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What changed in Bitcoin Depot Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Bitcoin Depot Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+463 added−463 removedSource: 10-K (2025-03-24) vs 10-K (2024-04-15)

Top changes in Bitcoin Depot Inc.'s 2024 10-K

463 paragraphs added · 463 removed · 329 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

81 edited+47 added−10 removed91 unchanged
Biggest changeBy aligning with CEFCO, a reputable and rapidly growing chain, we gain access to a broader customer base and increase brand visibility. Competition We operate in a highly competitive industry with an increasing number of participants. Industries adjacent to the digital financial system are highly fragmented, quickly evolving, intensely competitive, and subject to growing global regulatory scrutiny and oversight.
Biggest changeIndustries adjacent to the digital financial system are highly fragmented, quickly evolving, intensely competitive, and subject to growing global regulatory scrutiny and oversight. 10 Table of Contents There are several publicly traded companies that operate cash to Bitcoin ATMs, including Athena Bitcoin Inc. and Bitcoin Well Inc.
Among existing partners, our kiosks are located in approximately 1,300 out of the over 9,000 total Circle K locations in the U.S. and Canada. Our broad footprint and user base presents us an opportunity to offer additional products and services in the future, which we believe will further strengthen and grow our user base.
Among existing partners, our kiosks are located in approximately 1,100 out of the over 9,000 total Circle K locations in the U.S. and Canada. Our broad footprint and user base presents us an opportunity to offer additional products and services in the future, which we believe will further strengthen and grow our user base.
Further, our BTMs take photos throughout the transaction process, which allows us to verify that users match the identifying information that has been provided during the KYC process. We utilize blockchain analysis and work with various third parties for transaction monitoring, case management and regulatory filings and reporting.
Further, our BTMs take photos throughout the transaction process, which allows us to verify that users match the identifying information that has been provided during the KYC process. We utilize blockchain analytics and work with various third parties for transaction monitoring, case management and regulatory filings and reporting.
For the year ended December 31, 2023, our average daily USD balance held in fiat wallets on the Gemini exchange was approximately $0.5 million. Cash Transportation We contract with large and reputable armored courier services to transport and transfer funds to and from our kiosks.
For the year ended December 31, 2024, our average daily USD balance held in fiat wallets on the Gemini exchange was approximately $0.5 million. Cash Transportation We contract with large and reputable armored courier services to transport and transfer funds to and from our kiosks.
Abra is a financial services and technology company that operates a cryptocurrency wallet service including a trading service for buying and selling cryptocurrencies and a service for earning interest on cryptocurrencies and stablecoins. Genmega Genmega is a global provider of kiosks and traditional cash ATMs and is currently the sole provider of our BTM kiosks.
Abra is a financial services and technology company that operates a cryptocurrency wallet service including a trading service for buying and selling cryptocurrencies and a service for earning interest on cryptocurrencies and stablecoins. Genmega Genmega is a global provider of kiosks and traditional cash ATMs and is currently the largest provider of our BTM kiosks.
The 2023 Diary of Consumer Payment Choice also shows that a significant percentage of person-to-person payments continue to be made in cash, and credit cards, the percentage of these payments made with credit cards has been steadily increasing compared to the prior years.
The 2024 Diary of Consumer Payment Choice also shows that a significant percentage of person-to-person payments continue to be made in cash, and credit cards, the percentage of these payments made with credit cards has been steadily increasing compared to the prior years.
Our compliance team routinely rejects user applicants that fail authentication requirements, and bans users from transacting at our kiosks and via BDCheckout when our compliance team discovers suspicious activity or when the users violate our terms of service (which can be accessed on our website) to which users agree prior to transacting at a BTM or during the BDCheckout transaction process, as applicable.
Our compliance systems routinely reject user applicants that fail authentication requirements, and bans users from transacting at our kiosks and via BDCheckout when our compliance team discovers suspicious activity or when the users violate our terms of service (which can be accessed on our website) to which users agree prior to transacting at a BTM or during the BDCheckout transaction process, as applicable.
Additional regulatory developments 16 Table of Contents Various regulatory authorities continue to evaluate and implement laws, rules and regulations governing a wide variety of issues, including cryptocurrencies, identity theft, account management guidelines, disclosure rules, cybersecurity, marketing, ESG performance, transparency, and reporting, including requirements related to overall corporate ESG disclosures and climate-related financial disclosures which may impact our business.
Additional regulatory developments Various regulatory authorities continue to evaluate and implement laws, rules and regulations governing a wide variety of issues, including cryptocurrencies, identity theft, account management guidelines, disclosure rules, cybersecurity, marketing, ESG performance, transparency, and reporting, including requirements related to overall corporate ESG disclosures and climate-related financial disclosures which may impact our business.
Figures only account for cash-to-Bitcoin ATMs, which results in the exclusion of LibertyX. 5 Table of Contents Our diverse retail locations and intuitive transaction process make us a convenient option for our users, and our predictable minimum monthly rent payments to our retail partners where our kiosks are located make us an attractive option for these retailers.
Figures only account for cash-to-Bitcoin ATMs, which results in the exclusion of LibertyX. Our diverse retail locations and intuitive transaction process make us a convenient option for our users, and our predictable minimum monthly rent payments to our retail partners where our kiosks are located make us an attractive option for these retailers.
We currently intend to reinvest the majority of the profits back in our business to continue to develop new products and services to address the needs of our users, such as BDCheckout, allowing us to achieve further brand recognition and brand loyalty and grow our user base. • Strategic Acquisitions and Partnerships We believe the BTM market is fragmented.
We currently intend to reinvest the majority of the profits back in our business to continue to develop new products and services to address the needs of our users, such as BDCheckout, allowing us to achieve further brand recognition and brand loyalty and grow our user base. • Strategic Acquisitions and Partnerships 9 Table of Contents We believe the BTM market is fragmented.
Intellectual Property, Patents and Trademarks 12 Table of Contents Although we believe our success depends upon our technical and marketing expertise more than our proprietary rights, our future success and ability to compete depend in part upon our proprietary technology. We have registered or filed applications for our primary trademarks. Most of our technology is not patented.
Intellectual Property, Patents and Trademarks Although we believe our success depends upon our technical and marketing expertise more than our proprietary rights, our future success and ability to compete depend in part upon our proprietary technology. We have registered or filed applications for our primary trademarks. Most of our technology is not patented.
Our founder and other executive officers bring extensive multidisciplinary experience in technology and business. We 10 Table of Contents believe our management team has a competitive advantage in their ability to attract a highly talented pool of experienced engineers and seasoned industry professionals.
Our founder and other executive officers bring extensive multidisciplinary experience in technology and business. We believe our management team has a competitive advantage in their ability to attract a highly talented pool of experienced engineers and seasoned industry professionals.
Our human capital strategy focuses on: 14 Table of Contents Diversity, Equity and Inclusion: We recognize the value of diversity, equity and inclusion within our organization and strive to ensure that our workplace reflects the diverse communities in which we operate in order to promote collaboration, innovation, creativity and belonging.
Our human capital strategy focuses on: Diversity, Equity and Inclusion: We recognize the value of diversity, equity and inclusion within our organization and strive to ensure that our workplace reflects the diverse communities in which we operate in order to promote collaboration, innovation, creativity and belonging.
We provide telephonic customer service almost around the clock to address questions or concerns from our users and to facilitate a smooth transaction process.
We provide telephone customer service almost around the clock to address questions or concerns from our users and to facilitate a smooth transaction process.
As of December 31, 2023, our sales and marketing teams consisted of 28 employees. Those who are exclusively focused on sales typically receive a combination of base salary and an incentive-based compensation. In addition to targeting new business opportunities, our sales team supports our business initiatives by building and maintaining relationships with new retail partners.
As of December 31, 2024, our sales and marketing teams consisted of 21 employees. Those who are exclusively focused on sales typically receive a combination of base salary and an incentive-based compensation. In addition to targeting new business opportunities, our sales team supports our business initiatives by building and maintaining relationships with new retail partners.
We regularly monitor official SEC releases and comments made by senior SEC officials, including Chairman Gensler, regarding the regulation of cryptocurrencies and related activities.
We regularly monitor official SEC releases and comments made by senior SEC officials, including the sitting Chairman, regarding the regulation of cryptocurrencies and related activities.
Based on our observations, our kiosks provide the benefit of driving additional foot traffic at retail locations, which as a result potentially drives additional business to our partners, thereby increasing their revenue. • Robust Compliance Procedures We complete our customer KYC process prior to permitting a user to transact.
Based on our observations, our kiosks provide the benefit of driving additional foot traffic at retail locations, which as a result potentially drives additional business to our partners, thereby increasing their revenue. • Robust Compliance Procedures We complete our customer Know Your Customer (“KYC”) process prior to permitting a user to transact.
The level of user verification for any given user transacting at our kiosks is generally based on the user’s proposed transaction volume with us. Generally, verification involves collecting users’ names, email addresses, phone numbers, driver’s licenses or other ID, social security numbers and photos of each user.
For KYC verification for any given user transacting at our kiosks is generally based on the user’s proposed transaction amount with us. Generally, verification involves collecting users’ names, email addresses, phone numbers, driver’s licenses or other ID, social security numbers and photos of each user.
The terms of our retail partner contracts vary because of negotiations at the time of execution. In addition, through BDCheckout, our users can now load cash into their accounts at the checkout counter at approximately 5,700 retailer locations, and then use those funds to purchase Bitcoin.
The terms of our retail partner contracts vary because of negotiations at the time of execution. In addition, through BDCheckout, our users can now load cash into their accounts at the checkout counter at approximately 7,600 retailer locations, and then use those funds to purchase Bitcoin.
Associated costs are recorded in Selling, general and administrative expense on the Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) and are not material. Our Retail Partners In the U.S., we have contracts with approximately 56 major national and regional retailers, including convenience stores, supermarkets, drug stores, and other high-traffic retail chains, which represent approximately 2,200 BTMs.
Associated costs are recorded in Selling, general and administrative expense on the Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) and are not material. Our Retail Partners In the U.S., we have contracts with over 50 major national and regional retailers, including convenience stores, supermarkets, drug stores, and other high-traffic retail chains, which represent approximately 2,700 BTMs.
Our relationship with our primary liquidity provider allows us to purchase Bitcoin to quickly replenish amounts sold to users, which means that we hold relatively small amounts of Bitcoin at any given time.
Our relationship with our primary liquidity provider allows us to purchase Bitcoin to quickly replenish amounts sold to users, which means that we hold relatively small amounts of Bitcoin for customer sales at any given time.
For the year ended December 31, 2023, we generated approximately $689.0 million of revenue, $88.6 million of gross profit (12.9% of gross profit margin), $1.5 million of net income and $56.3 million in Adjusted EBITDA (non-GAAP), which represented 14.7% of Adjusted Gross Profit Margin (non-GAAP) for the same period.
For the year ended December 31, 2023, we generated approximately $689.0 million of revenue, $1.5 million of net income and $56.3 million in Adjusted EBITDA (non-GAAP), which represented 14.7% of Adjusted Gross Profit Margin (non-GAAP) for the same period.
We have locations across the U.S. and Canada at, among others, the following type of retailers: • Convenience Stores and Gas Station Chains : Our largest BTM deployment to date is with Circle K, a convenience store chain with over 9,000 locations in North America and over 4,800 stores in Europe and other international markets.
We have locations across the U.S., Canada and Puerto Rico at, among others, the following type of retailers: • Convenience Stores and Gas Station Chains : Our largest BTM deployment to date is with Circle K, a convenience store chain with over 9,000 locations in North America and over 5,000 stores in Europe and other international markets.
Governmental Regulation Currently, we operate in the U.S. and Canada in a complex and rapidly evolving regulatory environment and are subject to a wide range of laws, rules and regulations enacted by U.S. and Canadian federal, state, provincial, and local governments and regulatory authorities.
Governmental Regulation Currently, we operate in the U.S., Puerto Rico, Canada and Australia in a complex and rapidly evolving regulatory environment and are subject to a wide range of laws, rules and regulations enacted by U.S. and Canadian federal, state, territorial, provincial, and local governments and regulatory authorities.
In addition, we continue to look for potential acquisitions to enhance our capabilities in areas such as cyber security and compliance, among others. • Grow Volume of Retail Transactions Through BDCheckout We launched BDCheckout in June 2022 and as of December 31, 2023, it is available at approximately 5,700 retail locations across North America, including convenience stores, gas stations, pharmacies, grocery chains and shopping malls.
In addition, we continue to look for potential acquisitions to enhance our capabilities in areas such as cyber security and compliance, among others. • Grow Volume of Retail Transactions Through BDCheckout We launched BDCheckout in June 2022 and as of December 31, 2024, it is available at approximately 7,600 retail locations across North America, including convenience stores, gas stations, pharmacies, grocery chains and shopping malls.
The 2023 Diary of Consumer Payment Choice, a study conducted by Federal Reserve Bank of San Francisco found that while it has declined over time, the share of payments in cash was 18% in 2022, which was a decrease from the data in 2021.
The 2024 Diary of Consumer Payment Choice, a study conducted by Federal Reserve Bank of San Francisco found that while it has declined over time, the share of payments in cash was 16% in 2023, which was a decrease from the data in 2021.
Contracts with these nine other nine retail partners have a weighted average remaining life of 1.9 years as of December 31, 2023. Many of our contracts include auto-renewal features providing for additional one-year terms following the expiration of the initial term. Such contracts may be terminated at either party’s option by giving proper notice in accordance with the subject contract.
Contracts with these other nine retail partners have a weighted average remaining life of 3.4 years as of December 31, 2024. Many of our contracts include auto-renewal features providing for additional one-year terms following the expiration of the initial term. Such contracts may be terminated at either party’s option by giving proper notice in accordance with the subject contract.
Recent Highlights In March 2023, we announced a partnership agreement with GetGo ® Café + Market, an innovative, food-first convenience store retailer with locations throughout western Pennsylvania, Ohio, northern West Virginia, Maryland and Indiana. We plan to install our BTMs into 125 GetGo ® Café + Market stores in multiple metropolitan areas, strengthening our presence throughout the Midwest and Mid-Atlantic.
Recent Highlights In March 2023, we announced a partnership agreement with GetGo ® Café + Market, an innovative, food-first convenience store retailer with locations throughout western Pennsylvania, Ohio, northern West Virginia, Maryland and Indiana. We have begun installing our BTMs into 125 GetGo ® Café + Market stores in multiple metropolitan areas, strengthening our presence throughout the Midwest and Mid-Atlantic.
Bitcoin Depot takes custody of the user’s cash at the time the same is inserted into the BTM. BDCheckout Additionally, Bitcoin Depot sells Bitcoin without the use of kiosks at several thousand additional retailer locations through a relationship with a leading global payments technology company.
Bitcoin Depot takes custody of the user’s cash at the time the same is inserted into the BTM. 6 Table of Contents BDCheckout Bitcoin Depot also sells Bitcoin without the use of kiosks at several thousand additional retailer locations through a relationship with a leading global payments technology company.
We have been able to negotiate with several lease providers and are able to receive market rates for these lease arrangements. As of December 31, 2023, we have lease commitments to acquire all the kiosks for a bargain purchase option at the end the lease term.
We have been able to negotiate with several lease providers and are able to receive 12 Table of Contents market rates for these lease arrangements. As of December 31, 2024, we have lease commitments to acquire all the kiosks for a bargain purchase option at the end the lease term.
We also supplement our vendors by insourcing some field activities with several employees who travel to various markets as needed. Lease Providers We utilize four major lessors to finance approximately 6,000 of our BTMs. We believe these lessors are experienced in lease transactions and have adequate equity reserves.
We also supplement our vendors by insourcing some field activities with several employees who travel to various markets as needed. Lease Providers We utilize three major lessors to finance approximately 3,500 of our BTMs. We believe these lessors are experienced in lease transactions and have adequate equity reserves.
There can be no assurance that our operating results will not continue to be affected by inflation in the future or that we will be successful in managing such cost increases.
There can be no assurance that 13 Table of Contents our operating results will not continue to be affected by inflation in the future or that we will be successful in managing such cost increases.
The following map illustrates the number of BTMs we operate by U.S. state and Canadian province as of March 11, 2024: Both our revenue and transaction volumes have historically grown despite volatility in market prices for Bitcoin and other cryptocurrencies and we expect this trend to continue as Bitcoin becomes increasingly accepted across the world.
The following map illustrates the number of BTMs we operate by U.S. and Australian state and Canadian province as of January 31, 2025: Both our revenue and transaction volumes have historically grown despite volatility in market prices for Bitcoin and other cryptocurrencies and we expect this trend to continue as Bitcoin becomes increasingly accepted across the world.
We have invested in and maintain robust, multi-layer compliance procedures to evaluate potential users, open user accounts and monitor transactions at our BTMs. Our compliance team, comprised of 16 individuals, has over 100 years of combined experience in AML (Anti-Money Laundering), KYC (Know-Your-Customer), BSA (Bank Secrecy Act), and OFAC (Office of Foreign Assets Control) compliance.
We have invested in and maintain robust, multi-layer compliance procedures to evaluate potential users, open user accounts and monitor transactions at our BTMs. Our compliance team, comprised of 20 individuals, has over 100 years of combined experience in AML (Anti-Money Laundering), BSA (Bank Secrecy Act), OFAC (Office of Foreign Assets Control) and Consumer Protection compliance.
We are the exclusive provider and operator of BTMs for Circle K in the U.S. and Canada, and as of December 31, 2023, we have installed our BTMs in approximately 1,300 Circle K stores. • Pharmacies and Grocers : In addition to our installed BTMs at pharmacy and grocery chains, we have thousands of additional access points via our BDCheckout product.
We are 4 Table of Contents the exclusive provider and operator of BTMs for Circle K in the U.S. and Canada, and as of December 31, 2024, we have installed our BTMs in approximately 1,100 Circle K stores. • Pharmacies and Grocers : In addition to our installed BTMs at pharmacy and grocery chains, we have thousands of additional access points via our BDCheckout product.
As of October 2022, the value of currency in circulation passed $2.23 trillion, a 28% increase compared to February 2020, but with slower growth since 2021. In addition, according to a study by Travis Credit Union conducted in 2020, 29% of U.S. adults sampled prefer to use cash to purchase goods.
As of December 2024, the value of currency in circulation passed $2.36 trillion, a 36% increase compared to February 2020, but with slower growth since 2021. In addition, according to a study by Travis Credit Union conducted in 2020, 29% of U.S. adults sampled prefer to use cash to purchase goods.
The company was founded over ten years ago and has cumulatively delivered more than 150,000 ATMs worldwide. Since 2016, Genmega has supplied more than 7,200 kiosks to us. 13 Table of Contents Gemini Gemini is an American cryptocurrency exchange and custodian that allows customers to buy, sell, and store digital assets.
The company was founded over ten years ago and has cumulatively delivered more than 150,000 ATMs worldwide. Since 2016, Genmega has supplied more than 8,000 kiosks to us. Gemini Gemini is an American cryptocurrency exchange and custodian that allows customers to buy, sell, and store digital assets.
Our costs of goods, services and labor and third-party services, have been impacted by the recent high inflationary environment. To date, we have been successful in managing these inflationary cost increases.
Our costs of goods, services and labor and third-party services, have been impacted by the recent high inflationary environment. To date, we have been successful in managing these inflationary cost increases through pricing, productivity and cost-cutting initiatives.
The charts below illustrate the number of BTMs and corresponding market shares for the leading BTM operators in the U.S. and Canada, as of December 31, 2023: (Note data is delayed from our actual active kiosks, please see Section 7, Management discussion and analysis for additional information regarding kiosk information.) 4 Table of Contents (1) Source: Coinatmradar.com as of December 31, 2023.
The charts below illustrate the number of BTMs and corresponding market shares for the leading BTM operators in the U.S. and Canada, as of December 31, 2024: (Note data is delayed from our actual active kiosks, please see Section 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations for additional information regarding kiosk information.) (1) Source: coinatmradar.com as of December 31, 2024.
As of December 31, 2023, we have approximately 6,300 active kiosks across 48 states in the U.S. and 10 9 Table of Contents provinces in Canada across convenience stores, gas stations, pharmacies, grocery chains and shopping malls. Bitcoin Depot’s strategically placed network of BTMs and BDCheckout access points are located in zip codes addressing approximately 52% of the U.S. population.
As of December 31, 2024, we have approximately 8,500 active kiosks across 48 states in the U.S. and 10 provinces in Canada across convenience stores, gas stations, pharmacies, grocery chains and shopping malls. Bitcoin Depot’s strategically placed network of BTMs and BDCheckout access points are located in zip codes addressing approximately 55% of the U.S. population.
