Digital asset-friendly bank, Silvergate has recently announced that it will delay the filing of its annual 10-K report, which has sent its stock price down more than thirty percent after hours.
Notably, a 10-K report is a document required by the SEC that provides a comprehensive overview of a firm’s business and financial condition. The virtual asset bank mentioned that it would require an additional 2 weeks to finish the report for the last fiscal year.
In its late filing notice, Silvergate explained that it sold additional debt securities in the months of January and February and anticipates to record further losses in the impending months.
The firm stated,
“These additional losses will negatively impact the regulatory capital ratios of the Company and the Company’s wholly owned subsidiary, Silvergate Bank (the “Bank”), and could result in the Company and the Bank being less than well-capitalized.”
Silvergate further said,
“In addition, the Company is evaluating the impact that these subsequent events have on its ability to continue as a going concern for the twelve months following the issuance of its financial statements.”
“The Company is currently in the process of reevaluating its businesses and strategies in light of the business and regulatory challenges it currently faces.”
The digital asset bank added that it’s in the process of conducting extra procedures and providing documentation, as requested by its independent registered public accounting firm, to complete a series of audits.
Silvergate further explained that a number of factors might have an impact on the financial health of the company in the impending future.
Among those include the considerable market volatility experienced in the 4th quarter of last year, a couple of high-profile bankruptcies in the year 2022 which has disrupted investor confidence in virtual assets and uncompromising regulatory oversight on banks offering cryptocurrency services.
The firm added that customer retention might be an issue, in addition to any potential liabilities or restrictions of the firm that may be brought about by lawsuit.
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