# Marblegate Capital Corp: Form 10-Q for the period ended Mar 31, 2025

- Company: [Marblegate Capital Corp](/companies/mgte.md) (CIK 1965052)
- Form: 10-Q
- Filed: 2025-05-15
- Accepted by EDGAR: May 15, 2025, 16:01 ET
- Period: 2025-03-31
- Accession: 0000950170-25-072547
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1965052/000095017025072547/ck0001965052-20250331.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1965052/000095017025072547/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2025-03-31.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Operating income | 3 months, 2025-01-01 to 2025-03-31 | −$91.6k | us-gaap:OperatingIncomeLoss |
| Net income | 3 months, 2025-01-01 to 2025-03-31 | −$91.6k | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2025-01-01 to 2025-03-31 | $0.00 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2025-01-01 to 2025-03-31 | $0.00 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2025-01-01 to 2025-03-31 | 0 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 3 months, 2025-01-01 to 2025-03-31 | $0 | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Total assets | at 2025-03-31 | $0 | us-gaap:Assets |
| Total liabilities | at 2025-03-31 | $153.1k | us-gaap:Liabilities |
| Shareholders' equity | at 2025-03-31 | −$153.1k | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 103,442 characters.

### MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF NEW MAC

*Unless context otherwise requires, all references in this section to “we,” “us,”, “our”, or “New MAC” refer to Marblegate Capital Corporation Inc., a Delaware corporation and its wholly owned subsidiary MAC Merger Sub, Inc. (“Merger Sub”). References to our “management” or our “management team” refer to our officers and directors. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors. Please see “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors” in this Quarterly Report on Form 10-Q.*

### Overview

New MAC is a Delaware corporation, formed by MAC on February 2, 2023 (inception), to consummate the Business Combination. New MAC has adopted a fiscal year-end of December 31. New MAC was formed to be the surviving company in connection with the proposed Business Combination between MAC, MAM, DePalma I, and DePalma II. New MAC has no prior operating activities.

### Proposed Business Combination and Recent Developments

On February 14, 2023, New MAC entered into the Business Combination Agreement with MAC, MAM, Merger Sub, DePalma I and DePalma II, pursuant to which MAC agreed to combine with the DePalma Companies in a series of transactions that will result in New MAC becoming a public company. Under the Business Combination Agreement, the aggregate consideration payable to the DePalma Companies at the closing of the Business Combination is based on a valuation of the DePalma Companies of approximately $750 million plus minimum cash anticipated to be required at closing for working capital purposes. The closing of the Business Combination was subject to the satisfaction or waiver of certain conditions defined in the Business Combination Agreement, including, among others, approval by MAC stockholders and the Nasdaq Stock Market’s approval for listing the common stock of New MAC issued in connection with the Business Combination. On April 5, 2025, New MAC, MAC, MAM, Merger Sub, DePalma I and DePalma II entered into a Waiver to the Business Combination to waive the approval by the Nasdaq Stock Market of New MAC’s initial listing application.

Immediately prior to the consummation of the Business Combination, which occurred on April 7, 2025, and as contemplated by the Business Combination Agreement, New MAC and the DePalma Companies effected a series of reorganization transactions, resulting in New MAC 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. On April 7, 2025, MAC was delisted from Nasdaq and merged with Merger Sub and New MAC. New MAC received approval from the OTC Markets for quotation of New MAC’s common stock and warrants, each representing the right to purchase a share of common stock of New MAC on the OTCQX operated on the OTC Markets under the symbols “MTGE” and “MTGEW”, respectively. New MAC’s common stock and warrants commenced trading on OTCQX at the open of trading on April 10, 2025.

### Results of Operations

We incurred expenses for the three months ended March 31, 2025 for accounting fees and legal fees.

For the three months ended March 31, 2025, we incurred a net loss of $0.09 million related to accounting fees and legal expenses. For the three months ended March 31, 2024, we incurred a nil net loss.

### Liquidity and Capital Resources

As of March 31, 2025 and immediately prior to the consummation of the Business Combination, New MAC had no cash. Subsequent to the Business Combination, the liquidity and capital resources of New MAC will be dependent on the available liquidity and continuing operations of the combined company, and its ability to obtain new financing, if needed. New MAC cannot provide any assurance that new financing will be available to it on commercially acceptable terms, if at all.

### Contractual Obligations and Commitments

As of March 31, 2025, and December 31, 2024, we have no contractual obligations and commitments outside of the agreements to which we are party in connection with the Business Combination.

### Off-Balance Sheet Arrangements

As of March 31, 2025, and December 31, 2024, we had no obligations, assets or liabilities which would be considered off-balance sheet arrangements.

### Critical Accounting Policies and Estimates

The preparation of financial statements and related disclosures in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent liabilities, and the reported amounts of expenses during the reporting period. Actual results could materially differ from those estimates.

Management has determined New MAC does not have any critical accounting policies or significant estimates.

### Recent Accounting Pronouncements

See Note 2 in the sections entitled “*Summary of Significant Accounting Policies—Recent Accounting Standards Not Yet Adopted”* as referred to in the unaudited consolidated financial statements of New MAC included elsewhere in this Quarterly Report on Form 10-Q for a discussion about accounting pronouncements recently issued but not yet adopted.

### MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF DEPALMA

*Unless context otherwise requires, (i) all references in this section to “DePalma I” refer to DePalma Acquisition I LLC and its consolidated subsidiaries, (ii) all references in this section to “DePalma II” refer to DePalma Acquisition II LLC and its consolidated subsidiaries, and (iii) all references in this section to “DePalma,” “DePalma Companies,” “we,” “us” or “our” refer to DePalma I and DePalma II. The following discussion and analysis is intended to help the reader understand results of operations and financial condition of the DePalma Companies. This discussion and analysis is provided as a supplement to, and should be read in conjunction with, the unaudited consolidated financial statements and notes thereto of DePalma I, and unaudited consolidated financial statements and notes thereto of DePalma II, in each case included elsewhere in this Quarterly Report on Form 10-Q. Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report on Form 10-Q, including information with respect to DePalma’s plans and strategy for DePalma’s business, includes forward-looking statements that involve risks and uncertainties. DePalma’s 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.” The objective of this section is to provide investors an understanding of the financial drivers and levers in DePalma’s business and describe the financial performance of the business.*

### Overview

We are comprised of two companies primarily engaged in the NYC taxi medallion business, namely DePalma I and DePalma II. The DePalma Companies were formed as two Delaware limited liability companies on February 23, 2018 and commenced operations on March 29, 2018. Our core philosophy has been to work with key stakeholders in the NYC taxi industry to help facilitate an industry-wide restructuring of historical medallion lending practices and to standardize a key piece of the NYC mobility infrastructure. The DePalma Companies’ goal is to achieve superior risk adjusted returns for its shareholders by maintaining a focus on capital preservation, current revenues and capital appreciation. The DePalma Companies will continue to act in a manner consistent with maximizing the underlying value of a medallion and improving the health of the taxicab industry.

DePalma I is focused on acquiring, restructuring and owning medallion loans collateralized by NYC taxi medallions, whereas DePalma II is engaged in the business of owning and investing in taxi medallions as well as redeploying such medallions over time into the NYC taxi medallion lending and fleet operations market. Further, during the year ended December 31, 2024, DePalma II began selling medallions with seller financing attached. In February 2019, DePalma II entered into a non-controlling joint venture with Kirie Eleison Corp (“Kirie Eleison”), an unaffiliated strategic partner, and formed Septuagint Solutions LLC (“Septuagint”), in which DePalma II held a 50% interest and would have the right to exercise governance control once 85% of DePalma II’s Owned Medallions as of November 1, 2019 had been leased to Septuagint. Septuagint is a fully functioning medallion-leasing agent and taxi fleet operating company based in Long Island City, Queens, New York, licensed by the TLC as an agent/broker for managing NYC taxi medallions, formed for the purpose of operating and servicing taxicab medallions. The formation of Septuagint also allowed DePalma II to lease the medallions for its fleet operation business. Historically and through March 31, 2025, given the non-controlling nature of the relationship between DePalma II and Septuagint, Septuagint’s financial statements have not been consolidated with DePalma II. Summarized financial information of Septuagint is presented below within this discussion and analysis.

