Will the acquisition affect any existing or future debt covenants or loan agreements?

Short answer:

The press release does not mention any existing or planned debt covenants or loan agreements, so there is no explicit indication that the BTC acquisition will trigger a change to those agreements. Whether the purchase has any effect depends on the terms of Empery Digital’s current financing arrangements and how the company’s lenders treat cryptocurrency‑held assets in their covenants.

1. What the release tells us

The only quantitative data supplied are the number of Bitcoins purchased and the aggregate purchase price. No reference is made to:

• Existing credit facilities, term loans, revolving lines of credit, or any other debt.
• Debt‑covenant calculations (e.g., leverage ratios, net‑worth, asset‑coverage, or liquidity‑coverage ratios).
• Planned refinancing, new borrowing, or covenant‑waiver requests.

2. How a BTC acquisition could theoretically impact debt covenants

Even though the release is silent on debt matters, it is useful to outline the typical ways a large crypto‑asset purchase might intersect with loan agreements:

Key point: The effect is contract‑specific. If Empery’s existing loan agreements already treat cryptocurrency as an eligible asset, the acquisition could improve covenant metrics (e.g., asset‑coverage). Conversely, if the agreements exclude crypto or impose strict valuation haircuts, the acquisition may have little or no impact on covenant calculations.

3. Likely scenarios for Empery Digital

3.1 No existing debt or covenants

• Scenario: Empery is an all‑equity, cash‑rich company with no term loans or revolving credit facilities.
• Impact: The BTC purchase would not affect any debt covenants because none exist. The primary effect would be on the company’s balance sheet composition (more crypto assets, potentially higher volatility).

3.2 Existing debt that excludes crypto from asset‑coverage

• Scenario: A senior secured term loan that defines “eligible collateral” as cash, marketable securities, or tangible assets, explicitly omitting crypto.
• Impact: The BTC would be non‑counted for covenant purposes. The acquisition would not improve the asset‑coverage ratio, nor would it be usable as additional security. The only possible effect is if the purchase was financed with additional borrowing, which would raise the debt side of leverage ratios.

3. Existing debt that includes crypto (with haircut)

• Scenario: A revolving credit facility that permits crypto as collateral at a 70 % haircut.
• Impact: The $460 M BTC portfolio could be pledged, increasing the available borrowing headroom. However, the company would need to monitor the haircut and periodic re‑valuation; a sharp price decline could trigger a breach of the asset‑coverage covenant.

3. Future financing that leverages the BTC holdings

• Scenario: Empery plans to raise new capital or refinance existing debt, using the BTC as a “liquidity buffer.”
• Impact: Lenders may request a covenant‑waiver or a new covenant that explicitly references the crypto holdings (e.g., “net‑worth must be ≥ $500 M, inclusive of BTC at a 75 % discount”). The acquisition would be a key factor in those negotiations.

4. What we can conclude from the information at hand

1. No direct statement in the press release ties the BTC acquisition to any debt covenant or loan‑agreement change.
   
2. Potential indirect effects exist only if Empery’s existing financing documents treat cryptocurrency as a counted asset or if the company used debt to fund the $12.6 M purchase.
   
3. Absent further disclosure (e.g., a 10‑K, 8‑K, or a loan‑agreement amendment filing), we cannot definitively say that the acquisition will trigger a covenant breach or a covenant amendment.
   

5. Recommendations for Stakeholders

Bottom line

Based solely on the news release, there is no explicit indication that the acquisition of 110 BTC (bringing the total to 3,913 BTC) will affect Empery Digital’s existing or future debt covenants or loan agreements. The real impact—if any—depends on the specific language of the company’s current financing documents and whether the BTC is counted toward covenant calculations or used as collateral. Until those agreements are publicly disclosed or a company statement addresses them, the effect remains uncertain.