Quarterly Report for Quarter Ending September 30, 2026 (Form 10-Q)

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Unless context otherwise requires, all references in this section to "we", "us", "our" or "the Company" refer to Marblegate Capital Corporation, however historical references to "we", "us", "our" or "the Company" may refer to the historical operations of the DePalma Companies prior to the Business Combination. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and related notes thereto included elsewhere in this Quarterly Report and the Company's audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission ("SEC") on March 26, 2026. Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from management's expectations as a result of various factors, including but not limited to those discussed in the sections entitled "Risk Factors" and "Cautionary Note Regarding Forward-Looking Statements."

Overview

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

We were originally formed by Marblegate Acquisition Corporation ("MAC"), a Delaware corporation and special purpose acquisition company, on February 2, 2023, to be the surviving company in connection with a business combination with the DePalma Companies (as defined below) (the "Business Combination"). On the Closing Date (as defined below), 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"), by and among the Company, MAC, Marblegate Asset Management, LLC, a Delaware limited liability company (the "Manager"), MAC Merger Sub, Inc., a Delaware corporation and a direct wholly owned subsidiary of the Company, DePalma Acquisition I LLC, a Delaware limited liability company ("DePalma I"), and DePalma Acquisition II LLC, a Delaware limited liability company ("DePalma II", and together with DePalma I, the "DePalma Companies"), pursuant to which MAC agreed to combine with the DePalma Companies in a series of transactions that resulted in us becoming a publicly traded company and the surviving company. Immediately prior to the consummation of the Business Combination, on April 7, 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 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 (the "Signal Taxi Acquisition Date"), we, via DePalma II, acquired the remaining outstanding equity interests in Signal Taxi 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 1,651 New York City taxi medallions as of September 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 2,267 owned medallions ("Owned Medallions") as of September 30, 2026. Further, as of September 30, 2026, we have a managed taxi fleet of 1,130 vehicles and 1,047 active drivers operating Signal Taxi vehicles, as well as 115 vehicles managed under our Consulting Agreement.

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

On April 10, 2025, our common stock, par value $0.0001 per share ("Common Stock") and warrants began trading on the OTCQX market under the symbols "MGTE" and "MGTEW", respectively. Effective October 6, 2026, our warrants were removed from the OTCQX and, on October 7, 2026, began trading on the OTCQB as further detailed in the section entitled "Risk Factors". We have hired and may continue to hire additional personnel and implement procedures and processes to address public company regulatory requirements and customary practices. We expect to incur additional annual expenses as a public company for, among other things, directors' and officers' liability insurance, director fees and additional internal and external accounting, legal and administrative resources, including increased audit and legal fees.

Financial Overview

For the three and nine months ended September 30, 2026, we generated total revenues of $16.4 million and $47.2 million, respectively, and $12.0 million and $34.3 million for the three and nine months ended September 30, 2025, respectively. (Loss) income from operations for the three and nine months ended September 30, 2026 was $(4.2) million and $(12.0) million, respectively, and $(1.2) million and $1.4 million for the three and nine months ended September 30, 2025, respectively. Total other income/(expense), net for the three and nine months ended September 30, 2026 was $(0.3) million and $(2.3) million, respectively, and $1.6 million and $(2.8) million for the three and nine months ended September 30, 2025, respectively. Net loss for the three and nine months ended September 30, 2026 was $3.5 million and $9.8 million, respectively, and $1.3 million and $52.3 million for the three and nine months ended September 30, 2025, respectively.

Through September 30, 2026, we have received approximately $59 million of revenue from certain loans subject to the Medallion Relief Program+ established in March 2022 ("MRP+"), of which 31% related to payments made from the NYC funded deficiency credit support mechanism (the "Reserve Fund"). As of September 30, 2026, we had loans held for investment, at fair value of $245.1 million. For the nine months ended September 30, 2026 and 2025, we had gross collections of $30.2 million and $24.2 million, respectively, where 43% and 33% of such collections were related to payments made on account of restructurings or resolutions of medallion loans. Gross collections increased by approximately 25% during the nine months ended September 30, 2026, as compared to the same period in the prior year. The 25% increase in gross collections during the nine months ended September 30, 2026, compared to the same period in the prior year, was primarily driven by the increase in regular monthly collections which can be attributed to the inclusion of the TML IV portfolio.

For the nine months ended September 30, 2026, we realized a year-over-year increase of $0.9 million in regular monthly payments. Non-MRP+ (as defined below) restructuring saw a $2.8 million period-over-period increase in restructuring activity due to collection activities against large borrowers that did not participate in the MRP+ program compared to the nine months ended September 30, 2025, while MRP+ payments decreased by $0.3 million as a result of borrower payoffs and foreclosure of defaulted medallions. Regular monthly collections saw a slight increase to $17.2 million.

With respect to delinquencies, as of September 30, 2026 and 2025, the percentages of New York City loans by medallion count in default were 25% and 26%, respectively. The decrease in delinquencies at September 30, 2026 was largely due to the continued foreclosure of non-accruing loans during the nine months ended September 30, 2026, as well as newly restructured and originated medallion loans.