Septuagint is governed by an Operating Services Agreement, dated October 15, 2019 (the “OSA”). On September 26, 2024, we provided notice to Kirie Eleison of its default under certain provisions of the OSA, including a provision requiring Kirie Eleison to lease all of the medallions owned by Kirie Eleison and its affiliates and transfer their medallion leases to Septuagint. Pursuant to the OSA, Kirie Eleison had 30 days from the date of the notice to cure its default. However, on October 17, 2024, the DePalma Companies and Kirie Eleison signed an amendment to the OSA that eliminated Septuagint’s exclusive right under the OSA to lease DePalma II’s medallions and provided for a transition period until December 15, 2024 for DePalma II to decide whether to (i) have Kirie Eleison transfer its 50% interest in Septuagint to DePalma II or (ii) wind down Septuagint. The amendment allowed DePalma II to either wind down Septuagint or have Kirie Eleison transfer its ownership interest in Septuagint to DePalma II or a designee. While the transition period originally expired on December 15, 2024, pursuant to the October 17, 2024 amendment, DePalma II and Kirie Eleison subsequently agreed to further extend the transition period through March 31, 2025 in order to allow DePalma II and Kirie Eleison additional time to, among other things, evaluate their options and consider whether to continue Septuagint’s operations, or wind Septuagint down and have DePalma II continue to pursue other alternative fleet servicing arrangements with third parties and/or to establish its own fleet servicing entity. On March 31, 2025, DePalma II and Kirie Eleison agreed to further extend the transition period by which DePalma II may elect to require Kirie Eleison to transfer its membership interest in Septuagint to April 30, 2025. On April 7, 2025, Kirie Eleison assigned all of its interests in Septuagint to DePalma II and the principals of Kirie Eleison resigned from the board of directors, making Septuagint a wholly-owned subsidiary of DePalma II effective April 7, 2025. The DePalma Companies are in ongoing discussions with Kirie Eleison regarding the restructuring of its affiliates’ debt.

On November 15, 2024, DePalma II entered into a non-exclusive servicing agreement (the “Consulting Agreement”) with an unrelated taxi fleet (the “Consultant”) to provide operational support and access to physical garage and office space for our medallion leasing business. DePalma II and the Consultant entered into the Consulting Agreement primarily to assist in establishing and growing DePalma II’s taxi fleet operations. In connection with the Consulting Agreement, DePalma II, as lessee, entered into a lease agreement for taxicab business and garage space to run its 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 NYC taxi medallion lender with a medallion loan portfolio collateralized by approximately 1,720 NYC taxi medallions as of March 31, 2025. In addition to our ownership of medallion loans, we believe we are also the largest owner of NYC taxi medallions, with 2,088 Owned Medallions as of March 31, 2025. As of March 31, 2025, Septuagint utilized 316 of our Owned Medallions and managed a fleet of approximately 316 vehicles and 337 drivers via a TLC-licensed fleet.

Prior to the Business Combination, the DePalma Companies were managed and directly owned by their respective members, which in turn were the DePalma Equityholders managed by the Manager, a firm founded in 2009 to make secondary investments in event-driven, distressed credit, primarily in the U.S. middle market. Our Manager is also the managing member of the Sponsor. DePalma I holds its assets, mainly its medallion loans, either directly or indirectly through certain trusts it has established, whereas DePalma II holds its assets, primarily taxi medallions, indirectly through various holding entities that have been formed for the sole purpose of owning taxi medallions. Due to some member sensitivities around effectively connected income, upon foreclosure of a loan or surrender agreement, the underlying medallion collateral for the loan will be distributed out (in-kind) by DePalma I to the respective members and their respective feeders who then recontribute the medallion collateral (in-kind) into DePalma II, which is less sensitive to effectively connected income.

Over time, we plan to transition our portfolio of non-accruing loans and Owned Medallions by selling medallions, primarily with seller financing attached, which will have the impact of increasing interest income from loans. Consistent with the DePalma Companies’ 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. The DePalma Companies intend to conduct these activities with the primary purposes of protecting the value of the original investment while enabling the DePalma Companies to achieve their objectives of capital appreciation and interest income from loans.

### Financial Overview

For the three months ended March 31, 2025 and 2024, DePalma I generated total revenues of $3.2 million and $5.4 million, income from operations of $0.6 million and $3.0 million, other expense of $3.1 million and $0.1 million, and net (loss) income of ($2.5) million and $2.9 million, respectively. Other revenue includes payments made from the Reserve Fund. Through March 31, 2025, we have received approximately $38.5 million of revenue from MRP+ loans, of which 28% of such payments were made from the Reserve Fund. As of March 31, 2025, DePalma I had loans held for investment, at fair value of $212.0 million. For the three months ended March 31, 2025 and 2024, the DePalma Companies had gross collections of $9.8 million and $7.4 million, respectively, where 59% and 45% of such collections were related to payments made on account of restructurings or resolutions of medallion loans. The increase in gross collections was due to an increase in restructurings of Non MRP+ large borrowers during the first quarter of 2025. For the three months ended March 31, 2025, DePalma I realized a year-over-year decrease of $0.01 million in regular monthly payments (which includes interest income and amortization) from borrowers who restructured in connection with the MRP+ program, offset by $0.01 million year-over-year increase in payments received from the Reserve Fund in connection with delinquent MRP+ loans. Additionally, during the three months ended March 31, 2025, DePalma I realized a $2.5 million year-over-year increase in non-MRP+ restructuring activity from an escalation of enforcement and collection activities against defaulted loans that did not participate in the MRP+ program. The 32% increase in gross collections during the three months ended March 31, 2025 as compared to the same period in the prior year was primarily attributable to an increase in restructurings of Non-MRP+ large borrowers, compared to the three months ended March 31, 2024.

With respect to delinquencies, as of March 31, 2025 and 2024, the percentage of NYC loans by medallion count in default were 33% and 38%, respectively. The decrease in delinquencies at March 31, 2025 was largely due to the continued foreclosure of non-accruing loans during the three months ended March 31, 2025.

For the three months ended March 31, 2025 and 2024, the DePalma Companies completed restructurings of loans collateralized by 36 and 45 NYC medallions, respectively. The decrease in restructurings period over period was due to a reduction of restructurings and payoffs occurring in 2025, partially offset by an increase in Surrender agreements during this same period.

For the three months ended March 31, 2025 and 2024, the DePalma Companies foreclosed on 27 and 58 medallions, respectively. The decrease in the pace of foreclosures is due to the reduced size of the non-accruing loan pool as the Company has foreclosed on a significant portion of its non-accruing loans.

### Business Combination and Public Company Costs

On February 14, 2023, MAC entered into the Business Combination Agreement, with the Manager, New MAC, Merger Sub, DePalma I and DePalma II. The Business Combination closed on April 7, 2025, following the receipt of the requisite stockholder approval on March 25, 2025. The closing of the Business Combination was subject to the satisfaction or waiver of certain conditions defined in the Business Combination Agreement, including, among others, approval by MAC shareholders and the approval for listing the New MAC Common Stock to be issued in connection with the Business Combination. At the closing of the Business Combination, the aggregate merger consideration paid to the holders of capital stock of the DePalma Companies was $629.5 million, which consisted of 62,954,464 newly issued shares of New MAC Common Stock. On April 10, 2025, New MAC’s common stock and warrants began trading on the OTCQX market under the symbols “MGTE” and “MGTEW”, respectively.

Pursuant to the Business Combination Agreement, and subject to the terms and conditions contained therein, the Business Combination was effected as follows: (i) immediately prior to the consummation of the transactions contemplated by the Business Combination Agreement, New MAC and the DePalma Companies effected the Pre-Closing Transactions, resulting in New MAC becoming the owner of approximately 83.7% of the DePalma Companies, with the remaining 16.3% continuing to be owned by certain current limited partners of the DePalma Companies; and (ii) Merger Sub merged with and into MAC in the Merger, with MAC surviving as a wholly owned subsidiary of New MAC. As a result of the Business Combination, New MAC became a new publicly-traded company.

As a result of the Business Combination, New MAC will likely be required to hire additional personnel and implement procedures and processes to address public company regulatory requirements and customary practices. New MAC expects 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.

### Key Factors Affecting Operating Results

The DePalma Companies’ 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.”*

DePalma I’s balance sheet consists substantially of loans secured by taxicab medallions, which historically have been associated with higher than average delinquency rates and defaults as substantially all of the loans were acquired after they had defaulted. As of March 31, 2025, we held $339 million in aggregate principal of NYC taxicab medallion loans, of which approximately 46% of Non-MRP+ Loans by medallion count were in default. 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. DePalma II’s balance sheet consists substantially of taxicab medallions which are reported at cost and evaluated for impairment. As of March 31, 2025, DePalma held an aggregate of 2,258 taxicab medallions with a carrying value of $350.3 million. The value of our taxicab 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 taxicab 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 March 31, 2025, 37% of our current medallion loans based on the number of NYC taxi medallions that are either collateral to medallion loans or that we own, have participated in the MRP+, which is a Supplemental Loan Deficiency Guaranty program that was established to benefit participating NYC taxi medallion loan lenders by providing municipal credit support in the event of defaults by eligible and participating taxi medallion owners. As part of this initiative, the Reserve Fund was established in 2022. Initially funded with $49 million, the City of New York’s obligations to replenish the Reserve Fund is subject to and dependent upon appropriations being made from time to time by the New York City Council for such purpose. Any funding in excess of the initial $49 million is not legally required and is not committed by the City of New York and is subject to future appropriations by the New York City Council. The initial funding amount may fall short and, until the program is closed and all participants and statistics are quantified, we are unable to estimate how long the initial $49 million grant will last. The Reserve Fund balance is approximately $35 million as of March 31, 2025.

Under the MRP+, eligible medallion loans with a principal balance of $200,000 or more will be 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 will have 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 writedown 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 the DePalma Companies’ 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.

