QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) |
(IRS Employer Identification No.) | |
(Address of principal executive offices) |
(Zip Code) |
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered | ||
☐ |
Large accelerated filer |
☐ |
Accelerated filer | |||
☒ |
Non-accelerated filer |
Smaller reporting company | ||||
Emerging growth company |
Bitcoin Depot Inc.
Quarterly Report on Form 10-Q
Table of Contents
Page | ||||||
1 | ||||||
Item 1. |
Financial Statements | 1 | ||||
Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations | 48 | ||||
Item 3. |
Quantitative and Qualitative Disclosures About Market Risk | 66 | ||||
Item 4. |
Controls and Procedures | 68 | ||||
69 | ||||||
Item 1. |
Legal Proceedings | 69 | ||||
Item 1A. |
Risk Factors | 69 | ||||
Item 2. |
Unregistered Sales of Equity Securities and Use of Proceeds | 118 | ||||
Item 3. |
Defaults upon Senior Securities | 118 | ||||
Item 4. |
Mine Safety Disclosures | 118 | ||||
Item 5. |
Other Information | 118 | ||||
Item 6. |
Exhibits and Financial Statement Schedules | 119 | ||||
121 |
i
Cautionary Statement Regarding Forward-Looking Statements
Certain statements in this Quarterly Report on Form 10-Q may constitute “forward-looking statements” for purposes of the federal securities laws. Our forward-looking statements include, but are not limited to, statements regarding our and our management team’s expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “will,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. These forward-looking statements are provided for illustrative purposes only and are not intended to serve as, and must not be relied on by any investor as, a guarantee, an assurance, a prediction or a definitive statement of fact or probability. Actual events and circumstances are difficult or impossible to predict and will differ from assumptions. Many actual events and circumstances are beyond the control of Bitcoin Depot Inc. (the “Company” or “Bitcoin Depot”). Forward-looking statements in this Quarterly Report on Form 10-Q may include, for example, statements about:
• | risks relating to the uncertainty of the projected financial information with respect to the Company; |
• | failure to realize the anticipated benefits of the Merger; |
• | the ability to maintain the listing of the Class A common stock and the Warrants on Nasdaq; |
• | the Company’s ability to issue equity or equity-linked securities, to obtain debt financing or refinance existing indebtedness on satisfactory terms, or otherwise raise financing in the future; |
• | the liquidity and trading of the Class A common stock and the Warrants; |
• | members of the Company’s management team allocating their time to other businesses and potentially having conflicts of interest with the Company’s business; |
• | the Company’s future financial performance; |
• | the Company’s success in retaining or recruiting, or changes required in, its officers, key employees or directors; |
• | the Company’s ability to manage future growth; |
• | the Company’s ability to develop new products and services, bring them to market in a timely manner, and make enhancements to its business; |
• | the effects of competition on the Company’s business; |
• | market adoption and future performance of cryptocurrencies; |
• | changes in domestic and foreign business, financial, political and legal conditions; |
• | future global, regional or local economic and market conditions; |
• | the outcome of any potential litigation, government and regulatory proceedings, investigations and inquiries; |
• | the development, effects and enforcement of laws and regulations; and |
ii
• | the Company’s other plans, objectives, expectations and intentions described or referenced in this Quarterly Report on Form 10-Q under the heading “Risk Factors,” and other documents that the Company will file, from time to time with the Securities Exchange Commission (“SEC”). |
If any of these risks materialize or our assumptions prove incorrect, actual results could differ materially from the results implied by these forward-looking statements. There may be additional risks that we do not presently know or that we currently believe are immaterial that could also cause actual results to differ from those contained in the forward-looking statements.
In addition, forward-looking statements reflect our expectations, plans or forecasts of future events and views as of the date hereof. We anticipate that subsequent events and developments will cause our assessments to change. However, while we may elect to update these forward-looking statements at some point in the future, we specifically disclaim any obligation to do so except as otherwise required by applicable law. These forward-looking statements should not be relied upon as representing our assessment as of any date subsequent to the date hereof.
These statements are inherently uncertain, and investors are cautioned not to unduly rely upon these statements. As a result of a number of known and unknown risks and uncertainties, actual results or our performance of the Company may be materially different from those expressed or implied by these forward-looking statements.
