Katapult Holdings (KPLT) Registration filing summary

Company overview and business model

• Digital B2B2C POS lease-purchase platform serving U.S. nonprime consumers seeking durable goods; automated decisions average under 5 seconds, with no credit score required for approval.

• Flexible weekly, biweekly, semimonthly or monthly payments; customers can buy early, complete the lease term or return goods, and no late fees are charged.

• Proprietary machine-learning underwriting draws on 500,000+ transactions and 5+ years of repayment data; reported fraud rate below 3%, defined as leases with no payments after origination.

• More than 150 merchants; integrations include Shopify, BigCommerce, Magento and WooCommerce. Repeat customer rate was 48% at Dec. 31, 2020.

Financial performance and metrics

• FY2020 revenue $247.2M vs. $91.9M in 2019; net income $22.5M vs. net loss $18.8M. FY2018 net loss was $23.5M.

• Q1 2021 revenue $80.6M, up 88.0% YoY; gross profit $27.8M, up 78.4%; net income $8.1M vs. $3.7M in Q1 2020.

• Q1 2021 adjusted gross profit $21.3M vs. $10.7M; adjusted EBITDA $14.7M vs. $6.6M YoY.

• At Mar. 31, 2021, cash was $67.8M; revolving credit and long-term debt principal totaled $119.9M. Operating cash flow was $7.3M in Q1 2021 vs. cash use of $1.1M in Q1 2020.

Use of proceeds and capital allocation

• No proceeds from selling securityholders’ share or warrant sales; cash exercise of all warrants could yield up to $3.8M for general corporate purposes, including temporary or permanent debt repayment.

• Management retains broad discretion over warrant-exercise proceeds; holders may choose not to exercise. Issuer bears registration costs; selling holders bear their commissions and discounts.

• Merger and PIPE transaction provided $50M cash to the balance sheet; PIPE investors purchased 15M shares at $10 each for $150M in aggregate.