For the three and nine months ended September 30, 2026, we completed restructurings of loans collateralized by 16 and 52 New York City medallions, respectively. In comparison, during the three and nine months ended September 30, 2025, we completed restructurings of loans collateralized by 84 and 154 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 nine months ended September 30, 2026, through loan foreclosures we acquired 26 and 121 medallions, and 19 and 62 medallions for the three and nine months ended September 30, 2025, respectively. The increase in the pace of foreclosures was due to the increase in enforcement activity on defaulted non-accruing loans.

Key Factors Affecting Operating Results

Our performance and future success depend on several factors that present significant opportunities, but also pose risks and challenges, including those discussed below and in the section entitled "Risk Factors."

Our balance sheet consists substantially of taxi medallions and loans secured by taxi medallions, which historically have been associated with higher than average delinquency rates and defaults, as substantially all of these loans were acquired after they had defaulted. As of September 30, 2026, we held $300.6 million in aggregate principal of New York City taxi medallion loans, of which approximately 11% 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 September 30, 2026, we held 2,267 New York City medallions, as well as medallions in certain other jurisdictions, with an aggregate carrying value of $380.9 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.

MRP+

As of September 30, 2026, 35% 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 $25.1 million and $30.2 million as of September 30, 2026 and December 31, 2025, respectively. As of September 30, 2026, the Reserve Fund balance represented approximately 1.1x of the annual debt service.

Under the MRP+, eligible medallion loans with a principal balance of $200,000 or more were reduced to an initial principal balance of $200,000, and further reduced to $170,000 per medallion (after a $30,000 per medallion principal reduction payment in the form of a grant from the Reserve Fund). Existing medallion loans with a principal balance of $200,000 or less had a principal balance equal to the existing principal balance reduced by (i) $30,000 per medallion and (ii) further reduced by 5% of the post-paydown principal balance per medallion resulting from (i) above. In no event will the principal balance of any eligible medallion loan exceed $170,000 per medallion. A reduction in the outstanding principal balance to the restructured principal balance is recorded as a write-down of principal in which no cash is received, at which time a loss is recorded based on the reduction in principal balance. The fair value of loans before and after entering the MRP+ program has seen minimal immediate change in fair value due to our fair value accounting policies for MRP+ and Non-MRP+ loans and the historical valuations of underlying NYC medallion collateral for the period of time in which the MRP+ program has existed.

Changes in Interest Rates

Our exposure to changes in interest rates primarily relates to the interest income generated by our medallion loans. In addition, the value of our MRP+ loans is determined by applying a discount to the anticipated future cash flows of the underlying loans. The two factors determining the discount are the movement in interest rates and a risk premium for likelihood of transaction close. A change in interest rates may impact the valuation of MRP+ loans.

Our profitability may be directly affected by interest rate levels and fluctuations in interest rates. As interest rates change, our gross interest rate spread on loans will either increase or decrease because the rates potentially charged on future seller financings provided in medallion sales are limited by market and competitive conditions, restricting our ability to pass on increased interest costs to the borrower.

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%.

On 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 which effectively fixes our interest rate exposure on the Credit Facility. On December 30, 2025, in connection with the execution of the Credit Facility, the Company entered into a purchase agreement to acquire the outstanding equity interests of TML IV LLC ("TML IV"), an entity primarily holding investments in New York City taxi medallions and medallion loans (the "TML Asset Acquisition"). On December 31, 2025, the Company entered into a Loan and Security Agreement with Auxilior Capital Partners, Inc. which provides for loans in the aggregate amount of $17.2 million to finance the acquisition of taxicab vehicles (the "Term Loan"). The Term Loan bears a fixed interest rate and is not subject to interest rate variability. Furthermore, with respect to our assets that are not MRP+ loans, which consist of New York City Non-MRP+ loans, approximately 11% of which are in default as of September 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.

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

Key Components of Results of Operations

We have historically operated and managed our business in two reportable segments: Specialty Finance and Fleet Operations. We also report an Other category that includes corporate-level costs such as the MSA management fee, public company expenses, and directors' and officers' insurance. The following discussion of results of operations is based on each of our reportable segments and the Other category for the periods presented.

Revenue

Our revenue has historically been primarily comprised of interest income from the taxi medallion loans and any interest earned from cash on hand. All of the medallion loans are collateralized by one or more taxi medallions, with a significant portion of the loans participating in the MRP+ program. These loans are nonrecourse loans that do not carry a personal guarantee, but rather have credit support from funds provided by the City of New York. Medallion loans that do not participate in the MRP+ program are often further secured by personal guarantees and, in some cases, collateralized with additional collateral such as real estate of the borrowers. Our other revenue has historically been comprised of restructuring fees borrowers are requested to pay as part of the MRP+ program, payments received from the Reserve Fund as they are not contractual payments made by the borrowers, fees received in connection with Non-MRP+ restructurings and settlements, and the resolution of certain litigation and bankruptcy proceedings, as discussed further below.

Effective with the Signal Taxi Acquisition, our revenues also consist of fleet revenues from the leasing of our vehicle fleet and medallions to licensed TLC drivers, in which we act as the lessor. These leases generally are short-term and operate on a weekly basis with drivers renewing each week and payments being settled between the point-of-sale system, us, and the drivers on a 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.

