美國
證券交易委員會 及交易所
華盛頓特區，20549
表單
截至年度季度結束
或
自_______至_______的過渡期間
委員會
檔案編號：
(根據公司章程所述的註冊人的正確名稱)
（洲或其他管轄區） 公司組織或註冊證明書） |
（聯邦國稅局雇主身分識別號碼） 識別號碼） |
(主要執行辦公室地址) (郵政編碼)
（申報人的電話號碼，包括區號）
根據該法案第12(b)條紀錄的證券：
| 每個類別的標題 | 交易標誌 | 在哪個交易所上市的名字 | ||
勾選表示公司已按照證券交易法第13或15(d)條款的規定，在過去12個月（或公司需要提交此類報告的較短期限內）提交了所有所需的報告；並且公司在過去90天內一直受到此類提交報告的要求。
請勾選，指出在過去12個月內（或更短時間並應提供此類文件的情況下），申報人是否已依據Regulation S-t（本章節之§232.405號）提交每一個所需提交的互動式數據文件。
請勾選以下選項，指明掛牌者是否為大型快速申報掛牌者、快速申報掛牌者、非快速申報掛牌者、較小型的報告公司或新興成長型公司。關於Exchange Act第1202條中「大型快速申報掛牌者」、「快速申報掛牌者」、「較小型報告公司」和「新興成長型公司」的定義，請參閱。
| 大型及加速提交者 | ☐ | 加速提交者 | ☐ |
| ☒ | 較小的報告公司 | ||
| 新興成長型公司 |
如為新興成長企業，則應打勾選項表示申報人已選擇不使用交易所法第13(a)條所提供的任何新或修訂財務會計準則延長過渡期遵守。
請勾選是否登記者為外殼公司（依照交易所法規120億2的定義）。是 ☐ 否
截至2024年11月14日，發行人持有 普通股股票，每股面值為$擁有 每股未兌付。
SHARPS 科技, INC.
目錄
| 頁 號碼。 | ||
| 第一部分 基本報表 | ||
| 項目 1. | 基本 報表（未經審核） | |
| 簡明合併資產負債表 | 1 | |
| 損益綜合表簡明合併報表 | 2 | |
| 綜合損益簡明綜合報表 | 3 | |
| 股東權益簡明合併報表 | 4 | |
| 簡明合併現金流量量表 | 6 | |
| 簡明綜合財務報表附註 | 7 | |
| 項目 2. | 財務狀況和業績的管理討論和分析 | 22 |
| 項目 3. | 市場風險相關數量和質量的披露 | 32 |
| 項目 4. | 控制和程序 | 32 |
| 第二部分其他資訊 | ||
| ITEM 1. | 法律訴訟 | 33 |
| 項目 1A。 | 風險因素 | 33 |
| ITEM 2. | 未註冊的股票銷售和收益使用 | 33 |
| 項目6。 | 附件 | 34 |
| 簽名 | 35 | |
| i |
SHARPS 科技, INC.
簡明合併資產負債表
| 2024年 9月30日 | 十二月 31, 2023 | |||||||
| (未經審計) | （已經接受審計） | |||||||
| 資產： | ||||||||
| 流動資產 | ||||||||
| 現金 | $ | $ | ||||||
| 預付費用 及其他流動資產 | ||||||||
| 存貨， 淨額 (附註3) | ||||||||
| 流動資產 | ||||||||
| 固定資產，減除累積 折舊 （附註4及5） (附註4及5) | ||||||||
| 其他 資產 (附註6及7) | ||||||||
| 總資產 | $ | $ | ||||||
| 負債： | ||||||||
| 流動負債 | ||||||||
| 應付款項 | $ | $ | ||||||
| 應計及其他流動負債 (附註13和15) | ||||||||
| 應付票據 (注意 7) | ||||||||
| 認股權證負債 (附註 8 和 10) | ||||||||
| 總計 目前負債 | ||||||||
| 遞延稅賬 | ||||||||
| 負債總額 | ||||||||
| 承諾和潛在負債 (附註 15) | ||||||||
| 股東權益： | ||||||||
| 優先股，面額$0.01，授權股數為5,000,000股，發行且流通股數為截至2024年6月30日和2023年12月31日之184,668,188股和181,364,180股。 面值； 授權股份； 已發行並流通股份（2023年： ) | ||||||||
| 普通股，$ 面值； , 授權股份數；（ 中為2023年）， 已發行並流通股份（2023年： ) | ||||||||
| 額外實收資本 | ||||||||
| 累積其他綜合收益 | ||||||||
| 累積虧損 | ( | ) | ( | ) | ||||
| 股東權益總額 | ||||||||
| 總負債和股東權益 | $ | $ | ||||||
附註是這些財務報表的重要組成部分。
| 1 |
SHARPS 科技, INC.
綜合損益表
至2023年9月結束的三個月及九個月
(未經審核)
| 三個月截至 9月30日 | 九個月截至 9月30日 | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| 營業收入货币 | $ | $ | $ | $ | ||||||||||||
| 營運費用： | ||||||||||||||||
| 研究 與發展 | ||||||||||||||||
| 總務及管理 | ||||||||||||||||
| 營業費用總額 | ||||||||||||||||
| 營運損失 | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| 其他收入（費用） | ||||||||||||||||
| 其他 (費用) 收益 (附註15) | ( | ) | ( | ) | ||||||||||||
| 公允價值 調整warrants (附註10) | ||||||||||||||||
| 外幣 | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| 其他綜合損益合計 | ||||||||||||||||
| 淨損失 | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| 每股基本和稀釋淨損失 | $ | ) | $ | ) | $ | ) | $ | ) | ||||||||
| 計算每股基本和稀釋淨損失所使用的加權平均股份（附註1） | ||||||||||||||||
附註是這些財務報表的重要組成部分。
| 2 |
SHARPS 科技, INC.
綜合損益表合併精簡財務報表
截至九月三十日的三個月及九個月
(未經審核)
| 三個月結束 九月三十日 | 九個月結束 九月三十日 | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| 淨虧損 | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| 其他綜合收益： | ||||||||||||||||
| 外幣翻譯 調整收益/(虧損) | ( | ) | ( | ) | ||||||||||||
| 綜合損失 | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
附註是這些財務報表的重要組成部分。
| 3 |
SHARPS 科技, INC.
壓縮版 股東權益合併報表
截至2024年9月30日止三個月和九個月的情況
(未經審計)
| 優先股 | 普通 股 | 追加 已支付 | 累積 其他 綜合 | 累積的 | 總 股東 | |||||||||||||||||||||||||||
| 股份 | 金額 | 股份 | 金額 | 資本 | 收入 | 赤字 | 股本 | |||||||||||||||||||||||||
| 餘額 -2023年12月31日 | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||||
| 截至2024年3月31日的三個月淨 損失 | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||
| 以股份為基礎的 補償費用 | - | - | ||||||||||||||||||||||||||||||
| 預先資助warrants的 行使 | - | |||||||||||||||||||||||||||||||
| 外幣 轉換 | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||
| 截至2024年3月31日的結餘 | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||||
| 截至2024年6月30日的三個月淨 損失 | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||
| 以股份為基礎的 補償費用 | - | - | ||||||||||||||||||||||||||||||
| 提前資助的 warrants行使 | - | |||||||||||||||||||||||||||||||
| 註冊 A發行 | - | |||||||||||||||||||||||||||||||
| warrants 誘因 | ||||||||||||||||||||||||||||||||
| 外幣 轉換 | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||
| 截至2024年6月30日的餘額 | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||||
| 截至2024年9月30日的三個月 淨損失 | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||
| 優先股 的取消 | ( | ) | - | |||||||||||||||||||||||||||||
| 基於分享的 補償費用 | - | - | ||||||||||||||||||||||||||||||
| 普通股的發行 – 請參見第7註解 | , | |||||||||||||||||||||||||||||||
| warrants 行使 | - | |||||||||||||||||||||||||||||||
| 外幣 轉換 | - | - | ||||||||||||||||||||||||||||||
| 資產負債表 - 2024年9月30日 | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||||
| 4 |
SHARPS 科技, INC.
