Company: FLDDW
Filing Date: 2025-04-11
Form Type: 424B3
Source: 0001213900-25-031004
Chunk: 131

Company: Fold Holdings, Inc.
Filing Date: 2025-04-11
Form: 424B3
Chunk 131
---
olumes.

Compensation and benefits expenses

Compensation and benefits expenses primarily consist
of salaries and wages, employee insurance expenses, and other payroll benefits related to full time employees.

Marketing expenses

A significant portion of marketing expense is
related to rewards earned for the purposes of marketing, growth, or retention under the Fold Rewards Program (the “Marketing Rewards”).
The Company accrues Marketing Rewards within ‘Customer rewards liability’ in our accompanying balance sheets at the time the
Marketing Reward is earned, with the corresponding expense recorded within marketing expenses in our statements of operations. The liability
is initially recorded at the fair value of the bitcoin earned upon the action by the user and subsequently marked to fair value, with
gains and losses on this liability recorded within ‘Gain (Loss) on customer rewards liability’ in our accompanying statements of operations.
The liability is derecognized when the reward is claimed by the user and delivered to the user’s external bitcoin wallet.

Per the terms and conditions of the Fold Rewards
Program, rewards are subject to adjustment for chargebacks, returns, refunds, or other circumstances. In addition, rewards are subject
to expiry if users fail to maintain an active account for more than twelve consecutive months. The Company estimates the amount of rewards
that will expire based on historical data, current user trends, and other factors and accrues for those amounts in the period those rewards
were earned. These accruals are accounted for as a contra-expense within marketing expense for Marketing Rewards.

The other portion of marketing expense primarily
relates to advertising and other promotional expenses.

Professional fees

Professional fees consist primarily of expenses
related to fees paid for services, including legal, tax, accounting, and audit services.

Gain (loss) on customer rewards liability

Gain (loss) on customer rewards liability includes
components of unrealized gains (losses) resulting from the remeasurement in fair value of Revenue Rewards and Marketing Rewards denominated
in bitcoin in the current reporting period, as well as realized gains (losses) that occur upon the fulfillment of Rewards. Management
has determined that gains or losses on digital assets held for purposes of fulfilling Rewards are related to its core operations, and
therefore classifies all gains and losses on the remeasurement of this liability as an operating income or expense in its financial statements.

Gain (loss) on digital assets - rewards treasury

Gain (loss) on digital assets - rewards treasury
includes components of unrealized gains (losses) resulting from the remeasurement in fair