v3.26.1
Business Combination and Recapitalization
 6 Months Ended
Jun. 30, 2026
Business Combination [Abstract]  
Business Combination and Recapitalization

3. Business Combination and Recapitalization

On April 7, 2025 (the “Closing Date”), the Company consummated the Business Combination and related transactions, pursuant to which (i) the Company survived the merger, (ii) MAC became a wholly owned subsidiary of the Company, and (iii) the Company acquired approximately 83.7% interest in the DePalma Companies, with the remaining 16.3% continuing to be owned by certain limited partners of the DePalma Companies and representing noncontrolling interests. Upon the closing of the Business Combination, the Company’s amended and restated certificate of incorporation provided for, among other things, a total number of authorized shares of capital stock of 260,000,000 shares, of which 250,000,000 shares were classified as Common Stock and 10,000,000 shares were classified as preferred stock, $0.0001 par value (the “Preferred Stock”).

The Business Combination is accounted for as a reverse recapitalization. Upon consummation of the Business Combination, the DePalma Companies, as a group, have the largest voting interest in the Company and represent a significant majority of the assets and operations of the combined company. Therefore, the DePalma Companies have been determined to be the accounting acquirer for financial reporting purposes and the historical financial statements of the DePalma Companies became the basis for the historical financial statements of the Company upon the closing of the Business Combination. Accordingly, for accounting purposes, the Business Combination was treated as the equivalent of the DePalma Companies issuing Common Stock for the net assets of MAC and the Company, accompanied by a recapitalization. The net assets of MAC and the Company are stated at historical cost, with no goodwill or intangible assets recorded.

In accordance with guidance applicable to these circumstances, the equity structure has been restated in all comparable periods up to the Closing Date, to reflect the number of shares of Common Stock issued to the DePalma Companies’ equityholders in connection with the Business Combination. As such, the equity interests and corresponding member’s capital amounts and earnings per share related to the DePalma Companies’ historical outstanding equity have been retroactively restated as shares of Common Stock issued to the DePalma Companies’ equityholders in connection with the Business Combination. The noncontrolling interest recognized at the Closing Date reflects the proportionate interest in the precombination carrying amounts of the DePalma Companies’ net assets.

At the Closing Date, each share of MAC’s class A common stock (“MAC Class A Common Stock”) and class B common stock (“MAC Class B Common Stock”) issued and outstanding immediately prior to the Closing Date was cancelled and converted into the right to receive a share of Common Stock, and each whole warrant of MAC outstanding immediately prior to the Closing Date was cancelled in exchange for a warrant of the Company, with the Company assuming MAC’s obligations under MAC’s existing warrant agreements.

The Company made payments on the Closing Date totaling $11.7 million representing certain MAC liabilities assumed by the Company in the Business Combination. The liabilities assumed are included as a component of the effect of merger and recapitalization to additional paid-in capital.

In exchange for their equity interests in the DePalma Companies, the DePalma Companies’ equityholders received a number of shares of Common Stock determined based on agreed upon valuations of the DePalma Companies’ loan and taxi medallion portfolio, plus a minimum cash amount to meet the working capital needs of the Company (together the “DePalma Equity Value”), and the per share merger consideration, each as further detailed below and defined within the Business Combination Agreement (in thousands except share and per share amounts).

DePalma I Equity Value:

 

 

Cash

$

29,597

 

Medallion Loan Value

 

230,813

 

DePalma I Equity Value

 

260,410

 

DePalma II Equity Value

 

369,134

 

Total DePalma Equity Value

$

629,544

 

Per share merger consideration

$

10.00

 

Common Stock issued to DePalma Equityholders

 

62,954,464

 

The following table details the number of shares of Common Stock issued and outstanding immediately following the consummation of the Business Combination:

 

Shares of Common Stock

 

DePalma Companies' equityholders

 

62,954,464

 

MAC public stockholders(1)

 

46,605

 

MAC Sponsor

 

5,289,072

 

MAC other stockholders(2)

 

5,624,261

 

Total

 

73,914,402

 
(1)
Represents shares of MAC Class A Common Stock held by MAC public stockholders outstanding prior to the Business Combination and reflecting all redemptions of MAC Class A Common Stock.
(2)
Represents shares of MAC Class B Common Stock purchased from the Sponsor or transferred by the Sponsor to unaffiliated members of the Sponsor prior to the consummation of the Business Combination.

The following table reconciles the elements of the Business Combination to the Company’s condensed consolidated statements of changes in stockholders’ equity (in thousands):

 

 

 

Cash: MAC trust (net of redemptions)

$

515

 

Transaction costs paid with MAC trust proceeds

 

(515

)

Net proceeds from MAC trust

 

-

 

Net liabilities of MAC assumed in merger

 

(14,959

)

Noncontrolling interest recognized in merger

 

(106,624

)

Effect of merger and recapitalization to additional paid-in capital

$

(121,583

)