- Crypto firm Bakkt has sounded an alarm.
- The company has found itself in an existential crisis.
- A possible bailout includes raising millions through registered securities.
Once touted as a “ Bitcoin Savior,” cryptocurrency firm Bakkt faces an existential crisis due to financial constraints, and its business “might not be able to continue as a growing concern.”
Founded in 2018 by the New York Stock Exchange (NYSE) parent company, Bakkt aimed to power Bitcoin transactions for mainstream users, including Starbucks customers. Later, the company switched to providing B2B tech services, such as crypto trading and custody solutions for institutional clients.
Bakkt’s Financial Woes Threaten Business Continuity
In its recently amended Form 10-Q/A filed with the U.S. Securities and Exchange Commission (SEC), Bakkt doubts whether its available cash could sustain ongoing business operations for the next 12 months.
Specifically, the company noted that “significant uncertainty” was associated with its expansion to new markets and the growth of its revenue base “given the rapidly evolving environment associated with crypto assets.”
Bakkt openly acknowledged its reliance on swiftly securing capital to drive future success.
“If we are unable to raise sufficient capital through additional debt or equity arrangements, there will be uncertainty regarding our ability to maintain liquidity sufficient to operate our business effectively, which has raised substantial doubt as to our ability to continue as a going concern.” The company wrote.In a now-deleted February 8 post on X (Twitter), Bakkt said the amended filing would allow the company to issue up to $150M of registered securities in the public markets to raise additional capital for funding its “long-term vision.”
Following the filing, Bakkt’s stock dipped from its high for the day of $1.47 to $1.29. The company’s stock has plunged nearly 90% over the last year.
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