Filed Pursuant to Rule 424(b)(3)
Registration No.: 333-252558

Dear Stockholder:

On December18, 2020, FinServ Acquisition Corp., a Delaware corporation (“FinServ”), entered into an Agreement and Plan of Merger (the “merger agreement”) with Keys Merger Sub1, Inc., a Delaware corporation and wholly owned subsidiary of FinServ (“Merger Sub 1”), Keys Merger Sub2, LLC, a Delaware limited liability company and wholly owned subsidiary of FinServ (“Merger Sub 2”), Katapult Holdings, Inc., a Delaware corporation (“Katapult”), and Orlando Zayas, in his capacity as the representative of all Pre-Closing Holders (as defined in the merger agreement). If the merger agreement is adopted by Katapult’s stockholders, the merger agreement and the transactions contemplated thereby, including the issuance of common stock (“New Katapult common stock”) of New Katapult (as defined below) to be issued in connection with the merger is approved by FinServ’s stockholders, and the merger is subsequently completed, Merger Sub 1 will merge with and into Katapult, with Katapult surviving the merger as a wholly owned subsidiary of FinServ (the “First Merger”), followed immediately by the merger of the resulting company with and into Merger Sub2, with Merger Sub 2 surviving the merger as a wholly owned subsidiary of FinServ (the “Second Merger” and together with the First Merger, the “merger”), and FinServ’s name will be changed from “FinServ Acquisition Corp.” to “Katapult Holdings, Inc.” (“New Katapult”).

At the effective time of the First Merger (the “First Effective Time”), each share of Katapult common stock (including common stock to be issued as a result of the conversion of Katapult preferred stock in connection with the merger) that is issued and outstanding immediately prior to the First Effective Time (other than dissenting shares and unvested Katapult restricted shares that will not vest in connection with the merger) will be cancelled and converted into the right to receive the applicable portion of the merger consideration, in accordance with an allocation schedule to be provided by Katapult, consisting of (i) cash consideration, as determined under the merger agreement and further described herein, (ii) a number of shares of New Katapult common stock equal to (a) $833.0million (subject to adjustment in accordance with the terms of the merger agreement and net of the value of all Katapult options to be converted into New Katapult options), minus the aggregate amount of cash paid in clause (i), divided by (b) 10 and (iii) the applicable portion of the 7,500,000 restricted shares of New Katapult common stock that will vest upon, among other things, the achievement of certain earn-out thresholds prior to the sixth anniversary of the closing of the merger. See “The Merger Agreement — Merger Consideration” in the accompanying proxy statement/prospectus.

Based on the number of shares of Katapult preferred stock and the number of shares of Katapult common stock, in each case outstanding as of May11, 2021, the record date for the Special Meeting (as defined below), the total number of shares of New Katapult common stock expected to be issued in the merger at the closing of the merger is approximately 50,686,464 and 68,311,334, and holders of shares of Katapult common stock as of immediately prior to the closing of the merger (and following the conversion of Katapult preferred stock into Katapult common stock) will hold, in the aggregate, approximately 51.9% and 69.9% of the issued and outstanding shares of New Katapult common stock immediately following the closing of the merger, assuming no shares of FinServ common stock are redeemed and the maximum number of shares of FinServ common stock are redeemed, respectively.

FinServ’s units, Class A Common Stock and warrants are publicly traded on the Nasdaq Capital Market (the “Nasdaq”). We intend to list the combined company’s common stock and warrants on the Nasdaq under the symbols KPLT and KPLTW, respectively, upon the closing of the merger. FinServ will not have units traded following closing of the merger.

FinServ will hold a special meeting in lieu of the 2021 annual meeting of stockholders (the “Special Meeting”) to consider matters relating to the proposed merger. FinServ and Katapult cannot complete the merger unless FinServ’s stockholders consent to the approval of the merger agreement and the transactions contemplated thereby, including the issuance of New Katapult common stock to be issued in connection with the merger, and Katapult’s

stockholders consent to adoption and approval of the merger agreement and the transactions contemplated thereby. FinServ and Katapult are sending you this proxy statement/prospectus to ask you to vote in favor of these and the other matters described in this proxy statement/prospectus.

The Special Meeting will be held on June7, 2021, at 2:00 p.m. Eastern Time, via a virtual meeting. In light of the novel coronavirus (referred to as “COVID-19”) pandemic and to support the well-being of FinServ’s stockholders and partners, the Special Meeting will be virtual. You may attend the meeting and vote your shares electronically during the meeting via live audio webcast by visiting https://www.cstproxy.com/finservacquisition/sm2021. You will need the control number that is printed on your proxy card to enter the Special Meeting. FinServ recommends that you log in at least 15 minutes before the meeting to ensure you are logged in when the Special Meeting starts. Please note that you will not be able to attend the Special Meeting in person.

YOUR VOTE IS VERY IMPORTANT, REGARDLESS OF THE NUMBER OF SHARES OF CLASS A COMMON STOCK YOU OWN. To ensure your representation at the Special Meeting, please complete and return the enclosed proxy card or submit your proxy by following the instructions contained in this proxy statement/prospectus and on your proxy card. Please submit your proxy promptly whether or not you expect to attend the meeting. Submitting a proxy now will NOT prevent you from being able to vote online at the meeting. If you hold your shares in “street name,” you should instruct your broker, bank or other nominee how to vote in accordance with the voting instruction form you receive from your broker, bank or other nominee.

The FinServ board of directors has unanimously approved the merger agreement and the transactions contemplated thereby and recommends that FinServ stockholders vote “FOR” the approval of the merger agreement, “FOR” the issuance of New Katapult common stock to be issued in connection with the merger and “FOR” the other matters to be considered at the Special Meeting.

This proxy statement/prospectus provides you with detailed information about the proposed merger. It also contains or references information about FinServ and Katapult and certain related matters. You are encouraged to read this proxy statement/prospectus carefully. In particular, you should read the “Risk Factors” section beginning on page 23 for a discussion of the risks you should consider in evaluating the proposed merger and how it will affect you.

If you have any questions regarding the accompanying proxy statement/prospectus, you may contact Morrow Sodali, FinServ’s proxy solicitor, at (866) 662-5200 or email Morrow Sodali at FinServ.info@investor.morrowsodali.com.

Sincerely,

/s/ Lee Einbinder

Lee Einbinder

Chief Executive Officer and Director

Neither the Securities and Exchange Commission (the “SEC”) nor any state securities commission has approved or disapproved of the merger, the issuance of shares of New Katapult common stock in connection with the merger or the other transactions described in this proxy statement/prospectus, or passed upon the adequacy or accuracy of the disclosure in this proxy statement/prospectus. Any representation to the contrary is a criminal offense.

This proxy statement/prospectus is dated May18, 2021, and is first being mailed to stockholders of FinServ on or about May18, 2021.

FinServ Acquisition Corp.

NOTICE OF THE SPECIAL MEETING IN LIEU OF
2021 ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON JUNE 7, 2021

NOTICE IS HEREBY GIVEN that a special meeting in lieu of the 2021 annual meeting of the stockholders (the “Special Meeting”), of FinServ Acquisition Corp., a Delaware corporation (which is referred to as “FinServ”) will be held virtually, conducted via live audio webcast at https://www.cstproxy.com/finservacquisition/sm2021, 2:00 p.m. Eastern Time, on June7, 2021. You will need the control number that is printed on your proxy card to enter the Special Meeting. FinServ recommends that you log in at least 15 minutes before the Special Meeting to ensure you are logged in when the meeting starts. Please note that you will not be able to attend the Special Meeting in person. You are cordially invited to attend the Special Meeting for the following purposes:

1.      The Business Combination Proposal — To consider and vote upon a proposal to approve the Agreement and Plan of Merger, dated as of December18, 2020 (as it may be amended and/or restated from time to time, the “merger agreement”), by and among Katapult Holdings, Inc., a Delaware corporation (“Katapult” or the “Company”), FinServ, Keys Merger Sub1, Inc., a Delaware corporation (“Merger Sub 1”), Keys Merger Sub2, LLC, a Delaware limited liability company (“Merger Sub 2”), and Orlando Zayas, in his capacity as representative of the Pre-Closing Holders of Katapult, and the transactions contemplated thereby, pursuant to which Merger Sub 1 will merge with and into Katapult, with Katapult surviving the merger as a wholly owned subsidiary of FinServ (the “First Merger”), followed immediately by the merger of the resulting company with and into Merger Sub2, with Merger Sub 2 surviving the merger as a wholly owned subsidiary of FinServ (the “Second Merger” and together with the First Merger, the “merger”). A copy of the merger agreement is attached to this proxy statement/prospectus as Annex A (Proposal No. 1);

2.      The Charter Proposals — To consider and vote upon:

a.      separate proposals to approve the following material differences between the proposed amended and restated certificate of incorporation of FinServ (the “Proposed Charter”) that will be in effect upon the closing of the merger, a copy of which is attached to this proxy statement/prospectus as Annex B, and FinServ’s current amended and restated certificate of incorporation (the “Existing Charter”):

i.       to increase the number of authorized shares of New Katapult common stock from 110,000,000 to 250,000,000 and the number of authorized shares of New Katapult preferred stock from 1,000,000 to 25,000,000 (Proposal No. 2);

ii.      to eliminate the Class B common stock classification and provide for a single class of common stock (Proposal No. 3);

iii.     to provide that the number of authorized shares of any class or classes of stock may be increased or decreased by the affirmative vote of the holders of a majority of the voting power of the stock of FinServ entitled to vote in the election of directors, voting together as a single class (Proposal No. 4);

iv.      to provide that amendments to FinServ’s waiver of corporate opportunities will be prospective only (Proposal No. 5);

v.       to require the vote of 66.7% of the voting power of the stock of FinServ entitled to vote in the election of directors, voting together as a single class, to amend the provisions of the Proposed Charter relating to the powers, number, election, term, vacancies and removal of directors of FinServ, the provisions regarding meetings of stockholders and the amendment provision of the Proposed Charter (Proposal No. 6);

vi.     to provide that the Court of Chancery in the State of Delaware will be the sole and exclusive forum for any action asserting an “internal corporate claim” under the Delaware General Corporation Law (Proposal No. 7)

vii.    to provide that unless FinServ consents in writing to the selection of an alternative forum, the federal district courts of the United States of America will be the sole and exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended or any other claim for which the federal courts have exclusive jurisdiction (Proposal No. 8); and

b.      conditioned upon the approval of Proposals No. 2 through No. 8 above, a proposal to approve the Proposed Charter, which includes the approval of all other changes in the Proposed Charter in connection with replacing the Existing Charter with the Proposed Charter, including changing FinServ’s name from “FinServ Acquisition Corp.” to “Katapult Holdings, Inc.” (“New Katapult”) as of the closing of the merger (Proposal No. 9);

3.      The Director Election Proposal — To consider and vote upon a proposal to appoint each of the seven (7) directors to serve on the board of directors of FinServ until their respective successors are duly elected and qualified pursuant to the terms of the Proposed Charter (Proposal No. 10)

4.      The Nasdaq Proposal — To consider and vote upon a proposal to approve, for purposes of complying with applicable listing rules of the Nasdaq: (i) the issuance of shares of Class A Common Stock (such shares of Class A Common Stock to be automatically converted into New Katapult common stock upon the consummation of the merger) pursuant to the PIPE Agreements (as defined herein); (ii) the issuance of shares of New Katapult common stock pursuant to the merger agreement, including 7,500,000 restricted shares of New Katapult common stock that will vest upon, among other things, the achievement of certain earn-out thresholds prior to the sixth anniversary of the closing of the merger; and (iii) the related change of control of FinServ that will occur in connection with consummation of the merger and the other transactions contemplated by the merger agreement (Proposal No. 11);

5.      The Incentive Plan Proposal — To consider and vote upon a proposal to approve and adopt the Katapult Holdings, Inc. 2021 Equity Incentive Plan (the “Incentive Plan”) (Proposal No. 12); and

6.      The Adjournment Proposal — To consider and vote upon a proposal to adjourn the Special Meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies if, based upon the tabulated vote at the time of the Special Meeting, there are not sufficient votes to approve the Business Combination Proposal, the Charter Proposals, the Nasdaq Proposal or the Incentive Plan Proposal, or holders of FinServ’s Class A Common Stock have elected to redeem an amount of Class A Common Stock such that FinServ would have less than $5,000,001 of net tangible assets (Proposal No. 13).

Only holders of record of FinServ Class A Common Stock and Class B Common Stock (each as defined herein) at the close of business on May11, 2021 are entitled to notice of the Special Meeting and to vote at the Special Meeting and any adjournments or postponements of the Special Meeting. A complete list of FinServ stockholders of record entitled to vote at the Special Meeting will be available for 10 days before the Special Meeting at the principal executive offices of FinServ for inspection by stockholders during ordinary business hours for any purpose germane to the Special Meeting. The eligible FinServ stockholder list will also be available at that time on the Special Meeting website for examination by any stockholder attending the Special Meeting live audio webcast.

Pursuant to FinServ’s Existing Charter, FinServ will provide holders (“public stockholders”) of its Class A common stock, par value $0.0001 per share (“Class A Common Stock”), with the opportunity to redeem their shares of Class A Common Stock for cash equal to their pro rata share of the aggregate amount on deposit in the trust account (the “Trust Account”), which holds the proceeds of FinServ’s initial public offering (“FinServ’s IPO”) and certain of the proceeds from the private sale of FinServ units (the “Private Placement Units”) consummated concurrently with the closing of FinServ’s IPO, as of two (2) business days prior to the consummation of the transactions contemplated by the Business Combination Proposal (including interest earned on the funds held in the Trust Account and not previously released to FinServ to pay taxes) upon the closing of the transactions contemplated by the merger agreement. For illustrative purposes, based on funds in the Trust Account of approximately $251.2million on December31, 2020, the estimated per share redemption price would have been approximately $10.05, excluding additional interest earned on the funds held in the Trust Account and not previously released to FinServ to pay taxes. Public stockholders may elect to redeem their shares even if they

vote for the Business Combination Proposal. A public stockholder, together with any of his, her or its affiliates or any other person with whom he, she or it is acting in concert or as a “group” (as defined in Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from seeking redemption rights with respect to more than an aggregate of 15% of the Class A Common Stock. FinServ Holdings LLC, a Delaware limited liability company (the “Sponsor”), and FinServ’s officers and directors have agreed to waive their redemption rights in connection with the consummation of the merger with respect to any shares of Class A Common Stock they may hold. Currently, the Sponsor owns approximately 21.7% of FinServ’s common stock, consisting of (i) the shares of Class B common stock, par value $0.0001 per share (“Class B Common Stock”), initially purchased by the Sponsor in a private placement and a subsequent dividend thereon prior to FinServ’s IPO (together with the Class A Common Stock issuable upon the conversion thereof, the “Founder Shares”) and (ii) the shares of Class A Common Stock included in the Private Placement Units, purchased by the Sponsor in a private placement in conjunction with FinServ’s IPO. Founder Shares and Private Placement Units will be excluded from the pro rata calculation used to determine the per-share redemption price. The Sponsor and FinServ’s directors and officers have agreed to vote any shares of common stock owned by them in favor of the Business Combination Proposal.

Approval of the Business Combination Proposal, the Nasdaq Proposal and the Incentive Plan Proposal require the affirmative vote of a majority of the votes cast by holders of common stock, voting together as a single class at a meeting at which a quorum is present. Approval of the Charter Proposals requires the affirmative vote of the holders of a majority of the outstanding shares of common stock, voting together as a single class, and the affirmative vote of the holders of a majority of the Class B Common Stock then outstanding, voting separately as a single class. Approval of the election of each of the seven (7) directors nominated in the Director Election Proposal requires a plurality of the votes cast by holders of common stock at a meeting at which a quorum is present. Approval of the Adjournment Proposal requires the affirmative vote of a majority of the votes cast by holders of common stock, voting together as a single class, regardless of whether a quorum is present.

As of December31, 2020, there was approximately $251.2million in the Trust Account, which FinServ intends to use for the purposes of consummating a business combination within the time period described in this proxy statement/prospectus and to pay approximately $9,350,000 in deferred underwriting commissions to the underwriters of FinServ’s IPO. Each redemption of Class A Common Stock by its public stockholders will decrease the amount in the Trust Account. FinServ will not consummate the merger if the redemption of Class A Common Stock would result in FinServ’s failure to have at least $5,000,001 of net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) (or any successor rule). In addition, under the terms of the merger agreement, Katapult’s obligation to complete the merger is conditioned upon FinServ having at least $225million of available distributable cash, after giving effect to the PIPE Investment (as defined herein).

If FinServ stockholders fail to approve the Business Combination Proposal or the Nasdaq Proposal, or, unless otherwise waived by Katapult and FinServ, the Charter Proposals or the Incentive Plan Proposal, the merger will not occur.The Charter Proposals, the Director Election Proposal and the Incentive Plan Proposal are conditioned on the approval of the Business Combination Proposal and the Nasdaq Proposal. The Adjournment Proposal is not conditioned on the approval of any other proposal. The proxy statement/prospectus accompanying this notice explains the merger agreement and the transactions contemplated thereby, as well as the proposals to be considered at the Special Meeting. Please review the proxy statement/prospectus carefully.

The FinServ board of directors has set May11, 2021 as the record date for the Special Meeting. Only holders of record of shares of FinServ common stock at the close of business on May11, 2021 will be entitled to notice of and to vote at the Special Meeting and any adjournments or postponements thereof. Any stockholder entitled to attend and vote at the Special Meeting may attend the meeting virtually and is entitled to appoint a proxy to attend and vote on such stockholder’s behalf. Such proxy need not be a holder of shares of FinServ common stock.

YOUR VOTE IS VERY IMPORTANT, REGARDLESS OF THE NUMBER OF SHARES OF FINSERV COMMON STOCK YOU OWN. Whether or not you plan to attend the Special Meeting, please complete, sign, date and mail the enclosed proxy card in the postage-paid envelope provided at your earliest convenience. You may also submit a proxy by telephone or via the Internet by following the instructions printed on your proxy card. If you hold your shares through a broker, bank or other nominee, you should direct the vote of your shares in accordance with the voting instruction form received from your broker, bank or other nominee.

The FinServ board of directors has unanimously approved the merger agreement and the transactions contemplated thereby and recommends that you vote “FOR” the Business Combination Proposal, “FOR” the Charter Proposals, “FOR” the election of each of the seven (7) directors nominated in the Director Election Proposal, “FOR” the Nasdaq Proposal, “FOR” the Incentive Plan Proposal, and “FOR” the Adjournment Proposal (if necessary).

If you have any questions or need assistance with voting, please contact FinServ’s proxy solicitor, Morrow Sodali, at (800) 662-5200 or email Morrow Sodali at FinServ.info@investor.morrowsodali.com.

If you plan to attend the Special Meeting and are a beneficial investor who owns their investments through a bank or broker, you will need to contact Continental Stock Transfer & Trust Company to receive a control number. Please read carefully the sections in the proxy statement/prospectus regarding attending and voting at the Special Meeting to ensure that you comply with these requirements.

BY ORDER OF THE BOARD OF DIRECTORS

/s/ Lee Einbinder

Lee Einbinder

Chief Executive Officer and Director

TABLE OF CONTENTS

BASIS OF PRESENTATION AND GLOSSARY	ii
QUESTIONS AND ANSWERS	iv
SUMMARY	1
SUMMARY HISTORICAL FINANCIAL INFORMATION OF FINSERV	13
SELECTED HISTORICAL CONSOLIDATED FINANCIAL INFORMATION OF KATAPULT	14
MARKET PRICE AND DIVIDEND INFORMATION	19
FORWARD-LOOKING STATEMENTS; MARKET, RANKING AND OTHER INDUSTRY DATA	20
RISK FACTORS	23
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION	55
FINSERV SPECIAL MEETING OF STOCKHOLDERS	64
INFORMATION ABOUT FINSERV	70
MANAGEMENT OF FINSERV	75
SELECTED HISTORICAL FINANCIAL INFORMATION OF FINSERV	78
FINSERV’S MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	79
INFORMATION ABOUT KATAPULT	85
EXECUTIVE AND DIRECTOR COMPENSATION OF KATAPULT	94
KATAPULT’S MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	105
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT OF NEW KATAPULT	120
MANAGEMENT OF KATAPULT AFTER THE MERGER	123
THE MERGER	127
REGULATORY APPROVAL REQUIRED FOR THE MERGER	141
ACCOUNTING TREATMENT	142
PUBLIC TRADING MARKETS	143
THE MERGER AGREEMENT	144
OTHER AGREEMENTS	159
PROPOSAL NO. 1 — THE BUSINESS COMBINATION PROPOSAL	161
PROPOSALS NO. 2 THROUGH NO. 9 — THE CHARTER PROPOSALS	162
PROPOSAL NO. 10 — THE DIRECTOR ELECTION PROPOSAL	167
PROPOSAL NO. 11 — THE NASDAQ PROPOSAL	168
PROPOSAL NO. 12 — THE INCENTIVE PLAN PROPOSAL	169
PROPOSAL NO. 13 — THE ADJOURNMENT PROPOSAL	178
MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES	179
DESCRIPTION OF NEW KATAPULT CAPITAL STOCK	185
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS	193
EXPERTS	195
LEGAL MATTERS	195
OTHER MATTERS	195
HOUSEHOLDING INFORMATION	196
FUTURE STOCKHOLDER PROPOSALS	196
APPRAISAL RIGHTS	197
WHERE YOU CAN FIND MORE INFORMATION	197
INDEX TO FINANCIAL STATEMENTS	F-1
ANNEX A — AGREEMENT AND PLAN OF MERGER	A-1
ANNEX B — SECOND AMENDED AND RESTATED CERTIFICATE OF INCORPORATION	B-1
ANNEX C — AMENDED AND RESTATED BYLAWS	C-1
ANNEX D — INCENTIVE PLAN	D-1
ANNEX E — FORM OF AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT	E-1
ANNEX F — FORM OF SUPPORT AGREEMENT	F-1
ANNEX G — FORM OF SUBSCRIPTION AGREEMENT	G-1
ANNEX H — SPONSOR AGREEMENT	H-1

i

BASIS OF PRESENTATION AND GLOSSARY

As used in this proxy statement/prospectus, unless otherwise noted or the context otherwise requires:

•        references to “FinServ” are to FinServ Acquisition Corp. before giving effect to the merger;

•        references to “FinServ common stock” are to, prior to the First Effective Time, collectively, FinServ’s Class A Common Stock, par value $0.0001 per share (“Class A Common Stock”), and FinServ’s Class B Common Stock, par value $0.0001 per share (“Class B Common Stock”);

•        references to “FinServ’s IPO” or “our IPO” are to the initial public offering of FinServ completed on November5, 2019;

•        references to the “First Effective Time” are to the time at which the First Merger becomes effective;

•        references to the “First Merger” are to the proposed merger of Merger Sub 1 with and into Katapult, with Katapult surviving the merger as a wholly owned subsidiary of FinServ;

•        references to “Founder Shares” are to the shares of FinServ’s Class B Common Stock, initially purchased by the Sponsor in a private placement and a subsequent dividend thereon prior to FinServ Acquisition Corp.’s initial public offering, and the shares of Class A Common Stock issuable upon the conversion thereof;

•        references to “GAAP” are to generally accepted accounting principles in the United States;

•        references to “Katapult” are to, Katapult Holdings, Inc. and its consolidated subsidiaries prior to the First Effective Time;

•        references to the “merger” are to the proposed First Merger and Second Merger, collectively;

•        references to the “merger agreement” are to that certain Agreement and Plan of Merger, dated as of December18, 2020 (as it may be amended and/or restated from time to time), by and among FinServ, Merger Sub1, Merger Sub2, Katapult and Orlando Zayas, in his capacity as the representative of all Pre-Closing Holders;

•        references to “Merger Sub 1” are to Keys Merger Sub1, Inc.;

•        references to “Merger Sub 2” are to Keys Merger Sub2, LLC;

•        references to “New Katapult” are to Katapult Holdings, Inc. (formerly FinServ Acquisition Corp.), after giving effect to the merger and the effectiveness of the Proposed Charter;

•        references to “New Katapult common stock” are to, at and following the First Effective Time, New Katapult’s common stock, par value $0.0001;

•        references to “Pre-Closing Holders” are to all persons who hold one or more shares of Katapult common stock, Katapult preferred stock, Katapult options or Katapult restricted shares immediately prior to the First Effective Time;

•        references to “Private Placement Units” are to the 665,000 units of FinServ, consisting of one share of Class A Common Stock and one half of one warrant to purchase a share of Class A Common Stock, purchased by the Sponsor in a private placement in conjunction with FinServ’s initial public offering;

•        references to “Private Placement Warrants” are to the warrants included in the Private Placement Units;

•        references to the “Second Merger” are to the proposed merger of the surviving company in the First Merger with and into Merger Sub2, with Merger Sub 2 surviving the merger as a wholly owned subsidiary of FinServ, to occur immediately after the First Merger; and

•        references to the “Sponsor” are to FinServ Holdings LLC, a Delaware limited liability company.

ii

Unless specified otherwise, amounts in this proxy statement/prospectus are presented in United States (“U.S.”) dollars.

Defined terms in the financial statements contained in this proxy statement/prospectus have the meanings ascribed to them in the financial statements.

Unless otherwise specified, the share calculations and ownership percentages set forth in this proxy statement/prospectus with respect to New Katapult’s stockholders immediately following the First Effective Time are for illustrative purposes only and assume the following:

(i)     no exercise of the 12,832,500 warrants that will remain outstanding following the merger, which will become exercisable at the holder’s option 30 days after closing of the merger at an exercise price of $11.50 per share, provided that FinServ has an effective registration statement under the Securities Act covering the shares of common stock issuable upon exercise of the warrants or Private Placement Warrants and a current prospectus relating to them is available, which are not expected to occur within 60 days of the date of this proxy statement/prospectus;

(ii)    7,500,000 restricted Earn-Out Shares (as defined herein) are issued at the First Effective Time to Pre-Closing Holders of Katapult, which remain subject to vesting, forfeiture and certain other restrictions (including on transfer);

(iii)   15,000,000shares of FinServ Class A Common Stock are issued in connection with the PIPE Investment (as defined herein) for aggregate cash proceeds of $150million to FinServ immediately prior to the First Effective Time;

(iv)   all Katapult Options (as defined herein), whether vested or unvested, are exercised at or prior to the First Effective Time, and no Katapult Options are converted into New Katapult options (which assumption is subject to change);

(v)    as of the Measurement Time (as defined in the merger agreement), there is no adjustment to the merger consideration pursuant to the merger agreement for Net Cash (as defined in the merger agreement);

(vi)   no shares of Class A Common Stock are redeemed, and the balance of the Trust Account as of the First Effective Time is the same as its balance on December31, 2020 of $251.2million; and

(vii)  1,543,750 Sponsor Earn-Out Shares (as defined herein) remain issued and outstanding, which remain subject to vesting, forfeiture and other restrictions.

Beneficial ownership throughout this proxy statement/prospectus with respect to New Katapult’s stockholders is determined according to the rules of the SEC, which generally provide that a person has beneficial ownership of a security if he, she or it possesses sole or shared voting or investment power over that security, including options and warrants that are currently exercisable or exercisable within 60 days.

iii

QUESTIONS AND ANSWERS

The following are answers to certain questions that you may have regarding the merger and the stockholder meeting. We urge you to read carefully the remainder of this proxy statement/prospectus because the information in this section may not provide all the information that might be important to you in determining how to vote. Additional important information is also contained in the annexes to this proxy statement/prospectus.

QUESTIONS AND ANSWERS ABOUT THE MERGER

Q:     WHAT IS THE MERGER?

A:     FinServ, Merger Sub1, Merger Sub2, Katapult and Orlando Zayas, in his capacity as the representative of all Pre-Closing Holders, have entered into the merger agreement, pursuant to which Merger Sub 1 will merge with and into Katapult, with Katapult surviving the First Merger as a wholly owned subsidiary of FinServ, followed immediately by the merger of the resulting company with and into Merger Sub2, with Merger Sub 2 surviving the Second Merger as a wholly owned subsidiary of FinServ.

FinServ will hold the Special Meeting to, among other things, obtain the approvals required for the merger and the other transactions contemplated by the merger agreement (the “FinServ Shareholder Approval”) and you are receiving this proxy statement/prospectus in connection with such meeting. Katapult is also separately providing consent solicitation materials to the holders of Katapult common stock and preferred stock to solicit, among other things, the required written consent to adopt and approve in all respects the merger agreement and the transactions contemplated thereby (the “Business Combination Proposal”) and to approve the ancillary agreements thereto. See “The Merger Agreement” beginning on page 144. In addition, a copy of the merger agreement is attached to this proxy statement/prospectus as Annex A. We urge you to carefully read this proxy statement/prospectus and the merger agreement in their entirety.

Q:     WHY AM I RECEIVING THIS DOCUMENT?

A:     FinServ is sending this proxy statement/prospectus to its stockholders to help them decide how to vote their shares of FinServ common stock with respect to the matters to be considered at the Special Meeting.

The merger cannot be completed unless FinServ’s stockholders approve the Business Combination Proposal, the Nasdaq Proposal and, unless otherwise waived by Katapult and FinServ, the Charter Proposals and the Incentive Plan Proposal, set forth in this proxy statement/prospectus. Information about the Special Meeting, the merger and the other business to be considered by stockholders at the Special Meeting is contained in this proxy statement/prospectus.

This document constitutes a proxy statement and a prospectus of FinServ. It is a proxy statement because the board of directors of FinServ is soliciting proxies using this proxy statement/prospectus from its stockholders. It is a prospectus because FinServ, in connection with the merger, is offering shares of New Katapult common stock in exchange for the outstanding shares of Katapult common stock. See “The Merger Agreement — Merger Consideration.”

Q:     WHAT WILL HAPPEN TO FINSERV’S SECURITIES UPON CONSUMMATION OF THE BUSINESS COMBINATION?

A:     FinServ’s units, Class A Common Stock and warrants are currently listed on Nasdaq under the symbols FSRVU, FSRV, and FSRVW, respectively. Upon consummation of the business combination, FinServ will change its name to Katapult Holdings, Inc. and the Class A Common Stock will become the only outstanding class of common stock (and will no longer be designated as Class A) which will be listed on Nasdaq under the symbol KPLT. Furthermore, New Katapult’s warrants will remain listed on Nasdaq under the symbol KPLTW. The FinServ units (FSRVU), will not be traded on Nasdaq following consummation of the business combination and such units will automatically be separated into their component securities (KPLT and KPLTW) without any action needed to be taken on the part of the holders. FinServ warrant holders and those stockholders who do not elect to have their FinServ shares redeemed need not deliver their shares of Class A Common Stock or warrant certificates to FinServ or to FinServ’s transfer agent and they will remain outstanding.

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Q:     WHAT WILL KATAPULT STOCKHOLDERS RECEIVE IN THE MERGER?

A:     At the First Effective Time, each share of Katapult common stock (including common stock to be issued as a result of the conversion of Katapult preferred stock in connection with the merger) that is issued and outstanding immediately prior to the First Effective Time (other than dissenting shares and Unvested Katapult Restricted Shares (as defined herein)) will be cancelled and converted into the right to receive the applicable portion of the merger consideration, in accordance with an allocation schedule to be provided by Katapult (the “Allocation Schedule”), consisting of (i) cash consideration, as determined under the merger agreement and further described herein, (ii) a number of shares of New Katapult common stock equal to (a) $833.0million (subject to adjustment in accordance with the terms of the merger agreement and net of the value of all Katapult Options (as defined herein) to be converted into New Katapult options), minus the aggregate amount of cash paid in clause (i), divided by (b) 10 and (iii) the applicable portion of the 7,500,000 restricted shares of New Katapult common stock that will vest upon, among other things, the achievement of certain earn-out thresholds prior to the sixth anniversary of the closing of the merger. See “The Merger Agreement — Merger Consideration” in this proxy statement/prospectus.

Q: HOW WILL OUTSTANDING KATAPULT EQUITY AWARDS BE TREATED IN THE MERGER?

A:     Each option to purchase Katapult common stock granted pursuant to Katapult’s equity incentive plan (“Katapult Option”) that is outstanding immediately prior to the First Effective Time and held by a Pre-Closing Holder who has been actively employed by the Company for at least 730 consecutive days as of the First Effective Time will accelerate and become fully vested as of the First Effective Time in accordance with the terms of Katapult’s equity incentive plan. As of the First Effective Time, each Katapult Option, whether vested or unvested, that is outstanding immediately prior to the First Effective Time and held by a Pre-Closing Holder will be assumed and converted into an option with respect to a number of shares of New Katapult common stock in the manner set forth in the merger agreement.

In addition, each restricted share of Katapult common stock granted pursuant to Katapult’s equity incentive plan (the “Katapult Restricted Shares”) that is outstanding immediately prior to the First Effective Time and vests as a result of the Transactions (a “Vested Katapult Restricted Share”) will be cancelled and entitled to receive a portion of the merger consideration in accordance with the Allocation Schedule, and each Katapult Restricted Share that is not a Vested Katapult Restricted Share and that is outstanding immediately prior to the First Effective Time (an “Unvested Katapult Restricted Share”) will be cancelled for no consideration.

In addition, each Pre-Closing Holder who is actively employed by Katapult as of immediately prior to the First Effective Time and holds a Katapult Option and/or Vested Katapult Restricted Shares will receive such holder’s allocation of the Earn-Out Shares (as defined herein).

Q:     WHEN WILL THE MERGER BE COMPLETED?

A:     The parties currently expect that the merger will be completed during the first half of 2021. However, neither FinServ nor Katapult can assure you of when or if the merger will be completed and it is possible that factors outside of the control of both companies could result in the merger being completed at a different time or not at all. FinServ must first obtain the approval of FinServ stockholders for each of the proposals set forth in this proxy statement/prospectus for their approval (other than the Adjournment Proposal) and FinServ and Katapult must also first obtain certain necessary regulatory approvals and satisfy other closing conditions. See “The Merger Agreement — Conditions to the Merger” beginning on page 155.

Q:     WHAT HAPPENS TO KATAPULT STOCKHOLDERS IF THE MERGER IS NOT COMPLETED?

A:     If the merger is not completed, Katapult stockholders will not receive any consideration for their shares of Katapult common stock and Katapult preferred stock will not be converted into Katapult common stock. Instead, Katapult will remain an independent company. See “The Merger Agreement — Termination” and “Risk Factors” beginning on page 157 and page23, respectively.

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QUESTIONS AND ANSWERS ABOUT THE FINSERV SPECIAL MEETING

Q:     WHAT AM I BEING ASKED TO VOTE ON AND WHY IS THIS APPROVAL NECESSARY?

A:     FinServ stockholders are being asked to vote on the following proposals:

1.      the Business Combination Proposal;

2.      the Charter Proposals;

3.      the Director Election Proposal;

4.      the Nasdaq Proposal

5.      the Incentive Plan Proposal; and

6.      the Adjournment Proposal.

If FinServ stockholders fail to approve the Business Combination Proposal or the Nasdaq Proposal, or, unless otherwise waived by Katapult and FinServ, the Charter Proposals or the Incentive Plan Proposal, the merger will not occur.The Charter Proposals, the Director Election Proposal and the Incentive Plan Proposal are conditioned on the approval of the Business Combination Proposal and the Nasdaq Proposal. The Adjournment Proposal is not conditioned on the approval of any other proposal. If the Business Combination Proposal is not approved, the other proposals (except the Adjournment Proposal) will not be presented to the stockholders for a vote.

Q:     WHY IS FINSERV PROPOSING THE MERGER?

A:     FinServ was organized to effect a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or other similar business combination with one or more businesses.

On November5, 2019, FinServ completed its initial public offering (“IPO”). A total of $250.0million, comprised of $245.6million of the proceeds from FinServ’s IPO (including aggregate fees of $9.35million as deferred underwriting commissions) and $4.4million of the proceeds from the concurrent private sale of FinServ units were placed in a trust account (the “Trust Account”). Since FinServ’s IPO, FinServ’s activity has been limited to the evaluation of business combination candidates.

Katapult is a leading provider of e-commerce point-of-sale purchase options for nonprime U.S. consumers. Katapult’s fully digital, next generation technology platform provides consumers with a flexible lease-purchase option enabling them to obtain everyday durable goods from Katapult’s network of top tier e-commerce retailers. Katapult’s sophisticated end-to-end technology platform provides both a seamless integration with merchants and exceptional customer experiences.

Based on its due diligence investigations of Katapult and the industry in which it operates, including the financial and other information provided by Katapult in the course of their negotiations in connection with the merger agreement, FinServ believes that Katapult aligns well with the objectives laid out in its investment thesis, including a differentiated FinTech e-commerce payment platform, with significant opportunities to continue its growth trajectory by expanding its merchant and consumer base. As a result, FinServ believes that a merger with Katapult will provide FinServ stockholders with an opportunity to participate in the ownership of a publicly-listed company with significant growth potential at an attractive valuation. See the section entitled “The Merger — Recommendation of the FinServ Board of Directors and Reasons for the Merger.”

Q:     DID THE FINSERV BOARD OBTAIN A THIRD-PARTY VALUATION OR FAIRNESS OPINION IN DETERMINING WHETHER OR NOT TO PROCEED WITH THE MERGER?

A:     FinServ’s board of directors did not obtain a third-party valuation or fairness opinion in connection with their determination to approve the merger. FinServ’s officers, directors and advisors have substantial experience in evaluating the operating and financial merits of companies from a wide range of industries and concluded that

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their experience and backgrounds enabled them to make the necessary analyses and determinations regarding the merger. In addition, FinServ’s officers, directors and advisors have substantial experience with mergers and acquisitions. Accordingly, investors will be relying solely on the judgment of FinServ’s board of directors and advisors in valuing Katapult’s business.

Q:     DO I HAVE REDEMPTION RIGHTS?

A:     If you are a holder of Class A Common Stock, you have the right to demand that FinServ redeem such shares for a pro rata portion of the cash held in the Trust Account, which holds the proceeds of FinServ’s IPO and certain of the proceeds from the private sale of FinServ units consummated concurrently with the closing of FinServ’s IPO, as of two (2) business days prior to the Special Meeting (including interest earned on the funds held in the Trust Account and not previously released to FinServ to pay taxes) upon the closing of the transactions contemplated by the merger agreement (such rights, “redemption rights”).

Notwithstanding the foregoing, a holder of Class A Common Stock, together with any affiliate of such holder or any other person with whom such holder is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Exchange Act), will be restricted from seeking redemption with respect to more than 15% of the Class A Common Stock. Accordingly, all shares of Class A Common Stock in excess of 15% held by a public stockholder, together with any affiliate of such holder or any other person with whom such holder is acting in concert or as a “group,” will not be redeemed.

Holders of the outstanding warrants of FinServ do not have redemption rights with respect to such warrants in connection with the transactions contemplated by the Business Combination Proposal.

Under FinServ’s Existing Charter, the merger may be consummated only if FinServ has at least $5,000,001 of net tangible assets after giving effect to all holders of Class A Common Stock that properly demand redemption of their shares for cash. In addition, under the terms of the merger agreement, Katapult’s obligation to complete the merger is conditioned upon the satisfaction of the Minimum Cash Condition.

Q:     WILL HOW I VOTE AFFECT MY ABILITY TO EXERCISE REDEMPTION RIGHTS?

A:     No. You may exercise your redemption rights whether you vote your shares of Class A Common Stock for or against, or whether you abstain from voting on, the Business Combination Proposal or any other proposal described in this proxy statement/prospectus. As a result, the Business Combination Proposal can be approved by stockholders who will redeem their Class A Common Stock and no longer remain stockholders and the merger may be consummated even though the funds available from the Trust Account and the number of public stockholders are substantially reduced as a result of redemptions by public stockholders. With fewer shares of Class A Common Stock and public stockholders, the trading market for Class A Common Stock may be less liquid than the market for Class A Common Stock prior to the merger and FinServ may not be able to meet the listing standards of a national securities exchange. In addition, with fewer funds available from the Trust Account, the capital infusion from the Trust Account into Katapult’s business will be reduced and the amount of working capital available to New Katapult following the merger may be reduced. Your decision to exercise your redemption rights with respect to shares of Class A Common Stock will have no effect on warrants of FinServ you may also hold.

Q:     HOW DO I EXERCISE MY REDEMPTION RIGHTS?

A:     If you are a holder of Class A Common Stock and wish to exercise your redemption rights, you must demand that FinServ redeem your shares for cash no later than the second business day preceding the vote on the Business Combination Proposal by delivering your stock to FinServ’s transfer agent physically or electronically using Depository Trust Company’s DWAC (Deposit and Withdrawal at Custodian) system prior to the vote at the Special Meeting. Any holder of Class A Common Stock will be entitled to demand that such holder’s shares be redeemed for a full pro rata portion of the amount then in the Trust Account (which, for illustrative purposes, was approximately $251.2million, or $10.05 per share, as of December31, 2020). Such amount, including interest earned on the funds held in the Trust Account and not previously released to

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FinServ to pay its taxes, will be paid promptly upon consummation of the merger. However, under Delaware law, the proceeds held in the Trust Account could be subject to claims that could take priority over those of FinServ’s public stockholders exercising redemption rights, regardless of whether such holders vote for or against the Business Combination Proposal. Therefore, the per-share distribution from the Trust Account in such a situation may be less than originally anticipated due to such claims. Your vote on any proposal other than the Business Combination Proposal will have no impact on the amount you will receive upon exercise of your redemption rights.

Any request for redemption, once made by a holder of Class A Common Stock, may be withdrawn at any time up to the time the vote is taken with respect to the Business Combination Proposal at the Special Meeting. If you deliver your shares for redemption to FinServ’s transfer agent and later decide prior to the Special Meeting not to elect redemption, you may request that FinServ’s transfer agent return the shares (physically or electronically).

Any corrected or changed proxy card or written demand of redemption rights must be received by FinServ’s transfer agent prior to the vote taken on the Business Combination Proposal at the Special Meeting. No demand for redemption will be honored unless the holder’s stock has been delivered (either physically or electronically) to the transfer agent prior to the vote at the Special Meeting.

If a holder of Class A Common Stock properly makes a request for redemption and the shares of Class A Common Stock are delivered as described to FinServ’s transfer agent as described herein, then, if the merger is consummated, FinServ will redeem these shares for a pro rata portion of funds deposited in the Trust Account. If you exercise your redemption rights, then you will be exchanging your shares of Class A Common Stock for cash.

For a discussion of the material U.S. federal income tax considerations for holders of Class A Common Stock with respect to the exercise of these redemption rights, see “Material U.S. Federal Income Tax Consequences — Tax Consequences of a Redemption of FinServ Public Shares” beginning on page 180. The consequences of a redemption to any particular stockholder will depend on that stockholder’s particular facts and circumstances. Accordingly, you are urged to consult your tax advisor to determine your tax consequences from the exercise of your redemption rights, including the applicability and effect of U.S. federal, state, local and non-U.S. income and other tax laws in light of your particular circumstances.

Q:     WHAT HAPPENS TO THE FUNDS DEPOSITED IN THE TRUST ACCOUNT AFTER CONSUMMATION OF THE MERGER?

A:     The net proceeds of FinServ’s IPO, together with funds raised from the private sale of units simultaneously with the consummation of FinServ’s IPO, were placed in the Trust Account immediately following FinServ’s IPO. After consummation of the merger, the funds in the Trust Account will be used to pay holders of the Class A Common Stock who exercise redemption rights, to pay fees and expenses incurred in connection with the merger (including aggregate fees of $9.35million as deferred underwriting commissions related to FinServ’s IPO) and for Katapult’s working capital and general corporate purposes.

Q:     WHAT HAPPENS IF THE MERGER IS NOT CONSUMMATED?

A:     If FinServ does not complete the merger with Katapult for any reason, FinServ would search for another target business with which to complete a business combination. If FinServ does not complete the merger with Katapult or another target business by November5, 2021, FinServ must redeem 100% of the outstanding shares of Class A Common Stock, at a per-share price, payable in cash, equal to the amount then held in the Trust Account (including interest earned on the funds held in the Trust Account and not previously released to FinServ to pay taxes) divided by the number of outstanding shares of Class A Common Stock. The Sponsor has no redemption rights in the event a business combination is not effected in the required time period and, accordingly, its Founder Shares and Private Placement Units (each as defined herein) will be worthless. Additionally, in the event of such liquidation, there will be no distribution with respect to FinServ’s outstanding warrants. Accordingly, such warrants will expire worthless.

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Q:     HOW DOES THE SPONSOR INTEND TO VOTE ON THE PROPOSALS?

A:     The Sponsor owns of record and is entitled to vote an aggregate of approximately 21.7% of the outstanding shares of FinServ common stock. The Sponsor has agreed to vote any Founder Shares and any shares of Class A Common Stock held by it as of the record date for the Special Meeting (including underlying the Private Placement Units), in favor of the proposals. See “Other Agreements — FinServ Letter Agreement.”

Q:     WHAT CONSTITUTES A QUORUM AT THE FINSERV SPECIAL MEETING?

A:     A majority of the voting power of the issued and outstanding FinServ common stock entitled to vote at the Special Meeting as of the record date must be present virtually or by proxy, at the Special Meeting to constitute a quorum and in order to conduct business at the Special Meeting. Abstentions and broker non-votes will be counted as present for the purpose of determining a quorum. The holders of the Founder Shares, who currently own approximately 21.7% of the issued and outstanding shares of Class A Common Stock, will count towards this quorum. In the absence of a quorum, the chairman of the Special Meeting has power to adjourn the Special Meeting. As of the record date for the Special Meeting, 15,957,501shares of FinServ common stock would be required to achieve a quorum.

Q:     WHAT VOTE IS REQUIRED TO APPROVE EACH PROPOSAL AT THE FINSERV SPECIAL MEETING?

A:     The Business Combination Proposal:    The affirmative vote of a majority of the votes cast by holders of common stock, voting together as a single class at a meeting at which a quorum is present, is required to approve the Business Combination Proposal. FinServ stockholders must approve the Business Combination Proposal in order for the merger to occur. If FinServ stockholders fail to approve the Business Combination Proposal or the Nasdaq Proposal, or, unless otherwise waived by Katapult and FinServ, the Charter Proposals or the Incentive Plan Proposal, the merger will not occur. The Charter Proposals, the Director Election Proposal and the Incentive Plan Proposal are conditioned on the approval of the Business Combination Proposal and the Nasdaq Proposal. The Adjournment Proposal is not conditioned on the approval of any other proposal. As further discussed in the section entitled “Other Agreements — FinServ Letter Agreement,” beginning on page 159 of this proxy statement/prospectus, the Sponsor and FinServ’s officers and directors have entered into an agreement with FinServ (the “Letter Agreement”) pursuant to which the Sponsor and FinServ’s officers and directors have agreed to vote shares representing approximately 21.7% of the aggregate voting power of FinServ common stock in favor of the Business Combination Proposal.

The Charter Proposals:    The affirmative vote of the holders of a majority of the outstanding shares of common stock, voting together as a single class, and the affirmative vote of the holders of a majority of the Class B Common Stock then outstanding, voting separately as a single class. Notwithstanding the approval of the Charter Proposals, if the merger is not consummated for any reason, the actions contemplated by the Charter Proposals will not be effected.

The Director Election Proposal:    Approval of the election of each of the seven (7) directors nominated in the Director Election Proposal requires a plurality of the votes cast by holders of common stock at a meeting at which a quorum is present. Notwithstanding the approval of the Director Election Proposal, if the merger is not consummated for any reason, the actions contemplated by the Director Election Proposal will not be effected.

The Nasdaq Proposal:    The affirmative vote of a majority of the votes cast by holders of common stock, voting together as a single class at a meeting at which a quorum is present, is required to approve the Nasdaq Proposal. The merger is conditioned upon the approval of the Nasdaq Proposal, subject to the terms of the merger agreement. Notwithstanding the approval of the Nasdaq Proposal, if the merger is not consummated for any reason, the actions contemplated by the Nasdaq Proposal will not be effected.

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The Incentive Plan Proposal:    The affirmative vote of a majority of the votes cast by holders of common stock, voting together as a single class at a meeting at which a quorum is present, is required to approve the Incentive Plan Proposal. The merger is conditioned upon the approval of the Incentive Plan Proposal, subject to the terms of the merger agreement. Notwithstanding the approval of the Incentive Plan Proposal, if the merger is not consummated for any reason, the actions contemplated by the Incentive Plan Proposal will not be effected.

The Adjournment Proposal:    The affirmative vote of a majority of the votes cast by holders of common stock, voting together as a single class, regardless of whether a quorum is present, is required to approve the Adjournment Proposal. The merger is not conditioned upon the approval of the Adjournment Proposal.

