Item 1.01 Entry Into a Material Definitive Agreement.
On December 15, 2021, Katapult Holdings, Inc., a Delaware corporation (the “Company”), as guarantor, Katapult SPV-1 LLC, a Delaware limited liability company, as borrower (the “Borrower”), and Katapult Group, Inc., a Delaware corporation (“Holdings”), as guarantor, entered into the Twelfth Amendment to that certain Loan and Security Agreement, dated May 14, 2019 (the “Twelfth Amendment” and such agreement, as previously amended as of June 14, 2019, November 8, 2019, November 20, 2019, December 16, 2019, April 3, 2020, April 29, 2020, May 6, 2020, September 28, 2020, December 4, 2020, January 13, 2021 and July 1, 2021, and further amended by Twelfth Amendment, the “Credit Agreement”), with Midtown Madison Management LLC, a Delaware limited liability company, as administrative, payment and collateral agent (the “Agent”), for itself and for various funds for Atalaya Capital Management (“Atalaya”), as lenders (collectively, the “Lenders”), which modified certain of the terms applicable to the Company’s revolving credit facility provided thereunder (as modified by the Twelfth Amendment, the “Revolving Credit Facility”).
The Twelfth Amendment modifies the original Credit Agreement to, among other things: (1) amend the TTM Adjusted EBITDA (as defined in the Credit Agreement) financial covenant to (a) ($15.0) million until (and including) June 30, 2023, (b) $0.00 during the period on and after July 1, 2023 and until (and including) December 31, 2023, and (c) $20.0 million for all times thereafter; (2) increase the minimum liquidity covenant to $50.0 million; (3) amend the definition of “Liquidity” to include Cash Equivalents (as defined in the Credit Agreement): and (4) amend the Total Advance Rate (as defined in the Credit Agreement) financial covenant to (A) change the percentage thresholds to (i) 140% until (and including) December 31, 2022, (ii) 130% during the period on and after January 1, 2023 and until (and including) December 31, 2023, and (iii) 120% for all times thereafter, and (B) allow for any compliance with the covenant to be cured by the Borrower on no more than two occasions by depositing cash into a deposit account controlled by Agent. The Twelfth Amendment does not modify applicable funding costs or the maturity date of the Revolving Credit Facility.
“We’re delighted by the continued support from our existing long-term lending partner to provide us financial flexibility as we continue to invest in growth initiatives to capitalize on the addressable market opportunity ahead of us,” said Karissa Cupito, CFO of Katapult.
This description of the Twelfth Amendment does not purport to be complete, and is subject to and qualified in its entirety by reference to the full text of the Twelfth Amendment, which is attached as Exhibit 10.1 to this Current Report on Form 8-K, and is incorporated herein by reference.