Company: FLDDW
Filing Date: 2025-07-11
Form Type: S-1
Source: 0001213900-25-062935
Chunk: 326

Company: Fold Holdings, Inc.
Filing Date: 2025-07-11
Form: S-1
Chunk 326
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 wallet. Per the terms and conditions of the Fold Rewards Program, Rewards are subject to adjustment for chargebacks, returns, refunds, or other circumstances. In addition, Rewards are subject to expiry if users fail to maintain an active account for more than twelve consecutive months. The Company estimates the amount of Rewards that will expire based on historical data, current user trends, and other factors and records those estimated amounts in the period those Rewards were earned. These accruals are accounted for as an adjustment to the transaction price of the original revenue transaction if the expiration relates to Revenue Rewards, or as contra -expensewithin marketing expense if the expiration relates to Marketing Rewards. Derivatives As our customer rewards liability results in an obligation to deliver a fixed amount of digital assets in the future, the Company has determined that it meets the definition of a derivative and marked it to fair value as discussed above. The Company has not designated this derivative instrument as a hedging instrument. As of March 31, 2025 and December 31, 2024, the notional amount of the customer rewards liability outstanding was 89and 92bitcoin, respectively, and the derivative instrument was valued at $ 7.4million and $ 8.6million, respectively, within ‘Customer rewards liability’ on our accompanying balance sheets. For the three months ended March 31, 2025 and 2024, the Company recorded a gain of $ 1.1million and loss of $ 3.4million, respectively, on the remeasurement of this liability. For more detail on the fair value measurement of this derivative instrument, refer to Note 15. Convertible notes and warrants In December 2024, the Company entered into a Securities Purchase Agreement (the “December 2024 SPA”) with an institutional investor for the sale of a Senior Secured Convertible Note (“December 2024 Note”) which is convertible into shares of the Company’s common stock. The Company has accounted for the December 2024 Note and related warrants using the relative fair value allocation method on the date of issuance. Refer to Note 10 for further information. The December 2024 Note contains a host liability, freestanding warrants, and an embedded conversion feature. The Company uses the guidance under FASB ASC Topic 815 Derivatives and Hedging (“ASC 815”) to determine if the embedded conversion feature must be bifurcated and separately accounted for as a derivative under ASC 815. It also determines whether any embedded conversion features requiring bif