Empery Digital Inc.
For the period ended Jun 30, 2026. Filed Aug 7, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2026 · Filed Aug 7, 2026
EMPD$2.00-3.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-03-31; filed 2026-05-08.
0001683168-26-003608
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-07.
0001683168-26-006099
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 93 previous paragraphs and 114 current paragraphs.
47 unchanged; 35 reworded; 30 added; 11 removed; 0 previous and 2 current paragraphs rearranged.
Tables are not compared: 1 previous and 1 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (30)
Current report
The Company has an ATM program in place pursuant to which it can sell up to $1.0 billion of common stock and since the inception of the digital asset treasury strategy through of August 6, 2026 has sold 136,053 shares of common stock for$1.5 million, including commissions, at an average price of$10.90. On June 2, 2026, the Company entered into Amendment No. 2 and Waiver to the At-The-Market Issuance Sales Agreement with Aegis which, among other matters, extended the term of the ATM program, such that, unless earlier terminated by one of the parties thereto, it will automatically terminate upon the issuance and sale of all of the shares authorized thereunder.
Current report
Data Center Infrastructure Investments
Current report
On June 30, 2026, the Company announced a strategic relationship with Hunt Properties, the goal of which is to originate, evaluate, and acquire powered land properties with secured tenants suitable for artificial intelligence and high-performance computing data center development.
Current report
On June 26, 2026, the Company, through its wholly-owned subsidiary, Volcon Epowersports LLC (“VEPS”)formed EMHU with TexStack Infrastructure, LLC (“TexStack”), a wholly-owned subsidiary of Cardinal, entered into an Amended and Restated Limited Liability Company Agreement of EMHU LLC (the “LLC Agreement”) setting forth the terms relating to the Partnership. Pursuant to the LLC Agreement, VEPS made an initial capital contribution of $2.9 million for 25% of the common units of EMHU and committed to making a further capital contribution of $62.1 million upon the contemplated closing of the Property Acquisition (as defined below). See Note 3 to the condensed consolidated financial statements for further discussion of the EMHU. TexStack holds the remaining 75% equity interest in EMHU and made an initial capital contribution of $2.5 million.
Current report
On June 29, 2026, EMHU entered into a definitive agreement (the “Property PSA”)to purchase 100% of the equity interests of the current holder of a fee simple title to the Property that, upon closing, is intended to be converted into an AI data center, for an aggregate purchase price of approximately $230.0 million (the “Property Acquisition”). The closing of the Property Acquisition is subject to certain closing conditions, including the Partnership’s completion of its due diligenceand the expiration of a review period contemplated to end on August 14, 2026, which review period may be extended under the Property PSA. The Partnership exercised its option to extend the review period to August 13, 2026 and has the option to extend it an additional 15 days. While the Company anticipates the Property Acquisition to close during the third quarter of 2026, there can be no assurance that it will occur. In addition to the satisfaction by both the Partnership and the Property Seller of any closing conditions, TexStack is the managing member of the Partnership and, as such, has full discretion to make any decisions on behalf of the Partnership with respect to (i) its satisfaction relating to ongoing due diligence with respect to the Property, (ii) the Partnership’s decision whether or not to close the Property Acquisition, and (iii) any decision whether or not to extend the Review Period and/or the closing date and, if so, how often.
Current report
The Property has operated as a power-intensive industrial facility for the past three years and includes an owned substation and associated infrastructure for the approximately 150 MW of currently available capacity under an existing power agreement with a local utility. A recent load study confirmed the facility’s potential to almost double the available power to approximately 300 MW to support artificial intelligence workloads. Additionally, Cardinal has executed a non-binding letter of intent (the “LOI”) with a leading provider of compute (the “LOI Parties”). The LOI contemplates a triple net lease agreement between the Partnership and the LOI Parties that, subject to negotiation and execution of a definitive lease agreement, would potentially produce an aggregate of up to $1.0 billion in net lease payments and contemplates the ability to double the lease payments to the extent the power upgrade is completed.
Current report
As part of its strategic relationship with Hunt Properties and the Company’s strategy to allocate capital to opportunities in digital infrastructure, on July 20, 2026, the Company entered into a definitive agreement to purchase $20.0 million of CDP’s Series A-1 preferred stock, representing an approximately 8% ownership stake in CDP (the “CDP Investment”). The CDP Investment closed on July 20, 2026. CDP is a private developer of behind-the-meter powered data center campuses. The CDP Investment was part of an approximately $70.0 million Series A financing by CDP, intended to support CDP’s inaugural data center campus in West Texas, in connection with which CDP has entered into a letter of intent for a 750 MW Phase I data center campus.
Current report
The Company intends to evaluate additional data center infrastructure investment opportunities through and with Cardinal due to the significant investment and demand for these facilities due to the growth in artificial intelligence.
Current report
In July 2026, the Company was informed by Venom that it would not be able to repay the amounts the Company has financed as of June 30, 2026, including any partial payments made for inventory not yet completed by the manufacturer. The Company has reserved $2,026,087 for financing receivables owed by Venom and $96,450 for inventory deposits paid to the manufacturer for Venom inventory in the three and six months ended June 30, 2026. The Company has a security interest in the inventory and intends to exercise its rights to retain the inventory. Any recovery of amounts reserved, if any, will be recognized when the Company receives payment from Venom or from the sale of this inventory.
Current report
Revenue for the three months ended June 30, 2026 was $80,019 which represents financing income of $30,796, sales of Brats of $14,397, and accessories and parts of $34,533.
Current report
Revenue for the six months ended June 30, 2026 was $305,721 which represents financing income of $176,025, sales of Brats of $70,796, and accessories and parts of $57,585.
Current report
Revenue for the three months ended June 30, 2025 was $190,173 which represents sales of Brats of $202,998 and accessories and parts of $18,522 offset by $43,944 for the return of one Stag.