Finally, approximately 92% of BTMs worldwide are in North America, according to Coin ATM Radar as of March 26, 2024, presenting an attractive international expansion opportunity for us.
Finally, approximately 90% of BTMs worldwide are in North America, according to Coin ATM Radar as of December 31, 2024, presenting an attractive international expansion opportunity for us.
The agreement anticipates the placement of BTMs in 16 mall locations. 11 Table of Contents In October 2023, we fostered a critical relationship, for the placement of our kiosks, with one of the foremost distrib utors in the ATM industry, CORD, underscoring our reputation as a formidable player in the market which has more than 3000+ ATMs in the US.
In October 2023, we fostered a critical relationship, for the placement of our kiosks, with one of the foremost distrib utors in the ATM industry, CORD, underscoring our reputation as a formidable player in the market which has more than 3000+ ATMs in the US.
In September 2023, the Company entered into an On-Site Agreement, with Tanger Management, the property manager for the outlet centers located throughout the United States and Canada.
In September 2023, the Company entered into an On-Site Agreement, with Tanger Management, the property manager for the outlet centers located throughout the United States and Canada. The agreement anticipates the placement of BTMs in 16 mall locations.
Based on our own user surveys, a majority of our users use our products and services for non-speculative purposes, including money transfers, international remittances, and online purchases, among others. • Prudent Bitcoin Management We use a sophisticated Bitcoin management process to reduce our exposure to volatility in Bitcoin prices by maintaining a relatively low balance (typically less than $1 million) of Bitcoin at any given time, which we believe differentiates us from our competition.
Based on our own user surveys, a majority of our users use our products and services for non-speculative purposes, including money transfers, international remittances, and online purchases, among others. • Prudent Bitcoin Management We use a sophisticated Bitcoin management process to reduce our exposure to volatility in Bitcoin prices by maintaining a relatively low balance (typically less than $1.0 million) of Bitcoin at any given time in our hot wallets to fulfill orders from users while we are automatically placing orders with liquidity providers and exchanges to replenish the Bitcoin we have sold to users , which we believe differentiates us from our competition.
We prioritize proactive reporting procedures in accordance with local, state, and federal requirements.
We prioritize proactive 8 Table of Contents reporting procedures in accordance with local, state, and federal requirements.
We have generated positive net income and cash flow from operations during every year since our inception. For the year ended December 31, 2023 and 2022, we generated revenue of approximately $689.0 million and $646.8 million, respectively, gross profit of $88.6 million and $53.5 million, respectively, and adjusted gross profit of $101.0 million and $72.3 million, respectively.
We have generated positive net income and cash flow from operations during every year since our inception. For the years ended December 31, 2024 and 2023, we generated revenue of approximately $573.7 million and $689.0 million, respectively, gross profit of $81.5 million and $88.6 million, respectively, and adjusted gross profit of $91.4 million and $101.0 million, respectively.
Our Products As of December 31, 2023, we operated a portfolio of approximately 6,300 owned and leased kiosks across 48 U.S. states and 10 Canadian provinces. Within the United States, our kiosks and BDCheckout access points are located in zip codes containing approximately 52% of the U.S. population.
Our Products 5 Table of Contents As of December 31, 2024, we operated a portfolio of approximately 8,500 owned and leased kiosks across 48 U.S. states, 10 Canadian provinces and Puerto Rico. Within the United States, our kiosks and BDCheckout access points are located in zip codes containing approximately 55% of the U.S. population.
This overall flexibility to move our BTMs allows us to not record a liability on the balance sheet related to these retail location leases. The software that resides on the kiosk is designed to provide an intuitive user interface for our users.
Contracts with over a 12-month term allow for kiosks to be removed at our discretion, and this overall flexibility to move our BTMs allows us to not record a liability on the balance sheet related to these retail location leases. The software that resides on the kiosk is designed to provide an intuitive user interface for our users.
According to Coin ATM Radar, from January 1, 2017 to December 31, 2023, the total number of BTMs deployed grew from 968 to 33,936, representing a CAGR of approximately 84%, with the vast majority of BTMs now located in North 8 Table of Contents America.
According to Coin ATM Radar, from January 1, 2017 to December 31, 2024, the total number of BTMs deployed grew from approximately 1,000 to 38,000, representing a CAGR of approximately 46%, with the vast majority of BTMs now located in North America.
According to New York Digital Investment Group LLC d/b/a NYDIG, Bitcoin alone was the third largest payment network in 2022 with over $3.0 trillion in transaction volume, next only to Visa and Mastercard and ahead of American Express and Discover, and an estimated 22% of the U.S. adult population owns cryptocurrency.
According to New York Digital Investment Group LLC d/b/a NYDIG, Bitcoin alone was the largest payment network in 2024 with over $19 trillion in transaction volume, greater than Visa and Mastercard, and an estimated 27% of the U.S. adult population owns cryptocurrency.
Share of payment instrument use for all payments (1) (1) Source: 2023 Findings from the Diary of Consumer Payment Choice; For the most up-to-date figures please consult the links in the section titled “ Market, Industry and Other Data .” Our Competitive Strengths We believe the below competitive strengths differentiate us from our competition and enhance our ability to compete. • Largest BTM Operator in North America We are the largest operator of BTMs in North America with an approximately 23% market share as of December 31, 2023, according to Coin ATM Radar.
This use case can represent a more efficient means of sending money for those who are using cash to make person-to-person payments, or an alternative means of sending money for those who are using mobile apps. 7 Table of Contents Share of payment instrument use for all payments (1) (1) Source: 2024 Findings from the Diary of Consumer Payment Choice; For the most up-to-date figures please consult the links in the section titled “ Market, Industry and Other Data .” Our Competitive Strengths We believe the below competitive strengths differentiate us from our competition and enhance our ability to compete. • Largest BTM Operator in North America We are the largest operator of BTMs in North America with an approximately 25% market share as of December 31, 2024, according to Coin ATM Radar.
We maintain the leading position among cash-to-Bitcoin BTM operators in the U.S., representing an approximate 23% market share in the U.S., and a leading position in Canada.
We maintain the leading position among cash-to-Bitcoin BTM operators in the U.S., representing an approximate 25% market share in the U.S., and a strong position in Canada. Our BTMs offer one-way exchange of cash-to-Bitcoin.
As of December 31, 2023, our contracts with our top 10 retail partners had a weighted average remaining life of 1.7 years. Many of our contracts include auto-renewal features providing for additional one-year terms following the expiration of the initial term. Such contracts may be terminated at either party’s option by giving proper notice in accordance with the subject contract.
Many of our contracts include auto-renewal features providing for additional one-year terms following the expiration of the initial term. Such contracts may be terminated at either party’s option by giving proper notice in accordance with the subject contract.
There are several publicly traded companies that operate cash to Bitcoin ATMs, including Athena Bitcoin Inc. and Bitcoin Well Inc. We believe we do not have any direct, pure-play competitors, traded on major exchanges, who operate cash to Bitcoin ATMs at scale.
We believe we do not have any direct, pure-play competitors, traded on major exchanges, who operate cash to Bitcoin ATMs at scale.
Currently, we do not have plans to expand our users’ ability to sell Bitcoin to us in exchange for cash. We also operate a leading BTM device and transaction processing system, BitAccess, which provides software and operational capabilities to third-party BTM operators, which generates software revenue for the Company.
We also operate a leading BTM device and transaction processing system, BitAccess, which provides software and operational capabilities to third-party BTM operators, which generates software revenue for the Company.
These individuals have largely been excluded from the digital financial system and associated technological advancements in our global and digitally interconnected society. Bitcoin Depot’s simple and convenient process to convert cash into Bitcoin via our BTMs and full-service mobile app enables not only these users, but also the broader public, to access the digital financial system.
Bitcoin Depot’s simple and convenient process to convert cash into Bitcoin via our BTMs and BDCheckout products, as supported by our full-service mobile app, enables not only these users, but also the broader public, to access the digital financial system.
Bitcoin Depot 7 Table of Contents utilizes this wallet infrastructure to offer users the ability to use an un-hosted non-custodial wallet within the Bitcoin Depot mobile app or through other third-party apps which allow access to non-custodial wallets.
Bitcoin Depot utilizes this wallet infrastructure to offer users the ability to use an un-hosted non-custodial wallet within the Bitcoin Depot mobile app or through other third-party apps which allow access to non-custodial wallets. 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.
According to Coin ATM Radar, as of December 31, 2023, 90% of installed BTMs worldwide reside in the U.S. and Canada, in which Bitcoin Depot had a market share of 23% and 11%, respectively. Many BTMs deployed around the world initially supported transacting only in Bitcoin. Our BTMs currently support transactions in Bitcoin.
According to Coin ATM Radar, as of December 31, 2024, approximately 90% of installed BTMs worldwide reside in the U.S. and Canada, in which Bitcoin Depot had a market share of 25% and 8%, respectively.
None of our employees are represented by a labor union or covered by collective bargaining agreements, and we have not experienced any work stoppages. We believe we have a positive relationship with our employees. We believe that our success is driven by our employees.
Human Capital As of December 31, 2024, we had 126 full-time employees, most of whom were in the U.S. None of our employees are represented by a labor union or covered by collective bargaining agreements, and we have not experienced any work stoppages. We believe we have a positive relationship with our employees.
While we are currently not operating kiosks in New York or Puerto Rico, we have obtained a license (or equivalent) to operate in Puerto Rico and have applied for the license required to operate in New York. See “ —Government Regulation—Money transmission and virtual currency business activity ” for more information.
While we are currently not operating kiosks in New York, we have applied for the license required to operate in New York. See “ Item 1A.—Risk Factors—Government Regulation—Money transmission and virtual currency business activity ” for more information. BTM Our kiosks are located in convenience stores, gas stations, pharmacies, grocery chains and shopping malls across North America.
We have contracted with a network of providers to service our kiosks on an as-needed basis to support kiosk up-time, but our kiosks have typically not required frequent repair or maintenance. We have found that a key factor affecting transaction volumes at any particular kiosk is its location.
Because utilization is below that of typical cash ATMs, we believe that that the functional life of our kiosks is extended relative to manufacturer specifications. We have contracted with a network of providers to service our kiosks on an as-needed basis to support kiosk up-time, but our kiosks have typically not required frequent repair or maintenance.
In addition, the licensed entity within our corporate structure is subject to inspection and examination by the state licensing agencies and certain actions involving that entity, such as changes in controlling equity holders, board members, and senior management, may require regulatory approval.
In addition, the licensed entity within our corporate structure is subject to inspection and examination by the state licensing agencies and certain actions involving that entity, such as changes in controlling equity holders, board members, and senior management, may require regulatory approval. 14 Table of Contents Privacy and protection of user data We are subject to a number of laws, rules, directives, and regulations relating to the collection, use, retention, security, processing, and transfer of personally identifiable information about our users and employees in the jurisdictions where we operate.
Our strategy in deploying our BTMs is to identify locations that are expected to generate high visibility and high transaction volume. Site selection for kiosk deployment is also determined based on an analysis of historical business trends, demographic data, and a determination of the proximity and density of competitors’ kiosks.
Site selection for kiosk deployment is also determined based on an analysis of historical business trends and a determination of the proximity and density of competitors’ kiosks. The approximately 1,100 kiosks deployed at Circle K stores are a prime example of the types of locations that we seek when deploying our BTMs.
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. Cash is then inserted by the user into the kiosk, and the kiosk will confirm the dollar amount and other details of the transaction, including quantity of Bitcoin being purchased.
Cash is then inserted by the user into the kiosk, and the kiosk will confirm the dollar amount and other details of the transaction, including quantity of Bitcoin being purchased.
Contract terms are generally similar across the portfolio of retail partners, such as payment terms, service level agreements, rent, placement, and access. These contracts provide a recurring and stable source of revenue for our retail partners over a typical initial term of approximately five years, although our terms vary because of negotiations at the time of execution.
These contracts provide a recurring and stable source of revenue for our retail partners over a typical initial term of approximately five years, although our terms vary because of negotiations at the time of execution. As of December 31, 2024, our contracts with our top 10 retail partners had a weighted average remaining life of 1.8 years.
The Canaccord Claim asserts that Canaccord is entitled to $23.0 million in fees alleged to be payable for breach of contract upon the closing of an alleged transaction pursuant to a previously terminated engagement letter between Lux Vending and Canaccord under which Canaccord was to provide certain financial advisory services.
The claim asserts that Lux Vending, LLC breached the contract by terminating the contract to avoid paying fees for their services and that Canaccord is entitled to $23.0 million in damages equivalent to the fees alleged to be payable for breach of contract that would have been owed upon the closing of a transaction to acquire control, the sale of substantially all the Company’s assets, or a merger transaction pursuant to the previously terminated engagement letter for advisory services.
For the year ended December 31, 2022, we generated approximately $646.8 million of revenue, $53.5 million of gross profit (8.3% of gross profit margin), $3.5 million of net income and $41.2 million in Adjusted EBITDA (non-GAAP), which represented 11.2% of Adjusted Gross Profit Margin (non-GAAP) for the same period.
In light of the nature of our transactions, no customer is close to accounting for 10% of our revenue. For the year ended December 31, 2024, we generated approximately $573.7 million of revenue, $7.8 million of net income and $39.7 million in Adjusted EBITDA (non-GAAP), which represented 15.9% of Adjusted Gross Profit Margin (non-GAAP) for the same period.
We continuously monitor our BTM performance at each location, and at various times we relocate our BTMs to more profitable locations. The majority of our contracts contractually, allow us to move our BTMs with a limited notification to our retail partners. At December 31, 2023, we had approximately 900 BTMs with our logistics providers to redeploy to new locations.
The majority of our contracts contractually, allow us to move our BTMs with a limited notification to our retail partners. At December 31, 2024, we had approximately 2,100 BTMs with our logistics providers to redeploy to new locations. Our kiosks, with the operating software pre-loaded, are manufactured and deployed by multiple providers.
Our scale and leadership position has enabled us to develop a deeper understanding of our users’ needs and continually innovate and launch new products and services, such as BDCheckout, further enhancing the value of our platform. 6 Table of Contents From our inception in July 2016 through December 31, 2023, we have completed more than 3.3 million user transactions, equating to approximately $2.3 billion in total transaction value.
Our scale and leadership position has enabled us to develop a deeper understanding of our users’ needs and continually innovate and launch new products and services, such as BDCheckout, further enhancing the value of our platform.
We believe these matters will not have a material adverse effect on our consolidated financial position, results of operations or liquidity. Corporate Information Our principal executive office is located at 3343 Peachtree Road NE, Suite 750, Atlanta, Georgia, 30326, which is where our records are kept and the principal business address for our executive officers.
Corporate Information Our principal executive office is located at 3343 Peachtree Road NE, Suite 750, Atlanta, Georgia, 30326, which is where our records are kept and the principal business address for our executive officers. Our mailing address is 2870 Peachtree Road #327, Atlanta, 17 Table of Contents Georgia, 30305 and our telephone number is (678) 435-9604.
Due to the minimal amount of Bitcoin held at any given time (typically less than $1 million), coupled with our high transaction volumes, we do not store Bitcoin in cold wallets. Human Capital As of December 31, 2023, we had 124 full-time employees, most of whom were in the U.S.
Due to the minimal amount of Bitcoin held at any given time (typically less than $1.0 million) in our hot wallets to fulfill orders from users while we are automatically placing orders with liquidity providers and exchanges to replenish the Bitcoin we have sold to users , coupled with our high transaction volumes, we do not store Bitcoin in cold wallets.
The approximately 1,300 kiosks deployed at Circle K stores are a prime example of the types of locations that we seek when deploying our BTMs. In addition to the Circle K locations, we have also entered into agreements with a number of other retail partners. Our retail deployments are secured through negotiation with our retail partners.
In addition to the Circle K locations, we have also entered into agreements with a number of other retail partners. Our retail deployments are secured through negotiation with our retail partners. Contract terms are generally similar across the portfolio of retail partners, such as payment terms, service level agreements, rent, placement, and access.
BTM Our kiosks are located in convenience stores, gas stations, pharmacies, grocery chains and shopping malls across North America. Our largest deployment across a single retail chain is with Circle K, which accounted for approximately 1,300 of our total number of deployed kiosks as of December 31, 2023.
Our largest deployment across a single retail chain is with Circle K, which accounted for approximately 1,100 of our total number of deployed kiosks as of December 31, 2024. We continuously monitor our BTM performance at each location, and at various times we relocate our BTMs to more profitable locations.
(“Canaccord”) commenced proceedings against Lux Vending, LLC and Bitcoin Depot Operating LLC (collectively, for purposes of this paragraph, “Lux Vending”) in the Ontario Superior Court of Justice (the “Canaccord Claim”).
(“Canaccord”) commenced proceedings against the Company by filing a claim with the Superior Court of Justice in Toronto, Ontario which named Lux Vending, LLC and Bitcoin Depot LLC as the defendants.
Industry Trends The adoption of cryptocurrencies as a medium of exchange has grown significantly since Bitcoin’s introduction in 2009 and cryptocurrency is continuing to become more mainstream among consumers. In 2023, centralized and decentralized exchanges reported nearly $82.0 trillion, in cryptocurrency trading volume, a 6.5% decrease from 2022 levels.
However, the profitability of the two services is similar because of the higher markup that Bitcoin Depot applies to BTM transactions to support the higher costs associated therewith. Industry Trends The adoption of cryptocurrencies as a medium of exchange has grown significantly since Bitcoin’s introduction in 2009 and cryptocurrency is continuing to become more mainstream among consumers.
We also have BTMs in approximately 3,900 independent retail locations in the U.S. In Canada, we have contracts with one national merchant and approximately 100 independent merchants. Circle K is the largest retailer in our portfolio, representing approximately 27% and 32% of our total revenues for the year ended December 31, 2023 and 2022, respectively.
Circle K is the largest retailer in our portfolio, representing approximately 23% and 27% of our total revenues for the years ended December 31, 2024 and 2023, respectively. The underlying retail agreement with Circle K has an initial term of five years.
As of December 31, 2023, our offerings included approximately 6,300 BTMs in retailer locations throughout the U.S. and Canada, our BDCheckout product, which is accepted at approximately 5,700 retail locations, and our mobile app.
Our mobile app includes a buy online feature that connects consumers to a third-party service, Simplex powered by Nuvei, that allows consumers to buy Bitcoin without going to a kiosk or using BDCheckout As of December 31, 2024, our offerings included approximately 8,500 BTMs in retailer locations throughout the U.S., Canada and Puerto Rico, our BDCheckout product, which is accepted at approximately 7,600 retail locations, and our mobile app.
The underlying retail agreement with Circle K has an initial term of five years. As of December 31, 2023, our contracts with Circle K have a weighted average remaining life of 1.5 years. Our other top ten retail partners (excluding Circle K) comprise 7.4% of our retail locations.
As of December 31, 2024, our contract with Circle K had a 11 Table of Contents remaining life of 0.5 years. In January 2025, our contract with Circle K was extended by 1 year. Our other top ten retail partners (excluding Circle K) comprise 11.5% of our retail locations.
During the year ended December 31, 2023, we averaged approximately 21,824 monthly active users, which we define as the total number of unique customers.
From our inception in July 2016 through December 31, 2024, we have completed more than 3.7 million user transactions, equating to approximately $2.8 billion in total transaction value. During the year ended December 31, 2024, we averaged approximately 14,961 monthly active users, which we define as the total number of unique customers.
The claim also seeks an award for legal and other costs relating to the proceeding. Lux Vending denies the allegations made against it and intends to vigorously defend against them. The range of potential loss related to the identified claim is between $0 and the $23.0 million, the amount of damages that Canaccord is seeking in the lawsuit.
