Datavault AI Inc.

We lease all of our facilities and do not own any real property. We may procure additional space as we add employees and expand geographically. We believe that our facilities are adequate to meet our needs for the immediate future and that should it be needed, suitable additional space will be available to accommodate expansion of our operations.

• We expect fluctuations in our financial results, making it difficult to project future results, and if we fail to meet the expectations of securities analysts or investors with respect to our results of operations, our stock price could decline.
• Our sales are subject to fluctuation as a result of our customers’ new product introduction timelines and end-user adoption of our customers’ retail products, both of which are outside of our control.
• We depend on the timely delivery of products from our vendors and purchases from our partners and customers.
• We are reliant on module manufacturers to produce the modules which we then sell to our customers and any change in their management or business could have a negative effect on our operations.
• We currently rely on semiconductor manufacturers to manufacture our semiconductors, and our failure to manage our relationship with our semiconductor manufacturers successfully could negatively impact our business.
• We may not be able to successfully manage our growth, and if we are not able to grow efficiently, our business, financial condition and results of operations could be harmed.
• We rely upon third-party providers of cloud-based infrastructure to host our products. Any disruption in the operations of these third-party providers, limitations on capacity or interference with our use could adversely affect our business, financial condition and results of operations.
• Failure to stay on top of technology innovation could harm our business model.
• The competitive position of our technology depends in part on its ability to operate with third-party products and services, and if we are not successful in maintaining and expanding the compatibility of our technology with such third-party products and services, our business, financial condition, and results of operations could be adversely impacted.
• Our use and development of, and investment in, AI and blockchain technologies may not be successful and may present business, legal and reputational risks.
• If we enter into strategic alliances, partnerships, joint ventures or investments, we may not realize the anticipated strategic goals for any such transactions.
• Declines in or problems with the WiSA Association membership could negatively affect our reputation.
• Failure to effectively develop and expand our sales and marketing capabilities could harm our ability to increase our customer base and achieve broader market acceptance of our products.
• If we fail to maintain and enhance our brand, our ability to expand our customer base will be impaired and our business, financial condition and results of operations may suffer.
• If we or the third-parties with whom we work experience, or are unable to protect against cyber-attacks, ransomware, security incidents, or security breaches, or if unauthorized parties otherwise obtain access to or otherwise compromise our customers’ data, our data, or our platform and information technology systems, then our solution may be perceived as not being secure, our reputation may be harmed, demand for our platform and products may be reduced, and we may incur significant liabilities or additional expenses.
• Real or perceived errors, failures or bugs in our modules could adversely affect our operating results and growth prospects.
• Interruptions or performance problems associated with technology and wireless technology outside of our control may adversely affect our business and results of operations.
• Platform partnerships, strategic alliances and collaborations, or other similar arrangements may have a material adverse effect on our business, results of operations and prospects.
• If we fail to offer high-quality support, our reputation could suffer.
• If we fail to retain and motivate members of our management team or other key employees or fail to attract additional qualified personnel to support our operations, our business and future growth prospects would be harmed.
• Acquisitions, strategic investments, partnerships and/or alliances could be difficult to identify, pose integration challenges, divert the attention of management, disrupt our business, dilute stockholder value, and adversely affect our business, financial condition and results of operations.
• We conduct international operations, which exposes us to significant risks.
• Risks Related to our Industry and Competition
• If we fail to adapt and respond effectively to rapidly changing technology, evolving industry standards, changing regulations, or to changing customer needs, requirements or preferences, our platform and products may become less competitive.
• The markets in which we participate are competitive, and if we do not compete effectively, our business, financial condition and results of operations could be harmed.
• We face intense competition in our industry, and we may not be able to compete successfully in our target markets.
• The market for our solutions may develop more slowly or differently than we expect.
• A decline in discretionary consumer spending may adversely affect our industry, our operations and ultimately our profitability.
• Consumer spending weakness could impact our revenue.
• Climate change may have a long-term impact on our business.
• Risks Related to Legal, Regulatory and Accounting
• We typically provide service-level commitments under our subscription agreements. If we fail to meet these contractual commitments, we could be obligated to provide credits for future service or face subscription termination with refunds of prepaid amounts, which would lower our revenue and harm our business, financial condition and results of operations.
• Indemnity provisions in various agreements to which we are a party potentially expose us to substantial liability for infringement, misappropriation or other violation of intellectual property rights, data protection and other losses.
• We are subject to anti-corruption, anti-bribery, anti-money laundering, and similar laws, and non-compliance with such laws can subject us to criminal or civil liability and harm our business, financial condition and results of operations.
• We are subject to governmental export and import controls that could impair our ability to compete in international markets or subject us to liability if we violate the controls.
