Fold Holdings, Inc. 8-K

What Happened

• Fold Holdings, Inc. filed an 8-K (Feb 27, 2026) announcing a financing and related debt extinguishments. On Feb 25–26, 2026 the company sold a $13.0 million senior unsecured promissory note (the "New Note") and 520,000 common shares to SATS Credit Fund L.P. (SATS), closing Feb 26, 2026. The New Note is a one‑year note at 10.0% interest, payable monthly, and is prepayable without penalty; it can be renewed for one year by mutual consent if the company issues an additional 520,000 shares.
• Contemporaneously, Fold returned 500 bitcoin that had secured a March 2025 secured convertible note (the "March 2025 Note"). The March 2025 Note (face ~ $46.3M, 7% interest, convertible into up to 3.7M shares at $12.50) was extinguished by mutual consent on Feb 26, 2026 with no penalties. On Feb 27, 2026 the company also paid off and terminated an Investor Note (dated Dec 24, 2024) by paying approximately $27.5M in cash ( ~$20M principal + $7.5M contractual multiple); that Investor Note had been secured by bitcoin holdings.

Key Details

• New financing: $13.0M promissory note to SATS + 520,000 Initial Commitment Shares; 1‑year term, 10.0% interest, monthly payments; prepayable anytime without penalty.
• Triggered prepayment tied to bitcoin price: at $45k, $40k, $37k per BTC SATS may require prepayment of up to 25%, 50% and 100% of principal, respectively.
• March 2025 Note extinguished (face ~ $46.3M; convertible into up to 3.7M shares at $12.50); 500 BTC collateral returned to SATS before extinguishment.
• Investor Note extinguished for ~$27.5M cash; that note had been secured by 300 BTC plus 221 BTC reserve. Company used proceeds from the SATS transaction and bitcoin sales to pay it off.
• Related party: SATS is managed by Ten 31, LLC, an affiliate of Fold’s lead director Jonathan Kirkwood; the company’s audit committee approved the transactions.

Why It Matters

• Capital structure and dilution: extinguishing the March 2025 convertible note eliminates a potential conversion of up to 3.7 million shares at $12.50, reducing near‑term dilution risk from that instrument. However, the New Note required issuance of 520,000 shares today and could require another 520,000 shares to renew, so shareholders should watch for share issuance tied to refinancing.
• Liquidity and balance sheet effects: the company paid roughly $27.5M in cash to retire the Investor Note, funded by the SATS financing and sale of bitcoin collateral—this changes Fold’s cash and bitcoin holdings and shifts indebtedness from larger, secured convertible debt to a smaller, short‑term unsecured note.
• Short maturity and refinancing risk: the New Note matures in one year (renewable by mutual consent), so investors should monitor the company’s plan to repay or refinance in 2027; triggers tied to BTC price could accelerate repayments if bitcoin rises.
• Related‑party oversight: because SATS is affiliated with a company director, the audit committee approved the transactions; retail investors may want to note the governance disclosure.