The range of potential loss related to the identified claim is between $0 and $23.0 million, the amount of damages that Canaccord is seeking in the lawsuit. The additional costs mentioned in the claim are not able to be estimated at this time. The discovery phase of the litigation involving documentary productions and oral examinations is largely completed.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIf any of our users use our business to further such illegal activities, our business could be adversely affected. • If we fail to retain existing users or add new users, or if our users decrease their level of engagement with our products and services, our business, operating results, and financial condition may be significantly harmed. • Our products and services may be negatively characterized by consumer advocacy groups, the media or certain federal, state and local government officials, and if those negative characterizations become increasingly accepted by current or potential new users and/or our retail partners, or result in restrictions or limitations on the fees we charge to users, our reputation could be significantly impacted, which when coupled with required modifications to our fee model could result in decreased demand for our products and services and a corresponding decrease in our transaction volume, all of which could materially and adversely impact our business. • Our strategy and focus on delivering high-quality, compliant, easy-to-use, and secure Bitcoin-related [GL1] services may not maximize short-term or medium-term financial results. • Any significant disruption in our kiosks or software, information technology systems, or any of the blockchain networks related to our business, could result in a loss of users or funds and adversely impact our brand and reputation and our business, operating results, and financial condition. • Banks and financial institutions may not provide banking services, or may cut off services, to businesses that engage in Bitcoin and/or other cryptocurrency-related activities, or accept Bitcoin as payment, including financial institutions of investors in our securities, and we may be exposed to counterparty risk as a result. • Due to unfamiliarity and some negative publicity associated with cryptocurrency-related businesses, existing and potential users may lose confidence in cryptocurrency-related products and services, which could negatively affect our business. • We have entered into, and may in the future enter into, acquisitions, strategic investments, partnerships or relationships, entries into new businesses, joint ventures, divestitures, and other transactions which could fail to achieve strategic objectives, disrupt our ongoing operations or result in operating difficulties, divert the attention of management, liabilities and expenses, harm our business, and negatively impact our results of operations. • Our business could be harmed if we are unable to accurately forecast demand for Bitcoin and to adequately manage our Bitcoin balances and kiosk inventory. • Cryptocurrency balances, including the cryptocurrency balances we maintain for our own account or cryptocurrency balances that may be maintained for us, and any investments in cryptocurrency, is subject to volatile market prices, impairment, and other risks of loss. • Our failure to safeguard and manage our 3rd party operators' crypto assets could adversely impact our business, operating results, and financial condition. • Our products and services may not function as intended due to undetected errors in our software, hardware, and systems, product defects, developmental delays, or due to security breaches or incidents or human error in administering these systems, which could damage user or third-party relations, decrease our potential profitability and expose us to liability, and materially and adversely affect our business. 18 Table of Contents • Cybersecurity threats continue to increase in frequency and sophistication; a successful cybersecurity attack could interrupt or disrupt our information technology systems or cause the loss of confidential or protected data which could disrupt our business, force us to incur excessive costs, cause reputational harm and adversely affect our business. • Litigation or investigations involving us, our agents or other contractual counterparties could result in material settlements, fines or penalties and may adversely affect our business, financial condition and results of operations. • Major bank failure or sustained financial market illiquidity, or illiquidity at our clearing, cash management and custodial financial institutions, could adversely affect our business, financial condition and results of operations. • Our recent rapid growth, including in our transaction volume, may not be indicative of our future growth.
Biggest changeIf any users use our business to further such activities, our business could be adversely affected. • If we fail to retain existing users or add new users, or if our users decrease their level of engagement with our products and services, our business, operating results, and financial condition may be significantly harmed. • Our products and services may be negatively characterized by consumer advocacy groups, the media or certain federal, state and local government officials. • Our strategy and focus on delivering high-quality, compliant, easy-to-use, and secure Bitcoin-related services may not maximize short-term or medium-term financial results. • Any significant disruption in our kiosks or software, information technology systems, or any of the blockchain networks related to our business, could adversely impact our reputation and our business, operating results, and financial condition. 18 Table of Contents • Banks and financial institutions may not provide banking services, or may cut off services, to businesses that engage in Bitcoin and/or other cryptocurrency-related activities, or accept Bitcoin as payment, including financial institutions of investors in our securities, and we may be exposed to counterparty risk as a result. • Due to unfamiliarity and some negative publicity associated with cryptocurrency-related businesses, existing and potential users may lose confidence in cryptocurrency-related products and services, which could negatively affect our business. • We have entered into, and may in the future enter into, acquisitions, strategic investments, partnerships or relationships, entries into new businesses, joint ventures, divestitures, and other transactions which could fail to achieve strategic objectives, harm our business, and negatively impact our results of operations in a variety of ways. • Our business could be harmed if we are unable to accurately forecast demand for Bitcoin and to adequately manage our Bitcoin balances and kiosk inventory. • Cryptocurrency balances, including the balances we maintain for our own account or balances that may be maintained for us, and any investments in cryptocurrency, is subject to volatile market prices, impairment, and other risks of loss. • Our failure to safeguard and manage our 3rd party operators' crypto assets could adversely impact our business. • Cybersecurity threats continue to increase in frequency and sophistication; a successful cybersecurity attack could interrupt or disrupt our information technology systems or cause the loss of confidential or protected data which could disrupt our business, force us to incur excessive costs, cause reputational harm and adversely affect our business. • Litigation or investigations involving us, our agents or other contractual counterparties could result in material settlements, fines or penalties and may adversely affect our business, financial condition and results of operations. • Major bank failure or sustained financial market illiquidity, or illiquidity at our clearing, cash management and custodial financial institutions, could adversely affect our business, financial condition and results of operations. • Our recent rapid growth, including in our transaction volume, may not be indicative of our future growth.
Any real or perceived improper use of, disclosure of, or access to such data could harm our reputation, as well as have an adverse effect on our business. • We face intense competition, and if we are unable to continue to compete effectively for any reason, our business, financial condition, and results of operations could be adversely affected. • Converting cash into cryptocurrency (and vice versa) involves risks, which could result in loss of user assets, user disputes and other liabilities, which could adversely impact our business. • Disputes with our users could adversely impact our brand and reputation and our business, operating results, and financial condition. • There are a number of risks associated with our non-U.S. operations that could adversely affect our business. • Our products and services may be exploited to facilitate illegal activity such as fraud, money laundering, gambling, tax evasion, and scams.
Any real or perceived improper use of, disclosure of, or access to such data could harm our reputation, as well as have an adverse effect on our business. • We face intense competition, and if we are unable to continue to compete effectively for any reason, our business, financial condition, and results of operations could be adversely affected. • Converting cash into cryptocurrency (and vice versa) involves risks, which could result in loss of user assets, user disputes and other liabilities, which could adversely impact our business. • Disputes with our users could adversely impact our brand, reputation, business, operating results, and financial condition. • There are a number of risks associated with our non-U.S. operations that could adversely affect our business. • Our products and services may be exploited to facilitate illegal activity such as fraud, money laundering, gambling, tax evasion, and scams.
We are subject to investigation and enforcement action by state, federal, and international consumer protection agencies, including the Consumer Financial Protection Bureau, the Federal Trade Commission (“FTC”), state attorneys general in the U.S., the Canadian Office of Consumer Affairs, and other similar U.S. and Canadian government authorities, each of which monitors user complaints against us and, from time to time, escalates matters for investigation and potential enforcement against us.
We are subject to investigation and enforcement action by state, federal, and international consumer protection agencies, including the Consumer Financial Protection Bureau, the Federal Trade Commission (“FTC”), state agencies and attorneys general in the U.S., the Canadian Office of Consumer Affairs, and other similar U.S. and Canadian government authorities, each of which monitors user complaints against us and, from time to time, escalates matters for investigation and potential enforcement against us.
A significant portion of our total outstanding shares are restricted from immediate resale but may be sold into the market in the near future.
A significant portion of our total outstanding shares are restricted from immediate resale but may be sold into the market in the near future.
In addition to transaction and opportunity costs, these transactions involve large challenges and risks, whether or not such transactions are completed, any of which could harm our business and negatively impact our results of operations, including risks that: • the transaction may not advance our business strategy or may harm our growth or profitability; 29 Table of Contents • we may not be able to secure required regulatory approvals or otherwise satisfy closing conditions for a proposed transaction in a timely manner, or at all; • the transaction may subject us to additional regulatory burdens that affect our business in potentially unanticipated and significantly negative ways; • we may not realize a satisfactory return on our investment or increase our revenue; • we may experience difficulty, and may not be successful in, integrating technologies, IT or business enterprise systems, culture, or management or other personnel of the acquired business; • we may incur significant acquisition costs and transition costs, including in connection with the assumption of ongoing expenses of the acquired business; • we may not realize the expected benefits or synergies from the transaction in the expected time period, or at all; • we may be unable to retain key personnel; • acquired businesses or businesses that we invest in may not have adequate controls, processes, and procedures to ensure compliance with laws and regulations, including with respect to data privacy, data protection, and information security, and our due diligence process may not identify compliance issues or other liabilities; • acquired businesses’ technology stacks may add complexity, resource constraints, and legacy technological challenges that make it difficult and time consuming to achieve such adequate controls, processes, and procedures; • we may fail to identify or assess the magnitude of certain liabilities, shortcomings, or other circumstances prior to acquiring or investing in a business, which could result in additional financial, • legal, regulatory, or tax exposure and may subject us to additional controls, policies, procedures, liabilities, litigation, costs of compliance or remediation, or other adverse effects on our business, operating results, or financial condition; • we may have difficulty entering into new market segments or new geographic territories; • we may be unable to retain the users, vendors, and partners of acquired businesses; • there may be lawsuits or regulatory actions resulting from the transaction; • there may be risks associated with undetected security weaknesses, cyberattacks, or security breaches or incidents at companies that we acquire or with which we may combine or partner; • there may be local and foreign regulations applicable to the international activities of our business and the businesses we acquire; and • acquisitions could result in dilutive issuances of equity securities or the incurrence of debt.
In addition to transaction and opportunity costs, these transactions involve large challenges and risks, whether or not such transactions are completed, any of which could harm our business and negatively impact our results of operations, including risks that: • the transaction may not advance our business strategy or may harm our growth or profitability; • we may not be able to secure required regulatory approvals or otherwise satisfy closing conditions for a proposed transaction in a timely manner, or at all; • the transaction may subject us to additional regulatory burdens that affect our business in potentially unanticipated and significantly negative ways; • we may not realize a satisfactory return on our investment or increase our revenue; • we may experience difficulty, and may not be successful in, integrating technologies, IT or business enterprise systems, culture, or management or other personnel of the acquired business; • we may incur significant acquisition costs and transition costs, including in connection with the assumption of ongoing expenses of the acquired business; • we may not realize the expected benefits or synergies from the transaction in the expected time period, or at all; • we may be unable to retain key personnel; 30 Table of Contents • acquired businesses or businesses that we invest in may not have adequate controls, processes, and procedures to ensure compliance with laws and regulations, including with respect to data privacy, data protection, and information security, and our due diligence process may not identify compliance issues or other liabilities; • acquired businesses’ technology stacks may add complexity, resource constraints, and legacy technological challenges that make it difficult and time consuming to achieve such adequate controls, processes, and procedures; • we may fail to identify or assess the magnitude of certain liabilities, shortcomings, or other circumstances prior to acquiring or investing in a business, which could result in additional financial, • legal, regulatory, or tax exposure and may subject us to additional controls, policies, procedures, liabilities, litigation, costs of compliance or remediation, or other adverse effects on our business, operating results, or financial condition; • we may have difficulty entering into new market segments or new geographic territories; • we may be unable to retain the users, vendors, and partners of acquired businesses; • there may be lawsuits or regulatory actions resulting from the transaction; • there may be risks associated with undetected security weaknesses, cyberattacks, or security breaches or incidents at companies that we acquire or with which we may combine or partner; • there may be local and foreign regulations applicable to the international activities of our business and the businesses we acquire; and • acquisitions could result in dilutive issuances of equity securities or the incurrence of debt.
The market price of our Class A common stock could be subject to wide fluctuations in response to the risk factors described in this Annual Report on Form 10-K and others beyond our control, including: • the number of shares of Class A common stock publicly owned and available for trading; • overall performance of the equity markets or publicly-listed financial services, cryptocurrency and technology companies; • our actual or anticipated operating performance and the operating performance of our competitors; 52 Table of Contents • changes in the projected operational and financial results we provide to the public or our failure to meet those projections; • failure of securities analysts to initiate or maintain coverage of us, changes in financial estimates by any securities analysts who follow our company or our failure to meet the estimates or the expectations of investors; • any major change in our board of directors, management or key personnel; • issuance of shares of Class A common stock; • the highly volatile nature of the digital financial system and the prices of cryptocurrencies; • rumors and market speculation involving the digital financial system or us or other companies in our industry; • announcements by us or our competitors of significant innovations, new products, services, features, integrations or capabilities, acquisitions, strategic investments, partnerships, joint ventures, or capital commitments; and • other events or factors, including those resulting from COVID-19, political instability, and acts of war, or terrorism, or responses to these events, including the current conflict in Ukraine.
The market price of our Class A common stock could be subject to wide fluctuations in response to the risk factors described in this Annual Report on Form 10-K and others beyond our control, including: • the number of shares of Class A common stock publicly owned and available for trading; • overall performance of the equity markets or publicly-listed financial services, cryptocurrency and technology companies; • our actual or anticipated operating performance and the operating performance of our competitors; • changes in the projected operational and financial results we provide to the public or our failure to meet those projections; • failure of securities analysts to initiate or maintain coverage of us, changes in financial estimates by any securities analysts who follow our company or our failure to meet the estimates or the expectations of investors; • any major change in our board of directors, management or key personnel; • issuance of shares of Class A common stock; • the highly volatile nature of the digital financial system and the prices of cryptocurrencies; • rumors and market speculation involving the digital financial system or us or other companies in our industry; • announcements by us or our competitors of significant innovations, new products, services, features, integrations or capabilities, acquisitions, strategic investments, partnerships, joint ventures, or capital commitments; and • other events or factors, including those resulting from COVID-19, political instability, and acts of war, or terrorism, or responses to these events, including the current conflict in Ukraine.
Our ability to grow in international markets and our future results could be adversely affected by a number of factors, including: • difficulty in attracting a sufficient number of users or retail partners, or a lack of acceptance of our products and services; 24 Table of Contents • failure to anticipate competitive conditions and competition with service providers or other market players that have grater experience in the local markets than we do; • difficulty in recruiting and retaining qualified employees and managing foreign operations in an environment of diverse cultures, laws and customs; • challenges caused by distance, language and cultural differences and the increased travel, infrastructure and other resources associated with international operations; • failure to conform with applicable business customs, including translation into foreign languages, cultural context and associated expenses; • any inability or difficulties supporting or integrating with local third-party providers; • changes in political and economic conditions and potential instability in certain regions, including in particular the recent civil unrest, terrorism, political turmoil and economic uncertainty in Africa, the Middle East, Europe, and other regions; • restrictions on money transfers to, from and between certain countries; • currency controls, new currency adoptions and repatriation issues; • changes in regulatory requirements or in foreign policy, including the adoption of domestic or foreign laws, regulations and interpretations detrimental to our business (including, but not limited to, with respect to payments, privacy, data protection, information security and tax); • difficulty in gaining acceptance from industry self-regulating bodies; • possible increased costs and additional regulatory burdens imposed on our business, including tariffs, sanctions, fines or other trade restrictions; • changes to or the implementation of new U.S. sanctions, resulting in bank closures in certain countries, the ultimate freezing of our assets, adverse effects on existing business relationships, and/or restrictions on entering into new business relationships where carrying on business would violate such sanctions; • burdens of complying with a wide variety of laws and regulations; • potential increased exposure to public health issues such as pandemics, and related industry and governmental actions to address these issues; • possible fraud or theft losses and lack of compliance by international representatives in foreign legal jurisdictions where collection and legal enforcement may be difficult or costly; • reduced protection of our intellectual property rights; • unfavorable tax rules or trade barriers; and • failure to successfully manage our exposure to non-U.S. dollar exchange rates.
Our ability to grow in international markets and our future results could be adversely affected by a number of factors, including: • difficulty in attracting a sufficient number of users or retail partners, or a lack of acceptance of our products and services; • failure to anticipate competitive conditions and competition with service providers or other market players that have grater experience in the local markets than we do; • difficulty in recruiting and retaining qualified employees and managing foreign operations in an environment of diverse cultures, laws and customs; • challenges caused by distance, language and cultural differences and the increased travel, infrastructure and other resources associated with international operations; • failure to conform with applicable business customs, including translation into foreign languages, cultural context and associated expenses; • any inability or difficulties supporting or integrating with local third-party providers; • changes in political and economic conditions and potential instability in certain regions, including in particular the recent civil unrest, terrorism, political turmoil and economic uncertainty in Africa, the Middle East, Europe (including Ukraine), and other regions; • changes in the political and economic relationships between the U.S. and other nations, including the continued uncertainty in U.S. trade policy; • restrictions on money transfers to, from and between certain countries; 25 Table of Contents • currency controls, new currency adoptions and repatriation issues; • changes in regulatory requirements or in foreign policy, including the adoption of domestic or foreign laws, regulations and interpretations detrimental to our business (including, but not limited to, with respect to payments, privacy, data protection, information security and tax); • difficulty in gaining acceptance from industry self-regulating bodies; • possible increased costs and additional regulatory burdens imposed on our business, including tariffs, sanctions, fines or other trade restrictions; • changes to or the implementation of new U.S. sanctions, resulting in bank closures in certain countries, the ultimate freezing of our assets, adverse effects on existing business relationships, and/or restrictions on entering into new business relationships where carrying on business would violate such sanctions; • burdens of complying with a wide variety of laws and regulations; • potential increased exposure to public health issues such as pandemics, and related industry and governmental actions to address these issues; • possible fraud or theft losses and lack of compliance by international representatives in foreign legal jurisdictions where collection and legal enforcement may be difficult or costly; • reduced protection of our intellectual property rights; • unfavorable tax rules or trade barriers; and • failure to successfully manage our exposure to non-U.S. dollar exchange rates.
Our existing competitors have, and our potential competitors are expected to have, various competitive advantages over us, such as: • the ability to trade cryptocurrencies, and offer products and services, that we do not support or offer (due to constraints from regulatory authorities, our banking partners, and other factors) such as tokens that constitute securities or derivative instruments under U.S. or foreign laws; • greater name recognition, longer operating histories, larger user bases, and larger market shares; • larger sales and marketing budgets and organizations; • more established marketing, banking, and compliance relationships; • greater user support resources; • greater resources to make acquisitions; • lower labor, compliance, risk mitigation, and research and development costs; • larger and more mature intellectual property portfolios; • greater number of applicable licenses, registrations or similar authorizations; • established core business models outside of facilitating cryptocurrency transactions, allowing them to operate on lesser margins or at a loss; • operations in certain jurisdictions with lower compliance costs and greater flexibility to explore new product offerings; and 23 Table of Contents • substantially greater financial, technical, and other resources.
Our existing competitors have, and our potential competitors are expected to have, various competitive advantages over us, such as: • the ability to trade cryptocurrencies, and offer products and services, that we do not support or offer (due to constraints from regulatory authorities, our banking partners, and other factors) such as tokens that constitute securities or derivative instruments under U.S. or foreign laws; • greater name recognition, longer operating histories, larger user bases, and larger market shares; • larger sales and marketing budgets and organizations; • more established marketing, banking, and compliance relationships; • greater user support resources; • greater resources to make acquisitions; • lower labor, compliance, risk mitigation, and research and development costs; • larger and more mature intellectual property portfolios; • greater number of applicable licenses, registrations or similar authorizations; • established core business models outside of facilitating cryptocurrency transactions, allowing them to operate on lesser margins or at a loss; • operations in certain jurisdictions with lower compliance costs and greater flexibility to explore new product offerings; and • substantially greater financial, technical, and other resources.
Further, our Amended and Restated Charter and Amended and Restated Bylaws include provisions (i) providing our directors with the exclusive ability (subject to the rights of holders of any series of preferred stock) to fill a vacancy on the board of directors; (ii) authorizing our 54 Table of Contents board of directors to designate the terms of and issue new series of preferred stock without stockholder approval, which could be used, among other things, to institute a rights plan that would have the effect of significantly diluting the stock ownership of a potential hostile acquirer, likely preventing acquisitions that have not been approved by our board of directors; (iii) after we no longer qualify as a “controlled company” under applicable Nasdaq listing rules, limiting stockholders’ ability (a) to call special meetings of stockholders, (b) to require special meetings of stockholders to be called and (c) to take action by written consent; (iv) requiring advance notice of stockholder proposals for business to be conducted at meetings of our stockholders and for nominations of candidates for election to our board of directors; and (v) not permitting cumulative voting rights.
Further, our Amended and Restated Charter and Amended and Restated Bylaws include provisions (i) providing our directors with the exclusive ability (subject to the rights of holders of any series of preferred stock) to fill a vacancy on the board of directors; (ii) authorizing our board of directors to designate the terms of and issue new series of preferred stock without stockholder approval, which could be used, among other things, to institute a rights plan that would have the effect of significantly diluting the stock ownership of a potential hostile acquirer, likely preventing acquisitions that have not been approved by our board of directors; (iii) after we no longer qualify as a “controlled company” under applicable Nasdaq listing rules, limiting stockholders’ ability (a) to call special meetings of stockholders, (b) to require special meetings of stockholders to be called and (c) to take action by written consent; (iv) requiring advance notice of stockholder proposals for business to be conducted at meetings of our stockholders and for nominations of candidates for election to our board of directors; and (v) not permitting cumulative voting rights.