Current report
Cost of goods sold for the three months ended June 30, 2026 was $148,203, including payroll costs of $32,869 for employees and $34,438 for third party contractors performing product fulfillment, logistics management, and service and warranty, and facilities costs of $45,696. Inventory adjustments were $72,637 primarily due to the write off of Grunt and Grunt EVO parts transferred to a third party who will complete service and warranty obligations on these products. These costs are offset by a benefit of $83,318 due to the expiration of product warranties and the resulting reversal of warranty accrual. Product costs were, $28,481 for Brat and Brat parts.
Current report
Cost of goods sold for the six months ended June 30, 2026 was $310,827, including payroll costs of $83,843 for employees and $46,285 for third party direct labor contractors performing product fulfillment, logistics management, and service and warranty and facilities costs of $109,889. Inventory adjustments were $84,011 primarily due to the write off of Grunt and Grunt EVO parts transferred to a third party who will complete service and warranty obligations on these products. These costs are offset by a benefit of $129,176 due to the expiration of product warranties and the resulting reversal of warranty accrual. Product costs were $18,789 for Grunt EVO parts, and $82,811 for Brat and Brat parts.
Current report
Cost of goods sold for the three months ended June 30, 2025 was $387,271, including payroll costs of $91,520 for employees performing product fulfillment, logistics management, and service and warranty and facilities costs of $121,279. Inventory adjustments were $76,573 and warranty expense was a benefit of $61,394 due to the expiration of product warranties and the resulting reversal of warranty accrual. Product costs were $41,339 for Grunt EVOs, $190,072 for Brats, $60,908 of Stag costs due to the return of one unit and a reduction in shipping costs of $23,118.
Current report
Cost of goods sold for the six months ended June 30, 2025 was $891,863, including payroll costs of $160,085 for employees performing product fulfillment, logistics management, and service and warranty and facilities costs of $245,143. Inventory adjustments were $84,822 offset by a benefit of $61,394 due to the expiration of product warranties and the resulting reversal of warranty accrual. Product costs were $265,620 for Grunt EVOs, $309,861 for Brats, $60,908 of costs due to the return of one Stag that was written off and a reduction in shipping costs of $81,854.
Current report
Sales and marketing expenses were $2,382,844 for the three months ended June 30, 2026 and were primarily related to bad debt expense of $2,122,537 relating to the write off of Venom accounts receivable and prepaid financing deposits, expenses associated with promoting our products and brand of $146,091, employee payroll costs of $36,867, and professional fees of $27,025 for fees paid to a third party distributor, third party sales consultants and legal fees.
Current report
Sales and marketing expenses were $2,706,480 for the six months ended June 30, 2026 and were primarily related to bad debt expense of $2,122,537 relating to the write off of Venom accounts receivable and prepaid financing deposits, expenses associated with promoting our products and brand of $300,343 employee payroll costs of $93,399, and professional fees of $87,908 for fees paid to a third party distributor, third party sales consultants and legal fees. Travel expenses were $20,182 and software fees were $37,639.
Current report
Sales and marketing expenses were $368,718 for the three months ended June 30, 2025 and were primarily related to expenses associated with promoting our products and brand of $185,088, employee payroll costs of $90,414, and professional fees of $46,703 for fees paid to a third party distributor, third party sales consultants and legal fees.
Current report
Sales and marketing expenses were $664,942 for the six months ended June 30, 2025 and were primarily related to expenses associated with promoting our products and brand of $255,812 employee payroll costs of $169,537, and professional fees of $69,133 for fees paid to a third party distributor, third party sales consultants and legal fees and travel expenses were $48,278.
Current report
Product development expenses were $170,505 for the three months ended June 30, 2026 and were primarily related to expenses associated with employee payroll costs of $112,786, and prototype expense of $28,701.
Current report
Product development expenses were $295,451 for the six months ended June 30, 2026 and were primarily related to expenses associated with employee payroll costs of $207,183, prototype expenses of $33,708 and facilities costs of $20,164.
Current report
Product development expenses were $69,250 for the three months ended June 30, 2025 and were primarily related to expenses associated with employee payroll costs of $28,410, and facilities costs of $31,682.
Current report
Product development expenses were $303,902 for the six months ended June 30, 2025 and were primarily related to expenses associated with employee payroll costs of $151,269, depreciation expense of $36,432 and facilities costs of $72,714.
Current report
General and administrative expenses were $11,533,608 for the three months ended June 30, 2026, and were primarily related to costs of $9,858,130 for legal, advisory and consulting fees, primarily associated with the stockholder litigation matter, employee payroll costs of $410,862, stock-based compensation of $92,788 for a share-based award granted to Gemini, BTC custody fees with a cost of $23,705, professional fees of $378,872 (including auditor fees of $25,750, legal fees of $320,429 and consulting fees of $32,693), software costs of $70,167, insurance costs of $314,418 travel expenses of $36,370 and facilities expense of $61,646. Annual meeting costs in preparation of the annual meeting of $97,760 and Board compensation expense of $82,500.
Current report
General and administrative expenses were $16,105,390 for the six months ended June 30, 2026, and were primarily related to costs of $10,850,451 for legal, advisory and consulting fees, primarily associated with the stockholder litigation matter, employee payroll costs of $834,128, stock-based compensation of $1,797,041 for share-based awards granted to employees and to Gemini, BTC custody fees of $33,270, professional fees of $1,114,938 (including auditor fees of $158,607, legal fees of $877,804 and consulting fees of $78,527), software costs of $147,706, insurance costs of $635,835, travel expenses of $68,747 and facilities expense of $166,917. Annual meeting costs in preparation of the annual meeting of $97,760 and Board compensation expense of $165,000.
Current report
General and administrative expenses were $2,844,661 for the three months ended June 30, 2025, and were primarily related to expenses associated with employee payroll costs of $541,424, stock-based compensation of $1,125,802 for share-based awards granted to employees, professional fees of $190,954 (including auditor fees of $23,175, legal fees of $127,135 and consulting fees of $40,644), software costs of $121,655, insurance costs of $454,371 and travel expenses of $34,402. Public company expense costs of $123,147, annual meeting costs of $74,450 and Board compensation expense of $50,000.
