Bakkt Holdings said in a press release on Feb. 8 that it is “confident” it will continue to operate, despite previously raising concerns about liquidity in a regulatory filing.
Bakkt wrote that “management remains confident” and plans to continue serving customers and move toward profitability. The exchange added that its filing with the SEC for the quarter ended September 2023 described several risk factors related in part to the Apex Crypto acquisition, which closed in early 2023.
Bakkt said the February 7 amendment to that application describes risk factors related to its ability to maintain continuity for twelve months from the date of the amended form. The company said its healthcare analysis can only include management plans that have been implemented or are likely to be implemented; it should exclude new products and market introductions and products without proven sales.
Bakkt offers enterprise products including a turnkey crypto trading API, custody services, and crypto rewards solutions. Bakkt discontinued an app aimed at private users in March 2023. The parent company, ICE, terminated Bakkt Bitcoin futures and options contracts in September 2023.
SEC filing tells a different story
Despite Bakkt’s assurances to the public, its filing with the SEC explicitly states in bold:
“We may no longer be able to continue as a going concern.”
According to the filing, Bakkt said the revenue is not likely to generate sufficient profits and cash flows to continue doing business. It also described “expected operating losses and cash burn in the near future.”
Another section reads:
” … We have determined that we do not believe our cash and escrow will be sufficient to fund our operations for the twelve months following the date of this decision. [filing].”
The company said it is currently seeking additional capital, but noted that various methods of raising capital would not be available or acceptable. One option would be to issue securities, but that would dilute the share value.
Bakkt said a lack of financing could cause the company to reduce expansion efforts, reduce operating costs, limit future development or “even cease operations.” The company also expressed uncertainty about how to handle crypto in the event of bankruptcy.
The report that Bakkt says it is “confident” in continuing operations after the disclosure of liquidity issues in the SEC filing first appeared on CryptoSlate.