• Changes in government trade policies, including the imposition of tariffs and export restrictions, could have an adverse impact on our business operations and sales.
• We may become involved in legal, regulatory, and administrative inquiries and proceedings, and unfavorable outcomes in litigation or other matters could negatively impact our business, financial conditions, and results of operations.
• We could be subject to additional tax liabilities.
• Our ability to use our net operating losses to offset future taxable income may be subject to certain limitations.
• Our results of operations may be harmed if we are required to collect sales or other related taxes for our license arrangements in jurisdictions where we have not historically done so.
• Changes in financial accounting standards may cause adverse and unexpected revenue fluctuations and impact our reported results of operations.
• If our judgments or estimates relating to our critical accounting policies are based on assumptions that change or prove to be incorrect, our results of operations could fall below expectations of securities analysts and investors, resulting in a decline in our stock price.
• As a result of being a public company, we are obligated to develop and maintain proper and effective internal controls over financial reporting, and any failure to maintain the adequacy of these internal controls may adversely affect investor confidence in our company and, as a result, the value of our common stock.
• Anti-takeover provisions in our charter documents and under Delaware law could make an acquisition of our company more difficult, limit attempts by our stockholders to replace or remove our current management and limit the market price of our common stock.
• Risks Related to Our Intellectual Property
• Failure to protect our intellectual property rights could adversely affect our business.
• We may be subject to intellectual property rights claims by third parties, which are extremely costly to defend, could require us to pay significant damages and could limit our ability to use certain technologies.
• We use open source software in our products and we expect to continue to incorporate open source software in our services in the future.
• We rely on the availability of licenses to third-party technology that may be difficult to replace or that may cause errors or delay implementation of our technology and services should we not be able to continue or obtain a commercially reasonable license to such technology.
• Risks Related to Cryptocurrencies and Digital Assets
• Cryptocurrency and other digital assets are an emerging asset class that carries unique risk, including the risk of financial loss.
• A determination that a digital asset is a “security” in which we transact or facilitate transactions in, or that a product or service we provide or an activity in which we engage involves a “securities transaction” for purposes of the federal securities laws could adversely affect the value of that digital asset and potentially digital assets generally, or have adverse regulatory consequences for us, and could therefore adversely impact our business, financial condition and results of operations.
• The emergence or growth of other digital assets, including those with significant private or public sector backing, could have a negative impact on the price of cryptocurrencies we hold and adversely affect our business.
• If we were deemed to be an investment company under the 1940 Act, applicable restrictions likely would make it impractical for us to continue segments of our business as currently contemplated.
• Changes in the accounting treatment of cryptocurrency holdings could have significant accounting impacts, including increasing the volatility of our results.
• Cryptocurrency price volatility may materially depress asset valuations, necessitating substantial cash reserves or liquidity buffers to maintain operational resilience. These risks are compounded by the lack of comprehensive regulation governing cryptocurrency trading platforms, which face material exposure to fraud, market manipulation, security breaches, and operational failures that could materially and adversely affect the value of our cryptocurrency holdings.
• Cryptocurrency holdings are less liquid than our existing cash and cash equivalents and may not be able to serve as a source of liquidity for us to the same extent as cash and cash equivalents.
• Cryptocurrencies do not pay interest or dividends.
• If we or our third-party service providers experience a security breach or cyberattack and unauthorized parties obtain access to our cryptocurrency, or if our private keys are lost or destroyed, or other similar circumstances or events occur, we may lose some or all of our cryptocurrency and our financial condition and results of operations could be materially adversely affected.
• We will face significant risks relating to disruptions, forks, 51% attacks, hacks, network disruptions, or other adverse events or other compromises to the cryptocurrency blockchains, which could materially and adversely impact our business, financial condition and results of operations.
• Our custodially-held cryptocurrencies may become part of the custodian’s insolvency estate if one or more of our custodians enters bankruptcy, receivership or similar insolvency proceedings
• Risks Related to Ownership of Our Common Stock
• The market price for our common stock is particularly volatile given our status as a relatively unknown company with a small and thinly traded public float, and lack of profits, which could lead to wide fluctuations in our share price.
• If securities or industry analysts do not publish research or reports about our business, or these or other parties publish negative reports about our business, our common stock price and trading volume could decline.
• We have in the past and may in the future be subject to short selling strategies that may drive down the market price of our common stock.
• Our failure to meet the continued listing standards of Nasdaq could result in a delisting of our common stock.
• In the event that our common stock is delisted from Nasdaq, U.S. broker-dealers may be discouraged from effecting transactions in shares of our common stock because they may be considered penny stocks and thus be subject to the penny stock rules.
• Substantial future sales of shares of our common stock could cause the market price of our common stock to decline.