Cash-strapped crypto firm Bakkt has announced it has received regulatory approval to raise up to $150 million through the sale of its securities, just a week after expressing concerns about its financial position.
On 14th February, the company stated it had obtained approval for a “shelf registration,” also referred to as a shelf offering – a procedure where a company registers a new issuance of securities with the United States Securities and Exchange Commission (SEC) that can be gradually sold over a period without requiring separate approval each time.
Bakkt stated that this approval would enable it to raise an aggregate of $150 million in capital through one or more offerings over a span of three years.
“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,” the company said.
Bakkt, previously hailed as Bitcoin’s “saviour” during the 2018 bear market, disclosed on 7th February that it was facing a cash shortage and thus “might not be able to continue.”
At that time, Bakkt mentioned its intention to potentially raise additional capital by issuing its registered securities in the public markets to “fund our long-term vision.”
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Since being publicly listed in October 2021, the firm has reported eight consecutive quarters of net losses.
According to company financials, despite the crypto market’s recovery from a challenging 2022, the firm incurred losses of $44.9 million, $50.5 million, and $51.7 million in the first three quarters of 2023.
Net losses decreased in 2023 after the firm reported significant losses of $1.59 billion and $323.9 million in the third and fourth quarters of 2022, respectively.
The firm has recorded a total of $2.26 billion in net losses since the fourth quarter of 2021.
Bakkt operates a digital asset trading platform for institutions and has established strategic partnerships with companies such as Starbucks and Amazon Web Services to facilitate digital asset transactions and services.
Founded in 2018 by Intercontinental Exchange, the U.S.-based firm that owns the New York Stock Exchange, Bakkt saw its share price rise by 7.8% to $1.03 before the news.
However, it remains more than 51% down in 2024.
Although its share price reached over $42 on 29th October 2021, it sharply declined to $3.61 the following January and has since been steadily declining.
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