8-K: Katapult to Merge with Aarons and CCFI in All-Stock Deal

Sentiment:

Merger Announcement 15 December 2025 4:07 PM

Katapult Holdings, Inc. announced a definitive merger agreement to acquire Aarons Intermediate Holdco, Inc. and CCF Holdings LLC in an all-stock transaction, creating a combined entity with a new ownership structure.

Delay expectedThe Merger Agreement may be terminated if the transactions are not completed by September 30, 2026, with a possible 90-day extension under certain conditions (e.g., if the SEC has not declared the Form S-4 effective or if antitrust conditions are not met).Katapult may delay the filing or effectiveness of the Registration Statement for up to 30 days (or 45 consecutive days, 60 total days in any 12-month period) under specific circumstances, such as the need to include material non-public information or to convert the Registration Statement to a Form S-3.

Capital raiseThe transaction is structured as an all-stock merger, involving the issuance of Katapult Common Stock to Aarons and CCFI equity holders as consideration.Katapult will seek stockholder approval for a new incentive plan (the 2026 Plan) authorizing the issuance of at least 9,000,000 shares of Katapult Common Stock.The Hawthorn Preferred Stock Exchange involves Katapult repurchasing 65,000 shares of Katapult Preferred Stock by issuing a new debt instrument.The Hawthorn Warrant Exercise entails the cashless exercise of Katapult Private Warrants for Katapult Common Stock.The Second Amendment to the Loan Agreement permits the merger transactions and related corporate reorganizations, which are integral to the overall capital structure changes.

Summary

Katapult Holdings, Inc. (Katapult) will merge with Aarons Intermediate Holdco, Inc. (Aarons) and CCF Holdings LLC (CCFI) in an all-stock transaction, involving two merger subsidiaries of Katapult.
Aarons MIP Holders will contribute their MIP Equity to Katapult in exchange for 943,580 shares of Katapult Common Stock.
CCFI MIP Holders will contribute their MIP Equity to Katapult in exchange for 11,011,927 shares of Katapult Common Stock.
Existing Aarons equity interests (excluding MIP Units and dissenting shares) will convert into 11,369,237 shares of Katapult Common Stock.
Existing CCFI equity interests (excluding MIP Equity, options, and warrants) will convert into 58,516,558 shares of Katapult Common Stock.
An additional 244,146 shares of Katapult Common Stock will be subject to CCFI Warrants, assuming cashless exercise.
Immediately following the mergers, existing Katapult stockholders, CCFI unitholders, and Aarons stockholders are expected to hold approximately 6.0%, 79.9%, and 14.1%, respectively, of the combined company on a fully diluted basis.
The transactions are intended to qualify as an exchange described in Section 351 of the Code for U.S. federal income tax purposes.
Katapult also entered into a Limited Waiver and Second Amendment to its Amended and Restated Loan and Security Agreement, which permanently waives a default arising from the failure to maintain Minimum Trailing Three-Month Originations as of November 30, 2025.
The loan agreement amendment also releases Katapult from its guaranty obligations and liens on its assets in connection with the corporate reorganization contemplated by the merger.

Sentiment

Score: 7

Explanation: The filing outlines a significant strategic merger that could enhance Katapult's market position and operational scale. The waiver of a loan default is a positive for immediate financial stability. However, the complexity of the transaction, potential integration challenges, and the termination fee represent inherent risks. The all-stock nature and new incentive plan suggest a focus on long-term growth and alignment.

Positives

The transaction represents a strategic business combination for Katapult, Aarons, and CCFI, potentially leading to increased scale and market presence.
The mergers and equity exchanges are intended to qualify as a tax-free exchange under Section 351 of the Code for U.S. federal income tax purposes, which is beneficial for the Rollover MIP Holders.
The Katapult Board, acting upon the recommendation of its Transaction Committee, determined that the contemplated transactions are fair to and in the best interests of Katapult and its stockholders.
A default in Katapult's loan agreement related to Minimum Trailing Three-Month Originations as of November 30, 2025, was permanently waived, providing immediate financial stability.

Negatives

Katapult would be required to pay an aggregate termination fee of $1,514,174 to Aarons and CCFI under certain specified circumstances, such as a Katapult Triggering Event or acceptance of a superior acquisition proposal.
Vested CCFI Options that are outstanding immediately before the CCFI Merger Effective Time will be forfeited for no consideration, although holders will be notified and provided a reasonable exercise period prior to forfeiture.
Katapult Director Initial RSU Grants and Katapult Annual Director RSU Grants will be cancelled and converted into cash, which may alter long-term equity alignment for some directors.

