Empery Digital Inc.
For the period ended Sep 30, 2026. Filed Nov 6, 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.
Sep 30, 2026 · Filed Nov 6, 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 2026-06-30; filed 2026-08-07.
0001683168-26-006099
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-09-30; filed 2026-11-06.
0001683168-26-008381
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 114 previous paragraphs and 118 current paragraphs.
47 unchanged; 46 reworded; 24 added; 21 removed; 0 previous and 1 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 (24)
Current report
EMHU LLC
Current report
Following this divestiture, the Company will concentrate on its two-wheel business, including the launch of new products in the U.S. and Europe. The Company also plans to expand its inventory financing operations to generate positive cash flow by leveraging the spread between the Company’s cost of capital and interest income. Revenues and expenses for the two-wheel business and inventory financing business will be presented in the loss from continuing operations. Although the Company transferred the tradenames, design patents and engineering drawings for the Grunt, Grunt EVO and Stag in the Venom APA, the Company had discontinued the sale of these products before the shift in operations therefore revenues and costs associated with these products are also presented in the loss from continuing operations.
Current report
In July 2026, Venom informed the Company that it was unable to pay amounts due under the inventory financing agreement it had with the Company and that Venom was considering strategic alternatives and would not complete the reorganization to a Delaware corporation. While Venom did not complete the reorganization within this time period the Company has not elected to repurchase the Volcon IP. As discussed in Note 2, the Company reserved amounts due from Venom and inventory payments made to Venom’s manufacturer. The Company will no longer finance any future Venom inventory orders.
Current report
Revenue for the three months ended September 30, 2026 was $99,606 which primarily represents sales of Brats of $73,646 and accessories and parts of $27,064.
Current report
Revenue for the three months ended September 30, 2025 was $199,984 which primarily represents sales of Brats of $70,491. The Company also realized $69,624 of finance revenue from the first shipment of golf carts from a manufacturer to its customer where the Company provided the financing of the inventory purchase.
Current report
Revenue for the nine months ended September 30, 2025 was $852,489 which primarily represents sales of Brats of $372,947, Grunt EVOs of $307,336, and accessories and parts of $84,084. The Company also realized $69,624 of finance revenue from the first shipment of golf carts from a manufacturer to its customer where the Company provided the financing of the inventory purchase.
Current report
Cost of goods sold for the nine months ended September 30, 2025 was $1,089,400, including payroll costs of $239,406 for employees performing product fulfillment, logistics management, and service and warranty and facilities costs of $346,612. Inventory adjustments were $103,253 offset by a benefit from the reversal of our warranty accrual of $144,563 due to the expiration of product warranties. Product costs were $267,724 for Grunt EVOs, and $391,610 for Brats.
Current report
Sales and marketing expenses were $231,470 for the three months ended September 30, 2026 and were primarily related to expenses associated with promoting our products and brand of $115,659, employee payroll costs of $49,627, and professional fees of $50,652 for fees paid to a third party distributor, third party sales consultants and legal fees.
Current report
Sales and marketing expenses were $420,754 for the three months ended September 30, 2025 and were primarily related to expenses associated with promoting the Empery Digital brand after the announcement of our digital asset treasury strategy and name change in July 2025 of $235,876, sales employee payroll costs of $47,216 and professional fees of $47,278 for fees paid to a third-party distributor, third-party sales consultants and other consulting fees and depreciation expense of $11,424 primarily for demonstration vehicles used to promote our products.
Current report
Sales and marketing expenses were $1,085,696 for the nine months ended September 30, 2025 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 $491,688, employee payroll costs of $216,753, and professional fees of $116,411 for fees paid to a third-party distributor, third-party sales consultants and legal fees. Travel expenses were $74,433 and depreciation expense of $34,641 primarily for demonstration vehicles used to promote our products.
Current report
Product development expenses were $102,815 for the three months ended September 30, 2026 and were primarily related to expenses associated with employee payroll costs of $65,630, and professional fee expense of $14,691.
Current report
Product development expenses were $398,266 for the nine months ended September 30, 2026 and were primarily related to expenses associated with employee payroll costs of $272,813, and professional fee expense of $26,913, prototype expenses of $40,675 and facilities costs of $26,779.
