dvlt-20260331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


x			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2026

or

o			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

Datavault AI Inc.

(Exact name of registrant as specified in its charter)


Delaware						30-1135279
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

One Commerce Square
2005 Market Street, Suite 2400

Philadelphia, PA 19103

(Address of principal executive offices) (Zip Code)

(408) 627-4716

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.0001 per share

DVLT

The Nasdaq Capital Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	o	Accelerated filer	o
Non-accelerated filer	x	Smaller reporting company	x
		Emerging growth company	o

If an emerging growth company, indicate by check-mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

The number of shares of the registrant’s common stock outstanding as of May 11, 2026 is 855,561,995.

Table of Contents

DATAVAULT AI INC. and Subsidiaries

QUARTERLY REPORT ON FORM 10-Q

For the quarter ended March 31, 2026


			Page Number
PART I: FINANCIAL INFORMATION
Item 1. Financial Statements (unaudited)
Condensed Consolidated Balance Sheets			3
Condensed Consolidated Statements of Operations			4
Condensed Consolidated Statements of Stockholders’ Equity			5
Condensed Consolidated Statements of Cash Flows			6
Notes to Condensed Consolidated Financial Statements			7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			43
Item 3. Quantitative and Qualitative Disclosures About Market Risk			45
Item 4. Controls and Procedures			45

PART II. OTHER INFORMATION
Item 1. Legal Proceedings			47
Item 1A. Risk Factors			47
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			47
Item 3. Defaults Upon Senior Securities			47
Item 4. Mine Safety Disclosures			47
Item 5. Other Information			47
Item 6. Exhibits			48
SIGNATURES			50

Table of Contents

PART I: FINANCIAL INFORMATION

Item 1. Financial Statements

DATAVAULT AI INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share data)


	March 31, 2026		December 31, 2025
	(unaudited)		(1)
Assets
Current Assets:
Cash and cash equivalents	$	2,205	$	2,004
Accounts receivable	1,066		888
Related party receivable	29,500		30,000
Unbilled accounts receivable	1,304		1,705
Inventories	717		636
Note receivable	500		—
Crypto assets	57,111		92,222
Deferred offering costs	745		5,500
Prepaid software license, current	8,368		7,759
Prepaid expenses and other current assets	4,752		2,159
Total current assets	106,268		142,873
Property and equipment, net	1,199		606
Intangible assets	102,618		94,816
Goodwill	27,285		19,135
Prepaid software license, noncurrent	6,058		6,956
Investments in non-marketable securities	1,766		4,300
Deposit for business combination	—		1,000
Other assets	4,919		5,018
Total assets	$	250,113	$	274,704

Liabilities, Convertible Redeemable Preferred Stock and Stockholders’ Equity
Current Liabilities:
Accounts payable	$	7,051	$	10,832
Accrued liabilities	12,053		11,002
Due to related party	760		98
Short-term convertible note payable, related party	—		3,936
Short-term promissory notes	3,160		1,013
Total current liabilities	23,024		26,881
Convertible notes	3,380		5,917
Warrant liabilities	9		9
Other liabilities	3,672		3,923
Total liabilities	30,085		36,730


Common stock, par value $0.0001; 2,000,000,000 shares authorized; 617,813,176 and 573,438,153 shares issued and outstanding as of March 31, 2026 and December 31, 2025, respectively	63		59
Additional paid-in capital	650,541		615,360
Accumulated deficit	(430,576)		(377,445)
Total stockholders’ equity	220,028		237,974
Total liabilities and stockholders’ equity	$	250,113	$	274,704

________________________________________________

(1)The condensed consolidated balance sheet as of December 31, 2025 was derived from the audited consolidated balance sheet as of that date.

The accompanying notes are an integral part of these condensed consolidated financial statements

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DATAVAULT AI INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

For the three months ended March 31, 2026 and 2025

(in thousands, except share and per share data)

(unaudited)


	Three Months Ended March 31,
	2026		2025
Live event production revenue	2,499		—
Consumer audio products, components, and other revenue, net	917		629
Total net revenue	3,416		629

Cost of revenue, live events	2,795		—
Cost of revenue, consumer audio products, components, and other	510		560
Total cost of net revenue	3,305		560
Gross profit	111		69

Operating Expenses:
Research and development	5,729		2,361
Sales and marketing	6,636		1,495
General and administrative	18,696		5,644
Total operating expenses	31,061		9,500
Income (loss) from operations	(30,950)		(9,431)

