Datavault AI, a company listed on the Nasdaq, saw its shares plunge by 49.55% to $0.067 on October 27 after filing with the U.S. Securities and Exchange Commission (SEC) revealed significant financial restatements and challenges in accessing Bitcoin assets held with the crypto exchange Biconomy.
Financial Restatements and Bitcoin Reclassification
Datavault AI disclosed that it will restate four of its recent financial reports due to reclassification of assets linked to a major Bitcoin deal. The company plans to reduce reported assets by as much as $92.2 million, after determining that Bitcoin from a $150 million stock transaction with Scilex Holding should be recorded as a subscription receivable rather than as a digital asset.
Management at Datavault is reassessing its ability to operate as a going concern, as the company had classified the Bitcoin as a key liquidity source. The company emphasized that uncertainty surrounds its ability to collect the amounts owed by Scilex, a pharmaceutical company specializing in pain management products.
Datavault stated that the restatements are expected to reduce total assets by $8.1 million as of September 30, 2025; $92.2 million at the end of 2025; $57.1 million as of March 31; and $49 million as of June 30. This affects the 2025 annual report and three quarterly reports filed between November 2025 and August 2026.
The company notified investors that its previous financial statements should no longer be relied upon. Delays in completing the restated filings may impact its quarterly report for the period ending September 30, 2026.
Breakdown of the Bitcoin Transaction
The Bitcoin holdings in question stem from a September 25, 2025, agreement in which Scilex Holding agreed to pay $150 million in Bitcoin for 15 million Datavault shares and a pre-funded warrant for another 263.9 million shares. At the transaction’s pricing of $112,915.52 per Bitcoin, this amounted to approximately 1,328.43 BTC. Scilex transferred 1,309.04 BTC to Datavault’s Biconomy account on September 26 and November 25, 2025, after accounting for a 19.39 BTC deduction related to prior cash advances.
These Bitcoin credits were posted as off-chain transfers, meaning no coins actually moved across the blockchain and balances were adjusted internally by Biconomy.
Mini dictionary: Off-chain transfer, a type of transaction in which cryptocurrency balances are modified within the records of a platform (such as an exchange) instead of being recorded directly on the blockchain. These transactions can offer faster settlement but may entail additional counterparty risks.
| Event | Amount/Date | Details |
|---|---|---|
| Original Scilex-DataVault deal | Sept. 25, 2025 | $150 million in Bitcoin for Datavault shares |
| BTC priced per deal | $112,915.52 | 1,328.43 BTC total |
| BTC credited by Scilex | Sept. 26 & Nov. 25, 2025 | 1,309.04 BTC |
| BTC returned to Scilex | Sept. 2025 – Jan. 30, 2026 | 491.431 BTC for $40.5 million cash |
Between September 2025 and January 30, 2026, Datavault sold 491.431 BTC back to Scilex via similar off-chain transactions, receiving about $40.5 million in cash. After internal review, Datavault concluded that the Bitcoin never constituted a digital asset for their balance sheets and will now reflect these amounts as a receivable for newly issued stock, reducing stockholders’ equity accordingly.
Liquidity Concerns and Scilex Related Risks
With Datavault previously counting the Bitcoin as a liquidity source, the company’s management is now reviewing whether it can continue as a going concern. The company stated that collecting payments from Scilex is uncertain, and flagged potential risks, including Scilex’s creditworthiness, dependence on Biconomy as a third-party custodian, ongoing Nasdaq compliance, and potential litigation or regulatory issues stemming from the restatement.
Scilex, which focuses on pain-medicine development, had already involved Biconomy in related deals. Scilex’s own regulatory filings show that it sold 12.5 million shares of its Semnur Pharmaceuticals subsidiary to Biconomy on September 23, 2025, in exchange for $200 million in Bitcoin, applying $150 million of that sum to its purchase of Datavault stock.
In June 2026, the same month Datavault requested a Bitcoin withdrawal, Scilex signed a term sheet to purchase 837 BTC from Datavault’s Biconomy wallet for $50 million. The agreement included an upfront $30 million payment, with the remaining $20 million to be paid in quarterly installments through the end of 2028, in cash or Scilex securities. The 837 BTC, together with the previously returned 491.431 BTC, matches the 1,328.43 BTC originally involved in the transaction.
Following these developments, Datavault’s stock temporarily rebounded to approximately $0.085. Under the terms of the 2025 agreement, Scilex paid an effective price of $0.5378 per Datavault share.
Management warned investors that if filing delays persist, they may affect the company’s next quarterly report, extending through the period ending September 30, 2026.