Operating Expenses

Our operating expenses primarily consist of: (i) cost of fleet revenue consisting of net costs incurred as a result of the Consulting Agreement and other direct fleet operating costs; (ii) depreciation expense for rental vehicles and property and equipment; (iii) service fee expenses, consisting of fees paid to our third-party servicer, Field Point Servicing, LLC ("Field Point"), for servicing our medallion loans; (iv) management fee expenses, consisting of fees charged by the Manager under the MSA for ongoing management services; (v) general and administrative expenses; and (vi) professional fees, consisting of fees for third-party professional services, including consulting, legal, accounting and lobbying.

We expect our expenses, in particular professional fees and general and administrative fees, to increase for the foreseeable future as a result of operating as a public company, thereby requiring compliance with the rules and regulations of the SEC. As a result, we expect an increase in legal, audit, additional insurance expenses, investor relations activities and other administrative and professional services.

Other Income/(Expense)

We treat the loans purchased as a pool of loans in our books and records. Our purchases of taxi medallion loans have been transacted at significant discounts to par value and we have been working to resolve those loans. Resolution of the loans to date has resulted from (i) loan principal payments, at agreed upon amounts, either at or below par, and/or (ii) foreclosure and possession of collateral, the taxi medallions. In either case, we recognize a gain or loss, which is the difference between the sale proceeds of a loan, or collateral value less foreclosure costs in a foreclosure, and the carrying value. Gains on loans held for investment may derive from principal payments in cash or collateral that exceed the carrying value of the principal amount that was relieved. Losses on loans held for investment may occur upon a reduction in principal balance in a restructuring, including when loans enter the MRP+ program. For foreclosed loans, the difference between fair value of the collateral less foreclosure costs compared to the loan carrying value is recorded as a gain or loss. We record changes in fair value on loans held for investment as a result of changes in the fair value of loans collateralized by taxi medallions, as applicable, which are primarily generated through changes in medallion pricing and changes in unpaid principal balances on outstanding loans. Prior period changes in fair value have been included in the carrying value of such loans up until foreclosure.

We also primarily recognize within other income/(expense), net gains or losses from disposals of medallions, income earned from the City of New York's Wheelchair Accessible Vehicle ("WAV") incentive program, interest expense on our long-term borrowing arrangements, and changes in fair value of our interest rate swaps.

Provision for Income Taxes

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

On April 7, 2025, we consummated the Business Combination, resulting in a non-taxable transaction in accordance with Section 351 of the Internal Revenue Code of 1986, as amended. A portion of the non-corporate members of the DePalma Companies of approximately 83.7% contributed their ownership of the DePalma Companies in exchange for Common Stock of the Company. Following the Business Combination, we, a corporation, hold an 83.7% ownership interest in the DePalma Companies partnerships. In accordance with ASC 740, we are required to record deferred income taxes related to the difference between the tax basis received and the book basis in our 83.7% ownership interest in the DePalma Companies partnerships. The difference between the tax basis and the book basis in both partnerships was primarily driven by temporary differences within the DePalma Companies partnerships arising from specific assets and liabilities. The temporary differences generated prior to the transaction related to both taxi medallion amortization and unrealized gains and losses on loans held for investment. The DePalma Companies are treated as a partnership for U.S. tax purposes and therefore are not subject to federal, state, or local income taxes. Accordingly, there was no provision for income taxes recorded in the historical financial statements prior to the Business Combination.

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

Results of Operations

The following table summarizes our results of operations for the three and nine months ended September 30, 2026 and 2025:

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

Revenue

Three Months Ended September 30, 2026 Compared with the Same Period in 2025

Fleet revenue increased by $3.6 million, or 52%. This increase was primarily due to an increase in the number of active vehicles and drivers in our fleet during the three months ended September 30, 2026.

Interest income decreased by $0.3 million, or 7%. This decrease was primarily due to lower interest income on medallion loans due to lower outstanding principal balances resulting from increased borrower payoffs and foreclosures during the three months ended September 30, 2026.

Other revenue increased by $1.1 million, or 75%. This increase was primarily due to loan disposition-related gains and settlement fees during the three months ended September 30, 2026.

Nine Months Ended September 30, 2026 Compared with the Same Period in 2025

Fleet revenue increased by $9.6 million, or 47%. This increase was primarily due to an increase in active vehicles and drivers in our fleet during the nine months ended September 30, 2026.

Interest income increased by $1.0 million, or 10%. This increase was primarily due to restructured and performing Non-MRP+ loans, partially offset by a decrease in interest income due to lower cash balances.

Other revenue increased by $2.4 million, or 55%. This increase was primarily due to loan disposition-related gains and settlement fees during the nine months ended September 30, 2026.

Cost of Fleet Revenue, Net (Exclusive of Depreciation)

Three Months Ended September 30, 2026 Compared with the Same Period in 2025

Cost of fleet revenue increased by $4.0 million, or 77%. This increase was primarily due to an increase in active vehicles and drivers in our fleet and the related operating costs, most notably including vehicle insurance of $2.9 million and other direct fleet operating costs of $1.7 million, partially offset by a net decrease of $0.6 million from the Consulting Agreement.

Nine Months Ended September 30, 2026 Compared with the Same Period in 2025

Cost of fleet revenue increased by $15.7 million, or 158%. This increase was primarily due to an increase in active vehicles and drivers in our fleet and the related operating costs, most notably including vehicle insurance of $8.0 million and other direct fleet operating costs of $6.0 million, as well as a net increase of $1.7 million from the Consulting Agreement.

