Empery Digital Inc. Segments Disclosure

NOTE 3 – SEGMENT REPORTING

 

In November 2023, the Financial Accounting Standards Board issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-7”), requiring public companies to disclose information about their reportable segments’ significant expenses and other segment items on an interim and annual basis. Public companies with a single report segment were required to apply the disclosure requirements in ASU 2023-07, as well as all existing segment disclosures and reconciliation requirements of ASU 2023-07 during the year ended December 31, 2024.

 

Subsequent to the implementation of the Company’s digital asset treasury strategy, the Company continues to operate as one operating segment and the Company’s Co-CEOs are the Company’s chief operating decision makers (“CODMs”). The “Corporate & Other” category presented in the following tables is not considered an operating segment. It consists primarily of costs and expenses related to executing the Company’s Bitcoin strategy and includes the unrealized gain or loss on digital assets, other third-party costs associated with the Company’s Bitcoin holdings, and net interest expense primarily related to debt obligations, the net proceeds of which were primarily used to repurchase the Company’s common stock. Beginning in July 2025, the Company has dedicated certain corporate resources to its Bitcoin strategy. These costs, including related share-based compensation expense, are included within the “Corporate resources” and the “Share-based compensation expense” segment expense line items to better align with their activities and utilization.

 

The following tables present (for the operating segment and the Corporate & Other category, and on a consolidated basis) the Company’s revenues and significant expenses regularly provided to the CODMs, excluding discontinued operations as discussed in Note 18 below, reconciled to loss from continuing operations for the year ended December 31, 2025.

Schedule of segment information
		Operating Segment				Corporate & Other				Total
Revenue		$	974,977			$	–			$	974,977
Cost of goods sold			(1,337,595	)			–				(1,337,595	)
Gross margin			(362,618	)			–				(362,618	)
Operating expenses:
Sales and marketing			1,483,138				–				1,483,138
Product development			398,605				–				398,605
General and administrative			9,286,470				–				9,286,470
Corporate			–				752,323				752,323
Digital asset custody fee			–				713,185				713,185
Share-based compensation expense			1,100,670				16,724,269				17,824,939
Unrealized loss on digital assets			–				122,659,151				122,659,151
Total operating expenses			12,268,883				140,848,928				153,117,811
Other income			–				1,565,515				1,565,515
Loss on repayment of credit facility			–				(125,377	)			(125,377	)
Gain on change in fair value of financial liabilities			–				46,672				46,672
Interest income			–				292,623				292,623
Interest expense			–				(2,253,819	)			(2,253,819	)
Loss from continuing operations before income taxes			(12,631,501	)			(141,323,314	)			(153,954,815	)
Income tax benefit			–				5,383,973				5,383,973
Loss from continuing operations		$	(12,631,501	)		$	(135,939,341	)		$	(148,570,842	)

  

Prior to the implementation of the Company’s digital asset treasury strategy in July 2025, the Company operated as one operating segment, and the Company’s chief operating decision maker was the CEO, who used the consolidated statement of operations to assess financial performance. For the year ended December 31, 2024, see the consolidated statement of operations above.