Financial Performance - The company reported a net loss of $34.6 million for the third quarter of 2025, compared to a loss of $3.9 million in the previous quarter[15]. - Revenue for the third quarter of 2025 was $198,301, a significant decrease from $702,936 in the second quarter of 2025[15]. - Cash used in operations for the third quarter of 2025 was $7.6 million, significantly higher than the previous quarters due to one-time costs related to the Bitcoin treasury strategy[18]. - General and administrative expenses for the third quarter were $19.4 million, significantly higher due to one-time expenses related to the capital raise and treasury strategy[16]. - Cash provided by financing activities in the third quarter included $452.3 million from private placements and $49.7 million from borrowings[20]. - The company expects to generate cash inflows of $1.5 million in the fourth quarter of 2025 from inventory financing payments related to golf cart purchases[20]. Share Repurchase and Capital Strategy - The company has repurchased 11.1 million shares under its $150 million share repurchase program at an average price of $7.36 per share, with approximately $68.5 million remaining for future repurchases[5]. - The company raised over $500 million through a private placement to implement its Bitcoin treasury strategy, aiming to optimize its capital structure[3]. - The company is exploring share repurchases if its common stock trades below NAV[23]. Business Strategy and Product Development - The company plans to launch a modular cargo bike in European markets by the first half of 2026, targeting areas with restrictions on traditional vehicles[13]. - The company has divested its four-wheel products and is now focused on two-wheel products, which is expected to reduce operating costs[8]. - Demand for a cargo E-Bike is being evaluated, with potential for significant sales to generate positive cash flows[23]. Risks and Uncertainties - There is uncertainty regarding whether Bitcoin (BTC) will become mainstream and outperform markets[23]. - Increased competition in the industries where the company operates poses a risk[23]. - Legal, commercial, regulatory, and technical uncertainties regarding digital assets are significant[23]. - The treatment of crypto assets for U.S. and foreign tax purposes remains uncertain[23]. - Investors are advised to consider substantial risks and uncertainties related to the business[24]. - The forward-looking statements are subject to change and the company has no obligation to update them[24]. Cash Flow and Cost Management - The company aims to reduce costs and generate sufficient proceeds from inventory financing[23]. - The company's stock price may be highly correlated to the price of the digital assets it holds[23].

Financing Activities - The Company raised approximately $501 million through private placements, selling 44,414,189 shares at $10 per share, including $28 million in Bitcoin[170]. - The net proceeds of $452 million from the private placements were used to acquire Bitcoin and establish cryptocurrency treasury operations[170]. - The Company has sold 136,053 shares under its ATM program for $1.5 million at an average price of $10.90 since the inception of its digital asset treasury strategy[171]. - The share repurchase program allows for up to $150 million in repurchases, with $81.5 million spent to buy back 11,082,834 shares at an average price of $7.36[172]. - Cash provided by financing activities for the nine months ended September 30, 2025, was $485.3 million, primarily from the sale of common stock and prefunded warrants[234]. Revenue and Sales Performance - Revenue for the three months ended September 30, 2025, was $198,301, a significant decrease from $1,075,864 in the same period of 2024[194]. - For the nine months ended September 30, 2025, revenue totaled $1,637,286, compared to $3,050,275 for the same period in 2024, indicating a decline of approximately 46.3%[194]. - The company expects revenue to decrease in the three months ended December 31, 2025, as it transitions to providing golf cart inventory financing and developing new E-Bike products[198]. Expenses and Losses - The net loss for the three months ended September 30, 2025, was $34,555,301, compared to a net loss of $13,638,478 for the same period in 2024[194]. - General and administrative expenses for the three months ended September 30, 2025, were $19,400,760, significantly higher than $1,916,712 in the same period of 2024[215]. - General and administrative expenses for the nine months ended September 30, 2025, were $23,841,753, including $1,935,878 in employee payroll costs and $14,880,161 in stock-based compensation[216]. - Net loss for the nine months ended September 30, 2025, was $40,915,628, compared to a net loss of $40,292,940 for the same period in 2024[226][227]. - The company expects general and administrative expenses to decrease for the remainder of 2025, anticipating a reduction in one-time costs and lower insurance expenses[219]. Asset Management - The Company acquired 4,081 Bitcoin as of November 10, 2025, with 1,980 Bitcoin restricted as collateral for loans[174]. - The company recognized an unrealized loss of $14,106,222 on Bitcoin, with an average purchase price of $117,516 and a fair value of $114,061 as of September 30, 2025[220]. - An unrealized loss on digital assets of $14.1 million was recorded, representing 40.9% and 34.8% of operating expenses for the three and nine months ended September 30, 2025, respectively[176]. - Cash used in operating activities for the nine months ended September 30, 2025, was $14.9 million, including a $14.1 million unrealized loss on Bitcoin[229]. - Net cash used in investing activities for the nine months ended September 30, 2025, was $453.8 million, primarily for the purchase of Bitcoin[232]. Operational Changes and Agreements - The Company plans to divest its Volcon brand to Venom EV, LLC, in exchange for a non-dilutable 10% equity position in Venom's reorganized corporation[179]. - The Company entered into a supply agreement with Venom to supply up to $2.7 million worth of golf carts, with initial orders already placed[187]. - As of November 10, 2025, the Company has 23 active dealers for its bicycle products while transitioning powersports and golf cart dealers to Venom[189]. - The company has signed agreements with six importers in Latin America and additional importers in New Zealand, Australia, and Japan to expand its international distribution[191]. Cost Management - Cost of goods sold for the three months ended September 30, 2025, was $291,602, a decrease from $10,294,720 in the same period of 2024[199]. - The company anticipates a decrease in cost of goods sold for the remainder of 2025 due to lower revenue from product sales[203]. - Product development expenses for the three months ended September 30, 2025, were $181,671, compared to $528,352 in the same period of 2024[210].

Core Viewpoint - Velcan Holdings reported a significant decrease in net profit for the first half of 2025, primarily due to foreign exchange variations, despite stable turnover and operating costs [2][5]. Financial Performance - Turnover for the first half of 2025 was EUR 1.0 million, showing a 3% increase compared to EUR 1.0 million in the same period of 2024 [2]. - Net result for the first half of 2025 was EUR 0.6 million, a sharp decline of 85% from EUR 4.0 million in the first half of 2024 [2]. - Cash and financial instruments decreased by 3% to EUR 132 million as of June 30, 2025, from EUR 135 million at the end of 2024 [2]. - Consolidated equity remained stable at EUR 135 million [2]. Portfolio and Investment Insights - The portfolio gained EUR 10.8 million excluding forex effects, offset by EUR -8.2 million in currency losses, resulting in a net portfolio gain of EUR 2.6 million compared to EUR 6.1 million in H1 2024 [5]. - As of June 30, 2025, the asset composition included 33% equities, 30% sovereign bonds, 27% cash and equivalents, with the remainder in short positions, BRL/INR instruments, and private equity [5]. - The net cash position was EUR 74.6 million, excluding BRL and INR MM funds [5]. Operational Highlights - Revenue from the Rodeio Bonito hydropower plant in Brazil was EUR 1.0 million, reflecting a 3% year-over-year increase in EUR and a 19% increase in BRL, despite lower production due to drought [5]. - Operating costs remained stable at EUR -2.4 million, with depreciation and provisions at EUR -0.2 million [5]. Shareholder and Market Context - Shareholders' equity amounted to EUR 134.9 million as of June 30, 2025, slightly up from EUR 134.8 million at year-end 2024 [5]. - The company repurchased 32,328 shares for EUR 551,000 under a share buyback program initiated in January 2025 [5]. - The Board clarified that comparisons with other issuers on regulated markets are not relevant due to the distinct regulatory framework of Luxembourg's Euro MTF, where the company's shares are listed [5][11].

