8-K: Datavault AI and NYIAX Enter into Lock-Up Agreements Following Share Exchange

Datavault AI Inc. and NYIAX, Inc. have entered into multiple lock-up agreements restricting the transfer of shares issued in connection with a share exchange agreement.

Summary

• Datavault AI Inc. and NYIAX, Inc. entered into a share exchange agreement on March 16, 2025, where NYIAX exchanged 900,000 shares of its common stock (12% of outstanding) for up to 5,000,000 shares of Datavault AI common stock.
• In connection with this exchange, both companies agreed to several lock-up agreements.
• These agreements restrict the sale or transfer of Datavault AI shares issued to NYIAX and NYIAX shares issued to Datavault AI.
• There are four lock-up agreements: one for Datavault AI shares held by NYIAX, and three for NYIAX shares held by Datavault AI.
• The lock-up periods vary: four years for the Datavault AI shares, and one to two years for the NYIAX shares.
• The agreements outline specific conditions under which transfers are permitted, such as bona fide gifts, transfers to family members, or use as collateral for a loan where Datavault AI has the right to purchase the loan.
• The lock-up agreements are governed by New York law and subject to the jurisdiction of the United States District Court for the Southern District of New York.

Sentiment

Score: 7

Explanation: The document outlines a standard legal agreement related to a share exchange. The sentiment is neutral to slightly positive as it indicates a commitment from both parties to the long-term success of the transaction.

Positives

• The lock-up agreements provide stability by preventing large-scale selling of shares, which could negatively impact the stock price.
• The agreements allow for certain types of transfers, such as gifts and transfers to family members, providing some flexibility.
• The ability to use the shares as collateral for loans, with Datavault AI having the right to purchase the loan, offers potential financing options.

Negatives

• The lock-up agreements restrict NYIAX's ability to freely sell or transfer the Datavault AI shares for a period of up to four years.
• The conditions for permissible transfers are limited, potentially restricting NYIAX's flexibility in managing its investment.
• Datavault AI is restricted from selling or transferring the NYIAX shares for a period of up to two years.

Risks

• The lock-up agreements could limit NYIAX's ability to capitalize on potential gains in Datavault AI's stock price during the lock-up period.
• If Datavault AI's performance declines, NYIAX may be unable to sell its shares to mitigate losses during the lock-up period.
• The legal jurisdiction specified in the agreement (Southern District of New York) may present challenges depending on the location of the parties involved in any future disputes.

Future Outlook

The lock-up agreements are intended to provide stability during the initial period following the share exchange. The long-term impact will depend on the performance of both Datavault AI and NYIAX.

Management Comments

• The execution, delivery and performance of this Letter Agreement is a material inducement to the Company to complete the transactions contemplated by the Exchange Agreement and the Company shall be entitled to specific performance of the undersigneds obligations hereunder.

Industry Context

Lock-up agreements are common in mergers, acquisitions, and other significant corporate transactions to prevent insiders from immediately selling their shares and destabilizing the market. This agreement is standard practice to ensure confidence in the long-term success of the combined entity.

Comparison to Industry Standards

• Lock-up periods typically range from 180 days to one year in initial public offerings (IPOs).
• In mergers and acquisitions, lock-up periods can vary depending on the specific terms of the deal, but multi-year lock-ups, like the four-year restriction on Datavault AI shares, are less common but not unheard of, especially when key shareholders are involved.
• Comparable companies like Palantir Technologies have used lock-up agreements with staggered release dates to manage the potential impact on the stock price.
• The specific terms and conditions of these agreements are deal-specific and depend on the negotiation between the parties involved.

Stakeholder Impact

• Shareholders of Datavault AI may view the lock-up agreements positively as they reduce the risk of a sudden influx of shares into the market.
• NYIAX shareholders may be impacted by the restrictions on selling the Datavault AI shares, potentially limiting their ability to realize short-term gains.
• Employees of both companies may see the agreements as a sign of commitment to the long-term success of the partnership.

Next Steps

• The companies will need to monitor compliance with the lock-up agreements.
• NYIAX will need to adhere to the transfer restrictions for the specified lock-up periods.
• Datavault AI will need to enforce the lock-up agreements as necessary.

Key Dates

Keywords

lock-up agreement, share exchange, Datavault AI, NYIAX, shares, transfer restrictions, common stock