10-Q/A

Large, accelerated filer

Accelerated filer

Non-accelerated
filer

Smaller reporting company

Emerging growth company

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM

10-Q/A

(Amendment No. 1)

(MARK ONE)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2021

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from

Commission

filenumber:001-39544

Bakkt Holdings, Inc.

(Exact Name of Registrant as Specified in Its Charter)


Delaware		98-1550750
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

10000 Avalon Boulevard, Suite 1000, Alpharetta, Georgia		30009
(Address of principal executive offices)		(Zip Code)

(678)

534-5849

(Issuer’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A Common Stock, par value $0.0001 per share	BKKT	The New York Stock Exchange
Warrants to purchase Class A Common Stock	BKKT WS	The New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T(§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes

☒ No ☐

Indicate by check mark whether the registrant is a large, accelerated filer, an accelerated filer, a

non-accelerated

filer, a smaller reporting company or an emerging growth company. See definitions of “large, accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule12b-2ofthe Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined inRule12b-2ofthe Exchange Act). Yes ☒ No ☐

As of November

, 2021, there were 57,164,266 shares of common stock, $0.0001 par value issued and outstanding.

EXPLANATORY NOTE

Bakkt Holdings, Inc., formerly known as VPC Impact Acquisition Holdings (the “Company”) is filing this Amendment No. 1 to its Quarterly Report on Form

10-Q/A

for the three and nine month period ended September 30, 2021 (the “Amended Form

10-Q”

“10-Q/A”),

as originally filed with the U.S. Securities and Exchange Commission (the “SEC”) on October 13, 2021 (the “Original Form

10-Q”),

as further described below.

This amended and restated report on Form

10-Q/A

is presented as of the filing date of the Original Form

10-Q

and does not reflect events occurring after that date, or modify or update disclosures in any way other than as required to reflect the restatement as described below. Accordingly, this Amended

Form10-Q/A

should be read in conjunction with our filings with the SEC subsequent to the date on which we filed the Original Form

10-Q.

The Company is filing this Amended Form

10-Q/A

to reflect a restatement of the Company’s condensed financial statements for the three months ended March 31, 2021, as of and for the three and six months ended June 30, 2021.

On October 15, 2021, subsequent to the fiscal quarter ended September 30, 2021, the Company consummated the previously announced merger (the “Merger”), among other transactions (the Merger and other transactions contemplated by the Merger Agreement, collectively the “Business Combination”), pursuant to that certain Agreement and Plan of Merger, dated as of January 11, 2021 (as amended, the “Merger Agreement”), by and among the Company, Pylon Merger Company LLC, a Delaware corporation and direct wholly owned subsidiary of the Company (“Merger Sub”), and Bakkt Opco Holdings, LLC, a Delaware limited liability corporation (f/k/a Bakkt Holdings, LLC) (“Opco”).

On October 18, 2021, the trading day following the Closing Date, the Company’s Class A common stock and warrants began trading on the NYSE under the symbols “BKKT” and “BKKT WS,” respectively. The Company’s public units automatically separated into their component securities upon consummation of the Business Combination and, as a result, no longer trade as a separate security and were delisted from NASDAQ.

Unless stated otherwise, this report contains information about the Company before the consummation of the Business Combination. References to the “Company” in this report refer to Bakkt Holdings, Inc. before the consummation of the Business Combination. All other capitalized but unidentified terms in this Explanatory Note have the meanings ascribed to such terms elsewhere within this Amendment No. 1.

Background of Restatement

All of the shares held by the Company’s public shareholders (the “Public Shares”) contain a redemption feature which provides each holder of such shares with the opportunity to have their shares redeemed, and management has no control over which Public Shares will be redeemed. ASC

480-10-S99-3A

provides that redemption provisions not solely within the control of the issuer require shares subject to redemption to be classified outside of permanent equity. Furthermore, ASC

480-10-25-6(b)

provides guidance stating that in determining if an instrument is mandatorily redeemable, a provision that defers redemption until a specified liquidity level is reached would not affect classification of the instrument. As such, management has identified errors made in the historical financial statements where, at the closing of the Company’s Initial Public Offering, the Company improperly classified its Class A ordinary shares subject to possible redemption. The Company previously determined the Class A ordinary shares subject to possible redemption to be equal to the redemption value, while also taking into consideration a redemption cannot result in net tangible assets being less than $5,000,001. Management determined that the Public Shares can be redeemed or become redeemable subject to the occurrence of future events considered outside the Company’s control. Therefore, management concluded that the redemption value should include all Class A ordinary shares subject to possible redemption, resulting in the Class A ordinary shares subject to possible redemption being equal to their redemption value. As a result, in the Original Quarterly Report management has noted a reclassification adjustment related to temporary equity and permanent equity as of September 30, 2021.

