What the changes say
- Katapult faces major integration and dilution risks from its pending mergers with CCFI and Aaron’s.
What changed since the prior 10-K
New
- NewRisks Related to our Proposed Mergers with CCFI and Aaron’s
None of us, CCFI or Aaron’s can be sure if or when the Mergers will be completed
Completion of the CCFI and Aaron’s mergers is subject to antitrust clearance, regulatory approvals, and equityholder votes.
- NewRisks Related to our Proposed Mergers with CCFI and Aaron’s
The market price of the Company’s common stock following the Mergers may decline as a result of the Mergers
The company's stock price could drop if investors react negatively to the mergers or management is distracted from daily operations.
- NewRisks Related to our Proposed Mergers with CCFI and Aaron’s
The parties’ equityholders may not realize a benefit from the Mergers commensurate with the ownership dilution they will experience in connection with or following the Mergers
Existing equityholders will experience significant ownership dilution, with CCFI owning 79.9%, Aaron’s 14.1%, and Katapult just 6% post-merger.
- NewRisks Related to our Proposed Mergers with CCFI and Aaron’s
Certain provisions of the Merger Agreement may discourage third parties from submitting alternative takeover proposals, including proposals that may be superior to the arrangements contemplated by the Merger Agreement
The merger agreement restricts Katapult, CCFI, and Aaron's from soliciting or engaging in alternative takeover proposals.
- NewRisks Related to our Proposed Mergers with CCFI and Aaron’s
Each party is subject to business uncertainties and contractual restrictions while the Mergers are pending, which could adversely affect each party’s business and operations
Pending mergers may cause customers or suppliers to delay business decisions, and restrict Katapult from executing certain strategies.
- NewRisks Related to our Preferred Stock
Our Series A Convertible Preferred Stock and Series B Convertible Preferred Stock could further reduce the voting power and dilute the ownership of holders of our common stock and may adversely affect the market price of our common stock
The November 2025 issuance of 35,000 Series A and 30,000 Series B convertible preferred shares further dilutes common stockholders.
- NewRisks Related to our Preferred Stock
the Hawthorn Preferred Stock Exchange is not consummated, the Katapult Convertible Preferred Stock could remain outstanding following the Mergers
Katapult convertible preferred stock ranks senior to common stock and accrues PIK dividends, increasing future liquidation preferences and dilution.
- NewRisks Related to our Preferred Stock
If the Preferred Stock Investment Stockholder Approval is obtained, the Katapult Convertible Preferred Stock would be convertible without regard to the Ownership Limitation and would allow the holder(s) thereof to become the majority owner(s) of the Company
If stockholder approval is obtained, Hawthorn could convert its preferred stock without the 19.99% ownership limitation to become majority owner.
- NewRisks Related to the Loan Agreement and our Indebtedness
In addition, the Loan Agreement is secured by a pledge over all of the assets of the Borrower, is guaranteed by us and our wholly owned subsidiary, Katapult Group, Inc., which in turn is secured by a pledge over all of our assets and the assets of Katapult Group, Inc
The new revolving facility loan agreement contains restrictive covenants pledging all assets and limiting additional debt or dividends.
- NewRisks Related to Our Business, Strategy and Growth
merchant and customer experience, the demand for our products and technologies may decrease and our growth, business, results of operations, financial condition, and prospects could be materially and adversely affected
New products and technologies may fail to gain merchant and customer adoption or attract riskier profiles leading to higher defaults.
- NewRisks Related to Our Technology and Our Platform
We use AI/ML in many aspects of our business. Our AI/ML capabilities are a combination of internally developed
Katapult relies on proprietary AI/ML models and approximately 2,000 third-party data elements for fraud and credit risk decisions.
- NewRisks Related to Our Technology and Our Platform
investigations, administrative enforcement actions, sanctions, civil and criminal liability, and constraints on our ability to continue to operate
Data security breaches or failures to timely notify stakeholders of incidents could lead to costly investigations and liabilities.
