Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2023 | May 08, 2023 | |
Entity Listings [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-39116 | |
Entity Registrant Name | Katapult Holdings, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 81-4424170 | |
Entity Address, Address Line One | 5204 Tennyson Parkway, Suite 500 | |
Entity Address, City or Town | Plano | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 75024 | |
City Area Code | 833 | |
Local Phone Number | 528-2785 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 99,561,148 | |
Amendment Flag | false | |
Entity Central Index Key | 0001785424 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q1 | |
Common Stock, par value $0.0001 per share | ||
Entity Listings [Line Items] | ||
Title of 12(b) Security | Common Stock, par value $0.0001 per share | |
Trading Symbol | KPLT | |
Security Exchange Name | NASDAQ | |
Redeemable Warrants | ||
Entity Listings [Line Items] | ||
Title of 12(b) Security | Redeemable Warrants | |
Trading Symbol | KPLTW | |
Security Exchange Name | NASDAQ |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 40,552 | $ 65,430 |
Restricted cash | 4,397 | 4,411 |
Property held for lease, net of accumulated depreciation and impairment (Note 3) | 52,801 | 50,278 |
Prepaid expenses and other current assets | 5,737 | 8,515 |
Total current assets | 103,487 | 128,634 |
Property and equipment, net (Note 4) | 514 | 557 |
Security deposits | 91 | 91 |
Capitalized software and intangible assets, net (Note 5) | 1,994 | 1,847 |
Right-of-use assets (Note 8) | 674 | 772 |
Total assets | 106,760 | 131,901 |
Current liabilities: | ||
Accounts payable | 1,516 | 1,264 |
Accrued liabilities (Note 6) | 14,040 | 14,532 |
Term loan (Note 7) | 0 | 25,000 |
Unearned revenue | 2,002 | 1,552 |
Lease liabilities (Note 8) | 343 | 382 |
Total current liabilities | 17,901 | 42,730 |
Revolving line of credit (Note 7) | 60,905 | 57,639 |
Term loan, non-current (Note 7) | 22,811 | 23,057 |
Other liabilities | 770 | 902 |
Lease liabilities, non-current (Note 8) | 372 | 445 |
Total liabilities | 102,759 | 124,773 |
STOCKHOLDERS' EQUITY | ||
Common stock, $.0001 par value-- 250,000,000 shares authorized; 99,561,148 and 98,585,563 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively | 10 | 10 |
Additional paid-in capital | 89,781 | 83,794 |
Accumulated deficit | (85,790) | (76,676) |
Total stockholders' equity | 4,001 | 7,128 |
Total liabilities and stockholders' equity | $ 106,760 | $ 131,901 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - $ / shares | Mar. 31, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Common stock par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 250,000,000 | 250,000,000 |
Common stock, shares issued (in shares) | 99,561,148 | 98,585,563 |
Common stock, shares outstanding (in shares) | 99,561,148 | 98,585,563 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Revenue | ||
Rental revenue | $ 54,724 | $ 58,903 |
Other revenue | 952 | 974 |
Total revenue | 55,676 | 59,877 |
Cost of revenue | 42,173 | 48,113 |
Gross profit | 13,503 | 11,764 |
Operating expenses: | ||
Servicing costs | 990 | 1,207 |
Underwriting fees | 468 | 488 |
Professional and consulting fees | 2,655 | 3,288 |
Technology and data analytics | 1,665 | 2,410 |
Compensation costs | 7,057 | 5,377 |
General and administrative | 2,934 | 3,805 |
Total operating expenses | 15,769 | 16,575 |
Loss from operations | (2,266) | (4,811) |
Loss on partial extinguishment of debt | (2,391) | 0 |
Interest expense and other fees | (5,189) | (4,282) |
Interest income | 620 | 0 |
Change in fair value of warrant liability | 132 | 3,089 |
Loss before provision for income taxes | (9,094) | (6,004) |
Provision for income taxes | 20 | 35 |
Net loss | $ (9,114) | $ (6,039) |
Net loss per share: | ||
Basic (in dollars per share) | $ (0.09) | $ (0.06) |
Diluted (in dollars per share) | $ (0.09) | $ (0.06) |
Weighted average shares used in computing net loss per share: | ||
Basic (in shares) | 99,328,542 | 97,873,452 |
Diluted (in shares) | 99,328,542 | 97,873,452 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (UNAUDITED) - USD ($) $ in Thousands | Total | Cumulative Effect, Period of Adoption, Adjustment | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Deficit Cumulative Effect, Period of Adoption, Adjustment |
Beginning balance (in shares) at Dec. 31, 2021 | 97,574,171 | |||||
Beginning balance at Dec. 31, 2021 | $ 40,799 | $ (1,962) | $ 10 | $ 77,632 | $ (36,843) | $ (1,962) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock options exercised (in shares) | 275,435 | |||||
Stock options exercised | 60 | 60 | ||||
Vesting of restricted stock units (in shares) | 378,425 | |||||
Repurchases of restricted stock for payroll tax withholding (in shares) | (102,019) | |||||
Repurchases of restricted stock for payroll tax withholding | (195) | (195) | ||||
Stock-based compensation expense | 1,089 | 1,089 | ||||
Net loss | (6,039) | (6,039) | ||||
Ending balance (in shares) at Mar. 31, 2022 | 98,126,012 | |||||
Ending balance at Mar. 31, 2022 | $ 33,752 | $ 10 | 78,586 | (44,844) | ||
Beginning balance (in shares) at Dec. 31, 2022 | 98,585,563 | 98,585,563 | ||||
Beginning balance at Dec. 31, 2022 | $ 7,128 | $ 10 | 83,794 | (76,676) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of warrants in connection with Credit Agreement amendment | 4,060 | 4,060 | ||||
Vesting of restricted stock units (in shares) | 1,251,503 | |||||
Repurchases of restricted stock for payroll tax withholding (in shares) | (275,918) | |||||
Repurchases of restricted stock for payroll tax withholding | (163) | (163) | ||||
Stock-based compensation expense | 2,090 | 2,090 | ||||
Net loss | $ (9,114) | (9,114) | ||||
Ending balance (in shares) at Mar. 31, 2023 | 99,561,148 | 99,561,148 | ||||
Ending balance at Mar. 31, 2023 | $ 4,001 | $ 10 | $ 89,781 | $ (85,790) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Cash flows from operating activities: | ||
Net loss | $ (9,114) | $ (6,039) |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ||
Depreciation and amortization | 29,012 | 32,740 |
Net book value of property buyouts | 6,452 | 10,020 |
Impairment expense | 5,223 | 3,224 |
Change in fair value of warrant liability | (132) | (3,089) |
Stock-based compensation | 2,090 | 1,089 |
Loss on partial extinguishment of debt | 2,391 | 0 |
Amortization of debt discount | 1,093 | 1,018 |
Amortization of debt issuance costs, net | 81 | 91 |
Accrued PIK interest | 530 | 388 |
Amortization of right-of-use assets | 98 | 89 |
Change in operating assets and liabilities: | ||
Property held for lease | (43,013) | (36,398) |
Prepaid expenses and other current assets | 2,778 | 1,849 |
Accounts payable | 252 | 401 |
Accrued liabilities | (985) | (1,444) |
Lease liabilities | (112) | (99) |
Unearned revenues | 450 | (99) |
Net cash (used in) provided by operating activities | (2,906) | 3,741 |
Cash flows from investing activities: | ||
Purchases of property and equipment | (4) | (139) |
Additions to capitalized software | (297) | (472) |
Net cash used in investing activities | (301) | (611) |
Cash flows from financing activities: | ||
Proceeds from revolving line of credit | 4,350 | 0 |
Principal repayments on revolving line of credit | (872) | (13,224) |
Principal repayment on term loan | (25,000) | 0 |
Repurchases of restricted stock | (163) | (195) |
Proceeds from exercise of stock options | 0 | 60 |
Net cash used in financing activities | (21,685) | (13,359) |
Net decrease in cash, cash equivalents and restricted cash | (24,892) | (10,229) |
Cash, cash equivalents and restricted cash at beginning of period | 69,841 | 96,431 |
Cash, cash equivalents and restricted cash at end of period | 44,949 | 86,202 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 3,459 | 2,588 |
Cash paid for income taxes | 2 | 0 |
Debt issuance costs included in accrued liabilities | 493 | 0 |
Issuance of warrants to purchase common stock in connection with debt refinancing | 4,060 | 0 |
Right-of-use assets obtained in exchange for operating lease liabilities | 0 | 1,139 |
Cash paid for operating leases | $ 129 | $ 126 |
Description of Business and Bas
Description of Business and Basis of Presentation | 3 Months Ended |
Mar. 31, 2023 | |
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 an e-commerce focused financial technology company offering e-commerce point-of-sale (“POS”) lease-purchase options for non-prime US consumers. Katapult’s fully-digital technology platform provides non-prime consumers with a flexible lease-purchase option to enable them to obtain durable goods from Katapult’s network of e-commerce retailers. Katapult's end-to-end technology platform provides seamless integration with merchants. Subsidiaries— The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries Katapult Intermediate Holdings, LLC (formerly known as Keys Merger Sub 2, LLC), Katapult Group, Inc. and Katapult SPV-1 LLC. which originates all of the Company’s leases. Legacy Katapult was incorporated in Delaware in 2016 and changed its headquarters from New York, New York to Plano, Texas in December 2020. Katapult Group, Inc. was incorporated in the state of Delaware in 2012. Katapult SPV-1 LLC is a Delaware limited liability company formed in Delaware in 2019. Basis of Presentation — The condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) and the rules and regulations of the Securities and Exchange Commission (“SEC”). 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.Certain prior period amounts of revenue have been reclassified for consistency with the current year presentation. All intercompany balances and transactions have been eliminated in consolidation. Correction of Prior Period Error The Company corrected an immaterial error related to the amortization of debt discount in the three months ended March 31, 2022. The correction resulted in an increase of $481 in interest expense and other fees and a corresponding decrease to debt discount reflected in the term loan line item of the balance sheet which should have been recorded at March 31, 2022. Risks and Uncertainties — The Company is subject to a number of risks including, but not limited to, the need for successful development of our growth strategies, the need for additional capital (or financing) to fund operating losses, competition from substitute products and services from larger companies, protection of proprietary technology, patent litigation, dependence on key individuals, and risks associated with changes in information technology. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Use of Estimates — The preparation of the condensed consolidated financial statements in accordance with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, and the reported amounts of income and expense during the reporting period. The most significant estimates relate to the selection of useful lives of property and equipment, the selection of useful lives for property held for lease and the related depreciation method, determination of fair value of stock option gra nts, the fair value of warrants, and the valua tion allowance associated with deferred tax assets. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, and makes adjustments when facts and circumstances dictate. These estimates are based on information available as of the date of the condensed consolidated financial statements; therefore, actual results could differ from those estimates. Segment Information — Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. The Company’s chief operating decision maker is the chief executive officer. The Company has one business activity and there are no segment managers who are held accountable for operations, operating results and plans for levels or components below the consolidated unit level. Accordingly, the Company has one operating segment, and therefore, one reportable segment. Cash and Cash Equivalents — As of March 31, 2023 and December 31, 2022, cash consists primarily of checking and savings deposits. The Company holds certain cash equivalents, which consist of highly liquid investments with original maturities of three months or less at the time of purchase. Restricted Cash — The Company classifies all cash whose use is limited by contractual provisions as restricted cash. Restricted cash as of March 31, 2023, December 31, 2022 and March 31, 2022 consists primarily of cash advanced from the lines of credit in Katapult SPV-1 LLC, which were established pursuant to various agreements for the purpose of funding and servicing originated leases. All of the Company’s restricted cash is classified as current due to its short-term nature. The reconciliation of cash and restricted cash is as follows : March 31, December 31, March 31, 2023 2022 2022 Cash and cash equivalents $ 40,552 $ 65,430 $ 80,625 Restricted cash 4,397 4,411 5,577 Total cash, cash equivalents and restricted cash $ 44,949 $ 69,841 $ 86,202 Property Held for Lease, Net of Accumulated Depreciation and Impairment — Property held for lease consists of furniture, consumer electronics, appliances, and other durable goods offered for lease-purchase in the normal course of business. Such property is provided to consumers pursuant to a lease-purchase agreement with a minimum lease term; typically one week, two weeks, or one month. The renewal periods of the initial lease term of the agreement are typically 10, 12 or 18 months. Consumers may terminate a lease agreement at any