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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

☒	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, ~~2024~~2025

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________ to__________

Commission file number: 001-40867

~~Volcon,~~Empery Digital Inc.

(Exact Name of Registrant as Specified in Its Charter)

Delaware

84-4882689

(State or Other Jurisdiction of

Incorporation or Organization)

(I.R.S. Employer

Identification No.)

3121 Eagles Nest Street, Suite 120, Round Rock, TX		78665
(Address of Principal Executive Offices)		(Zip Code)

(512) 400-4271

(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class Trading symbol Name of each exchange on which registered Common Stock ~~VLCN~~EMPD The NASDAQ Stock Market LLC

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer ☐	Accelerated Filer ☐
Non-Accelerated Filer ☒	Smaller Reporting Company ☒
	Emerging Growth Company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to § 240.10D-1(b). ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of March 2825, ~~2025~~2026, there were 330,~~850~~247,~~824 outstanding~~668 outstanding shares of our common stock. The aggregate market value of shares of common stock held by non-affiliates as of June 30, ~~2024~~ 2025 was $73,~~030~~709,~~705~~ 736 based on the closing sale price as reported by the NASDAQ Stock Market.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant’s proxy statement related to its 2025 Annual Stockholders’ Meeting to be filed subsequently are incorporated by reference into Part IIIII of this Form 10-K. Except as expressly incorporated by reference, the registrant’s proxy statement shall not be deemed to be part of this report.

TABLE OF CONTENTS

		Page
PART I
Item 1.	Business	1
Item 1A.	Risk Factors	69
Item 1B.	Unresolved Staff Comments	2131
Item 1C.	Cybersecurity	2132
Item 2.	Properties	2133
Item 3.	Legal Proceedings	2233
Item 4.	Mine Safety Disclosures	2233
PART II
Item 5	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	2334
Item 6.	[Reserved]	2335
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2336
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	2945
Item 8.	Financial Statements and Supplementary Data	2945
Item 9.	Changes In and Disagreements With Accountants on Accounting and Financial Disclosure	6490
Item 9A.	Controls and Procedures	6490
Item 9B.	Other Information	6490
Item 9C.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	6490
PART III
Item 10.	Directors, Executive Officers and Corporate Governance	6591
Item 11.	Executive Compensation	6591
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	6591
Item 13.	Certain Relationships and Related Transactions and Director Independence	6591
Item 14.	Principal Accountant Fees and Services	6591
PART IV
Item 15.	Exhibit and Financial Statement Schedules	6692
Item 16.	Form 10-K Summary	6692
Index to Exhibits		6793
Signatures		7096

Special Note Regarding Forward-Looking Statements

This Annual Report on Form 10-K, together with other statements and information publicly disseminated by our ~~company~~Company, contains ~~certain~~forward-looking statements. These forward-looking statements generally ~~within~~can be identified by the ~~meaning~~use of ~~Section~~words ~~27A~~such ~~of the~~as ~~Securities~~“anticipate,” ~~Act~~“expect,” of“plan,” ~~1933~~“could,” “may,” as“believe,” ~~amended~~“estimate,” ~~(the~~“forecast,” ~~"Securities~~“goal,” ~~Act")~~“potentially,” “project,” and ~~Section~~other ~~21E~~words of ~~the~~similar ~~Securities~~meaning. ~~Exchange~~All ~~Act~~statements, ofother ~~1934,~~than asstatements ~~amended~~related to present facts or current conditions ~~(the~~or ~~"Exchange~~historical ~~Act").~~facts, Wecontained ~~intend~~in ~~such~~this Annual Report on Form 10-K are forward-looking statements, toincluding bestatements ~~covered~~regarding byour ~~the~~strategy, future ~~safe~~operations, ~~harbor~~future ~~provisions~~financial ~~for~~position, ~~forward~~including the Company’s digital asset-~~looking~~treasury strategy, the effects of the Company’s stockholder rights plan, statements ~~contained~~relating into the ~~Private~~sale ~~Securities~~of ~~Litigation~~Bitcoin ~~Reform~~and ~~Act~~use of ~~1995~~proceeds for repaying outstanding debt and ~~include~~share ~~this~~repurchases and ~~statement~~whether ~~for~~it ~~purposes~~will ofincrease ~~complying~~NAV ~~with~~per share, whether the Company will be able to continue to generate proceeds from derivative trades and ~~these~~the ~~safe~~Company’s ~~harbor~~ability ~~provisions~~to continue reducing corporate expenses.

InEach ~~addition, from time to time, we or our representatives may make~~ forward-looking ~~statements~~statement ~~orally~~is orsubject ~~in writing. We base these forward-looking statements on our expectations and projections about future events, which we derive from the information currently available~~ to ~~us. Such forward-looking statements relate to future~~ ~~events~~risks ~~or our future performance, including: our financial performance~~ and ~~projections;~~uncertainties ~~our growth in revenue and earnings; our product development and production releases; and our business prospects and opportunities. You can identify forward-looking statements by those~~ that ~~are~~could not historical in nature, particularly those that use terminology such as “may,” “should,” “expects,” “anticipates,” “contemplates,” “estimates,” “believes,” “plans,” “projected,” “predicts,” “potential,” or “hopes” or the negative of these or similar terms. In evaluating these forward-looking statements, you should consider various factors, including: our ability to change the direction of the Company; our ability to keep pace with new technology and changing market needs; and the competitive environment of our business. These and other factors may cause ~~our~~ actual results to differ materially from ~~any~~those ~~forward-looking~~expressed ~~statement.~~or ~~Forward-looking~~implied ~~statements are only predictions. The forward-looking events discussed~~ in ~~this~~such ~~document and other~~ statements. ~~made from time to time by us or our representatives, may not occur,~~Applicable ~~and~~risks ~~actual events~~ and ~~results~~uncertainties ~~may~~include ~~differ~~the ~~materially and are subject to~~ risks, ~~uncertainties~~ and ~~assumptions about us. We are not obligated to publicly update or revise any forward-looking statement, whether as a result of~~ uncertainties ~~and assumptions~~regarding, ~~the~~among ~~forward-looking events discussed in this document and~~ other ~~statements made from time to time by us or our representatives might not occur.~~things

~~While~~· wechanges ~~believe~~in webusiness, ~~have~~market, ~~identified~~financial, ~~material~~political ~~risks, these~~and regulatory conditions; · risks relating to the Company’s operations and ~~uncertainties~~business, ~~are~~including ~~not~~the ~~exhaustive.~~highly ~~Other~~volatile ~~sections~~nature of ~~this~~the ~~Form~~price ~~10-K~~of ~~describe~~Bitcoin ~~additional~~and ~~factors~~other cryptocurrencies; · the risk that ~~could~~the ~~adversely~~Company’s ~~impact our~~stock ~~business~~price ~~and~~may ~~financial~~be ~~performance.~~highly ~~Moreover,~~correlated weto ~~operate~~the price of the digital assets that it holds; · risks related to increased competition in athe ~~very~~industries ~~competitive~~in which the Company operates; · risks relating to significant legal, commercial, regulatory and ~~rapidly~~technical ~~changing~~uncertainty ~~environment.~~regarding ~~New~~digital assets generally; · risks relating to the treatment of crypto assets for U.S. and ~~uncertainties emerge~~foreign ~~from~~tax ~~time~~purpose; · the Company’s ability to ~~time~~keep pace with new technology and changing market needs; changes in business, market, financial, political and itregulatory isconditions; · the Company may not ~~possible~~be able to ~~predict~~generate ~~all~~revenues ~~risks~~from ~~and~~sales, ~~uncertainties~~generate cash from financing of inventory, ~~nor~~sale ~~can~~of weour ~~assess~~products and Bitcoin derivatives to offset expenses from operations and interest expense from the ~~impact~~Company’s borrowings; · a significant decrease in the market value of ~~all~~the ~~factors~~Company’s ~~on our~~Bitcoin ~~business~~holdings orcould adversely affect the ~~extent~~Company’s ability to ~~which~~satisfy ~~any~~its ~~factor~~financial obligations due to collateral required to be held by lenders for borrowings; · the Company’s ability to obtain additional financing through equity or debt offerings, obtain borrowings from financing arrangements or ~~combination~~generate cash from the sale of ~~factors~~Bitcoin may not be sufficient to satisfy the Company’s outstanding borrowings, fund share repurchases, purchase additional Bitcoin and fund operations; · if the Company’s third-party service providers experience a security breach or cyberattack and unauthorized parties obtain access to our Bitcoin, or if our private keys are lost or destroyed, or other similar circumstances or events occur, the Company may ~~cause~~lose ~~actual~~some or all of our Bitcoin and our financial condition and results toof ~~differ~~operations could be materially ~~from~~adversely ~~those~~affected; ~~contained in~~· ~~any~~the ~~forward~~Company’s ability to successfully find third-~~looking~~parties ~~statements.~~to design and manufacture the Company’s products may impact the Company’s ability to bring new products to market to increase revenue and generate cash flow from operations;

Although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance or achievements. Moreover, neither we nor any other person assumes responsibility for the accuracy or completeness of any of these forward-looking statements. You should not rely upon forward-looking statements as predictions of future events. We are under no duty to update any of these forward-looking statements after the date of this Form 10-K to conform our prior statements to actual results or revised expectations, and we do not intend to do so.

Forward-looking statements include, but are not limited to, statements about:

· our ability to maintain the listing of our common stock on the Nasdaq Stock Market; · our ability to generate revenues from sales, generate cash from operations, or obtain additional funding to market our vehicles and develop new products; · our ability to successfully implement and effectively manage our outsourced manufacturing, design and development model and achieve any anticipated benefits; · the ability of third party manufacturers to produce our vehicles in accordance with our design and quality specifications, with sufficient scale to satisfy customers and within a reasonable cost; · anticipated timing for the manufacture, design, production, shipping and launch of our vehicles; · the inability of our suppliers to deliver the necessary components for our vehicles at prices and volumes acceptable to our third party manufacturers; · our ability to establish a network of dealers and international distributors to sell and service our vehicles on the timeline we expect; · whether our vehicles will perform as expected; · our facing product warranty claims or product recalls; · our facing adverse determinations in significant product liability claims; · customer adoption of electric vehicles; · the development of alternative technology that adversely affects our business; · increased government regulation of our industry; · tariffs and currency exchange rates; and · the conflict with Russia and Ukraine and the potential adverse effect it may have on the availability of materials used in the manufacturing of batteries for our vehicles.

	·	the Company’s ability of third-party manufacturers to produce its vehicles in accordance with the Company’s design and quality specifications, with sufficient scale to satisfy customers and within a reasonable cost;

	·	the Company’s facing product warranty claims or product recalls;

	·	the Company’s facing adverse determinations in significant product liability claims;

	·	the Company’s ability to increase inventory financing revenue with its current customers or obtain new customers to finance their inventory purchases;

	·	tariffs and currency exchange rates may increase the cost of the Company’s products or our inventory financing customers products and make them unprofitable for sale;

	·	the potential impact that actions by activist stockholders could have on the pursuit of our business strategies; and

	·	other risks and uncertainties include those identified under the heading “Part I, Item 1A. 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.

·	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.

PART I

ITEM 1. BUSINESS

Overview

WeEmpery ~~are~~Digital anInc. ~~all-electric,~~(“Empery ~~off-road powersports~~Digital” ~~vehicle~~or ~~company~~the “Company”) ~~selling~~was ~~Volcon~~formed ~~electric~~on ~~two-wheeled~~February ~~E-Bikes~~21, ~~and motorcycles~~2020, ~~utility~~as ~~terrain~~a ~~vehicles,~~Delaware ~~or UTVs~~corporation, ~~also~~under ~~known as~~the ~~side-by-sides,~~name ~~and~~Frog ~~golf carts~~ePowersports, ~~along~~Inc. ~~with~~The aCompany was ~~line~~renamed ofVolcon, ~~upgrades and accessories~~Inc. Inon ~~January~~October ~~2025~~1, we2020. ~~also~~The ~~entered~~Company ~~into~~was arenamed ~~distribution agreement~~Empery ~~with~~Digital aInc. ~~golf~~on ~~cart~~July ~~manufacturer~~30, ~~Super~~2025, ~~Sonic Company Ltd. (“Super Sonic”) located~~ in ~~Vietnam,~~connection ~~and~~with awhich ~~subsidiary of~~the ~~Odes~~Company ~~Industry,~~changed toits ~~supply~~Nasdaq ~~golf~~ticker ~~carts~~symbol tofrom ~~other~~VLCN ~~companies~~to ~~in the United States who sell golf carts~~EMPD.

~~Our~~Digital ~~Industry~~Asset Treasury Strategy

~~Powersports~~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 ~~powersports~~key ~~industry~~component of the digital asset strategy is to ~~made~~optimize upthe ofCompany’s ~~on-road~~capital structure to increase BTC per share to drive stockholder value. This includes issuing equity when ~~and~~market ~~off-road~~conditions ~~motorcycles~~allow us to raise capital at a premium to net asset value (“NAV”), ~~scooters~~defined as the value of BTC holdings plus cash, ~~ATVs~~minus (debt divided by adjusted outstanding shares which includes common stock outstanding plus all pre-~~terrain~~funded ~~vehicles)~~warrants outstanding. On October 18, ~~UTVs~~2024, ~~PWC~~the ~~(personal~~Company ~~watercraft)~~entered ~~and~~into ~~snowmobiles.~~an ~~Until~~At-The-Market ~~recently~~Issuance Sales Agreement with Aegis Capital Corp., weas ~~focused~~placement agent (“Aegis”), onas ~~off-road~~amended ~~motorcycles~~by ~~and~~Amendment ~~UTVs~~No. We1 ~~are~~to ~~currently~~the ~~evaluating~~At-The-Market anIssuance Sales Agreement on~~-road/off-road~~ July 14, 2025 (~~dual~~the ~~sport~~“ATM Sales Agreement”), pursuant ~~motorcycle~~to ~~offering.~~which ~~During~~the ~~2024~~Company weestablished ~~introduced~~an At The Market (“ATM”) program pursuant to which the Company can sell up to $1.1 ~~two~~billion ~~off-road~~of ~~UTVs~~common stock. Since the inception of the digital asset treasury strategy through March 25, 2026, the ~~VLCN~~Company ~~MN1~~has ~~Tradesman~~sold 136,053 shares of common stock for ~~light~~$1.5 ~~utility~~million, ~~use~~including ~~and~~commissions, ~~the~~at ~~VLCN~~an ~~HF1a~~average ~~higher~~price ~~performance~~of ~~UTV~~$10.90. The Company may also complete other equity or convertible debt issuances if it determines market conditions are appropriate.

~~Outdoor~~In ~~recreation~~addition, our strategy includes repurchasing our common stock when our common stock is trading below NAV per share. The Company also has a ~~major~~share ~~driver~~repurchase ofprogram ~~the~~that ~~American~~allows it to repurchase ~~economy~~up to $150.0 Inmillion ~~2023~~of common stock as of December 31, ~~the~~2025, Uwhich was expanded to $200.S.0 ~~Bureau~~million ofon ~~Economic~~February ~~Analysis~~2, or2026 ~~the~~and ~~BEA~~through March 25, ~~found~~2026 ~~that~~has ~~outdoor~~bought ~~recreation~~23,114,391 ~~drives~~shares of common stock for $~~640~~135.6 ~~billion~~million, including commissions, at an average price of ~~the~~$5.87. ~~current-dollar~~Share repurchases ~~gross~~have ~~domestic~~been ~~product~~funded ~~for~~with ~~the~~proceeds ~~U.S~~from two borrowing arrangements, ~~compared~~that allow for borrowings of up to $~~563~~150.0 ~~billion~~million, inof ~~2022~~which $95.0 ~~The~~million has ~~BEA~~been ~~noted~~drawn ~~that~~as ~~motorcycles~~of ~~and~~March ~~ATVs~~25, ~~make~~2026, upand ~~$11~~sales of BTC.7 ~~billion~~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 ~~2023~~consolidated ~~total~~financial statements for further discussion of these borrowing arrangements.

~~According~~Additionally, a significant component of the digital asset treasury strategy is to reduce costs across the ~~PowerSports~~Company so that cash generated from operations can be used to pay operating expenses ~~Business~~and ~~2024~~any ~~Market~~excess ~~Data~~cash ~~Book:~~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.

· In the U.S., UTV sales were just under 569,000 units in 2023, an increase of approximately 3.5% from 2022, according to Power Products Marketing (“PPM”). · New motorcycle sales in 2023, meanwhile, were approximately 520,000 units, according to the Motorcycle Industry Council (“MIC”), compared to 733,537 in 2022. MIC estimates the total motorcycle population in the U.S. is 11.6 million units with 1.7 million being off-highway units and 727,000 being dual sport units. · According to dealership feedback, turnover of new unit inventory in 2023 at dealerships was 2.6 turns (compared to 4.6 turns in 2022) average. Similarly, new unit gross margin percentage at the dealership level was 14.9% on average during 2023 (compared to 17.1% in 2022). · Accessory sales for UTVs on average range from $635 to $652 worth of accessories at the time of purchase for work or multi purpose UTVs, respectively.

While inflationary pressures, economic uncertainty and higher interest rates may have impacted demand, we believe the culture of escape and outdoor activities will continue to drive off-road powersports recreation. We believe there are very few all-electric off-road powersports companies, and traditional powersports companies have only recently started making electric products, so significant data on off-road electric vehicles does not exist yet.

Golf Carts

The golf cart industry has grown from golf carts used on golf courses to golf carts used for leisure and transportation in neighborhoods and communities. According to Persistence Market Research, the U.S. market value is over $800 million and is expected to grow at a volume CAGR 4.3% through 2032. According to the U.S. Census Bureau 234,000 golf carts valued at $700 million, were imported from China to the U.S. in 2024 up from 114,000 units valued at $450 million in 2023.

~~Recently,~~The ~~the~~Company ~~American~~also ~~Personal~~recognizes ~~Transportation Vehicle~~the ~~Manufacturer~~risk ~~Coalition~~that ~~filed~~digital aassets pose ~~petition~~with ~~against~~respect ~~certain~~to ~~low-speed~~digital ~~personal~~wallets ~~transportation~~being ~~vehicles~~compromised ~~imported~~and ~~from~~the ~~China.~~Company ~~The~~uses ~~petition asserted~~institutional-grade ~~that~~custodians ~~manufacturers~~to ~~who~~hold ~~received~~its ~~foreign~~BTC ~~government~~in ~~subsidies~~wallets, some ~~were~~of ~~able~~which toare ~~import~~isolated ~~vehicles~~ from ~~China~~the atinternet, areferred ~~lower~~to ~~cost~~as ~~than~~cold ~~manufacturing in~~storage, ~~their~~to ~~home~~minimize ~~countries~~this risk. ~~This~~We ~~created~~view ~~unfair~~our ~~trade~~BTC ~~practices.~~as ~~The~~long-term ~~Department~~holdings, although ofthere ~~Commerce~~are ~~reviewed~~no ~~Chinese~~restrictions ~~manufacturers~~on ~~who~~selling ~~sold~~BTC ~~such vehicles and determined~~ that ~~they~~is ~~were~~not ~~unfairly~~held ~~competing~~as ~~due~~collateral toby ~~such~~our ~~government subsidies~~lenders. As aof ~~result~~March 25, ~~countervailing~~2026 ~~duties~~we ~~and~~have ~~antidumping tariffs~~3,359 ~~were assigned to Chinese manufacturers~~BTC, of which ~~cumulatively~~2,891 ~~range~~are ~~from~~restricted ~~149%~~by tolenders ~~500%~~as ~~(depending~~collateral onfor ~~the~~outstanding ~~manufacturer)~~loan balances.

~~During~~The ~~2024~~BTC wemarket ~~introduced~~has been characterized by significant volatility in price, relative anonymity, a ~~four~~developing ~~seat~~regulatory ~~golf~~landscape, ~~cart~~potential susceptibility to market abuse and manipulation, ~~the~~compliance ~~VLCN~~and ~~MN1~~internal ~~Adventurer~~control ~~(the~~failures ~~“Adventurer”)~~at exchanges, ~~that~~and ~~has~~various aother ~~fold~~risks ~~down~~that ~~rear~~are, ~~seat~~or tomay ~~allow~~be, ~~for~~inherent ~~light~~in ~~utility~~its ~~use.~~entirely ~~The Adventurer~~electronic, virtual form and ~~the~~decentralized ~~Tradesman,~~network. ~~discussed~~For ~~above~~example, ~~are~~since ~~manufactured~~the byimplementation ~~Super~~of ~~Sonic~~our ~~Company~~digital ~~Ltd.~~asset ~~(“Super~~treasury ~~Sonic”)~~strategy inthrough ~~Vietnam~~March 25, 2026, ~~which~~BTC ~~currently~~ has traded at a ~~tariff~~high of 2$126,117 and a low of $60,019 on the Gemini exchange.~~5%.~~

~~Ebike~~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.

~~According~~Electric to Grand View Research, the electric bicycle market was valued at $1.98 billion in the U.S. for 2022. The market is expected to grow at a volume CAGR 15.6% through 2030. This growth is attributed to a rise not only in recreational use, but also daily commuting due to environmental concerns, consumer vehicle cost of ownership, and government incentives.Vehicles

~~Our~~The ~~Products~~Company began its operations as an all-electric, off-road powersports vehicle business. Beginning in 2021, we began efforts to sell off-road powersports vehicles beginning with an electric two-wheeled motorcycle that we discontinued in March 2025. In 2022 we introduced an E-Bike, the Brat, and continue to sell this product. In late 2024 we began selling the HF1 UTV, the MN1 Adventurer and MN1 Tradesman UTV, along with a line of upgrades and accessories. As discussed below, in October 2025, we sold the HF1 and MN1 product lines.

~~Two-Wheeled~~Venom ~~Products~~Supply Agreement

WeOn ~~began~~February ~~selling~~24, ~~the~~2025, ~~Grunt~~we inentered ~~September~~into ~~2021~~a supply agreement with Venom-EV LLC (“Venom”) to supply Venom with certain golf carts. This agreement was amended and restated on April 25, 2025 (the ~~Grunt~~“Venom ~~EVO~~Supply ~~replaced~~Agreement”). ~~the~~The ~~Grunt~~Venom inSupply ~~September~~Agreement ~~2023~~allows Venom to purchase up to $2.0 ~~Due~~million of golf carts with payment terms of the earlier of 100 days from the date the golf carts are shipped from the manufacturer’s facility or upon sale to Venom’s dealers or to consumers. These golf carts will be purchased through a manufacturer specified in the ~~manufacturing~~Venom Supply Agreement and we will receive consideration of the cost of the ~~Grunt~~golf ~~EVO,~~carts weplus ~~terminated~~a five percent margin. We received an initial order from Venom for $2.0 million golf carts and paid a deposit to the ~~manufacturing~~manufacturer ~~contract~~of $0.6 million on May 2, 2025 and paid $0.8 million in September 2025 for itthe golf carts which were shipped in ~~December~~September ~~2024~~2025. AsThe ofremaining ~~March~~$0.6 ~~2025,~~million wewas ~~have~~paid ~~sold~~in ~~all~~the fourth quarter of 2025. All units were shipped by the ~~remaining~~manufacturer ~~Grunt~~to ~~EVO~~Venom ~~finished~~and ~~goods~~Venom paid all amounts due on this purchase as of December 31, 2025.

~~Beginning~~On inOctober ~~the~~29, ~~second~~2025, ~~quarter~~the ofVenom ~~2024,~~Supply weAgreement ~~began~~was ~~evaluating~~amended ~~other~~to ~~potential~~increase ~~electric~~the ~~motorcycle~~available ~~offerings.~~amount Weto ~~are~~purchase ~~determining~~by ~~what~~$0.7 ~~features~~million and ~~specifications~~Venom ~~would~~agreed beto ~~included~~purchase ~~for~~the ~~new offerings~~remaining ~~including~~138 ~~considering~~MN1 aunits ~~street~~ordered by ~~legal~~the ~~version~~Company ~~that~~under ~~would~~the beSuper ~~dual~~Sonic ~~purpose~~Distribution asAgreement ~~an on-road/off-road motorcycle~~ (~~not~~as ~~highway~~defined ~~legal~~below)~~. We~~ ~~have~~discussed ~~identified~~below. ~~one~~Payment ~~new~~terms ~~model~~are ~~which~~the weearlier ~~are~~of ~~working~~60 ondays from ~~developing~~receipt ~~with~~or aupon ~~third~~sale ~~party~~by ~~manufacturer~~Venom. WeAll ~~received~~of ~~prototypes~~these inunits ~~February 2025~~were ~~and~~received weby ~~are~~Venom ~~testing~~by ~~them~~January to30, ~~evaluate~~2026 ~~the feasibility to produce~~ and ~~sell~~payment ~~them.~~is ~~Provided~~due ~~testing~~by isMarch ~~successful~~31, ~~we expect to start selling this product in the third quarter of 2025~~2026.

InOn November 17, 2025, the ~~fourth~~Venom ~~quarter~~Supply ofAgreement ~~2022,~~was weamended ~~began~~to ~~selling~~increase the available amount to purchase by $2.5 million (for an ~~E-Bike~~aggregate total of $4.5 million, excluding the ~~Brat~~October ~~which~~29, 2025, isamendment. ~~manufactured~~Subsequent byto aDecember ~~third~~31, ~~party~~2025 through March 25, 2026, the Company has paid $0.9 ~~The~~million ~~Brat~~to isthe amanufacturer ~~class~~for 2orders placed ~~E-Bike~~by Venom, and ~~can~~additional payments due to be ~~used~~paid ~~on-road~~for orders placed by Venom as of March 25, 2026, are $1.4 million. Payment terms are the earlier of 60 days from receipt of inventory by Venom or ~~off-road~~upon sale by Venom.

We expect that we will ~~continue~~complete additional financing transactions for Venom under the Venom Supply Agreement and we are actively in discussions for the opportunity to ~~evaluate~~fund inventory purchases with other ~~potential~~companies ~~two-wheel~~that ~~product~~sell ~~offerings~~golf ~~throughout~~carts ~~2025~~and UTVs.

Utility Terrain Vehicles (UTVs)

Beginning in the second quarter of 2024, the Company began discussions with various third party manufacturers of electric UTVs to identify models that we could purchase. These models would be primarily used for utility purposes, have two or three passenger options, a dump bed or flatbed for hauling cargo, with speeds up to 30 miles per hour. These models may also include an enclosed cab with optional air conditioning.

During 2024, we signed an agreement with a manufacturer to distribute one of these utility UTV models, the VLCN HF1 in North America for five years, which includes a royalty agreement with the manufacturer for them to distribute the vehicle outside of North America. Royalties would commence in the third year of this agreement.

We also signed another agreement with Super Sonic to distribute other light UTV models, the VLCN MN1 in the United States. The VLCN MN1 has two models, the MN1 Adventurer, a golf cart style product, which has four seats with a fold down rear seat to accommodate light cargo and the MN1 Tradesman which has two seats with a dump bed for utility purposes.

~~Distribution~~Venom ~~and~~Asset ~~Supplier~~Purchase ~~Agreements~~Agreement

~~Exclusive~~On ~~Distribution~~October ~~Agreement~~15, 2025, the Company entered into an asset purchase agreement with Venom (the “Venom APA”), to divest the Volcon brand in exchange for a non-dilutable 10% equity position in Venom’s reorganized Delaware corporation on a fully-diluted basis. The Company transferred all Volcon intellectual property, brand assets, trademarks, sales and distribution networks and engineering documentation associated with the Volcon brand (the “Volcon IP”) other than its E-Bike, the Brat. The Company will have the right to appoint one director to Venom’s board and may continue to finance Venom’s inventory purchases. In the event that Venom does not complete its corporate reorganization within six months, the Company will have the option to repurchase the Volcon IP for a nominal amount. The Company expects that this agreement will reduce Empery Digital’s future product liability exposure by transferring ownership of Volcon’s four-wheel vehicle business to Venom. The Company also plans to expand its vehicle financing operations for golf carts and UTVs to generate positive cash flow by leveraging the spread between the Company’s cost of capital and interest income from vehicle financing. The Company has been transitioning its powersports dealers to Venom but will continue ongoing warranty support through the remaining warranty period of vehicles the Company sold within these channels.

InThe ~~January~~Company’s ~~2025, we signed an exclusive distribution~~decision ~~agreement~~to ~~(the~~sell ~~“Distribution~~these ~~Agreement”)~~assets ~~with~~represents ~~the~~a ~~manufacturer~~strategic ofshift ~~the~~in ~~MN1s~~operations toas ~~distribute their golf carts in~~ the ~~United~~Company ~~States and~~does ~~its~~not ~~territories.~~currently ~~Super~~plan ~~Sonic appointed us~~ to ~~act~~sell asany ~~their~~four-wheel ~~exclusive distributor of certain of their golf cart~~ products ~~(the “Products”),~~ inafter ~~the U~~2025.S. ~~Super~~Therefore, ~~Sonic agreed to recommend us as the sole provider for all Products to all their customers~~ in ~~the~~accordance ~~U.S.~~with .applicable ~~Super~~accounting ~~Sonic has~~guidance, the ~~right~~results ~~to sell non-Volcon branded Products to other customers and shall pay 5%~~ of the ~~order~~four-wheel ~~price~~product tolines ~~us.~~are ~~Before~~presented ~~the end of June~~as ~~2025,~~discontinued weoperations ~~agreed to provide a procurement plan, and if we fail to meet the minimum purchase requirement described~~ in the ~~procurement~~Consolidated ~~plan for~~Statements ~~two~~of ~~consecutive~~Income ~~months~~and, ~~Super~~as ~~Sonic~~such, ~~shall~~ have ~~the~~been ~~right~~excluded tofrom ~~immediately~~both ~~terminate~~continuing ~~the~~operations ~~Distribution~~and segment ~~Agreement.~~results ~~During~~for ~~the~~all ~~term~~periods ofpresented ~~the Distribution~~in ~~Agreement,~~this toAnnual ~~the~~Report ~~extent~~on weForm ~~sell any Volcon~~10-~~branded~~K. ~~products~~All ~~(the~~amounts ~~“Volcon~~and ~~Products”)~~disclosures ~~that~~for ~~are~~all ~~similar~~periods topresented ~~the~~in ~~Products,~~this weAnnual ~~agreed~~Report toon ~~provide~~Form ~~Super~~10-K ~~Sonic~~reflect ~~with~~only athe ~~right~~continuing ofoperations ~~first~~unless ~~refusal~~otherwise ~~to manufacture the Volcon Products~~noted. AsSee ~~more fully discussed in~~ Note 1518 ofto the ~~accompanying~~consolidated financial statements, wefor ~~may~~further ~~be required to issue our common stock, warrants to purchase our common stock and the right to appoint a director to our board of directors if certain golf cart sales volumes are attained~~discussion.

~~Supply~~Super Sonic Distribution Agreement

OnIn ~~February~~January ~~24,~~ 2025, we entered into a ~~Supply~~distribution agreement ~~(the “Supply Agreement”)~~ with ~~Venom-EV~~a ~~LLC~~golf ~~(“Venom”)~~cart tomanufacturer, ~~supply~~Super ~~Venom~~Sonic ~~with~~Company ~~certain golf carts~~Ltd. ~~The~~(Super ~~Supply~~Sonic), located ~~Agreement~~in ~~allows~~Vietnam, ~~Venom~~a tosubsidiary ~~purchase up to $3 million~~ of ~~golf~~Odes ~~carts~~Industry ~~with payment terms of 90 days from~~ (the ~~date~~“Super ~~the~~Sonic ~~golf carts~~Distribution ~~are~~Agreement”), ~~delivered~~ to ~~Venom’s~~supply ~~facility. These~~ golf carts ~~will~~to beother companies ~~purchased through a manufacturer specified~~ in the ~~Supply Agreement and we will receive consideration of the cost of the golf carts plus a three percent margin~~U. ~~We received an initial order from Venom for $2~~S.4 ~~million~~who ofsell golf carts. AtOn ~~the~~September ~~end~~18, ~~of each calendar quarter~~2025, we ~~agreed~~received toa ~~issue~~notice ~~Venom shares~~ of ~~Company~~termination ~~common~~from ~~stock~~Super ~~based~~Sonic onpursuant ~~the~~to which ~~number~~Super ofSonic ~~golf~~terminated ~~carts~~this ~~purchased~~distribution byagreement. ~~Venom~~The ~~during the quarter as follows: for each 1~~termination,~~000~~ ~~Units~~which ~~sold~~was ineffective ~~2025~~upon toreceipt ~~Venom~~of bythe ~~us,~~notice wefrom ~~shall~~Super ~~issue~~Sonic, ~~Venom~~was aeffected ~~number~~pursuant ~~of shares equal~~ to 1%the ofterms ~~our outstanding shares~~ of ~~common stock (~~the ~~“Venom~~Super ~~Shares”)~~Sonic asDistribution ofAgreement on the ~~last~~grounds ~~day of such quarter~~ that the ~~1,000~~Company ~~Units~~has ~~were~~failed ~~sold for no additional consideration. The requirement~~ to ~~issue~~meet the ~~Venom~~minimum purchase ~~Shares~~requirement ~~shall~~under ~~cease upon~~ the ~~sale~~Super ofSonic ~~5,000~~Distribution ~~Units~~Agreement orfor ~~June~~two ~~30,~~consecutive ~~2026~~months, ~~whichever~~which ~~comes~~gave ~~first.~~Super ~~Notwithstanding~~Sonic the ~~foregoing,~~right to ~~the~~immediately terminate ~~extent~~ the ~~issuance~~Super ofSonic ~~the~~Distribution ~~Venom Shares~~Agreement. ~~shall~~The ~~require~~termination ~~shareholder~~also ~~approval~~eliminates ~~pursuant~~any toobligation ~~the rules~~ of the ~~Nasdaq~~Company ~~Stock Market, such issuances shall be subject~~ to ~~the receipt of such shareholder approval If, for any reason, we fail to~~ issue ~~such~~equity ~~shares~~ to ~~Venom, Venom is entitled to compensatory damages in the~~Super ~~amount~~Sonic ~~equal~~pursuant to the ~~value~~terms of the ~~Venom~~Super ~~Shares~~Sonic ~~that~~Distribution ~~should~~Agreement. ~~have~~The ~~been~~Company ~~issued~~is tonot ~~Venom~~subject into ~~that~~any ~~quarter~~early ~~(determined~~termination ~~by the closing stock price~~penalties onrelated to the ~~last~~termination ~~day~~ of ~~that~~the ~~quarter),~~Super ~~and~~Sonic toDistribution ~~immediately terminate the Supply~~ Agreement.

Two-Wheeled Products

We began selling the Grunt off-road motorcycle in September 2021 and the Grunt EVO off-road motorcycle replaced the Grunt in September 2023. Due to the manufacturing cost of the Grunt EVO, we terminated the manufacturing contract for it in December 2024. As of March 31, 2025, we have sold all of the remaining Grunt EVO units.

Beginning in the second quarter of 2024, we began evaluating other potential electric motorcycle offerings. We are determining what features and specifications would be included for new offerings including considering a street legal version that would be dual purpose as an on-road/off-road motorcycle (not highway legal). We have identified one new model which we are working on developing with a third-party manufacturer. We received prototypes in February 2025 and we are testing them to evaluate the feasibility to have them manufactured at a reasonable cost and sell them for an acceptable profit. Provided testing is successful and whether the product cost, including tariffs, allows us to sell this product, we expect to start selling this product in the second half of 2026.

In the fourth quarter of 2022, we began selling an E-Bike, the Brat, which is manufactured by a third-party. The Brat is a class 2 E-Bike and can be used on-road or off-road. We have developed a line of accessories for the Brat that include color panels, headlight cowl, and seat, among other things. We are also developing a new model of the Brat that will incorporate some of these accessories in the base model.

Following the divestiture of the four-wheel products noted above, the Company expects to concentrate on its two-wheel business, including the launch of new products in European markets in the second half of 2026. We expect to continue to evaluate other potential two-wheel product offerings in 2026.

Customers

Dealers

WePrior ~~sell~~to ~~our~~the ~~products~~divestiture ~~through powersports~~of ~~dealers,~~our ~~bicycle~~four-wheel ~~retailers,~~product ~~and golf cart dealers. As of March 25~~lines, ~~2025,~~ we ~~have~~sold ~~117~~our ~~active~~products through powersports dealers, ~~13 active~~ bicycle ~~dealers~~retailers, and 8 golf cart dealers. ~~For~~We ~~dealers~~expect ~~who qualify for credit, we offer dealers payment terms of 30~~ to 90continue ~~days~~ to ~~make larger~~utilize ~~purchases of~~ our ~~vehicles~~bicycle ~~provided their order is within their established credit limit. For~~ dealers ~~that do not qualify for credit, they must pay for their order prior to shipment~~. ~~Powersports~~We ~~dealers~~are ~~can~~transitioning ~~order any of~~ our ~~available~~powersports ~~products, bicycle retailers can order the Brat,~~ and golf cart dealers ~~can order either version of the MN1. We have entered into an accounts receivable factoring arrangement~~ to Venom ~~allow~~but uswill ~~the~~continue ~~ability~~ to ~~generate~~support ~~cash~~these ~~for working capital. We have agreements with third party financing companies to provide financing to qualified customers of~~ dealers orfor ~~customers~~service ~~purchasing~~and ~~from~~warranty ~~our~~obligations ~~website.~~for ~~There~~products issold ~~no recourse~~ to ~~us or the dealer if the customer defaults on the financing agreement with the third party~~them.

Consumers

Consumers can purchase the Brat from our website and have it delivered to a location of their choosing in the continental U.S. During 2024, we began selling the Grunt EVO through our website where continental U.S. customers could pay a deposit and complete their purchase at one of our U.S. powersports dealer locations.

International Distributors

We also sell our two-wheel products internationally through importers. Each importer buys vehicles byand ~~the~~accessories ~~container~~ and sells ~~vehicles~~them ~~and accessories~~ to local dealers or directly to consumers. Payment for vehicle orders is required in advance of shipment~~, except in a few limited instances~~. Local dealers or the importer will provide warranty and repair services for vehicles purchased in in their country and we will reimburse them for any parts or labor incurred for warranty repairs. As of March 2125, ~~2025~~2026, we have ~~signed~~one ~~agreements with six importers~~ importer in ~~Latin America~~Mexico, one ~~importer~~ for the Caribbean Region, ~~collectively~~ ~~referred to herein as the LATAM importers,~~ and one ~~importer each~~ in New Zealand, ~~Australia and Japan~~ to sell our two-wheel vehicles and accessories in their assigned countries/markets. ~~In 2025, we expect to expand our global sales of our vehicles and accessories beyond our current distributor base and offer our four-wheel products to these customers.~~

Consumers

Consumers can purchase the Brat from our website and have it delivered to a location of their choosing in the continental U.S.

Manufacturers

We outsource the manufacturing of all of our ~~vehicles~~two-wheel products and accessories to ~~third~~an international third-party ~~manufacturers~~manufacturer, ~~and~~Huaian ~~suppliers~~PX Intelligent Manufacturing Co., Ltd (“PXID”). The estimated fulfillment of all two-wheeled ~~and UTV~~ orders we have received, or will receive, assumes that ~~our~~PXID ~~third party manufacturers~~ can successfully meet our order quantities and deadlines. WeIn the past we have experienced delays due to ~~our~~PXID ~~third party manufacturers~~ being unable to timely meet our order deadlines, and there is no assurance that we will not experience delays in the future until such time as we are able to source products from multiple manufacturers or from larger, more established manufacturers. If ~~they~~the ~~are~~manufacturer is unable to satisfy orders on a timely basis, our customers may cancel their orders. Also, due to the ~~limited number~~Company ofcurrently ~~third~~only ~~party~~having ~~manufacturers~~PXID ~~who~~ manufacture our two-wheel products, if ~~any~~they ~~one~~experience ~~of them experiences~~ financial hardship and cannot manufacture our products, our customers may cancel their orders which will harm our sales. ~~All~~Due ofto ~~our~~new ~~products~~and ~~are~~increased ~~manufactured~~tariffs ~~internationally. If~~and ~~there~~other istrade apolicies ~~change~~introduced inor ~~import~~threatened ~~laws,~~by ~~including~~the anU.S. ~~increase~~government since inthe ~~tariffs~~beginning of 2025, the cost of our products will increase without a decrease in manufacturing costs and may increase further if additional changes in import laws or tariffs occur. We could also experience delays in receiving shipments of our products if there are delays in getting carriers to ship our products or delays at the port of entry.

~~Intellectual~~Venom currently sources its golf cart and accessory ~~Property~~purchases from one international third-party manufacturer. Risks related to future purchases of their products from this manufacturer are similar to those of our two-wheel products noted above and could result in delays in ordering and receiving products that could impact the amount of inventory purchases that Venom may finance through the Company.

Our success depends, at least in part, on our ability to protect our core technology and intellectual property. To accomplish this, we currently rely on a combination of trade secrets, including know-how, employee and third party non-disclosure agreements, and other contractual rights to establish and protect our proprietary rights in our technology.

Our industrial designs are protected by design patents. In addition, we intend to file for additional utility patents. There is no assurance that we will be granted any such patents. We do not know whether any patent applications will result in the issuance of patents or whether the examination process will require us to narrow our claims. Even if granted, there can be no assurance that our issued patents or new patent applications will provide us with protection.

We have registrations for the trademarks VOLCON, GRUNT, and GRUNT EVO in the U.S. We have also applied to register additional trademarks – including VOLCON, VOLCON BRAT, EMPOWERING ADVENTURE, STAG, VOLCON STAG, VLCN, VLCN BRAT, VLCN HF1, VLCN MN1, VLCN FT1, VLCN HT1, VLCN SK1, and VLCN RV1 - in the U.S., Canada, New Zealand, Australia and certain additional countries in Latin America, and many of these trademarks are now allowed or registered in these countries. We have resolved some conflicts and potential conflicts that have arisen with regard to the use and registration of our trademarks through coexistence agreements and the submission of arguments. We have received notice from an entity in Brazil who has opposed our applications for trademarks including the word VOLCON, but we believe the trademarks and the goods being sold under them are not similar and there is no potential for confusion.

In addition, we have been transitioning from the use of VOLCON to VLCN in certain countries, in some instances to avoid potential conflicts with marks that are similar to VOLCON. Our efforts to secure trademark registrations for VOLCON and VLCN and other trademarks referenced above are ongoing and we may encounter resistance from other companies, particularly as we expand into additional territories. If we receive objections from other entities and are unsuccessful in obtaining agreements or otherwise resolving the matters with these entities, we will need to consider the use of different trademarks for our Company and our products.

Intellectual Property

As discussed above, prior to the Venom APA, we had registrations for the trademarks VOLCON, GRUNT, and GRUNT EVO in the U.S. We have also applied to register additional trademarks – including VOLCON, VOLCON BRAT, EMPOWERING ADVENTURE, STAG, VOLCON STAG, VLCN, VLCN BRAT, VLCN HF1, VLCN MN1, VLCN FT1, VLCN HT1, VLCN SK1, and VLCN RV1 - in the U.S., Canada, New Zealand, Australia and certain additional countries in Latin America, and many of these trademarks are now allowed or registered in these countries. Subsequent to the Venom APA, we only hold trademarks on the Volcon Brat and VLCN Brat in various countries.

Upon the changing of the Company’s name to Empery Digital Inc., we began registering trademarks for Empery in the U.S. and a number of other countries. Our efforts to secure trademark registrations for Empery are ongoing and we may encounter resistance from other companies, particularly as we register in additional territories. If we receive objections from other entities and are unsuccessful in obtaining agreements or otherwise resolving the matters with these entities, we will need to consider the use of different trademarks for our Company and our products.

