ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
Unless context otherwise requires, all references in this section to “we”, “us”, “our” or “the Company” refer to Marblegate Capital Corporation, however historical references to “we”, “us”, “our” or “the Company” may refer to the historical operations of the DePalma Companies prior to the Business Combination. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes thereto included elsewhere in this Annual Report. Some of the information contained in this discussion and analysis or set forth elsewhere in this Annual Report including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from management’s expectations as a result of various factors, including but not limited to those discussed in the sections entitled “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements.”
Overview
We are a fully integrated operating platform combining fleet operations and medallion-backed specialty finance, with operations focused in the New York City (“NYC”) regulated mobility market. Our business is centered on the NYC taxi medallion—a scarce, municipally regulated license that is the sole authorization to operate a vehicle for street-hail service in the City of New York—which we view as a critical piece of NYC’s mobility infrastructure. We are the largest combined lender to, and owner of, NYC taxi medallions and operate the largest taxi fleet in New York City, based on active vehicle data reported by the TLC, through Signal Taxi. Our goal is to achieve superior risk-adjusted returns for our stockholders by maintaining a focus on capital preservation, current revenues and capital appreciation. Our core philosophy is to work with key stakeholders in NYC’s mobility ecosystem to facilitate an industry-wide restructuring of historical medallion lending practices, to position the taxi medallion as a stabilized income-producing asset, and to support the long-term role of regulated street-hail service as an essential and enduring component of New York City’s transportation network. Accordingly, we regularly explore complementary business opportunities, including potential mergers and acquisitions, that would allow us to further develop our position in the broader urban mobility landscape.
We were originally formed by MAC, a Delaware corporation and special purpose acquisition company, on February 2, 2023 to be the surviving company in connection with Business Combination with the DePalma Companies. On April 7, 2025 (the “Closing Date”), we consummated the Business Combination contemplated by that certain Business Combination Agreement, by and among us, MAC, the Manager, MAC Merger Sub, Inc., a Delaware corporation and a direct wholly owned subsidiary of us, and the DePalma Companies, pursuant to which MAC agreed to combine with the DePalma Companies in a series of transactions that resulted in us becoming a publicly traded company and the surviving company. Immediately prior to the consummation of the Business Combination, on April 7, 2025, as contemplated by the Business Combination Agreement, we and the DePalma Companies effected a series of reorganization transactions, resulting in the Company becoming the owner of approximately 83.7% of the DePalma Companies, with the remaining 16.3% continuing to be owned by certain limited partners of the DePalma Companies. As a result of the Business Combination, we are a holding company and substantially all of our assets and operations are conducted through our subsidiaries.
Our operations are managed by the Manager pursuant to the MSA. Pursuant to the MSA, the Manager provides certain management services including, but not limited to, managing our day-to-day business and operations. Under the MSA, the Manager provides management services customarily performed by executive officers and employees of a publicly listed company, including overseeing the acquisition and disposition of our assets, overseeing our loan portfolio, managing our day‐to‐day business and operations, evaluating our financial and operational performance, and providing a management team to serve as our executive officers.
In February 2019, DePalma II entered into a non-controlling joint venture with Kirie Eleison Corp, an unaffiliated strategic partner, and formed Signal Taxi, in which DePalma II held a 50% interest. Signal Taxi is a fully functioning medallion-leasing agent and taxi fleet operating company based in NYC, licensed by the NYC Taxi and Limousine Commission (“NYC TLC”) as an agent/broker for managing NYC taxi medallions, formed for the purpose of operating and servicing taxi medallions. The formation of Signal Taxi also allowed DePalma II to lease the medallions for its fleet operation business. Historically, given the non-controlling nature of the relationship between DePalma II and Signal Taxi, Signal Taxi’s financial statements have not been consolidated; however on April 7, 2025, we, via DePalma II, completed the Signal Taxi Acquisition.
On November 15, 2024, we, via DePalma II, entered into Consulting Agreement with the Consultant to provide operational support and access to physical garage and office space for our medallion leasing business. DePalma II entered into the Consulting Agreement primarily to assist in establishing and growing its taxi fleet operations. In connection with the Consulting Agreement, DePalma II, as lessee, entered into a lease agreement for our taxicab business and garage space to run our taxicab operations. The Consulting Agreement and garage lease each have an initial term of five years, with the garage lease having an additional renewal option available to DePalma II.
We believe we are the largest New York City taxi medallion lender with a medallion loan portfolio collateralized by approximately 1,802 New York City taxi medallions as of December 31, 2025. In addition to our ownership of medallion loans, we believe we are also the largest owner of New York City taxi medallions, with 2,147 Owned Medallions as of December 31, 2025. Further, as of December 31, 2025, we have a managed taxi fleet of approximately 917 vehicles (including approximately 118 vehicles managed under our Consulting Agreement) and approximately 822 active drivers operating Signal Taxi vehicles.
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Over time, we plan to transition our portfolio of non-accruing loans and Owned Medallions by selling medallions, primarily with seller financing attached, which is expected to have the impact of increasing interest income from loans. Consistent with our strategy over the last several years, and in response to industry dynamics, we may choose to lease Owned Medallions until sufficient market demand exists to execute a subsequent sale either for cash or with seller financing. We intend to conduct these activities with the primary purposes of protecting the value of the original investment while enabling us to achieve our objectives of capital appreciation and interest income from loans.
On April 10, 2025, our common stock and warrants began trading on the OTCQX market under the symbols “MGTE” and “MGTEW”, respectively. We have hired and may continue to hire additional personnel and implement procedures and processes to address public company regulatory requirements and customary practices. We expect to incur additional annual expenses as a public company for, among other things, directors’ and officers’ liability insurance, director fees and additional internal and external accounting, legal and administrative resources, including increased audit and legal fees.
Financial Overview
For the years ended December 31, 2025 and 2024, we generated total revenues of $48.5 million and $21.0 million, respectively. Income from operations for the years ended December 31, 2025 and 2024 was $0.8 million and $6.1 million, respectively. Other income for the years ended December 31, 2025 and 2024 was $9.3 million and $3.3 million, respectively. net income (loss) for the years ended December 31, 2025 and 2024 was ($44.1) million and $9.4 million, respectively.
Through December 31, 2025, we have received approximately $48.4 million of revenue from certain loans subject to the Medallion Relief Program+ established in March 2022 (“MRP+”), of which 30% related to payments made from a New York City-funded deficiency credit support mechanism (the “Reserve Fund”). As of December 31, 2025, we had loans held for investment, at fair value of $281.7 million. For the years ended December 31, 2025 and 2024, we had gross collections of $33.7 million and $36.0 million, respectively, where 36% and 40% of such collections were related to payments made on account of restructurings or resolutions of medallion loans.Gross collections decreased by approximately 6% during the year ended December 31, 2025, as compared to the same period in the prior year and was primarily attributable to a decrease in restructurings of Non-MRP+ large borrowers, compared to the year ended December 31, 2024.
For the year ended December 31, 2025, we realized a year-over-year increase of $0.1 million in regular monthly payments. Non-MRP+ large borrower payments increased by $1.7 million due to restructuring efforts that improved performance in the Non MRP+ NYC cohort, while MRP+ payments decreased by $1.6 million as a result of borrower payoffs and foreclosure of defaulted medallions. Regular monthly collections remained steady at $21.6 million. The 6% decrease in gross collections during the year ended December 31, 2025, compared to the same period in the prior year, was primarily attributable to reduced restructuring activity among Non-MRP+ borrowers.
With respect to delinquencies, as of December 31, 2025 and 2024, the percentage of New York City loans by medallion count in default were 29% and 33%, respectively. The decrease in delinquencies at December 31, 2025 was largely due to the continued foreclosure of non-accruing loans during the year ended December 31, 2025, as well as newly originated medallion loans.
For the years ended December 31, 2025 and 2024, we completed restructurings of loans collateralized by 130 and 139 New York City medallions, respectively. The decrease in restructurings period over period was due to a reduction in the number of New York City non-performing loans requiring restructuring.
For the years ended December 31, 2025 and 2024, we foreclosed on 66 and 254 medallions, respectively. The decrease in the pace of foreclosures was due to the reduced size of the non-accruing loan pool as we have foreclosed on a significant portion of the pool’s non-accruing loans. During the year ended December 31, 2024, four large borrowers accounted for 182 of the foreclosed medallions, which lead to a significant decline period-over-period.
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Key Factors Affecting Operating Results
Our performance and future success depends on several factors that present significant opportunities, but also pose risks and challenges, including those discussed below and in the section entitled “Risk Factors.”
Our balance sheet consists substantially of taxi medallions and loans secured by taxi medallions, which historically have been associated with higher than average delinquency rates and defaults, as substantially all of these loans were acquired after they had defaulted. As of December 31, 2025, we held $361.0 million in aggregate principal of New York City taxi medallion loans, of which approximately 39.6% of Non-MRP+ loans by unpaid principal balance were in default, compared to 65% as of December 31, 2024. Defaulted loans may result in foreclosure or sale at auction of the medallions securing such loans, which may result in us collecting less interest income over the original stated life of the loan. For many loans in default, we may attempt to restructure the debt to bring it out of default or attempt to recover meaningful amounts in other ways, however these methods may not be successful. If we fail to realize enough value on loans in default to cover the price we paid to acquire the loans in the secondary market, then our results of operations could be adversely impacted. The actual rates of delinquencies, defaults, repossessions, and losses on these loans could be more dramatically affected by a general economic downturn. Our taxi medallions are reported at cost and evaluated for impairment. As of December 31, 2025, we held 2,147 New York City medallions, as well as medallions in certain other jurisdictions, with an aggregate carrying value of $359.0 million, compared to 2,061 New York City taxi medallions, as well as medallions in certain other jurisdictions, with an aggregate carrying value of $345.4 million as of December 31, 2024. The value of our taxi medallion and loan portfolio, and the taxi industry in general, is susceptible to risk of loss resulting from, including but not limited to, changes in taxicab industry regulations that result in the issuance of additional medallions or increases in the expenses involved in operating a medallion. Our business is heavily concentrated in medallion collateralized lending and owned medallions, including leasing medallions to fleets or other drivers. As a result, we are more susceptible to fluctuations and risks particular to the New York City taxicab industry than a more diversified company. For example, our business is particularly sensitive to macroeconomic conditions that affect the U.S. economy, travel and tourism, as well as those that affect the City of New York. During periods of economic slowdown, delinquencies, defaults, repossessions, and losses generally increase, and may reduce discretionary spending in areas such as recreation and tourism, which would have a detrimental effect on the taxicab industry, which would in turn impact the value of our taxi medallions. In addition, changing consumer and driver preferences about modes of transportation and/or other alternatives for drivers (such as ride-share) could have an impact on borrowers’ ability to service debt on a medallion collateralized loan, which could impact the value of our owned medallions and the medallions underlying the loans and the ability of borrowers to pay off medallion loans, both of which would adversely affect our results of operations.
MRP+
As of December 31, 2025, 33% of our current medallions based on NYC taxi medallion count have participated in the MRP+, See “Item 1. Business-MRP and MRP+ for a detailed description of the program. The Reserve Fund was initially funded with $49 million, and any funding in excess of the initial amount is subject to future appropriations by the New York City Council and is not legally required or committed by the City of New York. The Reserve Fund balance was approximately $30.2 million and $37 million as of December 31, 2025 and 2024, respectively. As of December 31, 2025, the Reserve Fund balance represented approximately 1.3x of the annual debt service.
Under the MRP+, eligible medallion loans with a principal balance of $200,000 or more were reduced to an initial principal balance of $200,000, and further reduced to $170,000 per medallion (after a $30,000 per medallion principal reduction payment in the form of a grant from the Reserve Fund). Existing medallion loans with a principal balance of $200,000 or less had a principal balance equal to the existing principal balance reduced by (i) $30,000 per medallion and (ii) further reduced by 5% of the post-paydown principal balance per medallion resulting from (i) above. In no event will the principal balance of any eligible medallion loan exceed $170,000 per medallion. A reduction in the outstanding principal balance to the restructured principal balance is recorded as a write-down of principal in which no cash is received, at which time a loss is recorded based on the reduction in principal balance. The fair value of loans before and after entering the MRP+ program have seen minimal immediate change in fair value due to our fair value accounting policies for MRP+ and Non-MRP+ loans and the historical valuations of underlying NYC medallion collateral for the period of time in which the MRP+ program has existed.
