EMPD

MKT CAP $84.9MP/E —DIV YIELD —FCF YIELD -24.78%REV TTM −$158K −105.9%NET INCOME −$272.1MNET CASH $3.6M52W 2.52 – 7.15SEC XBRL · TTM TO Invalid Date

How EMPD rewrote its risk factors

10-K ITEM 1A · FY2024 → FY2025

Text kept

12%

of sentences unchanged

Added

562

new sentences

Dropped

221

sentences removed

Length

+12,452

words, now 23,144

New in FY2025

Risk Factors ” contained in this Annual Report on Form 10-K and in any subsequent filings with the SEC.
As a result of these and other factors, we may not achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements.
The forward-looking statements contained in this Annual Report on Form 10-K reflect our views as of the date hereof.
We do not assume and specifically disclaim any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
Our business is subject to substantial risks and uncertainties, including those referenced above.
Investors, potential investors, and others should give careful consideration to these risks and uncertainties. iii Summary of Risk Factors Below is a summary of the principal factors that make an investment in our common stock speculative or risky.
This summary does not address all of the risks that we face.
Additional discussion of the risks summarized in this risk factor summary and other risks that we face can be found below under the heading “Part I, Item 1A.
Risk Factors ” and should be carefully considered, together with other information in this Annual Report on Form 10-K and our other filings with the SEC, before making an investment decision regarding our common stock. · Our losses from operations could raise substantial doubt regarding our ability to continue as a going concern.
Our ability to continue as a going concern requires that we obtain sufficient funding to finance our operations. · We have not remediated the material weaknesses in our internal control over financial reporting identified in our 2020 audit.
If we or our auditor identify additional material weaknesses in the future or otherwise fail to maintain an effective system of internal controls, we may not be able to accurately or timely report our financial condition or results of operations, which may adversely affect our business and stock price. · Our operating results, revenues, and expenses may fluctuate significantly, which could have an adverse effect on the market price of our common stock. · A significant decrease in the market value of our Bitcoin holdings could adversely affect our ability to satisfy our financial obligations or liquidity needs and could have an adverse effect on the market price paid for our common stock. · Our business may not generate sufficient funds, and we may otherwise be unable to maintain sufficient cash reserves to pay amounts due under our indebtedness and our cash needs may increase in the future. · The Company’s repurchases of its common stock may not be successful in increasing NAV per share. · Bitcoin and other digital assets are novel assets, and are subject to significant legal, commercial, regulatory and technical uncertainty, which could materially adversely affect the Company’s financial position, operations and prospects. · Changes in regulatory interpretations could require us to register as a money services business or money transmitter, leading to increased compliance costs or operational shutdowns. · We are not subject to legal and regulatory obligations that apply to investment companies such as mutual funds and exchange-traded funds, or to obligations applicable to investment advisers. · Due to the unregulated nature and lack of transparency surrounding the operations of many digital asset trading venues, digital asset trading venues may experience greater fraud, security failures or regulatory or operational problems than trading venues for more established asset classes, which may result in a loss of confidence in digital asset trading venues and adversely affect the value of digital assets, and the Company’s financial position, operations and prospects. · Our indebtedness and liabilities could limit the cash flow available for our operations, expose us to risks that could adversely affect our business, financial condition and results of operations and impair our ability to satisfy our obligations under our debt instruments when they come due. · The concentration of our Bitcoin holdings enhances the risks inherent in our Bitcoin strategy. · The Company will face risks relating to the custody of its digital assets.
If we or our third-party service providers experience a security breach or cyberattack and unauthorized parties obtain access to our digital assets, or if our private keys are lost or destroyed, or other similar circumstances or events occur, we may lose some or all of our digital assets and our financial condition and results of operations could be materially adversely affected. iv · We are subject to significant competition in the growing digital asset industry and the Company’s business, operating results, and financial condition may be adversely affected if the Company is unable to compete effectively. · We rely on an international third-party manufacturer who assists us with design , development and manufacturing of our E-Bikes which subjects us to risk of product delivery delays, reduced control over product costs and quality control. · We are subject to risks associated with our reliance on foreign manufacturing, suppliers and imports for our products. · Our third-party manufacturer operates outside of the U.S., subjecting us to risks of international operations. · Anti-takeover provisions in our governing documents and a stockholder rights plan adopted in February 2026 may discourage, delay or prevent a change of control of our Company. · Our business and operations could be negatively affected if we become subject to stockholder activism, which could cause us to incur significant expense, hinder execution of our business and growth strategy, and impact our stock price. · Your ownership may be diluted if additional capital stock is issued to raise capital, to purchase digital assets, repay outstanding debt, finance our operations, to complete acquisitions or in connection with strategic transactions. · If our stock price fluctuates, you could lose a significant part of your investment. v PART I ITEM 1.
(“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.
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.

and 522 more.