PART I — FINANCIAL INFORMATION [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements and detailed notes for periods ended June 30, 2025, and December 31, 2024 [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets increased from $6.2 million to $17.9 million, driven by cash, while liabilities decreased and equity surged | Metric | June 30, 2025 | December 31, 2024 | | :----- | :------------ | :---------------- | | Cash and cash equivalents | $11,793,028 | $2,193,573 | | Total current assets | $16,549,821 | $5,066,152 | | Total assets | $17,936,815 | $6,226,503 | | Total current liabilities | $3,632,039 | $4,636,803 | | Total liabilities | $4,116,916 | $6,185,742 | | Total stockholders' equity | $13,819,899 | $40,761 | [Condensed Consolidated Statements of Operations](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Net loss improved significantly for the six months ended June 30, 2025, to $6.4 million, despite decreased revenue, due to reduced costs | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :----- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Revenue | $702,936 | $940,863 | $1,438,985 | $1,974,411 | | Cost of goods sold | $(851,476) | $(3,113,429) | $(1,632,859) | $(4,735,009) | | Gross margin | $(148,540) | $(2,172,566) | $(193,874) | $(2,760,598) | | Loss from operations | $(3,871,806) | $(5,529,301) | $(6,378,277) | $(9,773,636) | | Net loss | $(3,899,897) | $(606,418) | $(6,360,327) | $(26,654,462) | | Net loss per common share – basic | $(7.57) | $(96.59) | $(14.88) | $(7,085.18) | [Condensed Consolidated Statements of Stockholders Equity](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders%20Equity) Stockholders' equity dramatically increased to $13.8 million by June 30, 2025, primarily from over $19.5 million in common stock issuances | Item | January 1, 2025 | June 30, 2025 | | :--- | :-------------- | :------------ | | Common Stock (Shares) | 78,859 | 533,008 | | Common Stock (Amount) | $1 | $6 | | Treasury Stock (Shares) | – | 65,348 | | Treasury Stock (Amount) | – | $(510,907) | | Additional Paid-in Capital | $166,357,207 | $187,007,574 | | Accumulated Deficit | $(166,316,447) | $(172,676,774) | | Total Stockholders' Equity | $40,761 | $13,819,899 | - Issuance of common stock from At the Market offering generated net proceeds of **$8,846,761**[15](index=15&type=chunk) - Issuance of common stock and pre-funded warrants generated net proceeds of **$10,703,882**[15](index=15&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash increased by $9.6 million for the six months ended June 30, 2025, driven by $19.0 million in financing activities | Cash Flow Activity | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :----------------- | :--------------------------- | :--------------------------- | | Net cash used in operating activities | $(7,230,924) | $(8,198,103) | | Net cash used in investing activities | $(2,204,927) | $(182,539) | | Net cash provided by financing activities | $19,035,306 | $2,344,471 | | NET CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH | $9,599,455 | $(6,036,171) | | CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD | $11,898,028 | $2,157,175 | - Financing activities were significantly boosted by **$10.7 million** from public offering of common stock and pre-funded warrants, and **$8.8 million** from At the Market offering[20](index=20&type=chunk) - Investing activities included a **$2.0 million** purchase of a certificate of deposit[20](index=20&type=chunk) [Notes to the Condensed Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) Detailed explanations of financial position, operations, and cash flows, including Bitcoin strategy, going concern, and financing [NOTE 1 – ORGANIZATION, NATURE OF OPERATIONS AND GOING CONCERN](index=12&type=section&id=NOTE%201%20%E2%80%93%20ORGANIZATION,%20NATURE%20OF%20OPERATIONS%20AND%20GOING%20CONCERN) Company renamed Empery Digital Inc., adopted a Bitcoin treasury strategy, and addressed Nasdaq compliance and tariff impacts - Company renamed Empery Digital Inc. on July 30, 2025, and changed Nasdaq ticker from VLCN to EMPD[22](index=22&type=chunk) - Adopted a Bitcoin treasury strategy effective July 17, 2025, with the goal of becoming a leading, low-cost, capital-efficient aggregator of Bitcoin[23](index=23&type=chunk) - Management anticipates cash on hand plus proceeds from Private Placements will be sufficient to fund operations beyond one year[32](index=32&type=chunk) - Nasdaq compliance issues regarding minimum bid price were regained on July 17, 2024, and again on July 17, 2025, after a 1-for-8 reverse stock split on June 11, 2025[36](index=36&type=chunk)[37](index=37&type=chunk) - Tariffs on imports from Vietnam are set at **20%**, and China at **30%**, impacting product costs and potentially reducing margins[39](index=39&type=chunk)[40](index=40&type=chunk)[41](index=41&type=chunk) [NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES](index=14&type=section&id=NOTE%202%20%E2%80%93%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) Unaudited interim statements, retroactive 1-for-8 reverse stock split, and concentration risk from outsourced manufacturing - Interim consolidated financial statements are unaudited and prepared in accordance with U.S. GAAP[42](index=42&type=chunk) - On June 11, 2025, the Company completed a reverse **1-for-8** stock split, with all share and per share amounts updated to reflect this[44](index=44&type=chunk) - The Company outsources product design, development, and manufacturing to third parties, leading to concentration risk[46](index=46&type=chunk) - Settlement agreements with manufacturers resulted in a **$700,000** reduction of expense in 2024 and a recorded expense of **$1,091,308** for excess raw materials[48](index=48&type=chunk)[49](index=49&type=chunk) [NOTE 3 – SEGMENT REPORTING](index=16&type=section&id=NOTE%203%20%E2%80%93%20SEGMENT%20REPORTING) The company operates as a single segment, with Co-CEOs as chief operating decision makers - The Company operates as one operating segment[52](index=52&type=chunk) - Co-CEOs are the chief operating decision makers, using consolidated statements of operations to assess financial performance and allocate resources[52](index=52&type=chunk) [NOTE 4 – NOTES PAYABLE](index=16&type=section&id=NOTE%204%20%E2%80%93%20NOTES%20PAYABLE) Total notes payable of $32,225 as of June 30, 2025, primarily from vehicle financing | Maturity Period | Amount | | :-------------- | :----- | | Remainder of 2025 | $5,450 | | 2026 | $10,898 | | 2027 | $10,898 | | 2028 | $10,898 | | 2029 | $1,816 | | Total future payments | $39,960 | | Less: Interest | $(7,735) | | Total notes payable | $32,225 | | Less current portion | $(7,602) | | Long-term notes payable | $24,623 | [NOTE 5 - CONVERTIBLE NOTES](index=16&type=section&id=NOTE%205%20-%20CONVERTIBLE%20NOTES) Remaining $24.7 million principal of May 2023 Convertible Notes exchanged for Series A Preferred Stock in March 2024 - In March 2024, **$7,414,025** of May 2023 Notes principal converted into **622** shares of common stock, resulting in a **$333,544** loss[63](index=63&type=chunk) - On March 4, 2024, the remaining **$24,716,118** principal of May 2023 Notes was exchanged for **24,698** shares of Series A Convertible Preferred Stock, leading to a **$1,314,065** loss on exchange[63](index=63&type=chunk) [NOTE 6 - MAY 2024 SENIOR NOTES](index=18&type=section&id=NOTE%206%20-%20MAY%202024%20SENIOR%20NOTES) $2.9 million Senior Notes issued in May 2024, fully