What changed

## IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

The following were stipulated to by the parties or proven by a preponderance of the evidence after trial.1

A.

In July 2025, Empery’s predecessor adopted a digital asset treasury (“DAT”)

Also in July 2025, Empery announced the closing of a $500 million private investment in public equity (PIPE), led by defendant Ryan Lane and his hedge fund,

2 PTO ¶ 13.

5 JX 677 (Expert Report of Angelo Chan (“Chan Report”)) ¶¶ 24-25.

7 PTO ¶ 17; Lane Tr. 272-74, 298.

8 PTO ¶ 17.

Lane, Kim, and Jonathan Foster, Adrian Solgaard, Örn Ólason, Ian Read, Rohan

Empery was no exception. By January 8, 2026, it was trading at a market-tonet-asset value of 0.73, meaning the market valued the Company at just 73% of the value of its Bitcoin.16 Thus, to the extent a stockholder could acquire control of

11 Lane Tr. 306; JX 437, “Daily Summary.”

Gabi Gliksberg—an activist investor—had also noticed Empery’s “very significant discount” to NAV.23 Gliksberg had recently launched plaintiff ATG

18 Brown Tr. 160, 171.

22 JX 82; see JX 83; see also JX 81; JX 86; JX 89.

Gliksberg set out to purchase “as much Empery stock as possible.”26 On the morning of January 15, ATG placed nineteen limit orders for approximately

Ma-Weaver, with whom he had previously invested, to investigate why Empery was trading at such a “steep discount.”28

Weaver—who had previously faced group allegations alongside Gliksberg— replied: “Not a group!”29 Ma-Weaver had no interest in taking an activist position and did not “want to inadvertently trigger a 13D.”30 He put Brown and Gliksberg in touch by email, writing: “You both called me on the same topic today, and you should get to know one another regardless.”31

25 JX 117 at 8-10; Gliksberg Tr. 101-03.

43 JX 960.

On January 18, Gliksberg asked ChatGPT for a “full timeline on all the important tasks” to “do a shareholder activist campaign against Empery Digital.”45

47 JX 108.

49 JX 120 at ‘3194; JX 133 at ‘3218.

59 JX 158 at 2.

immediately liquidate its Bitcoin to maximize returns.63 During the meeting, Brown claimed that other stockholders shared his views and maintained similar hedges. The only stockholder Brown named was ATG, referring to Gliksberg informally as “Gabi.”64 Unprompted, Brown volunteered: “I am not working with ATG.”65 To

“I’d like to liquidate a bitcoin treasury company. I’d like to speak publicly about

64 Silver Tr. 554-55.

66 Lane Tr. 285; Silver Tr. 555.

71 JX 217.

73 JX 219; see Gliksberg Tr. 139-40.

79 PTO ¶ 68(h).

82 JX 285; JX 287; JX 292; JX 294; JX 296; JX 298; JX 299; JX 300.

## The Board’s Rejection

On March 25, Empery’s Chief Financial Officer circulated counsel’s draft deficiency letters.87 The Board and the Nominating and Corporate Governance

The Nominating and Corporate Governance Committee recommended that the Board reject the nominations.91 The Board unanimously agreed.92 Empery, through counsel, subsequently issued substantially identical letters to ATG (the “Rejection Letter”) and Brown informing them that their nominations were deficient.93

89 Homer Tr. 535-37; see also Solgaard Dep. 91-92.

91 JX 496.

93 JX 496; JX 497 (“Rejection Letter”); JX 494.

95 Rejection Letter 3-4, 8-10.

questionnaires contained biographical omissions and inaccuracies regarding their employment histories and outside directorships.97

Concurrently, the Company took its online treasury dashboard offline, declaring that reporting NAV based on Bitcoin holdings “no longer fully reflect[ed] the total NAV of the Company” and was no longer a useful tool for investors.100 In July, Empery sold approximately half of its remaining Bitcoin.101 On July 23, the Company announced an additional $20 million strategic investment in another data center affiliate.102 After Empery announced the AI data center investment, ATG supplemented its complaint to demand that the nomination window be reopened.103

99 JX 658; JX 856.

100 JX 856; JX 857.

103 Verified Suppl. Compl. (Dkt. 207).

ATG contends the Board interfered with the stockholder franchise when it rejected its Nomination Notice and refused to extend the nomination deadline. It

has the burden to prove its claims by a preponderance of the evidence. “Proof by a preponderance of the evidence means proof that something is more likely than not.”