Following the filing of the Original Quarterly Report, the Company’s management, together with the Audit Committee,

re-evaluated

the materiality of the reclassification and whether the reclassification adjustment related to temporary equity and permanent equity should be restated as of the Initial Public Offering date and the next two subsequent reporting periods. Following such

re-evaluation,

the Company’s management, together with the Audit Committee determined that the Company’s financial statements and other financial data as of March 31, 2021 and June 30, 2021 should be restated through the filing of this Amended Form

10-Q.

The financial statements as of March 31, 2021 and as of June 30, 2021 have been restated in Note 2 of this Amended Form

10-Q,

with the restatements resulting in a change in the initial carrying value of the Class A ordinary shares subject to possible redemption with the offset recorded to additional

paid-in

capital (to the extent available), accumulated deficit and Class A ordinary shares. Further, due to change in presentation for the Class A ordinary shares subject to redemption, the Company also revised its earnings per share calculation to allocate net income (loss) evenly to Class A and Class B ordinary shares. This presentation contemplates a Business Combination as the most likely outcome, in which case, both classes of common stock share pro rata in the income (loss) of the Company. There is no impact to the reported amounts for total assets, total liabilities, cash flows, or net income (loss). On November 22, 2021, the Company filed a report on Form

8-K

disclosing the

non-reliance

on the financial statements included in the Original Quarterly Report the Form

10-Q

for the period ended March 31, 2021 filed on May 24, 2021 and the Form

10-Q

for the period ended June 30, 2021 filed on August 13, 2021.

The financial information that has been previously filed or otherwise reported for the period ended September 30, 2021 is superseded by the information in this Amended Form

10-Q,

and the financial statements and related financial information contained in the Original Quarterly Report, filed on October 12, 2021, including the filings for the Affected Periods should no longer be relied upon.

Internal Control Considerations

In connection with the restatement, management has

re-evaluated

the effectiveness of the Company’s disclosure controls and procedures and internal control over financial reporting as of September 30, 2021. Management has concluded that, in light of the errors described above, and the filing of the Amended Form

10-Q,

a material weakness exists in the Company’s internal control over financial reporting and that the Company’s disclosure controls and procedures were not effective as a result thereof. As a result of the Business Combination, the Company has a new Chief Executive Officer, Chief Financial Officer and Chief Accounting Officer as of the Closing Date. Management plans to enhance the system of evaluating and implementing the accounting standards that apply to our financial statements, including enhanced training of our personnel and increased communication among our personnel and third-party professionals with whom we consult regarding application of complex accounting standards for financial instruments. For a discussion of management’s consideration of our disclosure controls and procedures, internal controls over financial reporting, and the material weaknesses identified, see Part I, Item 4, “Controls and Procedures” of this Amended Form

10-Q.

VPC IMPACT ACQUISITION HOLDINGS

QUARTERLY REPORT ON

FORM 10-Q

FOR THE QUARTER ENDED SEPTEMBER 30, 2021

TABLE OF CONTENTS


	Page
PART 1 – FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets as of September 30, 2021 (unaudited) and December 31, 2020		3
Unaudited Condensed Consolidated Statements of Operations for the Three and Nine months Ended September 30, 2021 and for the period from July 31, 2020 (inception) through September 30, 2020		4
Unaudited Condensed Consolidated Statements of Changes in Shareholders’ Equity (Deficit) for the Three and Nine months Ended September 30, 2021 and for the period from July 31, 2020 (inception) through September 30, 2020		5
Unaudited Condensed Consolidated Statements of Cash Flows for the Nine months Ended September 30, 2021 and for the period from July 31, 2020 (inception) through September 30, 2020		6
Notes to Condensed (unaudited) Consolidated Financial Statements		7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		23
Item 3. Quantitative and Qualitative Disclosures about Market Risk		27
Item 4. Control and Procedures		27
PART II – OTHER INFORMATION		28
Item 1. Legal Proceedings		28
Item 1A. Risk Factors		28
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		28
Item 3. Defaults Upon Senior Securities		29
Item 4. Mine Safety Disclosures		29
Item 5. Other Information		29
Item 6. Exhibits		29
SIGNATURES		30

