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H.S. junior Avg
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New words:
accrual, advisor, Andrew, announced, Aspire, attained, avoid, BKKT, campaign, catalog, Chief, clause, conceived, corrected, correspondingly, cure, cured, curtail, cut, cutting, deficiency, detect, detected, divisible, emphasized, enact, Europe, evenly, exacerbate, fairly, finite, forfeited, fundraising, hearing, inclusive, interchangeably, iv, joint, Kraken, led, loan, Main, merge, merged, migration, misstatement, movement, notwithstanding, parity, placement, plaintiff, pledge, postponed, preserve, President, prevent, prevented, proportional, Proportionate, proportionately, ratio, regain, remediate, Remediation, resignation, resigned, retroactive, retroactively, rollout, seamlessly, specialist, split, stop, sublease, supplier, supply, surety, surrender, surviving, suspend, symbol, tendered, unchanged, unneeded, unsettled, viable, withholding
Removed:
accept, accessed, accommodate, aim, app, CFTC, commission, commodity, construct, cryptocurrency, default, delivery, document, ether, favorable, FCM, fit, higher, holiday, instance, intuitive, longer, merchant, national, NFA, partner, profitability, progressively, realizable, replenish, research, resource, retired, scalability, scale, seasonality, seek, served, simple, simplification, source, span, strong, successful, successfully, team, withdrew
Financial report summary
?Risks
- Our business model is newly developed and may encounter additional risks and challenges as it grows.
- Our platform is in its early stages of release, will be further developed, and is largely untested. Any failure by us to successfully execute on the development of our platform would have an adverse effect on our business, results of operations and financial condition.
- We have a limited operating history and a history of operating losses, which make it difficult to forecast our future results of operations. Further, we expect to reduce our operating expenses in the foreseeable future, and we may not achieve or sustain profitability to absorb our targeted expense base.
- Substantially all of our net revenues each quarter come from transactions that occur during that quarter, which has resulted in, and may continue to result in, significant fluctuations in our operating results.
- If we are unable to attract, retain or grow our relationships with our existing clients, our business, financial condition, results of operations and future prospects would be materially and adversely affected. Moreover, sales efforts to large clients involve risks that may not be present or that are present to a lesser extent with respect to sales to smaller organizations.
- Some of our current and prospective clients require the approval of their own regulators in order to deploy our solutions, especially our crypto solutions, and if they are unable to obtain those approvals on a timely basis, or at all, our results of operations and future prospects would be materially and adversely affected.
- We face substantial and increasingly intense competition worldwide in the industries in which we operate.
- If our platform does not meet our service level commitments, our revenue and reputation may be negatively impacted.
- We face operational, legal and other risks related to our reliance on third party vendors, over which we have no control.
- If we cannot keep pace with rapid technological developments to provide new and innovative products and services, the use of our products and services may not develop, and, consequently, our business would suffer.
- A large percentage of our revenue is concentrated with a small number of clients; the loss of any such client would materially and adversely affect our business, financial condition, results of operations and future prospects. Moreover, because of our B2B2C go-to-market model, the loss of any client – regardless of the reason – increases the risk that the customers that originally emanated from that client will transition to another provider or stop doing business with us, which would harm our business.
- Acquisitions, strategic investments, partnerships, or alliances may be difficult to identify. We may not realize the anticipated benefits of past or future investments, strategic transactions or acquisitions and integration of these acquisitions may pose integration challenges, divert the attention of management, disrupt our business, dilute stockholder value or otherwise adversely affect our business, financial condition and results of operations.
- We may require additional capital to support the growth of our business, and such capital might not be available on acceptable terms, if at all.
- The loss of the services of our senior management could adversely affect our business.
- Our business will suffer if we fail to attract and retain highly skilled employees.
- Our revenue is impacted, to a significant extent, by the general economy.
- If we experience rapid growth, it may place significant demands on our operational, administrative and financial resources and it may be difficult to sustain such growth.
- Future material impairments in the value of our long-lived assets, including goodwill, have in the past negatively affected, and could in the future negatively affect, our operating results.
