United States securities and exchange commission logo
January 19, 2023
Lewis Silberman
Co-Chief Executive Officer
GSR II Meteora Acquisition Corp.
840 Park Drive East
Boca Raton, Florida 33432
Re: GSR II Meteora
Acquisition Corp.
Amendment No. 1 to
Preliminary Proxy Statement on Schedule 14A
Filed December 1,
2022
File No. 001-41305
Dear Lewis Silberman:
We have reviewed your filing 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 these comments within ten business days by
providing the requested
information or advise us as soon as possible when you will respond. If
you do not believe our
comments apply to your facts and circumstances, please tell us why in
your response.
After reviewing your response to these comments, we may have
additional comments.
Unless we note otherwise, our references to prior comments are to
comments in our November 8,
2022 letter.
Revised Preliminary Proxy Statement filed December 1, 2022
General
1. Please disclose any
significant crypto asset market developments material to
understanding or
assessing your business, financial condition and results of operations, or
share price since your
last reporting period, including any material impact from the price
volatility of crypto
assets.
Certain Defined Terms, page 3
2. You define
cryptocurrency as "a digital currency designed to work as a medium of
exchange through a
computer network." This definition appears to exclude any coin or
token not used as a
peer to peer medium of exchange, and would appear to include
computer-based media of
exchange such as in-game video game currency and online store
Lewis Silberman
FirstName LastNameLewis
GSR II Meteora AcquisitionSilberman
Corp.
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incentives exchangeable for goods or services. We also note your use
of "cryptocurrency"
throughout your description of Bitcoin Depot's activities and your
disclosure that Bitcoin
Depot's offering is now limited to the sale and (in limited cases)
purchase of bitcoin. For
clarity, please revise "cryptocurrency" to "bitcoin" as appropriate,
or disclose the process
by which Bitcoin Depot will determine whether to offer additional
crypto assets through
its kiosks and BDCheckout in the future.
Questions and Answers About the Proposals for PubCo Stockholders
Q: What interests do the current officers and directors of PubCo have in the
business
combination?, page 26
3. Refer to your response to comment 4. We note that you describe certain
transaction costs
payable by the Sponsor on page 109 that will be payable regardless of
whether the
transaction completes. Please include these and any other transaction
costs in your
disclosure of the aggregate costs on pages 26 to 27, 40 to 41, 151 to
152 and 160 to 161.
Summary of the Proxy Statement
Organizational Structure, page 43
4. Please include post-closing ownership percentages for the entities in
the diagram.
Board of Directors of PubCo Following the Business Combination, page 43
5. Refer to your response to comment 7. Please confirm that to the extent
you determine to
avail yourself of the corporate governance exemptions under the Nasdaq
Listing
Rules, you will provide the disclosure called for by Instruction 1 to
Item 407(a) to
Regulation S-K.
Risk Factors, page 57
6. Refer to your response to comment 45. Please remove the language in
your risk factors on
pages 99 and 118 stating that there, "has been limited precedents for
the financial
accounting of cryptocurrencies and related valuation and revenue
recognition...and
financial condition." As noted previously, we observe that the FASB
codification is the
source of authoritative generally accepted accounting principles and
that there is
codification guidance whose scope applies to your transactions.
7. You state that you replenish [y]our hot wallet from time to time
through open market
purchases of cryptocurrency with certain liquidity providers. To
the extent material,
please describe any risk to you, either direct or indirect, from
excessive redemptions,
withdrawals, or a suspension of redemptions or withdrawals, of crypto
assets at your
relevant liquidity providers, if applicable.
8. To the extent material, please discuss any reputational harm you may
face in light of the
recent disruption in the crypto asset markets. For example, discuss
how market conditions
have affected how your business is perceived by customers,
counterparties, and regulators,
Lewis Silberman
GSR II Meteora Acquisition Corp.
January 19, 2023
Page 3
and whether there is a material impact on your operations or financial
condition.
9. We note that you are not authorized or permitted to offer your
products and services to
customers outside of the jurisdictions where you have obtained the
required governmental
licenses and authorizations. Please describe any material risks you
face from
unauthorized or impermissible customer access to your products and
services outside of
those jurisdictions.
10. Please describe any material risks to your business from the
possibility of regulatory
developments related to crypto assets and crypto asset markets.
Identify material pending
crypto legislation or regulation and describe any material effects it
may have on your
business, financial condition, and results of operations.
11. Please describe any material risks you face related to the assertion
of jurisdiction by U.S.
and foreign regulators and other government entities over crypto
assets and crypto asset
markets.
