Sequans sells 1,200 BTC, wipes out convertible debt

Sequans Communications sold roughly 1,200 bitcoin during the second quarter, reducing its holdings from 1,514 BTC at March 31 to 314 BTC at June 30. The company used sale proceeds to fully redeem outstanding convertible debt and to increase cash and cash equivalents to $21 million from $10.6 million.

The company agreed in February to redeem $94.5 million principal of convertible debt by June 1. The filing showed 1,114 BTC on April 30, including 817 coins pledged as collateral against about $35.9 million of debt. On May 28 Sequans disclosed it had completed the redemption using bitcoin sales and held roughly 658 BTC at that time, all unrestricted; the position fell further to 314 BTC by quarter end.

Sequans valued the remaining 314 BTC at $18.4 million and reported they were unrestricted and available for sale as of June 30. The June 30 snapshot was included in the company’s August financial release, which did not provide a later holdings update.

For the quarter the company recorded a $5.3 million realized net gain on bitcoin sales and a $3 million unrealized impairment on the remaining investment. The filing reported preliminary, unaudited second-quarter revenue of $7.5 million and a net loss of $9.8 million. The accounting for the period separates the effects of the bitcoin disposals from operating results.

Convertible debt fell to zero by June 30. The remaining coins were no longer pledged as collateral and are available to monetize for additional balance-sheet liquidity.