Current report
Product development expenses were $67,522 for the three months ended September 30, 2025 and were primarily related to expenses associated with employee payroll costs of $20,902.
Current report
Product development expenses were $371,424 for the nine months ended September 30, 2025 and were primarily related to expenses associated with employee payroll costs of $172,171, depreciation expense of $47,398 and facilities costs of $86,904.
Current report
General and administrative expenses were $19,403,727 for the three months ended September 30, 2025 including expenses associated with employee payroll costs of $844,052, including bonuses of $375,000 paid to the Company’s existing CEO and CFO prior to the Private Placements under new employment agreements signed concurrent with the Private Placements and a $225,000 signing bonus for the new Co-CEO. All bonuses were used by these individuals to purchase common stock sold in the Private Placements. The Company also recognized $13,754,360 of stock-based compensation including $8,072,716 for inducement stock options granted to three new employees upon completion of the Private Placements, $249,413 for warrants granted to a consultant for the Private Placements and $5,432,230 for vesting of some of the warrants granted to Gemini under the Strategic Digital Assets Services Agreement discussed in Note 8 of the condensed consolidated financial statements. In July 2025, the Company entered into a settlement agreement with Highbridge Consultants LLC (“Highbridge”) for $2,000,000. Company costs also include professional fees of $502,319 (including auditor fees of $23,175, legal fees of $423,871), software costs of $132,398 and insurance costs of $464,711. Additionally, the period includes Board compensation expense of $692,500, which includes $600,000 paid to the Company’s Board prior to the Private Placements in place of stock awards that could not be granted for past services. The remaining Board compensation represents fees paid quarterly.
Current report
General and administrative expenses were $23,797,668 for the nine months ended September 30, 2025, and include expenses associated with employee payroll costs of $1,935,878, including the $225,000 signing bonus paid to the new Co-CEO, and bonuses of $375,000 paid to the Company’s existing CEO and CFO, as noted above. The Company also recognized $14,880,161 of stock-based compensation including $1,125,802 for share-based awards granted to the Company’s CEO and CFO in May 2025, $8,072,716 for inducement stock options granted to three new employees upon completion of the Private Placements, $249,413 for warrants granted to a consultant for the Private Placements and $5,432,230 for vesting of some of the warrants granted to Gemini as discussed above. In July 2025, the Company entered into a settlement agreement with Highbridge for $2,000,000. Period expenses also include professional fees of $952,441 (including auditor fees of $123,600 and legal fees of $608,684), software costs of $377,683, insurance costs of $1,369,471, and travel expenses of $85,059. Additionally, the period includes Board compensation expense of $792,500, which includes $600,000 paid to the Company’s Board as noted above. The remaining Board compensation represents fees paid quarterly. The Company also had other public company costs of $163,209 for transfer agent and other miscellaneous services, and annual meeting costs of $74,450.
Current report
The Company’s average BTC purchase price was $117,516 for all BTC purchased by the Company in the three and nine months ended September 30, 2025, including the BTC received as payment in the Private Placements. Based on the price as of September 30, 2025 of $114,061, the Company recognized an unrealized loss of $14,106,222 for the three and nine months ended September 30, 2025.
Current report
Net interest and other income/expenses for the three months ended September 30, 2025 was a net expense of $73,504. This includes interest expense $361,464 primarily from borrowings to repurchase our common stock, interest income of $84,134 primarily earned on cash held in a money market account, a gain of $39,533 for the change in the fair value of the Series A warrants that are classified as derivative liabilities, and income of $287,095 from trading BTC put and call contracts and a loss on the repayment of a credit facility of $125,377 for the write off of unamortized issuance costs.
Current report
Net Interest and other income/expenses for the nine months ended September 30, 2025 was a net expense of $55,554. This includes interest expense of $525,111 primarily from 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 $241,426 primarily from interest earned on cash held in a money market account, net income generated from BTC derivative contracts as noted above and the loss on repayment of a credit facility noted above.
Current report
Net Income/ Loss
Current report
Net income for the three months ended September 30, 2026 was$23,986,094 and net loss for the nine months ended September 30, 2026 was $104,451,888. As discussed above, the net income for the three months ended September 30, 2026 was primarily due to an unrealized gain on BTC partially offset by costs incurred for thes tockholder litigation, proxy preparation and distribution, and stockholder solicitation. The net loss for the nine months ended September 30, 2026 is primarily related to the losses on BTC and costs incurred for the stockholder litigation matter.
