Sharplink (SBET) risk factors, FY2024 10-K

Risks Related to Our Business and the Industries We Serve

1. 01SharpLink has a history of losses and may not be able to achieve or sustain profitability in the future
2. 02If we are unable to increase our revenues or our operating costs are higher than expected, we may not be able to achieve profitability and our operating results may fluctuate significantly
3. 03We will require additional capital to support our growth plans and such capital may not be available on reasonable terms or at all. If we do not raise sufficient capital, there is substantial doubt about our ability to continue as a going concern
4. 04SharpLink operates in a competitive market and may lose clients and relationships to both existing and future competitors
5. 05SharpLink’s business may be materially and adversely affected if we are unable to keep pace with or adapt to rapidly changing technology, evolving industry standards and changing regulatory requirements, or if we do not invest in product development and provide services that are attractive to our partners
6. 06The loss or significant reduction in business from one or more of our large partners could materially and adversely affect our business, financial condition and results of operations
7. 07SharpLink’s operations are subject to seasonal fluctuations that may impact results of operations and cash flow
8. 08Our recruitment and retention of qualified personnel and key employees, including members of our senior management team, are vital to growing our businesses and meeting our business plans. The loss of any of our key executives or other key employees could harm our business
9. 09SharpLink has acquired, and in the future may acquire or merge with, other businesses. Our business may suffer if we are unable to successfully integrate acquired businesses into us or otherwise manage the growth associated with multiple acquisitions
10. 10the ability to retain or hire qualified personnel for expanded operations

Risks Related to Legal Matters and Regulations Affecting SharpLink’s Business

1. 11Failure to obtain or maintain the required regulatory approvals and licenses in the various jurisdictions that SharpLink operates or intends to operate, whether individually or collectively, could have a material adverse effect on our business
2. 12SharpLink’s collection, storage and use of personal data are subject to applicable data protection and privacy laws, and any failure to comply with such laws may harm our reputation and business or expose SharpLink to fines and other enforcement action
3. 13Reductions in discretionary consumer spending could have an adverse effect on our business, financial condition, results of operations and prospects
4. 14SharpLink may face claims for data rights infringement, which could subject us to monetary damages
5. 15We may invest in or acquire other businesses, and our business may suffer if we are unable to successfully integrate acquired businesses into our Company or otherwise manage the growth associated with multiple acquisitions

Risks Related to the Technology, Intellectual Property and Infrastructure of SharpLink’s Business

1. 16SharpLink’s failure to protect or enforce our proprietary and intellectual property rights, including our unregistered intellectual property, and the costs involved in such protection and enforcement, could harm our business, financial condition, results of operations and prospects
2. 17SharpLink may face claims for intellectual property infringement, which could subject it to monetary damages or limit SharpLink in using some of our technologies or providing certain solutions
3. 18We use third-party open source software components and failure to comply with the terms of the underlying open-source software licenses could restrict our ability to provide our product and service offerings
4. 19We may not regain compliance with the continued listing requirements of The Nasdaq Capital Market
5. 20We understand that the delisting action referenced in the Notice, dated January 8, 2025, has been stayed pending the issuance of a formal decision by the Panel following a hearing which was held on February 25, 2025
6. 21The market price of our securities may be volatile and may fluctuate in a way that is disproportionate to our operating performance
7. 22overall political and economic conditions, including Russia’s invasion of Ukraine, the Israel and Palestine conflict and growing geopolitical tension with China
8. 23We do not intend to pay cash dividends. As a result, capital appreciation, if any, will be your sole source of gain
9. 24We incur significant costs as a result of operating as a public reporting company, and our management is required to devote substantial time to regulatory compliance initiatives
10. 25We currently have outstanding, and we may in the future issue, instruments which are convertible into shares of Common Stock, which will result in additional dilution to our shareholders
11. 26FINRA sales practice requirements may limit a stockholder’s ability to buy and sell our securities
12. 27If securities or industry analysts do not publish research or reports about our business, if they adversely change their recommendations regarding our shares or if our results of operations do not meet their expectations, the price of our securities and trading volume could decline