Fold Holdings, Inc. annual report, FY2023

Filing identity and reporting period

Important identity mismatch: The supplied filing is FTAC Emerald Acquisition Corp.’s Form 10-K for the fiscal year ended December 31, 2023—not a filing for Fold Holdings, Inc. This summary reflects the filing text provided.

Business context

FTAC Emerald is a pre-combination SPAC formed to acquire one or more businesses. It had not begun operations or generated operating revenue by year-end. Its stated target focus includes clean energy, water sustainability, agricultural technology, shared-economy software and next-generation mobility, but it may pursue other sectors. No target company or business combination was identified in the filing.

Financial performance and condition

At December 31, 2023, the trust account held $165.65 million, down from $254.25 million a year earlier, primarily reflecting $96.79 million of redemptions in September 2023, partly offset by trust interest. Cash outside the trust was $29,844; working capital deficit was $3.09 million. Current liabilities were $3.39 million, including a $2.03 million non-interest-bearing related-party working-capital loan. Total liabilities were $4.55 million, and stockholders’ deficit was $4.31 million. Redeemable Class A shares were recorded as temporary equity at $165.72 million, or $10.60 per share.

Changes, unusual items and outlook

• Net income increased year over year, principally because trust investment interest rose; the company still had no operating revenue.
• In October 2023, the underwriter waived its $8.70 million deferred underwriting commission. The company recorded the waiver in additional paid-in capital and, after the related reimbursement arrangement was waived, recognized $1.16 million of advisory-fee expense.
• The company recorded $708,400 of expense for an agreement to issue 1.61 million shares to parties that agreed not to redeem shares at the September 2023 extension meeting. It also accrued $967,916 of federal excise tax related to those redemptions.
• After year-end, shareholders extended the deadline from January 19, 2024 to December 20, 2024. At the January 2024 meeting, 10.87 million shares were redeemed for approximately $115.49 million, leaving 4,757,884 public shares. Separate non-redemption agreements provide for 1,137,500 shares to be issued at a business-combination closing.
• Management intends to complete a business combination by December 20, 2024, but states that failure to do so would require liquidation. Management and the auditor report substantial doubt about the company’s ability to continue as a going concern. The audited financial statements were not adjusted for a possible liquidation.
• The filing provides no operating guidance or forecast. It identifies risks including limited cash outside the trust, dependence on sponsor loans, substantial redemptions, competition for targets, potential dilution, conflicts of interest and possible creditor claims against trust assets. Warrants may expire worthless if no combination is completed.

Most important facts to verify

1. Confirm the intended issuer: the supplied 10-K is for FTAC Emerald Acquisition Corp., not Fold Holdings, Inc.
2. Verify the post-January 2024 trust balance and public-share count after the $115.49 million redemption.
3. Assess whether the company has adequate funding to operate through the December 20, 2024 deadline; year-end outside-trust cash was only $29,844 and working-capital deficit was $3.09 million.
4. Review the terms and dilution implications of the non-redemption share commitments and the January 2024 Polar funding arrangement.
5. Confirm the treatment and payment source for the $967,916 excise-tax accrual and any further excise tax arising from redemptions.
6. Consider sponsor incentives and conflicts: founder shares were acquired for a nominal price, and the sponsor and related holders controlled approximately 66.8% of voting shares as of the filing’s stated date.