You should read this Quarterly Report on Form 10-Q and the documents that we reference in and have filed as exhibits to this Quarterly Report on Form 10-Q completely and with the understanding that our actual future results may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements.
iii
Item 1. |
Financial Statements. |
June 30, 2023 (unaudited) |
December 31, 2022 |
|||||||
Assets |
||||||||
Current: |
||||||||
Cash and cash equivalents |
$ | $ | ||||||
Cryptocurrencies |
||||||||
Accounts receivable, net |
||||||||
Prepaid expenses and other current assets |
||||||||
|
|
|
|
|||||
Total current assets |
||||||||
Property and equipment: |
||||||||
Furniture and fixtures |
||||||||
Leasehold improvements |
||||||||
Kiosk machines - owned |
||||||||
Kiosk machines - leased |
||||||||
Vehicles |
||||||||
|
|
|
|
|||||
Total property and equipment |
||||||||
Less: accumulated depreciation |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Total property and equipment, net |
||||||||
Intangible assets, net |
||||||||
Goodwill |
||||||||
Operating lease right-of-use |
||||||||
Security deposits |
||||||||
Deferred tax asset |
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Total assets |
$ | $ | ||||||
|
|
|
|
June 30, 2023 (unaudited) |
December 31, 2022 |
|||||||
Liabilities and Stockholders’ Equity and Member’s Equity |
||||||||
Current: |
||||||||
Accounts payable |
$ | $ | ||||||
Accrued expenses |
||||||||
Note payable |
||||||||
Income taxes p ayable |
||||||||
Deferred revenue |
||||||||
Operating lease liabilities, current portion |
||||||||
Current installments of obligations under finance leases |
||||||||
Derivative liabilities |
||||||||
Other t ax p ayable |
||||||||
|
|
|
|
|||||
Total current liabilities |
$ |
$ |
||||||
Long-term liabilities |
|
|
|
|
|
|
|
|
Note payable, non-current |
||||||||
Operating lease liabilities, non-current |
||||||||
Obligations under finance leases, non-current |
||||||||
Deferred income tax, net |
||||||||
Tax receivable agreement liability |
||||||||
|
|
|
|
|
|
|
|
|
Total long-term liabilities |
|
$ |
|
|
|
$ |
|
|
|
|
|
|
|||||
Total Liabilities |
$ |
$ |
||||||
|
|
|
|
|||||
Commitments and Contingencies (Note 22) |
||||||||
Stockholders’ Equity and Member’s Equity |
||||||||
Series A P referred S tock, $shares issued and outstanding , at June 30, 2023 |
||||||||
Class A common stock, $ shares issued and outstanding at June 30, 2023 |
||||||||
Class B common stock, $ 30, 2023 |
||||||||
Class E common stock, $ shares issued and at June 30, 2023 |
||||||||
Class M common stock, $ shares issued and outstanding at June 30, 2023 |
||||||||
Class O common stock, $ June 30, 2023 |
||||||||
Class V common stock, $ outstanding at June 30, 2023 |
|
|
|
|
|
|
| |
Stock subscriptions receivable |
( |
) | ||||||
Additional paid-in capital |
||||||||
Retained earnings (accumulated deficit) |
( |
) | ||||||
Equity attributed to Legacy Bitcoin Depot |
||||||||
Accumulated other comprehensive loss |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Total Stockholders’ Equity and Equity Attributable to Legacy Bitcoin Depot |
$ |
( |
) | $ |
||||
|
|
|
|
|
|
|
|
|
Equity attributable to non-controlling interests |
||||||||
|
|
|
|
|||||
Total Stockholders’ Equity and Member’s Equity |
$ |
$ |
||||||
|
|
|
|
|||||
Total Liabilities and Stockholders’ Equity and Member’s Equity |
$ | $ | ||||||
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
2023 |
2022 |
2023 |
2022 |
|||||||||||||
Revenue |
$ | $ | $ | $ | ||||||||||||
Cost of revenue (excluding depreciation and amortization) |
||||||||||||||||
Operating expenses: |
||||||||||||||||
Selling, general, and administrative |
||||||||||||||||
Depreciation and amortization |
||||||||||||||||
Total operating expenses |
$ |
$ |
$ |
$ |
||||||||||||
Income from operations |
$ |
$ |
$ |
$ |
||||||||||||
Other (expense ) income: |
||||||||||||||||
Interest expense |
( |
) |
( |
) | ( |
) | ( |
) | ||||||||
Other (expense) income |
( |
) | ( |
) | ( |
) | ||||||||||
(Loss) gain on foreign currency transactions |
( |
) | ( |
) | ( |
) | ||||||||||
Total other income |
$ |
( |
) | $ |
( |
) | $ |
( |
) | $ |
( |
) | ||||
Income (loss) before provision for income taxes and non-controlling interest |
( |
) | ||||||||||||||
