Company: FLDDW
Filing Date: 2025-04-11
Form Type: 424B3
Source: 0001213900-25-031004
Chunk: 236

Company: Fold Holdings, Inc.
Filing Date: 2025-04-11
Form: 424B3
Chunk 236
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3, the Company recorded a loss of $5.2 million and a loss of $4.3 million,
respectively, on the remeasurement of this liability. For more detail on the fair value measurement of this derivative instrument, refer
to Note 14.

Preferred stock

The Company’s preferred shares are assessed
at issuance for classification as liability or equity and embedded features requiring bifurcation. The Company presents outside of permanent
equity any preferred stock which (i) the Company undertakes to redeem at a fixed or determinable price on the fixed or determinable date
or dates, whether by operation of a sinking fund or otherwise; (ii) is redeemable at the option of the holders; or (iii) has conditions
for redemption that are not solely within the control of the issuer and for which all of the holders of equally and more subordinated
equity instruments of the Company would not always be entitled to also receive the same form of consideration (for example, cash or shares)
upon the occurrence of the event that gives rise to the redemption.

Simple Agreements for Future Equity (“SAFEs”)

The Company has issued certain SAFEs that grant
investors rights to participate in a future equity financing. These SAFE notes are agreements that provide investors with rights to acquire
certain shares upon execution of an Equity Financing or Liquidity Event. An Equity Financing is defined within these agreements as a bona
fide transaction or series of transactions with the principal purpose of raising capital, pursuant to which the Company issues and sells
Preferred Stock at a fixed valuation, including but not limited to, a pre-money or post-money valuation. A Liquidity Event is defined
within these agreements as Change of Control, a Direct Listing or an Initial Public Offering. The number of shares deliverable upon an
Equity Financing or Liquidity Event is determined based on the specific terms of the SAFE notes.

The Company’s SAFEs are recorded as a liability
in the accompanying balance sheets and the Company records subsequent remeasurements in “Changes in fair value of SAFEs” in
the statements of operations. In determining that these SAFE notes represent a liability, the Company’s accounting analysis considered
the guidance in ASC 480 to distinguish liabilities from equity.

The SAFE notes are not a legal form share or a
legal form debt instrument, as they do not have a stated maturity, stated coupon rate, or typical creditor rights, but are instead contracts
that require Fold to settle the instrument by issuing a variable number of its equity