Fold Holdings, Inc. to Be Acquired for $381.3M

At signing, the transaction implied a pre-money equity valuation for Fold of $365 million. FTAC Emerald's investor presentation, filed as Exhibit 99.1 to the July 24, 2024 Form 8-K, presented an illustrative transaction summary showing a pro forma enterprise value of $381.3 million (implied market capitalization of $493.8 million less $112.5 million of net cash/bitcoin), based on an assumed $10.72 per share price. These figures were explicitly labeled illustrative and subject to change based on actual redemption levels; no restated final valuation was disclosed in the closing 8-K. No EV/EBITDA, P/E, or price-to-tangible-book multiple was disclosed in any filing reviewed.

The deal was structured as an all-stock exchange. Under the Agreement and Plan of Merger, each share of Legacy Fold common stock was converted into the right to receive a number of shares of new Fold Holdings common stock equal to a defined exchange ratio; the closing 8-K states this exchange ratio equated to approximately 82.5% of a share of new common stock for each Legacy Fold share (including shares deemed issued on conversion of preferred stock and SAFEs). The merger agreement also contained a bitcoin-price-linked adjustment: if the 60-day volume-weighted average price of bitcoin as of the day before closing was at or above $90,000, the pre-money equity value was to be increased using a formula tied to Fold's bitcoin holdings, as described in the investor presentation footnotes.

At signing, the illustrative sources-and-uses schedule showed total sources of $410 million: $365 million of Fold rollover equity, $20 million of cash in trust (assuming 60% redemptions from approximately $50 million held in trust), and $25 million from a PIPE investment, assumed to be raised at the $10.72 estimated share price. Uses included $365 million of equity issued to Fold shareholders, $32.5 million of cash to the balance sheet, and $12.5 million of estimated transaction expenses. At signing, legacy Fold stockholders were expected to own approximately 71.2% of the combined company on a pro forma basis.

Actual closing-date mechanics differed from the signing-stage illustration. The closing 8-K discloses that holders of 3,304,183 shares of Emerald Class A common stock (all shares eligible for redemption from the IPO) properly exercised redemption rights, receiving a pro rata portion of the trust account calculated at approximately $11.07 per share, or $36,576,096 in the aggregate. Approximately $14,052,210 was paid from the trust account to cover transaction expenses incurred by Legacy Fold and Emerald, leaving a remaining trust balance of approximately $799,176 released to Fold for general corporate purposes. Following the closing, there were 46,138,876 shares of common stock issued and outstanding. Separately, pursuant to a December 2024 Securities Purchase Agreement, a note held by an existing investor was converted into a new Fold Initial Investor Note convertible into 1,739,130 shares of common stock, and Fold issued the investor warrants exercisable for 869,565 shares at $12.50 per share, 500,000 shares at $0.001 per share, and 869,565 shares at $11.50 per share, in exchange for existing Legacy Fold warrants.

Existing Fold stockholders agreed to a six-month lock-up on their shares, subject to early release if the combined company's stock price exceeds $12.00 per share for 20 trading days within any 30 consecutive trading day period ending at least 90 days after closing.

Strategic rationale was articulated by both companies' leadership at signing. Will Reeves, CEO of Fold, said the transaction "represents a significant step in Fold's mission to expand access to premium bitcoin financial services and empower individuals to achieve their dreams," adding that "Fold aims to make bitcoin available to everyone -- through accessible, engaging, and useful bitcoin products that are tailored to meet the needs of spenders, earners, and savers." Bracebridge (Brace) Young, Jr., President and CEO of FTAC Emerald, said, "We are excited to partner with Will and his team to bring Fold to the public markets. Fold has aligned its success with the success of its customers, democratizing wealth building with innovative bitcoin financial services while gaining a larger and larger wallet share as the preferred bitcoin savings tool." At closing, Reeves stated the company believes "being a public company better positions us to advance our vision of building a gateway to bitcoin-based financial services and expanding access to wealth creation for Fold's customers."

Fold, founded in 2019, was described in the July 2024 press release as having processed over $2 billion in aggregate transaction volume and distributed over $45 million in lifetime bitcoin rewards to customers since inception, with partnerships including Visa, BitGo, and Marqeta, and more than 1,000 bitcoin held in its corporate treasury both before and after the transaction.

Upon completion, Fold's management team led by Reeves continued to operate the combined company. The post-closing board added Brace Young (previously CEO of Mariner Investment Group and a Managing Director at Goldman Sachs), Andrew Hohns (an FTAC Emerald director and CEO of Newmarket Capital and its subsidiary Battery Finance, which focus on bitcoin-driven credit and specialty finance), and Jonathan Kirkwood (co-founder and Managing Partner of Ten31, a bitcoin venture capital and private equity platform), joining Reeves on the board.

Cohen & Company Capital Markets, a division of J.V.B. Financial Group, LLC, acted as exclusive financial advisor, capital markets advisor, and placement agent to Fold. Latham & Watkins LLP acted as legal advisor to Fold. Stevens & Lee PC acted as legal advisor to FTAC Emerald. No termination fee provision was identified in the Agreement and Plan of Merger; SPAC merger agreements of this type typically do not include a cash termination fee comparable to those found in corporate stock/cash mergers. The transaction was announced as unanimously approved by both companies' boards of directors. No Schedule 14A merger proxy (DEFM14A) was identified in Fold/Emerald's EDGAR filing history; the combined company instead registered the new shares via a Form S-4 registration statement (and amendments filed October 2024 through January 2025) that served as the proxy statement/prospectus for the stockholder vote, rather than a traditional merger proxy.