The number of user transactions and our transaction volumes may be partially dependent on the prices of Bitcoin, as well as the associated demand for buying, selling and trading Bitcoin, which can be and historically have been volatile. If such prices decline, the number of user transactions or our transaction volumes could decrease.
Additionally, the number of user transactions and our transaction volumes may be partially dependent on the prices of Bitcoin, as well as the associated demand for buying, selling and trading Bitcoin, which can be and historically have been volatile. If such prices decline, the number of user transactions or our transaction volumes could decrease.
We maintain insurance policies providing general liability, umbrella and excess liability coverage, each of which has an aggregate limit between $2 million to $5 million, as well as coverage relating to cyber-related incidents, having an aggregate policy limit of approximately $2 million.
We maintain insurance policies providing general liability, umbrella and excess liability coverage, each of which has an aggregate limit between $2 million to $9 million, as well as coverage relating to cyber-related incidents, having an aggregate policy limit of approximately $5 million.
The Tax Receivable Agreement provides that, in the case of certain early termination events (including certain changes of control, material breaches, or at our option subject to the approval of a majority of our independent directors), we will be required to make a lump-sum cash payment to BT Assets equal to the present value of all forecasted future payments that would have otherwise been made under the Tax Receivable Agreement, which lump-sum payment would be based on certain assumptions, including that we will have sufficient future taxable income to fully utilize the Tax Attributes over certain specified time periods and that all BT HoldCo Common Units that had not yet been exchanged for Class A common stock, Class M common stock, or cash are deemed exchanged.
The Tax Receivable Agreement provides that, in the case of certain early termination events (including certain changes of control, material breaches, or at our option subject to the approval of a majority of our independent directors), we will be required to make a lump-sum cash payment to BT Assets equal to the present value of all forecasted future payments that would have otherwise been made under the Tax Receivable Agreement, which lump-sum payment would be based on certain assumptions, including that we will 49 Table of Contents have sufficient future taxable income to fully utilize the Tax Attributes over certain specified time periods and that all BT HoldCo Common Units that had not yet been exchanged for Class A common stock, Class M common stock, or cash are deemed exchanged.
For example, our manufacturers may experience temporary or permanent disruptions in their manufacturing operations due to equipment breakdowns, labor strikes or shortages, natural disasters, the occurrence of a contagious disease or illness, component or material shortages, cost increases, acquisitions, insolvency, bankruptcy, business shutdowns, trade restrictions, changes in legal or regulatory requirements, or other similar problems.
For example, our manufacturers may experience temporary or permanent disruptions in their manufacturing operations due to equipment breakdowns, labor strikes or shortages, natural disasters, the occurrence of a contagious disease or illness, component or material shortages, freight/shipping shortages, cost increases, acquisitions, insolvency, bankruptcy, business shutdowns, trade restrictions, changes in legal or regulatory requirements, or other similar problems.
Each share of Series A Preferred Stock (i) ranks senior to our common stock with respect to dividends, distributions, redemptions, and payments upon liquidation or dissolution, (ii) is entitled to participate in any distributions or dividends made to holders of Class A common stock, (iii) does not have voting rights (other than in relation to amendments to the certificate of designation itself or as required by the DGCL), (iv) is initially convertible at any time at the election of the holder into one share of Class A common stock, subject to accrued and unpaid dividends, if any, and (v) be entitled to customary anti-dilution protections.
Each share of Series A Preferred Stock (i) ranks senior to our common stock with respect to dividends, distributions, redemptions, and payments upon liquidation or dissolution, (ii) is entitled to participate in any distributions or dividends made to holders of Class A common stock, (iii) does not have voting rights (other than in relation to amendments to the certificate of designation itself or as 55 Table of Contents required by the DGCL), (iv) is initially convertible at any time at the election of the holder into one share of Class A common stock, subject to accrued and unpaid dividends, if any, and (v) be entitled to customary anti-dilution protections.
Any number of factors can negatively affect user retention, growth, and engagement, including if: • we fail to increase awareness of our brand and successfully compete with the offerings and prices other companies, or if our users otherwise increasingly engage with competing products and services, including those that we are unable to offer due to regulatory reasons; • we fail to introduce new and improved products and services, or if we introduce new products or services that are not favorably received; • we fail to successfully identify and acquire or invest in businesses, products or technologies that we believe could complement or expand our business; • we fail to support new and in-demand cryptocurrencies or if we elect to support cryptocurrencies with negative reputations; • there are changes in sentiment about the quality or usefulness of our products and services or concerns related to privacy, security, or other factors including, without limitation, changes in macro-level user preference for using cash to purchase Bitcoin; • there are adverse changes in our products and services that are mandated by legislation, regulatory authorities, or litigation; • we fail to maintain existing authorizations as well as obtain newly required authorizations, registrations and licenses for our products; 26 Table of Contents • users perceiving Bitcoin and other cryptocurrencies to be a bad investment, or experiencing significant losses in Bitcoin or other cryptocurrencies, may not desire to utilize our products and services; • technical or other problems prevent us from delivering our products and services with the speed, functionality, security and reliability that our users expect, or if we fail to otherwise gain and maintain the trust and confidence of our users; • there are cyber security incidents, employee or service provider misconduct or other unforeseen activities that cause losses to us or our users; • there are modifications to our fee model, including as a result of changes in or the adoption of any laws or regulations imposing restrictions or limitations on the markup at which we sell Bitcoin to users or the separate flat transaction fee that we are able to charge our users, or modifications by competitors to their fee models; • we fail to provide adequate customer service for our users and retail partners; • regulatory and governmental bodies in countries that we target for expansion express negative views towards cryptocurrency-related services and, more broadly, the digital financial system; or • we or other companies in our industry are the subject of adverse media reports or other negative publicity.
Any number of factors can negatively affect user retention, growth, and engagement, including if: • we fail to increase awareness of our brand and successfully compete with the offerings and prices other companies, or if our users otherwise increasingly engage with competing products and services, including those that we are unable to offer due to regulatory reasons; • we fail to introduce new and improved products and services, or if we introduce new products or services that are not favorably received; • we fail to successfully identify and acquire or invest in businesses, products or technologies that we believe could complement or expand our business; • we fail to support new and in-demand cryptocurrencies or if we elect to support cryptocurrencies with negative reputations; • there are changes in sentiment about the quality or usefulness of our products and services or concerns related to privacy, security, or other factors including, without limitation, changes in macro-level user preference for using cash to purchase Bitcoin; • there are adverse changes in our products and services that are mandated by legislation, regulatory authorities, or litigation; • we fail to maintain existing authorizations as well as obtain newly required authorizations, registrations and licenses for our products; • users perceiving Bitcoin and other cryptocurrencies to be a bad investment, or experiencing significant losses in Bitcoin or other cryptocurrencies, may not desire to utilize our products and services; • technical or other problems prevent us from delivering our products and services with the speed, functionality, security and reliability that our users expect, or if we fail to otherwise gain and maintain the trust and confidence of our users; • there are cyber security incidents, employee or service provider misconduct or other unforeseen activities that cause losses to us or our users; • there are modifications to our fee model, including as a result of changes in or the adoption of any laws or regulations imposing restrictions or limitations on the markup at which we sell Bitcoin to users or the separate flat transaction fee that we are able to charge our users, or modifications by competitors to their fee models; • we fail to provide adequate customer service for our users and retail partners; • regulatory and governmental bodies in countries that we target for expansion express negative views towards cryptocurrency-related services and, more broadly, the digital financial system; or • we or other companies in our industry are the subject of adverse media reports or other negative publicity. 27 Table of Contents From time to time, certain of these factors have negatively affected user retention, growth, and engagement to varying degrees.
Our kiosks and certain cryptocurrency and blockchain networks have experienced from time to time, and may experience in the future, service interruptions or degradation because of hardware and software defects or malfunctions, distributed denial-of-service and other cyberattacks, insider threats, break-ins, sabotage, human error, vandalism, earthquakes, hurricanes, floods, fires, and other natural disasters, power losses, disruptions in telecommunications services, fraud, military or political conflicts, terrorist attacks, computer viruses or other malware, or other events.
Our kiosks and certain cryptocurrency and blockchain networks have experienced from time to time, and may experience in the future, service interruptions or degradation because of hardware and software defects or malfunctions, distributed denial-of-service and other cyberattacks, insider threats, break-ins, sabotage, human error, vandalism, earthquakes, hurricanes, floods, fires, and other natural disasters, power losses, disruptions in telecommunications services, fraud, military or political conflicts, terrorist attacks, computer 28 Table of Contents viruses or other malware, or other events.
In addition, we would no longer receive the benefit of certain increases in tax basis received as a result of our acquisition of BT HoldCo Common Units from BT Assets, and we would not be able to recover any payments previously made by us under the Tax Receivable Agreement, even if 49 Table of Contents the corresponding Tax Attributes were subsequently determined to have been unavailable due to BT HoldCo’s status as a publicly traded partnership.
In addition, we would no longer receive the benefit of certain increases in tax basis received as a result of our acquisition of BT HoldCo Common Units from BT Assets, and we would not be able to recover any payments previously made by us under the Tax Receivable Agreement, even if the corresponding Tax Attributes were subsequently determined to have been unavailable due to BT HoldCo’s status as a publicly traded partnership.
The BT HoldCo Amended and Restated Limited Liability Company Agreement requires tax distributions be made by BT HoldCo to the BT HoldCo unitholders (including us), on a pro rata basis, to the extent funds of BT HoldCo are legally available for distribution and such distribution would not be prohibited under any credit facility or any other agreement to which BT HoldCo or any of its subsidiaries is a party, in each case, as determined by us in our reasonable discretion.
The BT HoldCo Amended and Restated Limited Liability Company Agreement requires tax distributions be made by BT HoldCo to the BT HoldCo unitholders (including us), on a pro rata basis, to the extent funds of BT HoldCo are legally available for distribution and such distribution would not be prohibited under any credit facility or any other agreement to which BT HoldCo or any of its subsidiaries is 50 Table of Contents a party, in each case, as determined by us in our reasonable discretion.
Because a significant portion of our kiosks are placed with a small number of retailers, a portion of our future revenues and operating income depends upon the successful continuation of our relationship with our top retail partners and the loss of any of our largest retail 45 Table of Contents partners, a decision by any one of them to reduce the number of our kiosks placed in their locations, or a decision to sell or close their locations could result in a decline in our revenues or otherwise adversely impact our business operations.
Because a significant portion of our kiosks are placed with a small number of retailers, a portion of our future revenues and operating income depends upon the successful continuation of our relationship with our top retail partners and the loss of any of our largest retail partners, a decision by any one of them to reduce the number of our kiosks placed in their locations, or a decision to sell or close their locations could result in a decline in our revenues or otherwise adversely impact our business operations.
Substantially all of our operating costs with respect to regulation and compliance are correlated with our transaction volumes, and mainly driven by payroll to employ a growing number of personnel to support the expansion of our business. We also focus on driving 27 Table of Contents long-term engagement with our users through innovation and developing new industry-leading products and technologies.
Substantially all of our operating costs with respect to regulation and compliance are correlated with our transaction volumes, and mainly driven by payroll to employ a growing number of personnel to support the expansion of our business. We also focus on driving long-term engagement with our users through innovation and developing new industry-leading products and technologies.
While we maintain a program of insurance coverage for various types of liabilities, we may self-insure against certain business risks and expenses where we believe we can adequately self-insure against the anticipated exposure and risk or where insurance is either not available or deemed not cost-effective. We obtain and process a large amount of sensitive user data.
While we maintain a program of insurance coverage for various types of liabilities, we may self-insure against certain business risks and expenses where we believe we can adequately self-insure against the anticipated exposure and risk or where insurance is either not available or deemed not cost-effective. 22 Table of Contents We obtain and process a large amount of sensitive user data.
Similarly, a number of 28 Table of Contents companies and individuals or businesses associated with Bitcoin or other cryptocurrencies may have had and may continue to have their existing banking services discontinued with financial institutions in response to government action, particularly in China, where the regulatory response to cryptocurrencies has been to exclude their use for ordinary consumer transactions within China.
Similarly, a number of companies and individuals or businesses associated with Bitcoin or other cryptocurrencies may have had and may continue to have their existing banking services discontinued with financial institutions in response to government action, particularly in China, where the regulatory response to cryptocurrencies has been to exclude their use for ordinary consumer transactions within China.
As such, we do not have any independent means of generating revenue or cash flow, and our ability to pay taxes and operating expenses or declare and 46 Table of Contents pay dividends in the future, if any, is dependent upon the financial results and cash flows of BT HoldCo and its subsidiaries (including BT OpCo), and distributions we receive from BT HoldCo.
As such, we do not have any independent means of generating revenue or cash flow, and our ability to pay taxes and operating expenses or declare and pay dividends in the future, if any, is dependent upon the financial results and cash flows of BT HoldCo and its subsidiaries (including BT OpCo), and distributions we receive from BT HoldCo.
The products and services provided by our competitors are differentiated by features and functionalities, including brand recognition, user service, reliability, distribution network and options, price, speed, and convenience. Distribution channels such as online, mobile solutions, account deposit and kiosk-based services continue to evolve and impact the competitive environment for cryptocurrency transactions.
The products and services provided by our competitors are differentiated by features and functionalities, including brand recognition, user service, reliability, distribution network and options, information technology infrastructure, price, speed, and convenience. Distribution channels such as online, mobile solutions, account deposit and kiosk-based services continue to evolve and impact the competitive environment for cryptocurrency transactions.
Moreover, the complexity and evolving nature of our business and the significant uncertainty surrounding the regulation of cryptocurrencies and the 39 Table of Contents digital financial system requires us to exercise our judgment as to whether certain laws, rules, and regulations apply to us, and it is possible that governmental bodies and regulators may disagree with our conclusions.
Moreover, the complexity and evolving nature of our business and the significant uncertainty surrounding the regulation of cryptocurrencies and the digital financial system requires us to exercise our judgment as to whether certain laws, rules, and regulations apply to us, and it is possible that governmental bodies and regulators may disagree with our conclusions.
Competitors, including providers of traditional financial services, have spent years cultivating professional relationships with 41 Table of Contents relevant policymakers on behalf of their industry so that those policymakers may understand that industry, the current legal landscape affecting that industry, and the specific policy proposals that could be implemented to responsibly develop that industry.
Competitors, including providers of traditional financial services, have spent years cultivating professional relationships with relevant policymakers on behalf of their industry so that those policymakers may understand that industry, the current legal landscape affecting that industry, and the specific policy proposals that could be implemented to responsibly develop that industry.
The lobbyists working for these competitors have similarly spent years developing and working to implement strategies to advance these industries. Members of the digital financial system have started to engage policymakers directly and with the help of external advisors and lobbyists, but this work is still in a relatively nascent stage.
The lobbyists working for these competitors have similarly spent years developing and working to implement strategies to advance these industries. 41 Table of Contents Members of the digital financial system have started to engage policymakers directly and with the help of external advisors and lobbyists, but this work is still in a relatively nascent stage.
If any Ethereum or other cryptocurrency is sent to a Bitcoin wallet address, or if any of the foregoing errors occur, all of the user’s sent cryptocurrency will be permanently and irretrievably lost with no means of recovery. We have encountered and expect to encounter similar incidents with our users.
If any Ethereum or other cryptocurrency is sent to a Bitcoin wallet address, or if any of the foregoing errors occur, all of the user’s sent cryptocurrency will be permanently and irretrievably lost with no means of recovery. We have encountered and 24 Table of Contents expect to encounter similar incidents with our users.
As a result, there might not 48 Table of Contents be future cash payments against which such excess can be applied and we could be required to make payments under the Tax Receivable Agreement in excess of our actual savings in respect of the Tax Attributes, which could materially impair our financial condition.
As a result, there might not be future cash payments against which such excess can be applied and we could be required to make payments under the Tax Receivable Agreement in excess of our actual savings in respect of the Tax Attributes, which could materially impair our financial condition.
Changes in law have also increased the penalties for money transmitters for 25 Table of Contents certain illegal activities, and government authorities may consider increased or additional penalties from time to time. Government authorities may seek to bring legal action against money transmitters, including us, for involvement in the sale of infringing or allegedly infringing items.
Changes in law have also increased the penalties for money transmitters for certain illegal activities, and government authorities may consider increased or additional penalties from time to time. Government authorities may seek to bring legal action against money transmitters, including us, for involvement in the sale of infringing or allegedly infringing items.
As of December 31, 2023, approximately $1.6 million of our $29.8 million in cash, cash equivalents and interest-bearing deposits was not subject to insurance protection against loss or was in excess of the deposit insurance limits at banks; • further, to facilitate the purchasing process for Bitcoin on the cryptocurrency exchange operated by Gemini Trust Company, LLC, we maintain a minimum USD balance needed for anticipated Bitcoin purchases for any given day, all or a portion of which may not be subject to insurance protection against loss; • our existing debt financing agreements are sources of funding for our corporate transactions and liquidity needs.
As of December 31, 2024, approximately $12.8 million of our $29.5 million in cash, cash equivalents and interest-bearing deposits was not subject to insurance protection against loss or was in excess of the deposit insurance limits at banks; • further, to facilitate the purchasing process for Bitcoin on the cryptocurrency exchange operated by Gemini Trust Company, LLC, we maintain a minimum USD balance needed for anticipated Bitcoin purchases for any given day, all or a portion of which may not be subject to insurance protection against loss; • our existing debt financing agreements are sources of funding for our corporate transactions and liquidity needs.
There may also be adverse publicity associated with lawsuits and investigations that could decrease third-party and consumer use and acceptance of our products and services. Additionally, our business may be the subject of class action lawsuits including securities litigation, regulatory actions and investigations and other general litigation.
There may also be adverse publicity associated with lawsuits and 32 Table of Contents investigations that could decrease third-party and consumer use and acceptance of our products and services. Additionally, our business may be the subject of class action lawsuits including securities litigation, regulatory actions and investigations and other general litigation.
As such, any loss of private keys due to a hack, employee or service provider misconduct or error, or other compromise by third parties could hurt our brand and reputation, result in significant losses, and adversely impact our business. The balance in Bitcoin Depot’s hot wallets as of December 31, 2023 and 2022, was approximately $0.7 million.
As such, any loss of private keys due to a hack, employee or service provider misconduct or error, or other compromise by third parties could hurt our brand and reputation, result in significant losses, and adversely impact our business. The balance in Bitcoin Depot’s hot wallets as of December 31, 2024 and 2023, was approximately $0.9 million.
Because we rely on third parties to provide these services and systems and to facilitate certain of our business activities, 44 Table of Contents we face increased operational risks. We do not directly manage the operation of any of these third parties, including their data center facilities that we use.
Because we rely on third parties to provide these services and systems and to facilitate certain of our business activities, we face increased operational risks. We do not directly manage the operation of any of these third parties, including their data center facilities that we use.
The agreements governing our Term Loan include restrictive covenants that, among other things, restrict our ability to: • incur additional debt; • pay dividends and make distributions; • make certain investments; • repurchase equity interests and prepay certain indebtedness; • create liens; • enter into transactions with affiliates; • modify the nature of our business; • transfer and sell assets, including material intellectual property; • enter into agreements prohibiting our ability to grant liens in favor of our senior secured creditors; • amend or modify the terms of any junior financing arrangements; • amend our organizational documents; and • merge, dissolve, liquidate or consolidate.
The agreements governing our Term Loan include restrictive covenants that, among other things, restrict our ability to: • incur additional debt; • pay dividends and make distributions; • make certain investments; • repurchase equity interests and prepay certain indebtedness; • create liens; • enter into transactions with affiliates; • modify the nature of our business; • transfer and sell assets, including material intellectual property; • enter into agreements prohibiting our ability to grant liens in favor of our senior secured creditors; • amend or modify the terms of any junior financing arrangements; • amend our organizational documents; and • merge, dissolve, liquidate or consolidate. 51 Table of Contents In addition, our Term Loan includes other restrictions.
As restrictions on resale end and the registration statements are available for use, the market price of the Class A common stock could decline if the holders of currently restricted shares sell them or are perceived by the market as intending to sell them.
As restrictions on resale end and the registration 54 Table of Contents statements are available for use, the market price of the Class A common stock could decline if the holders of currently restricted shares sell them or are perceived by the market as intending to sell them.