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%. Additionally, DePalma I and DePalma II currently have no external borrowings, so fluctuations in interest rates have not historically impacted gross income spread or interest expense.

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 NYC Non-MRP+ Loans, approximately 46% of which are in default, 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 continue to monitor the interest rate environment and seek to mitigate the impact of interest rates, including potentially implementing any market based hedging strategies, we cannot provide assurance that the impact of changes in interest rates can be successfully mitigated.

### Key Components of Results of Operations

Each of the DePalma Companies has historically operated and managed its business in one reportable segment. The following discussion of results of operations are based on each of the DePalma Companies’ reportable segment for the periods presented.

### Revenue

DePalma I’s revenue has historically been primarily comprised of interest income from the taxicab medallion loans and any interest earned from cash on hand. All of the medallion loans are collateralized by one or more taxicab medallions, with a significant portion of the loans participating in the MRP+ program established by the City of New York and the New York City Taxi and Limousine Commission (“TLC”). 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 (or its predecessor, MRP) are often further secured by personal guarantees and, in some cases, collateralized with additional collateral such as real estate of the borrowers. In addition, DePalma I’s 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.

DePalma II’s revenue has historically been nominal due to the fact that the majority of the Unregistered Medallions have not yet been placed in operation through Septuagint or otherwise, however more recently, and during the three months ended March 31, 2025 and 2024, has recognized interest income from MRP+ loans, originating medallion loan financings, and from cash on hand. In addition, during the three months ended March 31, 2025, DePalma II began recognizing other revenue that is primarily comprised of payments from the Reserve Fund on behalf of borrowers.

### Operating Expenses

DePalma I’s operating expenses have historically been comprised of (1) service fee expenses, consisting of fees paid to its third-party servicer, Field Point, for servicing its medallion loans, (2) professional fees, consisting of fees for third-party professional services, including consulting, legal, accounting and lobbying, as well as (3) general and administrative fees, consisting of certain fees for third-party professional services and general and administrative expenses.

DePalma II’s operating expenses have historically been comprised of (1) depreciation expense on taxicab vehicles (2) professional fees, consisting of fees for third-party professional services, including consulting, legal, accounting and lobbying, (3) general and administrative fees, consisting of fees for third-party professional services, medallion administration costs, and general and administrative expenses, as well as (4) fleet servicing fees, consisting of net expenses incurred as a result of the Consulting Agreement.

The DePalma Companies expect their expenses, in particular professional fees and general and administrative fees, to increase for the foreseeable future as a result of their parent entity, New MAC, operating as a public company after the completed Business Combination, thereby requiring compliance with the rules and regulations of the SEC. As a result, the DePalma Companies expect an increase in legal, audit, additional insurance expenses, investor relations activities and other administrative and professional services.

### Other Income

DePalma I treats the loans purchased as a pool of loans in its books and records. DePalma I’s purchases of taxicab medallion loans have been transacted at significant discounts to par value and DePalma I has 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 (taxi medallions). In either case, DePalma I recognizes 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. DePalma I and DePalma II 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. DePalma II also recognizes a gain or loss from disposals of medallions.

### Results of Operations of DePalma I

### Comparison of the Three Months Ended March 31, 2025 and 2024

#### The following table summarizes our results of operations of DePalma I for the three months ended March 31, 2025 and 2024:

*(in thousands)*

| Revenue: | Three Months Ended March 31, 2025 | 2024 | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: |
| Interest income | $2,967 | $3,626 | $(659) | (18)% |
| Other revenue | 195 | 1,777 | (1,582) | (89)% |
| **Total revenue** | 3,162 | 5,403 | (2,241) | (41)% |
| **Operating expenses:** |  |  |  |  |
| Service fee expense | 1,050 | 1,200 | (150) | (13)% |
| Professional fees | 1,466 | 1,181 | 285 | 24% |
| General and administrative | 68 | 57 | 11 | 19% |
| **Total operating expenses** | 2,584 | 2,438 | 146 | 6% |
| **Income from operations** | 578 | 2,965 | (2,387) | (81)% |
| **Other expense:** |  |  |  |  |
| Losses on loans held for investment, net | (3,133) | (50) | (3,083) | \* |
| **Total other expense** | (3,133) | (50) | (3,083) | \* |
| **Net (loss) income** | $(2,555) | $2,915 | $(5,470) | (188)% |

\* Percentage not meaningful

### Revenue

*Interest income.* Interest income of DePalma I of $3.0 million decreased by $0.7 million, or 18%, for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. This decrease was generated by a decrease in interest income in both MRP+ loans and Non-MRP+ loans. DePalma I experienced a $0.3 million decrease in interest income from loans in the MRP+ program driven by principal paydowns from borrowers. DePalma I also experienced a $0.4 million decrease in interest income from Non-MRP+ loans due to an increase in loan satisfactions by performing borrowers.

*Other revenue.* Other revenue of DePalma I of $0.2 million decreased by $1.6 million, or 89%, for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. This decrease was due to a decrease in payments received from the Reserve Fund within DePalma I as a result the transfer of non-accruing MRP+ loans from DePalma I to DePalma II during the three months ended March 31, 2025.

### Operating Expenses

*Service fees.* Service fees of DePalma I of $1.1 million decreased by $0.2 million, or 13%, for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. Such decrease was due to a decrease in required service fees within DePalma I due to the transfer of non-accruing MRP+ loans from DePalma I to DePalma II during the three months ended March 31, 2025.

*Professional fees.* Professional fees of DePalma I of $1.5 million increased by $0.3 million, or 24%, for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. Such increase was due to additional costs in preparation for the closing of the Business Combination.

*General and administrative fees.* General and administrative fees of DePalma I of $0.07 million increased by $0.01 million, or 19%, for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. Such increase was due to additional costs in preparation for the closing of the Business Combination.

### Other Expense

For the three months ended March 31, 2025, principal payments were received on 979 loans secured by 1,247 medallions and DePalma I foreclosed on 27 medallions. For the three months ended March 31, 2024, principal payments were received on 1,086 loans secured by 1,325 medallions and DePalma I foreclosed on 58 medallions. The decrease in loans that received principal payments during the three months ended March 31, 2025 compared to the three months ended March 31, 2024, was due to satisfaction of loans by borrowers reducing the number of paying medallions. The decrease in foreclosed medallions during the three months ended March 31, 2025 compared to the three months ended March 31, 2024 was due to a decrease in non-performing loans from period to period, thereby reducing the potential medallion foreclosures.

*Losses on loans held for investment, net.* Losses on loans held for investment, net of DePalma I of $3.1 million increased by $3.1 million for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. DePalma I experienced a $5.6 million loss on loans collateralized by Chicago taxi medallions, $0.8 million of which was due to a revaluation of the underlying medallions and $4.8 million of which was due to a markdown of mortgage collateral, partially offset by a $1.5 million increase in gains from paydowns on Non-MRP+ loans, a $0.2 million increase in gains from foreclosures on NYC medallions in the MRP+ portfolio, and $0.8 million increase in gains from a revaluation of MRP+ loans as a result of a reduction in the risk-free rate.

### Results of Operations of DePalma II

### Comparison of the Three Months Ended March 31, 2025 and 2024

#### The following table summarizes our results of operations of DePalma II for the three months ended March 31, 2025 and 2024:

*(in thousands)*

| Revenue: | Three Months Ended March 31, 2025 | 2024 | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: |
| Interest income | $319 | $14 | $305 | \* |
| Other revenue | 1,108 | - | 1,108 | \* |
| **Total revenue** | 1,427 | 14 | 1,413 | \* |
| **Operating expenses:** |  |  |  |  |
| Depreciation expense | 539 | 462 | 77 | 17% |
| Professional fees | 871 | 521 | 350 | 67% |
| General and administrative | 361 | 51 | 310 | \* |
| Fleet servicing fees, net | 1,125 | - | 1,125 | \* |
| **Total operating expenses** | 2,896 | 1,034 | 1,862 | 180% |
| **Loss from operations** | (1,469) | (1,020) | (449) | 44% |
| **Other income:** |  |  |  |  |
| Gains from disposal of medallions | 66 | 54 | 12 | 22% |
| Gains on loans held for investment, net | 271 | - | 271 | \* |
| **Total other income** | 337 | 54 | 283 | 524% |
| **Net loss** | $(1,132) | $(966) | $(166) | 17% |

\*Percentage not meaningful

### Revenue

*Interest income.* Interest income was $0.3 million for the three months ended March 31, 2025. The increase in interest income was due to a $0.2 million increase in interest from cash on hand during the three months ended March 31, 2025, and a $0.1 million increase from additional originations of medallion loan financings.

*Other revenue.* Other revenue was $1.1 million for the three months ended March 31, 2025. The increase in other revenue was due to payments received from the Reserve Fund within DePalma II resulting from the in-kind contribution of MRP+ loans from DePalma I into DePalma II during the three months ended March 31, 2025.

### Operating Expenses

*Depreciation expense*. Depreciation expense of DePalma II of $0.5 million increased by $0.1 million, or 17%, for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. Such increase was due to the purchase and placement of additional taxicab vehicles in service.