Current report
General and administrative expenses were $4,393,941 for the six months ended June 30, 2025, and were primarily related to expenses associated with employee payroll costs of $1,091,826, stock-based compensation of $1,125,802 for share-based awards granted to employees, professional fees of $450,122 (including auditor fees of $100,425, legal fees of $184,813 and consulting fees of $164,884), software costs of $245,284, insurance costs of $904,759, and travel expenses of $34,402. Public company expense costs of $123,147, annual meeting costs of $74,450 and Board compensation expense of $100,000.
Current report
Net loss for the three and six months ended June 30, 2026 was $43,034,434 and $128,437,982, respectively.
Current report
Net loss from continuing operations for the three and six months ended June 30, 2025 was $3,507,818 and $5,584,193, respectively.
Removed paragraphs (11)
Previous report
Venom currently sources its golf cart and accessory purchases from one international third-party manufacturer. Risks related to future purchases of their products from this manufacturer are similar to those of our two-wheel products noted above and could result in delays in ordering and receiving products that could impact the amount of inventory purchases that Venom may finance through the Company.
Previous report
Revenue for the three months ended March 31, 2026 was $225,702 which represents sales of Brats of $56,399 and accessories and parts of $23,152. The Company also realized $145,229 of finance revenue where the Company provided the financing services for the purchase of inventory.
Previous report
Cost of goods sold for the three months ended March 31, 2026 was $162,624, including payroll costs of $50,975 for employees performing product fulfillment, logistics management, and service and warranty and facilities costs of $64,193, offset by a benefit from the reversal of our warranty accrual of $45,857 due to the expiration of product warranties. Product costs were $54,331 for Brats.
Previous report
Cost of goods sold for the three months ended March 31, 2025 was $504,592, including payroll costs of $68,565 for employees performing product fulfillment, logistics management, and service and warranty and facilities costs of $123,863. Product costs were $224,281 for Grunt EVOs, and $119,789 for Brats.
Previous report
Sales and marketing expenses were $323,636 for the three months ended March 31, 2026 and were primarily related to expenses associated with promoting our products and promoting the Empery Digital brand after the announcement of our digital asset treasury strategy and name change in July 2025 of $154,252, employee payroll costs of $56,532, and professional fees of $60,883 for fees paid to third-party sales consultants.
Previous report
Sales and marketing expenses were $296,224 for the three months ended March 31, 2025 and were primarily related to expenses associated with promoting our products and brand of $70,724 employee payroll costs of $79,123, and professional fees of $22,430 for fees paid to a third party distributor, third- party sales consultants and legal fees.
Previous report
Product development expenses were $124,946 for the three months ended March 31, 2026 and were primarily related to expenses associated with employee payroll costs of $94,397.
Previous report
Product development expenses were $234,652 for the three months ended March 31, 2025 and were primarily related to expenses associated with employee payroll costs of $122,859, and facilities costs of $41,032.
Previous report
General and administrative expenses were $4,571,782 for the three months ended March 31, 2026, and include expenses associated with employee payroll costs, excluding stock-based compensation, of $423,265. The Company recognized $1,704,252 of stock-based compensation including $677,665 for share-based awards for inducement stock options granted to three new employees upon completion of the Private Placements and $1,026,587 for the warrants granted to Gemini based on the fair value and derived service period of these equity awards (see Notes 9 and 10 to the condensed consolidated financial statements for further discussion). Period expenses also include professional fees of $1,606,077 (including auditor fees of $132,857, and legal fees of $1,549,385, which includes legal fees of $992,321 for stockholder activist matters), software costs of $77,540, insurance costs of $321,418, and facilities costs of $105,271. Additionally, the period includes Board compensation expense of $82,500.
Previous report
General and administrative expenses were $1,549,280 for the three months ended March 31, 2025, and were primarily related to expenses associated with employee payroll costs of $550,402, professional fees of $259,168 (including auditor fees of $77,250, legal fees of $57,678 and consulting fees of $124,240), software costs of $123,629, insurance costs of $450,388, and Board compensation expense of $50,000.
Previous report
The Company also sold BTC in the three months ended March 31, 2026 and realized a loss of $53.3 million based on theoriginal cost of the BTC sold.
Reworded paragraphs (35)
Previous wording
The following discussion and analysis is intended as a review of significant factors affecting the Company’s financial condition and results of operations for the periods indicated. This discussion and analysis should be read in conjunction with the financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q and the Company’s Annual Report on Form 10-K, which contains audited financial statements of the Company as of and for the year ended December 31, 2025, previously filed with the Securities and Exchange Commission. Results for the three months ended March 31, 2026 are not necessarily indicative of results for the year ending December 31, 2026 or any future period.
Current wording
The following discussion and analysis is intended as a review of significant factors affecting the Company’s financial condition and results of operations for the periods indicated. This discussion and analysis should be read in conjunction with the financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q and the Company’s Annual Report on Form 10-K, which contains audited financial statements of the Company as of and for the year ended December 31, 2025, previously filed with the Securities and Exchange Commission. Results for the three and six months ended June 30, 2026 are not necessarily indicative of results for the year ending December 31, 2026 or any future period.
Previous wording
This Quarterly Report on Form 10-Q contains forward-looking statements. These forward-looking statements generally can be identified by the use of words such as “anticipate,” “expect,” “plan,” “could,” “may,” “believe,” “estimate,” “forecast,” “goal,” “potentially,” “project,” and other words of similar meaning. All statements, other than statements related to present facts or current conditions or historical facts, contained in this Quarterly Report on Form 10-Q are forward-looking statements, including statements regarding our strategy, future operations, future financial position, including, but not limited to, the Company’s expectations regarding financial metrics and trends for the remainder of fiscal year 2026, the Company’s digital asset-treasury strategy, the Company’s ability to efficiently build its BTC portfolio and reposition its powersports business, the Company’s ability to increase Bitcoin per share to drive stockholder value, the Company’s ability to generate income through derivatives on BTC through the use of short-term put and call contracts, the repurchases under the Company’s share repurchase program and financing arrangements related thereto, the real time updates on the Company’s website and the ability of the Company to generate positive net interest income from financing of inventory purchases.