濃縮的 股東權益報表
截至2023年9月30日的三個月和九個月的財務報表
(未經審計)
| 優先股 | 普通 股 | 普通 股票訂閱 | 額外 資本溢 | 累計 其他綜合 | 累積 | 總 股東 | ||||||||||||||||||||||||||||||
| 股份 | 金額 | 股份 | 金額 | 應收款項 | 資本 | 收入 | 虧損 | 權益 | ||||||||||||||||||||||||||||
| 平衡-2022年12月31日 | | $ | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||||||||
| 2023年3月31日結束的三個月中淨虧損 | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
| 發行股份數 | ||||||||||||||||||||||||||||||||||||
| 基於股份的報酬費用 | - | - | ||||||||||||||||||||||||||||||||||
| 外匯貨幣翻譯 | - | |||||||||||||||||||||||||||||||||||
| 資金餘額 - 2023年3月31日 | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||||||||
| 2023年6月30日結束的三個月的淨損失 | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
| 基於股份的報酬費用 | - | - | ||||||||||||||||||||||||||||||||||
| 外幣 貨幣轉換 | - | |||||||||||||||||||||||||||||||||||
| 資產負債表 - 2023年6月30日 | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||||||||
| 2023年9月30日結束的三個月中網絡虧損 | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
| 以股份為基礎的補償費用 | - | - | ||||||||||||||||||||||||||||||||||
| 層架登記發售 – 請參閱註8 | - | |||||||||||||||||||||||||||||||||||
| 定向增發 – 請參閱註8 | - | |||||||||||||||||||||||||||||||||||
| 外幣兌換 | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||||
| 餘額 - 2023年9月30日 | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||||||||
附註是這些基本報表的重要組成部分
| 5 |
SHARPS 科技, INC.
綜合現金流量表
截至九月三十日止九個月
(未經審核)
| 2024 | 2023 | |||||||
| 營業活動之現金流量： | ||||||||
| 淨虧損 | $ | ( | ) | $ | ( | ) | ||
| 調整為使淨虧損轉化為經營活動所使用現金： | ||||||||
| 折舊及攤銷 | ||||||||
| 基於股票的薪酬 | ||||||||
| 債務折扣的增值 | ||||||||
| warrants的公平市值調整 | ( | ) | ( | ) | ||||
| 股本發行成本 | ||||||||
| 質押被沒收 | ||||||||
| 匯率期貨（收益）／損失 | ||||||||
| 營運資產變動: | ||||||||
| 預付費用及其他流動資產 | ( | ) | ( | ) | ||||
| 存貨 | ( | ) | ( | ) | ||||
| 應付帳款及應計負債 | ( | ) | ) | |||||
| 經營活動所用的淨現金 | ( | ) | ( | ) | ||||
| 投資活動產生的現金流量: | ||||||||
| 固定資產或支付的存款收購 | ( | ) | ( | ) | ||||
| 協議下的託管付款 | ( | ) | ( | ) | ||||
| 投資活動中使用的淨現金 | ( | ) | ( | ) | ||||
| 融資活動產生的現金流量: | ||||||||
| 增資及認股權證行使的淨收益 | ||||||||
| 來自債務融資的淨收益 | ||||||||
| 籌資活動提供的淨現金 | ||||||||
| 匯率變動對現金的影響 | ( | ) | ( | ) | ||||
| 現金的淨增加（減少） | ( | ) | ||||||
| 年初現金 | ||||||||
| 期末現金 | $ | $ | ||||||
附註是這些財務報表的重要組成部分。
| 6 |
SHARPS 科技, INC.
附註 至簡化合併基本報表
截至2024年和2023年9月30日的三個和九個月
注意 1. 業務描述
業務 性質及持續經營
Sharps 科技公司（“Sharps”或“公司”）是一家尚未產生營業收入的器械公司，已設計並獲得多項安全注射器的專利，並尋求透過製造及分銷其產品來實現商業化。
隨附的簡明綜合財務報表包括Sharps Technology, Inc.及其全資子公司Safegard Medical, Kft.和Sharps Technology Acquisition corp. 的帳戶，統稱為“公司”。截至2024年9月30日的簡明綜合資產負債表和簡明綜合損益表、綜合損失表、股東權益變動表以及截至2024年9月30日和2023年（“中期財務報表”）九個月的現金流量表是未經審計的。所有企業內部交易和餘額均已被消除。據管理層之見，為公正呈現中期時段的財務狀況和營運成果所需之所有調整（包括正常往來調整）均已完成。某些通常包含於按美國通用公認會計原則編製之年度財務報表中的資訊和附註披露已經被簡化或省略。應當閱讀截至2023年12月31日的年度綜合財務報表及附註，而附載於提交給證券交易委員會的公司第10-K表格內。截至2023年12月31日的簡明綜合資產負債表乃源自該日期之經審計財務報表。截至2024年9月30日結束的三個和九個月的營運結果並不一定反映可能預期於截至2024年12月31日的財政年度之結果。
相關的簡明合併基本報表是基於假設本公司將持續經營的前提下編制的。
自成立以來，本公司未產生任何營業收入或現金流入。截至2024年9月30日，本公司的運營資本為$
公司的財政年度在12月31日結束。
於2022年4月13日，公司的首次公開募股經認定生效，並於2022年4月14日開始交易。公司於2022年4月19日（參見附註7）獲得淨收益$。
生效於
2024年10月16日，
備註 2。 主要會計政策摘要
報表說明基礎
本 附隨的簡明合併基本報表是由公司按照美國通用會計原則（「GAAP」）編製的，並以美金表示。
| 7 |
SHARPS 科技, INC.
附註 至簡化合併基本報表
截至2024年和2023年9月30日的三個和九個月
備註 2. 重大會計政策摘要（續）
使用 估計數量
根據美國通用會計原則編製基本報表需要管理層對影響資產和負債報告金額、金錢報告的透支資產和負債以及收入和支出金額的估計和假設。 實際結果可能與這些估計有所不同。截至2024年9月30日，最重要的估計涉及衍生負債、以股份為基礎的補償、長壽命資產損失和債務及股本融資的會計處理。
現金及現金等價物
公司將所有在購買日期三個月或更短的原始或剩餘到期的高流動性投資視為現金等價物。現金及現金等價物存放於各種金融機構。至2024年9月30日及2023年12月31日，公司擁有
存貨
公司以成本（平均成本）或凈實現價值中的較低者估計存貨價值。在製品和成品庫存中包括了材料、人工和製造間接費用。淨實現價值是預期在業務常規過程中售價扣除合理可預測的完工、處置和運輸成本。對任何超額或過時存貨設立了備抵，否則可能被報銷。截至2024年9月30日和2023年12月31日，存貨包括原材料，包括包裝、在製品（元件）和成品。
公允價值衡量
ASC 820，公允價值計量與披露，要求實體在計量公允價值時最大限度地使用可觀察的輸入，並最小化使用不可觀察的輸入。ASC 820根據用於計量公允價值的輸入周圍的獨立、客觀證據的水平建立了公允價值層級。金融工具在公允價值層級中的分類是基於對公允價值計量至關重要的最低輸入級別。ASC 820將計量公允價值的輸入優先分為三個層級。
公司的未結算warrants的價值是根據交易價格定期評估的，這可能會導致報告期間的業務結果出現波動。
層級 1
等級 1適用於有活躍市場中相同資產或負債的報價價格的資產或負債。估值 基於在活躍市場中隨時可用且定期可得的報價價格，並且不需要大量的判斷。
等級 2
層級 2 适用于其具有其他而非層級 1 可觀察輸入的資產或負債，例如在活躍市場中類似資產或負債的報價價格；在成交量不足或交易不頻繁的市場（較不活躍市場）中的相同資產或負債的報價價格；或在顯著輸入可以主要從可觀察到的市場數據衍生或得到證實的模型衍生估值。
級別 2的工具相較於級別1的工具需要更多的管理判斷和主觀性。例如：確定哪些工具 與被定價的工具最為相似需要管理層根據票面利率、到期日、發行者信用評級和工具類型識別一組相似的安防， 並主觀地選擇被認為與被定價的安防最為相似的單一安防或多個安防；以及確定一個市場是否被視為活躍則需要管理判斷。
| 8 |
SHARPS 科技, INC.
