DEFA14A: Katapult Waives Proxy Filing, Adjusts Preferred Stock Terms

Katapult Holdings, Inc. entered a waiver with its preferred stockholder, delaying a proxy statement filing and conditionally adjusting the dividend rate on its Series A and B Convertible Preferred Stock.

Summary

• Katapult Holdings, Inc. (KPLT) entered into a waiver agreement with HHCF Series 21 Sub, LLC, the sole holder of its Series A and Series B Convertible Preferred Stock, on November 13, 2025.
• The waiver postpones the requirement for Katapult to file a preliminary proxy statement within ten (10) calendar days after the Initial Issue Date.
• It stipulates that the Regular Dividend Rate on the Preferred Stock will increase by one percent (1%) per annum, from 18% to 19%, only if Requisite Stockholder Approval for the conversion of preferred stock into common stock is not obtained by the Company's first annual meeting following the Initial Issue Date.
• The waiver explicitly foregoes any accumulation of this additional 1% dividend that would have occurred prior to the waiver.
• A proposal for stockholder approval regarding the issuance of common stock upon conversion of the Preferred Stock above the Ownership Limitation will be submitted to stockholders, requiring a proxy statement filing.

Sentiment

Score: 6

Explanation: The waiver provides the company with flexibility regarding a proxy filing and clarifies dividend terms. While there's a potential for a higher dividend rate, it's conditional and part of managing existing preferred stock, not necessarily a sign of distress but rather a structured adjustment to a financing agreement.

Positives

• The Company gains flexibility by waiving the immediate requirement to file a preliminary proxy statement within 10 days, allowing more time for preparation.
• The waiver explicitly waives the right to any accumulation of the additional 1% dividend per annum that would have occurred if the condition for the increase was met earlier, potentially saving the company some dividend payments.

Negatives

• There is a potential increase in the Regular Dividend Rate on the Preferred Stock by one percent (1%) per annum, from 18% to 19%, if Requisite Stockholder Approval is not obtained by the first annual meeting following the Initial Issue Date. This represents a higher cost of capital if the approval fails.

Risks

• Failure to obtain Requisite Stockholder Approval for the issuance of common stock upon conversion of the Preferred Stock above the Ownership Limitation could lead to an increase in the Regular Dividend Rate by one percent (1%) per annum, from 18% to 19%.

Future Outlook

The Company plans to submit a proposal to its stockholders for approval of the issuance of common stock upon conversion of the Preferred Stock above the Ownership Limitation. A proxy statement will be filed with the SEC to solicit this approval. The dividend rate on the preferred stock is contingent on this future stockholder vote.

Management Comments

• A proposal to approve the issuance of common stock upon conversion of the Preferred Stock above the Ownership Limitation will be submitted to the Company’s stockholders for their consideration.

Industry Context

This filing primarily addresses a specific corporate governance and financing arrangement for Katapult Holdings, Inc. It reflects internal capital structure management rather than broader industry trends. The use of convertible preferred stock is a common financing tool, and waivers are typical in complex financial agreements to adjust terms as circumstances evolve.

Comparison to Industry Standards

• NA

Corporate Governance

Related Party Transactions

• The waiver agreement is between Katapult Holdings, Inc. and HHCF Series 21 Sub, LLC, which is the holder of 100% of the Company's Series A and Series B Convertible Preferred Stock. This indicates a significant relationship and transaction with a single, substantial preferred stockholder.

Stakeholder Impact

• Shareholders: Will be asked to vote on a proposal to approve the issuance of common stock upon conversion of the Preferred Stock, which could impact dilution. Their vote also influences the future dividend rate on the preferred stock.
• Preferred Stockholders (HHCF Series 21 Sub, LLC): Their dividend rate is conditionally protected/increased if common stockholder approval is not met, providing a safeguard for their investment.

Next Steps

• The Company will file a proxy statement with the SEC to solicit stockholder approval for the issuance of common stock upon conversion of the Preferred Stock above the Ownership Limitation.
• Stockholders will consider and vote on the proposal at the Company's first annual meeting following the Initial Issue Date.

Key Dates

Recommendation

The filing details a specific corporate action related to preferred stock terms and a proxy statement filing. While it introduces a potential increase in dividend cost if stockholder approval isn't met, it also provides flexibility. This is an internal capital structure adjustment rather than a direct indicator of operational performance or a significant strategic shift. Investors should hold and monitor the outcome of the stockholder vote and the subsequent proxy statement for more comprehensive insights into the company's financial health and strategic direction.

Keywords

Katapult Holdings, KPLT, Preferred Stock, Convertible Stock, Dividend Rate, SEC Filing, Waiver Agreement, Stockholder Approval, Corporate Governance, Capital Structure