Risks

The ability to obtain regulatory approval and meet other closing conditions to the proposed transaction, including shareholder approval, is not guaranteed.
Potential adverse reactions or changes to business relationships may result from the announcement, pendency, or inability to complete the proposed transactions on the expected timeframe or at all.
Litigation relating to the proposed transactions, including by securityholders or debtholders, is a possibility.
There is a risk of inability to retain key personnel, or potential diminished productivity due to the impact of the proposed transactions on Katapult's current and prospective employees, key management, customers, distributors, merchants, and other business partners.
The combined company's ability to maintain adequate financing, meet liquidity requirements, and comply with restrictive covenants related to indebtedness is a concern.
Unexpected costs, charges, or expenses may result from the transactions.
The combined company's ability to successfully integrate and grow its business is a key uncertainty.
Compliance with laws and regulations applicable to Katapult's business and the business of the combined company, including laws and regulations related to rental purchase transactions, poses a risk.
Other external events or factors, including those resulting from civil unrest, war, foreign invasions, terrorism, geopolitical uncertainty, public health crises and pandemics, trade wars, or responses to such events, could impact the transaction.
There is no assurance that the transaction will be implemented or that plans of the respective directors and management of Katapult, Aarons, and CCFI will proceed as expected or will ultimately be successful.

Future Outlook

The combined company aims to successfully integrate and grow its business. The transactions are expected to be completed by September 30, 2026, subject to various conditions including regulatory and shareholder approvals. Katapult will file a Form S-4 Registration Statement and seek stockholder approval for the stock issuance and a new incentive plan (2026 Plan) authorizing at least 9,000,000 shares of Katapult Common Stock.

Management Comments

The Katapult Transaction Committee and Board determined that the Contemplated Transactions, including the Mergers, are fair to and in the best interests of Katapult and its stockholders.
The Aarons Board determined that the Contemplated Transactions, including the Aarons Merger, are fair to and in the best interests of Aarons and its stockholders.
The CCFI Special Committee and Board determined that the Contemplated Transactions, including the CCFI Merger, are fair to and in the best interests of CCFI and its unitholders.

Industry Context

The merger involves companies operating in the lease-to-own and rent-to-own sectors. This consolidation could lead to increased market share, operational efficiencies, and potentially a stronger competitive position for the combined entity within this specialized financial services niche. The mention of 'virtual KPay Leases' and 'Marqeta Inc.' suggests an ongoing focus on digital and virtual payment solutions, aligning with broader fintech trends and evolving consumer preferences in the retail financing space.

Management Changes

Role	Previous Person	New Person	Effective Date	Reason
Director	Philip Key Bartow III	NA	Closing	Resignation from Katapult Board.
Director	Don Gayhardt	NA	Closing	Resignation from Katapult Board.
Director	Derek Medlin	NA	Closing	Resignation from Katapult Board.
Director	NA	Jennifer Baldock	Closing	Appointment to Katapult Board (Class A Director).
Director	NA	Michael Heller	Closing	Appointment to Katapult Board (Class A Director).
Director	NA	Cory Miller	Closing	Appointment to Katapult Board (Class A Director).
Director	NA	Lynn DeVault	Closing	Appointment to Katapult Board (Class B Director).
Director	NA	Gene Schutt	Closing	Appointment to Katapult Board (Class B Director).
Director	NA	Will Jones	Closing	Appointment to Katapult Board (Class C Director).
Director	NA	Kyle Hanson	Closing	Appointment to Katapult Board (Class C Director).
Executive Chair of Katapult Board	NA	Kyle Hanson	Closing	Appointment to executive chair role.
Director	Orlando Zayas	Orlando Zayas	Closing	Remains on Katapult Board; potentially reappointed to Class B Director if Closing occurs after Katapult's 2026 annual meeting.
Director	Gregory L. Zink	Gregory L. Zink	Closing	Remains on Katapult Board; potentially reappointed to Class C Director if Closing occurs after Katapult's 2026 annual meeting.

