Company: FLDDW
Filing Date: 2025-05-15
Form Type: 424B3
Source: 0000950170-25-072851
Chunk: 22

Company: Fold Holdings, Inc.
Filing Date: 2025-05-15
Form: 424B3
Chunk 22
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 Note is secured by Fold’s assets as collateral, including 300 bitcoin held within Fold’s digital asset Investment Treasury. The Company has included the net balance of the December 2024 Initial Investor Note within non-current liabilities, as the maturity date was extended from 10 months to 36 months due to the Public Company Date. The Company has accounted for the December 2024 Initial Investor Note and the Investor Warrants using the relative fair value allocation method on the date of issuance. The estimated fair values of the December 2024 Initial Investor Note and Investor Warrants were calculated under a Black-Scholes model utilizing the enterprise valuation of Fold's common shares as of the issuance date. The Company has elected not to subsequently remeasure the convertible note. Further, the Company concluded that the Investor’s right to acquire the Additional Investor Note is separately exercisable from the December 2024 Initial Investor Note and the Investor Warrants. Each of the Investor Notes will be sold at an original issue discount of 5%. The Company recorded interest expense under the December 2024 Initial Investor Note based on a stated interest rate of 12% per annum, as well as the amortization of the debt discount and debt issuance costs, which the Company computed using the effective interest method. The debt discount represents the 5% original issue discount, as well as the bifurcation of the value ascribed to the Investor Warrants on a relative fair value basis, after separately valuing the warrants and the December 2024 Initial Investor Note.

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Fold Holdings, Inc.

Notes to Unaudited Condensed Financial Statements</div>

Total interest expense recognized related to the December 2024 Initial Investor Note for the three months ended March 31, 2025 was $1.1 million, comprised of an accrual of contractual interest expense of $0.6 million and $0.5 million of amortization of the debt discount and debt issuance costs. Interest is calculated on the basis of a 360-day year and is payable quarterly starting March 31, 2025, in cash or paid-in-kind and capitalized to the loan balance (“PIK”) until the Public Company Date. Subsequent to that date, interest is payable in cash or shares (or a combination thereof). Interest expense on the December 2024 Initial Investor Note commenced accruing on the date of issuance. The December 2024 Initial Investor Note, plus accrued and unpaid interest, is convertible at any time, at the Investor’s option, into shares