Business context and reporting period
The supplied filing is FTAC Emerald Acquisition Corp.’s unaudited Form 10-Q for the quarter ended June 30, 2022, not a filing identified as Fold Holdings, Inc. FTAC Emerald was a blank-check company seeking a business combination; it had not begun operating activities or generated operating revenue.
Financial results and position
| Metric | Three months ended June 30, 2022 | Six months ended June 30, 2022 |
|---|---|---|
| Operating and formation costs | $383,532 | $873,036 |
| Trust investment interest income | $339,099 | $364,340 |
| Income tax provision | $44,337 | $44,337 |
| Net loss | $88,770 | $553,033 |
| Basic and diluted loss per share | $0.00 for each share class, rounded | $0.02 for each share class |
No operating revenue or operating margin was reported; margins are not meaningful for this pre-combination SPAC. The prior-year quarter had no net loss, while the comparable inception-to-June 30, 2021 period reported a $208 net loss.
At June 30, 2022, total assets were $253.7 million, including $251.4 million in the Trust Account and $676,746 in cash. Total liabilities were $10.0 million, including $8.7 million of deferred underwriting discount payable only if a business combination closes. Redeemable Class A shares were recorded as $251.3 million of temporary equity. Stockholders’ deficit was $7.7 million. Management reported working capital of $1.04 million, excluding franchise and income tax payable. No working-capital loans were outstanding; the filing reports no long-term debt.
For the first half of 2022, operating cash use was $692,589. Investing activities used $28.8 million, primarily reflecting trust funding; financing activities provided $29.0 million, primarily from the over-allotment and private-placement proceeds. Cash declined by $551,168 to $676,746.
Changes versus prior period
- Trust investments increased from $222.2 million at December 31, 2021 to $251.4 million at June 30, 2022, mainly following the January 2022 partial over-allotment closing.
- Redeemable Class A shares increased from 22.0 million to 24.9 million; 2,869,342 over-allotment units were sold and 148,192 founder shares were forfeited.
- Operating costs and trust interest income were substantially higher than the 2021 comparison periods, when the company was newly formed and had not completed its IPO.
Outlook, risks and unusual items
Management intended to complete a business combination by June 20, 2023. Failure to do so would require liquidation and dissolution. Management stated that this uncertainty raises substantial doubt about the company’s ability to continue as a going concern; the financial statements include no liquidation adjustments. The company expected to use trust funds for a transaction and outside-trust cash for search and transaction costs, and cautioned that actual search costs or substantial redemptions could require additional financing.
Other disclosed uncertainties include the potential effects of COVID-19 and the Russia-Ukraine conflict, which management said were not readily determinable. The filing also notes proposed SEC rules for SPACs that could increase the time and cost of completing a business combination. The deferred underwriting discount and certain advisory fees would be payable at a transaction closing. No material legal proceedings or subsequent events requiring adjustment or disclosure were reported.
Key facts for investors to verify
- Confirm the issuer identity: this filing is for FTAC Emerald Acquisition Corp., not Fold Holdings, Inc.
- Check business-combination progress and the June 20, 2023 deadline, including any later extensions or liquidation developments.
- Review trust assets, redemption levels, and cash available outside the Trust Account to fund ongoing search costs.
- Confirm transaction-related fees and financing needs, particularly the deferred underwriting discount and possible additional financing.
- Assess the going-concern disclosure and the company’s ability to complete a transaction before the deadline.