Board’s rejection breached the Bylaws.107 I then proceed to an equitable review of whether the Board inequitably impaired ATG’s nomination right.108

1. The Contractual Review

As the party seeking to enforce its nomination, ATG bears the burden of demonstrating that its notice fulfilled the Bylaws’ requirements.112 “[A]dvance notice bylaw conditions act, in some respects, as conditions precedent to companies being contractually obligated to take certain actions.”113 Because corporate bylaws

constitute part of a broader binding contract among directors, officers, and stockholders, the court employs principles of contract interpretation when construing them. Clear and unambiguous terms are given their commonly accepted meaning, and any ambiguity in an advance notice bylaw is resolved in favor of the stockholder’s electoral rights.114 a. The Group Allegations

Brown’s strange preemptive statement during the January 28 meeting at Empery’s office that he was not working with Gliksberg—a statement that led the Board to suspect otherwise.117 At trial, the defendants elicited evidence supporting the

115 Defs.’ Post-trial Br. 7-14.

116 JX 495.

Board’s suspicion that Brown and Gliksberg were coordinating regarding Empery securities—even without the evidence lost to Brown and Gliksberg’s use of Signal with auto-delete enabled.118 It is more likely than not that Brown and Gliksberg’s multiple communications in mid-January went beyond sharing pleasantries and focused on their plans for Empery. After Ma-Weaver declined to work with Brown on his plan to “crack open the DAT,” Brown and Gliksberg’s activity—phone calls, stock purchases, and outreach to prospective nominees by Gliksberg—rapidly intensified.

January 28, 2026), the Company understands that Mr. Brown and ATG Capital have had specific discussions regarding the acquisition of the Company’s securities, as well as the timing of such acquisitions-actions that strongly indicate coordination between Mr. Brown and ATG Capital.”).

cases, the bylaws at issue explicitly required a nominating stockholder to disclose

Election to the Board,” lacks any provision requiring a nominating stockholder to disclose an AAU concerning Empery or the nomination. This omission is striking because Section 2.4 of the Bylaws, which governs notices of business proposals to be brought before a meeting, requires the disclosure of all agreements, arrangements, and understandings in connection with the proposal.121 Nor does Empery have a bylaw requiring the disclosure of a Section 13(d) group.122

122 Empery’s Bylaws mention Section 13(d) or its implementing regulations just twice. First, Section 2.4(c)(i) requires a proposing person or nominating stockholder to disclose shares that are “directly or indirectly, owned of record or beneficially owned (within the meaning of Rule 13d-3 under the Exchange Act).” Bylaws § 2.4(c)(i)(B). Second, Section 2.4(c)(ii)(A) mentions “Rule 13d” by referencing an inapplicable exception to the disclosure requirement for Schedule 13G filers. Id. § 2.4(c)(ii)(A).

123 Defs.’ Post-trial Br. 13 (“[B]rown was a ‘participant in such solicitation’ as the term is used in Section 2.5.”).

125 Rejection Letter ¶ 4.

Securities and Exchange Commission (SEC) in connection with certain proxy solicitations.131 Paragraph 3(a) of Instruction 3 to Item 4 of Schedule 14A delineates

128 Bylaws § 2.4(c) (“For purposes of this Section 2.4, the term ‘Proposing Person’ shall mean (i) the stockholder providing the notice of business proposed to be brought before an annual meeting, (ii) the beneficial owner or beneficial owners, if different, on whose behalf the notice of the business proposed to be brought before the annual meeting is made, and (iii) any participant (as defined in paragraphs (a)(ii)-(vi) of Instruction 3 to Item 4 of Schedule 14A) with such stockholder in such solicitation.” (emphasis added)).

131 17 C.F.R. § 240.14a-101.

The defendants focus on subparagraph (v). They argue that this subparagraph broadly captures anyone who “‘enters into any . . . understanding with a participant, for the purpose of . . . purchas[ing] . . . or voting’ securities ‘in support of’ a

participant.”133 This interpretation excises the core limiting language of the regulation, however.

133 Defs.’ Post-trial Br. 11 (citing 17 C.F.R. § 240.14a-101, Item 4, Instruction 3(a)(v)).

The canon of ejusdem generis further undermines the defendants’ broad reading. When general words follow specific words in an enumeration, the general words ordinarily embrace only objects similar in nature to those specifically enumerated.138 Here, the general phrase “any other arrangements” follows “lends money” and “furnishes credit” within a clause concerning “financing” and “otherwise inducing.”139 These surrounding terms indicate that “any other arrangements” must refer to arrangements of a similar financial or economic character—not to any tacit agreement that might facilitate an activist campaign.