Depreciation of Rental Vehicles

Three Months Ended September 30, 2026 Compared with the Same Period in 2025

Depreciation of rental vehicles increased by $1.6 million, or 206%. This increase was due to the purchase and placement of additional taxicab vehicles in service.

Nine Months Ended September 30, 2026 Compared with the Same Period in 2025

Depreciation of rental vehicles increased by $4.0 million, or 197%. This increase was due to the purchase and placement of additional taxicab vehicles in service.

Service Fee Expense

Three Months Ended September 30, 2026 Compared with the Same Period in 2025

Service fee expense decreased by $0.1 million, or 6%. This decrease was primarily due to timing of reimbursable pass-through costs (actual costs incurred by our service provider on our behalf, without markup).

Nine Months Ended September 30, 2026 Compared with the Same Period in 2025

Service fee expense increased by $0.3 million, or 8%. This increase was primarily due to timing of reimbursable pass-through costs (actual costs incurred by our service provider on our behalf, without markup).

Management Fee Expense - Related Party

Three Months Ended September 30, 2026 Compared with the Same Period in 2025

Management fee expense - related party increased by $0.2 million or 8%. This increase was due to an increase in adjusted net assets subject to the MSA during the three months ended September 30, 2026. Under the MSA, the Manager receives a management fee each fiscal quarter calculated as the product of (i) 0.375% multiplied by (ii) the Company's adjusted net assets. See Note 18 to our condensed consolidated financial statements for additional information regarding the MSA and related party transactions.

Nine Months Ended September 30, 2026 Compared with the Same Period in 2025

Management fee expense - related party increased by $2.9 million or 79%. This increase was due to the inclusion of a full nine month period of management fees in 2026, compared with the period from the closing of the Business Combination on April 7, 2025 through September 30, 2025.

Depreciation of Property and Equipment

Three Months Ended September 30, 2026 Compared with the Same Period in 2025

Depreciation of property and equipment increased by less than $0.1 million. This increase was due to additions of property and equipment placed in service.

Nine Months Ended September 30, 2026 Compared with the Same Period in 2025

Depreciation of property and equipment increased by $0.1 million. This increase was due to the acquisition of property and equipment in the Signal Taxi Acquisition.

General and Administrative

Three Months Ended September 30, 2026 Compared with the Same Period in 2025

General and administrative expenses increased by $0.5 million or 20%. This increase was primarily due to higher employee compensation of $0.7 million compared to the prior period, partially offset by a decrease in state and local non-income taxes and general office expenses.

Nine Months Ended September 30, 2026 Compared with the Same Period in 2025

General and administrative expenses increased by $2.9 million or 52%. This increase was primarily due to higher employee compensation of $2.2 million and state and local non-income taxes of $0.8 million.

Professional Fees

Three Months Ended September 30, 2026 Compared with the Same Period in 2025

Professional fees increased by $1.3 million, or 87%. This increase was primarily due to an increase in compliance, legal, and other professional fees associated with operating as a public company.

Nine Months Ended September 30, 2026 Compared with the Same Period in 2025

Professional fees increased by $0.3 million, or 4%. This increase was primarily due to an increase in compliance, legal, and other professional fees associated with operating as a public company.

(Losses) Gains on Loans Held for Investment, Net

Three Months Ended September 30, 2026 Compared with the Same Period in 2025

Losses on loans held for investment increased by $2.4 million, or 184%. This increase was primarily due to an increase in discount rates used to value MRP+ loans as a result of increases in U.S. Treasury rates through loan maturity and losses on Chicago medallion collateral resulting from lower observed medallion transfer prices.

Nine Months Ended September 30, 2026 Compared with the Same Period in 2025

Losses on loans held for investment decreased by $1.0 million, or 30%. This decrease was primarily due to markdowns on Non-MRP+ loans in the prior period from loan principal write off in restructurings, partially offset by an increase in discount rates used to value MRP+ loans as a result of increases in U.S. Treasury rates through loan maturity and losses on Chicago medallion collateral resulting from lower observed medallion transfer prices.

WAV Grant Income

Three Months Ended September 30, 2026 Compared with the Same Period in 2025

WAV grant income increased by $0.1 million, or 28%. This increase was due to the recognition of income from the quarterly WAV grant incentive on a larger number of WAV vehicles in service.

Nine Months Ended September 30, 2026 Compared with the Same Period in 2025

WAV grant income increased by $0.6 million, or 133%. This increase was due to the Signal Taxi Acquisition and the recognition of income from the quarterly WAV grant incentive on a larger number of WAV vehicles in service.

Interest Expense

Three Months Ended September 30, 2026 Compared with the Same Period in 2025

We did not have any interest expense prior to the long-term borrowing arrangements executed in December 2025. Interest expense increased as a result of coupon interest and amortization of issuance costs recognized related to our long-term borrowings.

Nine Months Ended September 30, 2026 Compared with the Same Period in 2025

We did not have any interest expense prior to the long-term borrowing arrangements executed in December 2025. Interest expense increased as a result of coupon interest and amortization of issuance costs recognized related to our long-term borrowings.

