Datavault AI Inc. Announces $25M Convertible Note Financing

What Happened
Datavault AI Inc. announced on Aug 18, 2026 (reported on Form 8-K) that it entered into a Securities Purchase Agreement with Streeterville Capital, LLC and completed an initial closing. The company issued an unsecured convertible promissory note with an original principal of $25,030,000 (purchase price $25,000,000) that carries 8% interest and a 30‑month maturity, and issued 15,000,000 pre‑delivery common shares to the investor for $1,500. Datavault also established a 300,000,000 share reserve to satisfy conversions and agreed the investor may buy up to an additional $25,000,000 in similar notes within 12 months.

Key Details

• Investor: Streeterville Capital, LLC; Closing Date: August 18, 2026.
• Note size and price: $25,030,000 principal (includes $30,000 in investor expenses); investor paid $25,000,000. Interest 8%, maturity 30 months.
• Conversion terms: initial fixed conversion price $1.55/share; from Jan 1, 2027 conversions permitted at 92% of the 7‑day VWAP (Market Price); certain earlier market conversions may be allowed Sept–Dec 2026 or Oct 1, 2026 if balance ≥ $15M. Converted amounts include make‑whole interest.
• Additional rights and limits: investor has a Reinvestment Right to buy up to $25M more in Additional Notes within 12 months; Pre‑Delivery Shares will be issued so investor holds 4.99% of outstanding shares on applicable dates. Beneficial ownership is capped at 9.99%, and issuances are subject to Nasdaq Rule 5635(d) limits unless the company obtains shareholder approval (“Approval”), which Datavault has agreed to seek within 90 days. A Voting Agreement has major stockholders agreeing to vote in favor of the Approval; failure to comply can trigger $25,000,000 in liquidated damages.

Why It Matters
This transaction provides Datavault AI with immediate cash ($25M) and the option to raise more under the same terms, increasing near‑term liquidity but also creating potential dilution for existing shareholders because of the convertible note and large pre‑delivery share issuance. The investor’s ability to convert at a discount to market (92% of VWAP) and the large share reserve (300M) are important to monitor because they affect share count and per‑share metrics. The company must seek shareholder approval for issuances that exceed Nasdaq limits, and major stockholders have contractually agreed to support that approval, reducing the chance of blocking the deal. Investors should watch future filings for (1) exercises of the Reinvestment Right, (2) conversion activity, (3) shareholder approval outcomes, and (4) any material changes to the share reserve or conversion mechanics.