The phrase “otherwise inducing” does not alter this conclusion. Basic grammatical structure dictates that “otherwise inducing” is part of the prepositional phrase “for the purpose of,” which describes the intent behind the lending of money, furnishing of credit, or other similar arrangements. Reading “any other arrangements” to encompass a non-monetary agreement to purchase shares on the open market severs the clause from its financial context and renders it redundant to subparagraph (iii), which addresses coordination in soliciting proxies. A plain reading gives each provision distinct meaning: subparagraph (iii) governs

139 17 C.F.R. § 240.14a-101, Item 4, Instruction 3(a)(v).

The defendants also cite the Section 14(a) Bylaws as requiring ATG to disclose its coordination with Brown.141 Bylaw Section 2.5(c)(iii)(B) requires a nomination notice to set forth all information relating to a director candidate “that is required to be disclosed in a proxy statement . . . in a contested election pursuant to

142 Bylaws § 2.5(c)(iii)(B) (requiring the disclosure of “[a]ll information relating to such candidate for nomination that is required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors in a contested election pursuant to Section 14(a) under the Exchange Act requires the nomination notice to disclose any “Disclosable Interests” for each

First, the defendants focus on Item 5(b)(1)(viii) of Schedule 14A, which requires specified disclosures in proxy solicitations regulated under Section 14(a) of the Exchange Act.144 Item 5(b)(1)(viii) contains a disclosure requirement for (including such candidate’s written consent to being named in the proxy statement as a nominee and to serving as a director if elected)”).

144 Defs.’ Post-trial Br. 8-9.

The defendants argue that because this regulation is incorporated into Section 14(a), and Section 14(a)’s requirements are incorporated into the Bylaws, ATG was required to disclose any AAU Gliksberg had with Brown concerning Empery’s securities.148

146 17 C.F.R. § 240.14a-101, Item 5(b)(1).

Second, the defendants argue that ATG was required to disclose any AAU with Brown because it was information material to voting stockholders under

Notice. The Rejection Letter did not mention the Section 14(a) Bylaws as requiring disclosure of any agreement or understanding with Brown, or reference Rule 14a-9 as an independent basis for rejection. Nor did it assert that the Section 14(a) Bylaws operate as a general requirement to disclose any information the Board deems material.152 Rather, the Rejection Letter’s reference to the AAU disclosure

150 17 C.F.R. § 240.14a-9(a).

152 At post-trial argument, defendants’ counsel contended that the Rejection Letter invoked the Section 14(a) and Rule 14a-9 requirements as an independent, broadly applicable disclosure obligation. See Tr. of Post-trial Oral Arg. (Dkt. 273) (“Post-trial Arg. Tr.”) 44requirement of Item 5(b)(1)(viii) was explicitly grounded in Brown’s status as an undisclosed “participant”:

Nomination Notice violated the Section 14(a) Bylaws by failing to disclose an AAU

with Brown irrespective of Brown’s status as a participant.157 That theory appeared only in post-trial briefing. It is waived.158 For that independent reason, I need not decide whether the Section 14(a) Bylaws would otherwise require disclosure of an

Nomination Notice therefore did not violate the Participant Bylaw.159

159 The defendants moved for an adverse inference based on Gliksberg’s spoliation of Signal messages, arguing that the destroyed communications would have proven that ATG and Brown were coordinating as a group. See Defs.’ Mot. For Adverse Inferences Due to Spoliation of Evid. (Dkt. 212). I need not resolve the spoliation motion to decide this claim. Even if I assume that the destroyed messages would prove that ATG (or Gliksberg) and Brown formed a group and coordinated their efforts to liquidate Empery, my conclusion would remain the same. The asserted Bylaw provisions did not require the disclosure of general coordination, and coordination alone does not necessarily transform Brown into a ‘participant’ under Schedule 14A, Item 4, Instruction 3(a). Because the requested inference would not amend the Bylaws, it would not cure the contractual invalidity of the Board’s rejection. The defendants’ request for adverse inferences is therefore denied as moot.

160 Rejection Letter ¶ 3.a.

164 Bylaws § 2.4(c)(ii).

requires that a proxy statement describe “any substantial interest, direct or indirect, by security holdings or otherwise, of each participant . . . in any matter to be acted upon at the meeting.”168 The regulation then identifies twelve categories of information, most of which are expressly sought by Empery’s bylaws and questionnaire (e.g., name, address, and occupation).169 None of those categories expressly requires disclosure of investments in unrelated assets or issuers, much less a nominating stockholder’s purported “misalignment” with other stockholders.