Current wording
This Quarterly Report on Form 10-Q contains forward-looking statements. These forward-looking statements generally can be identified by the use of words such as “anticipate,” “expect,” “plan,” “could,” “may,” “believe,” “estimate,” “forecast,” “goal,” “potentially,” “project,” and other words of similar meaning. All statements, other than statements related to present facts or current conditions or historical facts, contained in this Quarterly Report on Form 10-Q are forward-looking statements, including statements regarding our strategy, future operations, future financial position, including, but not limited to, statements relating to:, the Company’s expectations regarding financial metrics and trends for the remainder of fiscal year 2026, the Company’s digital asset-treasury strategy, the Company’s ability to efficiently manage its BTC portfolio and reposition its powersports business, the Company’s ability to increase Bitcoin per share to drive stockholder value, the Company’s ability to generate income through derivatives on BTC through the use of short-term put and call contracts, repurchases under the Company’s share repurchase program and financing arrangements related thereto; the Company’s strategic partnership with Cardinal Power LLC (“Cardinal”), the ability of the Company and Cardinal to execute on its shared vision for AI infrastructure and to identify, fund and execute on future opportunities, and the realization of the expected benefits therefrom; closing under the definitive agreement by EMHU, LLC, a Delaware limited liability company (“EMHU” or the “Partnership”) to purchase 100% of the equity interests of the current holder of a fee simple title to a property in the Midwest and the timing thereof; the proposed conversion of the Midwest property into an AI data center and the potential to increase its power capacity; EMHU or its affiliate executing a definitive lease agreement with respect to the Midwest property and the terms thereof, including the expected total net lease payments that may be realized in connection therewith; the Company’s plans for future data center-related opportunities; the Company’s plans for future capital allocation; Cardinal Data Power Inc.’s (“CDP”) proposed data center campus in West Texas and the letter of intent associated therewith;the expected outcome or impact of pending or threatened litigation and the anticipated insurance recoveries associated therewith; and the ability of the Company to generate positive net interest income from financing of inventory purchases.
Previous wording
Each forward-looking statement is subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied in such statements. Applicable risks and uncertainties include the risks and uncertainties regarding, among other things: our ability to keep pace with new technology and changing market needs; changes in business, market, financial, political and regulatory conditions; the Company’s operations and business, including the highly volatile nature of the price of Bitcoin and other cryptocurrencies; the Company’s stock price may be highly correlated to the price of the digital assets that it holds; increased competition in the industries in which the Company operates; significant legal, commercial, regulatory and technical uncertainty regarding digital assets generally; the treatment of crypto assets for U.S. and foreign tax purpose; the Company’s ability to generate revenues from sales and generate cash from financing of inventory, sale of its products and Bitcoin derivatives; significant decrease in the market value of the Company’s Bitcoin holdings; the Company’s ability to obtain additional financing through equity or debt offerings, obtain borrowings from financing arrangements or generate cash from the sale of Bitcoin and the competitive environment of our business. Other risks and uncertainties include those identified under the heading “Risk Factors” contained in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31, 2025, as filed with the SEC on March 27, 2026, and in any subsequent filings with the SEC.
Current wording
Each forward-looking statement is subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied in such statements. Applicable risks and uncertainties include the risks and uncertainties regarding, among other things: our ability to keep pace with new technology and changing market needs; changes in business, market, financial, political and regulatory conditions; reduced demand for data centers or decreases in information technology spending; increased competition or available supply of data center capacity; delays or disruptions in connectivity or availability of power; deterioration in the relationship between the Company and Cardinal or CDP, or between EMHU or CDP and their potential data center tenants; the Company’s operations and business, including the highly volatile nature of the price of Bitcoin and other cryptocurrencies; the Company’s stock price may be highly correlated to the price of the digital assets that it holds; increased competition in the industries in which the Company operates; significant legal, commercial, regulatory and technical uncertainty regarding digital assets generally; the treatment of crypto assets for U.S. and foreign tax purpose; the Company’s ability to generate revenues from sales and generate cash from financing of inventory, sale of its products and Bitcoin derivatives; significant decrease in the market value of the Company’s Bitcoin holdings; the Company’s ability to obtain additional financing through equity or debt offerings, obtain borrowings from financing arrangements or generate cash from the sale of Bitcoin and the competitive environment of our business. Other risks and uncertainties include those identified under the heading “Risk Factors” contained in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31, 2025, as filed with the SEC on March 27, 2026, (as amended by Form 10-K/A filed with the SEC on April 21, 2026, and in any subsequent filings with the SEC.
Previous wording
The key component of the digital asset strategy is to optimize the Company’s capital structure to increase BTC per share to drive stockholder value. This includes issuing equity when market conditions allow us to raise capital at a premium to net asset value (“NAV”), defined as the value of BTC holdings plus cash, minus debt, divided by adjusted outstanding shares, which includes common stock outstanding plus all pre-funded warrants outstanding. The Company may repurchase shares when shares trade below NAV. The Company has an ATM program in place pursuant to which it can sell up to $1.0 billion of common stock and since the inception of the digital asset treasury strategy through of May 7, 2026 has sold 136,053 shares of common stock for $1.5 million, including commissions, at an average price of $10.90. The Company may also complete other equity or convertible debt issuances if it determines market conditions are appropriate.
Current wording
The key component of the digital asset strategy is to optimize the Company’s capital structure to increase BTC per share to drive stockholder value. This includes issuing equity when market conditions allow us to raise capital at a premium to net asset value (“NAV”), defined as the value of BTC holdings plus cash, minus debt, divided by adjusted outstanding shares, which includes common stock outstanding plus all pre-funded warrants outstanding. The Company may repurchase shares when shares trade below NAV.
