Key Highlights:
- Datavault determined that roughly 1,328 Bitcoin tied to a $150 million share-purchase transaction with Scilex Holding never qualified as company-owned digital assets.
- The company will restate its 2025 annual report and three subsequent quarterly filings, slashing reported total assets by tens of millions of dollars across multiple quarters.
- Due to the loss of perceived crypto liquidity and doubts surrounding receivable collections from Scilex, Datavault management is reassessing the company’s ability to continue as a going concern.
Accounting Review Uncovers Flawed Off-Chain Bitcoin Transfers
Datavault is preparing extensive accounting restatements after concluding that a substantial holding of Bitcoin acquired through a corporate transaction never properly qualified as a digital asset on its balance sheet. The underlying transaction traces back to a September 25, 2025, agreement with pain-medicine manufacturer Scilex Holding. Under that deal, Scilex agreed to pay $150 million in Bitcoin in exchange for 15 million Datavault shares and a pre-funded warrant covering an additional 263.9 million shares—a mechanism giving the holder the right to purchase shares when nearly the entire purchase price is settled upfront.
Priced at $112,915.52 per coin, the arrangement was valued at approximately 1,328.43 BTC. Filings indicate that Scilex credited 1,309.04 BTC to Datavault’s corporate account at crypto exchange Biconomy on September 26 and November 25, 2025. This balance reflected a deduction of 19.39 BTC to account for prior cash advances Scilex had provided. However, these credits were carried out entirely as off-chain transfers, meaning Biconomy simply adjusted internal ledger balances rather than moving any coins across the Bitcoin blockchain. Between September 26, 2025, and January 30, 2026, Datavault executed off-chain sales of 491.431 BTC back to Scilex, receiving roughly $40.5 million in cash.
Multi-Year Restatements and Balance Sheet Reductions
Following a detailed internal review, Datavault determined that the Bitcoin credited within Biconomy never satisfied the accounting criteria to be recognized as digital assets owned by the enterprise. Consequently, Datavault will reclassify the transaction as a subscription receivable—money owed by an investor for newly issued shares—presented as a reduction of stockholders’ equity, with the $40.5 million cash already received serving to reduce the outstanding balance Scilex owes.
The corrective measures will alter four consecutive financial reporting periods, spanning Datavault’s 2025 annual report and three quarterly reports filed between November 2025 and August 2026. The restatements are projected to slash 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. Datavault also expects to reverse all previously recognized cryptocurrency gains and losses tied to the tokens.
Liquidity Crisis and Going Concern Reassessment
Because Datavault had previously relied on the recorded Bitcoin balances as a key liquidity reserve, the removal of these holdings has triggered an urgent review by management regarding whether the enterprise can continue as a going concern. Datavault’s disclosures highlight that collecting the remaining sums owed by Scilex is subject to significant uncertainty.
The company outlined a series of mounting operational and regulatory risks, explicitly citing Scilex’s overall creditworthiness, heavy reliance on third-party custodians, ongoing compliance with Nasdaq listing standards, and potential litigation or regulatory inquiries emerging from the restatement process. Shares of Datavault traded near $0.085 on Wednesday, down sharply relative to Scilex’s original effective entry price of $0.5378 per share under the September 2025 deal.
Origins of the Deal via Biconomy and Proposed Buyback
Filings submitted by Scilex clarify how Biconomy was originally integrated into the capital structure. On September 23, 2025, Scilex sold 12.5 million shares of its subsidiary, Semnur Pharmaceuticals, to Biconomy for $200 million in Bitcoin, subsequently deploying $150 million of that crypto consideration into the Datavault equity agreement.
Tensions escalated in June 2026 when Datavault sought to withdraw the Bitcoin. On June 24, 2026, Scilex executed a binding term sheet to repurchase the remaining 837 BTC situated in Datavault’s Biconomy wallet for $50 million, subject to finalized terms. Scilex proposed an upfront payment of $30 million alongside $20 million distributed in quarterly installments through December 31, 2028, payable in either cash or Scilex securities at its discretion. Combined with the 491.431 BTC previously sold back, this accounted for the full 1,328.43 BTC from the initial contract. Datavault has not yet confirmed when its revised reports will be completed, warning that filing delays may affect its quarterly report for the period ended September 30, 2026.
Why This Matters
This situation underscores the operational and accounting hazards micro-cap and mid-sized public companies face when integrating digital assets into core treasury operations without direct on-chain control. Because the transaction relied on off-chain book adjustments hosted by an exchange rather than verifiable settlement on the Bitcoin blockchain, the asset ownership came into question under standard accounting frameworks.
For Datavault, the resulting balance sheet write-downs dismantle its primary stated reserve of liquidity, directly imperiling its solvency and standing on the Nasdaq. Furthermore, the reliance on structured equity repurchases and long-term promissory installments from counterparties like Scilex demonstrates how non-traditional, multi-party corporate crypto transactions can compound credit and counterparty risks across interconnected balance sheets.
Frequently Asked Questions
Why did Datavault conclude it did not own the Bitcoin?
Datavault’s Bitcoin was never transferred across the Bitcoin blockchain directly to wallets controlled by the company. Instead, Biconomy handled the transactions as internal, off-chain ledger adjustments. After reviewing the mechanics and custodial relationship, Datavault determined the arrangement did not satisfy the accounting criteria required to recognize the cryptocurrency as corporate digital assets.
How does this accounting shift impact Datavault’s financial health?
The company must reverse previously reported crypto gains and remove tens of millions of dollars in asset value, including a $92.2 million balance sheet reduction as of year-end 2025. Because the Bitcoin was treated as accessible corporate liquidity, Datavault management must now formally re-evaluate whether the business has sufficient resources to continue operating as a going concern.
What are the terms of Scilex’s proposed buyback of the remaining Bitcoin?
Under a binding term sheet agreed on June 24, 2026, Scilex arranged to purchase the remaining 837 BTC for $50 million. The structure calls for an immediate $30 million payment, followed by $20 million in quarterly installments running through December 31, 2028, with Scilex maintaining the option to satisfy those installments in either cash or its own securities.