As such, any such declines, or any declines in the price of Bitcoin or market liquidity for cryptocurrency generally, may result in lower total revenue to us.
As such, any declines in the volume of transactions, or any declines in the price of Bitcoin or market liquidity for cryptocurrency generally, may result in lower total revenue to us.
For example, in light of the regulatory uncertainty around what digital assets qualify as “securities” under U.S. federal securities laws, we elected to only transact in Bitcoin and stop offering transactions of Litecoin and Ethereum.
For example, in light of the regulatory 39 Table of Contents uncertainty around what digital assets qualify as “securities” under U.S. federal securities laws, we elected to only transact in Bitcoin and stop offering transactions of Litecoin and Ethereum.
The criteria by which our corporate responsibility practices are assessed may change due to the constant evolution of the sustainability landscape, which could result in greater expectations of us and cause us to undertake costly initiatives to satisfy such new criteria.
The criteria by which our corporate responsibility practices are assessed may change due to the constant evolution of the sustainability landscape, 44 Table of Contents which could result in greater expectations of us and cause us to undertake costly initiatives to satisfy such new criteria.
Our long-term success depends on our ability to develop new and innovative products and services to address and keep pace with the rapidly evolving market for payments and financial services, and, if we are not able to implement successful enhancements and new features for our products and services, our business, operating results and financial condition could be materially and adversely affected.
Our long-term success depends on our ability to develop new and innovative products and services to address and keep pace with the rapidly evolving market for payments and financial services, and, if we are not able to implement successful enhancements and 21 Table of Contents new features for our products and services, our business, operating results and financial condition could be materially and adversely affected.
The interests of BT Assets and Brandon Mintz with respect to matters potentially or actually involving 47 Table of Contents or affecting us, such as future acquisitions, financings, and other corporate opportunities and attempts to acquire us, may conflict with the interests of our other stockholders.
The interests of BT Assets and Brandon Mintz with respect to matters potentially or actually involving or affecting us, such as future acquisitions, financings, and other corporate opportunities and attempts to acquire us, may conflict with the interests of our other stockholders.
Risks Related to Government Regulation and Privacy Matters • Any failure to obtain or maintain necessary money transmission registrations and licenses could adversely affect our operations. • We are subject to an extensive and highly evolving regulatory landscape and any adverse changes to, or our failure to comply with, any laws, rules, and regulations could adversely affect our brand, reputation, business, operating results, and financial condition. • It may become illegal to acquire, own, hold, sell, or use Bitcoin or other cryptocurrencies, participate in blockchains or utilize cryptocurrencies in other countries, which would adversely affect us. • The theft, loss, or destruction of private keys required to access any Bitcoin may be irreversible.
Risks Related to Government Regulation and Privacy Matters • Any failure to obtain or maintain necessary money transmission registrations and licenses could adversely affect our operations. 19 Table of Contents • We are subject to an extensive and highly evolving regulatory landscape and any adverse changes to, or our failure to comply with, any laws, rules, and regulations could adversely affect our business, and financial condition. • It may become illegal to acquire, own, hold, sell, or use Bitcoin or other cryptocurrencies, participate in blockchains or utilize cryptocurrencies in other countries, which would adversely affect us. • The theft, loss, or destruction of private keys required to access any Bitcoin may be irreversible.
In addition, if we fail to charge our users comparable and appropriate transaction and other fees relative to our competitors, users may not use our services, which could adversely affect our business, financial condition and results of operations.
In addition, if we fail to charge 23 Table of Contents our users comparable and appropriate transaction and other fees relative to our competitors, users may not use our services, which could adversely affect our business, financial condition and results of operations.
However, because of the nature of the relative voting power of classes of our common stock, the 53 Table of Contents holders of Class V common stock and Class M common stock, notwithstanding conversions of shares thereof conversions, may continue to control a majority of the combined voting power of our outstanding capital stock.
However, because of the nature of the relative voting power of classes of our common stock, the holders of Class V common stock and Class M common stock, notwithstanding conversions of shares thereof conversions, may continue to control a majority of the combined voting power of our outstanding capital stock.
We have been, and in the future may be, subject to allegations and complaints that individuals or entities have used our products and services for fraud-induced money transfers, as well as certain money laundering activities, which may result in fines, penalties, 32 Table of Contents judgments, settlements and litigation expenses.
We have been, and in the future may be, subject to allegations and complaints that individuals or entities have used our products and services for fraud-induced money transfers, as well as certain money laundering activities, which may result in fines, penalties, judgments, settlements and litigation expenses.
Moreover, the Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures, and internal control, over financial reporting. In order to maintain and, if required, improve our disclosure controls and procedures, and internal control, over financial reporting to meet this standard, significant resources and management oversight may be required.
Moreover, the Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures, and internal control, over financial reporting. In order to maintain and, if required, improve our disclosure controls and procedures, and internal control, 56 Table of Contents over financial reporting to meet this standard, significant resources and management oversight may be required.
These new obligations and constituents require significant attention from our senior management and could divert their attention away from the day-to-day management of our business, which could adversely affect our business, operating results, and financial condition.
These new obligations and constituents 46 Table of Contents require significant attention from our senior management and could divert their attention away from the day-to-day management of our business, which could adversely affect our business, operating results, and financial condition.
The average balance in Bitcoin Depot’s hot wallets during the year ended December 31, 2023 and 2022, was $0.6 million and $0.3 million, respectively. The digital financial system is novel.
The average balance in Bitcoin Depot’s hot wallets during the year ended December 31, 2024 and 2023, was $0.6 million and $0.6 million, respectively. The digital financial system is novel.
On June 30, 2023, in connection with the closing of the Merger, we issued 4,300,000 shares of Series A Preferred Stock in a private placement to entities affiliated with Shaolin in connection with the previously announced PIPE Financing. As of December 31, 2023, 825,000 shares of Series A Preferred Stock have been converted into Class A common stock.
On June 30, 2023, in connection with the closing of the Merger, we issued 4,300,000 shares of Series A Preferred Stock in a private placement to entities affiliated with Shaolin in connection with the previously announced PIPE Financing. As of December 31, 2024, 2,566,116 shares of Series A Preferred Stock have been converted into Class A common stock.
The price and trading volume of any cryptocurrency, including Bitcoin, is subject to significant uncertainty and volatility, depending on a number of factors, including: • market conditions of, and overall sentiment towards, cryptocurrency; • changes in liquidity, market-making volume, and trading activities; • trading activities in cryptocurrency, including on other cryptocurrency platforms worldwide, many of which may be unregulated, and may include manipulative activities; • investment and trading activities of highly active retail and institutional users, speculators, miners, and investors; • the speed and rate at which cryptocurrency is able to gain adoption as a medium of exchange, utility, store of value, consumptive asset, security instrument, or other financial assets worldwide, if at all; • changes in user and investor confidence in cryptocurrency and cryptocurrency platforms; • negative publicity and events relating to the digital financial system; • unpredictable social media coverage or “trending” of, or other rumors and market speculation regarding cryptocurrency; • the ability for cryptocurrency to meet user and investor demands; • the functionality and utility of cryptocurrency and its associated ecosystems and networks, including cryptocurrency designed for use in various applications; • retail user preferences and perceived value of cryptocurrency and cryptocurrency markets; • increased competition from other payment services or cryptocurrency for which we do not sell that exhibit better speed, security, scalability, or other characteristics; • regulatory or legislative changes and updates affecting the digital financial system; • the characterization of cryptocurrency under the laws of various jurisdictions around the world; 20 Table of Contents • the adoption of unfavorable taxation policies on cryptocurrency investments by governmental entities; • the maintenance, troubleshooting, and development of the blockchain networks underlying cryptocurrency, including by miners, validators, and the development community; • the ability for cryptocurrency networks to attract and retain miners or validators to secure and confirm transactions accurately and efficiently; • legal and regulatory changes affecting the operations of miners and validators of blockchain networks, including limitations and prohibitions on mining activities, or new legislative or regulatory requirements as a result of growing environmental concerns around the use of energy in mining cryptocurrency, including Bitcoin, and other proof-of-work mining activities; • ongoing technological viability and security of cryptocurrency and its associated smart contracts, applications and networks, including vulnerabilities against hacks and scalability; • fees and speed associated with processing cryptocurrency transactions, including on the underlying blockchain networks and on cryptocurrency platforms; • financial strength of market participants; • the availability and cost of funding and capital; • interruptions in service from or failures of major cryptocurrency platforms; • availability of an active derivatives market for various cryptocurrencies; • availability of banking and payment services to support cryptocurrency-related projects; • level of interest rates and inflation; • monetary policies of governments, trade restrictions, and fiat currency devaluations; and • national, North American and international economic and political conditions.
The price and trading volume of any cryptocurrency, including Bitcoin, is subject to significant uncertainty and volatility, depending on a number of factors, including: • market conditions of, and overall sentiment towards, cryptocurrency; • changes in liquidity, market-making volume, and trading activities; • trading activities in cryptocurrency, including on other cryptocurrency platforms worldwide, many of which may be unregulated, and may include manipulative activities; • investment and trading activities of highly active retail and institutional users, speculators, miners, and investors; • the speed and rate at which cryptocurrency is able to gain adoption as a medium of exchange, utility, store of value, consumptive asset, security instrument, or other financial assets worldwide, if at all; 20 Table of Contents • changes in user and investor confidence in cryptocurrency and cryptocurrency platforms; • negative publicity and events relating to the digital financial system; • unpredictable social media coverage or “trending” of, or other rumors and market speculation regarding cryptocurrency; • the ability for cryptocurrency to meet user and investor demands; • the functionality and utility of cryptocurrency and its associated ecosystems and networks, including cryptocurrency designed for use in various applications; • retail user preferences and perceived value of cryptocurrency and cryptocurrency markets; • increased competition from other payment services or cryptocurrency for which we do not sell that exhibit better speed, security, scalability, or other characteristics; • federal and state regulatory or legislative changes and updates affecting the digital financial system; • the characterization of cryptocurrency under the laws of various jurisdictions around the world; • the adoption of unfavorable taxation policies on cryptocurrency investments by governmental entities; • the maintenance, troubleshooting, and development of the blockchain networks underlying cryptocurrency, including by miners, validators, and the development community; • the ability for cryptocurrency networks to attract and retain miners or validators to secure and confirm transactions accurately and efficiently; • legal and regulatory changes affecting the operations of miners and validators of blockchain networks, including limitations and prohibitions on mining activities, or new legislative or regulatory requirements as a result of growing environmental concerns around the use of energy in mining cryptocurrency, including Bitcoin, and other proof-of-work mining activities; • ongoing technological viability and security of cryptocurrency and its associated smart contracts, applications and networks, including vulnerabilities against hacks and scalability, particularly given the evolution and increased adoption of artificial intelligence (“AI”) technologies, which amplifies these concerns; • fees and speed associated with processing cryptocurrency transactions, including on the underlying blockchain networks and on cryptocurrency platforms; • financial strength of market participants; • the availability and cost of funding and capital; • interruptions in service from or failures of major cryptocurrency platforms; • availability of an active derivatives market for various cryptocurrencies; • availability of banking and payment services to support cryptocurrency-related projects; • level of interest rates and inflation; • monetary policies of governments, trade restrictions, and fiat currency devaluations; and • national, North American and international economic and political conditions and the proliferation of global and regional conflicts and political instability, including the war in Ukraine, continued tensions between China and the United States and sustained conflicts in the Middle East.
As of December 31, 2023, our total indebtedness, excluding unamortized debt discounts and debt issuance costs of $3.2 million, was $24.3 million, including the accrual for the current note payable exit fee. In connection with the consummation of the Merger, we amended and restated our existing credit agreement, which provided BT OpCo with a $20.8 million term loan.
As of December 31, 2024, our total indebtedness, excluding unamortized debt discounts and debt issuance costs of $0.8 million, was $56.2 million, including the accrual for the current note payable exit fee. In connection with the consummation of the Merger, we amended and restated our existing credit agreement, which provided BT OpCo with a $20.8 million term loan.
We have applied for a BitLicense from the New York State Department of Financial Services and have money transmitter license applications pending in Arizona, Delaware, Illinois, Kentucky, Maine, Maryland, Massachusetts, Minnesota, Missouri, North Carolina, North Dakota, Oklahoma, Pennsylvania and Tennessee.
We have applied for a BitLicense from the New York State Department of Financial Services and we hold a Virtual Currency Business License from Louisiana and have money transmitter license applications pending in Arizona, Delaware, Illinois, Kentucky, Maine, Maryland, Massachusetts, Minnesota, Missouri, North Carolina, North Dakota, Oklahoma, Pennsylvania and Tennessee.
Such factors could have a material adverse effect on our ability to continue as a going concern or to pursue our strategy at all, which could ultimately have a material adverse effect on our business, prospects, or operations and harm investors.
Such factors could have a 29 Table of Contents material adverse effect on our ability to continue as a going concern or to pursue our strategy at all, which could ultimately have a material adverse effect on our business, prospects, or operations and harm investors.
If our credit ratings are downgraded or other negative action is taken, our ability to obtain additional financing in the future on favorable terms or at all could be adversely affected.
If our credit ratings are downgraded or other negative action is taken, our 57 Table of Contents ability to obtain additional financing in the future on favorable terms or at all could be adversely affected.
Additionally, privacy and data protection laws are evolving, and these laws may be interpreted and applied in a manner that is inconsistent with our data handling safeguards and practices that could result in fines, lawsuits, and other penalties, and significant changes to our business practices and products and services.
Additionally, privacy and data protection laws are evolving, and these laws may be interpreted and applied in a manner that is inconsistent with our data handling safeguards and practices that could result in fines, lawsuits, and other penalties, and significant changes to our business practices and products and services. Violation of privacy laws in the U.S.
Additionally, certain of our key business metrics are measured at a point in time and as our products and internal processes for calculating these metrics evolve over time, a previously reported number could fluctuate. We generally will not update previously disclosed key business metrics for any such inaccuracies or adjustments that are immaterial.
Additionally, certain of our key business metrics are measured at a point in time and as our products and internal processes for calculating these metrics evolve over time, a previously reported number could fluctuate. We generally will not update previously disclosed key business metrics for any such inaccuracies or adjustments that are immaterial. Item 1B. Unresolved Staff Comments None.
While our operations are currently limited to the U.S. and Canada, such restrictions may adversely affect our growth potential or us if the restrictions limit the large-scale use of cryptocurrency or if the use of cryptocurrency becomes 40 Table of Contents confined to certain regions globally.
While our operations are currently limited to the U.S., Puerto Rico and Canada, such restrictions may adversely affect our growth potential or us if the restrictions limit the large-scale use of cryptocurrency or if the use of cryptocurrency becomes confined to certain regions globally.
Our inability to obtain adequate financing or financing on terms 59 Table of Contents satisfactory to us, when we require it, could significantly limit our ability to continue supporting our business growth and responding to business challenges.
Our inability to obtain adequate financing or financing on terms satisfactory to us, when we require it, could significantly limit our ability to continue supporting our business growth and responding to business challenges.
In addition, BT Assets’ ownership of the BT HoldCo Preferred Units and the right to receive distributions pursuant thereto could influence decisions regarding the timing or amount of distributions by BT HoldCo, and BT Assets’ interests in connection with such matters may differ from the interests of our other stockholders. These decisions could adversely affect our liquidity or financial condition.
In addition, BT Assets’ ownership of the BT HoldCo Preferred Units and the right to receive distributions pursuant thereto could influence decisions regarding the timing or amount of distributions by BT HoldCo, and BT Assets’ interests in connection with such matters may differ from the interests of our other stockholders.
Risks Related to Government Regulation and Privacy Matters 38 Table of Contents Any failure to obtain or maintain necessary money transmission registrations and licenses could adversely affect our operations.
Risks Related to Government Regulation and Privacy Matters Any failure to obtain or maintain necessary money transmission registrations and licenses could adversely affect our operations.
Our rapid growth also makes it difficult to evaluate our future prospects and may increase the risk that we will not be successful. Our revenue was approximately $689.0 million in 2023 and $646.8 million in 2022. We have recently experienced significant growth in our transaction volume from the years ended December 31, 2022 to December 31, 2023.
Our rapid growth also makes it difficult to evaluate our future prospects and may increase the risk that we will not be successful. Our revenue was approximately $573.7 million in 2024 and $689.0 million in 2023. We have recently experienced growth in our transaction volume from the years ended December 31, 2023 to December 31, 2024.
If any third parties do not adequately or appropriately provide their services or systems or perform their responsibilities to us or our users on our behalf, such as if third-party service providers close their data center facilities without adequate notice, are unable to restore operations and data, fail to perform as expected, or experience other unanticipated problems, we may be unable to procure alternatives in a timely and efficient manner and on acceptable terms, or at all, and we may be subject to business disruptions, losses or costs to remediate any of the deficiencies, user dissatisfaction, reputational damage, legal or regulatory proceedings, or other adverse consequences which could harm our business.
If any third parties do not adequately or appropriately provide their services or systems or perform their responsibilities to us or our users on our behalf, such as if third-party service providers close their data center facilities without adequate notice, are unable to restore operations and data, fail to perform as expected, or experience other unanticipated problems, we may be unable to procure alternatives in a timely and efficient manner and on acceptable terms, or at all, and we may be subject to business disruptions, losses or costs to remediate any of the deficiencies, user dissatisfaction, reputational damage, legal or regulatory proceedings, or other adverse consequences which could harm our business. 45 Table of Contents Many of our kiosks and key components to these kiosks are procured from a single or limited number of suppliers.
Since 2016, there has been an increase in regulatory reviews and enforcement actions taken by the U.S. and other regulators related to antibribery laws, along with increased scrutiny on payments to and relationships with, foreign entities and individuals.
Since 2016 and prior to the change in federal administration, there had been an increase in regulatory reviews and enforcement actions taken by the U.S. and other regulators related to antibribery laws, along with increased scrutiny on payments to and relationships with, foreign entities and individuals.
The exercise price for each Warrant is $11.50 per share, subject to adjustment, which is greater than the market price of our Class A common stock, which was $1.90 per share based on the closing price on March 28, 2024.
The exercise price for each Warrant is $11.50 per share, subject to adjustment, which is greater than the market price of our Class A common stock, which was $1.38 per share based on the closing price on March 20, 2025.
For the year ended December 31, 2023 and 2022, we derived approximately 27% and 32.0%, respectively, of our total revenue from kiosks placed at the locations of our largest retail partner, Circle K, under individual corporate and franchisee lease agreements.
For the years ended December 31, 2024 and 2023, we derived approximately 23% and 27%, respectively, of our total revenue from kiosks placed at the locations of our largest retail partner, Circle K, under individual corporate and franchisee lease agreements.
To the extent natural disasters or other catastrophic events concurrently impact data centers we rely on in connection with processing transactions, users will experience significant delays in withdrawing funds, or in the extreme we may suffer loss of user funds. Climate change could negatively impact our business long-term.
To the extent natural disasters or other catastrophic events concurrently impact data centers we rely on in connection with processing transactions, users will experience significant delays in withdrawing funds, or in the extreme we may suffer loss of user funds.
In addition, our Term Loan includes other restrictions. Our failure to comply with the terms and covenants of our indebtedness could lead to a default under the terms of the governing documents, which would entitle the lenders to accelerate the indebtedness and declare all amounts owed due and payable.
Our failure to comply with the terms and covenants of our indebtedness could lead to a default under the terms of the governing documents, which would entitle the lenders to accelerate the indebtedness and declare all amounts owed due and payable.
For example, from January 1, 2020 through March 2024, the trading price of Bitcoin appreciated significantly, from a low of approximately $3,800 per Bitcoin in March 2020, to a high of approximately $73,750 per Bitcoin in March 2024.
For example, from January 1, 2020 through March 2025, the trading price of Bitcoin appreciated significantly, from a low of approximately $3,800 per Bitcoin in March 2020, to a high of approximately $109,588 per Bitcoin in January 2025.
There can be no assurance that the Warrants will be “in the money” prior to their expiration and, as such, the Warrants may expire worthless. 55 Table of Contents We also have the ability to redeem outstanding Public Warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per Public Warrant, provided that the last reported sale price of Class A common stock for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which we send the notice of redemption to the Public Warrant holders equals or exceeds $18.00 per share and provided certain other conditions are met.
We also have the ability to redeem outstanding Public Warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per Public Warrant, provided that the last reported sale price of Class A common stock for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which we send the notice of redemption to the Public Warrant holders equals or exceeds $18.00 per share and provided certain other conditions are met.