- NewRisks Related to Our Technology and Our Platform
use our intellectual property or other proprietary rights to develop services that compete with ours. We may not be able to register or enforce all of our trademarks or other intellectual property and other proprietary rights, any of which may be challenged by others
- NewLegal and Compliance Risks
proceedings, significant settlement amounts or final judgments could materially and adversely affect our liquidity and capital resources
- NewLegal and Compliance Risks
On November 3, 2025, we entered into certain registration rights agreements with Hawthorn pursuant to which we agreed to file a registration statement covering the resale of the shares of our common stock issuable upon conversion of the Katapult Convertible Preferred Stock
Dropped
- DroppedRisks Related to Our Business, Strategy and Growth
have grown to represent 32% of our total gross originations for the year ended December 31, 2024. Approximately 54% of our 2024 gross originations started with an interaction in our mobile app
- DroppedRisks Related to Our Indebtedness
We may not be able to refinance our indebtedness on favorable terms, or at all. Our inability to refinance our indebtedness would have a material adverse effect on our business, financial condition, results of operations, and prospects
- DroppedRisks Related to Our Indebtedness
A Change of Control as defined by our Credit Agreement could accelerate our obligation to pay our outstanding indebtedness, and we may not have sufficient liquid assets at that time to repay these amounts
- DroppedRisks Related to Our Technology and Our Platform
We utilize AI/ML, which could expose us to liability or adversely affect our business
- DroppedRisks Related to Our Technology and Our Platform
consequences we could suffer as a result of such a large-scale event could be catastrophic and result in irreparable harm
- DroppedLegal and Compliance Risks
regulations, or modifications by regulators concerning the interpretation or enforcement of existing laws, on our business is not known; however, any such changes could materially and adversely impact our business
- DroppedLegal and Compliance Risks
adversely affect our share price and our ability to raise new capital or to enter into critical contractual relationships with third parties
Mobile app originations growth and strategic initiatives engagement risks.
- DroppedLegal and Compliance Risks
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our financial statements will not be prevented or detected on a timely basis
- DroppedLegal and Compliance Risks
We face risks related to the restatement of our previously issued consolidated financial statements and financial information as of and for the fiscal year ended December 31, 2022, as well as for the interim financial periods for 2022 and 2023, which may adversely impact our business
- DroppedLegal and Compliance Risks
Delayed filing of our Annual Report on Form 10-K has made us currently ineligible to use certain registration statements to register the offer and sale of securities, which could adversely affect our ability to raise future capital or complete acquisitions
- DroppedLegal and Compliance Risks
We have previously fallen out of compliance with Nasdaq’s requirements for continued listing, and any future failure to comply with Nasdaq’s listing requirements could result in our common stock being delisted from the Nasdaq Global Market, which could have a material adverse effect on us and our stockholders
Reworded
- 89% rewrittenLegal and Compliance Risks
Our auditors have issued a going concern opinion, and we will not be able to achieve our objectives and will have to cease operations if we cannot refinance our indebtedness and adequately fund our operations
Updated to reflect a 2025 going concern opinion, noting indebtedness matures in December 2026 and potential covenant compliance issues.
- 79% rewrittenLegal and Compliance Risks
Outstanding warrants are exercisable for, shares of our common stock, which would increase the number of shares eligible for future resale in the public market and result in dilution to our existing stockholders
Updated warrant figures to disclose Hawthorn's ownership of 160,000 warrants at $0.25 and 486,264 warrants at $0.01 per share.
Was: Warrants are exercisable for our common stock, which would increase the number of shares eligible for future resale in the public market and result in dilution to our existing stockholders
- 78% rewrittenLegal and Compliance Risks
Operational Risks Related to Our Business
Removed employee retention risk from the bulleted list of operational risks.
- 73% rewrittenRisks Related to Our Business, Strategy and Growth
We are focused on our mission to provide innovative lease financing solutions to non-prime customers and to enable everyday essential transactions at the merchant point of sale
Updated KPay metrics: transactions grew to 42% of 2025 originations, and 62% of originations started in the Katapult App.
Was: We are focused on our mission to provide innovative lease financing solutions to non-prime customers and to enable essential transactions at the merchant point of sale
- 72% rewrittenRisks Related to Our Business, Strategy and Growth
To the extent that we seek to grow through future acquisitions, or other strategic investments or alliances, we may not be able to do so effectively
Added a warning that failure to consummate the Hawthorn Preferred Stock Exchange requires preferred holder approval for corporate actions.