Other Income/(Expense), Net

Three Months Ended September 30, 2026 Compared with the Same Period in 2025

Other income/(expense), net decreased by $0.1 million, or 381%. This decrease was primarily due to a loss on disposal of rental vehicles in the three months ended September 30, 2026 and gains on the disposal of medallions recognized in the three months ended September 30, 2025.

Nine Months Ended September 30, 2026 Compared with the Same Period in 2025

Other income/(expense), net decreased by $0.2 million, or 166%. This decrease was primarily due to a loss on disposal of rental vehicles in the nine months ended September 30, 2026 and gains on the disposal of medallions recognized in the nine months ended September 30, 2025.

Change in Fair Value of Interest Rate Swap

Three Months Ended September 30, 2026 Compared with the Same Period in 2025

Change in fair value of interest rate swap increased by $1.4 million. This increase was due to an unrealized, non-cash gain on our interest rate swaps in effect on the Credit Facility.

Nine Months Ended September 30, 2026 Compared with the Same Period in 2025

Change in fair value of interest rate swap increased by $1.8 million. This increase was due to an unrealized, non-cash gain on our interest rate swaps in effect on the Credit Facility.

Income Tax Benefit/(Expense)

Three Months Ended September 30, 2026 Compared with the Same Period in 2025

Income tax benefit/(expense) increased by $2.7 million, or 161%. This change was primarily attributable to the Company recognizing a pre-tax loss during the three months ended September 30, 2026, compared with pre-tax income during the three months ended September 30, 2025 and effects of corporate income taxes subsequent to the Business Combination.

Nine Months Ended September 30, 2026 Compared with the Same Period in 2025

Income tax benefit/(expense) increased by $55.5 million, or 109%. This change was primarily due to the one-time income tax adjustment of $50.6 million recognized in connection with the Business Combination.

Segment Results of Operations

We operate our business as two operating and reportable segments: Specialty Finance and Fleet Operations. For additional information about our segments, see Note 16 in the section entitled "Segment Information" as referred to in the notes to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report.

The following tables summarize our segment results of operations for the three and nine months ended September 30, 2026 and 2025:

Segment Revenue

Three Months Ended September 30, 2026 Compared with the Same Period in 2025

Specialty Finance revenue increased by $0.9 million, or 19%. This increase was due to a $1.1 million increase in loan disposition-related gains and settlement fees, partially offset by a decrease of $0.2 million in interest income.

Fleet Operations revenue increased by $3.6 million, or 51%. This increase was due to a $3.6 million increase in fleet revenue, primarily resulting from an increase in the number of active vehicles and drivers in our fleet.

Other revenue decreased by less than $0.1 million, or 18%. This decrease was primarily due to a decrease in interest income received on cash balances during the three months ended September 30, 2026.

Nine Months Ended September 30, 2026 Compared with the Same Period in 2025

Specialty Finance revenue increased by $3.5 million, or 26%. This increase was due to a $1.2 million increase in interest income from higher interest on restructured and performing Non-MRP+ loans and a $2.3 million increase in loan disposition-related gains and settlement fees.

Fleet Operations revenue increased by $9.6 million, or 47%. This increase was due to a $9.6 million increase in fleet revenue, primarily resulting from an increase in the number of active vehicles and drivers in our fleet.

Other revenue decreased by $0.2 million, or 67%. This decrease was primarily due to a decrease in interest income received on cash balances.

Segment Operating Expenses

Three Months Ended September 30, 2026 Compared with the Same Period in 2025

Specialty Finance operating expenses decreased by $0.1 million, or 8%. This decrease was due to lower service fee expense and professional service fees incurred during the three months ended September 30, 2026.

Fleet Operations operating expenses increased by $6.3 million, or 85%. This increase was primarily due to a $4.0 million increase in cost of fleet revenue, a $1.6 million increase in rental vehicle depreciation resulting from additional vehicles placed in service, as well as increases in other general and administrative expenses primarily including employee compensation.

Other operating expenses increased by $1.2 million, or 31%. This increase was primarily due to increases in professional fees associated with operating as a public company.

Nine Months Ended September 30, 2026 Compared with the Same Period in 2025

Specialty Finance operating expenses increased by $1.4 million, or 32%. This increase was due to higher professional and service fees incurred during the nine months ended September 30, 2026.

Fleet Operations operating expenses increased by $23.1 million, or 154%. This increase was primarily due to an increase in cost of fleet revenues of $15.7 million, a $4.0 million increase in rental vehicle depreciation, a $2.2 million increase in employee compensation costs and increases in other general and administrative expenses resulting from the growth of our fleet.

Other operating expenses increased by $1.8 million, or 13%. This increase was primarily due to the inclusion of a full nine month period of management fees in 2026, compared with the period from the closing of the Business Combination on April 7, 2025 through September 30, 2025.

Segment Net Income (Loss)

Three Months Ended September 30, 2026 Compared with the Same Period in 2025

Specialty Finance net income decreased by $4.6 million, or 71%. This decrease was primarily attributable to a decrease in gains on loans held for investment, net of $2.4 million and a $2.9 million increase in income tax expense, partially offset by a $0.9 million increase in revenue.