Current report
Net loss from continuing operations for the three and nine months ended September 30, 2025 was $28,685,309 and $34,269,502, respectively. The net loss for the three and nine months ended September 30, 2025 includes a loss on BTC of $14.1 million. There were nostockholder litigation costs in the three and nine months ended September 30, 2025.
Current report
As discussed above, EMHU is expected to close on the purchase of a data center facility which will require the Company to pay $62.1 million to fund its share of the purchase price. In addition, the Company has irrevocably guaranteed any additional capital contributions of VEPS pursuant to mandatory capital calls by TexStack, as managing member of EMHU. The Company may also make other strategic investments in additional data center facilities.
Current report
Critical Accounting Policies and Estimates
Removed paragraphs (21)
Previous report
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 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.
Previous 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.
Previous 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.
Previous report
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 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.
Previous 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.
Previous 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.
Previous 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.
Previous 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.
Previous 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.
Previous 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.
Previous 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.
Previous 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.
Previous 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.
Previous report
Interest and other income/expenses for the three and six months ended June 30, 2025 was insignificant.
Previous report
Net Loss
Previous report
Net loss for the three and six months ended June 30, 2026 was $43,034,434 and $128,437,982, respectively.
Previous 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.
Previous report
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 report
Critical Accounting Policies
Reworded paragraphs (46)
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 and six months ended June 30, 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 nine months ended September 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, 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.
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 Akron, Ohio and the timing thereof; the proposed conversion of the Akron, Ohio 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 Akron, Ohio 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; CDP’s 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; 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.
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 purposes; 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
On July 17, 2025, the Company announced its entry into securities purchase agreements with certain institutional and accredited investors in private placements for the purchase and sale of 44,414,189 shares of common stock of the Company, par value $0.00001 per share and pre-funded warrants to purchase up to an aggregate of 5,728,662 shares of common stock with an exercise price of $0.00001, at a price of $10.00 per share, for aggregate gross proceeds of approximately $501.0 million which includes payment in Bitcoin (“BTC” or “Bitcoin”) of $28.0 million, before deducting placement agent fees and other offering expenses (the “Private Placements”). The Private Placements closed on July 21, 2025. The Company has used the net proceeds of $452.0 million from the Private Placements (excluding the $28.0 million of BTC received) to purchase or otherwise acquire BTC and for the establishment of the Company’s cryptocurrency treasury operations. In connection with the announcement of the Private Placements, the Company announced the launch of its digital asset treasury strategy, pursuant to which the Company plans to pursue a number of strategic initiatives to acquire additional BTC and potentially other digital assets.
Current wording
On July 17, 2025, the Company announced its entry into securities purchase agreements with certain institutional and accredited investors in private placements for the purchase and sale of 44,414,189 shares of common stock of the Company, par value $0.00001 per share and pre-funded warrants to purchase up to an aggregate of 5,728,662 shares of common stock with an exercise price of $0.00001, at a price of $10.00 per share, for aggregate gross proceeds of approximately $501.0 million which includes payment in Bitcoin (“BTC” or “Bitcoin”) of $28.0 million, before deducting placement agent fees and other offering expenses (the “Private Placements”). The Private Placements closed on July 21, 2025. The Company has used the net proceeds of $452.3 million from the Private Placements (excluding the $28.0 million of BTC received) to purchase or otherwise acquire BTC and for the establishment of the Company’s cryptocurrency treasury operations. In connection with the announcement of the Private Placements, the Company announced the launch of its digital asset treasury strategy, pursuant to which the Company plans to pursue a number of strategic initiatives to acquire additional BTC and potentially other digital assets.
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.
Current wording
A 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. Following the data center infrastructure investments discussed below, we believe that NAV is no longer the most complete method of valuing the Company but it is still a helpful metric to consider as it relate to the value of assets held by the Company.
Previous wording
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 wording
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 November 5, 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.
Previous 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.
Current wording
The Company has a share repurchase program that allows it to repurchase up to $200.0 million of common stock and through November 5, 2026 has bought 26,655,276 shares of common stock for $150.9 million, including commissions, at an average price of$5.66. 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 November 5, 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 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.