- We may not be successful in achieving expected operating efficiencies and sustaining or improving operating expense reductions, and might experience business disruptions and adverse tax consequences associated with restructuring, realignment and cost reduction activities.
- Stakeholders’ expectations of our performance relating to environmental, social and governance factors may impose additional costs and expose us to new risks.
- Disruptions in the crypto market subject us to additional risks.
- Due to unfamiliarity and some negative publicity associated with crypto platforms, existing and potential customers may lose confidence in crypto platforms, which could have an adverse impact on our business.
- There may be a general perception among regulators and others that crypto is used to facilitate illegal activity such as fraud, money laundering, tax evasion and scams. Because we provide the ability to transact in crypto, any negative perceptions associated with crypto could harm our reputation.
- Crypto custodial solutions and related technology, including our systems and custodial arrangements, are subject to risks related to a loss of funds due to theft of crypto, employee or vendor sabotage, security and cybersecurity risks, system failures and other operational issues, the loss, destruction or other compromise of our private keys and a lack of sufficient insurance.
- Our failure to safeguard and manage our customers’ crypto could adversely impact our business, operating results, and financial condition.
- Crypto does not have extensive historical precedent and distributed ledger technology continues to rapidly evolve. The unique characteristics of crypto presents risks and challenges to us that could have a material adverse effect on our business.
- We may encounter technical issues in connection with the integration of supported crypto assets and changes and upgrades to their underlying networks, which could adversely affect our business.
- The blockchains on which ownership of crypto is recorded are dependent on the efforts of third parties acting in their capacity as the blockchain transaction miners or validators, and if these third parties fail to successfully perform these functions, the operation of the blockchains that record ownership of crypto could be compromised.
- Excessive redemptions or withdrawals, or a suspension of redemptions or withdrawals, of crypto assets could adversely impact our business.
- Our business is subject to extensive government regulation, oversight, licensure and approvals. Our failure to comply with extensive, complex, uncertain, overlapping and frequently changing rules, regulations and legal interpretations could materially harm our business.
- Regulatory regimes governing blockchain technologies and crypto are evolving and uncertain, and new legislation, regulations, guidance and enforcement actions have in the past required, and may in the future require, us to alter our business practices.
- A crypto’s status as a “security” in any relevant jurisdiction is subject to a high degree of uncertainty, and if crypto assets on our platform are later determined to be securities, we may be subject to regulatory scrutiny, investigations, fines, and other penalties, which may adversely affect our business, operating results, and financial condition.
- We are subject to significant litigation risk and risk of regulatory liability and penalties. Any current or future litigation or regulatory proceedings against us could be costly and time-consuming to defend.
- Bakkt Holdings, Inc. is a holding company, its only material asset is its interest in Opco, and it is accordingly dependent upon distributions made by its subsidiaries to pay taxes and expenses, make payments under the Tax Receivable Agreement and pay dividends.
- Pursuant to the Tax Receivable Agreement, we are required to pay 85% of the net income tax savings we realize as a result of increases in the tax basis in Opco’s assets as a result of exchanges of Opco Common Units for Class A Common Stock (or cash) pursuant to the Exchange Agreement, and those payments may be substantial.
- In certain cases, payments under the Tax Receivable Agreement may exceed the actual tax benefits we realize or such payments may be accelerated.
- We may have to constrain our business activities to avoid being deemed an investment company under the Investment Company Act.
- We are subject to anti-money laundering and counter terrorist financing laws and regulations, globally, including the USA PATRIOT Act, and failure to comply with such laws and regulations may subject us to liability. There can be no assurance that our employees or agents will not violate such laws and regulations.
- Failure to comply with anti-bribery and anti-corruption laws and similar laws could subject us to penalties and other adverse consequences.
- We are subject to federal and state consumer protection laws and regulations in the jurisdictions in which we operate, which may result in liability or expense, including potential private rights of action, if we do not comply, or it is alleged that we do not to comply, with such laws.
- Complying with evolving privacy and other data related laws and requirements may be expensive and force us to make changes to our business, and failure to comply with such laws and requirements could result in substantial harm to our business.
- We may be unable to sufficiently protect our proprietary rights and may encounter disputes from time to time relating to our use of the intellectual property of third parties.