12. Please describe any material risks related to safeguarding your crypto
assets. Describe any
material risks to your business and financial condition if your
policies and procedures
surrounding the safeguarding of crypto assets, conflicts of interest,
or comingling of assets
are not effective.
13. To the extent material, please describe any gaps your board or
management have
identified with respect to risk management processes and policies in
light of current crypto
asset market conditions as well as any changes they have made to
address those gaps.
14. To the extent material, please describe any of the following risks
from disruptions in the
crypto asset markets:
Risk from depreciation in your stock price.
Risk of loss of customer demand for your products and services.
Financing risk, including equity and debt financing.
Risk of increased losses or impairments in your investments or
other assets.
Risks of legal proceedings and government investigations, pending
or known to be
threatened, in the United States or in other jurisdictions against
you or your affiliates.
Risks from price declines or price volatility of crypto assets.
Risks Related to Government Regulation and Privacy Matters, page 57
15. Refer to your response to comment 12, including your statement that you
do not believe
"Bitcoin Depot is currently required to obtain money transmitter
licenses or any other
FirstName LastNameLewis Silberman
required licenses in the other jurisdictions in which it operates."
Please expand your
Comapany NameGSR
disclosure as to II
howMeteora Acquisition
you arrived at this Corp.
belief, and expand your risk
disclosure in the event
that you are found
January 19, 2023 Page 3 not to have obtained a required license for your
activities in a state.
FirstName LastName
Lewis Silberman
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GSR II Meteora AcquisitionSilberman
Corp.
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January
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The consummation of the business combination..., page 102
16. Refer to your disclosure in (i)(y) and (ii) of this risk factor.
Please disclose how you will
notify shareholders prior to the vote if a significant number of state
regulators deny to
consent to the change in control and describe the risk to investors
that you will be
permitted to close the transaction if regulators in states
representing up to 20% of your
revenue object to the transaction or to BT OpCo s operations in
their state, and that
investors may therefore own shares in a combined group with
significantly reduced
revenue.
Business of Bitcoin Depot, page 226
17. To the extent material, please discuss how the recent bankruptcies of
crypto asset market
participants and the downstream effects of those bankruptcies have
impacted or may
impact your business, financial condition, customers, and
counterparties, either directly or
indirectly. Clarify whether you have material assets that may not be
recovered because of
the bankruptcies or may otherwise be lost or misappropriated.
18. To the extent material to an understanding of your business, please
describe any direct or
indirect exposures to other counterparties, customers, custodians, or
other participants in
crypto asset markets known to:
Have filed for bankruptcy, been decreed insolvent or bankrupt,
made any assignment
for the benefit of creditors, or have had a receiver appointed
for them.
Have experienced excessive redemptions or suspended redemptions or
withdrawals
of crypto assets.
Have the crypto assets of their customers unaccounted for.
Have experienced material corporate compliance failures.
19. Refer to your response to comment 1 and your disclosure on page 226
that you allow
customers to sell "cryptocurrency to us in exchange for cash." Please
clarify whether
customers may sell cryptocurrency other than bitcoin to you using your
kiosks. If not,
please clarify that customers may sell bitcoin at certain kiosks.
20. Refer to your response to comment 23. Please disclose whether
transfers require executive
or management-level approval and disclose whether the private keys are
stored in the
United States or Canada, or in a jurisdiction where you do not
maintain kiosk operations.
21. We note your disclosure that you source all of your kiosks from
Genmega. To the
extent your relationship with Genmega is material to Bitcoin Depot's
business, please
disclose the material terms of any agreements with Genmega and expand
your risk factor
disclosure to cover the risk that your purchasing relationship with
Genmega may cease
and the challenges of finding a replacement kiosk provider.
22. You state on page 236 that you "hold an amount of cryptocurrency in a
hot wallet that
[you] own..." and that you "replenish [your] hot wallet from time to
time through open
market purchases of cryptocurrency with certain liquidity providers."
Please disclose
Lewis Silberman
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GSR II Meteora AcquisitionSilberman
Corp.
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2023 II Meteora Acquisition Corp.
January
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whether the price for crypto assets that you charge a customer is
based upon the price paid
by you to your liquidity providers, or the spot price at the time of
the customer's
transaction. If the former, please disclose any risks related to
fluctuations in crypto asset
prices between the time of purchase and onward sale to customers that
you face.
23. To the extent material to an understanding of your business, please
discuss any steps you
take to safeguard your customers crypto assets and describe any
policies and procedures
that are in place to prevent self-dealing and other potential
conflicts of interest. Describe
any policies and procedures you have regarding the commingling of
assets, including
customer assets, your assets, and those of affiliates or others.