Changes in Interest Rates
Our exposure to changes in interest rates primarily relates to the interest income generated by our medallion loans. In addition, the value of our MRP+ loans is determined by applying a discount to the anticipated future cash flows of the underlying loans. The two factors determining the discount are the movement in interest rates and a risk premium for likelihood of transaction close. A change in interest rates may impact the valuation of MRP+ loans.
Our profitability may be directly affected by interest rate levels and fluctuations in interest rates. As interest rates change, our gross interest rate spread on loans will either increase or decrease because the rates potentially charged on future seller financings provided in medallion sales are limited by market and competitive conditions, restricting our ability to pass on increased interest costs to the borrower.
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Changes in interest rates historically have not had an identifiable impact on our interest income, gross income spread, or our ability to pass on interest costs to the borrower. The majority of our loan portfolio historically has been non-accruing and has not made regular interest payments. The majority of our current interest income is from the MRP+ loans, which have a fixed interest rate of 7.3%.
Our Credit Facility requires the maintenance of an interest rate hedge. As of December 31, 2025, we had not yet entered into the required hedging transaction; the hedge was executed on January 26, 2026, within the contractual deadline of January 31, 2026. The hedge is an interest rate swap with a notional amount of $25.0 million, which corresponds to the initial draw on the Credit Facility, and effectively fixes our interest rate exposure on that portion of the Credit Facility at approximately 5.3% through the swap termination in August 2033, with the notional amount amortizing after December 2027 in line with projected loan repayments. The Term Loan bears a fixed interest rate and is not subject to interest rate variability. As the impact of interest rates has generally not been material to our historical operating results, we have not entered into any interest rate swaps or other hedging transactions to mitigate such risks. However, we may do so in the future if interest rates increase and our exposure to interest rates becomes more significant. Furthermore, with respect to our assets that are not MRP+ loans, which consist of New York City Non-MRP+ loans, approximately 40% of which are in default as of December 31, 2025, we believe that we are able to mitigate the impact from any rising interest rates as we are generally able to pass on such increased interest rate costs to the borrowers. For example, with respect to such assets, we generally expect to either refinance the defaulted loans into new medallion loans or restructure the existing loans with new loan terms, in each case at a rate that would reflect the then current market interest rate. As a result, we believe that we have the flexibility to adjust our interest rate exposure with respect to some of our asset portfolio.
While we have implemented hedging arrangements with respect to the Credit Facility and continue to monitor the interest rate and seek to mitigate the impact of interest rates, including potentially implementing any market based hedging strategies, we cannot provide assurance that such measures will fully mitigate the impact of changes in interest rates on our results of operations. Additional draws on the Credit Facility beyond the hedged notional amount, or any future variable-rate borrowings, would increase our exposure to interest rate fluctuations.
Key Components of Results of Operations
We have historically operated and managed our business in two reportable segments: Specialty Finance and Fleet Operations. We also report an Other category that includes corporate-level costs such as the MSA management fee, public company expenses, and directors’ and officers’ insurance. The following discussion of results of operations are based on each of our reportable segments and the Other category for the periods presented.
Revenue
Our revenue has historically been primarily comprised of interest income from the taxi medallion loans and any interest earned from cash on hand. All of the medallion loans are collateralized by one or more taxi medallions, with a significant portion of the loans participating in the MRP+ program. These loans are nonrecourse loans that do not carry a personal guarantee, but rather have credit support from funds provided by the City of New York. Medallion loans that do not participate in the MRP+ program are often further secured by personal guarantees and, in some cases, collateralized with additional collateral such as real estate of the borrowers. Our other revenue has historically been comprised of restructuring fees borrowers are requested to pay as part of the MRP+ program, payments received from the Reserve Fund as they are not contractual payments made by the borrowers, fees received in connection with Non-MRP+ restructurings and settlements, and the resolution of certain litigation and bankruptcy proceedings, as discussed further below.
Effective with the Signal Taxi Acquisition, our revenues also consist of fleet revenues from the leasing of our vehicle fleet and medallions to licensed TLC drivers, in which we act as the lessor. These leases generally are short-term and operate on a weekly basis with drivers renewing each week and payments being settled between the point-of-sale system, us, and the drivers on weekly basis. The leases may specify the weekly rate between medallion cost, vehicle cost, and other fees, or the lease will include all costs in one weekly lease rate agreed upon with a driver, and these fees can vary by lease based on prevailing market rates at the time of agreement. We account for these lease and non-lease components as a combined component in accordance with ASC 606.
Operating Expenses
Our operating expenses primarily comprise of: (i) service fee expenses, consisting of fees paid to our third-party servicer, Field Point Servicing, LLC (“Field Point”), for servicing our medallion loans; (ii) professional fees, consisting of fees for third-party professional services, including consulting, legal, accounting and lobbying; (iii) depreciation expense; (iv) management fee expenses, consisting of fees charged by the Manager under the MSA for ongoing management services; (v) general and administrative fees, consisting of certain fees for third-party professional services, medallion administration costs, taxi vehicle insurance and other vehicle related costs, and other general and administrative expenses; and (vi) fleet servicing fees, consisting of net expenses incurred as a result of the Consulting Agreement.
We expect our expenses, in particular professional fees and general and administrative fees, to increase for the foreseeable future as a result of operating as a public company, thereby requiring compliance with the rules and regulations of the SEC. As a result, we expect an increase in legal, audit, additional insurance expenses, investor relations activities and other administrative and professional services.
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Other Income (Expense)
We treat the loans purchased as a pool of loans in our books and records. Our purchases of taxi medallion loans have been transacted at significant discounts to par value and we have been working to resolve those loans. Resolution of the loans to date have resulted from (i) loan principal payments, at agreed upon amounts, either at or below par, and/or (ii) foreclosure and possession of collateral, the taxi medallions. In either case, we recognize a gain or loss, which is the difference between the sale proceeds of a loan, or collateral value less foreclosure costs in a foreclosure, and the carrying value. Gains on loans held for investment may derive from principal payments in cash or collateral that exceed the carrying value of the principal amount that was relieved. Losses on loans held for investment may occur upon a reduction in principal balance in a restructuring, including when loans enter the MRP+ program. For foreclosed loans, the difference between fair value of the collateral less foreclosure costs compared to the loan carrying value is recorded as a gain or loss. We record changes in fair value on loans held for investment as a result of changes in the fair value of loans collateralized by taxi medallions, as applicable, which are primarily generated through changes in medallion pricing and changes in unpaid principal balances on outstanding loans. Prior period changes in fair value have been included in the carrying value of such loans up until foreclosure.
We also primarily recognize within other income (expense) gains or losses from disposals of medallions, changes in fair value of our warrant liabilities, income earned from the City of New York’s WAV incentive program, and interest expense.
Provision for Income Taxes
Our provision for income taxes consists of federal and state taxes in the US, New York, and New York City.
On April 7, 2025, we consummated the Business Combination, resulting in a non-taxable transaction in accordance with Section 351 of the Internal Revenue Code of 1986, as amended. A portion of the non-corporate members of the DePalma Companies of approximately 83.7% contributed their ownership of the DePalma Companies in exchange for common stock of the Company. Following the Business Combination, we, a corporation, hold an 83.7% ownership interest in the DePalma Companies partnerships. In accordance with ASC 740, we are required to record deferred income taxes related to the difference between the tax basis received and the book basis in our 83.7% ownership interest in the DePalma Companies partnerships. The difference between the tax basis and the book basis in both partnerships was primarily driven by temporary differences within the DePalma Companies partnerships arising from specific assets and liabilities. The temporary differences generated prior to the transaction related to both taxi medallion amortization and unrealized gains and losses on loans held for investment. These items, along with others resulting during the periods presented, resulted in a net deferred tax liability and provision for incomes taxes of $54.1 million during the year ended December 31, 2025. The DePalma Companies are treated as a partnership for U.S. tax purposes and therefore are not subject to federal, state, or local income taxes. Accordingly, there was no provision for income taxes recorded in the historical financial statements prior to the Business Combination.
The Company, along with its wholly owned subsidiary, MAC, will file consolidated tax returns for US federal, New York State, and New York City jurisdictions. The filings will include our newly acquired 83.7% interest in the DePalma Companies.
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Results of Operations
The following table summarizes our results of operations for the years ended December 31, 2025 and 2024:
Year Ended December 31,
Revenue:
Fleet revenue $ 29,293 $ -
Operating expenses:
Management fee expense - related party 5,929 -
Other income:
Gains on loans held for investment, net 8,615 3,168
WAV grant income 555 -
Gains from disposal of medallions 88 103
Change in fair value of warrant liability 21 -
Interest expense (10 ) -
Income before provision for income taxes 10,078 9,355
Provision for income taxes (54,140 ) -
Net income attributable to non-controlling interest 885 -
Net income (loss) attributable to common stockholders $ (44,947 ) $ 9,355
The following discussion and analysis is for the years ended December 31, 2025 and 2024, respectively.
Revenue
Year Ended December 31,
(In thousands, except percentages) 2025 2024 % Change
Revenue:
Fleet revenue $ 29,293 $ - — %
Fleet revenue of $29.3 million was recognized during the year ended December 31, 2025 as a result of the Signal Taxi Acquisition. Fleet revenue is comprised of $21.3 million of revenue from the leasing of the Company’s vehicle fleet and medallions to licensed TLC drivers commencing with the Signal Taxi Acquisition, and $8.0 million from the one-time derecognition of a deposit liability upon the Signal Taxi Acquisition (see Note 6). The deposit liability represented vehicle lease payments received from Signal Taxi that had been deferred from recognition due to the collectability assessment of the underlying lease arrangements. Upon the Signal Taxi Acquisition, a change in circumstance occurred and the deposit liability was derecognized, representing the settlement of a preexisting relationship accounted for separately from the business combination. The $8.0 million is a non-recurring item; excluding it, recurring fleet revenue was $21.3 million.
Interest income decreased by $1.7 million, or 11%. This decrease was due to a $1.1 million decrease that was driven by lower interest income on cash due to lower cash balances, and a decrease of $1.0 million in interest from MRP+ loans due to lower outstanding
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principal, partially offset by a $0.4 million increase in interest from Non-MRP+ loans due to loan restructurings that increased loan performance.
Other revenue decreased by $0.1 million, or 1%. This decrease was due to lower payments received from the Reserve Fund resulting from a lower amount of MRP+ loans in default during the year ended December 31, 2025.
General and Administrative
Year Ended December 31,
(In thousands, except percentages) 2025 2024 % Change
General and administrative expenses increased by $17.0 million, or 3,382%. This increase was comprised of $12.0 million due to the Signal Taxi Acquisition and consolidation of Signal Taxi operating costs, most notably including vehicle insurance and other fleet operating costs, $2.1 million of public company corporate insurance expenses, $1.1 million in state and local non-income taxes, and various other corporate and public company expenses. The increase reflects costs incurred to support the expanded fleet operations and the related Fleet Revenue stream recognized during the year.
Professional Fees
Year Ended December 31,
(In thousands, except percentages) 2025 2024 % Change
Professional fees increased by $2.6 million, or 35%. This increase was due primarily to professional advisor costs related to the closing of the Business Combination and public company expenses.
Fleet Servicing Fees, Net
Year Ended December 31,
(In thousands, except percentages) 2025 2024 % Change
Fleet servicing fees increased by $5.7 million. This increase was due to our entry into the fleet servicing Consulting Agreement, which commenced on November 15, 2024.
