KEY POINTS
- Bakkt said there is "significant uncertainty" regarding new market expansion plans
- The crypto platform also said there are "numerous risks" beyond its control
- Bakkt said it may not be able to continue fulfilling NYSE listing requirements
Bakkt, which was introduced to much hype in 2018, announced it might not be able to continue operations as it believes its existing funds are insufficient to keep the business going over the next 12 months.
In an amended filing of its quarterly report filed with the U.S. Securities and Exchange Commission (SEC) on Wednesday, the Alpharetta-headquartered company said it "might not be able to continue as a going concern."
A Bakkt spokesperson said the company looks to sell up to $150 million in securities, which could help bring in some cash, Coindesk reported.
Funds running low is just one of Bakkt's problems as the crypto firm also raised concerns about "significant uncertainty" regarding its expansion to new markets and its revenue growth. Bakkt added that it has been unable to generate a sustainable operating profit, warning that its success in the coming months will largely depend on its ability to raise funds.
"If we are unable to attract, retain or grow our relationships with our existing clients our business, financial condition, results of operations and future prospects would be materially and adversely affected," it said.
Among Bakkt's major concerns is its ability to retain existing partners or obtain new partners and customers because it does not currently offer or plan to cease offering some crypto assets. It noted that the platform has delisted some crypto assets and the decision has had an effect on its revenues.
Bakkt is also concerned about the "numerous risks that are not within our control" as linked to some of its past or future investments. These risks include difficulty in integrating newly acquired technologies or products with its current product list and regulatory changes that could affect Bakkt's business value.
On evolving regulatory guidelines, Bakkt noted that regulatory regimes governing blockchain tech and digital assets are "uncertain" and the platform has gone through alternations in its business practices in the past due to such regulatory changes. Future regulatory changes may have a significant adverse impact on Bakkt's business, the amended filing noted.
Bakkt has also expressed doubt that it can continue to meet the New York Stock Exchange's (NYSE) listing requirements.
"The NYSE may delist our securities from trading on its exchange, which could limit investors' ability to make transactions in our securities and subject us to additional trading restrictions," the filing added.
Since its much-hyped introduction in 2018, Bakkt has made some significant moves, including its partnership with Starbucks that allows customers to pay for their orders using the Bakkt app which converts Bitcoin into U.S. dollars.
Bakkt went public in 2021. From share prices topping $40 at the time, Bakkt shares dropped 6% in the pre-market trading hours on Thursday and were trading at $1.36.
