Empery Digital Inc. 8-K

What Happened

• Empery Digital Inc. (EMPD) filed an 8-K on March 23, 2026 announcing a securities purchase agreement for a registered direct offering expected to close on or about March 24, 2026. The company agreed to sell 2,558,422 shares of common stock at $5.39 per share, pre‑funded warrants to purchase up to 2,079,797 shares (with $5.38999 prepaid at closing), and common warrants to purchase up to 4,638,219 shares with a $6.27 exercise price. Gross proceeds are expected to be approximately $25 million before fees and expenses. The offering is being made under the company’s Form S-3ASR registration statement (File No. 333-290374).

Key Details

• Shares to be sold: 2,558,422 common shares at $5.39 each.
• Pre‑Funded Warrants: up to 2,079,797 (unfunded exercise price $0.00001); exercisable cash or cashless; no expiration until fully exercised; beneficial ownership limit (default cap) not to exceed 9.99%.
• Common Warrants: up to 4,638,219; $6.27 exercise price; exercisable cash or cashless; four‑year term.
• Closing: expected on or about March 24, 2026; gross proceeds ~ $25M.
• Transaction terms include customary representations, indemnities, insider lock‑ups, a 30‑day limitation on additional equity issuances after closing (subject to exceptions), and the company’s obligation to keep registrations effective for the shares underlying the warrants.
• The board determined the transaction is an “Exempt Transaction” under the February 3, 2026 Rights Agreement, so the purchaser will not become an “Acquiring Person” or trigger the rights plan. Ropes & Gray provided a legal opinion on the issuance.

Why It Matters

• Cash and dilution: The offering will provide roughly $25M in gross proceeds to fund operations or strategic priorities, but it also increases the number of shares and potential future dilution if warrants are exercised.
• Exercise economics: Common warrants exercise at $6.27 (above the $5.39 share price in the offering), while pre‑funded warrants are structured to minimize additional cash required to obtain shares (practically a nominal exercise price).
• Investor protections and resale: Insider lock‑ups and a short prohibition on further equity issuances limit immediate additional dilution; the company’s registration efforts aim to permit resale of warrant shares, affecting liquidity for investors who receive those securities.
• Rights plan impact: The board’s determination that this is an exempt transaction means the offering will not trigger the company’s shareholder rights plan (poison pill), avoiding additional defensive consequences for stockholders.