- 70% rewrittenLegal and Compliance Risks
Our business is subject to the requirements of various federal, state and local laws and regulations, which can require significant compliance costs and expose us to government investigations, significant additional costs, fines or other monetary penalties or settlements, and compliance-related burdens
Expanded regulatory risk to explicitly include potential 'operations' alongside transactions.
- 64% rewrittenRisks Related to Our Technology and Our Platform
Failure to adequately obtain, maintain, protect, defend and enforce our intellectual property and other proprietary rights could harm our business, operating results and financial condition
Added 'obtain, maintain, protect, defend and enforce' to intellectual property defense terminology.
Was: Failure to adequately obtain, maintain, protect, defend and enforce our intellectual property and proprietary rights could harm our business, operating results and financial condition
- 54% rewrittenRisks Related to Our Business, Strategy and Growth
We have a history of operating losses and may not be profitable in the future
Updated financials to report net income of $1.4 million for 2025 compared to a net loss of $25.9 million for 2024.
- 54% rewrittenLegal and Compliance Risks
Future sales, or potential future sales, by us or our stockholders in the public market could cause the market price for our common stock to decline
- 53% rewrittenRisks Related to Our Business, Strategy and Growth
Our ability to use our net operating loss carry forwards and certain other tax attributes may be limited
- 53% rewrittenLegal and Compliance Risks
We are subject to legal proceedings and claims from time to time that may seek material damages or otherwise may have a material adverse effect on our business
- 51% rewrittenRisks Related to Our Technology and Our Platform
If major mobile application distribution channels change their standard terms and conditions in a manner that is detrimental to us, or suspend or terminate their existing relationship with us, our business, financial condition and results of operations may be materially and adversely affected
- 49% rewrittenRisks Related to Our Business, Strategy and Growth
The success and growth of our business depends upon our ability to continuously innovate and develop new products and technologies
- 45% rewrittenLegal and Compliance Risks
If we fail to establish and maintain effective internal control over financial reporting, our ability to accurately and timely report our financial results could be adversely affected
- 44% rewrittenRisks Related to the Loan Agreement and our Indebtedness
We have substantial indebtedness, which may reduce our capability to withstand adverse developments or business conditions
- 32% rewrittenLegal and Compliance Risks
Because there are no current plans to pay cash dividends on our common stock for the foreseeable future, you may not receive any return on investment unless you sell your common stock for a price greater than that which you paid for it
- 31% rewrittenLegal and Compliance Risks
Uncertain market and economic conditions have had, and may in the future have, a material adverse effect on our business, results of operation, financial condition and share price
Was: Uncertain market and economic conditions have had, and may in the future have, serious adverse consequences on our business, financial condition and share price
- 31% rewrittenRisks Related to Our Technology and Our Platform
We have in the past, and may in the future, be accused of infringing intellectual property and other proprietary rights of third parties which may materially and adversely affect our business, financial condition, and results of operations
Was: We have in the past, and may in the future, be accused of infringing intellectual property rights of third parties which may materially and adversely affect our business, financial condition, and results of operations
All 61 risk factors
Headings as the filing states them, in filing order.
