United States securities and exchange commission logo
February 22, 2023
Lewis Silberman
Co-Chief Executive Officer
GSR II Meteora Acquisition Corp.
418 Broadway, Suite N
Albany, New York 12207
Re: GSR II Meteora
Acquisition Corp.
Definitive Proxy
Statement on Schedule 14A
Filed February 8,
2023
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.
Definitive Proxy Statement filed February 8, 2023
General
1. Please describe what
relationship existed between Oppenheimer and GSR II Meteora after
the close of the IPO,
including any financial or merger-related advisory services
conducted by
Oppenheimer. For example, clarify whether Oppenheimer had any role in
the identification or
evaluation of business combination targets. Please disclose whether
Oppenheimer assisted in
the preparation or review of any materials reviewed by GSR II
Meteora's board of
directors or management as part of their services to GSR II Meteora
and whether Oppenheimer
has withdrawn its association with those materials and notified
GSR II Meteora of such
disassociation. For context, include that there are similar
circumstances in which
a financial institution is named and that Oppenheimer's
resignation indicates
it is not willing to have the liability associated with such work in this
transaction.
Lewis Silberman
FirstName LastNameLewis
GSR II Meteora AcquisitionSilberman
Corp.
Comapany22,
February NameGSR
2023 II Meteora Acquisition Corp.
February
Page 2 22, 2023 Page 2
FirstName LastName
2. Please provide us with any correspondence between Oppenheimer and GSR
II Meteora
relating to Oppenheimer's resignation.
3. Please provide us with the engagement letter between GSR II Meteora
and Oppenheimer.
Please discuss the impact on GSR II Meteora of any ongoing obligations
that survive
termination of the engagement under the engagement letter, including
those that you
reference on pages 27-28.
4. Please provide us with a letter from Oppenheimer stating whether it
agrees with the
statements made in your prospectus related to their resignation and,
if not, stating the
respects in which they do not agree. Please revise your disclosure
accordingly to reflect
that you have discussed the disclosure with Oppenheimer and it either
agrees or does not
agree with the conclusions and the risks associated with such outcome.
If Oppenheimer
does not respond, please revise your disclosure to indicate you have
asked and not
received a response and disclose the risks to investors. Additionally,
please indicate that
Oppenheimer withdrew from its role as underwriter and forfeited its
fees, if applicable,
and that the firm refused to discuss the reasons for its resignation
and forfeiture of fees, if
applicable, with management. Clarify whether Oppenheimer performed
substantially all
the work to earn its fees.
5. Please revise your disclosure on page 114 under the risk factor
captioned Oppenheimer
has resigned from its financial advisory role to specifically
highlight in this instance
that Oppenheimer s withdrawal indicates that it does not want to be
associated with the
disclosure or underlying business analysis related to the transaction.
6. We note your disclosure on page 28 that Oppenheimer was not
expected to have a
significant role in the closing of the business combination. Please
revise to identify what
party, if any, will be filling Oppenheimer s role.
7. We understand that Oppenheimer, the lead underwriter in your SPAC IPO,
intends to
waive the deferred underwriting commissions that would otherwise be
due to it upon the
closing of the business combination. Please disclose how this waiver
was obtained, why
the waiver was agreed to, and clarify the SPAC s current
relationship with Oppenheimer.
8. Please tell us whether you are aware of any disagreements with
Oppenheimer regarding
the disclosure in your proxy statement. Further, please add risk
factor disclosure that
clarifies that Oppenheimer was to be compensated, in part, on a
deferred basis for its
underwriting services in connection with the SPAC IPO and such
services have already
been rendered, yet Oppenheimer is waiving such fees and disclaiming
responsibility for
the proxy statement. Clarify the unusual nature of such a fee waiver
and the impact of it
on the evaluation of the business combination.
9. Please disclose whether Oppenheimer provided you with any reasons for
the fee waiver. If
there was no dialogue and you did not seek out the reasons why
Oppenheimer was
waiving deferred fees, despite already completing their services,
please indicate so in your
proxy statement. Further, revise the risk factor disclosure to
explicitly clarify that
Lewis Silberman
FirstName LastNameLewis
GSR II Meteora AcquisitionSilberman
Corp.
Comapany22,
February NameGSR
2023 II Meteora Acquisition Corp.
February
Page 3 22, 2023 Page 3
FirstName LastName
Oppenheimer has performed all their obligations to obtain the fee and
therefore is
gratuitously waiving the right to be compensated.