Q:     DO ANY OF FINSERV’S DIRECTORS OR OFFICERS HAVE INTERESTS IN THE MERGER THAT MAY DIFFER FROM OR BE IN ADDITION TO THE INTERESTS OF FINSERV STOCKHOLDERS?

A:     FinServ’s executive officers and certain non-employee directors may have interests in the merger that may be different from, or in addition to, the interests of FinServ stockholders generally. The FinServ board of directors was aware of and considered these interests to the extent such interests existed at the time, among other matters, in approving the merger agreement and in recommending that the merger agreement and the transactions contemplated thereby be approved by the stockholders of FinServ. See “The Merger — Interests of FinServ’s Directors and Officers in the Merger” beginning on page 139 of this proxy statement/prospectus.

Q:     WHAT DO I NEED TO DO NOW?

A:     After carefully reading and considering the information contained in this proxy statement/prospectus, please submit your proxies as soon as possible so that your shares will be represented at the Special Meeting. Please follow the instructions set forth on the proxy card or on the voting instruction form provided by your broker, bank or other nominee if your shares are held in the name of your broker, bank or other nominee.

Q:     HOW DO I VOTE?

A:     If you are a stockholder of record of FinServ as of May11, 2021, the record date for the Special Meeting, you may submit your proxy before the Special Meeting in any of the following ways, if available:

•        use the toll-free number shown on your proxy card;

•        visit the website shown on your proxy card to vote via the Internet; or

•        complete, sign, date and return the enclosed proxy card in the enclosed postage-paid envelope.

Stockholders who choose to participate in the Special Meeting can vote their shares electronically during the meeting via live audio webcast by visiting https://www.cstproxy.com/finservacquisition/sm2021. You will need the control number that is printed on your proxy card to enter the Special Meeting. FinServ recommends that you log in at least 15 minutes before the meeting to ensure you are logged in when the special meeting in lieu of the 2021 annual meeting starts.

If your shares are held in “street name” through a broker, bank or other nominee, your broker, bank or other nominee will send you separate instructions describing the procedure for voting your shares. “Street name” stockholders who wish to vote at the Special Meeting will need to obtain a proxy form from their broker, bank or other nominee.

Q:     WHEN AND WHERE IS THE FINSERV SPECIAL MEETING?

A:     The Special Meeting of stockholders will be held on June7, 2021, unless postponed or adjourned to a later date. In light of the novel coronavirus (referred to as “COVID-19”) pandemic and to support the well-being of FinServ’s stockholders and partners, the Special Meeting will be completely virtual. All FinServ stockholders as of the record date, or their duly appointed proxies, may attend the Special Meeting. Registration will begin on June3, 2021 at 9:00 a.m. Eastern Time.

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Q:     HOW CAN FINSERV’S STOCKHOLDERS ATTEND THE SPECIAL MEETING?

A:     As a registered shareholder, you received a Notice and Access instruction form or proxy card from Continental Stock Transfer & Trust Company (“CST”). Both forms contain instructions on how to attend the virtual Special Meeting including the URL address, along with your control number. You will need your control number for access. If you do not have your control number, contact CST at the phone number or e-mail address below. CST’s contact information is as follows: 917-262-2373, or email proxy@continentalstock.com.

You can pre-register to attend the virtual Special Meeting starting June3, 2021 at 9:00 a.m. Eastern Time. Enter the URL address into your browser https://www.cstproxy.com/finservacquisition/sm2021, enter your control number, name and email address. Once you pre-register you can vote or enter questions in the chat box. At the start of the meeting you will need to re-log in using your control number and will also be prompted to enter your control number if you vote during the meeting. FinServ recommends that you log in at least 15 minutes before the meeting to ensure you are logged in when the special meeting in lieu of the 2021 annual meeting starts.

Beneficial investors, who own their investments through a bank or broker, will need to contact CST to receive a control number. If you plan to vote at the Special Meeting you will need to have a legal proxy from your bank or broker or if you would like to join and not vote CST will issue you a guest control number with proof of ownership. Either way you must contact CST for specific instructions on how to receive the control number. We can be contacted at the number or email address above. Please allow up to 72 hours prior to the meeting for processing your control number.

If you do not have internet capabilities, you can listen only to the meeting by dialing +1 877-770-3647 (toll-free) outside the U.S. and Canada +1 312-780-0854 (standard rates apply) when prompted enter the pin number 65387477#. This is listen-only, you will not be able to vote or enter questions during the meeting.

Q:     WHY IS THE SPECIAL MEETING A VIRTUAL MEETING?

A:     FinServ has decided to hold the Special Meeting virtually due to the COVID-19 pandemic; FinServ is sensitive to the public health and travel concerns of FinServ’s stockholders and employees and the protocols that federal, state and local governments may impose. FinServ believes that hosting a virtual meeting will enable greater stockholder attendance and participation from any location around the world.

Q:     WHAT IF DURING THE CHECK-IN TIME OR DURING THE SPECIAL MEETING I HAVE TECHNICAL DIFFICULTIES OR TROUBLE ACCESSING THE VIRTUAL MEETING WEBSITE?

A:     If you encounter any difficulties accessing the virtual meeting during the check-in or meeting time, please call the technical support number that will be posted on the virtual stockholder meeting log in page.

Q:     IF MY SHARES ARE HELD IN “STREET NAME” BY A BROKER, BANK OR OTHER NOMINEE, WILL MY BROKER, BANK OR OTHER NOMINEE VOTE MY SHARES FOR ME?

A:     If your shares are held in “street name” in a stock brokerage account or by a broker, bank or other nominee, you must provide the record holder of your shares with instructions on how to vote your shares. Please follow the voting instructions provided by your broker, bank or other nominee. Please note that you may not vote shares held in “street name” by returning a proxy card directly to FinServ or by voting online at the Special Meeting unless you provide a “legal proxy,” which you must obtain from your broker, bank or other nominee.

Under the rules of the Nasdaq, brokers who hold shares in “street name” for a beneficial owner of those shares typically have the authority to vote in their discretion on “routine” proposals when they have not received instructions from beneficial owners. However, brokers are not permitted to exercise their voting discretion with respect to the approval of matters that the Nasdaq determines to be “non-routine” without specific instructions from the beneficial owner. It is expected that all proposals to be voted on at the Special Meeting are “non-routine” matters.

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If you are a FinServ stockholder holding your shares in “street name” and you do not instruct your broker, bank or other nominee on how to vote your shares, your broker, bank or other nominee will not vote your shares on the Business Combination Proposal, the Charter Proposals, the Director Election Proposal, the Nasdaq Proposal, the Incentive Plan Proposal or the Adjournment Proposal. The failure of your broker to vote will be the equivalent of a vote “AGAINST” the Charter Proposals, but will have no effect on the vote count for the other proposals.

Q:     WHAT HAPPENS IF I SELL MY SHARES OF CLASS A COMMON STOCK BEFORE THE FINSERV SPECIAL MEETING?

A:     The record date for the Special Meeting will be earlier than the date of the Special Meeting. If you transfer your shares of Class A Common Stock after the record date, but before the Special Meeting, unless the transferee obtains from you a proxy to vote those shares, you will retain your right to vote at the Special Meeting. However, you will not be able to seek redemption of your shares of Class A Common Stock because you will no longer be able to deliver them for cancellation upon the consummation of the merger in accordance with the provisions described herein. If you transfer your shares of Class A Common Stock prior to the record date, you will have no right to vote those shares at the Special Meeting or redeem those shares for a pro rata portion of the proceeds held in the Trust Account.

Q:     WHAT IF I ATTEND THE FINSERV SPECIAL MEETING AND ABSTAIN OR DO NOT VOTE?

A:     For purposes of the Special Meeting, an abstention occurs when a stockholder attends the meeting online and does not vote or returns a proxy with an “abstain” vote.

If you are a FinServ stockholder that attends the Special Meeting virtually and fails to vote on the Business Combination Proposal, the Charter Proposals, the Director Election Proposal, the Nasdaq Proposal, the Incentive Plan Proposal or the Adjournment Proposal, your failure to vote will have the same effect as a vote “AGAINST” the Charter Proposals, but will have no effect on the vote count for such other proposals. If you are a FinServ stockholder that attends the Special Meeting virtually and you respond to such proposals with an “abstain” vote, your “abstain” vote will have the same effect as a vote “AGAINST” the Charter Proposals but will have no effect on any of the other proposals.

Q:     WHAT WILL HAPPEN IF I RETURN MY PROXY CARD WITHOUT INDICATING HOW TO VOTE?

A:     If you sign and return your proxy card without indicating how to vote on any particular proposal, the FinServ common stock represented by your proxy will be voted as recommended by the FinServ board of directors with respect to that proposal.

Q:     MAY I CHANGE MY VOTE AFTER I HAVE DELIVERED MY PROXY OR VOTING INSTRUCTION CARD?

A:     Yes. You may change your vote at any time before your proxy is voted at the Special Meeting. You may do this in one of three ways:

•        filing a notice with the corporate secretary of FinServ;

•        mailing a new, subsequently dated proxy card; or

•        by attending the Special Meeting virtually and electing to vote your shares online.

If you are a stockholder of record of FinServ and you choose to send a written notice or to mail a new proxy, you must submit your notice of revocation or your new proxy to FinServ Acquisition Corp., c/o Ellenoff Grossman & Schole LLP, 1345 Avenue of the Americas, New York, NY 10105, and it must be received at any time before the vote is taken at the Special Meeting. Any proxy that you submitted may also be revoked by

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submitting a new proxy by mail, or online or by telephone, not later than 11:59 p.m. Eastern Time on June4, 2021, or by voting online at the Special Meeting. Simply attending the Special Meeting will not revoke your proxy. If you have instructed a broker, bank or other nominee to vote your shares of FinServ common stock, you must follow the directions you receive from your broker, bank or other nominee in order to change or revoke your vote.

Q:     WHAT HAPPENS IF I FAIL TO TAKE ANY ACTION WITH RESPECT TO THE FINSERV SPECIAL MEETING?

A:     If you fail to take any action with respect to the Special Meeting and the merger is approved by stockholders and consummated, you will continue to be a stockholder of FinServ. Failure to take any action with respect to the Special Meeting will not affect your ability to exercise your redemption rights. If you fail to take any action with respect to the Special Meeting and the merger is not approved, you will continue to be a stockholder of FinServ while FinServ searches for another target business with which to complete a business combination.

Q:     WHAT SHOULD I DO IF I RECEIVE MORE THAN ONE SET OF VOTING MATERIALS?

A:     Stockholders may receive more than one (1) set of voting materials, including multiple copies of this proxy statement/prospectus and multiple proxy cards or voting instruction cards. For example, if you hold your shares in more than one (1) brokerage account, you will receive a separate voting instruction card for each brokerage account in which you hold shares. If you are a holder of record and your shares are registered under more than one (1) name, you will receive more than one (1) proxy card. Please complete, sign, date and return each proxy card and voting instruction card that you receive in order to cast a vote with respect to all of your shares.

Q:     WHOM SHOULD I CONTACT IF I HAVE ANY QUESTIONS ABOUT THE PROXY MATERIALS OR VOTING?

A:     If you have any questions about the proxy materials, need assistance submitting your proxy or voting your shares or need additional copies of this proxy statement/prospectus or the enclosed proxy card, you should contact Morrow Sodali, the proxy solicitation agent for FinServ, toll-free at (800) 662-5200 (banks and brokers call (203) 658-9400) or email Morrow Sodali at FinServ.info@investor.morrowsodali.com.

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SUMMARY

This summary highlights selected information included in this proxy statement/prospectus and does not contain all of the information that may be important to you. You should read this entire document and its annexes and the other documents to which we refer before you decide how to vote. Each item in this summary includes a page reference directing you to a more complete description of that item.

The Merger and the Merger Agreement (pages 127 and 144)

The terms and conditions of the merger are contained in the merger agreement, which is attached as Annex A to this proxy statement/prospectus. We encourage you to read the merger agreement carefully, as it is the legal document that governs the merger.

If the merger agreement is approved and adopted and the merger is subsequently completed, Merger Sub 1 will merge with and into Katapult, with Katapult surviving the merger as a wholly owned subsidiary of FinServ, followed immediately by the merger of the resulting company with and into Merger Sub2, with Merger Sub 2 surviving the merger as a wholly owned subsidiary of FinServ.

Merger Consideration (page 144)

Immediately prior to the First Effective Time, each share of Katapult preferred stock issued and outstanding will be converted into a number of shares of Katapult common stock in accordance with the (i) irrevocable written consent executed by certain Pre-Closing Holders, who, collectively, hold at least a majority of Katapult preferred stock (the “Conversion Written Consent”) and (ii) fourth amended and restated certificate of incorporation of Katapult (the “Katapult charter”) (the “Katapult Preferred Conversion”).

At the First Effective Time, each share of Katapult common stock (including common stock to be issued as a result of the conversion of Katapult preferred stock in connection with the merger) that is issued and outstanding immediately prior to the First Effective Time (other than dissenting shares and Unvested Katapult Restricted Shares) will be cancelled and converted into the right to receive the applicable portion of the merger consideration, in accordance with the Allocation Schedule, consisting of (i) cash consideration, as determined under the merger agreement and further described herein, (ii) a number of shares of New Katapult common stock equal to (a) $833.0million (subject to adjustment in accordance with the terms of the merger agreement and net of the value of all Katapult Options to be converted into New Katapult options), minus the aggregate amount of cash paid in clause (i), divided by (b) 10 and (iii) the applicable portion of the 7,500,000 restricted shares of New Katapult common stock that will vest upon, among other things, the achievement of certain earn-out thresholds prior to the sixth anniversary of the closing of the merger. The following chart sets forth the merger consideration (excluding earn-out shares) per share of Katapult common stock and each series of Katapult preferred stock immediately prior to execution of the Merger Agreement and as of March30, 2021, assuming that (i) no shares of Class A Common Stock are redeemed, and (ii) Acquiror Expenses (as defined in the merger agreement) are equal to $25million, and (iii) there are no other adjustments to the aggregate consideration pursuant to the terms of the merger agreement:

Class or Series of Stock	Cash Consideration Per Share ($)				Stock Consideration Per Share (shares of New Katapult Common Stock)
	As of December 17, 2020		As of March 30, 2021		As of December 17, 2020	As of March 30, 2021
Katapult Common Stock	$	3.6154	$	3.6038	0.4628	0.4639
Katapult Series C-1 Preferred Stock	$	3.6154	$	3.6038	0.4628	0.4639
Katapult Series C Preferred Stock	$	3.6154	$	3.6038	0.4628	0.4639
Katapult Series C/A Preferred Stock	$	3.7363	$	3.7243	0.4783	0.4794
Katapult Series C/A-1 Preferred Stock	$	3.7421	$	3.7301	0.4790	0.4802
Katapult Series C/A-2 Preferred Stock	$	3.7384	$	3.7264	0.4786	0.4797
Katapult Series C/B Preferred Stock	$	3.7308	$	3.7189	0.4776	0.4787

See “The Merger Agreement — Merger Consideration” in this proxy statement/prospectus.

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Recommendation of the FinServ Board of Directors (page 136)

The FinServ board of directors has unanimously determined that the merger, on the terms and conditions set forth in the merger agreement, is advisable and in the best interests of FinServ and its stockholders and has directed that the proposals set forth in this proxy statement/prospectus be submitted to its stockholders for approval at the Special Meeting on the date and at the time and place set forth in this proxy statement/prospectus. The FinServ board of directors unanimously recommends that FinServ’s stockholders vote “FOR” the Business Combination Proposal, “FOR” the Charter Proposals, “FOR” the election of each of the seven (7) directors nominated in the Director Election Proposal, “FOR” the Nasdaq Proposal, “FOR” the Incentive Plan Proposal and “FOR” the Adjournment Proposal (if necessary). See “The Merger — Recommendation of the FinServ Board of Directors and Reasons for the Merger.”

Special Meeting of Stockholders (page 64)

The special meeting in lieu of the 2021 annual meeting of FinServ stockholders (the “Special Meeting”) will be held on June7, 2021, at 2:00 p.m. Eastern Time, via a virtual meeting. At the Special Meeting, FinServ stockholders will be asked to approve the Business Combination Proposal, the Charter Proposal, the Director Election Proposal, the Nasdaq Proposal, the Incentive Plan Proposal and the Adjournment Proposal (if necessary).

The FinServ board of directors has fixed the close of business on May11, 2021 as the record date for determining the holders of FinServ common stock entitled to receive notice of and to vote at the Special Meeting. As of the record date, there were 25,665,000shares of Class A Common Stock and 6,250,000shares of Class B Common Stock outstanding and entitled to vote at the Special Meeting held by one holder of record. Each share of FinServ common stock entitles the holder to one (1) vote at the Special Meeting on each proposal to be considered at the Special Meeting. As of the record date, the Sponsor and FinServ’s directors and executive officers and their affiliates owned and were entitled to vote 6,915,000shares of FinServ common stock, representing approximately 21.7% of the shares of FinServ common stock outstanding on that date. FinServ currently expects that the Sponsor and its directors and officers will vote their shares in favor of the proposals set forth in this proxy statement/prospectus, and, pursuant to agreements entered into in connection with FinServ’s IPO and the execution of the merger agreement, the Sponsor and FinServ’s directors have agreed to do so. As of the record date, Katapult did not beneficially hold any shares of FinServ common stock.

A majority of the voting power of the issued and outstanding FinServ common stock entitled to vote at the Special Meeting must be present, online or represented by proxy, at the Special Meeting to constitute a quorum and in order to conduct business at the Special Meeting.

Approval of the Business Combination Proposal, the Nasdaq Proposal and the Incentive Plan Proposal require the affirmative vote of a majority of the votes cast by holders of FinServ common stock, voting together as a single class at a meeting at which a quorum is present. Approval of the Charter Proposals requires the affirmative vote of the holders of a majority of the outstanding shares of common stock, voting together as a single class, and the affirmative vote of the holders of a majority of the Class B Common Stock then outstanding, voting separately as a single class. Approval of the election of each of the seven (7) directors nominated in the Director Election Proposal requires a plurality of the votes cast by holders of common stock at a meeting at which a quorum is present. Approval of the Adjournment Proposal requires the affirmative vote of a majority of the votes cast by holders of FinServ common stock, voting together as a single class, regardless of whether a quorum is present.

If FinServ stockholders fail to approve the Business Combination Proposal, the Nasdaq Proposal or, unless otherwise waived by Katapult and FinServ in accordance with the merger agreement, the Charter Proposals or the Incentive Plan Proposal, the merger will not occur. The Charter Proposals, the Director Election Proposal and the Incentive Plan Proposal are conditioned on the approval of the Business Combination Proposal and the Nasdaq Proposal. The Adjournment Proposal is not conditioned on the approval of any other proposal. If the Business Combination Proposal is not approved, the other proposals (except the Adjournment Proposal) will not be presented to the stockholders for a vote.

FinServ’s Directors and Executive Officers Have Financial Interests in the Merger (page 139)

Certain of FinServ’s executive officers and directors may have interests in the merger that may be different from, or in addition to, the interests of FinServ’s stockholders. The members of the FinServ board of directors

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were aware of and considered these interests, among other matters, when they approved the merger agreement and recommended that FinServ stockholders approve the proposals required to effect the merger. See “The Merger — Interests of FinServ’s Directors and Officers in the Merger.”

Treatment of Katapult Equity Awards (page 142)

As of the First Effective Time, the following will occur with respect to Katapult equity awards:

•        each Katapult Option that is outstanding immediately prior to the First Effective Time and held by a Pre-Closing Holder who has been actively employed by the Company for at least 730 consecutive days as of the First Effective Time will accelerate and become fully vested as of the First Effective Time in accordance with the terms of Katapult’s equity incentive plan. In addition, each Katapult Option, whether vested or unvested, that is outstanding immediately prior to the First Effective Time and held by a Pre-Closing Holder will be assumed and converted into an option with respect to a number of shares of New Katapult common stock in the manner set forth in the merger agreement;

•        each Vested Katapult Restricted Share will be cancelled and entitled to receive a portion of the merger consideration in accordance with the Allocation Schedule, and each Unvested Katapult Restricted Share will be cancelled for no consideration; and

•        each then-active employee of Katapult who is a Pre-Closing Holder who holds a Katapult Option and/or Vested Katapult Restricted Shares will receive such holder’s allocation of the Earn-Out Shares (as defined herein).

See “The Merger Agreement — Treatment of Katapult Equity Awards.”

Regulatory Approval Required for the Merger (page 141)

Completion of the merger is subject to approval under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”). FinServ agreed to use its reasonable best efforts to obtain all required regulatory approvals and Katapult agreed to request early termination of any waiting period under the HSR Act. FinServ and Katapult filed Notification and Report Forms with the Antitrust Division and the FTC on January5, 2021. The waiting period expired on February4, 2021. The regulatory approval to which completion of the merger is subject is described in more detail in the section of this proxy statement/prospectus entitled “Regulatory Approval Required for the Merger.”

Appraisal Rights (page 197)

Holders of FinServ common stock are not entitled to appraisal rights in connection with the merger under Delaware law.

Conditions to the Merger (page 155)

Conditions to Each Party’s Obligations.    The respective obligations of each of Katapult and FinServ to consummate the transactions contemplated by the merger agreement are subject to the satisfaction, or waiver, of the following conditions:

•        the applicable waiting period or consent under the HSR Act relating to the transactions contemplated by the merger agreement and the ancillary documents thereto shall have expired, been terminated or obtained;

•        no order or law issued by any court of competent jurisdiction or other governmental entity or other legal restraint or prohibition preventing the consummation of the transactions contemplated by the merger agreement and the ancillary documents thereto shall be in effect;

•        the registration statement of which this proxy statement/prospectus forms a part shall have become effective in accordance with the provisions of the Securities Act, no stop order shall have been

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issued by the SEC and shall remain in effect with respect to the proxy statement/prospectus, and no proceeding seeking such a stop order shall have been threatened or initiated by the SEC and remain pending;

•        the New Katapult common stock to be issued pursuant to the merger agreement (including the Earn-Out Shares) shall be listed on Nasdaq upon the closing, subject to any compliance extension on ability to remedy non-compliance, in each case as permitted by the Nasdaq continued listing rules;

•        the approval of the Business Combination Proposal, the Nasdaq Proposal, the Charter Proposals, the Incentive Plan Proposal, and the Adjournment Proposal (if necessary) by the affirmative vote of holders of the requisite number of votes cast by FinServ stockholders at the Special Meeting, in accordance with FinServ’s governing documents and applicable law (the “Required FinServ Shareholder Approval”), shall have been obtained and remain in full force and effect;

•        the approval of the merger agreement, the ancillary documents thereto and the transactions contemplated hereby and thereby (including the merger) by the stockholders of Katapult common stock after giving effect to the Katapult Preferred Conversion, in accordance with Katapult’s governing documents and any other contract to which Katapult is party or otherwise bound (the “Required Company Shareholder Approval”), shall have been obtained and remain in full force and effect;

•        the approval by the sole stockholder of Merger Sub 1 of the merger agreement, the ancillary documents thereto and the transactions contemplated hereby and thereby (including the merger), shall have been obtained and remain in full force and effect; and

•        after giving effect to the transactions contemplated hereby (including the PIPE Investment (as defined herein)), FinServ shall have at least $5,000,001 of net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) immediately after the First Effective Time.

Conditions to Obligations of FinServ Parties.    The obligation of the FinServ Parties (as defined herein) to complete the merger is also subject to the satisfaction, or waiver by FinServ, of the following conditions:

•        the accuracy of the representations and warranties of Katapult as of the date of the merger agreement and as of the closing date of the merger, subject to the materiality standards set forth in the merger agreement;

•        each of the covenants of Katapult to be performed or complied with as of or prior to the closing shall have been performed or complied with in all material respects;

•        no material adverse effect with respect to Katapult shall have occurred since the date of the merger agreement;

•        the receipt by FinServ of, among other required deliverables: (i) a certificate signed by an officer of Katapult certifying that the three preceding conditions have been satisfied; (ii) good standing certificates of Katapult and its subsidiaries as of a date no later than 15 days prior to the closing date; (iii) the receipt of a copy of the exchange agent agreement duly executed by the Holder Representative and the exchange agent; and (iv) the receipt of the A&R RRA duly executed by all of the Pre-Closing Holders party thereto; and

•        the Katapult Preferred Conversion shall have occurred as contemplated by the Conversion Written Consent.

Conditions to Obligations of Katapult.    The obligation of Katapult to complete the merger is also subject to the satisfaction or waiver by Katapult of the following conditions:

•        the accuracy of the representations and warranties of FinServ as of the date of the merger agreement and as of the closing date of the merger, subject to the materiality standards set forth in the merger agreement;

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•        each of the covenants of FinServ to be performed or complied with as of or prior to the closing shall have been performed or complied with in all material respects;

•        the receipt by Katapult of, among other required deliverables: (i) a certificate signed by an executive officer of FinServ certifying that the two preceding conditions have been satisfied; (ii) the receipt of a copy of the exchange agent agreement duly executed by FinServ, the Sponsor and the exchange agent; (iii) evidence that the Proposed Charter has been filed with the Secretary of State of Delaware; and (iv) the receipt of the A&R RRA (as defined herein) duly executed by FinServ and the Sponsor;

•        each of the covenants of the Sponsor required under the Sponsor Agreement to be performed as of or prior to the closing shall have been performed in all material respects; and

•        the sum of the amount of available distributable cash shall be at least $225million (the “Minimum Cash Condition”).

Exclusive Dealing (page 151)

Katapult has agreed that, from the date of the merger agreement until the earlier of its closing or termination, it shall not: (i) accept, initiate, respond to, encourage, entertain, solicit, discuss, negotiate, provide information with respect to any transaction or series of related transactions under which any person(s), directly or indirectly, acquires or otherwise purchases Katapult or any of its affiliates or all or a material portion of the assets, equity securities or businesses of Katapult or any of its subsidiaries, in the merger agreement (each such prohibited transaction, an “Acquisition Proposal”); (ii) furnish or disclose any non-public information to any person in connection with, or that could reasonably be expected to lead to, an Acquisition Proposal; (iii) enter into any contract regarding an Acquisition Proposal; (iv) prepare or take any steps in connection with a public offering of any equity securities of any Group Company; or (v) otherwise cooperate in any way with, or assist or participate in, or facilitate or encourage any effort to do any of the foregoing or further an Acquisition Proposal; provided, that, notwithstanding anything to the contrary in the foregoing, in no event shall an Acquisition Proposal include any transfer of Katapult capital stock to any party to a support agreement or an Affiliate of any party to a support agreement to the extent that such Katapult capital stock becomes subject to the obligations under such support agreement.

From the date of the merger agreement until the earlier of its closing or termination, FinServ, Merger Sub 1 and Merger Sub 2 (the “FinServ Parties”) have agreed not to, directly and indirectly: (i) commence, accept, initiate, respond to, encourage, entertain, solicit, discuss, negotiate, provide information with respect to any offers for, or (ii) issue or execute an indication of interest, memorandum of understanding, a letter of intent, or any other similar agreement with respect to any transactions or series of related transactions under which FinServ or any of its subsidiaries acquires or otherwise purchases all or a material portion of the assets, equity securities or businesses of any person(s) other than with respect to the transactions with Katapult contemplated by the merger agreement and ancillary documents thereto.

Termination (page 157)

Mutual termination rights.    The merger agreement may be terminated and the transactions contemplated thereby abandoned at any time prior to the closing:

•        by written consent of Katapult and FinServ;

•        by written notice from either Katapult or FinServ to the other if the Special Meeting has been held (including any adjournment or postponement thereof), has concluded, FinServ’s shareholders have duly voted, and the Required FinServ Shareholder Approval was not obtained;

•        by written notice from either Katapult or FinServ to the other if the closing has not occurred on or prior to July31, 2021 for any reason other than nonperformance of the party seeking such termination; or

•        by written notice from either Katapult or FinServ to the other if a governmental authority has issued an order or taken an action permanently enjoining, restraining or otherwise prohibiting the transactions contemplated by the merger agreement or any ancillary document and such order has become final and nonappealable.

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Katapult termination rights.    The merger agreement may be terminated and the transactions contemplated thereby abandoned if prior to the closing, by written notice to FinServ from Katapult, (i) the representations and warranties of FinServ are not true and correct or if FinServ has failed to perform any covenant or agreement to be performed by FinServ in such a way that the conditions to closing in the merger agreement would not be satisfied and (ii) Katapult is then not in breach of the merger agreement so as to prevent the closing conditions from being satisfied, and such breach or breaches of FinServ are not or cannot be cured before the earlier of 30 days after written notice is delivered to FinServ and July31, 2021.

FinServ termination rights.    The merger agreement may be terminated and the transactions contemplated thereby abandoned:

•        if prior to the closing, by written notice to Katapult from FinServ, (i) the representations and warranties of Katapult are not true and correct or if Katapult has failed to perform any covenant or agreement to be performed by Katapult in such a way that the conditions to closing in the merger agreement would not be satisfied and (ii) FinServ is then not in breach of the merger agreement so as to prevent the closing conditions from being satisfied, and such breach or breaches of Katapult are not or cannot be cured before the earlier of 30 days after written notice is delivered to Katapult and July31, 2021;

•        if Katapult does not deliver, or cause to be delivered, to FinServ, (i) a support agreement duly executed by each supporting holder or (ii) the Written Consent (as defined herein); or

•        if the Conversion Written Consent is, at any time, no longer valid or is otherwise wholly or partially revoked or rescinded at any time.

FinServ Letter Agreement (page 159)

Pursuant to the terms of a letter agreement (the “Letter Agreement”) entered into with FinServ, the Sponsor and FinServ’s officers and directors have agreed to vote any Founder Shares held by them and any shares of Class A Common Stock purchased during or after FinServ’s IPO (including underlying the Private Placement Units) in favor of an initial business combination. The Sponsor, FinServ’s officers and directors and their permitted transferees own at least 20% of its outstanding common stock entitled to vote thereon. The quorum and voting thresholds at the Special Meeting and the Letter Agreement may make it more likely that FinServ will consummate the merger. See “Other Agreements — FinServ Letter Agreement.”

Other Agreements (page 159)

Sponsor Agreement

Pursuant to the merger agreement, FinServ, the Sponsor, Katapult, Lee Einbinder, Howard Kurz, Robert Matza, Diane B. Glossman and Aris Kekedjian entered into the Sponsor Agreement, pursuant to which the Sponsor has agreed, among other things, (i) to vote in favor of the merger agreement and the transactions contemplated thereby (including the merger), (ii) to waive its anti-dilution rights with respect to its shares of Class B Common Stock in connection with the issuance of shares pursuant to the PIPE Investment, (iii) that 1,543,750 of its Founder Shares will be subject at the First Effective Time to certain vesting and forfeiture conditions, and (iv) to be bound by certain transfer restrictions with respect to its shares of Class B Common Stock prior to the closing of the business combination, in each case, on the terms and subject to the conditions set forth in the Sponsor Agreement. In addition, pursuant to the Sponsor Agreement, the lock up provisions of the Letter Agreement will be terminated with respect to the Sponsor, FinServ and each of Lee Einbinder, Howard Kurz, Robert Matza, Diane B. Glossman and Aris Kekedjian at the First Effective Time. See “Other Agreements — Sponsor Agreement.”

Subscription Agreements

In connection with the execution of the merger agreement, each of FinServ and certain third-party investors (the “PIPE Investors”) entered into subscription agreements (the “PIPE Agreements”) pursuant to which the PIPE Investors have subscribed for an aggregate of 15,000,000 newly-issued shares of Class A Common Stock to be issued at the closing of the merger. The obligations to consummate the subscriptions contemplated by the PIPE Agreements are conditioned upon, among other things, customary closing conditions and the consummation of the merger as set forth in the PIPE Agreements.

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Support Agreements

Promptly after the execution of the merger agreement, certain stockholders of Katapult holders representing a majority of the shares of each of Katapult’s preferred stock and Katapult’s common stock (determined on an as-converted basis) entered into support agreements with FinServ. Under the support agreements, the supporting holders agreed, among other things, to execute and deliver a written consent with respect to the outstanding shares of Katapult common stock held by the supporting holders (following the conversion of Katapult’s preferred stock into common stock in accordance with the Conversion Written Consent), which represent approximately 73.6% of the outstanding voting power of Katapult common stock (determined on an as-converted basis), adopting the merger agreement and approving the merger, subject to certain exceptions. See “Other Agreements — Support Agreements.”

Amended and Restated Registration Rights Agreement

In connection with the consummation of the merger, New Katapult will enter into an amended and restated registration rights agreement (the “A&R RRA”) with FinServ, the Sponsor and certain other stockholders of New Katapult, which will provide for customary “demand” and “piggyback” registration rights for certain stockholders. The A&R RRA will become effective upon the consummation of the merger. See “Other Agreements — Amended and Restated Registration Rights Agreement.”

Listing (page 168)

The Class A Common Stock is listed on the Nasdaq under the symbol “FSRV.” Following the merger, New Katapult common stock (including common stock issuable in the merger) will be listed on the Nasdaq under the symbol “KPLT.”

Information about FinServ (page 78)

FinServ is a special purpose acquisition company formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. Class A Common Stock, units and warrants are currently listed on the Nasdaq under the symbols “FSRV,” “FSRVU,” and “FSRVW,” respectively. The mailing address of FinServ’s principal executive office is c/o Ellenoff Grossman & Schole LLP, 1345 Avenue of the Americas, New York, NY 10105 and the telephone number of FinServ’s principal executive office is (212) 370-1300.

Information about Katapult (page 85)

Katapult is a next generation platform for digital and mobile-first commerce for the nonprime consumer. Katapult provides point of sale (POS) lease-purchase options for consumers challenged with accessing traditional financial products who are seeking to obtain everyday durable goods. The Company has developed a sophisticated end-to-end technology platform that enables seamless integration with merchants, underwriting capabilities that exceed those of commonly available services, and exceptional customer experiences.

Katapult was originally formed as a corporation under the laws of the State of Delaware on March12, 2012 as Neuralcash, Inc. It subsequently changed its name to Cognical Inc. on June10, 2013, and started doing business as Zibby on September2, 2014. On June24, 2016, Cognical Holdings Inc. was formed and Cognical Inc. became a wholly owned subsidiary of Cognical Holdings Inc. On January29, 2020, Cognical Holdings Inc. and Cognical Inc. changed their names to Katapult Holdings, Inc. and Katapult Group, Inc., respectively. Katapult’s principal executive offices are located at Katapult Holdings, Inc., P.O. Box 20019, Greeley Square, 4 East 27th Street, New York, NY 10001, and Katapult’s telephone number is (646) 780-8446.

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Summary of the Transactions

Set forth below is a summary of transactions that are contemplated to occur in connection with the merger.

Conversion of Equity Interests

Immediately prior to the First Effective Time, each share of Katapult preferred stock issued and outstanding will be converted into a number of shares of Katapult common stock in accordance with the (i) Conversion Written Consent and (ii) Katapult charter.

In addition, as of the First Effective Time:

•        each share of Katapult common stock (including common stock to be issued as a result of the conversion of Katapult preferred stock in connection with the merger) that is issued and outstanding immediately prior to the First Effective Time (other than dissenting shares and Unvested Katapult Restricted Shares) will be cancelled and converted into the right to receive the applicable portion of the merger consideration, in accordance with the Allocation Schedule, consisting of (i) cash consideration, as determined under the merger agreement and further described herein, (ii) a number of shares of New Katapult common stock equal to (a) $833.0million (subject to adjustment in accordance with the terms of the merger agreement and net of the value of all Katapult Options to be converted into New Katapult options), minus the aggregate amount of cash paid in clause (i), divided by (b) 10 and (iii) the applicable portion of the 7,500,000 restricted shares of New Katapult common stock that will vest upon, among other things, the achievement of certain earn-out thresholds prior to the sixth anniversary of the closing of the merger. See “The Merger Agreement — Merger Consideration.”

•        each Katapult Option that is outstanding immediately prior to the first Effective Time and held by a Pre-Closing Holder who has been actively employed by the Company for at least 730 consecutive days as of the First Effective Time will accelerate and become fully vested as of First Effective Time in accordance with the terms of Katapult’s equity incentive plan. In addition, each Katapult Option, whether vested or unvested, that is outstanding immediately prior to the First Effective Time and held by a Pre-Closing Holder will be assumed and converted into an option with respect to a number of shares of New Katapult common stock in the manner set forth in the merger agreement;

•        each Vested Katapult Restricted Share will be cancelled and entitled to receive a portion of the merger consideration in accordance with the Allocation Schedule, and each Unvested Katapult Restricted Share will be cancelled for no consideration; and

•        each then-active employee of Katapult who is a Pre-Closing Holder who holds a Katapult Option and/or Vested Katapult Restricted Shares will receive such holder’s allocation of the Earn-Out Shares.

See “The Merger Agreement — Treatment of Katapult Equity Awards.”

PIPE Investment

Contemporaneously with the execution and delivery of the merger agreement, FinServ and the PIPE Investors entered into the PIPE Agreements pursuant to which the PIPE Investors have committed (the “PIPE Investment”), on the terms and subject to the conditions of the PIPE Agreements, to subscribe for and purchase an aggregate of 15,000,000shares of Class A Common Stock from FinServ for consideration in an aggregate amount of $150million (such amount the “PIPE Investment Amount”). For more information, see “FinServ Proposals — Proposal No. 11 — The Nasdaq Proposal.”

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Summary of Risk Factors

You should consider all the information contained in this proxy statement/prospectus in deciding how to vote for the proposals presented in the proxy statement/prospectus. The occurrence of one or more of the events or circumstances described in the section titled “Risk Factors,” alone or in combination with other events or circumstances, may materially adversely affect our business, financial condition and operating results. Such risks include, but are not limited to:

•        Failure to effectively manage our costs could have a material adverse effect on our profitability.

•        Negative publicity about us or our industry could adversely affect our business, results of operations, financial condition, and future prospects.

•        Our results depend on more prominent presentation, integration, and support of our platform by our merchants.

•        Real or perceived software errors, failures, bugs, defects, or outages could adversely affect our business, results of operations, financial condition, and future prospects.

•        Any significant disruption in, or errors in, service on our platform or relating to vendors, including events beyond our control, could prevent us from processing transactions on our platform or posting payments and have a material and adverse effect on our business, results of operations, financial condition, and future prospects.

•        Our ability to protect our confidential, proprietary, or sensitive information, including the confidential information of consumers on our platform, may be adversely affected by cyber-attacks, employee or other internal misconduct, computer viruses, physical or electronic break-ins, or similar disruptions.

•        The COVID-19 pandemic has impacted our working environment and diverted personnel resources and any prolonged effects of the pandemic may adversely impact our operations and employees.

•        While we take precautions to prevent consumer identity fraud, it is possible that identity fraud may still occur or has occurred, which may adversely affect the performance of the lease-to-own transactions facilitated through our platform.

•        The success of our business is dependent on factors affecting consumer spending that are not under our control.

•        The success and growth of our business depends upon our ability to continuously innovate and develop new products and technologies.

•        We have a history of operating losses and may not sustain profitability in the future.

•        A large percentage of our customer acquisition is concentrated with a single merchant partner, and the loss of this merchant partner or any other significant merchant relationships would materially and adversely affect our business, results of operations, financial condition, and future prospects.

•        We have experienced rapid growth, which may be difficult to sustain and which may place significant demands on our operational, administrative, and financial resources. Raising additional funds to sustain our growth by issuing securities may cause dilution to existing stockholders and raising funds through lending arrangements may restrict our operations.

•        Our independent registered public accounting firm identified material weaknesses in our internal control over financial reporting in connection with the audit of our financial statements for the fiscal years ended December31, 2020, 2019, and 2018, and we may identify additional material weaknesses in the future that may cause us to fail to meet our reporting obligations or result in material misstatements of our financial statements.

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•        FinServ stockholders will have a reduced ownership and voting interest after the merger and will exercise less influence over management.

•        The market price of shares of New Katapult common stock after the merger may be affected by factors different from those currently affecting the prices of shares of Class A Common Stock.

•        FinServ has not obtained an opinion from an independent investment banking firm, and consequently, there is no assurance from an independent source that the merger consideration is fair to its stockholders from a financial point of view.

•        The consummation of the merger is subject to a number of conditions and if those conditions are not satisfied or waived, the merger agreement may be terminated in accordance with its terms and the merger may not be completed.

•        Termination of the merger agreement could negatively impact Katapult and FinServ.

•        Katapult will be subject to business uncertainties and contractual restrictions while the merger is pending.

•        FinServ directors and officers may have interests in the merger different from the interests of FinServ stockholders.

•        The unaudited pro forma condensed combined financial information included in this proxy statement/prospectus is preliminary and the actual financial condition and results of operations after the merger may differ materially.

•        Nasdaq may delist New Katapult’s securities from trading on its exchange, which could limit investors’ ability to make transactions in its securities and subject New Katapult to additional trading restrictions.

•        New Katapult’s stock price may change significantly following the merger and you could lose all or part of your investment as a result.

•        FinServ has identified a material weakness in its internal control over financial reporting. This material weakness could continue to adversely affect FinServ’s ability to report its results of operations and financial condition accurately and in a timely manner.

•        The restatement of FinServ’s financial statements in May 2021 has subjected FinServ to additional risks and uncertainties, including increased professional costs and the increased possibility of legal proceedings.

•        There is no guarantee that a FinServ public stockholder’s decision whether to redeem their shares for a pro rata portion of the Trust Account will put such stockholder in a better future economic position.

•        If FinServ public stockholders fail to comply with the redemption requirements specified in this proxy statement/prospectus, they will not be entitled to redeem their shares of Class A Common Stock for a pro rata portion of the funds held in the Trust Account.

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Recent Developments

FinServ’s Restatement of Financial Statements

On April12, 2021, the Acting Director of the Division of Corporation Finance and Acting Chief Accountant of the SEC together issued a statement regarding the accounting and reporting considerations for warrants issued by special purpose acquisition companies entitled “Staff Statement on Accounting and Reporting Considerations for Warrants Issued by Special Purpose Acquisition Companies (“SPACs”)” (the “SEC Statement”). Specifically, the SEC Statement focused on certain settlement terms and provisions related to certain tender offers following a business combination, which terms are similar to those contained in the warrant agreement, dated as of October31, 2019, between FinServ and Continental Stock Transfer & Trust Company, a New York corporation, as warrant agent. As a result of the SEC Statement, FinServ reevaluated the accounting treatment of it warrants, and determined to classify the warrants as derivative liabilities measured at fair value, with changes in fair value each period reported in earnings. The change in fair value of the warrants is a non-cash charge and will be reflected in FinServ’s statement of operations.

On April26, 2021, as discussed with WithumSmith+Brown, PC, FinServ’s independent registered public accounting firm (the “Independent Accountants”), FinServ’s management and the Audit Committee of FinServ’s Board of Directors (the “Audit Committee”) concluded that, in light of the SEC Statement, it is appropriate to restate FinServ’s financial statements to reclassify the warrants as liabilities for the periods ended November5, 2019, December31, 2019, March 31, 2020, June30, 2020, September30, 2020 and December31, 2020. Considering such restatement, such financial statements should no longer be relied upon. This proxy statement/prospectus has been updated to include the restated financial statements for the period from August9, 2019 (inception) through December31, 2019 and for the year ended December31, 2020.

Going forward, unless FinServ amends the terms of its warrant agreement, FinServ expects to continue to classify its warrants as liabilities, which would require FinServ to incur the cost of measuring the fair value of the warrant liabilities, and which may have an adverse effect on its results of operations.

DCA Litigation

On April9, 2021, Daiwa Corporate Advisory LLC (formerly known as DCS Advisory LLC) (“DCA”), a financial advisory firm, served Katapult Group, Inc. with a summons and 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 March22, 2018 letter agreement (the “Letter Agreement”) entered into by DCS Advisory LLC and Cognical Inc. (now known as Katapult Group, Inc.). 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 $100,000 termination fee payable in certain circumstances by Katapult Group, Inc. in the event that Katapult Group, Inc. terminated the Letter Agreement. For its first cause of action, DCA alleges that Katapult Group, Inc. “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” the 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 Katapult Group, Inc. properly terminated the Letter Agreement in April 2019 (which DCA disputes), Katapult Group, Inc. “also breached the Letter Agreement by failing to pay DCA a termination fee when it terminated the Letter Agreement,” and that “DCA’s right of first refusal remains in place for 24months after termination of the Letter Agreement.” DCA seeks “damages in an amount to be determined at trial, but no less than $100,000,” 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.” Copies of DCA’s complaint and the exhibits thereto are attached as Exhibit 99.8 to the registration statement of which this proxy statement/prospectus forms a part. Katapult has informed us that it disputes the allegations and intends to vigorously defend against the claims.

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Ownership of New Katapult

As of the date of this proxy statement/prospectus, there are 31,915,000shares of FinServ common stock issued and outstanding, including 6,250,000shares of Class B Common Stock, which will be converted into shares of Class A Common Stock on a one-for-one basis. As of the date of this proxy statement/prospectus, there are an aggregate of 12,832,500 warrants outstanding. Each whole warrant entitles the holder thereof to purchase one (1) share of Class A Common Stock. Therefore, as of the date of this proxy statement/prospectus (without giving effect to the merger and assuming no redemptions), assuming that each outstanding warrant is exercised and one (1) Class A Common Stock is issued as a result of such exercise, the FinServ fully-diluted stock capital would be 44,747,500shares of common stock.

The following table illustrates varying beneficial ownership levels in New Katapult immediately following the consummation of the transactions assuming the levels of redemptions by the public stockholders indicated:

	Share Ownership in New Katapult(1) No Redemptions(2)			Maximum Redemption(3)
	Number of Shares	Percentage of Outstanding Shares		Number of Shares	Percentage of Outstanding Shares
	(in millions)				(in millions)
Former equityholders of Katapult	50,686,464	51.9	%	68,311,334	69.9	%
FinServ’s public stockholders	25,000,000	25.6	%	7,462,711	7.6	%
Holders of FinServ’s Founder Shares(4)	6,915,000	7.1	%	6,915,000	7.1	%
PIPE Investors	15,000,000	15.4	%	15,000,000	15.4	%

____________

(1)      Percentages may not sum to 100% due to rounding. Figures and percentages do not give effect to the shares reserved for issuance under the Incentive Plan. See “Proposal No. 12 — The Incentive Plan Proposal” for additional information. See “Basis of Presentation and Glossary” for additional information with respect to assumptions underlying New Katapult share calculations and ownership percentages.

(2)      This scenario assumes that no shares of Class A Common Stock are redeemed.

(3)      This scenario assumes that 17,537,289shares of Class A Common Stock are redeemed for an aggregate payment of approximately $176.2million from the Trust Account, which is the maximum amount of redemptions that, after giving effect to the PIPE Investment, would result in the satisfaction of the Minimum Cash Condition.

(4)      Includes 1,543,750shares of New Katapult common stock subject to forfeiture in accordance with the Sponsor Agreement. See “Other Agreements — Sponsor Agreement.”

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SUMMARY HISTORICAL FINANCIAL INFORMATION OF FINSERV

The following table sets forth summary historical financial information derived from FinServ’s (i) audited financial statements included elsewhere in this proxy statement/prospectus as of and for the year ended December31, 2020 and (ii) audited financial statements as of December31, 2019 and for the period from August9, 2019 (inception) through December31, 2019. You should read the following summary financial information in conjunction with the section entitled “FinServ’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” and FinServ’s financial statements and related notes appearing elsewhere in this proxy statement/prospectus.

We have neither engaged in any operations nor generated any revenue to date. Our only activities from inception through December31, 2020 were organizational activities and those necessary to complete our IPO and identifying a target company for a business combination. We do not expect to generate any operating revenue until after the completion of the merger.

	For the period from August 9, 2019 (inception) through December 31, 2019			For the year ended December 31, 2020
	As Restated			As Restated
Statements of Operations Data:
Net loss	$	(3,065,680	)	$	(31,927,098	)
Weighted average shares outstanding of Class A Common Stock		25,000,000			25,000,000
Basic and diluted income per share, Class A	$	0.02		$	0.03
Cash Flow Data:
Net cash and cash equivalents used in operating activities	$	(156,163	)	$	(985,959	)
Net cash and cash equivalents provided by (used in) investing activities	$	(250,000,000	)	$	451,779
Net cash and cash equivalents provided by financing activities	$	251,734,238		$	—

	December 31, 2019			December 31, 2020
	As Restated			As Restated
Balance Sheet Data (end of period):
Total current assets	$	1,704,097		$	1,126,079
Marketable securities held in Trust Account	$	250,567,358		$	251,249,193
Total assets	$	252,271,455		$	252,375,272
Total liabilities	$	22,275,430		$	54,306,345
Class A Common Stock, 0.0001 par value; 100,000,000 shares authorized; 6,358,108 and 3,165,398 issued and outstanding (excluding 19,306,892 and 22,499,602 shares subject to possible redemption) at December 31, 2020 and 2019, respectively	$	316		$	636
Class B Common Stock, $0.0001 par value; 10,000,000 shares authorized; 6,250,000 shares issued and outstanding December 31, 2020 and 2019	$	625		$	625
Additional paid-in capital	$	8,064,744		$	39,991,524
Retained earnings	$	(3,065,680	)	$	(34,992,778	)
Redeemable Stock	$	224,996,020		$	193,068,920
Total stockholders’ equity	$	5,000,005		$	5,000,007
Total liabilities and stockholders’ equity	$	252,271,455		$	252,375,272

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SELECTED HISTORICAL CONSOLIDATED FINANCIAL INFORMATION OF KATAPULT

The following selected historical consolidated financial information and other data for Katapult set forth below should be read in conjunction with “Katapult’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Katapult’s historical consolidated financial statements and the related notes thereto contained elsewhere in this proxy statement/prospectus.

