NEW YORK–(BUSINESS WIRE)–Bragar Eagel & Squire, PC, a nationally recognized shareholder rights law firm, announces that a class action lawsuit has been filed against Bakkt Holdings, Inc. (“Bakkt” or the “Company”) ) (NYSE: BKKT) in the United States District Court for the Eastern District of New York on behalf of all persons and entities who purchased or otherwise acquired Bakkt securities traceable through the IPO on 15 October 2021 or between March 31, 2021 and November 19, 2021, both dates inclusive (the “Course Period”). Investors have until June 20, 2022 to ask the Court to be named lead plaintiff in the lawsuit.
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Bakkt was previously known as “VPC Impact Acquisition Holdings” and operated as a Special Purpose Acquisition Company (SPAC), also known as a Blank Check Company, which is a development-stage company that has no business plan or specific objective or stated business plan is to engage in a merger or acquisition with one or more unidentified companies, other entity or person.
On January 11, 2021, the Company and Legacy Bakkt announced that they had entered into a definitive agreement for the business combination which would make Legacy Bakkt a publicly traded company with an enterprise value of approximately $2.1 billion. .
On March 31, 2021, the Company filed a registration statement on Form S-4 with the United States Securities and Exchange Commission (“SEC”) in connection with the business combination, which, after several amendments, was declared effective by the SEC on September 17, 2021 (the “Registration Statement”). Also on September 17, 2021, the Company filed a proxy statement and prospectus on Form 424B3 with the SEC in connection with the business combination, which formed part of the registration statement (the “Proxy” and , together with the registration statement, the “Offering Documents”).
On or about October 15, 2021, the Company and Legacy Bakkt completed the business combination pursuant to the offering documents. Subsequently, the Company changed its name to “Bakkt Holdings, Inc.” and began operating a digital asset platform that allows consumers to buy, sell, convert and spend digital assets.
The complaint alleges that the offering documents were negligently prepared and, as a result, contained misrepresentations of material facts or failed to state other facts necessary to ensure that the statements made were not misleading and did not been prepared in accordance with the rules and regulations governing their preparation. , and that throughout the Class Period, the Defendants made materially false and misleading statements regarding the Company’s business, operations and compliance policies. Specifically, the Offering Documents and the Defendants made false and/or misleading statements and/or failed to disclose that: (i) the company had flawed financial controls; (ii) as a result, there have been errors in the Company’s financial statements relating to the misclassification of certain shares issued prior to the Business Combination; (iii) as a result, the Company should restate some of its financial statements; (iv) the Company has minimized the true extent and severity of such issues; (v) the Company has overstated its correction of its faulty financial controls; and (vi) as a result, the Defendants’ offering documents and public statements throughout the Class Period were materially false and/or misleading and did not contain the information that should be contained therein.
On May 17, 2021, Bakkt – then still operating as VIH – notified the SEC of its failure to timely file its quarterly report for the quarter ended March 31, 2021. Specifically, the Company indicated that, following a statement issued by the SEC, “the Company has reassessed the accounting treatment of its public warrants and private placement warrants” and is “currently determining the extent of the impact of the statement of the SEC on its financial statements[.]”
On this news, the Company’s stock price fell $0.13 per share, or 1.26%, to close at $10.18 per share on May 18, 2021.
Then, on October 13, 2021, the Company disclosed in an SEC filing that it had also previously failed to properly account for the classification of its Class A common stock and “adjust[ed] . . . the initial book value of the Class A common shares available for repurchase, with the offset recorded in additional contributed capital (to the extent available), accumulated deficit and Class A common shares.” In particular, the Company has revised its balance sheet as at December 31, 2020 including, among other changes, additional contributed capital which went from $9,860,338 to nil, an accumulated deficit which went from $4,861,190 to $29,250,419 and a total equity of $5,000,009 which resulted in a total shareholder deficit of $29,249,901.
Following these additional disclosures, the Company’s stock price fell $0.47 per share, or 4.73%, to close at $9.46 per share on October 14, 2021.
Finally, on November 22, 2021, Bakkt disclosed in another filing with the SEC that the company’s management “has reassessed. . . the accounting classification of Class A common shares. . . of [VIH] . . . and identified errors in the historical financial statements of VIH. . . related to misclassification. . . of the Class A Ordinary Shares before the [Business Combination].” Specifically, the Company noted that due to errors in its condensed consolidated financial statements for the year ended December 31, 2020 and the quarterly periods ended March 31, 2021, June 30, 2021 and September 30, 2021, Bakkt should “restate certain of the condensed consolidated financial statements of VIH for those periods.
On this news, Bakkt’s stock price fell $2.70 per share, or 13.69%, to close at $17.02 per share on November 22, 2021.
At the time the lawsuit was filed, Bakkt’s Class A common stock was trading between $4 and $5 per share and continues to trade below its initial value from the business combination, hurting investors.
If you have purchased or otherwise acquired Bakkt shares and suffered a loss, are a long-term shareholder, have information, want to know more about such claims, or have questions about this announcement or your rights or interests in these questions, please contact Brandon Walker or Alexandra Raymond by email at [email protected], by phone at (212) 355-4648, or by by filling out this contact form. There is no cost or obligation for you.
About Bragar Eagel & Squire, PC:
Bragar Eagel & Squire, PC is a nationally recognized law firm with offices in New York, California and South Carolina. The firm represents individual and institutional investors in commercial, securities, derivatives and other complex litigation before state and federal courts across the country. For more information about the company, please visit www.bespc.com. Lawyer advertisement. Prior results do not guarantee similar results.