Katapult Secures 12th Loan Waiver, Amends Debt Terms Amid Ongoing Financial Challenges

summarizeSummary

Katapult Holdings received its twelfth loan waiver, permanently removing a failed covenant but also facing a reduced advance rate on its debt facility, highlighting ongoing financial distress.

check_boxKey Events

• Twelfth Loan Waiver Obtained

  The company secured a 'Third Amendment and Limited Waiver' to its Loan and Security Agreement, marking the twelfth such waiver or amendment since June 2025, addressing a failure to maintain 'Minimum Trailing Three-Month Net Originations' as of May 31, 2026.

• Financial Covenant Removed

  The 'Minimum Trailing Net Three-Month Originations' requirement, which the company repeatedly failed to meet, has been permanently removed from the loan agreement.

• Borrowing Capacity Reduced

  Lenders reduced the advance rate on the loan facility from 90% to 85%, effectively decreasing the amount the company can borrow against its eligible leases.

• Merger and Reorganization Progress

  The amendment includes lender consent for the 'Parent Reorganization Transaction' and 'Katapult Merger Transaction', which were previously disclosed as highly dilutive events.

auto_awesomeAnalysis

Katapult Holdings has once again failed to meet a financial covenant, marking the twelfth such waiver or amendment to its loan agreement in less than a year. While the lenders have permanently waived the default related to 'Minimum Trailing Three-Month Net Originations' and removed this requirement, they have also tightened terms by reducing the advance rate from 90% to 85%. This indicates persistent financial instability and a precarious liquidity position for the micro-cap company, which has previously disclosed a 'going concern' warning. The reduced advance rate directly impacts the company's borrowing capacity, signaling increased lender caution despite the waiver of a specific covenant. This also comes as the company progresses with a previously announced highly dilutive merger.