Katapult Holdings Inc. is facing significant financial challenges as it navigates its current restructuring process. The company is dealing with substantial indebtedness, with $113.1 million in principal outstanding under its Refinancing Agreement. This agreement is secured by a pledge over all company assets and includes restrictive covenants that limit operational flexibility. A failure to comply with these covenants could lead to the acceleration of debt obligations or even bankruptcy proceedings. In a critical development, Class B Lenders holding 51% of the New Term Loan have the option to convert outstanding loans into common stock if specific conditions are met, potentially altering the company's financial landscape. The company's ability to meet its financial commitments is under threat due to economic downturns impacting cash flow and revenue, putting additional pressure on its restructuring efforts.