*Professional fees.* Professional fees of DePalma II of $0.9 million increased by $0.4 million, or 67%, for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. Such increase was due to a $0.3 million increase in additional costs incurred from the closing of the Business Combination, as well as a $0.1 million increase in fees from transferring medallions in the TLC’s records.

*General and administrative fees.* General and administrative fees was $0.4 million for the three months ended March 31, 2025. Such increase was due to a $0.2 million increase in rent expense from the new garage lease, a $0.1 million increase as a result of an increase in DePalma II’s share of third party administration costs due to DePalma II’s increase in net asset value, and $0.1 million was a result of an increase in loan servicing costs.

*Fleet servicing fees, net.* Fleet servicing fees, net was $1.1 million for the three months ended March 31, 2025. Such increase was due to DePalma II entering into the fleet servicing Consulting Agreement, which commenced on November 15, 2024.

### Other Income

*Gains from disposal of medallions.* Gains from disposal of medallions of DePalma II of $0.1 million increased by $0.01 million, or 22%, for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. This increase was due to DePalma II disposing of two medallion through a settlement transaction with DePalma I and a third-party borrower during the period.

*Gains on loans held for investment, net.* Gains on loans held for investment, net was $0.3 million for the three months ended March 31, 2025. The increase in gains on loans held for investment, net was due to a revaluation of MRP+ loans during the three months ended March 31, 2025 due to a reduction in the assumed risk free rate of return.

### Summarized Financial Information of Septuagint

DePalma II’s investment in Septuagint is accounted for under the equity method to which DePalma II has elected the fair value option. As of March 31, 2025 and December 31, 2024, the fair value of DePalma II’s equity investment in Septuagint was $0.

DePalma II and Septuagint have historically, and continue to, conduct related party transactions with each other. The most notable transactions include, but are not limited to, various working capital promissory notes issued from DePalma II to Septuagint in an aggregate amount of $3.5 million inclusive of PIK interest through March 31, 2025. These working capital notes were amended in June 2023 to extend the maturity date of principal and accrued interest to June 2026. As of March 31, 2025 and December 31, 2024, the fair value of the working capital notes are determined to be $0 based on DePalma II’s assessment of its historical collections and expected future collections. Furthermore, DePalma II does not expect to receive future payment related to the working capital notes upon termination of the OSA. In addition, DePalma II leases medallions and taxicab vehicles to Septuagint that Septuagint may use in its taxicab fleet operations. The monthly rental payment for each medallion is $1,500 per month, and the monthly rental payment for taxicab vehicles varies by lease. Please refer to the financial statements of DePalma II included within this Quarterly Report on Form 10-Q for additional information on DePalma II’s transactions with Septuagint and resulting impact to DePalma II’s financials statements, financial condition, and results of operations.

The primary factors that have limited the number of taxis in Septuagint’s fleet are availability of cars, the availability of drivers at certain times of the year, a desire by Septuagint to grow the fleet in a methodical manner that would not require the need for a capital infusion, and Septuagint’s need to scale up its operations as the fleet grows. In addition, Septuagint needs access to medallions in order to grow its fleet. DePalma II has discretion to determine, in its business judgment, the pace at which it will deploy its medallions for lease to Septuagint.

Effective April 7, 2025, Kirie Eleison assigned all of its interests in Septuagint to DePalma II. Consequently, the principals of Kirie Eleison resigned from the board of directors of Septuagint, making Septuagint a wholly-owned subsidiary of DePalma II as of that date. DePalma II intends to continue the operations of Septuagint and is currently evaluating the impact of consolidating Septuagint on its consolidated financial statements effective April 7, 2025.

The following tables present unaudited summarized financial information of Septuagint’s assets, liabilities, and results of operations for the periods presented:

*(in thousands)*

|  | March 31, 2025 | December 31, 2024 |
| --- | ---: | ---: |
| Current assets | $3,237 | $2,232 |
| Noncurrent assets | 6,766 | 4,744 |
| Current liabilities | 16,144 | 13,539 |
| Noncurrent liabilities | 9,863 | 7,553 |

*(in thousands)*

|  | Three Months Ended March 31, 2025 | 2024 |
| --- | ---: | ---: |
| Revenues | $3,636 | $2,798 |
| Gross profit | 1,477 | 1,641 |
| Net loss | (1,702) | (1,055) |

### Financial Condition

The Manager and the members of the DePalma Companies evaluate the financial condition and capital requirements of the DePalma Companies at the DePalma I and DePalma II levels, as well as on a combined basis. Historically, dependent upon the working capital needs of each of the DePalma Companies, DePalma I will, at times, advance working capital on behalf of DePalma II, and DePalma II will reimburse DePalma I in a timely manner. In addition, DePalma I may, via its Members, distribute capital to DePalma II that is not reimbursable to DePalma I. In addition, upon foreclosure of a loan or surrender agreement, the underlying medallion collateral for the loan will be distributed out (in-kind) by DePalma I to the respective members and their respective feeders who then recontribute the medallion collateral (in-kind) into DePalma II, consistent with the objective of each of the DePalma Companies. These in-kind transfers are largely dependent upon the activities of DePalma I, most notably including the frequency at which it obtains medallions secured as loan collateral. These in-kind transfers can have a significant impact on the reported amount of assets on each of the DePalma Companies’ balance sheets, as well as the resulting assessments of financial condition by the Manager and the members on each of the DePalma Companies. During the three months ended March 31, 2025 and 2024, DePalma I, through its members, made distributions of underlying medallion collateral in-kind to DePalma II of approximately $5.3 million and $13.8 million, respectively. Additionally, during the three months ended March 31, 2025, DePalma I, through its members, made distributions of MRP+ loans in-kind to DePalma II of approximately $53.5 million.

On a combined basis, the DePalma Companies’ most notable changes in financial condition from December 31, 2024 to March 31, 2025 included an increase in intangible assets of approximately $5.0 million, a decrease in loans held for investment, at fair value of approximately $12.7 million., and an increase in property and equipment of approximately $6.1 million. The increase in intangible assets was driven by contributions received on the medallion collateral (in-kind) into DePalma II resulting from medallion foreclosures. The decrease in loans held for investment, at fair value was driven by cash paydowns received and medallion foreclosures. The increase in property and equipment was driven by additional vehicles purchased by DePalma II.

### Liquidity and Capital Resources

### Cash Flows of DePalma I

DePalma I uses traditional measures of cash flow, including net cash provided by its operating activities and net cash provided b (used in) its investing activities, as well as cash available for distribution to evaluate its periodic cash flow results. As of March 31, 2025 and December 31, 2024, DePalma I had available cash and cash equivalents of $8.4 million and $2.4 million, respectively, which are available to fund its operations.

### Comparison of the Three Months Ended March 31, 2025 and 2024

#### The following table reflects the changes in cash flows of DePalma I for the three months ended March 31, 2025 and 2024:

*(in thousands)*

|  | Three Months Ended March 31, 2025 | 2024 | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: |
| Net cash provided by operating activities | $1,362 | $2,251 | $(889) | (39)% |
| Net cash provided by (used in) investing activities | 4,646 | (329) | 4,975 | \* |
| Net increase in cash and cash equivalents | 6,008 | 1,922 | 4,086 | 213% |
| Cash and cash equivalents, at beginning of period | 2,364 | 35,735 | (33,371) | (93)% |
| Cash and cash equivalents, at end of period | 8,372 | 37,657 | (29,285) | (78)% |

\* Percentage not meaningful

#### Operating Activities

The decrease to net cash provided by operating activities was $0.9 million, or 39% for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. Such decrease was driven by a decrease in other revenue of $1.6 million, as well as various changes in operating activities.

#### Investing Activities

The increase to net cash provided by investing activities was $5.0 million for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. Such increase was due to an increase in loan payments received on loans during the period, as well as a reduction in loan purchases.

### Cash Flows of DePalma II

DePalma II uses traditional measures of cash flow, including net cash provided by operating activities and net cash used in investing activities, as well as cash available for distribution to evaluate its periodic cash flow results. As of March 31, 2025 and December 31, 2024, DePalma II had available cash and cash equivalents of $26.8 million and $32.8 million, respectively, which are available to fund its operations.

The taxi industry is competitive and there are uncertainties around our cash flows. Septuagint competes with other established fleets, technology enabled ride sharing apps, and public transit among other competitors. On April 7, 2025, Kirie Eleison resigned from the board of directors, making Septuagint a wholly-owned subsidiary of DePalma II effective April 7, 2025. DePalma II intends to continue the operations of Septuagint.

### Comparison of the Three Months Ended March 31, 2025 and 2024

#### The following table reflects the changes in cash flows of DePalma II for the three months ended March 31, 2025 and 2024:

*(in thousands)*

|  | Three Months Ended March 31, 2025 | 2024 | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: |
| Net cash provided by operating activities | $422 | $206 | $216 | 105% |
| Net cash used in investing activities | (6,425) | (322) | (6,103) | \* |
| Net decrease in cash and cash equivalents | (6,003) | (116) | (5,887) | 5075% |
| Cash and cash equivalents, at beginning of period | 32,809 | 493 | 32,316 | 6555% |
| Cash and cash equivalents, at end of period | 26,806 | 377 | 26,429 | 7010% |

\* Percentage not meaningful

#### Operating Activities

The increase to net cash provided by operating activities was $0.2 million, or 105% for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. Such increase was primarily due to an increase in other revenue of $1.1 million, and an increase in interest income of $0.3 million, .partially offset by an increase in fleet servicing fees, net of $1.1 million.

