8-K: Datavault AI Secures $150M Bitcoin Investment from Scilex

Datavault AI Inc. has entered into a Securities Purchase Agreement with Scilex Holding Company for a $150 million investment, paid in Bitcoin, for common stock and pre-funded warrants.

Summary

• Datavault AI Inc. (the "Company") and Scilex Holding Company (the "Purchaser") entered into a Securities Purchase Agreement on September 25, 2025.
• The Purchaser will acquire 15,000,000 shares of common stock and a pre-funded warrant to purchase 263,914,094 shares of common stock.
• The total aggregate purchase price is $150,000,000, to be paid in the native currency of the Bitcoin blockchain (BTC).
• The per share purchase price for the common stock is $0.5378, with a nominal exercise price of $0.0001 per share for the pre-funded warrant.
• The initial closing for the common stock is expected on or about September 26, 2025.
• The additional closing for the pre-funded warrant will occur on the trading day immediately after stockholder approval to increase authorized shares and comply with Nasdaq rules.
• The Company must obtain stockholder support agreements from holders of 38,000,000 shares to vote in favor of the necessary proposals.
• Directors and executive officers are subject to lock-up agreements, restricting their ability to sell company securities until the additional closing date.
• The Company is restricted from using or disposing of the BTC received in the initial closing until the additional closing date without the Purchaser's consent.

Sentiment

Score: 7

Explanation: The filing outlines a substantial capital raise, which is generally positive for a company's financial health and growth prospects. The investment in Bitcoin is innovative. However, the significant potential for dilution, the contingent nature of the second tranche of funding, and restrictions on the use of initial BTC proceeds introduce elements of uncertainty and potential negative impact on existing shareholders. The board representation for the investor also indicates a shift in control dynamics. Overall, it's a net positive for securing funding but with notable caveats.

Positives

• Secured a significant capital injection of $150,000,000, providing substantial funding for operations and growth.
• The investment is paid in Bitcoin, potentially aligning with a forward-thinking, tech-savvy image and offering exposure to a digital asset.
• The pre-funded warrant structure provides immediate capital while deferring the full issuance of shares, potentially managing immediate dilution.
• The Purchaser has a right to participate in future equity/debt issuances up to 20%, indicating potential for further strategic investment.
• The Purchaser gains board representation (1-2 directors), suggesting a committed, long-term investor with potential strategic guidance.
• The Company will be reimbursed $300,000 for the Purchaser's legal fees and expenses incurred in connection with due diligence and transaction structuring.

Negatives

• Significant potential for dilution from the issuance of 15,000,000 shares and 263,914,094 pre-funded warrant shares.
• The Company is restricted from using or disposing of the initial Bitcoin payment until the additional closing, which is contingent on stockholder approval, potentially limiting immediate liquidity or strategic flexibility.
• The requirement for stockholder approval to increase authorized shares and for Nasdaq compliance introduces a contingency and potential delay for the full transaction.
• Directors and executive officers are subject to lock-up agreements, restricting their ability to sell shares.
• The Company is prohibited from certain variable rate transactions until the Additional Closing Date, limiting financing options.
• The Company cannot undertake reverse or forward stock splits without the Purchaser's prior written consent (with one exception), restricting capital structure flexibility.

Risks

• Stockholder Approval Risk: The Additional Closing and full issuance of Pre-Funded Warrant Shares are contingent on obtaining stockholder approval for Nasdaq rules compliance and increasing authorized common stock to 1,500,000,000 shares. Failure to obtain this could delay or prevent the full transaction.
• Dilution Risk: The issuance of 15,000,000 shares and 263,914,094 Pre-Funded Warrant Shares will result in substantial dilution for existing shareholders.
• Bitcoin Price Volatility Risk: The investment is paid in Bitcoin, exposing the Company to the volatility of cryptocurrency prices between the closing dates and until the funds are converted or utilized.
• Liquidity Restriction Risk: The Company is restricted from using or disposing of the initial Bitcoin payment until the Additional Closing Date, which could impact its ability to fund immediate operational needs or strategic initiatives.
• Market Price Impact Risk: The Purchaser's past or future trading activities, including short sales or derivative transactions, may negatively impact the market price of the Company's publicly-traded securities.
• Regulatory Compliance Risk: Failure to comply with Nasdaq listing requirements or other regulatory obligations could impact the Company's ability to complete the transaction or maintain its listing.
• Control/Influence Risk: The Purchaser's right to designate directors (up to two) could give them significant influence over the Company's strategic direction.

