Bakkt Issues Statement Regarding Recently Filed Amendments to Third Quarter Form 10-Q
- None.
- The inclusion of a risk factor relating to the company's ability to continue as a going concern raises concerns about its financial stability and long-term viability.
Insights
The amendments to Bakkt Holdings, Inc.'s Form 10-Q, which include updates on business descriptions and risk factors post the acquisition of Apex Crypto LLC, signal substantial changes in the company's operations and strategy. The inclusion of a 'going concern' risk factor is particularly noteworthy, as it implies that there may be significant doubts about the company's ability to continue its operations for the next 12 months. This disclosure often leads to increased scrutiny from investors and creditors, as it suggests potential liquidity issues or the need for additional capital.
From a financial standpoint, the 'going concern' note could impact the company's creditworthiness and might trigger a reassessment of its financial health by credit rating agencies. The stock market typically reacts negatively to such uncertainties, which could lead to a decline in Bakkt's stock price and market capitalization. Investors will be closely monitoring the company's next moves, especially any plans for capital raising or strategic partnerships that could alleviate these concerns.
The acquisition of Apex Crypto LLC, now Bakkt Crypto Solutions, LLC, reflects Bakkt's strategic pivot or expansion into the cryptocurrency service sector. This move may be aimed at diversifying revenue streams and capturing market share in the burgeoning digital asset industry. However, the integration of such acquisitions and the launch of new products in the crypto space entail significant risks and uncertainties, given the industry's volatility and regulatory complexity.
Investor sentiment in the cryptocurrency market is highly sensitive to regulatory news and market dynamics. Thus, the amended risk factors could have a bearing on the perceived risk-reward profile of Bakkt's stock. If Bakkt successfully navigates the integration and scales its crypto solutions, it could potentially unlock new growth avenues. However, failure to do so could exacerbate the going concern risks and lead to further erosion of investor confidence.
The amendments to the Form 10-Q, particularly related to the risk factors, require careful legal consideration. The disclosure of a going concern risk factor is a legal obligation under securities law when management is aware of conditions that could raise substantial doubt about the company's ability to continue as a going concern. This disclosure is crucial for maintaining transparency with the SEC and protecting investor interests.
Moreover, the acquisition of Apex Crypto LLC and its rebranding to Bakkt Crypto Solutions, LLC, likely involves complex legal and regulatory compliance issues, especially in the evolving landscape of cryptocurrency regulation. The legal implications of this acquisition and the subsequent integration into Bakkt's business model are significant and will require ongoing legal scrutiny to ensure adherence to financial regulations, which could affect the company's operational and financial strategies.
On Wednesday, we filed amendments to our Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2023 (the “Amended Form 10-Q”), to provide, among other things, further updates to the description of our business and the related risk factors, including those that may result from changes in the Company’s business following its acquisition of Apex Crypto LLC (now known as Bakkt Crypto Solutions, LLC). In the Amended Form 10-Q, we also included a risk factor relating to our ability to continue as a going concern 12 months following the date of the Amended Form 10-Q. Under generally accepted accounting principles, the going concern analysis can only include management’s plans that have been fully implemented and are probable of occurring as of the assessment date, which excludes new products/market launches that have not been fully implemented or do not have a sufficient revenue track record.
In response to questions, management remains confident about our business and will continue to focus on delivering for our clients, making progress on our primary business objectives, and working efficiently to scale our business and move toward profitability. We plan to share more during our earnings announcement later this quarter.
About Bakkt
Founded in 2018, Bakkt builds solutions that enable our clients to grow with the crypto economy. Through institutional-grade custody, trading, and onramp capabilities, our clients leverage technology that’s built for sustainable, long-term involvement in crypto.
Bakkt is headquartered in
Bakkt-C
Note on Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements include, but are not limited to, statements regarding Bakkt’s ability to continue as a going concern, Bakkt’s expectations relating to the launch of new products or in new markets and Bakkt’s ability to generate revenues from any such initiatives, Bakkt’s ability to continue operating its business as expected and achieve its business objectives, and Bakkt’s ability to scale its business and move towards profitability, among others. Forward-looking statements can be identified by words such as “will,” “likely,” “expect,” “continue,” “anticipate,” “estimate,” “believe,” “intend,” “plan,” “projection,” “outlook,” “grow,” “progress,” “potential” or words of similar meaning. Such forward-looking statements are based upon the current beliefs and expectations of Bakkt’s management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are difficult to predict and beyond Bakkt’s control. Actual results and the timing of events may differ materially from the results anticipated in such forward-looking statements as a result of the following factors, among others: Bakkt’s ability to raise additional capital on acceptable terms or at all; Bakkt’s ability to grow and manage growth profitably; changes in Bakkt’s business strategy; changes in the market in which Bakkt competes, including with respect to its competitive landscape, technology evolution or changes in applicable laws or regulations; changes in the markets that Bakkt targets; disruptions in the crypto market that subject Bakkt to additional risks, including the risk that banks may not provide banking services to Bakkt; the possibility that Bakkt may be adversely affected by other economic, business, and/or competitive factors; the inability to launch new services and products or to profitably expand into new markets and services; the inability to execute Bakkt’s growth strategies, including identifying and executing acquisitions and Bakkt’s initiatives to add new clients; Bakkt’s failure to comply with extensive government regulation, oversight, licensure and appraisals; uncertain regulatory regime governing blockchain technologies and crypto; the inability to maintain effective internal controls and procedures; the exposure to any liability, protracted and costly litigation or reputational damage relating to Bakkt’s data security; the impact of any goodwill or other intangible assets impairments on Bakkt’s operating results; the impact of any pandemics or other public health emergencies; Bakkt’s inability to maintain the listing of its securities on the New York Stock Exchange; and other risks and uncertainties indicated in Bakkt’s filings with the Securities and Exchange Commission. You are cautioned not to place undue reliance on such forward-looking statements. Such forward-looking statements relate only to events as of the date on which such statements are made and are based on information available to us as of the date of this press release. Unless otherwise required by law, we undertake no obligation to update any forward-looking statements made in this press release to reflect events or circumstances after the date of this press release or to reflect new information or the occurrence of unanticipated events.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240208131674/en/
Investor Relations
Ann DeVries, Head of Investor Relations
Ann.DeVries@bakkt.com
Media
press@bakkt.com
Source: Bakkt Holdings, Inc.
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