Volcon(VLCN) - 2025 Q2 - Quarterly Results

Executive Summary 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] 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][6] - 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][8][9] 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] Company Highlights & Strategic Initiatives 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][13] 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 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] 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][6] - Established social media accounts (X, Instagram, YouTube) for updates on BTC treasury strategy and blockchain ecosystem insights[5][6] - These channels are intended for broad, non-exclusionary distribution of information, including material disclosures under Regulation FD[7] 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] - Expected Vietnam tariff rate of 20% could lead to modest margin reduction and increased retail pricing for mobility products[9] - Company is evaluating strategic alternatives: U.S. assembly, shifting production, or adjusting selling prices to offset elevated import costs[9] - Empery Mobility continues to operate as the powersports brand, sourcing high-quality and sustainable electric vehicles[13] Second Quarter 2025 Financial Performance 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] - 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] 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] - Product development costs continued to decline in Q2 2025 due to no longer developing vehicles, reducing prototype and payroll costs[14] 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] - 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] About Empery Digital Inc. 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] - Formerly Volcon, the company was founded as the first all-electric powersports company[13] - The powersports brand now operates under "Empery Mobility," focusing on high-quality, sustainable electric vehicles for the outdoor community[13] Forward-Looking Statements and Risk Factors 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] - 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] - 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] Investor Relations and Company Contacts 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] - Company website www.emperydigital.com offers treasury dashboard and vehicle line-up information[16]