time without penalty. The average consumer continues to lease the property for 7 months because the consumer either exercises the buyout (early purchase) options or terminates the lease purchase agreement prior to the end of the 10, 12 or 18 month renewal periods. As a result, property held for lease is classified as a current asset on the condensed consolidated balance sheets. Property held for lease is carried at net book value. Depreciation for property held for lease is determined using the income forecasting method and is included within cost of revenue. Under the income forecasting method, property held for lease is depreciated in the proportion of rents received to total expected rents received based on historical data, which is an activity-based method similar to the units of production method. The Company provides for impairment for the undepreciated balance of the property held for lease assuming no salvage value with a corresponding charge to cost of revenue. Impairment expense includes expense related to property identified as impaired based on historical data, including default trends, such that the recorded amount closely approximates actual impairment expense incurred during the period. The Company derecognizes the undepreciated net book value of property buyouts as buyouts occur with a corresponding charge to cost of revenue. The Company periodically evaluates fully depreciated property held for lease, net. When it is determined there is no future economic benefit, the cost of the assets are written off and the related accumulated depreciation is reversed. Property and Equipment, Net — Property and equipment other than property held for lease are stated at cost less accumulated depreciation and amortization. Depreciation and amortization are calculated using the straight-line method and are recorded in general and administrative expense over the estimated useful lives of the assets. The estimated useful lives of property and equipment are described below: Property and Equipment Useful Life Computer, office and other equipment 5 years Computer software 3 years Furniture and fixtures 7 years Leasehold improvements Shorter of estimated useful life or remaining lease term Capitalized Software — The Company capitalizes certain development costs incurred in connection with its internal use software. Costs incurred in the preliminary stages of development are expensed as incurred. Capitalization of costs begins when the preliminary project stage is completed, and it is probable that the project will be completed and used for its intended function. Once an application has reached the development stage, internal and external costs, if direct and incremental, are capitalized until the software is substantially complete and ready for its intended use. Capitalization ceases upon completion of all substantial testing. The Company also capitalizes costs related to specific upgrades and enhancements when it is probable the expenditures will result in additional features and functionality. Maintenance costs are expensed as incurred. Internal use software is amortized on a straight-line basis over its estimated useful life, generally three years. Capitalized software cost is included within the Capitalized software and intangible assets, net line item of the condensed consolidated balance sheets. Amortization of capitalized software is included in general and administrative on the condensed consolidated statements of operations and comprehensive loss. Debt Issuance Costs — Costs incurred in connection with the issuance of the Company’s revolving line of credit (“RLOC”) and Term Loan have been recorded as a direct reduction against the debt and amortized over the life of the associated debt as a component of interest expense. The amortization of the Term Loan issuance costs utilizes the effective interest method, and the amortization of the RLOC debt issuance costs utilizes the straight-line method, which is not materially different compared to the effective interest method. The amortization of debt issuance costs is recorded and included in interest expense and other fees on the condensed consolidated statement of operations and comprehensive (loss) income. Impairment of Long-Lived Assets — The Company assesses long-lived assets for impairment in accordance with the provisions of ASC 360, Property, Plant and Equipment. Long-lived assets, such as intangible assets and property and equipment, are reviewed for impairment annually or whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. The carrying amount of a long-lived asset is not recoverable if it exceeds the sum of the undiscounted future cash flows expected to result from the use and eventual disposition of the asset. The amount of impairment loss, if any, is measured as the difference between the carrying value of the asset and its estimated fair value. Fair value is determined through various valuation techniques, including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary. No impairment charges have been recorded during the three months ended March 31, 2023 or 2022, respectively. Rental Revenue — Property held for lease is leased to customers pursuant to lease purchase agreements with an initial term: typically one week, two weeks, or one month, with non-refundable lease payments. Generally, the customer has the right to acquire title either through a 90-day promotional pricing option, an early purchase option (buyout) available prior to completion of the full agreement, or by completing all lease renewal payments, generally 10 to 18 months. On any current lease, customers have the option to terminate the agreement at any time without penalty in accordance with lease term. Accordingly, lease-purchase agreements are accounted for as operating leases with lease revenues recognized in the period they are earned and cash is collected. Amounts received from customers who elect early purchase options (buyouts) are included in rental revenue. Lease payments received prior to their due dates are deferred and recorded as unearned revenue and are recognized as rental revenue in the month in which the revenue is earned. Rental revenue also includes agreed-upon charges assessed for customer lease applications. Payments are received upon submission of the applications and execution of the lease-purchase agreements. Services are considered to be rendered and revenue earned over the initial lease term. Revenues from leases are reported net of sales taxes. Other Revenue — Other revenue consists primarily of asset sales revenue related to the sale of property held for lease. During the three months ended March 31, 2023, the Company continued to advance its strategy to focus on additional opportunities to generate revenue, which includes the sale of property held for lease to third parties. The sale of property held for lease is now considered recurring and ordinary in nature to the Company’s business. As such, these sales are accounted for within the scope of ASC 606, Revenue from Contracts with Customers. Revenue is recognized when a performance obligation is satisfied by transferring control over an asset to a customer. Revenue is recorded with corresponding costs of revenue, presented on a gross basis. Revenue from sales of property held for lease during the three months ended March 31, 2023 and 2022 were $952 and $974, respectively. Stock-Based Compensation — The Company measures and records compensation expense related to stock-based awards based on the fair value of those awards as determined on the date of the grant. The Company recognizes stock-based compensation expense over the requisite service period of the individual grant, generally equal to the vesting period and uses the straight-line method to recognize stock-based compensation. The Company uses the Black-Scholes-Merton (“Black-Scholes”) option-pricing model to determine the estimated fair value of stock option awards. The Black-Scholes option-pricing model requires estimates of highly subjective assumptions, which affect the fair value of each stock option. Forfeitures are accounted for as they are incurred. The Company calculates the fair value of stock options granted to employees by using the following assumptions: Expected Volatility —The Company estimates volatility for stock option grants by evaluating the average historical volatility of a peer group of companies for the period immediately preceding the stock option grant for a term that is approximately equal to the stock options’ expected term. Expected Term —The expected term of the Company’s stock options represents the period that the stock-based awards are expected to be outstanding. The Company has elected to use the midpoint of the stock options vesting term and contractual expiration period to compute the expected term, as the Company does not have sufficient historical information to develop reasonable expectations about future exercise patterns and post-vesting employment termination behavior. Risk-Free Interest Rate —The risk-free interest rate is based on the implied yield currently available on US Treasury zero-coupon issues with a term that is equal to the stock options’ expected term at the grant date. Dividend Yield —The Company has not declared or paid dividends to date and does not anticipate declaring dividends. As such, the dividend yield has been estimated to be zero. Income Taxes —The Company accounts for income taxes under the asset and liability method pursuant to ASC 740, Income Taxes . Under this method, the Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the condensed consolidated financial statements. Under this method, the Company determines deferred tax assets and liabilities on the basis of the differences between the financial statement and tax basis of assets and liabilities by using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. The Company recognizes deferred tax assets to the extent that these assets are more likely than not to be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. If the Company determines that the Company would be able to realize deferred tax assets in the future in excess of their net recorded amount, the Company would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes. The Company remains in a cumulative tax loss position for the 36 months ended March 31, 2023, and determined that it is more likely than not that its net deferred tax assets will not be realized. The Company continues to maintain a full valuation allowance as of March 31, 2023 and December 31, 2022. The Company records uncertain tax positions in accordance with ASC 740 on the basis of a two-step process in which (1) the Company determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, the Company recognizes the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. The Company recognizes interest and penalties related to unrecognized tax benefits in the income tax expense line in the accompanying condensed consolidated statement of operations and comprehensive (loss) income. As of March 31, 2023 and December 31, 2022, no accrued interest or penalties are included on the related tax liability line in the condensed consolidated balance sheets. Net (Loss) Income Per Share – The Company calculates basic and diluted net (loss) income per share attributable to common stockholders using the two-class method required for companies with participating securities. Under the two-class method, basic net (loss) income per share available to stockholders is calculated by dividing the net (loss) income available to stockholders by the weighted-average number of shares of common stock outstanding during the period. Diluted net (loss) income per share available to stockholders is computed by giving effect to all potentially dilutive common stock equivalents outstanding for the period. In periods in which the Company reports a net loss available to stockholders, diluted net loss per share available to stockholders would be the same as basic net loss per share available to stockholders, since dilutive common shares are not assumed to have been issued if their effect is anti-dilutive. The Company reported net loss available to common shareholders during the three months ended March 31, 2023 and 2022, respectively. Fair Value Measurements- Fair value accounting is applied for all assets and liabilities and nonfinancial assets and liabilities that are recognized or disclosed at fair value in the consolidated financial statements on a recurring basis (at least annually). Fair value is defined as the exchange price that would be received for an asset or an exit price that would be paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The Company follows the established framework for measuring fair value. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The authoritative guidance establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to measurements involving significant unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows: Level 1 —Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. Level 2 —Inputs are observable, unadjusted quoted prices in active markets for similar assets or liabilities, unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities. Level 3 —Inputs are unobservable inputs for the asset or liability. The level in the fair value hierarchy within which a fair value measurement in its entirety falls is based on the lowest-level input that is significant to the fair value measurement in its entirety. The Company’s financial instruments consist of accounts payable, accrued expenses, warrant liability, RLOC, and Term Loan. Accounts payable and accrued expenses are stated at their carrying value, which approximates fair value due to the short time to the expected receipt or payment date. The condensed consolidated financial statements al so include fair value level 3 measurements of private common stock warrants. The Company uses a third-party valuation firm to determine the fair value of certain of the Company's financial instruments. Refer to Note 13 for discussion of fair value measurements. Concentrations of Credit Risk —Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and accounts receivable. The Company’s cash balances exceed those that are federally insured. To date, the Company has not recognized any losses caused by uninsured balances. Significant customers are those which represent more than 10% of the Company’s total revenue or gross accounts receivable balance at each balance sheet date. During the three months ended March 31, 2023 and 2022, the Company did not have any customers that accounted for 10% or more of total revenue. As of December 31, 2022, the Company also did not have any customers that accounted for 10% or more of outstanding gross accounts receivable. A significant portion of the Company’s transaction volume is with a limited number of merchants, including most significantly, Wayfair Inc. Recently Adopted Accounting Pronouncements— In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting . This ASU provides temporary optional expedients and exceptions to the U.S. GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burdens related to the expected market transition from the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates. This ASU is effective for all entities beginning as of its date of effectiveness, March 12, 2020. In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848 which deferred the sunset date of ASC 848 until December 31, 2024. This ASU did not have a material impact on our consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), as amended (“ASU 2016-02”). Under ASU 2016-02, adoption requires the use of a modified retrospective transition method to measure leases at the beginning of the earliest period presented in the consolidated financial statements. In July 2018, the FASB issued ASU 2018-11 Leases , allowing companies to apply a transition method for adoption of the new standard as of the adoption date, with recognition of any cumulative effects as adjustments to the opening balance of retained earnings in the period of adoption. We have elected the transition method under ASU 2018-11 upon adoption of the new standard. The Company's lease-to-own agreements, which comprise the majority of our annual revenue, fall within the scope of ASU 2016-02 under lessor accounting. As a result, the Company recognizes revenue from customers when the revenue is earned and cash is collected. The Company no longer records accounts receivable arising from lease receivables due from customers incurred during the normal course of business for lease payments earned but not yet received from the customer or any corresponding allowance for doubtful accounts. Under ASU 2016-02 Effective Dates for Certain Entities (“ASU 2020-05”), which defers the effective date of ASU 2016-02 for private entities to fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. The Company adopted the new standard on January 1, 2022, in accordance with adoption dates provided by the FASB applicable to us under our emerging growth company status. Recent Accounting Pronouncements Not Yet Adopted — The Company has reviewed all other recently issued accounting pronouncements and concluded that they were either not applicable or not expected to have a material impact to its consolidated financial statements. |
Property Held for Lease, Net of
Property Held for Lease, Net of Accumulated Depreciation and Impairment | 3 Months Ended |
Mar. 31, 2023 | |
Leases [Abstract] | |
Property Held for Lease, Net of Accumulated Depreciation and Impairment | PROPERTY HELD FOR LEASE, NET OF ACCUMULATED DEPRECIATION AND IMPAIRMENT Property held for lease, net of accumulated depreciation and impairment consists of the following: March 31, December 31, 2023 2022 Property held for lease $ 178,050 $ 289,800 Less: accumulated depreciation and impairment (125,249) (239,522) Property held for lease, net $ 52,801 $ 50,278 Total depreciation expense related to property held for lease, net for the three months ended March 31, 2023 and 2022, was $28,815 and $32,618, respectively. Net book value of property buyouts for the three months ended March 31, 2023 and 2022, was $6,452 and $10,020, respectively. Total impairment charges related to property held for lease, net for the three months ended March 31, 2023 and 2022, was $5,223 and $3,224, respectively. Depreciation expense, net book value of property buyouts and impairment charges are included within cost of revenue in the condensed consolidated statement of operations and comprehensive (loss) income. Substantially all property held for lease, net is on-lease as of March 31, 2023 and December 31, 2022. |
Property and Equipment, Net
Property and Equipment, Net | 3 Months Ended |
Mar. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | PROPERTY AND EQUIPMENT, NET Property and equipment, net consists of the following: March 31, December 31, 2023 2022 Computer, office and other equipment $ 817 $ 813 Computer software 80 80 Furniture and fixtures 100 100 Leasehold improvements 252 252 1,249 1,245 Less: accumulated depreciation (735) (688) Property and equipment, net $ 514 $ 557 |
Capitalized Software and Intang
Capitalized Software and Intangible Assets, Net | 3 Months Ended |
Mar. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Capitalized Software and Intangible Assets, Net | CAPITALIZED SOFTWARE AND INTANGIBLE ASSETS, NET Capitalized software and intangible assets, net consists of the following: March 31, December 31, 2023 2022 Capitalized software $ 2,887 $ 2,591 Domain name 16 16 2,903 2,607 Less: accumulated amortization (909) (760) Capitalized software and intangible assets, net $ 1,994 $ 1,847 Total amortization expense for capitalized software and intangible assets was $150 and $75 for the three months ended March 31, 2023 and 2022, respectively. The following table summarizes estimated future amortization expense of capitalized software and intangible assets, net for the years ending December 31: 2023 (remaining nine months) $ 582 2024 586 2025 190 2026 1 $ 1,359 |
Other Accrued Liabilities
Other Accrued Liabilities | 3 Months Ended |
Mar. 31, 2023 | |
Other Liabilities Disclosure [Abstract] | |
Other Accrued Liabilities | OTHER ACCRUED LIABILITIES Accrued liabilities consists of the following: March 31, December 31, 2023 2022 Bonus accrual $ 1,130 $ 2,376 Sales tax payable 5,666 5,582 Unfunded lease payable 3,424 4,159 Interest payable 99 118 Other accrued liabilities 3,721 2,297 Total accrued liabilities $ 14,040 $ 14,532 |
Debt
Debt | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
Debt | DEBT On May 14, 2019, the Company entered into a Loan and Security Agreement (as amended the “Credit Agreement”) with respect to the RLOC, which resulted in an initial commitment amount of $50,000, with the lenders having the right to increase to a maximum of $150,000 commitment over time. The RLOC is subject to certain covenants and originally had an 85% advance rate on eligible accounts receivable, which was increased to 90% during March 2020. The annual interest rate on the principal was LIBOR plus 7.5% per annum. There was a 2% floor on LIBOR. As of March 31, 2023, total borrowings outstanding on the RLOC were $61,476 less issuance costs of $571, netting to a total of $60,905. As of December 31, 2022, the total outstanding on the RLOC was $57,998 less issuance costs of $359, netting a total of $57,639. The issuance costs are amortized over the life of the RLOC and included in interest expense and other fees. On September 28, 2020, the lender exercised their right to increase the maximum commitment to a total of $125,000. On December 4, 2020, the Company entered into the ninth amendment to the Credit Agreement which provided the lenders with the right to increase the revolving commitment amount from $125,000 to $250,000. Pursuant to the ninth amendment to the Credit Agreement, the lenders also provided the Company with a senior secured term loan (the “Term Loan”) commitment of up to $50,000. The Company drew down the full $50,000 of the Term Loan on December 4, 2020. The Term Loan bears interest at one-month LIBOR plus 8% per annum, (with a 1% floor on the LIBOR Rate). The interest rate for paid-in-kind (“PIK”) interest on the Term Loan (as defined in the Credit Agreement) is (A) if Liquidity is greater than $50,000, 4.5% or (B) if Liquidity is less than $50,000, 6%. The RLOC and Term Loan are also subject to certain customary representations, affirmative covenants, which consist of maintaining lease performance metrics, financial ratios related to operating results, and lease delinquency ratios, along with customary negative covenants. The Credit Agreement also requires the Company to maintain the financial covenants with respect to Minimum Adjusted EBITDA (as defined in the Credit Agreement), Minimum Tangible Net Worth, Minimum Liquidity and compliance with the Total Advance Rate (as defined in the Credit Agreement). On March 14, 2022, the Company entered into the 13th amendment to the Credit Agreement to amend the number of times the Company can cure a default with respect to compliance with the total advance rate covenant from two to five. On May 9, 2022, the Company entered into the 14th amendment to the Credit Agreement, which amended the Credit Agreement for certain financial covenants including, the minimum Adjusted EBITDA thresholds, Minimum Tangible Net Worth, Minimum Liquidity and compliance with a Total Advance Rate. In addition, the limitation on the number of times the Company can cure a breach of its Total Advance Rate covenant by depositing funds into a reserve bank account was eliminated. On March 6, 2023, the Company entered into the 15th amendment to the Credit Agreement. As part of the amendment, the maturity date of the RLOC and the Term Loan was extended to June 4, 2025 and the commitments under the RLOC were reduced to $75,000 from $125,000. The spread above the benchmark rate on the RLOC was increased to 8.5% from 7.5%, while the spread above the benchmark rate on the Term Loan remained at 8%. Additionally, effective April 1, 2023, the benchmark rate underlying the annual interest rate on both the RLOC and the Term Loan was changed from the one month LIBOR rate to one month term SOFR rate. In connection with the 15th amendment to the Credit Agreement, the Company repaid $25,000 of outstanding principal amount of the Term Loan and issued a warrant to purchase up to 2,000,000 shares of the Company common stock at an exercise price of $0.01 per share, which vests upon the earliest to occur of September 6, 2023 or a Change of Control. In addition, under the terms of the Credit Agreement, the Company may be required to grant an additional 2,000,000 shares of common stock at the same exercise price under the warrant agreement if any amount of the principal balance of the Term Loan remains outstanding upon the earlier to occur of (i) December 5, 2023, (ii) an Acquisition of the Company, and (iii) an Event of Default occurs under the Credit Agreement prior to December 5, 2023. If issued, such shares will become vested upon the first to occur of (i) three months after the grant date or (ii) an Acquisition of the Company. In conjunction with the 15th amendment to the Credit Agreement, the Company incurred a loss on partial extinguishment of debt of $2,391 for the three months ended March 31, 2023. The loss on partial extinguishment of debt is attributed to the derecognition of a proportionate amount of the unamortized debt discount, a result of repaying the $25,000 of outstanding principal on the Term Loan. In addition, the 15th amendment also updated certain financial covenants, including the Minimum Adjusted EBITDA levels, Minimum Tangible Net Worth, Minimum Liquidity and compliance with a Total Advance Rate. As of March 31, 2023 and December 31, 2022, the Company was in compliance with all covenants. A reconciliation of the outstanding principal to the carrying amount of the Term Loan is as follows: March 31, December 31, 2023 2022 Outstanding principal $ 25,000 $ 50,000 PIK 4,315 3,785 Debt discount (6,504) (5,728) Total carrying amount $ 22,811 $ 48,057 Total amortization expense related to the Term Loan discount was $ 1,093 |
Leases
Leases | 3 Months Ended |
Mar. 31, 2023 | |
Leases [Abstract] | |