VPC IMPACT ACQUISITION HOLDINGS

CONDENSED CONSOLIDATED BALANCE SHEETS


	September 30, 2021			December 31, 2020
	(Unaudited)
ASSETS
Current assets
Cash	$	708,642		$	1,177,678
Prepaid expenses		134,813			234,959

Total Current Assets		843,455			1,412,637
Cash and investments held in Trust Account		207,396,111			207,376,213

TOTAL ASSETS	$	208,239,566		$	208,788,850

LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT)
Liabilities
Current Liabilities
Accounts payable and accrued expenses	$	6,144,562		$	893,415
Accrued offering costs		—			2,230

Total Current Liabilities		6,144,562			895,645
Warrant liabilities		29,599,970			22,513,065
Deferred underwriting fee payable		7,258,021			7,258,021

Total Liabilities		43,002,553			30,666,731

Commitments and Contingencies
Class A ordinary shares subject to possible redemption, 20,737,202 shares at $10.00 per share as of September 30, 2021 and December 31, 2020		207,372,020			207,372,020
Shareholders’ Deficit
Preference shares, $0.0001 par value; 1,000,000 shares authorized; no shares issued and outstanding		—			—
Class A ordinary shares, $0.0001 par value; 200,000,000 shares authorized at September 30, 2021 and December 31, 2020		—			—
Class B ordinary shares, $0.0001 par value; 20,000,000 shares authorized; 5,184,300 shares issued and outstanding at September 30, 2021 and December 31, 2020		518			518
Additional paid-in capital		—			—
Accumulated deficit		(42,135,525	)		(29,250,419	)

Total Shareholders’ Deficit		(42,135,007	)		(29,249,901	)

TOTAL LIABILITIES AND SHAREHOLDERS’ DEFICIT	$	208,239,566		$	208,788,850

The accompanying notes are an integral part of these condensed consolidated financial statements.

VPC IMPACT ACQUISITION HOLDINGS

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)


	For The Three Months Ended September 30,			Nine months Ended September 30,			For the Period from July 31, 2020 (Inception) through September 30,
	2021			2021			2020
General and administrative expenses	$	2,241,776		$	5,822,575		$	17,543

Loss from operations		(2,241,776	)		(5,822,575	)		(17,543	)
Other income (expense):
Other Income		—			4,476			—
Interest earned on investments held in Trust Account		2,669			19,898			164
Change in fair value of warrant liabilities		1,755,959			(7,086,905	)		(2,260,000	)
Offering costs—warrants		—			—			(754,990	)

Total other income (expense), net		1,758,628			(7,062,531	)		(3,014,826	)

Net loss	$	(483,148	)	$	(12,885,106	)	$	(3,032,369	)

Weighted average shares outstanding of Class A ordinary shares		20,737,202			20,737,202			3,870,968

Basic and diluted net loss per share, Class A	$	(0.02	)	$	(0.50	)	$	(0.34	)

Weighted average shares outstanding of Class B ordinary shares		5,184,300			5,184,300			5,000,000

Basic and diluted net loss per share, Class B	$	(0.02	)	$	(0.50	)	$	(0.34	)

The accompanying notes are an integral part of these condensed consolidated financial statements.

VPC IMPACT ACQUISITION HOLDINGS

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ DEFICIT

(UNAUDITED)

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2021


	Class A Ordinary Shares				Class B Ordinary Shares				Additional Paid-in Capital		Accumulated Deficit			Total Shareholders’ Deficit
	Shares		Amount		Shares		Amount

Balance – January 1, 2021, as restated (see Note 2)		—	$	—		5,184,300	$	518	$	—	$	(29,250,419	)	$	(29,249,901	)
Net loss		—		—		—		—		—		(33,671,616	)		(33,671,616	)

Balance – March 31, 2021, as restated (see Note 2)		—	$	—		5,184,300	$	518	$	—	$	(62,922,035	)	$	(62,921,517	)
Net income		—		—		—		—		—		21,269,658			21,269,658

Balance – June 30, 2021, as restated (see Note 2)		—	$	—		5,184,300	$	518	$	—	$	(41,652,377	)	$	(41,651,859	)
Net loss		—		—		—		—		—		(483,148	)		(483,148	)

