Company: FLDDW
Filing Date: 2025-04-01
Form Type: S-1
Source: 0001213900-25-026537
Chunk: 252

Company: Fold Holdings, Inc.
Filing Date: 2025-04-01
Form: S-1
Chunk 252
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, in an orderly transaction between market participants at the measurement
date. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy gives
the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the
lowest priority to unobservable inputs (Level 3 measurements). The Company’s financial instruments are classified as either Level
1, Level 2 or Level 3. These tiers include:

| ● | Level 1,                                                                                                     
 defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets; |

| ● | Level 2,                                                                                                                             
 defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices 
 for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and  |

| ● | Level 3,                                                                                                                                    
 defined as unobservable inputs for which little or no market data exists, therefore requiring an entity to develop its own assumptions,     
 such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. |

Warrant Classification

The Company accounts for the warrants issued in
connection with the Public Offering and the Private Placement in accordance with the guidance contained in ASC 815-40 under which the
warrants meet the criteria for equity treatment and are recorded as equity.

Income Taxes

The Company accounts for income taxes under ASC
740, “Income Taxes.” ASC 740, Income Taxes, requires the recognition of deferred tax assets and liabilities for both the expected
impact of differences between the financial statements and tax basis of assets and liabilities and for the expected future tax benefit
to be derived from tax loss and tax credit carry forwards. ASC 740 additionally requires a valuation allowance to be established when
it is more likely than not that all or a portion of deferred tax assets will not be realized. As of December 31, 2024 and 2023, the Company’s
deferred tax assets had a full valuation allowance recorded against it. The Company’s effective tax rate was % and % for
the years ended December 31, 2024 and 2023, respectively. The effective tax rate differs from the statutory tax rate of % for the years
ended December 31, 2024 and 2023, due to changes in the valuation allowance on the deferred tax assets and merger and acquisition expenses.

ASC