Q: What will the value of shares of PubCo common stock be, page 23
10. Please revise the table to show the potential impact of redemptions on
the per share value
of the shares owned by non-redeeming shareholders at each redemption
level, taking into
account not only the money in the trust account, but the
post-transaction equity value of
the combined company. Your disclosure should show the impact of
certain equity
issuances on the per share value of the shares, including the
exercises of public and
private warrants, and the issuance of any earn-out shares under each
redemption scenario.
Summary Unaudited Pro Forma Condensed Combined Financial Information, page 55
11. Please tell us, and revise to clarify if the $4 million of
underwriting expenses incurred to
date were paid to Oppenheimer, or a different underwriter.
Our products and services may be exploited to facilitate illegal activity, page
66
12. Refer to the second and third paragraphs of this risk factor. Please
place this risk factor in
context by describing the specific challenges implementing user
due-diligence and other
compliance procedures given your business model.
If we fail to retain existing users or add users, page 67
13. Refer to the fourth to last bullet point regarding your fee model.
Please describe in a
separate risk factor the risks of modification of your fee model,
including because of
changes to regulation of the markup on Bitcoin sold to users and the
potential reputational
harm if your business model or marketing practices are perceived as
targeting vulnerable
communities.
The further development and acceptance of cryptocurrency networks, page 75
14. Refer to your response to comments 14 and 17. Please place this risk
factor in context by
discussing how recent market disruptions or similar disruptions in the
future may cause
reputational harm and explain how future market disruptions may
otherwise impact your
business given the dependence on bitcoin adoption. Please also address
risks from the
direct or indirect effects of Bitcoin price declines or volatility,
including factors that may
cause transaction volumes to correlate with declining prices or
volatility notwithstanding
historical performance. We note in this regard your disclosure in the
last paragraph on
page 244.
The theft, loss, or destruction of private keys, page 81
15. Refer to your response to comment 12. Please place the risk described
in context by
disclosing here the current Bitcoin balance in Bitcoin Depot's hot
wallets and the average
and maximum amounts held during the twelve months ended December 31,
2022.
Lewis Silberman
FirstName LastNameLewis
GSR II Meteora AcquisitionSilberman
Corp.
Comapany22,
February NameGSR
2023 II Meteora Acquisition Corp.
February
Page 4 22, 2023 Page 4
FirstName LastName
Business of Bitcoin Depot, page 231
16. Please disclose in this section the substance of your response to
comment 17. Please also
specifically address whether you have experienced any change in
transaction volume in
the period following the FTX bankruptcy and related market
disruptions.
Management's Discussion and Analysis of Financial Condition and Results of
Operations of
Bitcoin Depot
Key Business Metrics and Non-GAAP Financial Measures, page 247
17. We note your presentation of 'Adjusted Gross Profit' and 'Adjusted
EBITDA.' Please tell
us, and revise as appropriate, to address the following.
Separate Non-GAAP indicators into a separate and distinct section
apart from Key
Business Metrics.
Tell us why you present 'Adjusted EBITDA Margin' which is
calculated by dividing
'Adjusted EBITDA' by 'Adjusted Gross Profit', another Non-GAAP
indicator, rather
than the most directly comparable GAAP metric, Net Income. Refer
to Item
10(e)(1)(A) of Regulation S-K and Question 102.10 in SEC C&DI on
the Use of
Non-GAAP financial measures.
Summary of Critical Accounting Policies and Accounting Estimates, page 262
18. Please revise to present separately your accounting policy for
cryptocurrency held-for-
investment and cryptocurrency held-for-sale within your critical
accounting policy on
page 260, and your accounting policies on pages F-48 and F-82. These
should include
your impairment policies for both cryptocurrency held-for-investment
and held-for-sale.
Please be thorough and cite the appropriate authoritative accounting
literature that clearly
supports your determinations.
Lux Vending, LLC (DBA Bitcoin Depot)
Notes to Consolidated Financial Statements December 31, 2021 and 2020
Note 2. Summary of Significant Accounting Policies
(i) Revenue Recognition, page F-51
19. We note your response to prior comment 33. In that comment, we asked
for a robust
accounting analysis of your consideration of ASC 815 for accounting
for these software
transactions as a derivative, citing relevant literature. Your
response did not provide this
analysis; therefore, we are reissuing that part of the comment.
Note 14 - Commitments and Contingencies, page F-71
20. You disclose on pages F-71 and F-100 that, "The Company has legal
proceedings arising
in the normal course of business." We also note the new $22.3 million
Canaccord Genuity
Corp. claim pending against you disclosed on pages F-73 and F-100. As
such, please
revise to disclose your consideration of loss contingencies required
by ASC 450-20-50.
Lewis Silberman
FirstName LastNameLewis
GSR II Meteora AcquisitionSilberman
Corp.