The selected historical consolidated financial information and other data presented below for the years ended December31, 2020 and 2019, and the selected consolidated balance sheet and other data as of December31, 2020 and 2019 have been derived from Katapult’s audited consolidated financial statements included in this proxy statement/prospectus.

	Year Ended December 31,
	2020			2019			2018
	(in thousands)
Statement of Operations Data:
Total revenue	$	247,200		$	91,877		$	43,146
Cost of revenue		(167,412	)		(71,220	)		(38,710	)
Total operating expenses		(42,882	)		(30,049	)		(21,309	)
Income (loss) from operations		36,906			(9,392	)		(16,873	)
Other expenses
Loss on extinguishment of debt		(402	)		(823	)		(1,650	)
Interest expense and other fees		(13,588	)		(8,577	)		(4,986	)
Other income		102			—			—
Income (loss) before provision for income taxes		23,018			(18,792	)		(23,509	)
Provision for income taxes		(487	)		—			—
Net income (loss)	$	22,531		$	(18,792	)	$	(23,509	)

	As of December 31,
	2020			2019
	(in thousands)
Balance Sheet Data:
Cash and restricted cash	$	69,597		$	12,246
Total current assets		139,218			48,661
Total current liabilities		17,307			26,065
Total assets		139,827			49,014
Total debt		110,729			62,696
Total stockholders’ deficit		(50,843	)		(73,838	)

	Year Ended December 31,
	2020			2019			2018
	(in thousands)
Statement of Cash Flows Data:
Net cash (used in) operating activities	$	(2,142	)	$	(31,584	)	$	(25,477	)
Net cash provided by (used in) investing activities		(402	)		91			(58	)
Net cash provided by financing activities		59,895			40,777			25,654

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SUMMARY UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

The following selected unaudited pro forma condensed combined financial data is derived from the unaudited pro forma condensed combined balance sheet and unaudited pro forma condensed combined statements of operations included elsewhere in this proxy statement/prospectus.

The unaudited pro forma condensed combined financial statements are based on FinServ’s historical financial statements and Katapult’s historical consolidated financial statements as adjusted to give effect to the merger and the PIPE Investment for an aggregate commitment amount of $150million. The unaudited pro forma condensed combined balance sheet gives pro forma effect to the merger, treated as a reverse recapitalization for accounting purposes, and the PIPE Investment as if they had been consummated on December31, 2020. The unaudited pro forma condensed combined statement of operations for the year ended December31, 2020, gives effect to the merger and the PIPE Investment as if they had occurred on January1, 2020.

The unaudited pro forma condensed combined financial statements were prepared in accordance with Article 11 of SEC Regulation S-X, as amended by the final rule, Release No. 33-10786 “Amendments to Financial Disclosures about Acquired and Disposed Businesses.” Release No. 33-10786 replaces the existing pro forma adjustment criteria with simplified requirements to depict the accounting for the transaction (“Transaction Accounting Adjustments”) and present the reasonably estimable synergies and other transaction effects that have occurred or are reasonably expected to occur (“Management’s Adjustments”). FinServ has elected not to present Management’s Adjustments and will only be presenting Transaction Accounting Adjustments in the unaudited pro forma condensed combined financial information. The adjustments presented in the unaudited pro forma condensed combined financial information have been identified and presented to provide relevant information necessary for an understanding of the combined company upon consummation of the merger and the PIPE Investment.

The unaudited pro forma condensed combined financial information is for illustrative purposes only. The financial results may have been different had the companies always been combined. You should not rely on the unaudited pro forma condensed combined financial information as being indicative of the historical results that would have been achieved had the companies always been combined or the future results that the combined company will experience. FinServ and Katapult have not had any historical relationship prior to the merger. Accordingly, no pro forma Transaction Accounting Adjustments were required to eliminate activities between the companies.

This information should be read together with FinServ’s and Katapult’s historical financial statements and related notes, “Unaudited Pro Forma Condensed Combined Financial Information,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations of FinServ,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Katapult,” and other financial information relating to FinServ and Katapult included elsewhere in this proxy statement/prospectus.

	Pro Forma
	Year Ended December 31, 2020			Year Ended December 31, 2019
	(in thousands)
Combined Statement of Operations data:
Total revenue	$	247,200		$	91,877
Income (loss) from operations		26,540			(10,257	)
Net loss		(19,874	)		(24,941	)
Net loss available to common stockholders		(19,874	)		(24,941	)

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	Pro Forma
	As of December 31, 2020
	(in thousands)
Combined Balance Sheet data:
Total assets	$	170,112
Total revolving debt		74,316
Total long-term debt		36,413
Total liabilities		171,102
Total stockholders’ equity		(990	)

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UNAUDITED HISTORICAL COMPARATIVE AND PRO FORMA COMBINED PER SHARE DATA OF FINSERV AND KATAPULT

The following table sets forth selected historical comparative share information for FinServ and Katapult and unaudited pro forma condensed combined per share information of New Katapult after giving effect to the merger, assuming two redemption scenarios as follows:

•        Assuming no redemptions:    This scenario assumes that no FinServ public stockholders exercise their redemption rights demanding redemption of their shares of Class A Common Stock for a pro rata portion of the funds in the Trust Account, and thus the full amount held in the Trust Account as of closing is available for the merger; and

•        Assuming maximum redemptions:    This scenario assumes that FinServ public stockholders holding 17,537,289shares of Class A Common Stock will exercise their redemption rights demanding redemption of their shares of Class A Common Stock for a pro rata portion (approximately $10.05 per share) of the funds in the Trust Account. Under the merger agreement, it is a condition to Katapult’s obligations to close that after giving effect to any redemptions and the PIPE Investment, FinServ has at least $225million in available distributable cash. This scenario gives effect to redemptions of 17,537,289shares of Class A Common Stock for aggregate redemption payments of $176.2million using a per-share redemption price of $10.05 (due to investment related gains in the Trust Account).

The unaudited pro forma condensed combined balance sheet as of December31, 2020 was derived from the audited historical balance sheet of FinServ as of December31, 2020 and the audited historical consolidated balance sheet of Katapult as of December31, 2020 and gives effect to the merger and the PIPE Investment as if they occurred on December31, 2020. The unaudited pro forma condensed combined statement of operations for the year ended December31, 2020 gives effect to the merger and the PIPE Investment as if they occurred on January1, 2020, the beginning of the earliest period presented.

This information is only a summary and should be read together with the selected historical financial information included elsewhere in this proxy statement/prospectus, and the historical financial statements of FinServ and Katapult and related notes that are included elsewhere in this proxy statement/prospectus. The unaudited pro forma combined per share information of FinServ and Katapult is derived from, and should be read in conjunction with, the unaudited pro forma condensed combined financial information and related notes included elsewhere in this proxy statement/prospectus.

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The unaudited pro forma combined earnings per share information below does not purport to represent the earnings per share which would have occurred had the companies been combined during the periods presented, nor earnings per share for any future date or period. The unaudited pro forma combined book value per share information below does not purport to represent what the value of FinServ and Katapult would have been had the companies been combined during the periods presented.

	Historical
	FinServ			Katapult			Pro Forma
For the year ended December 31, 2020
Net income (loss)	$	(31,927	)	$	22,531		$	(19,874	)
Net income (loss) available to common stockholders	$	(32,665	)	$	1,933		$	(19,874	)
Weighted average common shares outstanding (no redemptions)
Basic		6,915,000			8,923,293			105,090,081
Diluted		6,915,000			25,015,960			105,090,181
Weighted average common shares outstanding (maximum redemptions)
Basic		6,915,000			8,923,293			105,177,711
Diluted		6,915,000			25,015,960			105,177,711
Earnings (loss) per common share (no and maximum redemptions)
Basic	$	(4.72	)	$	0.22		$	(0.19	)
Diluted	$	(4.72	)	$	0.08		$	(0.19	)
For the year ended December 31, 2019
Net loss	$	(3,066	)	$	(18,792	)	$	(21,582	)
Net loss available to common stockholders	$	(3,451	)	$	(21,272	)	$	(21,582	)
Weighted average common shares outstanding, basic and diluted
No redemptions		6,513,229			8,642,858			105,087,377
Maximum redemptions		6,513,229			8,642,858			105,176,908
Basic and diluted loss per common share (no and maximum redemptions)	$	(0.53	)	$	(2.46	)	$	(0.21	)

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MARKET PRICE AND DIVIDEND INFORMATION

FinServ

FinServ’s units, Class A Common Stock and warrants are currently listed on the Nasdaq under the symbols “FSRVU,” “FSRV,” and “FSRVW,” respectively.

The closing price of the units and the Class A Common Stock on December17, 2020, the last trading day before announcement of the execution of the merger agreement, was $11.74 and $10.50, respectively. As of May11, 2021, the record date for the Special Meeting, the most recent closing price for each unit and share of Class A Common Stock was $12.50 and $11.21, respectively. The warrants did not trade on May11, 2021.

Holders of the units, Class A Common Stock and warrants should obtain current market quotations for their securities. The market price of FinServ’s securities could vary at any time before the merger.

Holders

As of May11, 2021, there were two holders of record of FinServ’s units, one holder of record of FinServ’s Class A Common Stock and one holder of record of FinServ’s warrants. The number of holders of record does not include a substantially greater number of “street name” holders or beneficial holders whose units, shares of Class A Common Stock and warrants are held of record by banks, brokers and other financial institutions.

Dividend Policy

FinServ has not paid any cash dividends on its common stock to date and does not intend to pay cash dividends prior to the completion of the merger. The payment of cash dividends in the future will be dependent upon New Katapult’s revenues and earnings, if any, capital requirements and general financial condition subsequent to completion of the merger. The payment of any cash dividends subsequent to the merger will be within the discretion of New Katapult’s board of directors at such time. New Katapult’s ability to declare dividends will also be limited by restrictive covenants pursuant to any debt financing.

Katapult

Historical market price information for Katapult’s capital stock is not provided because there is no public market for Katapult’s capital stock. See “Katapult’s Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

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FORWARD-LOOKING STATEMENTS; MARKET, RANKING AND OTHER INDUSTRY DATA

This proxy statement/prospectus includes forward-looking statements regarding, among other things, the plans, strategies and prospects, both business and financial of FinServ and Katapult. These statements are based on the beliefs and assumptions of the management of FinServ and Katapult. Although FinServ and Katapult believe that their respective plans, intentions and expectations reflected in or suggested by these forward-looking statements are reasonable, neither FinServ nor Katapult can assure you that either will achieve or realize these plans, intentions or expectations. Forward-looking statements are inherently subject to risks, uncertainties and assumptions. Generally, statements that are not historical facts, including statements concerning possible or assumed future actions, business strategies, events or results of operations, are forward-looking statements. These statements may be preceded by, followed by or include the words “believes,” “estimates,” “expects,” “projects,” “forecasts,” “may,” “will,” “should,” “seeks,” “plans,” “scheduled,” “anticipates,” “intends” or similar expressions. Forward-looking statements contained in this proxy statement/prospectus include, but are not limited to, statements about the ability of FinServ and Katapult prior to the merger, and New Katapult following the merger, to:

•        access, collect and use personal data about consumers;

•        execute its business strategy, including monetization of services provided and expansions in and into existing and new lines of business;

•        anticipate the impact of the novel coronavirus (referred to as “COVID-19”) pandemic and its effect on business and financial conditions;

•        manage risks associated with operational changes in response to the COVID-19 pandemic;

•        meet the closing conditions to the merger, including approval by stockholders of FinServ and Katapult on the expected terms and schedule;

•        realize the benefits expected from the proposed merger;

•        anticipate the uncertainties inherent in the development of new business lines and business strategies;

•        retain and hire necessary employees;

•        increase brand awareness;

•        attract, train and retain effective officers, key employees or directors;

•        upgrade and maintain information technology systems;

•        acquire and protect intellectual property;

•        meet future liquidity requirements and comply with restrictive covenants related to long-term indebtedness;

•        effectively respond to general economic and business conditions;

•        maintain the listing on, or the delisting of FinServ’s or New Katapult’s securities from, Nasdaq or an inability to have our securities listed on the Nasdaq or another national securities exchange following the merger;

•        obtain additional capital, including use of the debt market;

•        enhance future operating and financial results;

•        successfully execute expansion plans;

•        anticipate rapid technological changes;

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•        comply with laws and regulations applicable to its business, including laws and regulations related to data privacy;

•        stay abreast of modified or new laws and regulations applying to its business, including copyright and privacy regulation;

•        anticipate the impact of, and response to, new accounting standards;

•        anticipate the significance and timing of contractual obligations;

•        maintain key strategic relationships with partners and distributors;

•        respond to uncertainties associated with product and service development and market acceptance;

•        anticipate the impact of new U.S. federal income tax law, including the impact on deferred tax assets;

•        successfully defend litigation; and

•        successfully deploy the proceeds from the merger.

Forward-looking statements are not guarantees of performance. You should not put undue reliance on these statements which speak only as of the date hereof. You should understand that the following important factors, in addition to those discussed under the heading “Risk Factors” and elsewhere in this proxy statement/prospectus, could affect the future results of FinServ and Katapult prior to the merger, and New Katapult following the merger, and could cause those results or other outcomes to differ materially from those expressed or implied in the forward-looking statements in this proxy statement/prospectus:

•        any delay in closing of the merger;

•        risks related to disruption of management’s time from ongoing business operations due to the proposed transactions;

•        litigation, complaints, product liability claims and/or adverse publicity;

•        the impact of changes in consumer spending patterns, consumer preferences, local, regional and national economic conditions, crime, weather, demographic trends and employee availability;

•        increases and/or decreases in utility and other energy costs, increased costs related to utility or governmental requirements;

•        privacy and data protection laws, privacy or data breaches, or the loss of data; and

•        the impact of the COVID-19 pandemic and its effect on business and financial conditions of Katapult.

These and other factors that could cause actual results to differ from those implied by the forward-looking statements in this proxy statement/prospectus are more fully described under the heading “Risk Factors” and elsewhere in this proxy statement/prospectus. The risks described under the heading “Risk Factors” are not exhaustive. Other sections of this proxy statement/prospectus describe additional factors that could adversely affect the business, financial condition or results of operations of FinServ and Katapult prior to the merger, and New Katapult following the merger. New risk factors emerge from time to time and it is not possible to predict all such risk factors, nor can FinServ or Katapult assess the impact of all such risk factors on the business of FinServ and Katapult prior to the merger, and New Katapult following the merger, or the extent to which any factor or combination of factors may cause actual results to differ materially from those contained in any forward-looking statements. All forward-looking statements attributable to FinServ or Katapult or persons acting on their behalf are expressly qualified in their entirety by the foregoing cautionary statements. FinServ and Katapult prior to the merger, and New Katapult following the merger, undertake no obligations to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

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In addition, statements of belief and similar statements reflect the beliefs and opinions of FinServ or Katapult, as applicable, on the relevant subject. These statements are based upon information available to FinServ or Katapult, as applicable, as of the date of this proxy statement/prospectus, and while such party believes such information forms a reasonable basis for such statements, such information may be limited or incomplete, and statements should not be read to indicate that FinServ or Katapult, as applicable, has conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and you are cautioned not to unduly rely upon these statements.

Market, ranking and industry data used throughout this proxy statement/prospectus is based on the good faith estimates of Katapult’s management, which in turn are based upon Katapult’s management’s review of internal surveys, independent industry surveys and publications, including reports by third-party research and publicly available information. These data involve a number of assumptions and limitations, and you are cautioned not to give undue weight to such estimates. While Katapult is not aware of any misstatements regarding the industry data presented herein, its estimates involve risks and uncertainties and are subject to change based on various factors, including those discussed under the heading “Risk Factors” and “Katapult’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this proxy statement/prospectus.

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RISK FACTORS

In addition to the other information contained in this proxy statement/prospectus, including the matters addressed under the heading “Forward-Looking Statements; Market, Ranking and Other Industry Data,” you should carefully consider the following risk factors in deciding how to vote on the proposals presented in this proxy statement/prospectus. Although we have organized risks generally according to these categories in the discussion below, many of the risks may have ramifications in more than one category. These categories, therefore, should be viewed as a starting point for understanding the significant risks facing us and not as a limitation on the potential impact of the matters discussed. It also should be noted that our business may be adversely affected by a downturn in general economic conditions and other forces beyond our control. Issues such as unemployment rates, technological advances, inflation or deflation and consumer confidence among a host of other factors, will have a bearing on the amount of assets that are leased by consumers and the costs that we incur. Also, to the extent that we have a concentration of business in one or more states or regions of the country, general economic conditions in those states or regions may have a greater impact on our business. We cannot predict whether the risks and uncertainties discussed in this section, or other risks not presently known to us or that we currently believe to be immaterial, may develop into actual events and impact our businesses. If any one or more of them does so, the events could materially adversely affect our financial condition, cash flows, or results of operations.

Risks Relating to Katapult’s Business and Industry

References in this section to “we,” “our,” or “us” generally refer to Katapult, unless otherwise specified.

Operational Risks

Failure to effectively manage our costs could have a material adverse effect on our profitability.

Certain elements of our cost structure are largely fixed in nature. Consumer spending remains uncertain, which makes it more challenging for us to maintain or increase our operating margins. The competitive environment in our industry and increasing price transparency means that the focus on achieving efficient operations is greater than ever. As a result, we must continuously focus on managing our cost structure. Failure to manage our overall cost of operations, labor and benefit rates, advertising and marketing expenses, operating leases, data costs, payment processing costs, cost of capital, or indirect spending could materially adversely affect our profitability.

Negative publicity about us or our industry could adversely affect our business, results of operations, financial condition, and future prospects.

Negative publicity about us or our industry, including the transparency, fairness, user experience, quality, and reliability of our platform or lease-to-own platforms in general, effectiveness of our risk model, our ability to effectively manage and resolve complaints, our privacy and security practices, litigation, regulatory activity, misconduct by our employees, funding sources, service providers, or others in our industry, the experience of consumers and investors with our platform or services or lease-to-own platforms in general, even if inaccurate, could adversely affect our reputation and the confidence in, and the use of, our platform, which could harm our reputation and cause disruptions to our platform. For instance, in October 2020, a data breach broker purported to offer customer records from a number of companies, including Katapult, for sale on a hacker forum. Although we determined with third party firms and our internal team that the compromised data was limited to non-sensitive information, we cannot guarantee that this publicity or any similar publicity in the future will not have a negative effect on our business or reputation. Any such reputational harm could further affect the behavior of consumers, including their willingness to utilize lease-to-own programs through our platform or to make payments on their leases. As a result, our business, results of operations, financial condition, and future prospects would be materially and adversely affected.

Misconduct and errors by our employees, vendors, and service providers could harm our business and reputation.

We are exposed to many types of operational risk, including the risk of misconduct and errors by our employees, vendors, and other service providers. Our business depends on our employees, vendors, and service providers to process a large number of increasingly complex transactions, including transactions that involve significant dollar amounts and lease-to-own transactions that involve the use and disclosure of personally

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identifiable information and business information. We could be adversely affected if transactions were redirected, misappropriated, or otherwise improperly executed, personal and business information was disclosed to unintended recipients, or an operational breakdown or failure in the processing of other transactions occurred, whether as a result of human error, a purposeful sabotage or a fraudulent manipulation of our operations or systems. In addition, the manner in which we store and use certain personal information and interact with consumers and merchants through our platform is governed by various federal and state laws. If any of our employees, vendors, or service providers take, convert, or misuse funds, documents, or data, or fail to follow protocol when interacting with consumers and merchants, we could be liable for damages and subject to regulatory actions and penalties. We could also be perceived to have facilitated or participated in the illegal misappropriation of funds, documents, or data, or the failure to follow protocol, and therefore be subject to civil or criminal liability. For example, our operations in the U.S. are subject to certain laws generally prohibiting companies and their intermediaries from making improper payments to government officials for the purpose of obtaining or retaining business, such as the U.S. Foreign Corrupt Practices Act, and similar anti-bribery laws in other jurisdictions. Violations by our employees, contractors or agents of policies and procedures we have implemented to ensure compliance with these laws could subject us to civil or criminal investigations in the U.S. and in other jurisdictions, could lead to substantial civil and criminal, monetary and non-monetary penalties, and related shareholder lawsuits, could cause us to incur significant legal fees, and could damage our reputation. It is not always possible to identify and deter misconduct or errors by employees, vendors, or service providers, and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses. Any of these occurrences could result in our diminished ability to operate our business, potential liability to consumers and merchants, inability to attract future consumers and merchants, reputational damage, regulatory intervention, and financial harm, which could negatively impact our business, results of operations, financial condition, and future prospects.

The loss of the services of any of our executive officers could materially and adversely affect our business, results of operations, financial condition, and future prospects.

The experience of our executive officers are valuable assets to us. Our executive officers have significant experience in the financial technology industry and would be difficult to replace. Competition for senior executives in our industry is intense, and we may not be able to attract and retain qualified personnel to replace or succeed any of our executive officers. Failure to retain any of our executive officers could have a material adverse effect on our business, results of operations, financial condition, and future prospects.

Our business depends on our ability to attract and retain highly skilled employees.

Our future success depends on our ability to identify, hire, develop, motivate, and retain highly qualified personnel for all areas of our organization, in particular, a highly experienced sales force, data scientists, and engineers. Competition for these types of highly skilled employees, is extremely intense. Trained and experienced personnel are in high demand and may be in short supply. Many of the companies with which we compete for experienced employees have greater resources than we do and may be able to offer more attractive terms of employment. In addition, we invest significant time and expense in training our employees, which increases their value to competitors that may seek to recruit them. We may not be able to attract, develop, and maintain the skilled workforce necessary to operate our business, and labor expenses may increase as a result of a shortage in the supply of qualified personnel. If we are unable to maintain and build our highly experienced salesforce, or are unable to continue to attract experienced engineering and technology personnel, as well as other qualified employees, our business, results of operations, financial condition, and future prospects could be materially and adversely affected.

Our results depend on more prominent presentation, integration, and support of our platform by our merchants.

We depend on our merchants, which generally accept most major credit cards and other forms of payment, to present our platform as a payment option and to integrate our platform into their website or in their store, such as by prominently featuring our platform on their websites or in their stores and not just as an option at website checkout. We do not have any recourse against merchants when they do not prominently present our platform as a payment option. The failure by our merchants to effectively present, integrate, and support our platform, or to effectively explain lease-to-own transactions to potential customers, would have a material and adverse effect on our business, results of operations, financial condition, and future prospects.

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Real or perceived software errors, failures, bugs, defects, or outages could adversely affect our business, results of operations, financial condition, and future prospects.

Our platform and our internal systems rely on software that is highly technical and complex. In addition, our platform and our internal systems depend on the ability of such software to store, retrieve, process, and manage immense amounts of data. As a result, undetected errors, failures, bugs, or defects may be present in such software or occur in the future in such software, including open source software and other software we license in from third parties, especially when updates or new products or services are released.

Any real or perceived errors, failures, bugs, or defects in the software may not be found until our consumers use our platform and could result in outages or degraded quality of service on our platform that could adversely impact our business (including through causing us not to meet contractually required service levels), as well as negative publicity, loss of or delay in market acceptance of our products and services, and harm to our brand or weakening of our competitive position. In such an event, we may be required, or may choose, to expend significant additional resources in order to correct the problem. Any real or perceived errors, failures, bugs, or defects in the software we rely on could also subject us to liability claims, impair our ability to attract new consumers, retain existing consumers, or expand their use of our products and services, which would adversely affect our business, results of operations, financial condition, and future prospects.

Any significant disruption in, or errors in, service on our platform or relating to vendors, including events beyond our control, could prevent us from processing transactions on our platform or posting payments and have a material and adverse effect on our business, results of operations, financial condition, and future prospects.

We use vendors, such as our cloud computing web services provider, virtual card processing companies, and third-party software providers, in the operation of our platform. The satisfactory performance, reliability, and availability of our technology and our underlying network and infrastructure are critical to our operations and reputation and the ability of our platform to attract new and retain existing merchants and consumers. We rely on these vendors to protect their systems and facilities against damage or service interruptions from natural disasters, power or telecommunications failures, air quality issues, environmental conditions, computer viruses or attempts to harm these systems, criminal acts, and similar events. If our arrangement with a vendor is terminated or if there is a lapse of service or damage to its systems or facilities, we could experience interruptions in our ability to operate our platform. We also may experience increased costs and difficulties in replacing that vendor and replacement services may not be available on commercially reasonable terms, on a timely basis, or at all. Any interruptions or delays in our platform availability, whether as a result of a failure to perform on the part of a vendor, any damage to one of our vendor’s systems or facilities, the termination of any of our third-party vendor agreements, software failures, our or our vendor’s error, natural disasters, terrorism, other man-made problems, security breaches, whether accidental or willful, or other factors, could harm our relationships with our merchants and consumers and also harm our reputation.

In addition, we source certain information from third parties. For example, our risk scoring model is based on algorithms that evaluate a number of factors and currently depend on sourcing certain information from third parties. In the event that any third-party from which we source information experiences a service disruption, whether as a result of maintenance, natural disasters, terrorism, or security breaches, whether accidental or willful, or other factors, the ability to score and decision lease-to-own applications through our platform may be adversely impacted. Additionally, there may be errors contained in the information provided by third parties. This may result in the inability to approve otherwise qualified applicants through our platform, which may adversely impact our business by negatively impacting our reputation and reducing our transaction volume.

To the extent we use or are dependent on any particular third-party data, technology, or software, we may also be harmed if such data, technology, or software becomes non-compliant with existing regulations or industry standards, becomes subject to third-party claims of intellectual property infringement, misappropriation, or other violation, or malfunctions or functions in a way we did not anticipate. Any loss of the right to use any of this data, technology, or software could result in delays in the provisioning of our products and services until equivalent or replacement data, technology, or software is either developed by us, or, if available, is identified, obtained, and integrated, and there is no guarantee that we would be successful in developing, identifying, obtaining, or integrating equivalent or similar data, technology, or software, which could result in the loss or limiting of our products, services, or features available in our products or services.

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In addition, in the event of damage or interruption, our insurance policies may not adequately compensate us for any losses that we may incur. Our disaster recovery plan has not been tested under actual disaster conditions, and we may not have sufficient capacity to recover all data and services in the event of an outage. These factors could prevent us from processing transactions or posting payments on our platform, damage our brand and reputation, divert the attention of our employees, reduce our revenue, subject us to liability, and cause consumers or merchants to abandon our platform, any of which could have a material and adverse effect on our business, results of operations, financial condition, and future prospects.

Our ability to protect our confidential, proprietary, or sensitive information, including the confidential information of consumers on our platform, may be adversely affected by cyber-attacks, employee or other internal misconduct, computer viruses, physical or electronic break-ins, or similar disruptions.

Our business involves the collection, storage, use, disclosure, processing, transfer, and other handling (collectively, “processing”) of a wide variety of information, including personally identifiable information, for various purposes in our business, including to help ensure the integrity of our services and to provide features and functionality to our consumers and merchants. The processing of the information we acquire in connection with our consumers’ and merchants’ use of our services is subject to numerous privacy, data protection, cybersecurity, and other laws and regulations in the United States and foreign jurisdictions. The automated nature of our business and our reliance on digital technologies may make us an attractive target for, and potentially vulnerable to, cyber-attacks, computer malware, computer viruses, social engineering (including phishing and ransomware attacks), general hacking, physical or electronic break-ins, or similar disruptions. While we and our vendors have taken steps to protect the confidential, proprietary, and sensitive information to which we have access and to prevent data loss, our security measures or those of our vendors could be breached, including as a result of employee theft, exfiltration, misuse or malfeasance, our actions, omissions, or errors, third-party actions, omissions, or errors, unintentional events, or deliberate attacks by cyber criminals, any of which may result in the loss of, or unauthorized access to, our or our consumers’ data, our intellectual property, or other confidential, proprietary, or sensitive business information. Any accidental or willful security breaches or other unauthorized access to our platform or servicing systems could cause confidential, proprietary, or sensitive information to be stolen and used for criminal or other unauthorized purposes. Security breaches or unauthorized access to confidential information could also expose us to liability related to the loss of the information, time-consuming and expensive litigation, and negative publicity. If security measures are breached because of employee theft, exfiltration, misuse or malfeasance, our actions, omissions, or errors, third-party actions, omissions, or errors, unintentional events, deliberate attacks by cyber criminals or otherwise, or if design flaws in our software or systems are exposed and exploited, our relationships with consumers or merchants could be damaged, and we could incur significant liability. Although we monitor our systems in order to detect security breaches or instances of unauthorized access to confidential information, there is no guarantee that our monitoring efforts will be effective.

The techniques used to obtain unauthorized, improper, or illegal access to our systems, our or our consumers’ data, or to disable or degrade service or sabotage systems, are constantly evolving, may be difficult to detect quickly, and often are not recognized until after they have been launched against a target. We may be unable to anticipate these techniques, react in a timely manner, or implement adequate preventative or remedial measures. Unauthorized parties have in the past attempted and may in the future attempt to gain access to our systems or facilities through various means, including, among others, hacking into our or our partners’ or consumers’ systems or facilities, or attempting to fraudulently induce our employees, partners, consumers or others into disclosing usernames, passwords, or other sensitive information, which may in turn be used to access our information technology systems and gain access to our or our consumers’ data or other confidential, proprietary, or sensitive information. For instance, in September 2020, we received alerts from our internal systems that there was suspicious activity involving keys used to access certain parts of the Company’s sites. After an investigation conducted by third party firms in conjunction with our internal team, we determined the compromised data was limited to non-sensitive information. Despite our monitoring efforts, there can be no assurances that future incidents would not result in a third party accessing sensitive information. Such efforts may be state-sponsored and supported by significant financial and technological resources, making them even more difficult to detect and prevent. For the years ended December31, 2020 and 2019, we did not incur material expenses relating to cyber-attacks, employee or other internal misconduct, computer viruses, physical or electronic break-ins, or similar disruptions.

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In addition, in certain circumstances we utilize vendors, including cloud service providers, to facilitate the servicing of consumer accounts. Under these arrangements, these vendors require access to certain consumer data for the purpose of servicing the accounts. Because we do not control our vendors, or the processing of data by our vendors, other than through our contractual relationships, our ability to monitor our vendors’ data security may be very limited such that we cannot ensure the integrity or security of measures they take to protect and prevent the loss of our or our consumers’ data. As a result, we are subject to the risk that cyber-attacks on, or other security incidents affecting, our vendors may adversely affect our business even if an attack or breach does not directly impact our systems. It is also possible that security breaches sustained by, or other security incidents affecting, our competitors could result in negative publicity for our entire industry that indirectly harms our reputation and diminishes demand for our products and services.

Any actual or perceived failure to comply with legal and regulatory requirements applicable to us, including those relating to information security, or any failure to protect the information that we collect from our consumers and merchants, including personally identifiable information, from cyber-attacks, or any such actual or perceived failure by our originating bank partners, may result in, among other things, revocation of required licenses or registrations, loss of approved status, private litigation, regulatory or governmental investigations, administrative enforcement actions, sanctions, civil and criminal liability, and constraints on our ability to continue to operate. Our originating bank partners also operate in a highly regulated environment, and many laws and regulations that apply directly to our originating bank partners are indirectly applicable to us through our arrangements with our originating bank partners.

Furthermore, federal and state regulators and many federal and state laws and regulations require notice of any data security breaches that involve personal information. These mandatory disclosures regarding a security breach are costly to implement and often lead to widespread negative publicity, which may cause consumers to lose confidence in the effectiveness of our data security measures. Any security breach suffered by us or our vendors, any attack against our service availability, any unauthorized, accidental, or unlawful access or loss of data, or the perception that any such event has occurred, could result in a disruption to our service, litigation, an obligation to notify regulators and affected individuals, the triggering of indemnification and other contractual obligations, regulatory investigations, government fines and penalties, reputational damage, and loss of consumers and ecosystem partners, and our business and operations could be adversely affected. In addition, we may incur significant costs and operational consequences in connection with investigating, mitigating, remediating, eliminating, and putting in place additional tools and devices designed to prevent future actual or perceived security incidents, as well as in connection with complying with any notification or other obligations resulting from any security incidents. Our insurance policies carry retention and coverage limits, which may not be adequate to reimburse us for losses caused by security breaches, and we may not be able to collect fully, if at all, under these insurance policies. The successful assertion of one or more large claims against us that exceed available insurance coverage, or the occurrence of changes in our insurance policies, including premium increases or the imposition of large deductible or co-insurance requirements, could adversely affect our business. Furthermore, we cannot be certain that insurance coverage will continue to be available on acceptable terms or at all, or that the insurer will not deny coverage as to any future claim.

The COVID-19 pandemic has impacted our working environment and diverted personnel resources and any prolonged effects of the pandemic may adversely impact our operations and employees.

We have had to expend, and expect to continue to expend, personnel resources to respond to the COVID-19 pandemic, including to develop and implement internal policies and procedures and track changes in laws. Any prolonged diversion of personnel resources may have an adverse effect on our operations. In addition, as a result of the COVID-19 pandemic, in March 2020, we transitioned our entire staff to a remote working environment. Over time such remote operations may decrease the cohesiveness of our teams and our ability to maintain our culture, both of which are critical to our success. Additionally, a remote working environment may impede our ability to undertake new business projects, to foster a creative environment, to hire new team members, and to retain existing team members. Such effects may adversely affect the productivity of our team members and overall operations, which could have a material adverse effect on our business, results of operations, financial condition, and future prospects.

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While we take precautions to prevent consumer identity fraud, it is possible that identity fraud may still occur or has occurred, which may adversely affect the performance of the lease-to-own transactions facilitated through our platform.

There is risk of fraudulent activity associated with our platform, consumers, and third parties handling consumer information. Our resources, technologies, and fraud prevention tools may be insufficient to accurately detect and prevent fraud. We bear the risk of loss for lease-to-own transactions facilitated through our platform. The level of fraud related charge-offs on the lease-to-own transactions facilitated through our platform could be adversely affected if fraudulent activity were to significantly increase.

We bear the risk of consumer fraud in a transaction involving us, a consumer, and a merchant, and we generally have no recourse to the merchant to collect the amount owed by the consumer. Significant amounts of fraudulent cancellations or chargebacks and the potential cost of remediation could adversely affect our business or financial condition. High profile fraudulent activity or significant increases in fraudulent activity could also lead to regulatory intervention, negative publicity, and the erosion of trust from our consumers and merchants, and could materially and adversely affect our business, results of operations, financial condition, future prospects, and cash flows.

Strategic Risks

Our success depends on the effective implementation and continued execution of our strategies.

We are focused on our mission to provide innovative lease financing solutions to non-prime consumers and to enable everyday transactions at the merchant point of sale.

Growth of our business, including through the launch of new product offerings, requires us to invest in or expand our information and technology capabilities, engage and retain experienced management, and otherwise incur additional costs. Our inability to address these concerns or otherwise to achieve targeted results associated with our initiatives could adversely affect our results of operations, or negatively impact our ability to successfully execute future strategies, which may result in an adverse impact on our business and financial results.

The success of our business is dependent on factors affecting consumer spending that are not under our control.

Consumer spending is affected by general economic conditions and other factors including levels of employment, disposable consumer income, prevailing interest rates, consumer debt and availability of credit, costs of fuel, inflation, recession and fears of recession, war and fears of war, pandemics (such as COVID-19), inclement weather, tariff policies, tax rates and rate increases, timing of receipt of tax refunds, consumer confidence in future economic conditions and political conditions, and consumer perceptions of personal well-being and security. Unfavorable changes in factors affecting discretionary spending for nonprime consumers could reduce demand for our products and services resulting in lower revenue and negatively impacting the business and its financial results.

The success and growth of our business depends upon our ability to continuously innovate and develop new products and technologies.

Our solution is a technology-driven platform that relies on innovation to remain competitive. The process of developing new technologies and products is complex, and we build our own technology, using the latest in artificial intelligence and machine learning (“AI/ML”), cloud-based technologies, and other tools to differentiate our products and technologies. In addition, our dedication to incorporating technological advancements into our platform requires significant financial and personnel resources and talent. Our development efforts with respect to these initiatives could distract management from current operations and could divert capital and other resources from other growth initiatives important to our business. We operate in an industry experiencing rapid technological change and frequent product introductions. We may not be able to make technological improvements as quickly as demanded by our consumers and merchants, which could harm our ability to attract consumers and merchants. In addition, we may not be able to effectively implement new technology-driven products and services as quickly as competitors or be successful in marketing these products and services to consumers and merchants. If we are unable to successfully and timely innovate and continue to deliver a superior merchant and consumer experience, the demand for our products and technologies may decrease and our growth, business, results of operations, financial condition, and future prospects could be materially and adversely affected.

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Further, we use AI/ML in many aspects of our business, including fraud, credit risk analysis, and product personalization. The AI/ML models that we use are trained using various data sets. If the AI/ML models are incorrectly designed, the data we use to train them is incomplete, inadequate, or biased in some way, or we do not have sufficient rights to use the data on which our AI/ML models rely, the performance of our products, services, and business, as well as our reputation, could suffer or we could incur liability through the violation of laws, third-party privacy, or other rights, or contracts to which we are a party.

Our failure to accurately predict the demand or growth of our new products and technologies also could have a material and adverse effect on our business, results of operations, financial condition, and future prospects. New products and technologies are inherently risky, due to, among other things, risks associated with: the product or technology not working, or not working as expected; consumer and merchant acceptance; technological outages or failures; and the failure to meet consumer and merchant expectations. As a result of these risks, we could experience increased claims, reputational damage, or other adverse effects, which could be material. The profile of potential consumers using our new products and technologies also may not be as attractive as the profile of the consumers that we currently serve, which may lead to higher levels of delinquencies or defaults than we have historically experienced. Additionally, we can provide no assurance that we will be able to develop, commercially market, and achieve acceptance of our new products and technologies. In addition, our investment of resources to develop new products and technologies and make changes or updates to our platform may either be insufficient or result in expenses that exceed the revenue actually generated from these new products. Failure to accurately predict demand or growth with respect to our new products and technologies could have a material and adverse effect on our business, results of operations, financial condition, and future prospects.

To the extent that we seek to grow through future acquisitions, or other strategic investments or alliances, we may not be able to do so effectively.

We may in the future seek to grow our business by exploring potential acquisitions or other strategic investments or alliances. We may not be successful in identifying businesses or opportunities that meet our acquisition or expansion criteria. In addition, even if a potential acquisition target or other strategic investment is identified, we may not be successful in completing such acquisition or integrating such new business or other investment. We may face significant competition for acquisition and other strategic investment opportunities from other well-capitalized companies, many of which have greater financial resources and greater access to debt and equity capital to secure and complete acquisitions or other strategic investments, than we do. As a result of such competition, we may be unable to acquire certain assets or businesses, or take advantage of other strategic investment opportunities that we deem attractive; the purchase price for a given strategic opportunity may be significantly elevated; or certain other terms or circumstances may be substantially more onerous.

Any delay or failure on our part to identify, negotiate, finance on favorable terms, consummate, and integrate any such acquisition or other strategic investment opportunity could impede our growth. Additional risks relating to potential acquisitions include difficulties in integrating the operations, systems, technologies, products and personnel of the acquired businesses, diversion of management’s attention from normal daily operations of the business and the challenges of managing larger and more widespread operations, the potential loss of key employees, vendors and other business partners of the businesses we acquire; and increased amounts of debt incurred in connection with such activities or dilutive issuances of New Katapult common stock.

There is no assurance that we will be able to manage our expanding operations effectively or that we will be able to continue to grow, and any failure to do so could adversely affect our ability to generate revenue and control our expenses. Furthermore, we may be responsible for any legacy liabilities of businesses we acquire or be subject to additional liability in connection with other strategic investments. The existence or amount of these liabilities may not be known at the time of acquisition, or other strategic investment, and may have an adverse effect on our business, results of operations, financial condition, and future prospects.

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Financial Risks

We have a history of operating losses and may not sustain profitability in the future.

We generated net income of approximately $22.5million in the fiscal year ended December31, 2020. We incurred net losses of approximately $18.8 million in the fiscal year ended December31, 2019 and approximately $23.5 million in the fiscal year ended December31, 2018. As of December31, 2020, our accumulated deficit was approximately $50.8 million. We anticipate that our operating expenses will increase in the foreseeable future as we seek to continue to grow our business, attract consumers, merchants, and funding sources, and further enhance and develop our products and platform. As we expand our offerings to additional markets, our offerings in these markets may be less profitable than the markets in which we currently operate. These efforts may prove more expensive than we currently anticipate, and we may not succeed in increasing our revenue sufficiently to offset these higher expenses. We may incur net losses in the future and may not maintain profitability on a quarterly or annual basis.

Our estimates of market opportunity and forecasts of market growth may prove to be inaccurate, and even if the market in which we compete achieves the forecasted growth, our business could fail to grow at similar rates, if at all.

Our market opportunity estimates and expectations about market growth are subject to significant uncertainty and are based on assumptions and estimates that may not prove to be accurate. Even if the markets in which we compete meet our size estimates and growth expectations, our business could fail to grow for a variety of reasons, which could adversely affect our results of operations. For more information regarding the estimates of market opportunity and the expectations about market growth included in this prospectus, see “Information About Katapult — Industry Background.”

Our revenue and operating results may fluctuate, which could result in a decline in the Company’s profitability and make it more difficult for us to grow our business.

Our revenue and operating results may vary from quarter to quarter and by season. Periods of decline could result in an overall decline in profitability and make it more difficult for us to make payments on our indebtedness and grow our business. We expect our quarterly results to fluctuate in the future due to a number of factors, including general economic conditions in the markets where we operate, the cyclical nature of consumer spending, and seasonal sales and spending patterns of customers.

We rely on card issuers or payment processors. If we fail to comply with the applicable requirements of Visa or other payment processors, those payment processors could seek to fine us, suspend us or terminate our registrations, which could have a material adverse effect on our business, results of operations, financial condition, and future prospects.

We rely on card issuers or payment processors, and must pay a fee for this service. From time to time, payment processors such as Visa may increase the interchange fees that they charge for each transaction using one of their cards. The payment processors routinely update and modify their requirements. Changes in the requirements, including changes to risk management and collateral requirements, may impact our ongoing cost of doing business and we may not, in every circumstance, be able to pass through such costs to our merchants or associated participants. Furthermore, if we do not comply with the payment processors’ requirements (e.g., their rules, bylaws, and charter documentation), the payment processors could seek to fine us, suspend us or terminate our registrations that allow us to process transactions on their networks. The termination of our registration due to failure to comply with the applicable requirements of Visa or other payment processors, or any changes in the payment processors’ rules that would impair our registration, could require us to stop utilizing payment services from Visa or other payment processors, which could have a material adverse effect on our business, results of operations, financial condition, and future prospects.

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A large percentage of our customer acquisition is concentrated with a single merchant partner, and the loss of this merchant partner or any other significant merchant relationships would materially and adversely affect our business, results of operations, financial condition, and future prospects.

Our top merchant partner, Wayfair, represented approximately 72% and 58% of our origination dollars for the fiscal years ended December31, 2020 and 2019, respectively. Our top ten merchants in the aggregate represented approximately 90% and 87% of our total customer acquisition for the fiscal years ended December31, 2020 and 2019, respectively. The concentration of a significant portion of our business and transaction volume with a limited number of merchants, or type of merchant or industry, exposes us disproportionately to any of those merchants choosing to no longer partner with us or choosing to partner with a competitor, to the economic performance of those merchants or industry or to any events, circumstances, or risks affecting such merchants or industry. The loss of Wayfair as a merchant partner, or the loss of any other significant merchant relationships, would materially and adversely affect our business, results of operations, financial condition, and future prospects. In addition, an anticipated material modification in the merchant agreement with a significant merchant partner could affect the results of our operations, financial condition, and future prospects.

A change in control could accelerate our obligation to pay our outstanding indebtedness, and we may not have sufficient liquid assets at that time to repay these amounts.

Under our existing credit facility, all of the outstanding loans are required to be prepaid in full (together with accrued and unpaid interest and prepayment premium) and the revolving loan commitment will terminate if a third party not approved by the agent became the beneficial owner of 35.0% or more of the voting stock of Katapult Holdings, Inc. or certain changes in the composition of the board of Katapult Holdings, Inc. occurs during a twenty-four month period which were not recommended or approved by at least a majority of directors who were directors at the beginning of such twenty-four month period. As of December31, 2020, we had a $75.4million outstanding balance under our credit facility.

Although the merger will not result in a specified change of control under our existing credit facility, if another specified change in control occurs and the lenders accelerate these obligations, we may not have sufficient liquid assets to repay amounts outstanding under these agreements.

Our credit facility includes restrictive covenants, which could limit our flexibility and our ability to make distributions.

Our credit facility includes customary negative covenants. Early repayments of certain amounts under our credit facility are subject to prepayment penalties, which would limit our ability to pay or refinance our credit facility. Failure to comply with these covenants could cause a default under the agreements and result in a requirement to repay the indebtedness prior to its maturity, which could have an adverse effect on our cash flow and ability to make distributions to our stockholders. These or other limitations could decrease our operating flexibility and our ability to achieve our operating objectives.

The phase-out, replacement or unavailability of LIBOR and/or other interest rate benchmarks could adversely affect our indebtedness.

The interest rates applicable to our existing credit facility are based on, and the interest rates applicable to certain debt obligations we may incur in the future may be based on, a fluctuating rate of interest determined by reference to the London Interbank Offered Rate (“LIBOR”). In July 2017, the U.K.’s Financial Conduct Authority (“FCA”), which regulates LIBOR, announced that it intends to stop persuading or compelling banks to submit rates for the calculation of LIBOR after 2021. In November 2020, the FCA announced that it would continue to publish LIBOR rates through June30, 2023 for all US dollar settings except the 1 week and the 2month US Dollar settings. In response to concerns regarding the future of LIBOR, the Board of Governors of the Federal Reserve System and the Federal Reserve Bank of New York convened the Alternative Reference Rates Committee (the “ARRC”) to identify alternatives to LIBOR. The ARRC has recommended a benchmark replacement waterfall to assist issuers in continued capital market entry while safeguarding against LIBOR’s discontinuation. The initial steps in the ARRC’s recommended provision reference variations of the Secured Overnight Financing Rate (“SOFR”), calculated using short-term repurchase agreements backed by Treasury securities. At this time, it is not possible to predict whether SOFR will attain market traction as a LIBOR replacement. Additionally, it is uncertain if LIBOR will cease to exist after calendar year 2023, or whether additional reforms to LIBOR may be enacted, or whether alternative reference rates will gain market acceptance as a replacement for LIBOR.

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There can be no assurance that we will be able to reach any agreement on a replacement benchmark, and there can be no assurance that any agreement we reach will result in effective interest rates at least as favorable to us as our current effective interest rates. The failure to reach an agreement on a replacement benchmark, or the failure to reach an agreement that results in an effective interest rate at least as favorable to us as our current effective interest rates, could result in a significant increase in our debt service obligations, which could adversely affect our financial condition and results of operations. In addition, the overall financing market may be disrupted as a result of the phase-out or replacement of LIBOR, which could have an adverse impact on our ability to refinance, reprice or amend our credit facility or incur additional indebtedness, on favorable terms or at all

We have experienced rapid growth, which may be difficult to sustain and which may place significant demands on our operational, administrative, and financial resources. Raising additional funds to sustain our growth by issuing securities may cause dilution to existing stockholders and raising funds through lending arrangements may restrict our operations.

Since inception we have experienced significant transaction volume and revenue growth. Our revenue has more than doubled year-over-year since 2018. We have a relatively limited operating history at our current scale, and our growth in recent periods exposes us to increased risks, uncertainties, expenses, and difficulties. If we are unable to maintain at least our current level of operations using cash flow, our business, results of operations, financial condition, and future prospects would be materially and adversely affected.

If in the future we need to raise additional capital by issuing equity securities, our existing stockholders’ ownership will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect your rights as a common stockholder. Debt financing and preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures, or declaring dividends.