Competition

~~There~~According to an article by CNBC dated December 5, 2025, there are ~~dozens~~approximately of190 ~~manufacturers~~public companies employing digital asset treasury strategies that hold BTC, with another 10 to 20 companies employing digital asset treasury strategies that ~~sell~~hold ~~off-road~~other ~~motorcycles~~digital assets. These companies are estimated to collectively hold approximately $100.0 billion worth of cryptocurrencies combined, ~~UTVs~~according ~~and~~to ~~E-Bikes~~data infrom ~~the~~The UBlock.S. ~~and~~Many ~~even~~of these companies with digital asset treasury strategies hold more ~~globally.~~BTC ~~The~~than ~~markets~~us ~~for~~and ~~powersport~~some ~~vehicles~~have operations in other industries and ~~E-Bikes~~generate ~~are highly~~cash ~~competitive~~to ~~based~~cover ontheir aoperating ~~number~~costs. Some of these ~~factors,~~companies’ ~~including~~securities ~~innovation,~~trade ~~performance,~~at ~~price,~~or ~~technology,~~above ~~product~~their ~~features,~~NAV ~~styling~~per share, ~~fit and~~while ~~finish,~~many ~~brand~~also ~~recognition,~~trade ~~quality~~below ~~and~~their ~~distribution~~NAV per share. We believe our ability to compete successfully inwith these ~~markets~~competitors depends on our ability to ~~capitalize~~increase onNAV ~~our~~through ~~competitive~~the ~~strengths~~strategic sale or repurchase of equity as market conditions warrant and ~~build~~to ~~brand~~generate ~~recognition~~cash from derivative trading and operations to pay our expenses.

~~Many~~There are dozens of companies that sell E-Bikes in the U.S. and even more globally, many of which may have greater financial and marketing resources than us, ~~make~~and ~~electric~~have ~~street~~a ~~motorcycles~~stronger ,established brand ~~including~~name ~~Zero~~and ~~Motorcycles.~~product ~~Some~~line, ~~companies~~like ~~make electric~~Super ~~UTVs~~73. asThe ~~part~~markets offor ~~their~~E-Bikes ~~product~~are ~~line.~~highly ~~For~~competitive ~~example,~~based ~~Polaris~~on ~~has~~ a ~~joint~~number ~~venture~~of ~~with~~factors, ~~Zero~~including ~~Motorcycles~~innovation, performance, toprice, ~~help~~technology, ~~them~~product ~~design~~features, ~~dedicated electric~~styling, ~~UTVs~~fit and finish, ~~the~~brand ~~first~~recognition, ~~product~~quality ofand ~~which~~distribution. ~~began~~We ~~selling~~believe inour ability ~~2023.~~to ~~Many~~compete ~~companies,~~successfully ~~like~~in ~~Super~~these ~~73,~~markets ~~make~~depends ~~and~~on ~~sell~~our ~~E-Bikes~~ability ~~and~~to ~~have~~capitalize aon ~~stronger established~~our ~~brand~~competitive ~~name~~strengths and ~~product~~build ~~line~~brand recognition.

There are also many companies in the U.S. that finance inventory purchases. These companies may have access to substantially more cash or can borrow cash at interest rates lower than ours.

Government regulations

We ~~initially~~are ~~focused~~not onregistered ~~the off-road-only~~as ~~portion~~an ofinvestment company under the ~~market~~Investment ~~for~~Company ~~our~~Act ~~motorcycle and UTV because it is free~~ of ~~many of the homologation issues and highway certifications required to produce and sell an on-road vehicle. In some states~~1940, ~~off-road~~as ~~vehicles do have legislative restrictions~~amended, ~~but they are related to noise~~ and ~~exhaust~~stockholders ~~emissions, two things our vehicles~~ do not ~~produce.~~have ~~The~~the ~~MN1~~protections ~~product~~associated ~~line~~with ~~can~~ownership beof ~~used~~shares asin ~~an on-road vehicle and is~~a ~~required~~registered toinvestment ~~comply with certain federal~~company, ~~state~~nor ~~and~~the ~~local~~protections ~~regulations.~~afforded Inby ~~addition, we are currently in~~ the ~~early~~Commodity ~~stages~~Exchange ~~evaluating~~Act ~~an on-road/off-road~~of ~~motorcycle~~1936.

~~Federal,~~The ~~state,~~laws and ~~local governments~~regulations ~~have~~applicable ~~promulgated~~to Bitcoin and~~/or~~ digital assets are ~~considering~~evolving ~~promulgating laws~~ and ~~regulations~~subject ~~relating~~ to ~~the~~interpretation ~~safety~~and ~~of our products~~change. InGovernments ~~the~~around ~~U.S.,~~ the ~~Consumer~~world ~~Product~~have ~~Safety~~reacted ~~Commission~~differently ~~(CPSC)~~to ~~has~~digital assets; ~~federal~~certain ~~oversight~~governments ~~over~~have ~~product~~deemed ~~safety~~them ~~issues~~illegal, ~~related~~and toothers ~~off-road~~have ~~vehicles~~allowed ~~and~~their ~~E-Bikes. We~~use ~~believe~~and ~~that~~trade ~~our~~without ~~products~~restriction, ~~comply~~while ~~with~~in ~~all~~some ~~applicable~~jurisdictions, such ~~CPSC~~as ~~safety~~the ~~standards~~U.S., asdigital ~~well~~assets asare ~~all~~subject ~~other~~to ~~applicable~~overlapping, ~~safety~~uncertain ~~standards~~and inevolving ~~the U~~regulatory requirements.S.

The assembly, use, storage, transport and disposal of battery packs is subject to extensive regulation. Complying with these requirements involves substantial costs, and any failure to do so may result in heavy fines or other restrictions on our operations. Additionally, we may be responsible for the recycling and proper disposal of expended batteries from our vehicles. We may enter into agreements with third parties to manage such recycling and disposal; however, we may be found liable for any failures in compliance by these third parties and subject to fines or remediation liabilities, which costs may be substantial.

Vehicles sold internationally are subject to the local laws of each jurisdiction in which we sell our vehicles. Our international distributors are responsible for ensuring that our vehicles comply with the jurisdiction in which they are importing the vehicle. Costs associated with compliance are the responsibility of the distributor. These regulations may result in increased costs and expenses, which may materially and adversely affect the distributors business where it may not be economically feasible to sell our products locally, which in turn will adversely impact our results of operations or financial condition.

Human Capital

Mission

People are at the core of our DNA. Our mission is to source industry leading products that connect people to outdoor experiences through the intentional blending of leading technology and design. Our vision is to amplify the powersports experience for all. Our values are building the future of powersports.

Employee Engagement

Our employees and contractors focus on customer care, developing and sourcing our products, and building our marketing channels. We believe we offer competitive benefits and programs to develop employees’ expertise, performance, and engagement, while implementing corporate policies to provide a safe, harassment-free work environment. This work environment is guided by principles of fair and equal treatment and prioritizes effective communication and employee engagement.

WeAs ~~are~~digital ~~committed~~assets tohave ~~building~~grown in both popularity and amarket ~~strong~~size, ~~culture~~the ~~with~~U.S. ~~high~~Executive ~~levels~~Branch, ofCongress ~~employee~~and ~~engagement~~a number of U.S. Wefederal ~~hold~~and adstate ~~hoc~~agencies, ~~meetings~~including ~~where~~the ~~management~~Financial ~~discusses~~Crimes ~~various~~Enforcement Network, ~~topics~~the ~~with~~Commodity ~~employees~~Futures Trading Commission (“CFTC”), the SEC, the Financial Industry Regulatory Authority, the Consumer ~~including~~Financial ~~operational~~Protection ~~updates~~Bureau, ~~vehicle~~the ~~development~~Department of Justice, ~~financing~~the ~~activities~~Department of Homeland Security, ~~company~~the ~~policies~~Federal Bureau of Investigation, the Internal Revenue Service (“IRS”) and ~~safety.~~state ~~Management~~financial isregulators, ~~also~~have ~~committed~~been examining the operations of digital asset networks, digital asset users and digital asset exchanges, with particular focus on the extent to which digital assets can be used to violate state ~~being~~or ~~available~~federal laws, including to ~~discuss~~facilitate ~~any~~the ~~employee~~laundering ~~concerns~~of onproceeds aof ~~one~~illegal activities or the funding of criminal or terrorist enterprises, and the safety and soundness and consumer-~~on-one~~protective ~~basis.~~safeguards Weof ~~believe~~exchanges or other service-providers that ~~our~~hold, ~~employees~~transfer, ~~are~~trade ~~our~~or exchange ~~greatest~~digital ~~asset~~assets for users. Many of these state and ~~are~~federal ~~striving~~agencies have issued consumer advisories regarding the risks posed by digital assets to ~~consistently~~investors. ~~evaluate~~In ~~our~~addition, ~~progress~~federal inand ~~developing~~state agencies, and ~~maintaining~~other ~~engagement~~countries have issued rules or guidance regarding the treatment of digital asset transactions and requirements for businesses engaged in activities related to digital assets.

~~Available~~Depending ~~Information~~on the regulatory characterization of Bitcoin, the markets for Bitcoin in general, and our activities in particular, our business and our Bitcoin strategy may be subject to regulation by one or more regulators in the U.S. and globally. Ongoing and future regulatory actions may alter, to a materially adverse extent, the nature of digital assets markets, the participation of industry participants, including service providers and financial institutions in these markets, and our ability to pursue our Bitcoin strategy. Additionally, U.S. state and federal and foreign regulators and legislatures have taken action against industry participants, including digital assets businesses, and enacted restrictive regimes in response to adverse publicity arising from hacks, consumer harm, or criminal activity stemming from digital assets activity. U.S. federal and state energy regulatory authorities are also monitoring the total electricity consumption of cryptocurrency mining, and the potential impacts of cryptocurrency mining to the supply and dispatch functionality of the wholesale grid and retail distribution systems. Many state legislative bodies have passed, or are actively considering, legislation to address the impact of cryptocurrency mining in their respective states.

~~Our~~The ~~website~~CFTC istakes atthe ~~www.volcon.com. We~~position ~~make~~that ~~available~~Bitcoin, ~~free~~as ofwell ~~charge~~as some other digital assets, onfall ~~our~~within ~~corporate~~the ~~website,~~definition ~~our~~of ~~annual~~a ~~report~~“commodity” onunder ~~Form~~the ~~10-K,~~Commodity ~~quarterly~~Exchange ~~reports~~Act on(the ~~Form~~“CEA”). Under ~~10-Q~~the CEA, ~~current~~the ~~reports on~~CFTC ~~Form~~has ~~8-K~~broad ~~and~~enforcement ~~amendments~~authority to ~~those~~police ~~reports~~market ~~filed~~manipulation orand ~~furnished~~fraud ~~pursuant~~in tospot ~~Section~~digital ~~13(a)~~assets ormarkets ~~15(d)~~in ofwhich we ~~the~~may ~~Securities~~transact. ~~Exchange~~Beyond ~~Act~~instances of ~~1934, as~~fraud ~~amended~~or ~~(the “Exchange Act”)~~manipulation, asthe ~~soon~~CFTC asgenerally ~~reasonably~~does ~~practicable~~not ~~after~~oversee ~~they~~cash ~~are~~or ~~electronically~~spot ~~filed~~market ~~with~~exchanges ~~the~~or ~~SEC. The SEC~~transactions ~~maintains~~involving andigital ~~internet~~asset ~~site~~commodities that ~~contains~~do ~~reports,~~not ~~proxy~~utilize ~~and~~margin, ~~information~~leverage, ~~statements~~or ~~and~~financing. ~~other~~In ~~information~~addition, ~~regarding~~CFTC ~~issuers~~regulations ~~that~~and ~~file~~CFTC ~~electronically~~oversight ~~with~~and ~~the~~enforcement ~~SEC~~authority atapply ~~www.sec.gov.~~with ~~Information~~respect ~~contained~~to onfutures, ~~our~~swaps, ~~website~~other ~~does~~derivative ~~not,~~products and ~~shall~~certain ~~not~~retail beleveraged ~~deemed~~commodity ~~to, constitute part of this Annual~~transactions ~~Report~~involving ondigital ~~Form~~asset ~~10-K.~~commodities, ~~Our~~including ~~reference to~~ the ~~URL~~markets ~~for~~on ~~our~~which ~~website~~these isproducts ~~intended to be an inactive textual reference only~~trade.

The SEC and its staff have taken the position that ~~ITEM~~certain 1Aother ~~RISK~~digital ~~FACTORS~~assets, including certain spot crypto assets, fall within the definition of a “security” under the U.S. federal securities laws. Public statements made by senior officials and senior members of the staff at the SEC indicate that the SEC does not consider Bitcoin to be a security under the federal securities laws. However, such statements are not official policy statements by the SEC and reflect only the speakers’ views, which are not binding on the SEC or any other agency or court and cannot be generalized to any other digital assets.

~~Investing~~In inaddition, ~~our~~since ~~common~~transactions ~~stock~~in ~~involves~~Bitcoin provide a ~~high~~ degree of ~~risk.~~anonymity, ~~You~~they ~~should~~are ~~carefully~~susceptible ~~consider~~to ~~each~~misuse offor criminal activities, such as money laundering. This misuse, or the ~~following~~perception of ~~risks~~such misuse, ~~together~~could ~~with~~lead ~~all~~to ~~other~~greater ~~information~~regulatory ~~set~~oversight ~~forth~~of inBitcoin ~~this~~and ~~Annual~~Bitcoin platforms, and there is the possibility that law enforcement ~~Report~~agencies oncould ~~Form~~close 10or blacklist Bitcoin platforms or other Bitcoin-K,related ~~including~~infrastructure ~~the~~with ~~financial~~little ~~statements~~or no notice and ~~the~~prevent ~~related~~users from ~~notes,~~accessing inor ~~evaluating~~retrieving anBitcoin ~~investment~~held invia ~~our~~such ~~common~~platforms ~~stock~~or infrastructure. IfFor ~~any~~example, the U.S. Treasury Department’s Office of Foreign Assets Control has issued updated advisories regarding the ~~following~~use ~~risks~~of ~~actually~~virtual ~~occurs~~currencies, ~~our~~added ~~business~~a ~~could~~number beof ~~harmed.~~digital Inasset ~~that~~exchanges and ~~case,~~service providers to the ~~trading~~Specially ~~price~~Designated ofNationals ~~our~~and ~~common~~Blocked ~~stock~~Persons ~~could~~list ~~decline,~~ and ~~you~~engaged ~~may~~in ~~lose~~several ~~all~~enforcement oractions, ~~part~~including a series of ~~your~~enforcement ~~investment.~~actions ~~Additional~~that ~~risks~~have ~~not~~either ~~presently~~shut ~~known~~down toor ussignificantly orcurtailed ~~that~~the weoperations ~~currently~~of ~~deem~~several ~~immaterial~~smaller ~~may~~digital ~~also~~asset ~~impair~~exchanges ~~our~~associated ~~business~~with ~~operations~~Russian and/or North Korean nationals.

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. Our ability to continue as a going concern requires that we obtain sufficient funding to finance our operations.

To date we have funded operations through equity and debt offerings. 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 shares 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~~Activities ~~material~~involving ~~weaknesses~~Bitcoin inand ~~our~~other ~~internal~~digital ~~control~~assets may ~~over~~fall within the jurisdiction of more than one financial regulator and various courts and such laws and regulations are rapidly evolving ~~reporting~~and ~~identified~~increasing in ~~our~~scope. ~~2020~~On ~~audit~~January ~~have~~23, 2025, President Trump issued an executive order titled, Strengthening American Leadership in Digital Financial Technology. While the executive order did not ~~been~~mandate ~~remediated~~the adoption of any specific regulations, the executive order identifies certain key objectives to guide agencies involved in crypto regulation, including (i) protecting the sovereignty of the U.S, Ifdollar weby promoting ~~are~~the ~~unable~~development of U.S. dollar-backed stablecoins, (ii) providing regulatory clarity and certainty built on technology-neutral regulations for individuals and firms involved in digital assets, including through well-defined jurisdictional regulatory boundaries, and (iii) taking measures to ~~remediate~~protect Americans from the risks of Central Bank Digital Currencies. To achieve these ~~material~~objectives, ~~weaknesses~~the orexecutive order weestablished ora ~~our~~working group on digital asset markets within the National Economic Council, comprised of representatives from key ~~auditor~~federal ~~identify~~agencies, ~~additional~~with ~~material~~a ~~weaknesses~~tight timeline for examining existing regulations and proposing a new regulatory framework. This working group released a report on July 30, 2025 that recommended regulatory and legislative proposals to advance the policies established in the ~~future~~executive order. orThe ~~otherwise~~SEC ~~fail~~also toestablished ~~maintain~~a anCrypto ~~effective~~Task ~~system~~Force in furtherance of ~~internal~~these ~~controls~~objectives. Among other things, the Crypto Task Force is charged wewith ~~may~~helping to draw clear regulatory lines and to appropriately distinguish securities from non-securities. The work of the Crypto Task Force is in its early stages and it is not beyet ~~able~~clear whether it will result in material changes to ~~accurately~~the orexisting ~~timely~~regulatory ~~report~~framework ~~our~~of digital ~~financial~~assets. ~~condition~~In oraddition, ~~results~~Congress has considered legislation to establish additional regulation and oversight of ~~operations~~the digital asset markets. The GENIUS Act (Guiding and Establishing National Innovation for U.S. Stablecoins Act), which ~~may~~regulates ~~adversely~~payment ~~affect~~stablecoins, was ~~our~~signed ~~business~~into law in July 2025. The Digital Asset Market Clarity Act of 2025 (H.R. 3633), which establishes a framework for digital assets, passed the U.S. House of Representatives in July 2025. This bill distinguishes between digital commodities and ~~stock~~digital ~~price~~securities, and provides the CFTC with jurisdiction to oversee digital commodities, exchanges and brokers. As of January 2026, the U.S. Senate is considering its own legislation to establish a framework for digital asset markets.

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. A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim consolidated financial statements will not be prevented or detected on a timely basis. These material weaknesses are as follows:Vehicles

·Federal, ~~Inadequate~~state, ~~segregation~~and local governments have promulgated and/or are considering promulgating laws and regulations relating to the safety of ~~duties~~our ~~within~~products. ~~account~~In ~~processes~~the ~~due~~U.S., the Consumer Product Safety Commission (CPSC) has federal oversight over product safety issues related to ~~limited~~E-Bikes. ~~personnel~~We ·believe ~~Insufficient~~that ~~formal~~our ~~written~~products ~~policies~~comply ~~and~~with ~~procedures~~all ~~for~~applicable CPSC ~~accounting,~~safety ~~IT,~~standards ~~financial~~as ~~reporting~~well ~~and~~as ~~record~~all ~~keeping~~other applicable safety standards in the U.S.

InE-Bikes ~~addition~~sold tointernationally ~~hiring~~are ~~more~~subject ~~finance~~to ~~and~~the ~~accounting~~local ~~personnel~~laws of each jurisdiction in ~~2021~~which towe ~~improve~~have or may sell our ~~segregation~~product. ofOur ~~duties,~~international ~~through~~distributors ~~2024,~~are weresponsible ~~have~~for ~~made~~ensuring ~~further~~that ~~progress~~our products ~~towards~~comply ~~remediating~~with ~~these~~the ~~material weaknesses~~jurisdiction in which they are importing the product. WeCosts ~~have~~associated ~~hired~~with ~~more~~compliance ~~experienced~~are ~~accounting~~the ~~and~~responsibility of ~~finance~~the ~~personnel~~distributor. WeThese ~~have~~regulations ~~prepared~~may ~~some~~result ~~formal~~in ~~written~~increased ~~policies~~costs and ~~procedures for accounting~~expenses, ~~IT,~~which may materially and ~~financial~~adversely ~~reporting~~affect ~~and~~the ~~record~~distributors’ business ~~keeping.~~where Weit ~~have~~may ~~also~~not ~~started~~be ~~the~~economically ~~process~~feasible ofto ~~documenting~~sell our ~~internal~~products ~~controls. However~~locally, wewhich ~~have~~in ~~not~~turn ~~fully~~will ~~completed~~adversely ~~documentation~~impact orour ~~testing~~results of ~~these~~operations or ~~policies,~~financial ~~procedures, and internal controls~~condition.

~~While~~Human 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.Capital

We cannot assure you that the measures we have taken to date and may take in the future, will be sufficient to remediate the control deficiencies that led to our material weaknesses in internal control over financial reporting or that they will prevent or avoid potential future material weaknesses. The effectiveness of our internal control over financial reporting is subject to various inherent limitations, including cost limitations, judgments used in decision making, assumptions about the likelihood of future events, the possibility of human error and the risk of fraud. If we are unable to remediate the material weakness, our ability to record, process and report financial information accurately, and to prepare financial statements within the time periods required of public companies could be adversely affected which, in turn, may adversely affect our reputation and business and the market price of our common stock. In addition, any such failures could result in litigation or regulatory actions by the SEC or other regulatory authorities, loss of investor confidence, delisting of our securities and harm to our reputation and financial condition, or diversion of financial and management resources from the operation of our business.Employees

~~Our~~As ~~transition~~of toDecember an31, ~~outsourced~~2025, the ~~manufacturing~~Company employed 15 employees, ~~design~~all ~~and~~of ~~development~~whom were full time employees. None of our employees are represented by a labor union or subject ~~business~~to ~~model~~a ~~may~~collective bargaining agreement. We have not beexperienced ~~successful~~any material work stoppages, ~~which~~and ~~could~~we ~~harm~~consider our ~~ability~~relations towith ~~deliver~~our ~~products~~employees to ~~and~~be ~~recognize revenue~~good.

InEmployee 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.Engagement

~~During~~Our ~~2024~~Co-CEO, weRyan ~~signed~~Lane, ~~an agreement with a manufacturer to build the VLCN HF1 UTV~~ and weCOO, ~~signed~~Tim ~~another~~Silver, ~~agreement~~who ~~with~~were hired awhen ~~separate manufacturer to build~~ the ~~VLCN~~Company ~~MN1~~initiated ~~Adventurer~~its ~~and~~digital ~~the~~asset ~~VLCN~~strategy, ~~MN1 Tradesman~~have ~~vehicles.~~significant Inexperience ~~addition~~investing ~~we signed a distribution agreement with this manufacturer to distribute its golf carts~~ in ~~the~~various U.markets S. and ~~its~~ ~~territories~~asset classes.

AsOur aCo-CEO, ~~result~~John ofKim, ~~moving~~has toextensive anexperience ~~outsourced design,~~with the development and ~~manufacturing~~sales ~~model,~~of weE-Bikes. ~~have~~He ~~reduced~~was ~~headcount~~the infounder ~~all~~of ~~departments~~Super to73, ~~reduce~~one ~~costs.~~of Wethe ~~continue~~first toand ~~evaluate~~industry ~~further~~leading ~~cost reductions~~E-Bike ~~while~~brands ~~developing~~prior ~~our~~to ~~sales~~selling Super 73. Our employees and ~~marketing~~contractors ~~team~~serving tothe ~~sell~~E-Bike and ~~promote~~inventory ~~our~~financing ~~products~~operations tofocus ~~customers~~on incustomer ~~the~~care, ~~U.S.~~developing and tosourcing our products, and building our ~~international distributors~~marketing channels.

We ~~rely~~believe onwe ~~third~~offer ~~party~~competitive ~~manufacturers~~benefits and programs to develop employees’ expertise, ~~designers~~performance, and ~~developers~~engagement, ~~which~~ ~~subjects~~while usimplementing tocorporate ~~risk~~policies ofto ~~product~~provide ~~delivery~~a ~~delays~~safe, ~~reduced~~harassment-free work ~~control~~environment. ~~over~~This ~~product~~work ~~costs~~environment is guided by principles of fair and ~~quality~~equal ~~control~~treatment and prioritizes effective communication and employee engagement.

~~Our~~We ~~business~~are ~~success~~committed ~~will~~to ~~depend~~building ina ~~large~~strong ~~part~~culture with onhigh ~~our~~levels ~~third~~of ~~party~~employee ~~manufacturers’~~engagement. ~~ability~~We tohold ~~economically~~ad ~~produce~~hoc ~~our~~meetings ~~vehicles~~where atmanagement ~~sufficient~~discusses ~~capacity~~various totopics ~~meet~~with ~~the~~employees ~~demands~~including ofoperational updates, ~~our~~vehicle development, financing activities, company policies and safety. Management is also committed to being available to discuss ~~customers~~any employee concerns on a one-on-one basis.

~~Our~~Available ~~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:~~Information

·Our ~~delays~~website ~~due~~is toat ~~design~~www.emperydigital.com. ~~and~~We ~~development~~make available, free of ~~our~~charge, ~~products~~live up to ~~meet~~date information about our ~~product~~financial ~~specifications;~~position ·on ~~delays~~our ~~due~~corporate towebsite, ~~defective~~our ~~parts~~annual orreport ~~components;~~on ·Form 10-K, ~~unexpected~~quarterly ~~increases~~reports inon ~~manufacturing~~Form ~~costs;~~10-Q, ·current ~~interruptions~~reports inon ~~vehicle~~Form ~~deliveries~~8-K ifand aamendments ~~third~~to ~~party~~those ~~vendor~~reports isfiled ~~unable~~or tofurnished ~~complete~~pursuant ~~production~~to Section 13(a) or ~~design~~15(d) inof athe ~~timely~~Securities ~~manner;~~Exchange ·Act ~~shipping~~of ~~delays~~1934, ~~due~~as toamended ~~availability~~(the of“Exchange ~~ships~~Act”), ~~trains~~as soon as reasonably practicable after they are electronically filed with the SEC. The SEC maintains an internet site that contains reports, ~~trucks~~proxy orand ~~containers~~information tostatements and ~~ship~~other ~~products~~information orregarding ~~delays~~issuers atthat ~~ports~~file toelectronically ~~ship~~with ~~products~~the toSEC usat orwww.sec.gov. toInformation contained on our ~~customers;~~website does not, and ·shall ~~inability~~not be deemed to, ~~control~~constitute part of this Annual Report on Form 10-K. Our reference to the ~~quality~~URL offor ~~finished~~our ~~products~~website is intended to be an inactive textual reference only.

~~Our~~We ~~reliance~~also onuse ~~third~~other ~~parties~~mediums, ~~reduces~~including ~~our~~the ~~control~~following ~~over~~social ~~the~~media ~~manufacturing,~~channels ~~design~~as ~~and~~a ~~development~~means ~~processes,~~of ~~including~~disclosing ~~reduced~~information ~~control~~about ~~over~~the ~~timing~~company, toour ~~release~~ products, ~~quality,~~our ~~product costs~~planned financial and ~~product~~other ~~supply.~~announcements and Weattendance ~~experienced~~at ~~delays~~upcoming ininvestor ~~the~~and ~~design~~industry conferences, and ~~development~~other ofmatters ~~previous~~and ~~vehicles~~for wecomplying ~~were~~with ~~seeking~~our todisclosure ~~develop.~~obligations under Regulation FD:

WeWebsite ~~can~~Homepage: ~~provide no assurance that we will not realize future delays in production or our costs will stay at levels that allow us to sell our products profitably~~https://www. ~~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~~emperydigital.com/

IfTreasury ~~any~~Dashboard: 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 delayedhttps://www. ~~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~~emperydigital. These delays or product quality issues could have an immediate and material adverse effect on our ability to fulfill orders and could have a negative impact on our operating results. In addition, such delays or issues with product quality could harm our reputation and our relationship with our dealers, distributors and customers.com/treasury-dashboard

~~Our~~X ~~third~~(f/k/a ~~party~~Twitter) ~~manufacturers~~Account: ~~may be unable to meet our growing sales and delivery plans, which could harm our business and prospects~~https://x.com/EMPD_BTC

~~Our~~Instagram ~~sales~~Account: ~~growth and delivery plan contemplate achieving and sustaining increases in vehicle deliveries~~https://www. 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 changesinstagram. 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. In addition, as we do not have a long-term history of sales, our forecasted demand may be materially incorrect, which could cause us to either fail to meet unforeseen demand or incur higher costs for excess inventory purchased to meet our forecast. If we are unable to realize our sales and delivery plan, our brand, business, prospects, financial condition, and operating results could be materially damaged.com/empd_btc

YouTube Account: https://www.youtube.com/@emperydigital

Instagram Account: https://www.instagram.com/Volcon.ev/

These channels may be updated from time to time on our investor relations website at https://ir.EmperyDigital.com. The information we post through these channels may be deemed material. Accordingly, investors should monitor them in addition to following our investor relations website, press releases, SEC filings, and public conference calls and webcasts. This list may be updated from time to time. The information we post through these channels is not a part of this Annual Report on Form 10-K.

WeITEM ~~are dependent on our third party manufacturers, who are dependent on their suppliers, some of which could be single-source suppliers~~1A. ~~The~~RISK 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.FACTORS

~~Our~~Investing ~~vehicles~~in ~~contain numerous purchased parts that~~ our ~~third~~common ~~party~~stock ~~manufacturers~~involves ~~either (~~a) ~~source~~high ~~globally~~degree of ~~from~~risk. ~~direct~~You ~~suppliers,~~should ~~some~~carefully ofconsider ~~whom~~each ~~could~~of bethe ~~single-source~~following ~~suppliers~~risks, ortogether ~~(b) manufacture~~with ~~themselves~~all ~~from~~other ~~components~~information orset ~~materials.~~forth ~~Any~~in ~~significant~~this ~~unanticipated~~Annual ~~demand~~Report on ~~would~~Form ~~require~~10-K, ~~our~~including ~~third~~the ~~party~~financial ~~manufacturers to~~statements ~~procure~~and orthe ~~manufacture~~related ~~additional~~notes, ~~components~~ in aevaluating ~~short~~an ~~amount~~investment ofin ~~time. While we believe~~ our ~~third~~common ~~party~~stock. ~~manufacturers~~If ~~would~~any beof ~~able~~the tofollowing ~~secure~~risks ~~additional~~actually oroccurs, ~~alternate~~our ~~sources~~business ofcould ~~supply~~be ~~for~~harmed. ~~most~~In ofthat ~~our~~case, ~~components~~the ~~and~~trading ~~raw~~price ~~materials~~of inour acommon ~~relatively~~stock ~~short~~could ~~time frame~~decline, ~~there~~and isyou nomay ~~assurance~~lose ~~that~~all ~~they will be able to do so~~ or ~~develop~~part ~~their own replacements for certain highly customized components~~ of ~~our~~your ~~products~~investment. We ~~have~~Additional inrisks ~~the~~not ~~past~~presently ~~realized~~known ~~production delays due~~ to ~~delays~~us inor ~~sourcing certain parts from single-source suppliers. We can provide no assurance~~ that we ~~will~~currently ~~not~~deem inimmaterial ~~the~~may ~~future~~also impair ~~realize~~our ~~additional~~business ~~such delays~~operations.

IfRisks ~~our~~Related ~~third party manufacturers encounter unexpected difficulties with key suppliers, and if they are unable~~ to ~~fill these needs from other suppliers, we could experience production delays~~ ~~and~~Our ~~potential~~Business ~~loss of access to important technology and parts for producing, servicing and supporting our vehicles. This limited, and~~ in many cases single-source, supply chain exposes our third party manufacturers and us to multiple potential sources of delivery failure or component shortages for the production of our vehicles. The loss of any single or limited source supplier or the disruption in the supply of components from these suppliers could lead to design changes and delays in product deliveries to our customers, which could hurt our relationships with our customers and result in negative publicity, damage to our brand and reputation, and a material and adverse effect on our business, prospects, financial condition and operating results.General

Our ~~third~~losses ~~party~~from ~~manufacturers~~operations ~~operate~~could ~~outside~~raise ofsubstantial doubt ~~the~~regarding Uour ability to continue as a going concern.~~S.,~~ ~~subjecting us~~Our ability to ~~risks~~continue ofas ~~international~~a going concern requires that we obtain sufficient funding to finance our operations.

~~Our~~To ~~third~~date ~~party manufacturers operate outside of the U.S. and as a result~~ we ~~are~~have ~~increasingly~~funded ~~exposed~~operations tothrough ~~the~~equity ~~challenges~~ and ~~risks of doing business outside the U.S., which could reduce~~ ~~our~~debt ~~revenues or profits, increase our costs, result in significant liabilities or sanctions, or otherwise disrupt our business~~offerings. ~~These challenges~~As ~~include: (1) compliance with complex and changing laws, regulations and policies~~ of ~~governments~~December ~~that may impact our operations~~31, ~~such~~ ~~as foreign ownership restrictions~~2025, ~~import~~we ~~and~~have export controls, tariffs, and trade restrictions; (2) compliance with U.S. and foreign laws that affect the activities of companies abroad, such as anti-corruption laws, competition laws, currency regulations, and laws affecting dealings with certain nations; (3) the difficulties involved in managing an ~~organization~~accumulated ~~doing~~deficit ~~business in many different countries; (4) uncertainties as to the enforceability~~ of ~~contract and intellectual property rights under local laws; and (5) rapid changes in government policy, political or civil unrest, acts of terrorism, or the threat of international boycotts or U~~$321.S.8 ~~anti-boycott legislation~~million.

~~Products~~Management anticipates that ~~we have manufactured for us in China~~our ~~may~~cash ~~also~~on behand ~~subject~~as ~~to any uncertainty~~ of ~~trade~~December ~~relations~~31, ~~between China and the U. S.~~2025, ~~which~~plus ~~could~~cash ~~cause~~expected ~~the cost of our products manufactured there~~ to ~~rise,~~be orgenerated ~~result~~from inoperations ~~our~~and ~~inability~~net toproceeds ~~continue~~from toderivative ~~use third party manufacturers in China~~trading, ~~resulting in a need to find alternative~~cash ~~sources~~available offrom ~~manufacture,~~borrowings ~~which~~available ~~could~~on ~~result in the delay of manufacture and supply of~~ our ~~products,~~credit ~~increase~~facility ~~our cost of manufacture,~~ and ~~cause~~ athe ~~delay~~cash inreceived ~~our~~from ~~shipments~~the tosale ~~customers and a delay or cancellation~~ of ~~orders.~~Bitcoin ~~Our~~will ~~future operating results and financial condition could~~ be ~~materially~~sufficient ~~affected~~ to ~~the~~fund ~~extent~~planned operations ~~any~~and ofrepay ~~these actions occur~~borrowings.

InWe ~~addition,~~have ~~the~~not ~~prosecution~~remediated ofthe ~~intellectual~~material ~~property~~weaknesses ~~infringement~~in ~~and~~our ~~trade~~internal ~~secret~~control ~~theft~~over ~~outside~~financial ofreporting ~~the~~identified ~~U.S. may be more difficult than~~ in ~~the~~our U2020 audit.S. ~~Although~~If we ~~take~~or ~~precautions to protect~~ our ~~intellectual~~auditor ~~property,~~identify ~~using~~additional ~~our~~material ~~third party manufacturers~~ weaknesses in ~~China~~the ~~could~~future ~~subject~~or usotherwise tofail ~~an increased risk that unauthorized parties will be able~~ to ~~copy~~maintain oran ~~otherwise~~effective ~~obtain~~system orof ~~use~~internal ~~our intellectual property~~controls, ~~and~~ we may not be ~~unsuccessful~~able into ~~monitoring~~accurately ~~and~~or ~~enforcing~~timely ~~our~~report ~~intellectual property rights against them, which could harm~~ our ~~business.~~financial Wecondition ~~may also have limited legal recourse in the event we encounter patent~~ or ~~trademark infringers, which could adversely affect our business,~~ results of operations, ~~and~~which ~~financial condition. While we take measures to protect our trade secrets, the use of third party manufacturers~~ may ~~also~~adversely ~~risk~~affect ~~disclosure of~~ our ~~innovative~~business and ~~proprietary manufacturing~~stock ~~methodologies, which could adversely affect our business~~price.

9The 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, 2025. A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim consolidated financial statements will not be prevented or detected on a timely basis. These material weaknesses are as follows:

We· ~~are~~Inadequate ~~utilizing~~segregation ~~a small number~~ of ~~vendors~~duties towithin ~~assist~~account usprocesses ~~with the~~due ~~manufacturing,~~to ~~development~~limited ~~and~~personnel ~~design~~· ofInsufficient ~~our~~formal ~~vehicles,~~written ~~including~~policies ~~the chassis, electrical systems, safety requirements, body components~~ and ~~accessories,~~procedures ~~and the inability of these vendors to complete our respective design requirements may delay our ability to release these vehicles~~ for ~~production~~accounting, ~~which~~IT, ~~could have a material adverse effect on our~~ financial ~~condition~~reporting and ~~operating~~record ~~results.~~keeping

WeIn ~~have~~addition ~~entered~~to ~~into~~hiring ~~manufacturing,~~more ~~design~~finance and ~~development~~ ~~agreements~~accounting ~~with vendors with experience~~ personnel in ~~the~~2021 ~~manufacturing,~~to ~~design~~improve ~~and~~our ~~development~~segregation of ~~two-wheel~~duties, ~~and~~we ~~four-wheel~~have ~~off-road vehicles~~made tofurther ~~assist~~progress ustowards ~~with~~remediating ~~the~~these ~~development~~material ~~of certain aspects of and manufacturing of our vehicles~~weaknesses. ~~Although~~We ~~these vendors~~ have ~~successfully~~hired ~~assisted~~more ~~other~~experienced ~~companies~~accounting ~~with manufacture, design~~ and ~~development~~finance ofpersonnel. ~~vehicles,~~We ~~they~~have ~~may~~prepared ~~not~~some beformal ~~able~~written topolicies ~~successfully design, develop~~ and ~~manufacture~~ ~~our~~procedures ~~vehicles.~~for ~~These vendors may experience delays in fulfilling their obligations under these contracts due to the inability to source parts from other vendors~~accounting, ~~lack of employees available to work on our projects due to labor shortages or other competing projects from other customers. Failure of these vendors to complete the contracted design~~IT, ~~development~~ and ~~manufacture projects for our vehicles~~ ~~will~~financial ~~result~~reporting ~~in delays in obtaining regulatory approvals~~ and ~~delay~~record ~~production~~keeping. ~~and~~We ~~release of the vehicles for sale, which could~~ have ~~a material~~also ~~adverse~~started ~~effect~~the onprocess ~~our business, reputation, results~~ of ~~operations~~documenting orour ~~financial~~internal ~~condition~~controls.

~~Increases~~While inwe ~~costs,~~believe ~~disruption~~these ofefforts ~~supply~~have improved the internal control over financial reporting, orthey ~~shortage~~did not fully remediate the material weaknesses as we have not fully documented all of ~~materials~~our policies ~~could~~or ~~harm~~procedures and we have not performed any testing of our ~~business~~internal controls.

~~Our~~We ~~third~~cannot ~~party~~assure ~~manufacturers~~you ~~may~~that ~~experience~~the ~~increases~~measures we have taken to date and may take in the ~~cost~~future, orwill abe ~~sustained~~sufficient ~~interruption~~to inremediate the ~~supply~~control ordeficiencies ~~shortage~~that ofled ~~materials.~~to ~~Any~~our ~~such~~material ~~increase,~~weaknesses ~~supply~~in ~~interruption~~internal control over financial reporting or ~~shortage~~that ~~could materially~~they ~~and~~will ~~negatively~~prevent ~~impact~~or avoid potential future material weaknesses. The effectiveness of our ~~business,~~internal control ~~prospects,~~over financial ~~condition~~reporting ~~and~~is ~~operating~~subject ~~results.~~to ~~The~~various ~~prices~~inherent ~~for~~limitations, ~~these~~including ~~materials~~cost ~~fluctuate~~limitations, judgments used in decision making, ~~and~~assumptions ~~their~~about ~~available~~the ~~supply~~likelihood ~~may~~of befuture ~~unstable~~events, ~~depending~~the onpossibility ~~market~~of ~~conditions~~human error and ~~global~~the ~~demand~~risk ~~for~~of ~~these~~fraud. ~~materials,~~If ~~including~~we asare aunable ~~result~~to remediate ofthe ~~increased~~material ~~production~~weakness, ofour ~~electric~~ability ~~vehicle~~to ~~(EV)~~record, ~~products~~process byand ~~our~~report ~~competitors~~financial information accurately, and to prepare financial statements within the time periods required of public companies could be adversely affected which, in turn, may adversely affect our reputation and business and ~~operating~~the ~~results~~market price of our common stock. In addition, any such failures could result in litigation or regulatory actions by ~~For~~the ~~instance~~SEC or other regulatory authorities, weloss ~~are~~of ~~exposed~~investor toconfidence, ~~multiple~~delisting ~~risks~~of ~~relating~~our securities and harm to ~~battery~~our ~~packs~~reputation and financial condition, or diversion of financial and management resources from the operation of our business.

~~These risks include:~~9

·Our operating anresults, ~~increase in the cost~~revenues, orand ~~decrease~~expenses inmay ~~the~~fluctuate ~~available supply~~significantly, ~~of materials used in the battery packs; · disruption in the supply of battery packs due to quality issues or recalls by battery cell manufacturers; · sanctions imposed by the U.S. on countries in~~ which ~~our~~could ~~products~~have ~~are~~an ~~manufactured~~adverse oreffect ~~where parts are manufactured for our third party manufacturers; and · tariffs~~ on the ~~products~~market weprice ~~source~~of inour ~~China~~common stock.

Our ~~business is dependent on the continued supply~~ ofoperating ~~battery~~results, ~~cells for the battery packs used in our vehicles. Any disruption in the supply of battery cells~~revenues, ~~including those caused by the conflict between Russia~~ and ~~the~~expenses ~~Ukraine~~have ~~and~~varied ~~sanctions imposed on Russia noted below, could disrupt production of our vehicles. Substantial increases~~ in the ~~prices~~past ~~charged to us, such as those charged by battery cell suppliers, would increase our operating costs,~~ and ~~could reduce~~may ~~our~~vary ~~margins~~significantly ifin ~~we cannot recoup~~ the ~~increased~~future ~~costs~~from ~~through~~period ~~increased~~to ~~selling prices of our vehicles~~period. ~~Any attempts to increase~~These ~~prices~~fluctuations incould ~~response~~have toan ~~increased~~adverse ~~material~~effect ~~costs~~on ~~could result in~~ the ~~cancellation~~market price of ~~vehicle orders and therefore materially and adversely affect~~ our ~~brand,~~common ~~image, business, prospects and operating results~~stock.

~~We have and could continue to experience delays and other complications~~Our inoperating ~~the~~results ~~design,~~may ~~manufacture~~fluctuate, ~~launch~~in ~~and production ramp of our vehicles and our future planned vehicles~~part, ~~which~~as ~~could~~a ~~harm~~result ~~our brand, business, prospects, financial condition and operating results.~~of:

We· ~~have~~fluctuations ~~encountered~~in ~~unanticipated~~the ~~challenges,~~price ~~such as~~of ~~supply~~Bitcoin, ~~chain~~of ~~constraints,~~which ~~that~~we ~~led~~have tosignificant ~~initial~~holdings ~~delays~~and inwith ~~producing~~respect ~~our~~to ~~vehicles.~~which Wewe ~~have~~may ~~experienced~~continue ~~longer~~to ~~lead~~make ~~times~~future ~~with~~purchases, ~~certain suppliers~~and topotential ~~obtain~~fair ~~parts,~~value ~~especially~~changes ~~those~~associated ~~imported~~therewith; ~~where~~· ~~shipping~~any ~~delays~~sales ~~from~~by ~~outbound~~us ~~and~~of ~~inbound~~our ~~ports~~Bitcoin ~~have~~at ~~caused~~prices ~~delays~~above or ~~required us~~below totheir ~~use~~carrying ~~air~~value, ~~freight~~which ~~and~~would ~~incur~~result ~~higher~~in ~~shipping~~our ~~costs.~~recording Wegains ~~have~~or ~~outsourced~~losses ~~the~~upon ~~manufacturing~~sale of ~~all~~our ofBitcoin; ~~our~~· ~~vehicles~~regulatory, commercial, and ~~plan~~technical developments related to ~~outsource all~~Bitcoin ~~manufacturing~~or ofthe ~~our~~Bitcoin ~~vehicles~~blockchain, ~~for~~or ~~the~~digital ~~foreseeable~~assets ~~future.~~more Wegenerally; ~~also~~· ~~reduced~~the ~~headcount~~incurrence inof ~~all~~additional interest charges on our ~~departments,~~outstanding asdebt weor ~~have~~additional ~~outsourced the~~future ~~design~~borrowings; ~~and~~· ~~development~~the impact of ~~our~~war, ~~vehicles.~~terrorism, ~~Any~~infectious ~~significant~~diseases, ~~delay~~natural ordisasters and other ~~complications~~global inevents, ~~the~~and ~~production~~government ofresponses ~~our~~to ~~vehicles~~such orevents, on the ~~development, manufacture,~~global economy and ~~production~~the ~~ramp~~market offor ~~our~~and ~~future~~price ~~vehicles,~~of ~~including~~Bitcoin; ~~complications~~and ~~associated~~· ~~with~~significant changes to our ~~third~~E-Bike ~~party~~and ~~manufacturers’ supply~~inventory ~~chains~~financing orbusiness, ~~obtaining~~including orsignificant ~~maintaining~~changes ~~regulatory~~in ~~approvals,~~our ~~could~~product ~~materially~~sales ~~damage~~or ~~our~~operating ~~brand~~expenses, ~~business,~~or ~~prospects,~~the ~~financial~~timing ~~condition and~~of ~~operating~~announcements ~~results~~of new offerings or product development costs.

