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Related Parties
 6 Months Ended
Jun. 30, 2025
Related Party Transactions [Abstract]  
Related Parties

Note 13 - Related Parties

 

Strategic Advisory Agreement with Consensys Software Inc.

 

In connection with the PIPE transaction, the Company entered into a Strategic Advisor Agreement with Consensys Software Inc. (“Consensys”), a Delaware corporation, and a related party. Consensys is a global blockchain technology company that provides decentralized applications and enterprise solutions, focusing on building and scaling blockchain-based systems primarily on the Ethereum blockchain. Under the terms of the agreement, Consensys will provide a broad range of advisory services related to the Company’s ETH treasury strategy to the Company for three years. As consideration for these services, Consensys received warrants to purchase up to 3,455,019 shares of the Company’s common stock (the “Strategic Advisor Warrants”). The Strategic Advisor Warrants have various exercise prices as follows: (i) 1,382,007 shares of Common Stock at an exercise price of $6.15 per share of common stock; (ii) 691,004 shares of common stock at an exercise price of $6.765 per share of common stock; (iii) 691,004 shares of common stock at an exercise price of $7.38 per share of common stock; and (iv) 691,004 shares of common stock at an exercise price of $7.995 per share of common stock. The Company recorded $16,379,368 as stock-based compensation expense, related party, determined using a Black Scholes model, on the statement of operations for the period ended June 30, 2025.

 

Secondment Agreements with Consensys Employees

 

As part of the ongoing collaboration between the Company and Consensys, three employees of Consensys have been seconded to SharpLink under secondment agreements. These employees provide key services in areas including strategic planning, treasury management, technology integration and business development. The secondment agreements outline the terms of the assignment, the duration, which began during the month of June 2025 and terminate September 30, 2025, total monthly compensation of approximately $80,000 payable to Consensys and stock-based compensation of a total of approximately $75,000 for RSU’s to be awarded in July, and the allocation of responsibilities between the parties. The seconded employees remain employees of Consensys, but perform their duties for the Company during the secondment period and report to the Company’s Chief Executive Office and Chief Financial Officer. In exchange for these services, the Company compensates Consensys for the associated costs on a monthly basis, including the employees’ salaries, benefits and other related expenses. For the period ended June 30, 2025, approximately $43,000 was accrued in selling, general and administrative expenses in relation to these agreements and their applicable start date.