Note 8 – Stock Compensation

Inducement Award Plan

On August 19, 2025, the board of directors (the “Board”) of the Company, then known as SharpLink Gaming, Inc., adopted the SharpLink Gaming, Inc. Inducement Award Plan (the “Inducement Award Plan”). The Board reserved 3,000,000 shares of the Company’s Common Stock for issuance under the Inducement Award Plan, including restricted stock units (time-based and performance-based), subject to adjustment as provided in the plan document.

The terms of the Inducement Award Plan are substantially similar to the terms of the Company’s Amended and Restated 2023 Equity Incentive Plan, with the exception that incentive stock options may not be issued under the Inducement Award Plan, and equity awards under the Inducement Award Plan (including nonqualified stock options, restricted stock, restricted stock units, and other stock-based awards) may be issued only to an employee who is commencing employment with the Company or any subsidiary or who is being rehired following a bona fide interruption of employment by the Company or any subsidiary, in either case if he or she is granted such award in connection with his or her commencement of employment and such grant is an inducement material to his or her entering into employment with the Company or such subsidiary.

Stock Options

Option awards are generally granted with an exercise price equal to the market price of the Company’s Common Stock at the date of grant; those options generally vest based on three years of continuous service and have ten-year contractual terms. Certain option and share awards provide for accelerated vesting if there is a change in control, as defined in the plans. The Company has the following equity plans: Sharplink Ltd. 2021 Equity Incentive Plan and Sharplink, Inc. 2023 Equity Incentive Plan

SHARPLINK, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

THREE AND SIX MONTHS ENDED JUNE 30, 2026 AND 2025

(dollar amounts in thousands, except share, per share data, and crypto asset tokens)

The Company did not grant any stock options for the three and six months ended June 30, 2026 and 2025, respectively. The Company recognized stock compensation expense for stock options of $0 and $37 for the three months ended June 30, 2026 and 2025, respectively, and $1 and $73 for the six months ended June 30, 2026 and 2025, respectively.

The summary of activity under the plans as of June 30, 2026, and change during the six months ended June 30, 2026, is as follows:

Schedule of Stock Option Activity  

The summary of activity under the plans as of June 30, 2025, and change during the six months ended June 30, 2025, is as follows:

Restricted Stock Units

The Company’s Compensation Committee recommended to the Board and the Board approved the granting of certain restricted stock units (“RSUs”) to employees and the Board that vest over the passage of time as well as performance based restricted stock units.

SHARPLINK, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

THREE AND SIX MONTHS ENDED JUNE 30, 2026 AND 2025

(dollar amounts in thousands, except share, per share data, and crypto asset tokens)

The following is a summary of RSU activity for the six months ended June 30, 2026:

Schedule of Restricted Stock Units  

The following is a summary of RSU activity for the six months ended June 30, 2025:

Restricted Stock Units - Time Based

The Company recognized stock compensation expense for time based RSU awards of $2,490 and $261 for the three months ended June 30, 2026 and 2025, respectively, and $5,423 and $294 for the six months ended June 30, 2026 and 2025, respectively. The total unrecognized compensation cost related to unvested time based RSUs as of June 30, 2026 was $23,960 and will be recognized through 2029 for 1,315,859 unvested RSUs. During the six months ended June 30, 2026, the grant date fair value of the vested and issued restricted stock was $13,450.

Restricted Stock Units - Performance Based

The Company’s Compensation Committee recommended to the Board of Directors and the Board approved the design of performance based restricted stock units (“Performance RSU”) for certain executive officers. The awards are intended to vest based on the achievement of specified financial and operational performance metrics over a three annual performance periods, subject to continued service through the end of each annual performance period. The Company recognizes the stock-based compensation expense in connection with the Performance RSUs when they are granted or at the service inception date if the service inception date precedes the grant date. As of June 30, 2026, a grant date had not yet been established for 49,265 Performance RSUs because certain performance conditions and award parameters remained subject to the final determination by the Board of Directors. The Company remeasures the fair value of the award at each reporting date, as the service date preceded the grant date. In the period in which the grant date occurs, cumulative compensation cost will be adjusted to reflect the cumulative effect of measuring compensation cost based on the fair value at the grant date rather than the fair value previously used at the service inception date or subsequent reporting dates. For the three and six months ended June 30, 2026, the Company recognized $566 and $632, respectively, in stock compensation expense. Unamortized stock compensation expense of $4 will be recognized through 2026 for 49,265 unvested RSUs.

SHARPLINK, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

THREE AND SIX MONTHS ENDED JUNE 30, 2026 AND 2025

(dollar amounts in thousands, except share, per share data, and crypto asset tokens)

On June 29, 2026, the Compensation Committee certified achievement of the maximum performance level (200% of target) for the first annual performance cycle (July 1, 2025 through June 30, 2026) for three of the Company’s executive officers, and amended the related 2025 Performance RSU award agreements to provide that units earned for each annual performance cycle vest at the end of that cycle, rather than cliff-vesting at the original July 24, 2028 vesting date. The vesting amendment shortened the requisite service period for the first tranche of these awards from approximately 35 months to approximately 10 months, which the Company accounted for as a change in accounting estimate, recognizing the cumulative effect in the three months ended June 30, 2026.

The accounting grant date for the first tranche is June 29, 2026 for two of these executive officers, whose awards the Compensation Committee approved under its charter authority, and July 3, 2026 for the remaining executive officer, whose award required and received approval by unanimous written consent of the Board of Directors. Because the June 29, 2026 grant date occurred within the second quarter of 2026 and those two awards were fully vested at June 30, 2026, they were measured at the June 29, 2026 grant-date fair value of $4.92 per unit and fully recognized in the three and six months ended June 30, 2026, with no further cost recognized thereafter. The remaining executive officer’s first-tranche award was unvested at June 30, 2026; the second-quarter cost was measured at the June 30, 2026 reporting-date fair value of $4.80 per unit, and cumulative cost will be trued up to the $5.31 grant-date fair value in the third quarter of 2026, when the July 3, 2026 grant date occurs. Also see Note 14- Subsequent Events.

Net Share Settlement of Restricted Stock Units

Upon vesting of certain RSUs, the Company withholds a portion of the shares otherwise issuable to satisfy the employees’ statutory tax withholding obligation. As a result, the number of shares ultimately issued is less than the number of RSUs vested. During the period ended June 30, 2026, RSUs representing 960,467 shares vested on a gross basis, of which 74,539 were issued to employees not subject to net share settlement, and 382,699 shares were withheld to satisfy tax withholding obligations, which resulted in 503,229 net shares issued to employees, executives and our former Co-CEO. The shares withheld are treated as a repurchase of Common Stock and recorded as a reduction of $(3,068) to additional paid-in-capital.