8-K/A: Fold Holdings Secures $45M Bitcoin-Backed Credit Facility

Fold Holdings, Inc. has secured a revolving credit facility of up to $45 million, collateralized by bitcoin, to support working capital and general corporate purposes.

Summary

• Fold, Inc., a wholly owned subsidiary of Fold Holdings, Inc., entered into a Master Loan Agreement (MLA) with Two Prime Lending Limited on October 1, 2025.
• The MLA establishes a revolving credit facility (the Facility) allowing the Borrower to request advances of funds up to an aggregate principal amount of $45,000,000.
• Loans under the Facility bear interest at a rate of 6.5% per annum, accruing daily on a 360-day year basis and payable in USD.
• The first advance under the first Loan Term Sheet will mature on October 1, 2026.
• The Borrower may prepay any outstanding amounts, in whole or in part, without premium or penalty, at any time prior to the Maturity Date.
• The company expects to use any borrowed amounts for working capital and general corporate purposes, emphasizing its non-dilutive nature and preservation of bitcoin treasury optionality.
• The Borrower's obligations are secured by a portion of its bitcoin holdings, with an Initial Collateral Level of 250% for the first advance.
• A triparty Account Control Agreement (ACA) with BitGo Trust Company, Inc. as custodian governs the custody and control of the bitcoin collateral.
• If the collateralization ratio falls below 175% (Collateral Call Level), Two Prime can require additional collateral. If it falls below 150% (Liquidation Level), an automatic event of default is triggered, allowing Two Prime to liquidate collateral without prior notice.
• If the collateralization ratio exceeds 345% (Collateral Refund Level), the Borrower may request the return of excess collateral.
• The 8-K/A filing is an amendment to the original 8-K filed on October 1, 2025, solely to add the signing officer's signature, which was inadvertently omitted.

Sentiment

Score: 7

Explanation: The sentiment is positive due to securing a substantial non-dilutive credit facility for growth and working capital, which preserves equity and offers flexibility with bitcoin holdings. However, the inherent volatility of bitcoin collateral and the associated liquidation risks temper the score slightly.

Positives

• Secured a substantial revolving credit facility of up to $45,000,000, providing significant liquidity.
• The capital is non-dilutive, meaning it does not involve issuing new shares and thus avoids shareholder dilution.
• Preserves optionality with regard to managing its bitcoin treasury, allowing the company to retain its bitcoin holdings while accessing USD liquidity.
• The Borrower has a prepayment option, allowing repayment of loans without premium or penalty, offering financial flexibility.
• The Lender (Two Prime) cannot lend, invest, re-pledge, rehypothecate, or otherwise use or encumber the collateral, ensuring the security of the bitcoin assets.

Negatives

• The initial collateral level for the first advance is high at 250%, requiring a significant portion of bitcoin holdings to secure the loan.
• A rapid decrease in bitcoin value could trigger margin calls (below 175% collateral level) or automatic liquidation (below 150% collateral level) without prior notice.
• Late fees of 5.0% per annum apply to unpaid sums, which can quickly increase the cost of borrowing if payments are missed.
• Two Prime Lending Limited has sole and absolute discretion to extend or decline advances, which could limit the company's access to funds when needed.
• The Borrower does not control the order, manner, or price of sale if collateral is liquidated by the Lender upon an event of default.

Risks

• **Bitcoin Price Volatility:** Significant fluctuations in the price of bitcoin could lead to the collateralization ratio falling below the Collateral Call Level (175%) or Liquidation Level (150%), triggering margin calls or automatic liquidation of collateral.
• **Regulatory or Liquidity Risk of Digital Assets:** Two Prime has the right to require prepayment of the loan if it determines there is any regulatory or liquidity risk related to the digital assets provided as collateral, or litigation against the issuer.
• **Liquidation Risk:** If the Collateral Level falls below 150%, an automatic event of default is triggered, and Two Prime can instruct the Custodian to liquidate collateral without prior notice to the Borrower, potentially at unfavorable prices.
• **Default Events:** Various events, including failure to repay loans, failure to pay fees, or insolvency, can trigger an Event of Default, leading to acceleration of the loan and liquidation of collateral.
• **Counterparty Risk:** Reliance on Two Prime Lending Limited for discretion in extending advances and BitGo Trust Company, Inc. as custodian introduces counterparty risk.

Future Outlook

The company expects to use borrowed amounts from the facility for working capital and general corporate purposes, aiming to support growth with non-dilutive capital and maintain flexibility with its bitcoin treasury.

Management Comments

• Will Reeves, Chief Executive Officer, signed the amended report, indicating formal approval of the Master Loan Agreement.

Industry Context

This agreement reflects a growing trend of companies leveraging digital assets, specifically bitcoin, as collateral for traditional financing, providing non-dilutive capital in a volatile market. It allows Fold Holdings to access liquidity without selling its bitcoin holdings, a strategy increasingly adopted by crypto-native businesses seeking to manage their balance sheets and fund operations while retaining exposure to digital asset appreciation.

Comparison to Industry Standards

• NA The filing does not provide specific comparable companies, projects, or results to assess against global benchmarks. However, the use of bitcoin as collateral for a credit facility is a common practice among companies with significant digital asset holdings in the cryptocurrency and blockchain industry.

Stakeholder Impact

• **Shareholders:** Benefit from non-dilutive capital for growth, which avoids dilution of ownership and potentially enhances long-term value. The preservation of bitcoin treasury optionality also aligns with potential upside from bitcoin price appreciation.
• **Creditors (Two Prime Lending):** Gain a first-priority security interest in the company's bitcoin collateral, providing a strong assurance for the loan. The structured collateral levels and liquidation rights protect their investment.
• **Employees:** May benefit from enhanced company stability and growth prospects as the credit facility provides capital for operational needs and strategic initiatives.

Next Steps

• The Borrower may, from time to time, request advances of funds under the Facility by entering into individually executed loan term sheets with Two Prime Lending Limited.
• The Borrower will make interest payments in USD and repay the principal amount of loans by their respective maturity dates, with the first advance maturing on October 1, 2026.
• The company will continue to manage its bitcoin collateral levels to avoid margin calls or liquidation events.

Key Dates

Recommendation

The securing of a $45 million non-dilutive credit facility, backed by bitcoin, provides Fold Holdings with significant liquidity for working capital and growth initiatives. This strategic move preserves equity and offers flexibility in managing its bitcoin treasury, which is a strong positive for future operations and shareholder value. While the inherent volatility of bitcoin collateral introduces risk, the structured collateral levels and prepayment options mitigate some of this exposure, making it an attractive financing option for growth. This access to capital should support the company's strategic objectives and operational stability.

Keywords

Fold Holdings, Bitcoin, Credit Facility, Digital Assets, Revolving Credit, Non-Dilutive Capital, SEC Filing, 8-K, Corporate Finance, Collateralized Loan, Two Prime Lending, BitGo Trust