What changed in Empery Digital Inc.'s 10-K — 2024 vs 2025

ITEM 1. BUSINESS Overview Empery Digital Inc. (“Empery Digital” or the “Company”) was formed on February 21, 2020, as a Delaware corporation, under the name Frog ePowersports, Inc. The Company was renamed Volcon, Inc. on October 1, 2020.

The Company was renamed Empery Digital Inc. on July 30, 2025, in connection with which the Company changed its Nasdaq ticker symbol from VLCN to EMPD.

Digital Asset Treasury Strategy 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.

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.

On October 18, 2024, the Company entered into an At-The-Market Issuance Sales Agreement with Aegis Capital Corp., as placement agent (“Aegis”), as amended by Amendment No. 1 to the At-The-Market Issuance Sales Agreement on July 14, 2025 (the “ATM Sales Agreement”), pursuant to which the Company established an At The Market (“ATM”) program pursuant to which the Company can sell up to $1.1 billion of common stock.

Since the inception of the digital asset treasury strategy through March 25, 2026, the Company has s old 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.

In addition, our strategy includes repurchasing our common stock when our common stock is trading below NAV per share.

The Company also has a share repurchase program that allows it to repurchase up to $150.0 million of common stock as of December 31, 2025, which was expanded to $200.0 million on February 2, 2026 and through March 25, 2026 has bought 23,114,391 shares of common stock for $135.6 million, including commissions, at an average price of $5.87.

Share repurchases have been funded with proceeds from two borrowing arrangements, that allow for borrowings of up to $150.0 million, of which $95.0 million has been drawn as of March 25, 2026, and sales of BTC.

Some of our BTC is held by these lenders as collateral for outstanding borrowings, which we may repay with future equity offerings or by selling BTC. See Note 7 to the consolidated financial statements for further discussion of these borrowing arrangements.

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 March 25, 2026, the Company generated income of $2.0 million from trading these derivatives, which is recorded in Other income in the consolidated statement of operations. 1 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 March 25, 2026 we have 3,359 BTC, of which 2,891 are restricted by lenders as collateral for outstanding loan balances.

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 March 25, 2026, BTC has traded at a high of $126,117 and a low of $60,019 on the Gemini exchange. Unrealized losses on digital assets significantly contributed to our results of operations for the year ended December 31, 2025.

The unrealized loss on digital assets of $122.7 million was recorded, representing 79.3%, of our operating expenses for the year. Electric Vehicles The Company began its operations as an all-electric, off-road powersports vehicle business. Beginning in 2021, we began efforts to sell off-road powersports vehicles beginning with an electric two-wheeled motorcycle that we discontinued in March 2025.

In 2022 we introduced an E-Bike, the Brat, and continue to sell this product. In late 2024 we began selling the HF1 UTV, the MN1 Adventurer and MN1 Tradesman UTV, along with a line of upgrades and accessories. As discussed below, in October 2025, we sold the HF1 and MN1 product lines.

All units were shipped by the manufacturer to Venom and Venom paid all amounts due on this purchase as of December 31, 2025.

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 (as defined below) discussed below. Payment terms are the earlier of 60 days from receipt or upon sale by Venom.

All of these units were received by Venom by January 30, 2026 and payment is due by March 31, 2026. On November 17, 2025, the Venom Supply Agreement was amended to increase the available amount to purchase by $2.5 million (for an aggregate total of $4.5 million, excluding the October 29, 2025, amendment.

Subsequent to December 31, 2025 through March 25, 2026, the Company has paid $0.9 million to the manufacturer for orders placed by Venom, and additional payments due to be paid for orders placed by Venom as of March 25, 2026, are $1.4 million.

Payment terms are the earlier of 60 days from receipt of inventory by Venom or upon sale by Venom.

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. 2 Venom Asset Purchase Agreement On October 15, 2025, the Company entered into an asset purchase agreement with Venom (the “Venom APA”), 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.

Despite our continuing efforts, we cannot guarantee that our cybersecurity safeguards will prevent breaches or breakdowns of our or our third-party service providers’ information technology systems, particularly in the face of continually evolving cybersecurity threats and increasingly sophisticated threat actors.

A cybersecurity incident may materially affect our business, results of operations or financial condition, including where such an incident results in reputational, competitive or business harm or damage to our brand, lost sales, reduced demand, loss of intellectual property rights, significant costs or government investigations, litigation, fines or damages.

The Audit Committee of our Board of Directors has primary responsibility for oversight of cybersecurity and is briefed on cybersecurity risks at least once each year and following any material cybersecurity incidents. At the management level, our Chief Financial Officer (“CFO”) is primarily responsible for assessing and managing our material risks from cybersecurity threats.