- Regulatory requirements upon a change of control of our regulated subsidiaries may require an investor to obtain prior approval or submit information to regulators upon acquiring a direct or indirect controlling interest in us.
- Our tax information reporting obligations with respect to transactions involving loyalty points or other incentives are subject to change.
- Changes in tax laws or their judicial or administrative interpretations, or becoming subject to additional taxes that cannot be passed through to our loyalty customers, could negatively affect our business, financial condition and results of operations.
- Our ability to use net operating losses to offset future taxable income may be subject to certain limitations under U.S. or foreign tax law.
- We may be subject to various governmental export control and trade sanctions laws and regulations that could impair our ability to compete in international markets or subject us to liability if we violate these controls.
- Actual or perceived cyberattacks, security incidents or breaches could result in serious harm to our reputation, business and financial condition.
- Systems failures and resulting interruptions in the availability of our websites, applications, products or services could harm our business.
- If we use open source software inconsistent with our policies and procedures or the license terms applicable to such software, we could be subject to legal expenses, damages, or costly remediation or disruption to our business.
- Real or perceived inaccuracies in our key operating metrics may harm our reputation and negatively affect our business.
- If we are unable to develop and maintain effective internal controls over financial reporting, we may not be able to produce timely and accurate financial statements, which could have a material adverse effect on our business.
- If our estimates or judgments relating to our critical accounting policies prove to be incorrect, our results of operations could be adversely affected.
- Our management has limited experience in operating a public company.
- If members or former members of our management engage in business activities of the types conducted by us, we may be materially adversely affected.
- We have incurred and continue to incur increased costs as a public company, and our management is required to devote substantial time to compliance matters.
- We are an “emerging growth company” and a “smaller reporting company” and any decision to comply with certain reduced reporting and disclosure requirements applicable to emerging growth companies and smaller reporting companies could make our securities less attractive to investors.
- Future changes in financial accounting standards may significantly change our reported results of operations.
- Material weaknesses or control deficiencies could occur that could adversely affect our ability to report our results of operations and financial condition accurately and in a timely manner.
- Our warrants are exercisable for Class A Common Stock. Any such exercise increases the number of shares outstanding and eligible for future resale in the public market and results in dilution to our stockholders.
- The valuation of our warrants could increase the volatility in our net income (loss) in our consolidated statements of operations.
- We may issue additional shares of common stock or other equity securities , which would dilute stockholders’ ownership interest in us and may reduce the market price of our securities.
- We may not receive any additional funds upon the exercise of the Pre-Funded Warrants or Warrants.
- If securities and industry analysts do not publish research or publish inaccurate or unfavorable research about our business, the prices and trading volumes of our securities could decline.
- Delaware law and our Certificate of Incorporation and By-Laws contain certain provisions, including anti-takeover provisions that limit the ability of stockholders to take certain actions and could delay or discourage takeover attempts that stockholders may consider favorable.
- We cannot predict the impact our dual class structure may have on the stock price of our Class A Common Stock.
- Our Certificate of Incorporation designates a state or federal court located within the State of Delaware as the exclusive forum for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to choose the judicial forum for disputes with us or our directors, officers, or employees.
- Our Certificate of Incorporation does not limit the ability of ICE to compete with us.
- ICE may exert significant influence over us and its interests may conflict with yours or those of other stockholders in the future.
- The price of our securities may be volatile.
- Because there are no current plans to pay cash dividends on the Class A Common Stock for the foreseeable future, you may not receive any return on investment unless you sell your Class A Common Stock at a price greater than what you paid for it.
- Our securities may be delisted from the New York Stock Exchange if we cannot regain compliance with the NYSE’s continued listing requirements.
Management Discussion
- •Revenue increased $841.4 million, primarily driven by a significant increase in crypto services revenue due to our acquisition of Bakkt Crypto Solutions; and
- •Operating expenses increased $827.8 million primarily driven by increased trading costs in connection with our acquisition of Bakkt Crypto Solutions.
- Revenues consist of crypto and loyalty revenue. We earn revenue when consumers use our services to buy, sell, and store crypto and redeem loyalty points. We generate revenue across our platform in the following key areas: