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Fair Value
 6 Months Ended
Jun. 30, 2025
Fair Value Disclosures [Abstract]  
Fair Value

Note 5 - Fair Value

 

In accordance with fair value accounting guidance, the Company determines fair value based on the exchange price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants.

 

As disclosed in Note 4, SharpLink entered into a Settlement Agreement on January 19, 2024 for the 2023 Warrant for purposes of the Warrant Repurchase at $900,000. On March 6, 2024, SharpLink entered into an Exchange Agreement with Alpha to change the Warrant Repurchase of $900,000. Pursuant to the terms set forth in the Exchange Agreement, the Company agreed to exchange the 2023 Warrant for (i) 13,107 shares of Common Stock (the “Shares”), (ii) a pre-funded warrant in the amount of 39,130 shares of Common Stock (the “Pre-Funded Warrant”) and (iii) the remaining unexchanged balance of the 2023 Warrant Repurchase (the “Warrant Repurchase Balance”).

 

On June 30, 2024, SharpLink negotiated an Amendment to the Exchange Agreement (the “Amendment”) to reduce the strike price per warrant of the unexchanged balance of the 2023 Warrants Repurchase Balance from $4.07 to $0.0001 and to remove the re-purchase option. The fair value of the warrant liability was zero as of June 30, 2024.

 

The following table presents a reconciliation of the beginning and ending balances of the Debenture measured at fair value on a recurring basis that uses significant unobservable inputs (Level 3) and the related expenses and losses recorded in the consolidated statement of operations during the six months ended June 30, 2024:

 

      
Fair Value, December 31, 2023  $4,395,753 
Principle and interest convertible debenture repayments   (4,395,753)
Issuance of warrant repurchase balance   900,000 
Conversion of warrants to shares and pre-funded warrants   (498,029)
Change in fair value of warrant repurchase balance   (231,589)
Change in fair value of warrant amendment   (17,996)
Settlement of warrant liability due to amendment   (152,386)
Fair Value, June 30, 2024  $- 

 

The fair value of the Debenture was determined using a Monte Carlo Simulation (“MCS”), which incorporates the probability and timing of the consummation of a Fundamental Transaction event and conversion of the Debenture as of the valuation date.

 

As disclosed in Note 1, the Company purchased crypto assets held at fair value in June of 2025. The fair value of the Company’s crypto assets is disclosed in Note 2. The crypto assets are measured at fair value on a recurring basis using observable prices (Level 1).