10-K: Datavault AI Inc. Navigates Web 3.0 with Data Vault and Adio Platforms: 2024 Annual Report Highlights Strategic Shift

Datavault AI Inc.'s 2024 annual report details its strategic shift towards Web 3.0 data management and acoustic science innovations, marked by key acquisitions and financial activities.

Summary

• Datavault AI Inc. (formerly WiSA Technologies, Inc.) filed its annual report on Form 10-K for the fiscal year ended December 31, 2024.
• The company is focusing on cyber secure privacy protected data management and monetization and acoustic science innovations.
• Datavault AI owns a portfolio of patented, secure platforms designed to redefine how data is managed, valued, and monetized.
• The company's offerings will be centered around AI-driven agents branded as Data Vault, DataValue, DataScore, and Data Vault Bank.
• These tools harness generative AI to deliver enterprise-grade data management solutions tailored for the HPC landscape and the Web 3.0 paradigm.
• The company has two synergistic platforms: Data Science and Acoustic Science.
• The Data Sciences Platform is anchored by the Data Vault platform, a patented, cyber-secure asset tokenization platform.
• The Acoustic Sciences Platform features a fusion of WiSAs proven and wireless standard technology and the category creating ADIO inaudible tone, data over sound, and mobile quick response technology.
• Revenue for the year ended December 31, 2024, was $2,674,000, an increase of $591,000 or 28%, compared to the revenue of $2,083,000 for the year ended December 31, 2023.
• Gross profit for the year ended December 31, 2024, was $376,000, an increase of $3,833,000 compared to a gross deficit of $3,457,000 for the year ended December 31, 2023.
• The company recorded a deemed dividend of $5,842,000 which was primarily related to the accretion upon the repurchase of 62,657 Series B Preferred Stock shares and extinguishment of 81,315 Series B Preferred Stock warrants.
• The company recorded a deemed dividend of $10,475,000 primarily related to excess fair value of equity instruments transferred to warrant holders in connection with modifications and exchanges to equity classified common stock warrants.
• Cash and cash equivalents as of December 31, 2024, were $3,330,000, compared to $411,000 as of December 31, 2023.
• The company used net cash in operating activities of $17,526,000 for the year ended December 31, 2024.
• The company has financed its operations to date primarily through the issuance of equity securities, proceeds from the exercise of warrants to purchase common stock and sale of debt instruments.
• The company expects operating losses to continue in the foreseeable future.
• The company will need to raise additional funds during the next 12 months by selling additional equity or incurring debt.
• The company completed the asset purchase of information technology assets, certain patents and trademarks from EOS Technology Holdings Inc. on December 31, 2024.
• The company appointed Nathaniel Bradley as its new principal executive officer and a member of the Board, effective upon the DV Closing on December 31, 2024.
• The company filed a Certificate of Amendment to its Certificate of Incorporation with the Secretary of State of the State of Delaware to change its name to Datavault AI Inc. on February 13, 2025.

Sentiment

Score: 5

Explanation: The document presents a mixed sentiment. While there's revenue growth and a shift towards innovative platforms, the company faces ongoing losses and the need for additional funding, creating uncertainty.

Positives

• Revenue increased by 28% to $2,674,000 for the year ended December 31, 2024.
• Gross profit increased significantly to $376,000 for the year ended December 31, 2024, compared to a gross deficit of $3,457,000 in the previous year.
• Cash and cash equivalents increased to $3,330,000 as of December 31, 2024.

Negatives

• The company used net cash in operating activities of $17,526,000 for the year ended December 31, 2024.
• The company expects operating losses to continue in the foreseeable future.
• The company will need to raise additional funds during the next 12 months by selling additional equity or incurring debt.

Risks

• The company's ability to continue as a going concern is subject to substantial doubt.
• The company's reliance on a few customers poses a risk to revenue stability.
• The company's dependence on sole-source suppliers could disrupt its ability to meet demand.

