Fold Holdings, Inc. current report, 13 January 2023

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Filing Overview

On January 13, 2023, FTAC Emerald Acquisition Corp., a special purpose acquisition company (SPAC), filed a Form 8-K reporting the issuance of a promissory note to Emerald ESG Sponsor, LLC. The filing identifies FTAC Emerald Acquisition Corp. as the registrant; it does not identify Fold Holdings, Inc. as the filing entity.

Financial Position and Key Metrics

  • The sponsor agreed to lend the company up to $1.5 million under a non-interest-bearing promissory note.
  • The company borrowed $350,000 on January 13, 2023.
  • All outstanding amounts are due when the company consummates a business combination.
  • If no business combination is completed, repayment may be made only from funds held outside the IPO trust account. Trust-account proceeds may not be used.
  • Any unpaid balance would be forgiven if funds outside the trust account are insufficient for repayment.
  • The filing does not provide revenue, profit, cash flow, margin, liquidity, or other operating financial metrics.

Material Changes and Obligations

The principal material change was the creation of a $1.5 million sponsor financing facility and the related $350,000 borrowing. The promissory note creates a direct financial obligation under Item 2.03.

The note does not permit outstanding amounts to be converted into units at $10 per unit, notwithstanding a conversion feature that had previously been described as permissible in the IPO prospectus.

Outlook, Risks, and Unusual Items

  • Repayment is contingent on the company’s ability to complete a business combination or access funds outside the trust account.
  • If a business combination is not completed and non-trust funds are insufficient, the unpaid obligation would be forgiven.
  • The filing provides no business-combination guidance, operating outlook, or management forecast.
  • The financing is from a company sponsor and is non-interest-bearing, making it an unusual related-party funding arrangement.

Investor Verification Points

  • Verify the correct registrant, because the provided metadata references Fold Holdings, Inc., while the filing names FTAC Emerald Acquisition Corp.
  • Confirm the outstanding balance under the promissory note and whether additional amounts were subsequently borrowed.
  • Review the note’s maturity and repayment provisions alongside later filings regarding any business combination.
  • Determine the amount of funds available outside the IPO trust account for potential repayment.
  • Review subsequent filings for amendments, forgiveness, repayment, or replacement of the sponsor financing.