Cover
Cover - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Mar. 25, 2022 | Jun. 30, 2021 | |
Document Information [Line Items] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2021 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Transition Report | false | ||
Entity File Number | 001-39544 | ||
Entity Registrant Name | Bakkt Holdings, Inc. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 98-1550750 | ||
Entity Address, Address Line One | 10000 Avalon Boulevard | ||
Entity Address, Address Line Two | Suite 1000 | ||
Entity Address, City or Town | Alpharetta | ||
Entity Address, State or Province | GA | ||
Entity Address, Postal Zip Code | 30009 | ||
City Area Code | 678 | ||
Local Phone Number | 534-5849 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | false | ||
ICFR Auditor Attestation Flag | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 207.6 | ||
Documents Incorporated by Reference | Portions of the registrant’s Definitive Proxy Statement relating to the 2022 Annual Meeting of Stockholders are incorporated by reference into Part III of this Annual Report on Form 10-K where indicated. Such Definitive Proxy Statement will be filed with the Securities and Exchange Commission within 120 days after the end of the registrant’s fiscal year ended December 31, 2021. | ||
Amendment Flag | false | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2021 | ||
Entity Central Index Key | 0001820302 | ||
Common Class A | |||
Document Information [Line Items] | |||
Title of 12(b) Security | Class A Common Stock, par value $0.0001 per share | ||
Trading Symbol | BKKT | ||
Security Exchange Name | NYSE | ||
Entity Common Stock, Shares Outstanding (in shares) | 57,164,488 | ||
Warrants | |||
Document Information [Line Items] | |||
Title of 12(b) Security | Warrants to purchase Class A Common Stock | ||
Trading Symbol | BKKT WS | ||
Security Exchange Name | NYSE | ||
Entity Common Stock, Shares Outstanding (in shares) | 7,140,929 | ||
Common Class V | |||
Document Information [Line Items] | |||
Entity Common Stock, Shares Outstanding (in shares) | 206,003,270 |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2021 | |
Audit Information [Abstract] | |
Auditor Firm ID | 42 |
Auditor Name | Ernst & Young LLP |
Auditor Location | Atlanta, GA |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 | |
Current Assets: | |||
Cash and cash equivalents | $ 391,364 | $ 75,361 | |
Restricted cash | 16,500 | 16,500 | |
Customer funds | 551 | 81 | |
Accounts receivable, net | 18,142 | 10,408 | |
Investment in shares of affiliate stock, current | 0 | 1,823 | |
Deposits with clearinghouse, current (affiliate in Predecessor period) | [1] | 0 | 20,200 |
Prepaid insurance | 32,206 | 734 | |
Other current assets | 4,784 | 6,956 | |
Total current assets | 463,547 | 132,063 | |
Property, equipment and software, net | 6,121 | 19,957 | |
Goodwill | 1,527,118 | 233,429 | |
Net Carrying Amount | 388,469 | 62,199 | |
Deposits with clearinghouse, noncurrent (affiliate in Predecessor period) | [1] | 15,151 | 15,150 |
Other assets | 13,879 | 5,578 | |
Total assets | 2,414,285 | 468,376 | |
Current liabilities: | |||
Accounts payable and accrued liabilities | 64,090 | 42,915 | |
Customer funds payable | 551 | 81 | |
Deferred revenue, current | 4,629 | 4,282 | |
Due to related party (affiliate in Predecessor period) | [1] | 617 | 1,856 |
Other current liabilities | 3,717 | 1,943 | |
Total current liabilities | 73,604 | 51,077 | |
Deferred revenue, noncurrent | 4,819 | 4,103 | |
Warrant liability | 17,424 | 0 | |
Deferred tax liabilities, net | 11,593 | 95 | |
Other noncurrent liabilities | 12,674 | 3,319 | |
Total liabilities | 120,114 | 58,594 | |
Commitments and Contingencies (Note 14) | |||
Mezzanine equity: | |||
Incentive units (156,000,000 authorized, 103,318,325 unvested units and 85,875,000 unvested units issued and outstanding as of December 31, 2020) | 21,452 | ||
Stockholders’ equity: | |||
Class B warrant (Note 10) | 5,426 | ||
Additional paid-in capital | 566,766 | ||
Accumulated other comprehensive income (loss) | (55) | 191 | |
Accumulated deficit | (98,342) | (112,504) | |
Members' Equity | 388,330 | ||
Total stockholders’ equity and members’ equity. | 468,396 | ||
Noncontrolling interest | 1,825,775 | ||
Total equity | 2,294,171 | ||
Total liabilities, stockholders’ equity and members’ equity | 2,414,285 | 468,376 | |
Class A Voting Units | |||
Stockholders’ equity: | |||
Voting units, value | 2,613 | ||
Class B Voting Units | |||
Stockholders’ equity: | |||
Voting units, value | 182,500 | ||
Class C Voting Units | |||
Stockholders’ equity: | |||
Voting units, value | $ 310,104 | ||
Class A Common Stock | |||
Stockholders’ equity: | |||
Common stock, value | 6 | ||
Class V Common Stock | |||
Stockholders’ equity: | |||
Common stock, value | $ 21 | ||
[1] | As a result of the Business Combination (Note 4), ICE and its affiliates are no longer our affiliates. Refer to Note 8 for our related party disclosures. |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) | Dec. 31, 2020shares |
Incentive units, shares authorized | 156,000,000 |
Incentive units, shares issued | 103,318,325 |
Incentive units, shares outstanding | 85,875,000 |
Class A Voting Units | |
Voting units, shares authorized | 413,000,000 |
Voting units, shares issued | 400,000,000 |
Voting units, shares outstanding | 400,000,000 |
Class B Voting Units | |
Voting units, shares authorized | 212,500,000 |
Voting units, shares issued | 182,500,000 |
Voting units, shares outstanding | 182,500,000 |
Class C Voting Units | |
Voting units, shares authorized | 284,000,000 |
Voting units, shares issued | 270,270,270 |
Voting units, shares outstanding | 270,270,270 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Dec. 31, 2021 | Oct. 14, 2021 | Dec. 31, 2020 | |||
Revenues: | |||||
Net revenues (includes related party net revenues of $71 and affiliate net revenues of $136 and $(2,007), respectively) (1) | $ 11,481 | [1] | $ 27,956 | $ 28,495 | |
Operating expenses: | |||||
Compensation and benefits | 62,180 | 91,275 | 43,141 | ||
Professional services | 3,034 | 5,175 | 5,751 | ||
Technology and communication | 3,056 | 10,384 | 9,741 | ||
Selling, general and administrative | 8,521 | 20,309 | 8,219 | ||
Acquisition-related expenses | 1,603 | 24,793 | 13,372 | ||
Depreciation and amortization | 5,422 | 9,620 | 8,159 | ||
Related party expenses (affiliate in Predecessor periods) | [1] | 617 | 1,484 | 3,082 | |
Impairment of long-lived assets | 1,196 | 3,598 | 15,292 | ||
Other operating expenses | 398 | 1,379 | 857 | ||
Total operating expenses | 86,027 | 168,017 | 107,614 | ||
Operating loss | (74,546) | (140,061) | (79,119) | ||
Interest income (expense), net | 11 | (247) | 123 | ||
Loss from change in fair value of warrant liability | (79,373) | 0 | 0 | ||
Other income (expense), net | 832 | 487 | (218) | ||
Loss before income taxes | (153,076) | (139,821) | (79,214) | ||
Income tax (expense) benefit | (11,751) | 602 | (391) | ||
Net loss | (164,827) | (139,219) | (79,605) | ||
Less: Net loss attributable to noncontrolling interest | (120,832) | ||||
Net loss attributable to Bakkt Holdings, Inc. | $ (43,995) | $ (139,219) | $ (79,605) | ||
Net loss per share attributable to Bakkt Holdings, Inc. Class A common stockholders per share: | |||||
Basic (in dollars per share) | [2] | $ (0.81) | |||
Diluted (in dollars per share) | [2] | $ (0.81) | |||
[1] | As a result of the Business Combination (Note 4), ICE and its affiliates are no longer our affiliates. Refer to Note 8 for our related party disclosures. | ||||
[2] | Basic and diluted loss per share is not presented for the Predecessor periods due to lack of comparability with the Successor period. |
Consolidated Statements of Op_2
Consolidated Statements of Operations (Parentheticals) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended |
Dec. 31, 2021 | Oct. 14, 2021 | Dec. 31, 2020 | |
Income Statement [Abstract] | |||
Related party net revenues | $ 71 | $ 136 | $ (2,007) |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended |
Dec. 31, 2021 | Oct. 14, 2021 | Dec. 31, 2020 | |
Statement of Comprehensive Income [Abstract] | |||
Net loss | $ (164,827) | $ (139,219) | $ (79,605) |
Currency translation adjustment, net of tax | (259) | 248 | 191 |
Comprehensive loss | (165,086) | ||
Comprehensive loss attributable to noncontrolling interest | (121,036) | ||
Comprehensive loss attributable to Bakkt Holdings, Inc. | $ (44,050) | $ (138,971) | $ (79,414) |
Consolidated Statements of Chan
Consolidated Statements of Changes in Members’ Equity and Mezzanine Equity - USD ($) $ in Thousands | Total | Conversion Of Class A Ordinary Shares And Class B Ordinary Shares Into Class A Common Stock | Conversion Of Opco Class A, Class B, And Class C Voting Units Into Class V Common Stock | Issuance Of Class V Common Stock For Opco Incentive Units | Class A Voting Units | Class C Voting Units | Common Class A | Incentive Units | Member UnitsClass A Voting Units | Member UnitsClass B Voting Units | Member UnitsClass C Voting Units | Private and public warrantsClass B Warrant | Private and public warrantsClass C Warrant | Accumulated Deficit | Accumulated Other Comprehensive Income | Common StockCommon Class A | Common StockCommon Class AConversion Of Class A Ordinary Shares And Class B Ordinary Shares Into Class A Common Stock | Common StockClass V Common Stock | Common StockClass V Common StockConversion Of Opco Class A, Class B, And Class C Voting Units Into Class V Common Stock | Common StockClass V Common StockIssuance Of Class V Common Stock For Opco Incentive Units | Common StockClass B Ordinary Shares | Common StockClass B Ordinary SharesConversion Of Class A Ordinary Shares And Class B Ordinary Shares Into Class A Common Stock | Additional Paid-in Capital | Additional Paid-in CapitalConversion Of Class A Ordinary Shares And Class B Ordinary Shares Into Class A Common Stock | Total Stockholders’ Equity | Total Stockholders’ EquityConversion Of Class A Ordinary Shares And Class B Ordinary Shares Into Class A Common Stock | Total Stockholders’ EquityConversion Of Opco Class A, Class B, And Class C Voting Units Into Class V Common Stock | Total Stockholders’ EquityIssuance Of Class V Common Stock For Opco Incentive Units | Noncontrolling Interest | Noncontrolling InterestConversion Of Opco Class A, Class B, And Class C Voting Units Into Class V Common Stock | Noncontrolling InterestIssuance Of Class V Common Stock For Opco Incentive Units |
Beginning balance (in shares) at Dec. 31, 2019 | 400,000,000 | 182,500,000 | 0 | 0 | 0 | ||||||||||||||||||||||||||
Ending balance (in shares) at Dec. 31, 2020 | 400,000,000 | 182,500,000 | 270,270,270 | 0 | 0 | ||||||||||||||||||||||||||
Beginning balance at Dec. 31, 2019 | $ 151,517 | $ 1,916 | $ 182,500 | $ 0 | $ 0 | $ 0 | $ (32,899) | $ 0 | |||||||||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||||||||||||||||
Issuance of Class A voting units and Issuance of common stock to PIPE investors, net of issuance costs (in shares) | 0 | 270,270,270 | |||||||||||||||||||||||||||||
Issuance of Class A voting units and Issuance of common stock to PIPE investors, net of issuance costs | $ 697 | $ 300,000 | $ 697 | $ 300,000 | |||||||||||||||||||||||||||
Pushdown accounting resulting from Bridge2 Solutions acquisition (Note 4) | 10,104 | 10,104 | |||||||||||||||||||||||||||||
Issuance of Class B warrant (Note 10) | 5,426 | ||||||||||||||||||||||||||||||
Currency translation adjustment, net of tax | 191 | 191 | |||||||||||||||||||||||||||||
Net loss | (79,605) | ||||||||||||||||||||||||||||||
Ending balance at Dec. 31, 2020 | 388,330 | $ 2,613 | $ 182,500 | $ 310,104 | $ 5,426 | $ 0 | (112,504) | 191 | |||||||||||||||||||||||
Incentive units beginning balance (in shares) at Dec. 31, 2019 | 0 | ||||||||||||||||||||||||||||||
Mezzanine equity beginning balance at Dec. 31, 2019 | 10,515 | $ 10,515 | |||||||||||||||||||||||||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||||||||||||||||||||||||||
Unit-based incentive compensation (Note 11) | $ 10,937 | $ 10,937 | |||||||||||||||||||||||||||||
Incentive units ending balance (in shares) at Dec. 31, 2020 | 85,875,000 | 0 | |||||||||||||||||||||||||||||
Mezzanine equity ending balance at Dec. 31, 2020 | $ 21,452 | $ 21,452 | |||||||||||||||||||||||||||||
Ending balance (in shares) at Oct. 14, 2021 | 400,000,000 | 192,453,454 | 270,270,270 | 0 | 0 | ||||||||||||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||||||||||||||||
Issuance of Class A voting units and Issuance of common stock to PIPE investors, net of issuance costs (in shares) | 0 | ||||||||||||||||||||||||||||||
Issuance of Class A voting units and Issuance of common stock to PIPE investors, net of issuance costs | $ 185 | $ 185 | |||||||||||||||||||||||||||||
Exercise of warrants (Notes 9) (in shares) | 9,953,454 | ||||||||||||||||||||||||||||||
Exercise of warrants (Note 9) | $ 5,426 | $ (5,426) | |||||||||||||||||||||||||||||
Vesting of Class C warrant (Note 10) | 969 | $ 969 | |||||||||||||||||||||||||||||
Currency translation adjustment, net of tax | 248 | 248 | |||||||||||||||||||||||||||||
Net loss | (139,219) | ||||||||||||||||||||||||||||||
Ending balance at Oct. 14, 2021 | 250,513 | $ 2,798 | $ 187,926 | $ 310,104 | $ 0 | $ 969 | (251,723) | 439 | |||||||||||||||||||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||||||||||||||||||||||||||
Unit-based incentive compensation (Note 11) | 26,538 | $ 26,538 | |||||||||||||||||||||||||||||
Incentive units ending balance (in shares) at Oct. 14, 2021 | 0 | ||||||||||||||||||||||||||||||
Mezzanine equity ending balance at Oct. 14, 2021 | 47,990 | $ 47,990 | |||||||||||||||||||||||||||||
Ending balance (in shares) at Oct. 15, 2021 | 5,184,300 | ||||||||||||||||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||||||||||||||||
Conversion of stock (in shares) | 5,184,300 | ||||||||||||||||||||||||||||||
Ending balance at Oct. 15, 2021 | $ (54,346) | (54,347) | 0 | $ 1 | $ 0 | $ (54,346) | $ 0 | ||||||||||||||||||||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||||||||||||||||||||||||||
Redemption of Class A ordinary shares (Note 4) (in shares) | (8,452,042) | ||||||||||||||||||||||||||||||
Conversion of Class A ordinary shares and Class B ordinary shares into Class A common stock (Note 4) (in shares) | (12,285,160) | ||||||||||||||||||||||||||||||
Incentive units ending balance (in shares) at Oct. 15, 2021 | 20,737,202 | ||||||||||||||||||||||||||||||
Mezzanine equity ending balance at Oct. 15, 2021 | $ 207,372 | ||||||||||||||||||||||||||||||
Beginning balance (in shares) at Oct. 14, 2021 | 400,000,000 | 192,453,454 | 270,270,270 | 0 | 0 | ||||||||||||||||||||||||||
Ending balance (in shares) at Dec. 31, 2021 | 57,164,388 | 206,271,792 | 0 | ||||||||||||||||||||||||||||
Beginning balance at Oct. 14, 2021 | 250,513 | $ 2,798 | $ 187,926 | $ 310,104 | $ 0 | $ 969 | (251,723) | 439 | |||||||||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||||||||||||||||
Issuance of Class A voting units and Issuance of common stock to PIPE investors, net of issuance costs (in shares) | 32,500,000 | ||||||||||||||||||||||||||||||
Issuance of Class A voting units and Issuance of common stock to PIPE investors, net of issuance costs | 312,000 | $ 3 | 311,997 | ||||||||||||||||||||||||||||
Exercise of warrants (Notes 9) (in shares) | 7,194,928 | ||||||||||||||||||||||||||||||
Exercise of warrants (Note 9) | 130,908 | $ 1 | 130,907 | 130,908 | |||||||||||||||||||||||||||
Conversion of stock (in shares) | 7,194,928 | 17,469,460 | 189,933,286 | 17,473,362 | (5,184,300) | ||||||||||||||||||||||||||
Conversion of stock | $ 122,841 | $ 1,796,769 | $ 107,879 | $ 2 | $ 19 | $ 2 | $ (1) | $ 122,840 | $ 122,841 | $ 19 | $ 2 | $ 1,796,750 | $ 107,877 | ||||||||||||||||||
Share-based compensation (Note 11) | 1,022 | $ 1,022 | |||||||||||||||||||||||||||||
Unit-based compensation (Note 11) | 46,786 | 46,786 | |||||||||||||||||||||||||||||
Forfeiture and cancellation of common units (Note 11) (in shares) | (1,134,856) | ||||||||||||||||||||||||||||||
Forfeiture and cancellation of common units (Note 11) | (4,602) | $ 0 | (4,602) | ||||||||||||||||||||||||||||
Currency translation adjustment, net of tax | (259) | (55) | (55) | (204) | |||||||||||||||||||||||||||
Net loss | (164,827) | (43,995) | (43,995) | (120,832) | |||||||||||||||||||||||||||
Ending balance at Dec. 31, 2021 | 2,294,171 | (98,342) | (55) | $ 6 | $ 21 | $ 0 | 566,766 | 468,396 | 1,825,775 | ||||||||||||||||||||||
Incentive units beginning balance (in shares) at Oct. 14, 2021 | 0 | ||||||||||||||||||||||||||||||
Mezzanine equity beginning balance at Oct. 14, 2021 | 47,990 | $ 47,990 | |||||||||||||||||||||||||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||||||||||||||||||||||||||
Redemption of Class A ordinary shares (Note 4) | $ (84,530) | ||||||||||||||||||||||||||||||
Redemption of Class A ordinary shares (Note 4) (in shares) | (8,452,042) | ||||||||||||||||||||||||||||||
Conversion of Class A ordinary shares and Class B ordinary shares into Class A common stock (Note 4) | $ (122,842) | ||||||||||||||||||||||||||||||
Conversion of Class A ordinary shares and Class B ordinary shares into Class A common stock (Note 4) (in shares) | (12,285,160) | ||||||||||||||||||||||||||||||
Beginning balance (in shares) at Oct. 15, 2021 | 5,184,300 | ||||||||||||||||||||||||||||||
Ending balance (in shares) at Dec. 31, 2021 | 57,164,388 | 206,271,792 | 0 | ||||||||||||||||||||||||||||
Beginning balance at Oct. 15, 2021 | $ (54,346) | (54,347) | 0 | $ 1 | 0 | (54,346) | 0 | ||||||||||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||||||||||||||||
Net loss | (164,827) | ||||||||||||||||||||||||||||||
Ending balance at Dec. 31, 2021 | $ 2,294,171 | $ (98,342) | $ (55) | $ 6 | $ 21 | $ 0 | $ 566,766 | $ 468,396 | $ 1,825,775 | ||||||||||||||||||||||
Incentive units beginning balance (in shares) at Oct. 15, 2021 | 20,737,202 | ||||||||||||||||||||||||||||||
Mezzanine equity beginning balance at Oct. 15, 2021 | $ 207,372 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |
Dec. 31, 2021 | Oct. 14, 2021 | Dec. 31, 2020 | ||
Cash flows from operating activities: | ||||
Net loss | $ (164,827) | $ (139,219) | $ (79,605) | |
Adjustments to reconcile net loss to net cash used in operating activities: | ||||
Depreciation and amortization expense | 5,422 | 9,512 | 7,973 | |
Non-cash lease expense | 249 | 946 | 1,388 | |
Share-based compensation expense (Note 11) | 1,022 | 0 | 0 | |
Unit-based compensation expense (Note 11) | 44,892 | 33,877 | 11,649 | |
Recognition of affiliate capital contribution (Note 8) | 0 | 185 | 697 | |
Amortization of customer consideration asset (Note 10) | 0 | 1,743 | 388 | |
Deferred income taxes | 11,733 | 0 | (354) | |
Impairment of long-lived assets | 1,196 | 3,598 | 15,292 | |
Acquisition-related expenses | 0 | 0 | 1,378 | |
Unrealized gain on investment in shares of affiliate stock (Note 8) | 0 | 0 | (628) | |
Loss on sale of shares of affiliate stock | 0 | 63 | 0 | |
Loss from change in fair value of warrant liability | 79,373 | 0 | 0 | |
Gain on extinguishment of software license liability | (1,301) | 0 | 0 | |
Modification and vesting of Class C warrant (Note 10) | 0 | 969 | 0 | |
Cancellation of common units | (192) | 0 | 0 | |
Other | (129) | 655 | 117 | |
Changes in operating assets and liabilities: | ||||
Accounts receivable | (1,133) | (6,601) | (264) | |
Other receivable | 0 | 0 | 115 | |
Prepaid insurance | (31,121) | (351) | (580) | |
Deposits with clearinghouse affiliate | 0 | 20,199 | 11,002 | |
Accounts payable and accrued liabilities | (19,728) | 23,292 | 16,076 | |
Due to related party (affiliate in Predecessor periods) (1) | [1] | (1,696) | 457 | (7,927) |
Deferred revenues | 24 | 1,038 | (4,331) | |
Operating lease liabilities. | (12) | (822) | (1,192) | |
Customer funds payable | 124 | 345 | 81 | |
Other assets and liabilities (Note 11) | (7,283) | (801) | (2,215) | |
Net cash used in operating activities | (83,387) | (50,915) | (30,940) | |
Cash flows from investing activities: | ||||
Capitalized internal-use software development costs and other capital expenditures | (3,578) | (12,109) | (20,569) | |
Proceeds from maturities of short-term investments | 0 | 0 | 1,988 | |
Proceeds from disposal of assets | 0 | 8 | 0 | |
Proceeds from sale of shares of affiliate stock | 0 | 1,759 | 0 | |
Cash acquired through Business Combination | 30,837 | 0 | 10,652 | |
Net cash provided by (used in) investing activities | 27,259 | (10,342) | (7,929) | |
Cash flows from financing activities: | ||||
Payment of finance lease liability | (404) | (97) | (313) | |
Repurchase of redeemed Class A ordinary shares | (84,530) | 0 | 0 | |
Payment of deferred underwriting fee | (7,258) | 0 | 0 | |
Proceeds from the exercise of warrants (Note 9) | 37,117 | 0 | 0 | |
Proceeds from PIPE, net of issuance costs (Note 4) | 312,000 | 0 | 0 | |
Proceeds from issuance of Class C voting units (Note 10) | 0 | 0 | 37,800 | |
Net cash provided by (used in) financing activities | 256,925 | (97) | 37,487 | |
Effect of exchange rate changes | (307) | 248 | 191 | |
Net increase (decrease) in cash, cash equivalents, restricted cash and customer funds | 200,490 | (61,106) | (1,191) | |
Cash, cash equivalents, restricted cash and customer funds at the beginning of the period | 207,925 | 91,943 | 93,134 | |
Cash, cash equivalents, restricted cash and customer funds at the end of the period | 408,415 | 30,837 | 91,943 | |
Supplemental disclosure of cash flow information: | ||||
Cash paid for income taxes | 0 | 0 | 0 | |
Non-cash operating lease right-of-use asset acquired | 10,347 | 0 | 2,991 | |
Supplemental disclosure of non-cash investing and financing activity: | ||||
Issuance of Class A voting units in exchange of capital contribution (Note 10) | 0 | 26 | 697 | |
Capitalized internal-use software development costs and other capital expenditures included in accounts payable and accrued liabilities. | 1,929 | 1,809 | 1,564 | |
Issuance of Class B warrant | 0 | 0 | 5,426 | |
Cashless exercise of private placement warrants | 64,978 | 0 | 0 | |
Non-cash contribution of Bridge2 Holdings by affiliate (Note 8) | 0 | 0 | 260,811 | |
Reconciliation of cash, cash equivalents, restricted cash and customer funds to consolidated balance sheet: | ||||
Cash and cash equivalents | 391,364 | 13,911 | 75,361 | |
Restricted cash | 16,500 | 16,500 | 16,500 | |
Customer funds | 551 | 426 | 82 | |
Total cash, cash equivalents, restricted cash and customer funds | $ 408,415 | $ 30,837 | $ 91,943 | |
[1] | As a result of the Business Combination (Note 4), ICE and its affiliates are no longer our affiliates. Refer to Note 8 for our related party disclosures. |
Organization and Description of
Organization and Description of Business | 12 Months Ended |
Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Description of Business | Organization and Description of Business Organization VPC Impact Acquisition Holdings (“VIH”) was a blank check company incorporated as a Cayman Islands exempted company on July 31, 2020. VIH was incorporated for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses or entities. VIH’s sponsor was VPC Impact Acquisition Holdings Sponsor, LLC (the “Sponsor”). The registration statement for VIH’s Initial Public Offering was declared effective on September 22, 2020. On September 25, 2020, VIH consummated the Initial Public Offering of 20,000,000 units (the “Units”), generating gross proceeds of $200.0 million. Simultaneously with the closing of the Initial Public Offering, VIH consummated the sale of 6,000,000 warrants (the “private placement warrants”) at a price of $1.00 per Private Placement Warrant in a private placement to the Sponsor, generating gross proceeds of $6.0 million. On September 29, 2020, the underwriters notified VIH of their intention to partially exercise their over-allotment option on October 1, 2020. As such, on October 1, 2020, VIH consummated the sale of an additional 737,202 Units, at $10.00 per Unit, and the sale of an additional 147,440 private placement warrants, at $1.00 per Private Warrant, generating total gross proceeds of $7.5 million. Following the closing of the Initial Public Offering on September 25, 2020 and the partial exercise of the underwriter’s over-allotment on October 1, 2020, an amount of approximately $207.4 million ($10.00 per Unit) from the proceeds of the sale of the Units in the Initial Public Offering and the sale of the private placement warrants, net of transaction costs, was placed in a trust account (the “Trust Account”). On October 15, 2021 (the “Closing Date”), VIH and Bakkt Opco Holdings, LLC and its operating subsidiaries (f/k/a Bakkt Holdings, LLC, “Opco”) consummated a business combination (the “Business Combination”) contemplated by the definitive Agreement and Plan of Merger entered into on January 11, 2021 (as amended, the “Merger Agreement”). In connection with the finalization of the Business Combination, VIH changed its name to “Bakkt Holdings, Inc.” and changed its jurisdiction of incorporation from the Cayman Islands to the State of Delaware (the “Domestication”). Unless the context otherwise provides, “we,” “us,” “our,” “Bakkt”, the “Company” and like terms refer (i) prior to the Closing Date, to Opco and its subsidiaries and (ii) after the Closing Date, to Bakkt Holdings, Inc. and its subsidiaries, including Opco. Immediately following the Domestication, we became organized in an umbrella partnership corporation, or “up-C,” structure in which substantially all of our assets and business are held by Opco, and our only direct assets consist of common units in Opco (“Opco common units”), which are non-voting interests in Opco, and the managing member interest in Opco. In connection with the Business Combination, a portion of VIH shares were exchanged for cash for shareholders who elected to execute their redemption right. The remaining VIH shares were exchanged for newly issued shares of our Class A common stock. Additionally, all outstanding membership interests and rights to acquire membership interests in Opco were exchanged for Opco common units and an equal number of newly issued shares of our Class V common stock. The existing owners of Opco other than Bakkt are considered noncontrolling interests in the accompanying consolidated financial statements (the “financial statements”). Refer to Note 4 for further discussion on the Business Combination. Our Class A common stock and warrants are listed on the New York Stock Exchange under the ticker symbols “BKKT” and “BKKT WS,” respectively. Description of Business We offer a platform with three complementary aspects - a digital asset marketplace, a loyalty redemption service, and an alternative payment method. Digital Asset Marketplace . Our digital asset marketplace enables participants to seamlessly transact in a growing universe of digital assets and has applications for individual consumers, businesses and institutions. Through Bakkt Trust Company LLC (“Bakkt Trust”), we have an institutional-grade custodian for bitcoin and ether. Bakkt Trust is a New York limited-purpose trust company that is chartered by and subject to the supervision and oversight of the New York Department of Financial Services (“NYDFS”). In September 2019, Bakkt Trust, along with ICE Futures U.S., Inc. (“IFUS”) and ICE Clear US, Inc. (“ICUS”), both of which are wholly-owned subsidiaries of ICE, brought to market an institutional-grade, regulated infrastructure for trading, clearing, and custody services for bitcoin. Bakkt Trust acts as a qualified custodian for bitcoin, which enables Bakkt Trust to offer end-to-end regulated, physically-delivered bitcoin futures and options contracts to financial institutions and market makers. In addition, Bakkt Trust offers non-trading- related, standalone custody of bitcoin and ether to institutions and certain high net worth individuals in cryptoassets, subject to NYDFS regulatory oversight. Loyalty Redemption . Our loyalty redemption service, an institutional-grade loyalty platform born out of our acquisition of Bridge2 Solutions in February 2020 (Note 4), provides seamless and cost-effective options for consumers to use their loyalty points. Our loyalty redemption platform, which is cloud-based and delivered through major web browsers and mobile devices, connects loyalty programs to leading commerce partners allowing consumers to redeem a spectrum of loyalty currencies for merchandise, services and gift cards. Alternative Payments . Our alternative payments platform provides choice and convenience to both consumers and merchants. Through Bakkt Marketplace, LLC (“Bakkt Marketplace”), we have an integrated platform that enables consumers and enterprises to transact in digital assets. Alternative payments users have a digital wallet that enables them to purchase, sell, convert, and or spend digital assets. Users can also use their digital wallet to spend fiat currency with various retailers and convert loyalty and rewards points into fiat currency. We have received money transmitter licenses from all states throughout the U.S. where such licenses are required, have obtained a New York State virtual currency license, and are registered as a money services business with the Financial Crimes Enforcement Network of the United States Department of the Treasury. Bakkt Trust’s custody solution provides support to Bakkt Marketplace with respect to bitcoin and ether functionality within the consumer app. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation and Consolidation As a result of the Business Combination, we evaluated if VIH or Opco is the predecessor for accounting purposes. In connection therewith, we considered the application of Rule 405 of Regulation C, the interpretive guidance of the staff of the SEC, including factors for registrants to consider in determining the predecessor, and analyzed the following: (1) the order in which the entities were acquired, (2) the size of the entities, (3) the fair value of the entities, (4) the historical and ongoing management structure, and (5) how management discusses our business in this Form 10-K. In considering the foregoing principles of predecessor determination in light of our specific facts and circumstances, we determined that Opco is the predecessor for accounting purposes. The financial statement presentation includes the financial statements of Opco as “Predecessor” for periods prior to the Closing Date and the financial statements of the Company as “Successor” for the period after the Closing Date, including the consolidation of Opco. Refer to Note 4 for further discussion on the Business Combination. The financial statements are prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”) and include the accounts of the Company and our subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. In addition, certain reclassifications of amounts previously reported have been made to the accompanying consolidated financial statements in order to conform to current presentation. In the opinion of management, all adjustments (consisting of normal recurring accruals), considered necessary for a fair presentation have been included. The historical financial information is not necessarily indicative of our future results of operations, financial position, and cash flows. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. We base our estimates on historical experience and various other assumptions that we believe to be reasonable under the circumstances. The inputs into our estimates consider the economic implications of COVID-19 on our critical and significant accounting estimates. Additionally, subsequent to December 31, 2021, there has been a military conflict in Eastern Europe that may have an impact on our operations. As of the date of issuance, the conflict is still ongoing and thus there is uncertainty as to the ultimate impact to us. The significant estimates and assumptions that affect the financial statements may include, but are not limited to, those that are related to income tax valuation allowances, useful lives of intangible assets and property, equipment and software, fair value of financial assets and liabilities, determining provision for doubtful accounts, valuation of acquired tangible and intangible assets, the impairment of intangible assets and goodwill, and fair market value of Opco common units, incentive units and participation units. Actual results may materially differ from management’s estimates. Segment Information We operate in one operating and reportable segment. Operating segments are defined as components of an enterprise about which separate financial information is evaluated regularly by the chief operating decision maker, who is our chief executive officer (“CEO”), in deciding how to allocate resources and assessing performance. Further, all material operations are within the United States. Our chief operating decision maker allocates resources and assesses performance based upon discrete financial information at the consolidated level. Cash and Cash Equivalents and Restricted Cash We consider all short-term, highly liquid investments with maturities from the purchase date of three months or less to be cash equivalents. Cash equivalents consists of amounts invested in money market funds of $343.1 million and $38.8 million as of December 31, 2021 and 2020, respectively. We classify all cash and cash equivalents that are not available for immediate or general business use as restricted. The restricted cash includes amounts set aside due to regulatory requirements (Note 13). Customer Funds and Customer Funds Payable Customer funds represents fiat currency deposited in digital wallets. In accordance with state money transmitter laws, we may invest customer cash deposits in certain permissible investments. As of December 31, 2021, we have not made any such investments. We classify the assets as current since they are readily available for customer use with a corresponding customer funds payable liability. Translation of Foreign Currencies and Foreign Currency Transactions Our foreign subsidiaries’ functional currencies are their respective local currencies. The assets and liabilities of foreign subsidiaries are translated into U.S. dollars at the exchange rate at the balance sheet date. Revenue and expenses are translated using average monthly rates. Translation adjustments are included in “Accumulated other comprehensive income” in the balance sheets and reflected as “Currency translation adjustment, net of tax” in the accompanying consolidated statements of operations (the “statements of operations”). Transactions denominated in currencies other than the functional currency are remeasured based on the exchange rates at the time of the transaction. Monetary assets and liabilities are translated at the rate in effect at the balance sheet date, with subsequent changes in exchange rates resulting in transaction gains or losses, which are included in “Other income (expense), net” in the statements of operations and comprehensive loss. Non-monetary assets and liabilities are translated at historical rates and revenue and expenses are translated at average rates in effect during each reporting period. Accounts Receivable and Allowance for Doubtful Accounts We classify rights to consideration in exchange for services or goods as accounts receivables. Accounts receivable are rights to consideration that are unconditional (i.e., only the passage of time is required before payment is due). “Accounts receivable, net” includes billed and contract assets (i.e., unbilled receivables), net of an estimated allowance for doubtful accounts. We calculate the allowance using the current expected credit loss model. It is based upon historical loss patterns, the number of days that billings are past due, an evaluation of the potential risk of loss associated with delinquent accounts and incorporates the use of forward-looking information over the contractual term of our accounts receivable. Receivables are written-off and charged against our recorded allowance when we have exhausted collection efforts without success. The allowance for doubtful accounts was approximately $0.2 million and $0.2 million as of December 31, 2021 and 2020, respectively. There were no write-offs of receivables during the periods from October 15, 2021 through December 31, 2021 and January 1, 2021 through October 14, 2021, and the year ended December 31, 2020, respectively. Property, Equipment and Software, Net Property, equipment and software are stated at cost, less accumulated depreciation and amortization. Costs related to software we develop or obtain for internal use and such costs are included in “Property, equipment and software, net”. Costs incurred during the preliminary or maintenance development stage are expensed, and costs incurred during the application development stage are capitalized and are amortized over the useful life of the software. Depreciation and amortization are computed using the straight-line method over the following estimated useful lives of assets: Successor Predecessor December 31, 2021 December 31, 2020 Internal use software 3-7 years 3-7 years Purchased software 3 years 3 years Assets under finance