#### Investing Activities

The increase to net cash used in investing activities was $6.1 million for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. Such increase was driven by a $6.7 million increase in vehicles purchased during the period, partially offset by medallion settlement payments received of $0.4 million.

### Future sources and uses of liquidity

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), growth in volume and collections of medallion and vehicle leases, general economic conditions, future market growth and competition in the mobility market.

In the future, we may be required or choose to seek additional equity or debt financing. In the event that 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 such 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.

On November 15, 2024, DePalma II entered into an operating lease for taxicab garage and office space. DePalma II’s contractual obligations under this operating lease, excluding periods covered by renewal options, include minimum lease payments of $0.7 million for each of the fiscal years ending December 31, 2025 through 2029. The DePalma companies have no other long-term contractual commitments as of March 31, 2025.

### Off-Balance Sheet Arrangements

DePalma I and DePalma II do not have any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.

### Critical Accounting Policies and Estimates

The DePalma Companies’ unaudited consolidated financial statements and the related notes thereto included elsewhere in this Quarterly Report on Form 10-Q are prepared in accordance with U.S. GAAP. The preparation of the DePalma Companies’ unaudited consolidated financial statements requires each management 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. Each of the DePalma Companies’ management bases their estimates on historical experience and on various other assumptions that they believe to be reasonable under the circumstances. Actual results could differ significantly from the estimates made by each management. To the extent that there are differences between their estimates and actual results, future financial statement presentation, financial condition, results of operations, and cash flows of the DePalma Companies 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 unaudited consolidated financial statements.

Management of each of the DePalma Companies believes the following critical accounting policies reflect the more significant estimates and assumptions used in the preparation of its consolidated financial statements. For a description of DePalma I’s significant accounting policies, see Note 2 “*Summary of Significant Accounting Policies,”* of the notes to DePalma I’s unaudited consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q. For a description of DePalma II’s significant accounting policies, see Note 2 “*Summary of Significant Accounting Policies,”* of the notes to DePalma II’s unaudited consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

### Fair Value Measurements

Each of the DePalma Companies applies the provisions of ASC 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 which 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 DePalma Companies. Unobservable inputs reflect respective members’ own assumptions about the inputs market participants would use in pricing the asset or liability 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:

- Level 1 — Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities and in which transaction 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. The inputs or methodology used for valuing securities are not necessarily an indication of the risks associated with investing in those securities. The types of investments which would generally be included in this category are private equity and/or debt securities issued by private entities, and thinly traded securities.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an investment’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.

With respect to instruments valued by management, the valuation techniques that may be considered are the evaluation of arm’s-length transactions with third parties, an income approach reflecting a discounted cash flow analysis, and a market approach that includes a comparative analysis of acquisition multiples and pricing multiples generated by market participants.

#### DePalma I

As of March 31, 2025 and December 31, 2024, DePalma I had loans held for investment, at fair value of $212.0 million and $278.6 million, respectively. The following table presents information about DePalma I’s loans held for investment, at fair value by levels within the valuation hierarchy as of March 31, 2025 and December 31, 2024.

*(in thousands)*

| Loans held for investment, at fair value Private Loans: | March 31, 2025 Level 3 | December 31, 2024 |
| --- | ---: | ---: |
| MRP+ Loans | $142,134 | $201,106 |
| Non-MRP+ Loans | 69,893 | 77,465 |
| **Total loans held for investment, at fair value** | $212,027 | $278,571 |

83

The following tables summarize the valuation techniques and significant unobservable inputs used for DePalma I’s investments that are categorized within Level 3 of the fair value hierarchy as of March 31, 2025 and December 31, 2024:

*March 31, 2025*

*(in thousands)*

| Loans held for investment, at fair value | Fair Value | Approach | Unobservable Inputs | Low Range | High Range | Weighted Average5 |
| --- | ---: | --- | --- | ---: | ---: | ---: |
| MRP+ Loans | $142,134 | Income Approach1 | Discount Rate2 | 8.00% | 8.00% | 8.00% |
| Non-MRP+ Loans - NYC | 59,305 | Market Approach3 | Discounted Medallion Price4 | $166 | $166 | $166 |
| Non-MRP+ Loans - Other | 10,588 | Market Approach | Market Medallion Price | $9 | $12 | $10 |
| Total | $212,027 |  |  |  |  |  |

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, DePalma considers 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.

3\. The most significant inputs include recent DePalma I 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 $81,667 to $150,000). 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 March 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 DePalma.

5\. Weighted average medallion prices are calculated based on the total fair value of underlying medallion collateral.

*December 31, 2024*

*(in thousands)*

| Loans held for investment, at fair value | Fair Value | Approach | Unobservable Inputs | Low Range | High Range | Weighted Average5 |
| --- | ---: | --- | --- | ---: | ---: | ---: |
| MRP+ Loans | $201,106 | Income Approach1 | Discount Rate2 | 8.25% | 8.25% | 8.25% |
| Non-MRP+ Loans - NYC | 60,996 | Market Approach3 | Discounted Medallion Price4 | $166 | $166 | $166 |
| Non-MRP+ Loans - Other | 16,469 | Market Approach | Market Medallion Price | $10 | $12 | $11 |
| Total | $278,571 |  |  |  |  |  |

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, DePalma considers 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.

3\. The most significant inputs include recent DePalma I 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 DePalma.

5\. Weighted average medallion prices are calculated based on the total fair value of underlying medallion collateral.

#### DePalma II

As of March 31 31, 2025 and December 31, 2024, DePalma II had investments at fair value of $56.3 million and $2.4 million, respectively. The following table presents information about DePalma II’s investments by levels within the valuation hierarchy as of March 31, 2025 and December 31, 2024.

*(in thousands)*

|  | March 31, 2025 Level 3 | December 31, 2024 |
| --- | ---: | ---: |
| Working Capital Note | $— | $— |
| Loans held for investment, at fair value |  |  |
| Private loans: |  |  |
| MRP+ Loans | 53,737 | — |
| Non-MRP+ Loans - NYC | 2,585 | 2,427 |
| **Total** | $56,322 | $2,427 |

The following tables summarize the valuation techniques and significant unobservable inputs used for DePalma II’s investments that are categorized within Level 3 of the fair value hierarchy as of March 31, 2025 and December 31, 2024:

*March 31, 2025*

*(in thousands)*

| Loans held for investment, at fair value | Fair Value | Approach | Unobservable Inputs | Low Range | High Range | Weighted Average5 |
| --- | ---: | --- | --- | ---: | ---: | ---: |
| MRP+ Loans | $53,737 | Income Approach1 | Discount Rate2 | 8.00% | 8.00% | 8.00% |
| Non-MRP+ Loans - NYC | 2,585 | Market Approach3 | Discounted Medallion Price4 | $166 | $166 | $166 |
| Total | $56,322 |  |  |  |  |  |

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, DePalma II considers 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.

3\. The most significant inputs include recent DePalma I 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 $81,667 to $150,000). In instances where loans are overcollateralized with an unpaid principal balance less than or equal to $165,000 as of March 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 DePalma II.

5\. Weighted average medallion prices are calculated based on the total fair value of underlying medallion collateral.

*December 31, 2024*

*(in thousands)*

| Loans held for investment, at fair value | Fair Value | Approach | Unobservable Inputs | Low Range | High Range | Weighted Average3 |
| --- | ---: | --- | --- | ---: | ---: | ---: |
| Non-MRP+ Loans - NYC | $2,427 | Market Approach1, 2 | Discounted Medallion Price2 | $166 | $166 | $166 |
|  | $2,427 |  |  |  |  |  |

1\. Increased significance is placed on data that DePalma II assesses to indicate market transactions. The most significant inputs include recent DePalma I medallion sale prices (ranging from $175,000 to $210,000), the amount restructured by the City of New York under a certain taxi medallion relief program (“MRP+”) ($170,000), and certain market prices reported by the TLC (ranging from $30,000 to $200,000). 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.

2\. 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 low value was $165,000 and the high value was $185,000.

3\. Weighted average medallion prices are calculated based on the total fair value of underlying medallion collateral.

### Intangible Assets

DePalma II’s 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. DePalma II 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.

DePalma II evaluates its taxi medallions as a single unit of accounting for purposes of testing for impairment, as taxi medallions are homogeneous assets, which are interchangeable and have identical characteristics. In DePalma II’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, DePalma II 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 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 three months ended March 31, 2025 and 2024.

### 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 the unaudited consolidated financial statements of DePalma I, and Note 2 in the section entitled “*Summary of Significant Accounting Policies — Recent Accounting Pronouncements”* as referred to in the notes to the unaudited consolidated financial statements of DePalma II, in each case included elsewhere in this Quarterly Report on Form 10-Q for a discussion about accounting pronouncements recently issued not yet adopted.