Our products and services may be negatively characterized by consumer advocacy groups, the media or certain federal, state and local government officials, and if those negative characterizations become increasingly accepted by current or potential new users and/or our retail partners, or result in restrictions or limitations on the fees we charge to users, our reputation could be significantly impacted, which when coupled with required modifications to our fee model could result in decreased demand for our products and services and a corresponding decrease in our transaction volume, all of which could materially and adversely impact our business.
Our products and services may be negatively characterized by consumer advocacy groups, the media or certain federal, state and local government officials, and if those negative characterizations result in restrictions on the fees we charge to users or become increasingly accepted by current or potential new users and/or our retail partners, our reputation could be significantly impacted, , all of which could materially and adversely impact our business.
Any decrease in user retention, growth, or engagement could render our products and services less attractive to users, which may have an adverse impact on our revenue, business, operating results, and financial condition.
If we are unable to maintain or increase our user base and user engagement, our revenue and financial results may be adversely affected. Any decrease in user retention, growth, or engagement could render our products and services less attractive to users, which may have an adverse impact on our revenue, business, operating results, and financial condition.
In the U.S., we are registered as a money services business with the Financial Crimes Enforcement Network of the U.S. Department of the Treasury (“FinCEN”) and are currently also licensed to operate as a money transmitter in Alabama, Alaska, Arkansas, Connecticut, Florida, Georgia, Iowa, Louisiana, Nevada, New Mexico, Ohio, Rhode Island, Vermont, Washington, Puerto Rico, and the District of Columbia.
Department of the Treasury 38 Table of Contents (“FinCEN”) and are currently also licensed to operate as a money transmitter in Alabama, Alaska, Arkansas, Connecticut, Florida, Georgia, Iowa, Louisiana, Nevada, New Mexico, Ohio, Rhode Island, Vermont, Washington, Puerto Rico, and the District of Columbia.
Many of our kiosks and key components to these kiosks are procured from a single or limited number of suppliers. Thus, we are at risk of shortage, price increases, tariffs, changes, delay, or discontinuation of these kiosks or components, which could disrupt and materially and adversely affect our business.
Thus, we are at risk of shortage, price increases, tariffs, changes, delay, or discontinuation of these kiosks or components, which could disrupt and materially and adversely affect our business.
We are required to make payments to BT Assets under the Tax Receivable Agreement for certain Tax Attributes, and no such payments will be made to any party other than BT Assets. The amounts of such payments could be significant.
These decisions could adversely affect our liquidity or financial condition. 48 Table of Contents We are required to make payments to BT Assets under the Tax Receivable Agreement for certain Tax Attributes, and no such payments will be made to any party other than BT Assets. The amounts of such payments could be significant.
Any material failure by us to maintain the necessary controls, policies, procedures or to manage the crypto assets we hold for our own operating purposes could also adversely impact our business, operating results, and financial condition. Our security technology is designed to prevent, detect, and mitigate inappropriate access to our systems, by internal or external threats.
Any material failure by us to maintain the necessary controls, policies, procedures or to manage the crypto assets we hold for our own operating purposes could also adversely impact our business, operating results, and financial condition.
We often rely not only on our own initiatives and innovations, but also on third parties, including some of our competitors, for the development of and access to new technologies and development of a robust market for these new products and technologies.
We often rely not only on our own initiatives and innovations, but also on third parties, including some of our competitors, for the development of and access to new technologies and development of a robust market for these new products and technologies. Failure to accurately predict or to respond effectively to developments in our industry may significantly impair our business.
Section 27 of the Exchange Act creates exclusive federal jurisdiction over all claims brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder. The exclusive forum provision applies to suits brought to enforce any duty or liability created by the Exchange Act to the fullest extent permitted by law.
Section 27 of the Exchange Act creates exclusive federal jurisdiction over all claims brought to enforce any duty or liability created by the Exchange 53 Table of Contents Act or the rules and regulations thereunder.
Any such disruptions may also magnify the impact of other risks described in this Annual Report on Form 10-K. Risks Related to Third Parties We currently rely on third-party service providers and their systems for certain aspects of our operations, and any interruptions in services provided by these third parties may impair our ability to support our users.
Risks Related to Third Parties We currently rely on third-party service providers and their systems for certain aspects of our operations, and any interruptions in services provided by these third parties may impair our ability to support our users.
If we are unable to effectively react to future proposed legislation and regulation of cryptocurrencies or cryptocurrency businesses, our business, operating results, and financial condition could be adversely affected. 19 Table of Contents • Our obligations to comply with the laws, rules, regulations, and policies of a variety of jurisdictions may increase and we may be subject to inquiries, investigations, and enforcement actions by U.S. and non-U.S. regulators and governmental authorities, including those related to sanctions, export control, and anti-money laundering. • Complex and evolving U.S. and international laws, rules and regulation regarding privacy and data protection could result in claims, changes to our business practices, penalties, increased cost of operations, or otherwise harm our business. • We are subject to compliance with U.S. anti-money laundering laws, the Foreign Corrupt Practices Act and numerous laws and regulations.
If we are unable to effectively react to future proposed legislation and regulation of cryptocurrencies or cryptocurrency businesses, our business, and financial condition could be adversely affected. • Our obligations to comply with the laws, rules, regulations, and policies of a variety of jurisdictions may increase and we may be subject to inquiries, investigations, and enforcement actions by U.S. and non-U.S. regulators and governmental authorities, including those related to sanctions, export control, and anti-money laundering. • Complex and evolving U.S. and international laws, rules and regulation regarding privacy and data protection could result in claims, changes to our business practices, penalties, increased cost of operations, or otherwise harm our business. • We are subject to compliance with U.S. anti-money laundering laws, the Foreign Corrupt Practices Act and numerous laws and regulations. • Future developments in tax laws or regulations regarding the treatment and reporting of cryptocurrencies for U.S. and foreign tax purposes could adversely impact our tax expense and liabilities, reporting obligations, liquidity, and business. • Changing environmental and safety regulations, including those regarding climate change, coupled with investors’ expectations of our performance relating to environmental, social, and governance factors may impose additional costs and expose us to new risks.
If we encounter material weaknesses or deficiencies in our internal control over financial reporting, we may not detect errors on a timely basis and our consolidated financial statements may be materially misstated.
If we encounter material weaknesses or deficiencies in our internal control over financial reporting, we may not detect errors on a timely basis and our consolidated financial statements may be materially misstated. Effective internal control is necessary for us to produce reliable financial reports and is important to prevent fraud.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeSenior management, including our Bitcoin Depot’s Chief Technology Officer, Chief Information Security Officer, Cybersecurity Operations Director, Chief Financial Officer and General Counsel are responsible for implementing these security measures, as well as being involved in all aspects of cybersecurity incident response and data breach management processes. Bitcoin Depot’s incident management plan provides a roadmap for responding to and categorizing incidents.
Biggest changeSenior management, including our Bitcoin Depot’s Chief Technology Officer, Chief Information Security Officer, Cybersecurity Operations Director, Chief Financial Officer and General Counsel are responsible for implementing these security measures, as well 58 Table of Contents as being involved in all aspects of cybersecurity incident response and data breach management processes.
Prior to entering into the private sector, he served as a police officer where he was a detective, specializing in computer crimes and forensics. Our Chief Financial Officer has over 30 years of experience in financial statement reporting and auditing.
Prior to entering into the private sector, he served as a police officer where he was a detective, specializing in computer crimes and forensics. Our Chief Financial Officer has over 10 years of experience in financial statement reporting and auditing.
Our General Counsel has significant experience advising on cybersecurity matters and data protection matters and building out cybersecurity and data privacy compliance program across business lines in the financial services industry.
Our General Counsel has significant experience advising on cybersecurity matters and data protection matters and building out cybersecurity and data privacy compliance program across retail-facing business lines in the financial services industry.
To protect 60 Table of Contents against, detect, and respond to cybersecurity incidents, we, among other things, leverage intrusion prevention and detection systems, perform penetration testing, conduct employee training, monitor emerging laws and regulations related to data protection and information security, and implement appropriate changes to comply with the identified emerging laws and regulations.
To protect against, detect, and respond to cybersecurity incidents, we, among other things, leverage intrusion prevention and detection systems, perform penetration testing, conduct employee training, monitor emerging laws and regulations related to data protection and information security, and implement appropriate changes to comply with the identified emerging laws and regulations.
Bitcoin Depot’s IT and cybersecurity teams collaborate with other company stakeholders to develop strategies for mitigating and responding to identified cybersecurity events. Our cybersecurity threat and risk management processes also involve assessing third-party risks.
Bitcoin Depot’s incident management plan provides a roadmap for responding to and categorizing incidents. Bitcoin Depot’s IT and cybersecurity teams collaborate with other company stakeholders to develop strategies for mitigating and responding to identified cybersecurity events. Our cybersecurity threat and risk management processes also involve assessing third-party risks .

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe believe that these facilities are suitable to meet our needs. 61 Table of Contents
Biggest changeWe believe that these facilities are suitable to meet our needs.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

4 edited+9 added−1 removed1 unchanged
Biggest changeWe are also party to various other legal proceedings and claims in the ordinary course of our business. We believe these matters will not have a material adverse effect on our consolidated financial position, results of operations or liquidity. See Note 24 - Commitments and Contingencies in Item 8 of this Annual Report on Form 10-K. Item 4.
Biggest changeWe are also party to various other legal proceedings and claims in the ordinary course of our business. We believe these matters will not have a material adverse effect on our consolidated financial position, results of operations or liquidity. Item 4. Mine Safety Disclosures Not applicable. PART II
The claim asserts that Bitcoin Depot breached the contract by terminating the contract to avoid paying fees for their services and that Canaccord is entitled to $22.3 million in damages equivalent to the fees alleged to be payable for breach of contract that would have been owed upon the closing of a transaction to acquire control, the sale of substantially all the Company’s assets, or a merger transaction pursuant to the previously terminated engagement letter for advisory services.
The claim asserts that Lux Vending, LLC breached the contract by terminating the contract to avoid paying fees for their services and that Canaccord is entitled to $23.0 million in damages equivalent to the fees alleged to be payable for breach of contract that would have been owed upon the closing of a transaction to acquire control, the sale of substantially all the Company’s assets, or a merger transaction pursuant to the previously terminated engagement letter for advisory services.
Item 3. Legal Proceedings On January 13, 2023, Canaccord Genuity Corp. (“Canaccord”) commenced proceedings against the Company by filing a claim with the Superior Court of Justice in Toronto, Ontario which named Bitcoin Depot as the defendant.
Item 3. Legal Proceedings On January 13, 2023, Canaccord Genuity Corp. (“Canaccord”) commenced proceedings against the Company by filing a claim with the Superior Court of Justice in Toronto, Ontario which named Lux Vending, LLC and Bitcoin Depot LLC as the defendants.
Canaccord proposes that the amount of fees would be calculated on the total cash transaction value of the business combination of $880.0 million. The claim also seeks an award for legal and other costs relating to the proceeding.
Canaccord proposes that the amount of fees would be calculated on the total cash transaction value of the business combination of $880.0 million.
Removed
On October 25, 2023, Canaccord amended its claim against the Company to increase the demand amount to $23.0 million which is an additional $0.7 million. Canaccord did not present evidence or statements to support the reason for the increased demand amount. In March 2024, the Canaccord matter moved into the discovery phase.
Added
The claim also seeks an award for legal and other costs relating to the proceeding. 59 Table of Contents In 2024 Canaccord added Bitcoin Depot Operating LLC as a defendant to account for the name change following the closing of the merger. Canaccord now estimates the total transaction value could be up to $655 million.
Added
Bitcoin Depot does not believe the allegations made against it are valid and intends to vigorously defend against them. The range of potential loss related to the identified claim is between $0 and $23.0 million, the amount of damages that Canaccord is seeking in the lawsuit.
Added
The additional costs mentioned in the claim are not able to be estimated at this time. The discovery phase of the litigation involving documentary productions and oral examinations is largely completed. A mediation of the dispute has been rescheduled to second quarter of 2025.
Added
In March 2025, two of our subsidiaries were served with a civil complaint from the Attorney General of the State of Iowa (the “Iowa AG”) in connection with a suit filed against us by the Iowa AG, on behalf of the state of Iowa, in the Iowa District Court for Polk County.
Added
The complaint alleges that our subsidiaries violated certain provisions of the Iowa Consumer Fraud Act as a result of Bitcoin withdrawals made from our ATMs being used by our customers to pay make payments under a variety of fraudulent schemes.
Added
The complaint further alleges that Bitcoin Depot should have known that the purpose of these withdrawals was to make payment under such schemes and that it should have taken additional steps to protect its customers.
Added
The complaint is seeking a preliminary and permanent injunction against the subsidiaries from either operating in Iowa or further violating the Iowa Consumer Fraud Act as well as monetary penalties. The Company strongly rejects any allegations that its subsidiaries or their BTMs violated the Iowa Consumer Fraud Act and intends to vigorously defend itself against the allegations.
Added
While we believe that the Iowa AG is misinterpreting the related act and we have other strong defenses, we cannot assure you of the ultimate outcome of the claim.
Added
Although the Company does not believe that this matter will have a material adverse effect on its business, financial position, results of operations or cash flows, the Company can provide no assurance as to the scope and outcome of this matter and no assurance as to whether there will be a material adverse effect to its business or its Consolidated Financial Statements.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeItem 4. Mine Safety Disclosures 62 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 62 Item 6. Selected Financial Data 63 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 64
Biggest changeItem 4. Mine Safety Disclosures 60 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 60 Item 6. Selected Financial Data 61 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 62

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe Company purchased 120,644 shares of our Class A common stock during the three months ended December 31, 2023 and for the fiscal year ended December 31, 2023 on the open market. The following table provides information regarding purchases of our securities made by us for the quarter ended December 31, 2023.
Biggest changeThe Company purchased 69,976 shares of our Class A common stock during the fiscal year ended December 31, 2024 on the open market. The following table provides information regarding purchases of our securities made by us for the years ended December 31, 2024 and 2023.
As of the filing date, there were 24 registered holders of record of our listed Warrants. Since many of our shares of Class A common stock and Warrants are held by brokers and other institutions on behalf of stockholders, we are unable to estimate the total number of stockholders represented by these record holders.
As of the filing date, there were 18 registered holders of record of our listed Warrants. Since many of our shares of Class A common stock and Warrants are held by brokers and other institutions on behalf of stockholders, we are unable to estimate the total number of stockholders represented by these record holders.
In addition, under Delaware law, our board of directors may declare dividends only to the extent of our surplus (which is defined as total assets at fair market value minus total liabilities, minus statutory capital) or, if there is no surplus, out of our net profits for the then-current and/or immediately preceding fiscal year.
In addition, under Delaware law, our board of directors may declare dividends only to the extent of our surplus (which is defined as total assets at fair market value minus total liabilities, minus statutory capital) or, if there is no 60 Table of Contents surplus, out of our net profits for the then-current and/or immediately preceding fiscal year.
Stock Performance Graph 62 Table of Contents N/A Issuer Purchases of Equity Securities On September 22, 2023, the Company announced that its Board of Directors authorized a share repurchase program providing for repurchases of up to $10 million of the Company’s outstanding Class A common stock through June 30, 2024.
Issuer Purchases of Equity Securities On September 22, 2023, the Company announced that its Board of Directors authorized a share repurchase program providing for repurchases of up to $10 million of the Company’s outstanding Class A common stock through June 30, 2024.
No other classes of our equity securities are listed or traded on any stock exchange. Holders of Record As of, April 9, 2024, there were 43 registered holders of record of our Class A common stock and 9 registered holders of record of our Class B common stock.
No other classes of our equity securities are listed or traded on any stock exchange. Holders of Record As of, March 20, 2025, there were 23 registered holders of record of our Class A common stock and no registered holders of record of our Class B common stock.
Removed
SHARE REPURCHASES AND DIVIDENDS Following are our monthly share repurchases for the fourth quarter of fiscal year 2023: Period Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs 2023 October — $ — — — November 44,842 $ 2.27 44,842 9,898,209 December 75,802 $ 2.31 75,802 9,723,106
Added
Securities Authorized for Issuance Under Equity Compensation Plans For certain information concerning securities authorized for issuance under our equity compensation plan, see Item 12 — Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. Recent Sales of Unregistered Securities; Use of Proceeds From Registered Securities None.
Added
SHARE REPURCHASES AND DIVIDENDS The Company did not repurchase any shares during the fourth quarter of 2024.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

115 edited+44 added−41 removed97 unchanged
Biggest changeInterest expense consists primarily of the interest expense on our borrowings and our finance leases. 68 Table of Contents Results of Operations Comparison between Year Ended December 31, 2023 and Year Ended December 31, 2022 The following table sets forth selected historical operating data for the periods indicated: Year Ended December 31, (in thousands) 2023 2022 $ Change % Change Statements of Income and Comprehensive Income (Loss) information: Revenue $ 688,967 $ 646,830 $ 42,137 6.5 % Cost of revenue (excluding depreciation and amortization reported separately below) 587,938 574,535 13,403 2.3 % Operating expenses Selling, general and administrative 57,770 36,991 20,779 56.2 % Depreciation and amortization 12,788 18,783 (5,995 ) (31.9 )% Total operating expenses $ 70,558 $ 55,774 $ 14,784 26.5 % Income from operations $ 30,471 $ 16,521 $ 13,950 84.4 % Other (expense) income Interest expense (11,926 ) (12,318 ) 392 (3.2 )% Other (expense) income (16,737 ) 118 (16,855 ) (14,283.9 )% Loss on foreign currency transactions (289 ) (380 ) 91 (23.9 )% Total other expense $ (28,952 ) $ (12,580 ) $ (16,372 ) 130.1 % Income before provision for income taxes and non-controlling interest 1,519 3,941 (2,422 ) (61.5 )% Income tax (expense) benefit (49 ) (395 ) 346 (87.6 )% Net income $ 1,470 $ 3,546 $ (2,076 ) (58.5 )% Net income attributable to Legacy Bitcoin Depot unit holders 12,906 3,980 8,926 224.3 % Net income (loss) attributable to non-controlling interest 14,666 (434 ) 15,100 (3,479.3 )% Net loss attributable to Bitcoin Depot Inc. $ (26,102 ) $ - $ (26,102 ) (100.0 )% Other comprehensive income (loss), net of tax Net income 1,470 3,546 (2,076 ) (58.5 )% Foreign currency translation adjustments (4 ) (110 ) 106 (96.4 )% Total comprehensive income $ 1,466 $ 3,436 $ (1,970 ) (57.3 )% Comprehensive income attributable to Legacy Bitcoin Depot unit holders $ 12,885 $ 3,870 $ 9,015 232.9 % Comprehensive income (loss) attributable to non-controlling interest $ 14,683 $ (434 ) $ 15,117 (3,483.2 )% Comprehensive loss attributable to Bitcoin Depot Inc. $ (26,102 ) $ - $ (26,102 ) (100.0 )% Revenue Revenue increased by approximately $42.1 million, or 6.5%, for the year ended December 31, 2023, as compared to the year ended December 31, 2022, primarily due to increases in kiosk transaction revenue which was resulting from an increase in the average transaction size and an increased number of users and transaction volume in relocated kiosks offset by a lower average number of installed kiosks in 2023. 69 Table of Contents Revenue disaggregated by revenue stream is as follows for the periods indicated: Year Ended December 31, (in thousands) 2023 2022 $ Change % Change Kiosk Transaction Revenue $ 686,314 $ 639,965 $ 46,349 7.2 % BDCheckout 1,149 692 457 66.0 % OTC — 2,080 (2,080 ) (100.0 )% Company Website 879 173 706 408.1 % Software Services Revenue 575 3,185 (2,610 ) (81.9 )% Hardware Revenue 50 735 (685 ) (93.2 )% Total Revenue $ 688,967 $ 646,830 $ 42,137 6.5 % Kiosk Transaction Revenue Revenue generated by our BTM kiosks increased by approximately $46.3 million, or 7.2%, for the year ended December 31, 2023, as compared to the year ended December 31, 2022, primarily related to an increase in the average transaction size and an increased number of users and transaction volume in relocated kiosks.