167 Rejection Letter ¶ 3.a; see Bylaws §§ 2.5(c)(iii)(B), 2.5(c)(ii).

168 17 C.F.R. § 240.14a-101, Item 5(b)(1) (2025).

The defendants also argue that ATG’s Bitcoin hedge was material information that Empery “[s]tockholders were entitled to know” under Rule 14a-9.170 As with their arguments concerning Rule 14a-9 and the disclosure of an AAU, this theory was not asserted as a basis for rejection and is waived. I need not reach whether

170 Defs.’ Post-trial Br. 30-31; see also JX 657 (Expert Report of Joseph A. Grundfest) ¶ 42.

172 The Board never asked ATG for information about its Bitcoin hedge, although the Bylaws expressly contemplate that the Board may request additional information from a nominating stockholder. See Bylaws § 2.5(g).

The defendants also insist that the Board properly rejected ATG’s Nomination

175 Read Tr. 727 (“[I]t was not so much about the bylaws as about the suitability of having a long-term shareholder who is actively betting against the value of bitcoin.”); see Foster Tr. 708 (noting a “guttural reaction” that the Bitcoin short should have been disclosed).

Because the Bylaws did not require the disclosure of commodity hedges, ATG could not have breached the Bylaws by failing to disclose its Bitcoin hedge in its

My analysis proceeds to the second step of Delaware’s twice-tested framework: an equitable review of the Board’s actions.180

2. The Equitable Review

Rejection Letter did not exist.185 But the Board’s mistaken view of the Bylaws does

185 An AI-generated transcript of the March 26 Board meeting reflects a discussion that the Rejection Letter “threw [in] the kitchen sink” and that though no “single” omission in the Nomination Notice was “detrimental . . . in the aggregate [ATG was] sloppy.” JX 495 at 1.

Lane acknowledged that the “objective” was to “reject” the Nomination Notice and “see what” ATG and Brown did in response. Id. at 2.

188 Silver Tr. 551-52; Lane Tr. 284.

190 JX 219. Gliksberg testified that he sent the text to keep business and personal texts separate. Gliksberg Tr. 139-40. This explanation makes little sense in the context of his other text message chains. Instead, the timing and context of the message suggest an intent to conceal coordination.

Assuming, without deciding, that the Board reasonably perceived a legitimate threat, the Board nevertheless fails the second Unocal prong. Its response— rejecting the Nomination Notice—was not reasonable in relation to the threat it perceived.

Empery’s Bitcoin strategy, and the risks the Board believed a change in control board’s belief that “certain director nominees would be worse for the company than themselves”).

presented.195 Those arguments could then have been tested through the electoral process. Nothing in the record suggests that permitting Empery’s stockholders to consider ATG’s slate would have prevented the Board from making its case to the electorate or from disclosing the information it regarded as material.

## The Nomination Reopening Claim

because it is an “unanticipated” and “material” change to Empery’s business announced after the nomination deadline.200 The defendants insist that Hubbard lends no support to ATG’s request because, among other reasons, ATG already nominated its slate and no other stockholder seeks to nominate.201

Hubbard presents a “context-specific application of Schnell.”202 In Hubbard, after the advance notice deadline passed, the board settled with an insurgent, shifted the allegiance of a board majority to his radical new agenda, and contractually bound itself not to waive the advance notice bylaw.203 The court reopened the nomination window because this post-deadline, board-driven “material change of circumstances” locked stockholders out of mounting a dissident slate.204

stand for the notion that a dissident is entitled to a do-over of its nomination whenever a company undertakes a post-deadline commercial transaction. The overarching principle is that Schnell and its progeny protect electoral fairness, not business strategy.206

Here, Empery’s stockholders will not be disenfranchised. Because I have found that ATG’s Nomination Notice is valid and that the Board's rejection was inequitable, ATG’s nominees will stand for election. Empery’s stockholders will therefore have a choice between the incumbent Board and ATG’s slate, which publicly committed to evaluate strategic alternatives.207 Even if the data center transaction radically altered the Company’s strategic direction, it did not manipulate the corporate machinery or result in the sort of uncontested election Hubbard sought to prevent. ATG therefore did not prove that the Board breached its fiduciary duties by declining to reopen the nomination window after announcing the data center transaction.

207 JX 453 at 14 (ATG preliminary proxy statement).

The parties are to confer on a form of order to implement this decision, which must be filed within three business days. Within 14 business days, they are to provide the court with a proposed schedule for resolving the remainder of the claims.