repaid in July 2024, resulting in a $1.5 million loss on extinguishment - Issued Senior Notes with **$2,942,170** principal on May 22, 2024, for net proceeds of **$2,255,851**[65](index=65&type=chunk) - Notes were fully repaid on July 12, 2024, resulting in a **$1,470,554** loss on early extinguishment[65](index=65&type=chunk) [NOTE 7 - WARRANT LIABILITIES](index=18&type=section&id=NOTE%207%20-%20WARRANT%20LIABILITIES) Warrant liability for Series A Warrants is $146,468, with Series B Warrants reclassified to equity in May 2024 | Metric | Amount | | :----- | :----- | | Fair value on January 1, 2025 | $111,658 | | Loss on changes in fair value | $34,810 | | Balance at June 30, 2025 | $146,468 | - Series B Warrants were reclassified to equity on May 17, 2024, after an amendment introduced a cashless exercise provision, with a fair value of **$3,405,662**[68](index=68&type=chunk) [NOTE 8 – RELATED PARTY TRANSACTIONS](index=19&type=section&id=NOTE%208%20%E2%80%93%20RELATED%20PARTY%20TRANSACTIONS) Engaged in consulting agreements, executive employment, and terminated a Highbridge agreement for a $2.0 million fee - Paid **$45,000** to ThankYou Studios, an entity owned by Board member Orn Olason, for marketing and brand assessment[70](index=70&type=chunk) - CEO John Kim's salary was **$800,000** with a **$250,000** annual bonus and **10%** equity award (approved **180,375** stock options)[72](index=72&type=chunk) - CFO Greg Endo's salary was **$300,000** with up to **50%** bonus and **4%** equity award (approved **72,150** stock options)[73](index=73&type=chunk) - Terminated Highbridge Consulting Agreement on July 11, 2025, for a **$2.0 million** termination fee, releasing obligations for potential future milestone payments[78](index=78&type=chunk)[79](index=79&type=chunk) [NOTE 9 – STOCKHOLDERS' EQUITY](index=20&type=section&id=NOTE%209%20%E2%80%93%20STOCKHOLDERS%27%20EQUITY) Executed a 1-for-8 reverse stock split, repurchased shares, and raised significant capital through ATM and public offerings - Completed a **1-for-8** reverse stock split on June 11, 2025[81](index=81&type=chunk) - Repurchased **65,348** shares of common stock for **$510,907** under a stock buyback program through June 30, 2025[87](index=87&type=chunk) - Raised net proceeds of **$8,846,761** from the sale of **220,515** shares of common stock through the ATM program during the six months ended June 30, 2025[84](index=84&type=chunk) - Received net proceeds of **$10,703,882** from an underwritten public offering of **53,750** common stock units and **696,250** pre-funded warrant units on February 6, 2025[85](index=85&type=chunk) Common Stock Warrants | Warrant Type | Outstanding at Jan 1, 2025 | Granted | Exercised | Outstanding at June 30, 2025 | Weighted Average Exercise Price at June 30, 2025 | | :----------- | :------------------------- | :------ | :-------- | :--------------------------- | :--------------------------------------------- | | Common Stock Warrants | 25,067 | 1,456,527 | (226,117) | 1,255,477 | $58.69 | [NOTE 10 – STOCK-BASED COMPENSATION](index=25&type=section&id=NOTE%2010%20%E2%80%93%20STOCK-BASED%20COMPENSATION) Recognized $1.1 million in stock-based compensation for six months ended June 30, 2025, primarily for CEO and CFO options - Recognized **$1,100,670** in total stock-based compensation for the six months ended June 30, 2025[114](index=114&type=chunk) - Fully vested stock options granted to CEO and CFO to purchase **252,525** shares at **$4.56** per share resulted in **$1,125,802** in share-based compensation for the six months ended June 30, 2025[111](index=111&type=chunk) - No shares are available for issuance under the 2021 Plan as of June 30, 2025[110](index=110&type=chunk) Stock Option Activity | Stock Option Activity | Shares | Weighted Average Exercise Price | | :-------------------- | :----- | :---------------------------- | | Outstanding at January 1, 2025 | 816 | $14,203.20 | | Granted | 252,525 | $4.56 | | Canceled | (782) | $104.32 | | Outstanding at June 30, 2025 | 252,559 | $576.03 | [NOTE 11 – LOSS PER COMMON SHARE](index=26&type=section&id=NOTE%2011%20%E2%80%93%20LOSS%20PER%20COMMON%20SHARE) Basic and diluted net loss per common share improved to $(14.88) for six months ended June 30, 2025, due to more shares outstanding | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :----- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net loss | $(3,899,897) | $(606,418) | $(6,360,327) | $(26,654,462) | | Weighted average common shares outstanding – basic | 515,490 | 6,278 | 427,361 | 3,762 | | Basic and diluted net loss per common share | $(7.57) | $(96.59) | $(14.88) | $(7,085.18) | Potentially Dilutive Shares | Potentially Dilutive Shares | June 30, 2025 | June 30, 2024 | | :-------------------------- | :------------ | :------------ | | Warrants | 1,255,477 | 1,708 | | Stock options | 252,559 | 34 | | Preferred Stock | – | 988,069 | | Total | 1,508,036 | 989,811 | [NOTE 12 – INCOME TAXES](index=27&type=section&id=NOTE%2012%20%E2%80%93%20INCOME%20TAXES) No income tax benefit or expense recognized due to recurring losses, with a full valuation allowance established - No income tax benefit or expense recognized due to recurring losses since inception[118](index=118&type=chunk) - A full valuation allowance has been established for any tax benefit[118](index=118&type=chunk) [NOTE 13 - SUBSEQUENT EVENTS](index=27&type=section&id=NOTE%2013%20-%20SUBSEQUENT%20EVENTS) Post-quarter, company entered Gemini agreements, completed $501 million private placements, and approved new stock options and buyback program - Entered into Strategic Digital Assets Services Agreement and Custodial Services Agreement with Gemini on July 13, 2025[120](index=120&type=chunk)[121](index=121&type=chunk) - Completed Private Placements on July 21, 2025, raising over **$501 million** gross proceeds (including **$28 million** in Bitcoin), with net proceeds of **$481 million**[123](index=123&type=chunk) - Intends to use net proceeds from Private Placements to purchase Bitcoin under its treasury strategy; purchased approximately **$472 million** in Bitcoin through August 8, 2025[130](index=130&type=chunk) - Appointed new directors (Ryan Lane, Ian Read, Rohan Chauhan, Matthew Homer) and executive officers (Ryan Lane as Co-CEO, Timothy Silver as COO, Brett Director as VP Legal)[131](index=131&type=chunk)[132](index=132&type=chunk) - Approved stock option grants for **6,727,188** shares at **$10.00** exercise price under the 2025 Stock Plan (subject to shareholder approval), with **80%** vested as of August 8, 2025[134](index=134&type=chunk) - Increased ATM program capacity by **$1 billion** and approved a **$100 million** common stock repurchase program effective through July 24, 2027[135](index=135&type=chunk)[136](index=136&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=28&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Reviews financial condition, operations, liquidity, and capital resources, emphasizing the digital asset strategy [Special Note Regarding Forward-Looking Statements](index=31&type=section&id=Special%20Note%20Regarding%20Forward-Looking%20Statements) Report contains forward-looking statements subject to risks, including digital asset strategy and market volatility, with no obligation to update - Forward-looking statements are subject to risks and uncertainties, including the ability to change company direction, keep pace with technology, successful implementation of digital asset strategy, and