lease 2-5 years 2-5 years Office, furniture and equipment 7-10 years 7-10 years Leasehold improvements 7 years 7 years Other computer and network equipment 3 years 3 years Impairment of Long-Lived Assets Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of the asset may not be recoverable. The period of depreciation and amortization of long-lived assets is evaluated to determine whether events or circumstances warrant revised estimates of useful lives. When indicators of impairment are present, the recoverability of our long-lived assets is determined by comparing the carrying value of the long-lived assets to total amount of undiscounted net cash flows expected to result from the use of the assets and their eventual disposition. If the estimated future undiscounted cash flows demonstrate the long-lived assets are not recoverable, an impairment loss would be calculated based on the excess of the carrying amounts of the long-lived assets over their fair value. We recorded impairment charges of approximately $1.2 million, $3.6 million and $15.3 million related to long-lived assets during the periods from October 15, 2021 through December 31, 2021 and January 1, 2021 through October 14, 2021, and the year ended December 31, 2020, respectively (Note 6). Leases In accordance with ASU 2016-02, Leases (Topic 842) , we determine if an arrangement is a lease and whether it is classified as finance or operating at the inception of the contract. We recognize the lease at its commencement date on the balance sheet as a liability for our obligation related to the lease and a corresponding asset representing our right to use the underlying asset over the period of use. Leases with an initial term of 12 months or less are not recorded on the balance sheet and the lease expense for these leases is recognized on a straight-line basis over the lease term. The lease liability for each lease is recognized as the present value of the lease payments not yet paid at the commencement date. The right-of-use (“ROU”) asset for each lease is recorded at the amount equal to the initial measurement of lease liability, adjusted for balances of prepaid rent, lease incentives received and initial direct costs incurred. When determining lease term, we consider renewal options that are reasonably certain to exercise and termination options that are reasonably certain to not be exercised, in addition to the non-cancellable lease term. For operating leases, expense is generally recognized on a straight-line basis over the lease term, and is recorded within “Selling, general and administrative”. For finance leases, interest on lease liability is recognized using the effective interest method, while the ROU asset is amortized on a straight-line basis over the shorter of the useful life of the ROU asset or the lease term. Interest on lease liability is recorded within “Interest income (expense), net”, and amortization of right-of-use assets is recorded within “Depreciation and amortization”. Business Combinations We account for our business combinations using the acquisition accounting method, which requires us to determine the fair value of identifiable assets acquired and liabilities assumed, including any contingent consideration, to properly allocate the purchase price to the individual assets acquired and liabilities assumed and record any residual purchase price as goodwill in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 805, Business Combinations . We identify and attribute fair values and estimated lives to the intangible assets acquired and allocates the total cost of an acquisition to the underlying net assets based on their respective estimated fair values. Determining the fair value of assets acquired and liabilities assumed requires management’s judgment and involves the use of significant estimates, including projections of future cash inflows and outflows, discount rates and asset lives. These determinations will affect the amount of amortization expense recognized in future periods. We base our fair value estimates on assumptions we believe are reasonable but recognizes that the assumptions are inherently uncertain. For business combinations effected through a common control transaction, we measure the recognized net assets of the acquiree at the carrying amounts of the net assets previously recognized by our related party. We reflect the operations of entities acquired through a common control transaction in our financial statements as of the first date in the reporting period or as of the date that the entity was acquired by our related party, as applicable. If the initial accounting for the business combination has not been completed by the end of the reporting period in which the business combination occurs, provisional amounts are reported to present information about facts and circumstances that existed as of the acquisition date. Once the measurement period ends, which in no case extends beyond one year from the acquisition date, revisions to the accounting for the business combination are recorded in earnings. All acquisition-related costs, other than the costs to issue debt or equity securities, are accounted for as expenses in the period in which they are incurred. Goodwill and Intangible Assets Goodwill and intangible assets that have indefinite useful lives are accounted for in accordance with ASC 350, Intangibles — Goodwill and Other . We allocate the cost of an acquired entity to the assets acquired and liabilities assumed based on their estimated fair values at the date of acquisition. The excess of the acquisition consideration transferred over the fair value of the net assets acquired, including other intangible assets, is recorded as goodwill. Goodwill is tested for impairment at the reporting unit level, and we are organized and operate as a single reporting unit. Goodwill and indefinite-lived intangible assets are tested at least annually or more frequently when events or circumstances occur that indicate that it is more likely than not that an impairment has occurred. In assessing goodwill and intangible assets for impairment, we first assess qualitative factors to determine whether it is necessary to perform the quantitative impairment test. In the qualitative assessment, we may consider factors such as economic conditions, industry and market conditions and developments, overall financial performance and other relevant entity-specific events in determining whether it is more likely than not that the fair value of the reporting unit is less than the carrying amount. Should we conclude that it is more likely than not that the recorded goodwill and intangible assets amounts have been impaired, we would perform the impairment test. An impairment loss is recognized in earnings if the estimated fair value of a reporting unit or indefinite lived intangible asset is less than the carrying amount of the reporting unit or intangible asset. Significant judgment is applied when goodwill and intangible assets are assessed for impairment. Identifiable intangible assets with finite lives are amortized on a straight-line basis over their estimated useful lives and are also reviewed at least annually for impairment or more frequently if conditions exist that indicate that an asset may be impaired. We did not record any impairment charges related to goodwill and intangible assets during the periods from October 15, 2021 through December 31, 2021 and January 1, 2021 through October 14, 2021, and the year ended December 31, 2020, respectively. Revenue Recognition We recognize revenue when we transfer promised goods or services to customers in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods or services. Digital asset marketplace Digital asset marketplace revenues are derived from the Triparty agreement and our custody services. Triparty Agreement: The Digital Currency Trading, Clearing, and Warehouse Services Agreement with IFUS and ICUS (the “Triparty Agreement”) governs the trading, clearing and custody services for physically-delivered bitcoin futures contracts and options contracts (collectively, “PDF Contracts”). While our performance obligation to IFUS and ICUS is comprised of several related promises as described in Note 8, we have concluded that we have a single performance obligation to provide a stand-ready custody function that supports the trading and clearing services as required for the PDF Contracts for parties that trade PDF Contracts (“PDF Contract Traders”), so that IFUS can execute its trading services and ICUS can clear and arrange for the settlement of the PDF Contracts. We have concluded that the related activities that collectively comprise this single performance obligation are not separately identifiable within the context of the Triparty Agreement, as all are necessary in order for IFUS and ICUS to offer PDF Contracts. We determine the obligation period associated with Triparty Agreement revenue using the portfolio method based on our historical transaction experience, as the PDF Contracts have similar characteristics. The average performance obligation period is less than one month based on the application of the portfolio method. Therefore, we recognize revenue for the stand-ready custody services that we provide to IFUS and ICUS on a straight-line basis over the average performance obligation period, which is less than one month. PDF Contract Traders pay a transaction fee for trading and clearing, which is collected by ICUS. Per terms of the Triparty Agreement, IFUS and ICUS pass to us all trading and clearing transaction fees, net of rebates and liquidity payments issued to PDF Contract Traders. We consider the transaction price to be the net transaction fee received from IFUS and ICUS or paid to IFUS and ICUS. Rebates offered by IFUS to support market liquidity and trading volume represent consideration payable to a customer and reduce the transaction price; as such, these rebates are included in “Net revenues”. Because these rebates are measured and resolved within the same reporting period, it is not necessary for us to estimate these at a given reporting period date. We also recognize a capital contribution for the cost of the trading and clearing services provided by IFUS and ICUS pursuant to the Contribution Agreement (Note 10), which reduces the revenue recognized as part of the net transaction fee. Revenue from the Triparty Agreement is included in “Transaction revenue, net” in the disaggregation of revenue by service type table within Note 3. Custody: For PDF Contract Traders with custody accounts related to PDF Contracts, we do not charge a fee specifically for the custody service. For customers using custody services on a standalone basis, we charge a fee, which is generally based on a fixed fee and represents fixed consideration. We invoice customers on a quarterly basis. Our performance obligation related to the storage and custody of a customer’s bitcoin represents an obligation to provide custody services for digital assets. The contract for custodial services may be terminated by the applicable institution or high net worth individual at any time upon final withdrawal of all digital assets, without incurring a penalty. As a result, we believe our contracts represent a day-to-day contract with each day representing a renewal. These renewals are priced consistently with the original contract and with other similar customers and as such, we do not believe that they represent a material right. The daily contract consists of a single performance obligation to provide custodial services, with the transaction price equal to a pro rata portion (i.e., daily) of the annual custody fee. Our performance obligation to provide custodial services meets the criterion to be satisfied over time. Revenue from our custodial services is included in “Net revenues” in the statements of operations. Revenue from our custody services is included in “Subscription and services revenue” in the disaggregation of revenue by service type table within Note 3. Loyalty redemption platform We host, operate and maintain a loyalty redemption platform connecting loyalty programs to ecommerce merchants allowing loyalty point holders to redeem a spectrum of loyalty currencies for other digital assets, merchandise and services. Our customer in these arrangements is generally the loyalty program sponsor. Our contracts related to our loyalty redemption platform consist of two performance obligations: (1) access to our SaaS-based redemption platform and customer support services and (2) facilitation of order fulfillment services. We are the principal related to providing access to our redemption platform. We are acting as the agent to facilitate order fulfillment services on behalf of the loyalty program sponsor. Revenues generated from our loyalty redemption platform are included in “Net revenues” in the statements of operations and include the following: • Platform subscription fees: Monthly fixed fee charged to customers to access the redemption platform and receive customer support services. We recognize revenue for these fees on a straight-line basis over the related contract term as the customer receives benefits evenly throughout the term of the contract. These fees are allocated to our performance obligation to provide access to our redemption platform, and thus are recognized on a gross basis. Revenue from our platform subscription fees is included in “Subscription and services revenue” in the disaggregation of revenue table by service type in Note 3. • Transaction fees: Transaction fees are earned for most transactions processed through our platform. These fees are allocated to our performance obligation to provide order placement services on behalf of the loyalty program sponsor, and therefore are recognized net of the related redemption cost. We allocate transaction fees to the period in which the related transaction occurs. Revenue from our transaction fees is included in “Transaction revenue, net” in the disaggregation of revenue table by service type in Note 3. • Revenue share fees: We are entitled to revenue share fees in the form of rebates from third-party commerce merchants and other partners which provide services facilitating redemption order fulfillment. We allocate revenue share fees to the period in which the related transaction occurs. Revenue from our revenue share fees is included in “Transaction revenue, net” in the disaggregation of revenue table by service type in Note 3. • Service fees: We earn fees for certain software development activities associated with the implementation of new customers on our loyalty redemption platform and other development activities if a customer requests that we customize certain features and functionalities for their loyalty program. We also earn fees for providing call center services for customers. We recognize service fees as revenue on a straight-line basis, beginning when the internally developed software resulting from such implementation or other development activities are operational in our platform over the longer of the remaining anticipated customer life and 3 years, which represents the estimated useful life of our internally developed software. Implementation and development service fees are generally billed when the implementation and development activities are performed. We recognize deferred revenue when all such fees are billed. Revenue from our services fees is included in “Subscription and services revenue” in the disaggregation of revenue table by service type in Note 3. Alternative payment platform Alternative payment platform revenues are transaction fees earned by Bakkt Marketplace. Development of this platform began in February 2020, when Opco entered into a Strategic Alliance Agreement (the “Strategic Alliance Agreement”) with a strategic partner, who was also a customer of Opco, to develop and operate a mechanism whereby a customer can purchase food and beverage items from the strategic partner using their Bakkt digital wallet. In conjunction with the Strategic Alliance Agreement, the parties entered into a separate agreement under which the Company issued the strategic partner a warrant to purchase 15 million Class B voting units. Opco accounted for the cost of the warrant as consideration payable to a customer within the scope of ASC 606, Revenue from Contracts with Customers , and recorded an asset at the fair value on the grant date of the warrant. Opco recognized the customer consideration asset as a reduction to transaction fees on a straight-line basis over 28 months, which represents the time period between the launch date of the services under the Strategic Alliance Agreement, which occurred in November 2020, and the end of the contract term. These reductions to revenue are included in “Net revenues” in the statements of operations. As described in Note 10, the customer consideration asset was fully impaired during the period from January 1, 2021 through October 14, 2021. Accordingly, Successor period transaction fees no longer reflect a reduction for the recognition of the customer consideration asset. Refer to Note 10 for additional information related to the warrant. Transaction fees and the reduction to transaction fees are included in “Transaction revenue, net” in the disaggregation of revenue by service type table in Note 3. Sale of cryptoassets As part of our operation of the alternative payment platform, we transact in bitcoin and ether (collectively referred to as “cryptoassets”) with consumers. Consumer cryptoasset transactions are not material for the periods from October 15, 2021 through December 31, 2021 and January 1, 2021 through October 14, 2021. There were no consumer cryptoasset transactions for the year ended December 31, 2020. Additionally, as part of our operation of the alternative payment platform, we transact in cryptoassets with our trading partners in order to adjust our cryptoasset inventory based on actual consumer activity to maintain an inventory based on our inventory policy. Transactions in cryptoassets with our trading partners in the normal course of business is not material for the periods from October 15, 2021 through December 31, 2021 and January 1, 2021 through October 14, 2021. There were no material transactions in cryptoassets with our trading partners in the normal course of business for the year ended December 31, 2020. We maintain an inventory reserve of cryptoassets to facilitate consumer transactions if needed. We may adjust our inventory reserve levels under our inventory policy. Sales of cryptoassets resulting from inventory reserve adjustments are not part of our normal course of business. Accordingly, proceeds from the sale of cryptoassets outside of the normal course of business is included in “Other income (expense), net,” net of the cost of cryptoasset sold, in the statements of operations. Opco recognized income from the sale of cryptoassets, net of the cost of cryptoassets sold, of $0 and $1.0 million for periods from October 15, 2021 through December 31, 2021 and January 1, 2021 through October 14, 2021, respectively. There were no sales of cryptoassets outside of the normal course of business for the year ended December 31, 2020. Off-Balance Sheet Cryptoassets Cryptoassets held in a custodial capacity on behalf of our customers are not included in our balance sheet, as we do not own those cryptoassets and they do not exhibit the characteristics of assets as it relates to our consolidated financial statements. Practical expedients We have elected the following practical expedients under ASC 606: • Assessing the performance obligation period for Triparty Agreement transactions on a portfolio basis. • Exclude sales taxes from the measurement of the transaction price. • Not adjust the transaction price for the existence of a significant financing component if the timing difference between a customer’s payment and our performance is one year or less. • Not provide disclosures about the transaction price allocated to unsatisfied performance obligations for contracts with a duration of one year or less or when the consideration is variable and allocated entirely to a wholly unsatisfied performance obligation or a wholly unsatisfied promise to transfer a distinct good or service that forms part of a single performance obligation. Additionally, we have elected the practical expedient under ASC 340-40 to not capitalize incremental costs to obtain a contract with a customer if the amortization period would have been one year or less. Refer to Note 3 for additional disclosures related to our recognition of revenue. Deferred Revenue Deferred revenue includes amounts invoiced prior to our meeting the criteria for revenue recognition. We invoice customers for service fees at the time the service is performed, and such fees are recognized as revenue over time as we satisfy our performance obligation. The portion of deferred revenue to be recognized in the succeeding twelve-month period is recorded as non-current deferred revenue, and the remaining portion is recorded as current deferred revenue. We have determined that these arrangements do not contain a significant financing component, and therefore the transaction price is not adjusted. Compensation and Benefits Compensation and benefits primarily consist of salaries and wages, bonuses, contract labor fees, share-based compensation, unit-based compensation, payroll taxes and benefits associated with the compensation of our employees, excluding the accelerated unit-based compensation discussed in “Acquisition-related expenses,” and any contract labor not capitalized. Professional Services Professional services expenses consist of costs associated with audit, tax, legal and other professional services and are recognized as incurred. Technology and Communication Technology and communication expenses include costs incurred in operating and maintaining our platform, including software licenses, software maintenance and support, hosting and infrastructure costs. Selling, General and Administrative Selling, general and administrative expenses consist primarily of costs associated with advertising, marketing, insurance and rent. Advertising costs are expensed as incurred. Total advertising costs for the periods from October 15, 2021 through December 31, 2021 and January 1, 2021 through October 14, 2021, and the year ended December 31, 2020 were approximately $2.6 million, $16.2 million and $4.9 million, respectively. Acquisition-Related Expenses We incur incremental costs relating to our completed and potential acquisitions and other strategic opportunities. This includes fees for investment banking advisors, lawyers, accountants, tax advisors and public relations firms, as well as costs associated with other external costs directly related to the proposed or closed transactions. Acquisition-related expenses for the year ended December 31, 2020 included approximately $9.6 million of accelerated expense for our incentive and participation units resulting from the issuance of Class C voting units in connection with the acquisition of Bridge2 Solutions (Note 4). Share-Based Compensation Share-based compensation expense relates to the restricted stock units (“RSUs”) granted during the Successor period. Our RSUs are measured at fair value on the date of grant and recognized as expense in “Compensation and benefits” over the requisite service period. Expense is recognized on a straight-line basis for awards that vest based solely on a service condition, and on an accelerated attribution basis for all other awards. The fair value of our RSUs is determined as the closing price of our Class A common stock on the date of grant. We account for forfeitures as they occur. See Note 11 for additional disclosures related to share-based compensation. Unit-Based Compensation The Successor period unit-based compensation expense relates to the replacement common incentive units and phantom units (“participation” units) granted during the Predecessor period that were issued to employees as purchase consideration. The replacement incentive units and participation units were measured at fair value on the Closing Date, and we recognize expense in “Compensation and benefits” in the statements of operations over the requisite service period. A portion of the current year expense |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 12 Months Ended |
Dec. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contracts with Customers | Revenue from Contracts with Customers Disaggregation of Revenue We disaggregate revenue by service type and by platform, respectively, as follows (in thousands): Successor Predecessor Service Type October 15, 2021 through December 31, 2021 January 1, 2021 through October 14, 2021 Year ended December 31, 2020 Transaction revenue, net (a) $ 5,724 $ 10,637 $ 7,386 Subscription and service revenue 5,757 17,319 21,109 Total revenue $ 11,481 $ 27,956 $ 28,495 (a) Amounts are net of rebates and liquidity payments, reductions related to the Contribution Agreement and consideration payable pursuant to the Strategic Alliance Agreement of less than $0.1 million for the period from October 15, 2021 through December 31, 2021 and approximately $2.1 million and $4.5 million for the period from January 1, 2021 through October 14, 2021 and the year ended December 31, 2020, respectively. Included in these amounts are amounts earned from related parties of less than $0.1 million for the period from October 15, 2021 through December 31, 2021 and approximately $0.3 million and $4.1 million for the period from January 1, 2021 through October 14, 2021 and the year ended December 31, 2020, respectively (Note 8). Successor Predecessor Platform October 15, 2021 through December 31, 2021 January 1, 2021 Year ended December 31, 2020 Digital asset marketplace (b) $ 165 $ 518 $ (1,073) Loyalty redemption platform 11,315 29,179 30,774 Alternative payment platform (c) 1 (1,741) (576) Total revenue $ 11,481 $ 27,956 $ 28,495 (b) Amounts are net of rebates and liquidity payments and reductions related to the Contribution Agreement of less than $0.1 million for the period from October 15, 2021 through December 31, 2021 and approximately $0.3 million and $4.1 million for the period from January 1, 2021 through October 14, 2021 and the year ended December 31, 2020, respectively. (c) Amounts are net of consideration payable pursuant to the Strategic Alliance Agreement of $0, $1.7 million and $0.4 million for the periods from October 15, 2021 through December 31, 2021 and January 1, 2021 through October 14, 2021 and the year ended December 31, 2020, respectively. We have one reportable segment to which our revenues relate (Note 2). Deferred Revenue Contract liabilities consist of deferred revenues for amounts invoiced prior to us meeting the criteria for revenue recognition. We invoice customers for service fees at the time the service is performed, and such fees are recognized as revenue over time as we satisfy its performance obligation. Contract liabilities are classified as “Deferred revenue, current” and “Deferred revenue, noncurrent” in our consolidated balance sheets. The activity in deferred revenue for the periods from October 15, 2021 through December 31, 2021 and January 1, 2021 through October 14, 2021, and the year ended December 31, 2020 was as follows (in thousands): Successor Predecessor October 15, 2021 through December 31, 2021 January 1, 2021 through October 14, 2021 Year ended December 31, 2020 Beginning of the period contract liability $ 9,423 $ 8,385 $ — Fair value of contract liability acquired (Note 4) — — 12,703 Revenue recognized from contract liabilities included in the beginning balance (1,350) (3,524) (11,005) Increases due to cash received, net of amounts recognized in revenue during the period 1,375 4,562 6,687 End of the period contract liability $ 9,448 $ 9,423 $ 8,385 Remaining Performance Obligations As of December 31, 2021, the aggregate amount of the transaction price allocated to the remaining performance obligations related to partially completed contracts is $26.0 million, comprised of $16.6 million of subscription fees and $9.4 million of service fees that are deferred. We will recognize our subscription fees as revenue over a weighted-average period of 50 months (ranges from 10 months – 57 months) and our service fees as revenue over approximately 3 years. As of December 31, 2020, the aggregate amount of the transaction price allocated to the remaining performance obligations related to partially completed contracts is $15.5 million, comprised of $7.1 million of subscription fees and $8.4 million of service fees that are deferred. We will recognize our subscription fees as revenue over a weighted-average period of 18.5 months (ranges from 4 months – 42 months) and our service fees as revenue over approximately 3 years. |
Business Combination and Acquis
Business Combination and Acquisition | 12 Months Ended |
Dec. 31, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |
Business Combination and Acquisition | Business Combination and Acquisition Business Combination The Business Combination was completed on October 15, 2021. The Business Combination was accounted for as a business combination under ASC 805. Opco constitutes a business, with inputs, processes, and outputs. Accordingly, the acquisition of Opco constitutes the acquisition of a business for purposes of ASC 805, and due to the change in control, has been accounted for using the acquisition method with the Company as the accounting acquirer and Opco as the accounting acquiree. We have been determined to be the accounting acquirer based on an evaluation of the following factors: • We are the sole managing member of Opco, the managing member has full and complete charge of all affairs of Opco and the existing non-managing member equity holders of Opco do not have substantive participating or kick out rights; • The Sponsor and Opco jointly designated six of the initial eight members of the Board; and • Equity Holders do not hold a controlling interest in the Company or Opco due to (1) the limitation imposed by the Voting Agreement entered into between the Company and ICE at Closing on ICE and its affiliates’ voting power to 30% of the total voting power of all shares of our Class A common stock, par value $0.0001 per share (“Class A common stock”), and our Class V common stock, par value $0.0001 per share (“Class V common stock,” together with the Class A common stock, the “Common Stock”) that are issued and outstanding and entitled to vote as of the relevant record date so long as it owns shares of Common Stock representing more than 50% of the total voting power of the Company, and (2) ICE and its affiliates do not unilaterally control the Board, as only one out of the eight members of the Board is affiliated with ICE, and the majority of the Board are independent directors not affiliated with ICE. These factors support the conclusion that the Company acquired a controlling interest in Opco and is the accounting acquirer. We are the primary beneficiary of Opco, which is a variable interest entity, since we have the power to direct the activities of Opco that most significantly impact Opco’s economic performance through our role as the managing member, and our ownership of Opco, which results in the right (and obligation) to receive benefits (and absorb losses) of Opco that could potentially be significant to us. Therefore, the Business Combination constituted a change in control and was accounted for using the acquisition method. Under the acquisition method, as the accounting acquirer, VIH’s net assets and stockholders equity retain their carrying values. The estimated fair value of the purchase price is allocated to the assets acquired and the liabilities assumed from Opco based on their estimated acquisition-date fair values. Opening successor cash and equity represent the carrying value of the accounting acquirer’s cash and equity and are not comparable to the predecessor cash and equity of Opco. Included in the opening cash balance as of October 15, 2021 was $207.4 million from the proceeds of the sale of the units in VIH’s Initial Public Offering and the sale of the private placement warrants, net of transaction costs, that was previously held in the Trust Account. The cash proceeds from the Trust Account were used for transaction expenses, deferred underwriting commission, redemption of Public Shares, and the operating activities of the Company following the Business Combination. We paid $84.5 million of cash for the repurchase of 8,452,042 shares Class A ordinary shares, for shareholders who elected to execute their redemption right, as presented within the financing activities of our statement of cash flows. The remaining 12,285,160 outstanding Class A ordinary shares of the Company, par value $0.0001 per share (the “Class A Ordinary Shares”), and 5,184,300 Class B ordinary shares of the Company, par value $0.0001 per share (the “Class B Ordinary Shares”), were exchanged for an equivalent number of shares of Class A common stock. We incurred $1.6 million of expenses directly related to the Business Combination from October 15, 2021 through December 31, 2021, which are reflected as “Acquisition-related expenses” in the statements of operations. Opco incurred approximately $24.8 million of expenses directly related to the Business Combination from January 1, 2021 through October 14, 2021, which are reflected as “Acquisition-related expenses” in the statements of operations, including a $12.1 million success fee for an investment bank advising Opco. At Closing, we paid approximately $7.3 million of deferred underwriting costs related to VIH’s initial public offering and $13.0 million of fees related to the $325.0 million in proceeds from the investors purchasing an aggregate of 32,500,000 shares of Class A common stock in connection with the Business Combination (the “PIPE Investment”). The cash inflow from the PIPE Investment is presented net of issuance costs within the financing section of the statement of cash flows. The fees associated with the PIPE were treated as a reduction of equity. Additionally, at Closing we paid approximately $0.9 million as a prepayment on Directors and Officers (“D&O”) insurance which is included in “Other current assets” in the balance sheets. Additionally, all outstanding membership interests and rights to acquire membership interests in Opco were exchanged for an aggregate of 208,200,000 Opco common units and an equal number of newly issued shares of our Class V common stock, par value $0.0001 per share (“Class V common stock”), which are non-economic, voting shares of the Company, of which 207,406,648 are outstanding and 793,352 reserved for issuance upon the exercise of a warrant agreement. Opco equity holders converted 400,000,000 Opco Class A voting units, 192,453,454 Opco Class B voting units, and 270,270,270 Opco Class C voting units to 189,933,286 shares of Class V common stock on a pro rata basis. Opco Class C warrants were exchanged for the 793,352 shares of Class V common stock referenced above. Opco incentive units were exchanged for 17,473,362 shares of Class V common stock. Each Opco common unit, when coupled with one share of our Class V common stock is referred to as a “Paired Interest.” Paired Interests may be exchanged for one share of our Class A common stock or a cash amount in accordance with the Third Amended and Restated Limited Liability Company Agreement of Opco and the Exchange Agreement, dated as of October 15, 2021, between the Company and certain holders of Opco common units (the “Exchange Agreement”). Following the Closing, the Company owned approximately 20.3% of the Opco common units and with the remaining Opco common units being owned by the equity owners of Opco prior to the Merger (the “Opco Equity Holders”). The following table summarizes the estimated fair value of the purchase consideration paid to Opco Equity Holders (in thousands, except per unit data): Consideration Equity consideration paid to Opco Equity Holders (1) $ 1,904,648 Cash paid for redeemed Opco Incentive Units (2) 1,488 Cash paid for seller transaction costs (3) 13,454 Total purchase consideration $ 1,919,590 (1) The equity consideration paid to Opco Equity Holders is equal to the estimated fair value of noncontrolling interest on the acquisition date. Equity consideration paid to Opco Equity Holders consisted of the following: Fair Value Opco common units 189,933 Fair value per unit $ 9.46 Fair value of Opco common units $ 1,796,769 Fair value of Opco common incentive units based on services rendered 107,879 Equity consideration paid to Opco Equity Holders $ 1,904,648 (2) Represents the cash paid to certain Opco Equity Holders in exchange for the redemption of 40% of the first one-third of their Opco common incentive units and preferred incentive units which vested at the effective time of the Business Combination (Note 11). (3) Represents Opco’s liability to pay transaction costs as of the Business Combination date, which was settled with cash received from the Business Combination. We recorded the preliminary allocation of the purchase price to Opco’s assets