Corporate Governance

Change Type	Description	Effective Date	Impact Assessment
Board Size Increase	The size of the Katapult Board will be increased to nine directors.	Closing	Expands board representation, likely to accommodate appointees from Aarons and CCFI, reflecting the new ownership structure and potentially diversifying expertise.
Board Composition Change	Three existing Katapult directors (Philip Key Bartow III, Don Gayhardt, Derek Medlin) will resign. Seven new directors (Jennifer Baldock, Michael Heller, Cory Miller, Lynn DeVault, Gene Schutt, Will Jones, Kyle Hanson) will be appointed, with Kyle Hanson serving as executive chair. Orlando Zayas and Gregory L. Zink will remain on the board.	Closing	Significant overhaul of the board, indicating a shift in control and strategic direction towards the interests of the merging entities. New directors are categorized into Class A, B, and C with staggered terms, ensuring a structured transition.
Prohibition on Short Form Mergers	For three years following the Closing, Katapult cannot engage in a merger or consolidation pursuant to Section 253 or Section 267 of the Delaware General Corporation Law without advance written approval from a majority of the disinterested and independent directors on the Katapult Board.	Closing	Provides protection for minority shareholders and ensures that significant corporate actions require broad board consensus, preventing rapid, unilateral changes that could be detrimental to certain shareholder groups.
Board Observer Rights	The Jones Group will have the right to designate a non-voting board observer (initially Allan Jones) to attend all Katapult Board and committee meetings, provided certain ownership thresholds are met and a non-disclosure agreement is executed.	Closing	Grants significant oversight and information access to a key investor group, enhancing transparency for them while maintaining the non-voting status of the observer, balancing influence with formal control.
Lock-Up Agreements	Certain equityholders of Katapult, Aarons, and CCFI entered into lock-up agreements restricting the sale of Katapult Common Stock for 6-12 months following the Closing, with phased release of shares (50% after 6 months, 75% after 9 months, full release after 12 months).	Closing	Aims to stabilize the stock price post-merger by preventing immediate large-scale selling by major shareholders, promoting long-term commitment and reducing market volatility.
Support Agreements	Certain stockholders of Katapult entered into voting and support agreements, committing to vote their equity securities in favor of the Merger Agreement and the consummation of the transactions.	December 11, 2025	Ensures the necessary shareholder approval for the merger, reducing uncertainty regarding the transaction's completion and facilitating a smoother process.
Registration Rights Agreement	Katapult will facilitate the registration of registrable securities for resale under the Securities Act for certain Aarons and CCFI equityholders, including filing a registration statement within 45 days after the Closing.	Closing	Provides liquidity pathways for former Aarons and CCFI equityholders who receive Katapult stock, which is crucial for their investment and integration into Katapult's public shareholder base.
New Incentive Plan	A customary incentive plan (the 2026 Plan) will be established, authorizing at least 9,000,000 shares of Katapult Common Stock for issuance, subject to stockholder approval.	Post-Closing (subject to approval)	Allows the combined company to attract, retain, and incentivize management and employees through equity compensation, aligning their interests with long-term shareholder value creation.

Legal Proceedings

The 'Forward-Looking Statements' section identifies 'litigation relating to the proposed Transactions' as a potential risk.
The 'Risks' section also mentions 'litigation brought by securityholders or debtholders arising from this Agreement or the Contemplated Transactions' as a risk factor.

Related Party Transactions

The filing generally states that there are no contracts, transactions, or series of related transactions between Aarons, CCFI, or Katapult and their respective current/former directors, executive officers, or 5% beneficial owners of the type required to be reported in Item 404 of Regulation S-K, except as set forth in their respective disclosure schedules (which are not publicly provided in the filing).
The Hawthorn Side Letter, executed concurrently with the Merger Agreement, involves Katapult repurchasing 65,000 shares of Katapult Preferred Stock from HHCF Series 21 Sub, LLC (Hawthorn) and Hawthorn exercising Katapult Private Warrants. This could be considered a related party transaction given Hawthorn's previous director nomination agreement with Katapult.

