Empery Digital, Inc. reported a significant decline in financial performance for the first quarter of 2026, with revenues totaling $225,702, a decrease of approximately 51% from $462,332 in the same period of 2025. The company attributed this drop primarily to the divestiture of its four-wheel product lines and a strategic shift towards its digital asset treasury strategy. The cost of goods sold also decreased to $162,624 from $504,592, resulting in a gross margin of $63,078, compared to a loss of $42,260 in the previous year.
The company's operating expenses surged to $83.4 million, largely driven by a $78.4 million loss on digital assets, which accounted for 94% of total operating expenses. This loss was a stark contrast to the previous year when there were no losses recorded in this category. General and administrative expenses rose significantly to $4.6 million from $1.5 million, influenced by increased legal fees and stock-based compensation related to new employee stock options. Consequently, Empery Digital reported a net loss of $85.4 million for the quarter, compared to a net loss of $2.5 million in the first quarter of 2025.
In terms of strategic developments, Empery Digital has undergone a transformation since adopting its digital asset treasury strategy in July 2025. The company divested its Volcon brand to Venom EV, LLC, in exchange for a 10% equity stake in Venom's reorganized corporation. This move is expected to reduce future product liability exposure and allow Empery to focus on its two-wheeled electric vehicle offerings, including the Brat E-Bike. The company is also exploring new product launches in the U.S. and Europe, with plans to introduce additional two-wheeled models later in 2026.
Operationally, Empery Digital's cash and cash equivalents decreased to $5.7 million as of March 31, 2026, down from $9.1 million at the end of 2025. The company has also seen a significant reduction in its employee headcount as it transitions away from four-wheeled products. The total assets of the company fell to $217.8 million, primarily due to the decline in digital asset values and the repayment of loans. The company held 2,989.4 Bitcoin, valued at approximately $129.1 million, with a significant portion restricted as collateral for loans.
Looking ahead, Empery Digital anticipates that its current cash reserves, along with expected cash flows from operations and potential proceeds from Bitcoin sales, will be sufficient to fund its operations for the foreseeable future. The company remains focused on optimizing its capital structure and increasing Bitcoin per share to enhance shareholder value, while also managing the risks associated with the volatile digital asset market.
About Empery Digital, Inc.
Volcon, Inc. designs and sells all-electric off-road powersports vehicles, including E-Bikes, motorcycles, UTVs, and golf carts. The company focuses on outdoor recreation markets in the U.S. and internationally, leveraging third-party manufacturing and distribution agreements. Its value lies in innovative, environmentally friendly vehicles targeting enthusiasts and utility users, with a business model centered on product development, strategic partnerships, and global dealer networks.
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