acquired and liabilities assumed based on their fair values as of October 15, 2021. The preliminary purchase price allocation is as follows (in thousands): Fair Value Cash and cash equivalents, restricted cash and customer funds $ 30,837 Accounts receivable, net 17,009 Other current assets 5,090 Property, equipment and software 4,115 Deposits with clearinghouse, noncurrent (affiliate in Predecessor period) 15,151 Intangible assets 393,070 Goodwill 1,527,071 Deferred tax asset 140 Other assets 3,002 Total assets acquired 1,995,485 Accounts payable and accrued liabilities (52,997) Due to related party (affiliate in Predecessor period) (2,313) Other current liabilities (3,140) Deferred revenue, current (4,665) Participation unit liability (6,756) Deferred revenue, noncurrent (4,758) Other liabilities (1,266) Total liabilities assumed (75,895) Total purchase consideration $ 1,919,590 The goodwill of $1,527.1 million represents the excess purchase price over the fair value of the net tangible and identifiable intangible assets acquired and liabilities assumed. Qualitative factors that contribute to the recognition of goodwill include certain intangible assets that are not recognized as separate identifiable intangible assets apart from goodwill. Intangible assets not recognized apart from goodwill consist primarily of expertise and industry know-how of the workforce, back-office infrastructure, strong market position and the assembled workforce of Opco. None of the goodwill recognized is expected to be deductible for income tax purposes. The weighted average amortization period for the acquired intangible assets is 5.7 years. The fair value of the intangible assets is as follows (in thousands): Weighted Average Useful Lives (in years) Fair Value Trademarks / trade names (1) Indefinite $ 39,470 Licenses (2) Indefinite 241,320 Customer relationships (3) 8.0 44,970 Technology (4) 4.2 67,310 Total intangible assets acquired $ 393,070 (1) The trademarks / trade names represent those that Opco originated which were valued using the relief-from-royalty method. (2) The licenses represent those that Opco acquired that were valued using the with-and-without method. (3) The customer relationships represent the existing customer relationships of Opco that were valued by applying the multi-period excess earnings methodology. (4) The technology represents technologies acquired and developed by Opco for the purpose of operating its platform, which were valued using the relief-from-royalty method. The following unaudited pro forma financial information presents the combined results of operations as if the Business Combination and the acquisition of Bridge2 Solutions had occurred as of January 1, 2020. The unaudited pro forma financial information as presented below is for illustrative purposes and does not purport to represent what the results of operations would actually have been if the business combinations occurred as of the date indicated or what the results would be for any future periods. The unaudited pro forma results reflect the step-up amortization adjustments for the fair value of intangible assets acquired, acquisition-related expenses, nonrecurring post-combination compensation expense, unit-based compensation expense under the new capital structure and the related adjustment to the income tax provision. Year ended December 31, 2021 Year ended December 31, 2020 Pro forma revenue, net $ 39,437 $ 34,154 Pro forma net loss (198,467) (168,751) Less: pro forma net loss attributable to noncontrolling interest (165,136) (140,376) Pro forma net loss attributable to Bakkt Holdings, Inc. $ (33,331) $ (28,375) Predecessor Acquisition Bridge2 Solutions, LLC On February 21, 2020, ICE acquired all of the issued and outstanding equity of Bridge2 Solutions LLC and its affiliated companies (collectively, “Bridge2 Solutions”), including their then-parent company B2S Holdings, Inc., a leading loyalty redemption platform provider connecting loyalty programs to ecommerce merchants allowing loyalty point holders to redeem a spectrum of loyalty currencies for digital assets, merchandise and services. On March 12, 2020, Bakkt completed a Series C round of financing valued at $300.0 million. As part of the financing, ICE contributed substantially all of the assets and liabilities of Bridge2 Solutions to the Company at a value of approximately $260.8 million. Bakkt accounted for the acquisition of Bridge2 Solutions as a common control transaction under ASC 805, as Bridge2 Solutions was owned by ICE prior to its combination with Opco. As such, we measured the recognized net assets of Bridge2 Solutions at the carrying amounts of the net assets previously recognized by ICE and began reflecting the operations of Bridge2 Solutions in its financial statements as of the date of its acquisition by ICE. This acquisition is included in the one reportable segment. The following table summarizes the fair values of the net assets acquired as of the acquisition date (in thousands): February 21, 2020 Cash and cash equivalents $ 10,652 Accounts receivable 10,158 Other current assets 1,284 Property and equipment 4,465 Customer relationships 53,620 Technology 11,990 Trade name 415 Other non-current assets 2,864 Goodwill 216,575 Total assets acquired 312,023 Accounts payable and accrued liabilities (22,450) Deferred revenue (12,703) Deferred income tax liabilities (3,005) Other non-current liabilities (2,402) Total liabilities assumed (40,560) Total purchase consideration $ 271,463 The identifiable intangible assets acquired were $53.6 million for customer relationships, which have been assigned a useful life of 12 years, approximately $12.0 million for acquired technology, which has been assigned a useful life of 7 years, and $0.4 million for a trade name, which has been assigned a useful life of 1 year. The weighted average amortization period for the acquired intangible assets is 11.0 years. The goodwill related to the acquisition represents the value paid for expertise and industry know-how of the workforce, back-office infrastructure and expected synergies from Bridge2 Solutions’ complementary business model. We recognized an additional amount of approximately $10.1 million of goodwill as a result of push-down accounting by ICE for certain deferred income tax liabilities recognized, but not expected to be settled with ICE, in connection with the Bridge2 Solutions acquisition. The actual results of operations of the acquisition has been included in the statements of operations from the date of acquisition. The following table summarizes Bridge2 Solutions’ revenue and earnings included in the statements of operations from February 22, 2020 through December 31, 2020 (in thousands): February 22, 2020 – December 31, 2020 Revenue $ 30,774 Net loss (11,085) |
Goodwill and Intangible Assets,
Goodwill and Intangible Assets, Net | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets, Net | Goodwill and Intangible Assets, Net Changes in goodwill consisted of the following (in thousands): Predecessor Balance as of January 1, 2020 $ 16,854 Acquisition of Bridge2 Solutions 216,575 Balance as of December 31, 2020 233,429 Foreign currency translation (48) Balance as of October 14, 2021 $ 233,381 Successor Balance as of October 15, 2021 $ 1,527,071 Foreign currency translation 47 Balance as of December 31, 2021 $ 1,527,118 The opening balance of goodwill as of October 15, 2021 represents the fair value of goodwill on the Closing Date. See Note 4 for additional details. No goodwill impairment charges have been recognized in the periods presented. Intangible assets consisted of the following (in thousands): Successor December 31, 2021 Weighted Average Useful Life (in years) Gross Accumulated Net Licenses Indefinite $ 241,320 $ — $ 241,320 Trademarks / trade names Indefinite 39,470 — 39,470 Technology 4.2 67,310 (3,415) 63,895 Customer relationships 8 44,970 (1,186) 43,784 Total $ 393,070 $ (4,601) $ 388,469 Predecessor December 31, 2020 Weighted Average Useful Life (in years) Gross Accumulated Net Regulatory licenses Indefinite $ 554 $ — $ 554 Acquired technology 7 13,690 (1,879) 11,811 Customer relationships 12 53,620 (3,844) 49,776 Trade name 1 415 (357) 58 Total $ 68,279 $ (6,080) $ 62,199 Amortization of intangible assets for the periods from October 15, 2021 through December 31, 2021 and January 1, 2021 through October 14, 2021 and the year ended December 31, 2020 was $4.6 million, $5.1 million and $6.5 million, respectively, and is included in “Depreciation and amortization” in the statements of operations. Estimated future amortization for definite-lived intangible assets as of December 31, 2021 is as follows (in thousands): December 31, 2021 Year ending December 31: 2022 $ 21,811 2023 21,811 2024 21,871 2025 18,896 2026 7,628 Thereafter 15,662 Total $ 107,679 |
Consolidated Balance Sheet Comp
Consolidated Balance Sheet Components | 12 Months Ended |
Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Consolidated Balance Sheet Components | Consolidated Balance Sheet Components Accounts Receivable, Net Accounts receivable, net consisted of the following (in thousands): Successor Predecessor December 31, 2021 December 31, 2020 Trade accounts receivable $ 11,404 $ 5,656 Unbilled receivables 5,448 2,590 Other receivables 1,500 2,312 Total accounts receivable 18,352 10,558 Less: allowance for doubtful accounts (210) (150) Total $ 18,142 $ 10,408 Other Current Assets Other current assets consisted of the following (in thousands): Successor Predecessor December 31, 2021 December 31, 2020 Prepaid expenses $ 4,784 $ 4,631 Customer consideration asset, current (Note 10) — 2,325 Total $ 4,784 $ 6,956 Property, Equipment and Software, Net Property, equipment and software, net consisted of the following (in thousands): Successor Predecessor December 31, 2021 December 31, 2020 Internal-use software $ 3,550 $ 20,343 Purchased software 17 110 Office furniture and equipment 19 609 Other computer and network equipment 2,991 1,199 Leasehold improvements 277 479 Property, equipment and software, gross 6,854 22,740 Less: accumulated amortization and depreciation (733) (2,783) Total $ 6,121 $ 19,957 For the periods from October 15, 2021 through December 31, 2021 and January 1, 2021 through October 14, 2021, and the year ended December 31, 2020, depreciation and amortization expense related to property, equipment and software amounted to approximately $0.8 million, $4.4 million and $2.7 million, respectively, of which $0.4 million, $3.6 million and $0.9 million, respectively, related to amortization expense of capitalized internal-use software placed in service. ICE contributed to the Opco software obtained for internal use (Note 10). In connection with the Business Combination, this internal-use software was measured at fair value on the acquisition date and is included in the fair value of technology acquired by the Company (Note 4). As of December 31, 2020, the total amount capitalized was $19.8 million, $17.4 million of which had been placed in service. We entered into a software license agreement that required a minimum usage fee of approximately $0.7 million annually for the contract term. The license was capitalized at the present value of minimum license payments over the contract term. We recognized a corresponding liability for the license payments. The software license was being amortized over the contract term. During the period from October 15, 2021 through December 31, 2021, we terminated the software license agreement. As a result of the termination, we recorded an impairment charge of approximately $1.2 million for the impairment of the related asset to a fair value of $0 and income of $1.3 million for the extinguishment of the related liability. The impairment charge and income are reflected as “Impairment of long-lived assets” and “Other income (expense), net”, respectively. During 2020, various customizations were made to an application being developed by a third party for Bakkt Marketplace to expand the application’s functionality to meet our business requirements. The application was customized to include necessary features, and its testing began in the second half of 2020. The testing indicated that the desired results would not be met, which was identified as a triggering event for impairment analysis that concluded that the application would not provide a viable solution for its business requirements. As a result, the carrying value of the capitalized internal-use software was impaired as of December 31, 2020. We recorded an impairment charge of approximately $11.5 million to reduce the carrying amount of internal-use software within property, equipment and software to a $0 fair value. The impairment charge is included in “Impairment of long-lived assets”. During 2020, we terminated a software license agreement in accordance with the terms of the agreement. The license was related to the underlying clearing software utilized by Bakkt Clearing and had a five During 2020, we purchased payment software to use in the roll-out of our alternative payment method. We ultimately built out our alternative payment method offering using API-based integrations instead of the acquired payment software. As such, we recorded an impairment charge of approximately $2.5 million to write-off the software to a $0 fair value that is included in “Impairment of long-lived assets”. Deposits with Clearinghouse Deposits with clearinghouse, current and noncurrent, consisted of the default resource contribution (Note 8). The default resource contribution amounted to approximately $15.2 million and $35.4 million as of December 31, 2021 and 2020, respectively. On January 19, 2021, ICUS self-certified a rule change with the CFTC, reducing Bakkt Trust’s “skin-in-the-game” contribution to the ICUS guaranty fund to approximately $15.2 million from $35.4 million. Following the two-week self-certification period, in which no comments were received from the CFTC, ICUS proceeded with the reduction. On February 3, 2021, ICUS returned $20.2 million to Bakkt Trust. The default resource contribution includes less than $0.1 million of cash margins held with ICUS. Other Assets Other assets consisted of the following (in thousands): Successor Predecessor December 31, 2021 December 31, 2020 Customer consideration asset, noncurrent (Note 10) $ — $ 2,713 Operating lease right-of-use assets (Note 17) 11,239 1,799 Finance lease right-of-use assets — 468 Other 2,640 598 Total $ 13,879 $ 5,578 Accounts Payable and Accrued Liabilities Accounts payable and accrued liabilities consisted of the following (in thousands): Successor Predecessor December 31, 2021 December 31, 2020 Accounts payable $ 10,646 $ 7,165 Accrued expenses 20,130 14,808 Purchasing card payable 17,698 12,683 Salaries and benefits payable 13,349 6,018 Other 2,267 2,241 Total $ 64,090 $ 42,915 Other Current Liabilities Other current liabilities consisted of the following (in thousands): Successor Predecessor December 31, 2021 December 31, 2020 Participation units liability, current (Note 11) $ 2,027 $ — Current maturities of operating lease liability 615 953 Software license obligation, current — 675 Current maturities of finance lease liability — 129 Other 1,075 186 Total $ 3,717 $ 1,943 Other Noncurrent Liabilities Other noncurrent liabilities consisted of the following (in thousands): Successor Predecessor December 31, 2021 December 31, 2020 Software license obligation, noncurrent $ — $ 1,233 Participation units liability, non-current (Note 11) 2,027 870 Operating lease liability, noncurrent (Note 17) 10,647 847 Finance lease liability, noncurrent — 369 Total $ 12,674 $ 3,319 |
Tax Receivable Agreement
Tax Receivable Agreement | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Tax Receivable Agreement | Tax Receivable Agreement On October 15, 2021, we entered into a Tax Receivable Agreement with certain Opco Equity Holders. Pursuant to the Tax Receivable Agreement, among other things, holders of Opco common units may, subject to certain conditions, from and after April 15, 2022, exchange such Paired Interests for Class A common stock on a one-for-one basis, subject to the terms of the Exchange Agreement, including our right to elect to deliver cash in lieu of Class A common stock and, in certain cases, adjustments as set forth therein. Opco will have in effect an election under Section 754 of the Internal Revenue Code for each taxable year in which an exchange of Opco common units for Class A common stock (or cash) occurs. The exchanges are expected to result in increases in the tax basis of the tangible and intangible assets of Opco. These increases in tax basis may reduce the amount of tax that we would otherwise be required to pay in the future. These increases in tax basis may also decrease gains (or increase losses) on future dispositions of certain capital assets to the extent tax basis is allocated to those capital assets. The Tax Receivable Agreement provides for the payment by us to exchanging holders of Opco common units of 85% of certain net income tax benefits, if any, that we realize (or in certain cases is deemed to realize) as a result of these increases in tax basis and certain other tax attributes of Opco and tax benefits related to entering into the Tax Receivable Agreement, including tax benefits attributable to payments under the Tax Receivable Agreement. This payment obligation is an obligation of the Company and not of Opco. For purposes of the Tax Receivable Agreement, the cash tax savings in income tax will be computed by comparing our actual income tax liability (calculated with certain assumptions) to the amount of such taxes that we would have been required to pay had there been no increase (or decrease) to the tax basis of the assets of Opco as a result of Opco having an election in effect under Section 754 of the Code for each taxable year in which an exchange of Opco common units for Class A common stock occurs and had we not entered into the Tax Receivable Agreement. Such increase or decrease will be calculated under the Tax Receivable Agreement without regard to any transfers of Opco common units or distributions with respect to such Opco common units before the exchange under the Exchange Agreement to which Section 743(b) or 734(b) of the Code applies. As of December 31, 2021, no such exchanges have occurred, and as such, no value has been recorded under the Tax Receivable Agreement. |
Related Parties
Related Parties | 12 Months Ended |
Dec. 31, 2021 | |
Related Party Transactions [Abstract] | |
Related Parties | Related Parties ICE Management and Technical Support In December 2018, we entered into an intercompany services agreement with ICE to provide management and technical support services. For the period October 15, 2021 through December 31, 2021 and January 1, 2021 through October 14, 2021 and the year ended December 31, 2020, expenses of $0, $1.5 million and $3.1 million, respectively have been recorded in connection with this agreement and are reflected as “Related party expenses (affiliate in Predecessor periods)” in the statements of operations. Prior to the Business Combination, ICE also made various payroll distributions and payments to vendors on behalf of Opco and made unitary state income taxes on behalf of DACC Technologies, Inc., and Digital Asset Custody Company, Inc. (collectively with DACC Technologies, Inc., “DACC”). Upon consummation of the Business Combination, we entered into a Transition Services Agreement (“TSA”) with ICE in which ICE will provide insurance, digital warehouse, data center, technical support, and other transition-related services in exchange for quarterly service fees to be paid by us. We recognized $0.6 million of expense related to the TSA for the period from October 15, 2021 through December 31, 2021, which is reflected as “Related party expenses (affiliate in Predecessor periods)” in the statements of operations and “Due to related party (affiliate in Predecessor period)” in the balance sheets. Purchase and Sale Agreement with Executive A Company executive was a party to the Purchase and Sale Agreement entered into during April 2019, by and among, DACC, the Company, and each of the sellers of DACC. The Company executive owned approximately three percent of DACC’s equity prior to the sale and was paid approximately $0.2 million as consideration for the shares owned at closing and additional amount of less than $0.1 million upon the release of the escrow amount during 2020. Triparty Agreements The Triparty Agreement entered into in August 2019 provides for IFUS to list for trading one or more digital currency futures and/or options contracts, and for ICUS to serve as the clearing house to provide central counterparty and ancillary services for such contracts. The Triparty Agreement also governs our PDF Contracts (Note 2). The PDF Contracts generally have a duration of less than one month, and substantially all of the PDF Contracts are settled in the same month in which the trade execution is initiated. At the expiration of a PDF Contract, physical delivery will occur if the counterparties to the PDF Contract have not previously settled the PDF Contract. PDF Contract Traders are generally institutional investors and market makers that enter into agreements separately with each of IFUS, ICUS and us for trading, clearing and custody related services, respectively. With respect to our provision of custody services that are necessary to support the trading and clearing services provided by IFUS and ICUS for the PDF Contracts, our customers are IFUS and ICUS, who are related parties. In this regard, our obligation is to provide a stand-ready custody function that supports the trading and clearing services for the PDF Contracts. Our obligation to provide a stand-ready custody function includes related promises such as: (i) the initial onboarding of PDF Contract Traders to the custody warehouse, which represents the commencement of the custody services; (ii) maintaining a system of accounts within its custody warehouse on behalf of IFUS and ICUS to ensure accurate, timely transfers of bitcoin at PDF Contract maturity (thereby mitigating ICUS’s clearing risk and ensuring safe storage of bitcoin, including when PDF Contracts settle through physical delivery); (iii) standing ready to accept bitcoin deposits from PDF Contract Traders at any point between execution and settlement of the PDF Contract; (iv) verifying account balances of PDF Contract Traders as their PDF Contracts approach expiration; (v) making transfers between PDF Contract Traders as instructed by ICUS when the PDF Contracts reach expiration; and (vi) permitting withdrawals of bitcoin as directed by PDF Contract Traders. The maximum duration of our performance obligation extends from trade execution through the later of settlement of a PDF Contract or the ultimate withdrawal of physically-delivered bitcoin underlying the PDF Contract. However, in our experience, less than 1% of PDF Contracts go to physical settlement. In certain arrangements with PDF Contract Traders, IFUS offers rebates to support market liquidity and trading volume, which provides qualified PDF Contract Traders with a discount to the applicable transaction fee. Under the terms of the Triparty Agreement, these rebates reduce the amount of the trading and clearing revenue that IFUS and ICUS pay to us. To the extent the rebates issued to PDF Contract Traders exceed the transaction fees collected by IFUS and ICUS, we pay IFUS and ICUS for the difference between the rebate amounts and the collected transaction fees. We do not receive any goods or services from IFUS or ICUS in exchange for the payment. The payment to IFUS and ICUS for such shortfall is required to be paid pursuant to the Triparty Agreement. We recognized revenues related to the Triparty Agreement of approximately $0.1 million, $0.1 million and $(2.0) million for the periods from October 15, 2021 through December 31, 2021 and January 1, 2021 through October 14, 2021 and the year ended December 31, 2020, respectively, net of less than $0.1 million for rebates and incentive payments (contra-revenue) for the period from October 15, 2021 through December 31, 2021 and approximately $0.2 million and $3.4 million for rebates and incentive payments (contra-revenue) for the period from January 1, 2021 through October 14, 2021 and the year ended December 31, 2020, respectively. The Triparty Agreement also required Bakkt Trust to make, and, subject to certain limits, to replenish as needed a $35.4 million default resource contribution to ICUS, to be used by ICUS in accordance with the ICUS rules. As described in Note 6, the contribution requirement was reduced to $15.0 million in 2021. The contribution is included in the “Deposits with clearinghouse (affiliate in Predecessor period)” current and noncurrent balances. Interest earned on the contribution, net of certain fees and costs, is paid to Bakkt Trust from ICUS. We did not earn any interest for the periods from October 15, 2021 through December 31, 2021 and January 1, 2021 through October 14, 2021. Total interest of $0.1 million was earned for the year ended December 31, 2020 and is included in “Interest income, net.” All interest earned was collected as of December 31, 2020. Prior to the Business Combination, we also recognized a capital contribution for the cost of the trading and clearing services provided by IFUS and ICUS pursuant to the Contribution Agreement, which reduced revenue attributable to the Triparty Agreement by $0.2 million and $0.7 million for the period from January 1, 2021 through October 14, 2021 and the year ended December 31, 2020, respectively (Note 10). We did not recognize a material reduction in revenue related to this capital contribution for the period from October 15, 2021 through December 31, 2021. Pursuant to a separate triparty agreement among ICE Futures Singapore (“IFS”), ICE Clear Singapore (“ICS”) and Opco, IFS and ICS provide trade execution and clearing services to customers that trade the cash-settled futures. We provide to IFS and ICS pricing data from its PDF Contracts and also licenses its name to IFS and ICS for use in marketing the cash-settled futures. ICS and IFS pay to us 35% of the net trading and clearing revenue that they earn with respect to these contracts. We are not a party to the contracts with customers that trade the cash-settled futures. To date, the cash-settled contracts have resulted in no net revenue payable to us. As of December 31, 2021 and 2020, we had $0 and approximately $1.9 million, respectively, reflected as “Due to related party (affiliate in Predecessor period)” in the balance sheets related to the intercompany services agreement and Triparty Agreement. As of December 31, 2021 and 2020, we had approximately $0.1 million and $0, respectively, as recorded within “Accounts receivable, net” in the balance sheets related to the intercompany services agreement and Triparty Agreement. Other Contractual Relationships with ICE Prior to the withdrawal of Bakkt Clearing’s ICUS membership on May 20, 2020, Bakkt Clearing was required to hold shares of ICE stock for ICUS membership privileges. These shares were carried at cost basis and evaluated periodically for impairment. In connection with the withdrawal of Bakkt Clearing’s ICUS membership, these shares were remeasured at fair value, with unrealized gains and losses being reflected as “Other income (expense), net” in the statements of operations. In June 2021, we sold all of its shares of ICE stock. For the period from January 1, 2021 through October 14, 2021, we recorded a realized loss on the sale of shares of affiliate stock of approximately $0.1 million. For the year ended December 31, 2020, we recorded an unrealized gain of $0.6 million which is included in “Other income (expense), net”. On February 21, 2020, ICE acquired 100% of the issued and outstanding ownership interests in Bridge2 Solutions (Note 4). On March 12, 2020, we completed Series C round of funding in the amount of $299.7 million and issued 270,000,000 Class C voting units to ICE and certain minority investors (Note 10). As part of this funding, ICE contributed the Bridge2 Solutions business to us at an enterprise value of $261.4 million with $10.1 million of additional goodwill, as discussed in Note 4, and made a $2.6 million cash contribution, approximately $1.4 million of which was used to pay acquisition-related expenses incurred by the Company. Additionally, we received approximately $36.6 million of cash contributions from ICE and certain minority investors. Minority Investor Transactions On May 19, 2020, we entered into an agreement to issue a warrant for our Class C voting units to a minority investor in exchange for certain management consulting services rendered by minority investor to us. The fair value of the warrant on the grant date was estimated to be approximately $1.6 million. See Note 10 for additional disclosures. |
Warrants
Warrants | 12 Months Ended |
Dec. 31, 2021 | |
Other Liabilities Disclosure [Abstract] | |
Warrants | Warrants As of December 31, 2021, there were 7,141,035 public warrants and 0 private placement warrants outstanding. public warrants may only be exercised for a whole number of shares. No fractional shares will be issued upon exercise of the public warrant. Each warrant entitles its holders to purchase one share of Class A common stock at an exercise price of $11.50 per share. The public warrants and private placement warrants became exercisable on November 15, 2021. The public warrants will expire five years after the Closing Date, or earlier upon redemption or liquidation. We may redeem the outstanding warrants when various conditions are met, such as specific stock prices, as detailed in the specific warrant agreements. The warrants are recorded as a liability and reflected as “Warrant liability” in the balance sheets. During the period from October 15, 2021 through December 31, 2021, we issued 7,194,928 shares of Class A common stock in exchange for the exercise of 3,227,566 public warrants and the cashless exercise of 6,147,440 private placement warrants. We received $37.1 million in proceeds from the exercise of the public warrants. We recognized a loss from the change in fair value of the warrant liability during the period from October 15, 2021 through December 31, 2021 of $79.4 million. |
Stockholders_ Equity
Stockholders’ Equity | 12 Months Ended |
Dec. 31, 2021 | |
Equity [Abstract] | |
Stockholders’ Equity | Stockholders’ Equity Preferred Stock We are authorized to issue 1,000,000 shares of preferred stock with a par value of $0.0001 per share. The holders of a series of preferred stock shall be entitled only to such voting rights as shall expressly be granted thereto by the Certificate of Incorporation (including any certificate of designation relating to such series of preferred stock). As of December 31, 2021, no shares of preferred stock have been issued. Common Stock Class A Common Stock We are authorized to issue 750,000,000 shares with a par value of $0.0001 per share. Each holder of Class A common stock is entitled to one vote for each share of Class A common stock held of record by such holder on all matters on which stockholders generally or holders of Class A common stock as a separate class are entitled to vote, including the election or removal of directors (whether voting separately as a class or together with one or more classes of our capital stock). As of December 31, 2021, there were 57,164,388 shares of Class A common stock issued and outstanding. Dividends Subject to preferences that may be applicable to any outstanding preferred stock, the holders of shares of Class A common stock are entitled to receive ratably such dividends, if any, as may be declared from time to time by our Board out of funds legally available therefor. Liquidation In the event of any voluntary or involuntary liquidation, dissolution or winding up of our affairs, the holders of Class A common stock are entitled to share ratably in all assets remaining after payment of our debts and other liabilities, subject to prior distribution rights of preferred stock or any class or series of stock having a preference over the Class A common stock, then outstanding, if any. Class V Common Stock We are authorized to issue 250,000,000 shares with par value $0.0001 per share. These shares have no economic value but entitle the holder to one vote per share. Each Opco common unit, when coupled with one share of our Class V common stock is referred to as a “Paired Interest.” Paired Interests may be exchanged for one share of our Class A common stock or a cash amount in accordance with the Third Amended and Restated Limited Liability Company Agreement of Opco, and the Exchange Agreement. As of December 31, 2021, there were 206,271,792 shares of Class V common stock issued and outstanding. Dividends Dividends shall not be declared or paid on the Class V common stock. Liquidation In the event of any voluntary or involuntary liquidation, dissolution or winding up of our affairs, the holders of Class V common stock shall not be entitled to receive any of our assets. Restrictions In the event that any outstanding share of Class V common stock ceases to be held directly or indirectly by a holder of a Opco common units, such share will automatically be transferred to us and cancelled for no consideration. We will not issue additional shares of Class V common stock after the effectiveness of the Certificate of Incorporation other than in connection with the valid issuance or transfer of Opco common units in accordance with Opco’s Third Amended and Restated Limited Liability Company Agreement (the “LLC Agreement”). Members’ Equity Prior to the Business Combination, Opco had three classes of voting units – Class A, Class B and Class C voting units – and incentive units granted under the Opco Incentive Equity Plan (the “Opco Plan”) (Note 11). In December 2018, pursuant to the contribution agreement between Opco and ICE in connection with ICE’s formation of Opco (the “Contribution Agreement”), ICE committed to contribute developed assets and licenses in exchange for 400,000,000 Class A voting units. The primary value contributed by ICE was the access to the trading and clearing services to be provided for the duration of the Triparty Agreement. Prior to 2020, ICE had contributed developed technology assets of $1.7 million, which is included in “Property, equipment and software, net” (Note 6). The contribution from ICE and associated increase in “Members’ equity” for the Class A voting units issued was recognized over time as the services were provided. During the period from January 1, 2021 through October 14, 2021 and the year ended December 31, 2020, ICE contributed approximately $0.2 million and $0.7 million, respectively, of exchange and clearing license value based on costs incurred by IFUS and ICUS for executing and clearing bitcoin futures under the Triparty Agreement. This is shown as a reduction to “Net revenues” in the statements of operations and an increase to “Members’ equity” in the balance sheets. The reduction to revenue for the period from October 15, 2021 through December 31, 2021 was immaterial. Also, in December, 2018, ICE and minority investors contributed $182.5 million in exchange for Class B voting units. This was comprised of $111.5 million and $71.0 million contributed by ICE and other Class B voting unit holders (“Minority Investors”), respectively. Each Class B voting unit was convertible at the option of the voting unit holder any time into Class A voting units using a defined conversion price formula. All Class B voting units were to convert automatically to Class A voting units in the event of an initial public offering. ICE had a call option on voting units held by Minority Investors that had a trigger date on the fifth anniversary of the launch of certain services, which occurred on September 23, 2019, and ending on the second anniversary after the trigger date. The Minority Investors had a put option on the voting units held requiring ICE to purchase the voting units, based on a trigger date on the third anniversary of the launch of certain services, which occurred on September 23, 2019, and ending on the second anniversary after the trigger date. The price on both the call and put was based on a fair market value calculation, as defined in the LLC Agreement. In February 2020, Opco entered into a second amended and restated limited liability company agreement. In March 2020, Opco issued approximately 270,000,000 Class C voting units at a price of $1.11 per share for total consideration of $299.7 million. The issuance resulted in Opco recognizing approximately $9.6 million of compensation cost associated with its equity incentive plan (Note 11). In connection with the Business Combination (Note 4), the Opco equity holders converted 400,000,000 Opco Class A voting units, 192,453,454 Opco Class B voting units, and 270,270,270 Opco Class C voting units to 189,933,286 shares of Class V common stock on a pro rata basis. Additionally, we issued 17,473,362 shares of Class V common stock related to the outstanding Opco incentive units. Issuance of Class B Warrant On February 19, 2020, Opco issued a warrant to a strategic partner to purchase 15,000,000 of Opco’s Class B voting units (“Class B Warrant”), at an exercise price of $1.00 per unit, exercisable upon issuance, that expires 3 years from issuance. Since the strategic partner is also a customer of Opco, the issuance of the warrant was determined to be consideration payable to a customer and was recognized as a unit-based sales incentive at fair value on the warrant’s issuance date of $5.4 million, with a corresponding asset recognized and amortized over the term of the customer contract as a reduction to revenue (Note 3). The current and noncurrent portions of the corresponding asset are included in “Other current assets” and “Other assets,” respectively. The fair value of the Class B Warrant at the issuance date was measured using the Black-Scholes model. The key inputs used in the valuation were as follows: As of February 19, Dividend yield — % Risk-free interest rate 1.39 % Expected volatility 40.00 % Expected term (years) 3.00 Estimates were determined as follows (i) expected term based on the warrant’s contractual period, (ii) based on the blended volatilities of comparable public companies, (iii) risk-free interest rates based on the U.S. Treasury yield for the expected term, and (iv) an expected dividend yield of zero percent was used since we did not yet and do not yet presently expect to pay dividends. On April 6, 2021, the strategic partner elected to net exercise its Class B Warrant in exchange for 9,953,454 of Class B voting units. In October 2021, Opco updated its assessment of future revenue from its relationship with the strategic partner and determined that the carrying value of the customer consideration asset exceeded the revenue less cost to provide service expected to be recognized from this relationship. As a result, Opco recorded an impairment charge of approximately $3.6 million to measure the fair value of the customer consideration asset at $0. The impairment charge is reflected as “Impairment of long-lived assets”. Refer to Note 3 for additional disclosures of the revenue reductions related to the customer consideration asset. Issuance of Class C Warrant In May, 2020, Opco issued a warrant to a minority investor to purchase 3,603,600 of Opco’s Class C voting units (“Class C Warrant”), at an exercise price of $1.11 per unit. The warrant vests upon the fulfillment of certain service conditions, with an expiration date of September 23, 2024. The fair value of the warrant on the grant date was estimated to be approximately $1.6 million. Opco measured the fair value of the warrant at issuance using the Black-Scholes option pricing model. The key inputs used in the valuation were as follows: Dividend yield — % Risk-free interest rate 0.33 % Expected volatility 50.00 % Expected term (years) 4.35 Estimates of expected term were based on the contractual period of the warrants. Estimates of the volatility for the Black-Scholes option-pricing model were based on the blended volatilities of comparable public companies. The risk-free interest rates were based on the U.S. Treasury yield for a term consistent with the expected term. Opco had neither declared or paid any cash dividends and did not plan to pay cash dividends in the foreseeable future as of the issuance date. As a result, an expected dividend yield of zero percent was used. In August 2021, Opco amended the Class C Warrant to change the service conditions for 781,515 warrant units. The service conditions for the remaining 2,822,085 units were unchanged. Opco accounted for the amendment as a modification and remeasured the fair value of the modified warrant units on the modification date using the Black-Scholes model. The fair value of the modified warrant units on modification date was estimated to be approximately $1.0 million. The key inputs used in the valuation were as follows: Dividend yield — % Risk-free interest rate 0.41 % Expected volatility 45.00 % Expected term (years) 3.06 Estimates of expected term were based on the contractual period of the warrants. Estimates of the volatility for the Black-Scholes model were based on the blended volatilities of comparable public companies. The risk-free interest rates were based on the U.S. Treasury yield for a term consistent with the expected term. Opco had neither declared or paid any cash dividends and did not plan to pay cash dividends in the foreseeable future as of the issuance date. As a result, an expected dividend yield of zero percent was used. In connection with the Business Combination, the modified warrant units automatically converted into the right to purchase 793,352 Paired Interests in Opco at an exercise price of $1.11 per Paired Interest. As of December 31, 2021, 172,055 modified warrant units have vested but have not been exercised, and the remaining 621,297 warrant units have not vested or been exercised. As of December 31, 2020, no warrant units had vested or been exercised. We recorded approximately $1.0 million of expense during the period from January 1, 2021 through October 14, 2021 upon the vesting of the modified warrant units which is reflected in “Selling, general and administrative” in the statements of operations. No expenses were recorded in the period from October 15, 2021 through December 31, 2021 or the year ended December 31, 2020 since the service conditions were not probable of being met in those periods. |
