LUCKNOW (CoinChapter.com) — Bakkt, a crypto company, says it is at risk of shutting down within a year if unable to secure significant new funding. The cautionary note came in an amended quarterly report filed with the US Securities and Exchange Commission (SEC) this week.
We might not be able to continue as a going concern. We do not believe that our cash and restricted cash are sufficient to fund our operations for the 12 months following the date of the filing.
the company said in the filing.
Bakkt Might Not Be Able to Survive the Year
Founded to allow Starbucks customers to pay for coffee with Bitcoin, Bakkt has shifted focus to providing enterprise cryptocurrency custody, trading, and other services. However, the company says the rapidly evolving crypto market has made generating sustainable profits extremely challenging.
There is significant uncertainty associated with our expansion to new markets and the growth of our revenue base.
Bakkt stated in the filing.
It admitted doubting current cash levels will support operations for the next year.
Bakkt emphasized that it cannot be confident that revenues will rise soon enough to achieve consistent operating income and a positive cash flow status unless it raises substantial additional capital.
Bakkt’s Eyes $150 Million Public Offering to Avert Shutdown
To shore up its finances, Bakkt is looking to tap public markets for additional funding by selling newly issued stock. It recently filed an amended registration statement that, once approved, would allow the company to raise $150 million through a sale of registered securities.
Bakkt removed a related social media post. The firm affirmed that it must raise capital to support long-term business goals.
Proceeds would be put towards general working capital needs and corporate purposes as Bakkt aims for long-term viability. However, the firm has not yet been approved to initiate the public offering.
Bakkt was founded in 2018 by Intercontinental Exchange, the New York Stock Exchange parent company. The firm was launched as one of the first major efforts to bring cryptocurrency services to institutional investors. Crypto markets were in a downturn at that time. Its initial CEO was future US Senator Kelly Loeffler.
Bakkt generated revenues from crypto trading, custody, and payment solutions. By 2021, it had rolled out a digital wallet competing with Venmo and PayPal. Later that year, Bakkt went public through a merger with a special purpose acquisition company, sending share prices as high as $40.
News of Bakkt’s financial woes sent its stock tumbling over 7% to $1.34 in after-hours trading Wednesday.
Shares have been down 37% in the cryptocurrency industry since the start of 2024.