Risks Related to Our Business, Strategy and Growth
- 01Financial Risks Related to Our Business
- 13To the extent that we seek to grow through future acquisitions, or other strategic investments or alliances, we may not be able to do so effectively72% rewritten
- 14If we are unable to attract additional direct merchants and retain and grow our relationships with our existing direct merchants, our business, results of operations, financial condition, and prospects would be materially and adversely affected
- 15The success of our business is dependent on customers making payments on their leases when due and other factors affecting consumer spending and default behavior that are not under our control
- 16Unexpected changes to consumer behavior could cause our proprietary algorithms and decisioning tools used in approving customers to no longer be indicative of our customer’s ability to perform
- 17We are focused on our mission to provide innovative lease financing solutions to non-prime customers and to enable everyday essential transactions at the merchant point of sale73% rewritten
- 18If we fail to maintain customer satisfaction and trust in our brand, our business, results of operations, financial condition, and prospects would be materially and adversely affected
- 19If we are unable to attract new customers and retain and grow our relationships with our existing customers, or if attracting or retaining customers is not cost-efficient, our results of operations, financial condition, and prospects would be materially and adversely affected
- 20We operate in a highly competitive industry, and our inability to compete successfully would materially and adversely affect our results of operations, financial condition, and prospects
- 21Our estimates of market opportunity and forecasts of market growth may prove to be inaccurate, and even if the market in which we compete achieves its forecasted growth, our business could fail to grow at similar rates, if at all
- 22We rely on the accuracy of third-party data, and inaccuracies in such data could adversely impact our approval process
- 23The success and growth of our business depends upon our ability to continuously innovate and develop new products and technologies49% rewritten
- 24merchant and customer experience, the demand for our products and technologies may decrease and our growth, business, results of operations, financial condition, and prospects could be materially and adversely affectedNew
- 25Our ability to timely raise capital in the future may be limited, or may be unavailable on acceptable terms, if at all
- 26We have a history of operating losses and may not be profitable in the future54% rewritten
- 27Our revenue and operating results may fluctuate, which could result in a decline in our profitability and make it more difficult for us to grow our business
- 28Any significant disruption or errors relating to our loan providers and loan processor, could delay the processing of transactions on our platform or cause temporary fluctuations in cash use and have a material and adverse effect on our business, results of operations, financial condition, and prospects
- 29Our ability to use our net operating loss carry forwards and certain other tax attributes may be limited53% rewritten
Legal and Compliance Risks
- 02Operational Risks Related to Our Business78% rewritten
- 41Our business is subject to the requirements of various federal, state and local laws and regulations, which can require significant compliance costs and expose us to government investigations, significant additional costs, fines or other monetary penalties or settlements, and compliance-related burdens70% rewritten
- 42If we fail to establish and maintain effective internal control over financial reporting, our ability to accurately and timely report our financial results could be adversely affected45% rewritten
- 43Changes to tax laws or exposure to additional tax liabilities may have a negative impact on our operating results
- 44We are subject to legal proceedings and claims from time to time that may seek material damages or otherwise may have a material adverse effect on our business53% rewritten
- 45proceedings, significant settlement amounts or final judgments could materially and adversely affect our liquidity and capital resourcesNew
- 46Uncertain market and economic conditions have had, and may in the future have, a material adverse effect on our business, results of operation, financial condition and share price31% rewritten
- 47Failure to effectively manage our costs could have a material adverse effect on our profitability
- 48Negative publicity about us or our industry could adversely affect our business, results of operations, financial condition, and prospects
- 49Misconduct and errors by our employees, vendors, and service providers could harm our business and reputation
- 50The loss of the services of any of our leadership team could materially and adversely affect our business, results of operations, financial condition, and prospects
- 51Our business depends on our ability to attract and retain highly skilled employees
- 52The price of our securities may change significantly in the future and stockholders could lose all or part of their investment as a result
- 53We will continue to incur significant costs as a result of operating as a public company, and our management will continue to devote substantial time to managing new compliance initiatives
- 54Because there are no current plans to pay cash dividends on our common stock for the foreseeable future, you may not receive any return on investment unless you sell your common stock for a price greater than that which you paid for it32% rewritten
- 55If securities analysts do not publish research or reports about our business or if they downgrade our stock or our sector, our stock price and trading volume could decline