10Our expenses are fixed and we have a limited ability to adjust expenses.

WeMany of our expenses, such as interest expense on our debt, insurance costs, facility leases and certain personnel costs, are anrelatively ~~early~~fixed. We do not expect the cash generated by our E-~~stage~~Bike, ~~company~~inventory financing operations and net proceeds from derivative trading of Bitcoin to be sufficient to cover such expenses during 2026, and we ~~have~~expect ~~delivered~~to ause ~~limited~~proceeds from equity or debt financings, or sale of Bitcoin ~~number~~to pay our expenses and satisfy our liquidity needs that are in excess of ~~vehicles~~our operating cash flows. If we are unable to ~~customers~~secure equity or debt financing in a timely manner, on favorable terms, or if the price of Bitcoin declines, we may not be able to satisfy our financial obligations. Such actions could cause significant variation in our operating results in any quarter.

WeA significant ~~have~~decrease ~~delivered~~in athe ~~limited~~market ~~number~~value of ~~vehicles to~~our ~~customers~~Bitcoin ~~and~~holdings wecould ~~have~~adversely noaffect ~~meaningful historical financial data upon which we may base~~ our ~~projected~~ability ~~revenue and operating expenses. Our limited operating history makes it difficult for potential investors~~ to ~~evaluate~~satisfy our ~~products~~financial obligations or ~~prospective~~liquidity ~~operations~~needs and ~~business prospects.~~could Wehave ~~are~~an ~~subject~~adverse toeffect ~~all~~on the ~~risks~~market ~~inherent~~price ~~in business development, financing, unexpected expenditures, and complications and delays that often occur in a new business. Investors should evaluate an investment in us in light~~ of ~~the uncertainties encountered by developing companies in a competitive environment. There can be no assurance that~~ our ~~efforts~~common ~~will be successful or that we will ultimately be able to attain profitability~~stock.

~~The~~Bitcoin’s market ~~conflict~~value ~~with~~has ~~Russia~~fluctuated ~~and~~significantly since the ~~Ukraine~~inception ~~could~~of ~~have~~our andigital ~~impact~~asset treasury strategy. For example, a decline in the price of Bitcoin at September 30, 2025 from the weighted average price we paid for purchasing Bitcoin when we implemented our digital asset treasury strategy in July 2025 resulted in our experiencing a $14.1 million unrealized loss on digital assets for the ~~availability~~quarter ofended ~~components~~September 30, ~~used~~2025, while decrease in the ~~manufacturing~~price of ~~lithium~~Bitcoin ~~ion~~at ~~batteries~~December 31, 2025 from the price at September 30, 2025 resulted in our experiencing a $108.6 million unrealized loss on digital assets for the quarter ended December 31, 2025. Additionally, it is possible that weadditional declines ~~use~~in toBitcoin ~~power~~may occur and the market price of our ~~vehicles~~common stock may decline further.

~~The~~As ~~ongoing~~of ~~conflict~~March ~~between~~25, ~~Russia~~2026, ~~and~~our outstanding ~~the~~indebtedness ~~Ukraine could~~was ~~impact~~$95.0 ~~the~~million ~~availability~~($50.0 million of ~~nickel,~~which anis ~~element~~due ~~used~~ in ~~the~~August ~~production~~2026) ofwith ~~lithium~~a ~~ion~~weighted ~~cells~~average ~~used~~interest inrate ~~batteries~~of ~~that power our vehicles~~7.98%. ~~According~~Collateral tofor ~~the~~this ~~Wall~~outstanding ~~Street~~indebtedness ~~Journal~~is 2,891 ~~Russia~~Bitcoin. ~~produces~~If ~~5%-6% of~~ the ~~world’s~~value ~~nickel~~of ~~supply~~Bitcoin ~~and~~declines ~~17%~~to ofcertain ~~the~~levels, ~~high~~a ~~purity~~margin ~~nickel~~call ~~production.~~will ~~The~~occur ~~shortage~~and ofwe ~~these~~will ~~cells~~be ~~could~~required ~~have~~to anprovide ~~impact~~additional onBitcoin ~~our ability~~ to ~~produce~~our ~~vehicles~~lender toas ~~meet~~collateral. ~~our~~If ~~customers’~~we ~~demands.~~do Innot ~~addition, sanctions~~have ~~against~~sufficient ~~Russia~~Bitcoin ~~could~~to ~~impact~~ meet the ~~price~~margin ofcall ~~elements,~~or ~~including~~if ~~nickel,~~we ~~that~~miss ~~are used in~~ the ~~production~~deadline ~~of batteries which would result in higher costs~~ to ~~produce~~provide ~~our~~the ~~vehicles.~~additional ~~These~~Bitcoin ~~sanctions~~(twelve ~~have~~hours), ~~also impacted~~ the ~~U.S.~~lender ~~and~~may ~~global~~liquidate ~~economy~~some ~~and~~of ~~could~~the ~~result in an~~Bitcoin ~~economic~~held ~~recession~~as ~~which~~collateral ~~could cause a broader disruption~~ to repay the ~~Company’s~~principal ~~supply chain~~ and ~~distribution~~interest ~~network~~due ~~and~~at ~~customer~~the ~~demand for~~time ~~our products. These factors would have a negative impact on our results~~ of ~~operations~~the ~~and~~margin ~~cash flows~~call.

We are currently taking orders for the Brat E-Bike, MN1s and HF1, and if these vehicles fail to perform as expected, our reputation could be harmed and our ability to develop, market and sell our vehicles could be harmed.10

IfAs part of our ~~vehicles~~Bitcoin ~~were~~strategy, we expect to ~~contain~~incur ~~defects~~or incontinue ~~design~~ to incur additional indebtedness and ~~manufacture~~fixed ~~that~~charges. ~~cause~~For ~~them~~the ~~not~~year toended ~~perform~~December as31, ~~expected~~2025, orour ~~that~~vehicle ~~require~~and inventory ~~repair~~financing orbusiness ~~take~~and ~~longer~~our ~~than~~Bitcoin ~~expected~~derivative totrades ~~deliver,~~did ~~our~~not ~~ability to~~generate ~~develop,~~positive ~~market~~cash flow from operations, and ~~sell~~we do not expect our ~~vehicles~~E-Bike ~~could~~sales, beinventory ~~harmed.~~financing ~~While~~business weand ~~intend~~Bitcoin toderivative ~~perform~~trades ~~internal~~to ~~testing~~generate onsufficient ~~the~~cash ~~vehicles,~~flow asfrom aoperations ~~start-up~~to ~~company~~satisfy our ~~frame~~financial ofobligations ~~reference~~or byliquidity ~~which~~needs toover ~~evaluate~~the ~~detailed~~next ~~long-term~~twelve ~~quality,~~months. ~~reliability,~~If ~~durability~~our E-Bike and ~~performance~~inventory ~~characteristics~~financing ofbusiness ~~our~~and Bitcoin derivative ~~vehicles~~trades isdo ~~based~~not ongenerate ~~industry~~cash ~~metrics~~flows ~~rather~~in ~~than~~future ~~historical~~periods ~~data.~~sufficient ~~Although~~to wesatisfy ~~have~~our ~~procedures~~financial toobligations ~~test~~and ~~all~~liquidity needs, including repayment of ~~our~~principal ~~vehicles~~and ~~for~~payment ~~defects~~of interest on our debt, ~~there~~ ~~can~~we beintend noto ~~assurance~~fund ~~that~~such wepayments ~~will~~using becash ~~able~~proceeds tofrom ~~detect~~equity ~~and~~or ~~fix~~debt ~~all~~financings ~~defects~~and sale inof our ~~products~~Bitcoin. ~~prior~~Our ability to ~~their~~obtain ~~sale~~equity toor ~~consumers.~~debt ~~Any~~financing ~~product defects~~may, ~~delays~~in turn, ordepend on, among other ~~failure~~factors, the value of our ~~products~~Bitcoin holdings, toinvestor ~~perform~~sentiment asand ~~expected~~the ~~could~~general ~~harm~~public perception of Bitcoin, our ~~reputation~~strategy and ~~result~~our invalue ~~delivery~~proposition. ~~delays~~Accordingly, ~~product~~a significant ~~recalls,~~decline ~~product~~in ~~liability~~the ~~claims,~~market ~~significant~~value ~~warranty~~of ~~and~~our Bitcoin holdings or a negative shift in these other ~~expenses,~~factors may create liquidity and ~~could~~credit ~~have~~risks as such a ~~material~~decline ~~adverse~~or such shifts may adversely impact onour ability to secure sufficient equity or debt financing and sell our ~~business, financial~~Bitcoin ~~condition,~~to ~~operating~~satisfy our ~~results~~financial obligations and ~~prospects~~liquidity needs.

WeAs ~~may~~Bitcoin ~~not~~constitutes the ~~succeed~~vast majority of assets on our balance sheet, if we are unable to secure equity or debt financing in ~~establishing~~a timely manner, ~~maintaining~~on favorable terms, or at all, we may be required to sell Bitcoin to satisfy our financial obligations or liquidity needs, and ~~strengthening~~we may be required to make such sales at prices below our ~~brand~~cost basis or on terms that are otherwise unfavorable. For the period from January 1, ~~which~~2026 ~~could~~to ~~materially~~March 25, 2026, we sold 722 Bitcoin for proceeds of $50.0 million and ~~adversely~~realized ~~affect~~a ~~customer~~loss ~~acceptance~~of $3.2 million. Any future sales of Bitcoin may have a material adverse effect on our ~~products,~~operating ~~which~~results and financial condition and could impair our ability to secure additional equity or debt financing in ~~turn~~the ~~materially~~future. ~~affect~~Our inability to secure additional equity or debt financing in a timely manner, on favorable terms or at all, or to sell our Bitcoin in amounts and at prices sufficient to satisfy our financial obligations or liquidity needs, including our ~~business~~debt service, ~~results~~could ofcause ~~operations~~us to default under such obligations. Any default on our current or future indebtedness could have a material adverse effect on our financial condition. See “Risks Related to Our Outstanding and Potential Future Indebtedness” for additional details about the risks which may impact us if we are unable to satisfy our debt service and cash dividend obligations.

Our business ~~and~~may ~~prospects~~not ~~heavily~~generate ~~depend~~sufficient ~~on our ability to develop~~funds, ~~maintain~~ and ~~strengthen~~we ~~the~~may ~~Volcon~~otherwise ~~brand.~~be ~~If we are~~ unable to ~~establish,~~ maintain ~~and~~sufficient ~~strengthen~~cash ~~our brand~~reserves, ~~we may lose the opportunity~~ to ~~build~~continue ~~and maintain a critical mass of customers. Our ability to develop, maintain and strengthen~~ repurchasing our ~~brand~~common ~~will depend~~stock ~~heavily~~under on the ~~success~~repurchase ofprograms ~~our~~or ~~marketing efforts. Failure~~ to ~~develop~~pay ~~and~~amounts ~~maintain~~due aunder ~~strong~~our ~~brand~~indebtedness ~~could materially~~ and ~~adversely affect customer acceptance of~~ our ~~vehicles,~~cash ~~could~~needs ~~result~~may inincrease ~~suppliers and other third parties being less likely to invest time and resources~~ in ~~developing~~the ~~business relationships with us, and could materially adversely affect our business, results of operations or financial condition~~future.

11We cannot guarantee that we will be able to implement our share repurchase programs or that they will achieve their objectives.

AnOur Board ~~adverse~~of ~~determination~~Directors has authorized a share repurchase program. We plan to fund repurchases under this program from our future cash flow generation, as well as from additional potential sources of cash. For example, we have in ~~any~~the ~~significant~~past ~~product~~entered ~~liability~~into master repurchase agreements ~~claim~~pursuant ~~against~~to which we have incurred indebtedness to fund share repurchases and may in the future incur additional indebtedness to fund share repurchases. Under this program, share repurchases may be made at our discretion from time to time in open market transactions, privately negotiated transactions, or other means. This program does not obligate us ~~could~~to ~~materially~~repurchase ~~adversely~~any ~~affect~~specific dollar amount or to acquire any specific number of shares of our ~~business~~common stock. The actual timing, ~~results~~number and value of ~~operations~~shares repurchased under the program will be determined by management at its discretion and will depend on a number of factors, including the market price of the common stock, general market and economic conditions, applicable legal requirements and the Company’s efforts to increase Bitcoin per share of common stock. Our Board of Directors will review this program periodically and may authorize adjustments of its terms, as it may deem appropriate. As a result, there can be no guarantee around the timing or ~~financial~~volume ~~condition~~of our share repurchases. This program could affect the price of our common stock, increase volatility and diminish our cash reserves. This program may be suspended or terminated at any time and, even if fully implemented, may not be effective in enhancing long-term stockholder value or increase the Bitcoin per share of common stock.

~~The~~Risks ~~development,~~Related ~~production, marketing, sale and usage of our vehicles will expose us~~ to ~~significant~~Our ~~risks~~Bitcoin ~~associated with product liability claims. The powersports vehicles industry~~Strategy ~~in particular is vulnerable to significant product liability claims,~~ and ~~we may face inherent risk of exposure to claims in the event~~Holdings ~~our vehicles do not perform or are claimed to not have performed as expected. If our products are defective, malfunction or are used incorrectly~~ by our customers, it may result in bodily injury, property damage or other injury, including death, which could give rise to product liability claims against us. Any losses that we may suffer from any liability claims and the effect that any product liability litigation may have upon the brand image, reputation and marketability of our products could have a material adverse impact on our business, results of operations or financial condition. No assurance can be given that material product liability claims will not be made in the future against us, or that claims will not arise in the future in excess or outside of our insurance coverage and contractual indemnities with suppliers and manufacturers. We believe we have adequate product liability insurance; however, as we release new products and expand our sales channels, we may not be able to obtain adequate product liability insurance or the cost of doing so may be prohibitive. Adverse determinations of material product liability claims made against us could also harm our reputation and cause us to lose customers and could have a material adverse effect on our business, results of operations or financial condition.

InOur ~~the~~historical ~~first quarter of 2024, we entered into a distribution~~financial ~~agreement~~statements ~~with~~do ~~Super~~not ~~Sonic~~reflect ~~and~~the apotential ~~golf~~variability ~~cart~~in ~~supply~~earnings ~~agreement~~that ~~with~~we ~~Venom company. We~~ may beexperience ~~required~~in ~~to issue shares of our common stock, a warrant and provide Super Sonic~~ the ~~right~~future torelating ~~appoint a director~~ to our ~~board~~holding of ~~directors~~digital assets. ifAccordingly, ~~certain~~it ~~order thresholds are met and we~~ may be ~~required~~difficult to ~~issue~~evaluate ~~shares~~the ofCompany’s ~~our~~business ~~common~~and ~~stock~~future toprospects, ~~Venom~~and ifthe ~~certain~~Company ~~sales thresholds are met. We~~ may not ~~realize~~be ~~significant sales~~able to achieve or ~~gross~~maintain ~~margin~~profitability ~~from~~in ~~these~~any ~~agreements.~~given period.

InOur ~~January~~historical ~~2025, we signed an exclusive Distribution~~financial ~~Agreement~~statements ~~with~~do ~~Super~~not ~~Sonic~~fully toreflect ~~act~~the aspotential ~~their~~variability ~~exclusive~~in ~~distributor~~earnings ofthat ~~certain~~we ofmay ~~their~~experience ~~Products,~~ in the U.future S.from ~~Super~~holding ~~Sonic~~or ~~agreed~~selling ~~to recommend~~digital toassets. ~~all~~The ~~customers~~price ~~the sole use~~ of usdigital ~~for~~assets ~~all~~generally ~~Products. Super Sonic~~ has ~~the~~historically ~~right~~been tosubject ~~sell non-Volcon branded Products~~ to ~~other~~dramatic ~~customers and shall pay 5% of the order~~ price tofluctuations ~~us. Before the end of June 2025, we agreed to provide a procurement plan,~~ and ifis wehighly ~~fail to meet the minimum purchase requirement described in the procurement plan for two consecutive months, Super Sonic shall have the right to immediately terminate the Distribution Agreement~~volatile. ~~During the term of the Distribution Agreement, to the extent we sell any Volcon-branded products~~As ~~(the~~a ~~“Volcon Products”) that are similar to the Products~~result, wevolatility ~~agreed to provide Super Sonic with a right of first refusal to manufacture the Volcon Products. As more fully discussed~~ in ~~Note~~our 15earnings ~~of the accompanying financial statements, we~~ may be ~~required~~significantly ~~to issue~~more ~~our~~than ~~common~~what ~~stock,~~we aexperienced ~~warrant~~in toprior ~~purchase our common stock and the right to appoint a director to our board of directors if certain golf cart sales volumes are attained~~periods.

On February 24, 2025, we entered into a Supply Agreement with Venom to supply Venom with certain golf carts. The Supply Agreement allows Venom to purchase up to $3 million of golf carts with payment terms of 90 days from the date the golf carts are delivered to Venom’s facility and to the extent payment is received, Venom may order additional units up to $3 million. These golf carts will be purchased through a manufacturer specified in the Supply Agreement and we will receive consideration of the cost of the golf carts plus a three percent margin. We received an initial order from Venom for $2.4 million of golf carts. At the end of each calendar quarter, we agreed to issue Venom shares of Company common stock based on the number of golf carts purchased by Venom during the quarter as follows: for each 1,000 Units sold in 2025 by us to Venom, we shall issue Venom a number of shares equal to 1% of our outstanding shares of common stock (the “Venom Shares”) as of the last day of such quarter that the 1,000 Units were sold for no additional consideration. The requirement to issue the Venom Shares shall cease upon the purchase of 5,000 Units or June 30, 2026, whichever comes first. Notwithstanding the foregoing, to the extent the issuance of the Venom Shares shall require shareholder approval pursuant to the rules of the Nasdaq Stock Market, such issuances shall be subject to the receipt of such shareholder approval If, for any reason, we fail to issue such shares to Venom, Venom is entitled to compensatory damages in the amount equal to the value of the Venom Shares that should have been issued to Venom in that quarter (determined by the closing stock price on the last day of that quarter), and to immediately terminate the Supply Agreement.11

~~Although Super Sonic has an~~The ~~incentive~~concentration toof ~~refer~~our ~~customers~~Bitcoin toholdings ~~purchase~~enhances ~~units~~the ~~through~~risks usinherent ~~and Venom has incentives to place orders, there are no minimum order quantities~~ in ~~their~~our ~~agreements~~Bitcoin ~~therefore we may not realize significant sales from these agreements~~strategy.

12As of March 25, 2026, we held approximately 3,359 Bitcoin that were acquired at an aggregate purchase price of $395.4 million and we intend to purchase additional Bitcoin and increase our overall holdings of Bitcoin in the future by generating proceeds from the sale of our common stock or additional indebtedness. The concentration of our Bitcoin holdings limits the risk mitigation that we could achieve if we were to purchase a more diversified portfolio of assets, and the absence of diversification enhances the risks inherent in our Bitcoin strategy. Any future significant declines in the price of Bitcoin would have a more pronounced impact on our financial condition than if we used our cash to purchase a more diverse portfolio of assets.

The ~~markets~~Company’s repurchases inof ~~which~~its wecommon ~~operate~~stock ~~are in their infancy and highly competitive, and we~~ may not be successful in ~~competing~~increasing inNAV ~~these~~per ~~industries as the industry further develops~~share. ~~We currently face competition from new and established competitors and expect to face competition from others in the future, including competition from companies with new technology.~~

The EVCompany ~~market~~has isadopted a instrategy ~~its~~to ~~infancy,~~increase ~~and~~NAV weper ~~expect it~~share ~~will~~by ~~become~~repurchasing ~~more~~shares ~~competitive~~of inits ~~the~~common ~~future.~~stock ~~There~~when isits noshares ~~assurance~~of ~~that~~common ~~our~~stock ~~vehicles~~trade ~~will~~at bea ~~successful~~discount ~~in the respective markets in~~to ~~which~~NAV ~~they~~per ~~compete.~~share, ~~A significant~~ and ~~growing number of established and new companies have entered or are reported~~ to ~~have~~leverage ~~plans~~its tobalance ~~enter the EV market~~sheet, including ~~the~~reducing ~~off-road~~its ~~market~~Bitcoin ~~that~~holdings, ~~we intend~~ to ~~pursue.~~fund ~~Most~~such ofshare ~~our~~repurchases ~~current~~ and ~~potential competitors have significantly~~potentially ~~greater~~repay ~~financial,~~additional ~~technical,~~portions ~~manufacturing,~~of ~~marketing,~~outstanding ~~sales~~borrowings. ~~networks,~~Despite ~~and~~such ~~other~~efforts ~~resources than we do and may be able~~ to ~~devote~~increase ~~greater resources~~NAV toper ~~the design~~share, ~~development,~~the ~~manufacturing,~~Company’s ~~distribution,~~shares ~~promotion, sale and support~~ of ~~their products. Increased competition~~common ~~could~~stock ~~result~~currently intrade ~~lower~~at ~~vehicle~~a ~~sales,~~discount ~~price~~to ~~reductions,~~NAV ~~revenue~~per ~~shortfalls,~~share ~~loss of customers~~ and ~~loss~~the ofCompany’s ~~market~~future share, ~~which~~repurchases ~~could~~and ~~harm our~~other ~~business,~~efforts ~~prospects,~~to ~~financial~~increase ~~condition,~~NAV per ~~and~~share ~~operating~~may ~~results~~be unsuccessful.

WeOur indebtedness ~~may~~and ~~need~~liabilities could limit the cash flow available for our operations, expose us to ~~defend~~risks ~~ourselves~~that ~~against~~could ~~intellectual~~adversely ~~property infringement~~affect ~~claims~~our business, ~~which~~financial ~~may~~condition beand ~~time-consuming~~results of operations and ~~could~~impair ~~cause~~our usability to ~~incur~~satisfy ~~substantial~~our ~~costs~~obligations under our debt instruments when they come due.

~~Others,~~The ~~including~~Company ~~our~~has ~~competitors,~~incurred ~~may~~indebtedness ~~hold or~~pursuant ~~obtain~~to ~~patents,~~a ~~copyrights,~~number ~~trademarks~~of orborrowing ~~other~~arrangements ~~proprietary~~and ~~rights~~facilities. ~~that~~For ~~could prevent~~example, ~~limit~~in orOctober ~~interfere~~2025, ~~with~~the ~~our~~Company ~~ability~~entered tointo ~~make,~~the ~~use~~MLA, ~~develop,~~ ~~sell~~which orwas ~~market~~amended on ~~our~~February ~~products~~10, ~~and services~~2026, pursuant to which ~~could~~the ~~make~~Company itmay ~~more~~borrow ~~difficult~~an ~~for~~aggregate usprincipal toamount ~~operate~~of ~~our~~up ~~business~~to $100.0 ~~From~~million ~~time~~collateralized ~~to time,~~with ~~the~~a ~~holders~~security ofinterest ~~such~~in ~~intellectual~~the ~~property~~Bitcoin ~~rights~~that ~~may~~we ~~assert~~post ~~their~~as ~~rights~~collateral. ~~and~~On ~~may~~September ~~bring~~26, ~~suits~~2025, ~~alleging~~the ~~infringement~~Company orentered ~~misappropriation of~~into ~~such~~a ~~rights.~~Master InRepurchase ~~addition,~~Agreement and ifrelated wetransaction ~~are~~confirmation ~~determined~~(together, tothe ~~have~~“Repo ~~infringed~~Facility”) ~~upon~~with a third -party’s ~~intellectual property rights~~lender, weproviding ~~may~~for be$50.0 million ~~required~~in tocash ~~cease~~advances ~~making,~~to ~~selling~~the orCompany ~~incorporating~~in ~~certain~~exchange ~~components~~for orpurchased ~~intellectual~~securities ~~property~~in ~~into~~ the ~~products~~form weof ~~offer,~~Bitcoin. toAs ~~pay~~of ~~substantial damages~~March ~~and/or license royalties~~25, ~~to redesign our products~~2026, ~~and/or~~we tohave ~~establish~~$95.0 ~~and~~million outstanding ~~maintain~~under ~~alternative~~these ~~branding~~borrowing ~~for our products~~arrangements.

We ~~have~~may ~~registrations for the trademarks VOLCON, GRUNT, and GRUNT EVO in the U.S. We have~~ also ~~applied~~incur ~~to register~~ additional ~~trademarks –~~indebtedness ~~including~~to ~~VOLCON,~~meet ~~VOLCON~~future ~~BRAT,~~financing ~~EMPOWERING ADVENTURE, STAG, VOLCON STAG, VLCN, VLCN BRAT, VLCN HF1, VLCN MN1, VLCN FT1, VLCN HT1, VLCN SK1, and VLCN RV1 - in the U~~needs.~~S.,~~ ~~Canada,~~Our ~~New~~indebtedness ~~Zealand,~~could ~~Australia and certain additional countries in Latin America, and many of these trademarks are now allowed or registered in these countries. We~~ have ~~resolved~~significant ~~some~~negative ~~conflicts~~consequences ~~and potential conflicts that have arisen~~for ~~with regard to the use and registration of~~ our ~~trademarks~~security ~~through~~holders ~~coexistence agreements~~ and ~~the submission of arguments. We have received notice from an entity in Brazil who has opposed~~ our ~~applications for trademarks including the word VOLCON~~business, ~~but~~results weof ~~believe~~operations ~~the trademarks~~ and ~~the~~financial ~~goods~~condition ~~being~~by, ~~sold~~among ~~under~~other ~~them are not similar and there is no potential for confusion.~~things:

~~In addition,~~· weincreasing ~~have~~our ~~been~~vulnerability ~~transitioning~~to ~~from~~adverse ~~the~~economic ~~use~~and ofindustry ~~VOLCON~~conditions; to· ~~VLCN~~limiting inour ~~certain~~ability ~~countries, in some instances~~ to ~~avoid~~obtain ~~potential~~additional ~~conflicts with~~financing ~~marks~~on ~~that~~acceptable ~~are~~terms ~~similar~~or toat ~~VOLCON.~~all; ~~Our~~· ~~efforts~~requiring tothe ~~secure~~dedication ~~trademark~~of ~~registrations~~a ~~for~~substantial ~~VOLCON~~portion ~~and~~of ~~VLCN~~our ~~and~~cash ~~other~~flow ~~trademarks~~from ~~referenced above~~operations ~~are~~to ~~ongoing~~service ~~and~~our weindebtedness, ~~may~~which ~~encounter~~will ~~resistance~~reduce ~~from~~the ~~other~~amount ~~companies,~~of ~~particularly~~cash asavailable wefor ~~expand~~other ~~into~~purposes; ~~additional~~· ~~territories.~~limiting Ifour weflexibility ~~receive objections~~to ~~from~~plan ~~other~~for, ~~entities~~or ~~and~~react ~~are~~to, ~~unsuccessful~~changes in ~~obtaining~~our ~~agreements~~business; orand ~~otherwise~~· ~~resolving~~placing ~~the~~us ~~matters~~at ~~with~~a ~~these~~possible ~~entities,~~competitive ~~we will~~disadvantage ~~need~~with tocompetitors ~~consider~~that ~~the~~are ~~use~~less ofleveraged ~~different~~than ~~trademarks~~us ~~for~~or ~~our~~have ~~Company~~better ~~and~~access ~~our~~to ~~products~~capital.

InThe Company has in the ~~event~~past ~~that~~and wemay ~~were~~in ~~required~~the future use the net proceeds from any sales under its ATM program to ~~take~~purchase ~~one~~ or ~~more~~otherwise ~~such~~acquire ~~actions~~Bitcoin, ~~our~~the price ~~business,~~of ~~prospects,~~which ~~operating~~has ~~results~~been, and ~~financial~~will ~~condition~~likely ~~could~~continue to be, ~~materially~~highly ~~adversely affected~~volatile. InThe ~~addition, any~~Company’s ~~litigation~~operating orresults ~~claims,~~and ~~whether~~share orprice ~~not~~may ~~valid~~significantly fluctuate, ~~could~~including ~~result~~due into ~~substantial~~the ~~costs,~~highly ~~negative~~volatile ~~publicity~~nature ~~and~~of ~~diversion~~the price of ~~resources~~Bitcoin and ~~management attention~~erratic market movements.

~~Increased~~We ~~tariffs~~have orin athe ~~global~~past ~~trade~~and intend ~~war~~in ~~could~~the ~~increase~~future to use the net proceeds from future sales pursuant to our ~~costs~~ATM program, if any, when market conditions allow the Company to issue equity at a premium to NAV per share to purchase or otherwise acquire Bitcoin. Bitcoin generally is a highly volatile asset. In addition, Bitcoin does not pay interest or other returns and ~~could~~so ~~further~~the ~~increase~~ability to generate a return on investment from the ~~cost~~net proceeds of ~~our~~any ~~products,~~capital ~~which~~raises ~~could~~will ~~adversely~~depend ~~impact~~on whether there is appreciation in the ~~competitiveness~~value of Bitcoin following our ~~products~~purchases ~~and~~of Bitcoin with the net proceeds from such capital raisings. Future fluctuations in Bitcoin trading prices may result in our ~~financial~~converting Bitcoin into cash ~~results~~with a value substantially below what we paid for such Bitcoin.

The Brat, MN1s and HF1 depend on materials from China, namely batteries, which are among the main components of our vehicles. We cannot predict what actions may be taken with respect to tariffs or trade relations between the U.S. and China, what products may be subject to such actions, or what actions may be taken by China in retaliation. The adoption and expansion of trade restrictions, the occurrence of a trade war, or other governmental action related to tariffs, trade agreements or related policies have the potential to adversely impact our supply chain and access to equipment, our costs and our product margins. Any such cost increases or decreases in availability could slow our growth and cause our financial results and operational metrics to suffer.12

13Bitcoin 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.

WeBitcoin ~~primarily~~and ~~sell~~other ~~our~~digital assets ~~vehicles~~are relatively novel and ~~accessories~~are ~~through~~subject ato ~~network~~ significant uncertainty, which could adversely impact their price. The application of ~~third~~state and ~~parties,~~federal securities laws and ~~there~~other laws and regulations to digital assets is nounclear ~~assurance~~in certain respects, and it is possible that weregulators in ~~will~~the beUnited ~~able~~States toor ~~successfully~~foreign ~~build~~countries ~~out~~may ~~this~~interpret ~~network~~or apply existing laws and regulations in a manner that adversely affects the price of Bitcoin or other digital assets.

AsThe U.S. federal government, states, regulatory agencies, and foreign countries may also enact new laws and regulations, or pursue regulatory, legislative, enforcement or judicial actions, that could materially impact the price of ~~March~~Bitcoin 25or the ability of individuals or institutions such as us to own or transfer Bitcoin. For example, ~~2025~~the U.S. executive branch, weSEC, the European Union’s Markets in Crypto Assets Regulation, among others, have ~~117~~been active ~~powersports dealers~~in recent years, 8and ~~golf~~in ~~cart~~the ~~dealers~~U.K., the Financial Services and 13Markets ~~bicycle~~Act ~~dealers~~2023, or FSMA 2023 became law. It is not possible to ~~sell~~predict ~~our~~whether, ~~vehicles~~or ~~and~~when, ~~accessories~~any of these developments will lead to Congress granting additional authorities to the SEC, Commodity Futures Trading Commission (“CFTC”), or other regulators, or whether, or when, any other federal, state or foreign legislative bodies will take any similar actions. WeIt ~~have~~is ~~hired~~also anot ~~new~~possible ~~sales~~to ~~team~~predict inthe ~~2024~~nature of any such additional authorities, how additional legislation or regulatory oversight might impact the ability of digital asset markets to ~~continue~~function or the willingness of financial and other institutions to ~~expand~~continue ~~this~~to ~~network~~provide services to the digital assets industry, nor how any new regulations or changes to existing regulations might impact the value of ~~dealers~~digital assets generally and Bitcoin specifically. The consequences of increased regulation of digital assets and digital asset activities could adversely affect the market price of Bitcoin and in turn adversely affect the market price of our common stock.

~~For~~Moreover, the ~~Grunt~~risks ~~EVO,~~of ~~MN1s and HF1s, we are required~~engaging ~~to comply with manufacture/dealer laws~~ in ~~states~~a ~~which~~digital ~~have~~asset ~~dealer~~treasury ~~regulations~~strategy inare ~~which~~relatively wenovel ~~sell~~and ~~our~~have ~~vehicles~~created, ~~through dealers. Dealer laws vary by state~~ and ~~although~~could ~~our~~continue ~~dealer agreements are intended~~ to ~~comply~~create ~~with~~complications ~~these~~due ~~laws, we may be required~~ to ~~amend~~the ~~our agreements if~~lack ~~these~~of ~~laws~~experience ~~are~~that ~~changed~~third orparties ~~are~~have ~~challenged~~with bycompanies ~~dealers~~engaging ~~or other OEMs. Our dealer and distribution agreements are generally short-term~~ in ~~nature~~ ~~and~~such ~~the~~a ~~dealer~~strategy, ~~distributor~~such oras weincreased ~~may~~costs ~~cancel~~of ~~these~~director ~~agreements under certain circumstances~~ and weofficer ~~may~~liability insurance ~~not be able to retain~~ or ~~expand~~ the ~~scope~~potential ofinability ~~our~~to ~~dealer~~obtain ~~and/or~~such ~~distribution~~coverage ~~network~~on acceptable terms in the future.

WeThe ~~have~~growth ~~entered~~of ~~into~~the andigital assets ~~accounts~~industry ~~receivable~~in ~~factoring arrangement~~general, toand ~~allow~~ the ~~Company~~use ~~the~~and ~~ability~~acceptance toof ~~generate~~Bitcoin ~~cash~~in ~~for~~particular, ~~working~~may ~~capital.~~also Weimpact ~~will~~the ~~incur~~price ~~financing~~of ~~costs~~Bitcoin ~~under~~and ~~this~~is ~~arrangement. On~~subject to a ~~longer~~high ~~term~~degree ~~basis~~of weuncertainty. ~~intend~~The topace ~~obtain~~of aworldwide ~~“flooring”~~growth ~~financing~~in ~~arrangement~~the toadoption ~~allow~~and ~~financing~~use ~~sources~~of Bitcoin may depend, for ~~our~~instance, ~~dealers~~on topublic familiarity ~~purchase~~with ~~vehicle~~digital ~~inventory.~~assets, Weease ~~may~~of ~~incur~~buying, ~~costs~~accessing toor ~~incentivize~~gaining ~~dealers~~exposure to ~~buy~~Bitcoin, ~~our~~institutional ~~vehicles~~demand ~~including~~for ~~free~~Bitcoin ~~dealer~~as ~~financing~~an ~~for~~investment ~~certain~~asset, ~~periods~~the orparticipation ~~based~~of ontraditional ~~purchase~~financial ~~volumes,~~institutions ~~interest~~in ~~rate~~the ~~buydowns~~digital onassets ~~the~~industry, ~~dealers’~~consumer ~~customer~~demand ~~financing~~for toBitcoin ~~incentivize~~as ~~their~~a ~~customers’ purchase~~means of ~~our~~payment, and ~~vehicles.~~the ~~Because~~availability weand ~~are~~popularity aof ~~young~~alternatives ~~company~~to ~~with~~Bitcoin. ~~limited~~Even ~~sales~~if ~~history~~growth ~~and~~in ~~recurring~~Bitcoin ~~losses,~~adoption weoccurs ~~may~~in ~~not~~the benear ~~able~~or ~~to obtain~~medium-term, ~~these~~there ~~inventory~~is ~~financing~~no ~~sources~~assurance ~~which~~that ~~may~~Bitcoin ~~result~~usage inwill ~~dealers~~continue ~~not wanting~~ to ~~sell~~grow ~~our~~over ~~vehicles~~the long-term.

InBecause Bitcoin has no physical existence beyond the ~~U.S.~~record of transactions on the Bitcoin blockchain, wea ~~began~~variety of technical factors related to ~~sell~~the Bitcoin blockchain could also impact the ~~Brat~~price onof ~~our~~Bitcoin. ~~website~~For example, malicious attacks by miners, inadequate mining fees to incentivize validating of inBitcoin ~~2023~~transactions, hard “forks” of the Bitcoin blockchain into multiple blockchains, and advances in ~~addition~~digital tocomputing, algebraic ~~our~~geometry, ~~dealer~~and ~~network~~quantum computing could undercut the integrity of the Bitcoin blockchain and ~~bicycle~~negatively ~~dealers.~~affect ~~Customers~~the ~~can~~price ~~request~~of ~~that~~Bitcoin. The ~~these~~liquidity ~~vehicles~~of Bitcoin may also be ~~delivered~~reduced and damage to athe ~~local~~public ~~Volcon~~perception of Bitcoin may occur, if financial institutions were ~~dealer~~to deny or ~~directly~~limit banking services to abusinesses ~~location~~that ~~they~~hold ~~can~~Bitcoin, ~~designate~~provide ~~within~~Bitcoin-related services or accept Bitcoin as payment, which could also decrease the ~~continental~~price Uof Bitcoin.S. WeSimilarly, dothe ~~not~~open-source ~~intend~~nature toof ~~compete~~the ~~with~~Bitcoin ~~our~~blockchain ~~dealers~~means ~~who~~the ~~sell~~contributors and developers ~~these~~of ~~products~~the ~~and~~Bitcoin weblockchain ~~provide~~are ~~price~~generally ~~protection~~not todirectly ~~them~~compensated for their contributions in maintaining and developing the ~~event~~blockchain, and weany ~~are~~failure ~~selling~~to ~~these~~properly ~~products~~monitor ~~below~~and upgrade the ~~retail~~Bitcoin ~~price~~blockchain ~~they~~could ~~are~~adversely ~~selling them~~affect ~~for~~the inBitcoin ~~order~~blockchain ~~for~~and ~~them~~negatively toaffect the ~~maintain~~price ~~their~~of ~~margin~~Bitcoin.

WeThe ~~also~~liquidity ~~sell~~of ~~our two-wheeled vehicles and accessories~~Bitcoin ~~internationally~~may ~~through~~also ~~international~~be ~~distributors.~~impacted Asto ofthe ~~March~~extent ~~25,~~that ~~2025,~~changes ~~we have signed distribution agreements with six distributors~~ in ~~Latin~~applicable ~~America,~~laws and ~~individual~~regulatory ~~distributor~~requirements ~~agreements~~negatively ~~with~~impact ~~distributors in New Zealand,~~ the ~~Caribbean~~ability ~~region,~~of ~~Australia~~ exchanges and ~~Japan.~~trading ~~We are~~venues ~~relying on these distributors~~ to ~~market,~~provide ~~promote,~~services ~~sell~~for ~~and~~Bitcoin ~~service our vehicles~~ and ~~sell accessories in their designated countries/territories. We plan to expand this distributor network to~~ other ~~countries~~digital ~~as well as sell our four-wheel products to these distributors assuming that our products can meet the regulatory requirements of these countries~~assets.

We believe our success will be highly dependent on our ability to build out this network in the major markets in which we intend to compete for customers, and to maintain this network in the future. Our business model is dependent not only on our ability to create the foregoing network, but also on the commitment and motivation of these third parties to promote our brand and products.13

~~Orders~~Due ~~for~~to ~~vehicles~~the ~~are~~unregulated nature ~~cancellable~~ and ~~there~~lack ~~can~~of betransparency nosurrounding ~~assurance~~the operations of many digital asset trading venues, digital asset trading venues may experience ~~that~~greater ~~all~~fraud, ~~orders~~security ~~will~~failures or regulatory or operational problems than trading venues for more established asset classes, which may result in ~~revenue~~a ~~being~~loss ~~recognized~~of confidence in digital asset trading venues and adversely affect the value of digital assets, and the Company’s financial position, operations and prospects.

~~Orders~~Digital ~~from~~asset Utrading venues are relatively new and, in many cases, unregulated.S. ~~dealers~~Furthermore, ~~who~~there are ~~eligible~~many ~~for~~digital ~~credit~~ asset trading venues that do not ~~require~~provide anthe ~~upfront~~public with ~~payment~~significant ~~and~~information ~~are~~regarding ~~cancellable~~their ~~prior~~ownership tostructure, ~~shipment~~management ~~with~~teams, nocorporate ~~penalty~~practices and regulatory compliance. ~~Most~~As a ~~importers~~result, ~~must~~the ~~pay~~marketplace ~~for~~may ~~orders~~lose confidence in ~~advance~~digital asset trading venues, including prominent exchanges that handle a significant volume of ~~shipment~~such ~~but~~trading ~~can~~and/or ~~cancel~~are ansubject ~~order~~to ~~prior~~regulatory tooversight, ~~shipment~~in ~~and~~the ~~receive~~event one or more digital asset trading venues cease or pause for a ~~refund~~prolonged ~~without~~period ~~penalty~~the trading of digital assets, or experience fraud, significant volumes of withdrawal, security failures or operational problems.

~~The~~Negative ~~estimated~~perception, ~~fulfillment~~a lack of ~~all~~stability ~~orders~~in wethe ~~have~~broader digital asset markets and the closure, temporary shutdown or operational disruption of digital asset trading ~~received~~venues, ~~assumes~~lending ~~our~~institutions, ~~third~~institutional ~~party~~investors, ~~manufacturers~~institutional ~~can~~miners, ~~successfully~~custodians, ~~increase~~or ~~their~~other ~~production~~major ~~capacity~~participants in the ~~future~~digital asset ecosystem, ofdue ~~which~~to ~~there~~fraud, isbusiness nofailure, cybersecurity events, government-mandated regulation, bankruptcy, or for any other reason, ~~assurance~~may result in a decline in confidence in digital assets and the broader digital asset ecosystem and greater volatility in the price of digital assets. IfThe weprice ~~are~~of ~~unable~~our tolisted ~~satisfy~~securities ~~pending~~may ~~orders~~be onaffected aby ~~timely~~the ~~basis~~value of our future digital asset holdings, ~~customers~~and ~~may~~the ~~cancel~~failure of ~~their~~a ~~orders~~major participant in the ecosystem could have a material adverse effect on the market price of our listed securities.

InDigital ~~some~~asset ~~cases, there will be significant time between~~holdings aare ~~customer~~less ~~ordering~~liquid athan ~~vehicle~~cash and ~~the~~cash ~~eventual~~equivalents ~~delivery~~and ofmay ~~the~~not ~~vehicle,~~be ~~which~~able ~~creates~~to aserve ~~heightened~~as ~~risk that~~ a ~~customer~~source ~~that~~of ~~ordered~~liquidity ~~a vehicle~~for ~~may~~us ~~change~~to ~~his or her mind and not ultimately take delivery of~~ the ~~vehicle,~~same ~~and~~extent ~~accessories,~~as ~~if purchased, in their order. Any~~cash ~~cancellations could harm our financial condition, business, prospects~~ and ~~operating~~cash ~~results~~equivalents.

14Historically, the digital asset market has been characterized by significant volatility in price, limited liquidity and trading volumes compared to sovereign currencies markets, relative anonymity, a developing regulatory landscape, potential susceptibility to market abuse and manipulation, compliance and internal control failures at exchanges, and various other risks inherent in its entirely electronic, virtual form and decentralized network. During times of market instability, we may not be able to sell our digital assets at favorable prices or at all. As a result, digital asset holdings may not be able to serve as a source of liquidity for us to the same extent as cash and cash equivalents. Further, digital assets we hold with our custodians and transact with our trade execution partners does not enjoy the same protections as are available to cash or securities deposited with or transacted by institutions subject to regulation by the Federal Deposit Insurance Corporation or the Securities Investor Protection Corporation. Additionally, we may be unable to enter into term loans or other capital raising transactions collateralized by our unencumbered digital assets or otherwise generate funds using our digital asset holdings, including in particular during times of market instability or when the price of digital assets has declined significantly. If we are unable to sell our digital assets, enter into additional capital raising transactions, including capital raising transactions using Bitcoin as collateral, or otherwise generate funds using our Bitcoin holdings, or if we are forced to sell our digital assets at a significant loss, in order to meet our working capital requirements, our business and financial condition could be negatively impacted.