Any debt financing we enter into may involve covenants that restrict our operations. These restrictive covenants may include limitations on additional borrowing and specific restrictions on the use of our assets as well as prohibitions on our ability to create liens, pay dividends, redeem our stock, or make investments. If we are unable to raise additional funds through equity or debt financings when needed, it could affect the results of our operations, financial condition, and future prospects.

Our management has limited experience in operating a public company.

Our executive officers have limited experience in the management of a publicly traded company. Our management team may not successfully or effectively manage our transition to a public company that will be subject to significant regulatory oversight and reporting obligations under federal securities laws. Their limited experience in dealing with the increasingly complex laws pertaining to public companies could be a significant disadvantage in that it is likely that an increasing amount of our management’s time may be devoted to these activities which will result in less time being devoted to the management and growth of New Katapult. We may not have adequate personnel with the appropriate level of knowledge, experience and training in the accounting policies, practices or internal control over financial reporting required of public companies in the U.S. The development and implementation of the standards and controls necessary for us to achieve the level of accounting standards required of a public company in the U.S. may require costs greater than expected. It is possible that we will be required to expand our employee base and hire additional employees to support our operations as a public company which will increase our operating costs in future periods.

We will incur increased costs as a result of operating as a public company, and our management will devote substantial time to new compliance initiatives.

If we complete the merger and become a public company, we will incur significant legal, accounting and other expenses that we did not incur as a private company, and these expenses may increase even more after we are no longer an emerging growth company, as defined in Section 2(a) of the Securities Act of 1933, as amended. As a public company, we will be subject to the reporting requirements of the Securities Exchange Act of 1934, as amended, the Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, as well as rules adopted, and to be adopted, by the SEC and Nasdaq. Our management and other personnel will need to devote a substantial amount of time to these compliance initiatives. Moreover, we expect these rules and regulations to

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substantially increase our legal and financial compliance costs and to make some activities more time-consuming and costly. The increased costs will increase our net loss. For example, we expect these rules and regulations to make it more difficult and more expensive for us to obtain director and officer liability insurance and we may be forced to accept reduced policy limits or incur substantially higher costs to maintain the same or similar coverage. We cannot predict or estimate the amount or timing of additional costs we may incur to respond to these requirements. The impact of these requirements could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors, our board committees or as executive officers.

Our ability to use our net operating loss carry forwards and certain other tax attributes may be limited.

Under Section 382 of the Internal Revenue Code of 1986, as amended, or the Code, if a corporation undergoes an “ownership change”, generally defined as a greater than 50.0% change (by value) in its equity ownership over a three-year period, the corporation’s ability to use its pre-change net operating loss carryforwards and other pre-change tax attributes, such as research tax credits, to offset its post-change income may be limited. The completion of the merger may trigger an “ownership change” limitation. We have not completed a formal study to determine if any “ownership changes” within the meaning of IRC Section 382 have occurred. If “ownership changes” within the meaning of Section 382 of the Code have occurred, and if we earn net taxable income, our ability to use our net operating loss carryforwards and other tax credits generated since inception to offset U.S. federal taxable income may be subject to limitations, which could potentially result in increased future tax liability to us and could require us to pay U.S. federal income taxes earlier than would be required if such limitations were not in effect. Similar rules and limitations may apply for state income tax purposes.

Legal and Compliance Risks

Our transactions are regulated by and subject to the requirements of various federal and state laws and regulations, which may require significant compliance costs and expose us to litigation. Any negative change in these laws or regulations or the passage of unfavorable new laws or regulations or the manner in which any of these are enforced could require us to alter our business practices in a manner that may be materially adverse to us.

Our transactions are regulated by and subject to the requirements of various federal and state laws and regulations, which may require significant compliance costs and expose us to litigation. Any negative change in these laws or regulations or the passage of unfavorable new laws or regulations or the manner in which any of these are enforced could require us to alter our business practices in a manner that may be materially adverse to us.

Currently, forty-seven states, the District of Columbia, Puerto Rico and Guam have passed laws that regulate rental purchase transactions as separate and distinct from credit sales. The specific rental purchase laws generally require certain contractual and advertising disclosures. They also provide varying levels of substantive consumer protection, such as requiring a grace period for late fees and contract reinstatement rights in the event the rental purchase agreement is terminated. The rental purchase laws of eleven states limit the total amount that may be charged over the life of a rental purchase agreement and the laws of six states limit the cash prices for which we may offer merchandise.

Similar to other companies with consumer-facing operations, our rental purchase transactions and related operations, for example collection, communication and payment processing, are governed by various other federal, state and/or municipal consumer protection laws. These laws, as well as the rental purchase statutes under which we operate, provide various consumer remedies, including monetary penalties, for violations.

The laws and regulations applicable to our operations are subject to administrative or judicial interpretation. Some of these laws and regulations have been enacted only recently and/or may not yet have been interpreted or may be interpreted infrequently. As a result of infrequent or sparse interpretations, ambiguities in these laws and regulations may create uncertainty with respect to what type of conduct is permitted or restricted under such laws and regulations. Any ambiguity under a law or regulation to which we are subject may lead to regulatory investigations, governmental enforcement actions and private causes of action, such as class action lawsuits, with respect to our compliance with such laws or regulations.

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Although there is currently no single comprehensive federal and/or state legislation regulating rental purchase transactions, new adverse legislation, federal and/or state, may be enacted in the future. For example, the Consumer Finance Protection Bureau may seek to more aggressively regulate areas involving Katapult’s business and operations, and enforce related laws. From time to time, both favorable and adverse federal legislation seeking to regulate our business has been introduced in Congress. In addition, various legislatures in the states where our rental purchase transactions are offered and where we otherwise conduct operations may adopt new legislation or amend existing laws that could require us to alter our business practices. Proposals to change the laws affecting our transactions may be introduced in Congress and state legislatures that, if enacted, may affect our operating environment in substantial and unpredictable ways. We cannot determine with any degree of certainty whether any such legislative or regulatory proposals will be enacted and, if enacted, the ultimate impact that any such potential legislation or implementing regulations, or any such potential regulatory actions by federal or state regulators, would have upon our business.

New laws, regulations, policy or changes in enforcement of existing laws or regulations applicable to our business, or reexamination of current practices, could adversely impact our profitability, limit our ability to continue existing or pursue new business activities, require a change of business practices or alter relationships with contractors or capital providers, affect retention of key personnel, including management, or expose us to additional costs (including increased compliance costs and/or capital provider, contractor or consumer remediation). These changes also may require us to invest significant resources, and devote significant management attention, to make any necessary changes and could adversely affect our business, results of operations and financial condition.

Our independent registered public accounting firm identified material weaknesses in our internal control over financial reporting in connection with the audit of our financial statements as of and for the fiscal years ended December 31, 2020, 2019 and 2018, and we may identify additional material weaknesses in the future that may cause us to fail to meet our reporting obligations or result in material misstatements of our financial statements. If we fail to remediate any material weaknesses or if we otherwise fail to establish and maintain effective internal control over financial reporting, our ability to accurately and timely report our financial results could be adversely affected.

We are not currently required to comply with the rules of the SEC implementing Section 404 of the Sarbanes-Oxley Act of 2002 the (“Sarbanes-Oxley Act”) and are therefore not required to make a formal assessment of the effectiveness of our internal control over financial reporting for that purpose. Upon becoming a public company, we will be required to comply with the SEC’s rules implementing Sections 302 and 404 of the Sarbanes-Oxley Act, which will require management to certify financial and other information in our quarterly and annual reports and provide an annual management report on the effectiveness of control over financial reporting. In addition to disclosing changes made in our internal controls and procedures on a quarterly basis, we will be required to make our first annual assessment of our internal control over financial reporting pursuant to Section 404 for the year ending December31, 2021. As an emerging growth company, our independent registered public accounting firm will not be required to attest to the effectiveness of our internal control over financial reporting pursuant to Section 404 until the later of the year following our first annual report that was filed with the SEC or the date we are no longer an emerging growth company. If our internal control over financial reporting is not effective, our independent registered public accounting firm may issue an adverse report.

In connection with the audit of our financial statements for the fiscal year ended December31, 2020, 2019, and 2018, our independent registered public accounting firm identified certain control deficiencies in the design and implementation of our internal control over financial reporting that in aggregate constituted material weaknesses. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our financial statements will not be prevented or detected on a timely basis. Our evaluation was based on the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) Internal Control — Integrated Framework (2013).

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The material weaknesses relate to (i) an insufficient number of personnel with an appropriate level of GAAP knowledge and experience to create the proper control environment for effective internal control over financial reporting and to ensure that oversight processes and procedures in applying nuanced guidance to complex accounting transactions for financial reporting are adequate, (ii) a lack of control in place to perform a review of the depreciation, cost of property sold, and impairment expense curves, specifically associated with evaluating the accuracy and completeness of the underlying data supporting the curves, or reconcile the expense amounts per the curves to the general ledger, (iii) a lack of controls in place to review journal entries, reconcile journal entries to underlying support and evaluate if journal entries are in compliance with GAAP before the entries are manually posted, and (iv) an incomplete implementation of the information and communication component of the COSO framework, specifically with respect to user access controls to ensure appropriate segregation of duties and to adequately restrict user and privileged access to its financial applications and data to appropriate company personnel.

As of the date of this proxy statement/prospectus these material weaknesses remain. As part of our plan to remediate these material weaknesses, we are performing a full review of our internal control procedures. We have implemented, and plan to continue to implement, new controls and new processes. We cannot assure you that the measures that we have taken, and that will be taken, to remediate these material weaknesses will, in fact, remedy the material weaknesses or will be sufficient to prevent future material weaknesses from occurring. We also cannot assure you that we have identified all of our existing material weaknesses. Further, as the accounting acquirer in the business combination with FinServ, we will have to address any un-remediated material weakness in internal controls over the financial reporting at FinServ, including the material weakness with respect to accounting for FinServ’s warrants.

In light of the control deficiencies and the resulting material weaknesses that were identified, we believe that it is possible that, had we and our independent registered public accounting firm performed an assessment or audit, respectively, of our internal control over financial reporting in accordance with the provisions of the Sarbanes-Oxley Act, additional material weaknesses may have been identified.

When evaluating our internal control over financial reporting, we may identify material weaknesses that we may not be able to remediate in time to meet the applicable deadline imposed upon us for compliance with the requirements of Section 404. If we are unable to remediate our existing material weakness or identify additional material weaknesses and are unable to comply with the requirements of Section 404 in a timely manner or assert that our internal control over financial reporting is effective, or if our independent registered public accounting firm is unable to express an opinion as to the effectiveness of our internal control over financial reporting once we are no longer an emerging growth company, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of New Katapult common stock could be negatively affected, and we could become subject to investigations by the stock exchange on which our securities are listed, the SEC or other regulatory authorities, which could require additional financial and management resources.

If we discover a material weakness in our internal control over financial reporting that we are unable to remedy or otherwise fail to maintain effective internal control over financial reporting or disclosure controls and procedures, our ability to report our financial results on a timely and accurate basis and the market price of New Katapult common stock may be adversely affected.

The Sarbanes-Oxley Act requires, among other things, that we maintain effective internal control over financial reporting and disclosure controls and procedures. In addition to the material weaknesses in internal control over financial reporting identified in connection with the audit of our financial statements for the fiscal year ended December31, 2020, subsequent testing by us or our independent registered public accounting firm, which has not performed an audit of our internal control over financial reporting, may reveal additional deficiencies in our internal control over financial reporting that are deemed to be material weaknesses. To comply with Section 404, we expect to incur substantial cost, expend significant management time on compliance-related issues and hire additional accounting, financial, and internal audit staff with appropriate public company experience and technical accounting knowledge. Moreover, if we are not able to comply with the requirements of Section 404 in a timely manner or if we or our independent registered public accounting firm identify deficiencies in our internal control over financial reporting that are deemed to be material weaknesses, we could be subject to sanctions or investigations by the SEC or other regulatory authorities, which would require additional financial and management resources. Any failure to maintain effective disclosure controls and procedures or internal control over financial reporting could have an adverse effect on our business and operating results, and cause a decline in the price of New Katapult common stock.

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Changes to tax laws or exposure to additional tax liabilities may have a negative impact on our operating results.

Continued developments in U.S. tax reform and changes to tax laws and rates in other jurisdictions where we do business could adversely affect our results of operations and cash flows. It is also possible that provisions of U.S. tax reform could be subsequently amended in a way that is adverse to the Company.

In addition, we may undergo tax audits in various jurisdictions in which we operate. Although we believe that our income tax provisions and accruals are reasonable and in accordance with generally accepted accounting principles in the United States, and that we prepare our tax filings in accordance with all applicable tax laws, the final determination with respect to any tax audits and any related litigation, could be materially different from our historical income tax provisions and accruals. The results of a tax audit or litigation could materially affect our operating results and cash flows in the periods for which that determination is made. In addition, future period net income may be adversely impacted by litigation costs, settlements, penalties and interest assessments.

We may be subject to legal proceedings from time to time which seek material damages. The costs we incur in defending ourselves or associated with settling any of these proceedings, as well as a material final judgment or decree against us, could materially adversely affect our financial condition by requiring the payment of the settlement amount, a judgment or the posting of a bond.

Others in our industry have defended class action lawsuits alleging various regulatory violations and have paid material amounts to settle such claims. If we are named in any such class action lawsuits or other legal proceedings, significant settlement amounts or final judgments could materially and adversely affect our liquidity and capital resources.

To attempt to limit costly and lengthy consumer, employee and other litigation, including class actions, we require our customers and employees to sign arbitration agreements, including class action waivers. In addition to opt-out provisions contained in such agreements, recent judicial and regulatory actions have attempted to restrict or eliminate the enforceability of such agreements and waivers. If we are not permitted to use arbitration agreements and/or class action waivers, or if the enforceability of such agreements and waivers is restricted or eliminated, we could incur increased costs to resolve legal actions brought by customers, employees and others, as we would be forced to participate in more expensive and lengthy dispute resolution processes.

Risks Relating to the Merger

FinServ stockholders will have a reduced ownership and voting interest after the merger and will exercise less influence over management.

Upon the issuance of the New Katapult common stock to Katapult stockholders, current FinServ stockholders’ percentage ownership will be diluted. Subject to the assumptions set forth under “Basis of Presentation and Glossary” and assuming no public stockholders exercise their redemption rights, current FinServ stockholders’ percentage ownership in New Katapult following the issuance of shares to Katapult stockholders would be 32.7%. Under the same assumptions and assuming that 17,537,289shares of Class A Common Stock (the maximum number of shares of Class A Common Stock that could be redeemed in connection with the merger) are redeemed in connection with the merger and excluding any shares issuable pursuant to FinServ’s outstanding warrants, current FinServ stockholders’ percentage ownership in New Katapult following the issuance of shares of New Katapult common stock to Katapult stockholders would be 8.3%. Additionally, of the expected members of the New Katapult board of directors after the completion of the merger, only one is expected to be a current director of FinServ or appointed solely by current stockholders of FinServ and the rest will be current directors of Katapult or appointed by current stockholders of Katapult. The percentage of New Katapult’s common stock that will be owned by current FinServ stockholders as a group will vary based on the number of shares of Class A Common Stock for which the holders thereof request redemption in connection with the merger. To illustrate the potential ownership percentages of current FinServ stockholders under different redemption levels, based on the number of issued and outstanding shares of FinServ common stock, Katapult common stock and Katapult preferred stock on May11, 2021, current FinServ stockholders, as a group, will own (1) if there are no redemptions, 32.7% of New Katapult common stock expected to be outstanding immediately after the merger or (2) if there are redemptions of 17,537,289 of the outstanding shares of FinServ common stock (which is the maximum amount of redemptions that, after giving

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effect to the PIPE Investment, would result in the satisfaction of the Minimum Cash Condition), 8.3% of New Katapult common stock expected to be outstanding immediately after the merger. Because of this, current FinServ stockholders, as a group, will have less influence on the board of directors, management and policies of New Katapult than they now have on the board of directors, management and policies of FinServ.

The market price of shares of New Katapult common stock after the merger may be affected by factors different from those currently affecting the prices of shares of Class A Common Stock.

Upon completion of the merger, holders of shares of Katapult common stock and preferred stock will become holders of shares of New Katapult common stock. Prior to the merger, FinServ has had limited operations. Upon completion of the merger, New Katapult’s results of operations will depend upon the performance of Katapult’s businesses, which are affected by factors that are different from those currently affecting the results of operations of FinServ.

FinServ has not obtained an opinion from an independent investment banking firm, and consequently, there is no assurance from an independent source that the merger consideration is fair to its stockholders from a financial point of view.

FinServ is not required to, and has not, obtained an opinion from an independent investment banking firm that the merger consideration it is paying for Katapult is fair to FinServ’s stockholders from a financial point of view. The fair market value of Katapult has been determined by FinServ’s board of directors based upon standards generally accepted by the financial community, such as potential sales and the price for which comparable businesses or assets have been valued. FinServ’s stockholders will be relying on the judgment of its board of directors with respect to such matters.

Financial projections are subject to significant risks, assumptions, estimates and uncertainties, and New Katapult’s actual results may differ materially from any such projections.

Katapult’s financial projections included in this proxy statement/prospectus are dependent on certain estimates and assumptions related to, among other things, growth assumptions that are inherently subject to significant uncertainties and contingencies, as well as, among other things, matters related specifically to the recent operational performance and anticipated development of our business, and are subject to significant economic, competitive, industry and other uncertainties, and may not be achieved in full, at all, or within projected timeframes. The financial projections also reflect numerous assumptions with respect to general business, economic, market, regulatory and financial conditions and various other factors, all of which are difficult to predict and many of which are beyond our control. Furthermore, the financial projections do not take into account any circumstances or events occurring after the date they were prepared.

These estimates and assumptions are also subject to various factors beyond our control, including, for example, changes in customer demand, increased labor costs, changes in the regulatory environment, the adoption of future legislation, the impact of global health crises (including the COVID-19 pandemic and COVID-19 variants), changes in our executive team and general business and economic conditions. There can be no assurance that any prospective results will be realized or that actual results will not be significantly higher or lower than estimated. Accordingly, our future financial condition and results of operations may differ materially from such projections. Our failure to achieve projected results could also harm the trading price of the New Katapult’s securities and its financial position following the completion of the merger. Neither Katapult nor FinServ have any duty to update the financial projections included in this proxy statement/prospectus.

If the merger’s benefits do not meet the expectations of financial analysts, the market price of New Katapult common stock may decline.

The market price of the New Katapult common stock may decline as a result of the merger if New Katapult does not achieve the perceived benefits of the merger as rapidly, or to the extent anticipated by, financial analysts or the effect of the merger on New Katapult’s financial results is not consistent with the expectations of financial analysts. Accordingly, holders of New Katapult common stock may experience a loss as a result of a decline in the

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market price of New Katapult common stock. In addition, a decline in the market price of New Katapult common stock could adversely affect New Katapult’s ability to issue additional securities and to obtain additional financing in the future.

The consummation of the merger is subject to a number of conditions and if those conditions are not satisfied or waived, the merger agreement may be terminated in accordance with its terms and the merger may not be completed.

The merger agreement is subject to a number of conditions which must be fulfilled in order to complete the merger. Those conditions include: approval of the proposals required to effect the merger by FinServ stockholders, as well as receipt of requisite regulatory approval, absence of orders prohibiting completion of the merger, effectiveness of the registration statement of which this proxy statement/prospectus is a part, approval of the shares of New Katapult common stock to be issued to Katapult stockholders for listing on the Nasdaq, meeting the Minimum Cash Condition, the occurrence of the Katapult Preferred Conversion, the delivery of the Written Consent by Katapult to FinServ, the accuracy of the representations and warranties by both parties (subject to the materiality standards set forth in the merger agreement) and the performance by both parties of their covenants and agreements. These conditions to the closing of the merger may not be fulfilled in a timely manner or at all, and, accordingly, the merger may not be completed. In addition, the parties can mutually decide to terminate the merger agreement at any time, before or after stockholder approval, or FinServ or Katapult may elect to terminate the merger agreement in certain other circumstances. See “The Merger Agreement — Termination” beginning on page 157.

Termination of the merger agreement could negatively impact Katapult and FinServ.

If the merger is not completed for any reason, including as a result of Katapult stockholders declining to adopt the merger agreement or FinServ stockholders declining to approve the proposals required to effect the merger, the ongoing businesses of Katapult and FinServ may be adversely impacted and, without realizing any of the anticipated benefits of completing the merger, Katapult and FinServ would be subject to a number of risks, including the following:

•        Katapult or FinServ may experience negative reactions from the financial markets, including negative impacts on FinServ’s stock price (including to the extent that the current market price reflects a market assumption that the merger will be completed);

•        Katapult may experience negative reactions from its customers, vendors and employees;

•        Katapult and FinServ will have incurred substantial expenses and will be required to pay certain costs relating to the merger, whether or not the merger is completed; and

•        Since the merger agreement restricts the conduct of Katapult’s and FinServ’s businesses prior to completion of the merger, each of Katapult and FinServ may not have been able to take certain actions during the pendency of the merger that would have benefitted it as an independent company, and the opportunity to take such actions may no longer be available (see the section entitled “The Merger Agreement — Covenants and Agreements” beginning on page 146 of this proxy statement/prospectus for a description of the restrictive covenants applicable to Katapult and FinServ).

If the merger agreement is terminated and Katapult’s board of directors seeks another merger or business combination, Katapult stockholders cannot be certain that Katapult will be able to find a party willing to offer equivalent or more attractive consideration than the consideration FinServ has agreed to provide in the merger or that such other merger or business combination is completed. If the merger agreement is terminated and FinServ’s board of directors seeks another merger or business combination, FinServ stockholders cannot be certain that FinServ will be able to find another acquisition target that would constitute a business combination or that such other merger or business combination will be completed. See “The Merger Agreement — Termination” on page 157.

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Katapult will be subject to business uncertainties and contractual restrictions while the merger is pending.

Uncertainty about the effect of the merger on employees, merchants and customers may have an adverse effect on Katapult and consequently on FinServ. These uncertainties may impair Katapult’s ability to attract, retain and motivate key personnel until the merger is completed, and could cause customers and others that deal with Katapult to seek to change existing business relationships with Katapult. Retention of certain employees may be challenging during the pendency of the merger, as certain employees may experience uncertainty about their future roles. If key employees depart because of issues relating to the uncertainty and difficulty of integration or a desire not to remain with the business, New Katapult’s business following the merger could be negatively impacted. In addition, the merger agreement restricts Katapult from making certain expenditures and taking other specified actions without the consent of FinServ until the merger occurs. These restrictions may prevent Katapult from pursuing attractive business opportunities that may arise prior to the completion of the merger. See “The Merger Agreement — Covenants and Agreements” beginning on page 146.

FinServ directors and officers may have interests in the merger different from the interests of FinServ Stockholders.

Executive officers of FinServ negotiated the terms of the merger agreement with their counterparts at Katapult, and the FinServ board of directors determined that the merger agreement and the transactions contemplated thereby are advisable and in the best interests of FinServ and its stockholders and to approve the merger agreement and the transactions contemplated thereby. In considering these facts and the other information contained in this proxy statement/prospectus, you should be aware that FinServ’s executive officers and directors may have financial interests in the merger that may be different from, or in addition to, the interests of FinServ stockholders. The FinServ board of directors was aware of and considered these interests, among other matters, in reaching the determination that the merger and the transactions contemplated by the merger agreement were advisable and in the best interests of FinServ and its stockholders. For a detailed discussion of the special interests that FinServ’s directors and executive officers may have in the merger, see the section entitled “The Merger — Interests of FinServ’s Directors and Officers in the Merger” beginning on page 139.

The unaudited pro forma condensed combined financial information included in this proxy statement/prospectus is preliminary and the actual financial condition and results of operations after the merger may differ materially.

The unaudited pro forma financial information included in this proxy statement/prospectus is presented for illustrative purposes only and is not necessarily indicative of what New Katapult’s actual financial position or results of operations would have been had the merger been completed on the date(s) indicated. The preparation of the pro forma financial information is based upon available information and certain assumptions and estimates that FinServ and Katapult currently believe are reasonable. The unaudited pro forma financial information reflects adjustments, which are based upon preliminary estimates, among other things, to allocate the purchase price to Katapult’s net assets. The purchase price allocation reflected in this proxy statement/prospectus is preliminary, and the final allocation of the purchase price will be based upon the actual purchase price and the fair value of the assets and liabilities of Katapult as of the date of the completion of the merger. In addition, following the completion of the merger, there may be further refinements of the purchase price allocation as additional information becomes available. Accordingly, the final purchase accounting adjustments may differ materially from the pro forma adjustments reflected in this proxy statement/prospectus. See “Summary Unaudited Pro Forma Condensed Combined Financial Information” beginning on page 15.

FinServ and Katapult will incur transaction costs in connection with the merger.

Each of FinServ and Katapult has incurred and expects that it will incur significant, non-recurring costs in connection with consummating the merger. FinServ and Katapult may also incur additional costs to retain key employees. FinServ and Katapult will also incur significant legal, financial advisor, accounting, banking and consulting fees, fees relating to regulatory filings and notices, SEC filing fees, printing and mailing fees and other costs associated with the merger. FinServ estimates that it will incur approximately $9.35million in deferred underwriting fees and $6.0million in fees related to the PIPE Investment and $9.65million in transaction costs. Katapult estimates that it will incur approximately $20.0million in transaction costs associated with the merger. Some of these costs are payable regardless of whether the merger is completed. See “The Merger — Terms of the Merger” beginning on page 127.

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The Sponsor has agreed to vote in favor of the proposals at the Special Meeting, regardless of how public stockholders vote.

As of the date hereof, the Founder Shares and Private Placement Units owned by FinServ’s Sponsors represent approximately 21.7% of the voting power of the outstanding FinServ common stock. Pursuant to the Letter Agreement entered into at the closing of FinServ’s IPO and the Sponsor Agreement, the Sponsor has agreed to vote its Founder Shares and any shares of Class A Common Stock held by it (including underlying the Private Placement Units) in favor of each of the proposals at the Special Meeting, regardless of how public stockholders vote. Accordingly, the agreement by the Sponsor to vote in favor of each of the proposals at the Special Meeting will increase the likelihood that FinServ will receive the requisite stockholder approval for the merger and the transactions contemplated thereby.

Because of FinServ’s limited resources and the significant competition for business combination opportunities, it may be more difficult for it to complete the initial business combination. If FinServ is unable to complete the initial business combination, its public stockholders may receive only approximately $10.05 per share on its redemption of its shares of Class A Common Stock, or less than such amount in certain circumstances based on the balance of its Trust Account (as of December 18, 2020), and its warrants will expire worthless.

FinServ encounters competition from other entities having a business objective similar to its own, including private investors (which may be individuals or investment partnerships), other blank check companies and other entities competing for the types of businesses it intends to acquire. Many of these individuals and entities are well-established and have extensive experience in identifying and effecting, directly or indirectly, acquisitions of companies operating in or providing services to various industries. Many of these competitors possess similar technical, human and other resources to those of FinServ, and its financial resources will be relatively limited when contrasted with those of many of these competitors. While FinServ believes there are numerous target businesses it could potentially acquire with the net proceeds of its IPO and the sale of the private placement warrants, FinServ’s ability to compete with respect to the acquisition of certain target businesses that are sizable will be limited by its available financial resources. This inherent competitive limitation gives others an advantage in pursuing the acquisition of certain target businesses. Furthermore, because FinServ is obligated to pay cash for the shares of Class A Common Stock its public stockholders redeem in connection with the initial business combination, target companies will be aware that this may reduce the resources available to FinServ for the initial business combination. This may place FinServ at a competitive disadvantage in successfully negotiating an initial business combination. If it is unable to complete an initial business combination, FinServ’s public stockholders may only receive $10.05 per share on the liquidation of its Trust Account, based on the balance of the Trust Account (as of December18, 2020), and its warrants will expire worthless.

FinServ may not be able to consummate the merger or an initial business combination within the required time period, in which case it would cease all operations except for the purpose of winding up and it would redeem the Class A Common Stock and liquidate, in which case the holders of Class A Common Stock may only receive $10.00 per share, or less than such amount in certain circumstances, and the warrants will expire worthless.

The Existing Charter provides that FinServ must complete an initial business combination by November5, 2021. If FinServ is unable to complete an initial business combination before November5, 2021, FinServ will: (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible but not more than 10 business days thereafter, redeem the Class A Common Stock, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account and not previously released to FinServ to pay its taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding shares of Class A Common Stock, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law; and (iii) as promptly as reasonably possible following such redemption, subject to the approval of its remaining stockholders and FinServ’s board of directors, dissolve and liquidate, subject in each case to FinServ’s obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to its warrants, which will expire worthless if FinServ fails to complete an initial business combination within the 24month time period. In certain circumstances, the holders of Class A Common Stock may receive less than $10.00 per share on the redemption of their shares.

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FinServ’s Sponsor, directors, officers, advisors and their affiliates may elect to purchase shares or warrants from holders of Class A Common Stock, which may influence the vote on the Business Combination Proposal and reduce the public float of the Class A Common Stock.

FinServ’s Sponsor, directors, officers, advisors or their affiliates may purchase Class A Common Stock or warrants or a combination thereof in privately negotiated transactions or in the open market either prior to or following the consummation of the merger and the other transactions contemplated by the merger agreement, although they are under no obligation to do so. However, they have no current commitments, plans or intentions to engage in such transactions and have not formulated any terms or conditions for any such transactions. None of the funds in the Trust Account will be used to purchase Class A Common Stock or warrants in such transactions.

Such a purchase may include a contractual acknowledgement that such stockholder, although still the record holder of Class A Common Stock is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights. In the event that FinServ’s Sponsor, directors, officers, advisors or their affiliates purchase shares in privately negotiated transactions from holders of Class A Common Stock who have already elected to exercise their redemption rights, such selling stockholders would be required to revoke their prior elections to redeem their shares. The purpose of such purchases could be to vote such shares in favor of the Business Combination Proposal and thereby increase the likelihood of obtaining stockholder approval of the Business Combination Proposal. The purpose of any such purchases of warrants could be to reduce the number of warrants outstanding or to vote such warrants on any matters submitted to the warrantholders for approval in connection with the merger or the other transactions contemplated by the merger agreement. Any such purchases of FinServ securities may result in the consummation of the merger, which may not otherwise have been possible. Any such purchases will be reported pursuant to Section 13 and Section 16 of the Exchange Act to the extent such purchasers are subject to such reporting requirements.

In addition, if such purchases are made, the public float of Class A Common Stock or warrants and the number of beneficial holders of FinServ securities may be reduced, possibly making it difficult to maintain the quotation, listing or trading of FinServ securities on a national securities exchange.

Neither FinServ nor its stockholders will have the protection of any indemnification, escrow, price adjustment or other provisions that allow for a post-closing adjustment to be made to the total merger consideration in the event that any of the representations and warranties made by Katapult in the merger agreement ultimately proves to be materially inaccurate or incorrect.

The representations and warranties made by Katapult and FinServ to each other in the merger agreement will not survive the consummation of the merger. As a result, FinServ and its stockholders will not have the protection of any indemnification, escrow, price adjustment or other provisions that allow for a post-closing adjustment to be made to the total merger consideration if any representation or warranty made by Katapult in the merger agreement proves to be materially inaccurate or incorrect. Accordingly, to the extent such representations or warranties are incorrect, FinServ would have no indemnification claim with respect thereto and its financial condition or results of operations could be adversely affected.

Either FinServ or Katapult may waive one or more of the conditions to the merger or certain of the other transactions contemplated by the merger agreement.

Either FinServ or Katapult may agree to waive, in whole or in part, some of the conditions to our obligations to consummate the merger or certain of the other transactions contemplated by the merger agreement, to the extent permitted by the Existing Charter and applicable laws. For example, it is a condition to our obligations to consummate the merger that certain of Katapult’s representations and warranties are true and correct in all respects as of the closing date, except where the failure of such representations and warranties to be true and correct, taken as a whole, does not result in a material adverse effect. However, if FinServ’s board of directors determines that it is in the best interest of the FinServ stockholders to waive any such breach, then the board may elect to waive that condition and consummate the merger. No party is able to waive the condition that FinServ stockholders approve the Business Combination Proposal.

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FinServ does not have a specified maximum redemption threshold. The absence of such a redemption threshold may make it possible for FinServ to consummate an initial business combination with which a substantial majority of FinServ’s stockholders do not agree.

The Existing Charter does not provide a specified maximum redemption threshold, except that in no event will FinServ redeem the Class A Common Stock in an amount that would cause its net tangible assets to be less than $5,000,001 upon consummation of an initial business combination and after payment of underwriters’ fees and commissions (such that FinServ is not subject to the SEC’s “penny stock” rules). As a result, FinServ may be able to consummate the merger even if a substantial majority of its stockholders do not agree with the merger and have redeemed their shares. In the event the aggregate cash consideration FinServ would be required to pay for all shares of Class A Common Stock that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the merger agreement exceed the aggregate amount of cash available to FinServ, FinServ will not complete the merger or redeem any shares, all shares of Class A Common Stock submitted for redemption will be returned to the holders thereof, and FinServ instead may search for an alternate business combination.

If third parties bring claims against FinServ, the proceeds held in the Trust Account could be reduced and the per-share redemption amount received by stockholders may be less than $10.00 per share.

FinServ’s placing of funds in the Trust Account may not protect those funds from third-party claims against FinServ. Although FinServ has sought to have all vendors, service providers, prospective target businesses and other entities with which it does business (except its independent registered accounting firm) execute agreements with FinServ waiving any right, title, interest or claim of any kind in or to any monies held in the Trust Account for the benefit of the holders of Class A Common Stock, such parties may not execute such agreements, or even if they execute such agreements they may not be prevented from bringing claims against the Trust Account, including, but not limited to, fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain advantage with respect to a claim against FinServ’s assets, including the funds held in the Trust Account. If any third party refuses to execute an agreement waiving such claims to the monies held in the Trust Account, FinServ’s management will perform an analysis of the alternatives available to it and will only enter into an agreement with a third party that has not executed a waiver if management believes that such third party’s engagement would be significantly more beneficial to FinServ than any alternative. FinServ is not aware of any product or service providers who have not or will not provide such waiver other than the underwriters of its IPO and FinServ’s independent registered public accounting firm.

FinServ’s directors may decide not to enforce the indemnification obligations of the Sponsor, resulting in a reduction in the amount of funds in the Trust Account available for distribution to the holders of Class A Common Stock.

In the event that the proceeds in the Trust Account are reduced below the lesser of (i) $10.00 per public share and (ii) the actual amount per share held in the Trust Account as of the date of the liquidation of the Trust Account if less than $10.00 per share due to reductions in the value of the trust assets, in each case net of the interest which may be withdrawn to pay taxes, and the Sponsor asserts that it is unable to satisfy its obligations or that it has no indemnification obligations related to a particular claim, FinServ’s independent directors would determine whether to take legal action against the Sponsor to enforce its indemnification obligations.

While FinServ currently expects that its independent directors would take legal action on its behalf against the Sponsor to enforce its indemnification obligations to FinServ, it is possible that FinServ’s independent directors in exercising their business judgment and subject to their fiduciary duties may choose not to do so in any particular instance if, for example, the cost of such legal action is deemed by the independent directors to be too high relative to the amount recoverable or if the independent directors determine that a favorable outcome is not likely. If FinServ’s independent directors choose not to enforce these indemnification obligations, the amount of funds in the Trust Account available for distribution to the holders of Class A Common Stock may be reduced below $10.00 per share.

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FinServ may not have sufficient funds to satisfy indemnification claims of its directors and executive officers.

FinServ has agreed to indemnify its officers and directors to the fullest extent permitted by law. However, FinServ’s officers and directors have agreed to waive any right, title, interest or claim of any kind in or to any monies in the Trust Account and not to seek recourse against the Trust Account for any reason whatsoever. Accordingly, any indemnification provided will be able to be satisfied by FinServ only if (i) FinServ has sufficient funds outside of the Trust Account or (ii) FinServ consummates an initial business combination. FinServ’s obligation to indemnify its officers and directors may discourage stockholders from bringing a lawsuit against its officers or directors for breach of their fiduciary duty. These provisions also may have the effect of reducing the likelihood of derivative litigation against FinServ’s officers and directors, even though such an action, if successful, might otherwise benefit FinServ and its stockholders. Furthermore, a stockholder’s investment may be adversely affected to the extent FinServ pays the costs of settlement and damage awards against its officers and directors pursuant to these indemnification provisions.

If, after FinServ distributes the proceeds in the Trust Account to the holders of Class A Common Stock, it files a bankruptcy petition or an involuntary bankruptcy petition is filed against FinServ that is not dismissed, a bankruptcy court may seek to recover such proceeds, and FinServ and its board may be exposed to claims of punitive damages.

If, after FinServ distributes the proceeds in the Trust Account to its stockholders, it files a bankruptcy petition or an involuntary bankruptcy petition is filed against FinServ that is not dismissed, any distributions received by FinServ’s stockholders could be viewed under applicable debtor/creditor and/or bankruptcy laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy court could seek to recover all amounts received by FinServ’s stockholders. In addition, the FinServ board may be viewed as having breached its fiduciary duty to its creditors and/or having acted in bad faith, thereby exposing itself and FinServ to claims of punitive damages, by paying FinServ’s stockholders from the Trust Account prior to addressing the claims of creditors.

If, before distributing the proceeds in the Trust Account to the holders of Class A Common Stock, FinServ files a bankruptcy petition or an involuntary bankruptcy petition is filed against FinServ that is not dismissed, the claims of creditors in such proceeding may have priority over the claims of FinServ’s stockholders and the per-share amount that would otherwise be received by FinServ’s stockholders in connection with FinServ’s liquidation may be reduced.

If, before distributing the proceeds in the Trust Account to the holders of Class A Common Stock, FinServ files a bankruptcy petition or an involuntary bankruptcy petition is filed against FinServ that is not dismissed, the proceeds held in the Trust Account could be subject to applicable bankruptcy law, and may be included in FinServ’s bankruptcy estate and subject to the claims of third parties with priority over the claims of FinServ’s stockholders. To the extent any bankruptcy claims deplete the Trust Account, the per-share amount that would otherwise be received by FinServ’s stockholders in connection with FinServ’s liquidation may be reduced.

FinServ stockholders may be held liable for claims by third parties against FinServ to the extent of distributions received by them upon redemption of their shares.

Under the DGCL, stockholders may be held liable for claims by third parties against a corporation to the extent of distributions received by them in a dissolution. The pro rata portion of the Trust Account distributed to the holders of Class A Common Stock upon the redemption of the Class A Common Stock in the event FinServ does not complete an initial business combination within the timeframe set forth in the Existing Charter may be considered a liquidating distribution under Delaware law. If a corporation complies with certain procedures set forth in Section 280 of the DGCL intended to ensure that it makes reasonable provision for all claims against it, including a 60-day notice period during which any third-party claims can be brought against the corporation, a 90-day period during which the corporation may reject any claims brought, and an additional 150-day waiting period before any liquidating distributions are made to stockholders, any liability of stockholders with respect to a liquidating distribution is limited to the lesser of such stockholder’s pro rata share of the claim or the amount distributed to the stockholder, and any liability of the stockholder would be barred after the third anniversary of the dissolution.

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However, it is FinServ’s intention to redeem the Class A Common Stock as soon as reasonably possible in the event it does not complete its initial business combination and, therefore, FinServ does not intend to comply with the foregoing procedures.

Because FinServ will not be complying with Section 280, Section 281(b) of the DGCL requires FinServ to adopt a plan, based on facts known to FinServ at such time that will provide for FinServ’s payment of all existing and pending claims or claims that may be potentially brought against FinServ within the 10 years following its dissolution. However, because FinServ is a blank check company, rather than an operating company, and FinServ’s operations are limited to searching for prospective target businesses to acquire, the only likely claims to arise would be from FinServ’s vendors (such as lawyers, investment bankers, etc.) or prospective target businesses. If FinServ’s plan of distribution complies with Section 281(b) of the DGCL, any liability of stockholders with respect to a liquidating distribution is limited to the lesser of such stockholder’s pro rata share of the claim or the amount distributed to the stockholder, and any liability of the stockholder would likely be barred after the third anniversary of the dissolution. FinServ cannot assure you that it will properly assess all claims that may be potentially brought against it. As such, FinServ’s stockholders could potentially be liable for any claims to the extent of distributions received by them (but no more) and any liability of FinServ’s stockholders may extend beyond the third anniversary of such date. Furthermore, if the pro rata portion of the Trust Account distributed to the holders of Class A Common Stock upon the redemption of the Class A Common Stock in the event FinServ does not complete an initial business combination within the timeframe set forth in the Existing Charter is not considered a liquidating distribution under Delaware law and such redemption distribution is deemed to be unlawful (potentially due to the imposition of legal proceedings that a party may bring or due to other circumstances that are currently unknown), then pursuant to Section 174 of the DGCL, the statute of limitations for claims of creditors could then be six (6) years after the unlawful redemption distribution, instead of three (3) years, as in the case of a liquidating distribution.

FinServ may not be able to complete the PIPE Investment in connection with the merger.

FinServ may not be able to complete the PIPE Investment on terms that are acceptable to FinServ, or at all. If FinServ does not complete the PIPE Investment, FinServ may not be able to consummate the merger or certain other transactions contemplated by the merger agreement. The terms of any alternative financing may be more onerous to the combined company than the PIPE Investment, and FinServ may be unable to obtain alternative financing on terms that are acceptable to it, or at all. The failure to secure additional financing could have a material adverse effect on the continued development or growth of the combined company. None of FinServ’s officers, directors or stockholders is required to provide any financing to FinServ in connection with or after the consummation of the merger.

FinServ may amend the terms of its warrants in a manner that may be adverse to holders of warrants with the approval by the holders of at least 65% of the then outstanding warrants. As a result, the exercise price of the warrants could be increased, the exercise period could be shortened and the number of shares of Class A Common Stock purchasable upon exercise of a public warrant could be decreased, all without your approval.

The FinServ warrants were issued in registered form under the Warrant Agreement between Continental Stock Transfer & Trust Company (“CST”), as warrant agent, and FinServ. The Warrant Agreement provides that the terms of FinServ’s warrants may be amended without the consent of any holder to cure any ambiguity or correct any defective provision, but requires the approval by the holders of at least 65% of the then outstanding warrants to make any change that adversely affects the interests of the registered holders of the warrants. Accordingly, FinServ may amend the terms of the warrants in a manner adverse to a holder if holders of at least 65% of the then outstanding warrants approve of such amendment. Although FinServ’s ability to amend the terms of the warrants with the consent of at least 65% of the then outstanding warrants is unlimited, examples of such amendments could be amendments to, among other things, increase the exercise price of the warrants, convert the warrants into cash or stock, shorten the exercise period or decrease the number of shares of Class A Common Stock purchasable upon exercise of a warrant.

FinServ may redeem your unexpired warrants prior to their exercise at a time that is disadvantageous to you, thereby making your warrants worthless.

FinServ has the ability to redeem outstanding warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per warrant, provided that the last reported sales price of Class A Common Stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations

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and the like) for any 20 trading days within a 30 trading-day period commencing once the warrants become exercisable and ending on the third trading day prior to the date on which FinServ gives proper notice of such redemption and provided certain other conditions are met. If and when the warrants become redeemable by FinServ, FinServ may not exercise its redemption right if the issuance of shares of common stock upon exercise of the warrants is not exempt from registration or qualification under applicable state blue sky laws or it is unable to effect such registration or qualification. FinServ will use its best efforts to register or qualify such shares of common stock under the blue sky laws of the state of residence in those states in which the warrants were offered. Redemption of the outstanding warrants could force you (i) to exercise your warrants and pay the exercise price therefor at a time when it may be disadvantageous for you to do so, (ii) to sell your warrants at the then-current market price when you might otherwise wish to hold your warrants or (iii) to accept the nominal redemption price which, at the time the outstanding warrants are called for redemption, is likely to be substantially less than the market value of your warrants. None of the Private Placement Warrants will be redeemable by FinServ so long as they are held by the Sponsor or its permitted transferees.

Subsequent to the consummation of the merger and the other transactions contemplated by the merger agreement, New Katapult may be required to take write-downs or write-offs, or the combined company may be subject to restructuring, impairment or other charges that could have a significant negative effect on the combined company’s financial condition, results of operations and the price of New Katapult common stock, which could cause you to lose some or all of your investment.

Although FinServ has conducted due diligence on Katapult, this diligence may not reveal all material issues that may be present with Katapult’s business. Factors outside of Katapult’s and FinServ’s respective control may, at any time, arise. As a result of these factors, the New Katapult may be forced to later write-down or write-off assets, restructure operations, or incur impairment or other charges that could result in the combined company reporting losses. Even if FinServ’s due diligence successfully identified certain risks, unexpected risks may arise, and previously known risks may materialize in a manner not consistent with FinServ’s preliminary risk analysis. Even though these charges may be non-cash items and therefore not have an immediate impact on the combined company’s liquidity, the fact that the combined company reports charges of this nature could contribute to negative market perceptions about the combined company or its securities. In addition, charges of this nature may cause the combined company to be unable to obtain future financing on favorable terms or at all.

New Katapult’s failure to timely and effectively implement controls and procedures required by Section 404(a) of the Sarbanes-Oxley Act that will be applicable to it after the merger is consummated could have a material adverse effect on its business.

Katapult is currently not subject to Section 404 of the Sarbanes-Oxley Act. However, following the consummation of the merger and the other transactions contemplated by the merger agreement, the combined company will be required to provide management’s attestation on internal controls commencing with New Katapult’s annual report for the year ending December31, 2021 in accordance with applicable SEC guidance. The standards required for a public company under Section 404(a) of the Sarbanes-Oxley Act are significantly more stringent than those required of Katapult as a privately-held company. Management may not be able to effectively and timely implement controls and procedures that adequately respond to the increased regulatory compliance and reporting requirements that will be applicable after the merger. If the combined company is not able to implement the additional requirements of Section 404(a) in a timely manner or with adequate compliance, it may not be able to assess whether its internal controls over financial reporting are effective, which may subject it to adverse regulatory consequences and could harm investor confidence and the market price of its securities.

New Katapult will qualify as an “emerging growth company” within the meaning of the Securities Act, and if it takes advantage of certain exemptions from disclosure requirements available to emerging growth companies, it could make New Katapult’s securities less attractive to investors and may make it more difficult to compare New Katapult’s performance to the performance of other public companies.

New Katapult will qualify as an “emerging growth company” as defined in Section 2(a)(19) of the Securities Act, as modified by the JOBS Act. As such, the combined company will be eligible for and intends to take advantage of certain exemptions from various reporting requirements applicable to other public companies that are not

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emerging growth companies for as long as it continues to be an emerging growth company, including, but not limited to, (a) not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, (b) reduced disclosure obligations regarding executive compensation in New Katapult’s periodic reports and proxy statements and (c) exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. As a result, New Katapult’s stockholders may not have access to certain information they may deem important. New Katapult will remain an emerging growth company until the earliest of (1) the last day of the fiscal year (a) following November5, 2024, (b) in which New Katapult has total annual gross revenue of at least $1.07billion, or (c) in which New Katapult is deemed to be a large accelerated filer, which means the market value of its common stock that is held by non-affiliates exceeds $700million as of the prior June 30th, and (2) the date on which New Katapult has issued more than $1.0billion in non-convertible debt securities during the prior three (3) year period. FinServ cannot predict whether investors will find New Katapult’s securities less attractive because it will rely on these exemptions. If some investors find the combined company’s securities less attractive as a result of the combined company’s reliance on these exemptions, the trading prices of the combined company’s securities may be lower than they otherwise would be, there may be a less active trading market for New Katapult’s securities and the trading prices of the combined company’s securities may be more volatile.

Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable. FinServ has elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, it, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of FinServ’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.

The future exercise of registration rights may adversely affect the market price of New Katapult’s common stock.

Certain New Katapult shareholders will have registration rights for restricted securities. In connection with the consummation of the merger, New Katapult will enter into the A&R RRA with FinServ, the Sponsor and certain other stockholders of New Katapult, which will provide for customary “demand” and “piggyback” registration rights for certain stockholders. Sales of a substantial number of shares of New Katapult common stock pursuant to the resale registration statement in the public market could occur at any time the registration statement remains effective. In addition, certain registration rights holders can request underwritten offerings to sell their securities. These sales, or the perception in the market that the holders of a large number of shares intend to sell shares, could reduce the market price of New Katapult common stock.

Warrants will become exercisable for New Katapult common stock, which would increase the number of shares eligible for future resale in the public market and result in dilution to New Katapult stockholders.

