Datavault AI shares dropped nearly 50% after the Nasdaq-listed company disclosed an accounting problem tied to a $150 million Bitcoin-denominated transaction with Scilex Holding. The company said in an Oct. 26 filing with the US Securities and Exchange Commission that four previously issued financial statements should no longer be relied on.

The filing centers on Bitcoin balances linked to Scilex that Datavault had treated as assets. The company now says those balances may have been recorded incorrectly, a change that could reduce previously reported assets by about $92.2 million and has prompted a broader review of its financial position.

How the Bitcoin deal was structured

The dispute traces back to September 2025, when Scilex agreed to acquire $150 million of Datavault shares and warrants using Bitcoin. Around the same time, Scilex also agreed to exchange $200 million of shares in its Semnur Pharmaceuticals subsidiary for Bitcoin and brought in crypto exchange Biconomy to handle the process.

According to the filing, the Bitcoin tied to the Datavault transaction never moved on-chain to the company. Instead, Scilex credited 1,309 BTC to Datavault’s account at Biconomy through internal records. That distinction is now central to Datavault’s conclusion that the balances may not have met the standard to be recognized as company-owned crypto assets.

What happened to the reported Bitcoin holdings

Datavault said it later sold 491 BTC back to Scilex for $40.5 million. The remaining 818 BTC became the larger issue. The company said those coins remain inaccessible after it submitted a withdrawal request in June, and the latest filing does not explain why the transfer has still not been completed.

Because the Bitcoin was apparently never delivered on-chain, Datavault now says the balance may need to be treated not as an asset in its possession but as an amount owed by Scilex. On that basis, the company said previously reported assets may have been overstated by roughly $92.2 million.

Financial statements withdrawn and stock tumbles

Datavault said four financial statements can no longer be relied on and will need to be corrected. The company also said it is reassessing whether it has sufficient resources to continue operating, a disclosure that added to investor concern.

The market reaction was immediate. Datavault shares fell by almost half, with roughly 244 million shares changing hands. Following the selloff, the stock stood about 88% below the price a major investor had agreed to pay last year, underscoring how sharply sentiment has shifted.

What remains unresolved

The company said it still has a claim against Scilex tied to the disputed Bitcoin balance. However, the SEC filing does not provide a reason the June withdrawal request for the 818 BTC remains unresolved, leaving a key part of the episode unexplained.

The next confirmed step is a restatement of the affected financial reports as Datavault reviews the treatment of the Scilex-linked Bitcoin and evaluates its liquidity. Until that process is completed, the status of the inaccessible BTC and the ultimate impact on the company’s balance sheet remain uncertain.

Source: beincrypto.com