Balance – September 30, 2021		—	$	—		5,184,300	$	518	$	—	$	(42,135,525	)	$	(42,135,007	)

FOR THE PERIOD FROM JULY 31, 2020 (INCEPTION) THROUGH SEPTEMBER 30, 2020


	Class A Ordinary Shares				Class B Ordinary Shares						Additional Paid-in Capital			Accumulated Deficit			Total Shareholders’ Deficit
	Shares		Amount		Shares			Amount

Balance – July 31, 2020 (inception)		—	$	—		—		$	—		$	—		$	—		$	—
Issuance of Class B ordinary shares to Sponsor		—		—		5,750,000			575			24,425			—			25,000
Accretion for Class A ordinary shares to redemption amount				—								(24,425	)		(23,521,731	)		(23,546,156	)
Forfeiture of Founder Shares		—		—		(565,700	)		(57	)					57			—
Net loss		—		—		—			—			—			(3,032,369	)		(3,032,369	)
Balance – September 30, 2020, as restated (see Note 2)		—	$	—		5,184,300		$	518		$	—		$	(26,554,043	)	$	(26,553,525	)

The accompanying notes are an integral part of these condensed consolidated financial statements.

VPC IMPACT ACQUISITION HOLDINGS

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)


	Nine months Ended September 30, 20 21			For the Period from July 31, 2020 (Inception) Through September 30, 2020
Cash Flows from Operating Activities:
Net loss	$	(12,885,106	)	$	(3,032,369	)
Adjustments to reconcile net loss to net cash used in operating activities:
Change in fair value of warrant liabilities		7,086,905			2,260,000
Formation cost paid by Sponsor in exchange for issuance of founder shares		—			6,606
Interest earned on investments held in Trust Account		(19,898	)		(164	)
Transaction costs allocated to warrants		—			754,990
Changes in operating assets and liabilities:
Prepaid expenses		100,146			(278,363	)
Accounts payable and accrued expenses		5,248,917			—

Net cash used in operating activities		(469,036	)		(289,300	)

Cash Flows from Investing Activities:
Investment of cash into T rust Account		—			(200,000,000	)

Net cash used in investing activities		—			(200,000,000	)

Cash Flows from Financing Activities:
Proceeds from sale of Units, net of underwriting discount paid		—			196,000,000
Proceeds from sale of Private Placement Units		—			6,000,000
Payment of offering costs		—			(397,793	)
Repayment of promissory note – related party		—			(82,729	)

Net cash provided by financing activities		—			201,519,478

Net Change in Cash		(469,036	)		1,230,178
Cash – Beginning of period		1,177,678			—

Cash – End of period	$	708,642		$	1,230,178

Non-Cash investing and financing activities:
Offering costs included in accrued offering costs	$	—		$	2,230

Offering costs paid by Sponsor in exchange for issuance of founder shares	$	—		$	18,394

Offering costs paid through promissory note	$	—		$	82,729

Initial classification of Class A ordinary shares subject to possible redemption	$	—		$	207,372,020

Deferred underwriting fee payable	$	—		$	7,000,000

The accompanying notes are an integral part of these condensed consolidated financial statements.

VPC IMPACT ACQUISITION HOLDINGS

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2021

NOTE 1—DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS

VPC Impact Acquisition Holdings (the “Company”) is a blank check company incorporated as a Cayman Islands exempted company on July 31, 2020. The Company 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 (a “Business Combination”).

On January 11, 2021, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”), with Pylon Merger Company LLC, a Delaware limited liability company and a direct wholly owned subsidiary of the Company (“Merger Sub”), and Bakkt Holdings, LLC, a Delaware limited liability company (“Bakkt”), a transformative digital asset marketplace launched in 2018 by Intercontinental Exchange, Inc. (“ICE”) and a group of investors and strategic partners (see Note 7).

The Company is not limited to a particular industry or sector for purposes of consummating a Business Combination. The Company is an early stage and emerging growth company and, as such, the Company is subject to all of the risks associated with early stage and emerging growth companies.

As of September 30, 2021, the Company had not commenced any operations. All activity from inception through September 30, 2021 relates to the Company’s formation, its initial public offering (“Initial Public Offering”), which is described below, and subsequent to the Initial Public Offering, identifying a target company for a Business Combination. The Company will not generate any operating revenues until after the completion of a Business Combination, at the earliest. The Company generates

non-operating

income in the form of interest income from the proceeds derived from the Initial Public Offering.