Fleet Operations net income decreased by $3.4 million, or 221%. This change was primarily attributable to a $4.0 million increase in cost of fleet revenue, a $1.6 million increase in depreciation of rental vehicles as a result of additional vehicles placed in service and a decrease in income tax benefit of $1.0 million, partially offset by a $3.6 million increase in fleet revenue.

Other net loss decreased by $5.8 million, or 62%. This decrease was primarily due to a $6.6 million favorable change in income tax benefit and a $1.4 million gain on the change in fair value of our interest rate swap, partially offset by $1.0 million of interest expense associated with our Credit Facility and term loan and other increases in expenses, primarily professional fees associated with operating as a public company.

Nine Months Ended September 30, 2026 Compared with the Same Period in 2025

Specialty Finance net income increased by $30.9 million, or 124%. This increase was primarily attributable to a $27.8 million favorable change in income tax, a $1.0 million decrease in losses on loans held for investment, net and increases in interest income of $1.2 million and other revenue of $2.3 million, partially offset by a $1.4 million increase in professional and service fees.

Fleet Operations net loss decreased by $6.9 million, or 58%. This improvement was primarily due to a $20.0 million favorable change in income tax and a $9.6 million increase in fleet revenue, partially offset by a $15.7 million increase in cost of fleet revenue, a $4.0 million increase in depreciation of rental vehicles and increases in general and administrative expenses of $3.2 million, primarily employee compensation, and professional fees.

Other net loss decreased by $4.8 million, or 31%. This decrease was primarily due to a $7.7 million favorable change in income tax and a $1.8 million gain on the change in fair value of our interest rate swap, partially offset by a $2.7 million increase of interest expense on our Credit Facility and term loan and an increase in management fee expense reflecting a full nine months of fees in 2026.

Liquidity and Capital Resources

Cash Flows

As of September 30, 2026, and December 31, 2025, we had available cash and cash equivalents, excluding restricted cash, of $11.6 million and $25.3 million, respectively, available to fund our operations. The decrease of $13.8 million was due to factors further described below. As of September 30, 2026 and December 31, 2025, we had restricted cash of $1.5 million and $0.5 million, respectively, which consists of funds held for security deposits and the lockbox arrangement of our Credit Facility.

The taxi industry is competitive and there are uncertainties around our cash flows, including those from our loan portfolio. We compete with other established fleets, technology enabled ride sharing apps, and public transit among other competitors. Our ability to maintain current cash flow levels from MRP+ loans is dependent on the continued availability of the Reserve Fund. See "Item 1. Business-Reserve Fund" from our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 for a description of the Reserve Fund balance, tiered replenishment mechanism, and important limitations.

Based on our current expectations, we believe that our existing cash and cash equivalents, together with the available borrowing capacity under our Credit Facility and cash provided by operating activities, will be sufficient to fund our working capital requirements for at least the next 12 months.

The following table summarizes our cash flows for the periods indicated:

Operating Activities

The increase to net cash used in operating activities was $12.1 million, or 1565%. This increase was due to the payment of $3.7 million of management fees and $1.9 million of service fees accrued at December 31, 2025, compared to a $4.9 million increase in such accruals in the prior-year period, partially offset by other operating activities in the aggregate.

Investing Activities

The decrease to net cash used in investing activities was $8.5 million, or 62%. This decrease was primarily due to a decrease in purchases of rental vehicles of $5.6 million, partially offset by an increase in asset-based WAV grant receipts of $3.0 million.

Financing Activities

The decrease to net cash used in financing activities was $15.3 million, or 131%. This decrease was primarily due to a reduction of $11.7 million from the non-recurring payment of MAC promissory notes, deferred underwriting fees, legal costs and other transaction costs incurred in connection with the Business Combination partially offset by an additional advance under the Credit Facility of $10.0 million in the nine months ended September 30, 2026, and further offset by principal payments on our executed long-term borrowing arrangements of $3.9 million and distributions to noncontrolling interests of $2.4 million in the nine months ended September 30, 2026.

Future sources and uses of liquidity

Our assets primarily consist of cash and cash equivalents, loans held for investment, at fair value, taxi vehicles, and taxi medallion intangible assets which, other than cash and cash equivalents, are generally not considered readily liquid assets by nature.

Our future capital requirements will depend on many factors, including our degree of success in collecting contractual payments on MRP+ loans, reperforming, restructuring or resolving Non-MRP+ loans, sales of medallions (which may include seller financing), our ability to scale the profitability of our taxi fleet, our ability to maintain compliance with contractual covenants on our long-term borrowing arrangements, general economic conditions, future market growth and competition in the mobility market.

In December 2025, we executed the Credit Facility with DZ Bank resulting in an increase in long-term borrowings outstanding of $25.0 million, primarily to facilitate the TML Asset Acquisition. On April 15, 2026, we drew an additional $10.0 million under the Credit Facility, bringing our total borrowings under the Credit Facility to $35.0 million. We are eligible to draw up to $120.0 million on the Credit Facility, subject to certain borrowing base collateral requirements of MRP+ loans, which can be used for general corporate purposes. We are required to secure MRP+ loans within a bankruptcy-remote special purpose vehicle, DePalma Financing SPV I LLC (the "SPV") as collateral to make draws on the Credit Facility. Although the SPV is included in our condensed consolidated financial statements, it is a separate legal entity with separate creditors. Upon the transfer of ownership and control of MRP+ loans to the SPV, we have no retained interests (other than certain limited repurchase rights and obligations of DePalma I, as seller, of such receivables) in the receivables sold and they become unavailable to other creditors should we become insolvent.