Interest expense, net	(1,121)		(120)
Change in fair value of warrant liabilities	—		17
Extinguishment of debt	(1,725)		—
Impairment of investment in nonmarketable security	(2,534)		—
Other expense, net	(16,801)		(29)
Loss before provision for income taxes	(53,131)		(9,563)
Provision for income taxes	—		—
Net loss attributable to common stockholders	$	(53,131)	$	(9,563)
Net loss per common share - basic and diluted	$	(0.09)	$	(0.18)
Weighted average number of common shares used in computing net loss per common share	574,220,923		53,681,828

The accompanying notes are an integral part of these condensed consolidated financial statements.

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DATAVAULT AI INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

For the three months ended March 31, 2026 and 2025

(in thousands, except share and per share data)

(unaudited)


	Common Shares			Additional Paid-in Capital		Accumulated Deficit		Total Stockholders’ Equity
	Shares	Amount
Balance as of December 31, 2025	573,438,153	$	59	$	615,360	$	(377,445)	$	237,974
Stock-based compensation	211,131	—		5,234				5,234
Equity issuance costs	—	—		(250)				(250)
Issuance of common stock for intangible asset acquisition	7,500,000	1		5,400				5,401
Issuance of common stock in connection with ATM offering, net of fees	36,663,892	3		24,797				24,800
Net loss	—	—		—		(53,131)		(53,131)
Balance as of March 31, 2026	617,813,176	$	63	$	650,541	$	(430,576)	$	220,028


	Common Shares			Additional Paid-in Capital		Accumulated Deficit		Total Stockholders’ Equity
	Shares	Amount
Balance as of December 31, 2024	52,034,060	$	5	$	384,172	$	(298,451)	$	85,726
Stock-based compensation	5,986,893	—		648		—		648
Issuance of common stock in connection with the February Offering	4,757,126	1		4,859		—		4,860
Issuance of common stock in connection with warrant exercise	3,246,111	—		—		—		-
Conversion of liability warrants to equity warrants	—	—		15		—		15
Net loss	—	—		—		(9,563)		(9,563)
Balance as of March 31, 2025	66,024,190	6		389,694		(308,014)		81,686

The accompanying notes are an integral part of these condensed consolidated financial statements.

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DATAVAULT AI INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the three months ended March 31, 2026 and 2025

(in thousands)

(unaudited)


	Three Months Ended March 31,
	2026		2025
Cash flows from operating activities:
Net loss	$	(53,131)	$	(9,563)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation	5,234		648
Depreciation and amortization	3,161		2,321
Amortization of debt discounts and paid-in-kind interest	902		120
Fair value of equity warrants in interest expense	—		(17)
Change in fair value of crypto currency	16,133		—
Loss on sale of bitcoin	822		—
Debt extinguishment	1,725		—
Impairment of nonmarketable security	2,534		—
Changes in operating assets and liabilities:
Accounts receivable	220		69
Related party receivable	500		—
Unbilled accounts receivable	401		—
Inventories	(81)		276
Prepaid expenses and other current assets	(2,554)		359
Prepaid software	289		—
Other assets	99		54
Accounts payable	(4,339)		(291)
Due to related party	18,818		—
Accrued liabilities	780		30
Other liabilities	(240)		(30)
Net cash used in operating activities	(8,727)		(6,024)
Cash flows from investing activities:
Issuance of note receivable	(500)		—
Deposit for business combination	—		(1,000)
Cash paid for acquisition of API Media, net	(12,949)		—
Purchases of property and equipment	(264)		(52)
Disposals of property and equipment	(171)		—
Net cash used in investing activities	(13,884)		(1,052)
Cash flows from financing activities:
Repayments on notes payable	(6,963)		(406)
Proceeds form issuing shares through an At-The-Market (ATM) program	29,985		4,945
Equity issuance costs	(210)		—
Repurchase of common stock warrants	—		(622)
Net cash provided by financing activities	22,812		3,917

Net increase (decrease) in cash and cash equivalents	201		(3,159)
Cash and cash equivalents as of beginning of period	2,004		3,330
Cash and cash equivalents as of end of period	$	2,205	$	171


Noncash Investing and Financing Activities:
Capitalized acquisition costs	—		117
Unpaid financing issuances costs	—		86
Unpaid deferred offering costs	469		117
Settlement of Related Party Payable with Bitcoin	18,156		—
Intangible assets acquired with issuance of common stock	5,400		—
ATM Non cash offering costs	5,812		—
Reclass liability warrant to equity	—		15

The accompanying notes are an integral part of these condensed consolidated financial statements.