### Emerging Growth Company Status

As a result of the consummation of the Business Combination, New MAC is an “emerging growth company” within the meaning of the Securities Act, as modified by the JOBS Act, and New MAC may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in the periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. As a result, New MAC’s stockholders may not have access to certain information they may deem important. New MAC could be an emerging growth company for up to five years, although circumstances could cause New MAC to lose that status earlier, including if the market value of the New MAC Common Stock held by non-affiliates exceeds $700 million as of any December 31 before that time, in which case New MAC would no longer be an emerging growth company as of the following December 31. New MAC cannot predict whether investors will find our securities less attractive because New MAC will rely on these exemptions. If some investors find New MAC’s securities less attractive as a result of New MAC’s reliance on these exemptions, the trading prices of New MAC’s securities may be lower than they otherwise would be, there may be a less active trading market for New MAC’s securities and the trading prices of New MAC’s securities may be more volatile.

Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. 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. New MAC 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, New MAC, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of New MAC’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.

New MAC will remain an emerging growth company until the earlier of: (1) the last day of the fiscal year (a) following the fifth anniversary of the closing of New MAC’s initial public offering, (b) in which New MAC has total annual gross revenue of at least $1.235 billion or (c) in which New MAC is deemed to be a “large accelerated filer” under the rules of the SEC which, in addition to certain other criteria, means the market value of New MAC’s common equity that is held by non-affiliates exceeds $700 million as of the end of the prior fiscal year’s second fiscal quarter; and (2) the date on which New MAC has issued more than $1.0 billion in non-convertible debt securities during the prior three-year period.

**MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF MARBLEGATE ACQUISITION CORP.**

### Cautionary Note Regarding Forward-Looking Statements

All statements other than statements of historical fact included in this Report including, without limitation, statements under this Item regarding our financial position, business strategy and the plans and objectives of Management for future operations, are forward-looking statements. When used in this Report, words such as “anticipate,” “believe,” “estimate,” “expect,” “intend” and similar expressions, as they relate to us or our Management, identify forward-looking statements. Such forward-looking statements are based on the beliefs of our Management, as well as assumptions made by, and information currently available to, our Management. Actual results could differ materially from those contemplated by the forward-looking statements as a result of certain factors detailed in our filings with the SEC. All subsequent written or oral forward-looking statements attributable to us or persons acting on our behalf are qualified in their entirety by this paragraph.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the unaudited condensed financial statements and the notes thereto included in this Report under Item 1. “Financial Statements”.

### Overview

We are a blank check company formed under the laws of the State of Delaware on December 10, 2020 for the purpose of effectuating a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or other similar business combination with one or more businesses (the “Business Combination”). We intend to effectuate our Business Combination using cash from the proceeds of the Initial Public Offering and the sale of the Private Placement Units, our capital stock, debt or a combination of cash, stock and debt.

#### Recent Developments

On January 17, 2025, we issued the January 2025 Note, in the principal amount of up to $485,000, to Marblegate SOMF. The January 2025 Note was issued in connection with advances the Payee has made, and may make in the future, to the Company for working capital expenses. The January 2025 Note bears no interest and is due and payable upon the earlier to occur of (i) the date on which the Company consummates its initial business combination and (ii) the date that the winding up of the Company is effective. At the election of the Payee, up to $485,000 of the unpaid principal amount of the January 2025 Note may be converted into Conversion Shares, equal to: (x) the portion of the principal amount of the Note being converted, divided by (y) $10.00, rounded up to the nearest whole number of shares. The Conversion Shares will be identical to the shares of Class A common stock included in the units issued by the Company to its sponsor and the representative of the underwriters in a private placement in connection with the Company’s initial public offering. The Conversion Shares are entitled to the registration rights set forth in the January 2025 Note.

On March 25, 2025, we held a special meeting of stockholders at which our stockholders approved and adopted (i) the DePalma Business Combination Agreement and (ii) an amendment and restatement of our amended and restated certificate of incorporation and the material differences between the proposed amended and restated certificate of incorporation of New MAC and our existing amended and restated certificate of incorporation. In connection with the Business Combination Meeting, holders of 322,274 public shares exercised their right to redeem such shares for a pro rata portion of the funds in the Company’s trust account. As a result, approximately $3.6 million will be removed from the Company’s trust account to pay such holders.

#### Extension of Combination Period

We originally had up to 15 months from the closing of our initial public offering, or until January 5, 2023, to consummate an initial business combination. However, at the First Extension Meeting, our stockholders approved the amendment to the certificate of incorporation to extend the end of the Combination Period from January 5, 2023 to July 5, 2023 (or such earlier date as determined by our board of directors). In connection with the First Extension Meeting, stockholders holding 28,989,609 public shares exercised their right to redeem their shares for a pro rata portion of the funds in the Company’s trust account. As a result, approximately $293.5 million (approximately $10.12 per public share) was removed from the Trust Account and paid to such holders on December 2, 2022.

On June 27, 2023, the Company held the Second Extension Meeting, at which our stockholders approved a second amendment to the amended and restated certificate of incorporation to extend the date by which we must consummate our initial business combination or an additional six (6) months, from July 5, 2023 to January 5, 2024, or such earlier date as determined by the board. In connection with the Second Extension Meeting, stockholders holding 244,327 public shares exercised their right to redeem such shares for a pro rata portion of the funds in the trust account. As a result, approximately $2.5 million (approximately $10.29 per share) was removed from the Trust Account to pay such holders on July 4, 2023.

On December 19, 2023, the Company held the Third Extension Meeting, at which our stockholders approved a third amendment to the amended and restated certificate of incorporation to extend the date by which we must consummate our initial business combination for an additional nine (9) months, from January 5, 2024 to October 5, 2024, or such earlier date as determined by the board. In connection with the Third Extension Meeting, stockholders holding 128,459 public shares exercised their right to redeem such shares for a pro rata portion of the funds in the trust account. As a result, approximately $1.4 million (approximately $10.62 per share) was removed from the trust account to pay such holders on December 22, 2023.

On September 10, 2024, the Company held the Fourth Extension Meeting, at which our stockholders approved the fourth amendment to the certificate of incorporation to extend the date by which we must consummate our initial business combination for an additional six (6) months, from October 5, 2024 to April 5, 2025 (or such earlier date as determined by our board of directors). In connection with the Fourth Extension Meeting, stockholders holding 268,726 public shares exercised their right to redeem their shares for a pro rata portion of the funds in the trust account. As a result, approximately $2.9 million (approximately $10.90 per share) was removed from the trust account and paid to such holders. Following the redemptions and as of March 31, 2025, we had 46,605 public shares outstanding.

On March 25, 2025, the Company held the Special Shareholder Meeting, at which our stockholders approved the DePalma Business Combination. In connection with the Special Shareholder Meeting, stockholders holding 322,274 public shares exercised their right to redeem their shares for a pro rata portion of the funds in the trust account. As a result, approximately $3.6 million (approximately $11.05 per share) was removed from the account and paid to such holders.

Following the redemptions and as of March 31, 2025, we had 46,605 public shares outstanding.

#### Founder Conversion

On June 28, 2023, we issued 4,000,000 shares of Class A common stock to the sponsor, upon the conversion of an equal number of shares of Class B common stock held by the sponsor. The 4,000,000 shares of Class A common stock issued in connection with the Founder Conversion are subject to the same restrictions as applied to the shares of Class B common stock before the Founder Conversion, including, among others, certain transfer restrictions, waiver of redemption rights and the obligation to vote in favor of an initial Business Combination; consequently, the shares of Class A common stock issued in connection with the Founder Conversion are not registered under the Securities Act and remain unregistered until registration is demanded by the sponsor pursuant to a letter agreement we entered into with our sponsor, officers and directors.

#### DePalma Business Combination

On February 14, 2023, we entered into the DePalma Business Combination Agreement with Marblegate, New MAC, Merger Sub and the DePalma Companies, pursuant to which, among other things, the parties agreed to the DePalma Business Combination under which we agreed to combine with DePalma in a series of transactions that will result in New MAC becoming a public company.

On April 5, 2025, the parties to the DePalma Business Combination entered into a waiver to the Business Combination Agreement to waive the listing condition set forth in Section 7.3(d) of the Business Combination Agreement that had required the Nasdaq market exchange to have approved New MAC’s listing application.

In connection with the closing of the DePalma Business Combination on April 7, 2025, MAC consummated the merger transaction, whereby Merger Sub merged with and into MAC, the separate corporate existence of Merger Sub ceasing and MAC being the surviving corporation and a direct wholly owned subsidiary of New MAC, whereupon New MAC applied for the New MAC Common Stock and New MAC Warrants to be quoted, as soon as possible following the consummation of the Business Combination, on the OTCQX® Best Market (“OTCQX”) operated on The OTC Market systems (the “OTC Market”) under the symbols “MGTE” and “MGTEW”, respectively. On April 10, 2025, New MAC received approval from the OTC Markets for quotation of the New MAC Common Stock and New MAC Warrants on the OTCQX. The New MAC Common Stock and New MAC Warrants commenced trading on OTCQX at the open of business on April 10, 2025.