Income tax (expense) benefit |
( |
) | ( |
) | ||||||||||||
Net (loss) income |
$ |
( |
) | $ |
$ |
$ |
||||||||||
Net income attributable to Legacy Bitcoin Depot unit holders |
||||||||||||||||
Net income (loss) attributable to non-controlling interest in subsidiary |
( |
) | ||||||||||||||
Net (loss) income |
$ |
( |
) | $ |
$ |
( |
) | $ |
||||||||
Other comprehensive income (loss), net of tax |
||||||||||||||||
Net (loss) income |
$ |
( |
) | $ |
$ |
$ |
||||||||||
Foreign currency translation adjustments |
( |
) |
( |
) | ( |
) | ( |
) | ||||||||
Total comprehensive (loss) income |
$ |
( |
) | $ |
$ |
$ |
||||||||||
Comprehensive income attributable to Legacy Bitcoin Depot unit holders |
||||||||||||||||
Comprehensive income (loss) attributable to non-controlling interest in subsidiary |
( |
) | ||||||||||||||
Comprehensive (loss) income attributable to Bitcoin Depot Inc. |
$ | ( |
) | $ | $ | ( |
) | $ | ||||||||
Net (loss) income attributable to Bitcoin Depot Inc. |
$ |
( |
) | $ | ( |
) | ||||||||||
(Loss) earnings per share basic and diluted |
$ | ( |
) |
$ | ( |
) |
||||||||||
Weighted average shares: basic and diluted |
||||||||||||||||
Equity Attributed to Legacy Bitcoin Depot |
Series A Preferred Stock |
Class A Common Stock |
Class V Common Stock |
Class E Common Stock |
Accumulated Other Comprehensive (Loss) |
Non-Controlling Interest |
Stock Subscriptions Receivable |
Additional Paid-In Capital |
Accumulated Deficit |
Total Stockholders’ Equity and Member’s Equity |
||||||||||||||||||||||||||||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
Shares |
Amount |
Shares |
Amount |
|||||||||||||||||||||||||||||||||||||||||||||||||||||
April 1, 2023 |
— |
— |
— |
— |
— |
— |
— |
( |
) |
— |
||||||||||||||||||||||||||||||||||||||||||||||||||
Distributions |
( |
) |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
( |
) | |||||||||||||||||||||||||||||||||||||||||||
Stock compensation prior to transaction |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
|||||||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation |
— |
— |
— |
— |
— |
— |
— |
— |
— |
( |
) |
— |
— |
— |
— |
( |
) | |||||||||||||||||||||||||||||||||||||||||||
Net income (loss) prior to transaction |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
||||||||||||||||||||||||||||||||||||||||||||||||
Recapitalization of Legacy Bitcoin Depot equity and establishment of non-controlling interest |
( |
) |
— |
— |
— |
— |
( |
) |
— |
( |
) |
( |
) | |||||||||||||||||||||||||||||||||||||||||||||||
Establishment of TRA |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
( |
) |
( |
) | |||||||||||||||||||||||||||||||||||||||||||
Shares issued in connection with the PIPE Financing |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
( |
) |
— |
|||||||||||||||||||||||||||||||||||||||||||||||
Post transaction stock compensation expense related to shares issued to founder |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
||||||||||||||||||||||||||||||||||||||||||||||||
Net Income (loss) after transaction-attributable to Bitcoin Depot Inc. |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
( |
) |
( |
) | |||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
June 30, 2023 |
— |
( |
) |
( |
) |
( |
) |
|||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
January 1, 2023 |
— |
— |
— |
— |
— |
— |
— |
— |
( |
) |
— |
— |
— |
|||||||||||||||||||||||||||||||||||||||||||||||
Distributions |
( |
) |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
( |
) | |||||||||||||||||||||||||||||||||||||||||||
Stock compensation prior to transaction |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
|||||||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation |
— |
— |
— |
— |
— |
— |
— |
— |
— |
( |
) |
— |
— |
— |
— |
( |
) | |||||||||||||||||||||||||||||||||||||||||||
Net income (loss) prior to transaction |
— |
— |
— |
— |
— |
— |
— |
— |
— |
( |
) |
— |
— |
— |
||||||||||||||||||||||||||||||||||||||||||||||
Recapitalization of Legacy Bitcoin Depot equity and establishment of non-controlling interest |
( |
) | — |
— |
— |
— |
( |
) |
— |
( |
) |
( |
) | |||||||||||||||||||||||||||||||||||||||||||||||
Establishment of TRA |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
( |
) |
( |
) | |||||||||||||||||||||||||||||||||||||||||||