Leases | LEASES Lessor Information — Refer to Note 2 to these condensed consolidated financial statements for further information about the Company’s revenue generating activities as a lessor. All of the Company’s customer agreements are considered operating leases. Lessee Information— The Company determines if a contract contains a lease at inception. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date of the lease based on the present value of lease payments over the lease term. The Company uses the incremental borrowing rate to determine the present value of lease payments, as the implicit rate is not readily determinable. The ROU asset also includes any lease payments made. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The Company leases office space in Plano, TX and New York, NY under operating leases with a non-cancelable lease term which end in August 2023 and June 2025, respectively. Lease expenses are included in general and administrative expenses on the condensed consolidated statement of operations and comprehensive (loss) income. The following is a schedule of future minimum lease payments required under the non-cancelable leases as of March 31, 2023, reconciled to the present value of operating lease liabilities: Years Ending December 31, 2023 (remaining 9 months) $ 327 2024 334 2025 170 Total future minimum lease payments $ 831 Less: Interest (116) Total present value of lease liabilities $ 715 Lease Liabilities — Lease liabilities as of March 31, 2023, consist of the following: Current portion of lease liabilities $ 343 Long-term lease liabilities, net of current portion 372 Total lease liabilities $ 715 Rent expense for operating leases for the three months ended March 31, 2023 and 2022 were $134 and $135, respectively. As of March 31, 2023, the Company had a weighted average remaining lease term o f 2.07 years and a weighted average discount rate of 9.25%. |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation | STOCK-BASED COMPENSATION The Company has two stock incentive plans, the Cognical Holdings, Inc. 2014 Stock Incentive Plan, (the “ 2014 Plan ”) and the Katapult Holdings, Inc. 2021 Stock Incentive Plan, (the “ 2021 Plan ”). 2014 Plan In accordance with the 2014 Plan, the board of directors of Legacy Katapult could grant equity awards to officers, employees, directors and consultants for common stock. There were no stock options or other equity awards granted to non-employees during 2023 and 2022. The 2014 Plan has specific vesting for each stock option grant allowing vesting of the options over one Stock Options A summary of the status of the stock options under the 2014 Plan as of March 31, 2023, and changes during the three months then ended is presented below: Number of Weighted- Average Weighted-Average Aggregate Balance - December 31, 2022 8,071,384 $ 0.30 6.32 $ 5,479 Granted — — Exercised — — Forfeited (3,905) 3.50 Balance - March 31, 2023 8,067,479 0.30 6.08 $ 1,605 Exercisable - March 31, 2023 8,065,212 0.29 6.08 $ 1,605 Unvested - March 31, 2023 2,267 3.50 7.54 $ — No stock options were exercised during the three months ended March 31, 2023. The total intrinsic value of stock options exercised during the three months ended March 31, 2022 was $602. As of March 31, 2023, total compensation cost not yet recognized related to unvested stock options was $10, which is expected to be recognized over a period of 1.13 years. 2021 Plan On June 9, 2021, the 2021 Plan, which was approved by the board of directors and stockholders, became effective. In accordance with the 2021 Plan, directors may issue equity awards, including restricted stock awards (“RSA”), restricted stock unit awards (“RSU”) and stock options to officers, employees, directors and consultants to purchase common stock. The awards granted are subject to either service-based and/or performance-based vesting conditions. Awards granted under the 2021 Plan generally vest over one Stock Options A summary of the status of the stock options under the 2021 Plan as of March 31, 2023, and changes during the three months then ended is presented below: Number of Shares Weighted- Average Exercise Price Weighted-Average Remaining Contractual Term (In Years) Aggregate Intrinsic Value Balance - December 31, 2022 346,603 $ 10.45 8.50 $ — Granted — — Exercised — — Forfeited — — Balance - March 31, 2023 346,603 10.45 8.25 $ — Exercisable - March 31, 2023 202,185 10.45 8.25 $ — Unvested - March 31, 2023 144,418 $ 10.45 8.25 $ — As of March 31, 2023, total compensation cost not yet recognized related to unvested stock options was $869 , which is expected to be recognized over a period of 1.63 years. No stock options were granted under the 2021 Plan during the three months ended March 31, 2023. Restricted Stock Units Restricted stock units (“RSUs”) are equity awards granted to employees that entitle the holder to shares of common stock when the awards vest. RSUs are measured based on the fair value of the Company’s common stock on the date of grant. A summary of the status of the RSUs under the 2021 Plan as of March 31, 2023, and changes during the three months then ended is presented below: Number of RSUs Weighted Average Grant Date Fair Value Outstanding - December 31, 2022 6,141,114 $ 2.38 Granted 466,610 0.98 Vested (1,251,503) 2.29 Forfeited (508,812) 2.34 Outstanding - March 31, 2023 4,847,409 $ 2.29 Stock-Based Compensation Expense — Stock-based compensation expense was $2,090 and $1,089 for three months ended March 31, 2023 and 2022, respectively. Stock-based compensation expense is included in compensation costs. As of March 31, 2023, there was approximately $9,174 of unrecognized compensation costs related to unvested RSUs. This amount is expected to be recognized over a weighted-average period o f 1.33 years. The total fair value of vested RSUs as of their respective vesting dates were $576. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES For the three months ended March 31, 2023 and 2022, the Company recorded an income tax provision of $20 and $35, respectively. The provisions for the three months ended March 31, 2023 and 2022 relates predominately to state income taxes due to the Company’s estimated taxable income for the year. Taxable income is expected to be generated in certain states where accelerated federal tax depreciation is disallowed. The Company’s effective tax rate for the three month period ended March 31, 2023 and 2022 is different than the statutory rate primarily due to changes in the Company’s valuation allowance. As of December 31, 2022, the Company had U.S. federal net operating loss carryforwards of $134,100 that will begin to expire in 2032 and includes $98,400 that have an unlimited carryforward period. As of December 31, 2022, the Company has U.S. state and local net operating loss carryforwards of $86,000 that will begin to expire in 2023. In evaluating its ability to realize its net deferred tax assets, the Company considered all available positive and negative evidence, such as past operating results, forecasted earnings, prudent and feasible tax planning strategies, and the future realization of the tax benefits of existing temporary differences. The Company remains in a cumulative tax loss position for the 36 months ended March 31, 2023, and determined that it is more likely than not that its net deferred tax assets will not be realized. The Company continues to maintain a full valuation allowance as of March 31, 2023 and December 31, 2022. It is possible that the Company will achieve profitability to enable the release of some or all of its valuation allowance in the future. |
Net Loss Per Share
Net Loss Per Share | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | NET LOSS PER SHAREThe following table sets forth the computation of net loss per common share: Three Months Ended March 31, 2023 2022 Net loss per share Numerator Net loss $ (9,114) $ (6,039) Denominator Denominator for basic net loss per weighted average common shares 99,328,542 97,873,452 Net loss per common share Basic $ (0.09) $ (0.06) Diluted $ (0.09) $ (0.06) As discussed in Note 7, the Company issued a warrant to purchase up to 2,000,000 shares of the Company common stock at an exercise price of $0.01 per share, which vests upon the earliest to occur of September 6, 2023 or a Change of Control. In addition, under the terms of the Credit Agreement, the Company may be required to grant an additional 2,000,000 shares of common stock at the same exercise price under the warrant agreement if any amount of the principal balance of the Term Loan remains outstanding upon the earlier to occur of (i) December 5, 2023, (ii) an Acquisition of the Company, and (iii) an Event of Default occurs under the Credit Agreement prior to December 5, 2023. If issued, such shares will become vested upon the first to occur of (i) three months after the grant date or (ii) an Acquisition of the Company. The warrant was considered exercisable for 2,000,000 shares for little to no consideration and the shares are therefore included in basic shares outstanding at their issuance date. The additional 2,000,000 warrants were excluded as the contingency associated with their issuance has not been met. The Company’s potentially dilutive securities, which include unvested RSUs, stock options to purchase common stock and warrants to purchase common stock, have been excluded from the computation of diluted net loss per share for certain periods, as the effect would be antidilutive. Therefore, the weighted-average number of common shares outstanding used to calculate both basic and diluted net loss per share is the same in periods of a net loss. The Company excluded the following potential common shares, presented based on amounts outstanding at each period end, from the computation of diluted net loss per share for the periods indicated because including them would have had an anti-dilutive effect: Three Months Ended March 31, 2023 2022 Public warrants 12,500,000 12,500,000 Private warrants 332,500 332,500 Stock options 8,414,082 8,442,265 Unvested restricted stock units 4,847,409 6,274,361 Issuance of common stock upon exercise of warrants 2,000,000 — Total common stock equivalents 28,093,991 27,549,126 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES Litigation risk— From time to time, the Company may become involved in various legal actions arising in the ordinary course of business. Management is of the opinion that the ultimate liability, if any, from these actions will not have a material effect on its financial condition or results of operations. The Company is not currently aware of any indemnification or other claims, except as discussed below and has not accrued any liabilities related to such obligations in the condensed consolidated financial statements as of March 31, 2023 and December 31, 2022. Except as set forth below, the Company and its subsidiaries are not a party to, and their properties are not the subject of, any material pending legal proceedings. DCA Litigation On April 9, 2021, Daiwa Corporate Advisory LLC (formerly known as DCS Advisory LLC) (“DCA”), a financial advisory firm, served the Company with a summons and a complaint filed in the Supreme Court of the State of New York, New York County, in a matter bearing the index number 652164/2021. The complaint relates to a March 22, 2018 letter agreement (the “Letter Agreement”) entered into by DCA and Legacy Katapult. Among other things, DCA alleges that the Letter Agreement confers upon DCA (i) a right to act as the “exclusive financial advisor” with respect to certain transactions defined in the Letter Agreement, (ii) a right to a “Placement Fee” and/or “mutually-agreed upon fees” in connection with such advisory roles, and (iii) a right to a $100 termination fee payable in certain circumstances by the Company in the event that the Company terminated the Letter Agreement. For its first cause of action, DCA alleges that the Company “breached the Letter Agreement by failing and/or refusing to extend to DCA the opportunity to exercise its right of first refusal in connection with” certain transactions and the PIPE Investment. DCA seeks “damages in an amount to be determined at trial” with respect to this first cause of action. For its second cause of action, DCA alleges that, assuming the Company properly terminated the Letter Agreement in April 2019 (which DCA disputes), the Company, Inc. “also breached the Letter Agreement by failing to pay DCA a termination fee when it terminated the Letter Agreement.” DCA seeks “damages in an amount to be determined at trial, but no less than $100,” with respect to this second cause of action. With respect to both causes of action, DCA also seeks attorneys’ fees and costs pursuant to the Letter Agreement, an award of pre- and- post -judgment interest, and such other and further relief as the Court deems just and proper. On May 24, 2021, the Company filed its answer to the complaint and also asserted counterclaims against DCA for breach of contract and for breach of the duty of good faith and fair dealing. In connection with its counterclaims, the Company is seeking damages in the amount of approximately $10,600, as well as attorneys’ fees and costs. The Company disputes the allegations in DCA’s complaint and intends to vigorously defend against the claims. On July 29, 2021, the court entered a Preliminary Conference Order, which was subsequently amended on September 13, 2021, October 25, 2021, and June 27, 2022. Pursuant to the October 25, 2021 scheduling order, fact discovery was completed on June 24, 2022. On August 8, 2022, DCA filed its Note of Issue, stating that its damages demand is $18,394, plus attorneys’ fees and costs. On September 12, 2022, DCA filed a motion seeking summary judgment as to both of its claims, and on September 13, 2022, the Company filed a motion seeking summary judgment as to DCA’s first cause of action. The parties filed opposition briefs on October 7, 2022. This matter went to mediation in January 2023 and is still in process. Shareholder Litigation On August 27, 2021, a putative class action lawsuit was filed in the U.S. District Court for the Southern District of New York against Katapult Holdings, Inc., two officers of FinServ, one of whom is a current Company director, and two officers of Legacy Katapult, both of whom are current Company officers. The lawsuit is captioned McIntosh v. Katapult Holdings, Inc., et al. On May 26, 2022, the Court appointed a lead plaintiff, who, on July 29, 2022, filed an amended complaint in the action. The amended complaint asserts violations of Sections 10(b), 14(a), and 20(a) of the Securities Exchange Act of 1934, and seeks an unspecified amount of damages on behalf of persons and entities that (a) beneficially owned and/or held FinServ common stock as of the close of business on May 11, 2021 and were eligible to vote at FinServ’s June 7, 2021 special meeting (the “FinServ Putative Class”); or (b) purchased or otherwise acquired Katapult securities between June 15, 2021 and August 9, 2021, inclusive (the “Katapult Putative Class”). The amended complaint alleges that certain defendants misled the FinServ Putative Class by failing to disclose that prime lenders could and would reach down the credit waterfall and take Katapult’s customers. The amended complaint further alleges that certain defendants misled the Katapult Putative Class by providing materially false and misleading financial guidance. The Company and the other defendants filed amended complaints on November 4, 2022. On January 9, 2023, the Company filed a motion to dismiss. In March 2023 the Plaintiffs filed opposition briefs and the Company replied in April 2023. The Company is currently waiting for response from the Court. The Company and the other defendants intend to vigorously defend against the claims in this action. The Company has not recorded any loss or gain contingencies associated with these matters as it is not probable or reasonably estimable at March 31, 2023. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | FAIR VALUE MEASUREMENTS The Company’s financial instruments consist of its warrant liability, RLOC, and Term Loan. The estimated fair value of the Company’s RLOC and Term Loan were as follows: March 31, 2023 December 31, 2022 Principal amount Carrying amount Fair value Principal amount Carrying amount Fair value RLOC $ 61,476 $ 60,905 $ 63,666 $ 57,998 $ 57,639 $ 58,708 Term Loan 29,315 22,811 32,613 53,785 48,057 56,828 $ 90,791 $ 83,716 $ 96,279 $ 111,783 $ 105,696 $ 115,536 The estimated fair values of the Company’s RLOC, and Term Loan were determined using Level 2 inputs based on an estimated credit rating for the Company and the trading value of debt for similar debt instruments with similar credit ratings. There were no assets measured at fair value on a recurring basis as of March 31, 2023 or December 31, 2022. Liabilities measured at fair value on a recurring basis were as follows: March 31, 2023 Total Level 1 Level 2 Level 3 Liabilities: Warrant liability - Public & Private Warrants $ 770 $ 750 $ — $ 20 Total Other Liabilities $ 770 $ 750 $ — $ 20 December 31, 2022 Total Level 1 Level 2 Level 3 Liabilities: Warrant liability - Public & Private Warrants $ 902 $ 875 $ — $ 27 Total Other Liabilities $ 902 $ 875 $ — $ 27 During the three months ended March 31, 2023 and 2022, there were no transfers between Level 1 and Level 2, nor into or out of Level 3. The following table summarizes the activity for the Company’s Level 3 liabilities measured at fair value on a recurring basis: Warrant Liability Balance at December 31, 2022 $ 902 Changes in fair value (132) Balance at March 31, 2023 $ 770 |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | SUBSEQUENT EVENTS The Company evaluated subsequent events from March 31, 2023, the date of these condensed consolidated financial statements, through May 11, 2023, which represents the date the condensed consolidated financial statements were issued, for events requiring adjustment to or disclosure in these condensed consolidated financial statements. Except as disclosed below, there are no events that require adjustment to or disclosure in these condensed consolidated financial statements. On April 21, 2023, the Company received a letter from the Listing Qualifications Department of Nasdaq notifying the Company that, for the prior 30 consecutive business days, the closing bid price for the Company’s common stock, was below $1.00 per share, which is the minimum closing bid price required for continued listing on The Nasdaq Capital Market pursuant to Nasdaq Listing Rule 5450(a)(1). This Notice was a notice of deficiency, not delisting, and had no |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Subsidiaries | Subsidiaries— The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries Katapult Intermediate Holdings, LLC (formerly known as Keys Merger Sub 2, LLC), Katapult Group, Inc. and Katapult SPV-1 LLC. which originates all of the Company’s leases. Legacy Katapult was incorporated in Delaware in 2016 and changed its headquarters from New York, New York to Plano, Texas in December 2020. Katapult Group, Inc. was incorporated in the state of Delaware in 2012. Katapult SPV-1 LLC is a Delaware limited liability company formed in Delaware in 2019. |
Basis of Presentation | Basis of Presentation— The condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) and the rules and regulations of the Securities and Exchange Commission (“SEC”). |
Risks and Uncertainties | Risks and Uncertainties — The Company is subject to a number of risks including, but not limited to, the need for successful development of our growth strategies, the need for additional capital (or financing) to fund operating losses, competition from substitute products and services from larger companies, protection of proprietary technology, patent litigation, dependence on key individuals, and risks associated with changes in information technology. |
Use of Estimates | Use of Estimates — The preparation of the condensed consolidated financial statements in accordance with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, and the reported amounts of income and expense during the reporting period. The most significant estimates relate to the selection of useful lives of property and equipment, the selection of useful lives for property held for lease and the related depreciation method, determination of fair value of stock option gra nts, the fair value of warrants, and the valua tion allowance associated with deferred tax assets. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, and makes adjustments when facts and circumstances dictate. These estimates are based on information available as of the date of the condensed consolidated financial statements; therefore, actual results could differ from those estimates. |
Segment Information | Segment Information — Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. The Company’s chief operating decision maker is the chief executive officer. The Company has one business activity and there are no segment managers who are held accountable for operations, operating results and plans for levels or components below the consolidated unit level. Accordingly, the Company has one operating segment, and therefore, one reportable segment. |
Cash and Cash Equivalents | Cash and Cash Equivalents — As of March 31, 2023 and December 31, 2022, cash consists primarily of checking and savings deposits. The Company holds certain cash equivalents, which consist of highly liquid investments with original maturities of three months or less at the time of purchase. |
Restricted Cash | Restricted Cash — The Company classifies all cash whose use is limited by contractual provisions as restricted cash. Restricted cash as of March 31, 2023, December 31, 2022 and March 31, 2022 consists primarily of cash advanced from the lines of credit in Katapult SPV-1 LLC, which were established pursuant to various agreements for the purpose of funding and servicing originated leases. All of the Company’s restricted cash is classified as current due to its short-term nature. |
Property Held for Lease, Net of Accumulated Depreciation and Impairment | Property Held for Lease, Net of Accumulated Depreciation and Impairment — Property held for lease consists of furniture, consumer electronics, appliances, and other durable goods offered for lease-purchase in the normal course of business. Such property is provided to consumers pursuant to a lease-purchase agreement with a minimum lease term; typically one week, two weeks, or one month. The renewal periods of the initial lease term of the agreement are typically 10, 12 or 18 months. Consumers may terminate a lease agreement at any time without penalty. The average consumer continues to lease the property for 7 months because the consumer either exercises the buyout (early purchase) options or terminates the lease purchase agreement prior to the end of the 10, 12 or 18 month renewal periods. As a result, property held for lease is classified as a current asset on the condensed consolidated balance sheets. Property held for lease is carried at net book value. Depreciation for property held for lease is determined using the income forecasting method and is included within cost of revenue. Under the income forecasting method, property held for lease is depreciated in the proportion of rents received to total expected rents received based on historical data, which is an activity-based method similar to the units of production method. The Company provides for impairment for the undepreciated balance of the property held for lease assuming no salvage value with a corresponding charge to cost of revenue. Impairment expense includes expense related to property identified as impaired based on historical data, including default trends, such that the recorded amount closely approximates actual impairment expense incurred during the period. The Company derecognizes the undepreciated net book value of property buyouts as buyouts occur with a corresponding charge to cost of revenue. The Company periodically evaluates fully depreciated property held for lease, net. When it is determined there is no future economic benefit, the cost of the assets are written off and the related accumulated depreciation is reversed. |
Property and Equipment, Net | Property and Equipment, Net — Property and equipment other than property held for lease are stated at cost less accumulated depreciation and amortization. Depreciation and amortization are calculated using the straight-line method and are recorded in general and administrative expense over the estimated useful lives of the assets. The estimated useful lives of property and equipment are described below: Property and Equipment Useful Life Computer, office and other equipment 5 years Computer software 3 years Furniture and fixtures 7 years Leasehold improvements Shorter of estimated useful life or remaining lease term |
Capitalized Software | Capitalized Software — The Company capitalizes certain development costs incurred in connection with its internal use software. Costs incurred in the preliminary stages of development are expensed as incurred. Capitalization of costs begins when the preliminary project stage is completed, and it is probable that the project will be completed and used for its intended function. Once an application has reached the development stage, internal and external costs, if direct and incremental, are capitalized until the software is substantially complete and ready for its intended use. Capitalization ceases upon completion of all substantial testing. The Company also capitalizes costs related to specific upgrades and enhancements when it is probable the expenditures will result in additional features and functionality. Maintenance costs are expensed as incurred. Internal use software is amortized on a straight-line basis over its estimated useful life, generally three years. Capitalized software cost is included within the Capitalized software and intangible assets, net line item of the condensed consolidated balance sheets. |
Debt Issuance Costs | Debt Issuance Costs — Costs incurred in connection with the issuance of the Company’s revolving line of credit (“RLOC”) and Term Loan have been recorded as a direct reduction against the debt and amortized over the life of the associated debt as a component of interest expense. The amortization of the Term Loan issuance costs utilizes the effective interest method, and the amortization of the RLOC debt issuance costs utilizes the straight-line method, which is not materially different compared to the effective interest method. The amortization of debt issuance costs is recorded and included in interest expense and other fees on the condensed consolidated statement of operations and comprehensive (loss) income. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets — The Company assesses long-lived assets for impairment in accordance with the provisions of ASC 360, Property, Plant and Equipment. Long-lived assets, such as intangible assets and property and equipment, are reviewed for impairment annually or whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. The carrying amount of a long-lived asset is not recoverable if it exceeds the sum of the undiscounted future cash flows expected to result from the use and eventual disposition of the asset. The amount of impairment loss, if any, is measured as the difference between the carrying value of the asset and its estimated fair value. Fair value is determined through various valuation techniques, including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary. No impairment charges have been recorded during the three months ended March 31, 2023 or 2022, respectively. |