Pursuant to the DePalma Business Combination Agreement, and subject to the terms and conditions contained therein, among other things:

(i) immediately prior to the consummation of the transactions contemplated by the DePalma Business Combination Agreement, New MAC and the DePalma Companies effected a series of reorganization transactions, resulting in the DePalma Companies becoming wholly-owned subsidiaries of New MAC;

(ii) Merger Sub merged with and into the Company, with the Company surviving as a wholly-owned subsidiary of New MAC, in accordance with the terms and subject to the conditions of the DePalma Business Combination Agreement; and

(iii) upon the Effective Time, (x) each share of Class A common stock issued and outstanding immediately prior to the Effective Time were cancelled and converted into the right to receive the Company Per Share Consideration; (y) each share of Class B common stock issued and outstanding immediately prior to the Effective Time were cancelled and converted into the right to receive the Company Per Share Consideration, and (z) each warrant of the Company outstanding immediately prior to the Effective Time were cancelled and converted into the right to receive one warrant of New MAC, with New MAC assuming our obligations under the existing warrant agreement.

### Results of Operations

We have neither engaged in any operations nor generated any revenues to date. Our only activities from December 10, 2020 (inception) through March 31, 2025 were organizational activities, those necessary to prepare for the Initial Public Offering and identifying a target company for a Business Combination and working to consummate a Business Combination. We do not expect to generate any operating revenues until after the completion of our Business Combination. We generate non-operating income in the form of interest income on cash held in the Trust Account established for the benefit of our public stockholders with Continental Stock Transfer & Trust Company (“Continental”) acting as trustee. We incur expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence and other expenses in connection with searching for and completing a Business Combination.

For the three months ended March 31, 2025, we had a net loss of $603,163, which consists of operating costs of $566,558, change in fair value of warrants of $59,150 and provision for income tax of $7,482, offset by interest income on cash held in the Trust Account of $30,027.

For the three months ended March 31, 2024, we had a net loss of $673,199, which consists of operating costs of $729,400, provision for income tax of $12,070 and change in fair value of warrant liabilities of $6,098, offset by interest income on cash held in the Trust Account of $74,369.

### Factors That May Adversely Affect our Results of Operations

Our results of operations and our ability to complete an initial Business Combination may be adversely affected by various factors that could cause economic uncertainty and volatility in the financial markets, many of which are beyond our control. Our results of operations and our ability to consummate an initial Business Combination could be impacted by, among other things, downturns in the financial markets or in economic conditions, increases in oil prices, inflation, fluctuations in interest rates, increases in tariffs, supply chain disruptions, declines in consumer confidence and spending, public health considerations, and geopolitical instability, such as the military conflicts in Ukraine and the Middle East. We cannot at this time predict the likelihood of one or more of the above events, their duration or magnitude or the extent to which they may negatively impact our business and our ability to complete an initial Business Combination.

### Liquidity and Capital Resources

On October 5, 2021, we consummated the Initial Public Offering of 30,000,000 units, generating gross proceeds of $300,000,000. Simultaneously with the closing of the Initial Public Offering, we consummated the sale of 910,000 private placement units at a price of $10.00 per private placement unit in the private placement, generating gross proceeds of $9,100,000.

Following the Initial Public Offering and the private placement, a total of $301,500,000 was placed in the Trust Account. We incurred $42,630,587 in Initial Public Offering related costs, including $6,000,000 of underwriting fees, $15,000,000 of deferred underwriting fees, net of reimbursement, $1,015,137 of other offering costs including $509,600 for the fair value of the private placement warrants included in the private placement units, and $505,537 of offering costs, and $20,615,450 for the fair value of the Founder Shares attributable to certain anchor investors.

For the three months ended March 31, 2025, cash used in operating activities was $289,824. Net loss of $603,163 was affected by interest earned on cash held in the Trust Account of $30,027 and change in fair value of warrants of $59,150. Changes in operating assets and liabilities reduced cash outflows from operating activities by $284,216.

For the three months ended March 31, 2024, cash used in operating activities was $343,718. Net loss of $673,199 was affected by interest earned on cash held in the Trust Account of $74,369 and change in fair value of warrant liabilities of $6,098. Changes in operating assets and liabilities reduced cash outflows from operating activities by $397,752.

As of March 31, 2025, we had cash held in the Trust Account of $4,074,710 (including $367,476 of interest income). Interest income on the balance in the Trust Account may be used by us to pay taxes. During the three months ended March 31, 2025, we withdrew $19,745 of interest income from the Trust Account to pay our franchise and income tax obligations.

We intend to use substantially all of the funds held in the Trust Account, including any amounts representing interest earned on the Trust Account (less deferred underwriting commissions and taxes payable), to complete our Business Combination. To the extent that our capital stock or debt is used, in whole or in part, as consideration to complete our Business Combination, the remaining proceeds held in the Trust Account will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies.

In November 2023, we instructed Continental to liquidate the investments held in the Trust Account and instead to hold the funds in the Trust Account in an interest-bearing demand deposit account at a bank, with Continental continuing to act as trustee, until the earlier of the consummation of our initial Business Combination or our liquidation. As a result, following the liquidation of investments in the Trust Account, the remaining proceeds from the Initial Public Offering and private placement are no longer invested in U.S. government securities or money market funds invested in U.S. government securities.

As of March 31, 2025, we had cash of $91,453 outside of the Trust Account. We have used and intend to continue to use the funds held outside the Trust Account primarily to complete a Business Combination, such as the DePalma Business Combination.

On June 30, 2022, we issued a promissory note (the “2022 Promissory Note”) to Marblegate SOMF, for a working capital loan for which we may borrow up to the principal sum of $600,000. On July 1, 2022, February 2, 2023 and February 8, 2023, we borrowed $200,000, $200,000 and $200,000 under the 2022 Promissory Note, respectively. On February 13, 2023, the Company issued an additional promissory note (the “2023 Promissory Note”) to Marblegate SOMF in the amount of $1,100,000. On July 20, 2023, the Company issued an additional promissory note (the “July 2023 Note”) to Marblegate SOMF in the amount of $500,000. On December 21, 2023, the Company issued another promissory note in the principal amount of up to $450,000 to Marblegate SOMF (the “December 2023 Promissory Note”). On April 11, 2024, the Company issued a promissory note (the “April 2024 Promissory Note”) in the principal amount of up to $240,000 to Marblegate SOMF. On July 18, 2024, the Company issued a promissory note (the “July 2024 Note”) in the principal amount of up to $255,000 to Marblegate SOMF. On October 22, 2024, the Company issued a promissory note (the “October 2024 Note”) in the principal amount of up to $250,000 to Marblegate SOMF. On January 17, 2025, the Company issued a promissory note (the “October 2024 Note”) in the principal amount of up to $485,000 to Marblegate SOMF. Each of the 2022 Promissory Note, the 2023 Promissory Note, the July 2023 Note, the December 2023 Promissory Note, the April 2024 Promissory Note the July 2024 Note, the October 2024 Note and January 17, 2025 Note bears no interest and is due and payable upon the earlier to occur of (i) the date on which the Company consummates its initial Business Combination and (ii) the date that the winding up of the Company is effective. At the election of the payee, all or a portion of the unpaid principal amount of the note may be converted into Conversion Shares, equal to: (x) the portion of the principal amount of the note being converted, divided by (y) $10.00, rounded up to the nearest whole number of shares. The Conversion Shares will be identical to the shares of Class A common stock included in the units issued by the Company to its Sponsor and the representative of the underwriters in a private placement in connection with the Company’s Initial Public Offering. If the Company is unable to raise additional capital, it may be required to take additional measures to conserve liquidity, which could include, but not necessarily be limited to, curtailing operations, suspending the pursuit of a potential transaction, including the DePalma Business Combination, and reducing overhead expenses. The Company cannot provide any assurance that new financing will be available to it on commercially acceptable terms, if at all. As of March 31, 2025 and December 31, 2024, $3,675,000 and $3,385,000 are outstanding on the working capital loans, respectively.

Upon consummation of the Business Combination the Company settled certain of its obligations from the funds available from its operating bank account and funds remaining in the Trust Account, as well as funds available from the merger flow of funds. Any further liabilities of the Company will be settled from the support of New MAC.

### Off-Balance Sheet Arrangements

We have no obligations, assets or liabilities, which would be considered off-balance sheet arrangements as of March 31, 2025. We do not participate in transactions that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established for the purpose of facilitating off-balance sheet arrangements. We have not entered into any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or purchased any non-financial assets.

### Contractual Obligations

We do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities, other than an agreement pay the Sponsor a total of up to $10,000 per month for secretarial and administrative support. We began incurring these fees on September 30, 2021 and will continue to incur these fees monthly until the earlier of the completion of the Business Combination and our liquidation. The total accumulated balance of accrued fees for administrative services included in accounts payable and accrued expenses in the accompanying condensed balance sheets as of March 31, 2025, and December 31, 2024, amounted to $419,744 and $389,744, respectively.