highly volatile cryptocurrency prices[139](index=139&type=chunk) - Company disclaims any obligation to update forward-looking statements, except as required by law[140](index=140&type=chunk) [Overview](index=31&type=section&id=Overview) Company pivoted to a digital asset treasury strategy while continuing its electric powersports vehicle business, facing tariff and supply chain challenges - Company launched a digital asset treasury strategy, using **$501 million** from Private Placements to acquire Bitcoin and other digital assets[141](index=141&type=chunk) - Operates an all-electric, off-road powersports vehicle business, selling E-Bikes (Brat) and UTVs (HF1, MN1 Adventurer/Tradesman)[142](index=142&type=chunk)[146](index=146&type=chunk)[150](index=150&type=chunk) - Discontinued Grunt EVO off-road motorcycle manufacturing due to cost and sold all remaining units by March 31, 2025[144](index=144&type=chunk) - Signed exclusive distribution agreement with Super Sonic for golf carts in the U.S. and a supply agreement with Venom-EV LLC for up to **$2.0 million** in golf carts[152](index=152&type=chunk)[153](index=153&type=chunk) - Outsourcing all vehicle and accessory manufacturing to third-party international manufacturers, leading to potential delays and increased costs due to tariffs[157](index=157&type=chunk) [Digital Asset Treasury Strategy](index=31&type=section&id=Digital%20Asset%20Treasury%20Strategy) Launched digital asset treasury strategy, using $501 million from private placements to acquire Bitcoin and establish crypto operations - Launched digital asset treasury strategy to acquire Bitcoin and other digital assets[141](index=141&type=chunk) - Used net proceeds from **$501 million** Private Placements to purchase Bitcoin and establish cryptocurrency treasury operations[141](index=141&type=chunk) [Electric Vehicle](index=32&type=section&id=Electric%20Vehicle) Operates an all-electric, off-road powersports vehicle business, selling E-Bikes and UTVs, and entered a golf cart distribution agreement - Operates an all-electric, off-road powersports vehicle business[142](index=142&type=chunk) - Sells E-Bike (Brat) and UTVs (HF1, MN1 Adventurer/Tradesman)[142](index=142&type=chunk) - Entered distribution agreement with Super Sonic Company Ltd. for golf carts in January 2025[143](index=143&type=chunk) [Two-Wheeled Products](index=32&type=section&id=Two-Wheeled%20Products) Discontinued Grunt EVO, continues Brat E-Bike sales, and is developing a new electric motorcycle for 2026 - Discontinued Grunt EVO off-road motorcycle manufacturing in December 2024 due to cost, with all remaining units sold by March 31, 2025[144](index=144&type=chunk) - Continues to sell the Brat E-Bike, a Class 2 E-Bike for on-road or off-road use[146](index=146&type=chunk) - Developing a new electric motorcycle model with prototypes received in February 2025, with expected sales in 2026[145](index=145&type=chunk) [Utility Terrain Vehicles (UTVs)](index=32&type=section&id=Utility%20Terrain%20Vehicles%20(UTVs)) Distributes VLCN HF1 and MN1 UTVs, which are subject to tariffs due to foreign manufacturing - Distributes VLCN HF1 UTV in North America under a five-year agreement[149](index=149&type=chunk) - Distributes VLCN MN1 UTV models (Adventurer and Tradesman) in the United States[150](index=150&type=chunk) - UTVs manufactured outside the U.S. are subject to potential tariffs, leading the company to evaluate international sales through distributors[151](index=151&type=chunk) [Distribution and Supplier Agreements](index=33&type=section&id=Distribution%20and%20Supplier%20Agreements) Signed exclusive distribution agreement for golf carts with Super Sonic and a supply agreement with Venom-EV LLC - Signed exclusive distribution agreement with Super Sonic in January 2025 for golf carts in the U.S., requiring a procurement plan by June 2025 (not yet provided as of August 8, 2025)[152](index=152&type=chunk) - Entered supply agreement with Venom-EV LLC in February 2025 to supply up to **$2.0 million** of golf carts with a **5%** margin[153](index=153&type=chunk) [Customers](index=33&type=section&id=Customers) Sells through 93 powersports dealers, 23 bicycle retailers, 16 golf cart dealers, direct-to-consumer, and international importers - Sells products through **93** active powersports dealers, **23** active bicycle dealers, and **16** golf cart dealers[154](index=154&type=chunk) - Offers **30-90** day payment terms for qualified dealers and floor plan financing of **$3.5 million**[154](index=154&type=chunk) - Sells two-wheel products internationally through importers in Latin America, the Caribbean, New Zealand, Australia, and Japan, with plans to expand global sales to include four-wheel products[156](index=156&type=chunk) [Manufacturers](index=34&type=section&id=Manufacturers) Relies entirely on third-party international manufacturers, facing supply chain delays, tariff costs, and financial hardship risks - Outsourcing all vehicle and accessory manufacturing to third-party international manufacturers[157](index=157&type=chunk) - Faces risks of supply chain delays, increased costs due to tariffs, and potential sales harm if manufacturers experience financial hardship[157](index=157&type=chunk) [Results of Operations](index=34&type=section&id=Results%20of%20Operations) Revenue decreased, but gross margin improved, and operating losses reduced due to lower cost of goods sold, with G&A increasing | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :----- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Revenue | $702,936 | $940,863 | $1,438,985 | $1,974,411 | | Cost of goods sold | $(851,476) | $(3,113,429) | $(1,632,859) | $(4,735,009) | | Gross margin | $(148,540) | $(2,172,566) | $(193,874) | $(2,760,598) | | Loss from operations | $(3,871,806) | $(5,529,301) | $(6,378,277) | $(9,773,636) | | Net loss | $(3,899,897) | $(606,418) | $(6,360,327) | $(26,654,462) | [Revenue](index=35&type=section&id=Revenue) Decreased by 25.3% for Q2 2025 and 27.1% for six months, primarily due to lower finished goods inventory | Product | 3 Months Ended June 30, 2025 | 6 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2024 | | :------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Brats | $202,998 | $302,456 | $240,750 | $773,556 | | HF1s | $307,198 | $449,319 | – | – | | MN1-Adventurers | $74,461 | $166,178 | – | – | | MN1-Tradesman | $123,884 | $157,683 | – | – | | Grunt EVOs | – | $304,905 | $284,147 | $613,764 | | Stags | – | – | $194,887 | $234,886 | | Volcon Youth | – | – | $192,924 | $286,680 | | Accessories & Parts | $26,992 | $51,337 | $52,696 | $86,800 | | Total Revenue | $702,936 | $1,438,985 | $940,863 | $1,974,411 | - Expects revenue to decrease in Q3 2025 due to lower finished goods inventory[162](index=162&type=chunk) [Cost of Goods Sold](index=35&type=section&id=Cost%20of%20Goods%20Sold) Significantly decreased by 72.7% for Q2 2025 and 65.5% for six months, driven by lower product costs and inventory adjustments | Metric | 3 Months Ended June 30, 2025 | 6 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2024 | | :----- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Total Cost of Goods Sold | $(851,476) | $(1,632,859) | $(3,113,429) | $(4,735,009) | | Payroll costs | $122,415 | $208,668 | $72,466 | $166,786 | | Facilities costs | $121,279 | $245,143 | $104,976 | $210,926 | | Inventory adjustments | $76,573 | $84,822 | – | – | | Warranty expense (benefit) | $(69,371) | $(74,184) | – | – | | Product costs (Grunt