Fold Holdings, Inc. has completed the substantial restructuring of its balance sheet by eliminating its $66.3 million of convertible debt, which was made public on February 27, 2026. By doing so, Fold has eliminated an important source of potential dilution of its outstanding shares, simplified its capital structure and freed up 521 Bitcoins that had previously been held as collateral—thereby enabling Fold to expand rapidly within its ecosystem of Bitcoin-focused products. Fold’s innovative restructuring denotes a key strategic milestone in its mission to make Bitcoin accessible to consumers through consumer-oriented solutions such as loyalty/rewards products and estimates of future products or services. This will eliminate complex types of debt, reduce operational restrictions, and improve overall operational flexibility to assure investors that investor concerns resulting from its IPO due to overhang issues can be eliminated.<h2>Details of the Debt Retirement and Restructuring</h2>Fold has completed the cancellation of two convertible notes that totaled $66.3 million originally when issued: <ol><li data-list="bullet">1. A $46.3 million Secured Convertible Note dated March 2025 to SATS Credit Fund L.P., which was secured by 500 bitcoins as collateral.</li></ol> <ol><li data-list="bullet">2. An additional Senior Secured Investor Note dated December 2024 which is also secured by 521 bitcoins and contains covenants that restrict certain activities.</li></ol> A combination of new financing and cash from Bitcoin sales funded the retirement through a: $13 million one year senior unsecured promissory note, with SATS being the issuer, at an interest rate of ten percent; plus an issuance of 520,000 Common Shares as a form of commitment equity; and approximately $27.5 million which was raised from Bitcoin sale proceeds was used to retire the Investor's note. The transactions were all completed within the period of February 25 - 27, 2026.<h3>Key Benefits of the Transaction Include:</h3> <ol><li data-list="bullet">No Outstanding Convertible Notes: Fold is now free of convertible debt; therefore, it has eliminated restrictive covenants, consent requirements and execution friction associated with that debt, which should allow for increased growth and flexibility going forward.</li></ol> <ol><li data-list="bullet">Collaboration's 521 Bitcoins have been released out of collateral, meaning that it no longer prohibits the company from using those assets for operational expenses, like credit card reserves or a means to improve the company's ability to access financing more effectively in the future.</li></ol> <ol><li data-list="bullet">Reduction in Potential Dilution of Existing Shareholders: By extinguishing the debt, an estimated 8 million to 10 million (8,000,000 to 10,000, 000) shares of common stock have been removed from the fully diluted share count; thus these shares are not dilutive to existing shareholders.</li></ol> According to Wolfe Repass, CFO of Fold, “Our goal with retiring these convertible instruments is to create direct value for our shareholders through a stronger balance sheet, less total debt on the books, and more flexibility in pursuing new business opportunities. The elimination of these convertible notes will significantly simplify our existing capital structure and remove a large encumbrance from our overall business."<h2>How Convertible Debt Works and Why Retirement Matters</h2>Convertible notes are a hybrid of two different instruments; they have some characteristics of a debt instrument but have an equity option to convert at a potential discount or premium. This makes them useful tools for companies in need of financing to support their growth with additional flexible financing options. However, they come with risks associated with dilutive issuances to existing stakeholders if converted. Due to covenants on their notes, Fold faced many operational limitations, including borrowing and/or using assets. By using mainly non-dilutive alternatives to retire these notes while still issuing a new $13 million note and common stock, Fold was able to delete large amounts of debt from its balance sheet without needing to raise large amounts of equity capital.<h2>Simplification is very useful to a business focused on Bitcoin:</h2> <ol><li data-list="bullet">Treasury optimization: BTC that is no longer locked up can be utilized to execute the company's treasury strategy. Fold is actively accumulating and holding BTC as treasury.</li></ol> <ol><li data-list="bullet">Growth funding: Available assets increase capital reserves available for high-capital projects.</li></ol> <ol><li data-list="bullet">Investor confidence: Dilution overhang removal suggests maturity and alignment of interests between shareholders and the business.</li></ol> <h2>Background on Fold and Its Path to Public Markets</h2>Fold is a company that aims to create access to cryptocurrency by allowing users to earn bitcoin rewards through their everyday purchases using many different payment methods, including debit cards, gift cards, and online shopping integrations. For their treasury, Fold invests in bitcoin as a way to achieve an overall increase in value with this currency. On February 25, 2025 (four years after inception), Fold went public through a SPAC (special-purpose acquisition company) merger with FTAC Emerald Acquisition Corp., listing on Nasdaq (National Association of Securities Dealers Automated Quotations) under ticker FLD. Fold is one of the earliest bitcoin-native financial services companies to go public on a major exchange. The public listing created an opportunity for Fold to receive growth capital; however, Fold exited multiple legacy pre-public funding rounds resulting in added complexity to Fold’s financial position. Since the public listing, Fold has focused on innovation in the area of bitcoin rewards and expanding their position at the intersection of the decentralized finance (DeFi) world and the traditional financial world.<h2>The Role of Bitcoin in Fold’s Strategy</h2>At Fold, Bitcoin has two main functions: - Rewarding purchases: Customers earn satoshis (sats) when they make purchases. - Corporate treasury: Bitcoin acts as a value store, and a strategic asset for the company's treasury. The release of 521 BTC from the company's collaterals will allow it to take advantage of these functions by increasing the amount of capital available for warehouse financing (i.e. credit card programs), operational liquidity and opportunistic acquisitions of bitcoin. The ability to have access to this capital will create additional shareholder value if the price of bitcoin continues to increase.<h3>Plans for Product Expansion and Growth Initiatives</h3>Fold is now focused on building out its product offering with a cleaner balance sheet: Credit Card — A consumer credit card product that gives consumers BTC rewards rather than traditional cashback or points to acquire and engage users. Broader Ecosystem Tools — Enhancements to current earn, save, and spend functionality related to Bitcoin. The restructuring has removed any organizational impediments to these initiatives, allowing for aggressive investment into product development, marketing and infrastructure without the prior constraints of debt.<img src="https://jid.rerrkvifj.com/media/customer/creatorSystem/aea64e3b-fd37-45c5-9269-96c808c94e6d.jpeg">By Author<h2>Broader Implications for Bitcoin Financial Services Companies</h2>These moves demonstrate the emergence of a more disciplined approach by publicly traded Bitcoin companies:Maintaining balance sheet discipline through a focus on limpiness to clean up debt using volatile currencies as collateral. Shareholder alignment by reducing dilution in a sector of high sensitivity that has an excess amount of equity.Using strategic assets by using their BTC holdings as more than just a tool for collateral.The example of Fold's restructuring could serve as a model for other companies in the industry as the acceptance of bitcoin increases in traditional finance.<h2>What does this mean for Fold?</h2>The retirement of $66.3 million in convertible debt and the release of 521 Bitcoin from collateral, which gives Fold more flexibility with its balance sheet, are decisive moves in achieving sustainable growth. Eliminating dilution risk, restrictive covenants and financing friction have all positioned Fold to pursue its vision for Bitcoin rewards, including the much-anticipated Bitcoin credit card, aggressively. Fold, one of only a few publicly-listed 'pure-play' Bitcoin firms which provide financial services, will be able to leverage its stronger position to attract institutional investors and serve as a reference point for treasury and capital management at other Bitcoin financial service firms. The company will now be in a position to better leverage the expanding use of Bitcoin in everyday financial transactions due to its newfound flexibility and clarity in terms of direction.

Fold eliminates $66.3M convertible debt, unlocks 521 BTC from collateral, cuts dilution risk & boosts flexibility for Bitcoin rewards growth.

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