Outstanding warrants to purchase an aggregate of 12,832,500shares of New Katapult common stock will become exercisable on the later of 30 days after the completion of the merger or 12months from the consummation of FinServ’s IPO. Each warrant entitles the holder thereof to purchase one (1) share of New Katapult common stock at a price of $11.50 per whole share, subject to adjustment. Warrants may be exercised only for a whole number of shares of New Katapult common stock. To the extent such warrants are exercised, additional shares of New Katapult common stock will be issued, which will result in dilution to the then existing holders of common stock of Katapult and increase the number of shares eligible for resale in the public market. Sales of substantial numbers of such shares in the public market could adversely affect the market price of our common stock.

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FinServ’s ability to successfully effect the merger and the other transactions contemplated by the merger agreement and New Katapult’s ability to successfully operate the business thereafter will be largely dependent upon the efforts of certain key personnel of Katapult, all of whom FinServ expects to stay with the combined company following the consummation of the merger. Any loss of such key personnel could negatively impact the operations and financial results of the combined business.

FinServ’s ability to successfully effect the merger and the other transactions contemplated by the merger agreement and New Katapult’s ability to successfully operate the business following the consummation of the merger is dependent upon the efforts of certain key personnel of Katapult. Although FinServ expects key personnel to remain with the combined company following the consummation of the merger, there can be no assurance that they will do so. It is possible that Katapult will lose some key personnel, the loss of which could negatively impact the operations and profitability of the combined company. Furthermore, following the consummation of the merger, certain of the key personnel of Katapult may be unfamiliar with the requirements of operating a company regulated by the SEC, which could cause the combined company to have to expend time and resources helping them become familiar with such requirements.

The Existing Charter requires, to the fullest extent permitted by law, that derivative actions brought in FinServ’s name, actions against FinServ’s directors, officers, other employees or stockholders for breach of fiduciary duty and other similar actions may be brought only in the Court of Chancery in the State of Delaware and, if brought outside of Delaware, the stockholder bringing the suit will be deemed to have consented to service of process on such stockholder’s counsel, which may have the effect of discouraging lawsuits against FinServ’s directors, officers, other employees or stockholders.

The Existing Charter requires, to the fullest extent permitted by law, that derivative actions brought in FinServ’s name, actions against FinServ’s directors, officers, other employees or stockholders for breach of fiduciary duty and other similar actions may be brought only in the Court of Chancery in the State of Delaware and, if brought outside of Delaware, the stockholder bringing the suit will be deemed to have consented to service of process on such stockholder’s counsel except any action (A) as to which the Court of Chancery in the State of Delaware determines that there is an indispensable party not subject to the jurisdiction of the Court of Chancery (and the indispensable party does not consent to the personal jurisdiction of the Court of Chancery within 10 days following such determination), (B) which is vested in the exclusive jurisdiction of a court or forum other than the Court of Chancery, (C) for which the Court of Chancery does not have subject matter jurisdiction, or (D) any action arising under the Securities Act, the Exchange Act or as to which the federal courts have exclusive jurisdiction, for which the federal district court for the District of Delaware will have sole jurisdiction. Any person or entity purchasing or otherwise acquiring any interest in shares of our capital stock will be deemed to have notice of and consented to the forum provisions in our Existing Charter. This choice of forum provision may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with FinServ or any of its directors, officers, other employees or stockholders, which may discourage lawsuits with respect to such claims, although such stockholders will not be deemed to have waived FinServ’s compliance with federal securities laws and the rules and regulations thereunder. However, there is no assurance that a court would enforce the choice of forum provision contained in the Existing Charter. If a court were to find such provision to be inapplicable or unenforceable in an action, FinServ may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, operating results and financial condition.

The Existing Charter provides that the exclusive forum provision will be applicable to the fullest extent permitted by applicable law. Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder. As a result, the exclusive forum provision will not apply to suits brought to enforce any duty or liability created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction.

Additional Risks Relating to Ownership of New Katapult Common Stock Following the Merger

Nasdaq may delist New Katapult’s securities from trading on its exchange, which could limit investors’ ability to make transactions in its securities and subject New Katapult to additional trading restrictions.

Currently, FinServ’s units, Class A Common Stock and warrants are publicly traded on the Nasdaq. We intend to list New Katapult’s common stock and warrants on the Nasdaq under the symbols KPLT and KPLTW,

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respectively, upon the closing of the merger. FinServ will not have units traded following closing of the merger. FinServ cannot assure you that its securities will continue to be listed on the Nasdaq following the merger. In order to continue listing its securities on the Nasdaq following the merger, New Katapult will be required to maintain certain financial, distribution and stock price levels. Generally, New Katapult will be required to maintain a minimum amount in stockholders’ equity (generally $2,500,000 for companies trading on the Nasdaq Capital Market) and a minimum number of holders of our securities (generally 300 public holders). Additionally, in connection with the merger, New Katapult will be required to demonstrate compliance with Nasdaq’s initial listing requirements, which are more rigorous than Nasdaq’s continued listing requirements, in order to continue to maintain the listing of its securities on the Nasdaq. For instance, New Katapult’s stock price would generally be required to be at least $4.00 per share, its stockholders’ equity would generally be required to be at least $5.0million and it would be required to have a minimum of 300 round lot holders of its securities. We cannot assure you that New Katapult will be able to meet those initial listing requirements at that time.

If Nasdaq delists New Katapult’s securities from trading on its exchange and New Katapult is not able to list its securities on another national securities exchange, we expect our securities could be quoted on an over-the-counter market. If this were to occur, we could face significant material adverse consequences, including:

•        a limited availability of market quotations for our securities;

•        reduced liquidity for our securities;

•        a determination that the New Katapult common stock is a “penny stock” which will require brokers trading in New Katapult common stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities;

•        a limited amount of news and analyst coverage; and

•        a decreased ability to issue additional securities or obtain additional financing in the future.

The National Securities Markets Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating the sale of certain securities, which are referred to as “covered securities.” Since FinServ’s units, Class A Common Stock and warrants are listed on the Nasdaq, they are covered securities. Although the states are preempted from regulating the sale of its securities, the federal statute does allow the states to investigate companies if there is a suspicion of fraud, and, if there is a finding of fraudulent activity, then the states can regulate or bar the sale of covered securities in a particular case. While FinServ is not aware of a state having used these powers to prohibit or restrict the sale of securities issued by blank check companies, other than the State of Idaho, certain state securities regulators view blank check companies unfavorably and might use these powers, or threaten to use these powers, to hinder the sale of securities of blank check companies in their states. Further, if FinServ was no longer listed on the Nasdaq, its securities would not be covered securities and it would be subject to regulation in each state in which it offers its securities, including in connection with the initial business combination.

New Katapult’s stock price may change significantly following the merger and you could lose all or part of your investment as a result.

The trading price of the New Katapult common stock is likely to be volatile. The stock market recently has experienced extreme volatility. This volatility often has been unrelated or disproportionate to the operating performance of particular companies. You may not be able to resell your shares at an attractive price due to a number of factors such as those listed in “— Risks Relating to Katapult’s Business and Industry” and the following:

•        results of operations that vary from the expectations of securities analysts and investors;

•        results of operations that vary from those of New Katapult’s competitors;

•        the impact of the COVID-19 pandemic and its effect on New Katapult’s business and financial conditions;

•        changes in expectations as to New Katapult’s future financial performance, including financial estimates and investment recommendations by securities analysts and investors;

•        declines in the market prices of stocks generally;

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•        strategic actions by New Katapult or its competitors;

•        announcements by New Katapult or its competitors of significant contracts, acquisitions, joint ventures, other strategic relationships or capital commitments;

•        any significant change in New Katapult’s management;

•        changes in general economic or market conditions or trends in New Katapult’s industry or markets;

•        changes in business or regulatory conditions, including new laws or regulations or new interpretations of existing laws or regulations applicable to New Katapult’s business;

•        future sales of New Katapult’s common stock or other securities;

•        investor perceptions or the investment opportunity associated with New Katapult’s common stock relative to other investment alternatives;

•        the public’s response to press releases or other public announcements by New Katapult or third parties, including New Katapult’s filings with the SEC;

•        litigation involving New Katapult, New Katapult’s industry, or both, or investigations by regulators into New Katapult’s operations or those of New Katapult’s competitors;

•        guidance, if any, that New Katapult provides to the public, any changes in this guidance or New Katapult’s failure to meet this guidance;

•        the development and sustainability of an active trading market for New Katapult’s stock;

•        actions by institutional or activist stockholders;

•        changes in accounting standards, policies, guidelines, interpretations or principles; and

•        other events or factors, including those resulting from natural disasters, war, acts of terrorism or responses to these events.

These broad market and industry fluctuations may adversely affect the market price of New Katapult’s common stock, regardless of New Katapult’s actual operating performance. In addition, price volatility may be greater if the public float and trading volume of New Katapult’s common stock is low.

In the past, following periods of market volatility, stockholders have instituted securities class action litigation. If New Katapult was involved in securities litigation, it could have a substantial cost and divert resources and the attention of executive management from New Katapult’s business regardless of the outcome of such litigation.

Because there are no current plans to pay cash dividends on New Katapult’s common stock for the foreseeable future, you may not receive any return on investment unless you sell your common stock for a price greater than that which you paid for it.

New Katapult intends to retain future earnings, if any, for future operations, expansion and debt repayment and there are no current plans to pay any cash dividends for the foreseeable future. The declaration, amount and payment of any future dividends on shares of New Katapult common stock will be at the sole discretion of New Katapult’s board of directors. New Katapult’s board of directors may take into account general and economic conditions, New Katapult’s financial condition and results of operations, New Katapult’s available cash and current and anticipated cash needs, capital requirements, contractual, legal, tax, and regulatory restrictions, implications on the payment of dividends by New Katapult to its stockholders or by its subsidiaries to it and such other factors as New Katapult’s board of directors may deem relevant. In addition, New Katapult’s ability to pay dividends is limited by covenants of Katapult’s existing and outstanding indebtedness and may be limited by covenants of any future indebtedness New Katapult incurs. As a result, you may not receive any return on an investment in New Katapult’s common stock unless you sell New Katapult’s common stock for a price greater than that which you paid for it.

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If securities analysts do not publish research or reports about New Katapult’s business or if they downgrade New Katapult’s stock or New Katapult’s sector, New Katapult’s stock price and trading volume could decline.

The trading market for New Katapult’s common stock will rely in part on the research and reports that industry or financial analysts publish about New Katapult or its business. New Katapult will not control these analysts. In addition, some financial analysts may have limited expertise with Katapult’s model and operations. Furthermore, if one or more of the analysts who do cover New Katapult downgrade its stock or industry, or the stock of any of its competitors, or publish inaccurate or unfavorable research about its business, the price of New Katapult’s stock could decline. If one or more of these analysts ceases coverage of New Katapult or fails to publish reports on it regularly, New Katapult could lose visibility in the market, which in turn could cause its stock price or trading volume to decline.

Future sales, or the perception of future sales, by New Katapult or its stockholders in the public market following the merger could cause the market price for New Katapult’s common stock to decline.

The sale of shares of New Katapult’s common stock in the public market, or the perception that such sales could occur, could harm the prevailing market price of shares of New Katapult’s common stock. These sales, or the possibility that these sales may occur, also might make it more difficult for New Katapult to sell equity securities in the future at a time and at a price that it deems appropriate.

Upon consummation of the merger, using the value of the Trust Account as of May11, 2021, and subject to the assumptions set forth in “Basis of Presentation and Glossary”, New Katapult would have a total of approximately 97.6million shares of common stock (assuming no redemptions) outstanding. All shares issued in the merger will be freely tradable without registration under the Securities Act and without restriction by persons other than New Katapult’s “affiliates” (as defined under Rule 144 of the Securities Act, “Rule 144”), including New Katapult’s directors, executive officers and other affiliates.

The Sponsor and the holder of the Founder Shares, and substantially all holders of Katapult’s common stock have agreed with FinServ, subject to certain exceptions, not to transfer or dispose of their New Katapult common stock (other than New Katapult common stock underlying the Private Placement Units) during the period from the date of the closing of the merger through the earlier of (i) 180 days after the consummation of the merger, (ii) the date that the closing price of the New Katapult common stock equals or exceeds $12.00 for 20 trading days within any 30 trading day period following the 90th day following the merger and (iii) the consummation of a liquidation, merger, capital stock exchange, reorganization or other similar transaction that results in all of New Katapult’s stockholders having the right to exchange their shares of New Katapult common stock for cash, securities or other property. FinServ’s current officers and directors and their affiliates have further agreed not to transfer or disposed of the New Katapult common stock underlying the Private Placement Units until 30 days following the merger.

Upon the expiration or waiver of the lock-ups described above, shares held by stockholders of New Katapult will be eligible for resale, except that shares held by certain substantial holders of Katapult’s common stock (determined on an as-converted basis) (the “Investors”) and certain other stockholders of New Katapult will be subject to volume, manner of sale and other limitations under Rule 144, when such rule becomes applicable to FinServ. In addition, pursuant to the A&R RRA, the Investors and certain other stockholders will have the right, subject to certain conditions, to require New Katapult to register the sale of their shares of New Katapult’s common stock under the Securities Act. By exercising their registration rights and selling a large number of shares, these stockholders could cause the prevailing market price of New Katapult’s common stock to decline. Following completion of the merger, the shares covered by registration rights will represent approximately 64.3% of New Katapult’s outstanding common stock.

As restrictions on resale end or if these stockholders exercise their registration rights, the market price of shares of New Katapult’s common stock could drop significantly if the holders of these shares sell them or are perceived by the market as intending to sell them. These factors could also make it more difficult for New Katapult to raise additional funds through future offerings of New Katapult’s shares of Class A Common Stock or other securities.

In addition, the shares of New Katapult common stock reserved for future issuance under New Katapult’s equity incentive plans will become eligible for sale in the public market once those shares are issued, subject to provisions relating to various vesting agreements, lock-up agreements and, in some cases, limitations on volume

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and manner of sale applicable to affiliates under Rule 144, as applicable. The number of shares of New Katapult’s common stock expected to be reserved for future issuance under its equity incentive plan is equal to the sum of (a) 10% of the aggregate number of shares of New Katapult common stock outstanding at closing, on a non-fully diluted basis (but without inclusion of any Earn-Out Shares) and (b) the number of Earn-Out Shares to be issued to employee recipients in connection with the reallocation of employee-held Earn-Out Shares that are forfeited during the six years following the closing. New Katapult is expected to file one or more registration statements on Form S-8 under the Securities Act to register shares of New Katapult’s common stock or securities convertible into or exchangeable for shares of New Katapult’s common stock issued pursuant to New Katapult’s equity incentive plans. Any such Form S-8 registration statements will automatically become effective upon filing. Accordingly, shares registered under such registration statements will be available for sale in the open market.

In the future, New Katapult may also issue its securities in connection with investments or acquisitions. The amount of shares of New Katapult’s common stock issued in connection with an investment or acquisition could constitute a material portion of New Katapult’s then-outstanding shares of Class A Common Stock. Any issuance of additional securities in connection with investments or acquisitions may result in additional dilution to New Katapult’s stockholders.

Anti-takeover provisions in New Katapult’s organizational documents could delay or prevent a change of control.

Certain provisions of New Katapult’s second amended and restated certificate of incorporation and amended and restated bylaws to become effective upon the consummation of the merger may have an anti-takeover effect and may delay, defer or prevent a merger, acquisition, tender offer, takeover attempt or other change of control transaction that a stockholder might consider in its best interest, including those attempts that might result in a premium over the market price for the shares held by New Katapult’s stockholders.

These provisions provide for, among other things:

•        the ability of New Katapult’s board of directors to issue one or more series of preferred stock;

•        advance notice for nominations of directors by stockholders and for stockholders to include matters to be considered at New Katapult’s annual meetings;

•        certain limitations on convening special stockholder meetings;

•        limiting the ability of stockholders to act by written consent; and

•        New Katapult’s board of directors have the express authority to make, alter or repeal New Katapult’s amended and restated bylaws.

These anti-takeover provisions could make it more difficult for a third party to acquire New Katapult, even if the third party’s offer may be considered beneficial by many of New Katapult’s stockholders. As a result, New Katapult’s stockholders may be limited in their ability to obtain a premium for their shares. These provisions could also discourage proxy contests and make it more difficult for you and other stockholders to elect directors of your choosing and to cause New Katapult to take other corporate actions you desire. See “Description of New Katapult Capital Stock.”

New Katapult’s second amended and restated certificate of incorporation will designate the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by New Katapult’s stockholders, which could limit New Katapult’s stockholders’ ability to obtain a favorable judicial forum for disputes with New Katapult or its directors, officers, employees or stockholders.

New Katapult’s second amended and restated certificate of incorporation will provide that, subject to limited exceptions, any (1) derivative action or proceeding brought on behalf of New Katapult, (2) action asserting a claim of breach of a fiduciary duty owed by any director, officer, stockholder or employee to New Katapult or its stockholders, (3) action asserting a claim arising pursuant to any provision of the DGCL or New Katapult’s amended and restated certificate of incorporation or New Katapult’s amended and restated bylaws, or (4) action asserting a claim governed by the internal affairs doctrine shall, to the fullest extent permitted by law, be exclusively brought in the Court of Chancery of the State of Delaware or, if such court does not have subject matter jurisdiction thereof, another state or federal court located within the State of Delaware. Any person or entity purchasing or otherwise

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acquiring any interest in shares of New Katapult’s capital stock shall be deemed to have notice of and to have consented to the provisions of New Katapult’s certificate of incorporation described above. This choice of forum provision may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with New Katapult or its directors, officers or other employees, which may discourage such lawsuits against New Katapult and its directors, officers and employees. Alternatively, if a court were to find these provisions of New Katapult’s amended and restated certificate of incorporation inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, New Katapult may incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect New Katapult’s business and financial condition.

Certain of New Katapult’s stockholders, including the Sponsor, may engage in business activities which compete with New Katapult or otherwise conflict with New Katapult’s interests.

The Sponsor is in the business of making investments in companies and may from time to time acquire and hold interests in businesses that compete directly or indirectly with New Katapult. New Katapult’s amended and restated certificate of incorporation will provide that none of the Sponsor, any of their respective affiliates or any director who is not employed by New Katapult (including any non-employee director who serves as one (1) of New Katapult’s officers in both his director and officer capacities) or his or her affiliates will have any duty to refrain from engaging, directly or indirectly, in the same business activities or similar business activities or lines of business in which New Katapult operates. The Sponsor also may pursue acquisition opportunities that may be complementary to New Katapult’s business and, as a result, those acquisition opportunities may not be available to New Katapult.

Risks Relating to FinServ’s Accounting of its Warrants

FinServ has identified a material weakness in its internal control over financial reporting. This material weakness could continue to adversely affect FinServ’s ability to report its results of operations and financial condition accurately and in a timely manner.

FinServ’s management is responsible for establishing and maintaining adequate internal control over financial reporting designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. FinServ’s management is likewise required, on a quarterly basis, to evaluate the effectiveness of its internal controls and to disclose any changes and material weaknesses identified through such evaluation in those internal controls. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of annual or interim financial statements will not be prevented or detected on a timely basis.

As described elsewhere in this proxy statement/prospectus, FinServ identified a material weakness in its internal control over financial reporting related to the accounting for the warrants FinServ issued in connection with its initial public offering in November 2019. As a result of this material weakness, FinServ’s management concluded that its internal control over financial reporting was not effective as of December31, 2020 and December31, 2019. This resulted in a restatement of FinServ’s warrant liabilities, Class A common stock subject to possible redemption, change in fair value of warrant liabilities, additional paid-in capital, accumulated deficit and related financial disclosures.

To respond to this material weakness, FinServ has devoted, and plans to continue to devote, significant effort and resources to the remediation and improvement of its internal control over financial reporting. While FinServ has processes to identify and appropriately apply applicable accounting requirements, it plans to enhance these processes to better evaluate our research and understanding of the nuances of the complex accounting standards that apply to our financial statements. FinServ’s plans at this time include providing enhanced access to accounting literature, research materials and documents and increased communication among its personnel and third-party professionals with whom FinServ consults regarding complex accounting applications. The elements of FinServ’s remediation plan can only be accomplished over time, and FinServ can offer no assurance that these initiatives will ultimately have the intended effects. For a discussion of FinServ’s management’s consideration of the material weakness identified related to our accounting for the warrants FinServ issued in connection with the November 2019 Initial Public Offering, see “Note 2 — Restatement of Previously Issued Financial Statements” to FinServ’s financial statements included elsewhere in this proxy statement/prospectus.

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Any failure to maintain such internal control could adversely impact FinServ’s ability to report its financial position and results from operations on a timely and accurate basis. If FinServ’s financial statements are not accurate, investors may not have a complete understanding of its operations. Likewise, if its financial statements are not filed on a timely basis, FinServ could be subject to sanctions or investigations by the stock exchange on which its common stock is listed, the SEC or other regulatory authorities. In either case, there could result a material adverse effect on FinServ’s business. Failure to timely file will cause FinServ to be ineligible to utilize short form registration statements on Form S-3 or Form S-4, which may impair its ability to obtain capital in a timely fashion to execute its business strategies or issue shares to effect an acquisition. Ineffective internal controls could also cause investors to lose confidence in FinServ’s reported financial information, which could have a negative effect on the trading price of its securities.

FinServ can give no assurance that the measures it has taken and plans to take in the future will remediate the material weakness identified or that any additional material weaknesses or restatements of financial results will not arise in the future due to a failure to implement and maintain adequate internal control over financial reporting or circumvention of these controls. In addition, even if FinServ is successful in strengthening its controls and procedures, in the future those controls and procedures may not be adequate to prevent or identify irregularities or errors or to facilitate the fair presentation of its financial statements.

FinServ’s warrants are required to be accounted for as liabilities rather than as equity and such requirement resulted in a restatement of its previously issued financial statements.

On April12, 2021, the staff of the SEC issued a public statement entitled “Staff Statement on Accounting and Reporting Considerations for Warrants issued by Special Purpose Acquisition Companies (“SPACs”)” (the “Statement”). In the Statement, the SEC staff expressed its view that certain terms and conditions common to SPAC warrants may require the warrants to be classified as liabilities on the SPAC’s balance sheet as opposed to equity. Since issuance, FinServ’s warrants were accounted for as equity within its balance sheet, and after discussion and evaluation, including with its independent auditors, FinServ has concluded that its warrants should be presented as liabilities with subsequent fair value remeasurement. Therefore, FinServ conducted a valuation of its warrants and restated its previously issued financial statements, which resulted in unanticipated costs and diversion of management resources and may result in potential loss of investor confidence. Although FinServ has now completed the restatement, it cannot guarantee that it will have no further inquiries from the SEC or Nasdaq regarding its restated financial statements or matters relating thereto.

Any future inquiries from the SEC or Nasdaq as a result of the restatement of FinServ’s historical financial statements will, regardless of the outcome, likely consume a significant amount of its resources in addition to those resources already consumed in connection with the restatement itself.

The restatement of FinServ’s financial statements in May 2021 has subjected FinServ to additional risks and uncertainties, including increased professional costs and the increased possibility of legal proceedings.

As a result of the restatement of its financial statements, FinServ has become subject to additional risks and uncertainties, including, among others, increased professional fees and expenses and time commitment that may be required to address matters related to the restatements, and scrutiny of the SEC and other regulatory bodies which could cause investors to lose confidence in its reported financial information and could subject FinServ to civil or criminal penalties or shareholder litigation. FinServ could face monetary judgments, penalties or other sanctions that could have a material adverse effect on its business, financial condition and results of operations and could cause its stock price to decline.

FinServ’s warrants are accounted for as a warrant liability and are recorded at fair value upon issuance with changes in fair value each period to be reported in earnings, which may have an adverse effect on the market price of its Class A Common Stock.

Following the restatement of its historical financial statements, FinServ accounted for its warrants as a warrant liability recorded at fair value upon issuance with any changes in fair value each period reported in earnings based upon a valuation report obtained from its independent third party valuation firm. The impact of changes in fair value on earnings may have an adverse effect on the market price of FinServ’s securities.

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Risks Relating to Redemption

There is no guarantee that a FinServ public stockholder’s decision whether to redeem their shares for a pro rata portion of the Trust Account will put such stockholder in a better future economic position.

No assurance can be given as to the price at which a public stockholder may be able to sell the shares of New Katapult common stock in the future following the completion of the merger. Certain events following the consummation of any business combination, including the merger, may cause an increase in New Katapult’s stock price, and may result in a lower value realized now than a FinServ stockholder might realize in the future had the stockholder not elected to redeem such stockholder’s shares of Class A Common Stock. Similarly, if a FinServ public stockholder does not redeem his, her or its shares, such stockholder will bear the risk of ownership of New Katapult common stock after the consummation of the merger, and there can be no assurance that a stockholder can sell his, her or its shares of New Katapult common stock in the future for a greater amount than the redemption price set forth in this proxy statement/prospectus. A FinServ public stockholder should consult his, her or its own tax and/or financial advisor for assistance on how this may affect its individual situation.

If FinServ public stockholders fail to comply with the redemption requirements specified in this proxy statement/prospectus, they will not be entitled to redeem their shares of Class A Common Stock for a pro rata portion of the funds held in the Trust Account.

To exercise their redemption rights, holders of FinServ Class A Common Stock are required to deliver their stock, either physically or electronically using Depository Trust Company’s DWAC System, to FinServ’s transfer agent prior to the vote at the Special Meeting. If a holder fails to properly seek redemption as described in this proxy statement/prospectus and the merger with Katapult is consummated, such holder will not be entitled to redeem these shares for a pro rata portion of funds deposited in the Trust Account. See the section entitled “Special Meeting of Stockholders — Redemption Rights” for additional information on how to exercise your redemption rights.

If you or a “group” of stockholders of which you are a part are deemed to hold an aggregate of more than 15% of the shares of Class A Common Stock, you (or, if a member of such a group, all of the members of such group in the aggregate) will lose the ability to redeem all such shares in excess of 15% of the Class A Common Stock.

A public stockholder, together with any of his, her or its affiliates or any other person with whom it is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Exchange Act), will be restricted from redeeming in the aggregate his, her or its shares of Class A Common Stock or, if part of such a group, the group’s Class A Common Stock, in excess of 15% of the shares of Class A Common Stock. Your inability to redeem any such excess shares of Class A Common Stock could resulting in you suffering a material loss on your investment in FinServ if you sell such excess Class A Common Stock in open market transactions. FinServ cannot assure you that the value of such excess Class A Common Stock will appreciate over time following the merger or that the market price of the Class A Common Stock will exceed the per-share redemption price.

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UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

The following unaudited pro forma condensed combined financial information is provided to aid you in your analysis of the financial aspects of the merger and the PIPE Investment.

The unaudited pro forma condensed combined balance sheet gives pro forma effect to the merger, treated as a reverse recapitalization for accounting purposes, and the PIPE Investment as if they had been consummated on December31, 2020. The unaudited pro forma condensed combined statement of operations for the year ended December31, 2020, gives effect to the merger and the PIPE Investment as if they had occurred on January1, 2020.

The unaudited pro forma condensed combined financial information has been derived from and should be read in conjunction with:

•        the accompanying notes to the unaudited pro forma condensed combined financial information;

•        the audited historical financial statements of FinServ as of and for the year ended December31, 2020, and the related notes thereto, included elsewhere in this proxy statement/prospectus;

•        the audited historical consolidated financial statements of Katapult as of and for the year ended December31, 2020, and the related notes thereto, included elsewhere in this proxy statement/prospectus; and

•        the sections entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations of FinServ,” “Management’s Discussion and Analysis of Financial Condition and Results of Operation of Katapult,” and other financial information relating to FinServ and Katapult included elsewhere in this proxy statement/prospectus.

The unaudited pro forma condensed combined financial information is for illustrative purposes only and is not necessarily indicative of what the actual results of operations and financial position would have been had the merger and the PIPE Investment taken place on the dates indicated, nor are they indicative of the future consolidated results of operations or financial position of the combined company.

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UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
AS OF DECEMBER 31, 2020
(in thousands, except share and per share amounts)

	Historical						Pro Forma
	5(A) FinServ			5(B) Katapult			Transaction Accounting Adjustments				Pro Forma Balance Sheet
ASSETS
Current assets:
Cash and cash equivalents	$	1,044		$	65,622		$	30,005		5(a)	$	96,671
Restricted cash		—			3,975			—				3,975
Accounts receivable, net		—			1,636			—				1,636
Property held for lease, net of accumulated depreciation and impairment		—			66,737			—				66,737
Prepaid expenses and other current assets		72			1,248			(846	)	5(b)		474
Prepaid income taxes		10			—			—				10
Total current assets		1,126			139,218			29,159				169,503
Property and equipment, net		—			330			—				330
Security deposits		—			91			—				91
Intangible assets, net		—			188			—				188
Marketable securities held in Trust Account		251,249			—			(251,249	)	5(c)		—
Total assets	$	252,375		$	139,827		$	(222,090	)		$	170,112
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	171		$	1,688		$	—			$	1,859
Accrued liabilities		—			12,967			(1,886	)	5(d)		11,081
Unearned revenue		—			2,652			—				2,652
Non-revolving line of credit, related parties		—			—			—				—
Income taxes payable		—			—			—				—
Total current liabilities		171			17,307			(1,886	)			15,592
Non-revolving line of credit, related parties		—			—			—				—
Revolving line of credit		—			74,316			—				74,316
Long term debt		—			36,413			—				36,413
Other liabilities		—			12,740			(12,744	)	5(e)		(4	)
Warrant liability		44,785			—			—				44,785
Deferred underwriting fee payable		9,350			—			(9,350	)	5(f)		—
Total liabilities		54,306			140,776			(23,980	)			171,102
COMMITMENTS AND CONTINGENCIES
Katapult Redeemable convertible preferred stock (Series C), $.001 par value		—			49,894			(49,894	)	5(g)		—
FinServ Class A Common stock subject to possible redemption		193,068			—			(193,068	)	5(h)		—
Stockholders’ Equity
Katapult Common stock, $.001 par value		—			10			(10	)	5(i)		—
FinServ Preferred stock, $0.0001 par value		—			—			—				—
FinServ Class A common stock, $0.0001 par value		1			—			11		5(i)		12
FinServ Class B common stock, $0.0001 par value		1			—			(1	)	5(i)		—
Additional paid-in capital		39,992			7,196			19,979		5(i)		67,167
Retained earnings (accumulated deficit)		(34,993	)		(58,049	)		24,873		5(i)		(68,169	)
Total stockholders’ equity		5,001			(50,843	)		44,852				(990	)
Total liabilities and stockholders’ equity	$	252,375		$	139,827		$	(222,090	)		$	170,112

See accompanying notes to the unaudited pro forma condensed combined financial information.

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UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2020
(in thousands, except share and per share amounts)

	Historical						Pro Forma
	6(A) FinServ			6(B) Katapult			Transaction Accounting Adjustments				Pro Forma Statement of Operations
Revenue:
Rental revenue	$	—		$	246,927		$	—			$	246,927
Other revenue		—			200			—				200
Service fees		—			73			—				73
Total revenue		—			247,200			—				247,200
Cost of revenue		—			167,412			—				167,412
Total gross profit		—			79,788			—				79,788
Operating expenses:
Servicing costs		—			4,077			—				4,077
Underwriting fees		—			2,344			—				2,344
Professional and consulting fees		—			2,949			—				2,949
Technology and data analytics		—			6,498			—				6,498
Bad debt expense		—			16,064			—				16,064
General and administrative		796			10,950			9,570		6(a)		21,316
Total operating expenses		796			42,882			9,570				53,248
Income (loss) from operations		(796	)		36,906			(9,570	)			26,540
Other income (expense):
Loss on extinguishment of debt		—			(402	)		—				(402	)
Interest expense and other fees		—			(13,588	)		—				(13,588	)
Other income		—			102			—				102
Interest earned on money market account		12			—			—				12
Interest earned on marketable securities held in Trust Account		1,134			—			(1,134	)	6(b)		—
Change in fair value of warrant liability		(32,081	)		—			—				(32,081	)
Income (loss) before provision for income taxes		(31,731	)		23,018			(10,704	)			(19,417	)
Provision for income taxes		(196	)		(487	)		226		6(c)		(457	)
Net income (loss)	$	(31,927	)	$	22,531		$	(10,478	)		$	(19,874	)
Net income (loss) available to common stockholders	$	(32,665	)	$	1,933						$	(19,874	)
Weighted average common shares outstanding (no redemptions)
Basic		6,915,000			8,923,293							105,090,081		6(d)
Diluted		6,915,000			25,015,960							105,090,081		6(d)
Weighted average common shares outstanding (maximum redemptions)
Basic		6,915,000			8,923,293							105,177,711		6(d)
Diluted		6,915,000			25,015,960							105,177,711		6(d)
Earnings (loss) per common share (no and maximum redemptions)
Basic	$	(4.72	)	$	0.22						$	(0.19)		6(d)
Diluted	$	(4.72	)	$	0.08						$	(0.19)		6(d)

See accompanying notes to the unaudited pro forma condensed combined financial information.

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1.      Description of the Transactions

The Merger

The terms and conditions of the merger are contained in the merger agreement, which is attached as Annex A to this proxy statement/prospectus. If the merger agreement is approved and adopted and the merger is subsequently completed, Merger Sub 1 will merge with and into Katapult, with Katapult surviving the merger as a wholly owned subsidiary of FinServ, followed immediately by the merger of the resulting company with and into Merger Sub 2, with Merger Sub 2 surviving the merger as a wholly owned subsidiary of FinServ.

Immediately prior to the First Effective Time, each share of Katapult preferred stock issued and outstanding will be converted into a number of shares of Katapult common stock in accordance with the (i) irrevocable written consent executed by certain Pre-Closing Holders, who, collectively, hold a majority of Katapult preferred stock (the “Conversion Written Consent”) and (ii) fourth amended and restated certificate of incorporation of Katapult (the “Katapult charter”) (the “Katapult Preferred Conversion”).

At the First Effective Time, each share of Katapult common stock (including common stock to be issued as a result of the conversion of Katapult preferred stock in connection with the merger) that is issued and outstanding immediately prior to the First Effective Time (other than dissenting shares and Unvested Katapult Restricted Shares) will be cancelled and converted into the right to receive the applicable portion of the merger consideration, in accordance with the Allocation Schedule, consisting of (i) cash consideration, as determined under the merger agreement and further described herein, (ii) a number of shares of New Katapult common stock equal to (a) $833.0million (subject to adjustment in accordance with the terms of the merger agreement and net of the value of all Katapult Options to be converted into New Katapult options), minus the aggregate amount of cash paid in clause (i), divided by (b) 10 and (iii) the applicable portion of the 7,500,000 restricted shares of New Katapult common stock that will vest upon, among other things, the achievement of certain earn-out thresholds prior to the sixth anniversary of the closing of the merger. See “The Merger Agreement — Merger Consideration” in this proxy statement/prospectus.

The PIPE Investment

In connection with the execution of the merger agreement, each of FinServ and certain third-party investors (the “PIPE Investors”) entered into subscription agreements (the “PIPE Agreements”) pursuant to which the PIPE Investors have respectively subscribed for 15,000,000 newly-issued shares of Class A Common Stock to be issued at the closing of the merger. The obligations to consummate the subscriptions contemplated by the PIPE Agreements are conditioned upon, among other things, customary closing conditions and the consummation of the merger as set forth in the PIPE Agreements.

2.      Basis of Presentation

The unaudited pro forma condensed combined financial statements were prepared in accordance with Article 11 of SEC Regulation S-X as amended by the final rule, Release No. 33-10786 “Amendments to Financial Disclosures about Acquired and Disposed Businesses.” Release No. 33-10786 replaces the existing pro forma adjustment criteria with simplified requirements to depict the accounting for the transaction (“Transaction Accounting Adjustments”) and present the reasonably estimable synergies and other transaction effects that have occurred or are reasonably expected to occur (“Management’s Adjustments”). FinServ has elected not to present Management’s Adjustments and will only be presenting Transaction Accounting Adjustments in the unaudited pro forma condensed combined financial information. The Transaction Accounting Adjustments presented in the unaudited pro forma condensed combined financial information have been identified and presented to provide relevant information necessary for an understanding of the combined company upon consummation of the merger and the PIPE Investment.

The unaudited pro forma condensed combined balance sheet as of December31, 2020 gives effect to the merger and the PIPE Investment as if they occurred on December31, 2020. The unaudited pro forma condensed combined statement of operations for the year ended December31, 2020 gives effect to the merger and the PIPE Investment as if they occurred on January1, 2020.

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Management has made significant estimates and assumptions in its determination of the pro forma Transaction Accounting Adjustments. As the unaudited pro forma condensed combined financial information has been prepared based on these estimates, the final amounts recorded may differ materially from the information presented.

The pro forma Transaction Accounting Adjustments reflecting the consummation of the merger and the PIPE Investment are based on certain currently available information and certain assumptions and methodologies that FinServ believes are reasonable under the circumstances. The pro forma Transaction Accounting Adjustments, which are described in the accompanying notes, may be revised as additional information becomes available and is evaluated. Therefore, it is likely that the actual adjustments will differ from the pro forma Transaction Accounting Adjustments, and it is possible the difference may be material.

The unaudited pro forma condensed combined financial information does not give effect to any anticipated synergies, operating efficiencies, tax savings, or cost savings that may be associated with the merger. FinServ and Katapult have not had any historical relationship prior to the merger. Accordingly, no pro forma Transaction Accounting Adjustments were required to eliminate activities between the companies. Amounts are presented in thousands, except for share and per share amounts or as otherwise specified.

The unaudited pro forma condensed combined financial information considers two redemption scenarios as follows:

•        Assuming no redemptions:    This scenario assumes that no FinServ public stockholders exercise their redemption rights demanding redemption of their shares of Class A Common Stock for a pro rata portion of the funds in the Trust Account, and thus the full amount held in the Trust Account as of closing is available for the merger; and

•        Assuming maximum redemptions:    This scenario assumes that FinServ public stockholders holding 17,537,289shares of Class A Common Stock will exercise their redemption rights demanding redemption of their Class A Common Stock for a pro rata portion (approximately $10.05 per share) of the funds in the Trust Account. Under the merger agreement, it is a condition to Katapult’s obligations to close that after giving effect to any redemptions and the PIPE Investment, FinServ has at least $225million in available distributable cash. This scenario gives effect to redemptions of 17,537,289share of Class A Common Stock for aggregate redemption payments of $176.2million using a per-share redemption price of $10.05 (due to investment related gains in the Trust Account).

Any payments to FinServ public stockholders for redemptions would have a corresponding decrease on the Cash Consideration paid to the sellers in connection with the merger such that the cash outflows under either redemption scenario are the same. Additionally, any redemptions of shares of Class A Common Stock would have a correlated, but not direct, increase in the Stock Consideration paid to the sellers in connection with the merger. The difference in the relationship between shares redeemed and Stock Consideration issued is a result of the per-share redemption price being $10.05 (due to investment-related gains in the Trust Account) compared to the $10.00 per share assumed in determining the Share Consideration per the merger agreement. Under either scenario, the unaudited pro forma condensed combined financial information would be the same, and as such, the two scenarios have not been presented separately.

The unaudited pro forma condensed combined financial information and related notes have been derived from and should be read in conjunction with:

•        the audited historical financial statements of FinServ as of and for the year ended December31, 2020, and the related notes thereto, included elsewhere in this proxy statement/prospectus;

•        the audited historical consolidated financial statements of Katapult as of and for the year ended December31, 2020, and the related notes thereto, included elsewhere in this proxy statement/prospectus; and

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•        the sections entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations of FinServ,” “Management’s Discussion and Analysis of Financial Condition and Results of Operation of Katapult,” and other financial information relating to FinServ and Katapult included elsewhere in this proxy statement/prospectus.

The unaudited pro forma condensed combined financial information is for illustrative purposes only and is not necessarily indicative of what the actual results of operations and financial position would have been had the merger and PIPE Investment taken place on the dates indicated, nor are they indicative of the future consolidated results of operations or financial position of the combined company.

3.      Accounting for the Merger

The merger will be accounted for as a reverse recapitalization, in accordance with GAAP. Under this method of accounting, although FinServ will issue shares for outstanding equity interests of Katapult in the merger, FinServ will be treated as the “acquired” company for financial reporting purposes. Accordingly, the merger will be treated as the equivalent of Katapult issuing stock for the net assets of FinServ, accompanied by a recapitalization. The net assets of FinServ will be stated at historical cost, with no goodwill or other intangible assets recorded. Operations prior to the merger will be those of Katapult.

Katapult has been determined to be the accounting acquirer based on the evaluation of the following facts and circumstances under both the no and maximum redemption scenarios:

•        The former owners of Katapult hold the majority of voting rights in the combined company;

•        Katapult and its former owners have the right to appoint a majority of the directors in the combined company;

•        Katapult’s existing senior management team will comprise senior management of the combined company;

•        The operations of the combined company will represent the operations of Katapult; and

•        The combined company will assume Katapult’s name and headquarters.

4.      Capitalization

The merger agreement provides that available distributable cash, after giving effect to redemptions by FinServ public stockholders and the PIPE Investment, must be at least $225million. As such, the maximum number of shares that can be redeemed by FinServ public stockholders is 17,537,289 for aggregate redemption payments of $176.2million using a per-share redemption price of $10.05 (due to investment-related gains in the Trust Account). Any payments to FinServ public stockholders for redemptions would have a corresponding decrease on the Cash Consideration paid to the sellers in connection with the merger such that the cash outflows under either redemption scenario are the same. Additionally, any redemptions of shares of Class A Common Stock would have a correlated, but not direct, increase in the Stock Consideration paid to the sellers in connection with the merger. The difference in the relationship between shares redeemed and Stock Consideration issued is a result of the per-share redemption price being $10.05 (due to investment-related gains in the Trust Account) compared to the $10.00 per share assumed in determining the Stock Consideration per the merger agreement.

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The following summarizes the pro forma ownership of New Katapult common stock following the merger and PIPE Investment under both the no and maximum redemption scenarios:

	Assuming No Redemptions			Assuming Maximum Redemptions
	Shares	%		Shares	%
Equity Capitalization Summary
Katapult Equity Holders(1)	58,175,081	55.4	%	75,800,000	72.1	%
FinServ Public Stockholders(2)	25,000,000	23.8	%	7,462,711	7.1	%
FinServ Sponsor(3)	6,915,000	6.6	%	6,915,000	6.6	%
PIPE Investors(4)	15,000,000	14.3	%	15,000,000	14.3	%
Total Class A common stock	105,090,081	100.0	%	105,177,711	100.0	%

____________

(1)      Assumes Cash Consideration of $326.2million and Stock Consideration of 58,175,081shares of New Katapult common stock, including 7,500,000 restricted Earn-Out Shares subject to forfeiture, based on the balance of the Trust Account as of December 31, 2020 and resulting available distributable cash under the no redemptions scenario. As the total transaction value is $833.0 million, stock consideration under this scenario, excluding the Earn-Out Shares, is $506.8 million, which equates to 50,675,081 shares at a price of $10.00 per share. Under the maximum redemptions scenario, it is assumed that 17,537,289 shares of Class A Common Stock are redeemed for aggregate redemption payments of $176.2 million using a per-share redemption price of $10.05 (due to investment-related gains in the Trust Account), resulting in Cash Consideration of $150 million and Stock Consideration of 75,800,000 shares of New Katapult common stock, including 7,500,000 restricted Earn-Out Shares subject to forfeiture.

(2)      Assumes maximum redemptions of 17,537,289shares of Class A Common Stock for aggregate redemption payments of $176.2million using a per-share redemption price of $10.05 (due to investment-related gains in the Trust Account).

(3)      Includes 1,543,750shares of New Katapult common stock subject to forfeiture in accordance with the Sponsor Agreement.

(4)      Assumes the PIPE Investment is consummated in accordance with its terms for $150million, with 15,000,000shares of Class A Common Stock issued to the PIPE Investors.

5.      Adjustments to Unaudited Pro Forma Condensed Combined Balance Sheet as of December31, 2020

The pro forma notes and adjustments, based on preliminary estimates that could change materially as additional information is obtained, are as follows:

Pro forma notes

(A)    Derived from the audited balance sheet of FinServ as of December31, 2020.

(B)    Derived from the audited consolidated balance sheet of Katapult as of December31, 2020.

Pro forma Transaction Accounting Adjustments

(a)     To reflect the net cash proceeds from the merger and the PIPE Investment as follows:

	Assuming No Redemptions			Assuming Maximum Redemptions
Release of Trust Account	$	251,249		$	251,249		5	(c)
Proceeds from PIPE Investment		150,000			150,000		5	(i)
Payment to redeeming FinServ public stockholders		—			(176,249	)	5	(i)
Payment of Cash Consideration		(326,249	)		(150,000	)	5	(i)
Payment of transaction expenses		(35,645	)		(35,645	)	5	(i)
Payment of FinServ deferred underwriting fee payable		(9,350	)		(9,350	)	5	(f)
Cash and cash equivalents	$	30,005		$	30,005

(b)    To reflect the reclassification of $846 of deferred transaction costs to additional paid-in capital (see Note 5(i)).

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(c)     To reflect the release of $251,249 from the Trust Account (see Note 5(a)).

(d)    To reflect the payment of $1,886 of accrued transaction costs (see Note 5(a)).

(e)     To reflect the exercise of $12,744 of Katapult warrants which will be exchanged for New Katapult common stock as consideration for the merger (see Note 5(i)). The fair value of the warrants were determined based on the implied value of the Merger transaction, assuming a 95% probability that Katapult would be acquired, and a Black Sholes valuation, assuming a 5% probability that no acquisition would occur.

(f)     To reflect the settlement of $9,350 of deferred underwriting fees incurred during FinServ’s IPO that are contractually due upon completion of the merger (see Note 5(a)).

(g)    To reflect the conversion of $49,894 of Katapult’s redeemable convertible preferred stock (Series C), which will be exchanged for New Katapult common stock as consideration for the merger. As such, this amount is reclassified to permanent equity (see Note 5(i)).

(h)    To reflect the reclassification of FinServ common stock subject to possible redemption of $193,068 to permanent equity immediately prior to the consummation of the merger. (see Note 5(i)).

(i)     To reflect the recapitalization of the combined company through the exchange of all the share capital of Katapult for common stock of New Katapult and the following equity transactions:

	Assuming No Redemptions			Assuming Maximum Redemptions
Reclassification of Katapult redeemable convertible preferred stock	$	49,894		$	49,894		5(g)
Reclassification of FinServ common stock subject to possible redemption		193,068			193,068		5(h)
Exercise of Katapult warrants		12,744			12,744		5(e)
Proceeds from PIPE Investment		150,000			150,000		5(a)
Payment to redeeming FinServ public stockholders		—			(176,249	)	5(a)
Payment of Cash Consideration		(326,249	)		(150,000	)	5(a)
Payment of transaction expenses		(34,605	)		(34,605	)	5(a)
Total shareholders’ equity	$	44,852		$	44,852

Under the terms of the merger agreement, the Cash Consideration paid to the sellers is reduced by any reduction of available distributable cash as a result of redemptions by FinServ public stockholders.

6.      Adjustments to Unaudited Pro Forma Condensed Combined Statement of Operations for the Year Ended December31, 2020

The pro forma notes and adjustments, based on preliminary estimates that could change materially as additional information is obtained, are as follows:

Pro forma notes

(A)    Derived from the audited statement of operations of FinServ for the year ended December31, 2020.

(B)    Derived from the audited consolidated statement of operations of Katapult for the year ended December31, 2020.

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Pro forma Transaction Accounting Adjustments

(a)     To eliminate fees incurred by FinServ under the administrative support agreement of $120 and consulting agreements of $110, respectively, which will cease upon closing of the merger as well as reflect the accelerated vesting of Katapult stock options of $452 and RSUs of $9,348, respectively, that will vest upon closing.

(b)    To eliminate interest income earned on the Trust Account which will be released upon closing of the merger.

(c)     To reflect the income tax effect of the pro forma Transaction Accounting Adjustments at Katapult’s effective tax rate of 2.1%. As a result of historical net operating losses and a full valuation allowance, there are no income tax expense adjustments to be presented for federal purposes in the unaudited pro forma condensed combined statement of operations.

(d)    The pro forma basic and diluted earnings per share amounts presented in the unaudited pro forma condensed combined statement of operations are based upon the number of FinServ shares outstanding at the closing of the merger and the PIPE Investment, assuming the merger and the PIPE Investment occurred on January1, 2020. Does not include the effect of warrants sold in the initial public offering and private placement to purchase 12,832,500shares of Class A common stock in the calculation of diluted income per share, since the exercise of the warrants is contingent upon the occurrence of future events and the inclusion of such warrants would be anti-dilutive.