EVOs) | $41,339 | $265,620 | $292,561 | $636,542 | | Product costs (Brats) | $190,072 | $309,861 | $221,624 | $804,174 | | Product costs (HF1s) | $206,684 | $332,785 | – | – | | Product costs (MN1s) | $225,186 | $356,623 | – | – | | Loss on disposal of Stag tooling | – | – | $466,481 | $466,481 | | Loss on disposal of Grunt EVO tooling | – | – | – | $155,621 | | Settlement with vendor (Stag suspension) | – | – | $1,117,429 | $1,117,429 | | Youth finished goods write-off | – | – | $57,262 | $57,262 | - Expects cost of goods sold to decrease for the remainder of 2025 due to lower expected revenue[167](index=167&type=chunk) [Sales and Marketing Expense](index=36&type=section&id=Sales%20and%20Marketing%20Expense) Increased by 14.5% for Q2 2025 but decreased by 13.1% for six months, with future increases expected for brand promotion and stock options | Metric | 3 Months Ended June 30, 2025 | 6 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2024 | | :----- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Sales and marketing expenses | $622,772 | $1,133,729 | $543,671 | $1,304,235 | | Brand promotion | $259,524 | $361,041 | $193,344 | $408,773 | | Employee payroll costs | $167,318 | $365,637 | $121,187 | $574,378 | | Professional fees | $59,069 | $131,620 | $64,412 | $84,336 | | Depreciation expense | $92,511 | $103,555 | $27,674 | $49,935 | | Stock-based compensation (benefit) | $(35,184) | $(25,132) | $67,001 | $11,930 | - Expects sales and marketing expenses to increase for the remainder of 2025 due to increased spending on the Empery Digital brand and stock-based compensation for new grants[173](index=173&type=chunk) [Product Development Expense](index=36&type=section&id=Product%20Development%20Expense) Decreased significantly by 72.5% for Q2 2025 and 62.4% for six months due to lower payroll and prototype costs | Metric | 3 Months Ended June 30, 2025 | 6 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2024 | | :----- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Product development expenses | $221,159 | $609,681 | $805,550 | $1,620,495 | | Employee payroll costs | $140,522 | $389,876 | $394,632 | $831,534 | | Facilities costs | $47,432 | $104,214 | $60,212 | $124,067 | | Prototype costs | – | – | $114,781 | $206,706 | | Stock-based compensation | – | – | $83,733 | $126,337 | - Expects product development employee costs to decrease due to fewer products in development, offset by an increase in stock-based compensation for new grants[178](index=178&type=chunk) [General and Administrative Expense](index=37&type=section&id=General%20and%20Administrative%20Expense) Increased by 43.4% for Q2 2025 and 8.6% for six months, driven by stock-based compensation, insurance, and professional fees | Metric | 3 Months Ended June 30, 2025 | 6 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2024 | | :----- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | General and administrative expenses | $2,879,335 | $4,440,993 | $2,007,514 | $4,088,308 | | Employee payroll costs | $541,424 | $1,091,826 | $527,052 | $1,106,415 | | Stock-based compensation | $1,125,802 | $1,125,802 | $138,203 | $159,390 | | Professional fees | $190,954 | $451,142 | $190,059 | $602,774 | | Insurance costs | $454,371 | $904,759 | $656,288 | $1,319,215 | - Expects general and administrative expenses to increase for the remainder of 2025 due to stock-based compensation for new grants and increased legal/professional fees related to the digital asset strategy[184](index=184&type=chunk) [Interest and Other Expenses](index=38&type=section&id=Interest%20and%20Other%20Expenses) Insignificant for 2025 periods, contrasting with significant gains/losses in 2024 from warrant liabilities and convertible notes - Interest and other income/expenses were insignificant for the three and six months ended June 30, 2025[185](index=185&type=chunk)[186](index=186&type=chunk) - For Q2 2024, interest and other income/expenses was **$4,922,883**, including a **$5,111,291** gain on change in fair value of Series A and B Warrant liabilities[187](index=187&type=chunk) - For the six months ended June 30, 2024, interest and other income/expenses was **$(16,880,826)**, including a **$(14,727,696)** loss on change in fair value of Series A and B Warrant liabilities and losses on conversion/exchange of convertible notes totaling **$1,647,609**[188](index=188&type=chunk) [Net Loss](index=38&type=section&id=Net%20Loss) Net loss for six months ended June 30, 2025, was $6.4 million, a significant improvement from $26.7 million in 2024 | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :----- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net loss | $(3,899,897) | $(606,418) | $(6,360,327) | $(26,654,462) | [Liquidity and Capital Resources](index=38&type=section&id=Liquidity%20and%20Capital%20Resources) Cash and equivalents were $11.9 million, with $19.0 million from financing activities, and post-quarter private placements raised $481 million net proceeds | Metric | June 30, 2025 | | :----- | :------------ | | Cash, cash equivalents and restricted cash | $11.9 million | | Working capital | $13.0 million | | Accumulated deficit | $172.7 million | | Cash Flow Activity | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :----------------- | :--------------------------- | :--------------------------- | | Net cash used in operating activities | $(7.2 million) | $(8.2 million) | | Net cash used in investing activities | $(2.2 million) | $(0.2 million) | | Net cash provided by financing activities | $19.0 million | $2.3 million | - Post-quarter, Private Placements generated **$481 million** in net proceeds, intended for Bitcoin purchases and funding operations[199](index=199&type=chunk) - Management anticipates sufficient liquidity to fund planned operations beyond one year[200](index=200&type=chunk) [JOBS Act Accounting Election](index=39&type=section&id=JOBS%20Act%20Accounting%20Election) Irrevocably elected not to use the extended transition period for new accounting standards under the JOBS Act - Irrevocably elected not to use the extended transition period under the JOBS Act for new accounting standards[201](index=201&type=chunk) - Adopts new or revised accounting standards on the same dates as other public companies[201](index=201&type=chunk) [Critical Accounting Policies](index=39&type=section&id=Critical%20Accounting%20Policies) No critical accounting policies to discuss in this section - No critical accounting policies to report[203](index=203&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=40&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, the registrant is not required to provide quantitative and qualitative disclosures about market risk - As a smaller reporting company, the registrant is not required to provide quantitative and qualitative disclosures about market risk[205](index=205&type=chunk) [Item 4. Controls and Procedures](index=40&type=section&id=Item%204.