Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2025 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______________to _______________. Commission File Number: 001-38608 One Commerce Square, 24th FL Philadelphia, PA 19103 (Address of prin ...

Core Insights - Datavault AI has launched the WiSA E Endeavour Receiver Module, which aims to set a new standard in price and quality for wireless audio transmission [1] Company Summary - The WiSA E Endeavour Receiver Module is positioned to enhance the wireless audio experience by providing superior quality and affordability [1] Industry Summary - The launch of this module signifies a potential shift in the wireless audio transmission market, emphasizing the importance of both price and quality in consumer electronics [1]

[Q2 2025 Financial and Operational Highlights](index=1&type=section&id=Q2%202025%20Financial%20and%20Operational%20Highlights) [Q2 2025 Financial Performance](index=1&type=section&id=Q2%202025%20Financial%20Performance) Datavault AI achieved significant revenue growth in Q2 2025, driven by IP commercialization and strategic partnerships, demonstrating strong year-over-year and sequential growth Key Financial Data for Q2 2025 | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Recognized Revenue | $1.7 million | $0.3 million | | Year-over-Year Growth | 467% | - | | Sequential Growth | 176% | - | [Strategic Bookings and Future Revenue Outlook](index=1&type=section&id=Strategic%20Bookings%20and%20Future%20Revenue%20Outlook) The company secured a $2.5 million booking via a patent licensing agreement with Nyiax and projects an annualized revenue run rate of $25 million by end of 2025, targeting $40-50 million in 2026 - Secured a **$2.5 million** patent licensing booking with Nyiax Inc., payable in Nyiax stock, providing critical access to Nasdaq financial frameworks for launching three token exchanges[2](index=2&type=chunk) Revenue Targets | Period | Revenue Target | | :--- | :--- | | End of 2025 | $25 million (Annualized Run Rate) | | 2026 | $40-$50 million | [Q2 2025 Operational Highlights](index=2&type=section&id=Q2%202025%20Operational%20Highlights) Datavault AI achieved several key operational milestones in Q2, including launching IBM watsonx.ai-based AI agent commercialization, securing a carbon credit tokenization patent, and finalizing strategic licensing agreements - Launched enterprise commercialization of AI agents based on IBM watsonx.ai for AI-driven data monetization[11](index=11&type=chunk) - Secured a patent for carbon credit tokenization, pioneering a scalable, stablecoin AI-driven blockchain platform for generating, trading, and monetizing carbon credits[11](index=11&type=chunk) - Finalized a strategic licensing agreement for ADIO®-enabled mobile rewards with GFT Rewards[11](index=11&type=chunk) - NFL Alumni Health organization leveraged Datavault AI's ADIO® for health-focused interactive Web 3.0 campaigns[11](index=11&type=chunk) [Intellectual Property and Strategic Developments](index=1&type=section&id=Intellectual%20Property%20and%20Strategic%20Developments) [IP Portfolio Expansion and Legal Developments](index=1&type=section&id=IP%20Portfolio%20Expansion%20and%20Legal%20Developments) Datavault AI's IP portfolio continues to expand, leading to infringement litigation against top US banks, with the "Genius Act" signing further validating its patent assets [Patent Infringement and Litigation](index=1&type=section&id=Patent%20Infringement%20and%20Litigation) The "Genius Act" signing validated Datavault AI's patent portfolio, leading the company to engage top IP litigation counsel to pursue licensing settlements or initiate lawsuits against infringing US banks - The **Genius Act** was signed into law on July 21, validating Datavault AI's growing patent portfolio[4](index=4&type=chunk) - Third-party legal counsel identified top US banks as infringing on Datavault AI's patented transaction and Web 3.0 technologies[4](index=4&type=chunk) - The company engaged a top IP litigation fund and law firm, Fish Richardson LLP, to immediately pursue licensing settlements or initiate litigation-based licensing activities[4](index=4&type=chunk) [IP Portfolio Details](index=2&type=section&id=IP%20Portfolio%20Details) Datavault AI holds 72 patent assets and numerous trademarks, covering secure data monetization, AI-driven valuation, and acoustic innovation, providing Web 3.0 anchoring, scalability, and cybersecurity compliance in high-risk sectors Intellectual Property Portfolio | Type | Quantity | | :--- | :--- | | Total Patent Assets | 72 | | Granted Patents | 30 | | Allowed Patents | 10 | | Pending Patents | 32+ | | Granted Trademarks | 14 | | Allowed Trademarks | 11 | | Pending Trademarks | 3 | - Key holdings and claims include secure data monetization, AI-driven valuation, and acoustic innovations for defense and consumer applications, building trust in high-risk sectors like defense, biotech, and finance through Web 3.0 anchoring, scalability, and cybersecurity compliance[5](index=5&type=chunk) [Strategic Initiatives for Q3 2025](index=2&type=section&id=Strategic%20Initiatives%20for%20Q3%202025) Datavault AI plans to launch new international exchanges, advance IBM-driven AI agent commercialization, complete strategic acquisitions in acoustics and data, and execute supercomputing and AI development strategies in Q3 2025 - Launch new international element exchanges, international NIL exchanges, and a US political exchange, leveraging Datavault's Web3 infrastructure and high-performance computing backbone[11](index=11&type=chunk) - Advance the commercialization of IBM-driven AI agents within the Datavault platform[11](index=11&type=chunk) - Complete strategic acquisitions in the acoustics and data divisions in 2025 to expand core growth markets[11](index=11&type=chunk) - Execute supercomputing and AI development strategic plans to support long-term scaling[11](index=11&type=chunk) - Provide updates on API Media integration, revenue impact, and next steps[11](index=11&type=chunk) [Acquisition Activity