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FINSERV SPECIAL MEETING OF STOCKHOLDERS

General

FinServ is furnishing this proxy statement/prospectus to its stockholders as part of the solicitation of proxies by the board of directors for use at the Special Meeting to be held on June7, 2021 and at any adjournment or postponement thereof. This proxy statement/prospectus provides FinServ’s stockholders with information they need to know to be able to vote or direct their vote to be cast at the Special Meeting.

Date, Time and Place

The Special Meeting will be held on June7, 2021, at 2:00 p.m. Eastern Time, via a virtual meeting. On or about May18, 2021, FinServ commenced mailing this proxy statement/prospectus and the enclosed form of proxy to its stockholders entitled to vote at the Special Meeting.

Purpose of the Special Meeting

FinServ stockholders are being asked to vote on the following proposals:

1.      the Business Combination Proposal;

2.      the Charter Proposals;

3.      the Director Election Proposal;

4.      the Nasdaq Proposal;

5 .     the Incentive Plan Proposal; and

6.      the Adjournment Proposal (if necessary).

Recommendation of the FinServ Board of Directors

The FinServ board of directors has unanimously determined that the merger, on the terms and conditions set forth in the merger agreement, is advisable and in the best interests of FinServ and its stockholders and has directed that the proposals set forth in this proxy statement/prospectus be submitted to its stockholders for approval at the Special Meeting on the date and at the time and place set forth in this proxy statement/prospectus. The FinServ board of directors unanimously recommends that FinServ’s stockholders vote “FOR” the Business Combination Proposal, “FOR” the Charter Proposals, “FOR” the election of each of the seven (7) directors nominated in the Director Election Proposal, “FOR” the Incentive Plan Proposal and “FOR” the Adjournment Proposal (if necessary).

Voting Power; Record Date

You will be entitled to vote or direct votes to be cast at the Special Meeting if you owned shares of FinServ common stock at the close of business on May11, 2021, which is the record date for the Special Meeting. You are entitled to one (1) vote for each share of FinServ common stock that you owned as of the close of business on the record date. If your shares are held in “street name” or are in a margin or similar account, you should contact your broker, bank or other nominee to ensure that votes related to the shares you beneficially own are properly counted. On the record date, there were 31,915,000shares of common stock outstanding, of which 25,665,000 are shares of Class A Common Stock and 6,915,000 are Founder Shares or Private Placement Units.

Vote of the Sponsor and FinServ’s Directors and Officers

FinServ has entered into an agreement with the Sponsor and FinServ’s officers and directors pursuant to which each has agreed to vote any shares of FinServ common stock owned by it in favor of the Business Combination Proposal.

The Sponsor has waived any redemption rights, including with respect to shares of FinServ common stock purchased in FinServ’s IPO or in the aftermarket, in connection with merger. The Founder Shares and Private Placement Units held by the Sponsor have no redemption rights upon FinServ’s liquidation and will be worthless

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if no business combination is effected by FinServ by November5, 2021. However, the Sponsor is entitled to redemption rights upon FinServ’s liquidation with respect to any shares of Class A Common Stock they may own other than those underlying the Private Placement Units.

Quorum and Required Vote for Proposals for the Special Meeting

A quorum of FinServ stockholders is necessary to hold a valid meeting. A quorum will be present at the Special Meeting if a majority of the issued and outstanding FinServ common stock entitled to vote as of the record date at the Special Meeting is represented virtually or by proxy. Abstentions and broker non-votes will be counted as present for the purpose of determining a quorum. The holders of the Founder Shares, who currently own 21.7% of the issued and outstanding shares of FinServ common stock, will count towards this quorum. As of the record date for the Special Meeting, 15,957,501shares of FinServ common stock would be required to achieve a quorum.

Approval of the Business Combination Proposal, the Nasdaq Proposal and the Incentive Plan Proposal require the affirmative vote of a majority of the votes cast by holders of common stock, voting together as a single class at a meeting at which a quorum is present. Approval of the Charter Proposals requires the affirmative vote of the holders of a majority of the outstanding shares of common stock, voting together as a single class, and the affirmative vote of the holders of a majority of the Class B Common Stock then outstanding, voting separately as a single class. Approval of the election of each of the seven (7) directors nominated in the Director Election Proposal requires a plurality of the votes cast by holders of common stock at a meeting at which a quorum is present. Approval of the Adjournment Proposal requires the affirmative vote of a majority of the votes cast by holders of common stock, voting together as a single class, regardless of whether a quorum is present.

If FinServ stockholders fail to approve the Business Combination Proposal, or, unless otherwise waived by Katapult and FinServ, the Charter Proposals or the Incentive Plan Proposal, the merger will not occur. The Charter Proposals, the Director Election Proposal and the Incentive Plan Proposal are conditioned on the approval of the Business Combination Proposal. The Adjournment Proposal is not conditioned on the approval of any other proposal. If the Business Combination Proposal is not approved, the other proposals (except the Adjournment Proposal) will not be presented to the stockholders for a vote. It is important for you to note that in the event that the Business Combination Proposal does not receive the requisite vote for approval, then the merger may not be consummated. If FinServ does not consummate the merger and fails to complete an initial business combination by November5, 2021, FinServ will be required to dissolve and liquidate its Trust Account by returning the then remaining funds in such account to the public stockholders.

Recommendation of the FinServ Board of Directors

FinServ’s board of directors unanimously determined that the merger agreement and the transactions contemplated thereby, including the merger, were advisable and in the best interests of, FinServ and its stockholders. Accordingly, FinServ’s board of directors unanimously recommends that its stockholders vote “FOR” the Business Combination Proposal and the other proposals herein.

When you consider the recommendation of FinServ’s board of directors in favor of approval of these proposals, you should keep in mind that FinServ’s directors and officers have interests in the merger that are different from or in addition to (and which may conflict with) your interests as a stockholder. These interests include, among other things:

•        If the merger or another business combination is not consummated by November5, 2021, FinServ will cease all operations except for the purpose of winding up, subject to the approval of its remaining stockholders and its board of directors, dissolving and liquidating. In such event, the 6,250,000 Founder Shares held by the Sponsor, which were acquired for an aggregate purchase price of $25,000 (and a subsequent dividend thereon) prior to FinServ’s IPO, would be worthless because the holders are not entitled to participate in any redemption or distribution with respect to such shares. Such shares had an estimated aggregate market value of $70,062,500 based upon the closing price of $11.21 per public share on the Nasdaq on May11, 2021, the record date for the Special Meeting.

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•        The Sponsor purchased an aggregate of 665,000 units (the “Private Placement Units”) from FinServ for an aggregate purchase price of $6,650,000 (or $10.00 per unit) in a private placement. These purchases took place on a private placement basis simultaneously with the consummation of FinServ’s IPO. A portion of the proceeds FinServ received from these purchases were placed in the Trust Account. Such units had an estimated aggregate value of $8,312,500 based on the closing price of $12.50 per unit on the Nasdaq on May11, 2021, the record date for the Special Meeting. The Private Placement Units are not subject to redemption and will become worthless if FinServ does not consummate a business combination by November5, 2021.

•        If FinServ is unable to complete a business combination within the required time period, its executive officers will be personally liable under certain circumstances described herein to ensure that the proceeds in the Trust Account are not reduced by the claims of target businesses or claims of vendors or other entities that are owed money by FinServ for services rendered or contracted for or products sold to FinServ. If FinServ consummates a business combination, on the other hand, FinServ will be liable for all such claims.

•        FinServ’s officers and directors, and their affiliates are entitled to reimbursement of out-of-pocket expenses incurred by them in connection with certain activities on FinServ’s behalf, such as identifying and investigating possible business targets and business combinations. However, if FinServ fails to consummate a business combination within the required period, they will not have any claim against the Trust Account for reimbursement. Accordingly, FinServ may not be able to reimburse these expenses if the merger or another business combination, are not completed by November5, 2021.

•        The continued indemnification of current directors and officers and the continuation of directors’ and officers’ liability insurance.

Abstentions and Broker Non-Votes

Abstentions are considered present for the purposes of establishing a quorum and will have the same effect as a vote “AGAINST” the Charter Proposals. Because there are no “non-routine” matters being proposed, there will be no broker non-votes at the Special Meeting.

Voting Your Shares

Each share of FinServ common stock that you own in your name entitles you to one (1) vote on each of the proposals for the Special Meeting. Your one or more proxy cards show the number of shares of FinServ common stock that you own. There are several ways to have your shares of common stock voted:

•        You can submit a proxy to vote your shares by completing, signing, dating and returning the enclosed proxy card in the postage-paid envelope provided. If you hold your shares in “street name” through a bank, broker or other nominee, you will need to follow the instructions provided to you by your bank, broker or other nominee to ensure that your shares are represented and voted at the Special Meeting. If you submit a proxy card, your “proxy,” whose name is listed on the proxy card, will vote your shares as you instruct on the proxy card. If you sign and return the proxy card but do not give instructions on how to vote your shares, your shares of FinServ common stock will be voted as recommended by FinServ’s board of directors. FinServ’s board of directors unanimously recommends that FinServ’s stockholders vote “FOR” the Business Combination Proposal, “FOR” the Charter Proposals, “FOR” the election of each of the seven (7) directors nominated in the Director Election Proposal, “FOR” the Nasdaq Proposal, FOR” the Incentive Plan Proposal and “FOR” the Adjournment Proposal (if necessary).

•        You can attend the Special Meeting and vote virtually even if you have previously voted by submitting a proxy pursuant to any of the methods noted above. You will be given a ballot when you arrive. However, if your shares of FinServ common stock are held in the name of your broker, bank or other nominee, you must get a proxy from the broker, bank or other nominee. That is the only way FinServ can be sure that the broker, bank or nominee has not already voted your shares of FinServ common stock.

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Revoking Your Proxy

If you are a record owner of your shares and you give a proxy, you may change or revoke it at any time before it is exercised by doing any one of the following:

•        you may send another proxy card with a later date;

•        you may notify FinServ’s secretary in writing before the Special Meeting that you have revoked your proxy; or

•        you may attend the Special Meeting virtually, revoke your proxy, and vote online as described above.

If your shares are held in “street name” or are in a margin or similar account, you should contact your broker for information on how to change or revoke your voting instructions.

No Additional Matters May be Presented at the Special Meeting

The Special Meeting has been called only to consider the approval of the Business Combination Proposal, the Charter Proposals, the Director Election Proposal, the Nasdaq Proposal, the Incentive Plan Proposal and the Adjournment Proposal (if necessary). Under FinServ’s bylaws, no other matters may be considered at the Special Meeting if they are not included in this proxy statement/prospectus, which serves as the notice of the Special Meeting.

Who Can Answer Your Questions About Voting

If you have any questions about how to vote or direct a vote in respect of your shares of FinServ common stock, you may call Morrow Sodali, the proxy solicitation agent for FinServ, toll-free at (800) 662-5200 (banks and brokers call (203) 658-9400) or email Morrow Sodali at FinServ.info@investor.morrowsodali.com.

Redemption Rights

Holders of Class A Common Stock may seek to redeem their shares for cash, regardless of whether they vote for or against, or whether they abstain from voting on, the Business Combination Proposal. Any stockholder holding Class A Common Stock may demand that FinServ redeem such shares for a full pro rata portion of the Trust Account (which, for illustrative purposes, was $10.05 per share as of December31, 2020), calculated as of two (2) business days prior to the anticipated consummation of the merger. If a holder properly seeks redemption as described in this section and the merger with Katapult is consummated, FinServ will redeem these shares for a pro rata portion of funds deposited in the Trust Account and the holder will no longer own these shares following the merger.

Notwithstanding the foregoing, a holder of Class A Common Stock, together with any affiliate of his or any other person with whom he is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Exchange Act), will be restricted from seeking redemption rights with respect to more than 15% of the Class A Common Stock. Accordingly, all shares of Class A Common Stock in excess of 15% held by a public stockholder, together with any affiliate of such holder or any other person with whom such holder is acting in concert or as a “group,” will not be redeemed for cash.

Holders of Founder Shares and Private Placement Units will not have redemption rights with respect to such shares.

Holders may demand redemption by delivering their stock, either physically or electronically using Depository Trust Company’s DWAC System, to FinServ’s transfer agent two (2) business days prior to the Special Meeting. If you hold the shares in “street name,” you will have to coordinate with your broker to have your shares certificated or delivered electronically. Certificates that have not been tendered (either physically or electronically) in accordance with these procedures will not be redeemed for cash. There is a nominal cost associated with this tendering process and the act of certificating the shares or delivering them through the DWAC system. The transfer agent will typically charge the tendering broker $80.00 and it would be up to the broker whether or not to pass this cost on to the redeeming stockholder. In the event the proposed merger is not consummated this may result in an additional cost to stockholders for the return of their shares.

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FinServ’s transfer agent can be contacted at the following address:

Continental Stock Transfer & Trust Company
1 State Street — 30th Floor
New York, New York 10004
Attn: Mark Zimkind
Email: mzimkind@continentalstock.com

Any request to redeem such shares, once made, may be withdrawn at any time up to the vote on the Business Combination Proposal. Furthermore, if a holder of a public share delivered its certificate in connection with an election of its redemption and subsequently decides prior to the applicable date not to elect to exercise such rights, it may simply request that the transfer agent return the certificate (physically or electronically).

If the merger is not approved or completed for any reason, then FinServ’s public stockholders who elected to exercise their redemption rights will not be entitled to redeem their shares for a full pro rata portion of the Trust Account, as applicable. In such case, FinServ will promptly return any shares delivered by public holders. If FinServ would be left with less than $5,000,001 of net tangible assets as a result of the holders of Class A Common Stock properly demanding redemption of their shares for cash or the Minimum Cash Condition would not be satisfied, FinServ will not be able to consummate the merger.

The closing price of Class A Common Stock on May11, 2021, the record date for the Special Meeting, was $11.21. The cash held in the Trust Account on such date was approximately $251.16million (approximately $10.05 per public share). Prior to exercising redemption rights, stockholders should verify the market price of Class A Common Stock as they may receive higher proceeds from the sale of their common stock in the public market than from exercising their redemption rights if the market price per share is higher than the redemption price. FinServ cannot assure its stockholders that they will be able to sell their shares of Class A Common Stock in the open market, even if the market price per share is higher than the redemption price stated above, as there may not be sufficient liquidity in its securities when its stockholders wish to sell their shares.

If a holder of Class A Common Stock exercises his, her or its redemption rights, then he, she or it will be exchanging its shares of Class A Common Stock for cash and will no longer own those shares. You will be entitled to receive cash for these shares only if you properly demand redemption no later than the close of the vote on the Business Combination Proposal by delivering your stock certificate (either physically or electronically) to FinServ’s transfer agent prior to the vote at the Special Meeting, and the merger is consummated.

For a discussion of the material U.S. federal income tax considerations for stockholders with respect to the exercise of these redemption rights, see “Material U.S. Federal Income Tax Consequences — Tax Consequences of a Redemption of FinServ Public Shares” beginning on page 180. The consequences of a redemption to any particular stockholder will depend on that stockholder’s particular facts and circumstances. Accordingly, you are urged to consult your tax advisor to determine your tax consequences from the exercise of your redemption rights, including the applicability and effect of U.S. federal, state, local and non-U.S. income and other tax laws in light of your particular circumstances.

Appraisal Rights

Appraisal rights are not available to holders of shares of FinServ common stock in connection with the merger.

Proxy Solicitation Costs

FinServ is soliciting proxies on behalf of its board of directors. This solicitation is being made by mail but also may be made by telephone. FinServ and its directors, officers and employees may also solicit proxies online. FinServ will file with the SEC all scripts and other electronic communications as proxy soliciting materials. FinServ will bear the cost of the solicitation.

FinServ has hired Morrow Sodali to assist in the proxy solicitation process. FinServ will pay Morrow Sodali a fee of $25,000, plus disbursements. FinServ will reimburse Morrow Sodali for its expenses and indemnify Morrow Sodali against certain losses, damages, expenses, liabilities or claims for its services as proxy solicitor.

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FinServ will ask banks, brokers and other institutions, nominees and fiduciaries to forward the proxy materials to their principals and to obtain their authority to execute proxies and voting instructions. FinServ will reimburse them for their reasonable expenses.

The Sponsor

As of May11, 2021, the record date for the Special Meeting, the Sponsor and FinServ’s directors owned of record and were entitled to vote an aggregate of 6,250,000 Founder Shares and 665,000 Private Placement Units that were issued prior to FinServ’s IPO. Such shares currently constitute 21.7% of the outstanding shares of FinServ common stock. The Sponsor and FinServ’s officers and directors have agreed to vote the Founder Shares, Private Placement Units and any shares of FinServ common stock acquired in the aftermarket, in favor of each of the proposals being presented at the Special Meeting. The Founder Shares and Private Placement Units have no right to participate in any redemption distribution and will be worthless if no business combination is effected by FinServ.

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INFORMATION ABOUT FINSERV

References in this section to “we,” “our,” “us,” the “Company,” or “FinServ” generally refer to FinServ Acquisition Corp.

General

FinServ is a blank check company incorporated in Delaware and formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. FinServ is an early stage and emerging growth company and, as such, the Company is subject to all of the risks associated with early stage and emerging growth companies.

Initial Public Offering and Private Placement

In August 2019, the Sponsor purchased 5,750,000 Founder Shares for an aggregate purchase price of $25,000, or approximately $0.004 per share. In October 2019, we effected a stock dividend for approximately 0.11shares for each share of Class B Common Stock outstanding, resulting in the Sponsor holding an aggregate of 6,325,000 Founder Shares.

On November5, 2019, FinServ completed its IPO of 25,000,000 units, which included the partial exercise by the underwriter of the over-allotment option to purchase an additional 3,000,000 units, at a price of $10.00 per unit (“units”), generating gross proceeds of $250million. Each unit consists of one share of Class A Common Stock, par value $0.0001, and one-half of one redeemable warrant. Each whole warrant entitles the holder thereof to purchase one share of Class A Common Stock at a price of $11.50 per share, subject to certain adjustments. Because the underwriters of FinServ’s IPO did not exercise their over-allotment option in full, 75,000 of the Sponsor’s Founder Shares were forfeited in November 2019, resulting in the Sponsor holding an aggregate of 6,250,000 Founder Shares.

Concurrently with the completion of FinServ’s IPO, the Sponsor purchased an aggregate of 665,000 Private Placement Units at a price of $10.00 per unit, or $6.65million in the aggregate. A portion of the purchase price of the Private Placement Units was added to the net proceeds of FinServ’s IPO and placed in the Trust Account such that the Trust Account held $250.0million at the time of closing of FinServ’s IPO. Each Private Placement Unit contains one share of Class A Common Stock and one half of one warrant.

Fair Market Value of Target Business

The Nasdaq rules require that FinServ’s initial business combination must occur with one or more operating businesses or assets with a fair market value equal to at least 80% of the net assets held in the Trust Account (net of amounts disbursed to management for working capital purposes and excluding the amount of any deferred underwriting discount held in trust) at the time of it signing a definitive agreement in connection with an initial business combination. FinServ’s board of directors determined that this test was met in connection with the proposed business combination with Katapult as described in the section titled “The Merger” in this proxy statement/prospectus.

Stockholder Approval of Merger and Redemptions

Under FinServ’s Existing Charter, in connection with any proposed business combination, FinServ is required to seek stockholder approval of a business combination at a meeting called for such purpose. Pursuant to the terms of this transaction as described in the section titled “Special Meeting of Stockholders” in this proxy statement/prospectus, FinServ is seeking stockholder approval at a meeting called for such purpose at which public stockholders may seek to redeem their Class A Common Stock for cash, regardless of whether they vote for or against the proposed business combination, subject to the limitations described in this proxy statement/prospectus. Accordingly, in connection with the merger, the FinServ public stockholders may seek to redeem their Class A Common Stock for cash in accordance with the procedures set forth in this proxy statement/prospectus.

FinServ will complete the merger only if the holders of a majority of the outstanding shares of FinServ common stock, voting together as a single class, vote in favor of the merger. A majority of the voting power of the issued and outstanding FinServ common stock entitled to vote at the Special Meeting must be present online or

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represented by proxy, at the Special Meeting to constitute a quorum and in order to conduct business. The holders of the Founder Shares and Private Placement Units, who currently own approximately 21.7% of the issued and outstanding shares of FinServ common stock, will count towards this quorum.

Voting Restrictions in Connection with Stockholder Meeting

Pursuant to the terms of the Letter Agreement entered into with FinServ, the Sponsor and FinServ’s officers and directors have agreed to vote any Founder Shares and Private Placement Units held by them and any shares of Class A Common Stock purchased during or after FinServ’s IPO in favor of an initial business combination. See “Other Agreements — FinServ Letter Agreement” and “Other Agreements — Sponsor Agreement” for more information. The Sponsor, FinServ’s directors and officers and their permitted transferees own at least 20% of its outstanding common stock entitled to vote thereon. The quorum and voting thresholds at the Special Meeting, the Letter Agreement may make it more likely that FinServ will consummate the merger. In addition, pursuant to the terms of the Letter Agreement, the Sponsor and FinServ’s officers and directors have agreed to waive their redemption rights with respect to any Founder Shares, Private Placement Units and any shares of Class A Common Stock held by them in connection with the completion of a business combination.

Liquidation if No Initial Business Combination

The Sponsor and FinServ’s officers and directors have agreed that FinServ will have only until November5, 2021 to complete any initial business combination. If FinServ is unable to complete an initial business combination before November5, 2021, FinServ will: (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible but not more than 10 business days thereafter, redeem the Class A Common Stock, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account and not previously released to FinServ to pay its taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding shares of Class A Common Stock, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law; and (iii) as promptly as reasonably possible following such redemption, subject to the approval of its remaining stockholders and FinServ’s board of directors, dissolve and liquidate, subject in each case to FinServ’s obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to its warrants, which will expire worthless if FinServ fails to complete an initial business combination within the 24month time period.

Pursuant to the Letter Agreement, the Sponsor and FinServ’s officers and directors have waived their rights to liquidating distributions from the Trust Account with respect to any Founder Shares and Private Placement Units held by them if FinServ fails to complete an initial business combination by November5, 2021. The Sponsor and FinServ’s directors and officers will be entitled to liquidating distributions from the Trust Account with respect to any shares of Class A Common Stock acquired in the aftermarket if FinServ fails to complete its initial business combination within the allotted time period.

Pursuant to the Letter Agreement, the Sponsor and FinServ’s officers and directors have agreed that they will not propose any amendment to FinServ’s Existing Charter that would affect the substance or timing of its obligation to redeem 100% of its shares of Class A Common Stock if FinServ does not complete an initial business combination before November5, 2021, unless FinServ provides its public stockholders with the opportunity to redeem their Class A Common Stock upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account and not previously released to FinServ to pay its taxes, divided by the number of then outstanding shares of Class A Common Stock. However, FinServ may not redeem its Class A Common Stock in an amount that would cause its net tangible assets to be less than $5,000,001 (so that it does not then become subject to the SEC’s “penny stock” rules).

FinServ expects that all costs and expenses associated with implementing its plan of dissolution, as well as payments to any creditors, will be funded from amounts remaining out of the approximately $1,150,000 of proceeds held outside the Trust Account, as of December31, 2020, although FinServ cannot assure you that there will be sufficient funds for such purpose. However, if those funds are not sufficient to cover the costs and expenses

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associated with implementing its plan of dissolution, to the extent that there is any interest accrued in the Trust Account not required to pay taxes, FinServ may request the trustee to release to it an additional amount of up to $100,000 of such accrued interest to pay those costs and expenses.

If FinServ were to expend all of the net proceeds of its IPO and the sale of the Private Placement Warrants, other than the proceeds deposited in the Trust Account, and without taking into account interest, if any, earned on the Trust Account, the per-share redemption amount received by stockholders upon FinServ’s dissolution would be approximately $10.00. The proceeds deposited in the Trust Account could, however, become subject to the claims of FinServ’s creditors which would have higher priority than the claims of its public stockholders. FinServ cannot assure you that the actual per-share redemption amount received by stockholders will not be substantially less than $10.00. While FinServ intends to pay such amounts, if any, it cannot assure you that it will have funds sufficient to pay or provide for all creditors’ claims.

Although FinServ seeks to have all third parties, service providers (other than its independent auditors), prospective target businesses or other entities with which it does business execute agreements with it waiving any right, title, interest or claim of any kind in or to any monies held in the Trust Account for the benefit of its public stockholders, there is no guarantee that they will execute such agreements or even if they execute or have executed such agreements that they would be prevented from bringing claims against the Trust Account including but not limited to fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain an advantage with respect to a claim against its assets, including the funds held in the Trust Account. If any third party refuses to execute an agreement waiving such claims to the monies held in the Trust Account, FinServ’s management performs an analysis of the alternatives available to it and only enters into an agreement with a third party that has not executed a waiver if management believes that such third party’s engagement would be significantly more beneficial to FinServ than any alternative. Examples of possible instances where FinServ may engage a third party that refuses to execute a waiver include the engagement of a third-party consultant whose particular expertise or skills are believed by management to be significantly superior to those of other consultants that would agree to execute a waiver or in cases where management is unable to find a service provider willing to execute a waiver.

In addition, there is no guarantee that such entities will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts or agreements with FinServ and will not seek recourse against the Trust Account for any reason. Upon redemption of the Class A Common Stock, if FinServ is unable to complete its initial business combination within the prescribed time frame, or upon the exercise of a redemption right in connection with its initial business combination, FinServ will be required to provide for payment of claims of creditors that were not waived that may be brought against FinServ within the 10 years following redemption. The Sponsor has agreed that it will be liable to FinServ, jointly and severally, if and to the extent any claims by a third party (other than FinServ’s independent auditors) for services rendered or products sold to FinServ, or a prospective target business with which FinServ has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below (i) $10.00 per public share or (ii) such lesser amount per public share held in the Trust Account as of the date of the liquidation of the Trust Account, due to reductions in the value of the trust assets, in each case net of the interest which may be withdrawn to pay its taxes, except as to any claims by a third party who executed a waiver of any and all rights to seek access to the Trust Account and except as to any claims under its indemnity of the underwriters of FinServ’s IPO against certain liabilities, including liabilities under the Securities Act. In the event that an executed waiver is deemed to be unenforceable against a third party, then the Sponsor will not be responsible to the extent of any liability for such third-party claims. FinServ has not independently verified whether the Sponsor has sufficient funds to satisfy their indemnity obligations and believes that the Sponsor’s only assets are securities of its company and, therefore, its Sponsor may not be able to satisfy those obligations. None of FinServ’s other officers will indemnify FinServ for claims by third parties including, without limitation, claims by vendors and prospective target businesses.

In the event that the proceeds in the Trust Account are reduced below (i) $10.00 per public share or (ii) such lesser amount per public share held in the Trust Account as of the date of the liquidation of the Trust Account, due to reductions in value of the trust assets, in each case net of the interest which may be withdrawn to pay its taxes, and the Sponsor asserts that it is unable to satisfy its indemnification obligations or that it has no indemnification obligations related to a particular claim, FinServ’s independent directors would determine whether to take legal action against its Sponsor to enforce their indemnification obligations. While FinServ currently expects that its independent directors would take legal action on its behalf against the Sponsor to enforce their indemnification

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obligations to FinServ, it is possible that its independent directors in exercising their business judgment may choose not to do so in any particular instance. Accordingly, FinServ cannot assure you that due to claims of creditors the actual value of the per share redemption price will not be substantially less than $10.00 per share.

FinServ will seek to reduce the possibility that the Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all third parties, service providers (other than its independent auditors), prospective target businesses or other entities with which FinServ does business execute agreements with it waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account. The Sponsor will also not be liable as to any claims under the indemnity of the underwriters of FinServ’s IPO against certain liabilities, including liabilities under the Securities Act. FinServ will have access to up to $1,150,000, of the proceeds held outside the Trust Account, as of December31, 2020, with which to pay any such potential claims (including costs and expenses incurred in connection with its liquidation, currently estimated to be no more than approximately $100,000). In the event that FinServ liquidates and it is subsequently determined that the reserve for claims and liabilities is insufficient, stockholders who received funds from FinServ’s Trust Account could be liable for claims made by creditors.

If FinServ files a bankruptcy petition or an involuntary bankruptcy petition is filed against it and the petition is not dismissed, the proceeds held in the Trust Account could be subject to applicable bankruptcy law, and may be included in the bankruptcy estate and subject to the claims of third parties with priority over the claims of FinServ’s stockholders. To the extent any bankruptcy claims deplete the Trust Account, FinServ cannot assure you it will be able to return $10.00 per share to its public stockholders. Additionally, if the bankruptcy petition is not dismissed, any distributions received by stockholders could be viewed under applicable debtor/creditor and/or bankruptcy laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy court could seek to recover from FinServ’s stockholders some or all amounts received. Furthermore, FinServ’s board may be viewed as having breached its fiduciary duty to FinServ’s creditors and/or may have acted in bad faith, and thereby exposing itself and FinServ to claims of punitive damages, by paying public stockholders from the Trust Account prior to addressing the claims of creditors. FinServ cannot assure you that claims will not be brought against FinServ for these reasons.

FinServ’s public stockholders will be entitled to receive funds from the Trust Account only upon the earlier to occur of: (i) the completion of the initial business combination; (ii) the redemption of any Class A Common Stock properly tendered in connection with a stockholder vote to amend any provisions of FinServ’s Existing Charter (A) to modify the substance or timing of FinServ’s obligation to offer redemption rights in connection with any proposed initial business combination or to redeem 100% of FinServ’s Class A Common Stock if it does not complete the initial business combination by November5, 2021 or (B) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity; and (iii) the redemption of all of FinServ’s Class A Common Stock if it is unable to complete the initial business combination by November5, 2021, subject to applicable law. In no other circumstances will a stockholder have any right or interest of any kind to or in the Trust Account. In connection with the merger, a stockholder’s vote in connection with the initial business combination alone will not result in a stockholder’s redeeming its shares of FinServ for an applicable pro rata share of the Trust Account. Such stockholder must have also exercised its redemption rights.

Facilities

FinServ currently maintains its executive offices at Ellenoff Grossman & Schole LLP, 1345 Avenue of the Americas, New York, NY 10105. FinServ considers its current office space adequate for its current operations. FinServ entered into an agreement with the Sponsor, pursuant to which it pays a total of $10,000 per month for office space and related support services. Upon consummation of the merger, the principal executive offices of FinServ will be those of Katapult, at which time nothing more will be paid to the Sponsor pursuant to such agreement.

Employees

FinServ currently has two (2) officers and does not intend to have any full-time employees prior to the completion of an initial business combination. These individuals are not obligated to devote any specific number of hours to FinServ’s matters but they devote as much of their time as they deem necessary to its affairs and intend to continue doing so until it has completed its initial business combination.

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Periodic Reporting and Financial Information

FinServ’s units, Class A Common Stock and warrants are registered under the Exchange Act and FinServ has reporting obligations, including the requirement that it file annual, quarterly and current reports with the SEC. In accordance with the requirements of the Exchange Act, FinServ’s annual reports contain financial statements audited and reported on by its independent registered public accounting firm.

Legal Proceedings

There is no material litigation, arbitration or governmental proceeding currently pending against FinServ or any members of its management team in their capacity as such.

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MANAGEMENT OF FINSERV

Directors and Executive Officers

The below lists FinServ’s officers and directors as of May11, 2021. Concurrently with the consummation of the merger, FinServ’s officers and directors, will resign from their respective positions at FinServ.

Name	Age	Position
Lee Einbinder	61	Chief Executive Officer and Director
Howard Kurz	64	President, Chief Financial Officer and Director
Robert Matza	64	Director
Diane B. Glossman	65	Director
Aris Kekedjian	55	Director

Lee Einbinder, our Chief Executive Officer and a Director since inception, has over 30 years’ experience as an M&A and capital markets advisor to financial services and FinTech companies. Previously, until August 2019, Mr.Einbinder was a Vice Chairman at Barclays and was responsible for senior client relationships across the financial services industry, including Banks, Specialty Finance, Financial Technology, Asset Management and Financial Sponsors. Mr. Einbinder was at Barclays since the acquisition of Lehman Brothers in 2008, and during that time was also co-Head of the Financial Institutions Group and a member of the Investment Banking Operating Committee. Prior to joining Barclays, Mr. Einbinder worked at Lehman Brothers from 1996 to 2008, where he was Head of the Specialty Finance group and founded the Financial Technology group. He previously worked in similar capacities at CS First Boston and Salomon Brothers. Mr.Einbinder is expected to serve as a Director of New Katapult upon the consummation of the merger. He received his M.B.A. with Distinction from the Wharton School and his B.S.E. cum laude from Princeton University.

Howard Kurz, our President and Chief Financial Officer since inception, has over 30 years’ experience as a successful institutional investor and asset manager. Mr. Kurz was the founder and has been serving as the Chief Executive Officer of Lily Pond Capital Management LLC (“LPCM”), an alternative investment manager headquartered in New York since January 2001. Most recently, LPCM was the investment manager of a Private Equity Fund (Lilypad Investors I) which provided early stage operating capital and expertise to an array of alternative investment management firms. Before founding LPCM, from September 1996 to January 2001, Mr. Kurz was Managing Director and Head of North American Financial Markets at The Royal Bank of Scotland Plc. Additionally, he was responsible globally for Foreign Exchange, Emerging Markets, and principal investments and was a senior member of the division’s Executive Committee. Prior to RBS, Mr. Kurz was a Managing Director at Lehman Brothers where he headed the Multi-Markets Proprietary Trading unit. He received his B.A. from University of Pennsylvania.

Robert Matza, who has served as one of our directors since our initial public offering, retired as President, Partner and member of the Executive Committee of GoldenTree in June 2019 after almost 14 years at the firm. Mr. Matza joined GoldenTree in January 2006 and managed GoldenTree’s business management infrastructure, which provides operational support to GoldenTree’s investment products and client franchise. During his time at GoldenTree, Mr. Matza was part of the senior management team that oversaw significant growth in assets under management (from approximately $7 billion to over $30 billion), long only and alternatives (private equity and hedge funds), product lines and personnel. Prior to GoldenTree, Mr. Matza served as President and Chief Operating Officer of Neuberger Berman, Inc., as well as a member of its Board of Directors and Executive Committee, and following its acquisition by Lehman Brothers, a member of Lehman Brothers’ Management and Investment Committees. He joined Neuberger Berman in April 1999 as a Principal, and led the team that successfully completed the initial public offering of Neuberger Berman in November of that same year. Between 2000 and 2003, he negotiated and completed several acquisitions and lift outs. In 2003, Mr. Matza negotiated the $2.6 billion sale of the company to Lehman Brothers. Assets under management grew from approximately $55 billion to over $107 billion from the time that Mr. Matza joined Neuberger Berman, until he left at the end of 2005. Mr. Matza’s industry experience prior to 1996 includes 16 years with Lehman Brothers and its predecessor companies, where he last served as Managing Director, Chief Financial Officer and a member of the Operating and Investment Committees. In 1996, he joined Travelers Group as its Treasurer and became Deputy Treasurer of Citigroup after Travelers and Citicorp merged in 1998. While at Citigroup, he served on the Finance, Investment and Merger & Acquisition Committees. He began his professional career at Coopers and Lybrand. Mr. Matza currently serves on the Board

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of Managers (as well as audit and compensation committees) of AG Artemis Holding LP, the holding company of Advisor Group Inc., a privately owned network of independent broker-dealers that was purchased by a private equity firm for $2.3 billion in 2019. He is also serving as a Senior Advisor to Algorand, a blockchain company focused on the commercialization of the secure blockchain to transact for global institutions. Mr. Matza is a member of the Dean’s Advisory Board and the Board of the Center for Institutional Investment Management of the University at Albany’s School of Business. Mr. Matza earned his bachelor’s degree from the State University of New York at Albany, his MBA in Finance from New York University and he is a Certified Public Accountant.

Diane B. Glossman, who has served as one of our directors since our initial public offering, spent 25 years as a research analyst, retiring as a Managing Director and head of U.S. bank and brokerage research at UBS. Prior to UBS, Ms. Glossman was co-head of Global Bank Research and head of Internet Financial Services Research at Lehman Brothers, and prior to that at Salomon Brothers for nine years where she was co-Head of U.S. Bank Stock Research. Over her sell-side research career, Ms. Glossman specialized in money center banks, trust banks and broker dealers, covering all aspects of banking and financial services, including banking technology and the revenue generating businesses of cash management, trade finance, and securities services. Ms. Glossman was a multiple-time member of Institutional Investor’s All-America Research Team. During her decade on the buy-side, she was responsible for coverage of all financials along with a variety of other industry sectors. Ms. Glossman has been serving as a member of the Board of Directors and Audit Committee of Barclays Bank Delaware, Barclays US consumer operations, since June 2016 and chaired the Audit Committee since December 2018. She has also been serving as a member of the advisory board of Barclays US LLC, the U.S. intermediate holding company of Barclays PLC, since its inception in April 2015, and since the advisory board upgrade into the Board of Directors, a member of the Board of Directors, Audit Committee Chair and member of the Governance Committee. In addition, she has been serving as a member of the Board of Directors and its various committees of Live Oak Bancshares, a $7 billion North Carolina-based bank, since August 2014, and assisted in its initial public offering. She was involved with Bucks County SPCA, a humane organization serving Bucks County, Pennsylvania, from 2003 to 2021 and most recently served as the Chair of the Finance Committee. Ms. Glossman’s previous board experience includes serving on the Board of Directors or Board of Trustees of WMI Holding, from bankruptcy emergence in March 2012 through its merger with Nationstar in August 2018; Ambac Assurance, a public finance insurance company, from October 2010 to February 2018 when it emerged from regulatory rehabilitation; QBE NA, the American subsidiary of the Australian insurer QBE, from February 2015 to December 2017; Powa Technologies Holdings Plc, a London-based mobile technology start-up, from July 2013 to November, 2016; State Street Global Advisors Mutual Funds from September 2009 to April 2011; and E Charge, an internet payment start-up company from 1999 to 2001. In addition to her directorships, Ms. Glossman has also worked as an independent consultant with a number of banks in the U.S. and U.K. on projects relating to strategy, business execution, and investor communications. During 2013 and 2014, she was a senior fellow at the Center of Financial Stability and was joint author of a report on bank capital. At that time, she also wrote articles for the Cornerstone Journal of Sustainable Finance and Banking regarding the banking industry. In 2013, she also served a member of SASB’s financial industry working group engaged in establishing sustainability reporting metrics for commercial banks, custody banks, and asset managers. From 2003 to 2005, she was an advisor to Citigroup’s Global Consumer Group and a member of its planning group. During much of that time, she was acting head of the International Retail Bank. Ms. Glossman received a B.S. in Economics from the Wharton School of the University of Pennsylvania, with a double major in finance and health care administration, and is a Chartered Financial Analyst.

Aris Kekedjian, who has served as one of our directors since our initial public offering, was hired in April 2021 to be the President and Chief Executive Officer of Icahn Enterprises L.P., and will also be joining their Board of Directors. Mr.Kekedjian retired from GE in 2019 after a 30 year career with the company, most recently serving as head of Corporate Development and Chief Investment Officer since 2016. During this time, Mr. Kekedjian led a number of notable M&A transactions, including the $30 billion merger of GE Oil & Gas with Baker Hughes, creating a $22 billion business with operations in 120 countries, and the $11 billion merger of GE Transportation with Wabtec Corporation, creating a technology category leader for rail equipment, services and software. Mr.Kekedjian served as a member of the Board of Directors and Chairman of the Audit Committee of Tuatara Capital Acquisition Corporation, a special purpose acquisition company, from February 2021 to April 2021. Mr. Kekedjian was also a strategic advisor to ECN Capital, a finance company listed on the Toronto Stock Exchange until April 2021. Mr. Kekedjian was previously a Managing Director and Global head of Business Development/M&A at GE Capital from 2010 through 2016. Mr. Kekedjian led the GE team that divested more than $200 billion of GE Capital’s business across the world. He also led the merger of Met Life’s online bank

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with Synchrony Financial and a subsequent $3 billion IPO and $20 billion stock split transaction for Synchrony Financial. He also led IPOs of both Cembra Money Bank in Switzerland and Moneta Bank in the Czech Republic. Prior to those divestitures, Mr. Kekedjian was responsible for creating comprehensive strategic plans for deal activities in the banking, real estate, leasing, mortgage, credit card and commercial lending sectors. From 2008 to 2010, Mr. Kekedjian served as Managing Director, Global Corporate Development and Chief Executive Officer for GE Capital, MEA region, responsible for company-wide strategic partnership and alliance development with global, sovereign capital partners. Mr. Kekedjian was previously the Chief Financial Officer of GE Banking & Consumer Finance for the EMEA region (GE Money) from 2004 to 2008, a $10 billion net revenue business with over $100 billion in assets and operations in 25 countries. He joined GE as a part of the Financial Management Program in 1989. Mr.Kekedjian received his BC from Concordia University in Montreal, Canada.

Executive Compensation and Director Compensation

The following disclosure concerns the compensation of FinServ’s executive officers and directors for the fiscal year ended December31, 2020 (i.e., pre-business combination).

None of FinServ’s executive officers or directors have received any cash compensation for services rendered to FinServ. Since the consummation of FinServ’s IPO and until the earlier of the consummation of the initial business combination and FinServ’s liquidation, FinServ will reimburse the Sponsor for office space, secretarial and administrative services provided to FinServ in an amount not to exceed $10,000 per month. In addition, FinServ’s Sponsor, executive officers and directors, or any of their respective affiliates are being reimbursed for any out-of-pocket expenses incurred in connection with activities conducted on FinServ’s behalf such as identifying potential target businesses and performing due diligence on suitable business combinations. FinServ’s audit committee reviews all payments that FinServ made to the Sponsor, executive officers or directors, or their affiliates on a quarterly basis. Any such payments prior to an initial business combination are made using funds held outside the Trust Account. Other than quarterly audit committee review of such reimbursements, FinServ does not have any additional controls in place for governing reimbursement payments to its directors and executive officers for their out-of-pocket expenses incurred on behalf of FinServ and in connection with identifying and consummating an initial business combination. Other than these payments and reimbursements, no compensation of any kind, including finder’s and consulting fees, is paid by FinServ to the Sponsor, executive officers and directors, or any of their respective affiliates, prior to completion of the initial business combination.

After the completion of the initial business combination, directors or members of its management team who remain with New Katapult may be paid consulting or management fees from New Katapult. For more information on post-combination company executive compensation, see “Executive and Director Compensation of Katapult.” FinServ has not established any limit on the amount of such fees that may be paid by Katapult to FinServ’s directors or members of management. It is unlikely the amount of such compensation will be known at the time of the proposed business combination, because the directors of New Katapult will be responsible for determining executive officer and director compensation. Any compensation to be paid to FinServ’s executive officers will be determined, or recommended to the board of directors of New Katapult for determination, by a compensation committee constituted solely of independent directors or a majority of the independent directors on New Katapult’s board of directors.

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SELECTED HISTORICAL FINANCIAL INFORMATION OF FINSERV

The following table sets forth selected historical financial information derived from FinServ’s (i) audited financial statements included elsewhere in this proxy statement/prospectus for and as of the year ended December31, 2020 and (ii) audited financial statements as of December31, 2019 and for the period from August9, 2019 (inception) through December31, 2019. You should read the following summary financial information in conjunction with the section entitled “FinServ’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” and FinServ’s financial statements and related notes appearing elsewhere in this proxy statement/prospectus.

We have neither engaged in any operations nor generated any revenue to date. Our only activities from inception through December31, 2020 were organizational activities and those necessary to complete our IPO and identifying a target company for a business combination. We do not expect to generate any operating revenue until after the completion of the merger.

	For the period from August 9, 2019 (inception) through December 31, 2019			For the year ended December 31, 2020
	As Restated			As Restated
Statements of Operations Data:
Net loss	$	(3,065,680	)	$	(31,927,098	)
Weighted average shares outstanding of Class A Common Stock		25,000,000			25,000,000
Basic and diluted income per redeemable share, Class A	$	0.02		$	0.03
Cash Flow Data:
Net cash and cash equivalents used in operating activities	$	(156,163	)	$	(985,959	)
Net cash and cash equivalents provided by (used in) investing activities	$	(250,000,000	)	$	451,779
Net cash and cash equivalents provided by financing activities	$	251,734,238		$	—

	December 31, 2019			December 31, 2020
	As Restated			As Restated
Balance Sheet Data (end of period):
Total current assets	$	1,704,097		$	1,126,079
Marketable securities held in Trust Account	$	250,567,358		$	251,249,193
Total assets	$	252,271,455		$	252,375,272
Total liabilities	$	22,275,430		$	54,306,345
Class A Common Stock, 0.0001 par value; 100,000,000 shares authorized; 6,358,108 and 3,165,398 issued and outstanding (excluding 19,306,892 and 22,499,602 shares subject to possible redemption) at December 31, 2020 and 2019, respectively	$	316		$	636
Class B Common Stock, $0.0001 par value; 10,000,000 shares authorized; 6,250,000 shares issued and outstanding December 31, 2020 and 2019	$	625		$	625
Additional paid-in capital	$	8,064,744		$	39,991,524
Retained earnings	$	(3,065,680	)	$	(34,992,778	)
Redeemable Stock	$	224,996,020		$	193,068,920
Total stockholders’ equity	$	5,000,005		$	5,000,007
Total liabilities and stockholders’ equity	$	252,271,455		$	252,375,272

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FINSERV’S MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of FinServ’s financial condition and results of operations should be read in conjunction with FinServ’s financial statements and the notes thereto contained elsewhere in this proxy statement/prospectus. Certain information contained in the discussion, including, but not limited to, those described under the heading “Risk Factors” and analysis set forth below includes forward-looking statements that involves risks and uncertainties. References in this section to “we,” “us,” “our,” and “the Company” are intended to mean the business and operations of FinServ.

Overview

We are a blank check company incorporated as a Delaware corporation and formed for the purpose of effecting an initial business combination. We are focusing our search on businesses that are providing or changing technology for traditional financial services with an equity value of approximately $500million to $2,000million. We intend to effectuate our initial business combination using cash from the proceeds of our IPO and the private placement of the Private Placement Units, the proceeds of the sale of our shares in connection with our initial business combination (pursuant to backstop agreements we may enter into), shares issued to the owners of the target, debt issued to bank or other lenders or the owners of the target, or a combination of the foregoing.

The issuance of additional shares in connection with an initial business combination to the owners of the target or other investors:

•        may significantly dilute the equity interest of investors in our IPO, which dilution would increase if the anti-dilution provisions in the Class B Common Stock resulted in the issuance of Class A shares on a greater than one-to-one basis upon conversion of the Class B Common Stock;

•        may subordinate the rights of holders of our common stock if preferred stock is issued with rights senior to those afforded our common stock;

•        could cause a change in control if a substantial number of shares of our common stock is issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors;

•        may have the effect of delaying or preventing a change of control of us by diluting the stock ownership or voting rights of a person seeking to obtain control of us; and

•        may adversely affect prevailing market prices for our Class A Common Stock and/or warrants.

Similarly, if we issue debt securities or otherwise incur significant debt to bank or other lenders or the owners of a target, it could result in:

•        default and foreclosure on our assets if our operating revenues after an initial business combination are insufficient to repay our debt obligations;

•        acceleration of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant;

•        our immediate payment of all principal and accrued interest, if any, if the debt security is payable on demand;

•        our inability to obtain necessary additional financing if the debt security contains covenants restricting our ability to obtain such financing while the debt security is outstanding;

•        our inability to pay dividends on our common stock;

•        using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on our common stock if declared, our ability to pay expenses, make capital expenditures and acquisitions, and fund other general corporate purposes;

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•        limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate;

•        increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation;

•        limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, and execution of our strategy; and

•        other purposes and other disadvantages compared to our competitors who have less debt.

We expect to continue to incur significant costs in the pursuit of our initial business combination. We cannot assure you that our plans to complete our initial business combination, such as the merger, will be successful.

Proposed Business Combination

On December18, 2020, we entered into the merger agreement with the Merger Subs, Katapult, and the other signatories thereto. Pursuant to the terms of the merger agreement, if the merger agreement is approved and adopted and the merger is subsequently completed, Merger Sub 1 will merge with and into Katapult, with Katapult surviving the merger as a wholly owned subsidiary of FinServ, followed immediately by the merger of the resulting company with and into Merger Sub2, with Merger Sub 2 surviving the merger as a wholly owned subsidiary of FinServ. The merger will be consummated subject to the deliverables and provisions as further described in the merger agreement. See “The Merger Agreement” beginning on page 144. In addition, a copy of the merger agreement is attached to this proxy statement/prospectus as Annex A.

Results of Operations

We have neither engaged in any operations nor generated any revenues to date. Our only activities since inception have been organizational activities and those necessary to prepare for our initial public offering and identifying a target for our initial business combination. We do not expect to generate any operating revenues until after completion of our initial business combination. We generate non-operating income in the form of interest income on marketable securities held in the Trust Account. We incur operating expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as expenses as we conduct due diligence on prospective initial business combination candidates.