Biggest changeInterest expense consists primarily of the interest expense on our borrowings and our finance leases. 65 Table of Contents Results of Operations Comparison between Year Ended December 31, 2024 and Year Ended December 31, 2023 The following table sets forth selected historical operating data for the periods indicated: Year Ended December 31, (in thousands) 2024 2023 $ Change % Change Statements of Income (Loss) and Comprehensive Income (Loss) information: Revenue $ 573,703 $ 688,967 $ (115,264 ) (16.7 )% Cost of revenue (excluding depreciation and amortization reported separately below) 482,263 587,938 (105,675 ) (18.0 )% Operating expenses Selling, general and administrative 57,158 57,770 (612 ) (1.1 )% Depreciation and amortization 10,072 12,788 (2,716 ) (21.2 )% Total operating expenses 67,230 70,558 (3,328 ) (4.7 )% Income from operations 24,210 30,471 (6,261 ) (20.5 )% Other (expense) income Interest expense (14,199 ) (11,926 ) (2,273 ) 19.1 % Other (expense) income 406 (16,737 ) 17,143 (102.4 )% Loss on foreign currency transactions (465 ) (289 ) (176 ) 60.9 % Total other expense, net (14,258 ) (28,952 ) 14,694 (50.8 )% Income before provision for income taxes and non-controlling interest 9,952 1,519 8,433 555.2 % Income tax (expense) benefit (2,138 ) (49 ) (2,089 ) 4,263.3 % Net income $ 7,814 $ 1,470 $ 6,344 431.6 % Net income attributable to Legacy Bitcoin Depot unit holders — 12,906 (12,906 ) (100.0 )% Net income (loss) attributable to non-controlling interest 19,500 14,666 4,834 33.0 % Net loss attributable to Bitcoin Depot Inc. $ (11,686 ) $ (26,102 ) $ 14,416 (55.2 )% Other comprehensive income (loss), net of tax Net income 7,814 1,470 6,344 431.6 % Foreign currency translation adjustments 34 (4 ) 38 (950.0 )% Total comprehensive income 7,848 1,466 6,382 435.3 % Comprehensive income attributable to Legacy Bitcoin Depot unit holders - 12,885 (12,885 ) (100.0 )% Comprehensive income (loss) attributable to non-controlling interest 19,500 14,683 4,817 32.8 % Comprehensive income (loss) attributable to Bitcoin Depot Inc. $ (11,652 ) $ (26,102 ) $ 14,450 (55.4 )% Revenue Revenue decreased by approximately $115.3 million for the year ended December 31, 2024, as compared to the year ended December 31, 2023, primarily due to decreases in kiosk transaction revenue which was related to decreases in transactions volume offset slightly by higher average transaction sizes.
The derivative will be carried at its fair value with changes in fair value recognized in earnings. The fair value of the embedded derivative was estimated using a Monte Carlo simulation to simulate potential changes in share price and the resulting impact on the amount of cash to be collected under the PIPE Agreement.
The derivative was carried at its fair value with changes in fair value recognized in earnings. The fair value of the embedded derivative was estimated using a Monte Carlo simulation to simulate potential changes in share price and the resulting impact on the amount of cash to be collected under the PIPE Agreement.
The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.
The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.
The markup percentage for BDCheckout transactions has been 15% since inception/rollout of such transaction type in 2023. Finally, the Company receives a commission as a percentage for our website transactions which was 12.0% through December 31, 2023.
The markup percentage for BDCheckout transactions has been 15% since inception/rollout of such transaction type in 2023. Finally, the Company receives a commission as a percentage for our website transactions which was 12.0% through December 31, 2024.
We sell our cryptocurrencies to our customers from our BTM kiosks, OTC and BDCheckout locations in exchange for cash, for a prescribed transaction fee applied to the current market price of the cryptocurrency at the time of the transaction, plus a predetermined markup.
We sell our cryptocurrencies to our customers from our BTM kiosks and BDCheckout locations in exchange for cash, for a prescribed transaction fee applied to the current market price of the cryptocurrency at the time of the transaction, plus a predetermined markup.
Tax Receivable Agreement Liability As described in Note 18 to the Consolidated Financial Statements, the Company is party to the Tax Receivable Agreement under which we are generally required to pay BT Assets 85% of the amount of savings, if any, in U.S. federal, state, local, and foreign income taxes that we realize.
Tax Receivable Agreement Liability As described in Note 19 to the Consolidated Financial Statements, the Company is party to the Tax Receivable Agreement under which we are generally required to pay BT Assets 85% of the amount of savings, if any, in U.S. federal, state, local, and foreign income taxes that we realize.
Estimates are used for, but not limited to, cryptocurrencies and the associated impairment, recoverability of intangible assets and goodwill, 77 Table of Contents revenue recognition, valuation of current and deferred income taxes, the determination of the useful lives of property and equipment, for share-based compensation specifically the performance-based awards and the probability of achieving the performance criteria, fair value of long-term debt, present value of lease liabilities and right of use assets, assumptions and inputs for fair value measurements used in business combinations and contingencies, including liabilities that we deem are not probable of assertion.
Estimates are used for, but not limited to, cryptocurrencies and the associated impairment, recoverability of intangible assets and goodwill, revenue recognition, valuation of current and deferred income taxes, the determination of the useful lives of property and equipment, for share-based compensation specifically the performance-based awards and the probability of achieving the performance criteria, fair value of long-term debt, present value of lease liabilities and right of use assets, assumptions and inputs for fair value measurements used in business combinations and contingencies, including liabilities that we deem are not probable of assertion.
We maintain Bitcoin (currently in an amount which, at any given time, is typically less than $0.8 million) in our hot wallets to fulfill orders from users while we are automatically placing orders with liquidity providers and exchanges to replenish the Bitcoin we have sold to users.
We maintain Bitcoin (currently in an amount which, at any given time, is typically less than $1.0 million) in our hot wallets to fulfill orders from users while we are automatically placing orders with liquidity providers and exchanges to replenish the Bitcoin we have sold to users.
As described in Note 4 of consolidated financial statements, the Subscription Receivable represents a hybrid financial instrument comprising a subscription receivable and an embedded derivative. The embedded derivative represents a net cash settled forward contract with a value that is indexed to the trading price of the Company’s Class A Common Stock.
As described in Note 4 of consolidated financial statements, the Subscription Receivable represented a hybrid financial instrument comprising a subscription receivable and an embedded derivative. The embedded derivative represented a net cash settled forward contract with a value that is indexed to the trading price of the Company’s Class A Common Stock.
For the periods presented, the markup percentage for BTM kiosk transactions ranged between 15% and 31%, of the USD amount of the transaction with such markup rates historically having been, and continuing to be, subject to fluctuation as a result of our ongoing price strategy testing.
For the periods presented, the markup percentage for BTM kiosk transactions ranged between 15% and 50%, of the USD amount of the transaction with such markup rates historically having been, and continuing to be, subject to fluctuation as a result of our ongoing price strategy testing.
Moreover, we have included Adjusted Gross Profit in 72 Table of Contents this Annual Report on Form 10-K because it is a key measurement used internally by management to measure the efficiency of our business. This non-GAAP financial measure should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with U.S. GAAP.
Moreover, we have included Adjusted Gross Profit in this Annual Report on Form 10-K because it is a key measurement used internally by management to measure the efficiency of our business. This non-GAAP financial measure should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with U.S. GAAP.
For the year ended December 31, 2023, and for the year ended December 31, 2022, currency exchange rate fluctuations had an insignificant impact on our consolidated revenues. Generally, the functional currency of our various subsidiaries is their local currency except BitAccess whose functional currency is USD.
For the year ended December 31, 2024, and for the year ended December 31, 2023, currency exchange rate fluctuations had an insignificant impact on our consolidated revenues. Generally, the functional currency of our various subsidiaries is their local currency except BitAccess whose functional currency is USD.
For each of the periods presented in this Annual Report on Form 10-K, approximately 99.9% of our total transaction volume was attributable to transactions in Bitcoin and, as of the date of this Annual Report on Form 10-K, transactions in Bitcoin account for 100% of our transaction volumes.
For each of the periods presented in this Annual Report on Form 10-K, approximately 99.7% of our total transaction volume was attributable to transactions in Bitcoin and, as of the date of this Annual Report on Form 10-K, transactions in Bitcoin account for 100% of our transaction volumes.
Our cryptocurrencies were primarily comprised of Bitcoin, LTC, and ETH for the periods presented and are collectively referred to as “cryptocurrencies” in the consolidated financial statements. We primarily purchase cryptocurrencies to sell to customers.
Our cryptocurrencies were primarily comprised of Bitcoin for the periods presented and are collectively referred to as “cryptocurrencies” in the consolidated financial statements. We primarily purchase cryptocurrencies to sell to customers.
The update is required to be applied retrospectively to prior periods presented, based on the significant segment expense categories identified and disclosed in the period of adoption. The amendments are required to be adopted for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024 with early adoption permitted.
The update is required to be applied retrospectively to prior periods presented, based on the significant segment expense categories identified and disclosed in the period of adoption. The amendments are required to be adopted for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.
Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.
Accordingly, we express no such opinion. Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
We have determined that a decline in the quoted market price below the carrying value at any time during the assessed period is viewed as an impairment indicator because the cryptocurrencies are traded in active markets where there are observable prices. Therefore, the fair value is used to assess whether an impairment loss should be recorded.
We have determined that a decline in the quoted market price below the carrying value at any time during 74 Table of Contents the assessed period is viewed as an impairment indicator because the cryptocurrencies are traded in active markets where there are observable prices. Therefore, the fair value is used to assess whether an impairment loss should be recorded.
Management periodically evaluates whether changes to estimated useful lives of intangible assets are necessary to ensure our estimates accurately reflect the economic use of the related intangible assets. Revenue Recognition BTM Kiosks, BDCheckout and OTC Revenue is principally derived from the sale of cryptocurrencies at the point-of-sale on transactions initiated by customers.
Management periodically evaluates whether changes to estimated useful lives of intangible assets are necessary to ensure our estimates accurately reflect the economic use of the related intangible assets. 75 Table of Contents Revenue Recognition BTM Kiosks and BDCheckout Revenue is principally derived from the sale of cryptocurrencies at the point-of-sale on transactions initiated by customers.
However, the profitability of the two services is similar because of the higher markup that Bitcoin Depot applies to BTM transactions to support the higher costs associated therewith. Operating expenses Operating expenses consists of selling, general and administrative expenses and depreciation and amortization. 67 Table of Contents Selling, general and administrative .
However, the profitability of the two services is similar because of the higher markup that Bitcoin Depot applies to BTM transactions to support the higher costs associated therewith. Operating expenses Operating expenses consists of selling, general and administrative expenses and depreciation and amortization. Selling, general and administrative .
To stay competitive in the evolving digital financial system, both against new entrants into the market and existing competitors, we anticipate that we will have to continue to offer competitive features and functionalities and keep up with technological advances at fair prices to our users relative to our competitors. ITEM 8 .
To stay competitive in the evolving digital financial system, both against new entrants into the market and existing competitors, we anticipate that we will have to continue to offer competitive features and functionalities and keep up with technological advances at fair prices to our users relative to our competitors. 79 Table of Contents ITEM 8 .
Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.
Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit.
We are the exclusive provider and operator of BTMs for Circle K in the U.S. and Canada, and as of December 31, 2023, we have installed our BTMs in approximately 1,300 Circle K stores. We also have kiosks deployed in other convenience stores, gas stations, grocery stores, pharmacies, and shopping malls.
We are the exclusive provider and operator of BTMs for Circle K in the U.S. and Canada, and as of December 31, 2024, we have installed our BTMs in approximately 1,100 Circle K stores. We also have kiosks deployed in other convenience stores, gas stations, grocery stores, pharmacies, and shopping malls.
For the year ended December 31, 2023 and for the year ended December 31, 2022, our transaction gains and losses were insignificant. We are also affected by fluctuations in exchange rates on our investments in foreign operations.
For the year ended December 31, 2024 and for the years ended December 31, 2023, our transaction gains and losses were insignificant. We are also affected by fluctuations in exchange rates on our investments in foreign operations.
For example, as of December 31, 2023, users who first transacted at one of our kiosks during the three months ended December 31, 2022 and who subsequently completed a second transaction completed an average of 8.3 transactions over the twelve months following their initial transaction.
For example, as of December 31, 2024, users who first transacted at one of our kiosks during the three months ended December 31, 2023 and who subsequently completed a second transaction completed an average of 6.3 transactions over the twelve months following their initial transaction.
BDCheckout sales are similar to sales from BTM kiosks, in that customers buy cryptocurrencies with cash; however, the BDCheckout transactions are completed at the checkout counter of retail locations, initiated using the Bitcoin Depot mobile app instead of through the BTM kiosks. OTC sales are initiated and completed through our website.
BDCheckout sales are similar to sales from BTM kiosks, in that customers buy cryptocurrencies with cash; however, the BDCheckout transactions are completed at the checkout counter of retail locations, initiated using the Bitcoin Depot mobile app instead of through the BTM kiosks.
Bitcoin represents 99% of our total transaction volume for the year ended December 31, 2023, with the remaining cryptocurrencies accounting for the remaining less than 1% of transaction volume. As the adoption of cryptocurrency continues to grow for the general public, we expect continued growth from our addressable market.
Bitcoin represents 99% of our total transaction volume for the year 78 Table of Contents ended December 31, 2024, with the remaining cryptocurrencies accounting for the remaining less than 1% of transaction volume. As the adoption of cryptocurrency continues to grow for the general public, we expect continued growth from our addressable market.
We do not believe that the ultimate outcome of these actions will have a material adverse effect on our financial condition but could have a material adverse effect on our results of operations, cash flows or liquidity in a given quarter or year.
We do not believe that the ultimate outcome of these actions will have a material adverse effect on our financial condition but could have a material adverse effect on our results of operations, cash flows or liquidity in a given quarter or year. Off-Balance Sheet Arrangements None.
In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2023, in conformity with U.S. generally accepted accounting principles.
In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023, and the results of its operations and its cash flows for the year then ended in conformity with U.S. generally accepted accounting principles.
Foreign Currency Exchange Rate Risk Certain of our operations are conducted in foreign currencies. Consequently, a portion of our revenues and expenses may be affected by fluctuations in foreign currency exchange rates on cash residing in the kiosks. We have not historically hedged our translation risk on foreign currency exposure, but we may do so in the future.
Consequently, a portion of our revenues and expenses may be affected by fluctuations in foreign currency exchange rates on cash residing in the kiosks. We have not historically hedged our translation risk on foreign currency exposure, but we may do so in the future.
Bitcoin Depot’s largest BTM deployment as of December 31, 2023 is with Circle K, a convenience store chain of over 9,000 stores in North America and over 4,800 stores in Europe and other international markets.
Bitcoin Depot’s largest BTM deployment as of December 31, 2024 is with Circle K, a convenience store chain of over 9,000 stores in North America and over 5,000 stores in Europe and other international markets.
The amendments in the ASU are effective for all entities for fiscal years beginning after December 15, 2024, including 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).
The amendments in the ASU are effective for all entities for fiscal years beginning after December 15, 2024, including 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). The Company is still assessing the impacts to its consolidated financial statements.
Kiosk Network and Retailer Relationships Bitcoin Depot operates a network of kiosks that allow users to purchase Bitcoin with cash and with respect to 29 kiosks allows them to sell us Bitcoin for cash. Upon using a Bitcoin Depot kiosk for the first time, users will be prompted to provide certain information for account creation and verification.
Kiosk Network and Retailer Relationships Bitcoin Depot operates a network of kiosks that allow users to purchase Bitcoin with cash. Upon using a Bitcoin Depot kiosk for the first time, users will be prompted to provide certain information for account creation and verification.
For example, approximately 99.9% of our revenue in the year ended December 31, 2023 was derived from the sale of our cryptocurrency, including the markup at which we sell cryptocurrency to users (which can vary between BDCheckout and BTM kiosks) and a separate flat transaction fee.
For example, approximately 99.7% of our revenue in the year ended December 31, 2024 was derived from the sale of our cryptocurrency, including 64 Table of Contents the markup at which we sell cryptocurrency to users (which can vary between BDCheckout and BTM kiosks) and a separate flat transaction fee.
For purposes of performing our annual impairment test, we evaluated the recoverability of our goodwill using the consolidated cash flows of the single reporting unit to determine if our goodwill and intangible asset were impaired as of December 31, 2023 in accordance with the methodology described above. There were no triggering events identified during the year ended December 31, 2023.
For purposes of performing our annual impairment test, we evaluated the recoverability of our goodwill using the consolidated cash flows of the single reporting unit to determine if our goodwill was impaired as of September 30, 2024 in accordance with the methodology described above. There were no triggering events identified during the year ended December 31, 2024.
Off-Balance Sheet Arrangements None. 80 Table of Contents Recently Issued Accounting Standards Accounting Pronouncement Adopted In October 2021, the FASB issued Accounting Standards Update ("ASU") 2021-08, “Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers,” which requires entities to apply Topic 606 to recognize and measure contract assets and contract liabilities in a business combination as if the acquiring entity had originated the contracts.
Recently Issued Accounting Standards Accounting Pronouncement Adopted In October 2021, the FASB issued Accounting Standards Update ("ASU") 2021-08, “Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers,” which requires entities to apply Topic 606 to recognize and measure contract assets and contract liabilities in a business combination as if the acquiring entity had originated the contracts.
For example, our revenue for the year ended December 31, 2023 grew by 6.5% year-over-year, while the market price of Bitcoin increased by 155% during the same period. Based on our own user surveys, a majority of our users use our products and services for non-speculative purposes, including money transfers, international remittances, and online purchases, among others.
For example, our revenue for the year ended December 31, 2024 declined by 16.7% year-over-year, while the market price of Bitcoin increased by 121% during the same period. Based on our own user surveys, a majority of our users use our products and services for non-speculative purposes, including money transfers, international remittances, and online purchases, among others.
See Note 14 to our audited consolidated financial statements included in Part I, Item 1 of this Annual Report on Form 10-K for additional information about our notes payable. See Note 18 to our audited consolidated financial statements included in Part I, Item 1 of this Annual Report on Form 10-K for additional information about our tax receivable agreement.
See Note 19 to our audited consolidated financial statements included in Part I, Item 1 of this Annual Report on Form 10-K for additional information about our tax receivable agreement. See Note 23 to our audited consolidated financial statements included in Part I, Item 1 of this Annual Report on Form 10-K for additional information about our leases.
The Company uses this measure to evaluate its overall profitability. Liquidity and Capital Resources On December 31, 2023, we had negative working capital of approximately $(8.8) million, which included cash and cash equivalents and other current assets of approximately $37.3 million, offset by accounts payable and other current liabilities of approximately $46.0 million.
The Company uses this measure to evaluate its overall profitability. Liquidity and Capital Resources On December 31, 2024, we had negative working capital of approximately $(6.3) million, which included cash and cash equivalents and other current assets of approximately $34.3 million, offset by accounts payable and other current liabilities of approximately $40.6 million.
Lease payments We expect to make lease payments of approximately $8.3 million for our operating and finance leases during fiscal year 2024 under our effective leases as of December 31, 2023.
Lease payments We expect to make lease payments of approximately $5.4 million for our operating and finance leases during fiscal year 2025 under our effective leases as of December 31, 2024.
As of December 31, 2023, our offerings included approximately 6,300 BTMs in retailer locations throughout the U.S. and Canada, our BDCheckout product, which is accepted at approximately 5,700 retail locations, and our mobile app. We maintain a leading position among cash-to-Bitcoin BTM operators in the U.S. and Canada.
As of December 31, 2024, our offerings included approximately 8,500 BTMs in retailer locations throughout the U.S., and Canada, our BDCheckout product, which is accepted at approximately 7,600 retail locations, and our mobile app. We maintain a leading position among cash-to-Bitcoin BTM operators in the U.S. and Canada.
Cryptocurrencies Our revenues, $689.0 million and $646.8 million for the year ended December 31, 2023 and 2022, respectively, have not been correlated to the price of Bitcoin historically, even in light of volatile Bitcoin prices.
Cryptocurrencies Our revenues, $573.7 million and $689.0 million for the years ended December 31, 2024 and 2023, respectively, have not been correlated to the price of Bitcoin historically, even in light of volatile Bitcoin prices.
We reported net income of approximately $3.5 million during the year ended December 31, 2022.
We reported net income of approximately $1.5 million during the year ended December 31, 2023.
Software Processing fees Our software processing fees decreased by approximately $2.2 million, or 88.9%, for the year ended December 31, 2023, as compared to the year ended December 31, 2022.
Software Processing fees Our software processing fees decreased by approximately $0.2 million for the year ended December 31, 2024, as compared to the year ended December 31, 2023.
Our revenue from contracts with customers is principally comprised of a single performance obligation to provide cryptocurrencies when customers buy cryptocurrencies at a BTM kiosk, through BDCheckout or directly via an over-the-counter (OTC) trade.
Our revenue from contracts with customers is principally comprised of a single performance obligation to provide cryptocurrencies when customers buy cryptocurrencies at a BTM kiosk or through BDCheckout.