Service Fee Expense
Year Ended December 31,
(In thousands, except percentages) 2025 2024 % Change
Service fee expense increased by $0.1 million, or 1%. This increase was primarily due to timing of reimbursable pass-through costs (actual costs incurred by our service provided on our behalf, without markup).
Management Fee Expense - Related Party
Year Ended December 31,
(In thousands, except percentages) 2025 2024 % Change
Management fee expense - related party $ 5,929 $ - — %
Managementfee expense - related party increased by $5.9 million. This increase was due to the execution of the MSA upon the closing of the Business Combination. Under the MSA, MAM receives a management fee each fiscal quarter calculated as the product of (i) 0.375% multiplied by (ii) the Company’s adjusted net assets. The MSA has an initial term of five years from the closing of the Business Combination and automatically renews for an additional five-year period unless terminated by either party. See Note 18 to our consolidation financial statements additional information regarding the MSA and related party transactions.
Depreciation Expense
Year Ended December 31,
(In thousands, except percentages) 2025 2024 % Change
Depreciation expense increased by $1.5 million, or 77%. This increase was due to the purchase and placement of additional taxicab vehicles in service.
Gains on Loans Held for Investment, Net
Year Ended December 31,
(In thousands, except percentages) 2025 2024 % Change
Gains on loans held for investment, net $ 8,615 $ 3,168 172 %
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Gains on loans held for investment, net increased by $5.4 million, or 172%, to $8.6 million for the year ended December 31, 2025 from $3.2 million for the year ended December 31, 2024. This increase was primarily driven by the recognition of approximately $12.2 million in fair value gains on the TML IV loan portfolio acquired in December 2025, reflecting the excess of the estimated fair value of the acquired loans over the purchase price at the acquisition date. This was partially offset by (i) a $5.1 million markdown on Chicago medallion loans, primarily due to lower observed medallion transfer prices in the Chicago market, (ii) a $4.2 million decrease in gains from Non-MRP+ loan restructurings, reflecting the impact of principal write-downs on loans restructured during the period, and (iii) a $0.2 million net decrease from changes in value of loans in other jurisdictions. MRP+ loan fair values contributed a $2.8 million increase, driven by improved collateral valuations and changes in the performing loan population.
WAV Grant Income
Year Ended December 31,
(In thousands, except percentages) 2025 2024 % Change
WAV grant income $ 555 $ - — %
WAV grant income increased by $0.6 million. This increase was due to the Signal Taxi Acquisition and the recognition of income from the quarterly WAV grant incentive.
Gains from Disposal of Medallions
Year Ended December 31,
(In thousands, except percentages) 2025 2024 % Change
Gains from disposal of medallions $ 88 $ 103 (15 )%
Gains from disposal of medallions decreased insignificantly relative to the total carrying value of our medallions. This decrease was due to the disposal of taxi medallions through sale or settlement transactions.
Change in Fair Value of Warrant Liability
Year Ended December 31,
(In thousands, except percentages) 2025 2024 % Change
Change in fair value of warrant liability $ 21 $ - — %
We did not have any warrants outstanding in 2024. The increase was due to the resulting change in fair value of the liability classified warrants that were assumed from MAC in the Business Combination.
Interest Expense
Year Ended December 31,
(In thousands, except percentages) 2025 2024 % Change
Interest expense $ (10 ) $ - — %
We did not have any interest expense prior to the long-term borrowing arrangements executed in December 2025. Interest expense increased as a result of coupon interest and amortization of issuance costs recognized related to our long-term borrowings.
Provision for Income Taxes
Year Ended December 31,
(In thousands, except percentages) 2025 2024 % Change
Provision for income taxes $ (54,140 ) $ - — %
Provision for income taxes increased by $54.1 million. This increase was due to the recognition of non-cash federal and state deferred taxes, primarily as a result of the acquisition of approximately 83.7% of the DePalma Companies in the Business Combination. The DePalma Companies are treated as a partnership for U.S. tax purposes and therefore are not subject to federal, state, or local income taxes. Accordingly, there was no provision for income taxes recorded in the historical financial statements prior to the Business Combination.
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Segment Results of Operations
We operate our business as two operating and reportable segments: Specialty Finance and Fleet Operations. For additional information about our segments, see Note 16 in the section entitled “Segment Information” as referred to in the notes to our consolidated financial statements included elsewhere in this Annual Report.
The following tables summarizes our segment results of operations for the years ended December 31, 2025 and 2024:
Revenue
Year Ended December 31,
(In thousands, except percentages) 2025 2024 % Change
Fleet Operations 29,694 - — %
Specialty finance revenue decreased by $1.1 million, or 6%. This decrease was primarily due to a decrease of $1.0 million in interest from MRP+ loans due to lower outstanding principal, a decrease of $0.5 million in other revenue due to lower payments received from the Reserve Fund resulting from a decrease in MRP+ loans in default during the year ended December 31, 2025, partially offset by a $0.4 million increase in interest from Non-MRP+ loans due to loan restructurings that increased loan performance.
Fleet operations revenue increased by $29.7 million. This increase was comprised of $21.3 million of recurring fleet revenue from the leasing of vehicles and medallions to licensed TLC drivers, and $8.0 million from the one-time derecognition of a deposit liability upon the Signal Taxi Acquisition (see Note 6). The deposit liability recognition is a non-recurring item.
Other revenue decreased by $1.1 million, or 79%. This decrease was due to a decrease in interest income received on cash balances during the year ended December 31, 2025.
Operating Expenses
Year Ended December 31,
(In thousands, except percentages) 2025 2024 % Change
Specialty finance operating expenses consist of service fee expenses and professional fees which, in the aggregate, decreased insignificantly by $0.1 million, or 2%.
Fleet operations operating expenses increased by $21.1 million, or 715%. This increase was primarily comprised of $11.9 million due to the Signal Taxi Acquisition and consolidation of Signal Taxi’s fleet operating costs most notably including insurance expenses, $5.7 million due to costs incurred in the Consulting Agreement that commenced in November 2024, and $1.5 million due to an increase in depreciation expense.
Other operating expenses increased by $11.8 million, or 191%. This increase was due to costs related to the closing of the Business Combination, public company expenses, and the execution of the MSA, which became effective upon the closing of the Business Combination.
Net Income (Loss)
Year Ended December 31,
(In thousands, except percentages) 2025 2024 % Change
Specialty finance net income decreased by $27.8 million, or 163%. This decrease was primarily due to an increase in provision for income taxes of $32.3 million as a result of the Business Combination, an increase in net gains on loans held for investment of $5.4 million, and a decrease in interest income and other revenues of $1.1 million.
Fleet operations net loss increased by $15.2 million, or 533%. This increase was primarily due to an increase in provision for income taxes of $24.3 million as a result of the Business Combination, partially offset by an $8.0 million increase in fleet revenue due to the derecognition of the deposit liability, which is a non-recurring item, and the net impact of the consolidation of Signal Taxi’s fleet
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operating results.
Other net loss increased by $10.5 million, or 216%. This increase was primarily due to an increase in costs related to the closing of the Business Combination and public company expenses of $5.9 million, the execution of the MSA which resulted in a management fee expense of $5.9 million, and a decrease in interest income of $1.1 million, partially offset by an increase in the benefit from income taxes of $2.4 million as a result of the Business Combination.
Liquidity and Capital Resources
Cash Flows
As of December 31, 2025, and 2024, we had available cash and cash equivalents, excluding restricted cash, of $25.3 million and $35.2 million, respectively, available to fund our operations. The decrease of $9.9 million was primarily due to the payment of certain non-recurring MAC transaction costs of $11.6 million paid at closing of the Business Combination, investments in taxi vehicles of $38.7 million, the TML asset acquisition of $15.9 million, and distributions to noncontrolling interests of $3.1 million, partially offset by proceeds from long-term borrowing arrangements, net of issuance costs, of $40.4 million, and repayments on loans held for investment of $10.1 million. As of December 31, 2025, and 2024, we had restricted cash of $0.5 million and $0, respectively, which consists of funds held for security deposits and the lockbox arrangement of our Credit Facility.
The taxi industry is competitive and there are uncertainties around our cash flows, including those from our loan portfolio. We compete with other established fleets, technology enabled ride sharing apps, and public transit among other competitors. Our ability to maintain current cash flow levels from MRP+ loans is dependent on the continued availability of the Reserve Fund. See ‘Item 1. Business—Reserve Fund’ for a description of the Reserve Fund balance, tiered replenishment mechanism, and important limitations.
Based on our current expectations, we believe that our existing cash and cash equivalents, together with the available borrowing capacity under our Credit Facility and cash provided by operating activities, will be sufficient to fund our working capital requirements for at least the next 12 months.
The following table summarizes our cash flows for the periods indicated:
Year Ended December 31,
(in thousands)
Operating Activities
The decrease to net cash provided by operating activities was $9.1 million, or 89%. This decrease was primarily a result of the Signal Taxi Acquisition and consolidation of Signal Taxi’s fleet operating results, including the $8.0 million non-cash derecognition of a deposit liability upon the Signal Taxi Acquisition, as well as a decrease in interest income of $1.7 million.
Investing Activities
The increase to net cash used in investing activities was $47.3 million, or 423%. This increase was primarily due to an increase in the purchases of taxi vehicles during the period of $37.8 million, the TML asset acquisition of $15.9 million, and a decrease in repayments on loans held for investment of $5.0 million, partially offset by a decrease in outflows for originations of loans of $2.8 million and an increase in asset-based WAV grants received of $8.0 million.
Financing Activities
The increase to net cash provided by financing activities was $48.1 million, or 214%. This increase was primarily due to proceeds from long-term borrowing arrangements, net of issuance costs, of $40.4 million and a decrease in capital distributions to pre-Business Combination DePalma Companies equityholders of $22.5 million, partially offset by the repayment of $3.7 million of MAC promissory notes that were outstanding at closing of the Business Combination, as well as the payment of MAC’s deferred underwriting fees, legal costs and other transaction costs incurred in connection with the Business Combination of $8.0 million each of which are non-recurring, and distributions to noncontrolling interests of $3.1 million.
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Future sources and uses of liquidity
Our assets primarily consist of cash and cash equivalents, loans held for investment, at fair value, taxi vehicles, and taxi medallion intangible assets which, other than cash and cash equivalents, are generally not considered readily liquid assets by nature.
Our future capital requirements will depend on many factors, including our degree of success in collecting contractual payments on MRP+ loans, reperforming, restructuring or resolving Non-MRP+ loans, sales of medallions (which may include seller financing), our ability to scale the profitability of our taxi fleet, our ability to maintain compliance with contractual covenants on our long-term borrowing arrangements, general economic conditions, future market growth and competition in the mobility market.
In December 2025, we executed the Credit Facility with DZ Bank resulting in an increase in long-term borrowings outstanding of $25.0 million, primarily to facilitate the TML asset acquisition. We are eligible to draw up to $120.0 million on the Credit Facility, subject to certain borrowing base collateral requirements of MRP+ loans, which can be used for general corporate purposes. We are required to secure MRP+ loans within the bankruptcy-remote SPV as collateral to make draws on the Credit Facility. Although the SPV is included in our consolidated financial statements, it is a separate legal entity with separate creditors. Upon the transfer of ownership and control of MRP+ loans to the SPV, we have limited retained interests in the receivables sold and they become unavailable to other creditors should we become insolvent.
During the term of the Credit Facility, all cash receipts from borrowers on secured MRP+ loans are deposited into a lockbox account that is subject to control by DZ Bank. Funds in the lockbox account are subject to monthly periodic disbursements based on a priority of payments schedule first including any fees or accrued interest due to the lender and other facility stakeholders, with the remainder available to be remitted to us. Subsequent to the revolving period on December 30, 2027, any funds remaining in the lockbox account after payment of lender fees and interest are to be applied to the principal balance outstanding on the Credit Facility. The Credit Facility otherwise matures in December 2030. As of December 31, 2025, approximately $39.8 million of MRP+ loans were secured within the SPV and less than $0.1 million was in the lockbox account. We plan to secure additional MRP+ loans as needed to support additional draws on the Credit Facility, however the restricted use of such secured assets and outstanding principal on the Credit Facility could have a significant impact on our sources and uses of liquidity. As of December 31, 2025, we were eligible to draw an additional $14.8 million based on existing applicable MRP+ loans secured in the SPV.
