The following discussion and analysis of the Company's financial condition and
results of operations should be read in conjunction with our audited financial
statements and the notes related thereto which are included in "Item 8.
Financial Statements and Supplementary Data" of this Annual Report on
Form 10-K. Certain information contained in the discussion and analysis set
forth below includes forward-looking statements. Our actual results may differ
materially from those anticipated in these forward-looking statements as a
result of many factors, including those set forth under "Special Note Regarding
Forward-Looking Statements," "Item 1A. Risk Factors" and elsewhere in this
Annual Report on Form 10-K.
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References to the "company," "our," "us" or "we" refer to GSR II Meteora
Acquisition Corp. The following discussion and analysis of the Company's
financial condition and results of operations should be read in conjunction with
the audited financial statements and the notes related thereto which are
included in "Item 8. Financial Statements and Supplementary Data" of this Annual
Report on Form 10-K. Certain information contained in the discussion and
analysis set forth below includes forward-looking statements. Our actual results
may differ materially from those anticipated in these forward-looking statements
as a result of many factors, including those set forth under "Cautionary Note
Regarding Forward-Looking Statements and Risk Factor Summary," "Item 1.A. Risk
Factors" and elsewhere in this Annual Report on Form 10-K.
Cautionary Note Regarding Forward-Looking Statements
This Annual Report on Form 10-K includes forward-looking statements within the
meaning of Section 27A of the Securities Act and Section 21E of the Securities
Exchange Act. We have based these forward-looking statements on our current
expectations and projections about future events. These forward-looking
statements are subject to known and unknown risks, uncertainties and assumptions
about us that may cause our actual results, levels of activity, performance or
achievements to be materially different from any future results, levels of
activity, performance or achievements expressed or implied by such
forward-looking statements. In some cases, you can identify forward-looking
statements by terminology such as "may," "should," "could," "would," "expect,"
"plan," "anticipate," "believe," "estimate," "continue," or the negative of such
terms or other similar expressions. Factors that might cause or contribute to
such a discrepancy include, but are not limited to, those described in our other
SEC filings.
Overview
We are a blank check company incorporated as a Delaware corporation on
October 13, 2021. We were incorporated for the purpose of effecting a merger,
capital stock exchange, asset acquisition, stock purchase, reorganization or
similar business combination with one or more businesses or entities that we
have not yet identified ("Business Combination").
As of December 31, 2022, we had not yet commenced operations. All activity
through December 31, 2022 relates to our formation and our initial public
offering (the "Initial Public Offering"), which is described below, and since
the Initial Public Offering, our search for a Business Combination. We will not
generate any operating revenues until after the completion of our initial
Business Combination, at the earliest. We generate non-operating income from the
proceeds held in the Trust Account (as defined below). We have selected
December 31 as our fiscal year end.
Our Sponsor is GSR II Meteora Sponsor LLC, a Delaware limited liability company
(the "Sponsor"). The registration statement for our Initial Public Offering was
declared effective on February 24, 2022. On March 1, 2022, we consummated the
Initial Public Offering of 31,625,000 units (the "Units" and, with respect to
the Class A common stock included in the Units being offered, the "Public
Shares"), including the issuance of 4,125,000 Units as a result of the
underwriter' full exercise of their over-allotment option, at $10.00 per Unit,
generating gross proceeds of approximately $316.3 million, and incurring
offering costs of approximately $4.7 million. Each Unit consists of one share of
Class A common stock, one redeemable warrant (a "Public Warrant")
and one one-sixteenth (1/16) of one Right. Each Public Warrant entitles the
holder to purchase one share of Class A common stock at a price of $11.50 per
share, subject to adjustment. Each holder of a whole Right will receive one
share of Class A common stock upon consummation of the initial Business
Combination.
Simultaneously with the closing of the Initial Public Offering, we consummated
the private placement ("Private Placement") of 12,223,750 warrants (each, a
"Private Placement Warrant" and collectively, the "Private Placement Warrants")
at a price of $1.00 per Private Placement Warrant to our Sponsor, generating
proceeds of approximately $12.2 million.
Upon the closing of the Initial Public Offering and the Private Placement,
approximately $321.0 million ($10.15 per Unit) of net proceeds, including the
net proceeds of the Initial Public Offering and certain of the proceeds of the
Private Placement, was placed in a trust account ("Trust Account") with
Continental Stock Transfer & Trust Company acting as trustee and invested in
United States "government securities" within the meaning of Section 2(a)(16) of
the Investment Company Act 1940, as amended (the "Investment Company Act"),
having a maturity of 185 days or less or in money market funds meeting certain
conditions under Rule 2a-7 promulgated under the Investment Company Act which
invest only in direct U.S. government treasury obligations, as determined by us,
until the earlier of: (i) the completion of a Business Combination or (ii) the
distribution of the Trust Account as described below.
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We will provide holders of the Company's outstanding Public Shares sold in the
Initial Public Offering (the "Public Stockholders") with the opportunity to
redeem all or a portion of their Public Shares upon the completion of a Business
Combination either (i) in connection with a stockholder meeting called to
approve the Business Combination or (ii) by means of a tender offer. The
decision as to whether we will seek stockholder approval of a Business
Combination or conduct a tender offer will be made by us, solely in our
discretion. The Public Stockholders will be entitled to redeem their Public
Shares for a pro rata portion of the amount then held in the Trust Account
(initially anticipated to be $10.15 per Public Share).
We have 15 months from the closing of the Initial Public Offering, or June 1,
2023, to complete the initial Business Combination. However, if we anticipate
that we may not be able to consummate the initial Business Combination within 15
months, we may, but are not obligated to, extend the period of time to
consummate a Business Combination by three additional one-month periods each
(for a total of up to 18 months). The Public Stockholders will not be entitled
to vote on, or redeem their shares in connection with, any such extension. In
order to extend the time available for us to consummate the initial Business
Combination, our Sponsor or its affiliates or designees, upon five business
days' advance notice prior to each deadline, must deposit into the Trust Account
an additional $0.033 per share of Class A common stock then outstanding (or
$1,043,625 in the aggregate) on or prior to the date of such deadline. In
connection with each such additional deposit, our Sponsor or its affiliates or
designees will receive an additional of up to 1,043,625 Private Placement
Warrants with the same terms as the original Private Placement Warrants.
If we are unable to complete a Business Combination within 15 months from the
closing of the Initial Public Offering (or up to 16 months, 17 months or 18
months, as applicable if the time to complete the initial Business Combination
has been extended in accordance with the procedures described above) (the
"Combination Period"), we 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 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 on the funds held in the
Trust Account and not previously released to us to pay our franchise and income
taxes (less up to $100,000 of interest to pay dissolution expenses and net of
taxes payable), divided by the number of then-outstanding Public Shares, which
redemption will completely extinguish Public Stockholders' rights as
stockholders (including the right to receive further liquidating distributions,
if any), subject to applicable law, and (iii) as promptly as reasonably possible
following such redemption, subject to the approval of our remaining stockholders
and our board of directors, dissolve and liquidate, subject in each case to our
obligations under Delaware law to provide for claims of creditors and the
requirements of other applicable law.
Proposed Business Combination
On August 24, 2022, we entered into a transaction agreement (the "Business
Combination Agreement"), by and among us, our Sponsor, BT Assets, Inc., a
Delaware corporation ("BT Assets"), and Lux Vending, LLC, a Georgia limited
liability company and a wholly owned subsidiary of BT Assets, dba Bitcoin Depot
("Lux Vending"), as fully disclosed in a Current Report on Form 8-K filed with
the SEC on August 25, 2022.
The obligations of the parties to consummate the transactions contemplated by
the Business Combination Agreement (together with the other agreements and
transactions contemplated by the Business Combination Agreement, the "Business
Combination") are subject to the satisfaction or waiver of certain customary
closing conditions.
Going Concern Consideration
As of December 31, 2022, we had approximately $477,000 in cash, and working
capital deficit of approximately $3.4 million (including tax obligations of
approximately $1.1 million; however, such amount may be paid by proceeds earned
from interest income on investments held in Trust Account, to the extent
available).
Our liquidity needs prior to the consummation of the Initial Public Offering
were satisfied through the payment of $25,000 from our Sponsor to purchase
Founder Shares, and loan proceeds from our Sponsor of approximately $242,000
under the Note. We repaid the Note in full on March 4, 2022. Subsequent to the
consummation of the Initial Public Offering, our liquidity has been satisfied
through the net proceeds from the consummation of the Initial Public Offering
and the Private Placement held outside of the Trust Account. In addition, in
order to finance transaction costs in connection with a Business Combination,
our Sponsor, members of our founding team or any of their affiliates may provide
us with Working Capital Loans as may be required (of which up to $1.5 million
may be converted at the lender's option into warrants).
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We have incurred and expect to continue to incur significant costs in pursuit of
its acquisition plans. We have until June 1, 2023 to consummate a Business
Combination. It is uncertain that we will be able to consummate a Business
Combination by this time, and if a Business Combination is not consummated by
this date, then there will be a mandatory liquidation and subsequent dissolution
of our company.
Our management has determined that the liquidity condition is not sufficient to
meet the Company's obligations through June 1, 2023 or for a period of time
within one year from the date the financial statements are issued. Additionally,
the mandatory liquidation, should a Business Combination not occur, and
potential subsequent dissolution raises substantial doubt about our ability to
continue as a going concern for a period of time within one year after the date
that the financial statements are issued. Management plans to address this
uncertainty through the initial Business Combination as discussed above. There
is no assurance that our plans to consummate the initial Business Combination
will be successful or successful within the Combination Period (by June 1,
2023). The financial statements do not include any adjustments that might result
from the outcome of this uncertainty.
Risks and Uncertainties
Our management continues to evaluate the impact of the COVID-19 pandemic on the
industry and has concluded that while it is reasonably possible that the virus
could have a negative effect on our financial position, results of our
operations, and/or search for a target company, the specific impact is not
readily determinable as of the date of these financial statements. The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.
Various social and political circumstances in the United States and around the
world (including wars and other forms of conflict, including rising trade
tensions between the United States and China, and other uncertainties regarding
actual and potential shifts in the United States and foreign, trade, economic
and other policies with other countries, terrorist acts, security operations and
catastrophic events such as fires, floods, earthquakes, tornadoes, hurricanes
and global health epidemics), may also contribute to increased market volatility
and economic uncertainties or deterioration in the United States and worldwide.
Specifically, the rising conflict between Russia and Ukraine, and resulting
market volatility could adversely affect our ability to complete a Business
Combination. In response to the conflict between Russia and Ukraine, the United
States and other countries have imposed sanctions or other restrictive actions
against Russia. Any of the above factors, including sanctions, export controls,
tariffs, trade wars and other governmental actions, could have a material
adverse effect on our ability to complete a Business Combination and the value
of our securities.
On August 16, 2022, the Inflation Reduction Act of 2022 (the "IR Act") was
signed into federal law. The IR Act provides for, among other things, a new U.S.
federal 1% excise tax on certain repurchases of stock by publicly traded U.S.
domestic corporations and certain U.S. domestic subsidiaries of publicly traded
foreign corporations occurring on or after January 1, 2023. The excise tax is
imposed on the repurchasing corporation itself, not its shareholders from which
shares are repurchased. The amount of the excise tax is generally 1% of the fair
market value of the shares repurchased at the time of the repurchase. However,
for purposes of calculating the excise tax, repurchasing corporations are
permitted to net the fair market value of certain new stock issuances against
the fair market value of stock repurchases during the same taxable year. In
addition, certain exceptions apply to the excise tax. The U.S. Department of the
Treasury (the "Treasury") has been given authority to provide regulations and
other guidance to carry out and prevent the abuse or avoidance of the excise
tax. Any share redemption or other share repurchase that occurs after
December 31, 2022, in connection with a Business Combination, extension vote or
otherwise, may be subject to the excise tax. Whether and to what extent we would
be subject to the excise tax in connection with a Business Combination,
extension vote or otherwise will depend on a number of factors, including
(i) the fair market value of the redemptions and repurchases in connection with
the Business Combination, extension or otherwise, (ii) the structure of a
Business Combination, (iii) the nature and amount of any "PIPE" or other equity
issuances in connection with a Business Combination (or otherwise issued not in
connection with a Business Combination but issued within the same taxable year
of a Business Combination) and (iv) the content of regulations and other
guidance from the Treasury. In addition, because the excise tax would be payable
by us and not by the redeeming holder, the mechanics of any required payment of
the excise tax have not been determined. The foregoing could cause a reduction
in the cash available on hand to complete a Business Combination and in our
ability to complete a Business Combination.
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Results of Operations
Our entire activity since inception up to December 31, 2022 relates to our
formation and the Initial Public Offering, and since the Initial Public
Offering, our search for a Business Combination. We will not generate any
operating revenues until the closing and completion of our initial Business
Combination, at the earliest. We generate non-operating income from the proceeds
held in the Trust Account.
For the year ended December 31, 2022, we had a net loss of approximately
$1.7 million, which consisted of approximately $5.1 million in general and
administrative expenses, approximately $200,000 in franchise tax expense and
approximately $891,000 in income tax expenses, partially offset by approximately
$4.4 million of increase in value of investments held in Trust Account.
For the period from October 13, 2021 (inception) through December 31, 2021, we
had a net loss of approximately $11,000, which consisted solely of general and
administrative expenses.
Contractual Obligations
Administrative Support Agreement
On February 24, 2022, we entered into an agreement with the Sponsor, pursuant to
which we agreed to reimburse our Sponsor $66,666 per month for office space,
utilities and secretarial and administrative support made available to us
through the earlier of consummation of the initial Business Combination and our
liquidation. We incurred approximately $667,000 in connection with such fees
during the year ended December 31, 2022, respectively, reported within general
and administrative expenses in the accompanying statement of operations.
In addition, our Sponsor, executive officers and directors, or any of their
respective affiliates will be reimbursed for any out-of-pocket expenses incurred
in connection with activities on our behalf such as identifying potential
partner businesses and performing due diligence on suitable Business
Combinations. Any such payments prior to an initial Business Combination will be
made using funds held outside the Trust Account.
Registration and Stockholder Rights
The holders of Founder Shares, Private Placement Warrants and warrants that may
be issued upon conversion of Working Capital Loans (and any shares of Class A
common stock issuable upon the exercise of the Private Placement Warrants and
warrants that may be issued upon conversion of Working Capital Loans and upon
conversion of the Founder Shares) were entitled to registration rights pursuant
to a registration rights agreement signed upon the consummation of the Initial
Public Offering. These holders are entitled to certain demand and "piggyback"
registration rights. We will bear the expenses incurred in connection with the
filing of any such registration statements.
Underwriting Agreement
We granted the underwriter a 45-day option from the date of the effective date
of the prospectus in connection with the Initial Public Offering to purchase up
to 4,125,000 additional Units to cover over-allotments at the Initial Public
Offering price less the underwriting discounts and commissions. On March 1,
2022, the underwriter consummated the exercise in full of the over-allotment
option.
The underwriter was entitled to an underwriting discount of $0.20 per unit, or
approximately $6.3 million in the aggregate, paid upon the closing of the
Initial Public Offering. In addition, the underwriter reimbursed us for certain
of our expenses for an aggregate of approximately $2.3 million upon closing of
the Initial Public Offering.