Share-Based and Unit-Based Comp
Share-Based and Unit-Based Compensation | 12 Months Ended |
Dec. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Share-Based and Unit-Based Compensation | Share-Based and Unit-Based Compensation 2021 Incentive Plan Our 2021 Omnibus Incentive Plan (the “2021 Incentive Plan”) became effective on the Closing Date with the approval of VIH’s shareholders and the Board of Directors. The 2021 Incentive Plan allows us to make equity and equity-based incentive awards to employees, non-employee directors and consultants. There are 25,816,946 shares of Class A common stock reserved for issuance under the 2021 Incentive Plan which can be granted as stock options, stock appreciation rights, restricted shares, restricted stock units (RSUs), performance stock units (PSUs), dividend equivalent rights and other share-based awards. No award may vest earlier than the first anniversary of the date of grant, expect under limited conditions. Share-Based Compensation Expense During the period from October 15, 2021 through December 31, 2021, we granted 2,141,778 RSUs to employees and directors of Bakkt and Bakkt Trust. We recorded $1.0 million of share-based compensation expense for the period from October 15, 2021 through December 31, 2021 which is included in “Compensation and benefits” in the statements of operations. Unrecognized compensation expense as of December 31, 2021 was $18.6 million for the RSUs. The unrecognized compensation expense will be recognized over a weighted-average period of 1.51 years. In January and February, 2022, we granted 6,869,070 RSUs and 4,765,378 PSUs to employees and directors of Bakkt and Bakkt Trust. The majority of these grants were related to initial employment agreements for executives, which were approved by the Compensation Committee of the Board of Directors. RSU Activity The following tables summarize RSU activity under the 2021 Incentive Plan for the period from October 15, 2021 through December 31, 2021 (in thousands, except per unit data): Successor RSUs Number Weighted Average Remaining Contractual Term (years) Weighted Average Grant Date Fair Value Aggregate Outstanding as of October 15, 2021 — Granted 2,142 $ 9.18 $ 19,669 Forfeited — Outstanding as of December 31, 2021 2,142 1.51 $ 9.18 Vested as of December 31, 2021 — Opco Plan In December 2018, Opco established the Opco Plan. The purpose of the Opco Plan was to provide incentives to selected employees, directors, and service providers to promote long-term growth and profitability. Three types of awards may be granted under the Opco Plan: (1) preferred incentive units, (2) common incentive units, and (3) participation units. The total number of units that Opco was authorized to issue under the Opco Plan was 156,000,000, which were granted at the discretion of the Compensation Committee of the Board of Directors of the Company. Preferred incentive units and common incentive units (collectively, “incentive units”) represent an ownership interest in Opco and are entitled to receive distributions from Opco, subject to certain vesting conditions. Opco classifies incentive units as equity awards on its consolidated balance sheets. Participation units, issued directly by Opco to Opco Plan participants, do not represent an ownership interest in Opco but rather provide Opco Plan participants the contractual right to participate in the value of Opco, if any through a cash payment upon the occurrence of certain events following vesting of the participation units. Because participation units are settled in cash, Opco classifies participation units as liability awards on its consolidated balance sheets. The units are unvested on the grant date and are subject to the vesting terms in the award agreement. They do not receive distributions until such units are vested. The units vest subject to continuous employment through the vesting date (subject to limited exceptions), and the achievement of certain performance and market conditions. A portion of the units may be subject to vesting upon a liquidity event, initial public offering, or partial exit event, or to the extent any incentive units and participation units remain outstanding and unvested on the date that is the eight-year anniversary of the launch of one of Opco’s services in a production environment, which occurred on September 23, 2019, these remaining units will vest based on the calculated fair market value of Opco as of such date. The Business Combination was an initial public offering vesting event contemplated in the Opco Plan. On December 19, 2018, Opco and Bakkt Management, LLC (the “Management Vehicle”), a wholly-owned subsidiary of Opco, entered into the Back-to-Back Agreement. The Management Vehicle has no substantive operations, and its sole purpose is to own incentive units in Opco. Under the Back-to-Back Agreement, Opco grants incentive units to the Management Vehicle, which is a member of Opco, and the Management Vehicle issues economically identical membership interests in the Management Vehicle (“Management incentive units”) to employees. Any employees who receive Management incentive units have an ownership interest in the Management Vehicle, which corresponds to an indirect ownership interest in Opco. Beginning on the 4th anniversary of the date that an incentive unit vests and assuming that Opco has not consummated an IPO or Liquidity Event, the Management Vehicle has the right, but not the obligation, to require Opco to purchase all of the incentive units then held by the Management Vehicle, for a period of four years. As such, Opco classified the incentive units as “Mezzanine equity” in the balance sheets due to this put option which represents a redemption feature. Since the incentive units reached a vesting event due to the Business Combination, the Management Vehicle no longer has the right to require Opco to purchase all of the incentive units held by the Management Vehicle. Accordingly, since the Closing Date, the Company classifies the incentive units as “Noncontrolling interest” in the balance sheets. Prior to the Business Combination, the incentive units were not subject to remeasurement until exercise of the put option became probable. As of December 31, 2020, Opco did not believe it was probable that the put option would be exercised and had not remeasured these incentive units. In February 2020, the Compensation Committee of the Board of Directors of ICE (the previous administrators of the Opco Plan) approved the exchange of certain participation units into common incentive units (the “Unit Exchange”). The Unit Exchange was communicated to eligible participants in April 2020, all of whom elected to participate in the exchange. Under the Unit Exchange, each participation unit was exchanged for common incentive units at a 1.00:1.11 ratio. The Unit Exchange did not result in additional compensation expense because the fair value of the units immediately before and after the modification was the same. In May 2020, Opco amended the Opco Plan. Under the modified Opco Plan, participants have the opportunity to continue to hold unvested units upon voluntary resignation of employment. The number of unvested units that a participant can continue to hold depends on the number of years that the participant was employed. Non-forfeited units vest upon the occurrence of a vesting event, as defined in the Opco Plan, subject to time restrictions. The modification to the Opco Plan did not result in additional compensation expense being recognized because the fair value of the units immediately before and after the modification was the same. In anticipation of the Business Combination, certain incentive unit awards granted under the Opco Plan in late 2020 were modified. The modification was approved in April 2021. The modification required Opco to redeem 40% of the first one-third of certain employee awards which were scheduled to vest upon consummation of the Business Combination. Upon consummation of the Business Combination, we paid approximately $1.5 million to award holders for the redemption. This amount is included in the purchase consideration paid to Opco Equity Holders (Note 4). As this obligation was contingent upon consummation of the Business Combination, Opco did not recognize any additional unit-based compensation expense as a result of the modification for the period from January 1, 2021 through October 14, 2021. Upon consummation of the Business Combination, the 76,475,000 outstanding preferred incentive units and 23,219,745 outstanding common incentive units were converted into 17,473,362 Successor common incentive units, and the 10,811,502 outstanding participation units were converted into 1,197,250 Successor participation units. Contemporaneously with the conversion, approximately one-third of the awards in the Opco Plan vested. In November 2021, we made total payments of $5.2 million to settle the vested participation units. These payments are included in “Other assets and liabilities” in the statements of cash flows. The second and third one-third tranches will generally vest on the one-year and two-year anniversary date of the closing, respectively, although under the terms of the Opco Plan, employees who are terminated without cause after the Closing Date will vest in the unvested portion of their awards immediately upon their termination date. Unit-Based Compensation Expense Unit-based compensation expense for the period from October 15, 2021 through December 31, 2021, was as follows (in thousands): Successor Type of unit Compensation Expense Statement of Operations and Comprehensive Loss Classification Balance Sheet Classification Common incentive unit $ 42,376 Compensation and benefits Noncontrolling interest Participation unit 2,516 Compensation and benefits Other noncurrent liabilities Total $ 44,892 Unit-based compensation expense for the period from January 1, 2021 through October 14, 2021, was as follows (in thousands): Predecessor Type of unit Compensation Expense Statement of Operations and Comprehensive Loss Classification Balance Sheet Classification Preferred incentive unit $ 14,091 Compensation and benefits Mezzanine equity Common incentive unit 12,447 Compensation and benefits Mezzanine equity Participation unit 7,339 Compensation and benefits Other noncurrent liabilities Total $ 33,877 Unit-based compensation expense for the year ended December 31, 2020 was as follows (in thousands): Predecessor Type of unit Compensation Expense Statement of Operations and Comprehensive Loss Classification Balance Sheet Classification Preferred incentive unit $ 9,210 Compensation and benefits Mezzanine equity Common incentive unit 1,727 Compensation and benefits Mezzanine equity Participation unit 712 Compensation and benefits Other noncurrent liabilities Total $ 11,649 Included in the unit-based compensation expense for the period from October 15, 2021 through December 31, 2021 is $47.2 million of accelerated expense related to the incremental fair value of Successor common incentive and participation units based on remeasurement of the fair value of common incentive units and participation units in the Opco Plan on the Closing Date, as well as acceleration of expense for non-substantive service. This increase in expense was partially offset by the reversal of expense previously recorded for forfeitures of preferred and common incentive units made by certain former employees. Included in the unit-based compensation expense for the period January 1, 2021 through October 14, 2021 is approximately $30.6 million of accelerated expense related to the one-third of the incentive units and participation units in the Opco Plan which vested upon consummation of the Business Combination. Included in the unit-based compensation expense for the year ended December 31, 2020 is approximately $9.6 million of accelerated expense related to Opco’s incentive and participation units resulting from the issuance of Class C voting units (Note 10). The additional compensation cost was recognized because the issuance of additional units changed the scenario in the Monte Carlo simulation that was used to calculate the fair value of incentive units and participation units. The new scenario resulted in an acceleration of the compensation cost recognized for Opco’s incentive and participation units. This compensation cost is included in “Acquisition-related expenses”. Unrecognized compensation expense as of December 31, 2021 was approximately $5.7 million and $1.9 million for common incentive units and participation units, respectively. The unrecognized compensation expense will be recognized over a weighted-average period of 1.79 years. Unrecognized compensation expense as of December 31, 2020 was approximately $13.7 million, $9.8 million, and $10.4 million for preferred incentive units, common incentive units, and participation units, respectively. At the time, the unrecognized compensation expense was to be recognized over a weighted-average period of 6.75 years. Unit Activity The following tables summarize common incentive unit activity under the Opco Plan for the period October 15, 2021 through December 31, 2021 (in thousands, except per unit data): Successor Common Incentive Units Number of Weighted Average Remaining Contractual Term (years) Weighted Average Grant Date Fair Value Aggregate Outstanding as of October 15, 2021 17,473 2.00 $ 6.30 $ 109,998 Granted — Forfeited (1,134) $ 6.30 Outstanding as of December 31, 2021 16,339 1.79 $ 6.30 $ 133,240 Vested as of December 31, 2021 11,507 $ 93,840 The following tables summarize preferred incentive unit and common incentive unit activity under the Opco Plan for the period from January 1, 2021 through October 14, 2021 and the year ended December 31, 2020 (in thousands, except per unit data): Predecessor Preferred Incentive Units Number of Weighted Average Remaining Contractual Term (years) Weighted Average Grant Date Fair Value Aggregate Outstanding as of January 1, 2020 82,125 7.73 $ 0.42 $ 34,493 Granted 3,350 $ 0.63 $ 2,105 Forfeited (9,000) $ 0.41 Outstanding as of December 31, 2020 76,475 6.75 $ 0.42 $ 88,711 Granted — Forfeited — Outstanding as of October 14, 2021 76,475 6.04 $ 0.42 $ 141,058 Vested as of October 14, 2021 — Predecessor Common Incentive Units Number of Weighted Average Remaining Contractual Term (years) Weighted Average Grant Date Fair Value Aggregate Outstanding as of January 1, 2020 3,750 7.73 $ 0.34 $ 1,275 Granted 31,333 $ 0.42 $ 13,065 Forfeited (8,250) $ 0.33 Outstanding as of December 31, 2020 26,833 6.75 $ 0.43 $ 25,760 Granted — Forfeited (3,613) $ 0.39 Outstanding as of October 14, 2021 23,220 6.04 $ 0.53 $ 25,605 Vested as of October 14, 2021 — The participation units granted during the periods from October 15, 2021 through December 31, 2021 and January 1, 2021 through October 14, 2021, and the year ended December 31, 2020 were 0.0 million, zero, and 10.7 million, respectively. The total number of participation units outstanding as of December 31, 2021, October 14, 2021, and December 31, 2020 were 0.7 million, 10.8 million, and 11.8 million, respectively. During the Successor period, we granted certain employees awards, which are payable over a two-year period in cash or shares of Class A common stock in an amount that will fluctuate based on the trading price of Class A common stock. We have included these awards in the amounts above as they are subject to the same accounting as the participation units. The fair value of the participation units as of December 31, 2021, October 14, 2021 and December 31, 2020 was $4.1 million, $6.7 million, and $0.9 million, respectively. Participation units are settled in cash and the balance is recorded within other current liabilities and other noncurrent liabilities as described in Note 6. Determination of Fair Value The fair value of incentive and participation units granted is calculated through a Monte Carlo simulation based on various outcomes. Opco determined that a Monte Carlo simulation was an appropriate estimation model because of the market condition associated with the vesting of the units. The determination of the fair value of the units is affected by Opco’s stock price and certain assumptions such as Opco’s expected stock price volatility over the term of the units, risk-free interest rates, and expected dividends, which are determined as follows: • Expected term – The expected term represents the period that a unit is expected to be outstanding. • Volatility – Opco has limited historical data available to derive its own stock price volatility. As such, Opco estimates stock price volatility based on the average historic price volatility of comparable public industry peers. • Risk-free interest rate – The risk-free rate is based on the U.S. Treasury yield curve in effect on the grant date for securities with similar expected terms to the term of Opco’s incentive units. • Expected dividends – Expected dividends is assumed to be zero as Opco has not paid and does not expect to pay cash dividends or non-liquidating distributions. • Discount for lack of marketability – an estimated two year time to exit Predecessor awards and the six month lock-up restriction on Successor awards is reflected as a discount for lack of marketability estimated using the Finnerty model. The inputs used in the models to estimate the fair value of the common incentive units and participation units granted in 2021 and preferred incentive units, common incentive units, and participation units granted in 2020, including the common incentive units granted in connection with the Unit Exchange, are summarized as follows: Successor Predecessor December 31, 2021 December 31, 2020 Dividend yield —% —% Risk-free interest rate 0.06% - 0.36% 1.85% Expected volatility 51.00% - 53.00% 45.00% Expected term (years) 0.50 - 2.00 4.73 and 7.73 Discount for lack of marketability 8.20% 21.00% - 24.00% |
Net Loss per share
Net Loss per share | 12 Months Ended |
Dec. 31, 2021 | |
Earnings Per Share [Abstract] | |
Net Loss per share | Net Loss per shareBasic earnings per share is based on the weighted average number of shares of Class A common stock issued and outstanding during the Successor period. Diluted earnings per share is based on the weighted average number shares of Class A common stock issued and outstanding and the effect of all dilutive common stock equivalents and potentially dilutive share-based awards outstanding during the Successor period. For the Successor period, there is no difference in the number of shares used to calculate basic and diluted shares outstanding due to our net loss position. The potentially dilutive securities that would be anti-dilutive due to our net loss are not included in the calculation of diluted net loss per share attributable to controlling interest. The anti-dilutive securities are included in the table below. The following is a reconciliation of the denominators of the basic and diluted per share computations for net loss (in thousands, except share and per share data): Successor From October 15, 2021 through December 31, 2021 Net Loss per share: Numerator – basic and diluted: Net loss $ (164,827) Less: Net loss attributable to noncontrolling interest (120,832) Net loss attributable to Bakkt Holdings, Inc. – basic and diluted $ (43,995) Denominator – basic and diluted: Weighted average shares outstanding – basic and diluted 54,018,064 Net loss per share – basic and diluted $ (0.81) Potential common shares issuable to employee or directors upon exercise or conversion of shares under our share-based and unit-based compensation plans and upon exercise of warrants are excluded from the computation of diluted earnings per common share when the effect would be anti-dilutive. The following table summarizes the total potential common shares excluded from diluted loss per common share as their effect would be anti-dilutive: Successor From October 15, 2021 through December 31, 2021 RSUs 2,141,778 Private and public warrants 7,141,035 Opco warrants 793,352 Opco unvested incentive units 4,831,432 Opco common units 201,440,360 Total 216,347,957 |
Capital Requirements
Capital Requirements | 12 Months Ended |
Dec. 31, 2021 | |
Financial Services, Banking and Thrift [Abstract] | |
Capital Requirements | Capital Requirements Bakkt Trust is subject to certain NYDFS regulatory capital requirements. These capital requirements require Bakkt Trust to maintain positive net worth at the greater of $15.0 million or the sum of the required percentage established for transmitted assets, cold wallet, and hot wallet custody assets. As of December 31, 2021 and 2020, Bakkt Trust had determined that $16.5 million, respectively should be set aside to satisfy these, which is reflected as “Restricted cash” in the balance sheets. Bakkt Clearing is registered as a futures commission merchant (“FCM”) with the Commodity Futures Trading Commission (“CFTC”) and is a member of the National Futures Association (“NFA”). Bakkt Clearing is subject to CFTC Regulation 1.17, and the NFA capital requirements. Under these requirements, it is generally required to maintain “adjusted net capital” equivalent to the greater of $1.0 million or the sum of 8 percent of customer and noncustomer risk maintenance margin requirements on all positions, as defined. These margin requirements may change from day to day, but as of December 31, 2021, Bakkt Clearing had adjusted net capital of $2.0 million. Bakkt Marketplace is required to maintain tangible member’s equity of a minimum amount, plus the amount of customer funds held in transit since it holds a number of money transmitter licenses and has a virtual currency license (or “BitLicense”) from the NYDFS, which subjects it to NYDFS’ oversight with respect to such business activities conducted in New York State and with New York residents. Tangible member’s equity means member’s equity minus intangible assets and tangible member’s equity amounted to $11.0 million as of December 31, 2021 and approximately $2.5 million as of December 31, 2020. The minimum capital requirements to which our subsidiaries are subject may restrict their ability to transfer cash. We may also be required to transfer cash to our subsidiaries such that they may continue to meet these minimum capital requirements. |
Commitment and Contingencies
Commitment and Contingencies | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies 401(k) Plan We sponsor a 401(k) defined contribution plan covering all eligible U.S. employees. Both Company and employee contributions to the 401(k) plan are discretionary. For the period from October 15, 2021 through December 31, 2021 and January 1, 2021 through October 14, 2021 and the year ended December 31, 2020, we recorded approximately $0.5 million, $1.6 million and $1.5 million respectively of expenses related to the 401(k) plan. Litigation Legal and regulatory proceedings have arisen and may arise in the ordinary course of business. However, we do not believe that the resolution of these matters will have a material adverse effect on our financial position, results of operations or cash flows. However, future results could be materially and adversely affected by new developments relating to the legal proceedings and claims. Commercial Purchasing Card Facility We, through our loyalty business, have a purchasing card facility with a bank that we utilize for redemption purchases made from merchant partners as part of our loyalty redemption platform. Expenditures made using the purchasing card facility are payable monthly, are not subject to formula-based restrictions and do not bear interest if amounts outstanding are paid when due and in full. Among other covenants, the purchasing card facility requires us to maintain a month-end cash balance of $40.0 million. In September 2021, we notified the facility provider that we anticipated a breach of the month-end cash balance requirement. The facility provider agreed to forbear on exercising its rights and remedies under the terms of the facility until October 31, 2021 to allow time for the closing of the Business Combination. We cured the cash balance requirement breach on October 15, 2021 with the closing of the Business Combination. In January 2021, the purchasing card facility was extended to April 15, 2022 in order to facilitate a long-term agreement on more favorable terms to us . Bakkt Holdings, Inc. serves as the guarantor on behalf of our subsidiary under the commercial purchasing card facility. Purchase Obligations In December 2021, we entered into a four-year cloud computing arrangement which includes minimum contractual payments due to the third-party provider. As of December 31, 2021, our outstanding purchase obligations consist of the following future minimum commitments (in thousands): Payments Due by Period Less than 1 year 1-3 years 3-5 years More than 5 years Total Purchase obligations $ 2,250 $ 8,750 $ 9,000 $ — $ 20,000 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income TaxesAs a result of the Business Combination, the Company acquired a controlling interest in Opco, which is treated as a partnership for U.S. federal income tax purposes, and in most applicable state and local income tax jurisdictions. As a partnership, Opco is not itself subject to U.S. federal and certain state and local income taxes. Any taxable income or loss generated by Opco is passed through to and included in the taxable income or loss of its partners, including the Company following the Business Combination, on a pro rata basis. The Company's U.S. federal and state income tax expense primarily relates to the Company’s allocable share of any taxable income or loss of Opco following the Business Combination. In addition, Opco’s wholly owned corporate subsidiaries that are consolidated for U.S. GAAP purposes but separately taxed for federal, state, and foreign income tax purposes as corporations are generating federal, state, and foreign income tax expense. The domestic and foreign components of income (loss) before income taxes for the following period were as follows (in thousands): Successor Predecessor October 15, 2021 through December 31, 2021 January 1, 2021 Year ended December 31, 2020 Domestic $ (153,831) $ (142,376) $ (82,339) Foreign 755 2,555 3,125 Total loss before provision for income taxes $ (153,076) $ (139,821) $ (79,214) Details of the income tax expense (benefit) are as follows (in thousands): Successor Predecessor October 15, 2021 through December 31, 2021 January 1, 2021 through October 14, 2021 Year ended December 31, 2020 Current: Foreign $ 5 $ (763) $ 830 Federal — 161 — State 18 — (85) Total current income tax expense (benefit) 23 (602) 745 Deferred: Foreign — — (1) Federal 10,004 — (11) State 1,724 — (342) Total deferred income tax expense (benefit) 11,728 — (354) Total income tax expense (benefit) $ 11,751 $ (602) $ 391 Successor Predecessor October 15, 2021 through December 31, 2021 January 1, 2021 through October 14, 2021 Year Ended December 31, 2020 Tax provision at federal statutory rate $ (32,146) $ (29,363) $ (16,635) Increase (decrease) in income tax resulting from: Tax on income not subject to entity level federal income tax — 29,859 17,716 Tax rate differences on income in other jurisdictions — — 172 State income taxes, net of federal tax effect 1,741 — (423) Noncontrolling interest 25,375 — — Fair value of warrant liability 16,668 — — Changes in valuation allowance (50) (301) 15 Stock Compensation — — (851) Other 163 (797) 397 Provision for (benefit from) income taxes $ 11,751 $ (602) $ 391 Effective tax rate -7.7 % 0.4 % -0.5 % The effective tax rate differs from the federal statutory rate primarily due to the loss allocated to noncontrolling interest that is not taxed to the Company and the non-deductible fair value expenses related to the warrant liability. While Opco incurred a net loss before income taxes of $153.1 million for the period from October 15, 2021 through December 31, 2021, only $32.4 million was allocated to Bakkt Holdings, Inc. The remaining $120.7 million is benefited for tax purposes by members outside of the reporting group. The primary driver of the expense results from the addback of $79.4 million of non-deductible expense related to fair market value adjustments to the Company’s warrant liability. This resulted in the Company recording income tax expense of $11.8 million for the period. For the period from January 1, 2021 through October 14, 2021 and the year ended December 31, 2020, Opco and its subsidiaries were classified as partnerships or other pass through entities for U.S. federal income tax purposes resulting in $0.6 million benefit from income taxes and $0.4 million income tax expense, respectively. The following summarizes the significant components of our deferred tax assets and liabilities (in thousands): Successor Predecessor December 31, 2021 December 31, 2020 Deferred tax assets: Net operating loss carryforwards 5,011 3,226 Deferred and share-based compensation 252 132 Acquisition costs — 138 Deferred revenue — 55 Property, equipment and software — 25 Other 51 — Total deferred tax assets 5,314 3,576 Less: valuation allowance (3,115) (2,901) Net deferred tax assets 2,199 675 Deferred tax liabilities: Investment in partnership $ 11,507 $ — Intercompany asset with Opco 2,285 — Customer relationships — 293 Acquired technology — 415 Other acquired intangibles — 21 Other — 41 Total deferred tax liabilities 13,792 770 Net deferred tax liabilities $ (11,593) $ (95) Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Deferred tax assets are reduced by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Our realizability of our deferred tax assets, in each jurisdiction, is dependent upon the generation of future taxable income sufficient to utilize the deferred tax assets on income tax returns, including the reversal of existing temporary differences, historical and projected operating results and tax planning strategies. We assessed that certain of its deferred tax assets were not more likely than not to be realized. As such, the Company has a valuation allowance of $3.1 million and $2.9 million as of December 31, 2021 and 2020, respectively. The increase in the valuation allowance during the year was primarily related to the assessment of the realizability of the deferred tax assets at DACC Technologies, Inc., for which the Company has determined it is not more likely than not that it will receive a benefit. As of December 31, 2021, the Company had gross federal net operating loss carryforwards (“NOLs”) of $17.1 million, of which $0.4 million will begin to expire in 2037 and $16.7 million can be carried forward indefinitely. The Company also had state NOLs of $21.4 million which begin to expire in 2037. The Company and its affiliates files income tax returns in the U.S. federal jurisdiction, various state jurisdictions and foreign jurisdictions. The Company is no longer subject to income tax examinations by tax authorities for years prior to 2017. Our non-U.S. subsidiaries are subject to Global Intangible Low-Taxed Income provisions under the Tax Cuts and Jobs Act; however, we have not generated any tax liability under these provisions since enacted. Further, our non-U.S. subsidiaries have not generated material earnings meriting an analysis of indefinite reinvestment of any undistributed earnings. Accordingly, no provision for U.S. federal and state income taxes has been made with respect to these undistributed earnings and a determination of the unrecognized deferred tax liability is not yet applicable or necessary. The effects of uncertain tax positions are recognized in the consolidated financial statements if these positions meet a “more-likely-than-not” threshold. For those uncertain tax positions that are recognized in the consolidated financial statements, liabilities are established to reflect the portion of those positions it cannot conclude “more- likely-than-not” to be realized upon ultimate settlement. The Company had no unrecognized tax benefits or related interest and penalties accrued for the period ended December 31, 2021 and 2020, respectively. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Financial assets and liabilities that are measured at fair value on a recurring basis are classified entirely as Level 1 as follows (in thousands): Successor As of December 31, 2021 Total Level 1 Level 2 Level 3 Liabilities: Warrant liability—public warrants $ 17,424 $ 17,424 $ — $ — Total Liabilities $ 17,424 $ 17,424 $ — $ — Predecessor As of December 31, 2020 Total Level 1 Level 2 Level 3 Assets: Investment in shares of affiliate stock $ 1,823 $ 1,823 $ — $ — Total Assets $ 1,823 $ 1,823 $ — $ — Our public warrant liability and investment in shares of affiliate stock are valued based on quoted prices in active markets and are classified within Level 1. The Private Placement Warrant liability was measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the Successor period until it was fully exercised on November 17, 2021. A reconciliation of the warrant liability associated with private placement warrants from October 15, 2021 through December 31, 2021 is summarized below (in thousands): Successor December 31, 2021 Balance as of October 15, 2021 $ 14,631 Loss from fair value of warrant liability 50,347 Exercise of warrants (64,978) Balance as of December 31, 2021 $ — The carrying amounts of certain financial instruments, including cash and cash equivalents, accounts receivables, unbilled accounts receivables, due from related party, deposits with clearinghouse, due to related party, accounts payable and accrued liabilities, and operating and finance lease obligations approximate their fair values due to their short- term nature. The balance of deposits with clearinghouse not invested in U.S. government securities are in the form of cash, and therefore approximate fair value. During the period from October 15, 2021 through December 31, 2021, we adjusted a |
