Company: FLDDW
Filing Date: 2025-04-11
Form Type: 424B3
Source: 0001213900-25-031004
Chunk: 135

Company: Fold Holdings, Inc.
Filing Date: 2025-04-11
Form: 424B3
Chunk 135
---
2 million for the year ended December 31, 2024. While still a small
part of our overall revenue in 2024, we expect custody and trading revenues to be an important growth driver for both volumes and revenues
going forward.

We launched our current custody and trading product
via a partnership with Fortress Trust LLC in Q4 2023. In 2024, we added BitGo Trust Company as a second Exchange Provider. Also during
2024 we expanded our trading product features by adding a comprehensive suite of purchase options including spot buys, dollar-cost averaging,
direct paycheck conversion, and round-ups. We also added the ability for customers to sell their bitcoin and added support for users from
new states (ex. Texas). In Q4 2024 we added the ability for users to deposit bitcoin into Fold to use as a funding method.

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 Debit Card and merchant offers. Banking and payments costs increased in relation to our increased merchant offer volumes as noted
above. Costs of sales from merchant offers increased 8% from $19.9 million for the year ended December 31, 2023 to $21.5 million for the
year ended December 31, 2024.

Excluding merchant offers, our banking and payments
costs decreased to $1.0 million for the year ended December 31, 2024 compared to $1.1 million for the year ended December 31, 2023.

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 2024 and 2023 costs included non-recurring set up fees related to onboarding with new bitcoin exchange providers.

While most of our custody and trading costs scale
in direct proportion to our volumes and revenues, some of our costs, such as monthly platform fees, are fixed and do not scale with volume.
Due to this cost structure, our margins on custody and trading are expected to increase over time with increased volumes.

Compensation and benefits

During the years ended December 31, 2024 and 2023,
we restructured our employee base by reducing certain positions, primarily operational and growth related roles, and by adding others