附註 至簡化合併基本報表
截至2024年和2023年9月30日的三個和九個月
備註 2. 重大會計政策摘要（續）
等級 3
第3級 適用於那些具有不可以觀察的評價方法輸入的資產或負債，這些輸入對於資產或負債的公允價值的衡量具有重要意義。 對於第3級工具的判斷需要最多的管理判斷和主觀性。
固定 資產
固定資產所載價為成本。維護和維修支出在發生時按照運營支付。公司的固定資產包括土地、建築、機械及設備、模具和網站。折舊採用直線法計算，從資產按照管理層預期運作方式開始，按以下預期壽命計算：建築物 - 年，機械和設備 - 年。
網站和電腦系統 - 年。模具的預期壽命基於預期模具能力生產的零件數量或5年中較小者。
長壽資產的減值
長期資產在發生減值時或在事件或環境變化表明資產的賬面金額可能無法收回時進行檢查。可收回性通過將資產組的賬面金額與預計產生的未來未折現現金流進行比較來衡量。如果這些資產被認爲是減值的，那麼應確認的減值金額是資產的賬面金額超過預計折現的未來淨現金流的金額。
截至2022年12月31日和2023年3月31日，共有未行使權證 截至2024年和2023年9月30日的三個月和九個月內確認的減值損失。
已購買 識別的無形資產
公司識別的無形資產按直線法在其估計的使用壽命5年內攤銷。當事實和情況表明有限使用年限的無形資產的使用壽命可能比原先預計的要短，或者資產的賬面價值可能無法收回時，公司對無形資產的可收回性進行判斷。如果存在這種事實和情況，公司通過將與相關資產或資產組的預計未折現淨現金流量與其各自的賬面價值進行比較來評估可收回性。減值的確認（如有）基於賬面價值超過這些資產的公允價值的部分。如果使用壽命短於原先的估計，公司將加速攤銷率，並在新的較短使用壽命內攤銷剩餘的賬面價值。公司在每當事件或情況變化表明資產的賬面價值可能無法收回時，評估無限使用年限無形資產的賬面價值，並在這些資產的賬面價值超過其 estim求公允價值的範圍內確認減值。
股票爲基礎的 補償費用
公司根據授予日期的預估公平價值衡量向員工授予的股權獎勵。對於股票期權獎勵，公司採用Black-Scholes期權定價模型。股權報酬費用按照必要服務期間確認，並基於最終預期歸屬的股權支付獎勵部分的價值進行確認。公司在發生股權獎勵放棄時，根據前瞻性基礎進行確認。
基於股票的 針對非員工授予的獎勵作爲服務的對價，其補償費用在履約日期按照所收對價的公允價值或所發行股權工具的公允價值進行計量，以更可靠的計量爲準。
| 9 |
銳利科技公司
財務報表附註
截至2024年和2023年9月30日的三個月和九個月
注意 2. 重大會計政策摘要（續）
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 September 30, 2024, certain warrants (see Notes 8 and 10) were 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 condensed 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 condensed consolidated statements of operations.
Comprehensive income (loss)
Comprehensive income (loss) consists of the Company’s consolidated net 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 September 30, 2024 and December 31, 2023. Accumulated other comprehensive income (loss) is a separate component of stockholders’ equity and consists of the cumulative foreign currency translation adjustments.
The Company computes net 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. 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 September 30, 2024, there were stock options and warrants, post reverse split effected, 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.
| 10 |
SHARPS TECHNOLOGY, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023
Note 2. Summary of Significant Accounting Policies (continued)
Income Taxes
The Company must make certain estimates and judgments in determining income tax expenses 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.
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 pronouncement to have a material impact on the Company and will disclose the nature and reason for any elections that the Company makes.
| 11 |
SHARPS TECHNOLOGY, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023
Note 2. Summary of Significant Accounting Policies (continued)
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, a, with early adoption permitted. The Company is currently evaluating 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 condensed consolidated financial statements.
We 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:
| September 30, 2024 | December 31, 2023 | |||||||
| Raw materials | $ | $ | ||||||
| Work in process | ||||||||
| Finished goods | ||||||||
| Total | $ | $ | ||||||
Note 4. Fixed Assets
Fixed assets, net, is summarized as follows as of:
| September 30, 2024 | December 31, 2023 | |||||||
| Land | $ | $ | ||||||
| Building | ||||||||
| Machinery and Equipment | ||||||||
| Computer Systems and Website & Other | ||||||||
| Total Fixed Assets | ||||||||
| Less: accumulated depreciation | ( | ) | ( | ) | ||||
| Fixed asset, net | $ | $ | ||||||
Depreciation
expense of fixed assets for the nine months ended September 30, 2024 and 2023 was $
| 12 |
SHARPS TECHNOLOGY, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023
Note 5. Asset Acquisition
Safegard Medical, Kft
In June 2020, the Company entered into a Share Purchase Agreement (“Agreement”) with Safegard Medical, Kft (“Safegard”) and amendments to the Agreement, collectively, the Agreements, to purchase either the stock or certain assets of a manufacturing facility for $M in cash, plus additional consideration of common stock and options with a fair market value of $ and $, respectively. The Agreements provided the Company various periods for due diligence and post due diligence, requirements for escrow payments through the closing date (“Closing Date”).
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 $
The relative fair value of the assets acquired and related deferred tax liability during 2022 was as follows:
| Land | $ | |||
| Building and affixed assets | ||||
| Machinery | ||||
| Inventory | ||||
| Intangibles | ||||
| Deferred tax liability | ( | ) | ||
| Total | $ |
The
useful lives for the acquired assets is Building -
Note 6. Other Assets
Other assets as of September 30, 2024, and December 31, 2023 are summarized as follows:
| September 30, 2024 | December 31, 2023 | |||||||
| Intangibles, net – See Note 6 | ||||||||
| Other – See Note 7 | ||||||||
| $ | $ | |||||||
| 13 |
SHARPS TECHNOLOGY, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023
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 $
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.
Note 8. Stockholders’ Equity
Capital Structure
On December 11, 2017, the Company was incorporated in Wyoming with shares of common stock authorized with a $ par value. Effective, April 18, 2019, the Company’s authorized common stock was increased to shares of common stock. The articles of incorporation also authorized preferred shares with a $ par value.
Effective
March 22, 2022, the Company completed a plan and agreement of merger with Sharps Technology, Inc., a Nevada corporation (“Sharps
Nevada”).
In July 2024, the shareholders approved the increase of the authorized common stock from to which was subsequently filed as an amendment to the articles of incorporation with the state of Nevada.
Common Stock
On September 23, 2024, as noted in Note 7, in connection with the Securities Purchase Agreement and Note the Company issued (pre reverse - ) shares of unregistered common stock.
| 14 |
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
(pre reverse - )
shares (the “Shares”) of Common Stock, par value $
per share of the Company at a price of $
(pre reverse -$
and received gross proceeds to the Company of $
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
The Company recorded a fair value charge in the three months and nine months ended September 30, 2024 to reflect the modification of the exercise price at the initial inducement date for the non-trading warrants relating to the February and September 2023 warrants below. (See Note 10)
| 15 |
SHARPS TECHNOLOGY, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023
Note 8 Stockholders’ Equity (continued)
On
September 29, 2023, the Company completed two simultaneous offerings and received aggregate gross proceeds of approximately $
| 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 of approximately $ | |
| 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 $ |
在
2023年2月3日，公司與機構投資者完成了一項證券購買協議（「發行」），並
從該發行中獲得了約 $
2022年4月13日，公司的首次公開發行（「IPO」）獲得SEC批准生效，公司共發行並出售了 （未反轉前-）單位（「單位」），
公司的普通股和認股權證於2022年4月14日開始在納斯達克資本市場或納斯達克交易。IPO募集資金淨額，按照特定上市和專業費用支付前約爲$
| 16 |
銳利科技公司
財務報表附註
截至2024年和2023年9月30日的三個月和九個月
注意 8. 股東權益（續）
認購權證
| a) | 在
2024年9月，公司降低了 |
| b) | 關於2024年第二季度的誘導權證，公司發行了
（反向前 - ）
非交易誘導權證，如上所述的普通股。誘導權證根據ASC
815 被分類爲負債，並要求在每個報告期進行重新計量。誘導權證以公允價值記錄，採用布萊克-斯科爾斯估值方法計算，並記錄了公允價值增益的調整 $ | |
| c) | 關於在2023年4月簽署的一年期顧問服務協議，公司發行了總計 | |
| d) | 與2023年9月的定向增發相關，公司發行了 （反向分拆前 ) 非交易定向增發warrants作爲上述普通股的組成部分。根據ASC 815，定向增發warrants被分類爲負債，並要求在每個報告期重新計量。定向增發warrants按公允價值記錄，計算方法使用黑色-Scholes估值法。截至2024年9月30日的三個月和九個月，公司記錄了公允價值的收益（損失）調整$( | |
| e) | 與2023年2月的發行相關，公司發行了 （反向前-) 非交易warrants發行warrants作爲上述普通股的組成部分。發行warrants根據ASC 815被分類爲負債，並要求在每個報告期重新計量。發行warrants按公允價值記錄，計算方法使用黑色-Scholes估值法。截至2024年9月30日的三個月和九個月，公司記錄了公允價值的收益（損失）調整 $ | |
| f) | 關於2022年4月的IPO
公司發行了
（反向前 - ）
warrants（交易權證）作爲單位的一部分，
（反向前 - ）
向承銷商提供的warrants（超額配售權證），如上面普通股所述。交易權證和超額配售權證是在首次公開募股生效日期按warrants的交易價格記錄爲公允市場價值，warrants依據ASC 815被分類爲負債。warrants負債要求在每個報告期根據warrants的交易價格進行重新計量。在截至2024年9月30日的三個月和九個月期間，公司記錄了公允市場價值的盈利調整爲$ | |