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 November 5, 2026, the Company generated income of $2.1 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 August 6, 2026 we have 1,279 BTC, of which 954 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 November 5, 2026 we have 1,067 BTC, of which 765 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 August 6, 2026, BTC has traded at a high of $126,279 and a low of$57,742.
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 November 5, 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 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.
Current wording
Losses on digital assets significantly contributed to our results of operations for the nine months ended September 30, 2026. The loss on digital assets of $69.3 million was recorded, representing 68.7% ofour operating expenses for the nine months ended September 30, 2026.
Previous wording
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 wording
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 investment. TexStack holds the remaining 75% equity interest in EMHU and made an initial capital contribution of $2.5 million.
Previous wording
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 wording
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 a property in Akron, Ohio (the “Property”) that, upon closing, is intended to be converted into an AI data center by the tenant and at the tenant’s expense, 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 diligence and the expiration of a review period contemplated to end on July 29, 2026, which review period may be extended, by the Partnership, under the Property PSA. The Partnership exercised its option to extend the review period through August 28, 2026. On November 4, 2026, the Partnership and the Seller amended the Property PSA and extended the closing date to March 31, 2027.
Previous wording
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 wording
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 neo cloud provider backed by 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.
Previous wording
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 wording
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, through VEPS, entered into a definitive agreement and purchased $20.0 million of CDP’s Series A-1 preferred stock, representing an approximately 8% ownership stake in CDP (the “CDP Investment”). 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.
Previous wording
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 wording
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 as a result of the significant demand for compute.
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. 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.
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. In addition, the Company transferred all Volcon IP, including all intellectual property, brand assets, trademarks, sales and distribution networks and engineering documentation associated with the Volcon brand (the “IP”) other than its E-Bike, the Brat. Also, the Company had the right to appoint one director to Venom’s board. In the event that Venom does not complete its corporate reorganization within six months plus a 60 day grace period, the Company had the option to repurchase the Volcon IP for a nominal amount, which the Company did not exercise.
Previous wording
The Company’s decision to sell these assets represents a strategic shift in operations as the Company does not currently plan to sell any four-wheel products after 2025. Therefore, in accordance with applicable accounting guidance, the results of the four-wheel product lines are presented as discontinued operations in the Condensed Consolidated Statements of Income and, as such, have been excluded from both continuing operations and segment results for all periods presented in this Quarterly Report on Form 10-Q. All amounts, and disclosures for all periods presented in this Quarterly Report on Form 10-Q reflect only the continuing operations unless otherwise noted. See Note 13 to the condensed consolidated financial statements for further discussion.
Current wording
The Company’s decision to sell these assets represents a strategic shift in operations as the Company does not currently plan to sell any four-wheel products after 2025. Therefore, in accordance with applicable accounting guidance, the results of the four-wheel product lines are presented as discontinued operations in the Condensed Consolidated Statements of Operations and, as such, have been excluded from both continuing operations and segment results for all periods presented in this Quarterly Report on Form 10-Q. All amounts, and disclosures for all periods presented in this Quarterly Report on Form 10-Q reflect only the continuing operations unless otherwise noted. See Note 13 to the condensed consolidated financial statements for further discussion.
Previous wording
On October 29, 2025, the Venom Supply Agreement was amended to increase the available amount to purchase by $0.7 million and Venom agreed to purchase the remaining 138 MN1 units ordered by the Company under the Super Sonic Distribution Agreement discussed below. The original payment terms were the earlier of 60 days from receipt or upon sale by Venom. The agreement was modified in April 2026 to extend the payment terms to the earlier of an additional 90 days or upon sale by Venom. All of these units were received by Venom by January 2026.
Current wording
On October 29, 2025, the Venom Supply Agreement was amended to increase the available amount to purchase by $0.7 million and Venom agreed to purchase the remaining 138 MN1 units ordered by the Company prior to it disposing of its four-wheel product lines. The original payment terms were the earlier of 60 days from receipt or upon sale by Venom. The agreement was modified in April 2026 to extend the payment terms to the earlier of an additional 90 days or upon sale by Venom. All of these units were received by Venom by January 2026.
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 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.
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.
Previous wording
We are actively in discussions for the opportunities to fund inventory purchases with other companies that sell Ebikes.
Current wording
We are actively in discussions for the opportunities to fund inventory purchases with companies that sell E-Bikes.