Leases
Leases | 12 Months Ended |
Dec. 31, 2021 | |
Leases [Abstract] | |
Leases | Leases We assumed operating and finance leases as a result of our acquisition of Bridge2 Solutions on February 21, 2020 for leased office facilities under the terms of various operating leases expiring through 2023. During the year ended December 31, 2021, we also entered into a new real estate lease for office space in Alpharetta, Georgia, that commenced on November 1, 2021, and expires in 2032. We reassessed leases as of the date of the Business Combination as part of our acquisition accounting described in Note 4. We consider a lease to have commenced on the date when we are granted access to the leased asset. Several of these leases include escalation clauses for adjusting rentals. The Company leases real estate for office space under operating leases and office equipment under finance leases. As of December 31, 2021, we do not have any active finance leases. Our real estate leases have remaining lease terms as of December 31, 2021 ranging from 16 months to 129 months, with one of our leases containing an option to extend the term for a period of 5 years exercisable by us, which we are not reasonably certain of exercising at commencement. None of our leases contain an option to terminate the lease without cause at the option of either party during the lease term. Certain equipment leases contain options to purchase the asset at the fair market value, available with the Company. Certain of our real estate leasing agreements include terms requiring us to reimburse the lessor for its share of real estate taxes, insurance, operating costs and utilities which we account for as variable lease costs when incurred since we have elected to not separate lease and non-lease components, and hence are not included in the measurement of lease liability. There are no restrictions or covenants imposed by any of the leases, and none of our leases contain material residual value guarantees. The discount rates for all of our leases are based on our estimated incremental borrowing rate since the rates implicit in the leases were not determinable. Our incremental borrowing rate is based on management’s estimate of the rate of interest we would have to pay to borrow on a fully collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. We have elected the practical expedient under which lease components would not be separated from the non-lease components for all our classes of underlying assets. Accordingly, each lease component and the non-lease components related to the lease component are accounted for as a single lease component. The components of total lease expense are as follows (in thousands): Successor Predecessor For the period October 15, 2021 through December 31, 2021 For the period Year Ended December 31, 2020 Finance lease cost Amortization of right-of-use assets $ — $ 108 $ 185 Interest on lease liabilities 38 27 44 Operating lease cost 370 856 984 Short-term lease cost 33 202 — Variable lease cost 10 56 63 Total lease cost $ 451 $ 1,249 $ 1,276 The short-term lease cost disclosed in the Successor period above reasonably reflects our ongoing short-term lease commitments. Successor Predecessor From October 15, 2021 through December 31, 2021 From January 1, 2021 through October 14, 2021 Year Ended December 31, 2020 Operating Leases Finance Leases Operating Leases Finance Leases Operating Leases Finance Leases Cash paid for amounts included in the measurement of lease liabilities Cash flow from financing activities $ — $ 404 $ — $ 97 $ — $ 313 Cash flow from operating activities $ 106 $ 38 $ 871 $ 27 $ 1,126 $ 44 Supplemental non-cash information on lease liabilities arising from obtaining right-of-use assets $ 10,347 $ — $ — $ — $ 2,991 $ 786 The weighted average remaining lease term for our operating leases was 120.7 months, and the weighted average discount rate for our operating leases was 5.0%. We do not have any active finance leases as of December 31, 2021. We were not party to any short-term leases during the periods presented. The following table shows balance sheet information about our leases: Successor Predecessor Balance sheet December 31, 2021 December 31, 2020 Operating leases: Right-of-use assets Other assets, noncurrent $ 11,239 $ 1,799 Lease liabilities, current Other current liabilities $ 615 $ 953 Lease liabilities, noncurrent Other liabilities, noncurrent $ 10,647 $ 847 Finance leases: Right-of-use assets Other assets, noncurrent $ — $ 468 Lease liabilities, current Other current liabilities $ — $ 129 Lease liabilities, noncurrent Other liabilities, noncurrent $ — $ 369 Future minimum lease payments under non-cancellable leases as of December 31, 2021 were as follows: Operating Leases Finance Leases For the year ended December 31, 2022 (1) $ (3,114) $ — 2023 1,941 — 2024 1,774 — 2025 1,823 — 2026 1,873 — Thereafter 11,817 — Total undiscounted lease payments $ 16,114 $ — Less: Imputed interest $ (4,852) $ — Total lease liability $ 11,262 $ — Current $ 615 $ — Noncurrent (Other noncurrent liabilities) $ 10,647 $ — |
Leases | Leases We assumed operating and finance leases as a result of our acquisition of Bridge2 Solutions on February 21, 2020 for leased office facilities under the terms of various operating leases expiring through 2023. During the year ended December 31, 2021, we also entered into a new real estate lease for office space in Alpharetta, Georgia, that commenced on November 1, 2021, and expires in 2032. We reassessed leases as of the date of the Business Combination as part of our acquisition accounting described in Note 4. We consider a lease to have commenced on the date when we are granted access to the leased asset. Several of these leases include escalation clauses for adjusting rentals. The Company leases real estate for office space under operating leases and office equipment under finance leases. As of December 31, 2021, we do not have any active finance leases. Our real estate leases have remaining lease terms as of December 31, 2021 ranging from 16 months to 129 months, with one of our leases containing an option to extend the term for a period of 5 years exercisable by us, which we are not reasonably certain of exercising at commencement. None of our leases contain an option to terminate the lease without cause at the option of either party during the lease term. Certain equipment leases contain options to purchase the asset at the fair market value, available with the Company. Certain of our real estate leasing agreements include terms requiring us to reimburse the lessor for its share of real estate taxes, insurance, operating costs and utilities which we account for as variable lease costs when incurred since we have elected to not separate lease and non-lease components, and hence are not included in the measurement of lease liability. There are no restrictions or covenants imposed by any of the leases, and none of our leases contain material residual value guarantees. The discount rates for all of our leases are based on our estimated incremental borrowing rate since the rates implicit in the leases were not determinable. Our incremental borrowing rate is based on management’s estimate of the rate of interest we would have to pay to borrow on a fully collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. We have elected the practical expedient under which lease components would not be separated from the non-lease components for all our classes of underlying assets. Accordingly, each lease component and the non-lease components related to the lease component are accounted for as a single lease component. The components of total lease expense are as follows (in thousands): Successor Predecessor For the period October 15, 2021 through December 31, 2021 For the period Year Ended December 31, 2020 Finance lease cost Amortization of right-of-use assets $ — $ 108 $ 185 Interest on lease liabilities 38 27 44 Operating lease cost 370 856 984 Short-term lease cost 33 202 — Variable lease cost 10 56 63 Total lease cost $ 451 $ 1,249 $ 1,276 The short-term lease cost disclosed in the Successor period above reasonably reflects our ongoing short-term lease commitments. Successor Predecessor From October 15, 2021 through December 31, 2021 From January 1, 2021 through October 14, 2021 Year Ended December 31, 2020 Operating Leases Finance Leases Operating Leases Finance Leases Operating Leases Finance Leases Cash paid for amounts included in the measurement of lease liabilities Cash flow from financing activities $ — $ 404 $ — $ 97 $ — $ 313 Cash flow from operating activities $ 106 $ 38 $ 871 $ 27 $ 1,126 $ 44 Supplemental non-cash information on lease liabilities arising from obtaining right-of-use assets $ 10,347 $ — $ — $ — $ 2,991 $ 786 The weighted average remaining lease term for our operating leases was 120.7 months, and the weighted average discount rate for our operating leases was 5.0%. We do not have any active finance leases as of December 31, 2021. We were not party to any short-term leases during the periods presented. The following table shows balance sheet information about our leases: Successor Predecessor Balance sheet December 31, 2021 December 31, 2020 Operating leases: Right-of-use assets Other assets, noncurrent $ 11,239 $ 1,799 Lease liabilities, current Other current liabilities $ 615 $ 953 Lease liabilities, noncurrent Other liabilities, noncurrent $ 10,647 $ 847 Finance leases: Right-of-use assets Other assets, noncurrent $ — $ 468 Lease liabilities, current Other current liabilities $ — $ 129 Lease liabilities, noncurrent Other liabilities, noncurrent $ — $ 369 Future minimum lease payments under non-cancellable leases as of December 31, 2021 were as follows: Operating Leases Finance Leases For the year ended December 31, 2022 (1) $ (3,114) $ — 2023 1,941 — 2024 1,774 — 2025 1,823 — 2026 1,873 — Thereafter 11,817 — Total undiscounted lease payments $ 16,114 $ — Less: Imputed interest $ (4,852) $ — Total lease liability $ 11,262 $ — Current $ 615 $ — Noncurrent (Other noncurrent liabilities) $ 10,647 $ — |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On January 31, 2022, we signed a lease agreement for office space in New York, New York. The lease will commence upon completion of tenant’s work to ready the space for occupancy and has a term of 94 months. The total fixed lease payments over the 94-month term of the lease are $7.3 million. We have evaluated subsequent events and transactions and determined that no other events or transactions met the definition of a subsequent event for purpose of recognition or disclosure in these financial statements. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Consolidation | Basis of Presentation and Consolidation As a result of the Business Combination, we evaluated if VIH or Opco is the predecessor for accounting purposes. In connection therewith, we considered the application of Rule 405 of Regulation C, the interpretive guidance of the staff of the SEC, including factors for registrants to consider in determining the predecessor, and analyzed the following: (1) the order in which the entities were acquired, (2) the size of the entities, (3) the fair value of the entities, (4) the historical and ongoing management structure, and (5) how management discusses our business in this Form 10-K. In considering the foregoing principles of predecessor determination in light of our specific facts and circumstances, we determined that Opco is the predecessor for accounting purposes. The financial statement presentation includes the financial statements of Opco as “Predecessor” for periods prior to the Closing Date and the financial statements of the Company as “Successor” for the period after the Closing Date, including the consolidation of Opco. Refer to Note 4 for further discussion on the Business Combination. The financial statements are prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”) and include the accounts of the Company and our subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. In addition, certain reclassifications of amounts previously reported have been made to the accompanying consolidated financial statements in order to conform to current presentation. In the opinion of management, all adjustments (consisting of normal recurring accruals), considered necessary for a fair presentation have been included. The historical financial information is not necessarily indicative of our future results of operations, financial position, and cash flows. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. We base our estimates on historical experience and various other assumptions that we believe to be reasonable under the circumstances. The inputs into our estimates consider the economic implications of COVID-19 on our critical and significant accounting estimates. Additionally, subsequent to December 31, 2021, there has been a military conflict in Eastern Europe that may have an impact on our operations. As of the date of issuance, the conflict is still ongoing and thus there is uncertainty as to |
Segment Information | Segment Information We operate in one operating and reportable segment. Operating segments are defined as components of an enterprise about which separate financial information is evaluated regularly by the chief operating decision maker, who is our chief executive officer (“CEO”), in deciding how to allocate resources and assessing performance. Further, all material operations are within the United States. Our chief operating decision maker allocates resources and assesses performance based upon discrete financial information at the consolidated level. |
Cash and Cash Equivalents and Restricted Cash | Cash and Cash Equivalents and Restricted Cash We consider all short-term, highly liquid investments with maturities from the purchase date of three months or less to be cash equivalents. Cash equivalents consists of amounts invested in money market funds of $343.1 million and $38.8 million as of December 31, 2021 and 2020, respectively. We classify all cash and cash equivalents that are not available for immediate or general business use as restricted. The restricted cash includes amounts set aside due to regulatory requirements (Note 13). |
Customer Funds and Customer Funds Payable | Customer Funds and Customer Funds Payable Customer funds represents fiat currency deposited in digital wallets. In accordance with state money transmitter laws, we may invest customer cash deposits in certain permissible investments. As of December 31, 2021, we have not made any such investments. We classify the assets as current since they are readily available for customer use with a corresponding customer funds payable liability. |
Translation of Foreign Currencies and Foreign Currency Transactions | Translation of Foreign Currencies and Foreign Currency Transactions Our foreign subsidiaries’ functional currencies are their respective local currencies. The assets and liabilities of foreign subsidiaries are translated into U.S. dollars at the exchange rate at the balance sheet date. Revenue and expenses are translated using average monthly rates. Translation adjustments are included in “Accumulated other comprehensive income” in the balance sheets and reflected as “Currency translation adjustment, net of tax” in the accompanying consolidated statements of operations (the “statements of operations”). Transactions denominated in currencies other than the functional currency are remeasured based on the exchange rates at the time of the transaction. Monetary assets and liabilities are translated at the rate in effect at the balance sheet date, with subsequent changes in exchange rates resulting in transaction gains or losses, which are included in “Other income (expense), net” in the statements of operations and comprehensive loss. Non-monetary assets and liabilities are translated at historical rates and revenue and expenses are translated at average rates in effect during each reporting period. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful AccountsWe classify rights to consideration in exchange for services or goods as accounts receivables. Accounts receivable are rights to consideration that are unconditional (i.e., only the passage of time is required before payment is due). “Accounts receivable, net” includes billed and contract assets (i.e., unbilled receivables), net of an estimated allowance for doubtful accounts. We calculate the allowance using the current expected credit loss model. It is based upon historical loss patterns, the number of days that billings are past due, an evaluation of the potential risk of loss associated with delinquent accounts and incorporates the use of forward-looking information over the contractual term of our accounts receivable. Receivables are written-off and charged against our recorded allowance when we have exhausted collection efforts without success. |
Property, Equipment and Software, Net | Property, Equipment and Software, Net Property, equipment and software are stated at cost, less accumulated depreciation and amortization. Costs related to software we develop or obtain for internal use and such costs are included in “Property, equipment and software, net”. Costs incurred during the preliminary or maintenance development stage are expensed, and costs incurred during the application development stage are capitalized and are amortized over the useful life of the software. |
Impairment of Long-Lived Assets | Impairment of Long-Lived AssetsLong-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of the asset may not be recoverable. The period of depreciation and amortization of long-lived assets is evaluated to determine whether events or circumstances warrant revised estimates of useful lives. When indicators of impairment are present, the recoverability of our long-lived assets is determined by comparing the carrying value of the long-lived assets to total amount of undiscounted net cash flows expected to result from the use of the assets and their eventual disposition. If the estimated future undiscounted cash flows demonstrate the long-lived assets are not recoverable, an impairment loss would be calculated based on the excess of the carrying amounts of the long-lived assets over their fair value. |
Leases | Leases In accordance with ASU 2016-02, Leases (Topic 842) , we determine if an arrangement is a lease and whether it is classified as finance or operating at the inception of the contract. We recognize the lease at its commencement date on the balance sheet as a liability for our obligation related to the lease and a corresponding asset representing our right to use the underlying asset over the period of use. Leases with an initial term of 12 months or less are not recorded on the balance sheet and the lease expense for these leases is recognized on a straight-line basis over the lease term. The lease liability for each lease is recognized as the present value of the lease payments not yet paid at the commencement date. The right-of-use (“ROU”) asset for each lease is recorded at the amount equal to the initial measurement of lease liability, adjusted for balances of prepaid rent, lease incentives received and initial direct costs incurred. When determining lease term, we consider renewal options that are reasonably certain to exercise and termination options that are reasonably certain to not be exercised, in addition to the non-cancellable lease term. For operating leases, expense is generally recognized on a straight-line basis over the lease term, and is recorded within “Selling, general and administrative”. For finance leases, interest on lease liability is recognized using the effective interest method, while the ROU asset is amortized on a straight-line basis over the shorter of the useful life of the ROU asset or the lease term. Interest on lease liability is recorded within “Interest income (expense), net”, and amortization of right-of-use assets is recorded within “Depreciation and amortization”. |
Business Combinations and Acquisition-Related Expenses | Business Combinations We account for our business combinations using the acquisition accounting method, which requires us to determine the fair value of identifiable assets acquired and liabilities assumed, including any contingent consideration, to properly allocate the purchase price to the individual assets acquired and liabilities assumed and record any residual purchase price as goodwill in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 805, Business Combinations . We identify and attribute fair values and estimated lives to the intangible assets acquired and allocates the total cost of an acquisition to the underlying net assets based on their respective estimated fair values. Determining the fair value of assets acquired and liabilities assumed requires management’s judgment and involves the use of significant estimates, including projections of future cash inflows and outflows, discount rates and asset lives. These determinations will affect the amount of amortization expense recognized in future periods. We base our fair value estimates on assumptions we believe are reasonable but recognizes that the assumptions are inherently uncertain. For business combinations effected through a common control transaction, we measure the recognized net assets of the acquiree at the carrying amounts of the net assets previously recognized by our related party. We reflect the operations of entities acquired through a common control transaction in our financial statements as of the first date in the reporting period or as of the date that the entity was acquired by our related party, as applicable. If the initial accounting for the business combination has not been completed by the end of the reporting period in which the business combination occurs, provisional amounts are reported to present information about facts and circumstances that existed as of the acquisition date. Once the measurement period ends, which in no case extends beyond one year from the acquisition date, revisions to the accounting for the business combination are recorded in earnings. All acquisition-related costs, other than the costs to issue debt or equity securities, are accounted for as expenses in the period in which they are incurred. |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill and intangible assets that have indefinite useful lives are accounted for in accordance with ASC 350, Intangibles — Goodwill and Other . We allocate the cost of an acquired entity to the assets acquired and liabilities assumed based on their estimated fair values at the date of acquisition. The excess of the acquisition consideration transferred over the fair value of the net assets acquired, including other intangible assets, is recorded as goodwill. Goodwill is tested for impairment at the reporting unit level, and we are organized and operate as a single reporting unit. Goodwill and indefinite-lived intangible assets are tested at least annually or more frequently when events or circumstances occur that indicate that it is more likely than not that an impairment has occurred. In assessing goodwill and intangible assets for impairment, we first assess qualitative factors to determine whether it is necessary to perform the quantitative impairment test. In the qualitative assessment, we may consider factors such as economic conditions, industry and market conditions and developments, overall financial performance and other relevant entity-specific events in determining whether it is more likely than not that the fair value of the reporting unit is less than the carrying amount. Should we conclude that it is more likely than not that the recorded goodwill and intangible assets amounts have been impaired, we would perform the impairment test. An impairment loss is recognized in earnings if the estimated fair value of a reporting unit or indefinite lived intangible asset is less than the carrying amount of the reporting unit or intangible asset. Significant judgment is applied when goodwill and intangible assets are assessed for impairment. Identifiable intangible assets with finite lives are amortized on a straight-line basis over their estimated useful lives and are also reviewed at least annually for impairment or more frequently if conditions exist that indicate that an asset may be impaired. |
Revenue Recognition and Deferred Revenue | Revenue Recognition We recognize revenue when we transfer promised goods or services to customers in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods or services. Digital asset marketplace Digital asset marketplace revenues are derived from the Triparty agreement and our custody services. Triparty Agreement: The Digital Currency Trading, Clearing, and Warehouse Services Agreement with IFUS and ICUS (the “Triparty Agreement”) governs the trading, clearing and custody services for physically-delivered bitcoin futures contracts and options contracts (collectively, “PDF Contracts”). While our performance obligation to IFUS and ICUS is comprised of several related promises as described in Note 8, we have concluded that we have a single performance obligation to provide a stand-ready custody function that supports the trading and clearing services as required for the PDF Contracts for parties that trade PDF Contracts (“PDF Contract Traders”), so that IFUS can execute its trading services and ICUS can clear and arrange for the settlement of the PDF Contracts. We have concluded that the related activities that collectively comprise this single performance obligation are not separately identifiable within the context of the Triparty Agreement, as all are necessary in order for IFUS and ICUS to offer PDF Contracts. We determine the obligation period associated with Triparty Agreement revenue using the portfolio method based on our historical transaction experience, as the PDF Contracts have similar characteristics. The average performance obligation period is less than one month based on the application of the portfolio method. Therefore, we recognize revenue for the stand-ready custody services that we provide to IFUS and ICUS on a straight-line basis over the average performance obligation period, which is less than one month. PDF Contract Traders pay a transaction fee for trading and clearing, which is collected by ICUS. Per terms of the Triparty Agreement, IFUS and ICUS pass to us all trading and clearing transaction fees, net of rebates and liquidity payments issued to PDF Contract Traders. We consider the transaction price to be the net transaction fee received from IFUS and ICUS or paid to IFUS and ICUS. Rebates offered by IFUS to support market liquidity and trading volume represent consideration payable to a customer and reduce the transaction price; as such, these rebates are included in “Net revenues”. Because these rebates are measured and resolved within the same reporting period, it is not necessary for us to estimate these at a given reporting period date. We also recognize a capital contribution for the cost of the trading and clearing services provided by IFUS and ICUS pursuant to the Contribution Agreement (Note 10), which reduces the revenue recognized as part of the net transaction fee. Revenue from the Triparty Agreement is included in “Transaction revenue, net” in the disaggregation of revenue by service type table within Note 3. Custody: For PDF Contract Traders with custody accounts related to PDF Contracts, we do not charge a fee specifically for the custody service. For customers using custody services on a standalone basis, we charge a fee, which is generally based on a fixed fee and represents fixed consideration. We invoice customers on a quarterly basis. Our performance obligation related to the storage and custody of a customer’s bitcoin represents an obligation to provide custody services for digital assets. The contract for custodial services may be terminated by the applicable institution or high net worth individual at any time upon final withdrawal of all digital assets, without incurring a penalty. As a result, we believe our contracts represent a day-to-day contract with each day representing a renewal. These renewals are priced consistently with the original contract and with other similar customers and as such, we do not believe that they represent a material right. The daily contract consists of a single performance obligation to provide custodial services, with the transaction price equal to a pro rata portion (i.e., daily) of the annual custody fee. Our performance obligation to provide custodial services meets the criterion to be satisfied over time. Revenue from our custodial services is included in “Net revenues” in the statements of operations. Revenue from our custody services is included in “Subscription and services revenue” in the disaggregation of revenue by service type table within Note 3. Loyalty redemption platform We host, operate and maintain a loyalty redemption platform connecting loyalty programs to ecommerce merchants allowing loyalty point holders to redeem a spectrum of loyalty currencies for other digital assets, merchandise and services. Our customer in these arrangements is generally the loyalty program sponsor. Our contracts related to our loyalty redemption platform consist of two performance obligations: (1) access to our SaaS-based redemption platform and customer support services and (2) facilitation of order fulfillment services. We are the principal related to providing access to our redemption platform. We are acting as the agent to facilitate order fulfillment services on behalf of the loyalty program sponsor. Revenues generated from our loyalty redemption platform are included in “Net revenues” in the statements of operations and include the following: • Platform subscription fees: Monthly fixed fee charged to customers to access the redemption platform and receive customer support services. We recognize revenue for these fees on a straight-line basis over the related contract term as the customer receives benefits evenly throughout the term of the contract. These fees are allocated to our performance obligation to provide access to our redemption platform, and thus are recognized on a gross basis. Revenue from our platform subscription fees is included in “Subscription and services revenue” in the disaggregation of revenue table by service type in Note 3. • Transaction fees: Transaction fees are earned for most transactions processed through our platform. These fees are allocated to our performance obligation to provide order placement services on behalf of the loyalty program sponsor, and therefore are recognized net of the related redemption cost. We allocate transaction fees to the period in which the related transaction occurs. Revenue from our transaction fees is included in “Transaction revenue, net” in the disaggregation of revenue table by service type in Note 3. • Revenue share fees: We are entitled to revenue share fees in the form of rebates from third-party commerce merchants and other partners which provide services facilitating redemption order fulfillment. We allocate revenue share fees to the period in which the related transaction occurs. Revenue from our revenue share fees is included in “Transaction revenue, net” in the disaggregation of revenue table by service type in Note 3. • Service fees: We earn fees for certain software development activities associated with the implementation of new customers on our loyalty redemption platform and other development activities if a customer requests that we customize certain features and functionalities for their loyalty program. We also earn fees for providing call center services for customers. We recognize service fees as revenue on a straight-line basis, beginning when the internally developed software resulting from such implementation or other development activities are operational in our platform over the longer of the remaining anticipated customer life and 3 years, which represents the estimated useful life of our internally developed software. Implementation and development service fees are generally billed when the implementation and development activities are performed. We recognize deferred revenue when all such fees are billed. Revenue from our services fees is included in “Subscription and services revenue” in the disaggregation of revenue table by service type in Note 3. Alternative payment platform Alternative payment platform revenues are transaction fees earned by Bakkt Marketplace. Development of this platform began in February 2020, when Opco entered into a Strategic Alliance Agreement (the “Strategic Alliance Agreement”) with a strategic partner, who was also a customer of Opco, to develop and operate a mechanism whereby a customer can purchase food and beverage items from the strategic partner using their Bakkt digital wallet. In conjunction with the Strategic Alliance Agreement, the parties entered into a separate agreement under which the Company issued the strategic partner a warrant to purchase 15 million Class B voting units. Opco accounted for the cost of the warrant as consideration payable to a customer within the scope of ASC 606, Revenue from Contracts with Customers , and recorded an asset at the fair value on the grant date of the warrant. Opco recognized the customer consideration asset as a reduction to transaction fees on a straight-line basis over 28 months, which represents the time period between the launch date of the services under the Strategic Alliance Agreement, which occurred in November 2020, and the end of the contract term. These reductions to revenue are included in “Net revenues” in the statements of operations. As described in Note 10, the customer consideration asset was fully impaired during the period from January 1, 2021 through October 14, 2021. Accordingly, Successor period transaction fees no longer reflect a reduction for the recognition of the customer consideration asset. Refer to Note 10 for additional information related to the warrant. Transaction fees and the reduction to transaction fees are included in “Transaction revenue, net” in the disaggregation of revenue by service type table in Note 3. Sale of cryptoassets As part of our operation of the alternative payment platform, we transact in bitcoin and ether (collectively referred to as “cryptoassets”) with consumers. Consumer cryptoasset transactions are not material for the periods from October 15, 2021 through December 31, 2021 and January 1, 2021 through October 14, 2021. There were no consumer cryptoasset transactions for the year ended December 31, 2020. Additionally, as part of our operation of the alternative payment platform, we transact in cryptoassets with our trading partners in order to adjust our cryptoasset inventory based on actual consumer activity to maintain an inventory based on our inventory policy. Transactions in cryptoassets with our trading partners in the normal course of business is not material for the periods from October 15, 2021 through December 31, 2021 and January 1, 2021 through October 14, 2021. There were no material transactions in cryptoassets with our trading partners in the normal course of business for the year ended December 31, 2020. We maintain an inventory reserve of cryptoassets to facilitate consumer transactions if needed. We may adjust our inventory reserve levels under our inventory policy. Sales of cryptoassets resulting from inventory reserve adjustments are not part of our normal course of business. Accordingly, proceeds from the sale of cryptoassets outside of the normal course of business is included in “Other income (expense), net,” net of the cost of cryptoasset sold, in the statements of operations. Opco recognized income from the sale of cryptoassets, net of the cost of cryptoassets sold, of $0 and $1.0 million for periods from October 15, 2021 through December 31, 2021 and January 1, 2021 through October 14, 2021, respectively. There were no sales of cryptoassets outside of the normal course of business for the year ended December 31, 2020. Off-Balance Sheet Cryptoassets Cryptoassets held in a custodial capacity on behalf of our customers are not included in our balance sheet, as we do not own those cryptoassets and they do not exhibit the characteristics of assets as it relates to our consolidated financial statements. Practical expedients We have elected the following practical expedients under ASC 606: • Assessing the performance obligation period for Triparty Agreement transactions on a portfolio basis. • Exclude sales taxes from the measurement of the transaction price. • Not adjust the transaction price for the existence of a significant financing component if the timing difference between a customer’s payment and our performance is one year or less. • Not provide disclosures about the transaction price allocated to unsatisfied performance obligations for contracts with a duration of one year or less or when the consideration is variable and allocated entirely to a wholly unsatisfied performance obligation or a wholly unsatisfied promise to transfer a distinct good or service that forms part of a single performance obligation. Additionally, we have elected the practical expedient under ASC 340-40 to not capitalize incremental costs to obtain a contract with a customer if the amortization period would have been one year or less. Refer to Note 3 for additional disclosures related to our recognition of revenue. Deferred Revenue Deferred revenue includes amounts invoiced prior to our meeting the criteria for revenue recognition. We invoice customers for service fees at the time the service is performed, and such fees are recognized as revenue over time as we satisfy our performance obligation. The portion of deferred revenue to be recognized in the succeeding twelve-month period is recorded as non-current deferred revenue, and the remaining portion is recorded as current deferred revenue. We have determined that these arrangements do not contain a significant financing component, and therefore the transaction price is not adjusted. |