Rental Revenue | Rental Revenue — Property held for lease is leased to customers pursuant to lease purchase agreements with an initial term: typically one week, two weeks, or one month, with non-refundable lease payments. Generally, the customer has the right to acquire title either through a 90-day promotional pricing option, an early purchase option (buyout) available prior to completion of the full agreement, or by completing all lease renewal payments, generally 10 to 18 months. On any current lease, customers have the option to terminate the agreement at any time without penalty in accordance with lease term. Accordingly, lease-purchase agreements are accounted for as operating leases with lease revenues recognized in the period they are earned and cash is collected. Amounts received from customers who elect early purchase options (buyouts) are included in rental revenue. Lease payments received prior to their due dates are deferred and recorded as unearned revenue and are recognized as rental revenue in the month in which the revenue is earned. Rental revenue also includes agreed-upon charges assessed for customer lease applications. Payments are received upon submission of the applications and execution of the lease-purchase agreements. Services are considered to be rendered and revenue earned over the initial lease term. Revenues from leases are reported net of sales taxes. |
Other Revenue | Other Revenue — Other revenue consists primarily of asset sales revenue related to the sale of property held for lease. During the three months ended March 31, 2023, the Company continued to advance its strategy to focus on additional opportunities to generate revenue, which includes the sale of property held for lease to third parties. The sale of property held for lease is now considered recurring and ordinary in nature to the Company’s business. As such, these sales are accounted for within the scope of ASC 606, Revenue from Contracts with Customers. Revenue is recognized when a performance obligation is satisfied by transferring control over an asset to a customer. Revenue is recorded with corresponding costs of revenue, presented on a gross basis. Revenue from sales of property held for lease during the three months ended March 31, 2023 and |
Stock-Based Compensation | Stock-Based Compensation — The Company measures and records compensation expense related to stock-based awards based on the fair value of those awards as determined on the date of the grant. The Company recognizes stock-based compensation expense over the requisite service period of the individual grant, generally equal to the vesting period and uses the straight-line method to recognize stock-based compensation. The Company uses the Black-Scholes-Merton (“Black-Scholes”) option-pricing model to determine the estimated fair value of stock option awards. The Black-Scholes option-pricing model requires estimates of highly subjective assumptions, which affect the fair value of each stock option. Forfeitures are accounted for as they are incurred. The Company calculates the fair value of stock options granted to employees by using the following assumptions: Expected Volatility —The Company estimates volatility for stock option grants by evaluating the average historical volatility of a peer group of companies for the period immediately preceding the stock option grant for a term that is approximately equal to the stock options’ expected term. Expected Term —The expected term of the Company’s stock options represents the period that the stock-based awards are expected to be outstanding. The Company has elected to use the midpoint of the stock options vesting term and contractual expiration period to compute the expected term, as the Company does not have sufficient historical information to develop reasonable expectations about future exercise patterns and post-vesting employment termination behavior. Risk-Free Interest Rate —The risk-free interest rate is based on the implied yield currently available on US Treasury zero-coupon issues with a term that is equal to the stock options’ expected term at the grant date. |
Income Taxes | Income Taxes —The Company accounts for income taxes under the asset and liability method pursuant to ASC 740, Income Taxes . Under this method, the Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the condensed consolidated financial statements. Under this method, the Company determines deferred tax assets and liabilities on the basis of the differences between the financial statement and tax basis of assets and liabilities by using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. The Company recognizes deferred tax assets to the extent that these assets are more likely than not to be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. If the Company determines that the Company would be able to realize deferred tax assets in the future in excess of their net recorded amount, the Company would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes. The Company remains in a cumulative tax loss position for the 36 months ended March 31, 2023, and determined that it is more likely than not that its net deferred tax assets will not be realized. The Company continues to maintain a full valuation allowance as of March 31, 2023 and December 31, 2022. The Company records uncertain tax positions in accordance with ASC 740 on the basis of a two-step process in which (1) the Company determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, the Company recognizes the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. The Company recognizes interest and penalties related to unrecognized tax benefits in the income tax expense line in the accompanying condensed consolidated statement of operations and comprehensive (loss) income. As of March 31, 2023 and December 31, 2022, no accrued interest or penalties are included on the related tax liability line in the condensed consolidated balance sheets. |
Net (Loss) Income Per Share | Net (Loss) Income Per Share – The Company calculates basic and diluted net (loss) income per share attributable to common stockholders using the two-class method required for companies with participating securities. |
Fair Value Measurements | Fair Value Measurements- Fair value accounting is applied for all assets and liabilities and nonfinancial assets and liabilities that are recognized or disclosed at fair value in the consolidated financial statements on a recurring basis (at least annually). Fair value is defined as the exchange price that would be received for an asset or an exit price that would be paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The Company follows the established framework for measuring fair value. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The authoritative guidance establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to measurements involving significant unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows: Level 1 —Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. Level 2 —Inputs are observable, unadjusted quoted prices in active markets for similar assets or liabilities, unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities. Level 3 —Inputs are unobservable inputs for the asset or liability. The level in the fair value hierarchy within which a fair value measurement in its entirety falls is based on the lowest-level input that is significant to the fair value measurement in its entirety. The Company’s financial instruments consist of accounts payable, accrued expenses, warrant liability, RLOC, and Term Loan. Accounts payable and accrued expenses are stated at their carrying value, which approximates fair value due to the short time to the expected receipt or payment date. The condensed consolidated financial statements al so include fair value level 3 measurements of private common stock warrants. The Company uses a third-party valuation firm to determine the fair value of certain of the Company's financial instruments. Refer to Note 13 for discussion of fair value measurements. |
Concentrations of Credit Risk | Concentrations of Credit Risk —Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and accounts receivable. The Company’s cash balances exceed those that are federally insured. To date, the Company has not recognized any losses caused by uninsured balances. |
Recently Adopted Accounting Pronouncements; Recent Accounting Pronouncements Not Yet Adopted | Recently Adopted Accounting Pronouncements— In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting . This ASU provides temporary optional expedients and exceptions to the U.S. GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burdens related to the expected market transition from the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates. This ASU is effective for all entities beginning as of its date of effectiveness, March 12, 2020. In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848 which deferred the sunset date of ASC 848 until December 31, 2024. This ASU did not have a material impact on our consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), as amended (“ASU 2016-02”). Under ASU 2016-02, adoption requires the use of a modified retrospective transition method to measure leases at the beginning of the earliest period presented in the consolidated financial statements. In July 2018, the FASB issued ASU 2018-11 Leases , allowing companies to apply a transition method for adoption of the new standard as of the adoption date, with recognition of any cumulative effects as adjustments to the opening balance of retained earnings in the period of adoption. We have elected the transition method under ASU 2018-11 upon adoption of the new standard. The Company's lease-to-own agreements, which comprise the majority of our annual revenue, fall within the scope of ASU 2016-02 under lessor accounting. As a result, the Company recognizes revenue from customers when the revenue is earned and cash is collected. The Company no longer records accounts receivable arising from lease receivables due from customers incurred during the normal course of business for lease payments earned but not yet received from the customer or any corresponding allowance for doubtful accounts. Under ASU 2016-02 Effective Dates for Certain Entities (“ASU 2020-05”), which defers the effective date of ASU 2016-02 for private entities to fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. The Company adopted the new standard on January 1, 2022, in accordance with adoption dates provided by the FASB applicable to us under our emerging growth company status. Recent Accounting Pronouncements Not Yet Adopted — The Company has reviewed all other recently issued accounting pronouncements and concluded that they were either not applicable or not expected to have a material impact to its consolidated financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Reconciliation of Cash and Restricted Cash | The reconciliation of cash and restricted cash is as follows : March 31, December 31, March 31, 2023 2022 2022 Cash and cash equivalents $ 40,552 $ 65,430 $ 80,625 Restricted cash 4,397 4,411 5,577 Total cash, cash equivalents and restricted cash $ 44,949 $ 69,841 $ 86,202 |
Reconciliation of Cash and Restricted Cash | The reconciliation of cash and restricted cash is as follows : March 31, December 31, March 31, 2023 2022 2022 Cash and cash equivalents $ 40,552 $ 65,430 $ 80,625 Restricted cash 4,397 4,411 5,577 Total cash, cash equivalents and restricted cash $ 44,949 $ 69,841 $ 86,202 |
Summary of Useful Lives | The estimated useful lives of property and equipment are described below: Property and Equipment Useful Life Computer, office and other equipment 5 years Computer software 3 years Furniture and fixtures 7 years Leasehold improvements Shorter of estimated useful life or remaining lease term Property and equipment, net consists of the following: March 31, December 31, 2023 2022 Computer, office and other equipment $ 817 $ 813 Computer software 80 80 Furniture and fixtures 100 100 Leasehold improvements 252 252 1,249 1,245 Less: accumulated depreciation (735) (688) Property and equipment, net $ 514 $ 557 |
Property Held for Lease, Net _2
Property Held for Lease, Net of Accumulated Depreciation and Impairment (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Leases [Abstract] | |
Schedule of Property Held for Lease, Net | Property held for lease, net of accumulated depreciation and impairment consists of the following: March 31, December 31, 2023 2022 Property held for lease $ 178,050 $ 289,800 Less: accumulated depreciation and impairment (125,249) (239,522) Property held for lease, net $ 52,801 $ 50,278 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Summary of Property and Equipment, Net | The estimated useful lives of property and equipment are described below: Property and Equipment Useful Life Computer, office and other equipment 5 years Computer software 3 years Furniture and fixtures 7 years Leasehold improvements Shorter of estimated useful life or remaining lease term Property and equipment, net consists of the following: March 31, December 31, 2023 2022 Computer, office and other equipment $ 817 $ 813 Computer software 80 80 Furniture and fixtures 100 100 Leasehold improvements 252 252 1,249 1,245 Less: accumulated depreciation (735) (688) Property and equipment, net $ 514 $ 557 |
