Datavault AI Announces $35M Funding Plan for BankWyse Acquisition as Liquidity Challenges Persist

Datavault AI has entered into an agreement to acquire BankWyse, a Wyoming-based banking institution, with a commitment to provide $35 million in funding for capitalization and operations. The deal, disclosed on August 19, represents a significant financial undertaking given the company’s limited reported cash reserves.

The transaction values the initial consideration at approximately $22 million, comprising $14.66 million in Datavault stock and $7.34 million in cash. Sellers may receive an additional $10 million upon meeting performance milestones, split evenly between cash and stock. Separately, Datavault has pledged $35 million for BankWyse’s capitalization, with payments structured as $5 million at closing, followed by five $2.5 million installments between days 60 and 180, and a final $17.5 million payment by the eighth month.

The deal’s feasibility hinges on securing immediate financing to cover closing obligations, including the $7.34 million cash payment and $5 million initial funding. However, Datavault’s June 30 balance sheet reveals significant liquidity constraints: the company reported only $1.4 million in cash and $49 million in Bitcoin, while burning approximately $80 million in operating cash during the first half of the year. Management acknowledged that existing resources are insufficient to sustain operations for the next 12 months, raising substantial doubt about its ability to continue as a going concern.

To bridge the funding gap, Datavault has proposed selling 837 Bitcoin to Scilex Holding for $50 million, though this transaction remains non-binding. Initial proceeds of $30 million are pledged, with the remaining $20 million scheduled through 2028, contingent on market conditions and Scilex’s payment preferences. Additionally, the company raised $32.4 million through its at-the-market stock program in the first half of the year, though it is unclear if further capital was raised post-June 30.

On August 18, Datavault issued an unsecured convertible note with $25.03 million principal for $25 million, bearing 8% interest. The note includes 15 million pre-delivery shares and allows conversion at $1.55 per share or at market price, potentially creating dilution. An optional secondary tranche of $25 million remains uncommitted. Regulatory approval from the Wyoming Division of Banking is also required, with the transaction subject to extensions if delayed.

Securities filings as of August 20 did not disclose a definitive funding source for the full $35 million commitment, leaving the deal’s execution risk centered on securing capital through market sales, asset monetization, or additional financing without exacerbating dilution or debt burdens.

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