the Company received $498 in proceeds. The underwriter, under an over- allotment option, purchased 7,143 (pre reverse- 2,142,857) 2025 Series A Warrants and 7,143 (pre reverse- 2,142,857) 2025 Series B Warrants for $0.0001 per Warrant.

The 2025 Offering was made pursuant to an effective registration statement on Form S-1 (No. 333-284237) previously filed with the U.S. Securities and Exchange Commission (SEC) and declared effective by the SEC on January 27, 2025.

F-14

SHARPS TECHNOLOGY, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2025 AND 2024

The 2025 Series A Warrants are exercisable immediately and expire 60 months after stockholder approval. The 2025 Series B Warrants are exercisable immediately and expire 30 months after stockholder approval. The exercise price of the 2025 Series A and B Warrants, were adjusted down to $87.60 (pre reverse - $0.292) after Shareholder approval (see Note 10).

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 828 (pre reverse – 248,430) shares (the “Shares”) of Common Stock, par value $0.0001 per share of the Company at a price of $585 per share (pre reverse -$1.95) 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 Capital of $399,793. 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.

On September 23, 2024, as noted in Note 7, in connection with the Securities Purchase Agreement and Note, the Company issued 864 (pre-reverses – 259,091) shares of unregistered common stock. The shares were subsequently registered by the Company with the Security and Exchange Commission.

On May 31 and June 13, 2024, the Company entered into subscription agreements with certain institutional investors, pursuant to which the Company agreed to issue and sell to the investors 636 (pre reverse - 190,773) shares (the “Shares”) of Common Stock, par value $0.0001 per share of the Company at a price of $2,589 (pre reverse -$8.63) and received gross proceeds to the Company of $1.6M, before expenses to the placement agent and other offering expenses of $298,000 with net proceeds, after reflecting par value, have been recorded in Additional Paid in Capital of $1,296,903. 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 under the Securities Act of 1933, as amended on May 21, 2024, and qualified on May 30, 2024.

F-15

SHARPS TECHNOLOGY, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2025 AND 2024

Note 8. Stockholders’ Equity (continued)

On May 30, 2024, the Company offered warrant inducements (the “Inducement Agreement”) to certain warrant holders (the “Warrant Holders”) which references the warrants registered for sale under both the registration statements on Form S-1 (file No. 333-263715) and/or the registration statement on Form S-1 (File No. 333-275011) (collectively, the “Registration Statements”) for up to a total of 1,666 (pre reverses - 499,932) warrants to purchase shares of the Company’s common stock, par value $0.0001 per share. Pursuant to the anti-dilution terms in the Inducement Agreement, the exercise price of the existing warrants was reduced from $4,224 (pre reverses -$14.08) per share to $2,178 (pre reverses -$7.26) per share. In addition, for each warrant that was exercised, as a result of the Inducement Agreement, the Company agreed to issue the Warrant Holders unregistered warrants with an exercise price of $2,970 (pre reverse - $9.90) per share (“Inducement Warrants”). In the aggregate, 869 (pre reverses -260,799) warrants were exercised as a result of the Inducement Agreement and accordingly, 869 shares were issued. The Company received gross proceeds of $1.9M before expenses to the placement agent and other expenses of $285,000. The net proceeds, after reflecting par value, has been recorded in Additional Paid in Capital of $978,955 and with respect to the Inducement Warrants, a liability under ASC 815 was recorded in the amount of $693,064.

On September 29, 2023, the Company completed two simultaneous offerings and received aggregate gross proceeds of approximately $5.6 million, before expenses to the placement agent and other offering expenses of $716,000.

	a.	The first offering, the securities purchase agreement offering (the “Shelf Offering”) with institutional investors and the Company resulted in the Company receiving net proceeds from the Shelf Offering and the sale of pre-funded warrants of approximately $2.5 million, includes the value of the pre-funded warrants recorded in APIC, net of $362,000 in fees relating to the placement agent and other offering expenses. The Shelf Offering was priced at the market under Nasdaq rules.

