United States securities and exchange commission logo
August 9, 2021
Scott R. Zemnick
General Counsel
VPC Impact Acquisition Holdings
c/o Victory Park Capital Advisors, LLC
150 North Riverside Plaza, Suite 5200
Chicago, IL 60606
Re: VPC Impact
Acquisition Holdings
Correspondence
dated August 4, 2021
Amendment No. 2 to
Registration Statement on Form S-4
Filed July 9, 2021
File No. 333-254935
Dear Mr. Zemnick:
We have reviewed your correspondence and have the following
comments. In some of
our comments, we may ask you to provide us with information so we may
better understand your
disclosure.
Please respond to this letter by amending your registration
statement and providing the
requested information. If you do not believe our comments apply to your
facts and
circumstances or do not believe an amendment is appropriate, please tell
us why in your
response. After reviewing any amendment to your registration statement
and the information
you provide in response to these comments, we may have additional
comments.
Correspondence dated August 4, 2021
Management s Discussion and Analysis of Financial Condition and
Results of Operations of
Bakkt, page 283
1. Please add a discussion
to your Digital Asset Marketplace, Loyalty Redemption, and
Alternative Payment
Method disclosure to describe how you recognize revenue for each
of these offerings. The
overview section should bridge your discussion between your
business offering and
how revenue is recognized. Also, please add a statement that
substantially all your
revenue is recognized from the Loyalty program. As it relates to
custody, note that
revenue is immaterial with less than 1% of PDF Contracts go to
contract maturity.
Also, note that the remaining revenue is recognized from providing
services to IFUS and
ICUS under the Triparty Agreements.
Scott R. Zemnick
VPC Impact Acquisition Holdings
August 9, 2021
Page 2
2. Revise to discuss The Triparty Agreement and the related party nature
of this
arrangement. This disclosure should include, but not limited to,
describing the promised
goods or services that you provide (i.e., custody and bullets
identified in your response
2(c)) and the reasons for negative revenue. In addition, your results
of operations
disclosure should separately discuss and analyze the revenue
recognized under this
agreement.
3. Based on your financial projections, we note that you expect to
generate a substantial
portion of your revenue in 2021 in Crypto Trades, which are sales of
cryptocurrency in
which Bakkt acts as the principal in transactions with its third-party
trading relationships
and consumers using its app. Discuss the material risks and
uncertainties related to your
plans to rely on Crypto Trades as a significant driver of your
business. To the extent
known, discuss the certain additional cryptocurrencies that you
intend to include in the
third quarter of 2021. For aspects of your business that did not
generate positive revenue,
discuss the circumstances that need to occur to begin generating
positive revenue.
Revenue Recognition
Triparty Agreement, page F-259
4. Revise your statement that you recognize revenue for trading and
clearing services to
agree to your performance obligations as outline in your response 2(c)
for Bakkt Trust. In
this regard, we note your representation that you are not providing
the trading and clearing
services. Make corresponding revision throughout your filing.
5. Please clarify the meaning of help facilitate the trading and
clearing services of IFUS and
ICUS by identifying your promised goods or services. For example,
are your promised
goods and services outlined in 2(c) and custody?
6. Revise your revenue recognition footnote for the Triparty agreement to
describe your
performance obligations. In this regard, the current disclosure
focuses more on the tasks
and duties of IFUS and ICUS instead of on your task and duties. This
disclosure should
clearly articulate what promised goods or services are distinct, how
many performance
obligations you have, and what promised goods or services are included
in each
performance obligation.
7. Please clarify when you recognize revenue for each performance
obligation in the Triparty
FirstName LastNameScott R. Zemnick
Agreement and what the ASC 606 contract period is for each performance
Comapany NameVPC
obligation. Also,Impact
revise Acquisition Holdings
to state whether revenue is recognized at a
point in time or over
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9, 2021 Page 2
FirstName LastName
Scott R. Zemnick
FirstName LastNameScott R. Zemnick
VPC Impact Acquisition Holdings
Comapany
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9, 2021
August
Page 3 9, 2021 Page 3
FirstName LastName
8. Please disclose the transaction price for each performance obligation.
We note that in your
statement in response to 2(b) the transaction price is 100% of the
trading and clearing fees
collected by IFUS and ICUS less rebates and incentive payments made by
IFUS and
ICUS to their customers. Also, disclose your obligation to make the
shortfall payment
describe in note 7 and include your assertion that you recognize this
payment as a
reduction of revenue because such payments are made to your customers,
IFUS and ICUS,
and you do not receive a distinct good or service for such payment.
9. Please confirm whether our understanding of your response is correct
that the rebates and
incentive payments are part of the transaction price and the shortfall
payment is
consideration payable to your customer and make corresponding revision
to your
proposed disclosure discussing variable consideration on page 17.
Also, we note your
reference that you generally do not need to estimate, describe
instances where you do need
to make estimates and whether those instances are material.
Custody, page F-260
10. Please revise your custody revenue recognition policy to reconcile the
discussion of PDF
Contract customers with your Triparty Agreement policy in which you
state the PDF
contract holder is not your customer.
General
11. We note your revised disclosure in response to prior comment 6
regarding the projected
financial information. Please provide a discussion of the "large
amount of
components...that were taken in consideration for purposes of arriving
at the projected
financial information" and were evaluated by the VIH Board.
You may contact Amanda Kim, Senior Staff Accountant, at (202) 551-3241
or
Stephen Krikorian, Accounting Branch Chief, at (202) 551-3488 if you have
questions
regarding comments on the financial statements and related matters. Please
contact Matthew
Crispino, Staff Attorney, at (202) 551-3456 or Jan Woo, Legal Branch Chief, at
(202) 551-3453
with any other questions.
Sincerely,
Division of
Corporation Finance
Office of
Technology
cc: Era Anagnosti