%20Controls%20and%20Procedures) Addresses effectiveness of disclosure controls, concluding ineffectiveness due to past missed filings, but no material changes to internal control [Evaluation of Disclosure Controls and Procedures](index=40&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) Disclosure controls and procedures were ineffective as of June 30, 2025, due to past missed filings, but financial statements are fairly presented - Co-Chief Executive Officers and Chief Financial Officer concluded that disclosure controls and procedures were not effective as of June 30, 2025[207](index=207&type=chunk) - Deficiency attributed to past missed timely filings and unaddressed control implementation/testing[207](index=207&type=chunk) - Management believes unaudited consolidated financial statements fairly present financial position, results of operations, and cash flows in all material respects[207](index=207&type=chunk) [Changes in Internal Control over Financial Reporting](index=40&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) No material changes to internal control over financial reporting during the three months ended June 30, 2025 - No material changes to internal control over financial reporting during the three months ended June 30, 2025[208](index=208&type=chunk) PART II — OTHER INFORMATION [Item 1. Legal Proceedings](index=41&type=section&id=Item%201.%20Legal%20Proceedings) Company may be involved in ordinary course legal proceedings with unpredictable outcomes, and cannot estimate potential losses - Company may be involved in ordinary course legal proceedings with unpredictable outcomes[209](index=209&type=chunk) - Cannot estimate aggregate amount or range of reasonably possible losses for matters where losses are not probable and estimable[209](index=209&type=chunk) [Item 1A. Risk Factors](index=41&type=section&id=Item%201A.%20Risk%20Factors) Faces significant risks including Nasdaq delisting, reliance on foreign manufacturing, tariffs, and high volatility/regulatory uncertainty of digital asset strategy - Risk of delisting from Nasdaq if minimum bid price compliance is not maintained through November 10, 2025[212](index=212&type=chunk) - High reliance on foreign manufacturing and imports from Asia (China, Vietnam) exposes the company to risks from trade laws, tariffs (e.g., **20%** for Vietnam, **30%** for China), and supply chain disruptions[214](index=214&type=chunk)[216](index=216&type=chunk) - Digital asset treasury strategy exposes the company to highly volatile Bitcoin prices, with potential for significant fluctuations in operating results and share price[218](index=218&type=chunk) - Significant legal, commercial, regulatory, and technical uncertainty surrounds Bitcoin and other digital assets, including potential classification as securities or commodities, which could lead to increased compliance costs or operational shutdowns[219](index=219&type=chunk)[228](index=228&type=chunk)[233](index=233&type=chunk) - Risks related to custody of digital assets, including security breaches, loss of private keys, and counterparty risk with custodians, could lead to total loss of assets[244](index=244&type=chunk) - Digital asset transactions are irreversible, exposing the company to risks of theft, loss, and human error without legal recourse or insurance[243](index=243&type=chunk)[246](index=246&type=chunk) - Faces significant competition in the digital asset industry and risks from the emergence or growth of other digital assets (e.g., stablecoins, CBDCs) that could negatively impact Bitcoin's price[250](index=250&type=chunk)[251](index=251&type=chunk)[252](index=252&type=chunk)[253](index=253&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=49&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered equity sales, repurchased 65,348 shares, and later expanded stock repurchase program to $100 million - No unregistered equity securities sold during the period, except as previously reported[254](index=254&type=chunk) | Period | Total Shares Purchased | Average Price Paid per Share ($) | Purchased as Part of Publicly Announced Plans or Programs | Maximum Number of Shares that May Yet Be Purchased Under the Plan or Program | | :----- | :--------------------- | :------------------------------- | :-------------------------------------------------------- | :----------------------------------------------------------- | | April 1, 2025 – April 30, 2025 | – | – | – | 1,598,194 | | May 1, 2025 – May 31, 2025 | 17,463 | 6.25 | 17,463 | 1,492,875 | | June 1, 2025 – June 30, 2025 | – | – | – | 1,492,875 | | Three Month period ended June 30, 2025 | 65,348 | N/A | 65,348 | $1,492,875 | - On July 24, 2025, the Board approved a **$100 million** common stock repurchase program, effective through July 24, 2027[254](index=254&type=chunk) [Item 3. Defaults Upon Senior Securities](index=49&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) No defaults upon senior securities - No defaults upon senior securities[255](index=255&type=chunk) [Item 4. Mine Safety Disclosures](index=49&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[256](index=256&type=chunk) [Item 5. Other Information](index=49&type=section&id=Item%205.%20Other%20Information) No director or officer adopted or terminated any Rule 10b5-1 trading arrangement during the quarter ended June 30, 2025 - No director or officer adopted or terminated any Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement during the quarter ended June 30, 2025[257](index=257&type=chunk) [Item 6. Exhibits](index=47&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including various amendments to the Certificate of Incorporation, Bylaws, and agreements, along with certifications required by the Securities Exchange Act - Includes various amendments to the Certificate of Incorporation and Bylaws[260](index=260&type=chunk) - Contains certifications from Co-Chief Executive Officers and Chief Financial Officer pursuant to Rule 13a-14(a) or 15d-14(a) and 18 U.S.C. Section 1350[260](index=260&type=chunk) Signatures [Signatures](index=51&type=section&id=Signatures) The report is signed by Ryan Lane (Co-Chief Executive Officer and Director), John Kim (Co-Chief Executive Officer and Director), and Greg Endo (Chief Financial Officer) on August 12, 2025 - Report signed by Ryan Lane (Co-CEO), John Kim (Co-CEO), and Greg Endo (CFO) on August 12, 2025[264](index=264&type=chunk)

Executive Summary [**Operational Highlights**](index=1&type=section&id=Operational_Highlights) Empery Digital initiated a Bitcoin treasury strategy, raising over $481 million in net proceeds and acquiring 4,026.71 BTC. The company also increased its ATM program capacity by $1 billion and approved a $100 million share repurchase program. New digital platforms were launched for enhanced communication, while the mobility business continues to evaluate the impact of tariffs. - Adopted **BTC** treasury strategy as of July 17, 2025, aiming to be a leading, low-cost, capital-efficient **BTC** aggregator[2](index=2&type=chunk) Capital Raising & BTC Acquisition | Item | Details | | :--- | :--- | | Private Placement Net Proceeds | **~$481 million** | | BTC Acquired | **4,026.71 BTC** | | Aggregate BTC Purchase Price | **~$473 million** | | Average BTC Purchase Price | **$117,546** per BTC | | ATM Program Increase | **$1 billion** (added to existing **$90 million**) | | Share Repurchase Program | **$100 million** approved | - Launched EmperyDigital.com with real-time portfolio metrics and various social media accounts to expand company communications[5](index=5&type=chunk)[6](index=6&type=chunk) - Continuing to evaluate the impact of tariffs on mobility products, with potential for modest margin reduction and increased retail pricing due to a **20%** Vietnam tariff rate[6](index=6&type=chunk)[8](index=8&type=chunk)[9](index=9&type=chunk) [**Financial Highlights**](index=2&type=section&id=Financial_Highlights) For Q2 2025, revenue was $0.7 million, consistent with Q1 2025 but down from Q4 2024. The company reported a net loss of $3.9 million, an