Datavault expects $92.2 million asset reduction after reviewing Bitcoin deal with Scilex
Key Facts
Datavault AI expects to reduce total assets by $8.1 million to $92.2 million in the periods covered by the restatement, after an accounting review concluded that Bitcoin tied to the Scilex deal does not meet the criteria for recognition as a digital asset of the company. The company said in a filing with the U.S. Securities and Exchange Commission that its identification and assessment of the errors are preliminary and unaudited, and may change as procedures are completed or additional errors emerge. The decision not to rely on the statements covers four sets: the third quarter and nine months ended September 30, 2025; the year ended December 31, 2025; the quarter ended March 31, 2026; and the first two quarters and six months ended June 30, 2026. This represents a review of how the transaction was recorded and its effect on assets and shareholders’ equity. The company also said the filing date for the corrected statements has not been determined.
According to Datavault, the transaction will be recorded as a subscription receivable arising from the issuance of shares, and presented as a reduction to shareholders’ equity, while amounts received from Bitcoin exchanges will reduce the receivable from Scilex. The correction means the accounting treatment involves more than removing a digital asset from the balance sheet; it also covers the classification of consideration tied to the share issuance and exchange proceeds. The company expects total assets to decline by $8.1 million as of September 30, 2025, then by $92.2 million as of December 31 of the same year. Expected reductions are $57.1 million as of March 31, 2026, and $49.0 million as of June 30. The company said it will also reflect the effects of gains and losses on crypto assets related to the transaction in the restated statements.
The transaction dates to an agreement Scilex and Datavault entered into on September 25, 2025, covering the purchase of 15,000,000 common shares and a pre-funded warrant to purchase 263,914,094 shares, for $150 million payable in Bitcoin. The agreement set the spot price of Bitcoin at $112,915.52, equivalent to about 1,328.43 Bitcoin. Datavault said the currency tied to the share purchase deal does not meet the criteria for recognition as a digital asset of the company. Under the treatment it intends to adopt, the consideration will be recorded as a subscription receivable deducted from shareholders’ equity, with Bitcoin exchange proceeds deducted from it. The reclassification puts collection of the receivable and the treatment of assets tied to the deal at the center of the financial statement review.
Scilex announced on November 26, 2025, that it had completed the second tranche of the investment, after Datavault shareholders approved it at a November 24 meeting. Scilex said the shares issuable upon full exercise of the warrant were valued at about $583.3 million, based on Datavault’s November 25 closing price of $2.21 per share. That is an estimated value of the shares at the market price used in the statement, not the agreed cash investment amount or the value of the Bitcoin transferred. The original agreement specified consideration of $150 million, based on the Bitcoin price set in it. Datavault is now reviewing how to record the Bitcoin and receivables associated with the arrangement in the affected financial periods.
The disclosure affected trading in the stock amid ongoing pressure on its price. Benzinga reported on October 27 that Datavault shares were down 38.10% to 8 cents at the time of publication. EL7 data showed the stock closed at $0.1328 on October 26, then at $0.067 on October 27. The company had previously disclosed a Nasdaq notice because its closing bid price had remained below $1 for 30 consecutive business days. The company set February 22, 2027, as the deadline for monitoring the restoration of compliance with the minimum bid price requirement.
Datavault said its review of the statements and assessment of internal control over financial reporting are ongoing, and that the procedures may uncover additional errors or delay filings. Management has not determined whether the errors indicate a material weakness in internal control, and the filing did not state a final outcome of this assessment. The audit committee and management discussed the accounting matters with CBIZ CPAs, the current independent auditor, and BPM LLP, the former auditor. Management is also reassessing the company’s ability to continue as a going concern for the year ended December 31, 2025, and the quarter ended March 31, 2026, while the final effect of the restatement on this assessment has not been determined. The company has not set a filing date for the corrected statements.