Company: FLDDW
Filing Date: 2025-01-14
Form Type: S-4/A
Source: 0001213900-25-003167
Chunk: 359

Company: Fold Holdings, Inc.
Filing Date: 2025-01-14
Form: S-4/A
Chunk 359
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 Revenue Rewards for certain debit card transactions during 2023, specifically category boosts and merchant boosts that provide users with a flat percent reward on each qualifying transaction. As noted above, Revenue Rewards are accounted for as a direct reduction to the transaction price (contra -revenue). Custody and trading In Q2 2023, we transitioned Bitcoin Service Providers from Prime Trust LLC to Fortress Trust LLC to support our custody and trading business. We re -launchedwith Fortress Trust LLC in Q4 2023 and therefore 2023 revenues related to that business were not meaningful. In August 2024, we entered into a direct relationship with BitGo Trust Company, Inc. We expect our custody and trading revenues to be an important growth driver for both volumes and revenues going forward. Operating expenses Banking and payments costs Banking and payments costs include direct costs related to licensing, servicing, and processing transactions within our banking and payments products, including costs related to our Fold Card and Merchant Offers. Banking and payments costs decreased in direct relation to our decreased merchant offer volumes as noted above. Costs of sales from merchant offers decreased 33% from $29.8 million for the year ended December 31, 2022 to $19.9 million for the year ended December 31, 2023. Excluding merchant offers, our banking and payments costs decreased to $1.1 million for the year ended December 31, 2023 compared to $2.0 million for the year ended December 31, 2022. This decrease was driven primarily by lower deposit processing fees ($0.6 million) as a result of restructured vendor contracts. While most of our costs scale in direct proportion to our volumes and revenues, some of our costs, including those related to our Fold Card, gradually reduce as a percentage of volumes as volumes increase. This factor, combined with expected additional products and features, is expected to drive continued higher margins across our business lines. Custody and trading costs Custody and trading costs consist primarily of licensing, servicing, and custodial fees related to our bitcoin exchange product. Custody and trading costs scale in proportion to our volumes. Both 2023 and 2022 costs included non -recurringset up fees related to onboarding with new bitcoin exchange providers. 222 Compensation and benefits During the years ended December 31, 2023 and 2022, we restructured our employee base by reducing certain positions, primarily operational and growth related roles, and by adding others, primarily product and engineering. The Company