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DATAVAULT AI INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Three and Three Months Ended March 31, 2026 and 2025

(unaudited)

1. Business and Summary of Significant Accounting Policies

Datavault AI Inc., formerly known as WiSA Technologies, Inc., and before then Summit Wireless Technologies, Inc. (together with its subsidiaries also referred to herein as “we”, “us”, “our”, “Datavault”, “Datavault AI” or the “Company”), was originally formed as a limited liability company in Delaware on July 23, 2010. The Company’s business is to deliver the best-in-class data management and monetization, as well as using wireless audio to transmit data and audio for consumer use. Datavault stands at the forefront of innovation, delivering cutting-edge Web 3.0 data management and high-performance computing solutions to a global audience.

On May 20, 2025, the Company completed its previously announced asset purchase of technology assets, customer contracts, trademarks, and other intellectual property (collectively, the “CSI Acquired Assets”) from CompuSystems, Inc. (“CSI”). CSI is a provider of registration, data analytics, and lead management services for live events, offering customer support to clients in the trade, association, corporate, and government event markets. Only the results of operations attributable to the CSI Acquired Assets acquired from CompuSystems, Inc. are included in the Company’s unaudited condensed consolidated financial statements from May 20, 2025, onward. Following the acquisition, the Company began operating the CSI Acquired Assets under the brand name “Event Citadel."

On January 22, 2026, the Company completed its previously announced acquisition of all of the outstanding shares of API Media Innovations Inc. (“API Media”). API Media is a technology provider specializing in on-site media capture, data collection, and digital engagement services for live outdoor events, including sporting events and large-scale experiential activations. The results of operations of API Media are included in the Company’s unaudited condensed consolidated financial statements from January 22, 2026, onward. Accordingly, the results of operations of API Media are included in the Company’s unaudited condensed consolidated financial statements for the three months ended March 31, 2026.

Nasdaq Compliance

On February 24, 2026, the Company received a letter from The Nasdaq Stock Market LLC (“Nasdaq”) notifying the Company that it was not in compliance with Nasdaq Listing Rule 5550(a)(2), which requires listed securities to maintain a minimum bid price of $1.00 per share (the “Minimum Bid Price Requirement”), because the closing bid price of the Company’s common stock had remained below $1.00 per share for 30 consecutive business days.

Pursuant to Nasdaq Listing Rule 5810(c)(3)(A), the Company has been granted an initial compliance period of 180 calendar days, or until August 24, 2026, to regain compliance with the Minimum Bid Price Requirement. If at any time during the compliance period the closing bid price of the Company’s common stock is at least $1.00 per share for a minimum of ten consecutive business days, Nasdaq will provide written confirmation that the Company has regained compliance.

If the Company does not regain compliance by August 24, 2026, the Company may be eligible for an additional 180-calendar day compliance period, provided it satisfies all other continued listing requirements for the Nasdaq Capital Market, other than the Minimum Bid Price Requirement, and provides written notice to Nasdaq of its intention to regain compliance, including, if necessary, by effecting a reverse stock split.

If the Company does not regain compliance within the applicable compliance period(s), including any extensions that may be granted by Nasdaq, Nasdaq would provide notice that the Company’s common stock would be subject to delisting from the Nasdaq Capital Market.

Previously, on May 6, 2025, the Company received notice from Nasdaq that it was not in compliance with the Minimum Bid Price Requirement. The Company subsequently regained compliance on October 10, 2025 after the closing bid price of the Company’s common stock remained at or above $1.00 per share for ten consecutive business days, and Nasdaq confirmed the matter had been closed.

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DATAVAULT AI INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Three and Three Months Ended March 31, 2026 and 2025

(unaudited)

Basis of Presentation

The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and include all adjustments necessary for the fair presentation of the Company’s financial position, results of operations and cash flows for the periods presented. The condensed consolidated financial statements reflect the accounts of Datavault AI Inc. and its wholly-owned subsidiaries, WISA Technologies Korea, LTD, a Korean limited company, which was established in September 2022, and WiSA, LLC, a Delaware limited liability company. All intercompany balances and transactions are eliminated.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

Concentration of Credit Risk and Other Risks and Uncertainties

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable. Cash and cash equivalents are deposited in demand and money market accounts at one financial institution. At times, such deposits may be in excess of insured limits. The Company has not experienced any losses on its deposits of cash and cash equivalents.