increase from Q1 2025 but an improvement from Q4 2024. Cash used in operations remained generally consistent across periods. Q2 2025 Key Financials (vs. prior quarters) | Metric | Q2 2025 | Q1 2025 | Q4 2024 | | :--- | :--- | :--- | :--- | | Revenue | **$702,936** | **$736,049** | **$986,916** | | Gross Margin | **$(148,540)** | **$(45,334)** | **$(2,151,643)** | | Net Loss | **$(3,899,897)** | **$(2,460,430)** | **$(5,217,369)** | | Cash used in operations | **$(3,718,211)** | **$(3,512,713)** | **$(3,765,549)** | - Gross margin is trending close to break-even, excluding significant Q4 2024 adjustments related to supply agreement terminations and inventory write-downs[10](index=10&type=chunk) Company Highlights & Strategic Initiatives [**Bitcoin Treasury Strategy Adoption**](index=1&type=section&id=Bitcoin_Treasury_Strategy_Adoption) Empery Digital officially adopted a Bitcoin treasury strategy on July 17, 2025, aiming to become a leading, low-cost, capital-efficient, globally trusted aggregator of Bitcoin. This marks a significant strategic shift for the company, formerly known as Volcon. - Strategy adopted July 17, 2025, with the goal of becoming a leading, low-cost, capital-efficient, globally trusted aggregator of **BTC**[2](index=2&type=chunk)[13](index=13&type=chunk) Initial BTC Acquisition Details | Metric | Value | | :--- | :--- | | BTC Acquired | **4,026.71 BTC** | | Aggregate Purchase Price | **~$473 million** | | Average Purchase Price per BTC | **$117,546** | [**Capital Raising and Shareholder Programs**](index=1&type=section&id=Capital_Raising_and_Shareholder_Programs) The company completed private placements, raising approximately $481 million in net cash proceeds. It also significantly increased its At-The-Market (ATM) issuance sales agreement capacity by $1 billion and approved a $100 million common stock repurchase program. Capital Raising & Shareholder Programs | Activity | Details | | :--- | :--- | | Private Placements (July 21, 2025) | **44,414,189** common shares + **5,728,662** pre-funded warrants | | Net Cash Proceeds from Private Placements | **~$481 million** | | ATM Program Increase | **$1 billion** (added to existing **$90 million**) | | Common Stock Repurchase Program | **$100 million** approved | - In Q2 2025, **$0.1 million** was used to purchase shares under the repurchase program. Q1 2025 financing activities included **$8.8 million** net from **ATM** sales and **$10.7 million** net from a public offering, offset by **$0.4 million** for share repurchases[15](index=15&type=chunk) [**Digital Communication and Investor Engagement**](index=1&type=section&id=Digital_Communication_and_Investor_Engagement) Empery Digital launched a new website, EmperyDigital.com, featuring a real-time treasury dashboard for BTC holdings and valuation metrics. The company also established various social media accounts to provide updates and engage with the blockchain ecosystem, intending these channels for material disclosures under Regulation FD. - Launched EmperyDigital.com with real-time portfolio metrics and a treasury dashboard[5](index=5&type=chunk)[6](index=6&type=chunk) - Established social media accounts (X, Instagram, YouTube) for updates on **BTC** treasury strategy and blockchain ecosystem insights[5](index=5&type=chunk)[6](index=6&type=chunk) - These channels are intended for broad, non-exclusionary distribution of information, including material disclosures under Regulation **FD**[7](index=7&type=chunk) [**Mobility Business and Tariff Impact**](index=2&type=section&id=Mobility_Business_and_Tariff_Impact) The company's original business, Empery Mobility (formerly Volcon), continues to be impacted by U.S. tariffs on imports from countries like China and Vietnam. Management is evaluating strategic alternatives, including U.S. assembly, shifting production, or adjusting selling prices to mitigate the impact on margins. - U.S. imposed reciprocal tariffs on imports from China and Vietnam starting April 2, 2025, with a **10%** baseline[8](index=8&type=chunk) - Expected Vietnam tariff rate of **20%** could lead to modest margin reduction and increased retail pricing for mobility products[9](index=9&type=chunk) - Company is evaluating strategic alternatives: U.S. assembly, shifting production, or adjusting selling prices to offset elevated import costs[9](index=9&type=chunk) - Empery Mobility continues to operate as the powersports brand, sourcing high-quality and sustainable electric vehicles[13](index=13&type=chunk) Second Quarter 2025 Financial Performance [**Statement of Operations Analysis**](index=2&type=section&id=Statement_of_Operations_Analysis) Empery Digital reported Q2 2025 revenue of $0.7 million, consistent with Q1 2025 but a decrease from Q4 2024. The gross margin remained negative, though significantly improved from Q4 2024 due to the absence of large one-time charges. Net loss for Q2 2025 was $3.9 million, an increase from Q1 2025, primarily due to higher general and administrative costs. Revenue & Gross Margin Trends | Metric | Q2 2025 | Q1 2025 | Q4 2024 | | :--- | :--- | :--- | :--- | | Revenue | **$702,936** | **$736,049** | **$986,916** | | Cost of Goods Sold | **$(851,476)** | **$(781,383)** | **$(3,138,559)** | | Gross Margin | **$(148,540)** | **$(45,334)** | **$(2,151,643)** | - Q2 2025 revenue breakdown: Brats (**$0.2M**), HF1s (**$0.3M**), MN1-Adventurers (**$0.1M**), and MN1-Tradesman (**$0.1M**)[10](index=10&type=chunk) - Q4 2024 Cost of Goods Sold included a **$2.5M** charge for supply agreement terminations and a **$0.3M** write-down of finished goods, offset by a **$0.7M** settlement reduction. Excluding these, gross margin is near break-even[10](index=10&type=chunk) Operating Expenses & Net Loss Trends | Metric | Q2 2025 | Q1 2025 | Q4 2024 | | :--- | :--- | :--- | :--- | | Sales & Marketing | **$622,772** | **$510,957** | **$774,026** | | Product Development | **$221,159** | **$388,523** | **$519,483** | | General & Administrative | **$2,879,335** | **$1,561,657** | **$1,660,627** | | Total Operating Expenses | **$3,723,266** | **$2,461,137** | **$2,954,136** | | Loss from Operations | **$(3,871,806)** | **$(2,506,471)** | **$(5,105,779)** | | Net Loss | **$(3,899,897)** | **$(2,460,430)** | **$(5,217,369)** | - General & Administrative costs increased by **~$1.3M** in Q2 2025, primarily due to **$1.1M** in share-based compensation for CEO/CFO stock options and **$0.1M** for the annual stockholders meeting and reverse stock split costs[14](index=14&type=chunk) - Product development costs continued to decline in Q2 2025 due to no longer developing vehicles, reducing prototype and payroll costs[14](index=14&type=chunk) [**Statement of Cash Flows Analysis**](index=3&type=section&id=Statement_of_Cash_Flows_Analysis) Cash used in operations remained generally consistent across all periods presented. Cash used in investing activities significantly increased in Q2 2025 due to the purchase of a $2 million certificate of deposit. Financing activities in Q2 2025 primarily involved cash used for share repurchases, contrasting with significant cash provided by financing in Q1 2025 from stock sales. Cash Flow Trends | Metric | Q2 2025 | Q1 2025 | Q4 2024 | | :--- | :--- | :--- | :--- | | Cash used in operations | **$(3,718,211)** | **$(3,512,713)** | **$(3,765,549)** | | Cash used in investing activities | **$(1,943,911)** | **$(261,016)** | **$(31,668)** | | Cash (used in) provided by financing activities | **$(111,812)** | **$19,147,118** | **$183,159** | | Net