As a result of the restatement described in Note 2 of the notes to FinServ’s financial statements included elsewhere in this proxy statement/prospectus, we classify the warrants issued in connection with our IPO as liabilities at their fair value and adjust the warrant instrument to fair value at each reporting period. This liability is subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in our statement of operations.

For the year ended December31, 2020, we had a net loss of $31,927,098, which consists of interest income on marketable securities held in the Trust Account of $1,133,614 and interest income on our money market account of $12,294, offset by a change in the fair value of the warrant liability of $32,081,250 operating costs of $795,708 and a provision for income taxes of $196,048.

For the period from August9, 2019 (inception) through December31, 2019, we had a net loss of $3,065,680, which consists of interest income on marketable securities held in the Trust Account of $567,358, offset by operating costs of $171,946, transaction costs allocable to warrant liabilities of $548,792, a change in the fair value of warrant liabilities of $2,809,850, and a provision for income taxes of $102,450.

Liquidity and Capital Resources

On November5, 2019, we consummated our IPO of 25,000,000 Units, which included the partial exercise by the underwriters of the over-allotment option to purchase an additional 3,000,000 Units, at $10.00 per Unit, generating gross proceeds of $250,000,000. Simultaneously with the closing of our IPO, we consummated the sale of 665,000 Private Placement Units to the Sponsor at a price of $10.00 per Private Placement Unit, generating gross proceeds of $6,650,000.

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Following our IPO, the exercise of the over-allotment option and the sale of the Private Placement Unit, a total of $250,000,000 was placed in the Trust Account. We incurred $14,267,762 in transaction costs, including $4,400,000 of underwriting fees, $9,350,000 of deferred underwriting fees and $517,762 of other offering costs.

For the year ended December31, 2020, cash used in operating activities was $985,959. Net loss of $31,927,098 was affected by interest earned on marketable securities held in the Trust Account of $1,133,614, a non-cash charge for the change in the fair value of the warrant liability of $32,081,250, and changes in operating assets and liabilities, which used $6,497 of cash from operating activities.

For the period from August9, 2019 (inception) through December31, 2019, cash used in operating activities was $704,955. Net loss of $3,065,680 was impacted by interest earned on marketable securities held in the trust account of $567,358, formation costs paid by a related party of $1,000, transaction costs allocable to warrant liabilities of $548,792, a change in the fair value of warrant liabilities of $2,809,850, and changes in operating assets and liabilities, which used $171,946 of cash from operating activities.

As of December31, 2020, we had cash and marketable securities of $251,249,193 held in the Trust Account. We intend to use substantially all of the funds held in the trust account, including any amounts representing interest earned on the Trust Account (less deferred underwriting commissions) to complete our initial business combination. We may withdraw interest to pay taxes. During the year ended December31, 2020, we withdrew approximately $452,000 of interest earned on the trust account to pay for our franchise and income taxes. To the extent that our capital stock or debt is used, in whole or in part, as consideration to complete our initial business combination, the remaining proceeds held in the Trust Account will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies.

As of December31, 2020, we had cash of $1,043,895 outside of the Trust Account. We intend to use the funds held outside the trust account primarily to identify and evaluate target businesses, perform business due diligence on prospective target businesses, travel to and from the offices, plants or similar locations of prospective target businesses or their representatives or owners, review corporate documents and material agreements of prospective target businesses, and structure, negotiate and complete our initial business combination.

In order to fund working capital deficiencies or finance transaction costs in connection with our initial business combination, our sponsor or an affiliate of our sponsor or certain of our officers and directors may, but are not obligated to, loan us funds as may be required. If we complete our initial business combination, we would repay such loaned amounts. In the event that our initial business combination does not close, we may use a portion of the working capital held outside the Trust Account to repay such loaned amounts but no proceeds from our trust account would be used for such repayment. Up to $1,500,000 of such loans may be convertible into units identical to the Private Placement Units, at a price of $10.00 per unit at the option of the lender.

We do not currently believe we will need to raise additional funds in order to meet the expenditures required for operating our business. However, if our estimate of the costs of identifying a target business, undertaking in-depth due diligence and negotiating our initial business combination are less than the actual amount necessary to do so, we may have insufficient funds available to operate our business prior to our initial business combination. Moreover, we may need to obtain additional financing either to complete our initial business combination or because we become obligated to redeem a significant number of our public shares upon consummation of our initial business combination, in which case we may issue additional securities or incur debt in connection with such initial business combination. Subject to compliance with applicable securities laws, we would only complete such financing simultaneously with the completion of our initial business combination. If we are unable to complete our initial business combination because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the trust account. In addition, following our initial business combination, if cash on hand is insufficient, we may need to obtain additional financing in order to meet our obligations.

In connection with our assessment of going concern considerations in accordance with Financial Accounting Standard Board’s Accounting Standards Update 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” we have until November5, 2021 to consummate an initial business combination. It is uncertain that we will be able to consummate an initial business combination by this time. If an initial business combination is not consummated by this date, there will be a mandatory liquidation and subsequent dissolution. Management has determined that the mandatory liquidation, should an initial business combination not occur, and potential subsequent dissolution, raises substantial doubt about our ability to continue as a going concern. No adjustments have been made to the carrying amounts of assets or liabilities should we be required to liquidate after November5, 2021.

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Related Party Transactions

Founder Shares

On August 9, 2019, the Sponsor purchased 5,750,000 Founder Shares for an aggregate price of $25,000. The Founder Shares will automatically convert into Class A Common Stock upon consummation of a Business Combination on a one-for-one basis, subject to certain adjustments.

On October31, 2019, we effected a 1.1 for 1 stock dividend for each share of Class B Common Stock outstanding, resulting in the Sponsor holding an aggregate of 6,325,000 Founder Shares. The 6,325,000 Founder Shares included an aggregate of up to 825,000shares subject to forfeiture to the extent that the underwriters’ over-allotment option was not exercised in full or in part, so that the Sponsor would own, on an as-converted basis, 20% of our issued and outstanding shares after the IPO (assuming the Sponsor did not purchase any shares of Class A Common Stock in the IPO and excluding the shares of Class A Common Stock included in the Private Placement Units). In connection with the underwriters’ partial exercise of the over-allotment option and the forfeiture of the remaining over-allotment option, 75,000 Founder Shares were forfeited and 750,000 Founder Shares are no longer subject to forfeiture resulting in an aggregate of 6,250,000 Founder Shares outstanding at December31, 2020.

The Sponsor has agreed, subject to limited exceptions, not to transfer, assign or sell any of its Founder Shares until the earlier to occur of: (A) one year after the completion of our initial business combination or (B) subsequent to our initial business combination, (x) if the last sale price of the Class A Common Stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after our initial business combination, or (y) the date on which the FinServ completes a liquidation, merger, capital stock exchange or other similar transaction that results in all FinServ stockholders having the right to exchange their shares of common stock for cash, securities or other property.

Advances from Related Party

The Sponsor advanced us funds to cover expenses related to our IPO. These advances were non-interest bearing and payable upon demand. Advances totaling $230,350 were repaid upon the consummation of our IPO on November5, 2019.

Related Party Loans

On August9, 2019, the Sponsor agreed to loan to us an aggregate of up to $300,000 to cover expenses related to our IPO pursuant to a promissory note (the “Promissory Note”). The Promissory Note was non-interest bearing and payable on the earlier of March30, 2020 or the completion of our IPO. The borrowings outstanding under the Promissory Note of $282,244 were repaid upon the consummation of our IPO on November5, 2019.

In addition, in order to finance transaction costs in connection with an initial business combination, the Sponsor or an affiliate of the Sponsor, or certain of our officers and directors may, but are not obligated to, loan us funds as may be required (“Working Capital Loans”). If we complete an initial business combination, we would repay the Working Capital Loans out of the proceeds of the Trust Account released to us. Otherwise, the Working Capital Loans would be repaid only out of funds held outside the Trust Account. In the event that an initial business combination does not close, we may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. Except for the foregoing, the terms of such Working Capital Loans, if any, have not been determined and no written agreements exist with respect to such loans. Up to $1,500,000 of such Working Capital Loans may be convertible into units identical to the Private Placement Units, at a price of $10.00 per unit at the option of the lender.

Administrative Support Agreement

We entered into an agreement whereby, commencing on November5, 2019 through the earlier of our consummation of an initial business combination and our liquidation, we will pay the Sponsor a total of $10,000 per month for office space, utilities and secretarial and administrative support. For the year ended December31, 2020 and the period from August9, 2019 (inception) through December31, 2019, we incurred $120,000 and $18,387, respectively, in fees for these services, of which $397 and $18,387 are included in accounts payable and accrued expenses in our consolidated balance sheets as of December31, 2020 and 2019, respectively.

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Consulting Agreement

We entered into a consulting agreement with a related party, pursuant to which the consultant will provide us, among other services, assistance in finding a potential target for an initial business combination, as well as supervising and performing due diligence on such targets, and we agreed to pay the consultant a fee of $10,000 per month, up to a maximum of $150,000. On May15, 2020, we amended the consulting agreement whereby the monthly fee was reduced to $7,500, from June1, 2020 through and including September 2020. The monthly fee reverted back to $10,000 per month on October1, 2020. For the year ended December31, 2020 and for the period from August9, 2019 (inception) through December31, 2019, we incurred $110,000 and $22,500, respectively, in such fees. At December31, 2020 and 2019, $10,000 of such fees was recorded in accounts payable and accrued expenses in our consolidated balance sheets.

Critical Accounting Policies and Estimates

The preparation of consolidated financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and income and expenses during the periods reported. Actual results could materially differ from those estimates. We have identified the following critical accounting policies:

Warrant Liability

We account for the warrants issued in connection with our IPO in accordance with the guidance contained in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Topic 815, “Derivatives and Hedging,” under which the warrants do not meet the criteria for equity treatment and must be recorded as liabilities. Accordingly, we classify the warrants as liabilities at their fair value and adjust the warrants to fair value at each reporting period. This liability is subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in our statement of operations. The fair value of the warrants included in the Units issued in our IPO was initially measured using a Monte Carlo simulation approach with subsequent measurements based off the quarterly trading price, whereas the fair value of the warrants included in the Private Placement Units was estimated initially and subsequently using a Modified Black Scholes Model.

Common Stock subject to possible redemption

We account for our Class A Common Stock subject to possible redemption in accordance with the guidance in Accounting Standards Codification Topic 480 “Distinguishing Liabilities from Equity.” Shares of Class A Common Stock subject to mandatory redemption is classified as a liability instrument and is measured at fair value. Conditionally redeemable common stock (including common stock that features redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within our control) is classified as temporary equity. At all other times, common stock is classified as stockholders’ equity.

Our Class A Common Stock features certain redemption rights that are considered to be outside of our control and subject to occurrence of uncertain future events. Accordingly, the shares of Class A Common Stock subject to possible redemption is presented as temporary equity, outside of the stockholders’ equity section of our consolidated balance sheets.

Net income (loss) per common share

We apply the two-class method in calculating earnings per share. Net income per common share, basic and diluted for Class A redeemable common stock is calculated by dividing the interest income earned on the Trust Account, net of applicable taxes, by the weighted average number of shares of Class A redeemable common stock outstanding for the periods. Net loss per common share, basic and diluted for Class A and Class B non-redeemable common stock is calculated by dividing net income less income attributable to Class A redeemable common stock, by the weighted average number of shares of Class A and Class B non-redeemable common stock outstanding for the periods presented.

Recent Accounting Standards

Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on our consolidated financial statements.

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Off-Balance Sheet Arrangements

We have no obligations, assets or liabilities, which would be considered off-balance sheet arrangements as of December31, 2020. We do not participate in transactions that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established for the purpose of facilitating off-balance sheet arrangements. We have not entered into any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or purchased any non-financial assets.

Contractual Obligations

We do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities, other than an agreement to pay an affiliate of the Sponsor a monthly fee of $10,000 for office space, utilities and secretarial and administrative support to the Company. We began incurring these fees on November5, 2019 and will continue to incur these fees monthly until the earlier of the completion of the initial business combination and the Company’s liquidation.

The underwriters are entitled to a deferred fee of (i) $0.35 per Unit of the gross proceeds of the initial 22,000,000 Units sold in our IPO, or $7,700,000, and (ii) $0.55 per Unit of the gross proceeds from the 3,000,000 Units sold pursuant to the over-allotment option, or $1,650,000, aggregating to a deferred fee of $9,350,000.

We entered into a consulting agreement with a related party, pursuant to which the consultant will provide us, among other services, assistance in finding a potential target for a business combination, as well as supervising and performing due diligence on such targets. We will pay the consultant a fee of $10,000 per month, up to a maximum of $150,000. On May15, 2020, we amended the consulting agreement whereby the monthly fee was reduced to $7,500, from June1, 2020 through and including September 2020. The monthly fee reverted back to $10,000 per month on October1, 2020.

JOBS Act

On April5, 2012, the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) was signed into law. The JOBS Act contains provisions that, among other things, relax certain reporting requirements for qualifying public companies. We qualify as an “emerging growth company” under the JOBS Act and are allowed to comply with new or revised accounting pronouncements based on the effective date for private (not publicly traded) companies. We are electing to delay the adoption of new or revised accounting standards, and as a result, we may not comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. As a result, our financial statements may not be comparable to those of companies that comply with new or revised accounting pronouncements as of public company effective dates.

In addition, Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We intend to take advantage of the benefits of this extended transition period. We will remain an emerging growth company until the earlier of (1) (a) December31, 2024, or the last day of the fiscal year (b) in which we have total annual gross revenue of at least $1.07billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our Class A Common Stock that is held by non-affiliates exceeds $700million as of the prior June 30th, and (2) the date on which we have issued more than $1.0billion in non-convertible debt securities during the prior three-year period.

Quantitative and Qualitative Disclosures About Market Risk

As of December31, 2020, we were not subject to any market or interest rate risk. Following the consummation of our IPO, the net proceeds of our IPO, including amounts in the Trust Account, have been invested in U.S. government treasury bills, notes or bonds with a maturity of 180 days or less or in certain money market funds that invest solely in U.S. treasuries. Due to the short-term nature of these investments, we believe there will be no associated material exposure to interest rate risk.

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INFORMATION ABOUT KATAPULT

Unless the context otherwise requires, all references in this section to “we,” “us,” or “our” refer to Katapult and its subsidiaries prior to the consummation of the merger.

Company Overview

Katapult is a next-generation platform for digital and mobile-first commerce focused on the non-prime consumer. Katapult provides point-of-sale (POS) lease-purchase options for non-prime consumers challenged with accessing traditional financing products needed to obtain everyday durable goods. The Company’s proprietary technology solution drives engagement with both Katapult’s network of merchants and the underserved non-prime U.S. consumer. Katapult’s solution solves critical consumer pain points by transforming the way non-prime consumers shop for durable goods. Merchants benefit from higher retail conversion and greater marketing spend efficiency by reaching this underserved segment.

Katapult is a business-to-business-to-consumer (“B2B2C”) platform, partnering with merchants and having direct relationships with consumers. The platform allows consumers a frustration-free checkout experience that is simple, easy and transparent. Consumers complete an easy application and Katapult’s fully automated approval process generates a decision in five seconds or less on average. The Company’s innovative lease-purchase option provides a pathway for consumers to gain access to the e-commerce durable goods they need from a growing community of quality retailers. Katapult empowers customers by providing flexibility in their lease-to-own arrangement. Customers can make payments on a weekly, bi-weekly, semi-monthly or monthly basis, and the Company offers transparent payment options, including allowing customers to continue making payments for their full renewal term, exercise an early purchase option (buyout), or return items if they have life cycle events or decide their needs change. Katapult never charges late fees.

Katapult’s solution empowers merchants to more efficiently promote and move inventory. The Company’s innovative lease-purchase options allow merchants to reach a previously inaccessible customer, providing greater revenue opportunities. Katapult provides merchants with access to an expanded consumer segment, drives incremental sales and lowers customer acquisition cost. The Company’s approach adds value throughout the full customer life cycle, from acquisition, to conversion, to repeat transactions; in fact, the customer repeat transaction rate at December31, 2020 was 48% and growing.

Katapult also has platform integrations with leading e-commerce platforms and prime lenders. Through e-commerce platform integrations with Shopify, BigCommerce, Magento, and WooCommerce, among others, Katapult can complete initial integrations with merchants rapidly and with little effort. Katapult’s prime lender partnerships lead to higher approval rates for merchants, ensuring that consumers have options at the checkout and merchants make the most of every consumer site visit. This model allows the Company to scale rapidly by expanding merchant relationships and increasing customer loyalty by providing an easy, simple and transparent user experience.

Katapult’s technology-powered platform delivers attractive options to non-prime consumers in need of goods. Alternative payment options and traditional risk and credit underwriting models can be complicated, misleading and limiting to both consumers and merchants. In comparison, Katapult’s maximum cost-to-own can be significantly less than alternatives that are not well-suited for e-commerce experiences and are built on legacy infrastructure and lack transparency. In contrast, Katapult is e-commerce born and bred, offering a simple click-to-ship checkout and employing sophisticated underwriting models that accurately reflect the ability to pay of non-prime consumers.

Technology is at the core of everything Katapult does from simplifying the customer experience to driving repeat transactions. Katapult’s proprietary risk model translates to higher approval rates and higher contribution margin, with less than 3% fraud rate across the portfolio. Katapult defines fraud in this context as transactions in which customers initiate a lease-to-own transaction but make no subsequent payments after origination. The Company’s sophisticated machine learning models have been built on alternative data sets, including data from over 500,000 lease-to-own transactions and over five years of repayments. Furthermore, the platform’s risk management models are built to perform better as the Company grows, as additional data from new lease-purchase transactions is continuously incorporated into the platform’s algorithms and business practices, and as lease performance improves.

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Katapult has already achieved significant scale, but the Company is just getting started. As of December31, 2020, Katapult has approved more than 1.6million customers since inception and is growing rapidly. Approximately 48% of leases facilitated through the platform during the year ended December31, 2020 were with repeat consumers. Katapult’s net promoter score (NPS) of 58 for the fiscal year ended December31, 2020, exceeds those of many legacy financial institutions and reflects the company focus on treating customers with dignity, respect and support. NPS is a score that measures the likelihood of users to recommend a company’s products or services to others, and ranges from a low of negative 100 to high of positive 100, and benchmark scores can vary significantly by industry. A score greater than zero represents a company having more promoters than detractors.

For the years ended December31, 2020 and 2019, revenue was approximately $247million and $92million, respectively, representing period-over-period revenue growth of approximately 169%. The Company generated net income of approximately $22.5million for the fiscal year ended December31, 2020. The Company incurred a net loss of approximately $18.8million during the fiscal year ended December31, 2019.

Industry Background

Katapult’s innovative lease-purchase platform offers consumers an alternative to traditional financing of electronics, computers, home furnishings, appliances and other durable goods. According to the Federal Reserve Bank of New York, approximately 38% of U.S. consumers have non-prime credit. Non-prime consumers typically do not have sufficient cash or credit to obtain these goods, and Katapult creates a pathway to elevate these consumers’ experiences.

Lease-to-own transaction

A lease-to-own transaction is a flexible alternative for consumers to obtain and enjoy brand name merchandise with no long-term obligation. Key features of Katapult’s lease-to-own transactions include:

•        Access to high quality e-commerce retailers.    Katapult is a transaction option at checkout for well-known e-commerce merchants such as Wayfair, Lenovo, Nectar, and Purple.

•        Convenient payment options.    Customers make payments on a weekly, bi-weekly, semi-monthly or monthly basis. Payments can be automatically charged to the customer’s authorized credit card, checking account or debit card. Additionally, customers may make additional payments and exercise cost-saving early payment options.

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•        No long-term commitment.    A Katapult customer has the flexibility of no long-term commitment and may return the item under the terms of the lease agreement if he or she does not exercise a purchase option or renew the lease.

Rapid growth of e-commerce durable goods

According to Canaccord Genuity, e-commerce durable goods spend is estimated at approximately $180billion in 2020 and expected to grow to approximately $300billion by 2023. We believe this growth trend indicates that commerce is rapidly moving online, and that Gen Z and Millennials are moving away from brick and mortar retail in favor of the ease and flexibility offered by shopping online. E-commerce penetration as a percent of total commerce in the United States has risen from 16% in 2019 to 33% in 2020, according to McKinsey.

Rise of the digital native consumer

Digital native brands and online retailers rely on technology and data to attract new customers and drive incremental sales. Online and mobile-first e-commerce has given rise to the digital native consumer, who expects easy-to-use, self-checkout experiences delivered through mobile devices. We believe the growth in e-commerce proves that consumers increasingly desire to transact for durable goods through digital channels and are seeking digital and mobile-first payment options to support those transactions.

E-Commerce merchants face rising customer acquisition costs, and are seeking alternative solutions

To attract the digital native consumer and broaden customer bases, merchants have been forced to turn to increasingly costly discounts or promotional marketing channels, such as online and social media advertising. As a result, online merchants of all sizes are looking to alternative strategies to acquire, convert, and retain customers more efficiently and cost effectively.

Katapult’s Solution

Katapult is transforming the way non-prime consumers do business by providing a seamless, easy, and transparent application and checkout experience.

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Consumer Features

•        Lease-to-own of durable goods.    Katapult empowers consumers with access to a path to ownership for high-quality e-commerce retail goods they need.

•        Simple process and efficient approval.    Through an easy 3-step application process requiring basic information inputs and no credit check, consumers receive fully-automated approval in less than 5 seconds.

•        Flexible payment options.    Customers have the option to lease to full term and then own their items. To lower the total cost, during the first 90 days customers have an option to purchase for a total cost-to-own of the cash price plus a 5% fee. A $45 fee is also charged in certain states. After 90 days, an early purchase option is available any time allowing customers to purchase the item for significantly less than the full-term cost-to-own. A Katapult customer has the flexibility of no long-term commitment and may return the item under the terms of the lease agreement if he or she does not exercise a purchase option or renew the lease.

The total cost a customer may pay in connection with a Katapult lease-purchase transaction depends on certain factors, including, but not limited to: (1) total cost limitations, which vary across states and generally range between 2.0 and 2.25 times the cash price, referred to as the Lease Multiple, (2) the maximum length of the term (typically 12-18months), (3) whether the early purchase option (buyout) is exercised, and (4) whether the customer exercises her or his right to terminate the lease, without penalty if current, thereby ending additional renewal payment obligations. In general, during the first ninety (90) days, Katapult customers have the ability to purchase the good for the cash price of the item plus 5% and any applicable fees (including initial fees, where applicable) and taxes. After ninety (90) days, but prior to reaching the maximum renewal term, the consumer may exercise the purchase option at a discount on the remaining lease renewal payments (typically 55–65% of the remaining renewal payments).

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Customers may renew through the maximum term at which point they will have paid approximately 2 times the cash price to own the item. Customers have the option to terminate the lease at any time with no penalty or further obligation (other than the lease cost already incurred). Lease-purchase transactions, unlike credit or a loan, are not subject to variable interest rates and do not include finance charges. Below is an illustrative timeline depicting the total cost a customer would pay at certain points during the life of the transaction:

Merchant Features

•        Marketing capabilities.    Katapult enables merchants to offer non-prime consumers an attractive option, coupled with tools and digital resources to attract, identify and educate consumers on the Katapult option for paying over time.

•        Analytics.    Katapult provides merchants with insightful analytics that help them understand performance and activity associated with non-prime applications. The platform also highlights other key insights into customers’ shopping habits to help merchants optimize customer conversion and customer acquisition costs.

•        Client success support.    Katapult’s high-touch client success team partners with merchants to analyze and interpret the insights delivered through the merchant dashboard. Katapult’s team conducts in-depth user experience analyses of merchant online storefronts, providing custom recommendations for the ideal mix and display of Katapult product offerings to present to customers in order to optimize average order values and conversion rates.

•        Simple integration and highly customizable solution.    Katapult’s off-the-shelf, custom integration options provide flexibility and seamlessness to merchants seeking efficient and effective rollouts of digital POS solutions.

•        Developer documentation.    Katapult’s developer portal contains extensive and engaging developer documentation that makes it easy for any developer to integrate via turnkey solutions, custom APIs, hosted programs, or other integrations, and maximize the benefit of all that Katapult offers both merchants and consumers.

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Merchants realize the following benefits:

•        More customers.    Merchants add incremental customers from the non-prime segment who otherwise might not be shopping on their site.

•        Better conversion.    Merchants experience increased customer conversion when they offer Katapult as customers have an attractive financing solution.

•        High rate of repeat customers.    Katapult’s easy-to-use platform has generated a loyal following of repeat consumers. At December31, 2020, Katapult’s repeat customer rate was 48%.

•        Broader target market    Katapult enables merchants to achieve incremental sales and expand their target market by creating lease-purchase opportunities for non-prime consumers.

•        Ease of integration    Katapult’s direct application programming interface, or API, allows for fast integration with minimal investment. Merchants can easily connect the platform to online shopping cart, and Katapult provides a dedicated integration team to ensure efficient rollouts.

Katapult currently has over 150 total merchants on the platform. Among e-commerce and prime lender partners, Katapult currently has low single digit penetration, which provides significant embedded upside potential.

Approach to fraud management

Katapult uses a complex set of proprietary approval and existing customer modeling to achieve low levels of fraud and high payment performance, thereby protecting consumers, merchants, and the Company. Katapult has less than 3% fraud rates across the portfolio. Katapult defines fraud in this context as transactions in which customers initiate a lease-to-own transaction but make no subsequent payments after origination. The platform checks approximately 100 transaction attributes and up to 2,000 data points in aggregate across the fraud detection and risk models, from a minimum of seven user inputs consumers provide and data acquired from other sources.

Katapult’s fraud management platform continuously learns and improves. The platform has 5+ years of transaction history on over 500,000 lease-to-own transactions. As additional data from new transactions is continuously incorporated into the algorithms and business practices, lease performance improves, driving down fraud and charge-off rates.

Developer-first approach to integration

Katapult’s platform is easy and seamless to integrate regardless of integration method:

•        Platform plug-in:    The Katapult API is fast and easy to integrate with a number of high traffic e-commerce platforms, including Shopify, Magento, WooCommerce and BigCommerce. Integrations with these platforms allow merchants to offer Katapult as an option at checkout, process Katapult charges in their order management system, and gain access to the platform’s analytics software — all without sacrificing control over customer experience.

•        Direct API:    The Katapult API enables merchants to fully control the placement and experience of Katapult’s offering, leading to the seamless integration of Katapult’s lease-purchase option into the merchant’s existing infrastructure.

•        Waterfall partnerships:    A waterfall is where the application will flow from the prime lender to other financing and lease-purchase options automatically; this gives the consumer the best option for their situation. Katapult’s technology supports a sophisticated integration with these partners and ensures a smooth and efficient customer transaction experience during application and checkout.

Katapult’s Competitive Advantages

Native e-commerce solution

From inception, Katapult was born and bred to be an e-commerce solution for consumers and is currently the only non-prime consumer POS lease-purchase platform focused on e-commerce. The Company offers a fully-digital, seamless and differentiated platform driven by proprietary technology and risk models that have been developed over several years of refinement and data collection. Furthermore, we believe the platform offers industry leading flexibility, customization and scalability.

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Technology, engineering talent and product architecture

Katapult’s proprietary technology platform is essential to the Company’s core operations. The Company utilizes modern, cutting-edge technology including sophisticated behavioral machine learning models and cloud-based computing to offer a seamless digital consumer experience on the front end as well as a constantly evolving real-time decision engine on the back end. In order to build these proprietary, innovative and secure products, Katapult places a significant emphasis on identifying and employing talented and driven technology-focused professionals and engineers. This is highlighted by the fact that as of December31, 2020, approximately 60% of salaried employees were in product, data analytics and technology-related roles.

Data driven

In conjunction with the proprietary technology platform Katapult has built, secure data collection, accumulation and analysis provides the Company with meaningful insights that allow the business to perform better. As additional data from new transactions is continuously incorporated into the risk assessment models, algorithms and business practices the lease performance improves over time. This allows Katapult to further mitigate repayment and fraud risk resulting in higher approval rates and contribution margin. Additionally, Katapult leverages customer preference and activity data to identify opportunities for repeat business, new customer offerings and general performance enhancements.

Proprietary risk assessment models

Katapult’s proprietary, end-to-end technology platform is custom built for the volume and data-intensity of e-commerce. Katapult’s highly predictive proprietary score outperforms the industry in fraud detection and false positive rates. The system is non-FICO based, relying on internally developed scoring and analytics to identify the right customers for the lease-purchase offering. Behavioral learning-based risk models are custom built to effectively price risk and provide customized recommendations. The platform considers data beyond traditional credit scores, such as lease history, behavioral biometrics and mobile device information to predict repayment ability, and leverages this with real-time response data.

Katapult’s risk models and highly predictive proprietary scores outperform standard industry sources and our potential competitors. Katapult’s sophisticated behavioral learning mitigates credit and fraud risks. The Company has less than 3% fraud rates across the portfolio and has strong repayment and collections performance. Katapult defines fraud in this context as transactions in which customers initiate a lease-to-own transaction but make no subsequent payments after origination.

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Katapult made substantial investments in underwriting technology and analytics platforms to support rapid scaling, innovation and regulatory compliance. Data scientists and risk analysts use the risk infrastructure to build and test strategies across the entire underwriting process, using alternative credit data, device authentication, identity verification, and many more data elements. Katapult’s real-time proprietary technology and risk analytics platform is unique among competitors in successfully underwriting non-prime online consumers. In addition, all applications are processed instantly with approvals and spending limits provided within seconds of submission.

Lean and scalable model

Compared to brick-and-mortar non-prime options, which are suffering from the same headwinds as traditional retail stores, Katapult has been successful in addressing the non-prime consumer through POS solutions on e-commerce merchant websites.

We believe Katapult’s model is more efficient and scalable for the following reasons:

•        As transaction volume grows, Katapult achieves more operating leverage. The Company’s model is primarily driven by a technology platform that does not require significant increases in operating overhead to support sales growth.

•        Katapult serves lease-to-own consumers across the United States without brick-and-mortar stores. The Company does not have any of the costs associated with physical stores and the personnel needed to operate them.

•        Katapult has no inventory risk and offers a completely drop-ship option. The Company does not have any of the costs associated with buying, storing and shipping inventory. Instead, goods are shipped directly to consumers.

Katapult’s Growth Strategies

Katapult has several strong levers for growth beginning with a substantial opportunity to increase market share of the e-commerce durable goods market. Katapult currently captures less than 1% of the 2020 durable goods e-commerce market.

We believe Katapult will continue to significantly benefit from increasing e-commerce adoption, deepening relationships with existing merchants, and further partner platform penetration. New merchants and partner POS integrations, as well as product enhancements and new product diversification also represent meaningful growth drivers. Additionally, Katapult can offer data analytics services to merchants and partners, as well as develop merchant co-marketing initiatives and dynamic consumer scoring models to further drive growth.

Katapult’s multi-pronged growth strategy is designed to continue to build upon the momentum generated so far in order to create opportunities that drive even greater value for consumers and merchants. Near-term areas of focus include expanding to higher-frequency transactions, expanding customer reach, and expanding merchant reach.

Significant levers for continued organic growth

•        Continued durable goods e-commerce adoption.    U.S. e-commerce durable goods spend is estimated at approximately $180billion in 2020 and expected to grow to approximately $300billion by 2023. We estimate the e-commerce durable goods market opportunity targeting an underserved population at $40 – $50billion based on 38% of U.S. consumers being underserved by prime credit products. We believe Katapult is well-positioned to address this market as more consumers and merchants transact on the platform. We believe Katapult is the only non-prime consumer POS lease-purchase platform primarily focused on e-commerce in the U.S.

•        Deepen relationships with existing merchants.    Today, Katapult transactions represent a small percentage of the average transaction volume for merchants on the platform. As more consumers become aware of the ease and transparency of using Katapult and as the Company proactively builds relationships with merchants through dedicated sales and customer success teams, we believe Katapult can significantly increase share of existing merchants’ overall transaction volumes.

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•        Further platform partner penetration.    Katapult has identified thousands of eligible merchants offering durable goods that could benefit from access to the Katapult platform. Katapult plans to pursue business relationships with eligible merchants on these platforms, as well as identify and integrate its platform into new or emerging systems to attract additional merchant communities.

•        New merchant and partner POS integrations.    Katapult has the opportunity to significantly increase the number of integrated merchants on the network through its dedicated sales team. Katapult’s differentiated technology, integration capabilities, and focus on customer experience wins merchants seeking greater access to non-prime consumers.

•        Product enhancements and new product diversification.    As Katapult continues to help merchants increase conversion rates, repeat transaction rates and customer satisfaction, the Company plans to enhance its current product offering and diversify with new product development.

Expand to higher-frequency transactions

Katapult has successfully demonstrated how its solutions can enable and accelerate commerce for larger purchases. A key principle of the next phase of growth is expanding into higher-frequency transactions, which will position Katapult to increase engagement with consumers and merchants. We believe this will lead to increased transaction volume on the platform, as well as the expansion of the consumer and merchant network.

Expand consumer reach

•        Add more consumers to the network.    As more consumers join the network, Katapult’s risk models become even more efficient and robust, allowing the Company to reach more non-prime consumers reliably. Merchant co-marketing initiatives will aim to attract new consumers to try lease-to-own as a payment option.

•        Drive repeat use.    Katapult aims to continue driving repeat use of its platform by treating customers with respect, identifying consumer needs, focusing on customer satisfaction and delivering advanced data analytics to merchants.

•        Innovate on new product solutions.    The Company is still at the beginning stages of future product roadmaps and is focused on continuing to innovate and bring new financial partnerships and products to market for non-prime consumers.

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EXECUTIVE AND DIRECTOR COMPENSATION OF KATAPULT

This section discusses the material components of the executive compensation program for Katapult’s named executive officers who are identified in the 2020 Summary Compensation Table below. This discussion may contain forward-looking statements that are based on Katapult’s current plans, considerations, expectations and determinations regarding future compensation programs. Actual compensation programs that New Katapult adopts following the completion of the merger may differ materially from the existing and currently planned programs summarized or referred to in this discussion.

Overview

We have opted to comply with the executive compensation disclosure rules applicable to emerging growth companies, as FinServ is an emerging growth company. The scaled down disclosure rules are those applicable to “smaller reporting companies,” as such term is defined in the rules promulgated under the Securities Act, which require compensation disclosure for Katapult’s principal executive officer and its two most highly compensated executive officers other than the principal executive officer whose total compensation for 2020 exceeded $100,000 and who were serving as executive officers as of December 31, 2020. We refer to these individuals as “named executive officers.” For 2020, Katapult’s named executive officers were:

•        Orlando Zayas, Chief Executive Officer

•        Karissa Cupito, Chief Financial Officer

•        Derek Medlin, Chief Operating Officer

We expect that New Katapult’s executive compensation program will evolve to reflect its status as a newly publicly-traded company, while still supporting New Katapult’s overall business and compensation objectives. In connection with the merger, Katapult expects to engage an independent executive compensation consultant to help advise on the post-merger executive compensation program.

2020 Compensation of Named Executive Officers

Base Salary

Base salaries are intended to provide a level of compensation sufficient to attract and retain an effective management team, when considered in combination with the other components of the executive compensation program. In general, we seek to provide a base salary level designed to reflect each executive officer’s scope of responsibility and accountability. See the “Salary” column in the 2020 Summary Compensation Table for the base salary amounts received by the named executive officers in 2020.

Bonuses

Historically, cash bonuses have been provided on a discretionary basis pursuant to each named executive officer’s employment agreement. Bonus compensation is designed to hold executives accountable, reward the executives based on actual business results and help create a “pay for performance” culture. See the “Bonus” column in the 2020 Summary Compensation Table for the bonus amounts received by the named executive officers in 2020.

Equity Awards

To further focus Katapult’s named executive officers on Katapult’s long-term performance, Katapult has granted equity compensation in the form of stock options and restricted stock awards pursuant to the Katapult Holdings, Inc. 2014 Stock Incentive Plan, or the Katapult Plan.

Katapult did not grant any option awards to its named executive officers in 2020.

In 2020, Katapult granted its named executive officers a total of 17,500,000 restricted shares of Katapult’s common stock. Such shares vest only upon a Liquidation Event, which is generally defined as any liquidation, dissolution, or winding up of Katapult (including a consolidation, stock exchange, or merger with another company), a business combination transaction between Katapult and a special purpose acquisition company, or SPAC, for the

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purpose of taking Katapult public, or an initial public offering. The number of shares that vest will depend upon the achieved liquidation price per common share (or, in the case of an initial public offering, the per common share offering price) and is contingent upon the recipient’s continuous employment with Katapult through such liquidation event. In connection with the closing of the merger, Katapult expects 15% of such shares to vest.

Perquisites

Katapult maintains a 401(k) plan for our employees, including our executive officers, to encourage our employees to save some portion of their cash compensation for their eventual retirement. Pursuant to a discretionary employer match, during 2020, we matched all employee contributions at 100% of the employee’s contribution up to a limit of 5% of the employee’s eligible compensation up to the IRS imposed limit.

Katapult’s chief executive officer has also received reimbursement or payment on their behalf for rent on an apartment in New York City.

2020 Summary Compensation Table

Name and principal position	Year	Salary ($)	Bonus ($)(1)	Stock awards ($)(2)	All other compensation ($)(3)	Total ($)
Orlando Zayas Chief Executive Officer	2020	360,444	400,000	7,425,092	70,750	8,256,286
Karissa Cupito Chief Financial Officer	2020	244,982	148,100	2,740,007	6,729	3,139,818
Derek Medlin Chief Operating Officer	2020	239,889	145,100	2,262,005	11,162	2,658,156

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(1)      Bonuses paid in 2020 pursuant to each named executive officer’s employment agreement.

(2)      Represents the grant date fair value under FASB ASC Topic 718 of equity awards granted during 2020.

(3)      Includes Company matching contributions made by us under our 401(k) plan. For Mr.Zayas, includes lease payments for an apartment in New York City equal to $57,000 in 2020.

October 2020 Employment Agreements

Orlando Zayas

On October1, 2020, Katapult and Orlando Zayas entered into an amended and restated employment agreement (the “Zayas Agreement”), pursuant to which Mr.Zayas continued to serve as Katapult’s Chief Executive Officer. The Zayas Agreement provides for an initial base salary of $400,000, and a discretionary cash bonus of up to 100% of Mr.Zayas’ base salary in each applicable year. Eighty percent (80%) of the discretionary cash bonus is based on financial targets and twenty percent (20%) is based on personal objectives. Mr.Zayas was paid a cash bonus in December 2020 equal to $400,000 pursuant to the Zayas Agreement.

The Zayas Agreement also provides for certain severance benefits, as described below.

If the Zayas Agreement is terminated by Katapult for Cause or Mr.Zayas resigns without Good Reason (each as defined in the Zayas Agreement), Mr.Zayas is entitled to (i) accrued base salary and accrued but unused vacation days, (ii) any earned but unpaid bonuses, (iii) certain benefits under the Katapult retirement and welfare benefit plans, and (iv) the opportunity to continue health coverage under the Company’s group health plan to the extent required by and in accordance with the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”).

If Mr.Zayas is terminated without Cause or resigns for Good Reason, in addition to the benefits described above, Katapult will (i) pay Mr.Zayas base salary for a period of twelve (12) months, (ii) pay the cost of Mr.Zayas’ COBRA premiums for twelve (12) months, (iii) accelerate the vesting of any portion of the option awards then held by Mr.Zayas that would have vested during Mr.Zayas’ twelve (12)-month severance period had Mr.Zayas remained employed, and (iv) extend the exercise period for any option awards to the earliest to occur of eighteen (18) months following his termination date, a Sale Event (as defined in the Plan) , or the expiration date of such options. Mr.Zayas’ severance benefits are contingent upon his execution and non-revocation of a general release of claims.

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“Cause” is generally defined in the Zayas Agreement as (i) Mr.Zayas’ indictment or conviction of, or plea of nolo contendere to, a felony or any other crime involving financial dishonesty against Katapult; (ii) Mr.Zayas’ engaging in any act of fraud, gross misconduct, illegality, or unlawful harassment which, as determined in good faith by the Katapult board of directors, would: (A) materially adversely affect the business or the reputation of Katapult with its current or prospective customers, suppliers, lenders and/or other third parties with whom such entity does or might do business; or (B) expose Katapult to a risk of civil or criminal legal damages, liabilities or penalties; or (iii) the repeated failure by Mr.Zayas to follow the reasonable and lawful directives of the Katapult board of directors.

“Good Reason” is generally defined in the Zayas Agreement as, absent Mr.Zayas’ prior written consent, (i) Katapult requiring Mr.Zayas to be based at any office or location more than thirty (30) miles from Mr.Zayas’ principal place of employment immediately prior to such relocation, (ii) an adverse change in Mr.Zayas’ job title or a material reduction in Mr.Zayas’ duties or responsibilities; (iii) material reduction in Mr.Zayas’ base salary, other than a general reduction in base salary affecting similarly situated senior executives of the Company; (iv) Katapult’s breach of this Agreement in any material respect; or (v) a single stockholder of Katapult (collectively with its affiliates) becomes entitled to elect a majority of the members of the Katapult board of directors, other than in connection with a Deemed Liquidation Event (as defined in the Katapult amended and restated certificate of incorporation, as amended from time to time).

Karissa Cupito

On November11, 2020, Katapult and Karissa Cupito entered into an amended and restated employment agreement (the “Cupito Agreement”), pursuant to which Ms. Cupito continued to serve as Katapult’s Chief Financial Officer. The Cupito Agreement provides for an initial base salary of $246,100 and a discretionary cash bonus of up to 60% of Ms. Cupito’s base salary in each applicable year. Eighty percent (80%) of the discretionary cash bonus is based on financial targets and twenty percent (20%) is based on personal objectives. Ms. Cupito was paid a cash bonus in December 2020 equal to $147,600 pursuant to the Cupito Agreement.

The Cupito Agreement also provides for certain severance benefits, as described below.

If the Cupito Agreement is terminated by Katapult for Cause or Ms. Cupito resigns without Good Reason (each as defined in the Cupito Agreement), Katapult shall pay Ms. Cupito (i) accrued base salary and accrued but unused vacation days, (ii) any earned but unpaid bonuses, (iii) certain benefits under the Katapult retirement and welfare benefit plans, and (iv) the opportunity to continue health coverage under the Company’s group health plan to the extent required by and in accordance with COBRA.

If Ms. Cupito is terminated without Cause, or resigns for Good Reason, in addition to the benefits described above, Katapult will (i) pay Ms. Cupito base salary for a period of twelve (12) months, (ii) pay the cost of Ms. Cupito’s COBRA premiums for twelve (12) months, (iii) accelerate the vesting of any portion of the option awards then held by Ms. Cupito that would have vested during Ms. Cupito twelve (12)-month severance period had Ms. Cupito remained employed, and (iv) extend the exercise period for any vested option awards to the earliest to occur of eighteen (18) months following her termination date, a Sale Event (as defined in the Plan), or the expiration date of such options. Ms. Cupito’s severance benefits are contingent upon her execution and non-revocation of a general release of claims.

“Cause” is generally defined in the Cupito Agreement as (i) Ms. Cupito’s indictment or conviction of, or plea of nolo contendere to, a felony or any other crime involving financial dishonesty against Katapult; (ii) Ms. Cupito’s engaging in any act of fraud, gross misconduct, illegality, or unlawful harassment which, as determined in good faith by the Katapult chief executive officer, would: (A) materially adversely affect the business or the reputation of Katapult with its current or prospective customers, suppliers, lenders and/or other third parties with whom such entity does or might do business; or (B) expose Katapult to a risk of civil or criminal legal damages, liabilities or penalties; or (iii) the repeated failure by Ms. Cupito to follow the reasonable and lawful directives of the Katapult chief executive officer.

“Good Reason” is generally defined in the Cupito Agreement as, absent Ms. Cupito’s prior written consent, (i) Katapult requiring Ms. Cupito to be based at any office or location more than thirty (30) miles from Ms. Cupito’s principal place of employment immediately prior to such relocation, (ii) an adverse change in Ms. Cupito’s job title or a material reduction in Ms. Cupito’s duties or responsibilities; (iii) material reduction in Ms. Cupito’s base salary, other than a general reduction in base salary affecting similarly situated senior executives of the Company;

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(iv) Katapult’s breach of this Agreement in any material respect; or (v) a single stockholder of Katapult (collectively with its affiliates) becomes entitled to elect a majority of the members of the Katapult board of directors, other than in connection with a Deemed Liquidation Event (as defined in the Katapult amended and restated certificate of incorporation, as amended from time to time).

Derek Medlin

On October1, 2020, Katapult and Derek Medlin entered into an amended and restated employment agreement (the “Medlin Agreement”), pursuant to which Mr.Medlin continued to serve as Katapult’s Chief Operating Officer. The Medlin Agreement provides for an initial base salary of $241,000, and a discretionary cash bonus of up to 60% of Mr.Medlin’s base salary in each applicable year. Eighty percent (80%) of the discretionary cash bonus is based on financial targets and twenty percent (20%) is based on personal objectives. Mr.Medlin was paid a cash bonus in December 2020 equal to $144,600 pursuant to the Medlin Agreement.

The Medlin Agreement also provides for certain severance benefits, as described below.

If the Medlin Agreement is terminated for Cause, Mr.Medlin is entitled to (i) accrued base salary and accrued but unused vacation days, (ii) any earned but unpaid bonuses, (iii) certain benefits under the Katapult retirement and welfare benefit plans, and (iv) the opportunity to continue health coverage under the Company’s group health plan to the extent required by and in accordance with COBRA.

If Mr.Medlin is terminated without Cause, or resigns for Good Reason, in addition to the benefits described above, Katapult will (i) pay Mr.Medlin base salary for a period of twelve (12) months, (ii) pay the cost of Mr.Medlin’s COBRA premiums for twelve (12) months, (iii) accelerate the vesting of any portion of the option awards then held by Mr.Medlin hat would have vested during Mr.Medlin’s twelve (12)-month severance period had Mr.Medlin remained employed, and (iv) extend the exercise period for any vested option awards to the earliest to occur of eighteen (18) months following his termination date, a Sale Event (as defined in the Plan), or the expiration date of such options. Mr.Medlin’s severance benefits are contingent upon his execution and non-revocation of a general release of claims.

“Cause” is generally defined in the Medlin Agreement as (i) Mr.Medlin’s indictment or conviction of, or plea of nolo contendere to, a felony or any other crime involving financial dishonesty against Katapult; (ii) Mr.Medlin’s engaging in any act of fraud, gross misconduct, illegality, or unlawful harassment which, as determined in good faith by the Katapult chief executive officer, would: (A) materially adversely affect the business or the reputation of Katapult with its current or prospective customers, suppliers, lenders and/or other third parties with whom such entity does or might do business; or (B) expose Katapult to a risk of civil or criminal legal damages, liabilities or penalties; or (iii) the repeated failure by Mr.Medlin to follow the reasonable and lawful directives of the Katapult chief executive officer.

“Good Reason” is generally defined in the Medlin Agreement as, absent Mr.Medlin’s prior written consent, (i) Katapult requiring Mr.Medlin to be based at any office or location more than thirty (30) miles from Mr.Medlin’s principal place of employment immediately prior to such relocation, (ii) an adverse change in Mr.Medlin’s job title or a material reduction in Mr.Medlin’s duties or responsibilities; (iii) material reduction in Mr.Medlin’s base salary, other than a general reduction in base salary affecting similarly situated senior executives of the Company; (iv) Katapult’s breach of this Agreement in any material respect; or (v) a single stockholder of Katapult (collectively with its affiliates) becomes entitled to elect a majority of the members of the Katapult board of directors, other than in connection with a Deemed Liquidation Event (as defined in the Katapult amended and restated certificate of incorporation, as amended from time to time).

May 2021 Employment Agreements

Orlando Zayas

On May4, 2021, Katapult and Orlando Zayas entered into a second amended and restated employment agreement (the “Restated Zayas Agreement”), effective as of closing of the merger, pursuant to which Mr.Zayas will continue to serve as Katapult’s Chief Executive Officer. The Restated Zayas Agreement provides for an initial base salary of $675,000, and a discretionary cash bonus with a target of no less than 100% of Mr.Zayas’ base salary in

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each applicable year (up to a maximum of 200% of the target amount), and for calendar year 2021 where Mr.Zayas’ discretionary cash bonus may be up to 200% of Mr.Zayas’ 2021 target amount depending on the Company’s level of achievement of certain financial targets. Mr.Zayas will also be eligible for an annual equity award under the Katapult Holdings, Inc. 2021 Equity Incentive Plan (the “Incentive Plan”) as determined by the Katapult board of directors. Promptly following closing of the merger, Mr.Zayas will also be granted a restricted share unit award with a grant date value equal to $5million under the Incentive Plan.

