MGTE 10-K & 10-Q changes, risk factors and insider trading

Risks Related to Our Business and Operations

Our business is heavily concentrated in loans secured by taxicabtaxi medallions as well as Owned Medallions, which carry a high risk of loss and could be adversely affected by an economic downturn as well as the regulatory policies of the City of New York and the New York City Taxi and Limousine Commission.TLC.

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, including as aillustrated resultby of the disruptions experienced during the COVID-19 pandemic. 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. We are also more susceptible to the risks of increased regulations and legal and other regulatory actions that are targeted at the for-hire-vehicle, taxicab or automotive industry. Our business concentration could lead to developments that may have a material adverse effect on our results of operations.

By its nature, medallion collateralized lending to sole proprietors that own cars,or fleet operators whothat own and operate cars,taxicabs, and leasing medallionsOwned Medallions to fleetsindividuals or otherfleet driversoperators involves high risk of loss. Although the net interest margins and lease rates are intended to be higher to compensate us for this increased risk, an economic downturn could result in higher loss rates and lower returns than expected, and could affect the profitability of our medallion loan portfolios.portfolios and Owned Medallions. 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.taxi medallions and lease rates. In addition, during an economic slowdown or recession, our servicing costs may increase without a corresponding increase in our net interest income.

Unless context otherwise requires, all references in this section to “we,we”, “us,us”, “our”, or “Newthe MACCompany” refer to Marblegate Capital CorporationCorporation, Inc.,however ahistorical Delaware corporation and its wholly owned subsidiary MAC Merger Sub, Inc. (“Merger Sub”). Referencesreferences to our“we”, “managementus”, “our” or our“the “management teamCompany” may refer to ourthe officershistorical operations of the DePalma Companies prior to the Business Combination. The following discussion and directors.analysis Certainof our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes thereto included elsewhere in this Annual Report. Some of the information contained in thethis discussion and analysis or set forth belowelsewhere in this Annual Report including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from those anticipatedmanagement’s in these forward-looking statementsexpectations as a result of manyvarious factors.factors, Pleaseincluding seebut not limited to those discussed in the sections entitled “Risk Factors” and “Cautionary Note Regarding Forward-Looking StatementsStatements.” and “Risk Factors” in this Annual Report on Form 10-K.

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”),Corp, an unaffiliated strategic partner, and formed SeptuagintSignal Solutions LLC (“Septuagint”),Taxi, in which DePalma II holds held a 50% interestinterest. andSignal will have the right to exercise governance control once 85% of DePalma II’s Owned Medallions as of November 1, 2019 have been leased to Septuagint. SeptuagintTaxi is a fully functioning medallion-leasing agent and taxi fleet operating company based in Long Island City, Queens, New York,NYC, licensed by the NYC Taxi and Limousine Commission (“NYC TLC”) as an agent/broker for managing NYC taxi medallions, formed for the purpose of operating and servicing taxicabtaxi medallions. The formation of SeptuagintSignal Taxi also allowed DePalma II to lease the medallions for its fleet operation business. GivenHistorically, given the non-controlling nature of the relationship between DePalma II and Septuagint,Signal Septuagint’sTaxi, Signal Taxi’s financial statements have not been consolidated; withhowever on April 7, 2025, we, via DePalma II.II, Summarizedcompleted financialthe informationSignal ofTaxi Septuagint is presented below within this discussion and analysis.Acquisition.

On November 15, 2024, we, via DePalma IIII, 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’sits taxi fleet operations. In connection with the Consulting Agreement, DePalma II, as lessee, entered into a lease agreement for our taxicab business and garage space to run itsour 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 NYCNew York City taxi medallion lender with a medallion loan portfolio collateralized by approximately 1,7601,802 NYCNew York City taxi medallions as of December 31, 2024.2025. In addition to our ownership of medallion loans, we believe we are also the largest owner of NYCNew York City taxi medallions, with 2,0612,147 Owned Medallions as of December 31, 2024.2025. AsFurther, as of December 31, 2024, Septuagint2025, utilizedwe 231have of our Owned Medallions anda managed ataxi fleet of approximately 231917 vehicles (including approximately 118 vehicles managed under our Consulting Agreement) and 261approximately 822 active drivers viaoperating aSignal TLC-licensedTaxi fleet.vehicles.

