Marblegate Acquisition (GATE) - 2021 Q4 - Annual Report

PART I Business Marblegate Acquisition Corp. is a SPAC focused on acquiring recently restructured businesses, with a deadline of January 5, 2023, to complete a business combination - The company is a blank check company (SPAC) focused on acquiring recently restructured businesses, leveraging management's distressed investing expertise[22] Initial Public Offering and Trust Account Details | Metric | Value | | :--- | :--- | | IPO Date | October 5, 2021 | | Units Offered | 30,000,000 | | Price Per Unit | $10.00 | | Gross Proceeds from IPO | $300,000,000 | | Gross Proceeds from Private Placement | $9,100,000 | | Total Placed in Trust Account | $301,500,000 | | Funds Available for Combination (as of 12/31/21) | $286,518,928 (after deferred fees) | - The deadline for completing an initial business combination is January 5, 2023, with failure leading to liquidation and public share redemption[25][107] - Key acquisition criteria include a post-restructured status, revitalized growth strategy, valuation discount, stronger balance sheet, and compelling industry characteristics[44] - The initial business combination's fair market value must be at least 80% of the trust account assets at the definitive agreement signing[54][68] Risk Factors The company faces inherent risks as a blank check company, including the inability to complete a business combination, conflicts of interest, and post-combination performance uncertainties - As a blank check company with no revenue, evaluating the ability to select a suitable business target is challenging[138] - Failure to complete an initial business combination within the prescribed timeframe risks liquidation and worthless warrants[138][140] - Conflicts of interest may arise from officers' and directors' other business commitments and potential personal gains despite public stockholder losses[138][140] - Warrants are accounted for as derivative liabilities, with fair value changes reported in earnings potentially impacting stock price[140] Unresolved Staff Comments The company reports no unresolved staff comments - Not applicable[142] Properties The company's executive offices are located in New York, NY, and are considered adequate for current operations - The company's executive offices are located at c/o Ellenoff Grossman & Schole LLP, 1345 Avenue of the Americas, New York, NY 10105[143] Legal Proceedings There is no pending or contemplated litigation against the company or its officers and directors - There is no pending or contemplated litigation against the company[144] Mine Safety Disclosures This item is not applicable to the company - Not applicable[145] PART II Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The company's units, Class A common stock, and public warrants trade on Nasdaq, with $301.5 million from IPO proceeds placed in a trust account, and no cash dividends paid to date Nasdaq Trading Information | Security | Symbol | Trading Commenced | | :--- | :--- | :--- | | Units | GATEU | October 1, 2021 | | Public Shares (Class A) | GATE | November 22, 2021 | | Public Warrants | GATEW | November 22, 2021 | - As of March 31, 2022, there were limited record holders for units, Class A common stock, and warrants[149] - The company has not paid and does not plan to pay cash dividends prior to completing its initial business combination[150] - A total of $301,500,000 was placed in a U.S.-based trust account from the IPO and private placement[154] Reserved This item is reserved Management's Discussion and Analysis of Financial Condition and Results of Operations As a blank check company with no revenue, the company reported a net loss of $267,638 in FY2021, holding $301.5 million in trust account marketable securities Results of Operations | Period | Net Loss | Key Components | | :--- | :--- | :--- | | Year Ended Dec 31, 2021 | $267,638 | Consists of $503,572 in operating costs, offset by a $259,350 change in fair value of warrant liabilities and $35,823 in interest income | | Dec 10, 2020 (Inception) to Dec 31, 2020 | $1,000 | Consisted of operating and formation costs | Liquidity and Capital Resources (as of Dec 31, 2021) | Item | Amount | | :--- | :--- | | Cash (outside trust) | $380,160 | | Marketable securities in Trust Account | $301,518,928 | | Cash used in operating activities (FY 2021) | $739,303 | - The sponsor or affiliates may provide loans up to $1,500,000 for working capital or transaction costs, convertible into units at $10.00 per unit[172] - Critical accounting policies include warrant accounting as re-measured liabilities and Class A common stock classification as temporary equity[178][179][180] Quantitative and Qualitative Disclosures About Market Risk The company's market risk exposure is limited, with trust account proceeds invested in short-term U.S. government treasury obligations, resulting in no material interest rate risk - The company has not engaged in and does not expect to engage in any hedging activities[185] - Trust account proceeds are invested in short-term U.S. government treasury obligations, leading to no material interest rate risk exposure[186] Financial Statements and Supplementary Data This section references the company's financial statements and supplementary data, located on pages F-1 through F-18 of the report - This item references the detailed financial statements located on pages F-1 through F-18 of the annual report[187] Changes in and Disagreements with Accountants on Accounting and Financial Disclosure The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - None reported[188] Controls and Procedures Management concluded the company's disclosure controls and procedures were effective as of December 31, 2021, with no management report on internal control over financial reporting included - As of December 31, 2021, the company's certifying officers concluded that disclosure controls and procedures were effective[190] - The report omits a management assessment of internal control over financial