WeThe ~~may~~Company befaces risks ~~unable~~relating to ~~improve~~the custody of its digital assets. If we or our ~~existing~~third-party ~~products~~service ~~and~~providers ~~develop~~experience a security breach or cyberattack and ~~market~~unauthorized ~~new~~parties ~~products~~obtain ~~that~~access ~~respond~~ to ~~customer~~our ~~needs~~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 ~~preferences~~our financial condition and ~~achieve~~results ~~market~~of ~~acceptance~~operations could be materially adversely affected.

We ~~may~~expect ~~not~~our beprimary ~~able~~counterparty risk towith ~~compete~~respect asto ~~effectively with~~ our ~~competitors,~~Bitcoin ~~and~~will ~~ultimately~~be ~~satisfy~~custodian ~~the~~performance ~~needs~~obligations ~~and~~under ~~preferences~~the ofcustody ~~our~~arrangements ~~customers,~~we ~~unless~~enter weinto. ~~can~~A ~~successfully~~series ~~enhance~~of ~~current~~recent high-profile ~~products~~bankruptcies, ~~develop~~ ~~new~~closures, ~~innovative products~~liquidations, ~~maintain~~regulatory orenforcement ~~lower~~actions ~~product costs~~ and ~~distinguish~~other ~~our~~events ~~products~~relating ~~from~~to ~~our~~companies ~~competitors’~~operating ~~products through~~in ~~innovation~~the ~~and~~digital ~~design.~~asset ~~Product development requires significant financial~~industry, ~~technological,~~the ~~and~~closure ~~other~~or ~~resources.~~liquidation ~~There~~of ~~can~~certain befinancial noinstitutions ~~assurance~~ that weprovided ~~will~~lending beand ~~able~~other services to ~~incur~~the digital aassets ~~level~~industry, ofSEC ~~investment~~enforcement inactions ~~research~~against ~~and~~other ~~development~~providers, ~~that~~or ~~will~~placement beinto ~~sufficient~~receivership toor ~~successfully~~civil ~~make~~fraud uslawsuit ~~competitive~~against indigital ~~product~~asset ~~innovation~~industry ~~and~~participants ~~design.~~have Inhighlighted ~~addition,~~the ~~even~~perceived ifand weactual ~~are~~counterparty ~~able~~risk applicable to ~~successfully~~digital ~~enhance~~asset ~~existing products~~ ownership and ~~develop~~trading. ~~new~~Legal ~~products, there~~precedent iscreated noin ~~guarantee~~these ~~that~~bankruptcy ~~the~~and ~~markets~~other ~~for~~proceedings ~~our~~may ~~existing~~increase ~~products~~the ~~and~~risk ~~new~~of ~~products~~future ~~will~~rulings ~~progress~~adverse asto ~~anticipated.~~our interests Ifin ~~any of~~ the ~~markets in~~event ~~which~~one ~~our~~or ~~existing~~more ~~products~~of ~~compete~~our docustodians ~~not~~becomes ~~develop~~a asdebtor ~~expected,~~in ~~our~~a ~~business,~~bankruptcy ~~results~~case ofor ~~operations~~is orthe ~~financial~~subject ~~condition~~of ~~could~~other beliquidation, insolvency ~~materially~~or ~~adversely~~similar ~~affected~~proceedings.

We have limited experience servicing our vehicles, we intend to primarily utilize third parties to service our vehicles, and if we are unable to address the service requirements of our customers, our business could be materially and adversely affected.14

WeWhile ~~have~~our ~~limited~~custodians ~~experience~~are subject ~~servicing~~to regulatory regimes intended to protect customers in the event of a custodial bankruptcy, receivership or ~~repairing~~similar insolvency ~~our~~proceeding, ~~vehicles~~no ~~and~~assurance wecan ~~are~~be ~~developing~~provided that our ~~service~~custodially-held ~~manuals~~Bitcoin ~~and~~will ~~service~~not ~~procedures~~become topart ~~repair~~of ~~our~~the ~~vehicles.~~custodian’s Weinsolvency ~~are~~estate if inone ~~the~~or ~~process~~more of ~~developing~~our custodians enters bankruptcy, receivership or similar insolvency proceedings. Additionally, if we pursue any strategies ato ~~network~~create ofincome ~~service~~streams ~~providers~~or ~~who~~otherwise ~~will~~generate ~~also~~funds beusing our ~~dealers~~Bitcoin asholdings, ~~many~~we ~~states~~would ~~require~~become ~~that~~subject ~~only~~to ~~dealers~~additional ~~can~~counterparty ~~provide~~risks. We ~~warranty~~need to carefully evaluate market conditions, including price volatility as well as service onprovider ~~vehicles.~~terms and market reputations and ~~For~~performance, among others, prior to implementing any such strategy, all of which could affect our ~~international~~ability ~~distributors~~to successfully implement and execute on any such future strategy. These risks, ~~they~~along ~~will~~with beany ~~service~~significant ~~providers~~non-performance by counterparties, including in particular the custodian or ~~will~~custodians ~~identify~~with ~~third~~which ~~parties~~we ~~who~~custody ~~will~~substantially beall ~~service~~of ~~providers~~our toBitcoin, ~~service~~ could have a material adverse effect on our ~~vehicles~~business, prospects, financial condition, and operating results.

~~Servicing~~The ~~electric vehicles is different from servicing~~irreversibility ~~vehicles~~of ~~with~~digital ~~internal~~asset ~~combustion~~transactions ~~engines~~exposes ~~and~~us ~~requires specialized skills, including high voltage training and servicing techniques. If we are unable~~ to ~~successfully~~risks ~~address the service requirements~~ of ~~our customers~~theft, ~~our~~loss ~~business~~ and ~~prospects~~human ~~will be materially and adversely affected. If we are unable to successfully address the servicing requirements of our customers or establish a market perception that we maintain high-quality support~~error, ~~our~~which ~~reputation~~ could benegatively ~~harmed,~~impact ~~we may be subject to claims from~~ our ~~customers, and our~~ business~~, results of operations or financial condition may be materially and adversely affected~~.

~~Significant~~Digital ~~product~~asset ~~repair~~transactions are not, from an administrative perspective, reversible without the consent and~~/or~~ ~~replacement~~active ~~due~~participation toof ~~product warranty~~the ~~claims~~recipient of the transaction or, ~~product~~in ~~recalls~~theory, ~~could~~control ~~have~~or consent of a ~~material~~majority ~~adverse~~of ~~impact~~the processing power on ~~our~~that ~~business~~digital asset network. Once a transaction has been verified and recorded in a block that is added to the blockchain, ~~results~~an incorrect transfer of ~~operations~~digital assets or ~~financial~~a ~~condition~~theft of digital assets generally will not be reversible, and we may not be capable of seeking compensation for any such transfer or theft.

WeAlthough ~~provide~~we aplan ~~one-year~~to ~~warranty against defects~~regularly ~~for~~transfer ~~the~~digital ~~Grunt~~assets ~~EVO~~to ~~and~~or ~~Brat~~from ~~and~~vendors, aconsultants ~~two-year warranty on the battery. We provide warranties on the HF1~~ and ~~MN1~~services ~~products~~providers, ~~which~~it ~~have~~is ~~varying warranty~~possible ~~terms depending on the part~~that, ~~but~~through ~~are~~computer ~~generally~~or ~~from~~human ~~6 months up to 2 years. The manufacturers of the HF1 and MN1 products provide~~error, ~~the~~or ~~warranty~~through ~~and~~theft weor ~~are~~criminal ~~reimbursed~~action, ~~for~~such ~~warranty~~assets ~~claims~~could ~~provided~~be wetransferred ~~obtain~~in ~~approval~~incorrect ofamounts ~~the~~or ~~claim~~to ~~from~~unauthorized ~~the~~third ~~manufacturer~~parties.

~~Our~~To ~~warranty~~the ~~will~~extent ~~generally~~we ~~require~~are us unable to ~~repair or~~seek ~~replace~~a ~~defective~~corrective ~~products~~transaction ~~during such warranty periods at no cost~~ to ~~the~~identify ~~consumer. Some of~~ the ~~parts~~third-party ~~are~~which ~~warrantied~~has byreceived ~~the~~our ~~part~~digital ~~manufacturer where~~assets ~~others~~through ~~are~~error ~~not.~~or Wetheft, ~~record~~we ~~provisions~~will ~~based~~be unable onto anrevert ~~estimate~~or ofotherwise ~~product~~recover ~~warranty claims, but there is~~ the ~~possibility~~impacted ~~that~~digital ~~actual~~assets, ~~claims may~~and ~~exceed~~any ~~these~~such ~~provisions~~loss ~~and~~could ~~therefore~~adversely ~~negatively~~affect ~~impact~~ our business, results of operations and of financial condition.

In addition, we may in the future be required to make product recalls or could be held liable in the event that some of our products do not meet safety standards or statutory requirements on product safety, even if the defects related to any such recall or liability are not covered by our limited warranty. The ~~repair~~lack ~~and replacement costs that we could incur in connection with a recall could have a material adverse effect on our business, results~~ of ~~operations~~legal orrecourse ~~financial condition. Product recalls could also harm our reputation~~ and ~~cause~~insurance usfor todigital ~~lose~~assets ~~customers,~~increases ~~particularly if recalls cause consumers to question~~ the ~~safety~~risk ~~or reliability~~ of ~~our~~total ~~products,~~loss ~~which~~in ~~could~~the ~~have~~event ~~a material adverse effect on our business, results~~ of ~~operations~~ theft or ~~financial condition~~destruction.

15Digital assets that we acquire will not be insured against theft, loss or destruction. If an event occurs where we lose our digital assets, whether due to cyberattacks, fraud or other malicious activities, we may not have any viable legal recourse or ability to recover the lost assets. Unlike funds held in insured banking institutions, our digital assets are not protected by the Federal Deposit Insurance Corporation or the Securities Investor Protection Corporation. If our digital assets are lost under circumstances that render another party liable, there is no guarantee that the responsible party will have the financial resources to compensate us. As a result, we and our stockholders could face significant financial losses.

~~Our~~We ~~success~~are issubject ~~dependent~~to significant ~~upon~~competition in the ~~success~~growing ofdigital ~~the~~asset ~~off-road vehicle~~ industry and ~~upon~~the ~~consumers~~Company’s ~~willingness~~business, tooperating ~~adopt~~results, ~~electric~~and ~~vehicles~~financial condition may be adversely affected if the Company is unable to compete effectively.

~~Our~~The ~~success~~Company isoperates ~~dependent~~in a ~~upon~~competitive ~~the~~environment ~~success~~and ofcompetes ~~the off-road~~against ~~vehicle~~other ~~industry~~companies ~~as a whole,~~ and inother ~~particular~~entities ~~upon~~with ~~consumers’~~similar ~~willingness~~strategies, toincluding ~~adopt~~companies ~~electric~~with ~~vehicles as an alternative~~significant toholdings ~~combustion~~in ~~vehicles.~~Bitcoin Ifand ~~the~~other ~~market~~digital ~~for~~assets, ~~electric~~and ~~off-road vehicles does not develop at~~ the ~~rate~~Company’s ~~or in the manner or to the extent that we expect~~business, ~~our~~operating ~~business~~results, ~~results~~and ~~of operations or~~ financial condition may be adversely ~~materially~~ affected. ~~The~~if ~~market~~the ~~for~~Company ~~electric vehicles~~ is ~~relatively~~unable ~~new,~~to ~~rapidly~~compete evolving, characterized by rapidly changing technologies, price competition, additional competitors, evolving government regulation and industry standard, frequent new vehicle announcements and changing consumer demands and behaviorseffectively. ~~Factors that may influence the adoption of electric vehicles include:~~

· perceptions about electric vehicle quality, safety, design, performance and costs; · the limited range over which electric vehicles may be driven on a single battery charge, and the decline of an electric vehicle’s range resulting from deterioration over time in the battery’s ability to hold a charge; · the ability to easily charge electric vehicles; · volatility in the cost of oil and gasoline, and improvements in the fuel economy of combustion engines; and · the environmental consciousness of off-road vehicles customers.15

The ~~influence~~emergence or growth of ~~any~~other ofdigital ~~the~~assets, ~~factors~~including ~~described~~those ~~above may~~with ~~cause~~significant ~~our~~private ~~customers~~or ~~not~~public tosector ~~purchase~~backing, ~~our~~including ~~vehicles~~by ~~and~~governments, ~~may~~consortiums ~~otherwise~~or ~~materially~~financial institutions, ~~adversely~~could ~~affect~~have ~~our~~a ~~business,~~negative ~~results~~impact on the price of ~~operations or~~Bitcoin ~~financial~~and ~~condition~~adversely affect the Company’s securities.

~~Higher~~As ~~inflation~~a ~~and~~result ~~interest~~of ~~rates~~our Bitcoin strategy, ~~volatile~~our assets are concentrated in Bitcoin holdings. Accordingly, the emergence or growth of digital assets other than Bitcoin may have a material adverse effect on our financial ~~markets~~condition. As of December 31, 2025, Bitcoin was the largest digital asset by market capitalization. ~~unemployment~~However, there are numerous alternative digital assets and ~~consumer~~many ~~confidence~~entities, ~~may~~including ~~cause~~consortiums ~~consumers~~and tofinancial ~~defer~~institutions, are researching and investing resources into private or permissioned blockchain platforms or digital assets that do not ~~purchase~~use ~~our~~proof-of-work ~~products~~mining like the Bitcoin network. For example, in late 2022, the Ethereum network transitioned to a “proof-of-stake” mechanism for validating transactions that requires significantly less computing power than proof-of-work mining. The Ethereum network has completed another major update since then and may undertake additional updates in the future. If the mechanisms for validating transactions in Ethereum and other alternative digital assets are perceived as superior to proof-of-work mining, those digital assets could gain market share relative to Bitcoin.

~~Globally~~Other ~~inflation~~alternative ~~and~~digital assets ~~interest~~that ~~rates~~compete ~~rose~~with Bitcoin in ~~2023~~certain ways include “stablecoins,” which are designed to maintain a constant price related ~~and~~to ~~remained~~or atbased on some other asset or traditional currency because of, for instance, their issuers’ promise to hold high-quality liquid assets (such ~~levels~~as inU.S. ~~2024~~dollar deposits and ~~could~~short-term ~~rise~~U.S. ortreasury ~~remain~~securities) atequal ~~current~~to ~~levels~~the total value of stablecoins in circulation. In July 2025, the ~~future.~~“GENIUS ~~Our~~Act” ~~vehicles~~was ~~represent~~passed, which established a ~~discretionary~~federal ~~purchase.~~framework for “payment stablecoins,” treating ~~Many~~them ~~consumers~~as ~~finance~~payment ~~the~~systems, ~~purchase~~not ofsecurities, anand ~~off~~mandating fiat-~~road~~backed ~~vehicle~~reserves, monthly disclosures, anti-money laundering safeguards, and similar ~~higher~~measures. ~~interest~~Stablecoins ~~rates~~have ~~will~~grown ~~result~~rapidly inas ~~higher~~an ~~monthly~~alternative ~~payments~~to ~~which~~Bitcoin ~~some~~and other digital assets as a medium of exchange and store ~~consumers~~of ~~may~~value, ~~not~~particularly ~~qualify~~on ~~for~~digital orasset ~~consumers~~trading ~~may~~platforms, ~~elect~~and their use as an alternative to ~~defer~~Bitcoin ~~their~~could ~~purchase~~expand ~~until~~further ~~interest~~if ~~rates~~the ~~decline~~GENIUS Act is enacted as law. As of June 30, 2025, two of the seven largest digital assets by market capitalization were U.S. dollar-pegged stablecoins.

~~In addition~~Additionally, ~~global~~central ~~financial~~banks in ~~markets~~some ~~overall~~countries have ~~seen~~ ~~significant~~started ~~volatility~~to ~~since~~introduce ~~2023~~digital ~~and~~forms ~~could~~of ~~continue~~legal totender. ~~experience~~For ~~volatility~~example, China’s central bank digital currency (“CBDC”) project was made available to consumers in ~~the~~January ~~future~~2022, and ~~could~~governments ~~decline.~~including Athe ~~number~~United ofStates, ~~large~~the United Kingdom, the European ~~companies~~Union, and Israel have ~~announced~~been ~~layoffs~~discussing the potential creation of new CBDCs. ~~Public~~Whether ~~companies~~or not they incorporate blockchain or similar technology, CBDCs, as legal tender in the EVissuing ~~sector~~jurisdiction, ~~have~~could ~~seen~~also ~~significant~~compete ~~declines~~with, or replace, Bitcoin and ~~volatility.~~other ~~Consumer~~digital ~~confidence~~assets as a medium inof ~~the~~exchange Uor store of value.S. ~~has~~As ~~declined~~a result, the emergence or growth of these or other digital assets could cause the market price of Bitcoin to decrease, which could have a material adverse effect on our business, prospects, financial condition, and operating results.

The availability ~~influence~~ of ~~any~~spot ofexchange-traded ~~the~~products ~~factors~~for ~~described~~Bitcoin ~~above may~~and ~~cause~~other ~~our~~digital ~~customers~~assets ~~not~~may toadversely ~~purchase~~affect ~~our~~the ~~vehicles~~market ~~and~~price ~~may~~of ~~otherwise~~our ~~materially~~common stock ~~adversely~~and ~~affect~~ our ~~business,~~ability ~~results~~to ofexecute ~~operations or~~our ~~financial~~Bitcoin ~~condition~~strategy.

WeInvestors in ~~currently~~the ~~operate~~United inStates annow ~~area~~have ofmultiple ~~the~~means ~~vehicle~~to ~~sector~~gain direct exposure to Bitcoin through traditional investment channels, including through spot Bitcoin exchange-traded products (“ETPs”) that iswere approved by the SEC for listing and trading on U.S. national securities ~~not~~exchanges ~~heavily~~beginning ~~regulated~~in January 2024. To the extent investors view our common stock as providing exposure to Bitcoin, ~~and~~it ~~future~~is ~~changes~~possible that any premium in ~~government~~the ~~oversight~~value of our common stock relative to the value of our Bitcoin holdings may ~~subject~~have usbeen attributable, in part, to ~~increased~~the prior ~~regulations~~scarcity of traditional investment vehicles providing investment exposure to Bitcoin, ~~which~~and that such premium may ~~increase~~decline ~~our~~due ~~expenses~~to investors now having a greater range of options to gain exposure to Bitcoin.

~~The~~Although we ~~off-road~~are an operating company and we believe we offer a different value proposition than a Bitcoin investment vehicle ~~market~~such isas ~~not~~a ~~heavily~~spot ~~regulated,~~Bitcoin ETP, investors may nevertheless view our common stock as ~~compared~~an alternative to ~~on-road~~an ~~vehicles,~~investment in a spot Bitcoin ETP and, aschoose ~~such,~~to wepurchase shares ~~are~~of ~~not~~a ~~currently~~spot ~~subject~~Bitcoin toETP ~~significant~~instead ~~government~~of ~~regulations~~our common stock. WeInvestors ~~expect~~may todo ~~develop~~so for a variety of reasons, including if they believe that ~~and~~spot ~~sell~~Bitcoin ~~on-road~~ETPs (offer “pure play” exposure to Bitcoin that is generally not onsubject ~~highway)~~to ~~and~~federal ~~off-road~~income ~~electric~~tax ~~motorcycles~~at inthe ~~2025.~~entity level ~~There~~as we are, ~~significant~~or ~~regulations~~the ~~that~~other ~~must~~risk befactors ~~met~~applicable ~~for~~to an operating a ~~motorcycle~~business ~~on-road~~such as ours. ~~There~~Additionally, isunlike nospot ~~guarantee~~Bitcoin ~~that~~ETPs, we (i) ~~will~~do benot ~~able~~seek for our shares of common stock to ~~meet~~exactly ~~these~~and ~~regulations.~~consistently Intrack ~~addition~~the value of the underlying Bitcoin we hold before payment of expenses and liabilities, (ii) do not benefit from various exemptions and relief under the ~~MN1~~Exchange isAct, ~~designed~~including Regulation M, and other securities laws, which enable ETPs to becontinuously ~~operated~~align the value of their shares to the price of the underlying assets they hold ~~on-road~~through share creation and redemption, and (iii) are a Delaware corporation rather than a statutory trust and do not onoperate ~~highway)~~pursuant to a trust agreement that would require us to pursue one or more stated investment objectives.

There are state and local regulations governing the operation of vehicles like the MN1 that vary from state to state and municipality to municipality. As an example, certain states only allow a top speed of 15 miles per hour whereas Texas allows a top speed of 25 miles per hour. There are also regulations where these types of vehicles may only be allowed to be operated on a road with a speed limit of 35 miles per hour or less.16

AsFurthermore, on ~~this~~May ~~market~~23, ~~develops~~2024, the SEC approved rule changes permitting the listing and ~~grows~~trading of spot ETPs that invest in ether, itthe ~~may~~principal ~~come~~digital ~~under~~asset ~~increased~~supporting ~~regulatory~~the ~~scrutiny~~Ethereum blockchain. The listing and trading of spot ETPs for ether offers investors another alternative to gain exposure to digital assets, which ~~may~~could result in ~~increased~~a ~~regulations.~~decline ~~This~~in ~~increase~~the intrading ~~regulations~~price ~~may~~of ~~result~~Bitcoin as well as a decline in ~~increased~~the value of our common ~~costs~~stock ~~and~~relative ~~expenses~~to the value of our Bitcoin holdings. Based on how we are viewed in the market relative to spot Bitcoin ETPs, and other vehicles which ~~may~~offer ~~materially~~economic exposure to Bitcoin, such as Bitcoin futures exchange-traded funds, leveraged Bitcoin futures exchange-traded funds, and ~~adversely~~similar ~~affect~~vehicles ~~our~~offered ~~business~~on international exchanges, ~~results~~any premium or discount in our common stock relative to the value of ~~operations~~our Bitcoin holdings may increase or ~~financial~~decrease ~~condition~~in different market conditions. As a result of the foregoing factors, the availability of spot ETPs for Bitcoin and other digital assets could have a material adverse effect on the market price of our common stock.

16Our Bitcoin strategy exposes us to risk of non-performance by counterparties.

WeOur Bitcoin ~~could~~strategy beexposes ~~negatively~~us ~~impacted~~to the risk of non-performance by ~~cybersecurity~~counterparties, ~~attacks~~whether ~~and~~contractual or otherwise. Risk of non-performance ~~are~~includes ~~subject~~inability or refusal of a counterparty to ~~evolving~~perform ~~privacy~~because ~~laws~~of a deterioration in the ~~U.S.~~counterparty’s financial condition and liquidity or for any other ~~jurisdictions~~reason. ~~that~~For example, our execution partners, custodians, or other counterparties might fail to perform in accordance with the terms of our agreements with them, which could ~~adversely~~result ~~impact~~in a loss of Bitcoin, a loss of the opportunity to generate funds, or other losses. Additionally, with more companies adopting a Bitcoin strategy similar to ours, our ~~business~~counterparties and ~~require~~service providers ~~that~~may experience increased demand for their services, which could impact the level or quality of service we receive, or the pricing ~~incur~~of ~~substantial~~these ~~costs.~~services in the future.

~~We use a variety of information technology systems~~Our inprimary ~~the~~counterparty ~~ordinary~~risk ~~course~~with ofrespect ~~business,~~to ~~which~~our ~~are~~Bitcoin ~~potentially~~is ~~vulnerable~~custodian toperformance ~~unauthorized~~obligations ~~access,~~under ~~computer~~the ~~viruses,~~various ~~ransomware~~custody ~~software~~arrangements ~~viruses~~we have ~~and~~entered ~~other~~into. ~~similar~~A ~~types~~series of ~~malicious~~recent ~~activities~~high-profile ~~and~~bankruptcies, ~~cyber-attacks~~closures, ~~including~~liquidations, ~~cyber-attacks~~regulatory toenforcement ~~our~~actions ~~information technology infrastructure~~ and ~~attempts~~other byevents ~~others~~ relating to ~~gain~~companies ~~access~~operating toin ~~our~~the ~~proprietary~~digital orasset ~~sensitive information~~industry, ~~and~~including ~~ranging~~the ~~from~~filings ~~individual~~for ~~attempts~~bankruptcy toprotection ~~advanced~~by ~~persistent~~Three Arrows Capital, Celsius ~~threats.~~Network, ~~Additionally~~Voyager Digital, ~~our~~FTX ~~vendors~~Trading and ~~potentially~~Genesis ~~our~~Global ~~customers~~Capital, ~~such~~the asclosure ~~federal,~~or ~~state~~liquidation ~~and~~of ~~local~~certain ~~governments,~~financial ~~require~~institutions usthat ~~to maintain~~provided lending and ~~protect~~other ~~our~~services ~~information~~to ~~technology~~the ~~infrastructure~~digital toassets ~~specified~~industry, ~~standards~~including inSignature ~~order~~Bank toand ~~protect~~Silvergate ~~not~~Bank, ~~only~~SEC ~~our~~enforcement ~~sensitive~~actions ~~information~~against Coinbase, ~~but also~~Inc., ~~their~~Binance ~~sensitive~~Holdings ~~information~~Ltd., ~~Further~~and Kraken, ~~ransomware~~the ~~attacks~~placement ~~are~~of ~~becoming~~Prime ~~increasingly~~Trust, ~~prevalent~~LLC ~~and~~into ~~severe.~~receivership Tofollowing ~~alleviate~~a ~~the~~cease-and-desist ~~financial,~~order ~~operational,~~issued ~~and~~by ~~reputational~~Nevada’s ~~impact~~Department of aBusiness ~~ransomware~~and ~~attack~~Industry, itand ~~may~~the befiling ~~preferable~~and tosubsequent ~~make~~settlement ~~extortion~~of ~~payments,~~a ~~but~~civil wefraud ~~may~~lawsuit beby ~~unwilling~~the orNew ~~unable~~York toAttorney doGeneral ~~so,~~against ~~including,~~Genesis ~~for~~Global ~~example~~Capital, ifits ~~applicable~~parent ~~laws~~company orDigital ~~regulations~~Currency ~~prohibit~~Group, ~~such payments~~Inc., ~~The procedures~~ and ~~controls~~former wepartner ~~use~~Gemini Trust toCompany ~~monitor~~have ~~these~~highlighted ~~threats~~the perceived and ~~mitigate~~actual ~~our~~counterparty ~~exposure~~risk ~~may~~applicable ~~not~~to bedigital ~~sufficient~~asset toownership ~~prevent~~and ~~cybersecurity incidents~~trading. ~~The~~Although ~~results of~~ these ~~incidents~~ ~~could include misstated financial data~~bankruptcies, ~~theft~~closures ofand ~~trade~~liquidations ~~secrets~~have ornot ~~other~~resulted ~~intellectual~~in ~~property,~~any ~~liability~~loss ~~for~~or ~~disclosure~~misappropriation of ~~confidential customer,~~our ~~supplier or employee information~~Bitcoin, ~~increased~~nor ~~costs~~have ~~arising~~such ~~from~~events ~~the implementation of additional security protective measures,~~adversely ~~litigation~~impacted ~~and~~our ~~reputational~~access ~~damage,~~to ~~which could materially adversely affect~~ our ~~financial condition~~Bitcoin, ~~business~~legal orprecedent ~~results~~created ofin ~~operations. Any~~these ~~remedial~~bankruptcy ~~costs~~and or other ~~liabilities~~proceedings ~~related to cybersecurity incidents~~ may ~~not~~increase bethe ~~fully~~risk ~~insured~~of ~~or indemnified by other means. Moreover,~~future werulings oradverse ~~our third party vendors or business partners may be more vulnerable~~ to ~~such~~our ~~attacks~~interests in ~~remote~~the ~~work~~event ~~environments,~~one ~~which~~or ~~increased in~~more ~~response~~of toour ~~the~~custodians ~~COVID-19~~becomes ~~pandemic.~~a ~~Additionally,~~debtor ~~security breaches could result~~ in a ~~violation~~bankruptcy ofcase ~~applicable~~or ~~U.S.~~is ~~and~~the ~~international privacy~~subject ~~and~~ of other ~~laws and subject us to governmental investigations and proceedings~~liquidation, ~~which~~insolvency ~~could result in our exposure to material civil~~ or ~~criminal~~similar ~~liability~~proceedings.

~~Risks~~While all ~~Related~~of our custodians are subject to regulatory regimes intended to protect customers in the event of a custodial bankruptcy, receivership or similar insolvency proceeding, no assurance can be provided that our ~~Common~~custodially-held ~~Stock~~Bitcoin will not become part of the custodian’s insolvency estate if one or more of our custodians enters bankruptcy, receivership or similar insolvency proceedings. Additionally, if we pursue any strategies to create income streams or otherwise generate funds using our Bitcoin holdings, we would become subject to additional counterparty risks. Any significant non-performance by counterparties, including in particular the custodians with which we custody substantially all of our Bitcoin, could have a material adverse effect on our business, prospects, financial condition, and operating results.

~~Your~~Digital ~~ownership~~asset ~~may be diluted if additional capital stock is~~lending ~~issued~~arrangements tomay ~~raise~~expose ~~capital,~~us to ~~finance~~risks ~~our~~of ~~operations~~borrower default, tooperational ~~complete~~failures ~~acquisitions~~and orcybersecurity ~~in connection with strategic transactions~~threats.

IfAlthough we ~~need~~are tonot ~~raise~~initially planning ~~additional funds~~ to ~~finance our~~lend ~~operations~~Bitcoin, tofrom ~~complete~~time ~~acquisitions or~~ to ~~develop~~time, ~~strategic~~we ~~relationships~~may bygenerate ~~issuing~~income ~~equity~~through orlending ~~convertible~~of ~~debt~~digital ~~securities~~assets, which ~~would~~ ~~reduce~~carries ~~the~~significant ~~percentage ownership of our existing stockholders~~risks. The ~~Our~~volatility ~~board~~ of ~~directors~~such ~~has~~digital ~~the~~assets ~~authority,~~increases ~~without action or vote of~~ the ~~stockholders,~~likelihood tothat ~~issue~~borrowers ~~all~~may ordefault ~~any~~due ~~part of our authorized but unissued shares of common or preferred stock. Our certificate of incorporation authorizes us~~ to ~~issue~~market ~~up to 250~~downturns,~~000,000~~ ~~shares~~liquidity ~~of common stock and 5~~crises,~~000,000~~ ~~shares~~fraud or ofother ~~preferred~~financial ~~stock~~distress. ~~Future~~These ~~issuances~~lending oftransactions ~~common~~may ~~or preferred stock would reduce your influence over matters on which stockholders vote and would~~ be ~~dilutive to earnings per share. In addition~~unsecured, ~~any~~ ~~newly~~and ~~issued~~so ~~preferred~~may ~~stock~~be ~~could~~subordinated ~~have rights, preferences and privileges senior~~ to ~~those~~secured debt of the ~~common stock~~borrower. ~~Those rights, preferences~~ ~~and~~If ~~privileges~~a ~~could~~borrower ~~include,~~becomes ~~among other things~~insolvent, ~~the~~we ~~establishment~~may ~~of dividends that must~~ be ~~paid~~unable ~~prior~~ to ~~declaring~~recover ~~or paying dividends or other distributions to holders of our common stock or providing for preferential liquidation rights. These rights, preferences and privileges could negatively affect~~ the ~~rights~~loaned ~~of holders of our common stock~~Bitcoin, ~~and~~leading ~~the right~~ to ~~convert~~substantial ~~such~~financial ~~preferred stock into shares of our common stock at a rate or price that would have a dilutive effect on the outstanding shares of our common stock~~losses.

IfAdditionally, ~~our~~digital ~~stock~~asset lending ~~price~~platforms ~~fluctuates~~are vulnerable to operational and cybersecurity risks. Technical failures, ~~you~~software bugs or system outages could ~~lose~~disrupt lending aactivities, ~~significant~~delay ~~part~~transactions or result in inaccurate record-keeping. Cybersecurity threats, including hacking, phishing and other malicious attacks, pose further risks, potentially leading to the loss, theft or misappropriation of ~~your~~our ~~investment~~loaned Bitcoin. A successful cyberattack or security breach could materially and adversely impact our financial position, reputation and ability to conduct future lending activities.

Our share price has historically been highly volatile and closed at $0.9601 on March 28, 2025. The market price of our common stock is subject to wide fluctuations in response to, among other things, the risk factors described in this filing and other factors beyond our control, such as fluctuations in the valuation of companies perceived by investors to be comparable to us. Furthermore, the stock markets have experienced price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies. These fluctuations often have been unrelated or disproportionate to the operating performance of those companies. These broad market and industry fluctuations, as well as general economic, political, and market conditions, such as recessions, interest rate changes or international currency fluctuations, may negatively affect the market price of our common stock. In the past, many companies that have experienced volatility in the market price of their stock have been subject to securities class action litigation. We may be the target of this type of litigation in the future. Securities litigation against us could result in substantial costs and divert our management’s attention from other business concerns, which could seriously harm our business.17

17We may have exposure to greater than anticipated tax liabilities.

WeIf ~~are~~we ~~party~~sold toany ~~certain~~of ~~agreements~~our Bitcoin at prices greater than the cost basis of the Bitcoin sold, we would incur a tax liability with respect to any gain recognized, and such tax liability could be material. Although the Company has a ~~founder~~history of losses the utilization of the Company’s net operating losses ~~and~~to ~~certain~~offset ~~executive~~tax ~~officers~~liabilities ~~that~~from the sale of Bitcoin may ~~create~~be asubject ~~conflict~~to limitation, including due to the “change in ownership provisions” under Section 382 of ~~interest~~the ~~for~~Internal ~~our~~Revenue ~~board~~Code. The Company’s cumulative net operating loss carry forward of ~~directors~~$120.7 million as of December 31, 2025, may be limited in ~~evaluating~~future ayears ~~potential~~depending ~~change~~on offuture ~~control~~taxable income in any given fiscal year. The net operating losses ~~transaction~~can be carried forward indefinitely.

~~We had previously entered into a consulting agreement~~Unrealized ~~with~~fair ~~Highbridge~~value ~~Consultants,~~gains ~~LLC~~on ~~(“Highbridge”),~~our anBitcoin ~~entity~~holdings ~~controlled~~could bycause ~~Mr.~~us ~~Adrian James, a founder of our Company. Pursuant~~ to ~~the~~become ~~consulting~~subject agreements, upon the occurrence of a Fundamental Transaction (as contemplated by such agreement), which generally includes a business combination, merger, or sale of all or substantially all of our assets (or similar events), for an aggregate gross sales price of $100.0 million or more, Highbridge will receive a cash payment equal to ~~1% of such gross sales price. This payment upon~~ the ~~consummation of~~corporate aalternative ~~Fundamental~~minimum ~~Transaction~~tax ~~may~~under ~~make our company less attractive to a potential acquirer or may reduce~~ the ~~valuation we receive in connection~~Inflation ~~with~~Reduction aAct ~~Fundamental~~of ~~Transaction~~2022.

~~Furthermore,~~The U.S. ifenacted ~~our~~the ~~market~~Inflation ~~capitalization~~Reduction ~~exceeds $300.0~~Act ~~million~~of ~~for~~2022 a(the ~~period~~“IRA”) ofin 21August ~~consecutive~~2022. ~~trading~~Unless ~~days~~an exemption applies, ~~Highbridge~~the ~~will~~IRA ~~receive~~imposes ana 15% ~~additional~~corporate ~~cash~~alternative ~~payment~~minimum ~~equal~~tax to(“CAMT”) ~~$15.0~~on ~~million; provided~~a ~~that~~corporation wewith ~~will~~respect ~~have~~to ~~the~~an ~~right,~~initial intax ~~our~~year ~~sole~~and ~~discretion,~~subsequent totax ~~make~~years if the ~~foregoing~~average ~~$15.0~~annual ~~million~~adjusted ~~payment~~financial bystatement ~~the~~income ~~issuance~~for ofany ~~shares~~consecutive ~~of our~~three-tax-year ~~common~~period ~~stock.~~preceding Ifthe weinitial ~~elect~~tax toyear ~~make~~exceeds $1 ~~any~~billion. ~~payments~~On toSeptember 12, 2024, the ~~entity~~Department inof the ~~form~~Treasury ofand ~~stock,~~the itInternal ~~would~~Revenue ~~reduce~~Service ~~the~~issued ~~ownership~~proposed ~~percentage~~regulations ofwith ~~our~~respect ~~other~~to ~~stockholders~~the application of CAMT.

InWe are ~~January~~required ~~2024,~~to ~~the~~measure ~~Company~~our ~~entered~~Bitcoin ~~into~~holdings anat ~~employment agreement~~fair ~~with~~value ~~John~~in ~~Kim,~~our astatement ~~member~~ of ~~the~~financial ~~board~~position ofunder ~~directors~~Accounting ofStandards ~~the~~Update ~~Company~~2023-08, with togains ~~become the Company’s CEO~~ and ~~President.~~losses ~~Also~~from changes in ~~January 2024,~~ the ~~Company~~fair ~~entered~~value ~~into~~of anour ~~employment~~Bitcoin ~~agreement~~recognized ~~with~~in ~~Greg~~net ~~Endo,~~income ~~the~~each ~~Company’s~~reporting ~~CFO and Executive Vice President~~period. AsWhen ~~part~~determining ofwhether ~~the~~we ~~employment~~are ~~agreements~~subject ~~with~~to ~~Mr.~~CAMT ~~Kim~~ and ~~Mr.~~when ~~Endo,~~calculating ~~they~~any ~~are~~related ~~each~~tax ~~entitled~~liability tofor aan ~~payment~~applicable oftax 5%year, of the ~~gross~~proposed ~~proceeds~~regulations ~~from~~provide ~~any merger~~that, ~~sale~~among orother ~~change~~adjustments, ofour ~~control~~adjusted ~~transaction~~financial ~~(as~~statement ~~determined~~income bymust ~~the~~include ~~board~~any ofunrealized ~~directors)~~gains ~~entered~~or ~~into~~losses byreported ~~the Company for a period of up to 6 months after termination of employment; provided that they are not terminated for cause (as defined~~ in the ~~employment~~applicable tax ~~agreement)~~year.

~~These~~On September ~~change~~30, 2025, the IRS announced that it intends to revise the proposed regulations and provided interim guidance that, for purposes of ~~control~~determining ~~payments~~whether CAMT applies, companies may ~~create~~exclude aunrealized ~~conflict~~gains or losses with respect to certain assets such as Bitcoin, ofassuming ~~interest~~certain ~~for~~requirements ~~these~~are ~~directors~~met. ~~and~~Taxpayers ~~officers~~are ingenerally ~~evaluating~~allowed ~~any~~to ~~future~~rely ~~change~~on ofsuch ~~control~~interim ~~transactions~~guidance until such proposed regulations are issued. However, there is no assurance that the proposed regulations, when finalized, will provide such relief or that the interim guidance will continue to be applicable.

WeAs a doresult ~~not~~of ~~intend~~the enactment of the IRA and our adoption of ASU 2023-08, unless the IRA is amended or the proposed regulations with respect to ~~pay~~CAMT, ~~dividends~~when finalized, are revised to provide relief (or other interim relief is granted), we could become subject to the CAMT in the ~~foreseeable~~2026 ~~future~~tax year and beyond. If we become subject to CAMT, it could result in a material tax obligation that we would need to satisfy in cash, which could materially affect our financial results, including our earnings and cash flow, and our financial condition.

WeThe ~~have never declared or paid any cash dividends~~Company’s onBitcoin ~~our~~strategy ~~capital~~subjects ~~stock.~~the WeCompany ~~do not expect~~ to ~~pay~~enhanced ~~any~~regulatory ~~cash~~oversight ~~dividends on our common stock in the foreseeable future. Payment of future dividends, if any, will be at the discretion of our board of directors~~ and ~~will~~could ~~depend~~have ~~on our financial condition~~accounting, ~~results~~regulatory ~~of operations, capital requirements, restrictions contained in any financing instruments, provisions of applicable law~~ and other ~~factors the board deems relevant~~impacts.

IfWe ~~securities~~have pledged a portion of our Bitcoin holdings as collateral pursuant to our debt arrangements and may in the future incur additional indebtedness or ~~industry~~enter ~~analysts~~into doother ~~not~~financial ~~publish~~instruments that ~~research~~may be collateralized by our digital asset holdings. For example, we have pledged Bitcoin as collateral to delayed draw term loan borrowings pursuant to the Master Loan Agreement the Company entered into on October 12, 2025, as amended on February 10, 2026 (the “MLA”). As of March 25, 2026, the Company held 2,891 Bitcoin with a carrying value of approximately $204.8 million as collateral by lenders for borrowing arrangements. We may in the future also consider pursuing strategies to create income streams or otherwise generate funds using ~~reports~~our ~~about~~Bitcoin holdings. These types of Bitcoin-related transactions are the subject of enhanced regulatory oversight. These and any other Bitcoin-related transactions we may enter into, beyond simply acquiring and holding Bitcoin, may subject us to additional regulatory compliance requirements and scrutiny, orincluding ifunder ~~they~~federal ~~adversely~~and ~~change~~state ~~their~~money ~~recommendations~~services ~~regarding~~regulations, ~~our~~money ~~common~~transmitter ~~stock~~licensing requirements and various commodity and securities laws and regulations. In addition, ~~then~~fluctuations ~~our~~in ~~stock~~the price ~~and~~of ~~trading~~Bitcoin ~~volume~~may result in additional holding of Bitcoin to be pledged as collateral pursuant to such debt agreements, which could ~~decline~~impact the accounting treatment and classification of our Bitcoin on our balance sheet.

The trading market for our common stock is influenced by the research and reports that industry or securities analysts publish about us, our industry and our market. If no analyst elects to cover us and publish research or reports about us, the market for our common stock could be severely limited and our stock price could be adversely affected. As a small-cap company, we are more likely than our larger competitors to lack coverage from securities analysts. In addition, even if we receive analyst coverage, if one or more analysts ceases coverage of us or fails to regularly publish reports on us, we could lose visibility in the financial markets, which in turn could cause our stock price or trading volume to decline. If one or more analysts who elect to cover us issue negative reports or adversely change their recommendations regarding our common stock, our stock price could decline.18

WeChanges ~~are currently not~~ in ~~compliance with~~regulatory ~~the~~interpretations ~~continued~~could ~~listing~~require ~~requirements~~us ~~of the Nasdaq Capital Market, we have in the past failed~~ to ~~maintain~~register ~~compliance~~as ~~with~~a ~~all~~money ~~applicable continued~~services ~~listing~~business ~~requirements~~or ofmoney ~~the Nasdaq Capital Market~~transmitter, ~~and~~leading ~~if we fail~~ to ~~maintain~~increased compliance ~~with all applicable continued listing~~costs ~~requirements~~or ofoperational the Nasdaq Capital Market in the future, we will not be afforded traditional cure periods under Nasdaq rules and our common stock will be delisted from Nasdaq, which could have an adverse impact on the liquidity and market price of our common stockshutdowns.

OnThe ~~December~~regulatory ~~19,~~regime ~~2023, we were~~for ~~notified~~digital byassets ~~the Listing Qualifications Department (the “Staff”) of the Nasdaq Stock Market (“Nasdaq”) that we were not~~ in ~~compliance with Nasdaq’s Listing Rule 5550(a)(2), as~~ the ~~minimum bid price of our common stock had been below $1~~U.~~00 per~~S. ~~share~~and ~~for~~elsewhere 30is ~~consecutive business days~~uncertain. OnThe ~~January~~Company 4,may ~~2024,~~be ~~the~~unable ~~Staff~~to ~~notified~~effectively usreact ~~that~~to ~~the~~proposed ~~market~~legislation ~~value~~and regulation of ~~our~~digital ~~listed securities had been below the minimum $35~~assets,~~000,000~~ ~~required~~which ~~for~~could ~~continued~~adversely ~~listing~~affect asits ~~set forth in Nasdaq’s Listing Rule 5550(b)(2) for the previous 180 calendar days and served as an additional basis for delisting~~business.

