Katapult announces new credit facilities

Katapult Holdings, Inc. (NASDAQ:KPLT), a leading lease-to-own platform with a market capitalization of $36.75 million, has entered into a significant financial agreement, according to an 8-K filing with the Securities and Exchange Commission (SEC). InvestingPro data shows the company faces challenges with cash burn and short-term obligations exceeding liquid assets, making this refinancing particularly crucial. On June 12, 2025, Katapult SPV-1 LLC, along with Katapult Group, Inc., Katapult Holdings, Inc., Midtown Madison Management LLC, and other lenders, signed an Amended and Restated Loan and Security Agreement, which revises the existing credit arrangement from May 14, 2019.

The new agreement introduces an amended revolving credit facility, initially set at $110 million, with an advance rate that may incrementally increase to 99% by November 1, 2025. Additionally, the agreement provides for a term loan facility of approximately $32.65 million, continuing the existing term loans on a cashless basis. This refinancing comes as the company manages a total debt of $109.71 million and maintains a concerning current ratio of 0.62, according to recent InvestingPro data. The term loan has a maturity date of December 4, 2026, or September 1, 2025, if certain conditions are not met, including shareholder approval for the conversion of the term loan into common stock.

Under the new terms, the revolving facility bears interest at a SOFR-based rate plus 7% annually, with a 3% floor, while the term loan carries an 18% annual interest rate, accruing weekly as PIK interest. The agreement includes financial covenants such as minimum net origination levels and liquidity requirements and restricts the company’s ability to incur additional debt, pay dividends, or engage in certain transactions without consent.

In connection with the refinancing, Katapult issued warrants to entities affiliated with Blue Owl Capital Inc. These warrants allow the purchase of up to 486,264 shares of common stock at $0.01 per share until June 12, 2032. The exercise of these warrants is subject to several conditions detailed in the agreement.

The company also disclosed that it is supplementing its risk factors in light of the refinancing transaction. Shareholder approval will be sought for the issuance of equity securities related to the refinancing, and a proxy statement will be filed with the SEC.

This news is based on the SEC filing and does not include subjective assessments or predictions. The financial restructuring aims to strengthen Katapult’s financial position and support its strategic goals, particularly important given the company’s revenue of $254.08 million in the last twelve months and 9.72% revenue growth. According to InvestingPro analysis, the stock currently appears undervalued, though investors should note that analysts do not anticipate profitability this year. For deeper insights into Katapult’s financial health and growth prospects, including 13 additional ProTips and comprehensive valuation metrics, check out the full InvestingPro Research Report.

In other recent news, Katapult Holdings reported significant financial growth for the first quarter of 2025, with revenue increasing by 10.6% to $71.9 million and gross originations rising 15.4% year-over-year to $64.2 million. Despite these positive results, the company is navigating complex financial negotiations as it seeks to extend the maturity date of its existing credit agreement to June 9, 2025. Katapult is actively negotiating with lenders to secure a comprehensive maturity extension amendment, though there is no guarantee of favorable terms. Furthermore, Katapult held its annual shareholder meeting where several proposals were approved, including the election of Mr. Chris Masto as a Class I Director and the ratification of Grant Thornton LLP as the company’s independent auditor. In terms of strategic partnerships, Katapult has expanded its KPay-enabled merchant network by adding major retailers like Ashley Furniture and Bed Bath and Beyond. These developments underscore Katapult’s efforts to align its financial obligations with its operational strategy, while continuing to drive growth through strategic partnerships and increased consumer engagement.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.