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Rewards app Fold has reached an agreement to merge with FTAC Emerald Acquisition Corp., a Nasdaq-listed special purpose acquisition company backed by Cohen Circle, in a move that would make Fold a publicly traded company.
Fold allows users to earn Bitcoin cashback on everyday purchases at retailers like Amazon, Uber, and Starbucks. It also offers a debit card that rewards Bitcoin for transactions, and users can spin a rewards wheel to earn additional Bitcoin. Integrated with the Bitcoin Lightning Network, Fold also includes features like recurring Bitcoin purchases, earning Bitcoin for bill payments like mortgages and rent, rounding up purchases to Bitcoin, and storing funds in an insurance account.
The transaction, which has been unanimously approved by the boards of directors of FTAC Emerald and Fold, is expected to close in the fourth quarter of 2024, pending regulatory and shareholder approvals. Upon closing, the newly combined company will continue to be listed on Nasdaq under a new ticker symbol that has not yet been announced, according to a statement Wednesday.
“This transaction represents an important step in Fold’s mission to expand access to premium Bitcoin financial services,” said Fold CEO Will Reeves. “Fold aims to make Bitcoin accessible to everyone through accessible, engaging, and useful Bitcoin products tailored to meet the needs of spenders, earners, and savers.”
Fold’s value is $365 million
Fold claims to have processed over $2 billion in transaction volume and distributed $45 million worth of bitcoin rewards to customers since its launch in 2019. The proposed deal would give Fold a pre-funding capital valuation of $365 million.
Following the transaction, Fold’s management team, led by Reeves, will continue to operate and manage Fold, and Reeves will be joined on the combined company’s board by FTAC Emerald President and CEO Brace Young, FTAC Emerald Director Andrew Hones, and Jonathan Kirkwood of Bitcoin venture capital firm Ten31.
Fold expects to have over 1,000 BTC ($66 million) on its consolidated balance sheet, with proceeds expected to be used to accelerate Fold’s operational growth and expand its treasury.
Existing Fold shareholders will be subject to a six-month lock-up period, subject to early release if the combined company’s stock price exceeds $12.00 per share for 20 of the 30 consecutive trading days, beginning at least 90 days after the closing of the transaction. Existing Fold shareholders are expected to own approximately 71% of the combined company’s outstanding shares.
“Going forward, Fold will continue to build on Bitcoin with a roadmap that envisions value-added credit, lending, and insurance solutions,” Reeves said. “Our products are designed to enhance savings and financial freedom for our community. Our business philosophy aligns Fold with the growth of Bitcoin through unique and accessible financial products designed by Bitcoin users for Bitcoin users.”
Fold and FTAC Emerald will host a joint investor conference call on Wednesday at 8:30 a.m. ET.
On Tuesday, Fold announced it would pay up to 1.5% cashback in bitcoin on ACH transfers.
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