reporting, permissible for newly public companies under SEC rules[192] Other Information The company reports no other information - None[193] Disclosure Regarding Foreign Jurisdictions that Prevent Inspections This item is not applicable to the company - Not applicable[194] PART III Directors, Executive Officers and Corporate Governance This section details the company's directors and executive officers, board structure, independent audit and compensation committees, and adopted Code of Ethics Key Management and Directors | Name | Position | | :--- | :--- | | Andrew Milgram | Chief Executive Officer and Executive Director | | Paul Arrouet | President and Executive Director | | Mark Zoldan | Chief Financial Officer | | Harvey Golub | Chairman of the Board | | Richard Goldman | Director | | Alan Mintz | Director | | Wallace Mathai-Davis | Director | - The Board of Directors maintains an Audit Committee chaired by Alan Mintz and a Compensation Committee chaired by Richard Goldman[208][212] - The company has adopted a Code of Ethics, with audit and compensation committee charters filed as registration statement exhibits[220] Executive Compensation No officers receive cash compensation; the sponsor is paid $10,000 monthly for administrative support, and officers are reimbursed for out-of-pocket expenses - No officers receive cash compensation; the sponsor is paid $10,000 per month for administrative support, ceasing upon business combination or liquidation[222] - Officers and directors are reimbursed for out-of-pocket expenses incurred in identifying and performing due diligence on potential target businesses[222] Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters As of March 31, 2022, the sponsor and executive officers collectively beneficially own approximately 20.5% of the common stock, with other significant shareholders holding over 5% Beneficial Ownership as of March 31, 2022 | Beneficial Owner | Approximate Percentage of Outstanding Common Stock | | :--- | :--- | | Marblegate Acquisition LLC (Sponsor) | 20.5% | | Andrew Milgram (CEO) | 20.5% | | Paul Arrouet (President) | 20.5% | | The Farallon Funds | 7.2% | | Polar Asset Management Partners Inc. | 7.2% | | AQR Capital Management, LLC | 6.8% | Certain Relationships and Related Transactions, and Director Independence Related party transactions include the sponsor's purchase of founder shares and private placement units, monthly administrative fees of $10,000, and potential loans up to $1.5 million; certain directors are deemed independent - The sponsor purchased 8,625,000 founder shares for $25,000 and 610,000 private placement units for $6.1 million[233][234] - The company pays the sponsor $10,000 per month for administrative support and has an arrangement for potential non-interest bearing loans up to $1,500,000 from the sponsor or affiliates for transaction costs[237][240] - The Board of Directors has determined Richard Goldman, Alan Mintz, and Wallace Mathai-Davis are independent directors per Nasdaq listing standards[250] Principal Accountant Fees and Services This section details fees paid to Marcum LLP, with total audit fees of $67,965 for FY2021, and all services pre-approved by the audit committee Accountant Fees (Marcum LLP) | Fee Category | FY 2021 | FY 2020 | | :--- | :--- | :--- | | Audit Fees | $67,965 | $0 | | Audit-Related Fees | $0 | $0 | | Tax Fees | $0 | $0 | | All Other Fees | $0 | $0 | PART IV Exhibit and Financial Statement Schedules This section lists documents filed as part of the Form 10-K, including financial statements and an index of all exhibits - This section provides an index to the financial statements (pages F-2 to F-7) and a list of all exhibits filed with the report[259][372] Form 10-K Summary This item is not applicable - Not applicable[260] Financial Statements Report of Independent Registered Public Accounting Firm Marcum LLP issued an unqualified opinion on the financial statements, emphasizing the company's SPAC status and January 5, 2023, liquidation deadline if a business combination is not completed - Marcum LLP expressed an unqualified opinion on the company's financial statements[264] - The report emphasizes the company's need to consummate a business combination by January 5, 2023, to avoid liquidation[265] Financial Statements Data As of December 31, 2021, the balance sheet shows $302.5 million in total assets, primarily trust account securities, $15.6 million in liabilities, and a $267,638 net loss for the year Balance Sheet Highlights (as of December 31, 2021) | Account | Amount | | :--- | :--- | | Assets | | | Cash | $380,160 | | Marketable securities held in Trust Account | $301,518,928 | | Total Assets | $302,481,269 | | Liabilities & Stockholders' Deficit | | | Total Current Liabilities | $347,950 | | Warrant liability | $250,250 | | Deferred underwriting fee payable | $15,000,000 | | Total Liabilities | $15,597,700 | | Class A common stock subject to possible redemption | $301,500,000 | | Total Stockholders' Deficit | ($14,616,431) | Statement of Operations (Year Ended December 31, 2021) | Account | Amount | | :--- | :--- | | Operating and formation costs | ($503,572) | | Interest income on marketable securities | $35,823 | | Change in fair value of warrant liabilities | $259,350 | | Net Loss | ($267,638) | Notes to Financial Statements The notes detail the company's accounting policies, SPAC organization, IPO and private placement specifics, related party transactions, commitments, and warrant accounting as fair-valued liabilities - The company must complete a Business Combination by January 5, 2023, or face liquidation[294] - Class A common stock subject to possible redemption is classified as temporary equity on the balance sheet[312] - The company has a related party administrative support agreement with its Sponsor at a cost of $10,000 per month[339] - Private Placement Warrants are treated as liabilities, measured at fair value using a binomial lattice model (Level 3 input), with changes recognized in the statement of operations[365][366]