According to Cointelegraph: Crypto firm Bakkt, backed by the Intercontinental Exchange (ICE) and instated in 2019 amid significant anticipation, is now warning that it might lack the necessary funds to continue business operations for the next 12 months. Bakkt alerted the market to the risk in an amendment to its quarterly report filed with the Securities and Exchange Commission on February 7.
Although launched in 2018 by ICE, the owner of the NYSE, with expansive hype and seen as an avenue for institutional investors to access Bitcoin, Bakkt now admits it is uncertain about its ability to expand into new markets and grow its revenue base due to the fast-paced environment associated with crypto assets.
Bakkt highlights its struggle to generate a sustainable operating profit and generate enough cash flows. The firm's future business hinges on raising the required capital and substantially increasing its revenues.
The firm is considering raising supplemental funds by issuing its registered securities publicly to support its long-term vision. An amended Form S-3 that is currently being filed will enable Bakkt to issue up to $150 million in registered securities in the public markets.
However, Bakkt's public journey, which began in 2021 with shares peaking over $40, seems to be on a rough patch, as its shares dropped 7.6% in after-hours trading on Wednesday and have declined 37% since the onset of this year.