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DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION | 3 Months Ended
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Mar. 31, 2026
Organization, Consolidation and Presentation of Financial Statements [Abstract] |
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION | DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION Business— Katapult Holdings, Inc. (“Katapult” or the “Company”) is a technology driven lease-to-own ("LTO") platform that integrates with omnichannel retailers and e-commerce platforms to power the purchase of everyday durable goods for underserved U.S. non-prime consumers. Through the Company’s point-of-sale (“POS”) integrations and innovative mobile app featuring Katapult Pay® (“KPay”), consumers who may be unable to access traditional financing can shop a growing network of merchants. The Company experiences moderate seasonal fluctuations in revenue as a result of consumer spending patterns. Historically, revenue is strongest during the first quarter primarily due to higher gross originations during the fourth quarter holiday season. First quarter revenue is also impacted by the federal and state income tax refunds that customers receive, which in the past, has led to customers more frequently exercising the early purchase option on their lease agreements. Adverse events that occur could have a disproportionate effect on financial results throughout the year. Subsidiaries— The condensed consolidated financial statements of Katapult include the accounts of the Company and its wholly owned subsidiaries Katapult Intermediate Holdings LLC (formerly known as Keys Merger Sub 2, LLC), a Delaware limited liability company formed in December 2020, Katapult Group, Inc. (formerly known as Cognical, Inc.), a Delaware corporation incorporated in March 2012, Katapult SPV-1 LLC, a Delaware limited liability company formed in 2019, Katapult SPV-2 LLC, a Delaware limited liability company formed in 2025, Katapult Intermediate Holdings I, LLC, a Delaware limited liability company formed in December 2025, Katapult Intermediate Holdings II, LLC, a Delaware limited liability company formed in December 2025, Katapult Intermediate Holdings III, LLC, a Delaware limited liability company formed in December 2025, Merger Sub 1, a Delaware corporation incorporated in December 2025 and Merger Sub 2, a Delaware limited liability company formed in December 2025. Legacy Katapult was incorporated in the state of Delaware in 2016. Katapult Group originates all of the Company's lease agreements with customers. Basis of Presentation— The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) and the rules and regulations of the SEC. The Company believes the disclosures made are adequate to make the information presented not misleading. However, the accompanying condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes contained in the Annual Report on Form 10-K for the year ended December 31, 2025. The condensed consolidated financial statements include the accounts of Katapult Holdings, Inc. and its wholly owned subsidiaries. In the opinion of management, all adjustments, of a normal recurring nature, considered necessary for a fair presentation have been included in these condensed consolidated financial statements. All intercompany balances and transactions have been eliminated in consolidation. The Company had no items of other comprehensive income (loss) for the periods presented; accordingly, net loss equals comprehensive loss in our condensed consolidated statements of operations, and accumulated other comprehensive income (loss) was zero as of March 31, 2026 and December 31, 2025 in our condensed consolidated balance sheets. Pending Mergers with CCFI and Aaron’s On December 11, 2025, the Company entered into a merger agreement with CCFI, Aaron’s, and two wholly owned indirect subsidiaries of the Company, pursuant to which those subsidiaries will merge with and into CCFI and Aaron’s, respectively. Upon completion of the Mergers, CCFI and Aaron’s will become wholly owned indirect subsidiaries of the Company. For additional information regarding the Mergers and related agreements, refer to Note 1, “Description of Business and Basis of Presentation,” included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. Under the terms of the Merger Agreement, equityholders of CCFI and Aaron’s will receive shares of the Company’s common stock, resulting in a change of control of the Company upon closing. The Mergers are currently expected to close within the third quarter of 2026, subject to customary closing conditions, including regulatory approvals, effectiveness of a registration statement on Form S-4, approval of the Company’s stockholders and the equityholders of CCFI and Aaron’s, and other customary conditions. The Company continues to evaluate the accounting and financial reporting implications of the Mergers, including purchase accounting and the related impact on its condensed consolidated financial statements. In connection with the pending Mergers, the Company incurred $1.7 million of transaction-related costs during the three months ended March 31, 2026, consisting primarily of professional and consulting fees and retention-related compensation costs, which are included in operating expenses within the condensed consolidated statements of operations three months ended March 31, 2026. The Company cannot reasonably estimate the full financial impact of the Mergers until closing has occurred.

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