and System Integrations](index=1&type=section&id=Acquisition%20Activity%20and%20System%20Integrations) Datavault AI made significant progress integrating CompuSystems, API Media, ADIO, and Datavault technologies with their respective businesses, aiming to unify operations and accelerate revenue growth - Since January 7, 2025, Datavault AI has executed the integration of Datavault Holdings, WiSA, CSI, and established partnerships with IBM Watsonx, Nyiax, GFT Rewards, and Turner Global Media[3](index=3&type=chunk) - Completed the integration of WiSA wireless audio IP with the Datavault data monetization platform, expanding opportunities in audio, NFT, and media verticals[11](index=11&type=chunk) - Completed the integration of CompuSystems event registration and data systems with Datavault AI systems[11](index=11&type=chunk) - Completed the integration of ADIO with NYAIX marketing management systems[15](index=15&type=chunk) - Finalized API Media acquisition plans and integration timelines[15](index=15&type=chunk) [Company Strategy and Outlook](index=3&type=section&id=Company%20Strategy%20and%20Outlook) [Strategic Financing and Growth Fuel](index=3&type=section&id=Strategic%20Financing%20and%20Growth%20Fuel) The company believes licensing technology, product lines, and acquired revenue streams, alongside focusing on annual recurring revenue and automated transaction income from its patented information data exchange technology stack, will drive sustainable growth and optimize its breakeven point - Revenue growth and increased cash flow from licensing technology, product lines, and sales of acquired revenue streams will drive sustainable growth[12](index=12&type=chunk) - Focus on **Annual Recurring Revenue (ARR)** and automated transaction revenue on the patented Information Data Exchange technology stack[12](index=12&type=chunk) - Aim to achieve an optimized breakeven point[12](index=12&type=chunk) [Management Commentary and Investor Relations](index=3&type=section&id=Management%20Commentary%20and%20Investor%20Relations) CEO Nate Bradley highlighted the company's successful execution in integration, innovation, and revenue expansion, reaffirming 2025 and 2026 revenue targets, and announced an upcoming investor call - CEO Nate Bradley stated these achievements reflect the company's focused execution in integrating acquisitions, innovating with partners like IBM, and expanding revenue in the thriving AI data economy[13](index=13&type=chunk) - The company is on track to achieve a **$25 million annualized run rate** this year and **$40-50 million** in revenue for 2026[13](index=13&type=chunk) - The company will host an investor conference call on August 20, 2025, to review business progress and discuss key strategic priorities[13](index=13&type=chunk) [About Datavault AI](index=3&type=section&id=About%20Datavault%20AI) Datavault AI (Nasdaq: DVLT) is a leader in AI-driven data experiences, Web 3.0 asset valuation, and monetization, offering comprehensive cloud platform solutions through its acoustic science and data science divisions - Datavault AI is a leader in AI-driven data experiences, asset valuation, and monetization within Web 3.0 environments[14](index=14&type=chunk) - The company comprises Acoustic Science and Data Science divisions, offering comprehensive cloud platform solutions[14](index=14&type=chunk) - The Acoustic Science division features WiSA®, ADIO®, and Sumerian® patented technologies, covering audio timing, synchronization, and multi-channel interference cancellation[14](index=14&type=chunk) - The Data Science division leverages Web 3.0 and high-performance computing to provide solutions for experiential data perception, valuation, and secure monetization[14](index=14&type=chunk) - Information Data Exchange® (IDE) enables licensing of digital twins, name, image, and likeness (NIL) rights, and facilitates responsible AI by securely attaching physical real-world objects to immutable metadata objects[14](index=14&type=chunk) - Serving industries include sports and entertainment, events and venues, biotechnology, education, fintech, real estate, healthcare, and energy[14](index=14&type=chunk) [Legal Disclosures and Contact Information](index=4&type=section&id=Legal%20Disclosures%20and%20Contact%20Information) [Forward-Looking Statements](index=4&type=section&id=Forward-Looking%20Statements) This press release contains forward-looking statements subject to various risks and uncertainties, including the company's ability to leverage IP, expand market share, secure additional financing, and manage costs, cautioning readers not to place undue reliance on these statements - Forward-looking statements are based on estimates and assumptions, inherently uncertain, and actual results may differ materially from expectations[16](index=16&type=chunk) - Risks include: ability to successfully leverage published and granted IP; risks of successfully expanding market share with acquired assets; risks of opening new revenue streams; current liquidity position and need for additional financing; market, economic, and other general conditions; ability to continue as a going concern; ability to maintain Nasdaq listing; ability to manage costs and execute operational budget plans; ability to achieve financial objectives; extent to which licensees implement company technology; risks related to technological innovation and intellectual property; and other risks detailed in SEC filings[16](index=16&type=chunk) - Information in this press release is provided only as of the date of issuance, and the company undertakes no obligation to update any forward-looking statements unless required by law[16](index=16&type=chunk) [Investor and Marketing Contacts](index=4&type=section&id=Investor%20and%20Marketing%20Contacts) Provides contact information for investor relations and marketing inquiries - Investor Contact: Alliance Advisors Investor Relations (datavaultinvestors@allianceadvisors.com)[17](index=17&type=chunk) - Marketing Inquiries Contact: marketing@vault.email[17](index=17&type=chunk)

