Company: FLDDW
Filing Date: 2025-03-28
Form Type: 10-K
Source: 0001013762-25-004107
Chunk: 317

Company: Fold Holdings, Inc.
Filing Date: 2025-03-28
Form: 10-K
Item: Item 1A
Chunk 317
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 Public Warrants.

66

A 1% U.S. federal excise tax may be imposed on us in connection
with our redemptions of our shares in connection with redemptions pursuant to the Business Combination.

The Inflation Reduction Act, among other things,
generally imposes a 1% U.S. federal excise tax (the “Excise Tax”) on certain repurchases of stock by “covered corporations”
(which include publicly traded domestic (i.e., U.S.) corporations and certain domestic subsidiaries of publicly traded foreign (i.e.,
non-U.S.) corporations). The Excise Tax is imposed on the repurchasing corporation itself, not its stockholders from which the stock is
repurchased. The amount of the Excise Tax is generally 1% of the fair market value of the shares repurchased at the time of the repurchase.
However, for purposes of calculating the Excise Tax, repurchasing corporations are permitted to net the fair market value of certain new
stock issuances against the fair market value of stock repurchases during the same taxable year. In addition, certain exceptions apply
to the Excise Tax. The U.S. Department of the Treasury (the “Treasury”) has authority to provide regulations and other
guidance to carry out, and prevent the abuse or avoidance of, the Excise Tax. On December 27, 2022, the Treasury issued a notice
that provides interim operating rules for the Excise Tax, including rules governing the calculation and reporting of the Excise Tax. The
Treasury issued proposed regulations on April 12, 2024 and final regulations on June 28, 2024, which generally adopt (but in
some respects expand or modify) the rules and guidance set forth in the earlier notice. Although such notice and Treasury regulations
clarify certain aspects of the Excise Tax, the interpretation and operation of certain other aspects of the Excise Tax remain unclear.

Because we are a Delaware corporation and our securities
trade on Nasdaq, we are a “covered corporation” for purposes of the Excise Tax. Because the application of the Excise Tax
is not entirely clear, the redemptions effected in connection with the Business Combination may be subject to the Excise Tax. The extent
to which we will be subject to the Excise Tax in connection with such redemptions will depend on a number of factors, including: (i) whether
the redemption is treated as a repurchase of