Compensation and Benefits | Compensation and Benefits Compensation and benefits primarily consist of salaries and wages, bonuses, contract labor fees, share-based compensation, unit-based compensation, payroll taxes and benefits associated with the compensation of our employees, |
Professional Services | Professional Services Professional services expenses consist of costs associated with audit, tax, legal and other professional services and are recognized as incurred. |
Technology And Communication | Technology and Communication Technology and communication expenses include costs incurred in operating and maintaining our platform, including software licenses, software maintenance and support, hosting and infrastructure costs. |
Selling, General and Administrative | Selling, General and AdministrativeSelling, general and administrative expenses consist primarily of costs associated with advertising, marketing, insurance and rent. Advertising costs are expensed as incurred. |
Share-Based Compensation | Share-Based Compensation Share-based compensation expense relates to the restricted stock units (“RSUs”) granted during the Successor period. Our RSUs are measured at fair value on the date of grant and recognized as expense in “Compensation and benefits” over the requisite service period. Expense is recognized on a straight-line basis for awards that vest based solely on a service condition, and on an accelerated attribution basis for all other awards. The fair value of our RSUs is determined as the closing price of our Class A common stock on the date of grant. We account for forfeitures as they occur. See Note 11 for additional disclosures related to share-based compensation. |
Unit-Based Compensation | Unit-Based Compensation The Successor period unit-based compensation expense relates to the replacement common incentive units and phantom units (“participation” units) granted during the Predecessor period that were issued to employees as purchase consideration. The replacement incentive units and participation units were measured at fair value on the Closing Date, and we recognize expense in “Compensation and benefits” in the statements of operations over the requisite service period. A portion of the current year expense relates to the acceleration of compensation expense given the satisfaction of non-substantive service obligations upon the Closing Date for certain participation units. Additionally, we recognize variable compensation expense for liability-classified participation units based on changes to the fair value of the awards at each reporting date. We account for forfeitures as they occur. Any cancellations of common incentive units due to clawbacks or similar provisions are recognized in “Other income (expense), net” at the lesser of the recognized compensation cost associated with the unit-based payment arrangement or the fair value of the consideration received. |
Warrant Accounting | Warrant Accounting We account for our Class A common stock warrants in accordance with applicable accounting guidance provided in ASC Topic 815, Derivatives and Hedging—Contracts in Entity’s Own Equity , as either derivative liabilities or as equity instruments depending on the specific terms of the warrant agreement. We classify as equity any equity-linked contracts that (1) require physical settlement or net-share settlement or (2) give us a choice of net-cash settlement or settlement in our own shares (physical settlement or net-share settlement). We classify as assets or liabilities any equity-linked contracts that (1) require net-cash settlement (including a requirement to net-cash settle the contract if an event occurs and if that event is outside our control) or (2) give the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement). All public and private placement warrants issued by us were deemed to qualify for liability classification (Note 9). |
Noncontrolling Interest | Noncontrolling InterestNoncontrolling interest represents the portion of Opco that we control and consolidate but do not own. We recognize each noncontrolling holders’ respective share of the estimated fair value of the net assets at the date of formation or acquisition. Noncontrolling interest is subsequently adjusted by the noncontrolling holders’ share of additional contributions, distributions and their share of the net earnings or losses of each respective consolidated entity. We allocate net income or loss to noncontrolling interest based on the weighted average ownership interest during the period. The net income or loss that is not attributable to the Company is reflected in “Net loss attributable to noncontrolling interest”. We do not recognize a gain or loss on transactions with a consolidated entity in which we do not own 100% of the equity, but we reflect the difference in cash received or paid from the noncontrolling interests carrying amount as additional paid-in capital. |
Income Taxes | Income Taxes We account for deferred income taxes related to the federal and state jurisdictions using the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of assets and liabilities and their respective tax bases. Deferred tax assets are also recognized for the future tax benefits attributable to the expected utilization of existing tax net operating loss carryforwards and other types of carryforwards. If the future utilization of some portion of deferred taxes is determined to be unlikely, a valuation allowance is provided to reduce the recorded tax benefits from such assets. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences and carryforwards are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. In the event interest or penalties are incurred with respect to income tax matters, our policy will be to include such items in income tax expense. We record deferred tax assets and liabilities on a net basis on the consolidated balance sheets. We will recognize interest and penalties related to uncertain tax positions in income tax expense. |
Fair Value Measurements | Fair Value Measurements We account for our financial assets and liabilities that are recognized and/or disclosed at fair value on a recurring basis in accordance with ASC 820, Fair Value Measurements and Disclosures . Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, we consider the principal or most advantageous market in which we would transact, and we consider assumptions that market participants would use when pricing the asset or liability. ASC 820 establishes a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable and proscribes the following fair value hierarchy in determining fair values: Level 1 — Quoted prices for identical assets or liabilities in active markets. Level 2 — Inputs other than quoted prices within Level 1 that are observable either directly or indirectly, including quoted prices in active markets for similar assets or liabilities, quoted prices in markets with insufficient volume or infrequent transactions (less active markets), or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data such as interest rates or yield curves. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash and cash equivalents, restricted cash, and accounts receivable, including unbilled accounts receivable. The associated risk of concentration for cash and cash equivalents and restricted cash is mitigated by banking with creditworthy institutions. At certain times, amounts on deposit exceed federal deposit insurance limits. We have not experienced any losses on our deposits of cash and cash equivalents. |
Investments | Investments Bakkt Clearing was required to hold shares of Intercontinental Exchange, Inc. (“ICE”) stock for ICUS membership privileges prior to the withdrawal of its ICUS membership on May 20, 2020. These shares were carried at cost basis and evaluated periodically for impairment. Upon withdrawal of its ICUS membership, these shares were remeasured at fair value, with realized and unrealized gains and losses being reflected as “Other income (expense), net”. In June 2021, we sold all of our shares of ICE stock, resulting in a realized loss on the sale of shares of affiliate stock of approximately $0.1 million for the period from January 1, 2021 through October 14, 2021. We recorded an unrealized gain of $0.6 million for the year ended December 31, 2020 (Note 8). Investments are classified as current or non-current depending on their maturity dates and when it is expected to be converted into cash. |
Recently Adopted Accounting Pronouncements and Recently Issued Accounting Pronouncements Not Yet Adopted | Recently Adopted Accounting Pronouncements Standard/Description Effective Date and Adoption Effect on Financial Statements ASU No. 2016-13, Financial Instruments - Measurement of Credit Losses on Financial Instruments, applies to all financial instruments carried at amortized cost including accounts receivable and certain off-balance-sheet credit exposures. It requires financial assets carried at amortized cost to be presented at the net amount expected to be collected and requires entities to record credit losses through an allowance for credit losses on available-for-sale debt securities. We adopted on January 1, 2020 on a modified retrospective basis. The adoption of this standard requires more timely recognition of credit losses and credit loss estimates are required to use historical information, current information and reasonable and supportable forecasts of future events. The adoption of the new standard did not have a material impact on our consolidated financial statement amounts. Standard/Description Effective Date and Adoption Effect on Financial Statements ASU 2017-04, Simplifying the Test for Goodwill Impairment, removes the second step of the goodwill impairment test, which requires a hypothetical purchase price allocation if the fair value of a reporting unit is less than its carrying value. Goodwill impairment will now be measured using the difference between the carrying value and the fair value of the reporting unit, and any loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. We adopted on January 1, 2020 on a prospective basis. The adoption of the new standard did not have a material impact on our consolidated financial statement amounts. The fair value of our reporting unit has been greater than its corresponding carrying value since our inception. Changes in future projections, market conditions, and other factors may cause a change in the excess of fair value of our reporting unit over its corresponding carrying value. ASU 2018-15, Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract, helps entities evaluate the accounting for fees paid by a customer in a cloud computing arrangement by providing guidance for determining when an arrangement includes a software license and is solely a hosted service. Customers will now apply the same criteria for capitalizing implementation costs as they would for a software license arrangement. The guidance also prescribes the balance sheet, income statement, and cash flow classification of the capitalized implementation costs and related amortization expense and requires additional quantitative and qualitative disclosures. We adopted on January 1, 2020 and apply the rules prospectively to eligible costs incurred on or after the effective date. The adoption of the new standard did not have a material impact on our consolidated financial statement amounts. ASU No. 2019-12, Simplifying the Accounting for Income Taxes, eliminates certain exceptions related to the approach for intra-period tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. It clarifies that single-member limited liability companies, and other similar disregarded entities that are not subject to income tax, are not required to recognize an allocation of consolidated income tax expense in their separate financial statements. Further, it simplifies the accounting for franchise taxes, enacted changes in tax laws or rates and transactions that result in a step-up in the tax basis of goodwill. We adopted on January 1, 2020 on a prospective basis. The adoption of the new standard did not have a material impact on our consolidated financial statement amounts. Standard/Description Effective Date and Adoption Effect on Financial Statements ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging— Contracts in Entity’s Own Equity (Subtopic 815-40). We early adopted on January 1, 2021. This standard is effective for annual periods beginning after December 15, 2023, including interim periods therein, with early adoption permitted. The adoption of the new standard did not have a material impact on our consolidated financial statement amounts. ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. This standard requires that an acquirer recognize, and measure contract assets and liabilities acquired in a business combination in accordance with ASU 2014-09, Revenue from Contracts with Customers (Topic 606), or ASU 2021-08. We early adopted on October 15, 2021 on a prospective basis. This standard is effective for annual periods beginning after December 15, 2022, including interim periods therein, with early adoption permitted. We applied the guidance to the Business Combination as it relates to the measurement of deferred revenue at the acquisition date. Recently Issued Accounting Pronouncements Not Yet Adopted Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Property, Equipment And Software, Useful Lives | Depreciation and amortization are computed using the straight-line method over the following estimated useful lives of assets: Successor Predecessor December 31, 2021 December 31, 2020 Internal use software 3-7 years 3-7 years Purchased software 3 years 3 years Assets under finance lease 2-5 years 2-5 years Office, furniture and equipment 7-10 years 7-10 years Leasehold improvements 7 years 7 years Other computer and network equipment 3 years 3 years Property, equipment and software, net consisted of the following (in thousands): Successor Predecessor December 31, 2021 December 31, 2020 Internal-use software $ 3,550 $ 20,343 Purchased software 17 110 Office furniture and equipment 19 609 Other computer and network equipment 2,991 1,199 Leasehold improvements 277 479 Property, equipment and software, gross 6,854 22,740 Less: accumulated amortization and depreciation (733) (2,783) Total $ 6,121 $ 19,957 |
Recently Adopted Accounting Pronouncements | Standard/Description Effective Date and Adoption Effect on Financial Statements ASU No. 2016-13, Financial Instruments - Measurement of Credit Losses on Financial Instruments, applies to all financial instruments carried at amortized cost including accounts receivable and certain off-balance-sheet credit exposures. It requires financial assets carried at amortized cost to be presented at the net amount expected to be collected and requires entities to record credit losses through an allowance for credit losses on available-for-sale debt securities. We adopted on January 1, 2020 on a modified retrospective basis. The adoption of this standard requires more timely recognition of credit losses and credit loss estimates are required to use historical information, current information and reasonable and supportable forecasts of future events. The adoption of the new standard did not have a material impact on our consolidated financial statement amounts. Standard/Description Effective Date and Adoption Effect on Financial Statements ASU 2017-04, Simplifying the Test for Goodwill Impairment, removes the second step of the goodwill impairment test, which requires a hypothetical purchase price allocation if the fair value of a reporting unit is less than its carrying value. Goodwill impairment will now be measured using the difference between the carrying value and the fair value of the reporting unit, and any loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. We adopted on January 1, 2020 on a prospective basis. The adoption of the new standard did not have a material impact on our consolidated financial statement amounts. The fair value of our reporting unit has been greater than its corresponding carrying value since our inception. Changes in future projections, market conditions, and other factors may cause a change in the excess of fair value of our reporting unit over its corresponding carrying value. ASU 2018-15, Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract, helps entities evaluate the accounting for fees paid by a customer in a cloud computing arrangement by providing guidance for determining when an arrangement includes a software license and is solely a hosted service. Customers will now apply the same criteria for capitalizing implementation costs as they would for a software license arrangement. The guidance also prescribes the balance sheet, income statement, and cash flow classification of the capitalized implementation costs and related amortization expense and requires additional quantitative and qualitative disclosures. We adopted on January 1, 2020 and apply the rules prospectively to eligible costs incurred on or after the effective date. The adoption of the new standard did not have a material impact on our consolidated financial statement amounts. ASU No. 2019-12, Simplifying the Accounting for Income Taxes, eliminates certain exceptions related to the approach for intra-period tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. It clarifies that single-member limited liability companies, and other similar disregarded entities that are not subject to income tax, are not required to recognize an allocation of consolidated income tax expense in their separate financial statements. Further, it simplifies the accounting for franchise taxes, enacted changes in tax laws or rates and transactions that result in a step-up in the tax basis of goodwill. We adopted on January 1, 2020 on a prospective basis. The adoption of the new standard did not have a material impact on our consolidated financial statement amounts. Standard/Description Effective Date and Adoption Effect on Financial Statements ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging— Contracts in Entity’s Own Equity (Subtopic 815-40). We early adopted on January 1, 2021. This standard is effective for annual periods beginning after December 15, 2023, including interim periods therein, with early adoption permitted. The adoption of the new standard did not have a material impact on our consolidated financial statement amounts. ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. This standard requires that an acquirer recognize, and measure contract assets and liabilities acquired in a business combination in accordance with ASU 2014-09, Revenue from Contracts with Customers (Topic 606), or ASU 2021-08. We early adopted on October 15, 2021 on a prospective basis. This standard is effective for annual periods beginning after December 15, 2022, including interim periods therein, with early adoption permitted. We applied the guidance to the Business Combination as it relates to the measurement of deferred revenue at the acquisition date. |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | We disaggregate revenue by service type and by platform, respectively, as follows (in thousands): Successor Predecessor Service Type October 15, 2021 through December 31, 2021 January 1, 2021 through October 14, 2021 Year ended December 31, 2020 Transaction revenue, net (a) $ 5,724 $ 10,637 $ 7,386 Subscription and service revenue 5,757 17,319 21,109 Total revenue $ 11,481 $ 27,956 $ 28,495 (a) Amounts are net of rebates and liquidity payments, reductions related to the Contribution Agreement and consideration payable pursuant to the Strategic Alliance Agreement of less than $0.1 million for the period from October 15, 2021 through December 31, 2021 and approximately $2.1 million and $4.5 million for the period from January 1, 2021 through October 14, 2021 and the year ended December 31, 2020, respectively. Included in these amounts are amounts earned from related parties of less than $0.1 million for the period from October 15, 2021 through December 31, 2021 and approximately $0.3 million and $4.1 million for the period from January 1, 2021 through October 14, 2021 and the year ended December 31, 2020, respectively (Note 8). Successor Predecessor Platform October 15, 2021 through December 31, 2021 January 1, 2021 Year ended December 31, 2020 Digital asset marketplace (b) $ 165 $ 518 $ (1,073) Loyalty redemption platform 11,315 29,179 30,774 Alternative payment platform (c) 1 (1,741) (576) Total revenue $ 11,481 $ 27,956 $ 28,495 (b) Amounts are net of rebates and liquidity payments and reductions related to the Contribution Agreement of less than $0.1 million for the period from October 15, 2021 through December 31, 2021 and approximately $0.3 million and $4.1 million for the period from January 1, 2021 through October 14, 2021 and the year ended December 31, 2020, respectively. (c) Amounts are net of consideration payable pursuant to the Strategic Alliance Agreement of $0, $1.7 million and $0.4 million for the periods from October 15, 2021 through December 31, 2021 and January 1, 2021 through October 14, 2021 and the year ended December 31, 2020, respectively. |
Contract Liabilities | The activity in deferred revenue for the periods from October 15, 2021 through December 31, 2021 and January 1, 2021 through October 14, 2021, and the year ended December 31, 2020 was as follows (in thousands): Successor Predecessor October 15, 2021 through December 31, 2021 January 1, 2021 through October 14, 2021 Year ended December 31, 2020 Beginning of the period contract liability $ 9,423 $ 8,385 $ — Fair value of contract liability acquired (Note 4) — — 12,703 Revenue recognized from contract liabilities included in the beginning balance (1,350) (3,524) (11,005) Increases due to cash received, net of amounts recognized in revenue during the period 1,375 4,562 6,687 End of the period contract liability $ 9,448 $ 9,423 $ 8,385 |
Business Combination and Acqu_2
Business Combination and Acquisition (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Business Acquisitions, by Acquisition | The following table summarizes the estimated fair value of the purchase consideration paid to Opco Equity Holders (in thousands, except per unit data): Consideration Equity consideration paid to Opco Equity Holders (1) $ 1,904,648 Cash paid for redeemed Opco Incentive Units (2) 1,488 Cash paid for seller transaction costs (3) 13,454 Total purchase consideration $ 1,919,590 (1) The equity consideration paid to Opco Equity Holders is equal to the estimated fair value of noncontrolling interest on the acquisition date. Equity consideration paid to Opco Equity Holders consisted of the following: Fair Value Opco common units 189,933 Fair value per unit $ 9.46 Fair value of Opco common units $ 1,796,769 Fair value of Opco common incentive units based on services rendered 107,879 Equity consideration paid to Opco Equity Holders $ 1,904,648 (2) Represents the cash paid to certain Opco Equity Holders in exchange for the redemption of 40% of the first one-third of their Opco common incentive units and preferred incentive units which vested at the effective time of the Business Combination (Note 11). (3) Represents Opco’s liability to pay transaction costs as of the Business Combination date, which was settled with cash received from the Business Combination. |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | We recorded the preliminary allocation of the purchase price to Opco’s assets acquired and liabilities assumed based on their fair values as of October 15, 2021. The preliminary purchase price allocation is as follows (in thousands): Fair Value Cash and cash equivalents, restricted cash and customer funds $ 30,837 Accounts receivable, net 17,009 Other current assets 5,090 Property, equipment and software 4,115 Deposits with clearinghouse, noncurrent (affiliate in Predecessor period) 15,151 Intangible assets 393,070 Goodwill 1,527,071 Deferred tax asset 140 Other assets 3,002 Total assets acquired 1,995,485 Accounts payable and accrued liabilities (52,997) Due to related party (affiliate in Predecessor period) (2,313) Other current liabilities (3,140) Deferred revenue, current (4,665) Participation unit liability (6,756) Deferred revenue, noncurrent (4,758) Other liabilities (1,266) Total liabilities assumed (75,895) Total purchase consideration $ 1,919,590 The following table summarizes the fair values of the net assets acquired as of the acquisition date (in thousands): February 21, 2020 Cash and cash equivalents $ 10,652 Accounts receivable 10,158 Other current assets 1,284 Property and equipment 4,465 Customer relationships 53,620 Technology 11,990 Trade name 415 Other non-current assets 2,864 Goodwill 216,575 Total assets acquired 312,023 Accounts payable and accrued liabilities (22,450) Deferred revenue (12,703) Deferred income tax liabilities (3,005) Other non-current liabilities (2,402) Total liabilities assumed (40,560) Total purchase consideration $ 271,463 |
Finite-Lived and Indefinite-Lived Intangible Assets Acquired as Part of Business Combination | The weighted average amortization period for the acquired intangible assets is 5.7 years. The fair value of the intangible assets is as follows (in thousands): Weighted Average Useful Lives (in years) Fair Value Trademarks / trade names (1) Indefinite $ 39,470 Licenses (2) Indefinite 241,320 Customer relationships (3) 8.0 44,970 Technology (4) 4.2 67,310 Total intangible assets acquired $ 393,070 (1) The trademarks / trade names represent those that Opco originated which were valued using the relief-from-royalty method. (2) The licenses represent those that Opco acquired that were valued using the with-and-without method. (3) The customer relationships represent the existing customer relationships of Opco that were valued by applying the multi-period excess earnings methodology. (4) The technology represents technologies acquired and developed by Opco for the purpose of operating its platform, which were valued using the relief-from-royalty method. |
Business Acquisition, Pro Forma Information | The following unaudited pro forma financial information presents the combined results of operations as if the Business Combination and the acquisition of Bridge2 Solutions had occurred as of January 1, 2020. The unaudited pro forma financial information as presented below is for illustrative purposes and does not purport to represent what the results of operations would actually have been if the business combinations occurred as of the date indicated or what the results would be for any future periods. The unaudited pro forma results reflect the step-up amortization adjustments for the fair value of intangible assets acquired, acquisition-related expenses, nonrecurring post-combination compensation expense, unit-based compensation expense under the new capital structure and the related adjustment to the income tax provision. Year ended December 31, 2021 Year ended December 31, 2020 Pro forma revenue, net $ 39,437 $ 34,154 Pro forma net loss (198,467) (168,751) Less: pro forma net loss attributable to noncontrolling interest (165,136) (140,376) Pro forma net loss attributable to Bakkt Holdings, Inc. $ (33,331) $ (28,375) February 22, 2020 – December 31, 2020 Revenue $ 30,774 Net loss (11,085) |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets, Net (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | Changes in goodwill consisted of the following (in thousands): Predecessor Balance as of January 1, 2020 $ 16,854 Acquisition of Bridge2 Solutions 216,575 Balance as of December 31, 2020 233,429 Foreign currency translation (48) Balance as of October 14, 2021 $ 233,381 Successor Balance as of October 15, 2021 $ 1,527,071 Foreign currency translation 47 Balance as of December 31, 2021 $ 1,527,118 |
Schedule of Finite-Lived Intangible Assets | Intangible assets consisted of the following (in thousands): Successor December 31, 2021 Weighted Average Useful Life (in years) Gross Accumulated Net Licenses Indefinite $ 241,320 $ — $ 241,320 Trademarks / trade names Indefinite 39,470 — 39,470 Technology 4.2 67,310 (3,415) 63,895 Customer relationships 8 44,970 (1,186) 43,784 Total $ 393,070 $ (4,601) $ 388,469 Predecessor December 31, 2020 Weighted Average Useful Life (in years) Gross Accumulated Net Regulatory licenses Indefinite $ 554 $ — $ 554 Acquired technology 7 13,690 (1,879) 11,811 Customer relationships 12 53,620 (3,844) 49,776 Trade name 1 415 (357) 58 Total $ 68,279 $ (6,080) $ 62,199 |
Schedule of Indefinite-Lived Intangible Assets | Intangible assets consisted of the following (in thousands): Successor December 31, 2021 Weighted Average Useful Life (in years) Gross Accumulated Net Licenses Indefinite $ 241,320 $ — $ 241,320 Trademarks / trade names Indefinite 39,470 — 39,470 Technology 4.2 67,310 (3,415) 63,895 Customer relationships 8 44,970 (1,186) 43,784 Total $ 393,070 $ (4,601) $ 388,469 Predecessor December 31, 2020 Weighted Average Useful Life (in years) Gross Accumulated Net Regulatory licenses Indefinite $ 554 $ — $ 554 Acquired technology 7 13,690 (1,879) 11,811 Customer relationships 12 53,620 (3,844) 49,776 Trade name 1 415 (357) 58 Total $ 68,279 $ (6,080) $ 62,199 |
Schedule of Future Amortization For Definite-Lived Intangible Assets | Estimated future amortization for definite-lived intangible assets as of December 31, 2021 is as follows (in thousands): December 31, 2021 Year ending December 31: 2022 $ 21,811 2023 21,811 2024 21,871 2025 18,896 2026 7,628 Thereafter 15,662 Total $ 107,679 |
Consolidated Balance Sheet Co_2
Consolidated Balance Sheet Components (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Accounts Receivable | Accounts receivable, net consisted of the following (in thousands): Successor Predecessor December 31, 2021 December 31, 2020 Trade accounts receivable $ 11,404 $ 5,656 Unbilled receivables 5,448 2,590 Other receivables 1,500 2,312 Total accounts receivable 18,352 10,558 Less: allowance for doubtful accounts (210) (150) Total $ 18,142 $ 10,408 |
Schedule of Other Current Assets | Other current assets consisted of the following (in thousands): Successor Predecessor December 31, 2021 December 31, 2020 Prepaid expenses $ 4,784 $ 4,631 Customer consideration asset, current (Note 10) — 2,325 Total $ 4,784 $ 6,956 |
Schedule of Property, Equipment and Software, Net | Depreciation and amortization are computed using the straight-line method over the following estimated useful lives of assets: Successor Predecessor December 31, 2021 December 31, 2020 Internal use software 3-7 years 3-7 years Purchased software 3 years 3 years Assets under finance lease 2-5 years 2-5 years Office, furniture and equipment 7-10 years 7-10 years Leasehold improvements 7 years 7 years Other computer and network equipment 3 years 3 years Property, equipment and software, net consisted of the following (in thousands): Successor Predecessor December 31, 2021 December 31, 2020 Internal-use software $ 3,550 $ 20,343 Purchased software 17 110 Office furniture and equipment 19 609 Other computer and network equipment 2,991 1,199 Leasehold improvements 277 479 Property, equipment and software, gross 6,854 22,740 Less: accumulated amortization and depreciation (733) (2,783) Total $ 6,121 $ 19,957 |
Schedule of Other Assets | Other assets consisted of the following (in thousands): Successor Predecessor December 31, 2021 December 31, 2020 Customer consideration asset, noncurrent (Note 10) $ — $ 2,713 Operating lease right-of-use assets (Note 17) 11,239 1,799 Finance lease right-of-use assets — 468 Other 2,640 598 Total $ 13,879 $ 5,578 |
Schedule of Accounts Payable and Accrued Liabilities | Accounts payable and accrued liabilities consisted of the following (in thousands): Successor Predecessor December 31, 2021 December 31, 2020 Accounts payable $ 10,646 $ 7,165 Accrued expenses 20,130 14,808 Purchasing card payable 17,698 12,683 Salaries and benefits payable 13,349 6,018 Other 2,267 2,241 Total $ 64,090 $ 42,915 |
Other Current Liabilities | Other current liabilities consisted of the following (in thousands): Successor Predecessor December 31, 2021 December 31, 2020 Participation units liability, current (Note 11) $ 2,027 $ — Current maturities of operating lease liability 615 953 Software license obligation, current — 675 Current maturities of finance lease liability — 129 Other 1,075 186 Total $ 3,717 $ 1,943 |
Other Noncurrent Liabilities | Other noncurrent liabilities consisted of the following (in thousands): Successor Predecessor December 31, 2021 December 31, 2020 Software license obligation, noncurrent $ — $ 1,233 Participation units liability, non-current (Note 11) 2,027 870 Operating lease liability, noncurrent (Note 17) 10,647 847 Finance lease liability, noncurrent — 369 Total $ 12,674 $ 3,319 |
Stockholders_ Equity (Tables)
Stockholders’ Equity (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Equity [Abstract] | |
Schedule of Key Inputs Used in Valuation | The key inputs used in the valuation were as follows: As of February 19, Dividend yield — % Risk-free interest rate 1.39 % Expected volatility 40.00 % Expected term (years) 3.00 Dividend yield — % Risk-free interest rate 0.33 % Expected volatility 50.00 % Expected term (years) 4.35 Dividend yield — % Risk-free interest rate 0.41 % Expected volatility 45.00 % Expected term (years) 3.06 |
Share-Based and Unit-Based Co_2
Share-Based and Unit-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Nonvested Restricted Stock Units Activity | The following tables summarize RSU activity under the 2021 Incentive Plan for the period from October 15, 2021 through December 31, 2021 (in thousands, except per unit data): Successor RSUs Number Weighted Average Remaining Contractual Term (years) Weighted Average Grant Date Fair Value Aggregate Outstanding as of October 15, 2021 — Granted 2,142 $ 9.18 $ 19,669 Forfeited — Outstanding as of December 31, 2021 2,142 1.51 $ 9.18 Vested as of December 31, 2021 — |
