Empery Digital Inc.

You should carefully review and consider the information regarding certain factors that could materially affect our business, financial condition or future results included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, filed with the SEC on March 27, 2026 (as amended by Form 10-K/A filed with the SEC on April 21, 2026) and our Quarterly Report on Form 10-Q for the quarter ended June 30, 2026, filed on August 7, 2026, (each of which is accessible on the SEC’s website at www.sec.gov) and as set forth below.

Risks Related to Our Data Center Infrastructure Investments Strategy

The data center projects underlying our existing investments, and any data center projects in which we may invest in the future, are subject to governmental permits, approvals and other regulatory requirements that we do not control.

Data center development and conversion projects typically require numerous permits, approvals and consents from state and local governmental authorities, public utility commissions and utilities, including zoning, land use, siting and building permits, environmental and air permits, and approvals relating to interconnection, power supply and on-site or behind-the-meter power generation. The process of obtaining these permits and approvals can be lengthy, costly and uncertain, and governmental authorities often have broad discretion in granting, conditioning or revoking them.

We hold minority, non-controlling interests in EMHU and CDP, and the value of these investments depends on the ability of those entities, their partners and their prospective tenants to obtain and maintain the governmental permits and approvals required for the underlying projects. To the extent we make additional investments in data center projects in the future, we expect to be subject to similar risks, and we may have limited or no ability to influence the permitting and approval process for those projects. Required permits and approvals may not be obtained on a timely basis, on acceptable terms or at all, and permits and approvals that have been obtained may be challenged, appealed, modified or revoked. Local community opposition, third-party litigation, environmental reviews and changes in governmental or utility policies toward data centers could delay, limit or prevent the issuance of required approvals or result in conditions that materially increase project costs.

In addition, laws, regulations and policies applicable to data centers are evolving, and governmental authorities may adopt new requirements or interpret existing ones in a manner that restricts or increases the cost of developing or operating data centers. Any delay in, or failure to obtain or maintain, required permits and approvals or any adverse change in applicable laws or regulations could delay or prevent the closing of our existing or any future data center projects in which we may invest, any of which could result in the partial or total impairment of our investments and materially adversely affect our business, financial condition and results of operations.

Risks Related to Our Common Stock

We have been and may in the future be subject to material litigation. These matters include individual, derivative and class action lawsuits, as well as investigations and enforcement actions by regulators and governmental authorities. These matters are often expensive and time consuming, and, if resolved adversely, could harm our business, financial condition, and operating results.

We have been and may in the future become subject to claims, arbitrations, individual and class action lawsuits with respect to a variety of matters, including employment, consumer protection, advertising, securities, derivative and stockholder activists. In addition, we may from time to time become subject to government and regulatory investigations, inquiries, actions or requests, other proceedings and enforcement actions alleging violations of laws, rules, and regulations, both foreign and domestic. The scope, determination and impact of claims, lawsuits, government and regulatory investigations, enforcement actions, disputes and proceedings to which we are subject cannot be predicted with certainty, and have and may result in:

For example, on April 2, 2026, a stockholder filed a complaint with the Court of Chancery of the State of Delaware (the “Court”) against the Company and its Board alleging that the Company’s Board took actions to reject the stockholders’ purported nominations in breach of their fiduciary duties. On October 16, 2026, the same stockholder filed a second supplemental complaint with the Court to disallow a certain number of votes cast by EAM in favor of one of the Company’s nominees, which would result in another of the stockholder’s nominees being elected to the Company’s Board. The litigation is ongoing and there can be no assurance as to its outcome or timing. We have incurred and may continue to incur significant costs relating to this litigation. For example, during the nine months ended September 30, 2026, we incurred approximately $21.5 million of legal, advisory and consulting fees primarily associated with this stockholder litigation matter and related proxy contest, including approximately $14.8 million of related party legal fees, most of which we expect our insurance carriers to reimburse after our $5.0 million retention is deducted. An adverse outcome in the remaining matters could result in monetary damages, further changes to the composition of our Board and continued diversion of management’s attention, any of which could adversely affect our business, strategy, financial condition and results of operations. See Note 14 to the condensed consolidated financial statements for further discussion of this matter, as well as Management’s Discussion and Analysis – General and Administrative Expenses regarding significant costs incurred in connection with defending the Company against the allegations.

Regardless of the outcome, any such matters can have an adverse impact, which may be material, on our business, operating results, or financial condition because of legal costs, diversion of management resources, reputational damage, and other factors. Due to our business activities, including our Bitcoin treasury strategy, it is possible that in the future we may be subject to investigations and inquiries by U.S. federal and state regulators and foreign regulators, many of which have broad discretion to audit and examine our business. The complexity of U.S. federal and state and international regulatory and enforcement regimes, coupled with the evolving global regulatory environment, could result in a single event prompting a large number of overlapping investigations and legal and regulatory proceedings by multiple government authorities in different jurisdictions. Any of the foregoing could, individually or in the aggregate, harm our reputation, damage our brand and business, and adversely affect our operating results and financial condition.

We are subject to a court order that requires us to give advance notice to a stockholder before taking certain significant corporate actions, which may limit our ability to take those actions quickly.

On October 26, 2026, the Delaware Court of Chancery (the “Court”) entered an order in connection with the stockholder litigation brought by ATG Capital Opportunities Fund LP (“ATG”) challenging the re-election of Ian Read to our Board of Directors (the “Board”) at our 2026 annual meeting of stockholders. Under the order, we must give ATG at least five business days’ prior written notice before taking certain significant corporate actions. These actions include:

The order does not restrict us from meeting our existing funding obligations under the EMHU LLC Agreement. We must also notify ATG before any Board action for which Mr. Read’s attendance is needed to establish a quorum, or his vote is needed to approve the action.

These requirements will remain in effect while the related litigation is pending, unless the Court modifies or lifts them earlier. The Court has scheduled a hearing for January 2027. We cannot predict the outcome of the hearing, whether the Court will extend, expand or modify the order, or when the Read Litigation will be resolved.

The notice requirements could delay or impede our ability to take certain corporate actions. They could also limit our ability to pursue, negotiate or complete strategic transactions, financings, material investments or material contracts on favorable terms or on a timely basis. Counterparties may also be reluctant to transact with us while the order is in effect. In addition, ATG may challenge any action we notify it of, which could lead to further or prolonged disputes with ATG, more litigation costs, and diversion of management's attention. Separately, an adverse outcome in the underlying could affect the composition of the Board or the validity of actions it has taken. Any of these outcomes, alone or together, could harm our reputation and business and adversely affect our results of operations and financial condition.** **