Over time, we plan to transition our portfolio of non-performing non-accruing loans and Owned Medallions by selling medallions, primarily with seller financing attached, which willis expected to have the impact of increasing interest income from loans. Consistent with the DePalma Companies’our strategy over the last several years, and in response to industry dynamics, we may choose to lease Owned Medallions until sufficient market demand exists to execute a subsequent sale either for cash or with seller financing. The DePalma CompaniesWe intend to conduct these activities with the primary purposes of protecting the value of the original investment while enabling the DePalma Companiesus to achieve theirour objectives of capital appreciation and interest income from loans.

With respect to delinquencies, as of December 31, 20242025 and 2023,2024, the percentage of NYCNew York City loans by medallion count in default were 35%29% and 45%, 33%, respectively. The decrease in delinquencies at December 31, 20242025 was largely due to the continued foreclosure of a significant portion of non-performingnon-accruing loans during the year ended December 31, 2024.2025, as well as newly originated medallion loans.

For the fiscal years ended December 31, 20242025 and 2023,2024, the DePalma Companieswe completed restructurings of loans collateralized by 139130 and 268139 NYCNew York City medallions, respectively. The substantial decrease in restructurings inperiod 2024over period was due to MRP+a restructurings occurringreduction in 2023.the number of New York City non-performing loans requiring restructuring.

For the fiscal years ended December 31, 20242025 and 2023,2024, the DePalma Companieswe foreclosed on 25466 and 739254 medallions, respectively. The decrease in the pace of foreclosures iswas due to the reduced size of the non-performingnon-accruing loan pool as thewe Company hashave foreclosed on a significant portion of its non-performingthe pool’s non-accruing loans. During the year ended December 31, 2024, four large borrowers accounted for 182 of the foreclosed medallions, which lead to a significant decline period-over-period.

The DePalma Companies’Our performance and future success depends on several factors that present significant opportunities, but also pose risks and challenges, including those discussed below and in the section entitled “Risk Factors.”

DePalmaOur I’s balance sheet consists substantially of taxi medallions and loans secured by taxicabtaxi medallions, which historically have been associated with higher than average delinquency rates and defaultsdefaults, as substantially all of thethese loans were acquired after they had defaulted. As of December 31, 2024,2025, we held $347$361.0 million in aggregate principal of NYCNew taxicabYork City taxi medallion loans, of which approximately 65%39.6% of Non-MRP+ Loansloans by medallionunpaid countprincipal balance were in default.default, compared to 65% as of December 31, 2024. Defaulted loans may result in foreclosure or sale at auction of the medallions securing such loans, which may result in us collecting less interest income over the original stated life of the loan. For many loans in defaultdefault, 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. DePalmaOur II’s balance sheet consists substantially of taxicabtaxi medallions which are reported at cost and evaluated for impairment. As of December 31, 2024,2025, DePalma IIwe held 2,147 New York City medallions, as well as medallions in certain other jurisdictions, with an aggregate carrying value of 2,210$359.0 taxicabmillion, compared to 2,061 New York City taxi medallions, as well as medallions in certain other jurisdictions, with aan aggregate carrying value of $345.4 million.million as of December 31, 2024. The value of our taxicabtaxi 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 taxicabour taxi medallions. In addition, changing consumer and driver preferences about modes of transportation and/or other alternatives for drivers (such as ride-share) could have an impact on borrowers’ ability to service debt on a medallion collateralized loanloan, 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.

Under the MRP+, eligible medallion loans with a principal balance of $200,000 or more will bewere 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 havehad 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$170,000exceed $170,000 per medallion. A reduction in the outstanding principal balance to the restructured principal balance is recorded as a writedownwrite-down of principal in which no cash is received, at which time a loss is recorded based on the reduction in principal balance. The fair value of loans before and after entering the MRP+ program have seen minimal immediate change in fair value due to DePalma I’sour 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 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-performingnon-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.

