XML 21 R13.htm IDEA: XBRL DOCUMENT v3.24.3
Related Party Transactions
 9 Months Ended
Sep. 30, 2024
Related Party Transactions [Abstract]  
Related Party Transactions

(5) Related Party Transactions

During the nine months ended September 30, 2023, Legacy Bitcoin Depot distributed to BT Assets 112.4 Litecoin ("LTC") and 7.5 Ethereum ("ETH") with a total cost basis of $0.02 million. Total cash distributions made to BT Assets during the three months ended September 30, 2024 and 2023 were $15.0 million and $0.3 million, respectively. Total cash distributions made to BT Assets during

the nine months ended September 30, 2024 and 2023 were $22.7 million and $13.0 million, respectively. Cash distributions are classified as cash outflows from financing activities in the Consolidated Statements of Cash Flows. The total cash and non-cash distributions are reflected in the Consolidated Statement of Changes in Stockholders’ (Deficit) Equity and the Consolidated Statement of Changes in Member's Equity. Based on the Operating Agreement distributions made after the closing of the Merger are considered tax distributions.

At the closing of the Merger, the Company entered into a Tax Receivable Agreement with BT HoldCo and BT Assets. Pursuant to the Tax Receivable Agreement, the Company is 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, or in certain circumstances are deemed to realize. See Note 15. Income Taxes for further discussion.

In connection with the closing of the Merger, the Company entered into separate indemnification agreements with its directors and executive officers. These agreements, among other things, require the Company to indemnify its directors and executive officers for certain costs, charges and expenses, including attorneys’ fees, judgments, fines and settlement amounts, reasonably incurred by a director or executive officer in any action or proceeding because of their association with the Company or any of its subsidiaries. No amounts have been recognized related to these agreements as of September 30, 2024.

On July 1, 2024, the Company declared and paid a $15.0 million preferred distribution to BT Assets as a partial return of BT Asset's preferred on the preferred units it holds in BT HoldCo. In the third quarter of 2024, the Company paid a $0.2 million tax distribution to BT Assets. The distribution amounts reduce the preferred dividend attributable to the Non-Controlling Interest from $29.0 million to a remaining balance of $13.8 million.

On July 10, 2024, the Company entered into a Kiosk Service Agreement with an entity owned by the CEO, that owns and operates kiosks unrelated to the Company’s Bitcoin ATM business. The agreement provides for the following services: kiosk placement, treasury management and other back office services. The Company will receive 30% of the net profit as compensation. The Company did not have any revenue and only incurred an immaterial amount of start-up costs related to this agreement in the nine months ended September 30, 2024.

Sopris Capital transactions

Class A Common purchase

During the second quarter of 2024, Sopris Capital ("Sopris") acquired 2,906,976 Class A common shares for $5.0 million from the Company. As part of this transaction, BT Assets exchanged 2,906,976 Class V common shares representing approximately 16.8% of the Class A Common shares outstanding and received $5.0 million. The exchange resulted in $0.5 million Re-Capitalization between the Non-Controlling Interest and the PubCo Shareholders which is reflected in the Consolidated Statement of Changes in Stockholders' (Deficit) Equity. See Note (14) Common Stock, Preferred Stock and Stockholders’ (Deficit) Equity for additional discussion regarding this exchange. Prior to this exchange, this party was an unaffiliated entity.

Franchise profit share program

During the second quarter of 2024, the Company entered into a kiosk profit share franchise agreement with Sopris. Under the terms of the Agreement, Sopris receives a share in the profits generated by a group of specifically identified 50 kiosks for a period of 5 years for total consideration of $0.6 million. As a result of the consideration received up front, the Company's determined this arrangement is treated under ASC 470, Debt. The upfront payment was recognized as long term liability on the Consolidated Balance Sheets. As the Company makes payments under this arrangement a portion of the payment is considered a repayment of principal and interest expense.

In July 2024, Sopris invested in an additional 200 BTMs related to our franchise profit share program for a period of 5 years for total consideration of $2 million.