kplt-20240630

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


x			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2024


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 001-39116

Katapult Holdings, Inc.

(Exact name of registrant as specified in its charter)


Delaware						84-2704291
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

5360 Legacy Drive, Building 2 Plano, TX						75024
(Address of Principal Executive Offices)						(Zip Code)

(833) 528-2785

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.0001 per share	KPLT	The Nasdaq Stock Market LLC
Redeemable Warrants	KPLTW	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	x	Smaller reporting company	x
		Emerging growth company	x

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

The number of shares of the registrant’s common stock outstanding as of August 12, 2024: 4,168,919.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (“Form 10-Q”) contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that involve substantial risks and uncertainties. All statements other than statements of historical fact contained in this report, including statements regarding our opportunity, our future results of operations and financial condition, business strategy, and plans and objectives of management for future operations, are forward-looking statements. In some cases, forward-looking statements may be identified by words such as “anticipate,” “assume” “believe,” “continue,” “could,” “design,” “estimate,” “expect,” “intend,” “may,” “plan,” “potentially,” “predict,” “should,” “will,” “would,” or the negative of these terms or other similar expressions. The forward-looking statements in this Quarterly Report on Form 10-Q are only predictions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. These statements involve known and unknown risks, including risks described in the section titled “Risk Factors” and elsewhere in this Form 10-Q, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward looking statements. Moreover, we operate in a very competitive and rapidly changing environment. New risk factors emerge from time to time, and it is not possible for our management to predict all risk factors nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ from those contained in, or implied by, any forward-looking statements. These forward-looking statements include, but are not limited to, statements concerning the following:

•executing on our business strategy, including launching new product offerings, new brand and expanding information and technology capabilities;

•our ability to refinance our indebtedness;

•our market opportunity and our ability to acquire and retain new merchants and customers and retain existing merchants and customers;

•customer adoption and continued growth of our mobile app featuring Katapult Pay;

•the timing and impact of our growth initiatives on our future financial performance and the impact of our brand strategy;

•anticipating the occurrence and timing of prime lending tightening and impact on our results of operations;

•general economic conditions in the markets where we operate, the cyclical nature of consumer spending, and seasonal sales and spending patterns of customers;

•factors affecting consumer spending that are not under our control, including, among others, levels of employment, disposable consumer income, inflation, prevailing interest rates, consumer debt and availability of credit, pandemics (such as COVID-19), consumer confidence in future economic conditions, political conditions, and consumer perceptions of personal well-being and security and willingness and ability of consumers to pay for the goods they lease through us when due;

•risks relating to uncertainty of our estimates of market opportunity and forecasts of market growth, including the home furnishings and retail environment;

•risks related to the concentration of a significant portion of our transaction volume with a single merchant, or type of merchant or industry;

•the effects of competition on our future business;

•meeting future liquidity requirements and complying with restrictive covenants related to indebtedness;

•reliability of our platform and effectiveness of our risk models;

•data security breaches or other information technology incidents or disruptions, including cyber-attacks, and the protection of confidential, proprietary, personal and other information, including personal data of consumers;

•attracting and retaining employees, executive officers or directors;

•enhancing future operating and financial results;

•anticipating rapid technological changes, including generative artificial intelligence and other new technologies;

•staying abreast of modified or new laws and regulations and complying with laws and regulations applicable to our business, including laws and regulations related to rental purchase transactions, U.S. federal income tax, and data privacy;

•responding to uncertainties associated with product and service developments and market acceptance;

•identifying material weaknesses in our internal control over financial reporting which, if not remediated, could affect the reliability of our condensed consolidated financial statements;

•costs and effects of legal and administrative proceedings, settlements, investigations and claims;

•litigation, regulatory matters, complaints, adverse publicity and/or misconduct by employees, vendors and/or service providers;

•our ability to meet the minimum requirements for continued listing on the Nasdaq Global Market (“Nasdaq”); and

•the effects of the reverse stock split on our common stock.

Given these uncertainties, you should not place undue reliance on any forward-looking statements. Except as required by applicable law, we assume no obligation to update these forward-looking statements, even if new information becomes available in the future, and you should not rely upon these forward looking statements after the date of this Quarterly Report on Form 10-Q.

KATAPULT HOLDINGS, INC.

FORM 10-Q

June 30, 2024

INDEX


		Page
PART 1	Financial Information
Item 1.	Financial Statements	1
	Condensed Consolidated Balance Sheets — June 30, 2024 (unaudited) and December 31, 2023	1
	Condensed Consolidated Statements of Operations and Comprehensive Loss (unaudited) — Three and Six Months Ended June 30, 2024 and 2023	2
	Condensed Consolidated Statements of Stockholders’ Deficit (unaudited) — Three and Six Months Ended June 30, 2024 and 2023	3
	Condensed Consolidated Statements of Cash Flows (unaudited) — Six Months Ended June 30, 2024 and 2023	5
	Notes to Unaudited Condensed Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	28
Item 4.	Controls and Procedures	28

PART II	Other Information	29
Item 1.	Legal Proceedings	29
Item 1A.	Risk Factors	30
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	56
Item 3.	Defaults Upon Senior Securities	56
Item 4.	Mine Safety Disclosures	56
Item 5.	Other Information	56
Item 6.	Exhibits	57
	Signatures	58

References in this Quarterly Report on Form 10-Q to “KPLT”, “Katapult”, “we”, “us”, “the Company”, or “our” means Katapult Holdings Inc. and its consolidated subsidiaries unless otherwise expressly stated or the context indicates otherwise.

PART I. Financial Information

Item 1. Financial Statements

KATAPULT HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(dollars in thousands, except per share data)


	June 30,		December 31,
	2024		2023
	(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	33,725	$	21,408
Restricted cash	4,649		7,403

Property held for lease, net of accumulated depreciation and impairment (Note 4)	56,887		59,335
Prepaid expenses and other current assets	3,489		4,491
Litigation insurance reimbursement receivable (Note 10)	5,000		5,000
Total current assets	103,750		97,637
Property and equipment, net	287		327
Capitalized software and intangible assets, net	1,767		1,919
Right-of-use assets	736		888
Security deposits	91		91
Total assets	$	106,631	$	100,862
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable	$	1,455	$	903
Accrued liabilities (Note 5)	22,613		24,146
Accrued litigation settlement (Note 10)	12,000		12,000

Unearned revenue	5,493		4,949
Revolving line of credit, net (Note 6)	69,466		—
Term loan, net, current (Note 6)	27,605		—
Lease liabilities	366		297
Total current liabilities	138,998		42,295
Revolving line of credit, net (Note 6)	—		60,347
Term loan, net, non-current (Note 6)	—		25,503
Lease liabilities, non-current	431		614
Other liabilities	148		95
Total liabilities	139,577		128,854
STOCKHOLDERS' DEFICIT
Common stock, $.0001 par value-- 250,000,000 shares authorized; 4,168,919 and 4,072,713 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively	—		—
Additional paid-in capital	97,048		94,544
Accumulated deficit	(129,994)		(122,536)
Total stockholders' deficit	(32,946)		(27,992)
Total liabilities and stockholders' deficit	$	106,631	$	100,862


See accompanying notes.

SEC Form 10-Q filed by Katapult Holdings Inc.