Fold sells 832 BTC to clear debt, weighs 1-for-50 reverse split

Fold sold 832 BTC to repay debt, cutting its treasury to 194 BTC as it weighs a reverse split for Nasdaq compliance.

The company's Aug. 11 quarterly filing with the SEC shows it held 194 BTC worth $11.4 million in its investment treasury as of June 30, after selling 832 BTC during the six months ended June 30. A separate rewards treasury held 77 BTC worth $4.5 million, though that balance was matched to a Bitcoin-denominated customer rewards liability.

Fold sold 200 BTC for $14.4 million in February and 632 BTC for $44.7 million in June. It used $20 million of the June proceeds to repay its Bitcoin-backed credit facility and retained the remaining $24.7 million as cash. The company reported $28.4 million in cash and cash equivalents at June 30, alongside a $15.6 million operating loss for the first half. It also raised $7.5 million by selling about 5.82 million shares under its equity facility.

Nasdaq notified Fold on July 14 that its shares had closed below the $1 minimum for 30 consecutive business days, giving the company an initial cure period through Jan. 11, 2027. Fold is seeking shareholder authority for a reverse split ranging from 1-for-2 to 1-for-50, which could address the bid-price rule without raising cash or consuming Bitcoin. However, an actual failure to maintain its Nasdaq listing would constitute an event of default on its $13 million investor note.

Debt cleanup left a smaller treasury

The reverse split is a compliance tool, not a funding solution. It would lift Fold's nominal share price without raising cash, issuing new shares, or consuming Bitcoin. But it would not pay operating expenses. The company has not said how it would cover future cash needs without returning to stock sales or using more of the investment treasury.

The 500 BTC returned to an investor when an earlier note was extinguished was separate from the 832 BTC sold during the half and did not generate sale proceeds.

Fold's situation mirrors broader stress in the Bitcoin treasury sector. Eric Trump's American Bitcoin recently forced a 1-for-15 reverse split to avoid Nasdaq delisting while holding roughly 8,000 BTC. Strategy maintains a $4.6 billion cash buffer that gives it nearly three years before Bitcoin sales create real stress, while Twenty One's $2.8 billion Bitcoin pile is worth far more than its stock but carries nearly $487 million of convertible debt.

To regain compliance, Fold's shares must close at or above $1 for at least 10 consecutive business days, or longer if Nasdaq requires. The company may qualify for another 180-day period if it meets the exchange's other conditions.

Fold could restore compliance without selling Bitcoin or raising equity if its stock recovers or a reverse split takes effect. What remains unanswered is how the company will fund continuing operations while protecting the 194 BTC it reported in its investment treasury as of June 30.

This article is for informational purposes only and does not constitute investment advice.