- 56Future sales, or potential future sales, by us or our stockholders in the public market could cause the market price for our common stock to decline54% rewritten
- 57On November 3, 2025, we entered into certain registration rights agreements with Hawthorn pursuant to which we agreed to file a registration statement covering the resale of the shares of our common stock issuable upon conversion of the Katapult Convertible Preferred StockNew
- 58Outstanding warrants are exercisable for, shares of our common stock, which would increase the number of shares eligible for future resale in the public market and result in dilution to our existing stockholders79% rewritten
- 59We will likely incur increased costs and devote additional management time to public company reporting and compliance obligations as a result of exiting “emerging growth company” status
- 60Anti-takeover provisions in our organizational documents could delay or prevent a change of control
- 61Our auditors have issued a going concern opinion, and we will not be able to achieve our objectives and will have to cease operations if we cannot refinance our indebtedness and adequately fund our operations89% rewritten
Risks Related to our Proposed Mergers with CCFI and Aaron’s
- 03None of us, CCFI or Aaron’s can be sure if or when the Mergers will be completedNew
- 04The market price of the Company’s common stock following the Mergers may decline as a result of the MergersNew
- 05The parties’ equityholders may not realize a benefit from the Mergers commensurate with the ownership dilution they will experience in connection with or following the MergersNew
- 06Certain provisions of the Merger Agreement may discourage third parties from submitting alternative takeover proposals, including proposals that may be superior to the arrangements contemplated by the Merger AgreementNew
- 07Each party is subject to business uncertainties and contractual restrictions while the Mergers are pending, which could adversely affect each party’s business and operationsNew
Risks Related to our Preferred Stock
- 08Our Series A Convertible Preferred Stock and Series B Convertible Preferred Stock could further reduce the voting power and dilute the ownership of holders of our common stock and may adversely affect the market price of our common stockNew
- 09the Hawthorn Preferred Stock Exchange is not consummated, the Katapult Convertible Preferred Stock could remain outstanding following the MergersNew
- 10If the Preferred Stock Investment Stockholder Approval is obtained, the Katapult Convertible Preferred Stock would be convertible without regard to the Ownership Limitation and would allow the holder(s) thereof to become the majority owner(s) of the CompanyNew
Risks Related to the Loan Agreement and our Indebtedness
- 11We have substantial indebtedness, which may reduce our capability to withstand adverse developments or business conditions44% rewritten
- 12In addition, the Loan Agreement is secured by a pledge over all of the assets of the Borrower, is guaranteed by us and our wholly owned subsidiary, Katapult Group, Inc., which in turn is secured by a pledge over all of our assets and the assets of Katapult Group, IncNew
Risks Related to Our Technology and Our Platform
- 30We use AI/ML in many aspects of our business. Our AI/ML capabilities are a combination of internally developedNew
- 31Real or perceived software errors, failures, bugs, defects, or outages could adversely affect our business, results of operations, financial condition, and prospects
- 32Our results depend on continued integration and support of our platforms, including our integration with direct merchants
- 33We rely on KPay enabled merchants to allow access to their stores through our Katapult App and our desktop and mobile websites
- 34We are subject to stringent and changing laws, regulations, rules, standards and contractual obligations related to data privacy and security, which could increase the cost of doing business, compliance risks and potential liability and otherwise negatively affect our operating results and business regulations
- 35If major mobile application distribution channels change their standard terms and conditions in a manner that is detrimental to us, or suspend or terminate their existing relationship with us, our business, financial condition and results of operations may be materially and adversely affected51% rewritten
- 36investigations, administrative enforcement actions, sanctions, civil and criminal liability, and constraints on our ability to continue to operateNew
- 37While we take precautions to prevent customer identity fraud, it is possible that identity fraud may still occur or has occurred, which may adversely affect the performance of the LTO transactions facilitated through our platform
- 38Failure to adequately obtain, maintain, protect, defend and enforce our intellectual property and other proprietary rights could harm our business, operating results and financial condition64% rewritten
- 39use our intellectual property or other proprietary rights to develop services that compete with ours. We may not be able to register or enforce all of our trademarks or other intellectual property and other proprietary rights, any of which may be challenged by othersNew
- 40We have in the past, and may in the future, be accused of infringing intellectual property and other proprietary rights of third parties which may materially and adversely affect our business, financial condition, and results of operations31% rewritten
Other Katapult Holdings 10-Ks
- FY2024 10-K risk factors57 risks
Katapult Holdings faces a going concern doubt as its $114.5 million debt matures June 4, 2025. Net losses reached $25.9 million in 2024 with an accumulated deficit of $148.5 million. The company confronts pending patent litigation from competitor FlexShopper filed in September 2024.
Filed Mar 28, 2025
About this page
The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.