Future Outlook

The Company anticipates using the net proceeds from this offering as outlined in the Prospectus Supplement. Future actions include obtaining stockholder approval for the issuance of additional shares and an amendment to its certificate of incorporation to increase authorized common stock to up to 1,500,000,000 shares, which is a prerequisite for the full issuance of the pre-funded warrant shares. The Company also plans to maintain its listing on the Trading Market and ensure eligibility for electronic transfer of its common stock.

Management Comments

• The Company acknowledges that the issuance of the Pre-Funded Warrants and Pre-Funded Warrant Shares may result in dilution of the outstanding shares of Common Stock, which dilution may be substantial under certain market conditions.
• The Company further acknowledges that its obligations under the Transaction Documents, including, without limitation, its obligation to issue the Shares and Pre-Funded Warrant Shares pursuant to the Transaction Documents, are unconditional and absolute and not subject to any right of set off, counterclaim, delay or reduction, regardless of the effect of any such dilution or any claim the Company may have against the Purchaser and regardless of the dilutive effect that such issuance may have on the ownership of the other stockholders of the Company.

Industry Context

This transaction highlights a growing trend of companies, particularly in the technology and AI sectors, exploring alternative financing mechanisms, including those involving digital assets like Bitcoin. The use of Bitcoin for a significant capital raise by an AI company like Datavault AI Inc. could signal a strategic move to embrace cryptocurrency as a treasury asset or a means of attracting a broader investor base interested in both AI and digital asset exposure. The involvement of Scilex Holding Company, a biopharmaceutical company, as the investor suggests a diversification strategy for Scilex or a belief in the long-term potential of Datavault AI's technology, potentially indicating cross-industry investment trends.

Management Changes

Corporate Governance

Stakeholder Impact

• Shareholders: Significant potential for dilution due to the issuance of a large number of shares and warrants. Existing shareholders will need to approve the increase in authorized shares.
• Management/Board: Directors and executive officers are subject to lock-up agreements. The Board will include representatives from Scilex Holding Company, influencing governance.
• Company Operations: The capital raise provides substantial funding for the Company's business operations and strategic initiatives.
• Investors (Scilex Holding Company): Gains significant equity stake, board representation, and participation rights in future financings, positioning them as a key strategic investor.

Next Steps

• Initial Closing for 15,000,000 common shares expected on or about September 26, 2025.
• Company to file a preliminary proxy statement with the SEC within 25 days of the Initial Closing Date to obtain Stockholder Approval.
• Hold a Stockholder Meeting no later than 75 days after the Initial Closing Date to obtain Stockholder Approval.
• If Stockholder Approval is not obtained, hold additional Stockholder Meetings every 45 days, then every fourth month, until approval is secured.
• Alternatively, obtain written consent from a majority of stockholders and file a Preliminary Information Statement on Schedule 14C within 15 days of the Initial Closing Date.
• Additional Closing for the pre-funded warrant to occur on the trading day immediately following Stockholder Approval.
• Company to apply to list all Shares and Pre-Funded Warrant Shares on its Trading Market.
• Company to maintain registration of Common Stock under the Exchange Act and timely file all required reports.

Key Dates

Recommendation

While the $150 million capital raise is a significant positive, providing substantial funding for Datavault AI's operations, the transaction introduces considerable dilution risk for existing shareholders. The payment in Bitcoin also adds a layer of cryptocurrency price volatility risk. The contingent nature of the second tranche of funding, dependent on stockholder approval, and restrictions on the use of initial BTC proceeds create uncertainty. The investor's board representation and participation rights suggest a long-term strategic alignment, but the immediate impact on share price could be mixed due to dilution concerns. A 'hold' recommendation is appropriate as investors should monitor the successful completion of the additional closing conditions, the Company's use of proceeds, and the market's absorption of the new shares before making further investment decisions.

Keywords

Datavault AI, Scilex Holding Company, Securities Purchase Agreement, Pre-Funded Warrant, Common Stock, Bitcoin Investment, Capital Raise, Stockholder Approval, Dilution, Corporate Governance, Nasdaq Compliance, Equity Financing, Digital Assets