Fold Holdings, Inc.

Evaluation of Disclosure Controls and Procedures

Our management, under the supervision and with the participation of our principal executive officer (our Chief Executive Officer) and our principal financial officer (our Chief Financial Officer), evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of December 31, 2025. Based on that evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that, as a result of the material weakness in our internal control over financial reporting described below, the design and operation of our disclosure controls and procedures were not effective as of December 31, 2025.

Management’s Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and 15(d)-15(f) under the Exchange Act) to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Our management, under the supervision of our Chief Executive Officer and Chief Financial Officer, assessed the effectiveness of our internal control over financial reporting under the framework promulgated by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Financial Reporting (2013). Based on this assessment, our Chief Executive Officer and our Chief Financial Officer concluded that, as a result of the material weakness described below, that our internal control over financial reporting was not effective as of December 31, 2025. As an emerging growth company, we are not required to obtain, and have not obtained, an attestation report on our internal control over financial reporting from our independent registered public accounting firm. Accordingly, CBIZ CPAs P.C., our independent registered public accounting firm, has not audited and does not express an opinion on the effectiveness of our internal control over financial reporting as of December 31, 2025.

Material Weakness

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. The following material weakness in our internal control over financial reporting exist as of December 31, 2025:

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We did not design or operate effective controls surrounding our complex debt and equity transactions.

We have begun the process of, and are focused on, designing and implementing effective internal controls measures to improve our internal control over financial reporting and remediate the material weakness. Our remediation efforts include several actions:

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We have engaged consultants to provide additional depth and breadth in our technical accounting and financial reporting capabilities, including reviews of complex debt and equity transactions.

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We have engaged consultants to assist with reviewing our internal controls over financial reporting controls to address gaps in the design and operating effectiveness of our internal controls, including controls specific to management's review of work performed by third party consultants.

The actions that we are taking are subject to ongoing senior management review, as well as oversight of the audit committee of our Board. We also may conclude that additional measures may be required to remediate the material weakness or determine to modify the remediation plans described above. We will not be able to conclude that we have remediated the material weakness until the applicable controls are fully implemented and operate for a sufficient period of time and management has concluded, through formal testing, that these controls are operating effectively. We will continue to monitor the design and effectiveness of these and other processes, procedures, and controls and make any further changes management deems appropriate.

Remediation of Previously Reported Material Weaknesses

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements would not be prevented or detected on a timely basis.

As previously disclosed in Part I, Item 4. "Controls and Procedures" of our Quarterly Reports on Form 10-Q for the quarterly periods ended March 31, 2025, June 30, 2025, and September 30, 2025, management concluded that the following material weaknesses existed in the Company's internal control over financial reporting: (i) we had not formally documented a top-down risk assessment related to the design, implementation, and operating effectiveness of our business cycle related to controls over financial reporting; and (ii) we had not designed or operated effective controls surrounding its financial reporting to ensure accurate disclosures are filed with the SEC.

Subsequently, management completed the following remedial actions:

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Engaged external consultants with technical accounting and financial reporting expertise to provide additional depth and breadth in the Company's financial reporting capabilities, including the review of financial statement disclosures filed with the SEC.

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Engaged external consultants to assist with the financial statement closing process and to implement appropriate segregation of duties among accounting personnel to enable adequate review controls.

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Engaged external consultants to assess the Company's internal controls over financial reporting and IT general controls, and to assist in the design and implementation of a formal top-down risk assessment framework to identify, monitor, and test controls across the Company's financial reporting processes.

As a result of these actions, and based on the results of management's evaluation confirming the effective design, implementation, and operating effectiveness of the remediated controls over a sufficient period of time, the Company concluded that, as of December 31, 2025, the material weaknesses previously disclosed in the Quarterly Reports on Form 10-Q for the quarterly periods ended March 31, 2025, June 30, 2025, and September 30, 2025, have been remediated.

Changes in Internal Controls Over Financial Reporting

Other than the ongoing remediation efforts described above, and the actions taken to remediate the previously reported material weaknesses, there were no changes to our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the most recently completed fiscal year that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations on the Effectiveness of Controls

The effectiveness of any system of internal control over financial reporting, including ours, is subject to inherent limitations, including the exercise of judgment in designing, implementing, operating, and evaluating the controls and procedures, and the inability to eliminate misconduct completely. Accordingly, in designing and evaluating the disclosure controls and procedures, management recognizes that any system of internal control over financial reporting, including ours, no matter how well designed and operated, can only provide reasonable, not absolute assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs. Moreover, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. We intend to continue to monitor and upgrade our internal controls as necessary or appropriate for our business but cannot assure you that such improvements will be sufficient to provide us with effective internal control over financial reporting.