Empery Digital sells 1,400 Bitcoin to fund debt and AI property deal

Empery Digital has sold 1,400 Bitcoin since May 7, turning a large chunk of its crypto reserves into cash for debt payments, a planned property investment, legal costs and operations. For investors tracking public companies that hold Bitcoin, the filing is a reminder that a corporate Bitcoin treasury, meaning coins held on the balance sheet, can become a source of liquidity when bills come due.

The publicly traded company raised about $87.1 million in gross proceeds from the sales, according to a Securities and Exchange Commission filing this week. Empery Digital said the Bitcoin was sold at an average price of about $62,200 per coin.

The sales cut the company’s Bitcoin position nearly in half. As of July 10, Empery Digital held 1,514 BTC and about $73.9 million in cash, the filing showed. The remaining Bitcoin was valued at nearly $96.5 million at the time referenced in the filing.

Where the cash is going

Empery Digital used $10 million of the proceeds to repay outstanding debt on July 7, according to the filing. The company still had $45 million outstanding under its debt facility as of July 10.

The company said the rest of the proceeds are intended for several uses: a pending property acquisition, legal expenses tied to stockholder litigation disclosed in its most recent quarterly report, and general operating costs.

The planned property investment was announced June 30. Empery Digital described it as a $65 million strategic investment for a 25% ownership stake in a private entity that is acquiring a Midwest facility planned for conversion into an AI data center.

The deal has not closed. The filing said the acquisition is subject to completion of a purchase and sale agreement, and it did not give a closing date. The filing also did not specify the amount of legal expenses connected to the stockholder litigation or provide a timeline for resolving it.

Empery Digital Co-CEO Ryan Lane told Decrypt in a statement that the investment “signals a shift” in where the company expects to put capital as it focuses on shareholder value.

Why Bitcoin treasury sales draw attention

Companies that hold Bitcoin can benefit when the token rises, but those holdings also sit inside a normal corporate finance structure. Debt payments, acquisitions, litigation costs and operating expenses can force management teams to decide whether to raise money elsewhere or sell assets already on hand.

That is why sales from Bitcoin treasuries tend to get close attention. They can show whether a company is treating Bitcoin mainly as a long-term reserve asset or as a flexible funding source.

Decrypt noted a similar dynamic at Strategy, the best-known corporate Bitcoin holder. The company has sold from its Bitcoin position to support dividend payments on preferred shares, according to Decrypt, as investors questioned its ability to meet financial obligations.

Empery Digital shares were recently trading at $3.87 on Friday, up about 2% on the day, according to Yahoo Finance. The stock was up more than 14% over the past month but down about 15% for the year.

This story draws on original reporting from Decrypt.