Gone since FY2024

ITEM 1A RISK FACTORS Investing in our common stock involves a high degree of risk.
Risks Related to the Company’s Business, Operations, and Industry Our losses from operations could continue to raise substantial doubt regarding our ability to continue as a going concern.
As of December 31, 2024, we have an accumulated deficit of $166.3 million.
Subsequent to December 31, 2024 through February 5, 2025, the Company received net proceeds of $8.8 million from the sale of 1,764,113 sh ares of its common stock from our At The Market (“ATM”) offering.
On February 6, 2025, the Company received net proceeds of $10.7 million from the sale of 430,000 common stock units, which consisted of 430,000 shares of common stock and 430,000 warrants to purchase the Company’s common stock at $2.00 per share, and 5,570,000 pre-funded warrant units, which consisted of 5,570,000 pre-funded fully exercisable warrants with an exercise price of $0.00001 and 5,570,000 warrants to purchase the Company’s common stock at $2.00 per share.
See Note 10 in the accompanying financial statements for further discussion of this offering.
Management anticipates that our cash on hand as of December 31, 2024 plus the cash expected to be generated from operations, and the cash received from the ATM and February 6, 2025 equity offering will not be sufficient to fund planned operations and maintain required cash balances for the Convertible Notes beyond one year from the date of the issuance of the financial statements as of and for the year ended December 31, 2024.
There can be no assurance that we will not require additional funding to support our operations.
There can be no assurance that such additional funding, if needed, would be available to the Company on acceptable terms, or at all.
These factors raise substantial doubt regarding our ability to continue as a going concern.
The material weaknesses in our internal control over financial reporting identified in our 2020 audit have not been remediated.
If we are unable to remediate these material weaknesses or we or our auditor identify additional material weaknesses in the future or otherwise fail to maintain an effective system of internal controls, we may not be able to accurately or timely report our financial condition or results of operations, which may adversely affect our business and stock price.
The material weaknesses identified by our independent registered public accounting firm in our internal control over financial reporting in our 2020 audit have not been remediated as of December 31, 2024.
These material weaknesses are as follows: · Inadequate segregation of duties within account processes due to limited personnel · Insufficient formal written policies and procedures for accounting, IT, financial reporting and record keeping In addition to hiring more finance and accounting personnel in 2021 to improve our segregation of duties, through 2024, we have made further progress towards remediating these material weaknesses.
However, we have not fully completed documentation or testing of these policies, procedures, and internal controls.
While we believe these efforts have improved the internal control over financial reporting during 2024, they did not fully remediate the material weaknesses as we have not fully documented all of our policies or procedures and we have not performed any testing of our internal controls.
Our transition to an outsourced manufacturing, design and development business model may not be successful, which could harm our ability to deliver products and recognize revenue.
In March 2022, we signed an agreement with a manufacturer in China to develop and manufacture the Brat, our first E-Bike.
We provided this vendor with our specifications and design drawings, and they developed prototypes and the manufacturing process to build the Brat at a cost that was acceptable to us.
We launched the Brat in December 2022 and have sold the Brat throughout 2024 and expect to continue to sell the Brat in 2025.
During 2024, we signed an agreement with a manufacturer to build the VLCN HF1 UTV and we signed another agreement with a separate manufacturer to build the VLCN MN1 Adventurer and the VLCN MN1 Tradesman vehicles.
In addition we signed a distribution agreement with this manufacturer to distribute its golf carts in the U.
As a result of moving to an outsourced design, development and manufacturing model, we have reduced headcount in all departments to reduce costs.
We continue to evaluate further cost reductions while developing our sales and marketing team to sell and promote our products to customers in the U.S. and to our international distributors.
We rely on third party manufacturers, designers and developers, which subjects us to risk of product delivery delays, reduced control over product costs and quality control.
Our business success will depend in large part on our third party manufacturers’ ability to economically produce our vehicles at sufficient capacity to meet the demands of our customers.
Our reliance on third parties for the manufacture, design and development of our vehicles exposes us to a number of risks which are outside our control, including: · delays due to design and development of our products to meet our product specifications; · delays due to defective parts or components; · unexpected increases in manufacturing costs; · interruptions in vehicle deliveries if a third party vendor is unable to complete production or design in a timely manner; · shipping delays due to availability of ships, trains, trucks or containers to ship products or delays at ports to ship products to us or to our customers; and · inability to control the quality of finished products.
Our reliance on third parties reduces our control over the manufacturing, design and development processes, including reduced control over timing to release products, quality, product costs and product supply.
We experienced delays in the design and development of previous vehicles we were seeking to develop.
Since we do not have multiple manufacturers or manufacture our products internally, our ability to release products on the timeline we expect will be dependent on our current outside manufacturers.
If any of our third party vendors suffer interruptions, experience delays in shipments or issues concerning product quality, supply chain or disruptions, including by reason of natural disasters, work stoppages or capacity constraints, our ability to ship products to dealers and our international distributors would be delayed.
Additionally, if any of our third party vendors experience quality control problems in their operations, we could be required to cover the repair or replacement of any defective products.
In addition, such delays or issues with product quality could harm our reputation and our relationship with our dealers, distributors and customers.
Our third party manufacturers may be unable to meet our growing sales and delivery plans, which could harm our business and prospects.
Our sales growth and delivery plan contemplate achieving and sustaining increases in vehicle deliveries.
Our ability to achieve this plan depends upon several factors, including our ability to identify third party manufacturers who can meet our forecasted demand while maintaining our desired quality levels and optimize design and product changes.
Although we believe that the third party manufacturers we have contracted with have the ability to meet our forecasted demand, there is no assurance that they will be successful in these efforts.
We are dependent on our third party manufacturers, who are dependent on their suppliers, some of which could be single-source suppliers.
The inability of these suppliers to deliver necessary components for our vehicles according to our schedule and at prices, quality levels and volumes acceptable to us, or our inability to efficiently manage these third party manufacturers and their suppliers has in the past and could in the future have a material adverse effect on our financial condition and operating results.
Our vehicles contain numerous purchased parts that our third party manufacturers either (a) source globally from direct suppliers, some of whom could be single-source suppliers, or (b) manufacture themselves from components or materials.

and 181 more.

Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2024 ↗, FY2025 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

Watch EMPD. Know when insiders buy.

One email the day a filing lands. Free.