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Business Combination Marketing Agreement
On February 24, 2022, we entered into a business combination marketing agreement
(the "Business Combination Marketing Agreement") to engage the underwriter,
Oppenheimer & Co., ("Oppenheimer") as advisor in connection with the Business
Combination to assist us in holding meetings with its stockholders to discuss
the potential Business Combination and the target business's attributes,
introduce us to potential investors that are interested in purchasing our
securities in connection with the potential Business Combination, assist us in
obtaining stockholder approval for the Business Combination and assist us with
our press releases and public filings in connection with the Business
Combination. We agreed to pay Oppenheimer a cash fee for such marketing services
upon the consummation of the initial Business Combination in an amount equal to,
in the aggregate, 3.5% of the gross proceeds of the Initial Public Offering, or
approximately $11.1 million in the aggregate (the "Marketing Fees"). The
Marketing Fees will become payable to Oppenheimer from the amounts held in the
Trust Account solely in the event that we complete an initial Business
Combination, subject to the terms of the underwriting agreement for the Initial
Public Offering. Up to $0.105 per unit, or up to approximately $3.3 million of
such Marketing Fees, may instead be paid, at our sole discretion, to third
parties advisors not participating in the Initial Public Offering that assist us
in consummating the initial Business Combination.
On February 6, 2023, we received a formal letter from Oppenheimer, advising that
it had waived any claims to the Marketing Fees and the fees previously owed to
Oppenheimer will not be paid or reallocated to any other advisor.
Critical Accounting Estimates
The preparation of financial statements and related disclosures in conformity
with accounting principles generally accepted in the United States of America
("GAAP") requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities, disclosure of contingent assets and
liabilities at the date of the financial statements, and the reported amounts of
income and expenses during the period reported. Actual results could materially
differ from those estimates. We have identified the following as our critical
accounting estimates:
Derivative Financial Instruments
We evaluate our equity-linked financial instruments to determine if such
instruments are derivatives or contain features that qualify as embedded
derivatives in accordance with ASC Topic 815, "Derivatives and Hedging." For
derivative financial instruments that are classified as liabilities, the
derivative instrument is initially recognized at fair value with subsequent
changes in fair value recognized in the statements of operations each reporting
period. The classification of derivative instruments, including whether such
instruments should be classified as liabilities or as equity, is evaluated at
the end of each reporting period.
We accounted for our Rights as equity-classified instruments based on an
assessment of the Right's specific terms and applicable authoritative guidance
in ASC 480 and ASC 815. The assessment considers whether the Rights are
freestanding financial instruments pursuant to ASC 480, meet the definition of a
liability pursuant to ASC 480, and whether the Rights meet all the requirements
for equity classification under ASC 815, including whether the Rights are
indexed to our own common stock, among other conditions for the equity
classification. This assessment, which requires the use of professional
judgement, was conducted at the time of Rights issuance.
We accounted for the warrants issued in connection with the Initial Public
Offering and the Private Placement in accordance with the guidance contained
in ASC 815-40. Such guidance provides that the warrants described above are not
precluded from equity classification. Equity-classified contracts were initially
measured at fair value (or allocated value). Subsequent changes in fair value
will not be recognized as long as the contracts continue to be classified in
equity in accordance with ASC 480 and ASC 815.
Redeemable Class A Common Stock
All of the 31,625,000 shares of Class A common stock sold as parts of the Units
in the Initial Public Offering contain a redemption feature. In accordance with
the Accounting Standards Codification 480-10-S99-3A "Classification and
Measurement of Redeemable Securities", redemption provisions not solely within
the control of us require the security to be classified outside of permanent
equity. Ordinary liquidation events, which involve the redemption and
liquidation of all of the entity's equity instruments, are excluded from the
provisions of ASC 480. We classified all of the shares of Class A common stock
as redeemable. Immediately upon the closing of the Initial Public Offering, we
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recognized a one-time charge against additional paid-in capital (to the extent
available) and accumulated deficit for the difference between the initial
carrying value of the Class A common stock and the redemption value. We
recognize changes in redemption value immediately as they occur and adjusts the
carrying value of redeemable common stock to equal the redemption value at the
end of each reporting period. Such changes are reflected in retained earnings,
or in the absence of retained earnings, in additional paid-in capital.