Identify what material
changes, if any, have been made to your processes in light of the
current crypto asset
market disruption.
Management's Discussion and Analysis of Financial Condition and Results of
Operations of
Bitcoin Depot, page 240
24. Refer to your response to comment 31. You disclose that you maintain a
low balance of
cryptocurrency - typically less than $0.5 million - and that you
transact almost exclusively
in Bitcoin. Given that your crypto asset balance was $6.6 million at
December 31, 2021,
and $6.0 million was in Ethereum, please include additional
disclosures in your next
amendment discussing these balances.
25. Given the low balance of cryptocurrency, please tell us the following
regarding your
replenishment process:
Address how the Company monitors the real time notifications and
activities of
customer requests for the purchases and sales of crypto assets and
how this equates to
the Company's buying and selling activities in order to maintain
sufficient inventory
of crypto assets on hand to meet customer demand; and
Address if you have had instances where you have not had
sufficient crypto assets in
inventory in order to execute customer transactions, and if not,
the steps taking to
perform execution of the transactions.
26. We note your response to comment 34 related to fees. For BTM kiosk
transactions,
you charge a $3 flat fee and for BDCheckout transactions, you charge a
$3.50 flat fee that
is equal to the fee charged by Incomm to facilitate BDCheckout
transactions. Please
clarify if you pass along any of the $3 flat fee for BTM kiosk
transactions, or if it all
represents net revenue. And clarify if you pass along the entire $3.50
flat fee on
BDCheckout transactions, or if there is no net revenue from flat fees
on BDCheckout
transactions.
27. We note your responses to comments 34, 35, 53, and 54 related to
prices used in
cryptocurrency transactions, including mark-ups. We disagree with your
assertion that
mark-up information is not meaningful to an investor's understanding
of your profitability
over time. Please tell us, and revise your next amendment, to address
the following
regarding these mark-ups:
Lewis Silberman
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GSR II Meteora AcquisitionSilberman
Corp.
Comapany
January 19,NameGSR
2023 II Meteora Acquisition Corp.
January
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Your mark-up percentages or a range of mark-up percentages, by
transaction type
(BTM kiosk, BDCheckout, Bitcoin Depot website) in the periods
presented; and
Specifically, how these mark-up percentages are determined,
taking into account
transaction volume, location, demand, etc.
28. Please tell us how your balance of kiosks-owned and kiosks-leased on
the Consolidated
Balance Sheets in the periods presented reconciles with the key
business metric installed
kiosks presented on page 242. For example, we noted that kiosks -
leased was exactly the
same at December 31, 2021, June 30, 2022 (as presented in your last
filing) and
September 30, 2022, kiosks - owned changed slightly during those
periods, but installed
kiosks increased from 6,220 to 6,955 to 6,787 at December 31, 2021,
June 30, 2022, and
September 30, 2022, respectively.
29. To the extent material, please discuss whether the crypto assets you
own serve as
collateral for any loan, margin, rehypothecation, or other similar
activities to which you or
your affiliates are a party. If so, identify and quantify the crypto
assets used in these
financing arrangements and disclose the nature of your relationship
for loans with parties
other than third-parties. State whether there are any encumbrances on
the collateral.
Discuss whether the current crypto asset market disruption has
affected the value of the
underlying collateral.
Lux Vending, LLC (DBA Bitcoin Depot)
Notes to Consolidated Financial Statements December 31, 2021 and 2020
Note 2. Summary of Significant Accounting Policies
(e) Cryptocurrencies, page F-48
30. Refer to your response to comment 48. We note that the Company
provides services
whereby customers can sell their crypto assets to the Company through
a BTM. As it
relates to this service offering, please address the following:
Quantify the revenue year-to-date in 2022, as well as for 2021,
and 2020;
Indicate the fiat currency available for withdrawal and if there
are any limitations on
the amount of cash that can be withdrawn, as well as the process
for replenishing
cash for withdrawal;
Disclose how the price for the cash withdrawal is determined
(e.g., is there a
markdown on the price of the crypto asset), as well as any fee
structure or terms of
sale;
Indicate the types of cryptocurrency which can be sold in these
types of transactions;
Disclose your accounting for these types of transactions (i.e.
both filled and
unfilled). Ensure that your response addresses accounting for
revenue recognition,
cost of revenue and balance sheet presentation, such as how the
asset is measured and
whether a financial liability is recognized.
31. Refer to your response to comment 46. Please tell us the following
concerning crypto
assets held for investment purposes:
Explain in greater detail the statement, "...cryptocurrencies are
recorded at cost less
Lewis Silberman
GSR II Meteora Acquisition Corp.
