FLD

Business Context and Reporting Period

This Form 10-K covers the fiscal year ended December 31, 2024, for Fold Holdings, Inc. (formerly FTAC Emerald Acquisition Corp.). The filing primarily reflects the financial position of the SPAC prior to its business combination with Fold, Inc., a bitcoin financial services company. The merger was consummated on February 14, 2025. Consequently, the financial statements do not include the operating results of Fold, Inc., which will be disclosed in a subsequent Form 8-K amendment.

Key Financial Metrics

Note: The company reported no operating revenue for the period as it was a pre-combination SPAC.

Material Changes vs. Prior Period

• Trust Account Reduction: Investments held in the Trust Account decreased significantly from $165.7 million in 2023 to $51.3 million in 2024. This reduction was driven by substantial shareholder redemptions totaling approximately $116.7 million during 2024.
• Net Loss: The company shifted from a net income of $4.4 million in 2023 to a net loss of $1.9 million in 2024. This was primarily due to a sharp decline in interest income earned on the Trust Account (down from $11.2M to $3.0M) and increased non-redemption agreement expenses ($838,825 in 2024 vs. $708,400 in 2023).
• Liabilities: Current liabilities increased to $9.3 million in 2024 from $3.4 million in 2023, largely due to the accrual of excise taxes on stock redemptions ($1.2 million) and increased related party loans.
• Share Count: Shares of Class A common stock subject to possible redemption decreased from 15.6 million to 4.6 million following redemptions.

Outlook, Risks, and Contingencies

• Business Combination: The merger with Fold, Inc. closed on February 14, 2025. The combined entity operates as a bitcoin financial services platform offering FDIC-insured checking, a Visa prepaid debit card, and bitcoin rewards. Fold holds over 1,000 bitcoin in its treasury.
• Going Concern: Prior to the merger, the company had a working capital deficit. Management concluded that the consummation of the Business Combination alleviated substantial doubt about the company's ability to continue as a going concern.
• Key Risks:
  • Bitcoin Volatility: Operating results are highly dependent on the volatile price of Bitcoin.
  • Regulatory Uncertainty: The company faces an evolving regulatory landscape regarding digital assets, banking partnerships, and money transmission laws.
  • Custody Risks: Reliance on third-party custodians (Fortress Trust and BitGo) for customer and corporate bitcoin assets introduces counterparty and insolvency risks.
  • Banking Relationships: Loss of critical banking partners (e.g., Sutton Bank) could disrupt operations.
• Unusual Items: The company recorded a $1.2 million excise tax liability related to stock redemptions under the Inflation Reduction Act. Additionally, $838,825 was expensed for non-redemption agreements to secure shareholder support for the merger.

Investor Verification Checklist

• Merger Closing Details: Verify the final terms of the February 14, 2025, merger and the specific number of shares issued to Fold shareholders.
• Fold Financials: Review the audited financial statements of Legacy Fold (expected in a Form 8-K amendment) to assess the actual operating revenue, user base, and profitability of the bitcoin rewards business.
• Bitcoin Treasury Valuation: Confirm the current quantity and valuation of bitcoin held by Fold, as this is a significant asset on the balance sheet subject to market volatility.
• Regulatory Status: Monitor any ongoing regulatory inquiries or enforcement actions related to Fold's banking partnerships or digital asset offerings.
• Debt Repayment: Confirm that all related party loans (totaling ~$5.2 million at year-end) were repaid at the closing of the business combination.