	b.	The second offering, the securities purchase agreement offering (“Private Placement”) with institutional investors and the Company received net proceeds from the Private Placement of approximately $2.4 million, net of $354,000 in fees relating to the placement agent and other offering expense. In connection with the Private Placement, the Company issued: (i) 391 (pre reverse – 117,340) PIPE Shares (or PIPE Pre-Funded Warrants in lieu thereof) and (ii) PIPE Warrants (non-trading) to purchase 1326 (pre reverse -397,727) shares of our common stock, at a combined purchase price of $7,089 (pre reverse -$23.63) per unit or $7,082 (pre reverse - $23,606) per pre-funded unit. The PIPE Warrants had a term of five and one-half (5.5) years from the issuance date and were exercisable for one share of common stock at an exercise price, after effect of the April 2025 and October 2024 reverse split, of $4,224 adjusted to $2,178 at May 30, 2024, based on anti-dilution terms in the warrants. See Note 8€ Warrants below for further adjustment. The net proceeds, after reflecting par value, has been recorded in Additional Paid in Capital of $1.6 million and with respect to the PIPE Warrants recorded as a liability under ASC 815 of $985,204. On October 16, 2023, the Company filed an S-1 (Resale) Registration Statement in connection with the Private Placement and on October 26, 2023 the S-1 went effective The PIPE Warrants were fully exercised in 2024 (See Note 10).

F-16

SHARPS TECHNOLOGY, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2025 AND 2024

Note 8. Stockholders’ Equity (continued)

On February 3, 2023, the Company completed a securities purchase agreement (“Offering”) with institutional investors and received net proceeds from the Offering of approximately $3.2 million, net of $600,000 in fees relating to the placement agent and other offering expenses. The Offering was priced at the market under Nasdaq rules. In connection with the Offering, the Company issued 341 (pre reverse - 102,206) units at a purchase price of $11,154 (pre reverse - $37.18) per unit. Each unit consisted of one share of common stock and one non-tradable warrant (“Offering Warrants”) exercisable for one share of common stock at a price, after effect of the reverse splits in April 2025 and October 2024, of $10,296, adjusted to $4,224 at September 29, 2023 and to $2,178 at May 30, 2024, based on anti-dilution terms in the warrants and a term of five years. See Note 8(f) for further adjustment. The Offering Warrants have a term of five years from the issuance date. On February 13, 2023, the Company filed an S-1 (Resale) Registration Statement in connection with the Offering and on April 14, 2023, an Amendment to the S-1 was filed and went effective (See Note 10).

On April 13, 2022, the Company’s initial public offering (“IPO”) was declared effective by the SEC pursuant to which the Company issued and sold an aggregate of 568 ( pre reverses -170,454) units (“Units”), each consisting of one share of common stock and two warrants, to purchase one share of common stock for each whole warrant, with an initial exercise price of $28,050 (pre reverse -$93.50) per share, adjusted to and with the effect of reverse splits in April 2025 and October 2024, $10,296 at February 3, 2023 and to $4,224 at September 29, 2023 and to $2,178 at May 30, 2024, based on anti-dilution terms in the warrants, and a term of five years. In addition, the Company granted Aegis Capital Corp., as underwriter a 45-day over-allotment option to purchase up to 15% of the number of shares included in the units sold in the offering, and/or additional warrants equal to 15% of the number of Warrants included in the units sold in the offering, in each case solely to cover over-allotments, which the Aegis Capital Corp. partially exercised with respect to 170 (pre reverse -51,136) warrants on April 19, 2022.

The Company’s common stock and warrants began trading on the Nasdaq Capital Market or Nasdaq on April 14, 2022. The net proceeds from the IPO, prior to payments of certain listing and professional fees were approximately $14.2 million. The net proceeds, after reflecting par value, has been recorded in Additional Paid in Capital of $9.0 million and with respect to the Warrants as a liability under ASC 815 of $5.2M (See Note 10).