From the date of authorization through December 31, 2023, 120,644 shares of the Company's Class A common stock had been repurchased with a total cost of $0.3 million. The Company anticipates using cash flows from operations to make any future share repurchases.
From the date of authorization through December 31, 2024, 190,620 shares of the 71 Table of Contents Company's Class A common stock had been repurchased with a total cost of $0.4 million. The Company anticipates using cash flows from operations to make any future share repurchases.
Therefore, the determination of estimates requires the exercise of judgment. Actual results inevitably will differ from those estimates, and such differences may be material to the financial statements.
Actual results inevitably will differ from those estimates, and such differences may be material to the financial statements.
Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. /s/ KPMG LLP We have served as the Company’s auditor since 2021. Atlanta, Georgia April 15, 2024 83
Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audit provides a reasonable basis for our opinion. /s/ KPMG LLP We served as the Company’s auditor from 2021 to 2024.
New or changing laws and regulations, including changes to their interpretation and implementation, as well as increased penalties and enforcement actions 65 Table of Contents related to non-compliance, could have a material adverse impact on our business, results of operations, and financial condition. See “Governmental Regulations” and “Legal Proceedings” in Part I, Item I.
New or changing laws and regulations, including changes to their interpretation and implementation, as well as increased penalties and enforcement actions related to non-compliance, could have a material adverse impact on our business, results of operations, and financial condition.
We believe our existing cash and cash equivalents, together with cash provided by operations, will be sufficient to meet our needs for at least the next twelve months from the date of this annual report on From 10-K.
We believe our existing cash and cash equivalents, together with cash provided by operations, will be sufficient to meet our future liquidity needs for the foreseeable future, both in the short-term (over the next twelve months from the date of this annual report on From 10-K) and beyond.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 82 Table of Contents Report of Independent Registered Public Accounting Firm To the Stockholders and the Board of Directors Bitcoin Depot Inc.: Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated balance sheets of Bitcoin Depot Inc. and subsidiaries (the Company) as of December 31, 2023 and 2022, the related consolidated statements of income (loss) and comprehensive income (loss), statement of changes in stockholders’ equity and member’s equity, statement of changes in member’s equity, and statements of cash flows for each of the years in the two-year period ended December 31, 2023, and the related notes (collectively, the consolidated financial statements).
Boston, Massachusetts March 24, 2025 81 Table of Contents Report of Independent Registered Public Accounting Firm To the Stockholders and the Board of Directors Bitcoin Depot Inc.: Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated balance sheet of Bitcoin Depot Inc. and subsidiaries (the Company) as of December 31, 2023, the related consolidated statements of income (loss) and comprehensive income (loss), changes in stockholders’ equity and member’s equity, and cash flows for the year then ended and the related notes (collectively, the consolidated financial statements).
Specifically, the Company expects its primary cash requirements for fiscal year 2024 to be as follows: 74 Table of Contents Debt service We expect to make principal and interest payments of approximately $7.5 million during fiscal year 2024 under our currently outstanding debt facilities based on interest rates at year end. Capital expenditures.
Specifically, the Company expects its primary cash requirements for fiscal year 2024 to be as follows: Debt service We expect to make principal and interest payments of approximately $5.7 million related to the profit share arrangements, and $11.8 million related to other credit agreements during fiscal year 2025, under our currently outstanding debt facilities based on interest rates at year end.
Summary of Critical Accounting Policies and Accounting Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions about future events that affect the amounts reported in the financial statements and accompanying notes. Future events and their effects cannot be determined with absolute certainty.
GAAP requires management to make estimates and assumptions about future events that affect the amounts reported in the financial statements and accompanying notes. Future events and their effects cannot be determined with absolute certainty. Therefore, the determination of estimates requires the exercise of judgment.
See Note 23 to our audited consolidated financial statements included in Part I, Item 1 of this Annual Report on Form 10-K for additional information about our leases. See Note 24 to our audited consolidated financial statements included in Part I, Item 1 of this Annual Report on Form 10-K for additional information about our material commitments and contingencies.
See Note 24 to our audited consolidated financial statements included in Part I, Item 1 of this Annual Report on Form 10-K for additional information about our material commitments and contingencies. Summary of Critical Accounting Policies and Accounting Estimates The preparation of financial statements in conformity with U.S.
You should review the reconciliation of net income to Adjusted EBITDA below and not rely on any single financial measure to evaluate our business. 73 Table of Contents The following table presents a reconciliation of net income to Adjusted EBITDA for the periods indicated: Year Ended December 31, (in thousands) 2023 2022 Net income $ 1,470 $ 3,546 Adjustments: Interest expense 11,926 12,318 Income tax (benefit) expense 49 395 Depreciation and amortization 12,788 18,783 Expense related to the PIPE transaction (1) 14,896 — Non-recurring expenses (2) 9,298 4,879 Share-based compensation 2,524 1,230 Special bonus (3) 3,040 — Expenses associated with the termination of the phantom equity participation plan 350 — Adjusted EBITDA $ 56,341 $ 41,151 Adjusted EBITDA margin (4) 8.2 % 6.4 % (1) Amounts include the recognition of a non-cash expense of $13.9 million related to the PIPE transaction for the year ended December 31, 2023, entered into as of close of the Merger on June 30, 2023.
The following table presents a reconciliation of net income to Adjusted EBITDA for the periods indicated: Year Ended December 31, (in thousands) 2024 2023 Net income $ 7,814 $ 1,470 Adjustments: Interest expense 14,199 11,926 Income tax (benefit) expense 2,138 49 Depreciation and amortization 10,072 12,788 Expense related to the PIPE transaction (1) — 14,896 Non-recurring expenses (2) 1,410 9,298 Share-based compensation 3,400 2,524 Special bonus (3) 675 3,040 Expenses associated with the termination of the phantom equity participation plan — 350 Adjusted EBITDA $ 39,708 $ 56,341 Adjusted EBITDA margin (4) 6.9 % 8.2 % (1) Amounts include the recognition of a non-cash expense of $13.9 million related to the PIPE transaction for the year ended December 31, 2023, entered into as of close of the Merger on June 30, 2023.
Net income attributable to non-controlling interest Prior to the Merger, the non-controlling interest reflected the unaffiliated interest in BitAccess. Subsequent to the close of the Merger, the non-controlling interest reflects both the unaffiliated interests in BitAccess and the interests held by BT Assets in BT HoldCo.
Net income attributable to non-controlling interest Prior to the close of the Merger, the non-controlling interest reflected Bitcoin Depot’s ownership in BitAccess. Subsequent to the close of the Merger, the non-controlling interest reflect both Bitcoin Depot's ownership in BitAccess and BT HoldCo.
We reported net income of approximately $1.5 million during the year ended December 31, 2023. On December 31, 2022, we had working capital of approximately $(6.5) million, which included cash and cash equivalents and other current assets of approximately $40.3 million, offset by accounts payable and other current liabilities of approximately $46.8 million.
We reported net income of approximately $7.8 million during the year ended December 31, 2024. 70 Table of Contents On December 31, 2023, we had working capital of approximately $(8.8) million, which included cash and cash equivalents and other current assets of approximately $34.2 million, offset by accounts payable and other current liabilities of approximately $43.0 million.
The following table presents a reconciliation of revenue to Adjusted Gross Profit for the periods indicated: Year Ended December 31, (in thousands) 2023 2022 Revenue $ 688,967 $ 646,830 Cost of revenue (excluding depreciation and amortization) (587,938 ) (574,535 ) Depreciation and amortization excluded from cost of revenue (12,455 ) (18,783 ) Gross Profit $ 88,574 $ 53,512 Adjustments: Depreciation and amortization excluded from cost of revenue $ 12,455 $ 18,783 Adjusted Gross Profit $ 101,029 $ 72,295 Gross Profit Margin (1) 12.9 % 8.3 % Adjusted Gross Profit Margin (1) 14.7 % 11.2 % (1) Calculated as a percentage of revenue.
The following table presents a reconciliation of revenue to Adjusted Gross Profit for the periods indicated: Year Ended December 31, (in thousands) 2024 2023 Revenue $ 573,703 $ 688,967 Cost of revenue (excluding depreciation and amortization) (482,263 ) (587,938 ) Depreciation and amortization excluded from cost of revenue (9,984 ) (12,455 ) Gross profit $ 81,456 $ 88,574 Adjustments: Depreciation and amortization excluded from cost of revenue $ 9,984 $ 12,455 Adjusted gross profit $ 91,440 $ 101,029 Gross profit margin (1) 14.2 % 12.9 % Adjusted gross profit margin (1) 15.9 % 14.7 % 69 Table of Contents (1) Calculated as a percentage of revenue.
BT HoldCo and certain of its subsidiaries are subject to certain financial covenants contained in the Amended and Restated Credit Agreement, which require us to maintain certain cash balances, and a maximum consolidated total leverage ratio, in addition to customary administrative covenants. As of December 31, 2023, we were in compliance with all financial and administrative covenants.
The Company is subject to certain financial covenants contained in the Amended and Restated Note, which require BT HoldCo and certain of its subsidiaries to maintain certain cash balances, and a maximum consolidated total leverage ratio, in addition to customary administrative covenants.
For the year ended December 31, 2023, the Company incurred expenses of $15.2 million associated with the PIPE agreement which has been recognized on the Consolidated Statements of Income (Loss) and Comprehensive Income (Loss). Kiosk Financing Transactions We have finance leases with our kiosk suppliers that expire on various dates through March 2026.
For the year ended December 31, 2023, the Company incurred expenses of $15.2 million associated with the PIPE agreement which has been recognized on the Consolidated Statements of Income (Loss) and Comprehensive Income (Loss).
There are two main components of the working capital required in our operations. On the Bitcoin side, we maintain Bitcoin in our hot wallets to fulfill orders from users while we are automatically placing orders with liquidity providers and exchanges to replenish the Bitcoin we have sold to users.
On the Bitcoin side, we maintain Bitcoin in our hot wallets to fulfill orders from users while we are automatically placing orders with liquidity providers and exchanges to replenish the Bitcoin we 62 Table of Contents have sold to users. The second component to working capital is the cash that accumulates in the BTM kiosks.
We use a sophisticated Bitcoin management process to reduce our exposure to volatility in Bitcoin prices by maintaining a relatively low balance (typically less than $0.8 million) of Bitcoin at any given time, which we believe differentiates us from our competition. Our typical practice is to purchase Bitcoin through a liquidity provider such as Cumberland DRW or Abra.
We use a sophisticated Bitcoin management process to reduce our exposure to volatility in Bitcoin prices by maintaining a relatively low balance (typically less than $1.0 million) of Bitcoin at any given time in our hot wallets to fulfill orders from users, which we believe differentiates us from our competition.
Our computation of Adjusted EBITDA may not be comparable to other similarly titled measures computed by other companies because not all companies calculate this measure in the same fashion.
Our computation of Adjusted EBITDA may not be comparable to other similarly titled measures computed by other companies because not all companies calculate this measure in the same fashion. You should review the reconciliation of net income to Adjusted EBITDA below and not rely on any single financial measure to evaluate our business.
Cost of Cryptocurrency - BDCheckout Our cost of goods sold related to BDCheckout increased by approximately $0.4 million, or 65.5% for the year ended December 31, 2023, as compared to the year ended December 31, 2022. The increase was a result of BDCheckout being first introduced in June 2022.
Cost of Cryptocurrency - BDCheckout Our cost of goods sold related to BDCheckout decreased by approximately $0.4 million for the year ended December 31, 2024, as compared to the year ended December 31, 2023. The decrease was a result of lower transaction volume in the year ended December 31, 2024.
The standard is effective for public companies for fiscal years beginning after December 15, 2023. Early adoption is permitted. The Company adopted this update effective January 1, 2024 and does not expect the adoption to have a material impact on the consolidated financial statements.
The standard is effective for public companies for fiscal years beginning after December 15, 2023. The Company adopted this update effective January 1, 2024 and did not have a material impact on the consolidated financial statements. In November 2023, the FASB issued ASU 2023-07 " Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures ".
Contract liabilities are presented in “Deferred revenue” on the consolidated Balance Sheets and are not material as of December 31, 2023. 79 Table of Contents Accounting for PIPE Financing, including Subscription Receivable Concurrently with the closing of the business combination, the Company entered into the PIPE Financing for which the Subscribers purchased 4,300,000 shares of Series A Preferred Stock in exchange for a subscription receivable (“Subscription Receivable”).
Accounting for PIPE Financing, including Subscription Receivable Concurrently with the closing of the business combination, the Company entered into the PIPE Financing for which the Subscribers purchased 4,300,000 shares of Series A Preferred Stock in exchange for a subscription receivable (“Subscription Receivable”).
The term “market risk” refers to the risk of loss arising from adverse changes in cryptocurrency prices and interest rates. The disclosures are not meant to be precise indicators of expected future losses, but rather indicators of reasonably possible losses. This forward-looking information provides indicators of how we view and manage our ongoing market risk exposures.
The disclosures are not meant to be precise indicators of expected future losses, but rather indicators of reasonably possible losses. This forward-looking information provides indicators of how we view and manage our ongoing market risk exposures. Foreign Currency Exchange Rate Risk Certain of our operations are conducted in foreign currencies.
Investing Activities Net cash used in investing activities decreased $3.1 million for the year ended December 31, 2023, as compared to the year ended December 31, 2022, due to a $2.0 million contingent consideration payment in 2022, and a $1.1 million decrease in acquisition of property and equipment.
Investing Activities Net cash used in investing activities increased $11.3 million for the year ended December 31, 2024, as compared to the year ended December 31, 2023, primarily due to a $10.7 million increase in acquisition of property and equipment.
Our financial position, results of operations and cash flows are impacted by the accounting policies we have adopted. To get a full understanding of our financial statements, one must have a clear understanding of the accounting policies employed.
To get a full understanding of our financial statements, one must have a clear understanding of the accounting policies employed.
Operating Activities Net cash provided by operating activities increased $9.8 million for the year ended December 31, 2023, as compared to the year ended December 31, 2022, due to a $12.8 million increase in non-cash items principally related to an $14.5 million increase from Series A Preferred Share PIPE Issuance and a $2.9 million increase in stock compensation, slightly offset by a $6.0 million decrease in depreciation and amortization, and a $2.5 million decrease in purchases of services in cryptocurrency.
Operating Activities Net cash provided by operating activities decreased $18.6 million for the year ended December 31, 2024, as compared to the year ended December 31, 2023, primarily due to a $14.5 million increase in non-cash items principally related to an $14.5 million decrease from Series A Preferred Share PIPE Issuance in 2023, a $9.6 million decrease from changes in accrued expenses, offset by a $5.5 million increase from accounts payable.
The related cash flows from purchases and sales of cryptocurrencies are presented as cash flows from operating activities on the consolidated Statements of Cash Flows. 78 Table of Contents Goodwill and intangible assets, net Goodwill represents the excess of the consideration transferred over the estimated fair value of the acquired assets, assumed liabilities, and any non-controlling interest in the acquired entity in a business combination.
Goodwill and intangible assets, net Goodwill represents the excess of the consideration transferred over the estimated fair value of the acquired assets, assumed liabilities, and any non-controlling interest in the acquired entity in a business combination.
Three Months Ended December 31 September 30 June 30 March 31 December 31 September 30 June 30 March 31 December 31 September 30 June 30 March 31 December 31 September 30 June 30 March 31 2023 2022 2021 2020 Installed kiosks (at period end) 6,334 6,404 6,351 6,441 6,530 6,787 6,955 6,711 6,220 4,520 2,811 1,859 1,061 671 159 127 Returning user transaction count 8.3 9.1 9.2 10.0 10.5 11.2 11.5 11.9 12.3 11.5 11.8 12.2 12.0 12.3 14.0 13.8 Median kiosk transaction size (in $) 200 200 200 200 200 180 170 176 168 160 160 140 140 100 70 90 BDCheckout locations (at period end) (1) (3) 5,681 5,681 5,195 2,754 8,661 8,661 8,395 — — — — — — — — — Kiosks held with logistics providers (2) 898 842 981 891 795 — — — — — — — — — — — (1) BDCheckout was launched in the second quarter of 2022.
The methodologies used to calculate our key metrics require judgment and we regularly review our processes for calculating these key metrics, and from time to time, we may make adjustments to improve their accuracy or relevance. 63 Table of Contents Three Months Ended December 31 September 30 June 30 March 31 December 31 September 30 June 30 March 31 December 31 September 30 June 30 March 31 December 31 September 30 June 30 March 31 2024 2023 2022 2021 Installed kiosks (at period end) 8,457 8,304 8,068 7,061 6,334 6,404 6,351 6,441 6,530 6,787 6,955 6,711 6,220 4,520 2,811 1,859 Returning user transaction count 6.3 7.3 7.1 7.7 8.3 9.1 9.2 10.0 10.5 11.2 11.5 11.9 12.3 11.5 11.8 12.2 Median kiosk transaction size (in $) 280 250 230 205 200 200 200 200 200 180 170 176 168 160 160 140 BDCheckout locations (at period end) (1) (3) 7,624 7,723 7,441 6,734 5,681 5,681 5,195 2,754 8,661 8,661 8,395 — — — — — Kiosks held with logistics providers (2) 2,117 2,506 758 587 898 842 981 891 795 — — — — — — — (1) BDCheckout was launched in the second quarter of 2022.
The future amounts payable, as well as the timing of any payments, under the Tax Receivable Agreement are dependent upon significant future events and estimates, which are described in further detail under the Related Party Transactions Section below.
The future amounts payable, as well as the timing of any payments, under the Tax Receivable Agreement are dependent upon significant future events and estimates, which are described in further detail under the Related Party Transactions Section below. 76 Table of Contents Commitments and Contingencies We assess legal contingencies in accordance with ASC 450— Contingencies and determines whether a legal contingency is probable, reasonably possible or remote.
The critical accounting policies should be read in connection with the discussion of significant accounting policies included in the notes of the consolidated financial statements.
The critical accounting policies should be read in connection with the discussion of significant accounting policies included in the notes of the consolidated financial statements. Our financial position, results of operations and cash flows are impacted by the accounting policies we have adopted.
The public entity incurred direct legal and professional services in maintaining its operations as well as costs associated with the PIPE Financing resulting in a $26.1 million net loss attributable to Bitcoin Depot Inc.
In addition to losses allocated under the HLBV methodology, the public entity incurred direct legal and professional services in maintaining its operations resulting in a Net Loss attributable to Bitcoin Depot Inc.
These contingencies are subject to significant uncertainties and we are unable to estimate the amount or range of loss, if any, in excess of amounts accrued.
We believe that adequate provisions for resolution of all contingencies, claims and pending litigation have been made for probable losses that are reasonably estimable. These contingencies are subject to significant uncertainties and we are unable to estimate the amount or range of loss, if any, in excess of amounts accrued.
The Company performs their annual test for impairment as of December 31 at the reporting unit level. As a result of the acquisition of BitAccess in July 2021, we determined we had two reporting units.
As a result of the acquisition of BitAccess in July 2021, we determined we had two reporting units.
As of December 31, 2023, cash in the BTM kiosks was approximately 21.2% of average monthly revenues. In connection with the closing of the Merger, we had several events impacting our liquidity. We refinanced our note payable and paid down approximately $16.4 million of principal, as well as incurred a $2.3 million exit fee.
As of December 31, 2024, cash in the BTM kiosks was approximately 22.4% of average monthly revenues. In connection with the closing of the Merger, we had several events impacting our liquidity.
When the cryptocurrency is sold to customers, we relieve the adjusted cost basis of our cryptocurrency, net of impairments, on a first-in, first-out basis within cost of revenue (excluding depreciation and amortization). In the fourth quarter of 2022, we discontinued the sale of ETH and LTC to our customers.
When the cryptocurrency is sold to customers, we relieve the adjusted cost basis of our cryptocurrency, net of impairments, on a first-in, first-out basis within cost of revenue (excluding depreciation and amortization). The related cash flows from purchases and sales of cryptocurrencies are presented as cash flows from operating activities on the consolidated Statements of Cash Flows.
We calculate median kiosk transaction size based on the dollar value of all purchases and sales of Bitcoin at our kiosks, including transaction fees, during the rolling twelve month period. 66 Table of Contents BDCheckout Locations We believe this metric provides us an indicator of our market penetration, the growth of our business and our potential future business opportunities.
Median Kiosk Transaction Size We believe this metric provides us information to analyze user behavior as well as evaluate our performance and formulate financial projections. We calculate median kiosk transaction size based on the dollar value of all purchases and sales of Bitcoin at our kiosks, including transaction fees, during the rolling twelve month period.

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