Further in December 2025, we executed the Auxilior Term Loan resulting in an increase in long-term borrowing outstanding of $17.2 million. We will use the proceeds of the term loan to finance the acquisition of new taxicab vehicles to scale our fleet operations. The Auxilior Term Loan requires fixed monthly payments of principal and interest and matures in January 2029, and requires that we collateralize certain of our taxicab vehicles, excluding any related taxi medallions. We do not anticipate the collateralization of such taxi vehicles to have a significant impact on our liquidity given taxi vehicles are not considered readily liquid assets by nature.
As of December 31, 2025, we have future commitments in the form of outstanding long-term borrowings. The table below is a summary of the composition of our long-term borrowing arrangements as of December 31, 2025:
Less: unamortized debt issuance costs (242 )
Less: current portion of term loan (4,806 )
Term loan, net of current portion 12,172
Total long-term borrowings, net of current portion $ 37,172
Refer to Note 14 of our consolidated financial statements included elsewhere in this Annual Report for further information.
In addition, as of December 31, 2025, we have additional outstanding commitments in the form of two operating leases that contain renewal options but are otherwise committed until June 2027 and November 2029, respectively. Refer to Note 12 of our consolidated financial statements included elsewhere in this Annual Report for further information.
In the future, we may be required or choose to seek additional equity or debt financing. If we require additional financing, we may not be able to raise such financing on terms acceptable to us or at all. If we are unable to raise additional capital or generate cash flows necessary to expand our operations, we may not be able to compete successfully, which would harm our business, results of operations, and financial condition. In addition, we cannot assure you that these measures and our cash flows from operations and cash and cash equivalents will be sufficient to meet our working capital requirements and to meet our commitments in the future.
Critical Accounting Policies and Estimates
Our consolidated financial statements and the related notes thereto included elsewhere in this Annual Report are prepared in accordance with U.S. GAAP. The preparation of our consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent liabilities, and the reported amounts of revenue, costs and expenses, and related disclosures. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results could differ significantly from these estimates. To the extent that there are
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differences between our estimates and actual results, future financial statement presentation, financial condition, results of operations, and our cash flows will be affected.
An accounting policy or estimate is considered to be critical or significant if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made, and if different estimates that reasonably could have been used, or changes in the accounting estimates that are reasonably likely to occur periodically, could materially impact the consolidated financial statements.
We believe the following critical accounting policies reflect the more significant estimates and assumptions used in the preparation of our consolidated financial statements. For a description of our significant accounting policies, see Note 2 “Summary of Significant Accounting Policies,” of the notes to our consolidated financial statements included elsewhere in this Annual Report.
Loans Held for Investment, at Fair Value
Our loans held for investment are generally collateralized by taxi medallions in various jurisdictions, primarily New York City. We account for our loans held for investment using the fair value option and by applying the fair value principles of ASC 820, Fair Value Measurement. Our loans held for investment are determined to be Level 3 measurements pursuant to the fair value hierarchy as the valuation requires inputs that are significant and unobservable. Our MRP+ loan portfolio is primarily performing and valued by using a discount rate to present value cash flows from loans restructured by the City of New York under the MRP+ program (at a price of $170,000). To determine the discount rate, we consider the internal rate of return on the investment, changes in the US Treasury rates to maturity of the loans and a risk premium for the likelihood of whether a loan will be successfully restructured under the MRP+ program. Our Non-MRP+ loan portfolio is primarily nonperforming and valued at the lesser of unpaid principal balance and the medallion or other collateral value attached to the loan, less a discount applied to the collateral value to estimate costs associated with taking ownership of the collateral. The most significant inputs in determining the medallion collateral value include our recent medallion sale prices, the amount backstopped by the City of New York under the MRP+, and certain market prices reported by the TLC. As of December 31, 2025, our New York City medallion collateral value was determined to be $175,000 for each medallion, calculated as the midpoint between an estimated range, of which the low value was $165,000 and the high value was $185,000.
Significant increases or decreases in such factors, or structural and/or regulatory changes to the New York City taxi industry would result in a significantly lower or higher fair value measurement. The value of the underlying collateral and thus, the portfolio of loans may be impacted by multiple factors including, but not limited to, general macroeconomic conditions and state of the taxi industry, loan restructurings, governmental initiatives, and medallion transfers. Without a readily ascertainable market value, the estimated value of our portfolio of loans held for investment, at fair value may differ significantly from the values that would be placed on the portfolio if a readily determinable market existed for the loans. The illiquidity of our loan portfolio may adversely affect our ability to dispose of loans at times when it may be advantageous to liquidate such portfolio. In addition, if we were required to liquidate some or all of the loans in the portfolio, the proceeds of such liquidation may be significantly less than the current value of such loans. Changes in the various unobservable inputs used to determine valuations may have similar or diverging impacts on valuation. Significant increases or decreases in these inputs in isolation and interrelationships between those inputs could result in significantly higher or lower fair value measurements than noted in the tables above.
Intangible Assets
Our taxi medallions are indefinite-lived intangible assets in accordance with ASC 350, Intangibles-Goodwill and Other. Costs incurred for renewal of taxi medallions are included within general and administrative expenses.
Indefinite-lived intangible assets are not amortized but instead tested for impairment. We evaluate indefinite-lived intangible assets for impairment annually on October 1st of each year or more frequently whenever events or changes in circumstances indicate that it is more likely than not that the asset is impaired.
We evaluate our taxi medallions as a single unit of accounting by jurisdiction for purposes of testing for impairment, as taxi medallions are homogeneous assets within each jurisdiction, which are interchangeable and have identical characteristics. In our evaluation of indefinite-lived intangible assets for impairment, a qualitative assessment is typically performed prior to performing the quantitative analysis. If, after assessing the qualitative factors, we determine that it is more likely than not that the fair value of the indefinite-lived intangible asset is less than its carrying value, a quantitative assessment is performed. The fair value of the indefinite-lived intangible asset is compared to its carrying amount and if the carrying value exceeds its fair value, an impairment loss will be recognized. Determining the fair value of these assets is judgmental in nature and involves the use of significant estimates and assumptions, notably including the determination of anticipated impacts of changes in regulatory and macroeconomic factors impacting our industry, as well as the use of limited readily available market information of third party medallion transfers, including those reported by the TLC. No impairment losses were recognized for the years ended December 31, 2025 and 2024.
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Recent Accounting Pronouncements
See Note 2 in the section entitled “Summary of Significant Accounting Policies — Recent Accounting Pronouncements” as referred to in the notes to our consolidated financial statements included elsewhere in this Annual Report for a discussion about accounting pronouncements recently issued.
Emerging Growth Company Status
We are an emerging growth company, as defined in the JOBS Act. The JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards applicable to public companies, allowing them to delay the adoption of those standards until those standards would otherwise apply to private companies. We have elected to use this extended transition period under the JOBS Act until the earlier of the date we are no longer an emerging growth company or we affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act. As a result, following the Business Combination, our consolidated financial statements may not be comparable to the financial statements of companies that are required to comply with the effective dates for new or revised accounting standards that are applicable to public companies, which may make common stock less attractive to investors.
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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
We are a smaller reporting company, as defined in Rule 12b‐2 under the Exchange Act, and are not required to provide the information required by Item 305 of Regulation S‐K. Accordingly, we have omitted this Item 7A.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
We have omitted the supplementary financial data required by Item 302 of Regulation S‐K, which is not required for smaller reporting companies.
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INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Report of Independent Registered Public Accounting Firm (PCAOB ID No. 34) 60
Consolidated Financial Statements
Consolidated Balance Sheets 61
Consolidated Statements of Operations 62
Consolidated Statements of Change in Stockholders’ Equity 63
Consolidated Statements of Cash Flows 64
Notes to Consolidated Financial Statements 65
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Report of Independent Registered Public Accounting Firm
To the shareholders and the Board of Directors of Marblegate Capital Corporation
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Marblegate Capital Corporation and its subsidiaries (the "Company") as of December 31, 2025 and 2024, the related consolidated statements of operations, changes in stockholders' equity, and cash flows, for each of the two years in the period ended December 31, 2025, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for the years ended December 31, 2025 and 2024, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
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 financial statements are free of material misstatement, whether due to error or fraud. 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. Accordingly, we express no such opinion.
Our audits 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. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
/s/ Deloitte & Touche LLP
New York, New York
March 26, 2026
We have served as the Company's auditor since 2023.
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Marblegate Capital Corporation
Consolidated Balance Sheets
(In thousands, except share amounts)
December 31,
Assets:
Current assets:
Restricted cash 526 —
Due from related party — 16
Prepaid expenses and other current assets 11,372 1,448
Property and equipment, net 572 -
Operating lease right-of-use assets 5,084 4,910
Other non-current assets 1,264 -
Liabilities and stockholders' equity:
Current liabilities:
Accrued expenses and other current liabilities $ 5,968 $ 1,274
Management fee payable - related party 5,929 —
Operating lease liabilities, current portion 410 315
Current portion of long-term borrowings 4,806 —
Deposit liability — 7,086
Deferred tax liability, net 54,140 —
Long-term borrowings, net of current portion 37,172 —
Operating lease liabilities, net of current portion 4,733 4,603
Commitments and contingencies (See Note 12)
Stockholders' equity:
Total Marblegate Capital Corporation stockholders' equity 491,899 658,428
Noncontrolling interests 104,371 —
Total liabilities and stockholders' equity $ 713,032 $ 673,018
The accompanying notes are an integral part of these consolidated financial statements.
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Marblegate Capital Corporation
Consolidated Statements of Operations
(In thousands, except share and per share amounts)
Year Ended December 31,
Revenue:
Fleet revenue $ 29,293 $ -
Operating expenses:
Management fee expense - related party 5,929 —
Other income (expense):
Gains on loans held for investment, net 8,615 3,168
WAV grant income 555 —
Gains from disposal of medallions 88 103
Change in fair value of warrant liability 21 —
Interest expense (10 ) —
Income before provision for income taxes 10,078 9,355
Provision for income taxes (54,140 ) —
Net income attributable to non-controlling interest 885 —
Net income (loss) attributable to common stockholders $ (44,947 ) $ 9,355
Net income (loss) per share:
Weighted-average shares outstanding:
The accompanying notes are an integral part of these consolidated financial statements.
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Marblegate Capital Corporation
Consolidated Statements of Changes in Stockholders’ Equity
(In thousands, except share amounts)
Common Stock
Distributions to noncontrolling interests - - - - (3,138 ) (3,138 )
The accompanying notes are an integral part of these consolidated financial statements.
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Marblegate Capital Corporation
Consolidated Statements of Cash Flows
(In thousands)
Year Ended December 31,
Cash flows from operating activities:
Gains on loans held for investment, net (8,615 ) (3,168 )
Noncash portion of fleet servicing fees 1,050 131
Noncash lease expense 51 8
Gains from disposal of medallions (88 ) (103 )
Change in fair value of warrant liability (21 ) -
Deferred income taxes 54,140 -
Changes in operating assets and liabilities:
Due from related party 16 (16 )
Prepaid expenses and other current assets (4,039 ) (400 )
Accrued expenses and other liabilities (168 ) (617 )
Management fee payable 5,929 -
Net cash (used in) provided by operating activities 1,169 10,266
Cash flows from investing activities:
Cash acquired in the Business Combination 91 -
Cash acquired in Signal Taxi Acquisition 34 -
Medallion disposal down payments and settlements received 430 10
Purchases of rental vehicles (38,656 ) (1,099 )
Asset-based WAV grant receipts 8,000 -
Purchases of property and equipment (247 ) -
Purchases of Non-MRP+ loans - (2,825 )
Repayments on loans held for investment 10,146 15,093
TML asset acquisition, net of cash acquired (15,909 ) -
Net cash (used in) provided by investing activities (36,111 ) 11,179
Cash flows from financing activities:
Capital distributions to DePalma Companies equityholders - (22,500 )
Distributions to noncontrolling interests (3,138 ) -
Proceeds from term loan 17,220 -
Proceeds from credit facility 25,000 -
Payment of issuance costs on term loan and credit facility (1,822 ) -
Net cash provided by (used in) financing activities 25,609 (22,500 )
Net decrease in cash and cash equivalents and restricted cash (9,333 ) (1,055 )
Cash and cash equivalents and restricted cash, at end of year $ 25,840 $ 35,173
Supplemental disclosure of cash flow information:
Non-cash investing and financing activities:
Intangible asset taxi medallions acquired in loan foreclosures $ 12,285 $ 45,114
WAV grant receivables applied to rental vehicles basis 4,300 -
Originations of Non-MRP+ loans from medallion disposals 495 385
Recognition of noncontrolling interests in the Business Combination 106,624 -
Right-of-use assets obtained in exchange for lease liabilities - 4,968
The accompanying notes are an integral part of these consolidated financial statements.
