Cash-strapped Bakkt granted permission to raise funds
Cryptocurrency company Bakkt has been given the green light to raise $150 million in additional funds through the sale of its securities over the next three years. This news follows Bakkt’s recent concerns about its balance sheet, which were expressed in a letter to the Securities and Exchange Commission (SEC).
“Bakkt believes the flexibility of a shelf registration on Form S-3 will provide the Company with significant benefits when raising capital in the future.”
Bakkt statement
Bakkt hopes to use the proceeds from this offering to support its long-term vision and potentially address its financial challenges. The company has experienced net losses for eight consecutive quarters since going public in October 2021. However, it reported a revenue increase of $334 million for Q2 of 2023 compared to just $14 million in the same period the previous year.
Risk of insolvency without additional funding
Last week, Bakkt highlighted that without securing additional capital through debt financing or equity dilution, it may not have sufficient funds to continue its operations. The company’s ambitious plans to enter new markets have created uncertainty regarding its ability to achieve sustainable profitability and generate adequate cash flow.
Bakkt’s management recognizes that it can only guarantee significant revenue growth by historical standards. Therefore, securing additional capital is crucial for maintaining operations and ensuring future success.
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