Share-based Payment Arrangement, Cost by Plan | Unit-based compensation expense for the period from October 15, 2021 through December 31, 2021, was as follows (in thousands): Successor Type of unit Compensation Expense Statement of Operations and Comprehensive Loss Classification Balance Sheet Classification Common incentive unit $ 42,376 Compensation and benefits Noncontrolling interest Participation unit 2,516 Compensation and benefits Other noncurrent liabilities Total $ 44,892 Unit-based compensation expense for the period from January 1, 2021 through October 14, 2021, was as follows (in thousands): Predecessor Type of unit Compensation Expense Statement of Operations and Comprehensive Loss Classification Balance Sheet Classification Preferred incentive unit $ 14,091 Compensation and benefits Mezzanine equity Common incentive unit 12,447 Compensation and benefits Mezzanine equity Participation unit 7,339 Compensation and benefits Other noncurrent liabilities Total $ 33,877 Unit-based compensation expense for the year ended December 31, 2020 was as follows (in thousands): Predecessor Type of unit Compensation Expense Statement of Operations and Comprehensive Loss Classification Balance Sheet Classification Preferred incentive unit $ 9,210 Compensation and benefits Mezzanine equity Common incentive unit 1,727 Compensation and benefits Mezzanine equity Participation unit 712 Compensation and benefits Other noncurrent liabilities Total $ 11,649 |
Share-based Payment Arrangement, Activity | The following tables summarize common incentive unit activity under the Opco Plan for the period October 15, 2021 through December 31, 2021 (in thousands, except per unit data): Successor Common Incentive Units Number of Weighted Average Remaining Contractual Term (years) Weighted Average Grant Date Fair Value Aggregate Outstanding as of October 15, 2021 17,473 2.00 $ 6.30 $ 109,998 Granted — Forfeited (1,134) $ 6.30 Outstanding as of December 31, 2021 16,339 1.79 $ 6.30 $ 133,240 Vested as of December 31, 2021 11,507 $ 93,840 The following tables summarize preferred incentive unit and common incentive unit activity under the Opco Plan for the period from January 1, 2021 through October 14, 2021 and the year ended December 31, 2020 (in thousands, except per unit data): Predecessor Preferred Incentive Units Number of Weighted Average Remaining Contractual Term (years) Weighted Average Grant Date Fair Value Aggregate Outstanding as of January 1, 2020 82,125 7.73 $ 0.42 $ 34,493 Granted 3,350 $ 0.63 $ 2,105 Forfeited (9,000) $ 0.41 Outstanding as of December 31, 2020 76,475 6.75 $ 0.42 $ 88,711 Granted — Forfeited — Outstanding as of October 14, 2021 76,475 6.04 $ 0.42 $ 141,058 Vested as of October 14, 2021 — Predecessor Common Incentive Units Number of Weighted Average Remaining Contractual Term (years) Weighted Average Grant Date Fair Value Aggregate Outstanding as of January 1, 2020 3,750 7.73 $ 0.34 $ 1,275 Granted 31,333 $ 0.42 $ 13,065 Forfeited (8,250) $ 0.33 Outstanding as of December 31, 2020 26,833 6.75 $ 0.43 $ 25,760 Granted — Forfeited (3,613) $ 0.39 Outstanding as of October 14, 2021 23,220 6.04 $ 0.53 $ 25,605 Vested as of October 14, 2021 — |
Schedule of Share-based Payment Award, Valuation Assumptions | The inputs used in the models to estimate the fair value of the common incentive units and participation units granted in 2021 and preferred incentive units, common incentive units, and participation units granted in 2020, including the common incentive units granted in connection with the Unit Exchange, are summarized as follows: Successor Predecessor December 31, 2021 December 31, 2020 Dividend yield —% —% Risk-free interest rate 0.06% - 0.36% 1.85% Expected volatility 51.00% - 53.00% 45.00% Expected term (years) 0.50 - 2.00 4.73 and 7.73 Discount for lack of marketability 8.20% 21.00% - 24.00% |
Net Loss per share (Tables)
Net Loss per share (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Per Share Computations For Net Loss | The following is a reconciliation of the denominators of the basic and diluted per share computations for net loss (in thousands, except share and per share data): Successor From October 15, 2021 through December 31, 2021 Net Loss per share: Numerator – basic and diluted: Net loss $ (164,827) Less: Net loss attributable to noncontrolling interest (120,832) Net loss attributable to Bakkt Holdings, Inc. – basic and diluted $ (43,995) Denominator – basic and diluted: Weighted average shares outstanding – basic and diluted 54,018,064 Net loss per share – basic and diluted $ (0.81) |
Schedule of Weighted-Average Potential Common Shares Excluded From Diluted Loss Per Common Share | The following table summarizes the total potential common shares excluded from diluted loss per common share as their effect would be anti-dilutive: Successor From October 15, 2021 through December 31, 2021 RSUs 2,141,778 Private and public warrants 7,141,035 Opco warrants 793,352 Opco unvested incentive units 4,831,432 Opco common units 201,440,360 Total 216,347,957 |
Commitment and Contingencies (T
Commitment and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Commitments | As of December 31, 2021, our outstanding purchase obligations consist of the following future minimum commitments (in thousands): Payments Due by Period Less than 1 year 1-3 years 3-5 years More than 5 years Total Purchase obligations $ 2,250 $ 8,750 $ 9,000 $ — $ 20,000 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income before Income Tax, Domestic and Foreign | The domestic and foreign components of income (loss) before income taxes for the following period were as follows (in thousands): Successor Predecessor October 15, 2021 through December 31, 2021 January 1, 2021 Year ended December 31, 2020 Domestic $ (153,831) $ (142,376) $ (82,339) Foreign 755 2,555 3,125 Total loss before provision for income taxes $ (153,076) $ (139,821) $ (79,214) |
Schedule of Components of Income Tax Expense (Benefit) | Details of the income tax expense (benefit) are as follows (in thousands): Successor Predecessor October 15, 2021 through December 31, 2021 January 1, 2021 through October 14, 2021 Year ended December 31, 2020 Current: Foreign $ 5 $ (763) $ 830 Federal — 161 — State 18 — (85) Total current income tax expense (benefit) 23 (602) 745 Deferred: Foreign — — (1) Federal 10,004 — (11) State 1,724 — (342) Total deferred income tax expense (benefit) 11,728 — (354) Total income tax expense (benefit) $ 11,751 $ (602) $ 391 |
Schedule of Effective Income Tax Rate Reconciliation | Successor Predecessor October 15, 2021 through December 31, 2021 January 1, 2021 through October 14, 2021 Year Ended December 31, 2020 Tax provision at federal statutory rate $ (32,146) $ (29,363) $ (16,635) Increase (decrease) in income tax resulting from: Tax on income not subject to entity level federal income tax — 29,859 17,716 Tax rate differences on income in other jurisdictions — — 172 State income taxes, net of federal tax effect 1,741 — (423) Noncontrolling interest 25,375 — — Fair value of warrant liability 16,668 — — Changes in valuation allowance (50) (301) 15 Stock Compensation — — (851) Other 163 (797) 397 Provision for (benefit from) income taxes $ 11,751 $ (602) $ 391 Effective tax rate -7.7 % 0.4 % -0.5 % |
Schedule of Deferred Tax Assets and Liabilities | The following summarizes the significant components of our deferred tax assets and liabilities (in thousands): Successor Predecessor December 31, 2021 December 31, 2020 Deferred tax assets: Net operating loss carryforwards 5,011 3,226 Deferred and share-based compensation 252 132 Acquisition costs — 138 Deferred revenue — 55 Property, equipment and software — 25 Other 51 — Total deferred tax assets 5,314 3,576 Less: valuation allowance (3,115) (2,901) Net deferred tax assets 2,199 675 Deferred tax liabilities: Investment in partnership $ 11,507 $ — Intercompany asset with Opco 2,285 — Customer relationships — 293 Acquired technology — 415 Other acquired intangibles — 21 Other — 41 Total deferred tax liabilities 13,792 770 Net deferred tax liabilities $ (11,593) $ (95) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | Financial assets and liabilities that are measured at fair value on a recurring basis are classified entirely as Level 1 as follows (in thousands): Successor As of December 31, 2021 Total Level 1 Level 2 Level 3 Liabilities: Warrant liability—public warrants $ 17,424 $ 17,424 $ — $ — Total Liabilities $ 17,424 $ 17,424 $ — $ — Predecessor As of December 31, 2020 Total Level 1 Level 2 Level 3 Assets: Investment in shares of affiliate stock $ 1,823 $ 1,823 $ — $ — Total Assets $ 1,823 $ 1,823 $ — $ — |
Reconciliation of Warrant Liability | A reconciliation of the warrant liability associated with private placement warrants from October 15, 2021 through December 31, 2021 is summarized below (in thousands): Successor December 31, 2021 Balance as of October 15, 2021 $ 14,631 Loss from fair value of warrant liability 50,347 Exercise of warrants (64,978) Balance as of December 31, 2021 $ — |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Leases [Abstract] | |
Summary of Lease Cost | The components of total lease expense are as follows (in thousands): Successor Predecessor For the period October 15, 2021 through December 31, 2021 For the period Year Ended December 31, 2020 Finance lease cost Amortization of right-of-use assets $ — $ 108 $ 185 Interest on lease liabilities 38 27 44 Operating lease cost 370 856 984 Short-term lease cost 33 202 — Variable lease cost 10 56 63 Total lease cost $ 451 $ 1,249 $ 1,276 The short-term lease cost disclosed in the Successor period above reasonably reflects our ongoing short-term lease commitments. Successor Predecessor From October 15, 2021 through December 31, 2021 From January 1, 2021 through October 14, 2021 Year Ended December 31, 2020 Operating Leases Finance Leases Operating Leases Finance Leases Operating Leases Finance Leases Cash paid for amounts included in the measurement of lease liabilities Cash flow from financing activities $ — $ 404 $ — $ 97 $ — $ 313 Cash flow from operating activities $ 106 $ 38 $ 871 $ 27 $ 1,126 $ 44 Supplemental non-cash information on lease liabilities arising from obtaining right-of-use assets $ 10,347 $ — $ — $ — $ 2,991 $ 786 |
Summary of Lessee Balance Sheet | The following table shows balance sheet information about our leases: Successor Predecessor Balance sheet December 31, 2021 December 31, 2020 Operating leases: Right-of-use assets Other assets, noncurrent $ 11,239 $ 1,799 Lease liabilities, current Other current liabilities $ 615 $ 953 Lease liabilities, noncurrent Other liabilities, noncurrent $ 10,647 $ 847 Finance leases: Right-of-use assets Other assets, noncurrent $ — $ 468 Lease liabilities, current Other current liabilities $ — $ 129 Lease liabilities, noncurrent Other liabilities, noncurrent $ — $ 369 |
Lessee, Operating Lease, Liability, Maturity | Future minimum lease payments under non-cancellable leases as of December 31, 2021 were as follows: Operating Leases Finance Leases For the year ended December 31, 2022 (1) $ (3,114) $ — 2023 1,941 — 2024 1,774 — 2025 1,823 — 2026 1,873 — Thereafter 11,817 — Total undiscounted lease payments $ 16,114 $ — Less: Imputed interest $ (4,852) $ — Total lease liability $ 11,262 $ — Current $ 615 $ — Noncurrent (Other noncurrent liabilities) $ 10,647 $ — |
Finance Lease, Liability, Fiscal Year Maturity | Future minimum lease payments under non-cancellable leases as of December 31, 2021 were as follows: Operating Leases Finance Leases For the year ended December 31, 2022 (1) $ (3,114) $ — 2023 1,941 — 2024 1,774 — 2025 1,823 — 2026 1,873 — Thereafter 11,817 — Total undiscounted lease payments $ 16,114 $ — Less: Imputed interest $ (4,852) $ — Total lease liability $ 11,262 $ — Current $ 615 $ — Noncurrent (Other noncurrent liabilities) $ 10,647 $ — |
Organization and Description _2
Organization and Description of Business (Details) - USD ($) $ / shares in Units, $ in Millions | Oct. 15, 2021 | Oct. 01, 2020 | Oct. 01, 2020 | Sep. 25, 2020 |
IPO and Over-Allotment Option | Member Units and Warrant | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Proceeds of sale of units and sale of warrants | $ 207.4 | |||
Proceeds from sale of stock and issuance of warrants, placed in trust account (in dollars per share) | $ 10 | $ 10 | ||
IPO | Member Units | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Sale of stock, number of units/warrants issued (in shares) | 20,000,000 | |||
Gross proceeds | $ 200 | |||
Private Placement | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Sale of stock, number of units/warrants issued (in shares) | 32,500,000 | |||
Gross proceeds | $ 325 | |||
Private Placement | Private and public warrants | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Sale of stock, number of units/warrants issued (in shares) | 147,440 | 6,000,000 | ||
Gross proceeds | $ 7.5 | $ 6 | ||
Sale of stock, price per share (in dollars per share) | $ 1 | 1 | $ 1 | |
Over-Allotment Option | Member Units | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Sale of stock, number of units/warrants issued (in shares) | 737,202 | |||
Sale of stock, price per share (in dollars per share) | $ 10 | $ 10 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) shares in Millions | Feb. 29, 2020shares | Dec. 31, 2021USD ($)segment | Dec. 31, 2021USD ($) | Oct. 14, 2021USD ($) | Dec. 31, 2021USD ($)segment | Dec. 31, 2020USD ($) | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Number of operating segments | segment | 1 | ||||||
Number of reportable segments | segment | 1 | 1 | |||||
Allowance for doubtful accounts | $ 200,000 | $ 200,000 | $ 200,000 | $ 200,000 | |||
Receivables, write-off | 0 | $ 0 | 0 | ||||
Impairment of long-lived assets | 1,196,000 | 1,196,000 | 3,598,000 | 15,292,000 | |||
Goodwill and intangible asset impairment charges | 0 | 0 | 0 | ||||
Period over which customer consideration asset is recognized as a reduction to transaction fees on a straight-line basis | 28 months | ||||||
Net revenue | 11,481,000 | [1] | 27,956,000 | 28,495,000 | |||
Other income (expense), net | 832,000 | 487,000 | (218,000) | ||||
Advertising expense | 2,600,000 | 16,200,000 | 4,900,000 | ||||
Acquisition-related expenses | 1,603,000 | 24,793,000 | 13,372,000 | ||||
Realized loss on sale of investment | 100,000 | ||||||
Unrealized gain on investment | 0 | 0 | 628,000 | ||||
Cryptoassets | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Other income (expense), net | 0 | 1,000,000 | 0 | ||||
Cryptoassets | Alternative Payment Platform, Consumer | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Net revenue | 0 | 0 | 0 | ||||
Cryptoassets | Alternative Payment Platform, Trading Partners | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Net revenue | $ 0 | $ 0 | $ 0 | ||||
Accounts Receivable | Customer Concentration Risk | Three Customers | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Customer concentration risk, percentage | 49.00% | ||||||
Accounts Receivable | Customer Concentration Risk | Four Customers | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Customer concentration risk, percentage | 58.00% | ||||||
Revenue from Contract with Customer Benchmark | Customer Concentration Risk | Three Customers | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Customer concentration risk, percentage | 55.00% | ||||||
Revenue from Contract with Customer Benchmark | Customer Concentration Risk | Four Customers | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Customer concentration risk, percentage | 59.00% | ||||||
Revenue from Contract with Customer Benchmark | Customer Concentration Risk | Two Customers | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Customer concentration risk, percentage | 65.00% | ||||||
Class B Voting Units | Member Units | Strategic Partner | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Warrants issued, number of units called by warrants (in shares) | shares | 15 | ||||||
Class C Voting Units | Member Units | Bridge2 Solutions | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Acquisition-related expenses | $ 9,600,000 | ||||||
Money Market Funds | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Cash equivalents, invested in money market funds | $ 343,100,000 | $ 343,100,000 | $ 343,100,000 | $ 38,800,000 | |||
[1] | As a result of the Business Combination (Note 4), ICE and its affiliates are no longer our affiliates. Refer to Note 8 for our related party disclosures. |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Property, Plant, and Equipment Useful Lives (Details) | 3 Months Ended | 12 Months Ended |
Dec. 31, 2021 | Dec. 31, 2020 | |
Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Assets under finance lease, estimated useful life | 2 years | 2 years |
Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Assets under finance lease, estimated useful life | 5 years | 5 years |
Internal use software | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Useful lives of assets | 3 years | 3 years |
Internal use software | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Useful lives of assets | 7 years | 7 years |
Purchased software | ||
Property, Plant and Equipment [Line Items] | ||
Useful lives of assets | 3 years | 3 years |
Office, furniture and equipment | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Useful lives of assets | 7 years | 7 years |
Office, furniture and equipment | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Useful lives of assets | 10 years | 10 years |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Useful lives of assets | 7 years | 7 years |
Other computer and network equipment | ||
Property, Plant and Equipment [Line Items] | ||
Useful lives of assets | 3 years | 3 years |
Revenue from Contracts with C_3
Revenue from Contracts with Customers - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |
Dec. 31, 2021 | Oct. 14, 2021 | Dec. 31, 2020 | ||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 11,481 | [1] | $ 27,956 | $ 28,495 |
Related party net revenues | 71 | 136 | (2,007) | |
Digital asset marketplace | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 165 | 518 | (1,073) | |
Rebates, liquidity payments, and reductions netted against total revenue | 100 | 300 | 4,100 | |
Loyalty redemption platform | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 11,315 | 29,179 | 30,774 | |
Alternative payment platform | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 1 | (1,741) | (576) | |
Considerations payable netted against total revenue | 0 | 1,700 | 400 | |
Transaction revenue, net | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 5,724 | 10,637 | 7,386 | |
Rebates, liquidity payments, reductions and considerations payable netted against total revenue | 100 | 2,100 | 4,500 | |
Related party net revenues | 100 | 300 | 4,100 | |
Subscription and service revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 5,757 | $ 17,319 | $ 21,109 | |
[1] | As a result of the Business Combination (Note 4), ICE and its affiliates are no longer our affiliates. Refer to Note 8 for our related party disclosures. |
Revenue from Contracts with C_4
Revenue from Contracts with Customers (Details) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |
Dec. 31, 2021USD ($)segment | Oct. 14, 2021USD ($) | Dec. 31, 2021USD ($)segment | Dec. 31, 2020USD ($) | |
Disaggregation of Revenue [Line Items] | ||||
Number of reportable segments | segment | 1 | 1 | ||
Transaction price allocated to remaining performance obligation | $ 26,000,000 | $ 26,000,000 | $ 15,500,000 | |
Contract costs | 100,000 | $ 700,000 | 0 | |
Subscription Fees | ||||
Disaggregation of Revenue [Line Items] | ||||
Transaction price allocated to remaining performance obligation | 16,600,000 | $ 16,600,000 | $ 7,100,000 | |
Revenue recognition period | 50 months | 18 months 15 days | ||
Subscription Fees | Minimum | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue recognition period | 10 months | 4 months | ||
Subscription Fees | Maximum | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue recognition period | 57 months | 42 months | ||
Service Fees | ||||
Disaggregation of Revenue [Line Items] | ||||
Transaction price allocated to remaining performance obligation | $ 9,400,000 | $ 9,400,000 | $ 8,400,000 | |
Revenue recognition period | 3 years | 3 years |
Revenue from Contracts with C_5
Revenue from Contracts with Customers - Deferred Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended |
Dec. 31, 2021 | Oct. 14, 2021 | Dec. 31, 2020 | |
Contract with Customer, Liability [Roll Forward] | |||
Beginning of the period contract liability | $ 9,423 | $ 8,385 | $ 0 |
Fair value of contract liability acquired (Note 4) | 0 | 0 | 12,703 |
Revenue recognized from contract liabilities included in the beginning balance | (1,350) | (3,524) | (11,005) |
Increases due to cash received, net of amounts recognized in revenue during the period | 1,375 | 4,562 | 6,687 |
End of the period contract liability | $ 9,448 | $ 9,423 | $ 8,385 |
Business Combination and Acqu_3
Business Combination and Acquisition - Narrative (Details) $ / shares in Units, $ in Thousands | Oct. 15, 2021USD ($)boardMember$ / sharesshares | Feb. 21, 2020USD ($) | Dec. 31, 2021USD ($)$ / sharesshares | Dec. 31, 2021USD ($)$ / sharesshares | Oct. 14, 2021USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) |
Business Acquisition [Line Items] | ||||||||
Repurchase of redeemed Class A ordinary shares | $ 84,500 | $ 84,530 | $ 0 | $ 0 | ||||
Class A ordinary shares redeemed (in shares) | shares | 8,452,042 | 8,452,042 | ||||||
Conversion of Class A ordinary shares and Class B ordinary shares into Class A common stock (Note 4) (in shares) | shares | 12,285,160 | 12,285,160 | ||||||
Temporary equity par value (in usd per share) | $ / shares | $ 0.0001 | |||||||
Acquisition-related expenses | $ 1,603 | 24,793 | 13,372 | |||||
Payment of deferred underwriting fee | 7,258 | 0 | 0 | |||||
Goodwill | $ 1,527,071 | $ 1,527,118 | $ 1,527,118 | 233,381 | $ 233,429 | $ 233,429 | $ 16,854 | |
Customer relationships | ||||||||
Business Acquisition [Line Items] | ||||||||
Weighted Average Useful Life (in years) | 8 years | 12 years | ||||||
Technology | ||||||||
Business Acquisition [Line Items] | ||||||||
Weighted Average Useful Life (in years) | 4 years 2 months 12 days | 7 years | ||||||
Trade Names | ||||||||
Business Acquisition [Line Items] | ||||||||
Weighted Average Useful Life (in years) | 1 year | |||||||
Opco | ||||||||
Business Acquisition [Line Items] | ||||||||
Ownership percentage by parent | 20.30% | |||||||
Private Placement | ||||||||
Business Acquisition [Line Items] | ||||||||
Payment of deferred underwriting fee | $ 7,300 | |||||||
Payments of stock issuance costs | 13,000 | |||||||
Gross proceeds | $ 325,000 | |||||||
Sale of stock, number of units/warrants issued (in shares) | shares | 32,500,000 | |||||||
Common Class A | ||||||||
Business Acquisition [Line Items] | ||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||||
Stock issued in exchange for exercise of warrants (in shares) | shares | 7,194,928 | |||||||
Common stock, shares issued (in shares) | shares | 57,164,388 | 57,164,388 | ||||||
Common Class A | Conversion Of Class A Ordinary Shares And Class B Ordinary Shares Into Class A Common Stock | Common Stock | ||||||||
Business Acquisition [Line Items] | ||||||||
Stock issued in exchange for exercise of warrants (in shares) | shares | 17,469,460 | |||||||
Class V Common Stock | ||||||||
Business Acquisition [Line Items] | ||||||||
Common stock, par value (in dollars per share) | $ / shares | 0.0001 | $ 0.0001 | $ 0.0001 | |||||
Common stock, shares issued (in shares) | shares | 206,271,792 | 206,271,792 | ||||||
Class V Common Stock | Conversion Of Opco Class A, Class B, And Class C Voting Units Into Class V Common Stock | Common Stock | ||||||||
Business Acquisition [Line Items] | ||||||||
Stock issued in exchange for exercise of warrants (in shares) | shares | 189,933,286 | |||||||
Class B Ordinary Shares | ||||||||
Business Acquisition [Line Items] | ||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | |||||||
Class B Ordinary Shares | Conversion Of Class A Ordinary Shares And Class B Ordinary Shares Into Class A Common Stock | Common Stock | ||||||||
Business Acquisition [Line Items] | ||||||||
Stock issued in exchange for exercise of warrants (in shares) | shares | 5,184,300 | (5,184,300) | ||||||
Opco | ||||||||
Business Acquisition [Line Items] | ||||||||
Maximum NCI voting power percentage | 30.00% | |||||||
Voting power of common stock threshold | 50.00% | |||||||
Number of board members from NCI | boardMember | 1 | |||||||
Total number of board members | boardMember | 8 | |||||||
Proceeds of sale of units and sale of warrants | $ 207,400 | |||||||
Acquisition-related expenses | $ 1,600 | 24,800 | ||||||
Success fee | $ 12,100 | |||||||
Payment of director and officer insurance | 900 | |||||||
Goodwill | 1,527,071 | |||||||
Equity consideration transferred | $ 1,904,648 | |||||||
Weighted Average Useful Life (in years) | 5 years 8 months 12 days | |||||||
Opco | Customer relationships | ||||||||
Business Acquisition [Line Items] | ||||||||
Finite-lived intangible assets acquired | $ 44,970 | |||||||
Weighted Average Useful Life (in years) | 8 years | |||||||
Opco | Technology | ||||||||
Business Acquisition [Line Items] | ||||||||
Finite-lived intangible assets acquired | $ 67,310 | |||||||
Weighted Average Useful Life (in years) | 4 years 2 months 12 days | |||||||
Opco | Class V Common Stock | ||||||||
Business Acquisition [Line Items] | ||||||||
Stock issued in exchange for exercise of warrants (in shares) | shares | 208,200,000 | |||||||
Common stock, shares issued (in shares) | shares | 207,406,648 | |||||||
Common stock reserved for future issuance (in shares) | shares | 793,352 | |||||||
Opco | Class V Common Stock | Conversion Of Opco Class A, Class B, And Class C Voting Units Into Class V Common Stock | ||||||||
Business Acquisition [Line Items] | ||||||||
Stock issued in exchange for exercise of warrants (in shares) | shares | 189,933,286 | |||||||
Opco | Class V Common Stock | Conversion of Opco Incentive Units | ||||||||
Business Acquisition [Line Items] | ||||||||
Stock issued in exchange for exercise of warrants (in shares) | shares | 17,473,362 | |||||||
Bridge2 Solutions, LLC | ||||||||
Business Acquisition [Line Items] | ||||||||
Goodwill | $ 216,575 | |||||||
Goodwill purchase accounting adjustments | $ 10,100 | |||||||
Equity consideration transferred | 300,000 | |||||||
Fair value contributed by affiliated entity | $ 260,800 | |||||||
Weighted Average Useful Life (in years) | 11 years | |||||||
Bridge2 Solutions, LLC | Customer relationships | ||||||||
Business Acquisition [Line Items] | ||||||||
Finite-lived intangible assets acquired | $ 53,600 | |||||||
Weighted Average Useful Life (in years) | 12 years | |||||||
Bridge2 Solutions, LLC | Technology | ||||||||
Business Acquisition [Line Items] | ||||||||
Finite-lived intangible assets acquired | $ 12,000 | |||||||
Weighted Average Useful Life (in years) | 7 years | |||||||
Bridge2 Solutions, LLC | Trade Names | ||||||||
Business Acquisition [Line Items] | ||||||||
Finite-lived intangible assets acquired | $ 400 | |||||||
Weighted Average Useful Life (in years) | 1 year |
Business Combination and Acqu_4
Business Combination and Acquisition - Okpo Consideration Transferred (Details) - Opco $ / shares in Units, $ in Thousands | Oct. 15, 2021USD ($)$ / sharesshares |
Business Acquisition [Line Items] | |
Equity consideration paid to Opco Equity Holders | $ 1,904,648 |
Cash paid for redeemed Opco Incentive Units | 1,488 |
Cash paid for seller transaction costs | 13,454 |
Total purchase consideration | $ 1,919,590 |
Opco common units (in shares) | shares | 189,933 |
Fair value per unit (in usd per share) | $ / shares | $ 9.46 |
Fair value of Opco common units | $ 1,796,769 |
Fair value of Opco common incentive units based on services rendered | 107,879 |
Equity consideration paid to Opco Equity Holders | $ 1,904,648 |
Redemption of temporary equity, percentage | 40.00% |
Percentage of awards vested | 0.33 |
Business Combination and Acqu_5
Business Combination and Acquisition - Opko Assets Acquired And Liabilities Assumed (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Oct. 15, 2021 | Oct. 14, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Business Acquisition [Line Items] | |||||
Goodwill | $ 1,527,118 | $ 1,527,071 | $ 233,381 | $ 233,429 | $ 16,854 |
Opco | |||||
Business Acquisition [Line Items] | |||||
Cash and cash equivalents, restricted cash and customer funds | 30,837 | ||||
Accounts receivable, net | 17,009 | ||||
Other current assets | 5,090 | ||||
Property, equipment and software | 4,115 | ||||
Deposits with clearinghouse, noncurrent (affiliate in Predecessor period) | 15,151 | ||||
Intangible assets | 393,070 | ||||
Goodwill | 1,527,071 | ||||
Deferred tax asset | 140 | ||||
Other assets | 3,002 | ||||
Total assets acquired | 1,995,485 | ||||
Accounts payable and accrued liabilities | (52,997) | ||||
Due to related party (affiliate in Predecessor period) | (2,313) | ||||
Other current liabilities | (3,140) | ||||
Deferred revenue, current | (4,665) | ||||
Participation unit liability | (6,756) | ||||
Deferred revenue, noncurrent | (4,758) | ||||
Other liabilities | (1,266) | ||||
Total liabilities assumed | (75,895) | ||||
Total purchase consideration | $ 1,919,590 |
Business Combination and Acqu_6
Business Combination and Acquisition - Opko Finite Lived Intangible Assets Acquired (Details) - USD ($) $ in Thousands | Oct. 15, 2021 | Dec. 31, 2021 | Dec. 31, 2020 |
Customer relationships | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Weighted Average Useful Life (in years) | 8 years | 12 years | |
Technology | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Weighted Average Useful Life (in years) | 4 years 2 months 12 days | 7 years | |
Opco | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets | $ 393,070 | ||
Weighted Average Useful Life (in years) | 5 years 8 months 12 days | ||
Opco | Customer relationships | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Finite-lived intangible assets acquired | $ 44,970 | ||
Weighted Average Useful Life (in years) | 8 years | ||
Opco | Technology | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Finite-lived intangible assets acquired | $ 67,310 | ||
Weighted Average Useful Life (in years) | 4 years 2 months 12 days | ||
Opco | Trademarks / trade names | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Indefinite-lived intangible assets acquired | $ 39,470 | ||
Opco | Licenses | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Indefinite-lived intangible assets acquired | $ 241,320 |
Business Combination and Acqu_7
Business Combination and Acquisition - Opko Pro Forma Information (Details) - Opco - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Business Acquisition [Line Items] | ||
Pro forma revenue, net | $ 39,437 | $ 34,154 |
Pro forma net loss | (198,467) | (168,751) |
Less: pro forma net loss attributable to noncontrolling interest | (165,136) | (140,376) |
Pro forma net loss attributable to Bakkt Holdings, Inc. | $ (33,331) | $ (28,375) |
Business Combination and Acqu_8
Business Combination and Acquisition - Bridge2 Solutions Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Oct. 15, 2021 | Oct. 14, 2021 | Dec. 31, 2020 | Feb. 21, 2020 | Dec. 31, 2019 |
Business Acquisition [Line Items] | ||||||
Goodwill | $ 1,527,118 | $ 1,527,071 | $ 233,381 | $ 233,429 | $ 16,854 | |
Bridge2 Solutions, LLC | ||||||
Business Acquisition [Line Items] | ||||||
Cash and cash equivalents, restricted cash and customer funds | $ 10,652 | |||||
Accounts receivable, net | 10,158 | |||||
Other current assets | 1,284 | |||||
Property, equipment and software | 4,465 | |||||
Other assets | 2,864 | |||||
Goodwill | 216,575 | |||||
Total assets acquired | 312,023 | |||||
Accounts payable and accrued liabilities | (22,450) | |||||
Deferred revenue, current | (12,703) | |||||
Deferred income tax liabilities | (3,005) | |||||
Other liabilities | (2,402) | |||||
Total liabilities assumed | (40,560) | |||||
Total purchase consideration | 271,463 | |||||
Bridge2 Solutions, LLC | Customer relationships | ||||||
Business Acquisition [Line Items] | ||||||
Finite-lived intangible assets | 53,620 | |||||
Bridge2 Solutions, LLC | Technology | ||||||
Business Acquisition [Line Items] | ||||||
Finite-lived intangible assets | 11,990 | |||||
Bridge2 Solutions, LLC | Trade Names | ||||||
Business Acquisition [Line Items] | ||||||
Finite-lived intangible assets | $ 415 |
Business Combination and Acqu_9
Business Combination and Acquisition - Bridge2 Solutions Pro Forma (Details) - Bridge2 Solutions, LLC $ in Thousands | 10 Months Ended |
Dec. 31, 2020USD ($) | |
Business Acquisition [Line Items] | |
Pro forma revenue, net | $ 30,774 |
Pro forma net loss | $ (11,085) |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets, Net - Goodwill (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended |
Dec. 31, 2021 | Oct. 14, 2021 | Dec. 31, 2020 | |
Goodwill [Roll Forward] | |||
Goodwill, beginning balance | $ 233,381 | $ 233,429 | $ 16,854 |
Acquisition of Bridge2 Solutions | 216,575 | ||
Foreign currency translation | 47 | (48) | |
Goodwill, ending balance | $ 1,527,118 | $ 233,381 | $ 233,429 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets, Net (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended |
Dec. 31, 2021 | Oct. 14, 2021 | Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Amortization of intangible assets | $ 4.6 | $ 5.1 | $ 6.5 |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets, Net - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Dec. 31, 2021 | Dec. 31, 2020 | |
Finite-Lived Intangible Assets [Line Items] | ||
Accumulated Amortization | $ (4,601) | $ (6,080) |
Total | 107,679 | |
Gross Carrying Amount | 393,070 | 68,279 |
Net Carrying Amount | 388,469 | 62,199 |
Licenses | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Indefinite-lived intangible assets | 241,320 | $ 554 |
Trademarks / trade names | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Indefinite-lived intangible assets | $ 39,470 | |
Technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Useful Life (in years) | 4 years 2 months 12 days | 7 years |
Gross Carrying Amount | $ 67,310 | $ 13,690 |
Accumulated Amortization | (3,415) | (1,879) |
Total | $ 63,895 | $ 11,811 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Useful Life (in years) | 8 years | 12 years |
Gross Carrying Amount | $ 44,970 | $ 53,620 |
Accumulated Amortization | (1,186) | (3,844) |
Total | $ 43,784 | $ 49,776 |
Trade Names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Useful Life (in years) | 1 year | |
Gross Carrying Amount | $ 415 | |
Accumulated Amortization | (357) | |
Total | $ 58 |
Goodwill and Intangible Asset_6
Goodwill and Intangible Assets, Net - Schedule of Future Amortization (Details) $ in Thousands | Dec. 31, 2021USD ($) |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |
2022 | $ 21,811 |
2023 | 21,811 |
2024 | 21,871 |
2025 | 18,896 |
2026 | 7,628 |
Thereafter | 15,662 |
Total | $ 107,679 |
Consolidated Balance Sheet Co_3
Consolidated Balance Sheet Components - Accounts Receivable, Net (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total accounts receivable | $ 18,352 | $ 10,558 |
Less: allowance for doubtful accounts | (210) | (150) |
Total | 18,142 | 10,408 |
Trade accounts receivable | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total accounts receivable | 11,404 | 5,656 |
Unbilled receivables | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total accounts receivable | 5,448 | 2,590 |
Other receivables | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total accounts receivable | $ 1,500 | $ 2,312 |
Consolidated Balance Sheet Co_4
Consolidated Balance Sheet Components - Other Current Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Prepaid expenses | $ 4,784 | $ 4,631 |
Customer consideration asset, current (Note 10) | 0 | 2,325 |
Other current assets | $ 4,784 | $ 6,956 |
Consolidated Balance Sheet Co_5
Consolidated Balance Sheet Components - Property, Equipment and Software, Net (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Property, Plant and Equipment [Line Items] | ||
Property, equipment and software, gross | $ 6,854 | $ 22,740 |
Less: accumulated amortization and depreciation | (733) | (2,783) |
Total | 6,121 | 19,957 |
Internal use software | ||
Property, Plant and Equipment [Line Items] | ||
Property, equipment and software, gross | 3,550 | 20,343 |
Purchased software | ||
Property, Plant and Equipment [Line Items] | ||
Property, equipment and software, gross | 17 | 110 |
Office, furniture and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, equipment and software, gross | 19 | 609 |
Other computer and network equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, equipment and software, gross | 2,991 | 1,199 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, equipment and software, gross | $ 277 | $ 479 |
Consolidated Balance Sheet Co_6
Consolidated Balance Sheet Components - Narrative (Details) - USD ($) | Feb. 03, 2021 | Jan. 19, 2021 | Dec. 31, 2021 | Dec. 31, 2021 | Oct. 14, 2021 | Dec. 31, 2020 | Jan. 18, 2021 |
