Bakkt, a cryptocurrency company founded in 2019 and backed by Intercontinental Exchange (ICE), has issued a warning about its financial stability, stating that it may face cash shortages over the next year. The company's revised quarterly report submitted to the U.S. Securities and Exchange Commission on February 7 included a section on risk factors indicating the possibility that it may not "continue as a going concern."
Initially launched in 2018 with significant support from Intercontinental Exchange, Bakkt aimed to provide institutional investors with access to Bitcoin during a challenging market period. However, despite the growing cryptocurrency market, Bakkt now acknowledges that its cash and restricted cash may not be adequate to sustain its operations in the foreseeable future.
Bakkt attributed its financial uncertainty to the rapidly evolving landscape of crypto-assets and expressed concerns about its expansion into new markets and the growth of its revenue base. The company admitted to facing challenges in generating sustainable operating profits and sufficient cash flow, emphasizing the critical role of capital raising in its future success.
To address its financial predicament, Bakkt announced plans to raise additional capital through a public market offering of registered securities, aiming to secure funds for its long-term vision. The company filed a revised Form S-3, seeking authorization to issue up to $150 million of registered securities to bolster its financial position.
While Bakkt did not specify the exact utilization of the proceeds from the offering, it stated that the funds would primarily support working capital and other general corporate purposes. Despite having established strategic partnerships with prominent entities like Starbucks and Amazon Web Services, Bakkt's stock performance has faced challenges, with shares declining significantly since its public debut in 2021.