Warrants

The Company allocated the proceeds of the January 2025 Offering based on the fair values for the Series A, Series B warrants and Prefunded Warrants. The Company determined the fair value of the Series A and Series B warrants at the Offering date using the Monte Carlo pricing model and treated the valuation as a liability in consideration of the variable number of the issuer’s equity shares in the warrant agreements. The fair value of the Prefunded warrants, also recorded as liability, was based on market price of the common shares. The aggregate fair value at the Offering date was $110.0M and the excess of the fair value over the Offering proceeds of $18.2M, in accordance with ASC 480 “Distinguishing Liabilities from Equity, was recorded as a FMV loss adjustment of $91.8M and a warrant liability of $110M. Subsequent to Shareholder approval of the price adjustment on March 28, 2025 and through March 31, 2025 of 23,933 (pre reverse – 7,198,124) Series B warrants were exercised, under the alternative cashless feature, at March 31, 2025 with the elimination of the variable feature in the Series A and B warrants and the complete exercise of the Prefunded warrants, a FMV gain adjustment was recorded of $96.3M, decrease in the warrant liability of $102M and increase to stockholders equity of $5.9M. At March 31, 2025, Fair Value was determined as follows: Series A at $8.52 ( pre reverse - $0.0284) using the Black Sholes valuation method and Series B at the contracted value for the alternative cashless value of $9.00 ( pre – reverse - $0.03). See Note 10 for the Black Sholes assumptions.

The remaining 916 (pre reverse - 275,000) Prefunded units were exercised prior to March 31, 2025 and the financial statement impact is included above.

Subsequent to March 31, 2025, 29,652 (pre -reverse -8,895,763) of the total of 54,762 (pre reverse - 16,428,571) Series B warrants, under the alternative cashless feature were exercised.

F-17

SHARPS TECHNOLOGY, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2025 AND 2024

	b)	In September 2024, the Company reduced the exercise price of the 767 (pre reverse – 230,091) outstanding warrants issued in February 2023 and September 2023 offerings (see below) from $2,178 (pre reverse - $7.26) to $0.0001. As noted below, all the February 2023 and September 2023 warrants are fully exercised.

	c)	In connection with the Inducement Warrants in the second quarter of 2024, the Company issued 869 (pre reverse - 260,799) non-trading Inducement Warrants as noted in Common Stock above. The Inducement Warrants are classified as a liability based on ASC 815 and require remeasurement at each reporting period. The Inducement Warrants are recorded at the FMV, computed using the Black Scholes valuation method and, recorded a FMV gain adjustment of $80,117 for the three months ended March 31, 2025 (See Note 10).

	d)	In connection with one-year advisory services arrangement entered into in April 2023, the Company issued an aggregate of 95 (pre reverse - 28,636) warrants over the one-year term, at an exercise price of $10,296 (pre reverse -$34.32) The warrants have a three-year term and were fully vested on issuance. The Company issued 450 (pre reverse – 135,000) warrants during the three months ended March 31, 2024, The FMV of the warrants recorded for the three months ended March 31, 2024, was computed using the Black Sholes valuation model was $8,590 respectively. The assumptions for the three months ended March 31, 2024, were: a) volatility of 33.46% to 81.62%, three-year term, risk free interest rate of 4.20% to 4.21% and 0% dividend rate.

	e)	In connection with the Private Placement in September 2023, the Company issued 1,326 (pre-reverse -397,727) non-trading PIPE Warrants as a component of the Unit as noted in Common Stock above. The PIPE Warrants were recorded at the FMV, computed using the Black Sholes valuation method. The PIPE Warrant’s liability required remeasurement at each reporting period. The PIPE Warrants were classified as a liability based on ASC 815. For the three months ended March 31, 2024, the Company recorded a FMV gain (loss) adjustment of $325,304, The warrants were fully exercised in 2024 (See Note 10).

	f)	In connection with the Offering in February 2023, the Company issued 341 (pre-reverse -102,206) non-trading warrants Offering Warrants as a component of the Unit as noted in Common Stock above. The Offering Warrant’s liability required remeasurement at each reporting period. The Offering Warrants were recorded at the FMV, computed using the Black Sholes valuation method. The Offering Warrants are classified as a liability based on ASC 815. During the three months ended March 31, 2024, the Company recorded a FMV gain adjustment of $81,738. The warrants are fully exercised in 2024. (See Note 10).

