Company: FLDDW
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0000950170-25-072818
Chunk: 2

Company: Fold Holdings, Inc.
Filing Date: 2025-05-15
Form: 10-Q
Item: Item 4
Chunk 2
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Limitations on Effectiveness of Controls and Procedures

In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our principal executive officer and our principal financial officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of March 31, 2025. Based on that evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that, as a result of the material weaknesses in our internal control over financial reporting described below, the design and operation of our disclosure controls and procedures were not effective as of March 31, 2025.

Material Weaknesses

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. The following material weaknesses in our internal control over financial reporting exist as of March 31, 2025:

•We did not formally document a top-down risk assessment related to the design, implementation, and operating effectiveness of our business cycle related to internal control over financial reporting.

•We did not design or operate effective controls surrounding our financial reporting to ensure accurate disclosures are filed with the SEC.

We have begun the process of, and are focused on, designing and implementing effective internal controls measures to improve our internal control over financial reporting and remediate these material weaknesses. Our efforts include several actions:

•We have engaged consultants to provide additional depth and breadth in our technical accounting and financial reporting capabilities.

•We have engaged consultants to assist with the financial statement closing process and segregating duties among accounting personnel to enable adequate review controls.

The actions that we are taking are subject to ongoing senior management review, as well as oversight of the audit committee of our Board. We also may conclude that additional measures may be required to remediate the material weaknesses or determine to modify the remediation plans described above. We will not be able to conclude that we have remediated the material weaknesses until the applicable controls are fully implemented and operate for a