During the term of the Credit Facility, all cash receipts from borrowers on secured MRP+ loans are deposited into a lockbox account that is subject to control by DZ Bank. Funds in the lockbox account are subject to monthly periodic disbursements based on a priority of payments schedule first including any fees or accrued interest due to the lender and other facility stakeholders, with the remainder available to be remitted to us. Subsequent to the revolving period on December 30, 2027, any funds remaining in the lockbox account after payment of lender fees and interest are to be applied to the principal balance outstanding on the Credit Facility. The Credit Facility otherwise matures in December 2030. The borrowing base, calculated as 80% of the aggregate principal balance of eligible MRP+ loans assigned to the SPV, was $54.8 million, resulting in $19.8 million of additional borrowing capacity as of September 30, 2026. Further, as of September 30, 2026, approximately $0.8 million was in the lockbox account. We plan to secure additional MRP+ loans as needed to support additional draws on the Credit Facility, however the restricted use of such secured assets and outstanding principal on the Credit Facility could have a significant impact on our sources and uses of liquidity.

Further in December 2025, we executed the Term Loan resulting in an increase in long-term borrowings outstanding of $17.2 million. We used the proceeds of the Term Loan to finance the acquisition of new taxicab vehicles to scale our fleet operations. The Term Loan requires fixed monthly payments of principal and interest and matures in January 2029, and requires that we collateralize certain of our taxicab vehicles, excluding any related taxi medallions. We do not anticipate the collateralization of such taxi vehicles to have a significant impact on our liquidity given taxi vehicles are not considered readily liquid assets by nature.

We are a holding company and conduct substantially all of our operations through, and hold substantially all of our assets at, our subsidiaries, including the bankruptcy-remote SPV that is the borrower under the Credit Facility. The assets of the SPV, including the pledged MRP+ loans and the related collection and lockbox accounts, are not available to pay our other creditors, and the Credit Facility limits the ability of the SPV to distribute cash to us. Other than the financial covenants described above and these limitations on the distribution of cash by the SPV, neither of these financing arrangements restricts our ability to pay dividends on our Common Stock. We have not paid any cash dividends on our Common Stock to date, and the payment of any future dividends is within the discretion of our board of directors.

As of September 30, 2026 we have future commitments in the form of outstanding long-term borrowings. The table below is a summary of the composition of our long-term borrowing arrangements as of September 30, 2026:

Refer to Note 14 of our condensed consolidated financial statements included elsewhere in this Quarterly Report for further information.

In addition, as of September 30, 2026, we have additional outstanding commitments in the form of operating leases with contractual commitments extending through November 2029. Certain of our leases may contain renewal options, of which the future minimum lease payments related to such renewal options may be included in our lease measurements for accounting purposes. Refer to Note 12 of our condensed consolidated financial statements included elsewhere in this Quarterly Report for further information.

In the future, we may be required or choose to seek additional equity or debt financing. If we require additional financing, we may not be able to raise such financing on terms acceptable to us or at all. If we are unable to raise additional capital or generate cash flows necessary to expand our operations, we may not be able to compete successfully, which would harm our business, results of operations, and financial condition. In addition, we cannot assure you that these measures and our cash flows from operations and cash and cash equivalents will be sufficient to meet our working capital requirements and to meet our commitments in the future.

Critical Accounting Policies and Estimates

Our unaudited condensed consolidated financial statements and the related notes thereto included elsewhere in this Quarterly Report are prepared in accordance with accounting principles generally accepted in the U.S. ("U.S. GAAP"). The preparation of our unaudited condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent liabilities, and the reported amounts of revenue, costs and expenses, and related disclosures. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results could differ significantly from these estimates. To the extent that there are differences between our estimates and actual results, future financial statement presentation, financial condition, results of operations, and our cash flows will be affected.

An accounting policy or estimate is considered to be critical or significant if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made, and if different estimates that reasonably could have been used, or changes in the accounting estimates that are reasonably likely to occur periodically, could materially impact the unaudited condensed consolidated financial statements.

We believe the following critical accounting policies reflect the more significant estimates and assumptions used in the preparation of our condensed consolidated financial statements. For a description of our significant accounting policies, see Note 2 "Summary of Significant Accounting Policies," of the notes to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report.

Loans Held for Investment, at Fair Value

Our loans held for investment are generally collateralized by taxi medallions in various jurisdictions, primarily New York City. We account for our loans held for investment using the fair value option and by applying the fair value principles of ASC 820, Fair Value Measurement. Our loans held for investment are determined to be Level 3 measurements pursuant to the fair value hierarchy as the valuation requires inputs that are significant and unobservable. Our MRP+ loan portfolio is primarily performing and valued by using a discount rate to present value cash flows from loans restructured by the City of New York under the MRP+ program (at a price of $170,000). To determine the discount rate, we consider the internal rate of return on the investment, changes in the U.S. Treasury rates to maturity of the loans and a risk premium for the likelihood of whether a loan will be successfully restructured under the MRP+ program. Our Non-MRP+ loan portfolio is primarily nonperforming and valued at the lesser of unpaid principal balance and the medallion or other collateral value attached to the loan, less a discount applied to the collateral value to estimate costs associated with taking ownership of the collateral. The most significant inputs in determining the medallion collateral value include our recent medallion sale prices, the amount backstopped by the City of New York under the MRP+, and certain market prices reported by the TLC. As of September 30, 2026, our New York City medallion collateral value was determined to be $175,000 for each medallion, calculated as the midpoint between an estimated range, of which the low value was $165,000 and the high value was $185,000.