Shares issued in connection with the PIPE Financing |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
( |
) |
— |
|||||||||||||||||||||||||||||||||||||||||||||||
Post transaction stock compensation expense related to shares issued to founder |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
||||||||||||||||||||||||||||||||||||||||||||||||
Net Income (loss) after transaction-attributable to Bitcoin Depot Inc. |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
( |
) |
( |
) | |||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
June 30, 2023 |
— |
( |
) |
( |
) |
( |
) |
|||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity Attributed to Legacy Bitcoin Depot |
Accumulated Other Comprehensive (Loss) |
Total Equity Attributed to Legacy Bitcoin Depot |
Equity Attributed to Non- Controlling Interest |
Total Member’s Equity |
||||||||||||||||
April 1, 2022 |
$ |
$ |
( |
) |
$ |
|
|
|
$ |
$ |
||||||||||
Distributions |
( |
) |
— |
|
( |
) |
|
— |
( |
) | ||||||||||
Stock compensation |
— |
— |
|
— |
|
|
||||||||||||||
Foreign currency translation |
— |
( |
) |
|
(222 |
) |
|
— |
( |
) | ||||||||||
Net income ( l oss) |
— |
|
|
|
|
( |
) |
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at June 30, 2022 |
( |
) |
|
|
|
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at January 1, 2022 |
( |
) |
|
|
|
|
||||||||||||||
Distributions |
( |
) |
— |
|
( |
) | |
— |
( |
) | ||||||||||
Stock compensation |
— |
— |
|
— |
|
|
||||||||||||||
Foreign currency translation |
— |
( |
) |
|
( |
) |
|
— |
( |
) | ||||||||||
Net income ( l oss) |
— |
|
|
|
|
( |
) |
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Balance at June 30, 2022 |
$ |
$ |
( |
) |
$ |
|
|
|
$ |
$ |
||||||||||
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, |
||||||||
2023 |
2022 |
|||||||
Cash flows from Operating Activities: |
||||||||
Net Income |
$ |
$ |
||||||
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: |
||||||||
Amortization of deferred financing costs |
||||||||
Adjustment to contingent earnout liability |
— |
|||||||
Depreciation and amortization |
||||||||
Expense associated with Series A Preferred Share PIPE Issuance |
||||||||
Non-cash stock compensation |
||||||||
Purchase of services in cryptocurrencies |
||||||||
Deferred taxes |
( |
) |
( |
) | ||||
Realized gain on cryptocurrencies |
— | ( |
) | |||||
Loss on lease m odification |
— | |||||||
Loss on disposal of property and equipment |
||||||||
Reduction in carrying amount of right-of-use assets |
||||||||
Cryptocurrency received as payment |
( |
) |
( |
) | ||||
Change in operating assets and liabilities: |
||||||||
Accounts receivable, net |
( |
) | ( |
) | ||||
Income tax receivable |
||||||||
Cryptocurrencies |
( |
) |
||||||
Prepaid expenses and other current assets |
( |
) |
||||||
Accounts payable |
( |
) | ( |
) | ||||
Accrued expenses |
||||||||
Income taxes payable |
( |
) | ||||||
Derivative liabilities |
— | |||||||
Deferred revenue |
||||||||
Operating lease liabilities |
( |
) |
( |
) | ||||
Net Cash Flows From (Used In) Operations |
$ |
$ |
||||||
Cash flows from Investing Activities: |
||||||||
Acquisition of property and equipment |
( |
) | ( |
) | ||||
Net Cash Flows From (Used In) Investing Activities |
$ |
( |
) | $ |
( |
) | ||
Cash flows from Financing Activities: |
||||||||
Net proceeds from Merger |
— | |||||||
PIPE commitment fee paid at closing |
( |
) | — | |||||
Proceeds from issuance of note payable |
— | |||||||
Principal payments on note payable |
( |
) | ( |
) | ||||
Principal payments finance lease |
( |
) | ( |
) | ||||
Payment for deferred financing costs |
( |
) | ( |
) | ||||
Distributions |
( |
) | ( |
) | ||||
Net Cash Flows From (Used In) Financing Activities |
$ |
( |
) | $ |
( |
) | ||
Effect of exchange rate changed on cash and cash equivalents |
( |
) | ||||||
Net change in cash |
$ |
( |
) | $ |
( |
) | ||
Cash and cash equivalents - beginning of period |
||||||||
Cash and cash equivalents - end of period |
$ |
$ |
||||||
Six Months Ended June 30, |
||||||||
2023 |
2022 |
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Supplemental disclosures of cash flow information: |
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Cash paid during the six months ended June 30 for: |
||||||||
Interest |
$ |