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Marblegate Capital Corporation
Notes to Consolidated Financial Statements
1. Description of Organization and Business Operations
Marblegate Capital Corporation (collectively, with its subsidiaries, the “Company” or “MCC”) is a Delaware corporation that operates a fully integrated platform combining fleet operations and medallion-backed specialty finance, primarily focused in the New York City regulated street-hail market.
The Company was originally formed by Marblegate Acquisition Corporation (“MAC”), a Delaware corporation and special purpose acquisition company, on February 2, 2023 and survived the Business Combination, as defined below. Following the closing of the Business Combination, shares of MCC common stock (“Common Stock”) and MCC warrants began trading on OTC Markets OTCQX (“OTCQX”) under the symbols “MGTE” and “MGTEW”, respectively, on April 10, 2025.
On April 7, 2025 (the “Closing Date”), the Company consummated the business combination contemplated by an agreement and plan of merger, dated as of February 14, 2023 (the “Business Combination Agreement”) by and among the Company, MAC, Marblegate Asset Management, LLC, a Delaware limited liability company (the “Manager”), MAC Merger Sub, Inc., a Delaware corporation and a direct wholly owned subsidiary of the Company, DePalma Acquisition I LLC, a Delaware limited liability company (“DePalma I”), and DePalma Acquisition II LLC, a Delaware limited liability company (“DePalma II,” and together with DePalma I, the “DePalma Companies”), pursuant to which MAC agreed to combine with the DePalma Companies in a series of transactions that resulted in the Company becoming a publicly traded company and the surviving company (the “Business Combination”). Immediately prior to the consummation of the Business Combination, on April 7, 2025, as contemplated by the agreement and plan of merger, the Company and the DePalma Companies effected a series of reorganization transactions, resulting in the Company becoming the owner of approximately 83.7% of the DePalma Companies, with the remaining 16.3% continuing to be owned by certain limited partners of the DePalma Companies.
As a result of the Business Combination, MCC is a holding company, in which substantially all of its assets are held by, and its businesses operate through, the DePalma Companies and its subsidiaries. The Business Combination was accounted for as a reverse recapitalization in accordance with accounting principles generally accepted in the U.S. (“U.S. GAAP”). The DePalma Companies were determined to be the accounting acquirer in the Business Combination, and, therefore, the historical combined financial statements of the DePalma Companies became the basis for the historical financial statements of the Company upon the closing of the Business Combination. The accompanying financial statements retrospectively combine the results of the DePalma Companies. See Note 3 for additional information.
The Company’s operations are managed by the Manager pursuant to a certain Management Services Agreement (the “MSA”) effective upon the Closing Date. The DePalma Companies were managed by the Manager prior to the Business Combination. Pursuant to the MSA, the Manager provides certain management services to the Company including, but not limited to, overseeing the acquisition and disposition of the Company’s assets, overseeing the loan portfolio held by the Company, managing the Company’s day-to-day business and operations, evaluating the financial and operational performance of the Company, providing a management team to serve as executive officers of the Company, and performing any other services for and on behalf of the Company to the extent that such services are consistent with those that are customarily performed by the executive officers and employees of a publicly listed company. In addition, Field Point Servicing, LLC (the “Loan Servicer” or “Field Point”) is the third-party loan servicer for all of the loans held by the Company.
2. Summary of Significant Accounting Policies
Basis of Presentation and Principles of Consolidation
The accompanying consolidated financial statements have been prepared in accordance with U.S. GAAP. The consolidated financial statements include the accounts of the Company and its wholly owned and majority-owned subsidiaries in which the Company has a controlling financial interest, including a variable interest entity (“VIE”) for which the Company is the primary beneficiary (see Note 14). Prior to the Closing Date, the combined financial statements include the accounts of the DePalma Companies. All intercompany transactions and balances have been eliminated in the consolidation.
Emerging Growth Company Status
The Company is an emerging growth company as defined in the Jumpstart Our Business Startups Act (“JOBS Act”). The JOBS Act provides emerging growth companies with certain exemptions from public company reporting requirements for up to five fiscal years while a company remains an emerging growth company. As part of these exemptions, the Company has reduced disclosure obligations such as for executive compensation, and it is not required to comply with auditor attestation requirements from Section 404(b) of the Sarbanes-Oxley Act of 2002, as amended, regarding its internal control over financial reporting. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an
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emerging growth company, is not required to adopt the new or revised standard at the time public companies adopt the new or revised standard.
Use of Estimates
Financial statements prepared in conformity with U.S. GAAP require management to make estimates and assumptions that affect the amounts and disclosures reported in the financial statements and accompanying notes. Such estimates and assumptions could change in the future as more information becomes known, which could impact the amounts reported and disclosed herein. Management evaluates its estimates, assumptions, and judgments on an ongoing basis using historical experience and other factors, including the current economic environment. Management believes these estimates, assumptions and judgments to be reasonable under the circumstances. The Company’s significant estimates and assumptions include the estimation of the testing of impairment for the indefinite-lived taxi medallion intangible assets, the fair value of loans held for investment, the fair value of indefinite-lived taxi medallion intangible assets acquired in acquisitions and loan foreclosures, the fair value of the medallion incentive liability, deferred taxes and income tax provisions, and the incremental borrowing rate to determine the present value of lease payments. Actual results could differ from these estimates.
Cash and Cash Equivalents and Restricted Cash
The Company considers money market accounts and highly liquid investments with an original maturity of three months or less to be cash equivalents. Restricted cash consists of cash balances segregated for security deposits as well as a lockbox arrangement on a credit facility. The Company’s cash and cash equivalents and restricted cash are held by major financial institutions, for which accounts are insured by the Federal Deposit Insurance Corporation up to $250,000 per legal entity. At times, cash and cash equivalents and restricted cash balances may exceed federally insured limits, and this potentially subjects the Company to concentration of credit risk. The Company has not experienced any losses in such accounts. Furthermore, the Company reduces risk by maintaining accounts with high quality financial institutions that management believes are creditworthy, and by monitoring this credit risk and adjusting when necessary.
The following table provides a reconciliation of cash and cash equivalents and restricted cash to amounts presented in the consolidated statements of cash flows:
December 31,
Restricted cash 526 -
Total cash and cash equivalents and restricted cash $ 25,840 $ 35,173
Intangible Assets
The Company’s taxi medallions are determined to be indefinite-lived intangible assets in accordance with the Accounting Standards Codification (“ASC”) 350, Intangibles-Goodwill and Other. The Company acquires taxi medallions by purchase, or by foreclosure on loans collateralized by taxi medallions. If medallion collateral is foreclosed on, the Company recognizes the medallion at fair value on the foreclosure date, less foreclosure related costs. The fair value of a medallion acquired in foreclosure is a nonrecurring Level 3 measurement and is measured consistent with the Company’s policy in determining market medallion prices to measure underlying collateral value for its loans held for investment, at fair value, as further detailed in Note 4. Costs incurred for renewal of taxi medallions are included within general and administrative expenses in the consolidated statements of operations.
Indefinite-lived intangible assets are not amortized but instead tested for impairment. The Company evaluates indefinite-lived intangible assets for impairment annually on October 1st of each year or more frequently whenever events or changes in circumstances indicate that it is more likely than not that the asset is impaired. The Company evaluates taxi medallions owned as a single unit of accounting by jurisdiction for purposes of testing for impairment, as taxi medallions are homogeneous assets within each jurisdiction, which are interchangeable and have identical characteristics. In the Company’s evaluation of indefinite-lived intangible assets for impairment, a qualitative assessment is typically performed prior to performing the quantitative analysis. If, after assessing the qualitative factors, the Company determines that it is more likely than not that the fair value of the indefinite-lived intangible asset is less than its carrying value, a quantitative assessment is performed. The fair value of the indefinite-lived intangible asset is compared to its carrying amount and if the carrying value exceeds its fair value, an impairment loss will be recognized. Determining the fair value of these indefinite-lived intangible assets is judgmental in nature and involves the use of significant estimates and assumptions. No impairment losses were recognized for the years ended December 31, 2025 and 2024.
Gains and losses on the disposal of taxi medallions are recorded within gains from disposal of medallions in the consolidated statements of operations and are measured as the difference between the sale proceeds and the carrying value of a taxi medallion on an average cost basis.
Rental Vehicles, net
Rental vehicles represent the Company’s taxicab vehicles which are rented to licensed taxicab drivers with the Company acting as the lessor. The leases generally are short-term and operate on a weekly basis with drivers renewing each week. Rental vehicles, net are
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stated at cost, less accumulated depreciation using the straight-line method over the estimated useful life and assumes no salvage value. Maintenance and repairs are charged to expense when incurred. Additions and improvements that extend the economic useful life of the asset are capitalized and depreciated over the remaining useful life of the vehicle. Rental vehicles are depreciated whether or not the vehicle is out on rent. The Company’s rental vehicles have useful lives ranging from 3-5 years.
Rental vehicles, along with other property and equipment, are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset or asset group may not be recoverable through the estimated undiscounted future cash flows derived from such assets. Factors that the Company considers in deciding when to perform an impairment review include significant changes in the Company’s forecasted projections for the asset or asset group for reasons including, but not limited to, significant changes, or planned changes in the Company’s use of the long-lived assets and significant negative industry or economic trends. If the Company determines that the carrying amount of such assets may not be recoverable, recoverability is measured based on the undiscounted cash flows expected to be generated by the related asset or asset group. If impairment is indicated, the long-lived asset group is written down by the amount by which the carrying value of the asset group exceeds the related fair value of the asset group with the related impairment charge recognized. For the years ended December 31, 2025 and 2024, there were no indicators of impairment of the value of rental vehicles or other property and equipment and no impairment losses were recognized.
Property and Equipment, net
Property and equipment, net are stated at cost, less accumulated depreciation. Maintenance and repairs are charged to expense when incurred. Additions and improvements that extend the economic useful life of the asset are capitalized and depreciated over the remaining useful lives of the assets. The cost and accumulated depreciation of assets sold or retired are removed from the respective accounts, and any resulting gain or loss is reflected in current earnings as income or loss from operations. Depreciation is recognized using the straight-line method in amounts considered to be sufficient to allocate the cost over the estimated useful lives, as follows:
Asset Category Depreciable Life
Furniture and fixtures 7 years
Leasehold improvements Lesser of useful life and lease term
Loans Held for Investment, at Fair Value
The Company holds loans for investment that are generally collateralized by taxi medallions in various jurisdictions, primarily New York City. In certain instances, the Company may leverage other forms of collateral in addition to taxi medallions, such as commercial and residential real estate.
Certain loans are subject to the New York City (“NYC”) Medallion Relief Program established in March 2021 or the Medallion Relief Program+ established in March 2022 (together, the “MRP+”). The MRP+ was established to assist economically distressed individual taxi medallion owners and to support the recovery of the NYC taxi industry. The MRP+ was established among the City of New York, the New York Taxi Works Alliance (“TWA”), and the Manager. The MRP+ program includes a NYC-funded deficiency credit support mechanism (the “Reserve Fund”) that (i) provides principal reduction and lower monthly payments to participating borrowers, (ii) may make scheduled loan payments to participating lenders for a period following a borrower payment default, and (iii) may satisfy any deficiency realized upon foreclosure of medallion collateral.