Property, Plant and Equipment [Line Items] | |||||||
Depreciation and amortization expense | $ 800,000 | $ 4,400,000 | $ 2,700,000 | ||||
Amortization expense of capitalized internal-use software placed in service | 400,000 | 3,600,000 | 900,000 | ||||
Capitalized computer software | 19,800,000 | ||||||
Capitalized computer software placed in service | 17,400,000 | ||||||
Software license obligation, current | 0 | $ 0 | 675,000 | ||||
Impairment of long-lived assets | 1,196,000 | 1,196,000 | $ 3,598,000 | 15,292,000 | |||
Default resource contribution | 15,200,000 | 15,200,000 | 35,400,000 | ||||
Bakkt Trust | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Default resource contribution | $ 15,200,000 | $ 35,400,000 | |||||
Self-certification period | 14 days | ||||||
Default resource contribution, amount returned | $ 20,200,000 | ||||||
Cash margins (less than) | 100,000 | 100,000 | |||||
License Agreements | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Software license obligation, current | 700,000 | 700,000 | |||||
Impairment of long-lived assets | 1,200,000 | 1,400,000 | |||||
Fair value of impaired asset | 0 | $ 0 | $ 0 | ||||
Income from extinguishment of software license liability | $ 1,300,000 | ||||||
Term of software license agreement | 5 years | ||||||
Internal use software | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Impairment of long-lived assets | $ 11,500,000 | ||||||
Fair value of impaired asset | 0 | ||||||
Purchased software | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Impairment of long-lived assets | 2,500,000 | ||||||
Fair value of impaired asset | $ 0 |
Consolidated Balance Sheet Co_7
Consolidated Balance Sheet Components - Other Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Customer consideration asset, noncurrent (Note 10) | $ 0 | $ 2,713 |
Operating lease right-of-use assets (Note 17) | 11,239 | 1,799 |
Finance lease right-of-use assets | 0 | 468 |
Other | 2,640 | 598 |
Other assets | $ 13,879 | $ 5,578 |
Consolidated Balance Sheet Co_8
Consolidated Balance Sheet Components - Accounts Payable and Accrued Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accounts payable | $ 10,646 | $ 7,165 |
Accrued expenses | 20,130 | 14,808 |
Purchasing card payable | 17,698 | 12,683 |
Salaries and benefits payable | 13,349 | 6,018 |
Other | 2,267 | 2,241 |
Total | $ 64,090 | $ 42,915 |
Consolidated Balance Sheet Co_9
Consolidated Balance Sheet Components - Other Current Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Participation units liability, current (Note 11) | $ 2,027 | $ 0 |
Current maturities of operating lease liability | 615 | 953 |
Software license obligation, current | 0 | 675 |
Current maturities of finance lease liability | 0 | 129 |
Other | 1,075 | 186 |
Total | $ 3,717 | $ 1,943 |
Consolidated Balance Sheet C_10
Consolidated Balance Sheet Components - Other Noncurrent Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Software license obligation, noncurrent | $ 0 | $ 1,233 |
Participation units liability, non-current (Note 11) | 2,027 | 870 |
Operating lease liability, noncurrent (Note 17) | 10,647 | 847 |
Finance lease liability, noncurrent | 0 | 369 |
Total | $ 12,674 | $ 3,319 |
Related Parties (Details)
Related Parties (Details) - USD ($) | Mar. 12, 2020 | Apr. 30, 2019 | Dec. 31, 2021 | Dec. 31, 2021 | Oct. 14, 2021 | Dec. 31, 2020 | Aug. 31, 2021 | Jan. 19, 2021 | Jan. 18, 2021 | May 31, 2020 | May 19, 2020 | Feb. 21, 2020 | |
Related Party Transaction [Line Items] | |||||||||||||
Related party net revenues | $ 71,000 | $ 136,000 | $ (2,007,000) | ||||||||||
Default resource contribution | 15,200,000 | $ 15,200,000 | 35,400,000 | ||||||||||
Interest income (expense), net | 11,000 | (247,000) | 123,000 | ||||||||||
Due to related party (affiliate in Predecessor period) | [1] | 617,000 | 617,000 | 1,856,000 | |||||||||
Accounts receivable, net | 18,142,000 | 18,142,000 | 10,408,000 | ||||||||||
Realized loss on sale of investment | 100,000 | ||||||||||||
Unrealized gain on investment | 0 | 0 | 628,000 | ||||||||||
Class C Warrant | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Fair value of warrant | $ 1,000,000 | $ 1,600,000 | |||||||||||
ICE | Bridge2 Solutions, LLC | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Percentage of issued and outstanding ownership interests acquired | 100.00% | ||||||||||||
Bakkt Trust | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Default resource contribution | $ 15,200,000 | $ 35,400,000 | |||||||||||
Intercompany Services Agreement And Triparty Agreement | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Due to related party (affiliate in Predecessor period) | 0 | 0 | 1,900,000 | ||||||||||
Accounts receivable, net | 100,000 | $ 100,000 | 0 | ||||||||||
Affiliated Entity | ICE | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Realized loss on sale of investment | 100,000 | ||||||||||||
Unrealized gain on investment | 600,000 | ||||||||||||
Business contributed, enterprise value | $ 261,400,000 | ||||||||||||
Business contributed, additional goodwill | 10,100,000 | ||||||||||||
Business contributed, cash contribution | 2,600,000 | ||||||||||||
Business contributed, cash contribution, amount used to pay acquisition-related expenses | 1,400,000 | ||||||||||||
Affiliated Entity | ICE | Intercompany Services Agreement | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Expenses | 0 | 1,500,000 | 3,100,000 | ||||||||||
Affiliated Entity | ICE | Transition Services Agreement | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Expenses | 600,000 | ||||||||||||
Affiliated Entity | IFUS and ICUS | Triparty Agreement | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Related party net revenues | 100,000 | 100,000 | (2,000,000) | ||||||||||
Rebates and incentive payments (contra-revenue) | 100,000 | 200,000 | 3,400,000 | ||||||||||
Reduction in revenue related to capital contribution | $ 0 | 200,000 | 700,000 | ||||||||||
Affiliated Entity | IFUS and ICUS | Triparty Agreement | PDF Contracts | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
General duration of PDF Contracts (less than) | 1 month | ||||||||||||
Percentage of PDF Contracts that go to physical settlement (less than) | 1.00% | ||||||||||||
Affiliated Entity | ICUS | Triparty Agreement | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Interest income (expense), net | $ 0 | $ 0 | 100,000 | ||||||||||
Affiliated Entity | ICUS | Triparty Agreement | Bakkt Trust | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Default resource contribution | $ 15,000,000 | $ 35,400,000 | |||||||||||
Affiliated Entity | IFS and ICS | Triparty Agreement | PDF Contracts | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Percentage of net trading and clearing revenue earned with respect to PDF Contracts paid to us | 35.00% | ||||||||||||
Affiliated Entity | ICE and Certain Minority Investors | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Business contributed, cash contribution | 36,600,000 | ||||||||||||
Affiliated Entity | ICE and Certain Minority Investors | Class C Voting Units | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Gross proceeds | $ 299,700,000 | ||||||||||||
Sale of stock, number of units/warrants issued (in shares) | 270,000,000 | ||||||||||||
Affiliated Entity | Minority Investor | Class C Warrant | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Fair value of warrant | $ 1,600,000 | ||||||||||||
Executive | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Percentage ownership prior to sale | 3.00% | ||||||||||||
Gross proceeds | $ 200,000 | $ 100,000 | |||||||||||
[1] | As a result of the Business Combination (Note 4), ICE and its affiliates are no longer our affiliates. Refer to Note 8 for our related party disclosures. |
Warrants (Details)
Warrants (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2021 | Oct. 14, 2021 | Dec. 31, 2020 | Oct. 15, 2021 | |
Class of Warrant or Right [Line Items] | |||||
Exercise price (in dollars per share) | $ 11.50 | $ 11.50 | |||
Proceeds from the exercise of warrants (Note 9) | $ 37,117 | $ 0 | $ 0 | ||
Loss from change in fair value of warrant liability | $ 79,373 | $ 79,373 | $ 0 | $ 0 | |
Class A Common Stock | |||||
Class of Warrant or Right [Line Items] | |||||
Number of shares entitled to holders of each warrant (in shares) | 1 | 1 | |||
Stock issued in exchange for exercise of warrants (in shares) | 7,194,928 | ||||
Public Warrants | |||||
Class of Warrant or Right [Line Items] | |||||
Warrants outstanding (in shares) | 7,141,035 | 7,141,035 | |||
Expected term (years) | 5 years | ||||
Warrants exercised (in shares) | 3,227,566 | ||||
Proceeds from the exercise of warrants (Note 9) | $ 37,100 | ||||
Private Placement Warrants | |||||
Class of Warrant or Right [Line Items] | |||||
Warrants outstanding (in shares) | 0 | 0 | |||
Warrants exercised (in shares) | 6,147,440 |
Stockholders_ Equity - Narrativ
Stockholders’ Equity - Narrative (Details) | Oct. 15, 2021$ / sharesshares | Apr. 06, 2021shares | Oct. 31, 2021USD ($) | Aug. 31, 2021USD ($)shares | Mar. 31, 2020USD ($)$ / sharesshares | Dec. 31, 2018USD ($)shares | Dec. 31, 2021USD ($)$ / sharesshares | Dec. 31, 2021USD ($)$ / sharesshares | Oct. 14, 2021USD ($) | Dec. 31, 2020USD ($)shares | Dec. 31, 2019USD ($) | May 31, 2020USD ($)$ / sharesshares | May 19, 2020USD ($) | Feb. 19, 2020USD ($)$ / sharesshares |
Class of Stock [Line Items] | ||||||||||||||
Preferred stock, shares authorized | 1,000,000 | 1,000,000 | ||||||||||||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | ||||||||||||
Preferred stock, shares issued | 0 | 0 | ||||||||||||
Issuance of voting units | $ | $ 312,000,000 | |||||||||||||
Exercise price (in dollars per share) | $ / shares | $ 11.50 | $ 11.50 | ||||||||||||
Impairment of long-lived assets | $ | $ 1,196,000 | $ 1,196,000 | $ 3,598,000 | $ 15,292,000 | ||||||||||
Selling, general and administrative | $ | $ 8,521,000 | 20,309,000 | $ 8,219,000 | |||||||||||
Customer Consideration Asset | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Impairment of long-lived assets | $ | $ 3,600,000 | |||||||||||||
Fair value of impaired asset | $ | $ 0 | |||||||||||||
Class B Warrant | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Exercise price (in dollars per share) | $ / shares | $ 1 | |||||||||||||
Expected term (years) | 3 years | |||||||||||||
Fair value of warrant | $ | $ 5,400,000 | |||||||||||||
Class B Warrant | Dividend yield | Black-Scholes Model | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Warrant measurement input | 0 | |||||||||||||
Class C Warrant | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Exercise price (in dollars per share) | $ / shares | $ 1.11 | $ 1.11 | ||||||||||||
Expected term (years) | 3 years 21 days | 4 years 4 months 6 days | ||||||||||||
Fair value of warrant | $ | $ 1,000,000 | $ 1,600,000 | ||||||||||||
Number of warrant units amended to change the service conditions | 781,515 | |||||||||||||
Number of warrant units with service conditions left unchanged | 2,822,085 | |||||||||||||
Warrant units vested but not exercised (in shares) | 172,055 | 172,055 | 0 | |||||||||||
Warrant units not vested or exercised (in shares) | 621,297 | 621,297 | ||||||||||||
Selling, general and administrative | $ | $ 0 | 1,000,000 | $ 0 | |||||||||||
Class C Warrant | Dividend yield | Black-Scholes Model | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Warrant measurement input | 0 | 0 | ||||||||||||
Opco Plan | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Accelerated costs | $ | 47,200,000 | 30,600,000 | 9,600,000 | |||||||||||
ICE | Developed Technology | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Developed technology assets contributed by ICE | $ | $ 1,700,000 | |||||||||||||
Minority Investor | Affiliated Entity | Class C Warrant | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Fair value of warrant | $ | $ 1,600,000 | |||||||||||||
IFUS and ICUS | Affiliated Entity | Triparty Agreement | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Reduction in revenue related to capital contribution | $ | $ 0 | 200,000 | 700,000 | |||||||||||
Common Class A | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Common stock, shares authorized | 750,000,000 | 750,000,000 | ||||||||||||
Common stock, par value (in dollars per share) | $ / shares | 0.0001 | $ 0.0001 | $ 0.0001 | |||||||||||
Common stock, shares issued (in shares) | 57,164,388 | 57,164,388 | ||||||||||||
Common stock, shares outstanding | 57,164,388 | 57,164,388 | ||||||||||||
Conversion of stock (in shares) | 7,194,928 | |||||||||||||
Class V Common Stock | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Common stock, shares authorized | 250,000,000 | 250,000,000 | ||||||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||||||||||
Common stock, shares issued (in shares) | 206,271,792 | 206,271,792 | ||||||||||||
Common stock, shares outstanding | 206,271,792 | 206,271,792 | ||||||||||||
Class V Common Stock | Issuance Of Class V Common Stock For Opco Class C Warrants And Incentive Units | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Conversion of stock (in shares) | 17,473,362 | |||||||||||||
Class V Common Stock | Opco | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Common stock, shares issued (in shares) | 207,406,648 | |||||||||||||
Conversion of stock (in shares) | 208,200,000 | |||||||||||||
Class V Common Stock | Opco | Conversion Of Opco Class A, Class B, And Class C Voting Units Into Class V Common Stock | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Conversion of stock (in shares) | 189,933,286 | |||||||||||||
Class A Voting Units | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Issuance of voting units | $ | $ 185,000 | 697,000 | ||||||||||||
Class A Voting Units | Opco | Conversion Of Opco Class A, Class B, And Class C Voting Units Into Class V Common Stock | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Conversion of stock (in shares) | (400,000,000) | |||||||||||||
Class A Voting Units | ICE | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Issuance of voting units (in shares) | 400,000,000 | |||||||||||||
Class B Voting Units | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Exercise of warrants (in shares) | 9,953,454 | |||||||||||||
Class B Voting Units | Class B Warrant | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Warrants issued, number of units called by warrants (in shares) | 15,000,000 | |||||||||||||
Class B Voting Units | Opco | Conversion Of Opco Class A, Class B, And Class C Voting Units Into Class V Common Stock | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Conversion of stock (in shares) | (192,453,454) | |||||||||||||
Class B Voting Units | ICE | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Issuance of voting units | $ | $ 111,500,000 | |||||||||||||
Class B Voting Units | ICE and Certain Minority Investors | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Issuance of voting units | $ | 182,500,000 | |||||||||||||
Class B Voting Units | Minority Investor | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Issuance of voting units | $ | $ 71,000,000 | |||||||||||||
Class C Voting Units | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Issuance of voting units (in shares) | 270,000,000 | |||||||||||||
Issuance of voting units | $ | $ 299,700,000 | $ 300,000,000 | ||||||||||||
Shares issued, price per share (in dollars per share) | $ / shares | $ 1.11 | |||||||||||||
Class C Voting Units | Class C Warrant | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Warrants issued, number of units called by warrants (in shares) | 3,603,600 | |||||||||||||
Class C Voting Units | Opco | Conversion Of Opco Class A, Class B, And Class C Voting Units Into Class V Common Stock | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Conversion of stock (in shares) | (270,270,270) | |||||||||||||
Paired Interest Rights | Class C Warrant | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Warrants issued, number of units called by warrants (in shares) | 793,352 |
Stockholders_ Equity - Key Valu
Stockholders’ Equity - Key Valuation Inputs (Details) | Aug. 31, 2021 | May 31, 2020 | Feb. 19, 2020 |
Class B Warrant | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Expected term (years) | 3 years | ||
Class B Warrant | Dividend yield | Black-Scholes Model | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Warrant measurement input | 0 | ||
Class B Warrant | Risk-free interest rate | Black-Scholes Model | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Warrant measurement input | 0.0139 | ||
Class B Warrant | Expected volatility | Black-Scholes Model | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Warrant measurement input | 0.4000 | ||
Class C Warrant | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Expected term (years) | 3 years 21 days | 4 years 4 months 6 days | |
Class C Warrant | Dividend yield | Black-Scholes Model | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Warrant measurement input | 0 | 0 | |
Class C Warrant | Risk-free interest rate | Black-Scholes Model | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Warrant measurement input | 0.0041 | 0.0033 | |
Class C Warrant | Expected volatility | Black-Scholes Model | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Warrant measurement input | 0.4500 | 0.5000 |
Share-Based and Unit-Based Co_3
Share-Based and Unit-Based Compensation (Details) $ in Thousands | Oct. 15, 2021USD ($)shares | Nov. 30, 2021USD ($) | Feb. 28, 2022shares | Dec. 31, 2021USD ($)shares | Oct. 14, 2021USD ($)shares | Dec. 31, 2021USD ($)shares | Dec. 31, 2020USD ($)shares | Feb. 29, 2020 | Dec. 31, 2019shares | Dec. 31, 2018shares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Compensation expense | $ | $ 2,516 | $ 7,339 | $ 712 | |||||||
Deferred Compensation, Share-based Payments | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Participation units exchange ratio | 0.9009009 | |||||||||
Number of participation units outstanding (in shares) | shares | 1,197,250 | 700,000 | 10,811,502 | 700,000 | 11,800,000 | |||||
Compensation expense | $ | $ 5,200 | |||||||||
Participation units outstanding (in shares) | shares | 0 | 0 | 10,700,000 | |||||||
Deferred compensation term | 2 years | |||||||||
Fair value of participation units outstanding | $ | $ 4,100 | $ 6,700 | $ 4,100 | $ 900 | ||||||
Opco | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Redemption of temporary equity, percentage | 40.00% | |||||||||
Cash paid for redeemed Opco Incentive Units | $ | $ 1,488 | |||||||||
Percentage of awards vested | 0.33 | |||||||||
RSUs | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Granted (in shares) | shares | 2,141,778 | |||||||||
Compensation expense | $ | $ 1,000 | |||||||||
Unrecognized compensation expense | $ | $ 18,600 | $ 18,600 | ||||||||
Period to recognize unrecognized compensation expense | 1 year 6 months 3 days | |||||||||
Shares outstanding (in shares) | shares | 0 | 2,142,000 | 2,142,000 | |||||||
RSUs | Subsequent Event | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Granted (in shares) | shares | 6,869,070 | |||||||||
Performance Stock Units | Subsequent Event | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Granted (in shares) | shares | 4,765,378 | |||||||||
Preferred Incentive Units | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Granted (in shares) | shares | 0 | 3,350,000 | ||||||||
Compensation expense | $ | $ 14,091 | $ 9,210 | ||||||||
Shares outstanding (in shares) | shares | 76,475,000 | 76,475,000 | 82,125,000 | |||||||
Common Incentive Units | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Granted (in shares) | shares | 0 | 0 | 31,333,000 | |||||||
Compensation expense | $ | $ 42,376 | $ 12,447 | $ 1,727 | |||||||
Shares outstanding (in shares) | shares | 17,473,362 | 16,339,000 | 23,219,745 | 16,339,000 | 26,833,000 | 3,750,000 | ||||
2021 Omnibus Incentive Plan | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Common stock reserved for future issuance (in shares) | shares | 25,816,946 | 25,816,946 | ||||||||
Opco Plan | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Period to recognize unrecognized compensation expense | 1 year 9 months 14 days | 6 years 9 months | ||||||||
Number of shares authorized (in shares) | shares | 156,000,000 | |||||||||
Accelerated costs | $ | $ 47,200 | $ 30,600 | $ 9,600 | |||||||
Deferred compensation costs not yet recognized | $ | 1,900 | $ 1,900 | 10,400 | |||||||
Opco Plan | Preferred Incentive Units | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Unrecognized compensation expense | $ | 9,800 | |||||||||
Opco Plan | Common Incentive Units | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Unrecognized compensation expense | $ | $ 5,700 | $ 5,700 | $ 13,700 |
Share-Based and Unit-Based Co_4
Share-Based and Unit-Based Compensation - RSU Activity (Details) - RSUs - USD ($) $ / shares in Units, $ in Thousands | Oct. 15, 2021 | Dec. 31, 2021 |
Number of RSUs | ||
Beginning balance (in shares) | ||
Granted (in shares) | 2,141,778 | |
Forfeited (in shares) | 0 | |
Ending balance (in shares) | 0 | 2,142,000 |
Weighted Average Remaining Contractual Term (years) | 1 year 6 months 3 days | |
Weighted Average Grant Date Fair Value | ||
Granted (in usd per share) | $ 9.18 | |
Ending balance (in usd per share) | $ 9.18 | |
Aggregate Intrinsic Value | ||
Granted | $ 19,669 | |
Vested as of December 31, 2021 | 0 |
Share-Based and Unit-Based Co_5
Share-Based and Unit-Based Compensation - Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2021 | Oct. 14, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Compensation expense | $ 2,516 | $ 7,339 | $ 712 | |
Total | 44,892 | $ 44,892 | 33,877 | 11,649 |
Common Incentive Units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Compensation expense | $ 42,376 | 12,447 | 1,727 | |
Preferred Incentive Units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Compensation expense | $ 14,091 | $ 9,210 |
Share-Based and Unit-Based Co_6
Share-Based and Unit-Based Compensation - Unit Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | Oct. 15, 2021 | Dec. 31, 2021 | Oct. 14, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Common Incentive Units | |||||
Number of RSUs | |||||
Beginning balance (in shares) | 23,219,745 | 23,219,745 | 26,833,000 | 3,750,000 | |
Granted (in shares) | 0 | 0 | 31,333,000 | ||
Forfeited (in shares) | (1,134,000) | (3,613,000) | (8,250,000) | ||
Ending balance (in shares) | 17,473,362 | 16,339,000 | 23,219,745 | 26,833,000 | 3,750,000 |
Weighted Average Remaining Contractual Term (years) | 2 years | 1 year 9 months 14 days | 6 years 14 days | 6 years 9 months | 7 years 8 months 23 days |
Weighted Average Grant Date Fair Value | |||||
Beginning balance (in usd per share) | $ 0.53 | $ 0.53 | $ 0.43 | $ 0.34 | |
Granted (in usd per share) | 0.42 | ||||
Forfeited (in usd per share) | 6.30 | 0.39 | 0.33 | ||
Ending balance (in usd per share) | $ 6.30 | $ 6.30 | $ 0.53 | $ 0.43 | $ 0.34 |
Aggregate Intrinsic Value | |||||
Outstanding | $ 109,998 | $ 133,240 | $ 25,605 | $ 25,760 | $ 1,275 |
Granted | $ 13,065 | ||||
Vested at period end | 11,507,000 | 0 | |||
Aggregate intrinsic value of shares vested | $ 93,840 | ||||
Preferred Incentive Units | |||||
Number of RSUs | |||||
Beginning balance (in shares) | 76,475,000 | 76,475,000 | 76,475,000 | 82,125,000 | |
Granted (in shares) | 0 | 3,350,000 | |||
Forfeited (in shares) | 0 | (9,000,000) | |||
Ending balance (in shares) | 76,475,000 | 76,475,000 | 82,125,000 | ||
Weighted Average Remaining Contractual Term (years) | 6 years 14 days | 6 years 9 months | 7 years 8 months 23 days | ||
Weighted Average Grant Date Fair Value | |||||
Beginning balance (in usd per share) | $ 0.42 | $ 0.42 | $ 0.42 | $ 0.42 | |
Granted (in usd per share) | 0.63 | ||||
Forfeited (in usd per share) | 0.41 | ||||
Ending balance (in usd per share) | $ 0.42 | $ 0.42 | $ 0.42 | ||
Aggregate Intrinsic Value | |||||
Outstanding | $ 141,058 | $ 88,711 | $ 34,493 | ||
Granted | $ 2,105 | ||||
Vested at period end | 0 |
Share-Based and Unit-Based Co_7
Share-Based and Unit-Based Compensation - Valuation Assumptions (Details) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Dividend yield | 0.00% | 0.00% |
Minimum risk-free interest rate | 0.06% | |
Maximum risk-free interest rate | 0.36% | |
Risk-free interest rate | 1.85% | |
Minimum expected volatility | 51.00% | |
Maximum expected volatility | 53.00% | |
Expected volatility | 45.00% | |
Discount for lack of marketability | 8.20% | |
Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected term (years) | 6 months | 4 years 8 months 23 days |
Discount for lack of marketability | 21.00% | |
Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected term (years) | 2 years | 7 years 8 months 23 days |
Discount for lack of marketability | 24.00% |
Net Loss per share - Basic and
Net Loss per share - Basic and Diluted Per Share Computations (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2021 | Oct. 14, 2021 | Dec. 31, 2020 | ||
Numerator – basic and diluted: | |||||
Net loss | $ (164,827) | $ (164,827) | $ (139,219) | $ (79,605) | |
Less: Net loss attributable to noncontrolling interest | (120,832) | ||||
Net loss attributable to Bakkt Holdings, Inc. | $ (43,995) | $ (139,219) | $ (79,605) | ||
Denominator – basic and diluted: | |||||
Weighted average shares outstanding – basic (in dollars per share) | 54,018,064 | ||||
Weighted average shares outstanding – diluted (in dollars per share) | 54,018,064 | ||||
Net loss per share – basic (in dollars per share) | [1] | $ (0.81) | |||
Net loss per share – diluted (in dollars per share) | [1] | $ (0.81) | |||
[1] | Basic and diluted loss per share is not presented for the Predecessor periods due to lack of comparability with the Successor period. |
Net Loss per share - Anti-dilut
Net Loss per share - Anti-dilutive Shares Excluded From Computation (Details) | 3 Months Ended |
Dec. 31, 2021shares | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Total | 216,347,957 |
RSUs | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Total | 2,141,778 |
Private and public warrants | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Total | 7,141,035 |
Opco warrants | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Total | 793,352 |
Opco unvested incentive units | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Total | 4,831,432 |
Opco common units | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Total | 201,440,360 |
Capital Requirements (Details)
Capital Requirements (Details) - USD ($) | Dec. 31, 2021 | Oct. 14, 2021 | Dec. 31, 2020 |
Financial Services, Banking And Thrift, Capital Requirements [Line Items] | |||
Restricted cash | $ 16,500,000 | $ 16,500,000 | $ 16,500,000 |
Bakkt Trust | |||
Financial Services, Banking And Thrift, Capital Requirements [Line Items] | |||
Capital requirements, positive minimum net worth | 15,000,000 | 15,000,000 | |
Restricted cash | 16,500,000 | 16,500,000 | |
Bakkt Clearing | |||
Financial Services, Banking And Thrift, Capital Requirements [Line Items] | |||
Capital requirements, adjusted net capital, amount | $ 1,000,000 | ||
Capital requirements, adjusted net capital, percent | 8.00% | ||
Adjusted net capital, actual | $ 2,000,000 | ||
Bakkt Marketplace | |||
Financial Services, Banking And Thrift, Capital Requirements [Line Items] | |||
Tangible member's equity | $ 11,000,000 | $ 2,500,000 |
Commitment and Contingencies (D
Commitment and Contingencies (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended |
Dec. 31, 2021 | Dec. 31, 2021 | Oct. 14, 2021 | Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | ||||
Expenses related to 401(k) plan | $ 0.5 | $ 1.6 | $ 1.5 | |
Month end cash balance to be maintained | $ 40 | $ 40 | ||
Term of cloud computing arrangement (in years) | 4 years |
Commitment and Contingencies -
Commitment and Contingencies - Future Minimum Commitments (Details) $ in Thousands | Dec. 31, 2021USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Less than 1 year | $ 2,250 |
1-3 years | 8,750 |
3-5 years | 9,000 |
More than 5 years | 0 |
Total | $ 20,000 |
Income Taxes - Schedule of Inco
Income Taxes - Schedule of Income before Income Tax, Domestic and Foreign (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended |
Dec. 31, 2021 | Oct. 14, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |||
Domestic | $ (153,831) | $ (142,376) | $ (82,339) |
Foreign | 755 | 2,555 | 3,125 |
Loss before income taxes | $ (153,076) | $ (139,821) | $ (79,214) |
Income Taxes - Schedule of Comp
Income Taxes - Schedule of Components of Income Tax Expense (Benefit) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended |
Dec. 31, 2021 | Oct. 14, 2021 | Dec. 31, 2020 | |
Current: | |||
Foreign | $ 5 | $ (763) | $ 830 |
Federal | 0 | 161 | 0 |
State | 18 | 0 | (85) |
Total current income tax expense (benefit) | 23 | (602) | 745 |
Deferred: | |||
Foreign | 0 | 0 | (1) |
Federal | 10,004 | 0 | (11) |
State | 1,724 | 0 | (342) |
Total deferred income tax expense (benefit) | 11,728 | 0 | (354) |
Total income tax expense (benefit) | $ 11,751 | $ (602) | $ 391 |
Income Taxes - Schedule of Effe
Income Taxes - Schedule of Effective Income Tax Rate Reconciliation (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended |
Dec. 31, 2021 | Oct. 14, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |||
Tax provision at federal statutory rate | $ (32,146) | $ (29,363) | $ (16,635) |
Tax on income not subject to entity level federal income tax | 0 | 29,859 | 17,716 |
Tax rate differences on income in other jurisdictions | 0 | 0 | 172 |
State income taxes, net of federal tax effect | 1,741 | 0 | (423) |
Noncontrolling interest | 25,375 | 0 | 0 |
Fair value of warrant liability | 16,668 | 0 | 0 |
Changes in valuation allowance | (50) | (301) | 15 |
Stock Compensation | 0 | 0 | (851) |
Other | 163 | (797) | 397 |
Total income tax expense (benefit) | $ 11,751 | $ (602) | $ 391 |
Effective tax rate | (7.70%) | 0.40% | (0.50%) |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended |
Dec. 31, 2021 | Oct. 14, 2021 | Dec. 31, 2020 | |
Income Tax Examination [Line Items] | |||
Total loss before provision for income taxes | $ (153,076,000) | $ (139,821,000) | $ (79,214,000) |
Income (loss) attributable to parent, before tax | (32,400,000) | ||
Income (loss) attributable to noncontrolling interest, before tax | (120,700,000) | ||
Addback of non-deductible expense related to fair market value adjustments to warrant liability | 79,400,000 | ||
Provision for (benefit from) income taxes | 11,751,000 | $ (602,000) | 391,000 |
Valuation allowance | 3,115,000 | 2,901,000 | |
Unrecognized tax benefits | 0 | 0 | |
Unrecognized tax benefits, interest and penalties accrued | 0 | $ 0 | |
Domestic Tax Authority | |||
Income Tax Examination [Line Items] | |||
Net operating loss carryforwards | 17,100,000 | ||
Net operating loss carryforwards subject to expiration | 400,000 | ||
Net operating loss carryforwards, not subject to expiration | 16,700,000 | ||
State and Local Jurisdiction | |||
Income Tax Examination [Line Items] | |||
Net operating loss carryforwards subject to expiration | $ 21,400,000 |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Deferred tax assets: | ||
Net operating loss carryforwards | $ 5,011 | $ 3,226 |
Deferred and share-based compensation | 252 | 132 |
Acquisition costs | 0 | 138 |
Deferred revenue | 0 | 55 |
Property, equipment and software | 0 | 25 |
Other | 51 | 0 |
Total deferred tax assets | 5,314 | 3,576 |
Less: valuation allowance | (3,115) | (2,901) |
Net deferred tax assets | 2,199 | 675 |
Deferred tax liabilities: | ||
Investment in partnership | 11,507 | 0 |
Intercompany asset with Opco | 2,285 | 0 |
Other | 0 | 41 |
Total deferred tax liabilities | 13,792 | 770 |
Net deferred tax liabilities | (11,593) | (95) |
Customer relationships | ||
Deferred tax liabilities: | ||
Intangible assets | 0 | 293 |
Technology | ||
Deferred tax liabilities: | ||
Intangible assets | 0 | 415 |
Other acquired intangibles | ||
Deferred tax liabilities: | ||
Intangible assets | $ 0 | $ 21 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Liabilities: | ||
Warrant liability—public warrants | $ 17,424 | $ 0 |
Fair Value, Recurring | ||
Liabilities: | ||
Total Liabilities | 17,424 | |
Assets: | ||
Investment in shares of affiliate stock | 1,823 | |
Total Assets | 1,823 | |
Fair Value, Recurring | Fair Value, Inputs, Level 1 | ||
Liabilities: | ||
Total Liabilities | 17,424 | |
Assets: | ||
Investment in shares of affiliate stock | 1,823 | |
Total Assets | 1,823 | |
Fair Value, Recurring | Fair Value, Inputs, Level 2 | ||
Liabilities: | ||
Total Liabilities | 0 | |
Assets: | ||
Investment in shares of affiliate stock | 0 | |
Total Assets | 0 | |
Fair Value, Recurring | Fair Value, Inputs, Level 3 | ||
Liabilities: | ||
Total Liabilities | 0 | |
Assets: | ||
Investment in shares of affiliate stock | 0 | |
Total Assets | $ 0 | |
Public Warrants | Fair Value, Recurring | ||
Liabilities: | ||
Warrant liability—public warrants | 17,424 | |
Public Warrants | Fair Value, Recurring | Fair Value, Inputs, Level 1 | ||
Liabilities: | ||
Warrant liability—public warrants | 17,424 | |
Public Warrants | Fair Value, Recurring | Fair Value, Inputs, Level 2 | ||
Liabilities: | ||
Warrant liability—public warrants | 0 | |
Public Warrants | Fair Value, Recurring | Fair Value, Inputs, Level 3 | ||
Liabilities: | ||
Warrant liability—public warrants | $ 0 |
Fair Value Measurements - Recon
Fair Value Measurements - Reconciliation of Warrant Liability (Details) - Private and public warrants $ in Thousands | 3 Months Ended |
Dec. 31, 2021USD ($) | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Balance as of October 15, 2021 | $ 14,631 |
Loss from fair value of warrant liability | 50,347 |
Exercise of warrants | (64,978) |
Balance as of December 31, 2021 | $ 0 |
Leases (Details)
Leases (Details) | Dec. 31, 2021 |
Lessee, Lease, Description [Line Items] | |
Option to extend | 5 years |
Weighted average remaining lease term | 120 months 21 days |
Weighted average discount rate | 5.00% |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Remaining lease terms | 129 months |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Remaining lease terms | 16 months |
Leases - Summary of Lease Cost
Leases - Summary of Lease Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2021 | Oct. 14, 2021 | Dec. 31, 2020 | |
Lease, Cost [Abstract] | ||||
Amortization of right-of-use assets | $ 0 | $ 108 | $ 185 | |
Interest on lease liabilities | 38 | 27 | 44 | |
Operating lease cost | 370 | 856 | 984 | |
Short-term lease cost | 33 | 202 | 0 | |
Variable lease cost | 10 | 56 | 63 | |
Total lease cost | 451 | 1,249 | 1,276 | |
Cash paid for amounts included in the measurement of lease liabilities | ||||
Payment of finance lease liability | $ 404 | 404 | 97 | 313 |
Cash flow from operating activities, Operating Leases | 106 | 871 | 1,126 | |
Cash flow from operating activities, Finance Leases | 38 | 27 | 44 | |
Non-cash operating lease right-of-use asset acquired | $ 10,347 | 10,347 | 0 | 2,991 |
Supplemental non-cash information on lease liabilities arising from obtaining right-of-use assets, Finance Leases | $ 0 | $ 0 | $ 786 |
Leases - Summary of Lessee Bala
Leases - Summary of Lessee Balance Sheet (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Operating leases: | ||
Right-of-use assets | $ 11,239 | $ 1,799 |
Lease liabilities, current | 615 | 953 |
Lease liabilities, noncurrent | $ 10,647 | $ 847 |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Other assets | Other assets |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Other current liabilities | Other current liabilities |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Other noncurrent liabilities | Other noncurrent liabilities |
Finance leases: | ||
Right-of-use assets | $ 0 | $ 468 |
Lease liabilities, current | 0 | 129 |
Lease liabilities, noncurrent | $ 0 | $ 369 |
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Other assets | Other assets |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Other current liabilities | Other current liabilities |
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Other noncurrent liabilities | Other noncurrent liabilities |
Leases - Operating and Finance
Leases - Operating and Finance Leases Maturity (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Operating Leases | ||
2022 | $ (3,114) | |
2023 | 1,941 | |
2024 | 1,774 | |
2025 | 1,823 | |
2026 | 1,873 | |
Thereafter | 11,817 | |
Total undiscounted lease payments | 16,114 | |
Less: Imputed interest | (4,852) | |
Total lease liability | 11,262 | |
Current | 615 | $ 953 |
Noncurrent (Other noncurrent liabilities) | 10,647 | 847 |
Finance Leases | ||
2022 | 0 | |
2023 | 0 | |
2024 | 0 | |
2025 | 0 | |
2026 | 0 | |
Thereafter | 0 | |
Total undiscounted lease payments | 0 | |
Less: Imputed interest | 0 | |
Total lease liability | 0 | |
Current | 0 | 129 |
Noncurrent (Other noncurrent liabilities) | $ 0 | $ 369 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ in Thousands | Jan. 31, 2022 | Dec. 31, 2021 |
Subsequent Event [Line Items] | ||
Total lease liability | $ 11,262 | |
Subsequent Event | ||
Subsequent Event [Line Items] | ||
Term of contract | 94 months | |
Total lease liability | $ 7,300 |