| g) | 公司發行了代表股，作爲發行初始公開股的承銷商代表的承銷補償部分。代表股與公開股相同，但承銷商同意在公司完成初始業務組合前不轉讓、轉讓或出售任何此類代表股。代表股被FINRA認爲是補償，因此在FINRA規則5110(e)(1)項下，其在此次發行銷售開始日後180天的期限內被限制。此外，承銷商已同意(i)放棄有關這些股票的贖回權，關於公司的初始業務組合(BC)完成，以及(ii)放棄關於這些股票從信託帳戶（如下文所定義的帳戶）獲得清算分配的權利，如果公司在2024年6月5日之前沒有完成其初始業務組合，則放棄這些股票（如果公司通過我們的贊助人或其關聯方的延長存款時間，最長可延長至2024年11月5日）。
(反向預備 -) 定向增發（「票據認股權證」）是爲了與2022年4月19日IPO償還相關的票據持有者。票據認股權證根據其FMV記錄，FMV爲認股權證的交易價格，依據ASC 815被分類爲負債。票據認股權證要求在每個報告期進行重新計量。在截至2024年9月30日的三個月和九個月內，公司記錄了FMV增益$ |
| 17 |
銳利科技公司
財務報表附註
截至2024年和2023年9月30日的三個月和九個月
注意 8. 股東權益（續）
| (h) | 承銷商收到了 (反向拆分前 - |
註釋9。優先股
在2018年2月，公司董事會向阿蘭·布萊克曼（公司的聯合創始人和前董事）發行了一股A系列優先股。
註釋 10. 權證負債
某些 warrants根據ASC 815-40作爲負債入賬，並在隨附的 簡明合併資產負債表中呈現爲warrant負債。warrant負債在初始時和定期進行公允價值測量，公允價值的變化在簡明合併損益表中呈現。用於2024年和2023年9月30日止九個月的Black Scholes期權定價模型使用了以下假設（見註釋8）。
| 2024年9月 30日 | 2023年9月30日 | |||||||
| 預期 期限（年） | ||||||||
| 預期波動率 | % | % | ||||||
| 無風險利率 | % | % | ||||||
| 股息 率 | ||||||||
2024年9月30日和2023年12月31日的權證負債如下：
| 2024年9月 30日 | 2023年12月31日 | |||||||
| 交易和超額配售 Warrants | $ | $ | ||||||
| 票據權證 | ||||||||
| 發行Warrants – 2023年2月 | ||||||||
| 發行Warrants – 2023年9月 | ||||||||
| 誘導Warrants – 2024年5月 | ||||||||
| 總計 Warrants負債 | $ | $ | ||||||
截至2024年9月30日和2023年12月31日的未決warrants如下：
| 2024年9月 30日 | 2023年12月 31日 | |||||||
| 交易、超額配售和承銷商認股權證 | ||||||||
| 票據權證 | ||||||||
| 發行認股權證 - 2023年2月 | ||||||||
| 發行認股權證 - 2023年9月 | ||||||||
| 誘因認股權證 - 2024年5月 | ||||||||
| 服務安排發行的認股權證 | ||||||||
| 總計 未償還的權證 | ||||||||
| 18 |
SHARPS TECHNOLOGY, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023
Note 10. Warrant Liability (continued)
For
the three months ended September 30, 2024, the FMV gain adjustment, which is reflected in the FMV adjustment on Warrants in the
Unaudited Condensed Consolidated Statements of Operations was $
For
the nine months September 30, 2024, the FMV gain adjustment, which is reflected in the FMV adjustment on Warrants in the Unaudited Condensed
Consolidated Statements of Operations was $
For
the three and nine months ended September 30, 2023, the FMV gain adjustment, which is reflected in the FMV adjustment gain (loss) on
Warrants in the Unaudited Condensed Consolidated Statements of Operations was $
| September 30, 2024 | ||||||||
| Options | Weighted Average Exercise Price | |||||||
| Outstanding at Beginning of year | $ | |||||||
| Granted | ||||||||
| Forfeited or cancelled | ( | ) | ||||||
| Outstanding at end of period | $ | |||||||
| Exercisable at end of period | $ | |||||||
At September 30, 2024, the Weighted Average Remaining Contractual Life is .
At September 30, 2024, the stock options outstanding and the options exercisable have exercise prices that exceed the stock market price at September 30, 2024 and as such no intrinsic value exists. Intrinsic value is defined as the difference between the exercise price of the options and the market price of the Company’s common stock.
During the nine months ended September 30, 2024, the Company granted -year options (the “Options”) to purchase a total of shares of the Company’s common stock, par value $ per share (the “Common Stock”) to its directors, executive officers, employees and consultants pursuant to the Company’s 2023 Equity Incentive Plan. The Options are exercisable at an average price of $ per share which was based on the closing price on the respective grant dates.
As of September 30, 2024, there was $ of unrecognized stock-based compensation related to unvested stock options with a weighted average fair value of $ per share, which is expected to be recognized over a weighted-average period of as of September 30, 2024.
For the three and nine months ended September 30, 2024, the Company recognized stock-based compensation expense of $ recorded in general and administrative and $, respectively, of which $ and $ was recorded in general and administrative and research and development expenses.
For the three and nine months ended September 30, 2023, the Company recognized stock-based compensation expense of $ and $, respectively, which was recorded in general and administrative.
| 19 |
SHARPS TECHNOLOGY, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023
Note 11. Stock Options (continued)
| September 30, 2024 | September 30, 2023 | |||||||
| Expected term (years) | to | to | ||||||
| Expected volatility | % to | % | % to | % | ||||
| Risk-free interest rate | % to | % | % to | % | ||||
| Dividend rate | ||||||||
Note 12. Income Taxes
At
the end of each interim reporting period, the Company estimates its effective tax rate expected to be applied for the full year.
This estimate is used to determine the income tax provision or benefit on a year-to-date basis and may change in subsequent interim
periods. Accordingly, the Company’s effective tax rate for the three and nine months ended September 30, 2024 and 2023 was
Note 13. Related Party Transactions and Balances
As
of September 30, 2024 and December 31, 2023, accounts payable and accrued liabilities include $
Note 14. Fair Value Measurements
The Company’s financial instruments include cash, accounts payable, and warrant liability. Cash and warrant liability are measured at fair value. Accounts payable is measured at amortized cost and approximates fair value due to its short duration.
As of September 30, 2024, the following financial assets and liabilities were measured at fair value on a recurring basis presented on the Company’s condensed consolidated balance sheet:
| Fair Value Measurements Using | ||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| Assets | ||||||||||||||||
| Cash | $ | $ | ||||||||||||||
| Total assets measured at fair value | $ | $ | ||||||||||||||
| Liabilities | ||||||||||||||||
| Warrant liability | $ | $ | $ | |||||||||||||
| Total liabilities measured at fair value | $ | $ | $ | |||||||||||||
| 20 |
SHARPS TECHNOLOGY, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023
Note 14. Fair Value Measurements (continued)
As of December 31, 2023, the following financial assets and liabilities were measured at fair value on a recurring basis presented on the Company’s condensed consolidated balance sheet:
| Fair Value Measurements Using | ||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| Assets | ||||||||||||||||
| Cash | $ | $ | ||||||||||||||
| Total assets measured at fair value | $ | $ | ||||||||||||||
| Liabilities | ||||||||||||||||
| Warrant liability | $ | $ | $ | |||||||||||||
| Total liabilities measured at fair value | $ | $ | $ | |||||||||||||
Note 15. Commitments and Contingencies
Contingencies
On
July 10, 2024, Barry Berler (“Berler”), a co-founder and former Chief Technology Officer of the Company, commenced a lawsuit
in the United States District Court for the Eastern District of New York, Barry Berler v. Sharps Technology, Inc. and Alan Blackman,
Case No. 2:24-cv-04787. In this case, Berler asserts claims for damages of an aggregate of $
On
June l7, 2024, Berler filed a demand for arbitration and statement of claim under the commercial arbitration rules of the American Arbitration
Association (“AAA”) asserting claims for payment of $
On
April 3, 2024, Plastomold Industries Ltd. (“Plastomold”) commenced a lawsuit against the Company in the United States District
Court for the Eastern District of New York, Plastomold Industries Ltd v. Sharps Technology, Inc., Case No. 2:24-CV-02580, asserting claims
for damages in the amount of $
Commitments
On
August 1, 2022, the Company cancelled the consulting agreement with Alan Blackman, Co- Chairman and Chief Operating Officer and
entered into an Employment Agreement. which provided for annual salary of $
On
May 20, 2024, the Company entered into an amendment to the Asset Purchase agreement (“Asset Purchase”) with InjectEZ,
LLC (“Seller”) for the purchase of certain assets for $
| 21 |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis summarizes the significant factors affecting the consolidated operating results, 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 consolidated financial statements and the accompanying notes thereto included elsewhere in this Quarterly Report on Form 10-Q. Unless the context requires otherwise, references in this Quarterly Report on Form 10-Q to “we,” “us,” and “our” refer to Sharps Technology, Inc.
Forward-Looking Statements
The information in this discussion contains forward-looking statements and information within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, which are subject to the “safe harbor” created by those sections. These forward-looking statements include, but are not limited to, statements concerning our strategy, future operations, future financial position, future revenues, projected costs, prospects and plans and objectives of management. The words “anticipates,” “believes,” “estimates,” “expects,” “intends,” “may,” “plans,” “projects,” “will,” “would” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements that we make. These forward-looking statements involve risks and uncertainties that could cause our actual results to differ materially from those in the forward-looking statements, including, without limitation, the risks set forth in our filings with the SEC. The forward-looking statements are applicable only as of the date on which they are made, and we do not assume any obligation to update any forward-looking statements.
Overview
Since our inception in 2017, we have devoted substantially all our resources to the research and development and commencing the latter part of 2023 on manufacturing of our safety syringe products. To date, we have not generated any significant revenues from the sale of syringe products. We have incurred net losses in each year since our inception and, as of September 30, 2024, we had an accumulated deficit of $29,918,777. Our net loss was $4,769,774 for the nine months ended September 30, 2024. 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, Liquidity and Capital Resources and Notes to Unaudited Condensed Consolidated Financial Statements.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company has not generated any significant revenue from the sale of syringe products or cash flow from operations since inception. As of September 30, 2024, the Company had working capital of $67,820 which is not expected to be sufficient to fund the Company’s planned operations for the next 12 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 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.
| 22 |
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, we entered into an agreement to acquire Safegard Medical (Safegard), a former syringe manufacturing facility in Hungary. Through the closing 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.
In order to compete in the market, we must maintain inventory. Commencing in the 4th Quarter of 2022 we started building inventory. We require commercial quantities of inventory to secure orders. Delivery is expected shortly after receiving orders.
Although we currently have production capacity for our products and thus the ability to receive and fulfill orders, we have used the proceeds from the February 2023, September 2023 fund raising and fund raising in the second and third quarter of 2024 to allow us to either increase our production capacity, build inventory or support working capital requirements This will help us to generate and fulfill orders for our current product line and advance our new innovative products in connection with recent collaboration arrangements. We have produced commercial quantities of our products and built inventory to support orders in late 2024 and in 2025. (See Recent Developments)
Products, Marketing and Sales
We continue to be in discussions with healthcare companies and distributors for sales of our disposable syringe and prefillable syringe products. We intend to market these products to the U.S. and foreign governments. We received a Purchase Order for our first Securegard sales to a South America distributor which was shipped in June 2024. We will also look to sell our disposable syringe products to hospitals and clinician offices as opportunities present themselves.
The Sharps Securegard product line continues to represent our initial disposable syringe platform to be commercially available to the market. The addition of the Sologard products and SafeR products from Roncadelle are recent expansions to the Company’s product portfolio. These platforms have advanced features and benefits to support the needs of the market along with a high level of readiness for manufacturing and the ability to provide large commercial quantities for customers.
As previously disclosed, there continue to be delays in the commercialization of the Sharps Provensa product line. The product’s specialized technology requires further design and assembly optimization as identified in our previous commercialization efforts. This on-going product refinement process is typical of the development of new technology for the healthcare market to ensure the products are safe and effective for use every time. At this time Sharps is not able to determine a timeline for final commercialization of the Provensa product.
Research and Development
Substantially all of our research and development expenses to date have been incurred in connection with our syringe products. We expect to continue to incur research and development expenses 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.
| 23 |
Business Developments:
Asset Purchase Agreement – Nephron Pharmaceuticals and Affiliates
On September 29, 2022, the Company entered into an agreement (the “NPC Agreement”) with Nephron Pharmaceuticals Corporation (“NPC”) and various affiliates of NPC, including InjectEZ, LLC. The NPC Agreement was intended to support several areas of the Company’s development and growth. The Company and NPC intended to supplement the NPC Agreement by entering into a manufacturing supply agreement, a sales and distribution agreement and a pharma services program to support growth, and a future agreement to support manufacturing expansion. As noted below, the sales and distribution agreement was terminated on March 8, 2024, and replaced. The original manufacturing supply agreement, noted above, was replaced as part of the Asset Purchase Agreement, entered into on September 22, 2023 and the Pharma Services agreement continues to be in place, although no activities have occurred to date. Further, under the additional agreement with NPC and affiliates of NPC (“Nephron Agreement”), the Company would provide technical advice and assistance to support manufacturing by InjectEZ, purchase certain quantities of syringes as they may order or require, and collaborate with Nephron on certain related business endeavors, but no activities have occurred to date. The Company will continue working to amend the terms of this NPC Agreement and Nephron Agreement, based on the Amended Asset Purchase Agreement below dated May 20, 2024. (See below)
On March 8, 2024, the Company and Nephron Pharmaceuticals Corporation terminated their distribution agreement dated December 8, 2022, which was partially replaced by the Agreement with Roncadelle, as stated below, and we continue to seek other parties to distribute for the US domestic market. The Company entered into a new logistics services agreement on the warehousing side with Owens and Minor (“O&M”) to replace Nephron’s distribution services. The Company can utilize O&M to provide 3PL services for both the Company and Roncadelle products, in North and South America when needed.
The Company and Nephron continue to maintain the Pharma Services Program (PSP), although no activities have occurred to date, which focuses on the creation of new business development and growth opportunities for both companies. These opportunities will include the development and sale of next generation drug delivery systems that will be produced by the Company and can be purchased by the healthcare industry, pharmaceutical markets, and Pharma companies such as Nephron and others.
On May 20, 2024, the Company entered into an Amendment to the Asset Purchase Agreement dated September 22, 2023, with Nephron and Nephron’s InjectEZ, LLC, (collectively, the “Seller”). The September 22, 2023 agreement superseded the manufacturing and supply agreement entered into in connection with the NPC Agreement on September 29, 2022, and the Nephron Agreement entered into on September 29, 2022. The Amended Asset Purchase Agreement includes the purchase of certain assets for $35M plus assumed liabilities of $4M, continues to provide for the Company to lease the Facility but excludes any leasehold improvements previously included. In connection with the Asset Purchase agreement, the Company paid a non-refundable deposit of $1M to be held in escrow under an agreeable escrow agreement as a deposit on the purchase price. The Asset Purchase agreement stipulated that the $1M deposit would be maintained until July 19, 2024, at which date, if the contemplated transaction was not consummated, through no fault of the Seller, the escrow would be released to the Seller by the escrow agent. The escrow deposit of $1,000,000 was released to the Seller and recorded in Other Expense as a forfeited agreement cost in the three months ended June 30, 2024. The Company and Seller continue to work towards a further amendment of the Asset Purchase Agreement. The closing of the Asset Purchase Agreement is contingent on obtaining further amendments and the necessary financing. There can be no assurance that the closing of the asset sale will occur.
| 24 |
Sales and Distribution Agreement – Roncadelle
On March 4, 2024 (the “Effective”) Company entered into a cooperative sales and distribution agreement (the “Agreement”) with Roncadelle Operations s.r.l (“Roncadelle”). In conjunction with the execution of the Agreement, Roncadelle appointed the Company as its exclusive distributor of Roncadelle products in the United States, Canada, Central and South America and their territories. The Company appointed Roncadelle as its exclusive distributor of Sharps products in Europe, Middle East, APAC, South Africa and Australia and their territories. The Company and Roncadelle agreed to bear their own separate costs and expenses, including fees and other expenses, relating to external advisors and the preparation, negotiation, execution and performance of this Agreement and any related documents. The Agreement is 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. The Company continues to work with Roncadelle for product introductions and execution of the Agreement for future sales.
Supply Agreement -Stericare Solutions
On July 24, 2024, the Company, entered into a Supply Agreement (the “Supply Agreement”) with Stericare Solutions, LLC, a Texas limited liability company, (“Stericare”), pursuant to which Stericare agreed to purchase 520 million units of 10ml polypropylene (“PP”) Sologard syringes from the Company. The specific purchase price is confidential but revenues are expected in excess of $50M. Pursuant to the Supply Agreement, Stericare has agreed to purchase 520 million units of 10ml PP Sologard syringes in the following increments: 40 million units in the first year, and 120 million units every year for the remaining life of the Supply Agreement. The Supply Agreement has a five (5) year term targeted to commence November 2024 (the “Initial Term”). Upon expiration of the Initial Term, the Supply Agreement will automatically renew for additional one (1) year periods (each, a “Renewal Term”), unless a party gives the other party written notice of termination at least ninety (90) days prior to the end of the Initial Term or Renewal Term. The Agreement may be terminated by either party upon written notice to the other party if the other party breaches any material term or condition of this Agreement and fails to cure such breach within thirty (30) days after receipt of written notice thereof. The Agreement may be terminated by either party upon written notice to the other party if the other party becomes insolvent, makes an assignment for the benefit of creditors, or a petition under any bankruptcy or insolvency Law is filed by or against such party and is not dismissed within 120 days. If either party is acquired by a competitor of the other party, then either party can terminate the Agreement with six (6) months written notice.
| 25 |
On July 12, 2023, The Nasdaq Stock Market LLC (“Nasdaq”) notified the Company that the bid price of its common stock had closed at less than $1.00 per share over the previous 30 consecutive business days, and, as a result, the Company was no longer in compliance with Nasdaq Listing Rule 5550(a)(2) (the “Nasdaq Rule”). In accordance with Listing Rule 5810(c)(3)(A), the Company was provided 180 calendar days, or until January 8, 2024, to regain compliance with the Rule. Subsequently, on January 16, 2024, the Company was provided an additional 180 calendar day compliance period, or until July 8, 2024, to demonstrate compliance. Pursuant to Nasdaq’s letter on July 9, 2024, the Company has not regained compliance with Listing Rule 5550(a)(2). Accordingly, its securities will be delisted from the Nasdaq Capital Market unless the Company requests a hearing and appeals Nasdaq’s determination by July 16, 2024., the trading of the Company’s common stock and warrants will be suspended at the opening of business on July 18, 2024. The Company filed a hearing request before the deadline. In the interim, the Company’s common stock and warrants have remained listed on NASDAQ under its existing symbols, “STSS” and “STSW” while it awaits the results from the hearing on August 13, 2024.
On July 15, 2024, the Company held a Special Meeting of its stockholders. At the Meeting, the following three (3) proposals were each approved.
| 1. | The Company’s stockholders approved the amendment to the Company’s articles of incorporation to increase the authorized shares of common stock from 100,000,000 shares to 500,000,000 shares; |
| 2. | The Company’s stockholders approved a proposal to authorize the Company’s Board of Directors (the “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 of up to 1-for-8, with the exact ratio to be determined by the Company’s Board and included in a public announcement; |
| 3. | The Company’s stockholders approved a proposal for the issuance of securities in one or more non-public offerings where the maximum discount at which the securities will be offered will be equivalent to a discount not to exceed 20% below the market price of our common stock in accordance with Nasdaq Marketplace Rule 5635(d). |
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”)
Critical Accounting Policies and Significant Judgments and Estimates
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 FMV adjustments, based on the trading price of outstanding warrants classified as liabilities, could impact the operating results in the reporting periods.
Nature of Business
Sharps Technology, Inc. (“Sharps” or the “Company”) continues to regard itself as a pre-revenue medical device company that has designed and patented various safety syringes and is seeking commercialization by manufacturing and distribution of its products. Through September 30, 2024, no substantial syringe product sales have occurred.
| 26 |
The accompanying unaudited condensed consolidated financial statements include the accounts of Sharps Technology, Inc. and its wholly owned subsidiary, Safegard Medical, Kft. and Sharps Technology Acquisition Corp. 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 Unaudited Condensed Consolidated Financial Statements)
Summary of Significant Accounting Policies
Our significant accounting policies are described in Note 2 of the accompanying condensed consolidated financial statements and further discussed in our annual financial statements included in our annual report on Form 10-K for the year ended December 31, 2023.
Off-Balance Sheet Arrangements
During the periods presented, we did not have any off-balance sheet arrangements as defined under Regulation S-K Item 303(a)(4).
Results of Operations – Three Months Ended September 30, 2024 and 2023.
| 2024 | 2023 | Change | Change % | |||||||||||||
| Research and development | $ | 145,611 | 225,191 | $ | (79,580 | ) | -35 | % | ||||||||
| General and administrative | 1,869,598 | 2,133,167 | (263,569 | ) | -12 | % | ||||||||||
| Other expense (income) | 70,905 | (17,620 | ) | 88,525 | 502 | % | ||||||||||
| FMV (gain) loss adjustment for warrants | (416,560 | ) | (321,981 | ) | (94,579 | ) | 29 | % | ||||||||
| Foreign currency | 15,506 | 3,587 | 11,919 | 332 | % | |||||||||||
| Net loss | $ | 1,685,060 | $ | 2,022,344 | $ | (337,284 | ) | -16 | % | |||||||
Revenue
The Company has not generated any significant syringe revenue to date.
Research and Development
For the three months ended September 30, 2024, Research and Development (“R&D”) expenses decreased to $145,611 compared to $225,191 for the three months ended September 30, 2023. The decrease of $79,580 was due to reduced R&D activities in 2024 as compared to 2023, primarily due to lower depreciation expense of $46,000 and lower R&D labor and consulting of $41,000 due to the overall shift to manufacturing.
| 27 |
General and Administrative
For the three months ended September 30, 2024, General and Administrative (“G&A”) expenses were $1,869,598 as compared to $2,133,167 for the three months ended September 30, 2023. The decrease of $263,569 was primarily attributable to: i) a decrease in payroll and consulting fees of $57,000 from $895,000 in 2023 to $838,000 in 2024, primarily due to lower consulting services and compensation expense, ii) decrease in stock compensation expense, due to the timing of option awards, vesting and options valuations, of approximately $85,000 from $201,000 in 2023 to $116,000 in 2024. Further, we had decreases in public company and investor relation costs ($65,600), travel ($17,000), computer costs ($44,000), insurance ($39,000), patent fees ($10,000), and other expenses ($50,700), partially offset by higher professional fees ($68,300), marketing ($2,000), rent ($12,000), depreciation expense ($16,000) and board costs ($6,500).
Other expense (income)
Other was an expense of $70,905 for the three months ended September 30, 2024, compared to income of $17,620 for three months ended September 30, 2023. In 2024 and 2023 the Company generated interest income of $4,377 and $17,620, respectively. The totals in each period related to interest earned from cash balances held in interest bearing accounts. In addition, in 2024 the Company incurred accreted interest costs associated with debt financing (See Note 7 to the Unaudited Condensed Consolidated Financial Statements).
FMV Adjustment for Derivatives
Certain Warrants require the Fair Market Value (“FMV”) to 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 September 30, 2024 and 2023, the Company recorded a $416,560 FMV gain, net of a modification charge of $155,703 for the warrants exercised at the reduced exercise prices and the related modification charge and $572,264 FMV gain to reflect adjustments required for outstanding Warrants liabilities. This is compared to a $321,981 FMV gain for the three months ended September 30, 2023 (See Notes 8 and 10 to the Unaudited Condensed Consolidated Financial Statements).
Results of Operations – Nine Months Ended September 30, 2024 and 2023.
| 2024 | 2023 | Change | Change % | |||||||||||||
| Research and development | $ | 523,347 | 783,340 | $ | (259,993 | ) | -33 | % | ||||||||
| General and administrative | 5,257,015 | 6,425,154 | (1,168,139 | ) | -18 | % | ||||||||||
| Other expense (income) | 1,046,593 | (94,492 | ) | 1,141,085 | 1,208 | % | ||||||||||
| FMV (gain) loss adjustment for warrants | (2,088,747 | ) | (415,958 | ) | (1,672,789 | ) | 402 | % | ||||||||
| Foreign exchange loss | 31,566 | 41,955 | (10,389 | ) | -25 | % | ||||||||||
| Net loss | $ | 4,769,774 | $ | 6,739,999 | $ | (1,970,225 | ) | -29 | % | |||||||
Revenue
The Company has not generated any significant syringe revenue to date.
Research and Development
For the nine months ended September 30, 2024, Research and Development (“R&D”) expenses decreased to $523,347 compared to $783,340 for the nine months ended September 30, 2023. The decrease of $259,993 was primarily due to a shift to increased manufacturing and reduced R&D activities in 2024 as compared to the 2023 period which amounted to lower expenses of $121,600, principally materials of $104,000. In addition, depreciation expense decreased $138,300.
| 28 |
General and Administrative
For the nine months ended September 30, 2024, General and Administrative (“G&A”) expenses were $5,257,015 as compared to $6,425,154 for the nine months ended September 30, 2023. The decrease of $1,168,139 was primarily attributable to: i) increases in payroll and consulting fees of $307,800 from $2,206,000 in 2023 to $2,514,502 in 2024, primarily due to compensation increases and additional consulting fees, ii) decrease in stock compensation expense, due to the timing of option awards, vesting and option valuations, of approximately $397,800 from $838,000 in 2023 to $441,200 in 2024, iii) decrease in public company and investor relations costs of $288,700 from $644,000 to $361,300 in 2024 primarily due to lower offering costs in the 2024 period and reduced investor relations activities. Further, we had decreases due to lower: a) marketing costs ($278,400) relating to promoting the Company, b) travel ($65,900), c) insurance costs ($87,000), d) rent ($45,000), e) general operating costs ($85,300), f) computer costs ($13,600), g) patent maintenance and registration fees ($2,200) and h) a contract settlement of $375,000 in 2023. These decreases were partially offset by higher: a) professional fees ($68,000, b) board costs ($41,500) and c) depreciation ($53,500).
Other expense (income)
Other was an expense of $1,046,593 for the nine months ended September 30, 2024, compared to income of $(94,492) for nine months ended September 30, 2023. In 2024 and 2023 the Company generated interest income of $(28,689) and $(94,492), respectively. The interest income in each period was related to interest income earned from cash balances held in interest bearing accounts. In the second quarter of 2024, the Company’s initial syringe sale of $10,871, which approximated cost, was to a distributor in South America. The escrow deposit of $1M, relating to the Asset Purchase Agreement, was released to the Seller on July 19, 2024, under the terms of the agreement and recorded as a forfeited agreement cost (See Note 15 to the Unaudited Condensed Consolidated Financial Statements). In addition, in the third quarter of 2024, the Company recorded accreted interest expense of $75,192 in connection with the debt financing (See Note 7 to the Unaudited Condensed Consolidated Financial Statements).
FMV Adjustment for Derivatives
Certain Warrants require the Fair Market Value (“FMV”) to be remeasured at each reporting date while outstanding with recognition of the changes in fair value to other income or expense in the consolidated statement of operations. For the nine months ended September 30, 2024 and 2023, the Company recorded a $2,088,747 and $415,958 FMV gain to reflect adjustments required for outstanding Warrants liabilities. (See Notes 8 and 10 to the Unaudited Condensed Consolidated Financial Statements)
Liquidity and Capital Resources
At September 30, 2024 and December 31, 2023, we had a cash balance of $2,473,197 and $3,012,908, respectively. The Company had working capital of $67,820 and $1,145,569 as of September 30, 2024 and December 31, 2023, respectively. The decrease in our working capital was primarily due to use of cash in operations and investing discussed below offset by net proceeds from the Reg A and Inducement Offerings in May and June 2024 and the net proceeds from the debt financing in September 2024 (See below and Notes 7 and 8 to the Unaudited Condensed Consolidated Financial Statements).
The Company continues to assess liquidity requirements and plans to continue to seek funding through equity offerings and/or debt financing opportunities.
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.
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 4,197,000 shares (the “Shares”) of Common Stock, par value $0.0001 per share of the Company at a price of $0.38 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 proceed, after reflecting par value, have been recorded in Additional Paid in Capital of $1,296, 922. 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.
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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 499,932 (pre reverse - 10,998,524) warrants to purchase shares of the Company’s common stock, par value $0.0001 per share. Pursuant to the Inducement Agreement, the exercise price of the existing warrants was reduced from $14.08 (pre reverse - $0.64) per share to $7.26 (pre reverse - $0.33) 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 $9.90 (pre reverse - $0.45) per share (“Inducement Warrants”). In the aggregate, 260,799 (pre reverse - 5,737,573) warrants were exercised as a result of the Inducement Agreement and accordingly, 260,799 Inducement Warrants 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 $978,407 and with respect to the Inducement Warrants, a liability under ASC 815 was recorded in the amount of $693,064. Certain outstanding warrants, with an exercise price of $14.08 (pre reverse - $0.64), were reduced to $7.26 (pre reverse - $0.33) based on anti-dilution terms in the respective warrant agreements.
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 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. In connection with the Shelf Offering, the Company issued 164,478 (pre reverse -3,618,521 shares of common at a purchase price of $14.08 per unit, adjusted to $7.26 (reverse effected) at May 30, 2024, based on anti-dilution terms in the warrants and 36,636 ( pre reverse -800,000) pre-funded warrants at $14.058 ( pre reverse - $0.639) per pre-funded warrants. The exercise price of the pre-funded warrants will be $0.001 per share. | |
| 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) 117,340 (pre reverse - 2,581,479) PIPE Shares (or PIPE Pre-Funded Warrants in lieu thereof) and (ii) PIPE Warrants (non-trading) to purchase 397,727 (pre reverse -8,750,003) shares of our common stock, at a combined purchase price of $23,63 (pre reverse- $1.074) per unit (or $23.606 (pre reverse - $1.073) per pre-funded unit). The PIPE Warrants have a term of five and one-half (5.5) years from the issuance date and are exercisable for one share of common stock at an exercise price of $14.08 adjusted to $7.26 (reverse affected) at May 30, 2024, based on anti-dilution terms in the warrants. 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. (See Note 10). |
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 102,206 (pre reverse - 2,248,521) units at a purchase price of $37.18 (pre reverse - $1.69 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 October reverse split, of $34.32, adjusted to $14.08 at September 29, 2023 and to $7.26 at May 30, 2024, based on anti-dilution terms in the warrants and a term of five years. 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 170,454 ( pre reverse - 3,750,000) 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 $ 93.50 (pre reverse - $4.25) per share, adjusted to and with the effect of reverse split October 2024, $34.32 at February 3, 2023 and to $14.08 at September 29, 2023 and to $7.26 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 51,136 ( pre reverse -1,125,000) 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)
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Cash Flows
Net Cash Used in Operating Activities
The Company used cash of $5,172,135 and $ 6,144,937 in operating activities for the nine months ended September 30, 2024 and 2023, respectively. The decrease in cash used of $972,802 was principally due to lower operating expenses during the nine months ended September 30, 2024.
Net Cash Used in Investing Activities
For the nine months ended September 30, 2024 and 2023, the Company used cash in investing activities of $1,069,659 and $431,379, respectively. In both periods cash was used to acquire or pay deposits for fixed assets, equipment and software. In 2024, the cash used for acquiring or paying deposits for fixed assets equipment and software was $69,659 as compared to $431,379 in the 2023 period. In connection with the Asset Purchase agreement the Company paid a non-refundable deposit of $1M to be held in escrow under an agreeable escrow agreement as a deposit on the purchase price. Under the terms of the Asset Purchase Agreement, the escrow deposit was released to the Seller and the Company recorded a forfeited agreement cost in Other Expenses (See Note 14 to the Unaudited Condensed Consolidated Financial Statements).
Net Cash Provided by Financing Activities
For the nine months ended September 30, 2024 and 2023, the Company provided cash from financing activities of $5,707,946 and $8,029,628, respectively. In the 2023 period, cash was provided from the offerings completed in February and September 2023. In the 2024 period, cash was provided from the exercise of pre-funded warrants, net proceeds from a Reg A offering and Warrant Inducements and a debt financing arrangement during September 2024 (See Note 7 and 8 to the Unaudited Condensed Consolidated Financial Statements).
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements as defined in Regulation S-K Item 303(a)(4).