Comapany22,
February NameGSR
2023 II Meteora Acquisition Corp.
February
Page 5 22, 2023 Page 5
FirstName LastName
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-81
21. We note your response to prior comment 36 and your disclosure on page
244 that "Bitcoin
is now our sole cryptocurrency offering. Bitcoin represents over 99%
of our total
transaction volume for each of the periods presented in this proxy
statement, with the
remaining cryptocurrencies accounting for the remaining less than 1%
of transaction
volume." Please tell us the following regarding your crypo asset
balances.
Provide the ending crypto asset balance for every individual day
during 2022.
Provide the maximum crypto asset balance for every individual day
during 2022.
22. We note your response to prior comment 36. For cryptocurrency
held-for-sale, your
response was not fulsome and did not address our concerns regarding
your accounting
policy for impairment, or your significant 2021 impairment cost of
$5.0 million (page
256) on net income of $5.9 million. For those reason(s), we re-issue
prior comment 36,
asking how you had no impairment on cryptocurrency held-for-sale in
2022 given the
volatility and decline in the price of Bitcoin and the fact that you
hold cryptocurrency in
your hot wallet for periods of time.
23. You state in your response to prior comment 36 that you did not record
any impairment
related to your investments in Ethereum during 2022, as the market
price did not fall
below the adjusted carrying values. Please provide us with quantified
information to
support this statement, given Ethereum s price history suggests that
it was worth
significantly less in 2022 than during 2021.
Note 4. Recent Accounting Pronouncements, page F-92
24. We note your response to prior comment 37 that "Bitcoin Depot holds in
its custody and
controls a limited amount of crypto in a hot wallet." Please address
the following
regarding Staff Accounting Bulletin No. 121 ("SAB 121") and bifurcate
each response for
all types of cryptocurrency transaction (BM kiosk, BDCheckout, or
directly by an OTC
trade), that a user may experience.
Provide a detailed example, complete with a timeline, of a
customer transaction from
when a customer puts in a request to purchase cryptocurrency
until the order is
fulfilled.
Tell us the typical holding period between customer purchase
request and order
fulfillment.
Tell us the average holding period between customer purchase
request and order
fulfillment.
Discuss how you account for orders that are not fulfilled and
quantify orders not
fulfilled during the periods presented.
Lewis Silberman
GSR II Meteora Acquisition Corp.
February 22, 2023
Page 6
During the custody period when you hold the cryptocurrency in
your hot wallet,
address who has the risk of loss - you or the customer.
During the custody period when you hold the cryptocurrency in
your hot wallet,
address how you account for price volatility (e.g., the price of
the underlying
cryptocurrency increases or decreases).
Tell us in detail how you evaluate each transaction for
impairment in the event of
price decreases.
25. We note your disclosure that when using a Bitcoin Depot kiosk to
purchase bitcoin, users
can create and use a Bitcoin Depot-branded wallet (un-hosted and
non-custodial), that is
facilitated through an unaffiliated third-party. We further note your
disclosure that
Bitcoin Depot is not liable for any losses users may experience because
Bitcoin Depot
does not have access to users wallets or their private keys. Please
provide us with the
following additional information concerning this wallet service offering
to your users.
Tell us whether you entered into a contractual agreement with the
unaffiliated third
party to provide Bitcoin Depot-branded wallets for your users.
Provide us with a
summary of the significant terms of any such agreement. Explain
whether and how
you are paid for your wallets and how the third party is paid for
facilitating wallet
creation.
Tell us whether users enter into an agreement with Bitcoin Depot or
the unaffiliated
third-party in order to create and use a Bitcoin Depot-branded
wallet.
Tell us whether the users and/or unaffiliated third party maintains
the cryptographic
key information necessary to access the users bitcoin.
Tell us how you do not have access to, or any risk of loss related
to, user wallets that
are accessible via the Bitcoin Depot mobile app.
Explain how you considered that SAB 121 applies to entities that
have obligations to
safeguard crypto-assets held for their users and their agents. Tell
us whether you
believe the unaffiliated third-party who is facilitating the
creation of Bitcoin Depot-
branded wallets is an agent acting on your behalf and provide us
detailed information
FirstName LastNameLewis Silberman
to support your conclusion.
Comapany
ForNameGSR II Meteora
each period Acquisition
presented, quantifyCorp.
the amount of users
bitcoin in Bitcoin Depot-
branded wallets.
February 22, 2023 Page 6
FirstName LastName
Lewis Silberman
FirstName LastNameLewis
GSR II Meteora AcquisitionSilberman
Corp.
Comapany22,
February NameGSR
2023 II Meteora Acquisition Corp.
February
Page 7 22, 2023 Page 7
FirstName LastName
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 Crypto
Assets
cc: Steven Stokdyk