18If regulatory changes or interpretations require us to register as a money services business with FinCEN under the U.S. Bank Secrecy Act, or as a money transmitter under state laws, we may be subject to extensive regulatory requirements, resulting in significant compliance costs and operational burdens. In such a case, we may incur extraordinary expenses to meet these requirements or, alternatively, may determine that continued operations are not viable. If we decide to cease certain operations in response to new regulatory obligations, such actions could occur at a time that is unfavorable to investors.

WeMultiple ~~submitted~~states ahave ~~hearing request~~implemented toor ~~Nasdaq’s~~proposed ~~Hearings~~regulatory ~~Department,~~frameworks ~~which~~for ~~stayed~~digital ~~the~~asset ~~suspension~~businesses. ofCompliance ~~our~~with ~~common~~such ~~stock.~~state-specific ~~The~~regulations ~~hearing~~may ~~was~~increase ~~held~~costs onor impact ~~March~~our ~~26,~~business ~~2024~~operations. ~~On April 2~~Further, ~~2024,~~if we ~~received~~or ~~notification~~our ~~from~~service ~~the~~providers ~~Nasdaq~~are ~~Hearings~~unable ~~Panel~~to ~~(“Panel”)~~comply ~~that~~with itevolving ~~had~~federal ~~granted~~or anstate ~~extension until June 24~~regulations, ~~2024,~~we tomay ~~demonstrate~~be ~~compliance~~forced ~~with~~to ~~Listing~~dissolve ~~Rules~~or ~~5550(a)(2)~~liquidate ~~and~~certain ~~5550(b)(1)~~operations, (which ~~requires~~could atmaterially ~~least~~impact ~~$2.5~~our ~~million in shareholders’ equity), subject to certain conditions~~investors.

OnIf ~~July~~Bitcoin ~~17,~~or ~~2024, we received~~any ~~a letter from the Nasdaq Office~~ of ~~General Counsel confirming~~ the ~~decision~~digital ofassets ~~the Panel~~ that we ~~had~~may ~~demonstrated~~purchase ~~compliance~~are ~~with~~classified ~~the~~as ~~requirements for~~a ~~continued listing on The Nasdaq Capital Market~~security, ~~but that~~ we ~~will~~may be subject to aextensive ~~Discretionary~~regulation, ~~Panel~~which ~~Monitor~~could ~~for~~result in asignificant ~~period~~costs ofor ~~one~~force ~~year~~us to cease operations.

~~Our~~Regulatory ~~common~~changes ~~stock~~or ~~has traded~~interpretations ~~below~~that ~~$1.00~~classify ~~since~~digital ~~February~~assets ~~20,~~that ~~2025.~~we Ifhold ~~our~~as ~~common~~a ~~stock~~security ~~continues~~under tothe ~~trade~~Securities ~~below~~Act ~~$1.00~~of ~~for~~1933, 30as ~~consecutive days~~amended, weor ~~will~~Investment beCompany ~~out~~Act of ~~compliance~~1940, ~~with~~as ~~Nasdaq’s~~amended ~~Listing Rule 5550~~(~~a)(2). In~~ the ~~event~~“Investment ~~that~~Company ~~we have another deficiency or deficiencies~~Act”), wecould ~~will~~require ~~immediately go back into Nasdaq’s hearings process. In the event that the Nasdaq Hearings Department does not grant~~ us ~~an extension~~ to ~~demonstrate~~register ~~compliance our~~and ~~common~~comply ~~stock~~with ~~would~~additional beregulations. ~~delisted~~Compliance with ~~from~~these ~~Nasdaq~~requirements ~~and trading of our common stock~~ could beimpose ~~conducted~~extraordinary, ~~only in the over~~non-~~the-counter~~recurring ~~market or~~expenses on anour ~~electronic~~business. ~~bulletin~~If ~~board established for unlisted securities such as~~ the ~~Pink~~costs ~~Sheets~~and orregulatory ~~the~~burdens ~~OTC~~become too ~~Bulletin Board. In such an event~~great, it ~~could~~we ~~become~~may ~~more~~be ~~difficult~~forced to ~~dispose~~modify ~~of,~~ or ~~obtain~~cease ~~accurate~~certain ~~price quotations for~~operations, ~~our common stock, and there would likely also be a reduction in our coverage by securities analysts and the news media,~~ which could ~~cause the price of our common stock to decline further. Also, it may~~ be ~~difficult~~detrimental ~~for us~~ to ~~raise~~our ~~additional capital if we are not listed on a major exchange~~investors.

InThe anSEC ~~effort~~has topreviously ~~regain~~indicated that ~~compliance~~certain ~~with~~digital ~~Nasdaq~~assets ~~listing~~may ~~rules, we~~be ~~completed~~considered ~~reverse~~securities ~~stock~~depending ~~splits~~on ~~during~~their ~~2024~~structure and use. WeFuture ~~cannot~~developments ~~predict~~could ~~whether~~change wethe ~~will~~legal status ~~need~~of todigital ~~complete~~assets anthat ~~additional~~we ~~reverse~~may ~~stock~~hold, ~~split~~requiring ~~and the~~us ~~effect~~to ~~that~~comply ~~such~~with ~~reverse~~securities ~~stock~~laws. ~~split~~If ~~will~~we ~~have~~fail onto ~~the~~do ~~market~~so, ~~price~~we ~~for~~may ~~shares~~be forced to discontinue some or all of our ~~common~~business ~~stock~~activities, negatively impacting investments in our securities.

AsIf ~~noted~~the inSEC ~~the~~or ~~risk~~other ~~factor~~regulators determine ~~above~~that digital assets that we may hold qualify as securities, inwe anmay ~~effort~~ be required to ~~regain~~register ~~compliance~~as ~~with~~an ~~the~~investment ~~Nasdaq~~company ~~bid~~under ~~price~~the Investment ~~rule~~Company weAct. ~~completed~~This ~~reverse~~classification ~~stock~~would ~~splits~~subject inus ~~February~~to ~~2024~~additional periodic reporting, ~~June~~disclosure ~~2024~~requirements, and ~~November~~regulatory compliance ~~2024~~obligations, significantly increasing our operational costs. In addition, if Bitcoin or another digital asset we hold were ~~The~~determined ~~Company’s~~to ~~stock~~constitute ~~price~~a assecurity for purposes of ~~March~~the 28federal securities laws, ~~2025~~we ~~was~~would ~~$0.9601~~likely ~~and~~take westeps to reduce the percentage of Bitcoin or such other digital assets that constitute investment assets under the Investment Company Act. These steps may ~~need~~include, toamong others, ~~complete~~selling ~~another~~Bitcoin ~~reverse~~that ~~stock~~we ~~split~~might otherwise hold for the long term and deploying our cash in ~~order~~non-investment assets, and we may be forced to ~~regain~~sell ~~compliance~~our ~~with~~Bitcoin ~~the~~or ~~Nasdaq~~other ~~bid~~digital ~~price~~assets ~~rule~~at unattractive prices.

WeAlthough ~~cannot~~we ~~predict~~do ~~the~~not ~~effect that the reverse stock~~currently ~~split~~engage ~~will~~in ~~have~~investing, onreinvesting, ~~the~~or ~~market~~trading ~~price for shares of our common stock~~securities, and ~~the~~we ~~history~~do ~~of previous reverse stock splits has~~ not ~~resulted in~~hold ~~our~~ourselves ~~share~~out ~~price~~as ~~remaining~~an ~~above~~investment ~~$1.00.~~company, ~~Some~~we ~~investors~~could ~~may~~inadvertently be ~~have~~deemed aone ~~negative~~under ~~view~~the ofInvestment aCompany ~~reverse stock split~~Act. ~~Even~~If ifwe ~~the~~are ~~reverse~~unable ~~stock split~~to ~~has~~rely ~~a positive effect~~ on ~~the~~an ~~market price for shares of our common stock~~exclusion, ~~performance~~we ofwould ~~our~~be ~~business~~required ~~and~~to ~~financial~~register ~~results,~~with ~~general economic conditions and~~ the ~~market perception of our business~~SEC, ~~and other adverse factors~~ which ~~may not be in our control~~ could ~~lead~~impose ~~to a~~additional ~~decrease~~financial inand ~~the~~regulatory ~~price of our common stock following the reverse stock split~~burdens.

~~Furthermore~~Further, ~~even~~state ~~if the reverse stock split does~~regulators ~~result~~may inconclude anthat ~~increased market price per share of our common stock,~~ the ~~market~~digital ~~price~~assets ~~per~~we ~~share~~hold ~~following~~are ~~the~~securities ~~reverse~~under ~~stock~~state ~~split~~laws, ~~may~~requiring ~~not increase~~us ~~in proportion~~ to ~~the~~comply ~~reduction~~with ofstate-specific ~~the~~securities ~~number of shares of our common stock outstanding before the implementation of the reverse~~regulations. ~~stock~~States ~~split.~~like ~~Accordingly,~~California ~~even~~have ~~with~~stricter andefinitions ~~increased market price per share, the total market capitalization~~ of ~~shares~~“investment ofcontracts” ~~our common stock after a reverse stock split could be lower~~ than the ~~total market capitalization before the reverse stock split. Also~~SEC, ~~even~~increasing ~~if there is an initial increase in~~ the ~~market~~risk ~~price per share~~ of ~~our common stock after a reverse stock split, the market price may not remain at~~additional ~~that~~regulatory ~~level~~scrutiny.

If the market price of shares of our common stock declines following the reverse stock split, the percentage decline as an absolute number and as a percentage of our overall market capitalization may be greater than would occur in the absence of the reverse stock split due to decreased liquidity in the market for our common stock. Accordingly, the total market capitalization of our common stock following the reverse stock split could be lower than the total market capitalization before the reverse stock split.19

19The classification of Bitcoin that we hold, or any digital asset we may purchase in the future, as a commodity could subject us to additional CFTC regulation, resulting in significant compliance costs or the cessation of certain operations.

AsUnder ancurrent ~~“emerging~~interpretations, Bitcoin ~~growth~~is ~~company”~~classified as a commodity under the ~~Jumpstart Our~~Commodity ~~Business~~Exchange ~~Startups~~ Act, orand ~~JOBS~~is ~~Act~~subject to regulation by the CFTC. If our activities require CFTC registration, we ~~are~~may ~~permitted~~be required to comply with extensive regulatory obligations, which could result in significant costs and ~~intend~~operational disruptions. toAdditionally, ~~rely~~current onand ~~exemptions~~future ~~from~~legislative ~~certain~~or ~~disclosure~~regulatory ~~requirements~~developments, including new CFTC interpretations, could further impact how Bitcoin and Bitcoin derivatives are classified and traded.

AsIf anBitcoin ~~“emerging~~is ~~growth~~further ~~company” under~~regulated ~~the~~as ~~JOBS~~a ~~Act~~commodity, we ~~are~~may ~~permitted~~be required to, register as a commodity pool operator and ~~intend~~register ~~to,~~the ~~rely~~Company onas ~~exemptions~~a ~~from~~commodity ~~certain~~pool ~~disclosure~~with ~~requirements~~the CFTC through the National Futures Association. WeCompliance ~~are~~with these additional regulatory requirements could result in substantial, non-recurring expenses, adversely affecting an ~~emerging~~investment ~~growth~~in ~~company~~our securities. If we determine not to comply with such regulations, we may be forced to ~~until~~cease ~~the~~certain ~~earliest~~operations, ~~of:~~which could negatively impact our investors.

·We ~~the~~are ~~last~~not ~~day~~subject to oflegal ~~the~~and ~~fiscal~~regulatory ~~year~~obligations ~~during~~that ~~which~~apply weto ~~have~~investment ~~total~~companies ~~annual~~such ~~gross~~as ~~revenues~~mutual offunds ~~$1.235~~and ~~billion or more; · the last day of the fiscal year following the fifth anniversary of our initial public offering; · the date on which we have, during the previous 3~~exchange-~~year~~traded ~~period~~funds, ~~issued more than $1 billion in non-convertible debt;~~ or ·to ~~the~~obligations applicable ~~date~~to oninvestment ~~which we are deemed a “large accelerated issuer” as defined under the federal securities laws~~advisers.

~~For~~Mutual sofunds, ~~long~~ETFs and their directors and management are subject to extensive regulation as we“investment ~~remain~~companies” anand ~~emerging~~“investment ~~growth~~advisers” under ~~company~~U.S. federal and state law; this regulation is intended for the benefit and protection of investors. We are not subject to, and wedo ~~will~~not otherwise voluntarily comply with, these laws and regulations. This means, among other things, that the execution of our changes to our digital asset strategy, our use of leverage, our ability to engage in transactions with affiliated parties and our operating and investment activities generally are not besubject ~~required~~to the extensive legal and regulatory requirements and prohibitions that apply to: investment companies and investment advisers.

·Intellectual ~~have~~property disputes anrelated ~~auditor report on our internal control over financial reporting pursuant~~ to the ~~Sarbanes~~open-~~Oxley~~source ~~Act~~structure of ~~2002;~~digital ·asset ~~comply~~networks ~~with~~exposes ~~any~~us ~~requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement~~ to ~~the~~risks ~~auditor’s~~related ~~report providing additional information about the audit and the financial statements (auditor discussion and analysis); · submit certain executive compensation matters~~ to ~~stockholders~~software ~~advisory~~development, ~~votes~~security vulnerabilities ~~pursuant to the “say on frequency”~~ and ~~“say~~potential ondisruptions ~~pay” provisions (requiring a non-binding stockholder vote~~ to ~~approve~~digital ~~compensation~~asset oftechnology ~~certain~~could ~~executive~~threaten ~~officers)~~our ~~and~~ability ~~the “say on golden parachute” provisions (requiring a non-binding stockholder vote~~ to approve golden parachute arrangements for certain executive officers in connection with mergers and certain other business combinations) of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010; and · include detailed compensation discussion and analysis in our filings under the Securities Exchange Act of 1934, as amended, and instead may provide a reduced level of disclosure concerning executive compensationoperate.

~~Additionally,~~Digital ~~for~~asset sonetworks ~~long~~are asopen-source projects weand, ~~remain~~although there may be an influential group of leaders in the network community, generally there is no official developer or group of developers that formally controls the digital asset network. Without guaranteed financial incentives, there may be insufficient resources to address emerging issues, upgrade security or implement necessary improvements to the network in a timely manner. If the ~~growth~~digital ~~company~~asset network’s software is not properly maintained or developed, ~~we:~~it could become vulnerable to security threats, operational inefficiencies and reduced trust, all of which could negatively impact the digital assets’ long-term viability and our business.

	·	may present only two years of audited financial statements and only two years of related Management’s Discussion and Analysis of Financial Condition and Results of Operations, or MD&A; and
	·	are eligible to claim longer phase-in periods for the adoption of new or revised financial accounting standards under §107 of the JOBS Act.

Risks Related to Our E-Bike and Inventory Financing Business Strategy

We ~~intend~~rely toon ~~take~~an ~~advantage~~international ofthird-party ~~all of these reduced~~manufacturer ~~reporting~~who ~~requirements~~assists ~~and~~us ~~exemptions~~with design, ~~other~~development ~~than~~and ~~the~~manufacturing ~~longer~~of ~~phase~~our E-inBikes ~~periods~~which ~~for~~subjects ~~the~~us ~~adoption~~to risk of ~~new~~product ordelivery ~~revised~~delays, ~~financial accounting~~reduced ~~standards~~control ~~under~~over ~~§107~~product ofcosts ~~the~~and ~~JOBS~~quality ~~Act~~control.

~~Certain~~Our ofbusiness ~~these~~success ~~reduced~~will ~~reporting~~depend ~~requirements and~~in ~~exemptions~~large ~~were~~part ~~already~~on available to us due to the fact that we also qualify as a “smaller reporting company” under SEC rules. For instance, smaller reporting companies are not required to obtain an auditor attestation and report regarding managementPXID’s ~~assessment~~ability ~~of internal control over financial reporting; are not required~~ to ~~provide~~economically aproduce ~~compensation~~our ~~discussion~~products ~~and~~at ~~analysis;~~sufficient ~~are~~capacity ~~not required~~ to ~~provide~~meet athe ~~pay-for-performance~~demands ~~graph or CEO pay ratio disclosure; and may present only two years~~ of ~~audited~~our ~~financial statements and related MD&A disclosure~~customers.

20Our reliance on PXID for the manufacture, design and development of our E-Bikes 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;
	·	unexpected increases in tariffs and shipping 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 a third-party 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 have experienced delays in the design and development of previous vehicles we were seeking to develop with other third-party manufacturers.

We can provide no assurance that we will not realize future delays in production or our costs will stay at levels that allow us to sell our products profitably. 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 manufacturer.

If PXID or its suppliers 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 customers would be delayed. Additionally, if PXID experiences quality control problems in its operations, we could be required to cover the repair or replacement of any defective products. These delays or product quality issues could have an immediate and material adverse effect on our ability to fulfill orders and could have a negative impact on our operating results. In addition, such delays or issues with product quality could harm our reputation and our relationship with our customers.

We are utilizing a single vendor to assist us with the manufacturing, development and design of our E-Bike and the inability of this vendor to complete our respective design requirements may delay our ability to release these vehicles for production, which could have a material adverse effect on our financial condition and operating results.

We have entered into a manufacturing, design and development agreement with PXID who has experience in the manufacturing, design and development of two-wheel products to assist us with the development of certain aspects of and manufacturing of our products. Although PXID has successfully assisted us and other companies with manufacturing, design and development of two-wheeled products, they may not be able to successfully design, develop and manufacture new products. PXID may experience delays in fulfilling their obligations under these contracts due to their inability to source parts from other vendors, lack of employees available to work on our projects due to labor shortages or other competing projects from other customers. Failure of PXID to complete the contracted design, development and manufacture projects for our products will result in delays in obtaining regulatory approvals and delay production and release of the products for sale, which could have a material adverse effect on our business, reputation, results of operations or financial condition.

Our third-party manufacturer operates outside of the U.S., subjecting us to risks of international operations.

Our third-party manufacturer, PXID, operates outside of the U.S. and as a result we are increasingly exposed to the challenges and risks of doing business outside the U.S., which could reduce our revenues or profits, increase our costs, result in significant liabilities or sanctions, or otherwise disrupt our business. These challenges include: (1) compliance with complex and changing laws, regulations and policies of governments that may impact our operations, such as foreign ownership restrictions, import and export controls, tariffs, and trade restrictions; (2) compliance with U.S. and foreign laws that affect the activities of companies abroad, such as anti-corruption laws, competition laws, currency regulations, and laws affecting dealings with certain nations; (3) the difficulties involved in managing an organization doing business in many different countries; (4) uncertainties as to the enforceability of contract and intellectual property rights under local laws; and (5) rapid changes in government policy, political or civil unrest, acts of terrorism, or the threat of international boycotts or U.S. anti-boycott legislation.

Our E-Bikes are currently manufactured for us in China which is subject to any uncertainty of trade relations between China and the U. S., and could cause the cost of our products manufactured there to rise, or result in our inability to continue to use third-party manufacturers in China, resulting in a need to find alternative sources of manufacture, which could result in the delay of manufacture and supply of our products, increase our cost of manufacture, and cause a delay in our shipments to customers and a delay or cancellation of orders. Our future operating results and financial condition could be materially affected to the extent any of these actions occur.

In addition, the prosecution of intellectual property infringement and trade secret theft outside of the U.S. may be more difficult than in the U.S. Although we take precautions to protect our intellectual property, using our third-party manufacturers in China could subject us to an increased risk that unauthorized parties will be able to copy or otherwise obtain or use our intellectual property, and we may be unsuccessful in monitoring and enforcing our intellectual property rights against them, which could harm our business. We may also have limited legal recourse in the event we encounter patent or trademark infringers, which could adversely affect our business, results of operations, and financial condition. While we take measures to protect our trade secrets, the use of third-party manufacturers may also risk disclosure of our innovative and proprietary manufacturing methodologies, which could adversely affect our business.

We are dependent on our third-party manufacturer, who is 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 this third-party manufacturer 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 E-Bikes contain numerous purchased parts that PXID either (a) sources globally from direct suppliers, some of whom could be single-source suppliers, or (b) manufacture themselves from components or materials. Any significant unanticipated demand would require PXID to procure or manufacture additional components in a short amount of time. While we believe PXID would be able to secure additional or alternate sources of supply for most of our components and raw materials in a relatively short time frame, there is no assurance that they will be able to do so or develop their own replacements for certain highly customized components of our products. We have in the past realized production delays due to delays from other third-party manufacturers in sourcing certain parts from single-source suppliers. We can provide no assurance that we will not in the future realize additional such delays.

If PXID encounters unexpected difficulties with key suppliers, and if they are unable to fill these needs from other suppliers, we could experience production delays and potential loss of access to important technology and parts for producing, servicing and supporting our products. This limited, and in many cases single-source, supply chain exposes PXID and us to multiple potential sources of delivery failure or component shortages for the production of our products. The loss of any single or limited source supplier or the disruption in the supply of components from these suppliers could lead to design changes and delays in product deliveries to our customers, which could hurt our relationships with our customers and result in negative publicity, damage to our brand and reputation, and a material and adverse effect on our business, prospects, financial condition and operating results.

We are subject to risks associated with our reliance on foreign manufacturing, suppliers and imports for our products.

We procure our E-Bikes from PXID located in China. As a result, our business highly depends on global trade, as well as trade and other factors that impact the specific country where our supplier’s manufacturing facilities are located. Our future success will depend in large part upon our ability to maintain our existing foreign supplier and vender relationships and to develop new ones based on the requirements of our business and any changes in trade dynamics that might dictate changes in the locations for sourcing of products.

Events that have in the past and could in the future cause disruptions to our supply chain include but are not limited to, the imposition of additional trade laws or regulations; public health crises; political instability, international conflicts, acts of terrorism or natural disasters; the imposition of additional duties, tariffs and other charges on imports and exports; foreign currency fluctuations; theft; and restrictions on the transfer of funds. The occurrence of any of the foregoing could materially increase the cost and reduce or delay the supply of our products, which could materially and adversely affect our business, financial condition, results of operations, liquidity and stock price.

All of our vehicles imported into the U.S. and are subject to import taxes or costs, including new or increased tariffs, or similar duties, some of which could be applied retroactively, and modification to or withdrawal from free trade agreements or trade relationships, could increase the cost of the products that we distribute. For example, Since the beginning of 2025, the U.S. government has announced several different measures regarding tariffs, including the imposition of new tariffs on products imported into the U.S. from a number of countries, including Vietnam, and China, and could propose additional tariffs or increases to those already in place. On July 31, 2025, the U.S. administration issued a formal Executive Order modifying the reciprocal tariff regime under the International Emergency Powers Act (“IEEPA”). For example, after announcing proposed blanket tariff rates of 46% on imports from Vietnam in April 2025, the U.S. and Vietnam governments announced a trade deal between the countries that imposes 20% tariffs on all products imported to the U.S. from Vietnam. The 20% rate became effective August 7, 2025, under the aforementioned Executive Order and is currently in force.

On February 20, 2026, the U.S. Supreme Court ruled that the IEEPA does not authorize the U.S. administration to impose tariffs. The tariffs paid by importers under the Executive order are subject to refund, however the process to obtain such refunds is currently being evaluated. Effective February 24, 2026, the U.S. administration has imposed a 10% global tariff under Section 122 of the Trade Act of 1974 that could remain in place for up to 150 days.

These tariffs, as well as a government’s adoption of “buy national” and similar policies or retaliation by another government against such tariffs or policies could introduce significant uncertainty into the market and may affect the prices of and supply of the products available to us. Tariffs also can impact our or our suppliers’ ability to source product efficiently or create other supply chain disruptions. We may not be able to fully or substantially mitigate the impact of these or future tariffs, pass price increases on to our customers or secure adequate alternative sources of vehicles, which would have a material adverse effect on our business, operating results and financial performance.

We also face uncertainty in the interpretation of new tariffs and their applicability, including with respect to customs valuation, product classification and country-of-origin determinations. Although we and our vendors seek to comply with applicable customs laws and regulations, the application of rules regarding new tariffs can be subject to varying interpretations or future re-interpretations. It is possible that U.S. Customs and Border Protection or other relevant authorities could, upon review or audit, disagree with the valuation, rules of origin or classification methods applied to certain merchandise. Any such disagreement could result in the retroactive assessment of additional duties with interest, the imposition of penalties, or other enforcement actions without the ability to mitigate such penalties, thereby adversely affecting our operations or financial results.

Our third-party manufacturer 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 E-Bike deliveries. Our ability to achieve this plan depends upon several factors, including the ability of PXID to meet our forecasted demand and meet our quality levels and optimize design and product changes or our ability to identify other 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 PXID has the ability to meet our forecasted demand, there is no assurance that they will be successful in these efforts. In addition, as we do not have a long-term history of sales, our forecasted demand may be materially incorrect, which could cause us to either fail to meet unforeseen demand or incur higher costs for excess inventory purchased to meet our forecast. If we are unable to realize our sales and delivery plan, our brand, business, prospects, financial condition, and operating results could be materially damaged.

Increases in costs, disruption of supply, or shortage of materials could harm our business.

PXID may experience increases in the cost or a sustained interruption in the supply or shortage of materials. Any such increase, supply interruption or shortage could materially and negatively impact our business, prospects, financial condition and operating results. The prices for these materials fluctuate, and their available supply may be unstable, depending on market conditions and global demand for these materials, including as a result of increased production of E-Bikes and electric vehicle (EV) products by our competitors, and could adversely affect our business and operating results. For instance, we are exposed to multiple risks relating to batteries.

These risks include:

	·	an increase in the cost, or decrease in the available supply, of materials used in the battery;
	·	disruption in the supply of batteries due to quality issues or recalls by battery cell manufacturers;
	·	sanctions imposed by the U.S. on countries in which our products are manufactured or where parts are manufactured for our third-party manufacturers; and
	·	tariffs on the products we source in China.

Our business is dependent on the continued supply of battery cells for the batteries used in our E-Bikes. Any disruption in the supply of battery cells could disrupt production of our products. Substantial increases in the prices charged to us, such as those charged by battery cell suppliers, would increase our operating costs, and could reduce our margins if we cannot recoup the increased costs through increased selling prices of our vehicles. Any attempts to increase prices in response to increased material costs could result in the cancellation of vehicle orders and therefore materially and adversely affect our brand, image, business, prospects and operating results.

We have and could continue to experience delays and other complications in the design, manufacture, launch and production ramp of our vehicles and our future planned vehicles, which could harm our brand, business, prospects, financial condition and operating results.

We have encountered unanticipated challenges, such as supply chain constraints, that led to initial delays in producing our vehicles. We have experienced longer lead times with certain suppliers to obtain parts, especially those imported where shipping delays from outbound and inbound ports have caused delays or required us to use air freight and incur higher shipping costs. We have outsourced the manufacturing of our products and plan to outsource all manufacturing for the foreseeable future. We also reduced headcount in all our departments, as we have outsourced the design and development of our vehicles. Any significant delay or other complications in the production of our vehicles or the development, manufacture, and production ramp of our future products, including complications associated with our third-party manufacturers’ supply chains or obtaining or maintaining regulatory approvals, could materially damage our brand, business, prospects, financial condition and operating results.

We are currently taking orders for the Brat E-Bike and if the Brat fails to perform as expected, our reputation could be harmed and our ability to develop, market and sell our E-Bikes could be harmed.

If the Brat or any new E-Bikes we develop were to contain defects in design and manufacture that cause them not to perform as expected or that require repair or take longer than expected to deliver, our ability to develop, market and sell our E-Bikes could be harmed. While we intend to perform internal testing on these products, our frame of reference by which to evaluate detailed long-term quality, reliability, durability and performance characteristics of our vehicles is based on limited historical data. Although we have procedures to test all of our products for defects, there can be no assurance that we will be able to detect and fix all defects in our products prior to their sale to consumers. Any product defects, delays, or other failure of our products to perform as expected could harm our reputation and result in delivery delays, product recalls, product liability claims, significant warranty and other expenses, and could have a material adverse impact on our business, financial condition, operating results and prospects.

Significant product repair and/or replacement due to product warranty claims or product recalls could have a material adverse impact on our business, results of operations or financial condition.

We provided a one-year warranty against defects for the Grunt EVO and Brat and a two-year warranty on the battery. We provided warranties on the HF1 and MN1 products we sold prior to the sale of these product lines in the Venom APA which have varying warranty terms depending on the part but are generally from 6 months up to 2 years. The manufacturers of the HF1 and MN1 products provide the warranty and we are reimbursed for warranty claims provided we obtain approval of the claim from the manufacturer.

Our warranty will generally require us to repair or replace defective products during such warranty periods at no cost to the consumer. Some of the parts are warranted by the part manufacturer where others are not. We record provisions based on an estimate of product warranty claims, but there is the possibility that actual claims may exceed these provisions and therefore negatively impact our results of operations of financial condition.

In addition, we may in the future be required to make product recalls or could be held liable in the event that some of our products do not meet safety standards or statutory requirements on product safety, even if the defects related to any such recall or liability are not covered by our limited warranty. The repair and replacement costs that we could incur in connection with a recall could have a material adverse effect on our business, results of operations or financial condition. Product recalls could also harm our reputation and cause us to lose customers, particularly if recalls cause consumers to question the safety or reliability of our products, which could have a material adverse effect on our business, results of operations or financial condition.

An adverse determination in any significant product liability claim against us could materially adversely affect our business, results of operations or financial condition.

The development, production, marketing, sale and usage of our products will expose us to significant risks associated with product liability claims. The powersports vehicles industry in particular is vulnerable to significant product liability claims, and we may face inherent risk of exposure to claims in the event our vehicles do not perform or are claimed to not have performed as expected. If our products are defective, malfunction or are used incorrectly by our customers, it may result in bodily injury, property damage or other injury, including death, which could give rise to product liability claims against us. Any losses that we may suffer from any liability claims and the effect that any product liability litigation may have upon the brand image, reputation and marketability of our products could have a material adverse impact on our business, results of operations or financial condition. No assurance can be given that material product liability claims will not be made in the future against us, or that claims will not arise in the future in excess or outside of our insurance coverage and contractual indemnities with suppliers and manufacturers. We believe we have adequate product liability insurance; however, as we release new products, we may not be able to obtain adequate product liability insurance or the cost of doing so may be prohibitive. Adverse determinations of material product liability claims made against us could also harm our reputation and cause us to lose customers and could have a material adverse effect on our business, results of operations or financial condition.

We sell the Brat and accessories through a network of third-party dealers and international distributors in addition to our website, and there is no assurance that we will be able to successfully build out this network.

In the U.S., we began to sell the Brat on our website in 2023, in addition to our dealer network and bicycle dealers. We also began selling the Brat through a national retailer in 2025, Dick’s Sporting Goods, in a limited number of its stores where we hope to expand this nationally. We do not intend to compete with our dealers or retailers who sell these products and we provide price protection to them in the event we are selling these products below the retail price they are selling them for in order for them to maintain their margin.

We also sell the Brat and accessories internationally through international distributors. As of March 25, 2026, we have one importer in Mexico, one importer for the Caribbean Region, and one in New Zealand to sell our two-wheel vehicles and accessories in their assigned countries/markets. We are relying on these distributors to market, promote, sell and service the Brat and sell accessories in their designated countries/territories. We plan to add new E-Bike models and we plan to expand this distributor network to other countries in Europe assuming that our products can meet the regulatory requirements of these countries.

We may be unable to improve our existing products and develop and market new products that respond to customer needs and preferences and achieve market acceptance.

We may not be able to compete as effectively with our competitors, and ultimately satisfy the needs and preferences of our customers, unless we can successfully enhance current products, develop new innovative products, maintain or lower product costs and distinguish our products from our competitors’ products through innovation and design. Product development requires significant financial, technological, and other resources. There can be no assurance that we will be able to incur a level of investment in research and development that will be sufficient to successfully make us competitive in product innovation and design. In addition, even if we are able to successfully enhance existing products and develop new products, there is no guarantee that the markets for our existing products and new products will progress as anticipated. If any of the markets in which our existing products compete do not develop as expected, our business, results of operations or financial condition could be materially adversely affected.

We may not succeed in establishing, maintaining and strengthening our brand, which could materially and adversely affect customer acceptance of our products, which could in turn materially affect our business, results of operations or financial condition.

Our business and prospects heavily depend on our ability to develop, maintain and strengthen the Company’s brand. We sold the Volcon brand name and our four-wheel products in October 2025 after renaming the Company as Empery Digital Inc. If we are unable to establish, maintain and strengthen our new brand, we may lose the opportunity to build and maintain a critical mass of customers. Our ability to develop, maintain and strengthen our brand will depend heavily on the success of our marketing efforts. Failure to develop and maintain a strong brand could materially and adversely affect customer acceptance of our vehicles, could result in suppliers and other third parties being less likely to invest time and resources in developing business relationships with us, and could materially adversely affect our business, results of operations or financial condition.

We have a limited history of financing inventory purchases and parties to inventory financing agreements may default on amounts owed to us which could materially adversely affect our business, results of operations or financial condition.

We have a limited history of financing inventory purchases. On April 17, 2025, we entered into the Venom Supply Agreement to finance inventory purchases with Venom to finance Venom’s golf cart and accessory purchases from their international third-party supplier. The Venom Supply Agreement allowed Venom to purchase up to $2.0 million of golf carts with payment terms of earlier of 100 days from the date the golf carts leave the supplier’s facility or upon sale of the inventory by Venom and the Company would receive a 5% fee for the total cost of inventory ordered by Venom. Inventory purchased by Venom under the Venom Supply Agreement is collateral for the amount financed by the Company. The Venom Supply Agreement was amended on October 29, 2025 (“Amendment 1”) to increase the amount of inventory purchases by $700,000 with payment terms of the earlier of 60 days from when the inventory was received by Venom or upon sale of the inventory. Amendment 1 was completed to allow Venom to purchase MN1 Tradesman and MN1 Adventurers that the Company ordered but had not received from Super Sonic prior to the Venom APA being signed. The Venom Supply Agreement was further amended on November 17, 2025 to increase the amount of inventory purchases by $2.5 million.

Venom has fully paid for the initial inventory ordered under the Venom Supply Agreement as of December 31, 2025. As of March 25, 2026, all payments for the inventory under Amendment 1 and Amendment 2 were paid by the Company to the suppliers, payments of $610,808 have been received from Venom for these orders and $2,354,591 remains outstanding. Although the Company completed a background check of Venom and its owners, there is no guarantee that Venom will be able to pay for the amounts outstanding under Amendments 1 and 2 to the Venom Supply Agreement. Although the Company has a security interest in the inventory, the Company does not have a dealer network or access to Venom’s dealer network to sell the inventory immediately.

We are evaluating other opportunities to finance inventory purchases from other vendors, some of which may not be in an industry or for products which we have experience with, however such financing arrangements may not be available with favorable terms to us, or at all. Default by customers on inventory purchases financed by us could have a material adverse effect on our business, results of operations or financial condition.

Increased tariffs or a global trade war could increase the costs of products for the customers we finance inventory purchases, and could increase the costs of our products, which could adversely impact the competitiveness of theirs or our products and our financial results.

Venom’s products are manufactured for them by an international third-party manufacturer. The Brat is manufactured in China and our future E-Bike products are expected to be manufactured in China and depend on materials from China, namely batteries, which is the main component of the E-Bikes. We cannot predict what actions may be taken with respect to tariffs or trade relations between the U.S., China and other countries, what products may be subject to such actions, or what actions may be taken by China or other countries in retaliation. The adoption and expansion of trade restrictions, the occurrence of a trade war, or other governmental action related to tariffs, trade agreements or related policies have the potential to adversely impact Venom’s and our supply chain and access to equipment, Venom’s and our costs and Venom’s and our product margins. Any such cost increases or decreases in availability could slow our growth and reduce Venom’s inventory purchases. Other potential customers considering inventory financing opportunities with us may defer purchases or not purchase inventory at all if tariffs make their costs too high to sell profitably which could have a material adverse effect on our business, results of operations or financial condition.

We may need to defend ourselves against intellectual property infringement claims, which may be time-consuming and could cause us to incur substantial costs.

Others, including our competitors, may hold or obtain patents, copyrights, trademarks or other proprietary rights that could prevent, limit or interfere with our ability to make, use, develop, sell or market our products and services, which could make it more difficult for us to operate our business. From time to time, the holders of such intellectual property rights may assert their rights and may bring suits alleging infringement or misappropriation of such rights. In addition, if we are determined to have infringed upon a third-party’s intellectual property rights, we may be required to cease making, selling or incorporating certain components or intellectual property into the products we offer, to pay substantial damages and/or license royalties, to redesign our products, and/or to establish and maintain alternative branding for our products.

Prior to the Venom APA, we had registrations for the trademarks VOLCON, GRUNT, and GRUNT EVO in the U.S. We have also applied to register additional trademarks – including VOLCON, VOLCON BRAT, EMPOWERING ADVENTURE, STAG, VOLCON STAG, VLCN, VLCN BRAT, VLCN HF1, VLCN MN1, VLCN FT1, VLCN HT1, VLCN SK1, and VLCN RV1 - in the U.S., Canada, New Zealand, Australia and certain additional countries in Latin America, and many of these trademarks are now allowed or registered in these countries. Other than the VOLCON BRAT and VLCN BRAT, we sold all these trademarks to Venom.

Upon the changing of the Company’s name to Empery Digital Inc., we began registering trademarks for Empery in the U.S. and other countries. Our efforts to secure trademark registrations for Empery are ongoing and we may encounter resistance from other companies, particularly as we register in additional territories. If we receive objections from other entities and are unsuccessful in obtaining agreements or otherwise resolving the matters with these entities, we will need to consider the use of different trademarks for our Company and our products.

In the event that we were required to take one or more such actions, our business, prospects, operating results and financial condition could be materially adversely affected. In addition, any litigation or claims, whether or not valid, could result in substantial costs, negative publicity and diversion of resources and management attention.

We could be negatively impacted by cybersecurity attacks and are subject to evolving privacy laws in the U.S. and other jurisdictions that could adversely impact our business and require that we incur substantial costs.

We use a variety of information technology systems in the ordinary course of business, which are potentially vulnerable to unauthorized access, computer viruses, ransomware software viruses and other similar types of malicious activities and cyber-attacks, including cyber-attacks to our information technology infrastructure and attempts by others to gain access to our proprietary or sensitive information, and ranging from individual attempts to advanced persistent threats. Additionally, our vendors and potentially our customers, such as federal, state and local governments, require us to maintain and protect our information technology infrastructure to specified standards in order to protect not only our sensitive information, but also their sensitive information. Further, ransomware attacks are becoming increasingly prevalent and severe. To alleviate the financial, operational, and reputational impact of a ransomware attack, it may be preferable to make extortion payments, but we may be unwilling or unable to do so, including, for example, if applicable laws or regulations prohibit such payments. The procedures and controls we use to monitor these threats and mitigate our exposure may not be sufficient to prevent cybersecurity incidents. The results of these incidents could include misstated financial data, theft of trade secrets or other intellectual property, liability for disclosure of confidential customer, supplier or employee information, increased costs arising from the implementation of additional security protective measures, litigation and reputational damage, which could materially adversely affect our financial condition, business or results of operations. Any remedial costs or other liabilities related to cybersecurity incidents may not be fully insured or indemnified by other means. Moreover, we or our third-party vendors or business partners may be more vulnerable to such attacks in remote work environments, which increased in response to the COVID-19 pandemic. Additionally, security breaches could result in a violation of applicable U.S. and international privacy and other laws and subject us to governmental investigations and proceedings, which could result in our exposure to material civil or criminal liability.

Risks Related to our Common Stock

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 certificate of incorporation and bylaws contain certain provisions that may discourage, delay or prevent a change in our management or change of control, including that they, collectively: authorize the issuance of “blank check” preferred stock that could be issued by our board of directors to thwart a takeover attempt; provide that, subject to the special rights of the holders of one or more series of preferred stock, special meetings of the stockholders may be called only by or at the direction of the Board of Directors, the Chairperson of the Board of Directors, the Chief Executive Officer or President, and shall not be called by any other person or persons. prohibit stockholder action by written consent, thereby requiring all actions to be taken at a meeting of the stockholders; and establish advance notice requirements for nominations of candidates for election as directors or to bring other business before an annual meeting of our stockholders.

Additionally, in February 2026, we adopted a stockholder rights plan, pursuant to which we issued a dividend of one preferred share purchase right (a “Right”) for each share of our common stock then outstanding. In the event of certain takeover events not authorized by our board of directors, the holders of Rights may purchase additional shares of common stock at a discount, diluting the ownership stake of any potential acquirer and making a takeover more expensive and difficult.

These provisions in our certificate of incorporation and bylaws and the Rights could prevent our stockholders from receiving the benefit from any premium to the market price of our common stock offered by a bidder in a takeover context. Their impact that delays, deters, renders more difficult or prevents a change in our control in a takeover attempt may not be in the best interests of our stockholders. Even in the absence of a takeover attempt, the existence of these provisions and the Rights could adversely affect the prevailing market price of our common stock if their impact is perceived by investors as detrimental. Also, they could make it more difficult for stockholders to replace or remove our management and thus facilitate management entrenchment.

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.

We have been, and may in the future be, subject to informal private or public inquiries and formal proxy actions or proposals from stockholders or others that may not align with our business strategies or the interests of our other stockholders. Stockholder activism, which could take many forms or arise in a variety of situations, has been increasing in recent years. Volatility in the stock price of our common stock or the adoption and execution of our Bitcoin treasury strategy or other reasons may in the future cause us to become the target of stockholder activism. Responding to such actions can be costly and time-consuming, disrupt our business and operations, and divert the attention of our Board of Directors, management, and employees from the pursuit of our business strategies.

We strive to maintain constructive, ongoing communications with all stockholders, and we welcome constructive input from all stockholders toward the shared goal of enhancing long-term stockholder value. Nonetheless, we may not be successful in engaging constructively with one or more stockholders, and any resulting activist campaign that contests, or seeks to change, our Board of Directors, management, strategic direction or business could have an adverse effect on us because (i) responding to proxy contests and other actions by activist stockholders can be costly and time-consuming, disrupting our operations and diverting the attention of management and our Board of Directors, (ii) perceived uncertainties as to our future direction caused by activist stockholders could result in the loss of potential business opportunities, make it more difficult to attract and retain qualified personnel and business partners, and affect our relationships with suppliers and other service providers, and (iii) if individuals are elected to our Board of Directors with a specific agenda, it may adversely affect our ability to effectively implement our business strategy and create additional value for our stockholders. Our stock price could also be subject to significant fluctuations or otherwise be adversely affected by the events, risks and uncertainties of any stockholder activism. In addition, we may be required to incur significant legal fees and other expenses related to any stockholder activism matters and our stock price could be subject to significant fluctuation or otherwise be adversely affected by the events, risks and uncertainties of any stockholder activism. As a result, the actions of stockholder activists could materially and adversely impact our business, operating results, and financial condition.

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 we need to raise additional funds to purchase digital assets, repay outstanding debt, finance our operations, to complete acquisitions or to develop strategic relationships by issuing equity or convertible debt securities, which would reduce the percentage ownership of our existing stockholders. Our board of directors has the authority, without action or vote of the stockholders, to issue all or any part of our authorized but unissued shares of common or preferred stock. Our certificate of incorporation authorizes us to issue up to 250,000,000 shares of common stock and 5,000,000 shares of preferred stock. Future issuances of common or preferred stock would reduce your influence over matters on which stockholders vote and would be dilutive to earnings per share. In addition, any newly issued preferred stock could have rights, preferences and privileges senior to those of the common stock. Those rights, preferences and privileges could include, among other things, the establishment of dividends that must be paid prior to declaring or paying dividends or other distributions to holders of our common stock or providing for preferential liquidation rights. These rights, preferences and privileges could negatively affect the rights of holders of our common stock, and the right to convert such preferred stock into shares of our common stock at a rate or price that would have a dilutive effect on the outstanding shares of our common stock.