Previous wording
In addition, the Company’s strategy includes repurchasing the Company’s common stock when the Company’s common stock is trading below NAV per share. The Company has a share repurchase program that allows it to repurchase up to $200.0 million of common stock and through May 7, 2026 has bought 26,244,657 shares of common stock for $149.7 million, including commissions, at an average price of $5.71. The Company has used proceeds of $105.0 million from two borrowing arrangements that allowed for borrowings of up to $150.0 million, to fund these share repurchases. Some of our BTC is held by these lenders as collateral for outstanding borrowings. On March 31, 2026, the Company repaid $50.0 million of borrowings on a term loan from proceeds received from the sale of BTC and proceeds from the March 2026 equity offering noted above. See Note 5 to the condensed consolidated financial statements for further discussion of these borrowing arrangements.
Current wording
The Company has a share repurchase program that allows it to repurchase up to $200.0 million of common stock and through August 6, 2026 has bought 26,244,657 shares of common stock for$149.7 million, including commissions, at an average price of$5.71. The Company has used proceedsof $105.0 million from two borrowing arrangements that allowed for borrowings of up to $150.0 million as well as proceeds received from the sale of BTC, to fund these share repurchases. Some of our BTC is held by these lenders as collateral for outstanding borrowings. On March 31, 2026, the Company repaid $50.0 million of borrowings on a term loan from proceeds received from the sale of BTC and proceeds from the March 2026 equity offering noted above. As of August 6, 2026, the Company has $35.0 million outstanding under its $100.0 million credit facility. See Note 6 to the condensed consolidated financial statements for further discussion of these borrowing arrangements.
Previous wording
Additionally, a significant component of the digital asset treasury strategy is to reduce costs across the Company so that cash generated from operations can be used to pay operating expenses and any excess cash generated can be used to purchase more BTC or repurchase shares of our common stock. We also generated, and may continue to generate income through buying and selling derivatives on BTC, including the use of short-term put and call contracts. Since the inception of our digital asset strategy through May 7, 2026, the Company generated income of $1.4 million from trading these derivatives, which is recorded in Other income in the condensed consolidated statement of operations.
Current wording
Additionally, a significant component of the digital asset treasury strategy is to reduce costs across the Company so that cash generated from operations can be used to pay operating expenses and any excess cash generated can be used to purchase more BTC or repurchase shares of our common stock. We also generated, and may continue to generate income through buying and selling derivatives on BTC, including the use of short-term put and call contracts. Since the inception of our digital asset strategy through August 6, 2026, the Company generated income of $2.0 million from trading these derivatives, which is recorded in Other income in the condensed consolidated statement of operations.
Previous wording
The Company also recognizes the risk that digital assets pose with respect to digital wallets being compromised and the Company uses institutional-grade custodians to hold its BTC in wallets, some of which are isolated from the internet, referred to as cold storage, to minimize this risk. We view our BTC as long-term holdings, although there are no restrictions on selling BTC that is not held as collateral by our lenders. As of May 7, 2026 we have 2,914 BTC, of which 1,353 are restricted by lenders as collateral for outstanding loan balances.
Current wording
The Company also recognizes the risk that digital assets pose with respect to digital wallets being compromised and the Company uses institutional-grade custodians to hold its BTC in wallets, some of which are isolated from the internet, referred to as cold storage, to minimize this risk. We view our BTC as long-term holdings, although there are no restrictions on selling BTC that is not held as collateral by our lenders. As of August 6, 2026 we have 1,279 BTC, of which 954 are restricted by lenders as collateral for outstanding loan balances.
Previous wording
The BTC market has been characterized by significant volatility in price, relative anonymity, a developing regulatory landscape, potential susceptibility to market abuse and manipulation, compliance and internal control failures at exchanges, and various other risks that are, or may be, inherent in its entirely electronic, virtual form and decentralized network. For example, since the implementation of our digital asset treasury strategy through May 7, 2026, BTC has closed at a high of $126,279 and a low of $60,033.
Current wording
The BTC market has been characterized by significant volatility in price, relative anonymity, a developing regulatory landscape, potential susceptibility to market abuse and manipulation, compliance and internal control failures at exchanges, and various other risks that are, or may be, inherent in its entirely electronic, virtual form and decentralized network. For example, since the implementation of our digital asset treasury strategy through August 6, 2026, BTC has traded at a high of $126,279 and a low of$57,742.
Previous wording
Losses on digital assets significantly contributed to our results of operations for the three months ended March 31, 2026. The loss on digital assets of $78.4 million was recorded, representing 94%, of our operating expenses for the three months ended March 31, 2026.
Current wording
Losses on digital assets significantly contributed to our results of operations for the six months ended June 30, 2026. The loss on digital assets of$106.3 million was recorded, representing 87%, of our operating expenses for the six months ended June 30, 2026.
Previous wording
On October 15, 2025, the Company entered into the Venom APA with Venom to divest the Volcon brand in exchange for a non-dilutable 10% equity position in Venom’s reorganized Delaware corporation on a fully-diluted basis. The Company transferred all Volcon IP, including all Volcon intellectual property, brand assets, trademarks, sales and distribution networks and engineering documentation associated with the Volcon IP other than its E-Bike, the Brat. The Company will have the right to appoint one director to Venom’s board and may continue to finance Venom’s inventory purchases. In the event that Venom does not complete its corporate reorganization within six months, with a 60 day grace period, the Company will have the option to repurchase the Volcon IP for a nominal amount.
