Company: FLDDW
Filing Date: 2025-07-28
Form Type: S-1/A
Source: 0001213900-25-068264
Chunk: 277

Company: Fold Holdings, Inc.
Filing Date: 2025-07-28
Form: S-1/A
Chunk 277
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 deferred revenue approximate their fair values due to their short -termnature. 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.

F-28

Fold, Inc.
Notes to Financial Statements 14. FAIR VALUE MEASUREMENTS (cont.) 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 -yeartrailing 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 -weightedaverage 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 -moneyvaluation 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 -moneyvaluation 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 -weightedaverage of those outcomes is then discounted back to each reporting period in which the SAFEs are outstanding, in each case based on a risk -adjusteddiscount rate estimated to set the probability -weightedsum 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 to reflect the market movement between the issuance date and valuation date. Additionally, in the Company’s estimate of the