Datavault AI shares fell nearly 50% after revealing issues in withdrawing Bitcoin from Biconomy and plans to restate financial reports.
Datavault AI Stock Plummets After SEC Filing
Shares of Datavault AI dropped nearly 50% to $0.067 on October 27, following a disclosure that the company has been unable to withdraw Bitcoin from the Biconomy exchange since June. This setback has raised concerns regarding the company's financial health and liquidity.
Financial Restatements and Asset Reclassification
The company announced it will restate four financial reports, which will reduce its reported assets by up to $92.2 million. Previously, Datavault had classified Bitcoin related to a $150 million stock deal with Scilex Holding as a digital asset, but it will now be recorded as a subscription receivable instead.
This reclassification stems from a Form 8-K filed on October 26, where Datavault stated that it had requested the Bitcoin withdrawal in June but could not complete the process. The filing did not elaborate on the reasons for the withdrawal failure.
Concerns Over Going-Concern Status
Management is now reevaluating its going-concern status, as the Bitcoin was previously considered a source of liquidity. The uncertainty surrounding the collection of funds owed by Scilex adds to the company's financial risks, which include reliance on third-party custodians and potential regulatory scrutiny.
Scilex, a pain-medicine company, had agreed to pay Datavault in Bitcoin for shares in a deal that initially credited Datavault with 1,309.04 BTC. However, after a review, Datavault determined that these Bitcoin balances do not qualify as digital assets, prompting the need for the restatement.
Future Implications
As the company navigates these challenges, the stock price briefly rebounded to around $0.085 after the initial plunge. However, the uncertainty surrounding its financial statements and the withdrawal issue could lead to further instability. Datavault has not provided a timeline for the filing of the restated financial reports, which could delay its quarterly report for the period ending September 30, 2026.