	g)	In connection with the IPO in April 2022, the Company issued 1,136 (pre-reverse - 340,900) warrants (Trading Warrants) as a component of the Units and 170 (pre-reverse- 51,136) warrants to the underwriter (Overallotment Warrants), as noted in Common Stock above. The Trading and Overallotment Warrants were recorded at the FMV, being the trading price of the warrants, on the IPO effective date and the Warrants are classified as a Liability based on ASC 815. The Warrant liability requires remeasurement at each reporting period. During the three months ended March 31, 2025 and 2024, the Company recorded a FMV (loss) gain adjustment of 11,081and $431,250, respectively (See Note 10).

	h)	The Company has issued 36 (pre-reverse –10,695) Warrants (“Note Warrants”) to the Purchasers of the Notes on April 19, 2022. The Note Warrants have an exercise price of $28,050 ( pre-reverse - $93.50) and a term of five years. During the three months ended March 31, 2025 and 2024, the Company recorded a FMV gain of $322 and $11,765, respectively (See Note 10)

	i)	The underwriter received 28 (pre reverse -8,523) warrants in connection with the IPO for a nominal cost of $11,250. The Warrants have an exercise price of $35,112 (Pre-reverse - $117.04) and are exercisable after October 9, 2022. The FMV at the date of issuance was $228,750 computed using the Black Sholes valuation model with the following assumptions: a) volatility of 93.47%, five-year term, risk free interest rate 2.77% and 0% dividend rate. These warrants were recorded in Equity at the estimated FMV and classified as additional issuance costs.

F-18

SHARPS TECHNOLOGY, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2025 AND 2024

Note 9. Preferred Stock

In February 2018, the Company Board of Directors issued one share of Series A Preferred Stock to Alan Blackman, the Company’s co-founder and Director. The Series A Preferred Stock entitled the holder to vote on any matters related to the election of directors. The Series A Preferred Stock had no right to dividends, or distributions in the event of a liquidation and is not convertible into common stock. The two year provision after the IPO that if the price per share was more than 500% of the initial offering price per Unit in the IPO, the Series A Preferred Stock, as in effect upon completion of the IPO, will entitle the holder to 10% of the total purchase price was not met and no longer in effect as of April 2024.

In connection with final settlement with Mr. Blackman on August 2024, the Series A Preferred Stock were cancelled and forfeited without any further consideration. The Series A Preferred was returned to the status of an authorized but unissued share of preferred stock of the Company (See Note 15).

Note 10. Warrant Liability

As noted above, the 2025 Series A and 2025 Series B Warrants issued in connection with the 2025 Offering were accounted for as liabilities in accordance with ASC 815-40 and are presented as a Warrant liability in the accompanying consolidated balance sheet. The 2025 Series A and B warrants, were measured at fair value at inception. As of March 31, 2025, and thereafter, the Series A will be remeasured based on the Black Scholes method, with changes in fair value presented within the consolidated statement of operations. The Black Scholes valuation assumptions as of March 31, 2025 were as follows (See Note 8):

Schedule of Fair Value of Warrant

	March 31, 2025
Expected term (years)		4.99
Expected volatility		206.65	%
Risk-free interest rate		3.89	%
Dividend rate		0

The Warrants, arising prior to 2025, accounted for as liabilities in accordance with ASC 815-40 are presented as a Warrant liability in the accompanying consolidated balance sheet. The warrant liabilities are measured at fair value at inception and on a recurring basis, with changes in fair value presented within the consolidated statement of operations, The non-trading warrants, related to the February 2023, September 2023 and May 2024 offerings, were valued using the Black-Scholes pricing model. The assumptions as of the three months ended March 31, 2025, which related to the May 2024 warrants only since the February and September 2023 warrants were fully exercised by December 31, 2024, and 2024 were as follows: (See Note 8)

	March 31, 2025			March 31, 2024
Expected term (years)		4.83			3.85 to 5
Expected volatility		206.65	%		68.05	%
Risk-free interest rate		3.88	%		4.10 to 4.20	%
Dividend rate		0			0

The Warrant liability at March 31, 2025 and December 31, 2024 consists of the following:

Schedule of Warrant Liability

	2025		2024
Trading and Overallotment Warrants	$	3,882	$	15,681
Note Warrants		106		428

SEC Form 10-Q filed by Sharps Technology Inc.