The registration statement for the Company’s Initial Public Offering was declared effective on September 22, 2020. On September 25, 2020 the Company consummated the Initial Public Offering of 20,000,000 units (the “Units” and, with respect to the Class A ordinary shares included in the Units sold, the “Public Shares”), generating gross proceeds of $200,000,000 which is described in Note 4.

Simultaneously with the closing of the Initial Public Offering, the Company 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 VPC Impact Acquisition Holdings Sponsor, LLC (the “Sponsor”), generating gross proceeds of $6,000,000, which is described in Note 5.

On September 29, 2020, the underwriters notified the Company of their intention to partially exercise their over-allotment option on October 1, 2020. As such, on October 1, 2020, the Company 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 $7,519,460.

Transaction costs charged to equity amounted to $11,906,607, consisting of $4,147,440 of underwriting fees, $7,258,021 of deferred underwriting fees and $501,146 of other offering costs.

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 $207,372,020 ($10.00 per Unit) from the net proceeds of the sale of the Units in the Initial Public Offering and the sale of the Private Placement Warrants was placed in a trust account (the “Trust Account”) and invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “Investment Company Act”), with a maturity of 185 days or less, or in any open-ended investment company that holds itself out as a money market fund investing solely in U.S. Treasuries and meeting certain conditions under

Rule 2a-7

the Investment Company Act, as determined by the Company, until the earliest of: (i) the completion of a Business Combination and (ii) the distribution of the funds in the Trust Account to the Company’s shareholders, as described below.

The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering and the sale of the Private Placement Warrants, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. The stock exchange listing rules require that the Business Combination must be with one or more operating businesses or assets with a fair market value equal to at least 80% of the assets held in the Trust Account (excluding the deferred underwriting commissions and taxes payable on the interest earned on the Trust Account). The Company will only complete a Business Combination if the post-Business Combination company owns or acquires 50% or more of the issued and outstanding voting securities of the target or otherwise acquires a controlling interest in the target business sufficient for it not to be required to register as an investment company under the Investment Company Act. There is no assurance that the Company will be able to successfully effect a Business Combination.

The Company will provide the holders of the public shares (the “Public Shareholders”) with the opportunity to redeem all or a portion of their public shares upon the completion of the Business Combination, either (i) in connection with a general meeting called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek shareholder approval of a Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The Public Shareholders will be entitled to redeem their Public Shares, equal to the aggregate amount then on deposit in the Trust Account, calculated as of two business days prior to the consummation of the Business Combination (initially $10.00 per Public Share), including interest (which interest shall be net of taxes payable), divided by the number of then issued and outstanding public shares, subject to certain limitations as described in the prospectus. The

per-share

amount to be distributed to the Public Shareholders who properly redeem their shares will not be reduced by the deferred underwriting commissions the Company will pay to the underwriters (as discussed in Note 7). There will be no redemption rights upon the completion of a Business Combination with respect to the Company’s warrants.

VPC IMPACT ACQUISITION HOLDINGS

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2021

The Company will proceed with a Business Combination only if the Company has net tangible assets of at least $5,000,001 and, if the Company seeks shareholder approval, it receives an ordinary resolution under Cayman Islands law approving a Business Combination, which requires the affirmative vote of a majority of the shareholders who attend and vote at a general meeting of the Company. If a shareholder vote is not required and the Company does not decide to hold a shareholder vote for business or other legal reasons, the Company will, pursuant to its Amended and Restated Memorandum and Articles of Association, conduct the redemptions pursuant to the tender offer rules of the U.S. Securities and Exchange Commission (“SEC”), and file tender offer documents containing substantially the same information as would be included in a proxy statement with the SEC prior to completing a Business Combination. If the Company seeks shareholder approval in connection with a Business Combination, the Sponsor has agreed to vote its Founder Shares (as defined in Note 6) and any Public Shares purchased during or after the Initial Public Offering in favor of approving a Business Combination. Additionally, each Public Shareholder may elect to redeem their Public Shares, without voting, and if they do vote, irrespective of whether they vote for or against a proposed Business Combination.