Revenue Growth - Revenue for Q2 2025 was $1.7 million, a 403% increase from $0.3 million in Q2 2024, driven by the acquisition of CompuSystems, Inc. (CSI) [278] - Revenue for the first half of 2025 was $2.4 million, a 294% increase from $0.6 million in the same period of 2024, also attributed to the CSI acquisition [279] Profitability - Gross profit for Q2 2025 was $35,000, with a gross margin of 2%, compared to a gross profit of $11,000 and a margin of 3% in Q2 2024 [280] - The company recorded a net loss of $37.1 million for Q2 2025, compared to a net loss of $46.7 million for the first half of 2025 [295] Expenses - Research and development expenses for Q2 2025 were $4.2 million, up from $1.8 million in Q2 2024, primarily due to the acquisition of NYIAX assets and increased headcount [281] - General and administrative expenses for Q2 2025 were $6.5 million, an increase of $3.7 million from $2.8 million in Q2 2024, mainly due to higher amortization of intangible assets [285] - Interest expense for Q2 2025 was $17.2 million, a significant increase from $4,000 in Q2 2024, due to the issuance of Additional Warrants with the 2025 Notes [288] Cash Position - Cash and cash equivalents as of June 30, 2025, were $0.7 million, down from $3.3 million as of December 31, 2024 [294] Financing Activities - The company raised approximately $16.7 million from financing activities in the first half of 2025, compared to $14.9 million in the same period of 2024 [296] Strategic Acquisition - The strategic acquisition of CompuSystems, Inc. was finalized on May 20, 2025, enhancing capabilities in event management and data monetization [275]

