Company: FLDDW
Filing Date: 2025-04-11
Form Type: 424B3
Source: 0001213900-25-031004
Chunk: 263

Company: Fold Holdings, Inc.
Filing Date: 2025-04-11
Form: 424B3
Chunk 263
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The carrying amounts of certain financial instruments,
including cash and cash equivalents, accounts receivables, accounts payable and accrued liabilities, and deferred revenue approximate
their fair values due to their short-term nature.

The fair value of our digital assets was determined
using the Level 1 input of bitcoin prices in the market we determined to be the principal market as of December 31, 2024 and 2023.

Customer rewards liability

The customer reward liability is classified as
a Level 3 financial instrument within the fair value hierarchy primarily due to the reward forfeiture rate applied to the value of the
bitcoin obligation, which is an unobservable input to the fair value measurement. The Company has determined the bitcoin price based on
its value in the market we determined to be the principal market for the related digital asset as of December 31, 2024 and 2023, which
is considered a Level 1 input. The forfeiture rate is then applied to reflect an estimated breakage rate of rewards that have been forfeited
based on the contractual terms and conditions of our Rewards Program and historical trends of forfeiture rates on a three-year trailing
basis. The estimated forfeiture rate applied to our customer rewards liability for each of the years ended December 31, 2024 and 2023
was 10%.

Simple Agreements for Future Equity

The estimated fair value of the SAFEs (refer to
Note 8) is determined based on the aggregated, probability-weighted average of the outcomes of certain scenarios, including: (i) equity
financing, with conversion of the SAFEs into a number of shares of convertible preferred stock at the lower of the post-money valuation
cap price or discount price (ii) liquidity event (change of control, direct listing, or an initial public offering) with mandatory conversion
to common stock at the lower of the post-money valuation cap price or discount price and (iii) dissolution event, with SAFE holders automatically
entitled to receive cash payments equal to the purchase amount, prior to and in preference to any distribution of any assets or surplus
funds to the holders of convertible preferred and common stock. The combined value of the probability-weighted average of those outcomes
is then discounted back to each reporting period in which the SAFEs are outstanding, in each case based on a risk-adjusted discount rate
estimated to set the probability-weighted sum of each scenario to the purchase price. The discount rate at each valuation date was adjusted
by the change in the USD CCC bond rate