The Company’s accounts receivable are derived from revenue earned from customers located throughout the world. The Company performs credit evaluations of its customers’ financial condition and may, in certain circumstances, require full or partial payment in advance of shipping. As of March 31, 2026 and December 31, 2025, there was no allowance for credit losses. As of March 31, 2026, the Company had two customers accounting for 65% and 31% of accounts receivable. As of December 31, 2025, the Company had two customers accounting for 65% and 32% of accounts receivable.

The Company had two customers accounting for 14% and 11% of its net revenue for the three months ended March 31, 2026. The Company had three customers accounting for 29%, 25% and 18% of its net revenue for the three months ended March 31, 2025.

The Company’s future results of operations involve a number of risks and uncertainties. Factors that could affect the Company’s future operating results and cause actual results to vary materially from expectations include, but are not limited to, rapid technological change, continued acceptance of the Company’s products, competition from substitute products and larger companies, protection of proprietary technology, strategic relationships and dependence on key individuals.

The Company relies on sole-source suppliers to manufacture some of the components used in its product. The Company’s manufacturers and suppliers may encounter problems during manufacturing due to a variety of reasons, any of which could delay or impede their ability to meet demand. The Company is heavily dependent on a single contractor in China for assembly and testing of its products, a single contractor in Japan for the production of its transmit semiconductor chips and a single contractor in China for the production of its receive semiconductor chips.

The Company also generates revenue through the licensing of its proprietary intellectual property and through the provision of live event and media-related services. Revenue derived from intellectual property licensing arrangements may be concentrated among a limited number of counterparties and is subject to risks including the licensee’s ability to commercialize the underlying technology, maintain sufficient funding, and comply with contractual payment terms. Additionally, certain licensing arrangements may include variable consideration or milestone-based payments, which could impact the timing and amount of revenue recognized.

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DATAVAULT AI INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Three and Three Months Ended March 31, 2026 and 2025

(unaudited)

Revenue from the Company’s live event and media services business is dependent on the successful execution of events, customer demand, and the continuation of relationships with key customers and partners. This line of business may be subject to seasonality, event timing, and external factors such as economic conditions, venue availability, and potential disruptions to scheduled events. The Company may also rely on a limited number of significant customers, which could result in revenue concentration and variability in operating results from period to period.

Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents.

Accounts Receivable and Allowance for Credit Losses

Accounts receivable are recorded at the invoice amount and are generally not interest bearing. The Company reviews its trade receivables aging to identify specific customers with known disputes or collection issues. The Company exercises judgment when determining the adequacy of these reserves as it evaluates historical bad debt trends and changes to customers’ financial conditions. No allowance for credit losses was deemed necessary as of March 31, 2026 or December 31, 2025.

Fair Value of Financial Instruments

Carrying amounts of certain of the Company’s financial instruments, including cash and cash equivalents, accounts receivable, prepaid expenses and other current assets, accounts payable and accrued liabilities approximate fair value due to their relatively short maturities. The carrying value of the Company’s borrowings and capital lease liabilities approximates fair value based upon borrowing rates currently available to the Company for loans and capital leases with similar terms. The Company’s Crypto assets, NYIAX Investment, Convertible note payable and Warrant liability, are the only financial instruments that are adjusted to fair value on a recurring basis.

Inventories

Inventories, principally purchased components, are stated at the lower of cost or net realizable value. Cost is determined using an average cost, which approximates actual cost on a first-in, first-out basis. Inventory in excess of salable amounts and inventory which is considered obsolete based upon changes in existing technology is written off. At the point of loss recognition, a new lower cost basis for that inventory is established and subsequent changes in facts and circumstances do not result in the restoration or increase in the new cost basis.

Deferred Offering Costs

Deferred offering costs, consisting of legal, accounting and filing fees relating to public offerings, are capitalized. The deferred offering costs will be offset against public offering proceeds upon the effectiveness of an offering. The offering costs for the July ATM were offset with proceeds on a pro-rata basis. In the event that an offering is terminated, deferred offering costs will be expensed. As of March 31, 2026 and December 31, 2025, the Company had capitalized $0.7 million and $5.5 million deferred offering costs, respectively.