Our Credit Facility requires the maintenance of an interest rate hedge. As of December 31, 2025, we had not yet entered into the required hedging transaction; the hedge was executed on January 26, 2026, within the contractual deadline of January 31, 2026. The hedge is an interest rate swap with a notional amount of $25.0 million, which corresponds to the initial draw on the Credit Facility, and effectively fixes our interest rate exposure on that portion of the Credit Facility at approximately 5.3% through the swap termination in August 2033, with the notional amount amortizing after December 2027 in line with projected loan repayments. The Term Loan bears a fixed interest rate and is not subject to interest rate variability. As the impact of interest rates has generally not been material to our historical operating results, we have not entered into any interest rate swaps or other hedging transactions to mitigate such risks. However, we may do so in the future if interest rates increase and our exposure to interest rates becomes more significant. Furthermore, with respect to our assets that are not MRP+ Loans,loans, which consist of NYCNew York City Non-MRP+ Loansloans, (approximately 65%40% of which are in default) andas Ownedof Medallions,December 31, 2025, we believe that we are able to mitigate the impact from any rising interest rates as we are generally able to pass on such increased interest rate costs to the borrowers. For example, with respect to such assets, we generally expect to either refinance the defaulted loans into new medallion loans or restructure the existing loans with new loan terms, in each case at a rate that would reflect the then current market interest rate. As a result, we believe that we have the flexibility to adjust our interest rate exposure with respect to some of our asset portfolio.

While we have implemented hedging arrangements with respect to the Credit Facility and continue to monitor the interest rate environment and seek to mitigate the impact of interest rates, including potentially implementing any market based hedging strategies, we cannot provide assurance that such measures will fully mitigate the impact of changes in interest rates canon beour successfullyresults mitigated.of operations. Additional draws on the Credit Facility beyond the hedged notional amount, or any future variable-rate borrowings, would increase our exposure to interest rate fluctuations.

EachWe of the DePalma Companies hashave historically operated and managed itsour business in onetwo reportable segment.segments: Specialty Finance and Fleet Operations. We also report an Other category that includes corporate-level costs such as the MSA management fee, public company expenses, and directors’ and officers’ insurance. The following discussion of results of operations are based on each of the DePalma Companies’our reportable segmentsegments and the Other category for the periods presented.

DePalma I’sOur revenue has historically been primarily comprised of interest income from the taxicabtaxi medallion loans and any interest earned from cash on hand. All of the medallion loans are collateralized by one or more taxicabtaxi 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”).program. These loans are nonrecourse loans that do not carry a personal guarantee, but rather have credit support from funds provided by the City of New York. Medallion loans that do not participate in the MRP+ program (or its predecessor, MRP) are often further secured by personal guarantees of the borrowers, shareholders or equity members and, in some cases, collateralized with additional collateral such as real estate of the borrowers. In addition, DePalma I’sOur 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-MRPNon-MRP+ restructurings and settlements, and the resolution of certain litigation and bankruptcy proceedings, as discussed further below.

DePalma II’sOur operating expenses haveprimarily historicallycomprise beenof: comprised(i) service fee expenses, consisting of (1)fees depreciationpaid expenseto onour taxicabthird-party vehiclesservicer, Field Point Servicing, LLC (2“Field Point”), for servicing our medallion loans; (ii) professional fees, consisting of fees for third-party professional services, including consulting, legal, accounting and lobbying, lobbying; (3iii) depreciation expense; (iv) management fee expenses, consisting of fees charged by the Manager under the MSA for ongoing management services; (v) general and administrative fees, consisting of certain fees for third-party professional services, medallion administration costs, taxi vehicle insurance and other vehicle related costs, and other general and administrative expenses,expenses; as well asand (4vi) fleet servicing fees, consisting of net expenses incurred as a result of the Consulting Agreement.