The underwriters are entitled to a deferred fee of 5.0% of the gross proceeds of the initial 30,000,000 units sold in the Initial Public Offering, or $15,000,000. The deferred fee will be paid in cash upon the closing of a Business Combination from the amounts held in the Trust Account, subject to the terms of the underwriting agreement. On August 11, 2023, the Company entered into a fee reduction agreement with the underwriters whereby the underwriters agreed to forfeit $12,000,000 of the aggregate $15,000,000 deferred fee contingent upon the consummation of the DePalma Business Combination. The reduced deferred fee of $3,000,000 shall be payable on the consummation of the DePalma Business Combination, as contemplated by the underwriting agreement. If the contemplated DePalma Business Combination is not completed, and the Company completes a Business Combination with another target, the deferred underwriting fee due would then revert to the original amount of $15,000,000.

### Critical Accounting Policies

The preparation of condensed financial statements and related disclosures in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and income and expenses during the periods reported. Actual results could materially differ from those estimates. We have identified the following critical accounting policies:

### Warrant Liabilities

We account for the warrants issued in connection with our Initial Public Offering in accordance with the guidance contained in ASC Topic 815-40-15-7D, (“Derivatives and Hedging”), under which the warrants do not meet the criteria for equity treatment and must be recorded as liabilities. Accordingly, we classify the warrants as liabilities at their fair value and adjust the warrants to fair value at each reporting period. This liability is subject to re-measurement at each balance sheet date until the private placement warrants are exercised or expire, and any change in fair value will be recognized in our statements of operations.

### Class A Common Stock Subject to Possible Redemption

We account for our Class A common stock subject to possible redemption in accordance with the guidance in FASB ASC Topic 480 “Distinguishing Liabilities from Equity.” Class A common stock subject to mandatory redemption is classified as a liability instrument and is measured at fair value. Conditionally redeemable Class A common stock (including Class A common stock that features redemption rights that is either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within our control) is classified as temporary equity. At all other times, Class A common stock is classified as stockholders’ equity. Our Class A common stock features certain redemption rights that are considered to be outside of our control and subject to occurrence of uncertain future events. Accordingly, Class A common stock subject to possible redemption is presented at redemption value as temporary equity, outside of the stockholders’ deficit section of our balance sheets.

### Net Loss Per Share of Common Stock‌

Net loss per share of common stock is computed by dividing net loss by the weighted average number of shares of common stock outstanding for the period. The Company applies the two-class method in calculating loss per share. Accretion associated with the redeemable shares of Class A common stock is excluded from earnings per share as the redemption value approximates fair value.

### Recent Accounting Standards‌

In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” (“ASU 2023-09”), which requires disclosure of incremental income tax information within the rate reconciliation and expanded disclosures of income taxes paid, among other disclosure requirements. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company’s management does not believe the adoption of ASU 2023-09 will have a material impact on its consolidated financial statements and disclosures. Management does not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on our condensed financial statements.

## Market risk

As filed, 1,779 characters.

We are exposed to market risks in the ordinary course of our business. We consider the principal types of risk to be risk of potential adverse changes to the value of financial instruments because of changes in market conditions, such as interest and currency rate movements and volatility in commodity or security prices, liquidity risk arising in the general funding of our trading activities, as well as inflation risk on asset values and increased costs. We are also impacted by general macroeconomic conditions and state of the taxi industry, governmental initiatives and medallion transfers. Accordingly, our risk management systems and procedures are designed to identify and analyze our risks, to set appropriate policies and limits, and to continually monitor these risks and limits by means of reliable administrative and information systems and other policies and programs.

In addition, the illiquidity of portions of our medallion loans, medallions and related assets may adversely affect our ability to dispose of them at times when it may be advantageous for us to liquidate such assets. In addition, if we were required to liquidate some or all of our assets, the proceeds of such liquidation may be significantly less than the current value of such assets.

We do not believe that an increase or decrease in interest rates of 100 basis points would have a material effect on our operating results or financial condition. However, in periods of sharply rising interest rates, our cost of funds would increase if we were to conduct any external borrowings in the future, which would reduce our net interest income. As such, there can be no assurance that a significant change in market interest rates will not have a material adverse effect on our interest income.

## Controls and procedures

As filed, 2,370 characters.

### Limitations on effectiveness of controls and procedures

In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.

### Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures (as such term is defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of such date. Our disclosure controls and procedures are designed to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to management including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures.

### Changes in Internal Control Over Financial Reporting

There have been no changes in our internal control over financial reporting (as such term is defined in rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter ended March 31, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

### Management’s Report on Internal Control Over Financial Reporting

This report does not include a report of management’s assessment regarding internal control over financial reporting or an attestation report of our independent registered public accounting firm due to a transition period established by the rules of the SEC for newly public companies.

## Risk factors

As filed, 5,685 characters.

Other than as set forth below, there have been no material changes to the Risk Factors previously disclosed in Item 1A. to Part I of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 (our “Form 10-K”). The risks described in our Form 10-K are not the only risks facing our Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition, and/or operating results.

### Our securities are thinly traded and largely illiquid.

Our shares of common stock and our warrants are currently quoted on the OTC Markets (OTCQX). Although it is the highest-level platform on the OTC Markets, it is not a national exchange, which can prevent institutional investors from trading in our securities, and results in a lower frequency of trades and trading volume than securities quoted on a national exchange. Continued trading on the OTCQX may also adversely affect our ability to obtain financing in the future due to the decreased liquidity of our securities and other restrictions that certain investors have for investing in securities not traded on a national exchange. No assurance can be given as to (i) the likelihood that an active market for our securities will develop and be sustained, (ii) the liquidity of any such market, (iii) the ability of our securityholders to sell their securities or (iv) the prices that our securityholders may obtain for any of our securities that they hold. No prediction can be made as to the effect, if any, that future sales of our securities, or the availability of our securities for future sale, will have on the market price prevailing from time to time. Sales of substantial amounts of our securities, or the perception that such sales could occur, may adversely affect prevailing market prices of our securities.

While we intend to seek listing on the Nasdaq Stock Market (“Nasdaq”), the New York Stock Exchange (“NYSE”) or another national stock exchange when our company is eligible, there can be no assurance when or if our common stock will be listed on Nasdaq, NYSE or another national stock exchange. Until then, we expect our securities to remain volatile and lack the liquidity of larger companies.

***If securities or industry analysts do not publish research or reports about our business, or publish negative reports about our business, the price or trading volume of our securities could decline.***

The trading market for our securities will, to some extent, depend on the research and reports that securities or industry analysts publish about us or our business. We do not have any control over these analysts. If one or more of the analysts who cover us downgrade our shares of common stock or change their opinion of our shares of common stock, the price of our securities would likely decline. If one or more of these analysts cease coverage of us or fail to regularly publish reports on us, we could lose visibility in the financial markets, which could cause the price or trading volume of our securities to decline.

***Our business may be negatively impacted by imposed tariffs on imports from foreign countries.***

Changes to policy implemented by the U.S. Congress, the Trump administration or any new administration have impacted and may in the future impact, among other things, the U.S. and global economy, international trade relations, unemployment, immigration, healthcare, taxation, the U.S. regulatory environment, inflation and other areas. For example, during the prior Trump administration, increased tariffs were implemented on goods imported into the U.S., particularly from China, Canada, and Mexico. On February 1, 2025, the U.S. imposed a 25% tariff on imports from Canada and Mexico, which were subsequently suspended for a period of one month, and a 10% additional tariff on imports from China. More recently on April 2, 2025, President Trump signed an executive order imposing a minimum 10% baseline tariff on all U.S. imports, with higher tariffs applied to imports from 57 specific countries. The baseline tariff rate became effective on April 5, while tariffs on imports from the 57 targeted nations, ranging from 11% to 50%, took effect on April 9. On the same day, President Trump announced a 90-day “pause” on reciprocal tariffs for all but China, which continues to face tariffs as high as 145%. Historically, tariffs have led to increased trade and political tensions, between not only the U.S. and

China, but also between the U.S. and other countries in the international community. In response to tariffs, other countries have implemented retaliatory tariffs on U.S. goods.

We currently operate a taxi fleet and intend to expand the size of our fleet. To expand our taxi fleet, the Company intends to purchase additional vehicles. Any of the abovementioned factors, or any other negative impact on the global economy, capital markets or other geopolitical conditions resulting from the tariff on imports from foreign countries could adversely affect our business, including an increase to the cost of vehicles the Company intends to purchase in the future and supply chain disruptions that limit our ability to purchase vehicles and the required component parts to convert vehicles into taxicabs. The extent and duration of any tariffs or related market disruptions are impossible to predict, but could be substantial and may also have the effect of heightening other risks listed in our Annual Report on Form 10-K and this Quarterly Report on Form 10-Q, which could materially adversely affect our business, profitability and financial condition.

Filed May 15, 2025.
Source: SEC EDGAR, the filing index for accession 0000950170-25-072547. Last ingested by Listed: Oct 24, 2026, 15:16 ET. No prices; not investment advice.