Capitalized Software and Inta_2
Capitalized Software and Intangible Assets, Net (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Capitalized Software and Intangible Assets, Net | Capitalized software and intangible assets, net consists of the following: March 31, December 31, 2023 2022 Capitalized software $ 2,887 $ 2,591 Domain name 16 16 2,903 2,607 Less: accumulated amortization (909) (760) Capitalized software and intangible assets, net $ 1,994 $ 1,847 |
Summary of Estimated Future Amortization Expense | The following table summarizes estimated future amortization expense of capitalized software and intangible assets, net for the years ending December 31: 2023 (remaining nine months) $ 582 2024 586 2025 190 2026 1 $ 1,359 |
Other Accrued Liabilities (Tabl
Other Accrued Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Other Liabilities Disclosure [Abstract] | |
Schedule of Accrued Liabilities | Accrued liabilities consists of the following: March 31, December 31, 2023 2022 Bonus accrual $ 1,130 $ 2,376 Sales tax payable 5,666 5,582 Unfunded lease payable 3,424 4,159 Interest payable 99 118 Other accrued liabilities 3,721 2,297 Total accrued liabilities $ 14,040 $ 14,532 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt | A reconciliation of the outstanding principal to the carrying amount of the Term Loan is as follows: March 31, December 31, 2023 2022 Outstanding principal $ 25,000 $ 50,000 PIK 4,315 3,785 Debt discount (6,504) (5,728) Total carrying amount $ 22,811 $ 48,057 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Leases [Abstract] | |
Schedule of Future Minimum Lease Payments | The following is a schedule of future minimum lease payments required under the non-cancelable leases as of March 31, 2023, reconciled to the present value of operating lease liabilities: Years Ending December 31, 2023 (remaining 9 months) $ 327 2024 334 2025 170 Total future minimum lease payments $ 831 Less: Interest (116) Total present value of lease liabilities $ 715 |
Schedule of Lease Liabilities | Lease liabilities as of March 31, 2023, consist of the following: Current portion of lease liabilities $ 343 Long-term lease liabilities, net of current portion 372 Total lease liabilities $ 715 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Summary of Stock Options | A summary of the status of the stock options under the 2014 Plan as of March 31, 2023, and changes during the three months then ended is presented below: Number of Weighted- Average Weighted-Average Aggregate Balance - December 31, 2022 8,071,384 $ 0.30 6.32 $ 5,479 Granted — — Exercised — — Forfeited (3,905) 3.50 Balance - March 31, 2023 8,067,479 0.30 6.08 $ 1,605 Exercisable - March 31, 2023 8,065,212 0.29 6.08 $ 1,605 Unvested - March 31, 2023 2,267 3.50 7.54 $ — A summary of the status of the stock options under the 2021 Plan as of March 31, 2023, and changes during the three months then ended is presented below: Number of Shares Weighted- Average Exercise Price Weighted-Average Remaining Contractual Term (In Years) Aggregate Intrinsic Value Balance - December 31, 2022 346,603 $ 10.45 8.50 $ — Granted — — Exercised — — Forfeited — — Balance - March 31, 2023 346,603 10.45 8.25 $ — Exercisable - March 31, 2023 202,185 10.45 8.25 $ — Unvested - March 31, 2023 144,418 $ 10.45 8.25 $ — |
Summary of RSUs | A summary of the status of the RSUs under the 2021 Plan as of March 31, 2023, and changes during the three months then ended is presented below: Number of RSUs Weighted Average Grant Date Fair Value Outstanding - December 31, 2022 6,141,114 $ 2.38 Granted 466,610 0.98 Vested (1,251,503) 2.29 Forfeited (508,812) 2.34 Outstanding - March 31, 2023 4,847,409 $ 2.29 |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Net Loss Per Share | The following table sets forth the computation of net loss per common share: Three Months Ended March 31, 2023 2022 Net loss per share Numerator Net loss $ (9,114) $ (6,039) Denominator Denominator for basic net loss per weighted average common shares 99,328,542 97,873,452 Net loss per common share Basic $ (0.09) $ (0.06) Diluted $ (0.09) $ (0.06) |
Schedule of Antidilutive Securities | The Company excluded the following potential common shares, presented based on amounts outstanding at each period end, from the computation of diluted net loss per share for the periods indicated because including them would have had an anti-dilutive effect: Three Months Ended March 31, 2023 2022 Public warrants 12,500,000 12,500,000 Private warrants 332,500 332,500 Stock options 8,414,082 8,442,265 Unvested restricted stock units 4,847,409 6,274,361 Issuance of common stock upon exercise of warrants 2,000,000 — Total common stock equivalents 28,093,991 27,549,126 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Summary of Fair Values | The estimated fair value of the Company’s RLOC and Term Loan were as follows: March 31, 2023 December 31, 2022 Principal amount Carrying amount Fair value Principal amount Carrying amount Fair value RLOC $ 61,476 $ 60,905 $ 63,666 $ 57,998 $ 57,639 $ 58,708 Term Loan 29,315 22,811 32,613 53,785 48,057 56,828 $ 90,791 $ 83,716 $ 96,279 $ 111,783 $ 105,696 $ 115,536 |
Summary of Liabilities Measured on a Recurring Basis | Liabilities measured at fair value on a recurring basis were as follows: March 31, 2023 Total Level 1 Level 2 Level 3 Liabilities: Warrant liability - Public & Private Warrants $ 770 $ 750 $ — $ 20 Total Other Liabilities $ 770 $ 750 $ — $ 20 December 31, 2022 Total Level 1 Level 2 Level 3 Liabilities: Warrant liability - Public & Private Warrants $ 902 $ 875 $ — $ 27 Total Other Liabilities $ 902 $ 875 $ — $ 27 |
Summary of Level 3 Liability Activity | The following table summarizes the activity for the Company’s Level 3 liabilities measured at fair value on a recurring basis: Warrant Liability Balance at December 31, 2022 $ 902 Changes in fair value (132) Balance at March 31, 2023 $ 770 |
Description of Business and B_2
Description of Business and Basis of Presentation (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Interest expense and other fees | $ 5,189 | $ 4,282 |
Immaterial Classification Error Correction | ||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Interest expense and other fees | 481 | |
Debt discount | $ 481 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Narrative (Details) | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2023 USD ($) segment | Mar. 31, 2022 USD ($) | Dec. 31, 2021 | Dec. 31, 2022 USD ($) | Jan. 01, 2022 USD ($) | |
Property, Plant and Equipment [Line Items] | |||||
Number of operating segments | segment | 1 | ||||
Number of reportable segments | segment | 1 | ||||
Impairment charges | $ 0 | $ 0 | |||
Other revenue | $ 952,000 | $ 974,000 | |||
Dividend yield | 0% | ||||
Accrued interest and penalties | $ 0 | $ 0 | |||
Accounting Standards Update [Extensible Enumeration] | Accounting Standards Update 2016-02 [Member] | ||||
Total present value of lease liabilities | 715,000 | ||||
Right-of-use assets | $ 674,000 | $ 772,000 | |||
Cumulative Effect, Period of Adoption, Adjustment | |||||
Property, Plant and Equipment [Line Items] | |||||
Total present value of lease liabilities | $ 1,240,000 | ||||
Right-of-use assets | $ 1,139,000 | ||||
Capitalized software | |||||
Property, Plant and Equipment [Line Items] | |||||
Useful life | 3 years | ||||
Ten Months | |||||
Property, Plant and Equipment [Line Items] | |||||
Renewal term | 10 months | ||||
Twelve Months | |||||
Property, Plant and Equipment [Line Items] | |||||
Renewal term | 12 months | ||||
Eighteen Months | |||||
Property, Plant and Equipment [Line Items] | |||||
Renewal term | 18 months |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Cash and Restricted Cash (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 | Mar. 31, 2022 | Dec. 31, 2021 |
Accounting Policies [Abstract] | ||||
Cash and cash equivalents | $ 40,552 | $ 65,430 | $ 80,625 | |
Restricted cash | 4,397 | 4,411 | 5,577 | |
Total cash, cash equivalents and restricted cash | $ 44,949 | $ 69,841 | $ 86,202 | $ 96,431 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Useful Lives (Details) | 3 Months Ended |
Mar. 31, 2023 | |
Computer, office and other equipment | |
Property, Plant and Equipment [Line Items] | |
Useful life | 5 years |
Computer software | |
Property, Plant and Equipment [Line Items] | |
Useful life | 3 years |
Furniture and fixtures | |
Property, Plant and Equipment [Line Items] | |
Useful life | 7 years |
Property Held for Lease, Net _3
Property Held for Lease, Net of Accumulated Depreciation and Impairment (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Leases [Abstract] | ||
Property held for lease | $ 178,050 | $ 289,800 |
Less: accumulated depreciation and impairment | (125,249) | (239,522) |
Property held for lease, net | $ 52,801 | $ 50,278 |
Property Held for Lease, Net _4
Property Held for Lease, Net of Accumulated Depreciation and Impairment - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Leases [Abstract] | ||
Depreciation expense | $ 28,815 | $ 32,618 |
Net book value of property buyouts | 6,452 | 10,020 |
Impairment charges | $ 5,223 | $ 3,224 |
Property and Equipment, Net - S
Property and Equipment, Net - Summary of Property and Equipment, Net (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 1,249 | $ 1,245 |
Less: accumulated depreciation | (735) | (688) |
Property and equipment, net | 514 | 557 |
Computer, office and other equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 817 | 813 |
Computer software | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 80 | 80 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 100 | 100 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 252 | $ 252 |
Property and Equipment, Net - N
Property and Equipment, Net - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 47 | $ 45 |
Capitalized Software and Inta_3
Capitalized Software and Intangible Assets, Net - Summary of Capitalized Software and Intangible Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Finite-Lived Intangible Assets [Line Items] | ||
Capitalized software and intangible assets, gross | $ 2,903 | $ 2,607 |
Less: accumulated amortization | (909) | (760) |
Capitalized software and intangible assets, net | 1,994 | 1,847 |
Capitalized software | ||
Finite-Lived Intangible Assets [Line Items] | ||
Capitalized software and intangible assets, gross | 2,887 | 2,591 |
Domain name | ||
Finite-Lived Intangible Assets [Line Items] | ||
Capitalized software and intangible assets, gross | $ 16 | $ 16 |
Capitalized Software and Inta_4
Capitalized Software and Intangible Assets, Net - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Amortization expense | $ 150 | $ 75 | |
Capitalized computer software, not yet placed in service | $ 619 | $ 398 |
Capitalized Software and Inta_5
Capitalized Software and Intangible Assets, Net - Future Amortization (Details) $ in Thousands | Mar. 31, 2023 USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2023 (remaining nine months) | $ 582 |
2024 | 586 |
2025 | 190 |
2026 | 1 |
Capitalized software and intangible assets, net | $ 1,359 |
Other Accrued Liabilities (Deta
Other Accrued Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Other Liabilities Disclosure [Abstract] | ||
Bonus accrual | $ 1,130 | $ 2,376 |
Sales tax payable | 5,666 | 5,582 |
Unfunded lease payable | 3,424 | 4,159 |
Interest payable | 99 | 118 |
Other accrued liabilities | 3,721 | 2,297 |
Total accrued liabilities | $ 14,040 | $ 14,532 |
Debt - Narrative (Details)
Debt - Narrative (Details) | 1 Months Ended | 3 Months Ended | |||||||||
Mar. 06, 2023 USD ($) $ / shares shares | Mar. 05, 2023 USD ($) | Dec. 04, 2020 USD ($) | May 14, 2019 USD ($) | Mar. 31, 2020 | Mar. 31, 2023 USD ($) | Mar. 31, 2022 USD ($) | Dec. 31, 2022 USD ($) | Mar. 14, 2022 default_cure | Mar. 13, 2022 default_cure | Sep. 28, 2020 USD ($) | |
Line of Credit Facility [Line Items] | |||||||||||
Debt instrument, face amount | $ 90,791,000 | $ 111,783,000 | |||||||||
Principal repayment on term loan | 25,000,000 | $ 0 | |||||||||
Loss on partial extinguishment of debt | 2,391,000 | 0 | |||||||||
Senior Secured Term Loan Facility Commitment | Senior Loans | |||||||||||
Line of Credit Facility [Line Items] | |||||||||||
Debt instrument, face amount | $ 50,000,000 | 25,000,000 | 50,000,000 | ||||||||
Paid-in-kind interest liquidity trigger amount | $ 50,000,000 | ||||||||||
Paid-in-kind interest rate | 4.50% | ||||||||||
Paid-in-kind interest rate if liquidity is less | 6% | ||||||||||
Principal repayment on term loan | $ 25,000,000 | ||||||||||
Amortization expense | $ 1,093,000 | $ 1,018,000 | |||||||||
Senior Secured Term Loan Facility Commitment | Senior Loans | Term Loan Warrants Issued March 2023 | |||||||||||
Line of Credit Facility [Line Items] | |||||||||||
Number of shares called by warrants (in shares) | shares | 2,000,000 | ||||||||||
Exercise price (in dollars per share) | $ / shares | $ 0.01 | ||||||||||
Senior Secured Term Loan Facility Commitment | Senior Loans | Term Loan Warrants Issued December 2023 | |||||||||||
Line of Credit Facility [Line Items] | |||||||||||
Number of shares called by warrants (in shares) | shares | 2,000,000 | ||||||||||
Warrants outstanding, term | 3 months | ||||||||||
Senior Secured Term Loan Facility Commitment | London Interbank Offered Rate (LIBOR) | Senior Loans | |||||||||||