We are a fully integrated operating platform combining fleet operations and medallion-backed specialty finance with operations focused in the NYC regulated mobility market. Our business is centered on the NYC taxi medallion—a scarce, municipally regulated license that is the sole authorization to operate a vehicle for street-hail service in the City of New York which we view as a critical piece of NYC’s mobility infrastructure. We are the largest combined lender to, and owner of, NYC taxi medallions and operate the largest taxi fleet in New York City, based on active vehicle data reported by the TLC,New York City Taxi and Limousine Commission (“TLC”), through Septuagint Solutions LLC (f/k/a “Septuagint” and currently d/b/a “Signal Taxi.Taxi”). Our goal is to achieve superior risk-adjusted returns for our stockholders by maintaining a focus on capital preservation, current revenues and capital appreciation. Our core philosophy is to work with key stakeholders in NYC’s mobility ecosystem to facilitate an industry-wide restructuring of historical medallion lending practices, to position the taxi medallion as a stabilized income-producing asset, and to support the long-term role of regulated street-hail service as an essential and enduring component of New York City’s transportation network. Accordingly, we regularly explore complementary business opportunities, including potential mergers and acquisitions that would allow us to further develop our position in the broader urban mobility landscape.

We were originally formed by MAC,Marblegate Acquisition Corporation (“MAC”), a Delaware corporation and special purpose acquisition company, on February 2, 2023, to be the surviving company in connection with Businessa Combinationbusiness combination with the DePalma Companies.Companies (as defined below) (the “Business Combination”). On the Closing Date, we consummated the Business Combination contemplated by that certain agreement and plan of merger, dated as of February 14, 2023 (as amended, the “Business Combination Agreement,Agreement”), by and among us,the Company, MAC, Marblegate Asset Management, LLC, a Delaware limited liability company (the Manager,“Manager”), MAC Merger Sub, Inc., a Delaware corporation and a direct wholly owned subsidiary of us,the Company, DePalma Acquisition I LLC, a Delaware limited liability company (“DePalma I”), and theDePalma Acquisition II LLC, a Delaware limited liability company (“DePalma II”, and together with DePalma Companies,I, the “DePalma Companies”), pursuant to which MAC agreed to combine with the DePalma Companies in a series of transactions that resulted in us becoming a publicly traded company and the surviving company. Immediately prior to the consummation of the Business Combination, on April 7, 2025,2025 (the “Closing Date”), as contemplated by the Business Combination Agreement, we and the DePalma Companies effected a series of reorganization transactions, resulting in the Company becoming the owner of approximately 83.7% of the DePalma Companies, with the remaining 16.3% continuing to be owned by certain limited partners of the DePalma Companies. As a result of the Business Combination, we are a holding company and substantially all of our assets and operations are conducted through our subsidiaries.

Our operations are managed by the Manager pursuant to the MSA.Management Services Agreement (“MSA”). Pursuant to the MSA, the Manager provides certain management services including, but not limited to, managing our day-to-day business and operations. Under the MSA, the Manager provides management services customarily performed by executive officers and employees of a publicly listed company, including overseeing the acquisition and disposition of our assets, overseeing our loan portfolio, managing our day-to-day business and operations, evaluating our financial and operational performance, and providing a management team to serve as our executive officers.

In February 2019, DePalma II entered into a non-controlling joint venture with Kirie Eleison Corp, an unaffiliated strategic partner, and formed Signal Taxi, in which DePalma II held a 50% interest. Signal Taxi is a fully functioning medallion-leasing agent and taxi fleet operating company based in NYC, licensed by the TLC as an agent/broker for managing NYC taxi medallions, formed for the purpose of operating and servicing taxi medallions. The formation of Signal Taxi also allowed DePalma II to lease the medallions for its fleet operation business. Historically, given the non-controlling nature of the relationship between DePalma II and Signal Taxi, Signal Taxi’s financial statements have not been consolidated; however, on April 7, 2025,2025 (the “Signal Taxi Acquisition Date”), we, via DePalma II, completedacquired the remaining outstanding equity interests in Signal Taxi Acquisition.resulting in Signal Taxi becoming a wholly owned subsidiary of the Company (the “Signal Taxi Acquisition”).