Significant increases or decreases in such factors, or structural and/or regulatory changes to the New York City taxi industry would result in a significantly lower or higher fair value measurement. The value of the underlying collateral and thus, the portfolio of loans may be impacted by multiple factors including, but not limited to, general macroeconomic conditions and state of the taxi industry, loan restructurings, governmental initiatives, and medallion transfers. Without a readily ascertainable market value, the estimated value of our portfolio of loans held for investment, at fair value may differ significantly from the values that would be placed on the portfolio if a readily determinable market existed for the loans. The illiquidity of our loan portfolio may adversely affect our ability to dispose of loans at times when it may be advantageous to liquidate such portfolio. In addition, if we were required to liquidate some or all of the loans in the portfolio, the proceeds of such liquidation may be significantly less than the current value of such loans. Changes in the various unobservable inputs used to determine valuations may have similar or diverging impacts on valuation. Significant increases or decreases in these inputs in isolation and interrelationships between those inputs could result in significantly higher or lower fair value measurements than noted in the tables set forth in Note 4 of our condensed consolidated financial statements included elsewhere in this Quarterly Report.

Intangible Assets

Our taxi medallions are indefinite-lived intangible assets in accordance with ASC 350, Intangibles-Goodwill and Other. Costs incurred for renewal of taxi medallions are included within cost of fleet revenue, net.

Indefinite-lived intangible assets are not amortized but instead tested for impairment. We evaluate indefinite-lived intangible assets for impairment annually on October 1st of each year or more frequently whenever events or changes in circumstances indicate that it is more likely than not that the asset is impaired.

We evaluate our taxi medallions as a single unit of accounting by jurisdiction for purposes of testing for impairment, as taxi medallions are homogeneous assets within each jurisdiction, which are interchangeable and have identical characteristics. In our evaluation of indefinite-lived intangible assets for impairment, a qualitative assessment is typically performed prior to performing the quantitative analysis. If, after assessing the qualitative factors, we determine that it is more likely than not that the fair value of the indefinite-lived intangible asset is less than its carrying value, a quantitative assessment is performed. The fair value of the indefinite-lived intangible asset is compared to its carrying amount and if the carrying value exceeds its fair value, an impairment loss will be recognized. Determining the fair value of these assets is judgmental in nature and involves the use of significant estimates and assumptions, notably including the determination of anticipated impacts of changes in regulatory and macroeconomic factors impacting our industry, as well as the use of limited readily available market information of third party medallion transfers, including those reported by the TLC. No impairment losses were recognized for the three and nine months ended September 30, 2026 and 2025.

Recent Accounting Pronouncements

See Note 2 in the section entitled "Summary of Significant Accounting Policies - Recent Accounting Pronouncements" as referred to in the notes to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report for a discussion about accounting pronouncements recently issued.

Potential Uplisting

Our Common Stock is currently quoted on the OTCQX under the symbol "MGTE." We intend to pursue a listing of our Common Stock on a national securities exchange, such as The Nasdaq Stock Market LLC ("Nasdaq"), as part of our broader capital markets strategy. A national securities exchange listing, if obtained, would be expected to provide us with improved access to capital, enhanced trading liquidity, and greater market visibility. In connection with this evaluation, we are reviewing applicable quantitative, qualitative and corporate governance listing requirements and considering steps that may be required to support a future application. Nasdaq's initial listing standards include, among other requirements, minimum thresholds for stockholders' equity, market value of publicly held shares, share price, number of round lot holders, and compliance with Nasdaq's corporate governance requirements. Meeting these requirements may require us to raise additional capital and incur additional costs.

As of the date of this Quarterly Report, we have not submitted a listing application to Nasdaq, and any uplisting would be subject to, among other things, our ability to satisfy applicable initial listing standards, Nasdaq review and approval, market conditions and other factors. There can be no assurance that we will submit an application, satisfy the applicable listing requirements or complete an uplisting. See "Risk Factors-We may not be successful in listing our Common Stock on a national securities exchange, and our Common Stock may continue to trade on the OTC Markets" for additional information.

Emerging Growth Company Status

We are an emerging growth company, as defined in the Jumpstart Our Business Startups Act (the "JOBS Act"). The JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards applicable to public companies, allowing them to delay the adoption of those standards until those standards would otherwise apply to private companies. We have elected to use this extended transition period under the JOBS Act until the earlier of the date we are no longer an emerging growth company or we affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act. As a result, following the Business Combination, our condensed consolidated financial statements may not be comparable to the financial statements of companies that are required to comply with the effective dates for new or revised accounting standards that are applicable to public companies, which may make our Common Stock less attractive to investors.