Under the MRP+, eligible medallion loans with a principal balance of $200,000 or more were restructured to an initial principal balance of $200,000 and further reduced to $170,000 per medallion after a $30,000 principal reduction payment from the Reserve Fund. Medallion loans with a principal balance of $200,000 or less were reduced by (i) $30,000 per medallion and (ii) an additional 5% of the post-paydown principal balance. In no event does the principal balance of any MRP+ medallion loan exceed $170,000 per medallion after restructuring. MRP+ loans generally have a 25-year term from the restructuring date, bear interest at 7.3% per annum, and require fixed monthly payments. The Company also holds loans that are not subject to the MRP+ (“Non-MRP+”), which have varying terms and interest rate.
The Company has elected the fair value option and measures these collateralized loans at fair value with changes in fair value recorded in the consolidated statements of operations in the period of the change. The Company made this accounting election pursuant to ASC 825, Financial Instruments (“ASC 825”), to better align reported results with the underlying economic changes in the value of the loans on the consolidated balance sheets. After the initial adoption, the election is made at the acquisition of eligible loans or when certain specified reconsideration events occur.
The Company recognizes gains and losses upon sale, or foreclosure, of loans held for investment, at fair value. Gains and losses on loans held for investment, at fair value are recorded within gains (losses) on loans held for investment, net in the consolidated statements of operations and reported as the difference between the sale proceeds and the carrying value of a loan. For foreclosed loans, the difference between fair value of the collateral less foreclosure costs compared to the loan carrying value is recorded as a gain or loss. Prior period changes in fair value have been reflected in the carrying value of such loans up until foreclosure. Changes in fair value of loans are reported within gains (losses) on loans held for investment, net on the consolidated statements of operations.
Interest income on loans is generally recorded on the accrual basis. For loans placed on non-accrual status, interest income is recognized on a cash basis when received, and previously accrued but unpaid interest is reversed.
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Loans are placed on non-accrual status when, based on current information and events, there is doubt as to the collectability of interest or principal due according to the contractual terms of the original loan agreement, unless management has determined that they are both well-secured and in the process of collection. Generally, loans are placed on non-accrual status when they are greater than 90 days past due. MRP+ loans in which payments are being received from the Reserve Fund are placed on non-accrual status. During the three months ended March 31, 2025, the Company changed its general methodology for placing loans on non-accrual status from 30 days past due to 90 days past due to align with industry practice. The effect of this change in accounting policy did not have an impact on amounts previously reported in the consolidated balance sheets, consolidated statements of operations, or consolidated statements of cash flows.
The Company’s loan portfolio is serviced by Field Point in which the Company incurs costs related to the administration of the portfolio. These costs are included within service fee expense on the consolidated statements of operations. Service fee expense represents fees paid to Field Point for services provided for the medallion loan portfolio, including billing and collections, loan documentation, collateral maintenance, TLC compliance, and various other pass-through expenses.
Acquisitions
The Company assesses acquisitions of assets and other similar transactions to determine whether the transaction should be accounted for as a business combination or an asset acquisition in accordance with ASC 805, Business Combinations (“ASC 805”).
A transaction that meets the definition of a business is accounted for as a business combination under ASC 805 using the acquisition method of accounting. Under the acquisition method of accounting, all assets acquired, identifiable intangible assets acquired, liabilities assumed, and applicable non-controlling interests are recognized at fair value as of the acquisition date. Costs incurred associated with the acquisition of a business are expensed as incurred. The allocation of purchase price requires management to make significant estimates and assumptions, especially with respect to tangible assets, any intangible assets identified and non-controlling interests.
The Business Combination is accounted for as a reverse recapitalization in accordance with U.S. GAAP. In a reverse recapitalization, the entity legally issuing shares is treated as the acquired company for accounting purposes, while the operating company whose shareholders obtain control is identified as the accounting acquirer. Accordingly, for accounting purposes, the Business Combination was treated as the equivalent of the DePalma Companies issuing stock for the net assets of MAC, accompanied by a recapitalization. As a result, the consolidated assets, liabilities and results of operations prior to the Business Combination are those of the DePalma Companies and no goodwill or intangible assets are recorded.
A transaction is accounted for as an asset acquisition when substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets, or when the acquired set does not meet the definition of a business. In an asset acquisition, the cost of the acquisition is allocated to the individual assets acquired and liabilities assumed on a relative fair value basis. Transaction costs are capitalized as part of the cost of the assets acquired. Goodwill is not recognized in an asset acquisition.
Leases
As lessee, the Company determines if an arrangement is a lease at inception in accordance with ASC 842, Leases (“ASC 842”). Operating lease assets are presented net of accumulated amortization as operating lease right-of-use asset, net and the corresponding lease liabilities are included in operating lease liabilities on the consolidated balance sheets and further detailed in Note 12. Right-of-use (“ROU”) assets represent the Company’s right to use an underlying asset, and lease liabilities represent the Company’s obligation for lease payments in exchange for the ability to use the asset for the duration of the lease term.
The Company has lease agreements that contain both lease and non-lease components, which it has elected to account for as a single lease component when the payments are fixed. As such, variable lease payments that are not dependent on an index or rate, such as real estate taxes, utility charges, and other costs that are subject to fluctuation from period to period, are not included in lease measurement. Renewal options are included in the lease term only when it is reasonably certain that the Company will elect that renewal option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. Additionally, the Company does not recognize short-term leases (leases that have a term of twelve months or less) at lease commencement date as ROU assets or lease liabilities.
ROU assets and lease liabilities are recognized at lease commencement and determined using the present value of the future minimum lease payments over the lease term. The Company uses its incremental borrowing rate based on the information available at commencement date to determine the present value of a lease when the rate implicit in the lease is not readily determinable.
Revenue Recognition
In accordance with ASC 606, Revenue from Contracts with Customers (“ASC 606”), revenue is recognized when a customer obtains control of promised goods or services and is recognized in an amount that reflects the consideration that an entity expects to receive in exchange for those goods or services. The Company generates revenue from the following sources: (1) interest earned on loans held for investment which is not subject to ASC 606; (2) fleet revenues from the leasing of its vehicle fleet and medallions to licensed New York City Taxi and Limousine Commission (“TLC”) drivers; (3) consulting arrangements to lease taxicab vehicles (see Note 11); and (4) other revenues primarily from fees and restructuring activity of the Company’s loan portfolio which is not subject to ASC 606.
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The Company applies the following five-step model in relation to its revenue recognition: (i) identify the promised goods or services in the contract; (ii) determine whether the promised goods or services are performance obligations; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations; and (v) recognize revenue when (or as) performance obligations are satisfied. In arrangements where another party is involved in providing specified services to a customer, the Company evaluates whether the performance obligation is a promise to transfer services to the customer (as the principal) or to arrange for services to be provided by another party (as the agent). In this evaluation, the Company considers if control is obtained of the specified services before they are transferred to the customer, as well as other indicators such as the party primarily responsible for discretion in establishing price.
Fleet Revenue
The Company generates revenue from the leases of its vehicle fleet and medallions to the licensed TLC drivers, in which the Company acts as the lessor. The Company collects all rider credit card fares, including tips and surcharges, charged by the point-of-sale system in each taxi on behalf of the drivers and remits these amounts to the drivers as these amounts are not revenues of the Company. The leases generally are short-term and operate on a weekly basis with drivers renewing each week and payments being settled between the point-of-sale system, the Company, and the drivers on weekly basis. The leases may either (i) specify the weekly rate between medallion cost, vehicle cost, and other fees, or (ii) include all costs in one weekly lease rate agreed upon with a driver, and these fees can vary by lease based on prevailing market rates at the time of agreement. In either scenario, the Company views these contracts as having one performance obligation to provide a fully operational taxicab to a driver over the lease term. The vehicles in the lease agreements are a lease component subject to ASC 842, which the Company has determined to be operating leases based on their short-term nature, and the medallions are subject to ASC 606 as medallions are intangible assets not subject to ASC 842 and, therefore, a non-lease component. These contracts qualify for a practical expedient available to lessors to combine the lease and non-lease components and account for the combined component in accordance with the accounting treatment for the predominant component. The Company elected to apply this practical expedient and, therefore, has one performance obligation and recognizes all income from these contracts, net of sales tax, in accordance with ASC 606 as the medallions are the predominant component of the contract. The Company’s performance obligation is satisfied over time as the customer simultaneously receives and consumes the benefits provided over the weekly lease terms.
Other Revenue
Other revenue is comprised of restructuring fees paid by borrowers as part of the MRP+ program, payments received from the Reserve Fund that are not applied to a borrower’s loan balance, fees received in connection with the Non-MRP+ restructuring and settlements, the resolution of certain litigation and bankruptcy proceedings. Other revenue is primarily recognized in accordance with ASC 310, Receivables and when cash is received based on the non-accrual status of loans being restructured. Other revenue also includes advertising revenue.
Income Taxes
Income taxes are accounted for using the asset and liability approach in accordance with ASC 740, Income Taxes (“ASC 740”). Deferred tax assets and liabilities reflect the impact of temporary differences between the carrying amount of assets and liabilities and their tax basis and are stated at the enacted tax rates expected to apply in the year when taxes are actually paid or recovered. Deferred tax assets are also recorded for net operating losses, capital losses and any tax credit carryforwards.
A valuation allowance is provided against a deferred tax asset when it is more likely than not that some or all of the deferred tax assets will not be realized. All available evidence, both positive and negative, is considered to determine whether a valuation allowance for deferred tax assets is needed. Items considered in determining the Company’s valuation allowance include expectations of future earnings of the appropriate tax character, recent historical financial results, tax planning strategies, the length of statutory carryforward periods and the expected timing of the reversal of temporary differences.
The Company’s policy is to provide for uncertain tax positions and the related interest and penalties based upon management’s assessment of whether a tax benefit is more likely than not to be sustained upon examination by tax authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits in the provision for income taxes.
Reclassifications
The Company formerly presented ‘Fleet revenue’ as ‘Lease revenue’ in interim filings on Form 10-Q for the quarters ended June 30, 2025 and September 30, 2025, respectively. The Company now refers to this as ‘Fleet revenue’ to better align with the application of the elected ASC 606 practical expedient noted above. Fleet revenue now includes recurring revenue from weekly driver contracts (previously reported as “Lease revenue”) and $8.0 million of income recognized from the derecognition of a deposit liability in connection with the Signal Taxi Acquisition (previously reported as “Lease revenue from deposit liability”). The deposit liability represented vehicle lease payments received from Signal Taxi that had been deferred from recognition due to the collectability assessment of the underlying lease arrangements. Upon the Signal Taxi Acquisition on April 7, 2025, a change in circumstance occurred and the deposit liability was derecognized, representing the settlement of a preexisting relationship accounted for separately from the Business Combination (see Note 6). This amount is non-recurring.
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Recent Accounting Pronouncements
Accounting Pronouncements Recently Adopted
In December 2023, the Financial Accounting Standards Board (the “FASB”) issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”). The new standard requires a company to expand its existing income tax disclosures, specifically related to the rate reconciliation and income taxes paid. The standard was effective for the Company for annual periods beginning after December 15, 2024, with early adoption permitted. The Company adopted this standard effective January 1, 2025. The adoption of this standard resulted in additional disclosures, but did not have a material impact on the Company’s consolidated financial statements (see Note 17).