On November 15, 2024, we, via DePalma II, entered into a consulting agreement (the “Consulting Agreement”) with a third party (the “Consultant”) to provide operational support and access to physical garage and office space for our medallion leasing business. DePalma II entered into the Consulting Agreement primarily to assist in establishing and growing its taxi fleet operations. In connection with the Consulting Agreement, DePalma II, as lessee, entered into a lease agreement for our taxicab business and garage space to run our taxicab operations. The Consulting Agreement and the lease agreement with DePalma II, as lessee, for taxicab business office and garage space to run its taxicab operations (the “Garage Lease”) each have an initial term of five years, with the Garage Lease having an additional renewal option available to DePalma II.

We believe we are the largest New York City taxi medallion lender with a medallion loan portfolio collateralized by approximately 1,7971,693 New York City taxi medallions as of MarchJune 31,30, 2026. In addition to our ownership of medallion loans, we believe we are also the largest owner of New York City taxi medallions, with 2,1462,241 owned medallions (“Owned Medallions”) as of MarchJune 31,30, 2026. Further, as of June 30, 2026, we have a managed taxi fleet of 1,132 vehicles and 991 active drivers operating Signal Taxi vehicles, as well as 122 vehicles managed under our Consulting Agreement.

On April 10, 2025, our common stock, par value $0.0001 per share (“Common Stock”) and warrants began trading on the OTCQX market under the symbols “MGTE” and “MGTEW”, respectively. We have hired and may continue to hire additional personnel and implement procedures and processes to address public company regulatory requirements and customary practices. We expect to incur additional annual expenses as a public company for, among other things, directors’ and officers’ liability insurance, director fees and additional internal and external accounting, legal and administrative resources, including increased audit and legal fees.

For the three and six months ended MarchJune 31,30, 2026 and 2025,2026, we generated total revenues of $14.1$16.7 million and $4.6$30.8 million, respectively, and $17.8 million and $22.3 million for the three and six months ended June 30, 2025, respectively. Net income (loss) from operations for the three and six months ended MarchJune 31,30, 2026 was $3.5$(4.3) million and $0.9$(7.8) million, respectively, and $3.6 million and $2.7 million for the three and six months ended June 30, 2025, respectively. Other expense for the three and six months ended MarchJune 31,30, 2026 was $0.9$1.0 million and $2.8$2.0 million, respectively, and $1.6 million and $4.4 million for the three and six months ended June 30, 2025, respectively. Net loss for the three and six months ended MarchJune 31,30, 2026 was $1.5$4.8 million and $3.7$6.3 million, respectively, and $47.3 million and $51.0 million for the three and six months ended June 30, 2025, respectively.

Through MarchJune 31,30, 2026, we have received approximately $52$56 million of revenue from certain loans subject to the Medallion Relief Program+ established in March 2022 (“MRP+”), of which 30%31% related to payments made from the NYC funded deficiency credit support mechanism (the “Reserve Fund.Fund”). As of MarchJune 31,30, 2026, we had loans held for investment, at fair value of $279.8$259.9 million. For the threesix months ended MarchJune 31,30, 2026 and 2025, we had gross collections of $8.1$17.2 million and $9.8$16.3 million, respectively, where 27%33% and 59%35% of such collections were related to payments made on account of restructurings or resolutions of medallion loans. Gross collections decreasedincreased by approximately 18%6% during the threesix months ended MarchJune 31,30, 2026, as compared to the same period in the prior yearyear. andThe was6% primarily attributable to a decreaseincrease in restructuringsgross ofcollections Non-MRP+during largethe borrowers,six months ended June 30, 2026, compared to the threesame monthsperiod endedin Marchthe 31,prior 2025,year, partiallywas offsetprimarily driven by anthe increase in recurringregular paymentsmonthly fromcollections thatwhich cohortcan be attributed to the inclusion of restructuredthe largeTML borrowers.IV portfolio.