Stakeholder Impact

**Shareholders**: Existing Katapult shareholders will experience significant dilution, as their ownership stake in the combined company is expected to be approximately 6.0% on a fully diluted basis. Former CCFI and Aarons equity holders will become major shareholders, holding 79.9% and 14.1% respectively. Lock-up agreements are in place to manage post-merger stock sales.
**Employees**: The Contribution & Exchange Agreement explicitly states no obligation to continue employment relationships with Rollover MIP Holders. New benefit plans are to be developed for employees of the combined entity, which could lead to changes in compensation and benefits.
**Customers, Suppliers, Distributors, Merchants**: The 'Forward-Looking Statements' section identifies 'potential adverse reactions or changes to business relationships' with these stakeholders as a risk, indicating possible disruption or renegotiation of existing agreements.
**Management**: The Katapult Board will undergo significant changes, with several existing directors resigning and new directors appointed from Aarons and CCFI, including a new executive chair. This will alter the leadership and strategic direction of the combined company.
**Creditors**: The Limited Waiver and Second Amendment to the Loan Agreement addresses a specific default and modifies Katapult's guaranty obligations, impacting its relationship with its lenders.

Next Steps

Katapult will prepare and file a Form S-4 Registration Statement with the SEC, which will include a proxy statement for Katapult stockholders.
Katapult will call and hold a special meeting of its stockholders to vote on the Katapult Stock Issuance and the approval and adoption of the 2026 Plan.
The mergers (Aarons Merger and CCFI Merger) will be consummated after all conditions are met, including regulatory and equityholder approvals.
New directors will be appointed to the Katapult Board, and Kyle Hanson will serve as the executive chair.
Katapult, Aarons, and CCFI will cooperate to develop and implement new benefit plans for employees of the combined entity.
Katapult will use commercially reasonable efforts to maintain its existing listing on Nasdaq and obtain approval for the listing of the additional shares issued in the mergers.

Key Dates

Date	Description
January 1, 2023	Start date for various compliance and financial reporting periods mentioned in representations and warranties.
April 9, 2025	Date of Confidentiality Agreement between IQV Holdings, LLC and Katapult.
April 10, 2025	Date of Confidentiality Agreement between CCFI and Katapult.
April 16, 2025	Date of Mutual Non-Disclosure Agreement between CCF Intermediate Holdings, LLC, Aarons, LLC and IQVentures Holdings, LLC.
April 24, 2025	Date of Katapult's proxy statement filed with the SEC for its 2025 annual meeting of stockholders.
June 12, 2025	Original date of the Amended and Restated Loan and Security Agreement and issuance of certain Katapult Private Warrants expiring June 12, 2032.
August 6, 2025	Date of the Requisite Special Stockholder Meeting where Requisite Stockholder Approval was obtained for the issuance of Maximum Warrant Shares.
November 2, 2025	Date of Limited Waiver and First Amendment to Amended and Restated Loan and Security Agreement.
November 3, 2025	Date of director nomination agreement between Katapult and Hawthorn, which will terminate prior to the MIP Exchanges.
November 12, 2025	Date Katapult filed its Quarterly Report on Form 10-Q for the quarter ended September 30, 2025.
November 30, 2025	Last business day of the calendar month for which a default in Minimum Trailing Three-Month Originations was waived under the Loan Agreement.
December 11, 2025	Date of Report (earliest event reported), entry into Agreement and Plan of Merger, Contribution & Exchange Agreements, Lock-Up Agreements, Support Agreements, Stockholders Agreement, Registration Rights Agreement, and Limited Waiver and Second Amendment to Amended and Restated Loan and Security Agreement.
March 6, 2030	Expiration date for certain Katapult Private Warrants.
June 12, 2032	Expiration date for certain Katapult Private Warrants.
December 4, 2026	Maturity Date for the Revolving Loan Advances.
December 31, 2026	Latest date for payment of 2024 Management Bonuses.
September 30, 2026	End Date for consummation of the mergers (subject to a possible 90-day extension).

Recommendation

hold

The merger represents a significant strategic shift for Katapult, potentially creating a larger, more diversified entity in the lease-to-own sector. The waiver of the loan default is a positive for immediate stability. However, the substantial dilution for existing Katapult shareholders and the inherent risks associated with integrating three companies warrant a cautious approach. The long-term success hinges on effective integration and the realization of anticipated synergies, which are not yet guaranteed. Investors should hold to observe the execution of the merger and the performance of the combined entity.

Keywords

Merger, Acquisition, All-stock transaction, Katapult, Aarons, CCFI, SEC filing, 8-K, Equity exchange, Corporate governance, Risk factors, Loan amendment, Debt financing, Shareholder approval, Rent-to-own, Lease-to-own, Financial services

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