Revenue and Profitability - Revenue for the three months ended March 31, 2025, was $629,000, representing a 146% increase from $255,000 in the same period of 2024[12] - For the three months ended March 31, 2025, total net revenue was $629,000, a 147.1% increase from $255,000 in the same period of 2024[56] - Revenue from Components was $492,000, significantly up from $159,000 in the prior year, while Consumer Audio Products revenue increased to $137,000 from $96,000[56] - Gross profit for Q1 2025 was $69,000, compared to a gross deficit of $83,000 in Q1 2024[13] - The cost of net revenue for the same period was $560,000, compared to $338,000 in 2024, resulting in a gross loss of $9,563,000 for Q1 2025, compared to a net income of $2,707,000 in Q1 2024[170] Expenses and Losses - Total operating expenses increased to $9,500,000 in Q1 2025, up 133% from $4,075,000 in Q1 2024[13] - The net loss attributable to common stockholders for Q1 2025 was $9,563,000, compared to a net loss of $3,135,000 in Q1 2024[13] - Net cash used in operating activities was $6,024,000 for Q1 2025, an increase from $3,540,000 in Q1 2024, indicating higher cash outflows[21] - The company incurred salaries, benefits, and stock-based compensation expenses of $3,558,000 for Q1 2025, up from $2,284,000 in Q1 2024, indicating a 56% increase[170] - Research and development expenses increased to $2,361,000 in Q1 2025, up $646,000 from $1,715,000 in Q1 2024, primarily due to increased headcount and related costs[204] - Sales and marketing expenses rose to $1,495,000 in Q1 2025, an increase of $566,000 from $929,000 in Q1 2024, mainly due to higher salaries and consulting expenses[205] - General and administrative expenses surged to $5,644,000 in Q1 2025, an increase of $4,213,000 from $1,431,000 in Q1 2024, largely due to increased amortization and headcount-related costs[206] Cash and Liquidity - Cash and cash equivalents decreased to $171,000 as of March 31, 2025, down from $3,330,000 as of December 31, 2024[9] - The company had cash and cash equivalents of $171,000 at the end of Q1 2025, down from $2,763,000 at the end of Q1 2024, reflecting a decrease in liquidity[21] - Total current assets decreased to $2,693,000 as of March 31, 2025, from $6,439,000 as of December 31, 2024[9] Compliance and Regulatory Issues - The company has received a notification from Nasdaq regarding non-compliance with the minimum bid price requirement, with a compliance period until November 3, 2025, to regain compliance[27] - The company has been granted a 180-day grace period to regain compliance with the minimum bid price requirement, which is critical for maintaining its Nasdaq listing[28] Stock and Equity - The company issued 5,986,893 common shares as stock-based compensation during the three months ended March 31, 2025[16] - The weighted average number of common shares used in computing net loss per common share was 53,681,828 for Q1 2025[13] - The company executed a 1-for-150 reverse stock split in April 2024, which has been retroactively adjusted in the financial statements[30] - The company issued common stock purchase warrants in connection with the February 2024 Public Offering, with a fair value of $6.308 million allocated to the warrants liability[126] Liabilities and Debt - Total liabilities decreased to $13,987,000 as of March 31, 2025, from $14,899,000 as of December 31, 2024[9] - The company issued promissory notes totaling $1,000,000 on January 19, 2024, with gross proceeds of $600,000 received before fees and expenses[97] - The DV Convertible Note was issued with a principal amount of $10,000,000, maturing on December 31, 2027, and carries an interest rate of 5.12% per annum[102] - As of March 31, 2025, the carrying value of the DV Convertible Note was $9,582,000 after a partial repayment of $406,000[108] Inventory and Assets - Total inventories decreased from $1.618 million on December 31, 2024, to $1.342 million on March 31, 2025[87] - Property and equipment, net increased from $58,000 on December 31, 2024, to $98,000 on March 31, 2025[87] - The company has made a deposit of $2 million related to a pending acquisition of CompuSystems Inc, recorded as "deposit on business combination" as of March 31, 2025[95] Future Outlook and Risks - The Company expects operating losses to continue due to additional costs related to research and development, plans to expand its product portfolio, and increase market share[78] - The Company will need to raise additional funds in the next 12 months through selling equity or incurring debt, raising substantial doubt about its ability to continue as a going concern[79] - The company has incurred recurring losses since inception and is subject to risks associated with being an emerging business[201]

Revenue and Profit - Revenue for the year ended December 31, 2024 was $2,674,000, an increase of $591,000 or 28% compared to $2,083,000 for the year ended December 31, 2023[101] - 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, resulting in a gross margin of 14%[103] Expenses - Research and development expenses for the year ended December 31, 2024 were $7,818,000, an increase of $362,000 compared to $7,456,000 for the year ended December 31, 2023[104] - Sales and marketing expenses for the year ended December 31, 2024 were $3,974,000, a decrease of $1,203,000 compared to $5,177,000 for the year ended December 31, 2023[105] - General and administrative expenses for the year ended December 31, 2024 were $9,722,000, an increase of $4,355,000 compared to $5,367,000 for the year ended December 31, 2023[106] - Interest expense for the year ended December 31, 2024 was $1,272,000 compared to $932,000 for the year ended December 31, 2023[107] Cash Flow - Cash and cash equivalents as of December 31, 2024 were $3,330,000, compared to $411,000 as of December 31, 2023[115] - Net cash used in operating activities for the year ended December 31, 2024 was $17,526,000, compared to $14,826,000 for the year ended December 31, 2023[116] Other Financial Information - The company recorded a deemed dividend of $5,842,000 during the year ended December 31, 2024 related to the repurchase of Series B Preferred Stock shares[112] - The company expects operating losses to continue in the foreseeable future due to additional costs related to research and development and plans to expand its product portfolio[119]