For the threesix months ended MarchJune 31,30, 2026, we realized a year-over-year increase of $0.6$1.1 million in regular monthly payments. Non-MRP+ largerestructuring borrowersaw paymentsa increased by $0.7$2.1 million period-over-period decrease due to restructuring efforts that improved performance in thefewer Non-MRP+ NYCborrowers cohort,in default and available for restructuring compared to the six months ended June 30, 2025, while MRP+ payments decreased by $0.1$0.2 million as a result of borrower payoffs and foreclosure of defaulted medallions. Regular monthly collections remainedsaw steadya atslight $5.9 million. The 18% decrease in gross collections during the three months ended March 31, 2026, comparedincrease to the$11.6 same period in the prior year, was primarily attributable to reduced restructuring activity among Non-MRP+ borrowers.million.

With respect to delinquencies, as of MarchJune 31,30, 2026 and 2025, the percentage of New York City loans by medallion count in default were 28%24% and 33%,31%, respectively. The decrease in delinquencies at MarchJune 31,30, 2026 was largely due to the continued foreclosure of non-accruing loans during the threesix months ended MarchJune 31,30, 2026, as well as newly restructured and originated medallion loans.

For the three and six months ended MarchJune 31,30, 2026 and 2025,2026, we completed restructurings of loans collateralized by 0 and 36 New York City medallions, respectively. In comparison, during the three and six months ended June 30, 2025, we completed restructuring of loans collateralized by 34 and 70 New York City medallions, respectively. The decrease in restructurings period over period was due to a reduction in the number of New York City non-performing loans requiring restructuring.

For the three and six months ended MarchJune 31,30, 2026 and 2025,2026, we foreclosed on 094 medallion, and 2716 medallions.and 43 medallions for the three and six months ended June 30, 2025, respectively. The decreaseincrease in the pace of foreclosures was due to the reducedincrease sizein ofenforcement the non-accruing loan pool as we have foreclosedactivity on a significant portion of the pool’sdefaulted non-accruing loans.

Our balance sheet consists substantially of taxi medallions and loans secured by taxi medallions, which historically have been associated with higher than average delinquency rates and defaults, as substantially all of these loans were acquired after they had defaulted. As of MarchJune 31,30, 2026, we held $356.4$308.1 million in aggregate principal of New York City taxi medallion loans, of which approximately 29%10% of the Company loans that are not subject to the MRP+ (“Non-MRP+”) loans by unpaid principal balance were in default, compared to 40% as of December 31, 2025. Defaulted loans may result in foreclosure or sale at auction of the medallions securing such loans, which may result in us collecting less interest income over the original stated life of the loan. For many loans in default, we may attempt to restructure the debt to bring it out of default or attempt to recover meaningful amounts in other ways, however these methods may not be successful. If we fail to realize enough value on loans in default to cover the price we paid to acquire the loans in the secondary market, then our results of operations could be adversely impacted. The actual rates of delinquencies, defaults, repossessions, and losses on these loans could be more dramatically affected by a general economic downturn. Our taxi medallions are reported at cost and evaluated for impairment. As of MarchJune 31,30, 2026, we held 2,1462,241 New York City medallions, as well as medallions in certain other jurisdictions, with an aggregate carrying value of $358.9$376.1 million, compared to 2,147 New York City taxi medallions, as well as medallions in certain other jurisdictions, with an aggregate carrying value of $359.0 million as of December 31, 2025. The value of our taxi medallion and loan portfolio, and the taxi industry in general, is susceptible to risk of loss resulting from, including but not limited to, changes in taxicab industry regulations that result in the issuance of additional medallions or increases in the expenses involved in operating a medallion. Our business is heavily concentrated in medallion collateralized lending and Owned Medallions, including leasing medallions to fleets or other drivers. As a result, we are more susceptible to fluctuations and risks particular to the New York City taxicab industry than a more diversified company. For example, our business is particularly sensitive to macroeconomic conditions that affect the U.S. economy, travel and tourism, as well as those that affect the City of New York. During periods of economic slowdown, delinquencies, defaults, repossessions, and losses generally increase, and may reduce discretionary spending in areas such as recreation and tourism, which would have a detrimental effect on the taxicab industry, which would in turn impact the value of our taxi medallions. In addition, changing consumer and driver preferences about modes of transportation and/or other alternatives for drivers (such as ride-share) could have an impact on borrowers’ ability to service debt on a medallion collateralized loan, which could impact the value of our Owned Medallions and the medallions underlying the loans and the ability of borrowers to pay off medallion loans, both of which would adversely affect our results of operations.

