Bakkt, Inc. current report, 21 July 2022

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Bakkt Holdings, Inc. — Form 8-K Summary

Business Context and Reporting Period

Bakkt filed a Current Report on Form 8-K dated July 21, 2022, reporting a material contract amendment. The filing concerns Bakkt Trust Company LLC, a wholly owned subsidiary, and its existing digital currency trading, clearing, and warehouse services agreement with ICE Futures U.S., Inc. and ICE Clear US, Inc.

Material Agreement and Financial Implications

  • On July 21, 2022, the parties entered into Amendment No. 4 to the August 29, 2019 Triparty Agreement.
  • The amendment specifies certain marketing obligations of the parties.
  • For certain futures and option contracts traded on ICE Futures U.S. and cleared by ICE Clear US, one-half of the related trading and clearing revenues of those ICE entities will be for the account of Bakkt Trust.
  • One-half of Bakkt Trust’s revenues from providing certain services under the agreement will be for the account of ICE Futures U.S. and ICE Clear US collectively.
  • The filing does not provide dollar amounts, historical revenue, earnings, cash flow, margins, debt, liquidity, or quantified earnings impacts from the amendment.

Changes Versus the Prior Comparable Period

The filing does not present period-over-period financial results. The principal change is the revised revenue-allocation arrangement and specified marketing obligations under the amended Triparty Agreement.

Outlook, Risks, and Unusual Items

  • The amendment may affect the future distribution of revenues between Bakkt and ICE entities, but the filing does not quantify the expected impact or provide guidance.
  • ICE Futures U.S. and ICE Clear US are wholly owned subsidiaries of Intercontinental Exchange, Inc. (ICE).
  • Bakkt disclosed ongoing commercial and other relationships with ICE, including an ICE-affiliated employee serving on Bakkt’s board and other contractual relationships.
  • The detailed terms are contained in Exhibit 10.1, which is incorporated by reference into the filing.

Key Facts for Investors to Verify

  1. Review Exhibit 10.1 for the precise scope of covered contracts, services, marketing obligations, and revenue definitions.
  2. Determine how the 50% reciprocal revenue allocation could affect Bakkt’s future revenue, gross margin, and profitability.
  3. Assess whether the agreement contains additional termination, exclusivity, performance, or minimum-volume provisions not summarized in the filing.
  4. Review Bakkt’s subsequent periodic filings for reported revenue attributable to the amended arrangement and any related-party disclosures.