FLD

Business Context and Reporting Period

Company: Fold Holdings, Inc. (Fold)
Filing Type: Form 10-K (Annual Report)
Reporting Period: Fiscal year ended December 31, 2025
Business Overview: Fold is a bitcoin-focused financial services company offering a suite of consumer products including an FDIC-insured checking account, a Visa prepaid debit card, a bitcoin rewards credit card (launched on a limited basis in March 2026), and a bitcoin gift card. The company partners with Sutton Bank for fiat services and BitGo for bitcoin custody and trading. Fold also maintains a corporate bitcoin treasury strategy, holding bitcoin as a long-term investment and to fulfill customer rewards obligations.

Key Financial Metrics

Note: Debt figures reflect balances as of December 31, 2025. Subsequent debt restructuring occurred in February 2026 (see below).

Material Changes vs. Prior Period

• Revenue Growth: Net revenue increased 34% to $31.8 million, driven primarily by a 30% increase in merchant offer revenues ($28.1 million) and a significant rise in custody and trading revenues ($1.5 million) due to the launch of the Fold Bitcoin Gift Card.
• Expense Expansion: Total operating expenses doubled to $59.5 million. Key drivers included a 449% increase in compensation and benefits (largely due to $10.0 million in share-based compensation triggered by the Merger) and a 192% increase in professional fees related to the public company transition.
• Bitcoin Treasury Volatility: While the company increased its bitcoin holdings to 1,606 BTC, the unrealized loss on the Investment Treasury was $9.2 million due to a decline in bitcoin price from $93.4k (2024) to $87.5k (2025).
• Merger Completion: The business combination with FTAC Emerald Acquisition Corp. closed in February 2025, resulting in a reverse recapitalization and the conversion of all SAFEs and preferred stock into common stock.

Guidance, Outlook, and Risks

Recent Developments and Outlook

• Credit Card Launch: The Fold Credit Card launched on a limited basis in March 2026. A broader rollout is anticipated pending lender financing and third-party approvals.
• Debt Restructuring (Subsequent Event): In February 2026, the company extinguished its March 2025 Investor Note (repaid with 500 BTC) and the June 2025 Amended Investor Note (repaid with $27.5 million cash). A new $13.0 million senior unsecured promissory note was issued to SATS Credit Fund L.P.
• Capital Resources: The company maintains a $250 million equity purchase facility with SZOP Opportunities I, LLC, under which it sold 1.42 million shares for $4.4 million in 2025. Management believes existing cash, financing facilities, and digital assets are sufficient to fund operations for the next 12 months.

Key Risks and Contingencies

• Bitcoin Volatility: Operating results and funding options are highly sensitive to bitcoin price fluctuations. A decline in price can trigger collateral maintenance calls on credit facilities.
• Regulatory Uncertainty: The company faces an evolving regulatory landscape regarding crypto assets, money transmission, and consumer finance. Changes in laws could restrict product offerings or increase compliance costs.
• Third-Party Dependencies: Operations rely heavily on partners: Sutton Bank (fiat), BitGo (custody), and Celtic Bank/Stripe (credit card). Termination of these relationships would materially disrupt business.
• Internal Controls: Management identified a material weakness in internal controls over financial reporting related to complex debt and equity transactions. Remediation efforts are underway.
• Litigation: The company is a defendant in a bankruptcy clawback proceeding related to Prime Core Technologies, Inc., though management does not expect a material adverse effect.

Investor Verification Checklist

• Debt Status: Verify the terms and repayment status of the new $13.0 million note issued to SATS in February 2026 and the extinguishment of prior convertible notes.
• Credit Card Viability: Monitor the progress of the Fold Credit Card rollout, specifically the securing of a permanent lender and the ability to scale beyond the initial limited launch.
• Liquidity Runway: Assess the sufficiency of the $7.7 million cash balance against the history of negative operating cash flows ($16.1 million used in 2025) and the reliance on the equity purchase facility.
• Bitcoin Collateral: Review the collateral maintenance requirements for the Two Prime Credit Facility and the impact of recent bitcoin price volatility on the company's ability to draw funds.
• Internal Control Remediation: Track the progress of remediation for the material weakness in internal controls over financial reporting to ensure future reporting reliability.