Accounting Pronouncements Not Yet Adopted
In November 2024, the FASB issued ASU 2024-03, Income Statement — Reporting Comprehensive Income — Expense Disaggregation (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”) and in January 2025 issued ASU 2025-01, Income Statement —Reporting Comprehensive Income — Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date (“ASU 2025-01”). The amendments in ASU 2024-03 address investor requests for more detailed expense information and require additional disaggregated disclosures in the notes to financial statements for certain categories of expenses that are included on the face of the income statement. ASU 2024-03, as clarified by ASU 2025-01, is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 31, 2027, with early adoption permitted. The Company is currently evaluating the impact of the adoption of ASU 2024-03, as clarified by ASU 2025-01, on its consolidated financial statements and related disclosures.
In December 2025, the FASB issued ASU 2025-10, Government Grants (Topic 832): Accounting for Government Grants Received By Business Entities (“ASU 2025-10”), which establishes authoritative guidance on the recognition, measurement and presentation of government grants. Under ASU 2025-10, government grants are recognized when it is probable that the entity will comply with the condition of the grant and the grant will be received. The ASU provides specific accounting models for grants related to assets and grants related to income, including options to recognize government grants as deferred income or as a reduction of the asset’s cost basis. The ASU also requires enhanced disclosures regarding the nature of government grants, significant terms and conditions, accounting policies applied, and amounts recognized in the financial statements. ASU 2025-10 is effective for fiscal years beginning after December 15, 2028, including interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact of the adoption of ASU 2025-10 on its consolidated financial statements and related disclosures.
3. Business Combination and Recapitalization
On April 7, 2025 (the “Closing Date”), the Company consummated the Business Combination and related transactions, pursuant to which (i) the Company survived the merger, (ii) MAC became a wholly owned subsidiary of the Company, and (iii) the Company acquired approximately 83.7% interest in the DePalma Companies, with the remaining 16.3% continuing to be owned by certain limited partners of the DePalma Companies and representing noncontrolling interests. Upon the closing of the Business Combination, the Company’s amended and restated certificate of incorporation provided for, among other things, a total number of authorized shares of capital stock of 260,000,000 shares, of which 250,000,000 shares were classified as Common Stock and 10,000,000 shares were classified as preferred stock, $0.0001 par value (the “Preferred Stock”).
The Business Combination is accounted for as a reverse recapitalization. Upon consummation of the Business Combination, the DePalma Companies, as a group, have the largest voting interest in the Company and represent a significant majority of the assets and operations of the combined company. Therefore, the DePalma Companies have been determined to be the accounting acquirer for financial reporting purposes and the historical financial statements of the DePalma Companies became the basis for the historical financial statements of the Company upon the closing of the Business Combination. Accordingly, for accounting purposes, the Business Combination was treated as the equivalent of the DePalma Companies issuing Common Stock for the net assets of MAC and the Company, accompanied by a recapitalization. The net assets of MAC and the Company are stated at historical cost, with no goodwill or intangible assets recorded.
In accordance with guidance applicable to these circumstances, the equity structure has been restated in all comparable periods up to the Closing Date, to reflect the number of shares of Common Stock issued to the DePalma Companies’ equityholders in connection with the Business Combination. As such, the equity interests and corresponding member’s capital amounts and earnings per share related to the DePalma Companies’ historical outstanding equity have been retroactively restated as shares of Common Stock issued to the DePalma Companies’ equityholders in connection with the Business Combination. The noncontrolling interest recognized at the Closing Date reflects the proportionate interest in the precombination carrying amounts of the DePalma Companies’ net assets.
At the Closing Date, each share of MAC’s class A common stock (“MAC Class A Common Stock”) and class B common stock (“MAC Class B Common Stock”) issued and outstanding immediately prior to the Closing Date was cancelled and converted into the right to receive a share of Common Stock, and each whole warrant of MAC outstanding immediately prior to the Closing Date was cancelled in exchange for a warrant of the Company, with the Company assuming MAC’s obligations under MAC’s existing warrant agreements.
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The Company made payments on the Closing Date totaling $11.7 million representing certain MAC liabilities assumed by the Company in the Business Combination. The liabilities assumed are included as a component of the effect of merger and recapitalization to additional paid-in capital.
In exchange for their equity interests in the DePalma Companies, the DePalma Companies’ equityholders received a number of shares of Common Stock determined based on agreed upon valuations of the DePalma Companies’ loan and taxi medallion portfolio, plus a minimum cash amount to meet the working capital needs of the Company (together the “DePalma Equity Value”), and the per share merger consideration, each as further detailed below and defined within the Business Combination Agreement (in thousands except share and per share amounts).
DePalma I Equity Value:
DePalma II Equity Value 369,134
Total DePalma Equity Value $ 629,544
Per share merger consideration $ 10.00
Common Stock issued to DePalma Equityholders 62,954,464
The following table details the number of shares of Common Stock issued and outstanding immediately following the consummation of the Business Combination:
Shares ofCommon Stock
DePalma Companies' equityholders 62,954,464
MAC public stockholders(1) 46,605
(1)
Represents shares of MAC Class A Common Stock held by MAC public stockholders outstanding prior to the Business Combination and reflecting all redemptions of MAC Class A Common Stock.
(2)
Represents shares of MAC Class B Common Stock purchased from the Sponsor or transferred by the Sponsor to unaffiliated members of the Sponsor prior to the consummation of the Business Combination.
The following table reconciles the elements of the Business Combination to the Company’s consolidated statement of changes in stockholders’ equity (in thousands):
Cash: MAC trust (net of redemptions) $ 515
Transaction costs paid with MAC trust proceeds (515 )
Net proceeds from MAC trust -
Net liabilities of MAC assumed in merger (14,959 )
Noncontrolling interest recognized in merger (106,624 )
Effect of merger and recapitalization to additional paid-in capital $ (121,583 )
4. Fair Value Measurements
The Company applies the provisions of ASC Topic 820, Fair Value Measurement (“ASC 820”), which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., the exit price) in an orderly transaction between market participants at the measurement date.
ASC 820 establishes a hierarchical disclosure framework that prioritizes and ranks the level of market price observability used in measuring assets and liabilities at fair value. Under U.S. GAAP, a fair value hierarchy is implemented for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are those that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs reflect the Company’s own assumptions about the inputs market participants would use in pricing the asset or liability and are developed based on the best information available in the circumstances. The fair value hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).
The fair value hierarchy is categorized into three levels based on the inputs as follows:
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•
Level 1 — Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities and in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.
•
Level 2 — Quoted prices in markets that are not considered to be active or financial instruments for which all significant inputs are observable, either directly or indirectly.
•
Level 3 — Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable, such as estimates, assumptions, and valuation techniques when little or no market data exists for the assets or liabilities.
In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an asset’s or liability’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. Changes in the observability of valuation inputs may result in a reclassification for certain financial assets or liabilities. In addition to using the above inputs in asset or liability valuations, the Company continues to employ the valuation policy that is consistent with ASC 820.
The following table presents information about the Company’s assets and liabilities by level within the valuation hierarchy measured at fair value on a recurring basis (in thousands). Refer to Note 5 for further detail on the industry and geographic concentration:
Level 1 Level 2 Level 3 Amount atFair Value
Assets:
Loans held for investment, at fair value
Private loans:
Total loans held for investment, at fair value - - 281,671 281,671
Liabilities:
Other liabilities:
Medallion incentive liability $ - $ - $ 1,181 $ 1,181
Warrant liabilities - 51 - 51
Total liabilities $ - $ 51 $ - $ 1,232
Level 1 Level 2 Level 3 Amount atFair Value
Assets:
Loans held for investment, at fair value
Private loans:
Total loans held for investment, at fair value - - 280,998 280,998
Liabilities:
Other liabilities:
Medallion incentive liability $ - $ - $ 131 $ 131
Total liabilities $ - $ - $ 131 $ 131
The following table provides a reconciliation of the beginning and ending balances for loans held for investment, at fair value that use Level 3 inputs (in thousands):
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MRP+ Loans Non-MRP+ Loans
Transfers into MRP+ Program 1,146 (1,146 )
(Losses) gains on loans held for investment, net (154 ) 3,321
Purchase of Non-MRP+ loans - 2,825
Origination of Non-MRP+ loans - 1,967
Gains (losses) on loans held for investment, net 7,859 756
Origination of Non-MRP+ loans from medallion disposals - 495
Origination of Non-MRP+ loans from MRP+ settlements (4,550 ) 4,550
Purchase of loans in TML Asset Acquisition 5,065 8,929
Net change in estimated fair value of Level 3 loans still held as of December 31, 2025 and 2024, included in gains on loans held for investment, net on the consolidated statements of operations, was a net increase of $9.5 million and a net decrease of $3.4 millionfor the years ended December 31, 2025 and 2024, respectively.
With respect to instruments valued by management, the valuation techniques employed are an income approach reflecting a discounted cash flow analysis, and a market approach that includes market transactions.
The following table summarizes the valuation techniques and significant unobservable inputs used for the Company’s assets and liabilities that are categorized within Level 3 of the fair value hierarchy (in thousands):
(1)
Used to value MRP+ loan cash flows.
(2)
The discount rate is utilized to present value cash flows from loans restructured by the City of New York under the MRP+ program (at a price of $170,000). To determine the discount rate, the Company considers the internal rate of return on the investment, changes in the U.S. Treasury rates to maturity of the loans and a risk premium for the likelihood of whether a loan will be successfully restructured under the MRP+ program.
(3)
The most significant inputs include recent Company medallion sale prices (ranging from $166,206 to $210,000), the amount backstopped under the MRP+ ($170,000), and certain market prices reported by the TLC (ranging from $81,667 to $175,000). In addition, loans are valued at the lesser of unpaid principal balance and the medallion or other collateral value (such as commercial and residential real estate which generally does not exceed 5% of the total loans held for investment, at fair value), less a discount applied to the collateral value. In instances where loans are overcollateralized with an unpaid principal balance less than or equal to $165,000 as of December 31, 2025, these loans are determined to have a fair value equal to par. Significant increases or decreases in such factors, or structural and/or regulatory changes to the New York City taxi industry would result in a significantly lower or higher fair value measurement.
(4)
New York City medallion price valuation inputs were determined using a value of $175,000 for each medallion, calculated as the midpoint between an estimated range, of which the low value was $165,000 and the high value was $185,000. A 5% discount is applied to the market medallion price for New York City medallions to estimate costs associated with taking ownership of a medallion as the medallions are not directly held by the Company. The medallion incentive liability was determined based on the significant inputs of the New York City market medallion price described above resulting in a fair value of $175,000 for each medallion on a pro rata basis pursuant to the Consulting Agreement (see Note 11).
(5)
Weighted average medallion prices are calculated based on the total fair value of underlying medallion collateral.
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The following table summarizes the valuation techniques and significant unobservable inputs used for the Company’s assets and liabilities that are categorized within Level 3 of the fair value hierarchy (in thousands):
(1)
Used to value MRP+ loan cash flows.
(2)
The discount rate is utilized to present value cash flows from loans restructured by the City of New York under the MRP+ program (at a price of $170,000). To determine the discount rate, the Company considers the internal rate of return on the investment, changes in the U.S. Treasury rates to maturity of the loans and a risk premium for the likelihood of whether a loan will be successfully restructured under the MRP+ program.
(3)
The most significant inputs include recent Company medallion sale prices (ranging from $175,000 to $210,000), the amount backstopped under the MRP+ ($170,000), and certain market prices reported by the TLC (ranging from $30,000 to $200,000). In addition, loans are valued at the lesser of unpaid principal balance and the medallion or other collateral value (such as commercial and residential real estate which generally does not exceed 5% of the total loans held for investment, at fair value), less a discount applied to the collateral value. In instances where loans are overcollateralized with an unpaid principal balance less than or equal to $165,000 as of December 31, 2024, these loans are determined to have a fair value equal to par. Significant increases or decreases in such factors, or structural and/or regulatory changes to the New York City taxi industry would result in a significantly lower or higher fair value measurement.
(4)
New York City medallion price valuation inputs were determined using a value of $175,000 for each medallion, calculated as the midpoint between an estimated range, of which the low value was $165,000 and the high value was $185,000. A 5% discount is applied to the Market Medallion Price for New York City medallions to estimate costs associated with taking ownership of a medallion as the medallions are not directly held by the Company. The medallion incentive liability was determined based on the significant inputs of the New York City market medallion price described above resulting in a fair value of $175,000 for each medallion on a pro rata basis pursuant to the Consulting Agreement (see Note 11).