January 19, 2023
Page 7
any cumulative impairments until disposed of once the investment
purpose has been
achieved;"
Tell us how you have changed your business model in 2022 given
your disclosure on
page F-79 that you do not hold any cryptocurrencies for
investment purposes as of
September 30, 2022; and
Tell us if all cryptocurrencies received as payment are also
held for sale to customers,
or if some, or all, of these cryptocurrency balances are held for
investment.
(i) Revenue Recognition, page F-51
32. Refer to your response to comment 51. It appears that you have three
revenue streams for
sales of cryptocurrency to customers - (1) BTM kiosks, (2) BDCheckout
at the checkout
counter of retail locations, and (3) Bitcoin Depot's website, where
payment is made via a
wire transfer to Bitcoin Depot's cash account. Please revise your
disclosure to break out
revenues by the three revenue streams listed above for improved
transparency for
potential investors in the periods presented.
33. Refer to your response to comment 52. Please address the following:
We note that you earn a variable fee, settled in Bitcoin, equal to
a percentage of the
cash value of the cumulative transaction volume processed by the
software at the
kiosks during any given month. However, you note in your response
that you settle
"at the time of the transaction" and "multiple times a day."
Please clarify in your
response how you settle at the time of the transaction or multiple
times a day if you
the variable consideration is based on transaction volume
processed during any given
month;
Tell us how frequently you receive the transaction volume payments
in Bitcoin; and
Provide us with a robust accounting analysis of your consideration
of ASC 815 for
accounting for these contracts as a derivative, citing relevant
literature.
(j) Cost of Revenue, page F-52
34. Refer your response to comment 55. Please revise your next amendment
to break out the
cryptocurrency expense line item in your table of cost of revenue to
reflect all of the
components of this expense (cost of crypto assets, fees paid to obtain
crypto assets, etc.)
for the periods presented. Please discuss any material changes in
specific costs items in
MD&A.
Note 5. Restatement, page F-59
35. Refer to your response to comment 58. In addition to the narrative
discussion, please
revise your next amendment to provide a footnote corresponding to each
line item
FirstName LastNameLewis Silberman
showing a calculation and reconciliation to the adjustment reflected in
pro forma
Comapany NameGSR
information. II Meteora
These Acquisition
footnotes, includingCorp.
a narrative discussion and
quantitative
Januaryreconciliation,
19, 2023 Pageshould
7 be included after the table summarizing the
restatement.
FirstName LastName
Lewis Silberman
FirstName LastNameLewis
GSR II Meteora AcquisitionSilberman
Corp.
Comapany
January 19,NameGSR
2023 II Meteora Acquisition Corp.
January
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Lux Vending, LLC (DBA Bitcoin Depot)
Notes to Consolidated Financial Statements Periods Ended September 30, 2022
(Unaudited) and
December 31, 2021
Note 2. Summary of Significant Accounting Policies
(e) Cryptocurrencies, page F-78
36. Please tell us how you had no impairment on cryptocurrencies in 2022,
either held-for-
investment or held-for-sale to customers given the volatility and
decline in the price of
Bitcoin in 2022.
Note 4. Recent Accounting Pronouncements, page F-88
37. Please tell us, and revise your next amendment as appropriate, to
discuss the Company's
adoption and application of Staff Accounting Bullet No. 121 ("SAB
121"). Please
specifically address the following:
Quantify the total population of cryptocurrency assets held in
custody by either the
Company or on behalf of the Company at each reporting period date;
Reconcile the total population in the bullet above to where it is
currently reflected, if
at all, in the Company's financial statements; and
Tell us if the Company holds, or engages other parties to hold on
their behalf, any
other cryptocurrency assets for any other customers, third
parties, related parties or
entities that are not included in the consolidated financial
statements.
For each type of cryptocurrency transaction (BM kiosk, BDCheckout,
or directly by
an OTC trade), please tell us the following:
o Clarify at what point your full control and custody of the
cryptocurrencies
before the primary sale are transferred to the customers,
and the customers
obtains the right to transact in their cryptocurrencies.
o Tell us who has the risk of loss for cryptocurrency held by
thirdparty custodians.
We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence of
action by the staff.
You may contact David Irving at 202-551-3321 or Bonnie Baynes at
202-551-4924 if
you have questions regarding comments on the financial statements and related
matters. Please
contact Christopher Wall at 202-551-4162 or J. Nolan McWilliams, Acting Legal
Branch Chief,
at 202-551-3217 with any other questions.
Sincerely,
Division of
Corporation Finance
Office of
Finance