Previous wording
Beginning in the second quarter of 2024, we began evaluating other potential electric motorcycle offerings. We are determining what features and specifications would be included for new offerings including considering a street legal version that would be dual purpose as an on-road/off-road motorcycle (not highway legal). We have identified one new model which we are working on developing with a third-party manufacturer. We received prototypes in February 2025 and we are testing them to evaluate the feasibility to have them manufactured at a reasonable cost and sell them for an acceptable profit. In April 2026, we received our second prototype units and continue to evaluate and test these units. Provided testing is successful and whether the product cost, including tariffs, allow for us to sell this product, we expect to start selling this product in the second half of 2026.
Current wording
Beginning in the second quarter of 2024, we began evaluating other potential electric motorcycle offerings. We are determining what features and specifications would be included for new offerings including considering a street legal version that would be dual purpose as an on-road/off-road motorcycle (not highway legal). We have identified one new model which we are working on developing with a third-party manufacturer. We received prototypes in February 2025 and we tested them to evaluate the feasibility to have them manufactured at a reasonable cost and sell them for an acceptable profit. In April 2026, we received our second prototype units and evaluated and tested these units. The timing to release this product, if at all, is uncertain.
Previous wording
Following the divestiture of the four-wheel products noted above, the Company expects to concentrate on its two-wheel business, including the launch of new products in European markets in the second half of 2026. We expect to continue to evaluate other potential two-wheel product offerings in 2026.
Current wording
Following the divestiture of the four-wheel products noted above, the Company expects to concentrate on its two-wheel business, including the launch of a new product in the U.S. in the fourth quarter of 2026 and additional products in the first half of 2027. We expect to continue to evaluate other potential two-wheel product offerings in 2026.
Previous wording
The following financial information is for the three and six months ended June 30, 2026 and 2025.
Current wording
The following financial information is for the three and nine months ended September 30, 2026 and 2025.
Previous wording
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 wording
Revenue for the nine months ended September 30, 2026 was $405,327 which primarily represents financing income of $176,025, sales of Brats of $144,442, and accessories and parts of $84,749.
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, 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.
Current wording
For the remainder of 2026 we expect our sales to decrease compared to 2025 due to the divestiture of our four-wheel products to Venom, lower financing inventory purchases for other companies due to the termination of our inventory financing agreement with Venom and lower Brat sales as we develop the next version of the Brat and other E-Bike models.
Previous wording
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 wording
Cost of goods sold for the three months ended September 30, 2026 was $285,354, including payroll costs of $25,587 for employees and $35,497 for third party contractors performing product fulfillment, logistics management, and service and warranty, and facilities costs of $53,798. Inventory adjustments were $30,600 primarily due to the write down of Brats. These costs are offset by a benefit of $13,464 due to the expiration of product warranties and the resulting reversal of warranty accrual. Product costs were $124,734 for Brat and Brat parts.
Previous wording
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 wording
Cost of goods sold for the nine months ended September 30, 2026 was $596,181, including payroll costs of $109,431 for employees and $81,782 for third party direct labor contractors performing product fulfillment, logistics management, and service and warranty and facilities costs of $163,687. Inventory adjustments were $114,611 primarily due to the write down of Brats and 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 $142,639 due to the expiration of product warranties and the resulting reversal of warranty accrual. Product costs were $25,089 for Grunt EVO parts, and $207,545 for Brat and Brat parts.
Previous wording
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 wording
Cost of goods sold for the three months ended September 30, 2025 was $197,537, including payroll costs of $79,321 for employees performing product fulfillment, logistics management, and service and warranty and facilities costs of $101,470. Warranty expense was a benefit of $75,856 due to the expiration of product warranties and resulting reversal of warranty accrual. Product costs were $81,749 for Brats.
Previous wording
For the remainder of 2026, we expect cost of goods sold to decrease as compared to 2025 due to lower revenue from product sales as noted above and a reduction in our Texas warehouse facility when our lease ends in August 2026.
Current wording
For the remainder of 2026, we expect cost of goods sold to decrease as compared to 2025 due to lower revenue from product sales as noted above and a reduction in our Texas warehouse facility due to the lease expiring in August 2026.