As of MarchJune 31,30, 2026, 36% of our current medallions based on NYC taxi medallion count have participated in the MRP+. See “Item 1. Business—MRP and MRP+” from our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 for a detailed description of the program. The Reserve Fund was funded with $49 million, and any funding in excess of the initial amount is subject to future appropriations by the New York City Council and is not legally required or committed by the City of New York. The Reserve Fund balance was approximately $28.3$26.8 million and $30.2 million as of MarchJune 31,30, 2026 and December 31, 2025, respectively. As of MarchJune 31,30, 2026, the Reserve Fund balance represented approximately 1.2x of the annual debt service.

OurOn December 30, 2025, the Company entered into a series of agreements by and among certain of the Company’s subsidiaries and DZ Bank AG Deutsche Zentral-Genossenschaftsbank and affiliated lenders (“DZ Bank” or the “Lender”), most notably executing the terms of a Receivables Loan and Security Agreement (the “Credit Facility”). The Credit Facility requires the maintenance of an interest rate hedge. The hedge was executed on January 26, 2026, within the contractual deadline of January 31, 2026. The hedge is an interest rate swap with a notional amount of $25.0 million, which corresponds to the initial draw on the Credit Facility, and effectively fixes our interest rate exposure on thatthe portionCredit Facility. On December 30, 2025, in connection with the execution of the Credit Facility at approximately 5.3% throughFacility, the swapCompany terminationentered into a purchase agreement to acquire the outstanding equity interests of TML IV LLC (“TML IV”), an entity primarily holding investments in AugustNew 2033,York City taxi medallions and medallion loans (the “TML Asset Acquisition”). On December 31, 2025, the Company entered into a Loan and Security Agreement with Auxilior Capital Partners, Inc. which provides for loans in the notionalaggregate amount amortizingof after$17.2 Decembermillion 2027to infinance linethe withacquisition projectedof loantaxicab repayments.vehicles (the “Term Loan”). The Term Loan bears a fixed interest rate and is not subject to interest rate variability. As the impact of interest rates has generally not been material to our historical operating results, we have not entered into any interest rate swaps or other hedging transactions to mitigate such risks. However, we may do so in the future if interest rates increase and our exposure to interest rates becomes more significant. Furthermore, with respect to our assets that are not MRP+ loans, which consist of New York City Non-MRP+ loans, approximately 29%10% of which are in default as of MarchJune 31,30, 2026, 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.

Effective with the Signal Taxi Acquisition, our revenues also consist of fleet revenues from the leasing of our vehicle fleet and medallions to licensed TLC drivers, in which we act as the lessor. These leases generally are short-term and operate on a weekly basis with drivers renewing each week and payments being settled between the point-of-sale system, us, and the drivers on weekly basis. The leases may specify the weekly rate between medallion cost, vehicle cost, and other fees, or the lease will include all costs in one weekly lease rate agreed upon with a driver, and these fees can vary by lease based on prevailing market rates at the time of agreement. We account for these lease and non-lease components as a combined component in accordance with Accounting Standards Codification (“ASC”) 606.

We also primarily recognize within other income (expense) gains or losses from disposals of medallions, income earned from the City of New York’s Wheelchair Accessible Vehicle (“WAV”) incentive program, interest expense,expense on our long-term borrowing arrangements, and changes in fair value of warrantour andinterest derivativerate liabilities.swaps.