新興成長公司地位
我們 是一家"新興成長型公司"，根據《就業法案》的定義，只要我們繼續作爲新興成長型公司， 我們可以選擇利用適用於其他上市公司但不適用於新興成長型公司的各種報告要求的豁免，包括但不限於，無需我們的獨立註冊公共會計師事務所對我們的 財務報告內部控制進行審計，依照《薩班斯-奧克斯利法》第404條的規定，減少我們週期性報告與代理聲明中關於高管薪酬的披露義務，以及免於進行不具約束力的顧問投票的要求 關於高管薪酬和股東對任何未獲批准的黃金降落傘支付的批准。作爲一家新興成長型公司， 我們還可以推遲採用新的或修訂的會計標準，直到這些標準適用於私營公司爲止。我們打算 利用這些期權。一旦採用，我們必須繼續以這種方式報告，直到我們不再符合新興成長型公司的資格。
我們 在以下情況下將不再是新興成長型公司: (i) 首次公開發行後的第五個財政年度結束後; (ii) 我們的年度營業收入達到10.7億美元或更多的第一個財政年度; (iii) 在此之前的三年內，我們發行的非可轉換債券超過10億美元的日期; 或 (iv) 在該財政年度內，非關聯方持有的我們普通股的市值在該財政年度第二季度結束時超過7千萬美元的當日。我們無法預測如果選擇依賴這些豁免規定，投資者是否會認爲我們的普通股變得不那麼吸引人。如果由於我們決定減少未來披露而導致投資者發現我們的普通股不那麼吸引人，那麼我們的普通股交易市場可能不那麼活躍，我們普通股的價格可能更加波動。
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我們也是一個「較小報告公司」，這意味着非關聯方持有的我們股票的市場價值加上我們因首次公開發行獲得的總收益金額少於$70,000,000，而我們在最近完成的會計年度內的年度營業收入少於$100,000,000。如果在任何時候我們仍然是一個較小報告公司，那要麼（i）非關聯方持有的我們股票的市場價值少於$25,000,000，要麼（ii）我們在最近完成的會計年度內的年度營業收入少於$100,000,000且非關聯方持有的我們股票的市場價值少於$70,000,000。如果我們在某時仍是一個較小報告公司，則一旦停止是一家新興成長公司，我們可能繼續依靠對其他披露要求的豁免權，這些豁免對較小報告公司是可用的。具體而言，作爲一個較小報告公司，我們可以選擇在我們的年度報告Form 10-K中僅呈現最近兩個會計年度的財務報表，並且，就像新興成長公司一樣，較小報告公司在執行薪酬方面的披露義務更少。
項目3。關於市場風險的數量和質量披露
較小的報告公司不需要。
項目4.控制和程序
披露控制和程序的評估
根據交易所法案第13a-15(b)條的要求，我們的管理層，包括我們的首席執行官和致富金融(臨時代碼)，評估了本季度報告表格10-Q覆蓋期末時我們的披露控制和程序的有效性。基於該評估，我們的首席執行官和致富金融(臨時代碼)得出結論，截至本季度報告表格10-Q覆蓋期末，我們的披露控制和程序有效，能夠合理保證我們在交易所法案規定的時期內記錄、處理、總結和報告我們提交或備檔的報告中需要披露的信息，並提供合理保證這些信息被累積並傳達給我們的管理層，包括我們的首席執行官和致富金融(臨時代碼)。
財務報告內部控制的變化
在本季度10-Q報告所涵蓋的期間內，未發現與內部控制評估相關的財務報告內部控制的任何變化，這些變化對我們的財務報告內部控制產生了重大影響或有合理可能會產生重大影響。
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部分II - 其他信息
事項1.法律訴訟
我們可能會不時捲入與我們業務的日常運作相關的法律訴訟。無論結果如何，訴訟 可能對我們產生不利影響，這包括軍工股和和解費用、管理資源的分散、負面宣發、聲譽損害以及其他因素。
在2024年7月10日，巴里·伯勒（"伯勒"），公司聯合創始人和前首席科技官，在美國紐約東區地方法院提起訴訟，案件名稱爲巴里·伯勒訴夏普斯科技公司及阿蘭·布萊克曼，案件編號爲2:24-cv-04787。在此案中，伯勒主張索賠合計$456,000，理由爲（1）未能根據與公司的諮詢協議（"諮詢協議"）全額支付某些月度付款，金額爲$52,500，（2）未能根據諮詢協議支付目標爲$216,000的獎金，（3）$187,500，代表公司支付給公司聯合創始人、前首席運營官和聯席主席黑曼先生的解僱賠償的50%，以及請求確認和禁令救濟以確認伯勒是公司A系列優先股（該優先股現已不存在）50%合法所有者。公司已爲未支付的月度諮詢費的索賠計提。公司認爲伯勒的索賠毫無依據，打算積極辯護，並已請求駁回這些索賠。此外，2024年9月17日，公司就此提交了答辯和反索賠，包括追回公司先前已支付給伯勒的某些補償。
在2024年6月17日，Berler根據美國仲裁協會（「AAA」）商業仲裁規則提交了仲裁請求和索賠聲明，聲稱根據與Berler的版稅協議（經修訂）要求支付50萬美元及利息，申請撤銷該協議並將相關知識產權轉回給Berler。公司認爲Berler的主張沒有根據，並打算在涉及這些主張的情況下進行堅決的自我辯護。
在2024年4月3日，Plastomold Industries Ltd.（「Plastomold」）在美國紐約東區地方法院對該公司提起訴訟，案件編號爲2:24-CV-02580，指控索賠176.2萬美元，理由包括（1）未支付發票，其中約100萬美元涉及一份維護協議，該協議所涉及的單位據稱是使用有缺陷的機械製造和銷售的，並且從未成功生產出任何可銷售的產品，（2）違反隱含的誠信和公平交易契約，（3）不當得利，以及（4）轉換。Plastomold聲稱其爲公司提供的某些產品和服務未能完全支付其發票。公司認爲Plastomold的索賠毫無根據，並打算積極進行自我辯護。2024年6月3日，公司提交了答辯及抗辯和反訴，反訴內容是公司認爲將超過Plastomold提出的索賠，基於Plastomold服務的不足及其結果，包括未能提供能夠可靠製造符合設計規格和功能要求的指定產品的機械，以及相關測試結果失敗。
ITEM 1A: 風險因素
可能導致我們的實際結果與本季度報告中所述結果存在重大差異的因素包括在截至2023年12月31日的Form 10-k中描述的任何風險，這些因素可能會對我們的運營結果或財務狀況產生重大或不利的影響。目前我們未知或認爲不重要的額外風險因素也可能會損害我們的業務或運營結果。截至本季度報告之日，截至2023年12月31日的Form 10-k中披露的風險因素沒有重大變化。我們可能會在今後的SEC文件中披露這些因素的變化或披露其他因素。
ITEM 2. 未註冊的股票發行和用途
最近 出售未註冊的股權證券
在截至2024年9月30日的季度內，公司根據Reg A發行了190,773股（反向拆股前爲410萬股）未註冊但符合資格的普通股。
在截至2024年9月30日的季度，公司發行了259,091股（預留：5,700,006）未註冊普通股。
使用收益
2022年4月13日，根據SEC宣佈的表格S-1(No. 333-263715)註冊聲明生效，我們發行並出售了總計375萬單位(未發生反向效應)，每單位由一股普通股和兩個認股權證組成，每個認股權證可購買一股普通股，初始行權價格爲每股4.25美元(未發生反向效應)，期限爲五年。此外，我們授予Aegis Capital corp.作爲承銷商有權在45天內超額配售購買多達15%的單位中包括的股份數量和/或額外認股權證數量，相當於買入單位中認股權證數量的15%，僅用於覆蓋超額配售，Aegis Capital corp.於2022年4月19日部分行使了112.5萬認股權證。未向以下人員直接或間接支付上述費用：(i) 我們的任何高管或董事及其關聯人，(ii) 任何持有我公司任何股份類別10%或更多股份的人，或(iii) 我們的任何關聯方。截至2013年12月31日，我們已將IPO淨收益用於營運資金、收購匈牙利設施和資本支出。
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事項6.附屬文件
| Exhibit Number | 描述 | |
| 31.1* | 根據《1934年證券交易法》13a-14(a)和15d-14(a)條的規定，由聯席首席執行官（首席執行官）簽署的證明，依據《2002年薩班斯-豪利法》第302條採納。 | |
| 31.2* | 首席財務官（首席財務和會計官）認證，依據1934年證券交易法第13a-14(a)和15d-14(a)條款，經2002年薩班斯-奧克斯利法第302條款採納。 | |
| 32.1** | 根據《18 U.S.C. 第1350條》的規定，由聯席首席執行官（首席執行官）簽署的證明，依據《2002年薩班斯-豪利法》第906條採納。 | |
| 32.2** | 首席財務官（首席財務和會計官）認證，依據18 U.S.C.第1350條款，經2002年薩班斯-奧克斯利法第906條款採納。 | |
| 101.INS | 內聯XBRL實例文檔 | |
| 101.SCH | 內聯XBRL分類擴展模式文檔 | |
| 101.CAL | 內聯XBRL分類擴展計算鏈路庫文檔 | |
| 101.DEF | 內聯XBRL分類擴展定義鏈路庫文檔 | |
| 101.LAB | 內聯XBRL分類擴展標籤鏈路庫文檔 | |
| 101.PRE | 內聯XBRL分類擴展演示鏈路庫文檔 | |
| 104* | 封面頁面交互式數據文件（格式爲內聯XBRL幷包含在展品101中） |
| * | 隨本申報文件提交。 |
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簽名
根據1934年修訂後的證券交易法的要求，註冊人已經要求在2024年11月14日由下面簽署的授權人代表其簽署了本報告。
| SHARPS TECHNOLOGY, INC. | ||
| 2024年11月 | /s/ Robert M. Hayes | |
| 羅伯特·M·海耶斯 | ||
| 首席執行官兼董事 (首席執行官) | ||
| 2024年11月 | /s/ Andrew R. Crescenzo | |
| Andrew R. Crescenzo | ||
| 首席財務官 | ||
| /s/ Maria Stan |
| 35 |