Group 1: Core Insights - WiSA Technologies has integrated its WiSA E wireless multichannel audio software into Sagemcom's next-generation Video Soundbox (VSB) set-top box, enhancing the audio experience for consumers by enabling wireless transmission of Dolby Atmos audio [1][5] - Sagemcom's VSB combines a high-quality soundbar and set-top box, providing a space-saving solution that simplifies installation and reduces clutter, making it an affordable upgrade for home entertainment systems [2][3] - The incorporation of WiSA's software allows for superior wireless connectivity and high-quality audio, reducing material costs for manufacturers and accelerating time-to-market for new products [3][5] Group 2: Market Opportunities - The partnership between WiSA and Sagemcom represents a significant opportunity for WiSA to expand its market presence as demand for wireless audio solutions grows [5][6] - Increased adoption of WiSA E software is expected as more companies integrate it into their products, streamlining design and providing consumers with a sophisticated entertainment experience [5][6] Group 3: Stock Performance - WiSA's stock has experienced a significant decline of 87.3% over the past year, contrasting with the industry's growth of 29.5% [7] - WiSA currently holds a Zacks Rank of 2 (Buy), indicating a positive outlook for the stock [9]

Key Points Industry/Company Involved - **Company**: WiSA Technologies, Inc. (NASDAQ: WISA) - **Industry**: Merger & Acquisition (M&A) - **Target**: CompuSystems, Inc. [1] Core Views and Arguments - **Forward-Looking Statements**: The call includes forward-looking statements subject to risks and uncertainties. [1] - **Acquisition Details**: WiSA Technologies plans to acquire CompuSystems. [3] - **Participants**: Nate Bradley (CEO, Data Vault Holdings), Mark LoGiurato (CEO, CompuSystems), Brett Moyer (CEO and President, WiSA Technologies), and Michael Fazio (Controlling Investor, CompuSystems) participated in the call. [4] - **No Obligation to Update**: WiSA assumes no obligation to update forward-looking statements except as required by law. [5] [1][3][4][5] Other Important Content - **Conference Call Details**: The call took place on December 30, 2024, at 11:00 AM ET. [6] - **Participant Roles**: David Barnard (Alliance Advisors, IR) moderated the call. [6] - **Listening Mode**: Participants were in listen-only mode during the presentation. [7] - **Recording**: The call was being recorded. [7] [6][7]

Group 1 - WiSA Technologies is conducting a special conference call to discuss its planned acquisition of CompuSystems, Inc. [5] - The call features key participants including Nate Bradley, CEO of Data Vault Holdings, Mark LoGiurato, CEO of CompuSystems, and Brett Moyer, CEO and President of WiSA Technologies [9] - The conference call is being recorded and will include a Q&A session after the presentation [5][8] Group 2 - Forward-looking statements will be made during the call, which are subject to various risks and uncertainties [8] - The company emphasizes the importance of considering these statements alongside cautionary notes and risk factors in their SEC filings [8]

Core Viewpoint - WiSA's acquisition of CompuSystem is aimed at enhancing its growth strategy by integrating advanced technology and event management capabilities, which is expected to drive new revenue opportunities and improve financial performance [2][8][11]. Group 1: Acquisition Details - WiSA has entered into a definitive agreement to acquire CompuSystem for an undisclosed amount, which is part of a broader strategy that includes the acquisition of Datavault's intellectual property and technology assets [8]. - The integration of Datavault's ADIO platform into CompuSystem's M3 Expo Wallet App is set to begin in January 2025, enhancing user experiences and monetization opportunities through Web 3.0 assets [10][11]. Group 2: Financial Implications - The acquisition is projected to significantly contribute to WiSA's revenues and EBITDA in upcoming quarters, potentially leading to an upward movement in stock price [2]. - WiSA's stock has experienced a decline of 86.8% over the past year, contrasting with the industry's growth of 26.1%, indicating a need for improved financial performance [3]. Group 3: Company Background - CompuSystem is recognized as a premier provider of registration, data analytics, and lead management services for live events, focusing on innovation and exceptional customer service [9]. - The combination of CompuSystem's event management expertise with WiSA's advanced technologies is expected to unlock significant new opportunities, particularly in monetizing event data [11].