Datavault AI Says It Cannot Withdraw Bitcoin, Shares Plunge

Highlights

Datavault AI shares fell 49.55% to $0.067 on Oct. 27 after the company disclosed in an SEC filing that it has been unable to complete a June request to withdraw Bitcoin held at Biconomy. The company plans to restate four financial reports, reclassifying Bitcoin received in a $150 million stock transaction as a subscription receivable and reducing reported assets by as much as $92.2 million. Management is reassessing whether Datavault can continue as a going concern because it had treated the Bitcoin as a source of liquidity, while collection of amounts owed by Scilex is uncertain. The unresolved withdrawal and accounting changes have created significant uncertainty about the company’s financial position.

Sentiment Analysis

• Overall sentiment: Negative. The article focuses on Datavault AI’s inability to withdraw Bitcoin, a steep decline in its share price, and the need to correct previously issued financial statements. These developments are presented as material setbacks rather than routine adjustments.
• Financial outlook: The assessment is cautious because the company is reconsidering its going-concern status and says collection from Scilex is uncertain. This raises questions about liquidity and the ability to meet obligations.
• Governance and reporting: The planned restatements and potential delays in future filings add further uncertainty. The article also notes possible risks involving a third-party custodian, Nasdaq listing compliance, and litigation or regulatory inquiries.
• Balancing context: The filing describes the underlying transactions and Scilex’s payment terms, but does not explain why the withdrawal remains incomplete. Datavault shares later bounced near $0.085, though this does not resolve the broader concerns.

Article Text

Datavault AI reported that it has been unable to complete a request to withdraw Bitcoin from the cryptocurrency exchange Biconomy. The company said in a Form 8-K filed Oct. 26 that it had requested a transfer to an external account in June, but the withdrawal had not been completed. The filing did not explain the reason for the delay. After the disclosure, Datavault shares fell more than 50% on Tuesday, closing at $0.06. A separate summary of the move reported a 49.55% decline to $0.067 on Oct. 27.

The Bitcoin is connected to an agreement dated Sept. 25, 2025, under which Scilex Holding agreed to pay $150 million in Bitcoin for 15 million Datavault shares and a pre-funded warrant covering another 263.9 million shares. A pre-funded warrant gives its holder the right to acquire stock after nearly all of the purchase price has already been paid. At $112,915.52 per Bitcoin, the transaction represented about 1,328.43 BTC.

According to the filing, Scilex credited 1,309.04 BTC to Datavault’s Biconomy account on Sept. 26 and Nov. 25, 2025. That amount reflects a 19.39 BTC deduction for cash advances made by Scilex. The transfers were recorded off-chain: Biconomy adjusted account balances on its own records rather than transferring coins through the Bitcoin blockchain. Between Sept. 26, 2025, and Jan. 30, 2026, Datavault sold 491.431 BTC back to Scilex through the same type of arrangement, receiving about $40.5 million in cash.

Following a review, Datavault concluded that the Bitcoin did not qualify as a digital asset owned by the company. It plans to account for the transaction as a subscription receivable, representing money owed by a buyer for newly issued shares. The receivable will be presented as a reduction of stockholders’ equity, while the $40.5 million in cash will reduce the amount Scilex owes. This reclassification means Datavault will no longer report the Bitcoin as an asset it can use directly for liquidity.

The proposed restatements are expected to reduce total assets by $8.1 million as of Sept. 30, 2025, $92.2 million at the end of 2025, $57.1 million as of March 31, and $49 million as of June 30. The affected reports include the 2025 annual report and three quarterly reports filed between November 2025 and August 2026. Datavault also expects to reverse crypto gains and losses previously recorded on the Bitcoin.

Because management had counted the Bitcoin balances as a source of liquidity, the company is reassessing its going-concern status. This accounting assessment considers whether a business can continue operating and meet its obligations. Datavault said collection of the sums owed by Scilex is uncertain. Its listed risks also include Scilex’s creditworthiness, reliance on a third-party custodian, compliance with Nasdaq listing requirements, and potential litigation or regulatory inquiries related to the restatement.

Scilex’s quarterly filing provides additional background on Biconomy’s role. Scilex said it sold 12.5 million shares of its Semnur Pharmaceuticals subsidiary to Biconomy on Sept. 23, 2025, for $200 million in Bitcoin, then used $150 million of that amount to purchase Datavault stock. On June 24, 2026, the same month Datavault says it requested its withdrawal, Scilex signed a binding term sheet to purchase 837 BTC held in Datavault’s Biconomy wallet for $50 million, subject to a definitive agreement.

The proposed payment terms called for an initial $30 million payment, with the remaining $20 million due in quarterly installments through Dec. 31, 2028. Scilex could make those later payments in cash or Scilex securities at its discretion. The 837 BTC covered by the term sheet, combined with the 491.431 BTC previously sold back, equals the 1,328.43 BTC associated with the original agreement.

Datavault shares rebounded to near $0.085 on Wednesday. Under the 2025 agreement, Scilex’s purchase price worked out to an effective $0.5378 per share. Datavault has not announced when it will file the restated statements and warned that delays could also affect its quarterly report for the period ended Sept. 30, 2026. The filing leaves the reason for the incomplete withdrawal unexplained, while the revised accounting and uncertain receivable collection remain central issues for investors.

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