Current wording
On October 15, 2025, the Company entered into the Venom APA with Venom to divest the Volcon brand in exchange for a non-dilutable 10% equity position in Venom’s reorganized Delaware corporation on a fully-diluted basis. The Company transferred all Volcon IP, including all Volcon intellectual property, brand assets, trademarks, sales and distribution networks and engineering documentation associated with the Volcon IP other than its E-Bike, the Brat. The Company will have the right to appoint one director to Venom’s board. In the event that Venom did not complete its corporate reorganization within six months, with a 60 day grace period, the Company had the option to repurchase the Volcon IP for a nominal amount. While Venom did not complete the reorganization within this time period the Company has not elected to repurchase the Volcon IP.
Previous wording
The Company expects that this agreement will reduce Empery Digital’s future product liability exposure by transferring ownership of Volcon’s four-wheel vehicle business to Venom. The Company also plans to expand its vehicle financing operations for golf carts and UTVs to generate positive cash flow by leveraging the spread between the Company’s cost of capital and interest income from vehicle financing. The Company has been transitioning its powersports dealers to Venom but will continue ongoing warranty support through the remaining warranty period of vehicles the Company sold within these channels.
Current wording
The Company expects that this agreement will reduce Empery Digital’s future product liability exposure by transferring ownership of Volcon’s four-wheel vehicle business to Venom. The Company also plans to expand its vehicle financing operations for Ebikes, golf carts and UTVs to generate positive cash flow by leveraging the spread between the Company’s cost of capital and interest income from vehicle financing. The Company has been transitioning its powersports dealers to Venom but will continue ongoing warranty support through the remaining warranty period of vehicles the Company sold within these channels.
Previous wording
On November 17, 2025, the Venom Supply Agreement was amended to increase the amount by $2.5 million (for a total of $4.5 million excluding the October 29, 2025 amendment). Payment terms are the earlier of 60 days from receipt of inventory by Venom or upon sale by Venom. As of March 31, 2026, Venom has outstanding $2.4 million of financing receivables, of which $1.7 million has been paid through May 7, 2026. Subsequent to March 31, 2026 through May 7, 2026, the Company has paid $0.5 million to the manufacturer for orders placed by Venom and additional payments due to be paid for orders placed by Venom as of May 7, 2026, are $0.7 million.
Current wording
On November 17, 2025, the Venom Supply Agreement was amended to increase the amount by $2.5 million (for a total of $4.5 million excluding the October 29, 2025 amendment). Payment terms are the earlier of 60 days from receipt of inventory by Venom or upon sale by Venom. As of June 30, 2026, Venom has outstanding $2.1 million of financing receivables.. Subsequent to June 30, 2026 through August 6, 2026, the Company has not paid any additional amounts to the manufacturer for orders placed by Venom and additional payments due to be paid for orders placed by Venom as of August 6, 2026, are $309,280.
Previous wording
We expect that we will complete additional financing transactions for Venom under the Venom Supply Agreement and we are actively in discussions for the opportunity to fund inventory purchases with other companies that sell golf carts and UTVs.
Current wording
We are actively in discussions for the opportunities to fund inventory purchases with other companies that sell Ebikes.
Previous wording
We began selling the Grunt off-road motorcycle in September 2021 and the Grunt EVO off-road motorcycle replaced the Grunt in September 2023. Due to the manufacturing cost of the Grunt EVO, we terminated the manufacturing contract for it in December 2024. As of March 31, 2025, we have sold all of the remaining Grunt EVO units.
Current wording
We began selling the Grunt off-road motorcycle in September 2021 and the Grunt EVO off-road motorcycle replaced the Grunt in September 2023. Due to the manufacturing cost of the Grunt EVO, we terminated the manufacturing contract for it in December 2024. As of March 31, 2025, we sold all of the remaining Grunt EVO units.
Previous wording
Prior to the divestiture of our four-wheel product lines, we sold our products through powersports dealers, bicycle retailers, and golf cart dealers. We expect to continue to utilize our bicycle dealers. We are transitioning our powersports and golf cart dealers to Venom but will continue to support these dealers for service and warranty obligations for products we sold to them.
Current wording
Prior to the divestiture of our four-wheel product lines, we sold our products through powersports dealers, bicycle retailers, and golf cart dealers. We expect to continue to expand our bicycle dealers.
Previous wording
We also sell our two-wheel products internationally through importers. Each importer buys vehicles and accessories and sells them to local dealers or directly to consumers. Payment for vehicle orders is required in advance of shipment. Local dealers or the importer will provide warranty and repair services for vehicles purchased in their country and we will reimburse them for any parts or labor incurred for warranty repairs. As of May 7, 2026, we have one importer in Mexico, one for the Caribbean Region, and one in New Zealand to sell our two-wheel vehicles and accessories in their assigned countries/markets.
Current wording
We also sell our two-wheel products internationally through importers. Each importer buys vehicles and accessories and sells them to local dealers or directly to consumers. Payment for vehicle orders is required in advance of shipment. Local dealers or the importer will provide warranty and repair services for vehicles purchased in their country and we will reimburse them for any parts or labor incurred for warranty repairs. As of May 7, 2026, we have one importer in Mexico and one for the Caribbean Region to sell our two-wheel vehicles and accessories in their assigned countries/markets.
Previous wording
The following financial information is for the three months ended March 31, 2026 and 2025.
Current wording
The following financial information is for the three and six months ended June 30, 2026 and 2025.
Previous wording
Revenue for the three months ended March 31, 2025 was $462,332 which represents sales of Grunt EVOs of $304,905, Brats of $99,458, and accessories and parts of $18,265.
Current wording
Revenue for the six months ended June 30, 2025 was $652,505 which primarily represents sales of Grunt EVOs of $304,905, Brats of $302,456, and accessories and parts of $36,787 offset by $43,944 for the return of one Stag.
Previous wording
For the remainder of 2026 we expect our sales to decrease compared to 2025 due to the sale of our four-wheel products to Venom and our transition to financing inventory purchases for other golf cart and four-wheel product companies.
Current wording
For the remainder of 2026 we expect our sales to decrease compared to 2025 due to the sale of our four-wheel products to Venom, our transition to financing inventory purchases for other companies and lower Brat sales as we develop the next version of the Brat and other Ebike models.