If our stock price fluctuates, you could lose a significant part of your investment.

Our share price has historically been highly volatile and closed at $4.35 on March 25, 2026. The market price of our common stock is subject to wide fluctuations in response to, among other things, the risk factors described in this filing and other factors beyond our control, such as the market value of Bitcoin and fluctuations in the valuation of companies perceived by investors to be comparable to us. Furthermore, the stock markets have experienced price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies. These fluctuations often have been unrelated or disproportionate to the operating performance of those companies. These broad market and industry fluctuations, as well as general economic, political, and market conditions, such as recessions, interest rate changes or international currency fluctuations, may negatively affect the market price of our common stock. In the past, many companies that have experienced volatility in the market price of their stock have been subject to securities class action litigation. We may be the target of this type of litigation in the future. Securities litigation against us could result in substantial costs and divert our management’s attention from other business concerns, which could seriously harm our business.

We have in the past failed to maintain compliance with all applicable continued listing requirements of the Nasdaq Global Select Market, and if we fail to maintain compliance with all applicable continued listing requirements of the Nasdaq Global Select Market in the future, we will not be afforded traditional cure periods under Nasdaq rules and our common stock will be delisted from Nasdaq, which could have an adverse impact on the liquidity and market price of our common stock.

On May 13, 2025, the Company received a notice from Nasdaq that it was not in compliance with Nasdaq’s Listing Rule 5550(a)(2), as the minimum bid price of its common stock had been below $1.00 per share for 30 consecutive business days. The Company submitted a hearing request to Nasdaq’s Hearings Department for this matter, which stayed the suspension of the Company’s common stock. The Company participated in a hearing with Nasdaq’s Hearings Department on June 24, 2025. On July 17, 2025, Nasdaq informed the Company that it had regained compliance with the above listing rules and had to remain in compliance with the minimum bid price rule through November 10, 2025, which the Company did.

In the event that the Company does not maintain compliance in the future our common stock could be delisted from Nasdaq and trading of our common stock could be conducted only in the over-the-counter market or on an electronic bulletin board established for unlisted securities such as the Pink Sheets or the OTC Bulletin Board. In such an event, it could become more difficult to dispose of, or obtain accurate price quotations for, our common stock, and there would likely also be a reduction in our coverage by securities analysts and the news media, which could cause the price of our common stock to decline further. Also, it may be difficult for us to raise additional capital if we are not listed on a major exchange.

We may be subject to material litigation, including individual and class action lawsuits, as well as investigations and enforcement actions by regulators and governmental authorities. These matters are often expensive and time consuming, and, if resolved adversely, could harm our business, financial condition, and operating results.

We may from time to time become subject to claims, arbitrations, individual and class action lawsuits with respect to a variety of matters, including employment, consumer protection, advertising, and securities. In addition, we may from time to time become subject to government and regulatory investigations, inquiries, actions or requests, other proceedings and enforcement actions alleging violations of laws, rules, and regulations, both foreign and domestic. The scope, determination and impact of claims, lawsuits, government and regulatory investigations, enforcement actions, disputes and proceedings to which we are subject cannot be predicted with certainty, and may result in:

substantial payments to satisfy judgments, fines, or penalties;

substantial outside counsel, advisor and consultant fees and costs;

additional compliance and licensure requirements;

loss or non-renewal of existing licenses or authorizations, or prohibition from or delays in obtaining additional licenses or authorizations required for our business;

loss of productivity and high demands on employee time;

criminal sanctions or consent decrees;

termination of certain employees, including members of our executive team;

barring of certain employees from participating in our business in whole or in part;

orders that restrict our business or prevent us from offering certain products or services;

changes to our business model and practices;

an inability to deliver on our strategy;

delays to planned transactions, product launches, or improvements; and

damage to our brand and reputation.

Regardless of the outcome, any such matters can have an adverse impact, which may be material, on our business, operating results, or financial condition because of legal costs, diversion of management resources, reputational damage, and other factors. Due to our business activities, including our bitcoin treasury strategy, it is possible that in the future we may be subject to investigations and inquiries by U.S. federal and state regulators and foreign regulators, many of which have broad discretion to audit and examine our business. The complexity of U.S. federal and state and international regulatory and enforcement regimes, coupled with the evolving global regulatory environment, could result in a single event prompting a large number of overlapping investigations and legal and regulatory proceedings by multiple government authorities in different jurisdictions. Any of the foregoing could, individually or in the aggregate, harm our reputation, damage our brand and business, and adversely affect our operating results and financial condition.

We do not intend to pay dividends in the foreseeable future.

We have never declared or paid any cash dividends on our capital stock. We do not expect to pay any cash dividends on our common stock in the foreseeable future. Payment of future dividends, if any, will be at the discretion of our board of directors and will depend on our financial condition, results of operations, capital requirements, restrictions contained in any financing instruments, provisions of applicable law and other factors the board deems relevant.

As an “emerging growth company” under the Jumpstart Our Business Startups Act, or JOBS Act, we are permitted to, and intend to, rely on exemptions from certain disclosure requirements.

As an “emerging growth company” under the JOBS Act, we are permitted to, and intend to, rely on exemptions from certain disclosure requirements. We are an emerging growth company until the earliest of:

	·	the last day of the fiscal year during which we have total annual gross revenues of $1.235 billion or more;
	·	the last day of the fiscal year following the fifth anniversary of our initial public offering;
	·	the date on which we have, during the previous 3-year period, issued more than $1 billion in non-convertible debt; or
	·	the date on which we are deemed a “large accelerated issuer” as defined under the federal securities laws.

For so long as we remain an emerging growth company, we will not be required to:

	·	have an auditor report on our internal control over financial reporting pursuant to the Sarbanes-Oxley Act of 2002;
	·	comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (auditor discussion and analysis);
	·	submit certain executive compensation matters to stockholders advisory votes pursuant to the “say on frequency” and “say on pay” provisions (requiring a non-binding stockholder vote to approve compensation of certain executive officers) and the “say on golden parachute” provisions (requiring a non-binding stockholder vote to approve golden parachute arrangements for certain executive officers in connection with mergers and certain other business combinations) of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010; and
	·	include detailed compensation discussion and analysis in our filings under the Securities Exchange Act of 1934, as amended, and instead may provide a reduced level of disclosure concerning executive compensation.

Additionally, for so long as we remain an emerging growth company, we:

	·	may present only two years of audited financial statements and only two years of related Management’s Discussion and Analysis of Financial Condition and Results of Operations, or MD&A; and
	·	are eligible to claim longer phase-in periods for the adoption of new or revised financial accounting standards under §107 of the JOBS Act.

For fiscal 2026, we will no longer qualify as an emerging growth company and will be required to comply with of all of these reporting requirements and lose the exemptions under §107 of the JOBS Act.

Certain of these reduced reporting requirements and exemptions were already available to us due to the fact that we also qualify as a “smaller reporting company” under SEC rules. However, if we no longer qualify as a smaller reporting company, wee will be required to obtain an auditor attestation and report regarding management’s assessment of internal control over financial reporting; provide a compensation discussion and analysis; provide a pay-for-performance graph or CEO pay ratio disclosure; and present three years of audited financial statements and related MD&A disclosure.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

ITEM 1C. CYBERSECURITY

Risk Management and Strategy

We have established policies and procedures for assessing, identifying, and managing material risk from cybersecurity threats. We monitor cybersecurity threats, including any potential unauthorized occurrence on or conducted through our information systems that we use through third -party providers that may result in adverse effects on the confidentiality, integrity, or availability of our information systems or any information residing therein.

We conducted a NIST risk assessment and performed as needed updates to our risks to identify cybersecurity threats, as well as assessments in the event of a material change in our business practices that may affect information systems that are vulnerable to such cybersecurity threats. We engage a managed service provider (“MSP”) and other third parties in connection with our cybersecurity and information technology risk assessment processes and our MSP also assists us with managing and monitoring our network and local computer systems. These service providers assist us in designing and implementing our cybersecurity policies and procedures, as well as monitoring and testing our safeguards. Personnel at all levels and departments are made aware of our cybersecurity policies through communications.

As of December 31, ~~2024~~2025, and through the date of the filing of this report, we are not aware of any cybersecurity incidents that have materially affected or are reasonably likely to materially affect us, including our business strategy, results of operations or financial condition. Despite our continuing efforts, we cannot guarantee that our cybersecurity safeguards will prevent breaches or breakdowns of our or our third-party service providers’ information technology systems, particularly in the face of continually evolving cybersecurity threats and increasingly sophisticated threat actors. A cybersecurity incident may materially affect our business, results of operations or financial condition, including where such an incident results in reputational, competitive or business harm or damage to our brand, lost sales, reduced demand, loss of intellectual property rights, significant costs or government investigations, litigation, fines or damages. For additional information regarding risks from cybersecurity threats, please refer to Item 1A, “Risk Factors,” in this Annual report on Form 10-K.

Governance

One of the key responsibilities of our board of directors is informed oversight of our risk management process, including risks from cybersecurity threats. Our board of directors is responsible for monitoring and assessing strategic risk exposure, and our executive officers are responsible for the day-to-day management of the material risks we face. The Audit Committee of our Board of Directors has primary responsibility for oversight of cybersecurity and is briefed on cybersecurity risks at least once each year and following any material cybersecurity incidents.

~~Our~~At ~~Executive~~the ~~Vice-President and~~management level, our Chief Financial Officer (“CFO”) is primarily responsible for assessing and managing our material risks from cybersecurity threats. In this regard, our CFO has assistance from service providers, other consultants and third parties. Our CFO has served as an executive officer for four ~~three~~ years and prior to this was an audit and advisory partner at a public accounting firm overseeing financial statement audits of public and private companies. Audit procedures performed for his clients included evaluating internal controls and risk assessment evaluations over information technology and cybersecurity policies.

Our CFO oversees our cybersecurity policies and procedures, including those described in “Risk Management and Strategy” above. Under such policies and procedures, our CFO is responsible for reporting to our ~~board~~Board of ~~directors~~Directors and the Audit Committee regarding any cybersecurity incident including the results of cybersecurity risk assessments.

ITEM 2. PROPERTIES

Our corporate headquarters is located in Round Rock, Texas, where we currently lease approximately 2317,~~300~~600 square feet of space across ~~three~~two facilities. We also lease approximately 3,000 square feet of office space in New York, New York for four of our employees including our Co-Chief Executive Officer and Chairman of the Board of Directors (Ryan Lane), Chief Operating Officer and Vice President - Legal.

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

ITEM 3. LEGAL PROCEEDINGS

From time to time in the ordinary course of our business, we may be involved in legal proceedings, the outcomes of which may not be determinable. The results of litigation are inherently unpredictable. Any claims against us, whether meritorious or not, could be time consuming, result in costly litigation, require significant amounts of management time and result in diversion of significant resources. We are not able to estimate an aggregate amount or range of reasonably possible losses for those legal matters for which losses are not probable and estimable. We have insurance policies covering ~~potential~~ potential losses where such coverage is cost -effective.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

2233

PART II

Market Information

Our common stock is listed on the NASDAQ Stock ~~Market~~ Market LLC under the symbol “~~VLCN~~EMPD”.

~~Holders~~Stockholder Rights Plan

AsOn February 3, 2026, our Board of ~~March~~Directors 28declared a dividend of one preferred share purchase right (a “Right”), ~~2025~~payable on February 13, we2026, ~~had~~for 1each share of Common Stock,~~148~~ outstanding on February 13, 2026 to the stockholders of record ~~and~~on that date. In connection with the distribution of the Rights, the Company entered into a Rights Agreement (the “Rights Agreement”), dated as of February 3,~~850~~ 2026,~~824~~ ~~outstanding~~between ~~shares~~the Company and Computershare Trust Company, N.A., as rights agent. Each Right entitles the registered holder to purchase from the Company one one-thousandth of a share of Series A Preferred Stock, par value $0.00001 per share (the “Preferred Shares”), of the Company at a price of $15.00 per one one-thousandth of a Preferred Share represented by a Right (the “Purchase Price”), subject to adjustment.

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

WeInitially, ~~have~~the ~~never~~Rights ~~declared~~are orattached ~~paid~~to ~~any~~all ~~cash dividends~~common onstock ~~our~~certificates ~~capital~~and ~~stock.~~no ~~The~~separate ~~payment~~certificates ofevidencing ~~dividends~~the inRights ~~the~~(“Right ~~future~~Certificates”) will be ~~contingent~~issued. ~~upon~~Until ~~our~~the ~~revenues~~Distribution Date ~~and~~(as ~~earnings,~~defined ~~if any~~below), ~~capital~~the ~~requirements and~~Rights ~~general~~will ~~financial~~be ~~condition.~~transferred Wewith ~~currently~~and ~~intend~~only towith ~~retain~~the ~~earnings,~~common ifstock. ~~any,~~As tolong ~~finance~~as the ~~growth~~Rights ~~and~~are ~~development~~attached ~~of our business. We do not expect~~ to ~~pay any cash dividends on our~~ the common stock ~~in the foreseeable future. Payment of future dividends~~, ~~if any, will be at~~ the ~~discretion~~Company ~~of our board of directors and~~ will ~~depend~~issue onone ~~our~~Right ~~financial~~with ~~condition,~~each ~~results~~new ofCommon ~~operations,~~Stock ~~capital~~so ~~requirements,~~that ~~restrictions contained~~all insuch ~~any~~Common ~~financing~~Stock ~~instruments,~~will ~~provisions~~have ofRights ~~applicable law and other factors the board deems relevant~~attached.

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

~~None~~Additional information regarding the Rights Plan is available in the Company’s Current Reports on Form 8-K filed February 3, 2026.

~~Recent Sales of Unregistered Securities~~Holders

~~All~~As ~~information~~of ~~related to~~March ~~equity~~25, ~~securities~~2026, ~~sold~~we byhad us25 ~~during~~stockholders the period covered by this report that were not registered under the Securities Act have been included in our Form 10-Q filings or in a Form 8-K filing. We did not issue any equity securities during the fourth quarter of ~~2024 that were not~~ ~~registered~~record ~~under~~and ~~the~~30,247,668 ~~Securities~~outstanding ~~Act~~shares.

Dividends

We have never declared or paid any cash dividends on our capital stock. The payment of dividends in the future will be contingent upon our revenues and earnings, if any, capital requirements and general financial condition. We currently intend to retain earnings, if any, to finance the growth and development of our business. We do not expect to pay any cash dividends on our common stock in the foreseeable future. Payment of future dividends, if any, will be at the discretion of our board of directors and will depend on our financial condition, results of operations, capital requirements, restrictions contained in any financing instruments, provisions of applicable law and other factors the board deems relevant.

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

Issuer Purchases of Equity Securities

The following table provides information relating to the purchases of our common stock during the three months ended December 31, 2025 in accordance with Item 703 of Regulation S-K:

Period	(a) Total Number of Shares (or Units) Purchased		(b) Average Price Paid per Share (or Unit) ($)		(c) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs (1)		(d) Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plan or Program
October 1, 2025 – October 31, 2025		4,991,977		7.32		4,991,977		74,573,346
November 1, 2025 – November 30, 2025		3,514,987		5.75		3,514,987		54,374,156
December 1, 2025 – December 31, 2025		29,964		4.85		29,964		54,228,939
Three Month period ended December 31, 2025		8,536,928				8,536,928	$	54,228,939

(1)

On March 17, 2025, the Company’s Board of Directors adopted a stock repurchase program of up to $2.0 million of shares of its outstanding common stock. This repurchase program was set to expire on March 7, 2026. On July 24, 2025, the Board approved a $100.0 million common stock repurchase program effective through July 24, 2027 and increased by the Board to $150.0 million on October 10, 2025 (increased to $200.0 million on February 2, 2026 which is not included in the amounts above), subject to extension or earlier termination by the Board at any time. The March 2025 repurchase program was terminated upon the approval of the July 2025 repurchase program.

Recent Sales of Unregistered Securities

None.

ITEM 6. [RESERVED]

~~ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS~~35

~~You~~ ~~should~~ITEM read the following discussion and analysis of our financial condition and results of operations in conjunction with the financial statements and the related notes appearing elsewhere in this Annual Report on Form 10-K7. ~~This~~MANAGEMENT’S ~~discussion~~DISCUSSION ~~contains~~AND ~~forward-looking~~ANALYSIS ~~statements~~OF ~~reflecting~~FINANCIAL ~~our~~CONDITION ~~current~~AND ~~expectations that~~RESULTS ~~involve~~OF risks and uncertainties. Actual results and the timing of events could differ materially from those discussed in our forward-looking statements as a result of many factors, including those set forth under “Risk Factors” and elsewhere in this Annual Report on Form 10-K.OPERATIONS

~~Overview~~The following discussion and analysis of our financial condition and results of operations is intended as a review of significant factors affecting the Company’s financial condition and results of operations for the periods indicated. This discussion and analysis should be read in conjunction with the financial statements and related notes appearing elsewhere in this Annual Report on Form 10-K, which contains audited financial statements of the Company as of and for the year ended December 31, 2025, Results for the year ended December 31, 2025 are not necessarily indicative of results for the year ending December 31, 2026 or any future period. Some of the information contained in this discussion and analysis, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from management’s expectations as a result of various factors. Factors that could cause or contribute to these differences include, but are not limited to, those identified below and those discussed in the “Special Note Regarding Forward-Looking Statements” section and in the “Risk Factors” section in this Annual Report on Form 10-K.

We are an all-electric, off-road powersports vehicle company selling and developing Volcon electric two-wheeled E-Bikes and motorcycles, four-wheeled utility terrain vehicles, or UTVs, also known as side-by-sides, and golf carts, along with a line of upgrades and accessories. In January 2025, we also entered into a distribution agreement with a golf cart manufacturer, Super Sonic Company Ltd. (“Super Sonic”) located in Vietnam, and a subsidiary of Odes Industry, to supply golf carts to other companies in the U. S. who sell golf carts.Overview

23Digital Asset Treasury Strategy

~~Distribution~~On July 17, 2025, the Company announced its entry into securities purchase agreements with certain institutional and ~~Supplier~~accredited ~~Agreements~~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 BTC of $28.0 million, before deducting placement agent fees and other offering expenses. 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.

~~Exclusive~~The ~~Distribution~~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 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. Pursuant to the ATM Sales Agreement with Aegis, the Company can sell up to $1.1 billion of common stock under the ATM program, and since the inception of the digital asset treasury strategy through March 25, 2026, the Company has sold 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 ~~January 2025~~addition, weour ~~signed~~strategy anincludes repurchasing ~~exclusive~~our ~~Distribution~~common ~~Agreement~~stock ~~with~~when ~~Super~~market ~~Sonic~~conditions toallow, ~~act~~when asour ~~their~~common ~~exclusive~~stock ~~distributor~~is oftrading ~~certain~~below ofNAV ~~their~~per ~~golf~~share. ~~cart~~The ~~products~~Company ~~(the~~also ~~“Products”), in~~has ~~the~~a U.share ~~S..~~repurchase program ~~Super~~that ~~Sonic~~allows ~~agreed~~it to ~~recommend~~repurchase up to ~~all~~$150.0 ~~customers~~million ~~the sole use~~ of uscommon ~~for~~stock ~~all~~as ~~Products.~~of ~~Super~~December ~~Sonic~~31, ~~has~~2025, ~~the~~which ~~right~~was expanded to ~~sell~~$200.0 million ~~non-Volcon~~on ~~branded~~February ~~Products~~2, to2026 ~~other customers~~ and ~~shall~~through ~~pay~~March 5%25, of2026 ~~the~~has ~~order~~bought ~~price~~23,114,391 toshares ~~us.~~of ~~Before~~common ~~the~~stock ~~end~~for of$135.6 ~~June 2025~~million, weincluding ~~agreed to provide~~commissions, aat ~~procurement~~an ~~plan,~~average ~~and~~price ifof we$5.87. ~~fail~~Share torepurchases ~~meet~~have ~~the~~been ~~minimum~~funded ~~purchase~~with ~~requirement~~proceeds ~~described~~from ~~in the procurement plan for~~ two ~~consecutive~~borrowing ~~months~~arrangements, ~~Super~~ ~~Sonic~~that ~~shall~~allow ~~have~~for ~~the~~borrowings of ~~right~~up to ~~immediately terminate the Distribution Agreement~~$150.0 ~~During~~million, ~~the term~~ of ~~the~~which ~~Distribution~~$95.0 ~~Agreement,~~million ~~to the~~has ~~extent~~been wedrawn ~~sell~~as ~~any~~of ~~Volcon-branded~~March ~~products~~25, ~~(the “Volcon Products”) that are similar to the Products~~2026, weand ~~agreed~~sales toof ~~provide Super~~BTC. ~~Sonic~~Some ~~with a right~~ of ~~first~~our ~~refusal~~BTC tois ~~manufacture~~held ~~the~~by ~~Volcon~~these lenders ~~Products.~~as Ascollateral ~~more~~for ~~fully~~outstanding ~~discussed~~borrowings inwhich ~~Note 15 of the accompanying financial statements,~~ we may berepay ~~required~~with tofuture ~~issue~~equity ~~our~~offerings ~~common~~or ~~stock,~~by ~~warrants~~selling toBTC. ~~purchase~~See ~~our~~Note ~~common~~7 ~~stock~~to ~~and~~ the consolidated ~~right~~financial tostatements ~~appoint~~for afurther ~~director~~discussion ~~to our board~~ of ~~directors~~these ifborrowing ~~certain golf cart sales volumes are attained~~arrangements.

~~Supply~~Additionally, a significant component of the digital ~~Agreement~~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 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 derivative contracts, which is recorded in Other income in the consolidated statement of operations.

On February 24, 2025, we entered into a Supply Agreement with Venom-EV LLC (“Venom”) to supply Venom with certain golf carts. The Supply Agreement allows Venom to purchase up to $3 million of golf carts with payment terms of 90 days from the date the golf carts are delivered to Venom’s facility. These golf carts will be purchased through a manufacturer specified in the Supply Agreement and we will receive consideration of the cost of the golf carts plus a three percent margin. We received an initial order from Venom for $2.4 million of golf carts. At the end of each calendar quarter, we agreed to issue Venom shares of Company common stock based on the number of golf carts purchased by Venom during the quarter as follows: for each 1,000 Units sold in 2025 to Venom by us, we shall issue Venom a number of shares equal to 1% of our outstanding shares of common stock as of the last day of such quarter that the 1,000 Units were sold for no additional consideration.36

~~Results~~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 ~~Operations~~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 ~~following~~BTC market has been characterized by significant ~~financial~~volatility ~~information~~in isprice, ~~for~~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 ~~years~~implementation ~~ended~~of ~~December~~our 31digital asset treasury strategy through March 25, 2026, ~~2024~~BTC has traded at a high of $126,117 and ~~2023~~a low of $60,019 on the Gemini exchange.

	2024			2023
Revenue	$	4,037,191		$	3,260,988
Cost of goods sold		18,168,288			11,391,040
Gross margin		(14,131,097	)		(8,130,052	)
Operating expenses:
Sales and marketing		2,548,953			7,405,705
Product development		2,668,330			7,868,985
General and administrative		7,665,647			6,388,007
Total operating expenses		12,882,930			21,662,697
Loss from operations		(27,014,027	)		(29,792,749	)
Interest and other expense		(18,496,282	)		(15,278,462	)
Net loss	$	(45,510,309	)	$	(45,071,211	)

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.

~~Due~~Electric ~~to recurring losses, there is no provision for income taxes for any period presented.~~Vehicles

24The Company began its operations as an all-electric, off-road powersports vehicle business. Beginning in 2021, we began efforts to sell off-road powersports vehicles beginning with an electric two-wheeled motorcycle that we discontinued in March 2025. In 2022 we introduced an E-Bike, the Brat, and continue to sell this product. In late 2024 we began selling the HF1 UTV, the MN1 Adventurer and MN1 Tradesman UTV, along with a line of upgrades and accessories. As discussed below, in October 2025, we sold the HF1 and MN1 product lines.

~~Revenue~~Venom Supply Agreement

~~Revenue for~~On February 24, 2025, we entered into the ~~year~~Venom ~~ended~~Supply Agreement ~~December~~with ~~31,~~Venom ~~2024,~~to supply Venom with certain golf carts. The Venom Supply Agreement was $4amended and restated on April 25,~~037,191~~ ~~which~~2025. ~~represents~~The Venom ~~sales~~Supply ofAgreement ~~Brats~~allows ofVenom to purchase up to $~~1,561,555,~~2.0 ~~Grunt~~million ~~EVOs~~of golf carts with payment terms of ~~$1,280,739,~~the ~~Stags~~earlier of 100 days from the ~~$371,552,~~date ~~Volcon~~the ~~Youth~~golf ofcarts ~~$286,680~~are ~~(which~~shipped wefrom ~~stopped~~the ~~selling~~manufacturer’s asfacility ofor ~~June~~upon ~~30,~~sale ~~2024),~~to ~~MN1s~~Venom’s dealers or to consumers. These golf carts will be purchased through a manufacturer specified in the Venom Supply Agreement and we will receive consideration of ~~$31,225,~~the ~~HF1s~~cost of the golf carts plus a five percent margin. We received an initial order from Venom for $~~22,500~~2.0 ~~and~~million ~~accessories~~golf carts and paid a deposit to the ~~parts~~manufacturer of $~~264~~0.6 million on May 2,~~338~~ 2025 and paid $0.8 ~~Revenue~~million ~~also~~in ~~increased~~September ~~due~~2025 tofor the ~~reversal~~golf ofcarts, ~~unclaimed~~which ~~dealer~~were ~~rebates~~shipped ~~and~~in ~~price~~September 2025. ~~adjustment~~The ~~credits~~remaining $0.6 million was paid in the ~~amount~~fourth quarter of ~~$350,093~~ ~~offset~~2025. All units were shipped by ~~discounts~~the ~~due~~manufacturer to ~~various~~Venom, ~~promotions~~and inVenom paid ~~the~~all ~~amount~~amounts due on this purchase as of ~~$125~~December 31,~~859.~~ 2025.

~~Revenue~~On ~~for~~October ~~the~~29, ~~year~~2025, ~~ended~~the ~~December~~Venom ~~31,~~Supply ~~2023,~~Agreement was ~~$3,260,988~~amended ~~which~~to ~~represents~~increase ~~sales~~the ofavailable ~~Brats~~amount ofto purchase by $~~2,341,097,~~0.7 ~~Grunt~~million ~~EVO~~and ~~motorcycles~~Venom ofagreed ~~$465,438,~~to ~~Grunt~~purchase ~~motorcycles~~the ofremaining ~~$129,117,~~138 ~~Volcon~~MN1 ~~Youth~~units ordered ~~and~~by ~~Torrot~~the ~~motorcycles~~Company under the Super Sonic Distribution Agreement discussed below. Payment terms are the earlier of ~~$498,160~~60 ~~and~~days ~~accessories~~from ~~and~~receipt ~~parts~~or upon sale by Venom. All of ~~$261,663~~these ~~offset~~units were received by ~~$436,333~~Venom ~~for~~by ~~rebates~~January 30, 2026 and ~~dealer~~payment ~~discounts~~is due by March 31, 2026.

~~Cost~~On November 17, 2025, the Venom Supply Agreement was amended to increase the amount by $2.5 million (for a total of ~~goods~~$4.5 ~~sold~~million excluding the October 29, 2025 amendment). Subsequent to December 31, 2025 through March 25, 2026, the Company has paid $0.9 million to the manufacturer for orders placed by Venom and additional payments due to be paid for orders placed by Venom as of March 25, 2026, are $1.4 million. Payment terms are the earlier of 60 days from receipt of inventory by Venom or upon sale by Venom.

~~Cost of~~We ~~goods~~expect ~~sold~~that ~~for~~we ~~the~~will ~~year~~complete ~~ended~~additional ~~December~~financing ~~31,~~transactions ~~2024 were $18,168,288 including payroll costs of $274,801~~ for ~~employees~~Venom ~~performing product~~under ~~fulfillment,~~the ~~logistics~~Venom ~~management,~~Supply ~~and~~Agreement ~~service~~ and ~~warranty,~~we ~~partially~~are ~~offset~~actively byin adiscussions ~~stock-based compensation benefit of ($11,827)~~ for the ~~reversal~~ ofopportunity ~~previously recognized stock-based compensation on stock options that did not vest due~~ to ~~employee~~fund ~~terminations. Product costs for Brats and Grunt EVOs sold during the period were $1,523,053 and $1,427,562, (before the finished goods~~ inventory ~~write~~purchases ~~down~~with ~~discussed below),~~other ~~respectively.~~companies ~~Volcon Youth product costs were $186,813 before the additional expense of $81,911 for the write down of all Volcon~~that ~~Youth inventory as the Company could no longer~~ sell ~~Volcon~~golf ~~Youth~~carts ~~motorcycles or parts after June 30, 2024. MN1~~ and ~~HF1 product costs were $34,491 and $125,550 respectively~~UTVs.

Stag product costs were $950,424, which includes an expense of $112,168 for the loss the Company realized due to agreeing to provide additional units to a customer at a sales price less than the manufactured cost of the units. As noted above, the Company also wrote off all Stag parts inventory and prepaid inventory deposits resulting in an expense of $8,712,644. The Company also recognized an expense of $976,420 for a settlement agreement with a vendor who supplies certain suspension components for the Stag, an expense of $2,526,410 for a settlement agreement with the manufacturer of the Stag and $35,000 for a settlement to a vendor of Grunt parts. These expenses were offset by a credit of $700,000 for an amendment to the original settlement agreement with Torrot whereby the Company agreed to settle the future payment obligation by making a one-time lump sum payment and returning all unsold units and parts to Torrot. The Company also wrote down the Grunt EVO finished goods inventory by $674,379 due to the Company lowering the sales price to dealers and distributors. 37

~~The~~Venom ~~Company recorded~~Asset aPurchase loss on disposal of assets of $817,736 primarily tooling related to Stag, Grunt EVO and Runt. The Company also recorded $175,000 as an offset to expenses for the partial recovery of a previously written off prepaid inventory deposit. Facilities costs for the year ended December 31, 2024 were $408,217 for our warehouse facility and third party warehousing costs.Agreement

~~Cost~~On ofOctober ~~goods~~15, ~~sold~~2025, ~~for~~ the ~~year~~Company ~~ended~~entered ~~December 31,~~into ~~2023~~the ~~were~~Venom ~~$11,391,040,~~APA ~~including~~with ~~payroll~~Venom ~~costs~~to ofdivest ~~$1,200,098~~the ~~and~~Volcon ~~stock-based~~brand ~~compensation~~in ofexchange ~~$211,981~~ for ~~employees~~a ~~performing warehouse~~non-dilutable ~~and~~10% ~~logistics~~equity ~~management~~position ~~and~~in ~~quality~~Venom’s ~~control~~reorganized ~~testing.~~Delaware ~~Product~~corporation ~~costs~~on ~~for~~a ~~Brats,~~fully-diluted ~~Grunt~~basis. ~~EVOs,~~The ~~and~~Company ~~Volcon~~transferred ~~Youth~~all ~~motorcycles~~Volcon ~~sold~~IP, including ~~during~~all ~~the period~~Volcon ~~were~~intellectual $1property,~~674,987,~~ ~~$711~~brand assets,~~807~~ ~~and $3~~trademarks,~~236,773,~~ ~~respectively.~~sales Weand ~~recorded~~distribution anetworks ~~write~~and ~~down~~engineering ofdocumentation ~~$2,674,352~~associated with ~~for~~the Volcon ~~Youth~~IP ~~motorcycles~~other ~~to reduce~~than ~~their~~its ~~costs~~E-Bike, to the ~~expected net realizable value~~Brat. WeThe ~~also~~Company ~~recorded~~will anhave ~~expense~~the ofright ~~$2,070,000~~to ~~for~~appoint ~~the~~one ~~termination~~director ofto ~~the~~Venom’s ~~Torrot~~board ~~agreement.~~and Wemay ~~recorded~~continue anto ~~expense~~finance ofVenom’s ~~$450,282~~inventory ~~related~~purchases. toIn ~~fees~~the ~~paid~~event tothat ~~cancel~~Venom ~~purchase~~does ~~orders~~not tocomplete ~~reduce~~its ~~raw~~corporate ~~material~~reorganization ~~quantities. The Company also~~within ~~recorded~~six ~~an expense of $1~~months,~~401,490~~ tothe ~~write~~Company ~~off~~will ~~inventory~~have ~~contributed~~the option to ~~our~~repurchase ~~third party manufacturer of~~ the ~~Grunt~~Volcon ~~EVO~~IP ~~in return~~ for a ~~credit~~ ~~that~~nominal ~~would be provided for each unit purchased up to 900 units~~amount.

~~Facilities~~The ~~costs~~Company ~~for~~expects ~~the~~that ~~year~~this ~~ended~~agreement ~~December~~will ~~31,~~reduce ~~2023~~Empery ~~were~~Digital’s ~~$509,360~~future ~~for~~product ~~our~~liability ~~warehouse~~exposure ~~facility~~by ~~and~~transferring ~~third~~ownership ~~party~~of ~~warehousing~~Volcon’s ~~costs.~~four-wheel ~~Accrued~~vehicle ~~warranty~~business to Venom. ~~costs~~The ~~were~~Company ~~$205,069~~also ~~offset~~plans byto aexpand ~~reversal~~its ofvehicle ~~the~~financing ~~accrued~~operations ~~warranty~~for ~~liability~~golf incarts and UTVs to generate positive cash flow by leveraging the ~~amount~~spread between the Company’s cost of ~~$472,978~~capital ~~for~~and ~~the~~interest income from vehicle financing. The Company has been transitioning ~~Grunt~~its ~~where~~powersports ~~the~~dealers ~~one~~to ~~year~~Venom but will continue ongoing warranty ~~for~~support ~~defects~~through ~~had~~the ~~expired~~remaining ~~and~~warranty ~~claims~~period ~~were~~of ~~not~~vehicles asthe ~~high~~Company sold aswithin ~~estimated~~these channels.

InThe ~~2025~~Company’s wedecision ~~expect~~to ~~revenue and~~sell ~~cost~~these ofassets ~~goods~~represents ~~sold~~a tostrategic ~~increase~~shift ~~due~~in tooperations as the ~~expected~~Company does ~~increase~~not currently plan to sell any four-wheel products after 2025. Therefore, in ~~sales~~accordance with applicable accounting guidance, the results of the ~~Brat~~four-wheel product lines are presented as discontinued operations in the Consolidated Statements of Income and, ~~MN1~~as such, have been excluded from both continuing operations and ~~HF1~~segment ~~products.~~results ~~Additional~~for all periods presented in this Annual Report on Form 10-K. ~~cost~~All ~~savings~~amounts, ~~may~~and bedisclosures ~~realized~~for ifall periods presented in this Annual Report on Form 10-K reflect only the ~~third~~continuing ~~party~~operations ~~manufacturer~~unless otherwise ~~for~~noted. ~~these~~See ~~vehicles~~Note ~~can~~18 ~~source~~to orthe ~~manufacture~~consolidated ~~parts~~financial atstatements afor ~~lower~~further ~~cost~~discussion.

25Super Sonic Distribution Agreement

~~Sales~~In ~~and~~January ~~marketing~~2025, we entered into the Super Sonic Distribution Agreement with Super Sonic, a golf cart manufacturer, to supply golf carts to other companies in the U.S. who sell golf carts. On September 18, 2025, we received a notice of termination from Super Sonic pursuant to which Super Sonic terminated this distribution agreement. The termination, which was effective upon receipt of the notice from Super Sonic, was affected pursuant to the terms of the Super Sonic Distribution Agreement on the grounds that the Company has failed to meet the minimum purchase requirement under the Super Sonic Distribution Agreement for two consecutive months, which gave Super Sonic the right to immediately terminate the Super Sonic Distribution Agreement. The termination also eliminates any obligation of the Company to issue equity to Super Sonic pursuant to the terms of the Super Sonic Distribution Agreement. The Company is not subject to any early termination penalties related to the termination of the Super Sonic Distribution Agreement.

~~Sales~~Two-Wheeled ~~and marketing expenses relate to costs to increase exposure and awareness for our products and developing our network of U.S. dealers and international distributors.~~Products

~~Sales and~~We ~~marketing~~began ~~expenses~~selling ~~were $2,548,953 for~~ the ~~year~~Grunt ~~ended~~off-road ~~December~~motorcycle ~~31,~~in September ~~2024~~2021 and ~~were~~the ~~primarily~~Grunt ~~related~~EVO tooff-road ~~expenses~~motorcycle ~~associated~~replaced ~~with~~the ~~promoting our~~Grunt ~~products~~in ~~and~~September ~~brand~~2023. ofDue ~~$788,443,~~to ~~employee~~the ~~payroll~~manufacturing ~~costs~~cost of ~~$845,675,~~the ~~stock-based compensation of $37,062 for share-based awards granted~~Grunt ~~to employees and consultants~~EVO, ~~and~~we ~~travel~~terminated ~~costs~~the ofmanufacturing ~~$99,218~~contract ~~primarily related to costs incurred~~ for ~~travel~~it toin ~~build~~December ~~our dealer and distributor network and to attend events to promote our products~~2024. ~~Facilities~~As ~~costs~~of ~~were~~March ~~$117~~31,~~359.~~ ~~Professional fees were $253~~2025,~~872,~~ ~~mainly~~we ~~related to~~have ~~legal~~sold ~~fees~~all of ~~$19,506 related to entering into international distribution agreements and sales consultants in~~ the ~~amount~~remaining ~~of $189,673.~~Grunt ~~Depreciation~~EVO ~~expense, primarily for demo vehicles, was $157,950~~units.

~~Sales~~Beginning ~~and~~in ~~marketing~~the ~~expenses~~second ~~were~~quarter $7of 2024,~~405,705~~ ~~for~~we began evaluating ~~the~~other ~~year~~potential ~~ended~~electric ~~December~~motorcycle ~~31,~~offerings. ~~2023~~We ~~and~~are ~~were~~determining ~~primarily~~what ~~related~~features toand ~~expenses~~specifications ~~associated~~would ~~with~~be ~~promoting~~included ~~our~~for ~~products~~new ~~and~~offerings including ~~brand~~considering ofa ~~$2,889,421, employee~~street ~~payroll~~legal ~~costs~~version ofthat ~~$2,789,652,~~would ~~stock-based~~be ~~compensation~~dual ofpurpose ~~$693,559~~as ~~for~~an ~~share~~on-~~based~~road/off-road ~~awards~~motorcycle ~~granted~~(not tohighway ~~employees~~legal). ~~and~~We ~~consultants,~~have ~~and~~identified ~~travel~~one ~~costs~~new ofmodel ~~$294,323~~which ~~primarily~~we ~~related~~are toworking ~~costs~~on ~~incurred~~developing ~~for~~with ~~travel~~a tothird-party ~~build~~manufacturer. ~~our~~We ~~dealer~~received ~~and~~prototypes ~~distributor~~in ~~network~~February 2025 and we toare ~~attend events~~testing them to ~~promote~~evaluate ~~our~~the ~~products.~~feasibility ~~Facilities~~to ~~costs~~have ~~were~~them ~~$168,000.~~manufactured ~~Bad~~at ~~debt~~a ~~expense~~reasonable ~~was~~cost ~~$105,687~~ and ~~professional~~sell ~~fees~~them infor ~~the~~an ~~amount~~acceptable ~~of $201,125,~~profit. ~~mainly~~Provided ~~related~~testing tois ~~legal~~successful ~~fees~~and inwhether the ~~amount~~product ofcost, ~~$74~~including tariffs,~~090~~ ~~related~~allows us to ~~entering~~sell ~~into~~this ~~international~~product, ~~distribution~~we ~~agreements~~expect ~~and~~to ~~sales~~start ~~consultant~~selling ~~fees~~this product in the ~~amount~~second half of ~~$73,132~~2026.

~~We expect~~In ~~sales~~the ~~expenses~~fourth toquarter ~~increase~~of as2022, we ~~begin~~began ~~expanding~~selling ~~our~~an E-Bike, ~~international~~the ~~distributors~~Brat ~~and~~which ~~selling~~is ~~commissions~~manufactured toby ~~increase~~a ~~sales~~third-party. ofThe ~~Brats, MN1s~~Brat is a class 2 E-Bike and ~~HF1s~~can be used on-road or off-road. We ~~expect~~have ~~marketing~~developed a ~~expenses~~line toof ~~increase~~accessories tofor ~~promote~~ the ~~MN1~~Brat ~~and~~that ~~HF1~~include ~~products~~color panels, headlight cowl, and toseat, ~~launch~~among ~~the~~other ~~two-wheel~~things. ~~motorcycle~~We ~~that~~are also developing a new model of the Brat that will ~~replace~~incorporate some of these accessories in the ~~Grunt~~base ~~EVO~~model.

~~Product Development Expense~~38

~~Product~~Following ~~development~~the ~~expenses~~divestiture ~~relate~~of the four-wheel products noted above, the Company expects to ~~development~~concentrate on its two-wheel business, including the launch of ~~our~~new products ~~and~~in ~~process~~European markets in the second half of 2026. We will continue to ~~manufacture~~evaluate ~~these~~other ~~products~~potential two-wheel product offerings in 2026.

Product development expenses were $2,668,330 for year ended December 31, 2024 and were primarily related to expenses associated with employee payroll costs of $1,515,900, stock-based compensation of $126,337 for share-based awards granted to employees, facilities costs of $242,677, prototype costs of $252,147 and software fees related to product development in the amount of $77,837, travel expenses of $163,669 and depreciation expense of $100,782.Customers

Product development expenses were $7,868,985 for the year ended December 31, 2023 and were primarily related to expenses associated with employee payroll costs of $1,772,836, stock-based compensation of $837,271 for share-based awards granted to employees and consultants, professional fees of $298,713 for consultants assisting with product design and programming, prototype vehicles and parts costs of $3,662,908, testing costs of $240,472 to complete testing of vehicles including any required regulatory tests, $198,224 for supplies and software and facilities costs of $192,998.Dealers

WePrior ~~expect~~to ~~2025~~the divestiture of our four-wheel product ~~development~~lines, ~~costs~~we ~~related~~sold our products through powersports dealers, bicycle retailers, toand ~~employee~~golf ~~costs~~cart dealers. We expect to ~~remain~~continue ~~consistent~~to ~~with~~utilize ~~the~~our ~~year~~bicycle ~~ended~~dealers. ~~December~~We ~~31,~~are ~~2024~~transitioning our powersports and wegolf ~~expect~~cart andealers to ~~increase~~Venom inbut ~~prototype~~will ~~expenses~~continue asto wesupport ~~develop the~~these ~~dual~~dealers ~~sport~~for ~~motorcycle~~service and warranty obligations for products sold to them.

~~General~~International ~~and Administrative Expense~~Distributors

~~General~~We also sell our two-wheel products internationally through importers. Each importer buys vehicles and ~~administrative~~accessories ~~expenses~~and ~~relate~~sells them to ~~costs~~local dealers or directly to consumers. Payment for vehicle orders is required in advance of shipment. Local dealers or the importer will provide warranty and repair services for ~~our~~vehicles ~~finance,~~purchased in ~~accounting~~their country and ~~administrative~~we ~~functions~~will toreimburse ~~support~~them ~~the~~for ~~operations~~any parts or labor incurred for warranty repairs. As of March 25, ~~development~~2026, ~~marketing~~we have one importer in Mexico, one for the Caribbean Region and ~~sales~~one ofin New Zealand to sell our ~~products~~two-wheel vehicles and accessories in their assigned countries/markets.

For the year ended December 31, 2024, general and administrative expenses were $7,665,647 and were primarily related to expenses associated with employee payroll costs of $2,120,064, stock-based compensation of $159,388 for share-based awards granted to employees, professional fees of $1,130,595 (including legal fees of $574,952, tax and accounting fees of $82,116 and audit fees of $242,200), software costs of $549,238, insurance costs of $2,494,892, travel expenses of $161,078, facilities expense of $177,435, annual and special shareholder meeting costs of $201,268, board compensation expense of $125,000 and other public company expense costs of $327,774.Consumers

26Consumers can purchase the Brat from our website and have it delivered to a location of their choosing in the continental U.S.