(5)
Weighted average medallion prices are calculated based on the total fair value of underlying medallion collateral.
The value of the underlying collateral and thus, the portfolio of loans may be impacted by multiple factors including, but not limited to, general macroeconomic conditions, as well as the state of the taxi industry, loan restructurings, governmental initiatives, and medallion transfers. Without a readily ascertainable market value, the estimated value of the Company’s portfolio of loans held for investment, at fair value may differ significantly from the values that would be placed on the portfolio if a readily determinable market existed for the loans. The illiquidity of the Company’s loan portfolio may adversely affect the Company’s ability to dispose of loans at times when it may be advantageous for the Company to liquidate such portfolio. In addition, if the Company were required to liquidate some or all of the loans in the portfolio, the proceeds of such liquidation may be significantly less than the current value of such loans. Changes in the various unobservable inputs used to determine valuations may have similar or diverging impacts on valuation. Significant increases or decreases in these inputs in isolation and interrelationships between those inputs could result in significantly higher or lower fair value measurements than noted in the tables above.
5. Loans Held for Investment, at Fair Value
As mentioned in Note 2, the Company’s loan portfolio consists of loans that are collateralized by taxi medallions. The following table shows the composition of the difference between the aggregate principal balance outstanding and the aggregate fair value of the taxi medallion loans held for investment (in thousands):
December 31,
Adjustment to reduce loans to fair value (646,628 ) (639,109 )
Total loans held for investment, at fair value $ 281,671 $ 280,998
The following table shows major classifications of loans held for investment, at fair value on current and non-accrual status (in thousands):
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December 31,
Loans held for investment, at fair value
MRP+ Loans (NYC)
Non-MRP+ Loans (NYC):
Non-MRP+ Loans (Other):
Total loans held for investment, at fair value $ 281,671 $ 280,998
The aggregate fair value and outstanding principal balances of taxi medallion loans that were on non-accrual status were as follows (in thousands):
December 31,
Adjustment to reduce loans to fair value (582,227 ) (612,006 )
(1)
The tables above reflect the retrospective application of the change in accounting methodology for placing loans on non-accrual status from 30 days past due to 90 days past due, as further detailed in Note 2.
6. Acquisitions
TML Asset Acquisition
On December 30, 2025, in connection with the execution of the Credit Facility (see Note 14), the Company entered into a purchase agreement to acquire the outstanding equity interests of TML IV LLC (“TML IV”), an entity primarily holding investments in New York City taxi medallions and medallion loans (the “TML Asset Acquisition”). In exchange, the Company paid cash consideration of $15.8 million, which was financed from the proceeds received from the Credit Facility.
The transaction was determined to be an asset acquisition pursuant to ASC 805, Business Combinations, and, therefore, the purchase price, including allocated transaction costs of $0.1 million, were allocated to the assets acquired based on their relative fair values as a percentage of the total fair value of the assets acquired, with no goodwill recognized. See Note 4 for additional information related to the valuation methodologies of medallion loans and taxi medallions acquired.
The total cash consideration was allocated to the acquired assets as follows (in thousands):
Amount
Cash $ 5
Interest receivable 42
Taxi medallions 1,873
Signal Taxi Acquisition
In February 2019, DePalma II entered into a non-controlling joint venture with a third-party, Kirie Eleison Corp (“KE”), and formed Septuagint Solutions LLC (f/k/a “Septuagint” and current d/b/a “Signal Taxi”). Signal Taxi is a medallion leasing agent and taxi fleet operating company and was formed by issuance of units to its initial members for no monetary consideration. Since inception of Signal Taxi, DePalma II and KE each owned 50% of Signal Taxi’s outstanding voting units. Prior to the Signal Taxi Acquisition Date (as defined below), DePalma II accounted for its investment in Signal Taxi as an equity method investment for which DePalma II elected the fair value option and reported at a fair value of $0 since inception of Signal Taxi.
Following the closing of the Business Combination, on April 7, 2025 (the “Signal Taxi Acquisition Date”), the Company, via DePalma II, acquired the remaining outstanding equity interests in Signal Taxi, resulting in Signal Taxi becoming a wholly owned subsidiary of DePalma II (the “Signal Taxi Acquisition”). The Company accounted for the Signal Taxi Acquisition pursuant to the acquisition method under ASC 805. As such, the Company derecognized its existing equity method investment in Signal Taxi and recognized the assets and liabilities of Signal Taxi effective April 7, 2025 at their estimated fair values. No gain or loss was recognized on remeasurement of
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the previously held interest. The Signal Taxi Acquisition was completed to further develop the Company’s fleet operations and occurred without the transfer of consideration pursuant to an assignment and assumption agreement.
The following represents the fair value of the net assets acquired (in thousands):
Assets:
Cash and cash equivalents $ 34
WAV grant receivable 2,070
Prepaid expenses and other current assets 1,507
Property and equipment 385
Operating lease right-of-use assets 576
Liabilities:
Accrued expenses and other current liabilities $ 1,996
Deferred WAV revenue 2,000
Operating lease liabilities 576
Total liabilities $ 4,572
Net assets acquired $ -
Prior to the Signal Taxi Acquisition Date, DePalma II (as lessor) and Signal Taxi (as lessee) had preexisting arrangements related to taxi medallions and vehicles. In connection with the Signal Taxi Acquisition, these preexisting arrangements were effectively settled as Signal Taxi became a wholly owned subsidiary of DePalma II. Accordingly, and pursuant to ASC 805, the Company accounted for the settlement of the preexisting arrangements separately from the business combination and not as part of the consideration transferred. As a result of the settlement, the Company derecognized $8.0 million of deposit liabilities as of the Signal Taxi Acquisition Date and recognized a corresponding amount in fleet revenue in the consolidated statements of operations for the year ended December 31, 2025. The settlement amount reflects the carrying amount of the deposit liabilities at the acquisition date, and no additional consideration was transferred or received in connection with the settlement.
7. Rental Vehicles, net
Rental vehicles, net consisted of the following (in thousands):
December 31,
Less: accumulated depreciation, rental vehicles (8,500 ) (5,229 )
Depreciation expense for rental vehicles was $3.3 million and $1.9 million for the years ended December 31, 2025 and 2024, respectively.
8. Property and Equipment, net
Property and equipment, net consisted of the following (in thousands):
December 31,
Leasehold improvements $ 596 $ -
Furniture and fixtures 36 -
Less: accumulated depreciation (60 ) -
Property and equipment, net $ 572 $ -
Depreciation expense for property and equipment was less than $0.1 million and $0 for the years ended December 31, 2025 and 2024, respectively.
9. Prepaid Expenses and Other Current Assets
Prepaid expenses and other current assets consisted of the following (in thousands):
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December 31,
WAV grant receivable $ 4,626 $ -
Other receivables 2,737 -
WAV Program
The Company participates in the City of New York’s Wheelchair Accessible Vehicle (“WAV”) incentive program. The WAV program incentivizes taxi owners to place wheelchair accessible vehicles into service by providing a rebate credit for incurring the up-front costs to place a wheelchair accessible vehicle into service. Under the WAV program, the Company receives a $20,000 rebate credit for each wheelchair accessible vehicle placed into service. The WAV program also provides for quarterly rebates of $625 for each wheelchair accessible vehicle that completes at least 750 trips within a quarter. The total amount of the rebate credits for the up-front and operational payments is capped at $30,000 per vehicle. The Company qualifies for the rebate grants when a WAV is placed in service, or quarterly trips are completed, and an application for rebate is approved, at which time amounts are recognized as WAV grant receivable within prepaid expenses and other current assets on the consolidated balance sheets.
The Company accounts for the WAV program government grants as (i) grants related to an asset and as part of the cost basis in determining the carrying value of the asset for the initial placed-in-service rebate credit, and (ii) as a grant related to income reported within WAV grant income on the consolidated statements of operations for the quarterly rebate credit. The Company recognized WAV grant income of $0.6 million and $0 for the years ended December 31, 2025 and 2024, respectively.
10. Accrued Expenses and Other Current Liabilities
Accrued expenses and other current liabilities consisted of the following (in thousands):
December 31,
Accrued professional fees $ 1,794 $ 888
Franchise and sales tax 1,691 17
Fleet operations 1,309 -
11. Fleet Servicing Agreement
On November 15, 2024, the Company, via DePalma II, entered into a consulting agreement (the “Consulting Agreement”) with a third party (the “Consultant”). The Consultant has historically operated a taxi fleet as a TLC agent in New York City, primarily earning revenues from leasing operational taxicab vehicles to end-user drivers under daily and weekly arrangements. The Company and the Consultant entered into the Consulting Agreement primarily to assist the Company in establishing and growing the Company’s taxi fleet operations. The Consultant will provide services generally required to operate and grow commercial taxicab fleet operations, including, but not limited to, servicing vehicles, leasing, insurance, and providing the appropriate personnel on behalf of the Company. During the term of the Consulting Agreement, the Company will provide services including financial planning and vendor management in support of the Consultant’s operations of leasing operational taxicab vehicles to end-user drivers. In connection with the Consulting Agreement, DePalma II, as lessee, entered into a lease agreement for taxicab business office and garage space to run its taxicab operations (the “Garage Lease”). The Consulting Agreement and Garage Lease each have an initial term of five years, with the Garage Lease having an additional renewal option available to the Company, as further described in Note 12. The Consulting Agreement can be terminated by the Company upon a material breach by the Consultant, or upon mutual agreement by both parties.
In exchange for the Consultant’s services, the Company will pay the Consultant a base fee of $100,000 per month as well as reimburse the Consultant for certain of its operating and other reimbursable expenses. At the end of each month, the Consultant and the Company will reconcile amounts due to each party, which is determined by the total revenues generated by the taxi fleet operations, less the base fee and the reimbursable operating expenses. The Company determined it is acting as the agent from inception of the Consulting Agreement through December 31, 2025 pursuant to ASC 606, as during this period the Consultant continues to be the party obligated to fulfill the performance obligation of leasing an operational taxicab to the end-user driver. As such, the Company will report all revenues generated by the taxi fleet operations and expenses incurred as a result of the Consulting Agreement on a net basis through December 31, 2025 as fleet servicing fees, net on the consolidated statements of operations as further detailed below.
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Further, the Consultant is entitled to a medallion incentive payment of six (6) NYC taxi medallions per year to be earned on November 15th of each year and payable at the end of the five-year term or upon earlier termination of the Consulting Agreement. Inthe event the Consulting Agreement is terminated prior to November 15 of a given year, no medallion consideration will be earned by the Consultant for that year, whether on a pro rata basis or otherwise. The Company ratably recognizes to expense the fair value of the medallions to be earned by the Consultant over the term of the Consulting Agreement within fleet servicing fees, net on the consolidated statements of operations, and recognizes a liability within other liabilities on the consolidated balance sheets. The Company will remeasure such liability at each reporting period based on the fair value of the medallions earned at each period end, with any changes in fair value being reported within earnings. See Note 4 for additional information.
The following table sets forth the components of the Company’s fleet servicing fees, net (in thousands):
Year Ended December 31,
Consultant fleet revenues $ 4,534 $ 937
Less: Base consulting fees (1,200 ) (150 )
Less: Noncash medallion incentive (1,050 ) (131 )
Less: Fleet operating and reimbursable expenses (8,531 ) (1,198 )
Fleet servicing fees, net $ (6,247 ) $ (542 )
The Company may make advances for the base consulting fees and other fleet operating expenses prior to period end reconciliations with the Consultant. As of December 31, 2025, $0.1 million was due to the Consultant, which is included within accrued expenses and other current liabilities on the consolidated balance sheets. As of December 31, 2024, less than $0.1 million was due from the Consultant, which is included within prepaid expenses and other current assets on the consolidated balance sheets.
12. Commitments and Contingencies