Line of Credit Facility [Line Items] | |||||||||||
Basis spread on variable rate | 8% | ||||||||||
Senior Secured Term Loan Facility Commitment | London Interbank Offered Rate (LIBOR) | Minimum | Senior Loans | |||||||||||
Line of Credit Facility [Line Items] | |||||||||||
Basis spread on variable rate | 1% | ||||||||||
Senior Secured Term Loan Facility Commitment | Secured Overnight Financing Rate (SOFR) | Senior Loans | |||||||||||
Line of Credit Facility [Line Items] | |||||||||||
Basis spread on variable rate | 8% | ||||||||||
RLOC | |||||||||||
Line of Credit Facility [Line Items] | |||||||||||
Line of credit, principal amount | 61,476,000 | 57,998,000 | |||||||||
RLOC | First Revolving Line of Credit, Refinanced | |||||||||||
Line of Credit Facility [Line Items] | |||||||||||
Current borrowing capacity | $ 50,000,000 | $ 125,000,000 | |||||||||
Line of credit, principal amount | $ 75,000,000 | $ 125,000,000 | $ 250,000,000 | $ 150,000,000 | |||||||
Advance rate | 85% | 90% | |||||||||
Gross amount outstanding | 61,476,000 | 57,998,000 | |||||||||
Issuance costs | 571,000 | 359,000 | |||||||||
Amount outstanding | $ 60,905,000 | $ 57,639,000 | |||||||||
Number of times a borrower can cure a default | default_cure | 5 | 2 | |||||||||
RLOC | First Revolving Line of Credit, Refinanced | London Interbank Offered Rate (LIBOR) | |||||||||||
Line of Credit Facility [Line Items] | |||||||||||
Basis spread on variable rate | 7.50% | ||||||||||
RLOC | First Revolving Line of Credit, Refinanced | London Interbank Offered Rate (LIBOR) | Minimum | |||||||||||
Line of Credit Facility [Line Items] | |||||||||||
Basis spread on variable rate | 2% | ||||||||||
RLOC | First Revolving Line of Credit, Refinanced | Secured Overnight Financing Rate (SOFR) | |||||||||||
Line of Credit Facility [Line Items] | |||||||||||
Basis spread on variable rate | 8.50% | 7.50% |
Debt - Schedule of Debt (Detail
Debt - Schedule of Debt (Details) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 | Dec. 04, 2020 |
Debt Instrument [Line Items] | |||
Outstanding principal | $ 90,791,000 | $ 111,783,000 | |
Senior Loans | Senior Secured Term Loan Facility Commitment | |||
Debt Instrument [Line Items] | |||
Outstanding principal | 25,000,000 | 50,000,000 | $ 50,000,000 |
PIK | 4,315,000 | 3,785,000 | |
Debt discount | (6,504,000) | (5,728,000) | |
Total carrying amount | $ 22,811,000 | $ 48,057,000 |
Leases - Maturities (Details)
Leases - Maturities (Details) $ in Thousands | Mar. 31, 2023 USD ($) |
Leases [Abstract] | |
2023 (remaining 9 months) | $ 327 |
2024 | 334 |
2025 | 170 |
Total future minimum lease payments | 831 |
Less: Interest | (116) |
Total present value of lease liabilities | $ 715 |
Leases - Lease Liabilities (Det
Leases - Lease Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Leases [Abstract] | ||
Current portion of lease liabilities | $ 343 | $ 382 |
Long-term lease liabilities, net of current portion | 372 | $ 445 |
Total lease liabilities | $ 715 |
Leases - Narrative (Details)
Leases - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Leases [Abstract] | ||
Rent expense | $ 134 | $ 135 |
Weighted average remaining lease term | 2 years 25 days | |
Weighted average discount rate | 9.25% |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) $ in Thousands | 3 Months Ended | 30 Months Ended | |
Mar. 31, 2023 USD ($) plan shares | Mar. 31, 2022 USD ($) shares | Mar. 31, 2023 USD ($) shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of plans | plan | 2 | ||
Stock-based compensation expense | $ 2,090 | $ 1,089 | |
Unvested RSU’s | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Compensation cost not yet recognized, period of recognition | 1 year 3 months 29 days | ||
RSU compensation cost not yet recognized | $ 9,174 | $ 9,174 | |
Fair value of vested RSUs | $ 576 | ||
2014 Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock options granted (in shares) | shares | 0 | 0 | |
Stock options exercised (in shares) | shares | 0 | ||
Shares exercised, intrinsic value | $ 602 | ||
Compensation cost not yet recognized | $ 10 | $ 10 | |
2014 Plan | Stock options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Compensation cost not yet recognized, period of recognition | 1 year 1 month 17 days | ||
2021 Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock options granted (in shares) | shares | 0 | ||
Stock options exercised (in shares) | shares | 0 | ||
Compensation cost not yet recognized | $ 869 | $ 869 | |
2021 Plan | Stock options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Compensation cost not yet recognized, period of recognition | 1 year 7 months 17 days | ||
Minimum | 2014 Plan | Stock options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 1 year | ||
Minimum | 2021 Plan | Stock options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 1 year | ||
Maximum | 2014 Plan | Stock options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 4 years | ||
Maximum | 2021 Plan | Stock options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 4 years | ||
Nonemployee | 2014 Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock options granted (in shares) | shares | 0 | 0 |
Stock-Based Compensation - Opti
Stock-Based Compensation - Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | 30 Months Ended |
Mar. 31, 2023 | Dec. 31, 2022 | Mar. 31, 2023 | |
2014 Plan | |||
Number of Shares | |||
Beginning balance (in shares) | 8,071,384 | ||
Granted (in shares) | 0 | 0 | |
Exercised (in shares) | 0 | ||
Forfeited (in shares) | (3,905) | ||
Ending balance (in shares) | 8,067,479 | 8,071,384 | 8,067,479 |
Exercisable (in shares) | 8,065,212 | 8,065,212 | |
Unvested (in shares) | 2,267 | 2,267 | |
Weighted- Average Exercise Price | |||
Beginning balance (in dollars per share) | $ 0.30 | ||
Granted (in dollars per share) | 0 | ||
Exercised (in dollars per share) | 0 | ||
Forfeited (in dollars per share) | 3.50 | ||
Ending balance (in dollars per share) | 0.30 | $ 0.30 | $ 0.30 |
Exercisable (in dollars per share) | 0.29 | 0.29 | |
Unvested (in dollars per share) | $ 3.50 | $ 3.50 | |
Additional Disclosures | |||
Options outstanding, weighted-average remaining contractual term | 6 years 29 days | 6 years 3 months 25 days | |
Options exercisable, weighted-average remaining contractual term | 6 years 29 days | ||
Options unvested, weighted-average remaining contractual term | 7 years 6 months 14 days | ||
Options outstanding, aggregate intrinsic value | $ 1,605 | $ 5,479 | $ 1,605 |
Options exercisable, aggregate intrinsic value | 1,605 | 1,605 | |
Options unvested, aggregate intrinsic value | $ 0 | $ 0 | |
2021 Plan | |||
Number of Shares | |||
Beginning balance (in shares) | 346,603 | ||
Granted (in shares) | 0 | ||
Exercised (in shares) | 0 | ||
Forfeited (in shares) | 0 | ||
Ending balance (in shares) | 346,603 | 346,603 | 346,603 |
Exercisable (in shares) | 202,185 | 202,185 | |
Unvested (in shares) | 144,418 | 144,418 | |
Weighted- Average Exercise Price | |||
Beginning balance (in dollars per share) | $ 10.45 | ||
Granted (in dollars per share) | 0 | ||
Exercised (in dollars per share) | 0 | ||
Forfeited (in dollars per share) | 0 | ||
Ending balance (in dollars per share) | 10.45 | $ 10.45 | $ 10.45 |
Exercisable (in dollars per share) | 10.45 | 10.45 | |
Unvested (in dollars per share) | $ 10.45 | $ 10.45 | |
Additional Disclosures | |||
Options outstanding, weighted-average remaining contractual term | 8 years 3 months | 8 years 6 months | |
Options exercisable, weighted-average remaining contractual term | 8 years 3 months | ||
Options unvested, weighted-average remaining contractual term | 8 years 3 months | ||
Options outstanding, aggregate intrinsic value | $ 0 | $ 0 | $ 0 |
Options exercisable, aggregate intrinsic value | 0 | 0 | |
Options unvested, aggregate intrinsic value | $ 0 | $ 0 |
Stock-Based Compensation - RSU
Stock-Based Compensation - RSU Activity (Details) | 3 Months Ended |
Mar. 31, 2023 $ / shares shares | |
Number of RSUs | |
Outstanding, beginning balance (in shares) | shares | 6,141,114 |
Granted (in shares) | shares | 466,610 |
Vested (in shares) | shares | (1,251,503) |
Forfeited (in shares) | shares | (508,812) |
Outstanding, ending balance (in shares) | shares | 4,847,409 |
Weighted Average Grant Date Fair Value | |
Outstanding, beginning balance (in dollars per share) | $ / shares | $ 2.38 |
Granted (in dollars per share) | $ / shares | 0.98 |
Vested (in dollars per share) | $ / shares | 2.29 |
Forfeited (in dollars per share) | $ / shares | 2.34 |
Outstanding, ending balance (in dollars per share) | $ / shares | $ 2.29 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Operating Loss Carryforwards [Line Items] | |||
Income tax provision | $ 20 | $ 35 | |
Federal | |||
Operating Loss Carryforwards [Line Items] | |||
Operating loss carryforwards | $ 134,100 | ||
Operating loss carryforwards not subject to expiration | 98,400 | ||
State and Local | |||
Operating Loss Carryforwards [Line Items] | |||
Operating loss carryforwards | $ 86,000 |
Net Loss Per Share - Schedule o
Net Loss Per Share - Schedule of Net Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Numerator | ||
Net loss | $ (9,114) | $ (6,039) |
Denominator | ||
Denominator for basic net loss per weighted average common shares (in shares) | 99,328,542 | 97,873,452 |
Net loss per common share | ||
Basic (in dollars per share) | $ (0.09) | $ (0.06) |
Diluted (in dollars per share) | $ (0.09) | $ (0.06) |
Net Loss Per Share - Narrative
Net Loss Per Share - Narrative (Details) - Senior Secured Term Loan Facility Commitment - Senior Loans | Mar. 06, 2023 $ / shares shares |
Term Loan Warrants Issued March 2023 | |
Class of Warrant or Right [Line Items] | |
Number of shares called by warrants (in shares) | 2,000,000 |
Exercise price (in dollars per share) | $ / shares | $ 0.01 |
Term Loan Warrants Issued December 2023 | |
Class of Warrant or Right [Line Items] | |
Number of shares called by warrants (in shares) | 2,000,000 |
Warrants outstanding, term | 3 months |
Net Loss Per Share - Antidiluti
Net Loss Per Share - Antidilutive Securities (Details) - shares | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities (in shares) | 28,093,991 | 27,549,126 |
Public warrants | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities (in shares) | 12,500,000 | 12,500,000 |
Private warrants | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities (in shares) | 332,500 | 332,500 |
Stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities (in shares) | 8,414,082 | 8,442,265 |
Unvested restricted stock units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities (in shares) | 4,847,409 | 6,274,361 |
Issuance of common stock upon exercise of warrants | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities (in shares) | 2,000,000 | 0 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Thousands | Aug. 08, 2022 USD ($) | Aug. 27, 2021 board_member | May 24, 2021 USD ($) | Apr. 09, 2021 USD ($) |
Loss Contingencies [Line Items] | ||||
Termination fee | $ 100 | |||
Damages sought (no less than) | $ 10,600 | $ 100 | ||
DCA Litigation | ||||
Loss Contingencies [Line Items] | ||||
Damages sought (no less than) | $ 18,394 | |||
McIntosh v. Katapult Holdings, Inc., et all | Officer | Pending Litigation | FinServ | ||||
Loss Contingencies [Line Items] | ||||
Number of defendants | board_member | 2 | |||
McIntosh v. Katapult Holdings, Inc., et all | Officer | Pending Litigation | Legacy Katapult | ||||
Loss Contingencies [Line Items] | ||||
Number of defendants | board_member | 2 |
Fair Value Measurements - Estim
Fair Value Measurements - Estimated Debt Fair Value (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Term loan, principal amount | $ 90,791 | $ 111,783 |
Term Loan | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Term loan, principal amount | 29,315 | 53,785 |
RLOC | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
RLOC, principal amount | 61,476 | 57,998 |
Carrying amount | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Term Loan | 22,811 | 48,057 |
Debt | 83,716 | 105,696 |
Carrying amount | RLOC | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
RLOC | 60,905 | 57,639 |
Fair value | Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Term Loan | 32,613 | 56,828 |
Debt | 96,279 | 115,536 |
Fair value | RLOC | Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
RLOC | $ 63,666 | $ 58,708 |
Fair Value Measurements - Liabi
Fair Value Measurements - Liabilities (Details) - Fair Value, Recurring - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Warrant liability - Public & Private Warrants | $ 770 | $ 902 |
Total Other Liabilities | 770 | 902 |
Level 1 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Warrant liability - Public & Private Warrants | 750 | 875 |
Total Other Liabilities | 750 | 875 |
Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Warrant liability - Public & Private Warrants | 0 | 0 |
Total Other Liabilities | 0 | 0 |
Level 3 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Warrant liability - Public & Private Warrants | 20 | 27 |
Total Other Liabilities | $ 20 | $ 27 |
Fair Value Measurements - Level
Fair Value Measurements - Level 3 (Details) - Level 3 - Fair Value, Recurring - Issuance of common stock upon exercise of warrants $ in Thousands | 3 Months Ended |
Mar. 31, 2023 USD ($) | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Beginning balance | $ 902 |
Changes in fair value | (132) |
Ending balance | $ 770 |