Cash-strapped crypto firm Bakkt has announced receiving regulatory approval to raise up to $150 million through the sale of its securities. This approval comes shortly after the firm expressed concerns about its balance sheet.
On Feb. 14, Bakkt disclosed securing approval for a “shelf registration,” also known as a shelf offering. This process involves a company registering a new issue of securities with the Securities and Exchange Commission (SEC), enabling gradual sales over a period without requiring separate approval each time.
Bakkt stated that the approval grants it the capability to raise an aggregate of $150 million in capital through one or more offerings over a span of three years. The firm emphasized the benefits of flexibility associated with a shelf registration on Form S-3 for future capital-raising endeavors.
Despite once being hailed as Bitcoin’s potential savior during the 2018 bear market, Bakkt revealed concerns about its cash reserves last week, acknowledging potential difficulties in sustaining operations. To address this, the firm expressed intentions to potentially raise additional capital by issuing its registered securities in the public markets to fund its long-term vision.
Bakkt has reported net losses for eight consecutive quarters since its public listing in October 2021. Financial reports indicate losses of $44.9 million, $50.5 million, and $51.7 million throughout the first three quarters of 2023, despite a rebound in the crypto market from a challenging 2022. Net losses in 2023 narrowed compared to devastating losses recorded in the third and fourth quarters of 2022.
Bakkt operates a digital asset trading platform catering to institutions and has established strategic partnerships with major entities like Starbucks and Amazon Web Services to facilitate digital asset transactions and services.
Founded in 2018 by Intercontinental Exchange, a US-based firm that owns the New York Stock Exchange, Bakkt has undergone significant market fluctuations since its inception.
Before the recent announcement, Bakkt’s (BKKT) share price surged 7.8% to $1.03. However, it remains down over 51% year-to-date in 2024. Despite reaching a high of $42 on Oct. 29, 2021, the share price sharply declined in subsequent months and has continued on a downward trajectory.
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