Bakkt said in an SEC filing that it was ‘confident’ about continuing operations after disclosing liquidity issues.

Bakkt Holdings said in a Feb. 8 press release that it was “confident” it would continue operating despite concerns about liquidity raised in regulatory filings.

Bakkt wrote that “management remains confident” and plans to continue serving customers and move toward profitability. The exchange added that in its filing with the SEC for the quarter ending September 2023, it outlined various risk factors partially related to the Apex Crypto acquisition, which closed in early 2023.

Bakkt said the Feb. 7 amendment to its filing sets out risk factors related to its ability to continue as a going concern for 12 months from the date of the amended form. The company said its analysis of concerns may only include management plans that have been implemented or are likely to be implemented. New products, launches to market, and products without proven returns should be excluded.

Bakkt provides business products including turnkey cryptocurrency trading APIs, custody services, and cryptocurrency rewards solutions. Bakkt discontinued its app targeting retail users in March 2023. Parent company ICE terminated the Bakkt Bitcoin futures and options contract in September 2023.

SEC filings tell a different story

Despite Bakkt’s assurances to the public, its filing with the SEC states in bold letters:

“We may not be able to continue as a going concern.”

Bakkt said the proceeds were unlikely to generate sufficient profits and cash flow to continue the business, according to the filing. It also described “expected operating losses and cash burn in the near future.”

Another section is:

” … We have determined that our cash and restricted cash reserves are not sufficient to fund our operations for a period of 12 months following the date of this document (filing date).”

The company said it is currently seeking additional capital but that various methods of raising capital may not be available or acceptable. One option would be to issue securities, but that would dilute the value of the stock.

Bakkt said the lack of funding could reduce expansion efforts, reduce operating costs, limit future development or even halt operations. The company also expressed uncertainty about its treatment of cryptocurrencies in the event of bankruptcy.

Bakkt posted that it was ‘confident’ about continuing operations after disclosing liquidity issues in SEC filing, first appeared on CryptoSlate