Notwithstanding the foregoing, if the Company seeks shareholder approval of the Business Combination and the Company does not conduct redemptions pursuant to the tender offer rules, a Public Shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from redeeming its shares with respect to more than an aggregate of 15% of the Public Shares without the Company’s prior written consent.

he Sponsor has agreed (a) to waive its redemption rights with respect to any Founder Shares and Public Shares held by it in connection with the completion of a Business Combination and (b) not to propose an amendment to the Amended and Restated Memorandum and Articles of Association (i) to modify the substance or timing of the Company’s obligation to allow redemption in connection with the Company’s initial Business Combination or to redeem 100% of the Public Shares if the Company does not complete a Business Combination within the Combination Period (as defined below) or (ii) with respect to any other provision relating to shareholders’ rights or

pre-initial

business combination activity, unless the Company provides the Public Shareholders with the opportunity to redeem their Public Shares upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the Trust Account and not previously released to pay taxes, divided by the number of then issued and outstanding Public Shares.

The Company will have until September 25, 2022 to consummate a Business Combination (the “Combination Period”). However, if the Company has not completed a Business Combination within the Combination Period, the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem 100%

of the Public Shares, at a

per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned and not previously released to the Company to pay its taxes, if any (less up to

$100,000

of interest to pay dissolution expenses), divided by the number of then issued and outstanding Public Shares, which redemption will completely extinguish the rights of the Public Shareholders as shareholders (including the right to receive further liquidating distributions, if any), and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining Public Shareholders and its Board of Directors, liquidate and dissolve, subject in each case to the Company’s obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to the Company’s warrants, which will expire worthless if the Company fails to complete a Business Combination within the Combination Period.

The Sponsor has agreed to waive its rights to liquidating distributions from the Trust Account with respect to the Founder Shares it will receive if the Company fails to complete a Business Combination within the Combination Period. However, if the Sponsor or any of its respective affiliates acquire Public Shares, such Public Shares will be entitled to liquidating distributions from the Trust Account if the Company fails to complete a Business Combination within the Combination Period. The underwriters have agreed to waive their rights to their deferred underwriting commission (see Note 7) held in the Trust Account in the event the Company does not complete a Business Combination within the Combination Period, and in such event, such amounts will be included with the other funds held in the Trust Account that will be available to fund the redemption of the Public Shares. In the event of such distribution, it is possible that the per share value of the assets remaining available for distribution will be less than the Initial Public Offering price per Unit ($10.00).

In order to protect the amounts held in the Trust Account, the Sponsor has agreed that it will be liable to the Company if and to the extent any claims by a third party (other than the Company’s independent registered public accounting firm) for services rendered or products sold to the Company, or a prospective target business with which the Company has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below the lesser of (1) $10.00 per Public Share and (2) the actual amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account, if less than $10.00 per Public Share, due to reductions in the value of trust assets, in each case net of the interest that may be withdrawn to pay taxes. This liability will not apply to any claims by a third party who executed a waiver of any and all rights to seek access to the Trust Account and as to any claims under the Company’s indemnity of the underwriters of the Initial

VPC IMPACT ACQUISITION HOLDINGS

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2021

Public Offering against certain liabilities, including liabilities under the Securities Act of 1933, as ame

ded (the “Securities Act”). In the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability for such third-party claims. The Company will seek to reduce the possibility that the Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers (other than the Company’s independent registered public accounting firm), prospective target businesses or other entities with which the Company does business, execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account.

Liquidity and Capital Resources

As of September 30, 2021, the Company had approximately $709,000 in its operating bank accounts and working capital deficit of approximately $5.3 million.

Prior to the completion of the Initial Public Offering, the Company’s liquidity needs had been satisfied through a contribution of $25,000 from Sponsor to cover for certain formation and offering costs in exchange for the issuance of the Founder Shares, the loan of up to $300,000 from the Sponsor pursuant to the Note (see Note 6), and the proceeds from the consummation of the Private Placement not held in the Trust Account. The Note was repaid on September 25, 2020. In addition, in order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of the Company’s officers and directors may, but are not obligated to, provide the Company Working Capital Loans (see Note 6). As of September 30, 2021 and December 31, 2020, there were no amounts outstanding under any Working Capital Loan.

s of October 15, 2021, substantial doubt about our ability to continue as a going concern related to the date for mandatory liquidation and dissolution was alleviated due to the closing of the business combination.