For the year ended December 31, 2023, general and administrative expenses were $6,388,007 and were primarily related to expenses associated with employee payroll costs of $1,613,575, stock-based compensation of $885,113 for share-based awards granted to employees, professional fees of $1,024,774 (including legal fees of $522,334, tax and audit fees of $326,702 and recruiting fees of $50,297), software costs were $444,318, insurance costs of $1,465,092, facilities costs of $249,074, which includes $85,756 of lease termination costs, annual and special stockholder meeting costs of $227,439 and board compensation expense of $117,000.Manufacturers

We ~~expect~~outsource ~~general~~the manufacturing of all our two-wheel products and ~~administrative expenses~~accessories to ~~remain~~an ~~consistent~~international ~~over~~third-party ~~the~~manufacturer, ~~next~~PXID. ~~several~~The ~~quarters~~estimated fulfillment of all two-wheeled orders we have received, or will receive, assumes that PXID can successfully meet our order quantities and deadlines. ~~Costs~~We have experienced delays in the past due to other third-party manufacturers being unable to timely meet our order deadlines, and there is no assurance that we will not experience delays in the future until such time as ~~product~~we ~~liability~~are ~~insurance~~able to source products from multiple manufacturers or from larger, more established manufacturers. If PXID is unable to satisfy orders on a timely basis, our customers may ~~increase~~cancel their orders. Also, due to the ~~introduction~~ Company currently only having PXID for design, development and manufacturing of ~~new~~our two-wheel products, if they experience financial hardship and ~~increased~~cannot manufacture our products, our customers may cancel their orders which will harm our sales. Due to new and increased tariffs and other trade policies introduced or threatened by the U.S. government since the beginning of 2025, the cost of our products will increase without a decrease in manufacturing costs and may increase further if additional changes in import laws or tariffs occur. We could also experience delays in receiving shipments of our products if there are delays in getting carriers to ship our products or delays at the port of entry.

~~Interest~~Venom currently sources its golf cart and ~~Other~~accessory ~~Expenses,~~purchases ~~net~~from one international third-party manufacturer. Risks related to future purchases of their products from this manufacturer are similar to those of our two-wheel products noted above and could result in delays in ordering and receiving products that could impact the amount of inventory purchases that Venom may finance through the Company.

Interest and other income/expenses for the year ended December 31, 2024 was $18,496,282. Non-cash interest expense of $314,838 was recognized for the amortization of debt issuance costs and accretion of principal on the May 2023 Notes through the date these notes were exchanged for Preferred Stock in March 2024. We recorded a loss on the conversion of some of these notes of $333,544 and a loss from the exchange of these notes for Preferred Stock of $1,314,065. We recognized a loss of $1,470,554 when we repaid the outstanding principal of the May 2024 Notes with the proceeds received from our July 2024 equity offering. Non-cash interest expense of $238,965 was recognized for the amortization of debt issuance costs and accretion of principal on the May 2024 Notes until they were repaid. We recorded a loss on the change in the estimated fair value of the Series A and Series B Warrant liabilities of $14,933,739 which was partially offset by a gain of $165,355 from the exercise of some of the Series B Warrants.39

~~Interest~~Results ~~and other income/expenses for the year ended December 31, 2023 was $15,278,462. A loss on extinguishment~~ of the Convertible Notes of $22,296,988 was recognized in the year ended December 31, 2023 (see Note 6 to the consolidated financial statements). Non-cash interest expense of $4,969,590 was recognized for the amortization of debt issuance costs and accretion of principal on the Convertible Notes issued in August 2022 prior to extinguishment of the Convertible Notes and for the May 2023 Notes. A gain on the change in the valuation of derivative financial liabilities and warrant liabilities of $13,473,218 was recognized in the year ended December 31, 2023 (see Note 7 to the consolidated financial statements). Offering costs related to the November 2023 public offering for the amount allocated to the issuance of Series A and Series B Warrants in the amount of $1,444,547.Operations

~~Non-cash~~The ~~interest expense~~following ~~will~~financial noinformation ~~longer~~is ~~be recognized on the May 2023 Notes in the future due to the exchange of the May 2023 Notes~~ for ~~Series A Convertible Preferred Stock. Non-cash interest expense will no longer be recognized on~~ the ~~May~~years ~~2024~~ended ~~Senior~~December ~~Notes~~31, ~~after~~2025 ~~repayment~~and ~~of these notes in July~~ 2024 ~~with the proceeds from the sale of common stock~~.

Net Loss

	2025			2024
Revenue	$	974,977		$	3,983,466
Cost of goods sold		1,337,595			17,987,951
Gross margin		(362,618	)		(14,004,485	)

Operating expenses:
Sales and marketing		1,458,006			2,228,027
Product development		398,605			1,857,391
General and administrative		28,602,049			7,567,874
Unrealized loss on digital asset		122,659,151			–
Total operating expenses		153,117,811			11,653,292

Loss from operations		(153,480,429	)		(25,657,777	)

Interest and other expense		(474,386	)		(18,496,282	)

Loss from continuing operations before taxes		(153,954,815	)		(44,154,059	)
Tax benefit		5,383,973			–
Loss from continuing operations		(148,570,842	)		(44,154,059	)
Discontinued operations		(1,481,644	)		(1,356,250	)
Net loss	$	(150,052,486	)	$	(45,510,309	)

~~Net loss for the year ended December 31, 2024 was $45,510,309, compared to $45,071,211 for the year ended December 31, 2023.~~Revenue

~~Liquidity~~Revenue for the year ended December 31, 2025 was $974,977 which represents sales of Grunt EVOs of $302,841, which were discontinued in March 2025, Brats of $437,144 and ~~Capital~~accessories ~~Resources~~and parts of $116,009. The Company also realized $98,448 of finance revenue where the Company provided the financing services for the purchase of inventory.

On Revenue for the year ended December 31, 2024, wewas ~~had~~$3,983,466 which ~~cash~~represents ~~and~~sales ~~restricted~~of ~~cash~~Brats of $~~2.3 million~~1,561,555, ~~including~~Grunt EVOs of $0.1,280,739, ~~million~~Stags of ~~restricted cash~~$371,552 ~~and~~(which we ~~had~~stopped aselling ~~working~~in ~~capital~~the third quarter of 2024), Volcon Youth of $~~0.4~~286,680 ~~million~~(which we stopped selling as of June 30, 2024), and accessories and parts of $264,338. ~~Since~~Revenue ~~inception~~during 2024 wewas ~~have~~also ~~funded~~higher ~~our~~due ~~operations~~to ~~from~~the ~~proceeds~~reversal ~~from~~of ~~debt~~unclaimed dealer rebates and ~~equity~~price ~~sales~~adjustment credits in the amount of $350,093 offset by discounts due to various promotions in the amount of $125,859.

~~Cash~~In ~~used~~2026 inwe ~~operating~~expect ~~activities~~our sales to decrease due to the sale of our four-wheel products to Venom, discontinuing the Grunt EVO motorcycle and our transition to financing inventory purchases for other golf cart and four-wheel product companies.

Net cash used in operating activities was $16.0 million for year ended December 31, 2024 and includes all of our operating costs except depreciation and amortization of $0.4 million, write down of Stag, Grunt EVO and Volcon Youth inventory and inventory deposits of $9.3 million, non-cash interest expense for the amortization of debt issuance costs and accretion of principal on the May 2023 Notes and May 2024 Notes of $0.6 million, loss on change in derivative financial liabilities of $14.8 million, losses on conversion and extinguishment of Convertible Notes of $1.6 million, $1.5 million loss on repayment of the May 2024 Notes, $0.8 million from the loss on disposal of fixed assets, and stock based compensation of $0.3 million. Cash used in operating activities includes a decrease in accounts receivable of $0.1 million due to collections, a decrease of $0.8 million in prepaid inventory deposits due to inventory being received, a decrease of $0.9 million in inventory, a decrease of $0.9 million in prepaid assets primarily due to lower insurance costs, a decrease of $0.5 million in accounts payable, and an increase of $1.6 million in accrued liabilities primarily due to the vendor settlements noted above and $0.4 million used to pay our lease liabilities. As of December 31, 2024, we have a decrease of $0.2 million in customer deposits, primarily due to orders being fulfilled for two of our Latin American distributors for shipments of Brats and Grunt EVOs paid for previously. 40

27Cost of goods sold

~~Net~~Cost ~~cash~~of ~~used~~goods insold ~~operating activities was $29.6 million~~ for the year ended December 31, ~~2023~~2025 ~~and~~was ~~includes all of our operating costs except stock-based compensation of~~ $~~2.6 million~~1,337,595, ~~write-down~~including ofpayroll ~~inventory~~costs of $~~4.3 million~~297,244 ~~depreciation~~for ~~and~~employees ~~amortization~~performing ofproduct ~~$0.2 million~~fulfillment, ~~non-cash~~logistics ~~interest expense for~~management, ~~the~~and ~~amortization~~service ~~of debt issuance costs~~ and ~~accretion~~warranty ~~of principal on Convertible Notes~~ and ~~May~~facilities ~~2023~~costs ~~Notes~~ of $~~5.0 million~~430, ~~gain on change in derivative financial liabilities of $13~~426.5 ~~million,~~Inventory ~~loss~~adjustments onwere ~~extinguishment of Convertible Notes of~~ $~~22.3 million~~129,289 ~~bad~~offset ~~debt~~by ~~expense of $0.1 million. Cash used in operating activities includes~~ a ~~decrease~~benefit infrom ~~accounts receivable of $0.6 million due to collections, increases in inventory of $7.6 million due to~~ the ~~purchase~~reversal of ~~Brats, Volcon Youth motorcycles and purchases of inventory for the Stag after considering~~ ~~the~~our ~~write~~warranty ~~down~~accrual of ~~Grunt and Volcon Youth motorcycle inventory, a decrease of~~ $~~0.2 million in accounts payable~~199,957 ~~and an increase of $1.1 million in accrued liabilities~~ due ~~primarily~~ to the ~~accrual~~expiration ~~recorded~~of ~~for~~product ~~the settlement to Torrot~~warranties. AsProduct ofcosts ~~December~~were 31$235,147 ~~2023,~~for weGrunt ~~have~~EVOs ~~an increase~~and of $~~0.4 million in customer deposits~~459, ~~primarily~~ 449 for ~~orders to be fulfilled from two of our Latin American distributors for shipments of~~ Brats ~~and Grunt EVOs~~.

~~Cash~~Cost ~~used~~of ingoods ~~investing~~sold ~~activities~~for the year ended December 31, 2024 were $17,987,951 including payroll costs of $268,745 for employees performing product fulfillment, logistics management, and service and warranty, partially offset by a stock-based compensation benefit of ($11,827) for the reversal of previously recognized stock-based compensation on stock options that did not vest due to employee terminations. Product costs for Brats and Grunt EVOs sold during the period were $1,523,053 and $1,427,562, (before the finished goods inventory write down discussed below), respectively. Volcon Youth product costs were $186,813 before the additional expense of $81,911 for the write down of all Volcon Youth inventory as the Company could no longer sell Volcon Youth motorcycles or parts after June 30, 2024.

~~Net~~Stag product costs were $950,424, which includes an ~~cash~~expense ~~used~~of $112,168 for the loss the Company realized due to agreeing to provide additional units to a customer at a sales price less than the manufactured cost of the units. As noted above, the Company also wrote off all Stag parts inventory and prepaid inventory deposits resulting in ~~investing~~an ~~activities~~expense ~~was~~of $08,712,644.2 ~~million~~The ~~for~~Company ~~the~~also ~~year~~recognized ~~ended~~an ~~December~~expense 31of $976,420 ~~2024~~for a settlement agreement with a vendor who supplies certain suspension components for the Stag, ~~primarily~~an ~~consisting~~expense of $~~0.3~~2,526,410 ~~million~~for a settlement agreement with the manufacturer of ~~purchases~~the Stag and $35,000 for a settlement to a vendor of ~~equipment~~Grunt ~~and~~parts. ~~tooling~~These expenses were offset by ~~$0.1~~a ~~million~~credit ~~received~~of ~~from~~$700,000 for an ~~insurance~~amendment to the original settlement ~~for~~agreement with Torrot whereby the Company agreed to settle the future payment obligation by making a ~~vehicle~~one-time ~~that~~lump sum ~~was~~payment ~~totaled~~and inreturning all unsold units and parts to Torrot. The Company also wrote down the ~~period~~Grunt EVO finished goods inventory by $674,379 due to the Company lowering the sales price to dealers and distributors.

~~Net~~The ~~cash~~Company ~~used~~recorded ina ~~investing activities~~loss ~~was~~on ~~$0.9~~disposal ~~million~~of ~~for~~assets ~~the~~of $817,736 ~~year~~primarily ~~ended~~tooling ~~December~~related ~~31,~~to ~~2023~~Stag, ~~consisting~~Grunt ofEVO $0and Runt.9 ~~million~~The ofCompany ~~purchases~~also ofrecorded ~~equipment~~$175,000 ~~and~~as ~~tooling~~an offset by ~~proceeds~~to expenses for the partial recovery of $0a previously written off prepaid inventory deposit.1 ~~million~~Facilities ~~received~~costs for the ~~sale~~year ofended ~~two~~December ~~vehicles~~31, 2024 were $408,217 for our warehouse facility and third-party warehousing costs.

~~Cash~~In ~~provided~~2026 bywe ~~financing~~expect ~~activities~~cost of goods sold to decrease due to lower revenue from product sales as noted above.

~~Cash provided~~Sales ~~by financing activities for the year ended December 31, 2024, was $10.4 million~~ and was primarily related to the net proceeds from the issuance of common stock and pre funded warrants in July 2024 for net proceeds of $10.8 million and net proceeds from the issuance May 2024 Senior Notes and May 2024 Note Warrants of $2.3 million offset by the repayment of the May 2024 Senior Notes of $2.9 million. We also received net proceeds of $0.2 million for the issuance of common stock from our At The Market equity offering (“ATM”) established in October 2024 and proceeds of $0.1 million for the exercise of Series B warrants.marketing

~~Cash~~Sales ~~provided by financing activities for the year ended December 31, 2023, was $27.1 million~~ and ~~was~~marketing ~~related~~expenses ~~primarily~~relate to ~~proceeds~~costs ~~from~~to ~~the~~increase exposure ~~public~~and ~~offerings~~awareness of 42 ~~shares of~~ our ~~common~~digital ~~stock~~asset ~~for net proceeds of $4.6 million~~strategy, ~~issuance~~for ofour ~~convertible~~products ~~notes in a private offering with a principal amount of $4.9 million~~ and ~~net~~developing ~~proceeds~~our ofnetwork ~~$3.9 million, and proceeds from the public offering~~ of ~~93 common stock units and 1,099 pre-funded warrants units for net proceeds of $16~~U.~~2 million~~S. Wedealers ~~also received proceeds of $1.0 million from the exercise of 11 warrants~~ and ~~reduction of~~international ~~the exercise price for 12 warrants~~distributors.

~~Our~~Sales ~~continuation~~and asmarketing aexpenses ~~going~~were ~~concern~~$1,458,006 isfor ~~dependent~~the ~~upon~~year ~~our~~ended ~~ability~~December to31, ~~attain~~2025 ~~profitable operations~~ and ifwere ~~necessary,~~primarily ~~obtain~~related ~~continued~~to ~~financial~~expenses ~~support~~associated ~~from~~with ~~the~~promoting ~~issuance of~~our ~~debt~~products orand ~~equity.~~promoting the AsEmpery ofDigital ~~December~~brand ~~31,~~after ~~2024,~~the weannouncement ~~had incurred an accumulated deficit~~ of ~~$166.3~~our ~~million since~~digital ~~inception.~~asset ~~Subsequent~~treasury tostrategy ~~December~~and ~~31,~~name ~~2024,~~change ~~the~~in ~~Company~~July ~~received~~2025 ~~additional net proceeds from the issuance~~ of ~~common~~$753,643, ~~stock from~~employee ~~our~~payroll ~~ATM~~costs of $~~8.8 million. In addition~~250, ~~on February 6~~787, ~~2025,~~and ~~the~~professional ~~Company~~fees ~~received net proceeds~~ of $~~10.7~~182,376 ~~million~~for ~~from~~fees ~~the~~paid ~~issuance~~to ofa ~~common stock~~third-party ~~units~~distributor, ~~or pre~~third-~~funded~~party ~~warrant~~sales ~~units~~consultants and aslegal ~~more~~fees. ~~fully~~Travel ~~discussed~~expenses inwere ~~Note~~$81,748, 10facilities toexpenses ~~the~~were ~~accompanying~~$73,657, ~~financial~~and ~~statements.~~software fees were $88,216.

~~Management~~Sales ~~anticipates~~and ~~that~~marketing ~~our~~expenses ~~cash~~were on$2,228,027 ~~hand~~for asthe ofyear ended December 31, 2024 ~~plus~~and ~~the~~were ~~cash~~primarily ~~raised~~related ~~from the ATM subsequent~~ to ~~December~~expenses ~~31,~~associated ~~2024,~~with ~~net~~promoting ~~proceeds~~our ~~from~~products ~~the~~and ~~February~~brand 6of $617,098, ~~2025 equity~~employee ~~offering~~payroll ~~discussed~~costs ~~above~~of $778,306, ~~and~~stock-based ~~cash~~compensation ~~expected~~of to$37,062 befor ~~generated~~share-based ~~from~~awards ~~operations~~granted ~~will not be sufficient~~ to ~~fund~~employees ~~planned~~and ~~operations~~consultants, ~~beyond~~and ~~one~~travel ~~year~~costs ~~from the date~~ of ~~the~~$84,374 ~~issuance~~primarily ofrelated ~~the~~to ~~financial~~costs ~~statements~~incurred asfor oftravel ~~and~~to ~~for~~build ~~the~~our ~~year~~dealer ~~ended~~and ~~December~~distributor ~~31,~~network ~~2024.~~and Weto doattend ~~not~~events ~~have~~to ~~commitments~~promote ~~for~~our ~~any~~products. ~~such~~Facilities ~~financing,~~costs ~~and~~were ~~there~~$116,959. ~~can~~Professional befees nowere ~~assurance~~$189,984, ~~that~~mainly ~~such~~related ~~additional funding would be available~~ to ~~the~~legal ~~Company~~fees onof ~~acceptable terms~~$19, or506 atrelated ~~all. If we are unable~~ to ~~raise~~entering into ~~additional~~international ~~financing,~~distribution weagreements ~~will~~and besales ~~required~~consultants toin ~~modify~~the oramount ~~curtail~~of ~~our operations~~$125,785. ~~These~~Depreciation ~~factors~~expense, ~~raise substantial~~primarily ~~doubt~~for ~~regarding~~demo ~~our~~vehicles, was ~~ability to continue as a going concern~~$157,950.

AsFor of2026 ~~December 31, 2024,~~ we ~~had~~expect ~~shareholders’ equity~~sales ofexpenses ~~$40,761. As described above, subsequent~~ to ~~December~~decrease ~~31,~~as ~~2024,~~ we transition ~~received~~away ~~additional net proceeds~~ from ~~the~~selling ~~issuance~~four-wheeled ofproducts ~~common stock~~to ~~from~~financing ~~our~~inventory ~~ATM of $8~~purchases.8 ~~million,~~We ~~and~~expect wemarketing ~~received~~expenses ~~net~~to ~~proceeds~~remain ofconsistent as ~~$10.7~~we ~~million~~develop ~~from~~ the ~~issuance~~Empery ofDigital ~~common~~brand ~~stock~~and ~~units~~increase orawareness ~~pre-funded warrant units. As~~ of ~~the~~our ~~date~~digital ofasset ~~this report, we estimate we have shareholders’ equity of over $17~~strategy.~~0 million.~~

~~JOBS Act Accounting Election~~41

~~The~~Product ~~recently~~Development enacted JOBS Act provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended, for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have irrevocably elected not to avail ourselves of this extended transition period and, as a result, we will adopt new or revised accounting standards on the relevant dates on which adoption of such standards is required for other public companies.Expense

28Product development expenses relate to development of our products and process to manufacture these products.

WeProduct ~~have~~development ~~implemented~~expenses ~~all new~~were ~~accounting~~$398,605 ~~pronouncements~~for ~~that~~the ~~are~~year inended ~~effect~~December ~~and~~31, ~~may~~2025 ~~impact~~and ~~our~~were ~~financial~~primarily ~~statements~~related ~~and~~to weexpenses doassociated ~~not~~with ~~believe~~employee ~~that~~payroll ~~there~~costs ~~are~~of ~~any other new~~$177,480, ~~accounting~~depreciation ~~pronouncements~~expense ~~that~~of ~~have~~$49,864 ~~been~~and ~~issued~~facilities ~~that~~costs ~~might have a material impact on our financial position or results~~ of ~~operations~~$96,978.

~~Critical~~Product ~~Accounting~~development ~~Policies~~expenses were $1,857,391 for year ended December 31, 2024 and were primarily related to expenses associated with employee payroll costs of $923,353, stock-based compensation of $126,337 for share-based awards granted to employees, facilities costs of $220,310, prototype costs of $148,845 and software fees related to product development in the amount of $77,837, travel expenses of $94,434 and depreciation expense of $100,782.

~~None~~For 2026 we expect product development costs related to employee costs to decrease due to lower headcount as fewer products are in development compared to 2025, partially offset by an increase for product prototype costs for purchases of samples of new E-Bike products being considered for sale.

General and Administrative Expense

General and administrative expenses relate to costs for our finance, accounting and administrative functions to support the operations, development, marketing and sales of our products.

General and administrative expenses were $28,602,049 for the year ended December 31, 2025, and include expenses associated with employee payroll costs of $2,355,795, including the $225,000 signing bonus paid to the new Co-CEO, and bonuses of $375,000 paid to the Company’s existing CEO and CFO, as noted above. The Company also recognized $17,850,071 of stock-based compensation including $1,125,802 for share-based awards granted to the Company’s CEO and CFO in May 2025, $8,755,514 for inducement stock options granted to three new employees upon completion of the Private Placements, $249,413 for warrants granted to a consultant for the Private Placements and $7,719,342 for vesting of some of the warrants granted to Gemini as discussed above. In July 2025, the Company entered into a settlement agreement with Highbridge for $2,000,000. Period expenses also include professional fees of $1,508,040 (including auditor fees of $199,318, consultant fees of $266,085 and legal fees of $1,042,637), software costs of $491,614, insurance costs of $1,740,383, travel expenses of $125,845, and facilities costs of $240,335. Additionally, the period includes Board compensation expense of $875,000, which includes $600,000 paid to the Company’s Board as noted above. The remaining Board compensation represents fees paid quarterly. The Company also had other public company costs of $171,326 for transfer agent and other miscellaneous services, and annual meeting costs of $74,450. The Company also had costs of $713,185 for BTC Custody fees.

For the year ended December 31, 2024, general and administrative expenses were $7,567,874 and were primarily related to expenses associated with employee payroll costs of $2,120,064, stock-based compensation of $159,388 for share-based awards granted to employees, professional fees of $1,130,595 (including legal fees of $574,952, tax and accounting fees of $82,116 and audit fees of $242,200), software costs of $549,238, insurance costs of $2,494,892, travel expenses of $63,305, facilities expense of $177,435, annual and special stockholder meeting costs of $201,268, Board compensation expense of $125,000 and other public company expense costs of $327,774.

For 2026, we expect general and administrative expenses to decrease when compared to 2025 as we have substantially established our digital asset strategy and do not expect to incur certain one-time costs such as the $2,000,000 settlement with Highbridge, bonuses of $600,000 paid to management, $600,000 fees paid to existing independent Board members in connection with the July 2025 Private Placements. We also expect our insurance costs related to product liability, property and general liability to decrease by over $400,000 and although we have several underutilized facilities the Company currently leases through August 2026, we are actively working with our real estate broker and landlord to sublease these facilities and we do not plan to renew these leases at expiration. We also expect lower stock-based compensation for inducement stock awards granted to new employees as 80 percent of the awards are vested as of December 31, 2025 which may be offset by increased stock-based compensation if our 2025 Stock Plan and stock options granted from the July 2025 Private Placement are approved by stockholders at our 2026 annual meeting of stockholder (the “2026 Annual Meeting of Stockholders”).

We anticipate an increase in legal and professional fees in fiscal year 2026 due to certain corporate governance and stockholder engagement matters, including fees associated with stockholder activist matters.

Unrealized Loss on Digital Assets

The Company’s digital assets are initially recorded at cost and are measured at fair value as of each reporting period. The Company determines the fair value of its Bitcoin based on quoted (unadjusted) prices on the Gemini exchange, the active exchange that the Company has determined is its principal market for BTC. The Company’s average BTC purchase price was $117,516 for all BTC purchased by the Company in the year ended December 31, 2025, including the BTC received as payment in the Private Placements. Based on the price as of December 31, 2025 of $87,464, the Company recognized an unrealized loss of $122,659,151.

Interest and Other Expenses, net

Net Interest and other income/expenses for the year ended December 31, 2025 was net expense of $474,386. This includes interest expense of $2,253,819 primarily from borrowings to repurchase our common stock and interest expense on vendor settlement liabilities that were recorded on a discounted cash flow basis, interest income of $292,623 primarily from interest earned on cash held in a money market account, net income of $1,493,789 generated from BTC derivative contracts as noted above and the loss of $125,377 on repayment of a credit facility.

For fiscal year 2026, we expect interest expense to increase due to increased borrowings on our term loan and delayed draw credit facility for common stock repurchases. If market conditions allow, the Company may issue equity or sell Bitcoin to repay outstanding loans or obtain other loan facilities with lower interest rates that could reduce interest expense in the future.

Income tax benefit

The income tax benefit for the year ended December 31, 2025 is a result of the Company receiving BTC of $28.0 million for the purchase of common stock and pre-funded warrants in the Private Placement from two investors. The Company’s basis in the BTC is carried over from the investors’ basis which resulted in the Company having a tax basis of $3,578,522. The Company recorded a deferred tax liability for the tax effect of the difference in the tax basis and the $28.0 million as a reduction to additional paid in capital. As a result the Company released the same amount of its previously recorded valuation allowance on its deferred tax assets as a tax benefit.

Due to recurring losses, there is no tax provision for the year ended December 31, 2024.

Net Loss From Continuing Operations

Net loss from continuing operations for the year ended December 31, 2025 was $153,954,815, compared to $44,154,059 for the year ended December 31, 2024 primarily due to explanations noted above.

Liquidity and Capital Resources

On December 31, 2025, we had cash and restricted cash of $9.1 million, including $105,000 of restricted cash, and we had a working capital deficit of $38.5 million. Since inception we have funded our operations from proceeds from debt and equity sales.

Cash used in operating activities

Net cash used in operating activities was $17.8 million for the year ended December 31, 2025 and includes all of our operating costs, except non-cash costs of depreciation and amortization, loss on change in derivative financial liabilities all of which were insignificant for the period and stock-based compensation of $17.8 million and unrealized loss on Bitcoin of $122.7 million. Significant uses/contributions of cash used in operating activities includes a decrease of $0.8 million in inventory and inventory deposits, an increase in prepaid assets of $1.4 million due to inventory financing prepayments, and a decrease of $2.9 million in accrued liabilities primarily due to payments on vendor settlements and payment of management bonuses that were accrued at the end of 2024.

Net cash used in operating activities was $16.0 million for year ended December 31, 2024 and includes all of our operating costs except depreciation and amortization of $0.4 million, write down of Stag, Grunt EVO and Volcon Youth inventory and inventory deposits of $9.3 million, non-cash interest expense for the amortization of debt issuance costs and accretion of principal on the May 2023 Notes and May 2024 Notes of $0.6 million, loss on change in derivative financial liabilities of $14.8 million, losses on conversion and extinguishment of Convertible Notes of $1.6 million, $1.5 million loss on repayment of the May 2024 Notes, $0.8 million from the loss on disposal of fixed assets, and stock-based compensation of $0.3 million. Cash used in operating activities includes a decrease in accounts receivable of $0.1 million due to collections, a decrease of $0.8 million in prepaid inventory deposits due to inventory being received, a decrease of $0.9 million in inventory, a decrease of $0.9 million in prepaid assets primarily due to lower insurance costs, a decrease of $0.5 million in accounts payable, and an increase of $1.6 million in accrued liabilities primarily due to the vendor settlements noted above and $0.4 million used to pay our lease liabilities. As of December 31, 2024, we had a decrease of $0.2 million in customer deposits, primarily due to orders being fulfilled for two of our Latin American distributors for shipments of Brats and Grunt EVOs paid for previously.

Cash used in investing activities

Net cash used in investing activities was $453.8 million for the year ended December 31, 2025, primarily consisting of the purchase of Bitcoin of $451.6 million, the purchase of a certificate of deposit of $2.0 million as collateral for our dealer floor plan financing and $0.2 million for purchases of equipment and tooling.

Net cash used in investing activities was $0.2 million for the year ended December 31, 2024, primarily consisting of $0.3 million of purchases of equipment and tooling offset by $0.1 million received from an insurance settlement for a vehicle that was totaled in the period.

Cash provided by financing activities

Cash provided by financing activities for the year ended December 31, 2025, was $478.4 million and was primarily related to net proceeds of $452.3 million from the sale of common stock and pre-funded warrants from the Private Placements, proceeds of $10.3 million from the sale of common stock under the Company’s ATM program established in October 2024, proceeds of $10.7 million from the sale of common stock units and pre-funded warrant units, proceeds of $100.0 million from borrowing arrangements, proceeds of $1.8 million from warrant exercises, partially offset by share repurchases of $96.3 million.

Cash provided by financing activities for the year ended December 31, 2024, was $10.4 million and was primarily related to the net proceeds from the issuance of common stock and pre-funded warrants in July 2024 for net proceeds of $10.8 million and net proceeds from the issuance May 2024 Senior Notes and May 2024 Note Warrants of $2.3 million offset by the repayment of the May 2024 Senior Notes of $2.9 million. We also received net proceeds of $0.2 million for the issuance of common stock from our ATM and proceeds of $0.1 million for the exercise of Series B warrants.

Our continuation as a going concern is dependent upon our ability to attain profitable operations and if necessary, obtain continued financial support from the issuance of debt or equity. As of December 31, 2025, we had incurred an accumulated deficit of $316.4 million since inception.

Management anticipates that our cash on hand as of December 31, 2025, plus cash expected to be generated from operations and premium from derivative trading, cash available from borrowings available on our credit facility and the cash received from the sale of Bitcoin will be sufficient to fund planned operations and repay borrowings due beyond one year from the date of the issuance of the financial statements as of and for the year ended December 31, 2025.

As of December 31, 2025, we had stockholders’ equity of $269.2 million.

JOBS Act Accounting Election

The recently enacted JOBS Act provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended, for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have irrevocably elected not to avail ourselves of this extended transition period and, as a result, we will adopt new or revised accounting standards on the relevant dates on which adoption of such standards is required for other public companies.

We have implemented all new accounting pronouncements that are in effect and may impact our financial statements and we do not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on our financial position or results of operations.

Critical Accounting Policies

None

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Report of MaloneBailey, LLP, Houston, TX (PCAOB ID 206) Financial Statements Consolidated Balance Sheets as of December 31, ~~2024~~2025 and December 31, ~~2023~~2024 Consolidated Statements of Operations for the years ended December 31, ~~2024~~2025 and ~~2023~~2024 Consolidated Statements of Stockholders’ Equity ~~(Deficit)~~ for the years ended December 31, ~~2024~~2025 and ~~2023~~2024 Consolidated Statements of Cash Flows for the years ended December 31, ~~2024~~2025 and ~~2023~~2024 Notes to the Financial Statements

2945

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and Board of Directors of

~~Volcon,~~Empery Digital Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Empery Digital Inc. (f/k/a as Volcon, Inc.) and its subsidiary (collectively, the “Company”) as of December 31, ~~2024~~2025 and ~~2023~~2024, and the related consolidated statements of operations, stockholders’ equity ~~(deficit)~~, and cash flows for the years then ended, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, ~~2024~~2025 and ~~2023~~2024, and the results of ~~their operations~~its operations and ~~their~~its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

Going Concern Matter

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has suffered recurring losses from operations and has a net working capital deficiency that raise substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that ~~respond~~ respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as ~~evaluating~~ evaluating the overall presentation of the financial statements. We believe that our audits ~~provides~~provide a reasonable basis for our opinion.

/s/ MaloneBailey, LLP

www.malonebailey.com

We have served as the Company'’s auditor since 2021.

Houston, Texas

March 3127, ~~2025~~2026

3046

~~VOLCON,~~EMPERY DIGITAL INC.

CONSOLIDATED BALANCE SHEETS

AS OF DECEMBER 31, ~~2024~~2025 AND ~~2023~~2024

	2024			2023
	2025			2024
ASSETS
Current assets:
Cash	$	2,193,573		$	7,983,346
Cash and cash equivalents	$	8,963,856		$	2,193,573
Restricted cash		105,000			~~210~~105,000
Accounts receivable, net of allowance for doubtful accounts of $99,233 and $70,359 at December 31, 2024 and December 31, 2023, respectively		88,247			203,303
Certificate of deposit		2,049,413			–
Inventory		1,455,477			8,973,134
Accounts receivable, net of allowance for doubtful accounts of $71,869 and $99,233 at December 31, 2025 and December 31, 2024, respectively		312,106			88,247
Inventory deposits		191,156			258,316
Inventory		330,619			1,455,477
Prepaid expenses and other current assets		1,032,699			1,904,197
Inventory deposits		15,556			191,156
Total current assets		5,066,152			19,532,296
Prepaid expenses and other current assets		2,479,310			1,032,699
Total current assets		14,255,860			5,066,152
Long-term assets:
Property and equipment, net		206,138			1,258,607
Digital assets		126,926,895			–
Intangible asset, net		15,698			–
Digital assets restricted by lenders as collateral for loans		230,048,488			–
Other long-term assets		199,281			199,281
Property and equipment, net		234,652			206,138
Right-of-use assets - operating leases		739,234			1,136,213
Intangible asset, net		36,908			15,698
Total assets	$	6,226,503		$	22,126,397
Other long-term assets		155,056			199,281
Right-of-use assets - operating leases		778,235			739,234
Total assets	$	372,436,094		$	6,226,503
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities:
Accounts payable	$	~~385~~745,~~326~~466		$	~~831~~385,~~184~~326
Accrued liabilities		1560,~~379,191~~761			31,~~128~~379,~~906~~191
Vendor settlements - short-term		21,~~092~~189,~~975~~184			–2,092,975
Current portion of notes payable		7,181			15,278
Term loan		49,890,972			–
Convertible notes, net of discount and issuance costs		–			30,149,579
Current portion of notes payable		8,047			7,181
Warrant liabilities		~~111~~64,~~658~~985			5111,~~971,067~~658
Right-of-use operating lease liabilities - short-term		~~443~~322,~~950~~103			~~399~~443,~~611~~950
Customer deposits		~~216~~3,~~522~~145			~~417~~216,~~485~~522
Total current liabilities		452,~~636~~784,~~803~~663			404,~~913~~636,~~110~~803
Notes payable, net of current portion		28,533			69,138
Long-term loan		49,945,046			–
Vendor settlements - long-term		1,189,184			–
Notes payable, net of current portion		20,485			28,533
Right-of-use operating lease liabilities - long-term		331,222			775,170
Vendor settlements - long-term		–			1,189,184
Total liabilities		6,185,742			41,757,418
Right-of-use operating lease liabilities - long-term		471,683			331,222
Total liabilities		103,221,877			6,185,742
COMMITMENTS AND CONTINGENCIES		–
Stockholders’ equity (deficit):
Stockholders’ equity:
Preferred stock: $0.00001 par value, 5,000,000 shares authorized, 25,000 shares designated, no shares issued and outstanding as of December 31, 2024 and December 31, 2023		–			–
Preferred stock: $0.00001 par value, 5,000,000 shares authorized, 25,000 shares designated as Series A, no shares issued and outstanding as of December 31, 2025 and December 31, 2024		–			–
Common stock: $0.00001 par value, 250,000,000 shares authorized, 630,865 shares issued and outstanding as of December 31,2024 and 1,291 shares issued and outstanding as of December 31, 2023		7			–
Common stock: $0.00001 par value, 250,000,000 shares authorized,33,800,951 shares issued and outstanding as of December 31, 2025 and 78,859 shares issued and outstanding as of December 31, 2024		475			–
Additional paid-in capital		166,357,201			101,175,117
Treasury Stock		(96,282,082	)		–
Accumulated deficit		(166,316,447	)		(120,806,138	)
Additional paid-in capital		681,864,757			166,357,208
Total stockholders’ equity (deficit)		40,761			(19,631,021	)
Accumulated deficit		(316,368,933	)		(166,316,447	)
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)	$	6,226,503		$	22,126,397
Total stockholders’ equity		269,214,217			40,761
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	372,436,094		$	6,226,503

The accompanying notes are an integral part of these consolidated financial statements.

3147

~~VOLCON,~~EMPERY DIGITAL INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED DECEMBER 31, ~~2024~~2025 AND ~~2023~~2024

	2024			2023
	2025			2024
Revenue:	$	4974,~~037,191~~977		$	3,~~260~~983,~~988~~466
Cost of goods sold		181,~~168~~337,~~288~~595			1117,~~391~~987,~~040~~951
Gross margin		(14362,~~131,097~~618	)		(814,~~130~~004,~~052~~485	)
Operating expenses:
Sales and marketing		21,~~548~~458,~~953~~006			72,~~405~~228,~~705~~027
Product development		2398,~~668,330~~605			71,~~868~~857,~~985~~391
General and administrative expenses		728,~~665~~602,~~647~~049			67,~~388~~567,~~007~~874
Total operating expenses		12,882,930			21,662,697
Unrealized loss on digital assets		122,659,151			–
Loss from operations		(27,014,027	)		(29,792,749	)
Total operating expenses		153,117,811			11,653,292
Other income (expense)		33,981			(40,555	)
Loss from operations		(153,480,429	)		(25,657,777	)
Interest expense		(643,716	)		(4,969,590	)
Other income, net		1,565,515			33,981
Loss from extinguishment of debt		(1,647,608	)		(22,296,988	)
Loss on repayment of credit facility		(125,377	)		–
Issuance costs		–			(1,444,547	)
Loss on conversion and extinguishment of Convertible Notes		–			(1,647,608	)
Loss on repayment of debt		(1,470,554	)		–
Loss on repayment of May 2024 Notes		–			(1,470,554	)
Gain (Loss) on derivative liabilities and warrant liabilities		(14,768,385	)		13,473,218
Gain (loss) on change in fair value of financial liabilities		46,672			(14,768,385	)
Total other expense		(18,496,282	)		(15,278,462	)
Interest income		292,623			–
Loss before provision for income taxes		(45,510,309	)		(45,071,211	)
Interest expense		(2,253,819	)		(643,716	)
Total other expense		(474,386	)		(18,496,282	)
Loss before provision for income taxes		(153,954,815	)		(44,154,059	)
Provision for income taxes		–			–
Net loss	$	(45,510,309	)	$	(45,071,211	)
Loss from continuing operations before income tax		(153,954,815	)		(44,154,059	)
Net loss per common share – basic	$	(146.90	)	$	(187,796.71	)
Income tax benefit		5,383,973			–
Net loss per common share – diluted	$	(146.90	)	$	(187,796.71	)
Loss from continuing operations		(148,570,842	)		(44,154,059	)
Weighted average common shares outstanding – basic		309,798			240
Loss from discontinued operations		(1,481,644	)		(1,356,250	)
Weighted average common shares outstanding – diluted		309,798			240
Net loss	$	(150,052,486	)	$	(45,510,309	)
Earnings per common share
Loss from continuing operations per common share - basic	$	(8.04	)	$	(1,140.20	)
Loss from continuing operations per common share - diluted	$	(8.04	)	$	(1,140.20	)
Loss from discontinued operations per common share - basic	$	(0.08	)	$	(35.02	)
Loss from discontinued operations per common share - diluted	$	(0.08	)	$	(35.02	)
Net loss per common share – basic	$	(8.12	)	$	(1,175.22	)
Net loss per common share – diluted	$	(8.12	)	$	(1,175.22	)
Weighted average common stock outstanding – basic		18,482,865			38,725
Weighted average common stock outstanding – diluted		18,482,865			38,725

The accompanying notes are an integral part of these consolidated financial statements.

3248

~~VOLCON,~~EMPERY DIGITAL INC.

CONSOLIDATED STATEMENT OF ~~CHANGES IN~~ STOCKHOLDERS’ ~~EQUITY~~ ~~(DEFICIT)~~EQUITY

FOR THE YEAR ENDED DECEMBER 31, 2025


	Common stock					Treasury stock					Additional
	Number of Shares			Amount		Number of Shares		Amount			paid-in capital			Accumulated deficit			Total

Balance at January 1, 2025		78,859		$	–		–	$	–		$	166,357,208		$	(166,316,447	)	$	40,761

Issuance of common stock for exercises of pre-funded warrants		2,538,064			25		–		–			(25	)		–			–

Issuance of common stock from the At the Money offering, net of issuance costs of $374,392		356,568			4		–		–			10,288,059			–			10,288,063

Issuance of common stock and pre-funded warrants, net of issuance costs of $1,296,118		53,750			1		–		–			10,703,881			–			10,703,882

Issuance of common stock for disputed shares from November 2024 reverse stock split (see Note 2)		23,617			–		–		–			–			–			–

Purchase fractional shares		(179	)		–		–		–			(941	)		–			(941	)

Exchange of common stock for pre-funded warrants		(4,323	)		–		–		–			–			–			–

Issuance of common stock and pre-funded warrants, net of issuance costs of $21,136,401 and deferred taxes of $5,383,973		44,414,189			444		–		–			474,907,637			–			474,908,081

Issuance of common stock for exercises of warrants		111,500			1		–		–			1,783,999			–			1,784,000

Stock-based compensation		–			–		–		–			17,824,939			–			17,824,939

Repurchases of common stock		(13,771,094	)		–		13,771,094		(96,282,082	)		–			–			(96,282,082	)

Net loss		–			–		–		–			–			(150,052,486	)		(150,052,486	)

Balance at December 31, 2025		33,800,951		$	475		13,771,094	$	(96,282,082	)	$	681,864,757		$	(316,368,933	)	$	269,214,217

EMPERY DIGITAL INC.

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

FOR THE YEAR ENDED DECEMBER 31, 2024

Series A Convertible Preferred Stock

Common stock

Additional

Number of Shares

Amount

Number of Shares

Amount

~~Additional~~ paid -in capital

Accumulated deficit

Total

Balance at January 1, 2024

–

~~1,291~~162

–

101,175,117

(120,806,138

)

(19,631,021

)

Issuance of common stock for exercise of pre-funded warrants

–

~~226~~28,~~343~~293

2–

(2–

)

–

Issuance of common stock for exercise of Series A warrants

–

172,~~325~~166

–

17,352,653

–

17,352,653

Proceeds received for exercise of buydown warrants

–

102

–

3,500

–

3,500

Common stock issued for conversion of convertible notes

–

~~4,971~~622

–

7,395,907

–

7,395,907

Conversion of Convertible Notes for Preferred Stock

24,698

–

24,716,118

–

24,716,118

Conversion of Preferred Stock for common stock

(24,698

)

–

~~279~~34,~~043~~881

3–

(3–

)

–

Issuance of common stock for exercise of Series B Warrants

–

141,~~701~~838

–

)

–

)

Reclassification of warrant liability to equity

–

3,405,662

–

3,405,662

Proceeds received for issuance of warrants with May 2024 Notes, net of issuance costs of $111,194

–

1,023,200

–

1,023,200

Issuance of common stock and pre-funded warrants, net of issuance costs of $1,210,753

–

~~102~~12,~~605~~826

1–

10,789,~~260~~261

–

10,789,261

Stock-based compensation

–

310,961

–

310,961

Exchange of Common Stock for Prefunded Warrants

(96,821

)

–

Exchange of Common Stock for Pre-funded Warrants

–

(12,103

)

–

Proceeds from sale of common stock from ATM, net if issuance costs of $112,814

–

688,~~921~~616

1–

184,~~829~~830

–

184,830

Common stock issued for reverse stock split due to rounding

–

121,~~476~~556

–

Net loss

–

(45,510,309

)

(45,510,309

)

Balance at December 31, 2024

–

~~630~~78,~~865~~859

7–

166,357,~~201~~208

(166,316,447

)

40,761

The accompanying notes are an integral part of these consolidated financial statements.