Previous wording
For the remainder of 2026, we expect sales expenses to decrease due to our transition away from selling four-wheeled products to financing inventory purchases. We expect marketing expenses to remain consistent as we develop the Empery Digital brand and increase awareness of our digital asset strategy.
Current wording
For the remainder of 2026, we expect sales expenses to decrease compared to 2025 due to our transition away from selling four-wheeled products to financing inventory purchases. We expect marketing expenses to remain consistent as we develop the Empery Digital brand.
Previous wording
For the remainder of 2026, we expect general and administrative expenses to increase due to legal and other professional feesdue to certain corporate governance and stockholder engagement matters, including fees associated with stockholder activist matters, partially offset by a reduction in our facility cost when our current office lease expires in August 2026.
Current wording
For the remainder of 2026, we expect general and administrative expenses to remain elevated due to legal and other professional fees associated with stockholder activist and other related matters, partially offset by reimbursement by our insurance carrier for legal fees above our $5.0 million deductible and a reduction in our facility cost when our Round Rock, Texas office and warehouse leases expire in August 2026.
Previous wording
The Company’s digital assets are initially recorded at cost and are measured at fair value as of each reporting period. The Company determines the fair value of its Bitcoin based on quoted (unadjusted) prices on the Gemini exchange, the active exchange that the Company has determined is its principal market for BTC. Based on the price as of March 31, 2026 of $68,216 per BTC, the Company recognized a loss of $78.4 million.
Current wording
The Company’s digital assets are initially recorded at cost and are measured at fair value as of each reporting period. The Company determines the fair value of its Bitcoin based on quoted (unadjusted) prices on the Gemini exchange, the active exchange that the Company has determined is its principal market for BTC. The Company recognized a loss on digital assets of $27,913,227 and $106,267,263 for the three and six months ended June 30, 2026, respectively.
Previous wording
Net Interest and other income/expenses for the three months ended March 31, 2026 was net expense of $2,092,226. This includes interest expense of $2,058,035 primarily on the borrowings to repurchase our common stock and interest expense on vendor settlement liabilities that were recorded on a discounted cash flow basis, interest income of $42,539 primarily from interest earned on cash held in a money market account and a certificate of deposit, net income of $553,429 primarily generated from BTC derivative contracts and the loss of $568,142 on repayment of a credit facility and loss on the change in derivative liabilities of $62,017.
Current wording
Other income/expenses for the six months ended June 30, 2026 was a net expense of $3,058,292. This includes interest expense of $3,120,694 primarily on the borrowings to repurchase our common stock and interest expense on vendor settlement liabilities that were recorded on a discounted cash flow basis, interest income of $87,264 primarily from interest earned on cash held in a money market account and a certificate of deposit, other income of $585,180 primarily generated from BTC derivative contracts, a loss of $568,142 on repayment of a credit facility and loss on the change in derivative liabilities of $41,900.
Previous wording
Interest and other income/expenses for the three months ended March 31, 2025 was insignificant.
Current wording
Interest and other income/expenses for the three and six months ended June 30, 2025 was insignificant.
Previous wording
For the remainder of 2026, we expect interest expense to decrease compared to the quarter ended March 31, 2026 due to the repayment of the term loan unless we borrow additional amounts under the delayed draw credit facility to make additional repurchases of our common stock. If market conditions allow, the Company may issue equity or sell Bitcoin to repay outstanding loans or obtain other loan facilities with lower interest rates that could reduce interest expense in the future.
Current wording
For the remainder of 2026, we expect interest expense to decrease compared to the quarter ended June 30, 2026 due to the repayment of amounts borrowed from the delayed draw credit facility unless we borrow additional amounts under this facility to make additional repurchases of our common stock. If market conditions allow, the Company may issue equity or sell Bitcoin to repay outstanding loans or obtain other loan facilities with lower interest rates that could reduce interest expense in the future.
Previous wording
Net loss for the three months ended March 31, 2026, was $85,403,548 compared to a net loss of $2,460,430. As discussed above, the increase in net loss for the three months ended March 31, 2026 is primarily related to the losses on BTC as there were no such losses in the three months ended March 31, 2025.
Current wording
As discussed above, the increase in net loss for the three and six months ended June 30, 2026 is primarily related to the losses on BTC and costs incurred for the shareholder litigation matter as there were no such losses in the three and six months ended June 30, 2025.
Previous wording
On March 31, 2026, we had cash and restricted cash of $5.8 million, including $0.1 million of restricted cash, and we had a working capital of $6.5 million. Since inception we have funded our operations from proceeds from debt and equity sales.
Current wording
On June 30, 2026, we had cash, cash equivalents and restricted cash of $3.6 million, including $0.1 million of restricted cash, and we had a working capital deficit of $5.6 million. Since inception we have funded our operations from proceeds from debt and equity sales.
Previous wording
Net cash used in operating activities was $3.5 million for the three months ended March 31, 2026 and includes all of our operating costs, except non-cash costs of depreciation and amortization, loss on change in derivative financial liabilities all of which were insignificant for the period and stock-based compensation of $1.7 million and loss on Bitcoin of $78.4 million. Significant uses/contributions of cash used in operating activities includes an increase in accounts receivable of $2.2 million primarily due to inventory financing, an increase in accounts payable of $3.1 million primarily due to the classification of a negative balance in one of our bank balances of $2.8 million due to the timing of share repurchases funded from this bank account, an increase of $0.1 million in inventory and inventory deposits, a decrease in prepaid assets of $0.5 million due to the reclassification of inventory financing prepayments to accounts receivable as the Company invoiced Venom based on the financing terms, and an increase of $0.2 million in accrued liabilities primarily due to an increase in accrued legal fees of $0.9 million for legal fees offset by payments on vendor settlements of $0.4 million.