change in cash and restricted cash | **$(5,773,934)** | **$15,373,389** | **$(3,614,058)** | | Cash at end of period | **$11,898,028** | **$17,671,962** | **$2,298,573** | - Cash used in investing activities in Q2 2025 includes a **$2 million** certificate of deposit for dealer floor plan financing collateral[15](index=15&type=chunk) - Q1 2025 financing activities included **$8.8 million** net from **ATM** sales and **$10.7 million** net from a public offering, offset by **$0.4 million** for share repurchases[15](index=15&type=chunk) About Empery Digital Inc. [**Company Overview and Strategic Shift**](index=3&type=section&id=Company_Overview_and_Strategic_Shift) Empery Digital Inc., formerly Volcon, has transitioned its core strategy to a Bitcoin treasury model, aiming to be a leading Bitcoin aggregator. Concurrently, it continues to operate its original business under the Empery Mobility brand, focusing on all-electric, off-road powersports vehicles. - Company adopted a **Bitcoin** treasury strategy as of July 17, 2025, with the goal of becoming a leading, low-cost, capital-efficient, globally trusted aggregator of **Bitcoin**[13](index=13&type=chunk) - Formerly Volcon, the company was founded as the first all-electric powersports company[13](index=13&type=chunk) - The powersports brand now operates under "Empery Mobility," focusing on high-quality, sustainable electric vehicles for the outdoor community[13](index=13&type=chunk) Forward-Looking Statements and Risk Factors [**Forward-Looking Statements and Associated Risks**](index=4&type=section&id=Forward-Looking_Statements_and_Associated_Risks) The report contains forward-looking statements regarding the execution of the BTC treasury strategy, ATM utilization, share repurchases, tariff impacts, and cost reduction efforts. These statements are subject to various risks and uncertainties, including market conditions, Bitcoin price volatility, increased competition, and regulatory uncertainties regarding digital assets. - Forward-looking statements cover **BTC** treasury strategy execution, **ATM** utilization, common stock repurchases, tariff changes, and cost reduction[16](index=16&type=chunk) - Risks include changes in business, market, financial, political, and regulatory conditions; high volatility of **Bitcoin** price; correlation of stock price to digital asset prices; increased competition; and legal/regulatory uncertainty for digital assets[16](index=16&type=chunk) - Investors are cautioned not to place considerable reliance on forward-looking statements and are encouraged to review **SEC** filings for a discussion of risks[17](index=17&type=chunk) Investor Relations and Company Contacts [**Investor Information and Communication Channels**](index=3&type=section&id=Investor_Information_and_Communication_Channels) Empery Digital provides various contact channels for media, dealers, investors, marketing, and digital inquiries. Investor information, including press releases and SEC filings, is available on its investor relations website. - Investor information, press releases, and **SEC** filings are available at http://ir.emperydigital.com[12](index=12&type=chunk) - Contact information provided for Media, Dealers, Investors, Marketing, and Digital inquiries[16](index=16&type=chunk) - Company website www.emperydigital.com offers treasury dashboard and vehicle line-up information[16](index=16&type=chunk)

Funding & Strategy - Volcon, an electric car maker listed on Nasdaq, secured a $500 million raise [1] - The funding is intended for a bitcoin treasury strategy [1]

Financial Performance - Volcon's stock price increased by 135% [1] Investment & Strategy - Volcon raised $500 million to initiate a Bitcoin treasury [1]

Core Viewpoint - The company has initiated a share repurchase program, authorized by shareholders and implemented by the Board of Directors, aimed at enhancing shareholder value through the cancellation or coverage of free shares [1][2]. Group 1: Share Repurchase Program Details - The share repurchase program was authorized during the shareholders' meeting on 29 June 2021 and implemented on 8 January 2025 [1]. - The purchases were disclosed for the period from 7 July 2025 to 11 July 2025, with specific trading dates and details provided [1][2]. - A total of 40,750 shares were repurchased on 10 July 2025, with a total expenditure of €733,449.98 [2]. Group 2: Financial Details of Purchases - On 10 July 2025, 750 shares were purchased at €17.93 each, totaling €13,449.98 [2]. - Additionally, 40,000 shares were purchased at €18.00 each, amounting to €720,000.00 [2]. - The purpose of these purchases is stated as cancellation or free shares coverage [2]. Group 3: Regulatory and Contact Information - Regulatory information regarding the share buyback program is available on the company's website [3]. - For investor relations inquiries, the contact email provided is investor@velcan.lu [3].

Core Insights - Volcon ePowersports has launched a new floor plan financing and retail financing program through Dealer Direct Financial to enhance dealer inventory financing and access to electric off-road vehicles [1][2][3] Company Overview - Volcon is the first all-electric powersports company, focusing on sustainable electric vehicles for the outdoor community, emphasizing environmental benefits and near-silent operation [4][5] - The company’s product lineup includes motorcycles and UTVs, with notable products like the Grunt, Grunt EVO, and the Brat, which cater to both on-road and off-road markets [5] Financing Program Details - The new floor plan program aims to provide flexible financial solutions to support inventory acquisition and drive sales of Volcon's products, thereby expanding market presence [2][3] - The program is designed to empower dealers to grow their businesses and meet increasing customer demand for electric off-road vehicles [3][4] Strategic Goals - The initiative reflects Volcon's commitment to strengthening dealer relationships and accelerating the adoption of all-electric off-road vehicles [3] - The program is a significant step in Volcon's strategy to scale operations and support its growing dealer network [3]

Core Insights - Volcon ePowersports has received its first purchase order from Advanced EV for 1,000 golf carts, marking a significant step in their collaboration [1][2] - The order will be used for market testing of a new golf cart model developed with Super Sonic, indicating a strategic partnership aimed at expanding product offerings [2][3] - This order is part of a broader growth strategy, as Volcon has recently completed another multi-million dollar deal, suggesting a positive growth trajectory for the company [3] Company Overview - Volcon is based in Austin, Texas, and is recognized as the first all-electric powersports company, focusing on sustainable electric vehicles for outdoor activities [4] - The company’s product lineup includes motorcycles, UTVs, and eBikes, with notable products like the Grunt and the recently launched Grunt EVO and Brat [5] - Volcon aims to provide high-quality, innovative products that enhance outdoor experiences while minimizing environmental impact [4][5] Recent Developments - The company has resumed its share repurchase program, indicating confidence in its financial position and future prospects [3] - Volcon's vehicle roadmap includes the introduction of new models that offer thrilling performance without the noise and pollution associated with gas-powered units [5]