NOTE 2. RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS

In connection with the preparation of the Company’s financial statements as of September 30, 2021, management determined it should restate its previously reported financial statements. The Company determined, at the closing of the Company’s Initial Public Offering and shares sold pursuant to the exercise of the underwriters’ overallotment, it had improperly valued its Class A ordinary shares subject to possible redemption. The Company previously determined the Class A ordinary shares subject to possible redemption to be equal to the redemption value of

$10.00 per Class A ordinary share while also taking into consideration a redemption cannot result in net tangible assets being less than $5,000,001. Management determined that the Class A ordinary shares issued during the Initial Public Offering and pursuant to the exercise of the underwriters’ overallotment can be redeemed or become redeemable subject to the occurrence of future events considered outside the Company’s control. Therefore, management concluded that the redemption value should include all Class A ordinary shares subject to possible redemption, resulting in the Class A ordinary shares subject to possible redemption being equal to their redemption value. As a result, management has noted a reclassification adjustment related to temporary equity and permanent equity. This resulted in an adjustment to the initial carrying value of the Class A ordinary shares subject to possible redemption with the offset recorded to additional

paid-in

capital (to the extent available), accumulated deficit and Class A ordinary shares.

In connection with the change in presentation for the Class A ordinary shares subject to redemption, the Company also revised its earnings per share calculation to allocate net income (loss) evenly to Class A and Class B ordinary shares. This presentation contemplates a Business Combination as the most likely outcome, in which case, both classes of ordinary shares share pro rata in the income (loss) of the Company.

In accordance with SEC Staff Accounting Bulletin No. 99, “Materiality,” and SEC Staff Accounting Bulletin No. 108, “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements,” the Company evaluated the corrections and has determined that the related impact was material to the previously filed financial statements that contained the error, reported in the Company’s Form

10-Qs

for the quarterly periods ended March 31, 2021, and June 30, 2021 (the “Affected Quarterly Periods”). Therefore, the Company, in consultation with its Audit Committee, concluded that the Affected Quarterly Periods should be restated to present all Class A ordinary shares subject to possible redemption as temporary equity and to recognize accretion from the initial book value to redemption value at the time of its Initial Public Offering. As such, the Company is reporting these restatements to those periods in this quarterly report.

There has been no change in the Company’s total assets, liabilities or operating results.

VPC IMPACT ACQUISITION HOLDINGS

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2021

he impact of the restatement on the Company’s financial statements is reflected in the following table:


	As Previously Reported			Adjustment			As Restated
Balance Sheet as of March 31, 2021 (unaudited)


Class A ordinary shares subject to possible redemption	$	139,450,500		$	67,921,520		$	207,372,020
Class A ordinary shares	$	679		$	(679	)	$	—
Additional paid-in capital	$	43,531,612		$	(43,531,612	)	$	—
Accumulated deficit	$	(38,532,806	)	$	(24,389,229	)	$	(62,922,035	)
Total shareholders’ equity (deficit)	$	5,000,003		$	(67,921,520	)	$	(62,921,517	)
Number of shares subject to redemption		13,945,050			6,792,152			20,737,202

Balance Sheet as of June 30, 2021 (unaudited)
Class A ordinary shares subject to possible redemption	$	160,720,160		$	46,651,860		$	207,372,020
Class A ordinary shares	$	467		$	(467	)	$	—
Additional paid-in capital	$	22,262,164		$	(22,262,164	)	$	—
Accumulated deficit	$	(17,263,148	)	$	(24,389,229	)	$	(41,652,377	)
Total shareholders’ equity (deficit)	$	5,000,001		$	(46,651,860	)	$	(41,651,859	)
Number of shares subject to redemption		16,072,016			4,665,186			20,737,202


Statement of Cash Flows for the three months ended March 31, 2021 (unaudited)
Change in value of Class A ordinary shares subject to possible redemption	$	33,671,610		$	(33,671,610	)	$	—

Statement of Cash Flows for the six months ended June 30, 2021 (unaudited)
Change in value of Class A ordinary shares subject to possible redemption	$	(12,401,950	)	$	12,401,950		$	—

Statement of Operation for the three months ended March 31, 2021 (unaudited)
Weighted average shares outstanding, Class A ordinary shares		20,737,202			—			20,737,202
Basic and diluted net income per share, Class A ordinary shares	$	—		$	(1.30	)	$	(1.30	)
Weighted average shares outstanding, Class B ordinary shares		5,184,300			—			5,184,300
Basic and diluted net loss per share, Class B ordinary shares	$	(

SEC Form 10-Q/A filed by Bakkt Holdings Inc. (Amendment)