Our provision for income taxes consists of federal and state taxes in the US,United States, New York, and New York City.

The Company, along with its wholly owned subsidiary, MAC, will file consolidated tax returns for USU.S. federal, New York State, and New York City jurisdictions. The filings will include our newly acquired 83.7% interest in the DePalma Companies.

The following table summarizes our results of operations for the three and six months ended MarchJune 31,30, 2026 and 2025:

The following discussion and analysis is for the three and six months ended MarchJune 31,30, 2026, compared to the same period in 2025.

Interest income increased by $0.3$1.0 million, or 9%.32%. This increase was due to a $0.5 millionan increase in interest from restructured and performing Non-MRP+ loans, offset by a $0.2 million decrease in interest income due to lower cash balances.

Other revenue increased by $0.5$0.8 million, or 38%.50%. This increase was primarily due to disposition-related gains and higher payments received from the Reserve Fund resulting from an increase in MRP+ loans in default during the three months ended MarchJune 31,30, 2026.

Cost of Fleet Revenue, Net (Exclusive of Depreciation)

Management fee expense - related party increased by $2.2$0.5 million. This increase was due to the execution of the MSA upon the closing of the Business Combination. Under the MSA, MAM receives a management fee each fiscal quarter calculated as the product of (i) 0.375% multiplied by (ii) the Company’s adjusted net assets. The MSA has an initial term of five years from the closing of the Business Combination and automatically renews for an additional five-year period unless terminated by either party. See Note 18 to our condensed consolidated financial statements for additional information regarding the MSA and related party transactions.

General and administrative expenses increased by $2.7$2.5 million,million or 2,316%.75%. This increase was primarily due to the consolidation ofacquiring Signal Taxi operating costs including $0.8$1.5 million in employee compensation, as well as $1.0$0.7 million of general office expenses, $0.5 million of public company corporate insurance expenses, and $0.5$0.7 million in state and local non-income taxes.taxes, partially offset by a decrease in public company corporate insurance of $0.4 million.

WAV grant income increased by $0.3$0.2 million.million, or 156%. This increase was due to the Signal Taxi Acquisition and the recognition of income from the quarterly WAV grant incentive.

Other income (expense), net decreasedincreased by $0.1$0.3 million.million, or 771%. This decreaseincrease was primarily due to athe reductionchange in medallionthe disposalfair activity.value of interest rate swaps on the Credit Facility.

Income Tax Benefit (Expense)

Income tax benefit increased(expense) changed by $2.9$49.8 million.million, or 101%. This increasechange was primarily due to the recognition of corporate income taxes subsequent to the Business Combination. Prior to the Business Combination, the DePalma Companies were treated as a partnership for U.S. tax purposes and therefore were not subject to federal, state, or local income taxes. Accordingly, there was no benefit or provision for income taxes recorded in the historical financial statements prior to the Business Combination.

The following tables summarizessummarize our segment results of operations for the three and six months ended MarchJune 31,30, 2026 and 2025:

Specialty Finance operating expenses increased by $0.6$1.0 million, or 49%.64%. This increase was due to higher professional service fees incurred during the three months ended MarchJune 31,30, 2026.

Fleet Operations operating expenses increased by $8.3$8.5 million, or 319%.170%. This increase was primarily due to an increase in cost of fleet revenues of $6.3$5.4 million resulting subsequent tofrom the Signal Taxi Acquisition, an increase inof $1.0$1.5 million in rental vehicle depreciation, and $0.8 millionincreases in other general and administrative expenses primarily including employee compensation.

Other operating expenses increaseddecreased by $3.2$2.7 million, or 194%.35%. This increasedecrease was primarily due to costsdecreases relatedin to the closing of the Business Combination, public company expenses,professional and thegeneral executionand ofadministrative theexpenses MSA,resulting which became effective upon the closing offrom the Business Combination.