3350

~~VOLCON,~~EMPERY DIGITAL INC.

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

FOR THE YEAR ENDED DECEMBER 31, 2023

	Common stock				Additional
	Number of				paid-in		Accumulated
	Shares		Amount		capital		Deficit			Total
Balance at January 1, 2023		136	$	–	$	76,369,940	$	(75,734,927	)	$	635,013
Issuance of common stock in public offerings, net of issuance costs of $629,900		42		–		4,570,085		–			4,570,085
Issuance of common stock for exercise of stock options and vesting of restricted stock units		1		–		25,000		–			25,000
Issuance of common stock units in public offering, net of issuance costs of $28,777		93		–		255,505		–			255,505
Issuance of pre-funded warrant units, net of issuance costs of $342,071		–		–		3,037,121		–			3,037,121
Issuance of common stock for exercise of pre-funded warrants		1,006		–		8		–			8
Issuance of common stock for exercise of warrants		12		–		680,978		–			680,978
Proceeds received for reduction of warrant exercise price		–		–		346,500		–			346,500
Reclassification of derivative liabilities to equity		–		–		13,262,055		–			13,262,055
Stock-based compensation		1		–		2,627,925		–			2,627,925
Net loss		–		–		–		(45,071,211	)		(45,071,211	)
Balance at December 31, 2023		1,291	$	–	$	101,175,117	$	(120,806,138	)	$	(19,631,021	)

The accompanying notes are an integral part of these consolidated financial statements.

VOLCON, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, ~~2024~~2025 AND ~~2023~~2024

	2024			2023
	2025			2024
Cash flow from operating activities:
Net loss	$	(45150,~~510~~052,~~309~~486	)	$	(45,~~071~~510,~~211~~309	)
Adjustments to reconcile net loss to net cash used in operating activities:
Loss on repayment of May 2024 Notes		1,470,554			–
Unrealized loss on digital asset		122,659,151			–
Loss on extinguishment of convertible notes		1,314,065			22,296,988
Deferred tax benefit		(5,383,973	)		–
Loss on conversion of convertible notes to common stock		333,544			–
Loss on repayment of credit facility		125,377			–
Loss (gain) on change in fair value of financial liabilities		14,933,739			(13,473,218	)
(Gain) loss on change in fair value of financial liabilities		(46,673	)		14,933,739
Gain on exercise of Series B Warrants		(165,355	)		–
Noncash interest income on certificate of deposit		(49,413	)		–
Stock-based compensation		~~310~~17,~~961~~824,939			2310,~~627,925~~961
Loss on write down of inventory and inventory deposits		9145,~~286,071~~124			49,~~282~~286,~~321~~071
Loss on lease termination		–72,544			~~85,756~~–
Loss on sale/write off of property & equipment		~~844~~76,~~945~~349			56844,~~509~~945
Bad debt expense		2940,~~560~~730			~~105~~29,~~688~~560
Non-cash interest expense		~~553~~117,~~803~~909			4553,~~955,660~~803
Amortization of right-of-use assets		~~396~~417,~~979~~330			~~369~~396,~~774~~979
Depreciation and amortization		~~362~~301,~~138~~537			~~249~~362,~~207~~138
Loss on repayment of May 2024 Notes		–			1,470,554
Loss on extinguishment of convertible notes		–			1,314,065
Loss on conversion of convertible notes to common stock		–			333,544
Gain on exercise of Series B Warrants		–			(165,355	)
Changes in operating assets and liabilities:
Accounts receivable		85(264,~~496~~589	)		~~555~~85,~~967~~496
Inventory		~~(933~~668,~~844~~921	)		(7933,~~609,564~~844	)
Inventory deposits		~~(767~~175,~~410~~600	)		~~169~~(767,~~346~~410	)
Prepaid assets and other current assets		~~871~~(1,~~498~~446,611	)		~~(53~~871,~~531~~498	)
Accounts payable		~~(445~~360,~~859~~141	)		(~~205~~445,~~444~~859	)
Accrued liabilities and vendor settlements		1(2,~~592~~911,~~444~~405	)		1,~~055~~592,~~067~~444
Right-of-use liabilities - operating leases		(~~399~~466,~~609~~036	)		(~~359~~399,~~347~~609	)
Customer deposits		(~~200~~213,~~963~~377	)		~~394~~(200,~~014~~963	)
Net cash used in operating activities		(1617,~~037~~848,~~552~~911	)		(2916,~~568~~037,~~092~~552	)
Cash flow from investing activities:
Purchase of property and equipment		(312,090	)		(949,722	)
Purchase of digital assets		(451,634,534	)		–
Proceeds from sale of property and equipment		23,717			–
Proceeds paid for website development		(46,620	)		–
Proceeds from insurance settlement		58,060			–
Purchase of property and equipment		(204,927	)		(312,090	)
Proceeds from sale of vehicles		–			89,000
Proceeds from sale of property and equipment		134,749			23,717
Net cash used in investing activities		(230,313	)		(860,722	)
Proceeds from insurance settlement		–			58,060
Purchase of certificate of deposit		(2,000,000	)		–
Net cash used in investing activities		(453,751,332	)		(230,313	)
Cash flow from financing activities:
Repayment of notes payable		(487,~~702~~182	)		(8048,~~394~~702	)
Proceeds from issuance of common stock and pre-funded warrants from public offering, net of issuance costs of $1,210,753		10,789,261			–
Proceeds from credit facility, net of issuance costs of $194,551		34,805,449			–
Repayment of May 2024 Notes		(2,942,170	)		–
Repayment of credit facility		(35,000,000	)		–
Proceeds from issuance of May 2024 Notes and warrants, net of issuance costs of $245,150		2,255,851			–
Proceeds from term loan, net of issuance costs of $149,913		49,850,087			–
Proceeds from exercise of Series B Warrants		130,522			–
Proceeds from Credit facility, net of issuance costs of $62,804		49,937,196			–
Proceeds from exercise of buy down warrants		3,500			–
Proceeds from issuance of common stock units and pre-funded warrant units from February 2025 public offering, net of issuance costs of $1,296,118		10,703,882			–
Proceeds from sale of common stock from the At the Market equity offering, net of issuance costs of $112,814		184,830			–
Proceeds from issuance of common stock and pre-funded warrants from July 2025 private placement, net of issuance costs of $21,136,401		452,292,054			–
Proceeds from issuance of common stock from public offering, net of issuance costs of $629,900		–			4,570,085
Proceeds from exercise of warrants		1,784,000			–
Proceeds from issuance of convertible notes and warrants, net of issuance costs of $586,968		–			3,913,033
Proceeds from the issuance of common stock issued from the At the Market Offering, net of issuance costs of $374,392 in 2025 and $112,814 in 2024		10,288,063			184,830
Proceeds from issuance of common stock units, net of issuance costs of $28,777		–			255,505
Repurchase of common stock		(96,282,082	)		–
Proceeds from issuance of pre-funded warrant units, net of issuance costs of $342,071		–			3,037,121
Repurchase of fractional shares		(941	)		–
Proceeds for issuance of Series A and Series B warrants issued with common stock and pre-funded warrant units		–			14,336,490
Proceeds from issuance of common stock units and pre-funded warrant units from July 2024 public offering, net of issuance costs of $1,210,753		–			10,789,261
Proceeds from reduction of exercise price of warrants		–			346,500
Repayment of May 2024 Notes		–			(2,942,170	)
Proceeds from exercise of warrants		–			680,978
Proceeds from issuance of May 2024 Notes and warrants, net of issuance costs of $245,150		–			2,255,851
Proceeds from exercise of stock options		–			25,000
Proceeds from exercise of Series B Warrants		–			130,522
Net cash provided by financing activities		10,373,092			27,084,318
Proceeds from exercise of buy down warrants		–			3,500
NET CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH		(5,894,773	)		(3,344,496	)
Net cash provided by financing activities		478,370,526			10,373,092
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF PERIOD		8,193,346			11,537,842
NET CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH		6,770,283			(5,894,773	)
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD	$	2,298,573		$	8,193,346
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF PERIOD		2,298,573			8,193,346
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD	$	9,068,856		$	2,298,573

The accompanying notes are an integral part of these consolidated financial statements.

3551

~~VOLCON,~~EMPERY DIGITAL INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, ~~2024~~2025 AND ~~2023~~2024

SUPPLEMENTAL CASH FLOW INFORMATION

	2024		2023
	2025		2024
Supplemental disclosure of cash flow information:
Cash paid for interest	$	882,~~710~~135,910	$	1588,~~935~~710
Cash paid for income taxes	$	–	$	–
Non-cash transactions:
Conversion of Convertible Notes for common stock	$	7,414,025	$	–
Issuance of common stock for digital assets	$	28,000,000	$	–
Exchange of Convertible Notes for Preferred Stock	$	24,716,118	$	–
Transfer of inventory to property & equipment	$	310,813	$	–
Reclassification of warrant liability to equity for cashless exercise of Series A Warrants	$	17,352,653	$	–
Transfer of digital assets to lender for collateral	$	230,048,488	$	–
Reclassification of warrant liability to equity for modification of Series B Warrants	$	3,405,662	$	–
Recognition of right of use asset and liability - operating lease	$	563,660	$	–
Exchange of property & equipment in lieu of payments due for inventory purchases	$	60,000	$	–
Conversion of Convertible Notes for common stock	$	–	$	7,414,025
Exchange of finished goods inventory with vendor for raw materials inventory	$	417,285	$	–
Exchange of Convertible Notes for Preferred Stock	$	–	$	24,716,118
Conversion of preferred stock for common stock	$	3	$	–
Reclassification of warrant liability to equity for cashless exercise of Series A Warrants	$	–	$	17,352,653
Issuance of common stock for exercise of prefunded warrants	$	2	$	–
Reclassification of warrant liability to equity for modification of Series B Warrants	$	–	$	3,405,662
Acquisition of property and equipment with note payable	$	–	$	96,024
Exchange of property & equipment in lieu of payments due for inventory purchases	$	–	$	60,000
Reclassification of derivative liabilities to equity	$	–	$	13,262,055
Exchange of finished goods inventory with vendor for raw materials inventory	$	–	$	417,285
Conversion of preferred stock for common stock	$	–	$	3
Issuance of common stock for exercise of pre-funded warrants	$	25	$	2

The accompanying notes are an integral part of these consolidated financial statements.

3652

~~VOLCON,~~EMPERY DIGITAL INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 – ORGANIZATION, NATURE OF OPERATIONS AND GOING CONCERN

Organization and Nature of Operations

~~Volcon,~~Empery Digital Inc. (“~~Volcon”~~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. ~~Volcon~~The ~~designs~~Company was renamed Empery Digital Inc. on July 30, 2025, and ~~sells~~changed ~~all-electric~~its ~~off-road~~Nasdaq ~~powersport~~ticker symbol ~~vehicles~~from VLCN to EMPD.

On January 5, 2021, the Company created Volcon ePowersports, LLC (“Volcon LLC”), a Colorado wholly-owned subsidiary of the Company, to sell ~~Volcon~~the Company’s vehicles and accessories in the United States (“U. S.”). Since 2023 Volcon LLC ishas nonot ~~longer~~been used ~~for selling vehicles and accessories~~.

Effective as of July 17, 2025, the Company adopted a digital asset treasury strategy with the goal of becoming a leading, low cost, capital efficient, globally trusted aggregator of Bitcoin. Empery Digital Inc. was founded as the first all-electric powersports company sourcing high-quality and sustainable electric vehicles for the outdoor community. Going forward the Company intends to operate the powersports brand under the brand name Empery Mobility.

As discussed in Note 18, on October 15, 2025, the Company entered into an asset purchase agreement with Venom EV, LLC (“Venom”) (the “Venom APA”), to divest the Volcon brand in exchange for a non-dilutable 10% equity position in Venom’s reorganized Delaware corporation on a fully-diluted basis.

Going Concern

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. The Company has recurring losses and has generated negative cash flows from operations since inception.

In February and March 2024, certain holders of the convertible ~~May~~notes ~~2023~~issued ~~Convertible~~by ~~Notes~~the ~~issued~~Company in May 2023 (the “May 2023 Convertible Notes”) converted approximately $7.4 million of principal to shares of the Company’s common stock, par value $0.00001 per share (the “common stock”). In March 2024, ~~the~~ the holders exchanged the remaining ~~May~~$24.7 ~~2023~~million ~~Convertible~~outstanding ~~Notes~~principal amount of ~~$24.7~~May ~~million~~2023 Convertible Notes for Series A Convertible Preferred Stock (“Preferred Stock”) with a $1,000 per share value and an initial conversation price of $18,~~064.00~~512 per share for common stock (see Note 109). All covenants from the May 2023 Convertible Notes were terminated upon this exchange.

As discussed further in Note 710 below, on May 22, 2024, the Company issued Senior Notes with an aggregate principal amount of $2,942,170 due May 22, 2025 (the “May 2024 Notes”) for net proceeds of $2,255,851. The holders of the May 2024 Notes also received fully vested warrants (the “May 2024 Note Warrants”) to purchase 121,~~686~~589 shares of the Company’s common stock at an exercise price of $~~232.00~~1,856 per share. The May 2024 Note Warrants were exercisable beginning November 23, 2024 and expire November 23, 2029.

On July 12, 2024, the Company sold ~~102~~12,~~605~~826 shares of the Company’s common stock at a purchase price of $29233.2060 per share and pre-funded warrants to purchase ~~308~~38,~~355~~544 shares of common stock at $29233.~~19992~~60 per pre-funded warrant. The Company received net proceeds of $10,789,261. Proceeds from this offering were used to repay the May 2024 Notes.

In October 2024, the Company established an At the Market ~~equity~~program ~~offering~~ (“ATM”), as amended, whereby the Company can sell up to $~~100~~1.1 ~~million~~billion of its common stock. Through ~~February~~December 431, 2025, the Company has raised net proceeds of $910,~~143~~288,~~725.~~063 Onpursuant ~~February~~to ~~6, 2025,~~ the ~~Company sold 430,000 common stock units and 5,570,000 pre-funded warrant units at $2~~ATM.~~00 per unit. The Company received net proceeds of $10,703,882 from this offering.~~

~~Management~~On ~~anticipates~~February ~~that~~6, ~~our~~2025, ~~cash~~the onCompany ~~hand~~sold ~~as of December 31~~53,750 ~~2024~~common ~~plus~~stock ~~the~~units ~~cash~~(each ~~expected~~composing toof beone ~~generated~~share ~~from~~of ~~operations,~~common stock and ~~cash~~one ~~raised~~common ~~from~~warrant ~~the~~to ~~ATM~~purchase ~~and~~one ~~the~~share ~~February~~of 6,common ~~2025~~stock) ~~equity~~and ~~offering~~696,250 ~~will not~~pre-funded bewarrant ~~sufficient~~units to(each ~~fund~~comprising ~~planned~~of ~~operations beyond~~ one ~~year~~pre-funded ~~from~~warrant ~~the~~to ~~date~~purchase ofone ~~the~~share ~~issuance~~ of ~~the~~common ~~financial~~stock ~~statements~~and asone ofcommon ~~and~~warrant ~~for~~to ~~the~~purchase ~~year~~one ~~ended~~share ~~December~~of ~~31,~~common ~~2024.~~stock) ~~There~~at ~~can~~$16.00 beper nounit ~~assurance~~in ~~that~~an ~~additional~~underwritten ~~funding,~~public ifoffering ~~needed,~~(each ~~would~~as beadjusted ~~available~~for to the Company’s on1-for-8 ~~acceptable~~reverse ~~terms,~~stock ~~or at all~~split). ~~These~~The ~~factors~~common ~~raise~~warrants ~~substantial~~issued ~~doubt regarding our ability to continue~~ as apart ~~going~~of ~~concern.~~the ~~The~~units ~~consolidated~~had ~~financial statements~~an doexercise ~~not~~price ~~include~~of ~~any~~$16.00 ~~adjustments~~per ~~that~~share. ~~may~~The ~~result should the~~ Company bereceived ~~unable~~net toproceeds of ~~continue~~$10,703,882 asfrom athis ~~going concern~~offering.

On July 21, 2025, the Company completed private placements with certain institutional and accredited investors (“Private Placements”) for the sale of 44,414,189 shares of its common stock at a price of $10.00 per share, and pre-funded warrants to purchase an aggregate of 5,728,662 shares of its common stock with an exercise price of $0.00001, for $9.99999 per share of common stock underlying such warrants. The Company received gross proceeds of over $501.0 million which included payment by certain purchasers using Bitcoin valued at approximately $28.0 million and net cash proceeds of approximately $452.0 million after fees and expenses associated with the Private Placements. The Company has used the net proceeds to purchase Bitcoin under its digital asset treasury strategy.

As of December 31, 2025, the Company has borrowed $100.0 million from two lenders and primarily used the proceeds to repurchase its common stock. The borrowings are collateralized by the Company’s Bitcoin. Subsequent to December 31, 2025, the Company has sold Bitcoin to complete additional share repurchases (see Note 5 & 7).

Nasdaq Compliance

On July 5, 2023, the Company received a notice from Nasdaq that it was not in compliance with Nasdaq’s Listing Rule 5550(b)(2), which requires that it maintain a market value of listed securities (“MVLS”) of $35.0 million. MVLS is calculated by multiplying the Company’s shares outstanding by the closing price of its common stock. On December 19, 2023, the Company received a notice from Nasdaq that it was not in compliance with Nasdaq’s Listing Rule 5550(a)(2), as the minimum bid price of its common stock had been below $1.00 per share for 30 consecutive business days.

On December 26, 2023, the Company was notified by Nasdaq that it was not in compliance with Nasdaq’s Listing Rule 5810(c)(3)(A)(iii) as the closing bid price of our common stock had been below $0.10 for ten consecutive trading days from December 11, 2023 through December 22, 2023 and was subject to delisting on January 2, 2024. On January 4, 2024, the Company received notice from Nasdaq that it did not meet the MVLS requirement and it was subject to delisting. The Company submitted a hearing request to Nasdaq’s Hearings Department for both of these matters, which stayed the suspension of the Company’s common stock. The Company participated in a hearing with Nasdaq’s Hearings Department on March 26, 2024 and on April 2, 2024, they informed the Company that the Company has until June 24, 2024 to regain compliance with the above listing rules.

On June 11, 2024, the Company received a notice from ~~the~~ Nasdaq that the Company no longer met the minimum 500,000 publicly held shares requirement for Nasdaq and, as such, it no longer complied with Listing Rule 5550(a)(4). Furthermore, the notice indicated that this matter would serve as an additional basis for delisting the Company’s securities from Nasdaq, that the Panel would consider this matter in their decision regarding the Company’s continued listing on Nasdaq, and that the Company should present its views with respect to this additional deficiency to the Panel in writing no later than June 18, 2024. On June 18, 2024, the Company submitted a letter to Nasdaq notifying them that the Company was in compliance with Listing Rule 5550(a)(4) due to the issuance of additional shares of common stock from the conversion of preferred stock to common stock by certain Preferred Stockholders.

On July 17, 2024, Nasdaq informed the Company that it had regained compliance with the above listing rules but will continue to be monitored for ongoing compliance.

~~Employment~~On ~~Matters~~May 13, 2025, the Company received a notice from Nasdaq that it was not in compliance with Nasdaq’s Listing Rule 5550(a)(2), as the minimum bid price of its common stock had been below $1 per share for 30 consecutive business days. The Company submitted a hearing request to Nasdaq’s Hearings Department for this matter, which stayed the suspension of the Company’s common stock. On June 11, 2025, the Company completed a 1-for-8 reverse stock split. The Company participated in a hearing with Nasdaq’s Hearings Department on June 24, 2025.

On ~~January~~July 1317, ~~2024~~2025, Nasdaq informed the Company~~’s Chief~~ ~~Executive~~that ~~Officer~~it ~~(“CEO”),~~had ~~Jordan~~regained ~~Davis,~~compliance ~~resigned~~with ~~his~~the ~~employment~~above listing rules but will need to continue to remain in compliance with the ~~Company~~minimum ~~effective~~bid ~~February~~price rule 2through November 10, ~~2024~~2025 in order to avoid delisting. ~~The~~On ~~Company entered~~November ~~into~~14, a2025, ~~30-day~~Nasdaq ~~consulting~~informed ~~agreement~~the ~~with~~Company ~~Mr.~~that ~~Davis~~it ~~and~~remained ~~paid~~compliant with ~~him~~all ~~$12,500~~Nasdaq listing rules.

On January 30, 2024, John Kim, an independent board member of the Company signed an employment agreement with the Company to become the CEO effective February 3, 2024. Mr. Kim’s salary is $800,000 and he has an annual bonus of $250,000. Mr. Kim will also receive 5% of the gross proceeds or other consideration if the Company completes a sale of substantially all of its assets or otherwise enters into a change of control transaction. Mr. Kim is also entitled to an equity award equal to 10% of the Company’s fully diluted equity, subject to stockholder approval of an increase in the shares available under the 2021 Plan or a new equity plan.54

OnImpact ~~January~~of ~~30,~~Tariffs ~~2024,~~on ~~Greg~~Imported ~~Endo,~~Goods ~~the~~from ~~Company’s Chief~~China ~~Financial Officer, signed a new employment agreement with the Company. Mr. Endo’s salary was increased to $300,000~~ and he will have an annual bonus of up to 50% of his salary as determined by the compensation committee of the board of directors. Mr. Endo had agreed to a reduction in the salary to $238,500 through the end of 2024. On August 23, 2024 the compensation committee of the board of directors resolved that effective August 16, 2024 Mr. Endo’s annual salary would be restored to $300,000. Mr. Endo will also receive 5% of the gross proceeds or other consideration if the Company completes a sale of substantially all of its assets or otherwise enters into a change of control transaction. Mr. Endo is also entitled to an equity award equal to 4% of the Company’s fully diluted equity, subject to stockholder approval of an increase in the shares available under the 2021 Plan or a new equity plan.Vietnam

On ~~February~~April 2, 2025, 23the U.S. imposed reciprocal tariffs on imports from various countries including China and Vietnam starting with a 10% baseline tariff. On April 9, ~~2024~~2025, ~~Katherine~~China-specific ~~Hale~~tariffs ~~resigned~~increased significantly, while Vietnam’s tariffs were ~~her~~deferred ~~position~~for asan ~~Chief~~initial ~~Marketing~~90-day ~~Officer~~period. ~~Ms.~~That ~~Hale~~pause was ~~provided~~later aextended ~~severance~~to ~~amount~~August 1, 2025, ofand ~~$112,500~~then ~~which~~to ~~was~~August ~~paid~~7, ~~out~~2025, inmaintaining Vietnam’s ~~three~~tariff ~~monthly~~at ~~installments beginning~~the inbaseline ~~March~~10% ~~2024~~during such extension.

~~Impact~~Following ofongoing ~~Russia~~negotiations, ~~and~~a ~~Ukraine~~tentative ~~Conflict~~trade deal with Vietnam was reached on July 2, 2025. U.S. tariffs on Vietnamese goods would be set at 20%, while goods deemed to be Chinese in origin but routed through Vietnam (transshipments) would be subject to a 40% tariff. This replaces the originally stated 46% rate. The 20% rate became effective August 7, 2025.

On ~~February~~July 2431, ~~2022~~2025, ~~Russia~~the ~~invaded Ukraine~~U. ~~The~~S. ~~conflict~~administration ~~between~~issued ~~Russia~~a ~~and~~formal ~~Ukraine~~Executive ~~could~~Order modifying ~~impact~~ the ~~availability~~reciprocal oftariff ~~nickel,~~regime anunder ~~element used in~~ the ~~production~~International ofEmergency ~~lithium~~Powers ~~ion~~Act ~~cells used~~(“IEEPA”). inFor ~~batteries~~example, ~~that~~after ~~power~~announcing proposed ~~our~~blanket ~~vehicles.~~tariff ~~The~~rates ~~shortage~~ of ~~these~~46% ~~cells could have an impact~~ on ~~our~~imports ~~ability~~from toVietnam ~~produce~~in ~~vehicles~~April to2025, ~~meet our~~the ~~customers’ demands~~U.S. Inand ~~addition,~~Vietnam ~~sanctions~~governments ~~against~~announced ~~Russia~~a ~~could~~trade ~~impact~~deal between the ~~price~~countries ~~of elements, including nickel,~~ that ~~are~~imposes ~~used in~~20% ~~the~~tariffs ~~production~~on ofall ~~batteries~~products ~~which~~imported ~~would result in higher costs~~ to ~~produce our vehicles. These sanctions have also impacted~~ the U.S. ~~and~~ ~~global~~from ~~economies~~Vietnam. ~~and~~The ~~could~~20% ~~result~~rate inbecame aneffective ~~economic~~August ~~recession~~7, ~~which~~2025, under ~~could cause a broader disruption to~~ the ~~Company’s~~aforementioned ~~supply~~Executive ~~chain and~~Order ~~distribution network~~ and ~~customer~~is ~~demand~~currently ~~for~~in ~~our products~~force.

38China remains subject to an additional 30% tariff (down from the temporary increase, effective mid-May) under the continued reciprocal framework. That rate is in effect through August 12, 2025, pending further amendment. On August 11, 2025, the U.S. extended the existing tariff truce with China by 90 days to November 10, 2025, maintaining the 30% tariff rate during such extension.

Tariffs imposed by the current U.S. administration continue to impact the Company’s cost for vehicles and parts manufactured in China, The Company remains actively evaluating strategic alternatives, including U.S. assembly or shifting production as well as potentially adjusting selling prices to offset elevated import costs.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The basis of accounting applied is the United States Generally Accepted Accounting Principles (“U.S. GAAP”). The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiary. All intercompany accounts, transactions and balances have been eliminated in consolidation.

AsThe ~~discussed in Note 10, the~~ Company completed a ~~reverse~~ 1 -for -8 ~~stock split on November 8, 2024, a~~ reverse ~~1 for 100~~ stock split on June 611, ~~2024,~~2025. aAll share ~~reverse~~and 1per ~~for~~share 45amounts ~~stock~~previously ~~split~~disclosed ~~on February~~have 2,been ~~2024~~updated ~~and~~to areflect ~~reverse~~the 1impact ~~for~~of 5this ~~stock~~reverse split. onSee ~~October~~Note 13, ~~2023~~for further discussion.

Per the terms of the 1 -for -8 reverse stock split completed on November 8, 2024, the Company agreed that no fractional shares would be issued in connection with the reverse stock split and that it would issue one full share of the post-reverse stock split common stock to any stockholder who would have been entitled to receive a fractional share as a result of the process. On November 19, 2024, the Company received notice from DTCC on behalf of the brokerage firms that hold the shares of Company common stock held in “street name” that in connection with the foregoing rounding of shares the Company would need to issue ~~188~~23,~~950~~617 shares of common stock. The Company ~~does~~did not believe the number of shares being requested is was correct based on the historical number of ~~shareholders~~stockholders of its common stock and is aware of similar occurrences in recent months for other companies completing a reverse stock split. As such, the Company ~~has~~made ~~begun~~inquiries ~~an inquiry~~ into the calculations set forth in the request. ~~During~~ ~~the~~The ~~pendency of this inquiry, the~~ Company ~~does~~concluded that ~~not intend to issue any shares in connection with~~ the ~~fractional~~information ~~shares being~~ requested~~. The~~ ~~Company~~was ~~may~~not ~~face~~going ~~potential liability for its failure~~ to ~~issue~~be ~~the~~provided ~~shares~~and oftherefore ~~common~~on ~~stock~~May if5, it2025, isthese ~~determined that it is required to issue such~~ shares. ~~These~~were ~~shares~~issued ~~are~~(see ~~not included in the shares outstanding as of December 31, 2024 or in the amounts included in the basic and diluted net loss per share amounts. See~~ Note 1215 for further discussion of ~~the~~ impact to basic and diluted net loss per share).

As discussed in further detail in Note 18, on October 15, 2025, the Company entered into the Venom APA with Venom to divest the Volcon brand other than the Brat in exchange for a non-dilutable 10% equity position in Venom’s reorganized Delaware corporation on a fully-diluted basis. The Company has reclassified all revenue and costs associated with the HF1 and MN1 products to loss from discontinued operations.

Revisions to previously issued financial statements

In connection with the preparation of the Company’s consolidated financial statements as of and for the year ended December 31, 2025, the Company identified an error in relation to the accounting for the tax effects of the difference in the basis of Bitcoin received in the July 2025 Private Placement as discussed in Note 13.

The Company has a history of losses and has recognized significant non-cash expenses for share-based compensation and unrealized loss on Bitcoin, and as such believes most investors rely on cash used by operations on the statement of cashflows, net asset value (“NAV”) per share, (defined as net asset value of Bitcoin plus Cash minus Debt) divided by adjusted shares outstanding (defined as common stock outstanding plus pre-funded warrants), and mNAV (defined as market capitalization plus debt less cash divided by net asset value of Bitcoin) as metrics for evaluating the performance of the Company.

The Company assessed the materiality of the error on the interim financial statements as of and for the three and nine months ended September 30, 2025, on a qualitative and quantitative basis in accordance with SEC Staff Accounting Bulletin (“SAB”) No. 99, Materiality and SAB No. 108 on Quantifying Financial Statement Errors, codified in Accounting Standards Codification Topic 250, Accounting Changes and Error Corrections. The Company concluded that the error and the related impacts did not result in a material misstatement of these previously issued unaudited consolidated interim financial statements.

A summary of the corrections to the impacted financial statement line items from our previously issued financial statements are presented below:


Three months ended September 30, 2025 Consolidated Statement of Operations	As reported			As revised
Income tax benefit	$	–		$	5,383,973
Net loss	$	34,555,301		$	29,171,328
Net loss per share - basic and diluted	$	(0.96	)	$	(0.81	)

Nine months ended September 30, 2025 Consolidated Statement of Operations	As reported			As revised
Income tax benefit	$	–		$	5,383,973
Net loss	$	40,915,628		$	35,531,655
Net loss per share - basic and diluted	$	(3.28	)	$	(2.85	)

Consolidated Statement of Cashflows
Net loss	$	(40,915,628	)	$	(35,531,655	)
Adjustments to reconcile net loss to net cash used in operating activities:	$	–		$	–
Deferred tax benefit	$	–		$	(5,383,973	)

Consolidated Statement of Stockholders’ Equity
Issuance of common stock and pre-funded warrants, net of issuance costs	$	480,291,610		$	474,907,637
Net loss	$	(40,915,628	)	$	(35,531,655	)
Additional paid-in capital	$	684,278,820		$	678,894,847
Accumulated deficit	$	(207,232,075	)	$	(201,848,102	)

As of September 30, 2025 Consolidated Balance Sheet	As reported			As revised
Additional paid-in capital	$	684,278,820		$	678,894,847
Accumulated deficit	$	(207,232,075	)	$	(201,848,102	)

There was no impact to NAV per share or mNav as a result of this error.

Use of Estimates

The preparation of the financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of any contingent assets and liabilities as of the dates of the financial statements and the reported amounts of expenses during the reporting periods.

Making estimates requires management to exercise judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, actual results could differ significantly from those estimates.

Cash, Cash Equivalents and Restricted Cash

Cash and cash equivalents include short-term investments with original maturities of 90 days or less at the date of purchase. There were no cash equivalents as of December 31, 2025 or 2024. The recorded value of our cash ~~and cash equivalents~~ approximates ~~their~~ its fair value. ~~There~~Cash ~~were~~is noprimarily ~~cash~~placed ~~equivalents~~with asa oflarge ~~December~~sophisticated ~~31,~~creditworthy ~~2024~~financial orinstitution ~~2023~~thereby limiting the Company’s credit exposure. Restricted cash includes cash restricted as collateral for the Company’s corporate credit cards.

Revenue Recognition

For sales to dealers or distributors, revenue is recognized when transfer of control of the product is made as there is no acceptance period or right of return. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring control of vehicles, parts, and accessories. Beginning in February 2023 the Company began selling the Brat E-Bike and Volcon Youth motorcycles directly to consumers in addition to dealers. Beginning in the third quarter of 2024, the Company began selling the Grunt EVO motorcycles directly to consumers in addition to dealers. Revenue for direct to consumer sales is recognized when transfer of control of the product is made to the consumer.

39Consideration that is received in advance of the transfer of goods is recorded as customer deposits until delivery has occurred or the customer cancels their order, and the consideration is returned to the customer. Sales and other taxes the Company collects concurrent with revenue-producing activities are excluded from revenue. Other than the financing of inventory, the Company’s sales do not presently have a financing component.

~~Consideration~~Finance ~~that~~revenue. isThe ~~received~~Company infinances ~~advance~~golf ofcart ~~the~~and accessory inventory ~~transfer~~purchases for Venom who sells this inventory to their dealers. The international manufacturer of ~~goods~~this isinventory ~~recorded~~requires asan ~~customer~~up ~~deposits~~front ~~until~~deposit when ~~delivery~~the ~~has~~inventory ~~occurred~~order is placed and full payment either before shipment or before the ~~customer~~inventory ~~cancels~~reaches ~~their~~the designated U.S. port. The Company receives a fee of 5% of the inventory cost. Depending on the order, ~~and~~Venom’s payment terms to the ~~consideration~~Company vary from 100 days isfrom ~~returned~~shipment tofrom the ~~customer~~manufacturer to 60 days upon receipt at Venom’s warehouse. ~~Sales~~In ~~and~~the ~~other~~event ~~taxes~~that Venom sells the ~~Company~~inventory ~~collects~~before the ~~concurrent~~end ~~with~~of ~~revenue-producing~~the ~~activities~~payment ~~are~~term ~~excluded~~has ~~from revenue~~ended, then Venom must repay the Company upon sale. The Company’s ~~sales~~recognizes dorevenue ~~not~~when ~~presently~~it ~~have~~has athe ~~financing~~right to ~~component~~invoice Venom, which is based on the start of the payment terms noted above.

Sales promotions and incentives. The Company provides for estimated sales promotions and incentives, which are recognized as a component of sales in measuring the amount of consideration the Company expects to receive in exchange for transferring goods or providing services. Examples of sales promotion and incentive programs include rebates, distributor fees, dealer co-op advertising and volume incentives. Sales promotions and incentives are estimated based on contractual requirements. The Company records these amounts as a liability in the balance sheet until they are ultimately paid. Adjustments to sales promotions and incentives accruals are made as actual usage becomes known to properly estimate the amounts necessary to generate consumer demand based on market conditions as of the balance sheet date.

Shipping and handling charges and costs. The Company records shipping and handling amounts charged to the customer and related shipping costs as a component of cost of goods sold when control has transferred to the customer.

Product Warranties

The Company vehicles come with warranties that vary depending on the vehicle and vehicle components. The Company accrues warranty reserves at the time revenue is recognized. Warranty reserves include the Company’s best estimate of the projected cost to repair or to replace any items under warranty, based on actual warranty experience as it becomes available and other known factors that may impact the evaluation of historical data. The Company reviews its reserves quarterly to ensure that the accruals are adequate to meet expected future warranty obligations and will adjust estimates as needed. Factors that could have an impact on the warranty reserve include the following: changes in manufacturing quality, shifts in product mix, changes in warranty coverage periods, product recalls and changes in sales volume. Warranty expense is recorded as a component of cost of goods sold in the statement of operations and is recognized as a current liability.

Inventory and Inventory Deposits

Inventories and prepaid inventory deposits are stated at the lower of cost (first-in, first-out method) or net realizable value.

Certain vendors require the Company to pay an upfront deposit before they manufacture and ship the Company’s vehicles, parts or accessories. These payments are classified as prepaid inventory deposits on the balance sheet until title and risk of loss transfers to the Company, at which time they are classified as inventory.

~~Raw~~Inventory ~~materials inventory~~ costs include the cost of ~~parts,~~manufacturing ~~including~~and assembly of vehicles, duties, tariffs and shipping related to manufacturing and assembly of vehicles. ~~At December 31, 2023, raw materials~~ inventory represents parts associated with the manufacturing of the Stag. Finished goods also include spare parts for sale as replacement parts or for service and warranty or accessories for vehicles. There are no raw materials as of December 31, 2024 (see Note 3 below for further discussion).

Digital Assets

The Company accounts for its digital assets, which are composed solely of Bitcoin (“BTC” or “Bitcoin”), including BTC restricted by lenders as collateral for borrowings, as non-current indefinite-lived intangible assets in accordance with ASC 350, Intangibles—Goodwill and Other (“ASC 350”) and ASU 2023-08. The Company’s digital assets are initially recorded at cost, using a last in first out method, and are measured at fair value as of each reporting period. The Company determines the fair value of its BTC in accordance with ASC 820, Fair Value Measurement, based on quoted (unadjusted) prices on the Gemini exchange, the active exchange that the Company has determined is its principal market for BTC (Level 1 inputs). Changes in fair value are recognized as incurred within “Unrealized loss on digital assets”, within operating expenses in the Company’s Consolidated Statement of Operations. BTC restricted by lenders as collateral for borrowing are separately classified from digital assets due to the restrictions imposed on this Bitcoin until the underlying borrowings are repaid.

The Company also generated income through buying and selling derivatives on BTC, including the use of short-term put and call contracts. Through December 31, 2025, the Company generated income of $1.5 million from trading these derivative contracts, which is recorded in Other income in the consolidated statement of operations. There were no outstanding derivative contracts at December 31, 2025.

Property and Equipment

Property and equipment are valued at cost. Additions are capitalized and maintenance and repairs are charged to expense as incurred. Gains and losses on dispositions of equipment are reflected in operations. Depreciation is recorded using the straight-line method over the estimated useful lives of the assets as follows:

Schedule of estimated useful lives
Category		Estimated Useful Lives
Machinery, tooling and equipment		3-7 years
Vehicles		5 years
Internal use manufactured vehicles		1 year
Furniture & Fixtures		5 years
Computers		3 years

Leasehold improvements are depreciated over the shorter period of their estimated useful life or term of the lease.

4058

Intangible Assets

~~The~~In 2025, the Company ~~purchased~~paid ~~the~~$46,620 ~~domain~~to ~~name~~develop ~~VLCN.com~~its Empery Digital website to provide live updates to financial metrics related to its digital asset treasury strategy and is amortizing ~~this~~these ~~asset~~costs over ~~three~~two years. Amortization expense was $19,~~427~~712 for the year ended December 31, ~~2024~~2025.

In 2024, the Company purchased the domain name VLCN.com and was amortizing this asset over three years. Amortization expense was $3,330 and $1,427 for the years ended December 31, 2025 and 2024, respectively. In October 2025 the Company sold this domain name when it entered into the asset purchase agreement as discussed on Note 18.

Long-Lived Assets

The Company’s long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the historical carrying cost value of an asset may no longer be appropriate. The Company assesses recoverability of the asset by comparing the undiscounted future net cash flows expected to result from the asset to the carrying value. If the carrying value exceeds the undiscounted future net cash flows of the asset, an impairment loss is measured and recognized. An impairment loss is measured as the difference between the net book value and the fair value of the long-lived asset.

Leases

Right-of-use (“ROU”) assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at the lease commencement date based on the estimated present value of lease payments over the lease term. Leases with an initial term of 12 months or less are not recorded on the balance sheet; the Company recognizes lease expenses for these leases on a straight-line basis over the lease term. The Company does not separate non-lease components from the lease components to which they relate, and instead accounts for each separate lease and non-lease component associated with that lease component as a single lease component.

ASC 842 defines initial direct costs as only the incremental costs of signing a lease. Initial direct costs related to leasing that are not incremental are expensed as general and administrative expenses in our statements of operations.

The Company’s operating lease agreements primarily consist of leased real estate and are included within ROU assets – operating leases and ROU lease liabilities – operating leases on the balance sheets. The Company’s lease agreements may include options to extend the lease, which are not included in minimum lease payments unless they are reasonably certain to be exercised at lease commencement. The Company’s leases do not provide implicit interest rates, therefore the Company uses its estimated incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments.

Research and Development Expenses

The Company records research and development expenses in the period in which they are incurred as a component of product development expenses.

Income Taxes

Deferred taxes are determined utilizing the “asset and liability” method, whereby deferred tax asset and liability account balances are determined based on the differences between financial reporting and the tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company provides a valuation allowance, when it’s more likely than not that deferred tax assets will not be realized in the foreseeable future. Deferred tax liabilities and assets are classified as current or non-current based on the underlying asset or liability or if not directly related to an asset or liability based on the expected reversal dates of the specific temporary differences.

Fair Value of Financial Instruments

ASC Topic 820 Fair Value Measurements and Disclosures (“ASC Topic 820”) provides a framework for measuring fair value in accordance with generally accepted accounting principles.

ASC Topic 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC Topic 820 establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs).

The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy under ASC Topic 820 are described as follows:

	·	Level 1 — Unadjusted quoted prices in active markets for identical assets or liabilities that are accessible at the measurement date.
	·	Level 2 — Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability; and inputs that are derived principally from or corroborated by observable market data by correlation or other means.
	·	Level 3 — Inputs that are unobservable for the asset or liability.

The following section describes the valuation methodologies that the Company used to measure different financial instruments at fair value.

Debt

The fair value of the Company’s debt, which approximated the carrying value of the Company’s debt as of December 31, ~~2023~~2025. Factors that the Company considered when estimating the fair value of its debt included market conditions, and term of the debt. The level of the debt would be considered as Level 2

The Company relies on the guidance provided by ASC Topic 480, Distinguishing Liabilities from Equity, to classify certain convertible instruments. The Company first determines whether a financial instrument should be classified as a liability. The Company will determine the liability classification if the financial instrument is mandatorily redeemable, or if the financial instrument, other than outstanding shares, embodies a conditional obligation that the Company must or may settle by issuing a variable number of its equity shares.

The Company accounts for derivative instruments in accordance with ASC Topic 815, Derivatives and Hedging (“ASC Topic 815”), and all derivative instruments are reflected as either assets or liabilities at fair value on the consolidated balance sheets. The Company uses estimates of fair value to value its derivative instruments. Fair value is defined as the price to sell an asset or transfer a liability in an orderly transaction between able and willing market participants. In general, the Company’s policy in estimating fair values is to first look at observable market prices for identical assets and liabilities in active markets, where available. When these are not available, other inputs are used to model fair value such as prices of similar instruments, yield curves, volatilities, prepayment speeds, default rates and credit spreads, relying first on observable data from active markets. Depending on the availability of observable inputs and prices, different valuation models could produce materially different fair value estimates. The values presented may not represent future fair values and may not be realizable. The Company categorizes its fair value estimates in accordance with ASC Topic 820, based on the hierarchical framework associated with the three levels or price transparency utilized in measuring financial instruments at fair value as discussed above.

Once the Company determines that a financial instrument should not be classified as a liability, the Company determines whether the financial instrument should be presented between the liability section and the equity section of the balance sheet (“temporary equity”). The Company will determine temporary equity classification if the redemption of the financial instrument is outside the control of the Company (i.e. at the option of the holder). Otherwise, the Company accounts for the financial instrument as permanent equity.

Initial Measurement

The Company records its financial instruments classified as a liability, temporary equity or permanent equity at issuance at the fair value, or cash received.

Subsequent Measurement - Financial instruments classified as liabilities

The Company records the fair value of its financial instruments classified as liabilities at each subsequent measurement date. The changes in fair value of its financial instruments classified as liabilities are recorded as other expense/income. The Monte Carlo simulation is used to determine the fair value of derivatives for instruments with embedded conversion features and for free standing warrants as discussed further in Note 8.

Additional Disclosures Regarding Fair Value Measurements

The carrying value of cash, accounts receivable, inventory, other assets, and accounts payable and accrued expenses approximate their fair value due to the short-term maturity of those items.

Warrant Liabilities ~~and Convertible Liabilities~~

The fair value of the derivative liabilities and warrant liabilities is classified as Level 3 within the Company’s fair value hierarchy. Refer to Note 811, Derivative Instruments,

Filing Compare · Empery Digital Inc.