Katapult Holdings, Inc. Form 8-K Summary
Business Context and Reporting Period
Katapult Holdings, Inc. filed this Current Report on Form 8-K on December 17, 2021, reporting an agreement executed on December 15, 2021. The filing concerns the Twelfth Amendment to the company’s existing Loan and Security Agreement and revolving credit facility. No quarterly or annual operating results are reported.
Financial Metrics, Debt, and Liquidity
- The amendment applies to the revolving credit facility borrowed by Katapult SPV-1 LLC and guaranteed by Katapult Holdings, Inc. and Katapult Group, Inc.
- The minimum liquidity covenant was increased to $50.0 million.
- Liquidity was revised to include cash equivalents as defined in the Credit Agreement.
- The amendment did not change applicable funding costs or the maturity date of the revolving credit facility.
- The filing does not provide current revenue, profit, cash flow, margin, outstanding debt, borrowing capacity, or actual liquidity balances.
Material Changes Versus Prior Terms
- The TTM Adjusted EBITDA covenant was revised to require at least $(15.0) million through June 30, 2023; $0.00 from July 1, 2023 through December 31, 2023; and $20.0 million thereafter.
- The Total Advance Rate covenant thresholds were changed to 140% through December 31, 2022; 130% from January 1, 2023 through December 31, 2023; and 120% thereafter.
- The borrower may cure a Total Advance Rate covenant deficiency on no more than two occasions by depositing cash into an account controlled by the agent.
Outlook, Commentary, Risks, and Unusual Items
Management stated that the amendment provides financial flexibility to support investment in growth initiatives and pursue the company’s addressable market opportunity.
The revised covenants may provide additional near-term flexibility, but the increased minimum liquidity requirement and future Adjusted EBITDA thresholds remain important compliance conditions. Failure to satisfy the covenants or other credit agreement terms could have consequences under the revolving credit facility. The filing does not describe any default, waiver of an existing default, or current covenant breach.
Important Facts for Investors to Verify
- Review Exhibit 10.1 for the complete terms of the Twelfth Amendment, including any provisions not summarized in the filing.
- Verify the company’s actual liquidity, cash equivalents, borrowings, and availability under the revolving credit facility.
- Assess compliance with the revised Adjusted EBITDA, minimum liquidity, and Total Advance Rate covenants.
- Confirm the facility’s unchanged maturity date and funding costs in the underlying Credit Agreement.
- Review subsequent filings for covenant performance, additional amendments, defaults, or changes in financing arrangements.