Goodwill and Intangible Assets

The Company's intangible assets include goodwill and other intangible assets. Goodwill is recorded when the purchase price paid for an acquisition exceeds the estimated fair value of the net identified tangible and intangible assets acquired. Other intangible assets include trademarks and trade names, patents and customer-related intangibles. Indefinite-lived intangible assets consist of goodwill. All other intangible assets are definite-lived intangible assets and are amortized over their respective estimated lives, ranging from 3 to 10 years.

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DATAVAULT AI INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Three and Three Months Ended March 31, 2026 and 2025

(unaudited)

The Company is required to perform an impairment review of indefinite-lived intangible assets, including goodwill annually, and more frequently under certain circumstances. Indefinite-lived intangible assets are subjected to this annual impairment test during the fourth quarter of the Company's fiscal year. The Company's impairment evaluation consists of a qualitative impairment assessment in which management evaluates whether it is more likely than not that the indefinite-lived intangible assets are impaired. If it is determined that it is more likely than not, the Company performs a quantitative impairment test, which compares the fair value of the reporting unit or indefinite-lived intangible asset to its carrying value. If the Company determines through the impairment process that the indefinite-lived intangible asset has been impaired, the Company will record the impairment charge in its results of operation. Through March 31, 2026, the Company has never recorded a goodwill impairment charge. In the event that facts and circumstances indicate definite-lived intangible assets may be impaired, the Company evaluates the recoverability and estimated useful lives of such assets. If such indicators are present, recoverability is evaluated based on whether the sum of the estimated undiscounted cash flows attributable to the asset (group) in question is less than their carrying value. If less, the Company measures the fair value of the asset (group) and recognizes an impairment loss if the carrying amount of the assets exceeds their respective fair values.

Property and Equipment, Net

Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation of property and equipment is computed using the straight-line method over their estimated useful lives of two to five years. Leasehold improvements and assets acquired under capital lease are amortized on a straight-line basis over the shorter of the useful life or term of the lease. Upon retirement or sale, the cost and related accumulated depreciation are removed from the balance sheet and the resulting gain or loss is reflected in operations. Maintenance and repairs are charged to operations as incurred.

Convertible Financial Instruments

The Company bifurcates conversion options and warrants from their host instruments and accounts for them as freestanding derivative financial instruments if certain criteria are met. The criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument. An exception to this rule is when the host instrument is deemed to be conventional, as that term is described under applicable U.S. GAAP.

When the Company has determined that the embedded conversion options and warrants should be bifurcated from their host instruments, discounts are recorded for the intrinsic value of conversion options embedded in the instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the transaction and the effective conversion price embedded in the instrument.

Debt discounts under these arrangements are amortized to interest expense using the interest method over the earlier of the term of the related debt or their earliest date of redemption.

Warrants for Common Shares, Convertible Redeemable Preferred Shares, and Derivative Financial Instruments

Warrants for our common shares, convertible redeemable preferred shares, and derivative financial instruments are classified as equity if the contracts (1) require physical settlement or net-share settlement or (2) give the Company a choice of net-cash settlement or settlement in its own shares (physical settlement or net-share settlement). Contracts which (1) require net-cash settlement (including a requirement to net cash settle the contract if an event occurs and if that event is outside the control of the Company), (2) give the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement), or (3) contain reset provisions that do not qualify for

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DATAVAULT AI INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Three and Three Months Ended March 31, 2026 and 2025

(unaudited)

the scope exception are classified as equity or liabilities. The Company assesses classification of its warrants for shares of common stock and other derivatives at each reporting date to determine whether a change in classification between equity and liabilities is required.

Product Warranty

The Company’s products are generally subject to a one-year warranty, which provides for the repair, rework, or replacement of products (at the Company’s option) that fail to perform within the stated specification. The Company has assessed its historical claims and, to date, product warranty claims have not been significant. The Company will continue to assess if there should be a warranty accrual going forward.

Revenue Recognition

The Company generates revenue from the sale of consumer audio products and components (“Consumer Audio and Components”), registration, data analytics, and lead management services for live events (“Event Citadel Live Events”), and event-based media and broadcasting services (“API Media”). The Company recognizes revenue in accordance with Accounting Standards Codification ("ASC") 606, Revenue from Contracts with Customers, using the following five-step model: (1) identify the contract with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenue when, or as, performance obligations are satisfied.