We also lease approximately 3,000 square feet of office space in New York, New York for four of our employees including our Co-Chief Executive Officer and Chairman of the Board of Directors (Ryan Lane), Chief Operating Officer and Vice President - Legal.

We currently plan to leave the facilities in Round Rock, Texas, when the leases expire in August 2026, if not sooner if the landlord can identify a replacement tenant. We believe that suitable replacement and additional space, if necessary, will be available in the future on commercially reasonable terms.

Stockholder Rights Plan On February 3, 2026, our Board of Directors declared a dividend of one preferred share purchase right (a “Right”), payable on February 13, 2026, for each share of Common Stock, outstanding on February 13, 2026 to the stockholders of record on that date.

In connection with the distribution of the Rights, the Company entered into a Rights Agreement (the “Rights Agreement”), dated as of February 3, 2026, between the Company and Computershare Trust Company, N.A., as rights agent.

Each Right entitles the registered holder to purchase from the Company one one-thousandth of a share of Series A Preferred Stock, par value $0.00001 per share (the “Preferred Shares”), of the Company at a price of $15.00 per one one-thousandth of a Preferred Share represented by a Right (the “Purchase Price”), subject to adjustment.

The Rights are in all respects subject to and governed by the provisions of the Rights Agreement. The following description of the Rights Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Rights Agreement, which is attached hereto as Exhibit 4.29 and incorporated herein by reference.

Initially, the Rights are attached to all common stock certificates and no separate certificates evidencing the Rights (“Right Certificates”) will be issued. Until the Distribution Date (as defined below), the Rights will be transferred with and only with the common stock.

As long as the Rights are attached to the common stock, the Company will issue one Right with each new Common Stock so that all such Common Stock will have Rights attached.

The Rights will separate and begin trading separately from shares of Common Stock, and Right Certificates will be caused to evidence the Rights, on the earlier to occur of (i) the Close of Business (as such term is defined in the Rights Agreement) on the 10th day following a public announcement, or the public disclosure of facts indicating (or the Board of Directors becoming aware), that a Person (as such term is defined in the Rights Agreement) or group of affiliated or associated Persons has acquired Beneficial Ownership (as defined below) of 12.5% or more of the outstanding common stock (an “Acquiring Person”) (or, in the event the Board of Directors determines to effect an exchange in accordance with Section 24 of the Rights Agreement and the Board of Directors determines that a later date is advisable, then such later date) or (ii) the Close of Business on the 10th Business Day (as such term is defined in the Rights Agreement) (or such later date as may be determined by action of the Board of Directors prior to such time as any Person becomes an Acquiring Person) following the commencement of a tender offer or exchange offer the consummation of which would result in the Beneficial Ownership by a Person or group of 12.5% or more of the outstanding common stock (the earlier of such dates, the “Distribution Date”).

As soon as practicable after the Distribution Date, unless the Rights are recorded in book-entry or other uncertificated form, the Company will prepare and cause the Right Certificates to be sent to each record holder of common stock as of the Distribution Date.

Additional information regarding the Rights Plan is available in the Company’s Current Reports on Form 8-K filed February 3, 2026. Holders As of March 25, 2026, we had 25 stockholders of record and 30,247,668 outstanding shares. 34 Dividends We have never declared or paid any cash dividends on our capital stock.

As noted under the heading “Stockholder Rights Plan” above, on February 3, 2026, our Board of Directors declared a dividend of one preferred share purchase right, payable on February 13, 2026, for each share of Common Stock outstanding on February 13, 2026 to the stockholders of record on that date.

Issuer Purchases of Equity Securities The following table provides information relating to the purchases of our common stock during the three months ended December 31, 2025 in accordance with Item 703 of Regulation S-K: Period (a) Total Number of Shares (or Units) Purchased (b) Average Price Paid per Share (or Unit) ($) (c) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs (1) (d) Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plan or Program October 1, 2025 – October 31, 2025 4,991,977 7.32 4,991,977 74,573,346 November 1, 2025 – November 30, 2025 3,514,987 5.75 3,514,987 54,374,156 December 1, 2025 – December 31, 2025 29,964 4.85 29,964 54,228,939 Three Month period ended December 31, 2025 8,536,928 8,536,928 $ 54,228,939 (1) On March 17, 2025, the Company’s Board of Directors adopted a stock repurchase program of up to $2.0 million of shares of its outstanding common stock.

This repurchase program was set to expire on March 7, 2026.

On July 24, 2025, the Board approved a $100.0 million common stock repurchase program effective through July 24, 2027 and increased by the Board to $150.0 million on October 10, 2025 (increased to $200.0 million on February 2, 2026 which is not included in the amounts above), subject to extension or earlier termination by the Board at any time.

The March 2025 repurchase program was terminated upon the approval of the July 2025 repurchase program. Recent Sales of Unregistered Securities None.