Net Loss Per Share of Common Stock
We comply with accounting and disclosure requirements of FASB ASC Topic 260,
"Earnings Per Share." We have two classes of shares, which are referred to as
Class A common stock and Class B common stock. Income and losses are shared pro
rata between the two classes of shares. Net loss per share of common stock is
calculated by dividing the net income by the weighted average shares of common
stock outstanding for the respective period.
The calculation of diluted net loss does not consider the effect of the warrants
underlying the Units sold in the Initial Public Offering and the Private
Placement Warrants to purchase an aggregate of 43,848,750 shares of Class A
common stock and the Rights to receive 1,976,562 shares of Class A common stock
in the calculation of diluted loss per share, because their exercise is
contingent upon future events and their inclusion would be anti-dilutive under
the treasury stock method. Accretion associated with the redeemable Class A
common stock is excluded from earnings per share as the redemption value
approximates fair value.
Recent Accounting Pronouncements
In August 2020, the FASB issued Accounting Standards Update ("ASU") No. 2020-06,
Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives
and Hedging-Contracts in Entity's Own Equity (Subtopic 815-40): Accounting for
Convertible Instruments and Contracts in an Entity's Own Equity ("ASU 2020-06"),
which simplifies accounting for convertible instruments by removing major
separation models required under current GAAP. The ASU also removes certain
settlement conditions that are required for equity-linked contracts to qualify
for the derivative scope exception, and it simplifies the diluted earnings per
share calculation in certain areas. We adopted ASU 2020-06 on January 1, 2022.
Adoption of the ASU did not impact our financial position, results of operations
or cash flows.
In June 2022, the FASB issued ASU 2022-03, ASC Subtopic 820 "Fair Value
Measurement of Equity Securities Subject to Contractual Sale Restrictions". The
ASU amends ASC 820 to clarify that a contractual sales restriction is not
considered in measuring an equity security at fair value and to introduce new
disclosure requirements for equity securities subject to contractual sale
restrictions that are measured at fair value. The ASU applies to both holders
and issuers of equity and equity-linked securities measured at fair value. The
amendments in this ASU are effective for is in fiscal years beginning after
December 15, 2023, and interim periods within those fiscal years. Early adoption
is permitted for both interim and annual financial statements that have not yet
been issued or made available for issuance. We are still evaluating the impact
of this pronouncement on the financial statements.
Our management does not believe that any other recently issued, but not yet
effective, accounting pronouncements, if currently adopted, would have a
material effect on our financial statements.
Off-Balance Sheet Arrangements and Contractual Obligations
As of December 31, 2022, we did not have any off-balance sheet arrangements as
defined in Item 303(a)(4)(ii) of Regulation S-K and did not have any commitments
or contractual obligations.
JOBS Act
On April 5, 2012, the JOBS Act was signed into law. The JOBS Act contains
provisions that, among other things, relax certain reporting requirements for
qualifying public companies. We qualify as an "emerging growth company" under
the JOBS Act and are allowed to comply with new or revised accounting
pronouncements based on the effective date for private (not publicly traded)
companies. We elected to delay the adoption of new or revised accounting
standards, and as a result, we may not comply with new or revised accounting
standards on the relevant dates on which adoption of such standards is required
for non-emerging growth companies. As a result, our financial statements may not
be comparable to companies that comply with new or revised accounting
pronouncements as of public company effective dates.
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As an "emerging growth company", we are not required to, among other things,
(i) provide an auditor's attestation report on our system of internal controls
over financial reporting pursuant to Section 404, (ii) provide all of the
compensation disclosure that may be required of non-emerging growth public
companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act,
(iii) comply with any requirement that may be adopted by the PCAOB regarding
mandatory audit firm rotation or a supplement to the auditor's report providing
additional information about the audit and the financial statements (auditor
discussion and analysis), and (iv) disclose certain executive compensation
related items such as the correlation between executive compensation and
performance and comparisons of the CEO's compensation to median employee
compensation. These exemptions will apply for a period of five years following
the completion of our initial public offering or until we are no longer an
"emerging growth company," whichever is earlier.
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