Previous wording
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 wording
Sales and marketing expenses were $2,937,950 for the nine months ended September 30, 2026 and were primarily related to bad debt expense of $2,133,568 relating to the write off of Venom accounts receivable and prepaid financing deposits, expenses associated with promoting our products and brand of $416,001, employee payroll costs of $143,026, and professional fees of $138,560 for fees paid to a third party distributor, third party sales consultants and legal fees. Travel expenses were $26,978 and software fees were $54,978.
Previous wording
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 wording
General and administrative expenses were $12,104,995 for the three months ended September 30, 2026, and were primarily related to costs of $10,613,668 for legal advisory and consulting fees, including related party legal fees of $7,007,297, primarily associated with stockholder litigation, proxy preparation and stockholder solicitation, employee payroll costs of $414,244, BTC custody fees with a cost of $12,804, professional fees of $333,005 (including auditor fees of $25,750, legal fees of $291,868 and consulting fees of $15,388), software costs of $70,773, insurance costs of $322,522 travel expenses of $23,273 and facilities expense of $91,142. Annual meeting costs in preparation of the annual meeting of $40,965 and quarterly compensation expense of $82,500 for the Company’s board of directors (the “Board”).
Previous wording
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 wording
General and administrative expenses were $28,210,385 for the nine months ended September 30, 2026 and were primarily related to costs of $21,464,118 for legal advisory and consulting fees, including related party legal fees of $14,835,298, primarily associated with the stockholder litigation matter, proxy preparation and stockholder solicitation, employee payroll costs of $1,248,371, stock-based compensation of $1,797,041, consisting of $1,119,376 for warrants granted to Gemini and $677,665 for inducement stock option, BTC custody fees of $46,075, professional fees of $1,447,943 (including auditor fees of $184,357, legal fees of $1,169,671 and consulting fees of $93,915), software costs of $218,480, insurance costs of $958,357, travel expenses of $92,020 and facilities expense of $258,059. Annual meeting costs in preparation of the annual meeting of $138,725 and Board compensation expense of $247,500.
Previous 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.
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 from our Round Rock, Texas office and warehouse leases which expired 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. 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.
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 gain on digital assets of$36,986,989 and loss of $69,280,274 for the three and nine months ended September 30, 2026, respectively.
Previous wording
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.
Current wording
Other income/expenses for the three months ended September 30, 2026 was a net expense of $375,867. This includes interest expense of $750,907 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 $324,229 primarily from interest earned on cash held in a money market account and a certificate of deposit, other income of $34,298 and a gain on the change in derivative liabilities of $16,513.
Previous 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.
Current wording
Other income/expenses for the nine months ended September 30, 2026 was a net expense of $3,434,159. This includes interest expense of $3,871,601 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 $411,493 primarily from interest earned on cash held in a money market account and a certificate of deposit, other income of $619,478 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 $25,387.
Previous 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.
Current wording
On September 30, 2026, we had cash, cash equivalents and restricted cash of $78.2 million, including $0.1 million of restricted cash, and we had working capital of $70.8 million. Since inception we have funded our operations from proceeds from debt and equity sales.
Previous 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.
Current wording
Net cash used in operating activities was $25.4 million for the nine months ended September 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 $2.1 million relating to the write off of Venom accounts receivable and inventory financing deposits, and loss on Bitcoin of $69.3 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 $7.0 million due to the legal invoices related to the stockholder litigation matter, a decrease in prepaid assets of $0.8 million due tothe financing prepayments.
Previous 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.
Current wording
Net cash used in operating activities was $14.9 million for the nine months ended September 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 $14.9 million and unrealized loss on Bitcoin of $14.1 million. Significant uses/contributions of cash used in operating activities includes an increase in accounts receivable of $1.5 million due to the invoicing of a golf cart order to a customer who financed the purchase from its manufacturer through the Company, a decrease of $0.5 million in inventory and inventory deposits, an increase in prepaid assets of $0.9 million primarily from the renewal of the Company’s director and officer liability insurance policy, and a decrease of $2.0 million in accrued liabilities primarily due to payments on vendor settlements.
Showing the first 40 of 46 pairs. Open the source sections for the rest.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
In addition, subject to the satisfaction by both the Partnership and the seller of the Property (“Property Seller”) of any closing conditions, TexStack as the managing member of the Partnership and 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 further and/or the closing date.