Consumer Audio and Components

Customer purchase orders are considered contracts with customers for Consumer Audio and Components. Revenue, net of expected discounts and allowances, is recognized when control of the promised goods transfers to the customer, which typically occurs upon shipment. The products have been determined to represent the only distinct performance obligations within these arrangements.

Sales to certain distributors may include price adjustments, price protection, stock rotation, and other allowances under certain circumstances. These items are accounted for as variable consideration and are estimated at contract inception based on the expected amount to be provided to customers, which reduces the amount of revenue recognized. Although the Company does not provide customers with a contractual right of return, limited returns may be accepted on a case-by-case basis and are also accounted for as variable consideration. The Company does not expect significant changes to its estimates of variable consideration. Expected costs associated with assurance warranties and claims are recognized as expense as incurred. Taxes assessed by governmental authorities that are both imposed on and concurrent with specific revenue-producing transactions, and that are collected from customers and remitted to governmental authorities, are excluded from revenue.

Event Citadel Live Events

Event Citadel Live Events contracts generally relate to registration, data analytics, lead management, and event preparation and management services provided for trade shows, conferences, and other live events in both the corporate and government sectors. Contracts are generally multi-year arrangements with terms of approximately three years and typically terminate upon completion of the final event specified within the agreement, unless extended by mutual written consent. Event Citadel contracts generally do not contain termination-for-convenience provisions. Contracts may only be terminated for breach or non-performance, in which case the Company is entitled to compensation for services performed through the termination date.

The Company has concluded that Event Citadel contracts generally contain a single performance obligation consisting of integrated event preparation and management services, as the services are highly interrelated and are not separately identifiable within the context of the contract. The transaction price generally includes fixed service fees, pass-through costs, and other reimbursable expenses, including personnel and supply-related costs incurred on behalf of clients. The Company has concluded it acts as principal in these arrangements and therefore recognizes pass-through and

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DATAVAULT AI INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Three and Three Months Ended March 31, 2026 and 2025

(unaudited)

reimbursable costs on a gross basis within revenue, with the corresponding expenses recognized within cost of services. Certain contracts also include rebates payable to customers, which are estimated as variable consideration using the most likely amount method and reduce the transaction price.

Revenue is recognized over time as services are rendered because the customer simultaneously receives and consumes the benefits provided by the Company’s performance. The Company measures progress toward satisfaction of the performance obligation using an input method based on labor hours incurred, which management believes best depicts the transfer of services to the customer.

API Media

API Media provides event-based broadcasting, media, and data services for live sporting events, exhibitions, and other large-scale gatherings. Customer contracts generally contain a single integrated performance obligation consisting of on-site event services. Contracts typically require an upfront deposit, with the remaining balance invoiced upon completion of the event. Amounts billed or collected in advance are recorded as contract liabilities until the related services are performed. Revenue is recognized at a point in time upon completion of services at the event, which represents the point at which control of the promised services transfers to the customer and the Company’s performance obligation is satisfied. The Company’s revenue arrangements do not contain significant financing components.

Patent and Intellectual Property Licensing

Revenues generated from patent and intellectual property licensing arrangements are derived from granting customers rights to use the Company’s patented technologies and related intellectual property. The Company evaluates each arrangement to determine whether the license represents (i) a right-to-use intellectual property at a point in time or (ii) a right-to-access intellectual property over time in accordance with ASC 606-10-55-58 through 55-64.

Licenses that provide customers with a right-to-use functional intellectual property, where the underlying intellectual property is not expected to be significantly modified or enhanced by the Company during the license term, are recognized at a point in time when control of the license transfers to the customer. Control generally transfers upon execution of the agreement, at which point the customer has the right and ability to use, and obtain substantially all of the remaining benefits from, the licensed intellectual property.

Certain arrangements include fixed upfront license fees, sales-based or usage-based royalties, or a combination of both. Fixed consideration is recognized in accordance with the timing of the underlying license (point in time or over time). Sales-based or usage-based royalties promised in exchange for a license of intellectual property are recognized in the period in which the subsequent sales or usage occurs in accordance with the sales- or usage-based royalty exception under ASC 606-10-55-65.

During the three months ended March 31, 2026 and 2025, net revenue consisted of the following:


	For the Three Months Ended March 31,
(in thousands)	2026		2025
Components	$	903	$	492
Consumer Audio Products	14		137

Live Events	2,499		—
Total	$	3,416	$	629

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DATAVAULT AI INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEC Form 10-Q filed by Datavault AI Inc.