Datavault AI shares suffered a sharp sell-off after the Nasdaq-listed company disclosed that it has been unable to withdraw Bitcoin held through the Biconomy crypto exchange and that several previously issued financial reports should no longer be relied upon. The company said it is reassessing its ability to continue as a going concern after treating the Bitcoin as a source of liquidity.
According to Decrypt, Datavault’s stock fell 49.55% to $0.067 on Oct. 27, after the disclosure became public. The shares had fallen by more than 50% during the session to close at about $0.06, before recovering to nearly $0.085 the following day.
The issue was set out in a Form 8-K filed on Oct. 26. Datavault said it had requested a withdrawal to an external account in June but had been unable to complete it. The filing did not explain why the withdrawal had not gone through.
How the Bitcoin entered the transaction
The Bitcoin was linked to an agreement between Datavault and Scilex Holding, a pain-medicine company, dated Sept. 25, 2025. Under that arrangement, Scilex agreed to provide $150 million in Bitcoin in exchange for 15 million Datavault shares and a pre-funded warrant covering a further 263.9 million shares.
A pre-funded warrant gives its holder the right to buy shares after almost the entire purchase price has already been paid. Based on a Bitcoin price of $112,915.52, the agreement represented approximately 1,328.43 BTC.
Scilex credited 1,309.04 BTC to Datavault’s account at Biconomy in two transfers, dated Sept. 26 and Nov. 25, 2025. The amount was lower than the original figure because 19.39 BTC was deducted for cash advances Scilex had previously made.
The transfers took place off-chain. In other words, the Bitcoin balances were adjusted on the exchange’s internal records rather than moved between blockchain addresses. From Sept. 26, 2025, through Jan. 30, 2026, Datavault sold 491.431 BTC back to Scilex through similar internal transfers and received approximately $40.5 million in cash.
Accounting change and financial-report restatements
After reviewing the transaction, Datavault concluded that the Bitcoin did not qualify as a digital asset owned by the company. It now plans to account for the arrangement as a subscription receivable instead. That represents money owed by a buyer for newly issued shares and will be presented as a reduction of stockholders’ equity. The $40.5 million received in cash will reduce the amount Scilex owes.
As a result, Datavault said it will restate four financial reports: its 2025 annual report and three quarterly reports filed between November 2025 and August 2026. The company expects to reverse the cryptocurrency gains and losses previously recorded on the Bitcoin.
The expected reductions in total assets are:
- $8.1 million as of Sept. 30, 2025
- $92.2 million as of Dec. 31, 2025
- $57.1 million as of March 31, 2026
- $49 million as of June 30, 2026
Datavault has not provided a filing date for the corrected statements. It warned that the process could also delay its quarterly report for the period ended Sept. 30, 2026.
Liquidity concerns and the Scilex connection
The accounting change matters beyond the reported asset figures because Datavault had counted the Bitcoin balances as available liquidity. Management is now reassessing the company’s going-concern status, an accounting assessment of whether a business can continue operating and meet its obligations. Datavault said it is uncertain whether it will collect the amounts owed by Scilex.
The company identified several risks connected with the situation, including Scilex’s creditworthiness, reliance on a third-party custodian, compliance with Nasdaq listing requirements, and possible litigation or regulatory inquiries related to the restatement.
Scilex’s own quarterly filing provides additional background on how Biconomy became involved. On Sept. 23, 2025, Scilex said it sold 12.5 million shares of its Semnur Pharmaceuticals subsidiary to Biconomy for $200 million in Bitcoin. Scilex then used $150 million of that transaction to acquire Datavault stock.
On June 24, 2026—the same month Datavault said it requested the withdrawal—Scilex signed a binding term sheet to purchase 837 BTC held in Datavault’s Biconomy wallet for $50 million. The proposed payment consisted of $30 million initially, followed by $20 million in quarterly instalments through Dec. 31, 2028. Scilex could make the later payments in cash or Scilex securities at its discretion.
The 837 BTC covered by that term sheet, combined with the 491.431 BTC already sold back to Scilex, equals the approximately 1,328.43 BTC associated with the original 2025 agreement.
Moneyiar market picture
Moneyiar data at 22:39 on Oct. 25, 2026, showed Bitcoin at $80,430.5068, down 0.08% over 24 hours and 1.32% over seven days. Four (FORM) was $0.221008, up 0.66% in 24 hours but down 7.29% over seven days. Data Network (DATA) traded at $0.150355, down 4.42% over 24 hours and 7.71% over seven days. Loaded Lions (LION) stood at $0.00118177, down 2.39% over 24 hours and 3.06% over seven days.