Current wording
Net cash used in operating activities was $10.4 million for the six months ended June 30, 2026 and includes all of our operating costs, except non-cash costs of depreciation and amortization, loss on change in derivative financial liabilities all of which were insignificant for the period, stock-based compensation of $1.8 million, bad debt expense of $2.2 million relating to the write off of Venom accounts receivable and inventory financing deposits, and loss on Bitcoin of $106.3 million. Significant uses/contributions of cash used in operating activities includes an increase in accounts receivable of $1.9 million, an increase in related party payable of $7.8 million due to the legal invoices related to the shareholder litigation matter in the amount of $7.8 million, a decrease in prepaid assets of $1.5 million due to the financing prepayments.
Previous wording
Net cash used in operating activities was $3.6 million for the three months ended March 31, 2025 and includes all of our operating costs, except non-cash costs of depreciation and amortization, loss on change in derivative financial liabilities and stock-based compensation, all of which were insignificant for the period. Significant uses/contributions of cash used in operating activities includes a decrease of $0.4 million in inventory and inventory deposits, an increase of $0.4 million in prepaid assets, a decrease of $0.2 million in accounts payable, and a decrease of $0.7 million in accrued liabilities primarily due to payments on vendor settlements, $0.1 million used to pay our lease liabilities and $0.2 million for fulfillment of sales where customers had previously placed deposits.
Current wording
Net cash used in operating activities was $7.2 million for the six months ended June 30, 2025 and includes all of our operating costs, except non-cash costs of depreciation and amortization, loss on change in derivative financial liabilities all of which were insignificant for the period and stock-based compensation of $1.1 million. Significant uses/contributions of cash used in operating activities includes an increase of $0.2 million in inventory and inventory deposits, a decrease of $0.2 million in accounts payable, and a decrease of $1.5 million in accrued liabilities primarily due to payments on vendor settlements, $0.2 million used to pay our lease liabilities and $0.2 million for fulfillment of sales where customers had previously placed deposits.
Previous wording
For the remainder of 2026, we expect net cash used in operating activities will increase compared to the three months ended March 31, 2026 due to an increase in legal and professional fees related to stockholder activism matters, partially offset by a decrease in expenses such as rent in connection with our anticipated wind down our Texas facilities.
Current wording
For the remainder of 2026, we expect net cash used in operating activities will increase compared to the six months ended June 30, 2026 due to an increase in legal and professional fees related to stockholder activism matters, partially offset by a decrease in expenses such as rent in connection with our anticipated wind down of our Texas facilities.
Previous wording
Net cash provided by investing activities was $74.7 million for the three months ended March 31, 2026, consisting of proceeds from the sale of Bitcoin of $74.7 million
Current wording
Net cash provided by investing activities was $79.2 million for the six months ended June 30, 2026, consisting of proceeds from the sale of Bitcoin of $80.1 million, proceeds from the maturity of a certificate of deposit of $2.1 million, offset by an investment in EMHU of $2.9 million.
Previous wording
Net cash used in investing activities was $0.2 million for the three months ended March 31, 2025, primarily consisting of purchases of equipment and tooling.
Current wording
Net cash used in investing activities was $2.2 million for the six months ended June 30, 2025, primarily consisting of the purchase of a certificate of deposit $2.0 million as collateral for our dealer floor plan financing and $0.2 million for purchases of equipment and tooling.
Previous wording
Cash used in financing activities for the three months ended March 31, 2026, was $74.4 million and was primarily related to net proceeds of $24.8 million from the sale of common stock units and pre-funded warrant units from the March 2026 offering, proceeds of $5.0 million from borrowing arrangements, offset by share repurchases of $44.2 million, repayment of the term loan $50.0 million and a payment made on the delayed draw credit facility of $10.0 million.
Current wording
Cash used in financing activities for the six months ended June 20, 2026, was $74.2 million and was primarily related to net proceeds of $24.8 million from the sale of common stock units and pre-funded warrant units from the March 2026 offering, proceeds of $15.0 million from borrowing on the delayed draw credit facility, offset by share repurchases of $54.0 million, repayment of the term loan $50.0 million and a payment made on the delayed draw credit facility of $10.0 million.
Previous wording
Cash provided by financing activities for the three months ended March 31, 2025, was $19.1 million and was primarily related to proceeds of $8.8 million from the sale of our common stock from the At the Market offering, proceeds of $10.7 million from the sale of common stock units and prefunded warrant units, partially offset by share repurchases of $0.4 million.
Current wording
Cash provided by financing activities for the six months ended June 30, 2025, was $19.0 million and was primarily related to proceeds of $8.8 million from the sale of our common stock from the At the Market offering, proceeds of $10.7 million from the sale of common stock units and pre-funded warrant units, partially offset by share repurchases of $0.5 million.
Previous wording
As of March 31, 2026, we had incurred an accumulated deficit of $401.8 million since inception. Management anticipates that our cash on hand as of March 31, 2026, plus cash expected to be generated from operations and the borrowing available under the delayed draw credit facility and proceeds that could be received from the sale of Bitcoin will be sufficient to fund planned operations beyond one year from the date of the issuance of the financial statements as of and for the three months ended March 31, 2026.
Current wording
As of June 30, 2026, we had incurred an accumulated deficit of $444.8 million since inception. Management anticipates that our cash on hand as of June 30, 2026, plus cash expected to be generated from operations and the borrowing available under the delayed draw credit facility and proceeds that could be received from the sale of Bitcoin will be sufficient to fund planned operations beyond one year from the date of the issuance of the financial statements as of and for the six months ended June 30, 2026.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
The Company may also complete other equity or convertible debt issuances if it determines market conditions are appropriate.
Current report — wording carried from elsewhere
Other income/expenses for the three months ended June 30, 2026 was a net expense of $966,066. This includes interest expense of $1,062,659 primarily on the borrowings to repurchase our common stock and interest expense on vendor settlement liabilities that were recorded on a discounted cash flow basis, interest income of $44,725 primarily from interest earned on cash held in a money market account and a certificate of deposit, net income of $31,751 and a gain on the change in derivative liabilities of $20,117.