Datavault Expects $92.2 Million Asset Reduction in 2025 and Voids Reliance on Four Financial Periods
Key Facts
Datavault AI said investors should not rely on its published financial statements for the third quarter of 2025, the year ended December 2025, and the first and second quarters of 2026, after its audit committee and management concluded that bitcoin tied to a deal with Scilex had been accounted for incorrectly. The company estimated that the restatement would reduce total assets by $8.1 million at September 30, 2025, $92.2 million at December 31, 2025, $57.1 million at March 31, 2026, and $49 million at June 30, 2026. In a filing with the U.S. Securities and Exchange Commission, it said the bitcoin did not meet the criteria for recognition as a digital asset of the company. It said the consideration due for the share issuance should be recorded as subscription receivables that reduce shareholders’ equity. Datavault has not yet determined the precise impact on each financial statement or when it will file the amended statements, and asked investors not to rely on the affected statements until they are published.
The matter stems from an agreement dated September 25, 2025, under which Scilex agreed to buy 15 million common shares and a pre-funded warrant to purchase 263,914,094 shares in exchange for $150 million in bitcoin. The filing estimated the consideration at about 1,328.43 bitcoin, based on a spot price of $112,915.52 per coin. Datavault recorded a deposit of 1,309.04 bitcoin in its Biconomy wallet through an off-chain transfer, after deducting 19.39 bitcoin tied to cash advances. Between September 26, 2025, and January 30, 2026, the company sold 491.431 bitcoin to Scilex for about $40.5 million in cash. Under the new accounting treatment it expects, the proceeds from those sales should reduce subscription receivables, and the company expects to reverse the effects of crypto-asset gains and losses related to the transaction.
The question of access to the coins emerged alongside the review of their accounting treatment. Datavault said it requested in June 2026 that bitcoin be transferred from the wallet managed by Biconomy to an external account, but it had been unable to complete the withdrawal as of the date of its filing. The company had counted its bitcoin balances as a source of liquidity, while saying collection of amounts due from Scilex was uncertain. Management is therefore reassessing its going-concern disclosures for the year ended December 31, 2025, and the quarter ended March 31, 2026. In the context of liquidity, the previous annual report showed that cash and cash equivalents totaled $2.0 million at the end of 2025, compared with $3.3 million at the end of 2024, and that net cash used in operating activities rose to $23.6 million in 2025 from $17.5 million in 2024.
The audit committee and management discussed the matters with the company’s current auditor, CBIZ CPAs P.C., and former auditor, BPM LLP. Datavault said its review of the financial statements and assessment of internal control over financial reporting were ongoing, and that management had not yet completed its assessment of whether the errors indicated control deficiencies or required changes to its prior conclusions on their effectiveness. It added that the review could uncover other errors, potentially causing delays in financial filings. Risks cited by the company include a possible delay in its report for the quarter ended September 30, 2026, as well as its ability to maintain compliance with Nasdaq’s continued listing requirements. It did not announce a date for filing the restated financial statements.
The disclosure coincided with Datavault shares falling from a close of $0.1328 on October 26 to $0.067 on October 27, 2026. CoinDesk reported that the stock fell 49.55% in Tuesday’s session, with about 244 million shares traded. The move comes as the company faces questions over the accounting for assets tied to the Scilex deal and its ability to access some of the bitcoin held at Biconomy. Nasdaq had noted that Datavault announced on September 23, 2026, a rights offering for shareholders of record on October 9. The restated financial statements and assessment of internal controls remain among the steps the company said it has yet to complete.