Future Outlook

The company expects operating losses to continue in the foreseeable future and will need to raise additional funds in the next 12 months.

Industry Context

Datavault AI operates within the burgeoning Web 3.0 ecosystem, a next-generation internet framework defined by decentralization, blockchain technology, and user-centric data control. The global Web 3.0 blockchain market was valued at $2.2 billion in 2021 and is projected to reach $38.6 billion by 2030, growing at a compound annual growth rate (CAGR) of 43.6% from 2024 to 2030.

Management Changes

Related Party Transactions

• Nathaniel Bradley, the Chief Executive Officer (CEO) of the Company, is a control person of EOS Holdings which became a related party of the Company at the close of the DV Asset Acquisition on December 31, 2024.
• EOS Holdings received 40,000,000 shares of common stock in the DV Asset Acquisition which all but 3,999,911 shares of common stock were immediately distributed to various EOS Holdings shareholders at the close of the transaction.
• Pursuant to the DV Asset Acquisition Agreement, on the closing date of the transaction, the company issued a $10 million Convertible Note (the DV Convertible Note) to EOS Holdings, due on the third anniversary of closing, paying interest of 5.12% per annum.
• EOS Holdings owes $431,000 under the Data Vault Note Balance in notes receivable to the company, as of December 31, 2024, a company for which Nate Bradley, the company's CEO, is a control person.
• The company recorded $7,000 in interest income on the Data Vault Note Balance.
• On January 16, 2025, the company entered into a Transition Services Agreement (Transition Services Agreement) to receive from EOS Holdings, employees to provide transition services in connection with the Acquired Assets for a period of up to three months.
• For the period from January 16, 2025 through March 27, 2025, the company has paid $428,000 to EOS Holdings.
• Helge Kristensen has served as a member of the Board since 2010 and serves as vice president of Hansong Technology, an original device manufacturer of audio products based in China.
• For the years ended December 31, 2024 and 2023, Hansong Technology purchased modules from the company of approximately $58,000 and $88,000, respectively, and made payments to the company of approximately $38,000 and $254,000 respectively.
• At December 31, 2024 and 2023, Hansong Technology sold speaker products to the company of approximately $28,000 and $128,000, respectively, and the company made payments to Hansong Technology of approximately $235,000 and $1,223,000, respectively.
• At December 31, 2024 and 2023, the company owed Hansong Technology approximately $43,000 and $250,000, respectively.
• At December 31, 2024 and 2023, Hansong Technology owed the company approximately $24,000 and $4,000, respectively.
• David Howitt has served as a member of the Board since December 2021 and is the founder and CEO of Meriwether Group LLC (MWG), a strategic consulting firm.
• MWG, which is also majority-owned by Mr. Howitt, owns a 25% general partner interest in Meriwether Group Capital Hero Fund LP (Meriwether).
• On September 8, 2023, the company entered into a Loan and Security Agreement with Meriwether.
• Pursuant to the Loan and Security Agreement, Meriwether provided the company with a term loan in the principal amount of $650,000 that was scheduled to mature on November 7, 2023, subject to further extension (the Meriwether Loan).
• The company paid back the loan in full on December 7, 2023.

Stakeholder Impact

• Shareholders: The strategic shift and financial activities outlined in the report will likely impact shareholder value, with potential for long-term growth but also short-term dilution.
• Employees: Changes in executive leadership and strategic direction may affect employee roles and opportunities.
• Customers: The focus on innovative data management and acoustic solutions could lead to enhanced product offerings and customer experiences.

Next Steps

• The company intends to pursue targeted M&A opportunities to acquire complementary technologies, intellectual property, and customer bases.
• The company is committed to scaling its direct sales efforts to penetrate key verticals such as biotech, fintech, hospitality, and advertising.

Key Dates

Keywords

Datavault AI, Web 3.0, Data management, Acoustic science, Financial results, Asset acquisition, Nathaniel Bradley, WiSA, Patents, AI