Datavault Falls 49.6% to $0.067 After Bitcoin Withdrawal From Biconomy Fails
Key Facts
Datavault AI shares closed at $0.067 on Oct. 27, down 49.6% from the previous session’s close, according to The Block. The publication said about 250 million shares traded during the session, nearly eight times the previous day’s volume. The decline followed the company’s disclosure that it could not complete a request to withdraw Bitcoin from its wallet at Biconomy, and that it was reviewing the accounting treatment of balances tied to its Scilex deal. In its filing with the U.S. Securities and Exchange Commission, Datavault said those balances do not meet the criteria for recognition as a digital asset of the company. EL7 data showed the stock closed at $0.1328 on Oct. 26, while Scilex shares fell from $2.33 to $2.05 between Oct. 26 and 27.
Datavault said its audit committee and management concluded on Oct. 20 that the financial statements for four periods should no longer be relied upon. The periods ended on Sept. 30, 2025, Dec. 31, 2025, March 31, 2026, and June 30, 2026. The matter stems from an agreement dated Sept. 25, 2025, under which Scilex agreed to buy 15 million Datavault shares and a pre-funded warrant allowing it to purchase 263,914,094 shares. The agreed consideration was $150 million, payable in Bitcoin at a spot price of $112,915.52 per Bitcoin, or about 1,328.43 Bitcoin. The accounting review was therefore tied to a major share and financing transaction, not simply a withdrawal request separate from the companies’ dealings.
Datavault said Scilex deposited 1,309.04 Bitcoin into the company’s wallet at Biconomy through an off-chain transfer on Sept. 26 and Nov. 25, 2025. The balance reflected a deduction of 19.39 Bitcoin for cash advances between the signing and completion of the agreement. Between Sept. 26, 2025, and Jan. 30, 2026, Datavault again sold Scilex 491.431 Bitcoin for about $40.5 million in cash. The company then requested in June 2026 that Bitcoin be transferred from its Biconomy wallet to an external account, but said it had been unable to complete the withdrawal as of its report dated Oct. 26. It concluded that the Bitcoin tied to the deal does not meet the requirements for recognition as a digital asset it owns, and that the appropriate accounting treatment is to record subscription receivables as a reduction of shareholders’ equity.
The company expects the restatement to reduce total assets by $8.1 million as of Sept. 30, 2025. The expected reduction is $92.2 million as of Dec. 31, 2025, followed by $57.1 million as of March 31, 2026. As of June 30, 2026, Datavault expects to reduce assets by $49.0 million. The company said the adjustments relate to the four periods whose financial statements should no longer be relied upon. The largest expected reduction, $92.2 million, at the end of 2025 puts the reported scale of the accounting impact at the forefront of the deal review.
Datavault said it is reassessing its ability to continue as a going concern after deciding not to report the Bitcoin balances as company assets. The company also linked the assessment to uncertainty over collecting amounts owed by Scilex, and said the ultimate impact on its going-concern assessment has not yet been determined. It added that it has not set a date for filing the restated financial statements. The review of the statements and assessment of internal controls are ongoing, and the review could identify additional errors that lead to delays. The company has also not determined whether the errors constitute a material weakness in internal control over financial reporting.
The company listed the possibility of delays to the restated statements and periodic reports, including the quarterly report for the period ended Sept. 30, 2026, among the uncertainties. The risks it cited included maintaining compliance with Nasdaq’s continued listing requirements and obtaining additional financing. It also pointed to the outcome of efforts to collect amounts from Scilex and the possibility that Biconomy may not cooperate. On the Scilex side, the company said it sold 13,389,235 Datavault shares in October 2025 for gross proceeds of $26.4 million, then sold 21,079,599 shares after exercising the warrant in November for $13.6 million. Scilex said the deal increased its stake in Datavault to about 48% and gave it the right to nominate two members of the nine-member board, but it had not appointed either at the time of the disclosure.
Scilex said it bought $18.7 million worth of Bitcoin from Datavault during the first half of 2026. As of June 30 of that year, it disclosed holdings of 955 Bitcoin with a fair value of $56.087 million and a cost basis of $95.591 million. It also said it recorded a realized loss of $5.3 million and a realized gain of $37.1 million on its investment in Datavault during the first half of 2026. These disclosures place the Bitcoin and share transactions between the two companies in a broader context than the original agreement, as Datavault’s accounting review continues. The company did not give a specific date for restating the financial statements, while saying its review and assessment of controls remain in progress.