The Restated Zayas Agreement also provides for certain severance benefits, as described below.

If the Restated Zayas Agreement is terminated by Katapult for Cause or Mr.Zayas resigns without Good Reason (each as defined in the Restated Zayas Agreement), Mr.Zayas is entitled to (i) accrued base salary and accrued but unused vacation days, (ii) any earned but unpaid bonuses, (iii) certain benefits under the Katapult retirement and welfare benefit plans, and (iv) the opportunity to continue health coverage under the Company’s group health plan to the extent required by and in accordance with the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”) ((i) – (iv) the “Zayas Accrued Obligations”).

Subject to the following paragraph, if Mr.Zayas is terminated without Cause or resigns for Good Reason, in addition to the Zayas Accrued Obligations, Katapult will (i) pay Mr.Zayas base salary for a period of twelve (12) months, (ii) pay Mr.Zayas a pro-rated annual bonus for the calendar year in which such termination occurs, (iii) pay the cost of Mr.Zayas’ COBRA premiums for twelve (12) months, (iv) accelerate the vesting of any portion of any time-based vesting equity awards then held by Mr.Zayas that would have vested during Mr.Zayas’ twelve (12)-month severance period had Mr.Zayas remained employed, and (v) extend the exercise period for any option awards to the earliest to occur of eighteen (18) months following his termination date, a Change in Control (as defined in the Incentive Plan), or the expiration date of such options. Mr.Zayas’ severance benefits are contingent upon his execution and non-revocation of a general release of claims.

If during the period commencing within three (3) months prior to a Change in Control and ending twelve (12) months following a Change in Control the Company terminates Mr.Zayas’ employment without Cause or Mr.Zayas terminates his employment for Good Reason, then, in addition to the Zayas Accrued Obligations, Katapult will (i) pay Mr.Zayas a lump sum equal to two (2) times the sum of his base salary plus target bonus for the year of termination, (ii) pay the cost of Mr.Zayas’ COBRA premiums for eighteen (18) months, (iv) accelerate the vesting of any portion of any long-term incentive awards then held by Mr.Zayas to the extent not assumed by the successor entity (which includes any new buyer awards granted to Mr.Zayas in connection with the Change in Control), and (v) extend the exercise period for any option awards to the earliest to occur of eighteen (18) months following his termination date, a Change in Control, or the expiration date of such options. Mr.Zayas’ severance benefits are contingent upon his execution and non-revocation of a general release of claims.

“Cause” is generally defined in the Restated Zayas Agreement as (i) Mr.Zayas’ indictment or conviction of, or plea of nolo contendere to, a felony or any other crime involving financial dishonesty against Katapult; (ii) Mr.Zayas’ engaging in any act of fraud, gross misconduct, illegality, or unlawful harassment which, as determined in good faith by the Katapult board of directors, would: (A) materially adversely affect the business or the reputation of Katapult with its current or prospective customers, suppliers, lenders and/or other third parties with whom such entity does or might do business; or (B) expose Katapult to a risk of civil or criminal legal damages, liabilities or penalties; (iii) the repeated failure by Mr.Zayas to follow the reasonable and lawful directives of the Katapult board of directors, (iv) Mr.Zayas’ material breach of the Restated Zayas Agreement or other policies adopted by the Katapult board of directors, or (v) Mr.Zayas’ willful breach of his fiduciary obligations.

“Good Reason” is generally defined in the Restated Zayas Agreement as, absent Mr.Zayas’ prior written consent, (i) Katapult requiring Mr.Zayas to be based at any office or location more than thirty (30) miles from Mr.Zayas’ principal place of employment immediately prior to such relocation, (ii) an adverse change in Mr.Zayas’ job title or a material reduction in Mr.Zayas’ duties or responsibilities; (iii) material reduction in Mr.Zayas’ base salary, other than a general reduction in base salary affecting similarly situated senior executives of the Company; (iv) Katapult’s breach of this Agreement in any material respect; or (v) a single stockholder of Katapult (collectively with its affiliates) becomes entitled to elect a majority of the members of the Katapult board of directors, other than in connection with a Deemed Liquidation Event (as defined in the Katapult amended and restated certificate of incorporation, as amended from time to time).

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Karissa Cupito

On May4, 2021, Katapult and Karissa Cupito entered into a second amended and restated employment agreement (the “Restated Cupito Agreement”), effective as of closing of the merger, pursuant to which Ms. Cupito will continue to serve as Katapult’s Chief Financial Officer. The Restated Cupito Agreement provides for an initial base salary of $450,000, and a discretionary cash bonus with a target of no less than 75% of Ms. Cupito’s base salary in each applicable year (up to a maximum of 150% of the target amount), and for calendar year 2021 Ms. Cupito’s discretionary cash bonus may be up to 150% of Ms. Cupito’s 2021 target amount depending on the Company’s level of achievement of certain financial targets. Ms. Cupito will also be eligible for an annual equity award under the Incentive Plan as determined by the Katapult board of directors. Promptly following closing of the merger, Ms. Cupito will also be granted a restricted share unit award with a grant date value equal to $1.5million under the Incentive Plan.

The Restated Cupito Agreement also provides for certain severance benefits, as described below.

If the Restated Cupito Agreement is terminated by Katapult for Cause or Ms. Cupito resigns without Good Reason (each as defined in the Restated Cupito Agreement), Ms. Cupito is entitled to (i) accrued base salary and accrued but unused vacation days, (ii) any earned but unpaid bonuses, (iii) certain benefits under the Katapult retirement and welfare benefit plans, and (iv) the opportunity to continue health coverage under the Company’s group health plan to the extent required by and in accordance with COBRA ((i) – (iv) the “Cupito Accrued Obligations”).

Subject to the following paragraph, if Ms. Cupito is terminated without Cause or resigns for Good Reason, in addition to the Cupito Accrued Benefits, Katapult will (i) pay Ms. Cupito base salary for a period of twelve (12) months, (ii) pay Ms. Cupito a pro-rated annual bonus for the calendar year in which such termination occurs, (iii) pay the cost of Ms. Cupito’s COBRA premiums for twelve (12) months, (iv) accelerate the vesting of any portion of any time-based vesting equity awards then held by Ms. Cupito that would have vested during Ms. Cupito’s twelve (12)-month severance period had Ms. Cupito remained employed, and (v) extend the exercise period for any option awards to the earliest to occur of eighteen (18) months following her termination date, a Change in Control (as defined in the Incentive Plan), or the expiration date of such options. Ms. Cupito’s severance benefits are contingent upon her execution and non-revocation of a general release of claims.

If during the period commencing within three (3) months prior to a Change in Control and ending twelve (12) months following a Change in Control the Company terminates Ms. Cupito’s employment without Cause or Ms. Cupito terminates her employment for Good Reason, then, in addition to the Cupito Accrued Obligations, Katapult will (i) pay Ms. Cupito a lump sum equal to two (2) times the sum of his base salary plus target bonus for the year of termination, (ii) pay the cost of Ms. Cupito’s COBRA premiums for eighteen (18) months, (iv) accelerate the vesting of any portion of any long-term incentive awards then held by Mr.Cupito to the extent not assumed by the successor entity (which includes any new buyer awards granted to Ms. Cupito in connection with the Change in Control), and (v) extend the exercise period for any option awards to the earliest to occur of eighteen (18) months following her termination date, a Change in Control, or the expiration date of such options. Ms. Cupito’s severance benefits are contingent upon her execution and non-revocation of a general release of claims.

“Cause” is generally defined in the Restated Cupito Agreement as (i) Ms. Cupito’s indictment or conviction of, or plea of nolo contendere to, a felony or any other crime involving financial dishonesty against Katapult; (ii) Ms. Cupito’s engaging in any act of fraud, gross misconduct, illegality, or unlawful harassment which, as determined in good faith by the Katapult board of directors, would: (A) materially adversely affect the business or the reputation of Katapult with its current or prospective customers, suppliers, lenders and/or other third parties with whom such entity does or might do business; or (B) expose Katapult to a risk of civil or criminal legal damages, liabilities or penalties; (iii) the repeated failure by Ms. Cupito to follow the reasonable and lawful directives of the Katapult board of directors, (iv) Ms. Cupito’s material breach of the Restated Cupito Agreement or other policies adopted by the Katapult board of directors, or (v) Ms. Cupito’s willful breach of her fiduciary obligations.

“Good Reason” is generally defined in the Restated Cupito Agreement as, absent Ms. Cupito’s prior written consent, (i) Katapult requiring Ms. Cupito to be based at any office or location more than thirty (30) miles from Ms. Cupito’s principal place of employment immediately prior to such relocation, (ii) an adverse change in Ms. Cupito’s job title or a material reduction in Ms. Cupito’s duties or responsibilities; (iii) material reduction in Ms. Cupito’s base salary, other than a general reduction in base salary affecting similarly situated senior executives

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of the Company; (iv) Katapult’s breach of this Agreement in any material respect; or (v) a single stockholder of Katapult (collectively with its affiliates) becomes entitled to elect a majority of the members of the Katapult board of directors, other than in connection with a Deemed Liquidation Event (as defined in the Katapult amended and restated certificate of incorporation, as amended from time to time).

Derek Medlin

On May4, 2021, Katapult and Derek Medlin entered into a second amended and restated employment agreement (the “Restated Medlin Agreement”), effective as of closing of the merger, pursuant to which Mr.Medlin will continue to serve as Katapult’s Chief Operating Officer. The Restated Medlin Agreement provides for an initial base salary of $450,000, and a discretionary cash bonus with a target of no less than 75% of Mr.Medlin’s base salary in each applicable year (up to a maximum of 150% of the target amount), except for calendar year 2021 where Mr.Medlin’s discretionary cash bonus may be up to 150% of Mr.Medlin’s 2021 target amount depending on the Company’s level of achievement of certain financial targets. Mr.Medlin will also be eligible for an annual equity award under the Incentive Plan as determined by the Katapult board of directors. Promptly following closing of the merger, Mr.Medlin will also be granted a restricted share unit award with a grant date value equal to $1.5million under the Incentive Plan.

The Restated Medlin Agreement also provides for certain severance benefits, as described below.

If the Restated Medlin Agreement is terminated by Katapult for Cause or Mr.Medlin resigns without Good Reason (each as defined in the Restated Medlin Agreement), Mr.Medlin is entitled to (i) accrued base salary and accrued but unused vacation days, (ii) any earned but unpaid bonuses, (iii) certain benefits under the Katapult retirement and welfare benefit plans, and (iv) the opportunity to continue health coverage under the Company’s group health plan to the extent required by and in accordance with COBRA ((i) – (iv) the “Medlin Accrued Obligations”).

Subject to the following paragraph, if Mr.Medlin is terminated without Cause or resigns for Good Reason, in addition to the Medlin Accrued Benefits, Katapult will (i) pay Mr.Medlin base salary for a period of twelve (12) months, (ii) pay Mr.Medlin a pro-rated annual bonus for the calendar year in which such termination occurs, (iii) pay the cost of Mr.Medlin’s COBRA premiums for twelve (12) months, (iv) accelerate the vesting of any portion of any time-based vesting equity awards then held by Mr.Medlin that would have vested during Mr.Medlin’s twelve (12)-month severance period had Mr.Medlin remained employed, and (v) extend the exercise period for any option awards to the earliest to occur of eighteen (18) months following his termination date, a Change in Control (as defined in the Incentive Plan), or the expiration date of such options. Mr.Medlin’s severance benefits are contingent upon his execution and non-revocation of a general release of claims.

If during the period commencing within three (3) months prior to a Change in Control and ending twelve (12) months following a Change in Control the Company terminates Mr.Medlin’s employment without Cause or Mr.Medlin terminates his employment for Good Reason, then, in addition to the Medlin Accrued Obligations, Katapult will (i) pay Mr.Medlin a lump sum equal to two (2) times the sum of his base salary plus target bonus for the year of termination, (ii) pay the cost of Mr.Medlin’s COBRA premiums for eighteen (18) months, (iv) accelerate the vesting of any portion of any long-term incentive awards then held by Mr.Medlin to the extent not assumed by the successor entity (which includes any new buyer awards granted to Mr.Medlin in connection with the Change in Control), and (v) extend the exercise period for any option awards to the earliest to occur of eighteen (18) months following his termination date, a Change in Control, or the expiration date of such options. Mr.Medlin’s severance benefits are contingent upon his execution and non-revocation of a general release of claims.

“Cause” is generally defined in the Restated Medlin Agreement as (i) Mr.Medlin’s indictment or conviction of, or plea of nolo contendere to, a felony or any other crime involving financial dishonesty against Katapult; (ii) Mr.Medlin’s engaging in any act of fraud, gross misconduct, illegality, or unlawful harassment which, as determined in good faith by the Katapult board of directors, would: (A) materially adversely affect the business or the reputation of Katapult with its current or prospective customers, suppliers, lenders and/or other third parties with whom such entity does or might do business; or (B) expose Katapult to a risk of civil or criminal legal damages, liabilities or penalties; (iii) the repeated failure by Mr.Medlin to follow the reasonable and lawful directives of the Katapult board of directors, (iv) Mr.Medlin’s material breach of the Restated Medlin Agreement or other policies adopted by the Katapult board of directors, or (v) Mr.Medlin’s willful breach of his fiduciary obligations.

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“Good Reason” is generally defined in the Restated Medlin Agreement as, absent Mr.Medlin’s prior written consent, (i) Katapult requiring Mr.Medlin to be based at any office or location more than thirty (30) miles from Mr.Medlin’s principal place of employment immediately prior to such relocation, (ii) an adverse change in Mr.Medlin’s job title or a material reduction in Mr.Medlin’s duties or responsibilities; (iii) material reduction in Mr.Medlin’s base salary, other than a general reduction in base salary affecting similarly situated senior executives of the Company; (iv) Katapult’s breach of this Agreement in any material respect; or (v) a single stockholder of Katapult (collectively with its affiliates) becomes entitled to elect a majority of the members of the Katapult board of directors, other than in connection with a Deemed Liquidation Event (as defined in the Katapult amended and restated certificate of incorporation, as amended from time to time).

Potential Payments upon a Termination or Change of Control

Pursuant to the employment agreements with each of our named executive officers, any options granted to the named executive officers after the effective date of their respective employment agreements shall contain the following vesting provisions in the applicable award agreement, conditioned upon such named executive officers’ continued employment as of the effective date of such event:

•        upon a Sale Event, as defined in the Katapult Plan (as defined herein), fifty percent (50%) of any unvested options shall become fully vested, and

•        upon a Sale Event, if the named executive officer’s employment is terminated in connection with coincident with or following a Sale Event without Cause or by the named executive officer without Good Reason (each as defined in the applicable employment agreement), all unvested options shall become fully vested.

Each named executive officer is entitled to certain other benefits upon a termination or change of control as described above under the heading “Employment Agreements”.

Katapult Holdings, Inc. 2014 Stock Incentive Plan

Katapult maintains the Katapult Holdings, Inc. 2014 Stock Incentive Plan, or the Katapult Plan. The Katapult Plan permits the grant of incentive stock options, non-qualified stock options, restricted stock awards and unrestricted stock awards.  Incentive stock options may be granted only to employees of Katapult and its parent and subsidiaries. All other awards may be granted to Katapult’s directors and employees and consultants of Katapult and Katapult’s affiliates with respect to services provided to Katapult.

Administration.    Katapult’s board of directors or a committee delegated by the board of directors administers the Katapult Plan. Subject to the terms of the Katapult Plan, the administrator has the power to, among other things, select participants from among eligible employees, consultants and non-employee directors, determine the awards to be made pursuant to the Katapult Plan, determine the number of shares subject to each award, impose limitations on awards, determine and modify from time to time the terms and conditions of awards in a manner consistent with the Katapult Plan, accelerate the exercisability or vesting of all or any portion of any awards, interpret the terms and conditions of the Katapult Plan and any award agreement, and make all determinations it deems advisable for the administration of the Katapult Plan.

Options.    Katapult’s employees and service providers have historically received incentive stock options pursuant to the Katapult Plan. The exercise price per share of incentive stock options granted under the Katapult Plan must be at least 100% of the fair market value per share of Katapult’s common stock on the grant date; provided that the exercise price for an incentive stock option granted to a 10% or more holder of Katapult’s common stock will be no less than 110% of the fair market value per share of Katapult’s common stock on the grant date. Nonqualified stock options may be granted with a per share exercise price that is less than 100% of the per share fair market value of Katapult’s common stock. The aggregate fair market value of the shares with respect to which incentive stock options may be exercisable for the first time by an option holder in any calendar year, under the Katapult Plan or otherwise, may not exceed $100,000 (or such higher amount as permitted under Section 422 of the Internal Revenue Code of 1986, as amended, or the Code). Subject to the provisions of the Katapult Plan, the administrator determines the other terms of options, including exercise prices, any vesting and exercisability requirements, the method of

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payment of the option exercise price, the option expiration date (which may be no more than 10 years from the date of grant, or 5 years for an incentive stock option granted to a 10% or more holder of Katapult’s common stock), and the period following termination of service during which options may remain exercisable.

Stock Awards.    The administrator may, from time to time, grant to eligible individuals awards of restricted stock or unrestricted stock, collectively, Stock Awards. For the purposes of the Katapult Plan, “Restricted Stock” means an award of shares of common stock pursuant to which Katapult may, in its sole discretion, grant or sell, at such purchase price as determined by the administrator, in its sole discretion, shares subject to such restrictions and conditions as the administrator may determine at the time of grant, which purchase price shall be payable in cash or other form of consideration acceptable to the administrator. Conditions may be based on continuing employment (or other service relationship) and/or achievement of pre-established performance goals and objectives. A grantee of Restricted Stock shall have the rights of a stockholder with respect to the voting of the Restricted Stock, subject to such conditions contained in the written instrument evidencing the grant. The administrator at the time of grant shall specify the date or dates and/or the attainment of pre-established performance goals, objectives and other conditions on which Restricted Stock shall become vested, subject to such further rights of Katapult or its assigns as may be specified in the instrument evidencing the grant.

“Unrestricted Stock” may be granted or sold (at par value or such higher purchase price determined by the administrator) in respect of past services or other valid consideration, or in lieu of any cash compensation due to such individual or entity. Upon the request of a grantee and with the consent of the administrator, each such grantee may, pursuant to an advance written election delivered to Katapult no later than the date specified by the administrator, receive a portion of the cash compensation otherwise due to such grantee in the form of shares of Unrestricted Stock.

Capital Adjustments.    If, as a result of any reorganization, recapitalization, reclassification, stock dividend, stock split, reverse stock split, spin-off, split-up or other similar change in Katapult’s capital stock, the outstanding shares of Katapult’s stock are increased or decreased or are exchanged for a different number or kind of shares or other securities of the Company, or additional shares or new or different shares or other securities of Katapult or other non-cash assets are distributed with respect to such shares or other securities, or, if, as a result of any merger, consolidation or sale of all or substantially all of the assets of Katapult, the outstanding shares of Katapult stock are converted into or exchanged for a different number or kind of securities of Katapult or any successor entity (or a parent or subsidiary thereof), Katapult will make an appropriate or proportionate adjustment in (i) the maximum number of shares reserved for issuance under the Katapult Plan, (ii) the number and kind of shares or other securities subject to any then outstanding awards under the Katapult Plan, (iii) the repurchase price per share subject to each outstanding award, if any, and (iv) the exercise price and/or exchange price for each share subject to any then outstanding stock options under the Katapult Plan, in each case, in a manner in accordance with Section 409A of the Code.

Treatment Upon Sale Event.    In the event of a Sale Event, as defined in the Katapult Plan, the administrator shall have the right, but not the obligation, to accelerate the vesting with respect to any or all outstanding options. Upon the consummation of a Sale Event, the Katapult Plan and all options issued thereunder (both vested and unvested) shall terminate upon the effective time of any such Sale Event unless provision is made in connection with the Sale Event in the sole discretion of the parties thereto for the assumption or continuation of options theretofore granted by the successor entity, or the substitution of such options with new options of the successor entity or parent thereof, with appropriate adjustment as to the number and kind of shares underlying the options and, if appropriate, the exercise prices, as such parties shall agree (after taking into account any acceleration hereunder). Notwithstanding the above, in the event of a Sale Event pursuant to which holders of the Katapult common stock immediately prior to the consummation of such Sale Event will receive upon consummation thereof, a cash payment for each share surrendered in the Sale Event, Katapult shall have the right, but not the obligation, to make or provide for a cash payment to the grantees holding vested options (including options (if any) that vest as a result of such Sale Event) in exchange for the cancellation thereof, in an amount equal to the difference between (A) the value, as determined by the administrator, of the consideration payable per share pursuant to the Sale Event (the “Sale Price”) times the number of shares subject to outstanding vested options (to the extent then exercisable at prices not in excess of the Sale Price) and (B) the aggregate exercise price of all such outstanding vested options.

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Unless otherwise provided for in the Katapult Plan or in an award agreement, any shares of unrestricted stock granted under the Katapult Plan shall be treated in a Sale Event the same as all other shares then outstanding.

Plan Amendment or Termination.    Katapult’s board of directors may amend or discontinue the Katapult Plan and the committee may, at any time, amend or cancel any outstanding award in a manner not inconsistent with the terms of the Katapult Plan, provided that no such action adversely affects the rights under any outstanding award without the holder’s consent. In addition, to the extent determined by the committee to be required by the Code to ensure that incentive stock options granted under the Katapult Plan are qualified under Section 422 of the Code, amendments to the plan are subject to the approval by Katapult’s stockholders who are entitled to vote at a meeting of stockholders.

The Katapult Plan shall remain in effect until June5, 2024, unless otherwise earlier terminated in accordance with the terms of the plan. The Katapult Plan and all awards and actions taken thereunder are governed by, construed and enforced in accordance with, the laws of the State of Delaware. Any disputes arising under the Katapult Plan or any award made thereunder are subject to binding arbitration divisions as set forth in the Katapult Plan.

Outstanding Equity Awards at 2020 Fiscal Year-End

The following table presents information regarding the outstanding stock options and restricted stock awards held by each of the named executive officers as of December 31, 2020.

	Option Awards						Stock Awards
Name	Grant Date		Number of Securities Underlying Unexercised Options (#) Exercisable	Number of Securities Underlying Unexercised Options (#) Unexercisable	Option Exercise Price ($)	Option Expiration Date	Equity incentive plan awards: number of unearned shares, units or other rights that have not vested (#)	Equity incentive plan awards: market or payout value of unearned shares, units or other rights that have not vested ($)(4)
Orlando Zayas	11/21/2017	​(1)	1,130,651	260,920	0.50	11/21/2027
	9/5/2019	​(2)	1,333,333	1,666,667	0.17	9/5/2029
	9/5/2019		591,452	0	0.17	9/5/2029
	8/26/2020	​(3)					9,000,000	7,425,092
Karissa Cupito	12/11/2017	​(1)	270,797	90,266	0.50	12/11/2027
	12/11/2017		180,531	0	0.50	12/11/2027
	9/5/2019	​(2)	377,777	472,223	0.17	9/5/2029
	9/5/2019		223,235	0	0.17	9/5/2029
	8/26/2020	​(3)					4,250,000	2,740,007
Derek Medlin	7/31/2017	​(1)	72,588	12,394	0.50	7/31/2027
	8/1/2018	​(2)	84,125	16,825	0.79	8/1/2028
	9/5/2019	​(2)	333,333	416,667	0.17	9/5/2029
	9/5/2019		218,382	0	0.17	9/5/2029
	8/26/2020	​(3)					4,250,000	2,262,005

____________

(1)      Such option vested 25% on the first anniversary of the data of grant, then 1/48th vests on a monthly basis thereafter for three years.

(2)      Such option vests in equal monthly installments over a three year period.

(3)      Represents a grant of restricted shares of common stock that are expected to vest as to 15% of the shares upon the closing of the merger. The remaining shares subject to each grant are expected to be forfeited upon closing of the merger.

(4)      Represents the grant date fair value under FASB ASC Topic 718 of equity awards granted.

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Grants of Plan-Based Awards

Name	Grant Date		All Other Stock Awards: Number of Shares of Stock or Units (#)	Grant Date Fair Value of Stock and Options Awards ($)(1)(2)
Orlando Zayas	8/26/2020	​(2)	9,000,000	7,425,092
Karissa Cupito	8/26/2020	​(2)	4,250,000	2,740,007
Derek Medlin	8/26/2020	​(2)	4,250,000	2,262,005

____________

(1)      Represents the grant date fair value under FASB ASC Topic 718 of equity awards granted.

(2)      Represents a grant of restricted shares of common stock that are expected to vest as to 15% of the shares upon the closing of the merger. The remaining shares subject to each grant are expected to be forfeited upon closing of the merger.

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KATAPULT’S MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

Unless the context otherwise requires, all references in this section to “we,” “us,” “our,” the “Company”, or “Katapult” refer to Katapult Holdings, Inc. and subsidiaries prior to the consummation of the merger.

You should read the following discussion and analysis of our financial condition and results of operations together with the “Selected Historical Consolidated Financial Information of Katapult” section of this prospectus and our consolidated financial statements and the related notes appearing elsewhere in this prospectus. This discussion contains forward-looking statements that reflect our plans, estimates, and beliefs that involve risks and uncertainties. As a result of many factors, such as those set forth under the headings “Risk Factors” and “Forward-Looking Statements; Market, Ranking and Other Industry Data” and elsewhere in this proxy statement/prospectus, our actual results may differ materially from those anticipated in these forward-looking statements. All dollar amounts are in thousands, unless otherwise specified.

Overview

Katapult is an e-commerce focused financial technology company offering e-commerce point-of-sale (“POS”) lease-purchase options for nonprime U.S. consumers. Katapult’s fully-digital, next-generation technology platform provides nonprime consumers with a flexible lease purchase option to enable them to obtain durable goods from Katapult’s network of e-commerce retailers. The Company’s sophisticated end-to-end technology platform provides seamless integration with merchants, underwriting capabilities that exceed those of commonly available services, and exceptional customer experiences. See the section titled “Information about Katapult” beginning on page 85 of this document for further details on our business.

Key events impacting our business are as follows:

•        COVID-19 — In March 2020, The World Health Organization recognized a global pandemic known as the coronavirus, or COVID-19. Due to the economic uncertainty that this has and can continue to cause, there is an added risk factor in the overall future outlook of the Company. During 2020 the Company implemented cost containment and cash management initiatives to mitigate the potential impact of the COVID-19 pandemic on our business and liquidity. The Company experienced positive performance during the pandemic due to increased customer activity and the resiliency of our business model. However, certain COVID-19 related trends underlying that positive performance may not continue at current levels. Management will continue to monitor any changes to the business as the pandemic continues throughout 2021.

•        Pending Business Combination — On December18, 2020, Katapult announced that it had entered into a definitive merger agreement with FinServ Acquisition Corp., a publicly traded special purpose acquisition company. Under the terms of the proposed transaction, FinServ will merge with Katapult at an estimated combined enterprise value of approximately $1billion and equity value of $962million. Total consideration paid to Katapult’s existing shareholders will be $833million. Cash proceeds from the transaction will fund up to $325million of cash consideration to Katapult’s existing shareholders and $50million of cash to Katapult’s balance sheet. The cash components of the transaction will be funded by FinServ’s cash in trust of $250million (assuming no redemptions) as well as a $150million private placement of common stock at $10 per share from various institutional investors. The balance of the consideration to Katapult’s equity holders will consist of equity in the Company. Existing Katapult equity holders will have the potential to receive an earn-out for additional shares of equity if certain price targets are met as set forth in the definitive merger agreement. The transaction is expected to close during the first half of 2021 and remains subject to customary closing conditions.

Key Performance Metrics

We regularly review several metrics, including the following key metrics, to evaluate our business, measure our performance, identify trends affecting our business, formulate financial projections and make strategic decisions, which may also be useful to an investor.

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Originations

We measure originations to assess the growth trajectory and overall size of our lease portfolio. There is a direct correlation between origination growth and revenue growth. We define originations as the dollar amount of leases originated during the period, and we define cumulative originations as the aggregate amount of originations at a point in time. Originations may be useful to an investor because it helps to understand the growth trajectory of revenues.

The following table presents originations for the years ended December31, 2020, December31, 2019 and December31, 2018, as well as the Company’s lifetime cumulative originations as of each respective date.

	Year Ended December 31,						2019 – 2020 Change				2018 – 2019 Change
	2020		2019		2018		$		%		$		%
Originations	$	192,118	$	87,666	$	49,170	$	104,452	119.1	%	$	38,496	78.3	%

	As of December 31,						2019 – 2020 Change				2018 – 2019 Change
	2020		2019		2018		$		%		$		%
Cumulative Originations	$	373,128	$	181,010	$	93,344	$	192,118	106.1	%	$	87,666	93.9	%

Total Revenue, Unearned Revenue, and Bad Debt Recoveries

Total revenue represents the summation of rental revenue, other revenue, and service fees. Unearned revenue represents the Company’s liability for cash received from customers prior to the related revenue being earned, and bad debt recoveries represent customer payments for receivables that had previously been written off. Bad debt recoveries represent a reduction to bad debt expense in the period in which they are collected. We measure these metrics to assess the total view of paythrough performance of our customers. We believe looking at these components of our consolidated financial statements is useful to an investor as it helps to understand the total payment performance of customers.

The following table presents total revenue and bad debt recoveries for the years ended December31, 2020, 2019, and 2018, as well as unearned revenue as of December31, 2020, 2019, and 2018.

	Years Ended December 31,
	2020		2019		2018
Total revenue	$	247,200	$	91,877	$	43,146
Bad debt recoveries(1)		3,465		1,499		448

____________

(1)      Bad debt recoveries represent 22% of total bad debt expense of $16,064 for the year ended December 31, 2020, 16% of total bad debt expense of $9,163 for the year ended December 31, 2019, and 10% of total bad debt expense of $4,281 for the year ended December 31, 2018.

	As of December 31,
	2020		2019		2018
Unearned revenue	$	2,652	$	1,368	$	873

Gross Profit

Gross profit represents total revenue less cost of revenue, and is a measure presented in accordance with U.S. GAAP. See the “Non-GAAP Measures” section below for a presentation of this measure alongside adjusted gross profit, which is a non-GAAP measure utilized by management.

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Results of Operations

Comparison of the Years Ended December31, 2020, 2019 and 2018

The following tables are references for the discussion that follows.

	Years Ended December 31,									2019 – 2020Change					2018 – 2019Change
	2020			2019			2018			$			%		$		%
Revenue
Rental revenue	$	246,927		$	90,996		$	42,126		$	155,931		171.4	%	48,870		116.0	%
Other revenue		200			368			290			(168	)	-45.7	%	78		26.9	%
Service fees		73			513			730			(440	)	-85.8	%	(217	)	-29.7	%
Total revenue		247,200			91,877			43,146			155,323		169.1	%	48,731		112.9	%
Cost of revenue		167,412			71,220			38,710			96,192		135.1	%	32,510		84.0	%
Gross profit		79,788			20,657			4,436			59,131		286.3	%	16,221		365.7	%
Operating expenses:
Servicing costs		4,077			2,934			1,879			1,143		39.0	%	1,055		56.1	%
Underwriting fees		2,344			2,562			843			(218	)	-8.5	%	1,719		203.9	%
Professional and consulting fees		2,949			1,347			1,187			1,602		118.9	%	160		13.5	%
Technology and data analytics		6,498			4,293			2,920			2,205		51.4	%	1,373		47.0	%
Bad debt expense		16,064			9,163			4,281			6,901		75.3	%	4,882		114.0	%
General and administrative		10,950			9,750			10,199			1,200		12.3	%	(449	)	-4.4	%
Total operating expenses		42,882			30,049			21,309			12,833		42.7	%	8,740		41.0	%
Income (loss) from operations		36,906			(9,392	)		(16,873	)		46,298		-493.0	%	7,481		-44.3	%
Loss on extinguishment of debt		(402	)		(823	)		(1,650	)		421		-51.2	%	827		-50.1	%
Interest expense and other fees		(13,588	)		(8,577	)		(4,986	)		(5,011	)	58.4	%	(3,591	)	72.0	%
Other income		102			—			—			102		100.0	%	—		0.0	%
Income (loss) before provision for income taxes		23,018			(18,792	)		(23,509	)		41,810		-222.5	%	4,717		-20.1	%
Provision for income taxes		(487	)		—			—			(487	)	0.0	%	—		0.0	%
Net income (loss) and comprehensive income (loss)	$	22,531		$	(18,792	)	$	(23,509	)	$	41,323		-219.9	%	4,717		-20.1	%

Rental revenue

Rental revenue consists of revenue earned from property held for lease and agreed-upon charges related to lease-purchase agreements. Rental revenue increased by $155,931, or 171.4%, to $246,927 for the year ended December31, 2020, from $90,996 for 2019. This was primarily due to the Company’s addition of Wayfair as a merchant partner, which accounted for 72% of origination dollars in 2020, versus 58% in 2019. The difference in percentage of origination dollars was mainly driven by Wayfair being a merchant partner for the full year in 2020, versus a partial year in 2019. Additionally, the Company experienced a 119.1% increase in originations over the period due to the acceleration of e-commerce activity during the COVID-19 pandemic. A timing lag exists between originations and rental revenue because an origination in a given period will result in revenue over the resulting lease term, which can occur in subsequent periods. The 171.4% increase in rental revenue during 2020 was partly driven by a larger proportion of 2019 originations occurring in the second half of the year, as approximately 38% of 2019 originations occurred in the fourth quarter. These later 2019 originations contributed to an increase in rental revenue in early 2020. Rental revenue as a percentage of total revenue increased to 99.9% for the year ended December31, 2020 compared to 99.0% in 2019.

Rental revenue increased by $48,870, or 116.0%, to $90,996 for the year ended December31, 2019, from $42,126 for 2018. This was primarily due to the Company’s efforts to grow revenue sources from e-commerce partners, including Wayfair. Rental revenue as a percentage of total revenue increased to 99.0% in 2019 compared to 97.6% in 2018.

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Other revenue

Other revenue consists of revenue from merchant partnerships in 2020, 2019, and 2018 and also includes sub-lease revenue only in 2019 and 2018. Other revenue decreased by $168, or 45.7%, to $200 for the year ended December31, 2020, from $368 in 2019 due to our sub-lease arrangement ending in July 2019. Other revenue as a percentage of total revenue decreased to 0.1% for the year ended December31, 2020 compared to 0.4% in 2019.

Other revenue increased by $78, or 26.9%, to $368 for the year ended December31, 2019, from $290 for 2018. This increase was primarily driven by an increase in revenue from merchant partnerships. Other revenue as a percentage of total revenue decreased to 0.4% for the year ended December31, 2019 compared to 0.7% in 2018.

Service fees

Service fees consist primarily of fees earned from a third party, whereby the Company originates and services lease agreements in association with this third party. Revenue from service fees decreased by $440, or 85.8%, to $73 for the year ended December31, 2020, from $513 in 2019. This was primarily driven by the termination of a pilot partnership in February 2019. Revenue from service fees as a percentage of total revenue decreased to 0.0% for the year ended December31, 2020 compared to 0.6% in 2019.

Revenue from service fees decreased by $217, or 29.7%, to $513 for the year ended December31, 2019, from $730 for 2018. This was primarily due to the termination of a pilot partnership in February 2019. Revenue from service fees as a percentage of total revenue decreased to 0.6% in 2019 compared to 1.7% in 2018.

Cost of revenue

Cost of revenue consists primarily of depreciation expense related to property held for lease, impairment of property held for lease, net book value of property buyouts, processing fees, and other costs associated with offering lease-purchase transactions to customers. Cost of revenue increased $96,192, or 135.1%, to $167,412 for the year ended December31, 2020, from $71,220 in 2019. This increase was primarily driven by the proportional increase in rental revenue and origination volume over this period, which was offset by lower depreciation related to property held for lease. Cost of revenue as a percentage of total revenue decreased to 67.7% for the year ended December31, 2020, compared to 77.5% in 2019. Cost of revenue decreased as a percentage of total revenue due to improved underwriting and payment collection performance.

Cost of revenue increased by $32,510, or 84.0%, to $71,220 for the year ended December31, 2019, from $38,710 in 2018. This increase, which is directly correlated with rental revenue, was primarily driven by the proportional increase in origination volume over this period. Cost of revenue as a percentage of total revenue decreased to 77.5% in 2019 compared to 89.7% in 2018.

Gross profit

Gross profit increased by $59,131, or 286.3%, to $79,788 for the year ended December31, 2020, from $20,657 in 2019. This was due to the individual revenue and cost of revenue drivers described above. These individual drivers were caused by an overall increase in performance on recently originated leases, which was due to improved underwriting and payment collection performance. Gross profit as a percentage of total revenue increased to 32.3% for the year ended December31, 2020 compared to 22.5% in 2019.

Gross profit increased by $16,221, or 365.7%, to $20,657 for the year ended December31, 2019, from $4,436 in 2018. This was due to the individual revenue and cost of revenue drivers described above. These individual drivers were caused by an overall increase in performance on recently originated leases, which was due to improved underwriting and payment collection performance. Gross profit as a percentage of total revenue increased to 22.5% in 2019 compared to 10.3% in 2018.

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Operating expenses

The following tables quantify the dollar amounts of operating costs versus total revenue for the years ended December31, 2020, 2019, and 2018.

	Years Ended December 31,						Percentage of Total Revenue
	2020		2019		2018		2020		2019		2018
Total revenue	$	247,200	$	91,877	$	43,146
Servicing costs		4,077		2,934		1,879	1.6	%	3.2	%	4.4	%
Underwriting fees		2,344		2,562		843	0.9	%	2.8	%	2.0	%
Professional and consulting fees		2,949		1,347		1,187	1.2	%	1.5	%	2.8	%
Technology and data analytics		6,498		4,293		2,920	2.6	%	4.7	%	6.8	%
Bad debt expense		16,064		9,163		4,281	6.5	%	10.0	%	9.9	%
General and administrative		10,950		9,750		10,199	4.4	%	10.6	%	23.6	%

General and administrative

General and administrative expense consists primarily of payroll and related costs, stock-based compensation, occupancy costs, travel and entertainment, and other general overhead costs, including depreciation and amortization related to office equipment. General and administrative expense increased by $1,200, or 12.3%, to $10,950 for the year ended December31, 2020, from $9,750 in 2019. This increase is related to added headcount to support the growth trajectory of the Company, which drove a $1,324 increase in payroll costs within general and administrative expense in 2020. General and administrative expense as a percentage of total revenue decreased to 4.4% for the year ended December31, 2020 compared to 10.6% in 2019. General and administrative expense as a percentage of total revenue decreased due to the Company achieving scale.

General and administrative expense decreased by $449, or 4.4%, to $9,750 for the year ended December31, 2019, from $10,199 in 2018. This was primarily due to a decrease in compensation-related costs as the Company achieves scalability efficiencies in its workforce. General and administrative expense as a percentage of total revenue decreased to 10.6% in 2019 compared to 23.6% in 2018.

Servicing Costs

Servicing costs primarily consist of permanent and temporary call center support. Servicing costs increased by $1,143, or 39.0%, to $4,077 for the year ended December31, 2020, from $2,934 in 2019. This was primarily due to the increase in overall revenue during the same period and was offset by scalability efficiencies achieved in 2020. Servicing costs as a percentage of total revenue decreased to 1.6% for the year ended December31, 2020 compared to 3.2% in 2019.

Servicing costs increased by $1,055, or 56.1%, to $2,934 for the year ended December31, 2019, from $1,879 in 2018. This was primarily due to the increase in overall revenue during the same period, which was offset by scalability efficiencies achieved in 2019. Servicing costs as a percentage of total revenue decreased to 3.2% compared to 4.4% in 2018.

Underwriting fees

Underwriting fees primarily consist of data costs related to inputs from customer underwriting models. Underwriting fees decreased by $218, or 8.5%, to $2,344 for the year ended December31, 2020, from $2,562 in 2019. This was primarily due to scalability efficiencies achieved during the year as the Company refines its customer underwriting model, specifically the Company’s ability to favorably renegotiate third party data costs, despite an increase in underwriting activity associated with increased revenue volume over the period. Underwriting fees as a percentage of total revenue decreased to 0.9% for the year ended December31, 2020, compared to 2.8% in 2019.

Underwriting fees increased by $1,719, or 203.9%, to $2,562 for the year ended December31, 2019, from $843 in 2018. This was primarily due to the proportional increase to revenue volume over the same period, and investments in the underwriting process in 2019 as we sought to achieve scalability efficiencies. Underwriting fees as a percentage of total revenue increased to 2.8% in 2019 compared to 2.0% in 2018.

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Professional and consulting fees

Professional and consulting fees primarily consist of corporate legal and accounting costs. Professional and consulting fees increased by $1,602, or 118.9%, to $2,949 for the year ended December31, 2020, compared to $1,347 in 2019. This increase was primarily driven by the pending business combination which resulted in $1,040 of non-capitalizable expenses for the year ended December31, 2020. Additionally, the Company incurred $362 of legal fees associated with investor transactions for the year ended December31, 2020. Professional and consulting fees as a percentage of revenue decreased to 1.2% for the year ended December31, 2020, compared to 1.5% in 2019.

Professional and consulting fees increased by $160, or 13.5%, to $1,347 for the year ended December31, 2019, from $1,187 in 2018. This was primarily driven by increased expenses related to supporting the Company’s growth. Professional and consulting fees as a percentage of total revenue decreased to 1.5% in 2019 compared to 2.8% in 2018.

Technology and data analytics

Technology and data analytics expense primarily consist of salaries and benefits for computer programming and data analytics employees that support our underlying technology and proprietary risk model algorithms. Technology and data analytics expense increased by $2,205, or 51.4%, to $6,498 for the year ended December31, 2020, compared to $4,293 in 2019. This was primarily due to a proportional addition to employee headcount to continue the build-out of the Company’s technological infrastructure and continued improvement and management of our proprietary risk model algorithms. Technology and data analytics expense as a percentage of total revenue decreased to 2.6% for the year ended December31, 2020, compared to 4.7% in 2019.

Technology and data analytics expense increased by $1,373, or 47.0%, to $4,293 for the year ended December31, 2019, from $2,920 in 2018. This was primarily due to added employee headcount to continue the build-out of the Company’s technological infrastructure. Technology and data analytics expense as a percentage of total revenue decreased to 4.7% in 2019 compared to 6.8% in 2018.

Bad debt expense

Bad debt expense primarily consists of provisions for uncollectable accounts receivable, net of recoveries. Bad debt expense increased by $6,901, or 75.3%, to $16,064 for the year ended December31, 2020, compared to $9,163 in 2019. This increase was primarily driven by the proportional increase in rental revenue over this period, which was offset by decreased charge-off rates due to better underwriting and payment collection performance. Bad debt expense as a percentage of total revenue decreased to 6.5% for the year ended December31, 2020, compared to 10.0% in 2019.

Bad debt expense increased by $4,882, or 114.0%, to $9,163 for the year ended December31, 2019, compared to $4,281 in 2018. This increase, which is directly correlated with rental revenue, was primarily driven by the proportional increase in rental revenue over this period, and a decrease in charge-off rates due to better underwriting and payment collection performance from 2018 to 2019. Bad debt expense as a percentage of total revenue increased to 10.0% in 2019 compared to 9.9% in 2018.

Non-operating income/expense

The following tables quantify the dollar amounts of non-operating income and expenses versus total revenue for the years ended December31, 2020, 2019, and 2018.

	Years Ended December 31,									PercentageofTotalRevenue
	2020			2019			2018			2020		2019		2018
Total revenue	$	247,200		$	91,877		$	43,146
Loss on extinguishment of debt		(402	)		(823	)		(1,650	)	0.2	%	0.9	%	3.8	%
Interest expense and other fees		(13,588	)		(8,577	)		(4,986	)	5.5	%	9.3	%	11.6	%
Other income		102			—			—		0.0	%	0.0	%	0.0	%

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Loss on extinguishment of debt

Loss on extinguishment of debt decreased by $421, or 51.2%, to $402 for the year ended December31, 2020, compared to $823 in 2019. Loss on extinguishment of debt for the year ended December31, 2020 was related to the repayment of the Company’s non-revolving line of credit and bridge loan, and the 2019 loss on extinguishment was related to the capital raising activities and conversion of convertible notes during that period. Loss on extinguishment of debt as a percentage of total revenue was 0.2% for the year ended December31, 2020 compared to 0.9% in 2019.

Loss on extinguishment of debt decreased by $827, or 50.1%, to $823 for the year ended December31, 2019, from $1,650 in 2018. Loss on extinguishment for both 2019 and 2018 was related to capital raising activities, including conversion of convertible notes, for 2019 and refinancing of long-term debt for 2018. Loss on extinguishment of debt as a percentage of total revenue decreased to 0.9% in 2019 compared to 3.8% in 2018.

Interest expense and other fees

Interest expense and other fees increased by $5,011, or 58.4%, to $13,588 for the year ended December31, 2020, compared to $8,577 in 2019. This was primarily due to an increase in total outstanding principal balances on our debt during 2020. Principal balances increased due to increased origination volume. Interest expense and other fees as a percentage of total revenue decreased to 5.5% for the year ended December31, 2020 compared to 9.3% in 2019, which was primarily driven by lower interest rates on our debt facilities.

Interest expense and other fees increased by $3,591, or 72.0%, to $8,577 for the year ended December31, 2019, from $4,986 in 2018. This was primarily due to an increase in total outstanding principal balances on our debt during 2019. Interest expense and other fees as a percentage of total revenue decreased to 9.3% in 2019 compared to 11.6% in 2018.

Other income

Other income was $102 for the year ended December31, 2020 and was $0 in 2019. Other income consists of changes in the fair value of the Company’s warrant liability, and the 2020 other income of $102 was driven by a reduction in the fair value of this liability between issuance and year-end. Other income as a percentage of total revenue was 0.0% for the year ended December31, 2020.

Other income was $0 for the years ended December31, 2019 and 2018.

Provision for income taxes

Provision for income taxes was $487 for the year ended December31, 2020 and was $0 in 2019. This increase was primarily due to state income taxes on the Company’s taxable income for the year ended December31, 2020. Taxable income was generated in certain states where accelerated federal tax depreciation is disallowed. The primary driver of provision for income taxes for the year ended December31, 2020 was the state of California, where net operating loss carryforwards have been temporarily suspended for companies generating over $1,000 of taxable income. Provision for income taxes as a percentage of total revenue was 0.2% for the year ended December31, 2020.

Provision for income taxes was $0 for the years ended December31, 2019 and 2018.

Non-GAAP Measures

In addition to gross profit and net income (loss), which are measures presented in accordance with U.S. GAAP, management believes that adjusted gross profit and adjusted EBITDA provide relevant and useful information which is widely used by analysts, investors, and competitors in our industry in assessing performance. Adjusted gross profit and adjusted EBITDA are supplemental measures of Katapult’s performance that are neither required by nor presented in accordance with U.S. GAAP. Adjusted gross profit and adjusted EBITDA should not be considered as substitutes for U.S. GAAP metrics such as gross profit, operating income (loss), net income (loss), or any other performance measures derived in accordance with U.S. GAAP and may not be comparable to similar measures used by other companies.

Adjusted gross profit represents gross profit less variable operating expenses, which are servicing costs underwriting fees, and bad debt expense. We believe that adjusted gross profit provides a meaningful understanding of one aspect of our performance specifically attributable to total revenue and the variable costs associated with total revenue. We believe that adjusted gross profit is useful to an investor in evaluating our performance because this measure is used by our management for various purposes, including as a measure of performance and as a basis for strategic planning and forecasting.

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Adjusted EBITDA represents earnings (loss) before interest expense and other fees, taxes, depreciation and amortization on fixed assets, stock-based compensation, impairment on property held for lease, legal fees associated with investor transactions, loss on extinguishment of debt, employee recruiting costs, and transaction costs associated with the merger. We believe that adjusted EBITDA is a metric that provides additional insight into the quality of our earnings (loss).

Adjusted gross profit and adjusted EBITDA are useful to an investor in evaluating our performance because these measures:

•        Are widely used by investors to measure a company’s operating performance;

•        Are financial measurements that are used by rating agencies, lenders and other parties to evaluate our credit worthiness; and

•        Are used by our management for various purposes, including as measures of performance and as a basis for strategic planning and forecasting.

The following table presents gross profit and adjusted gross profit for the years ended December31, 2020, December31, 2019, and December31, 2018.

	Year Ended December 31,									2019 – 2020 Change				2018 – 2019 Change
Gross profit and Adjusted gross profit	2020			2019			2018			$		%		$		%
Total revenue	$	247,200		$	91,877		$	43,146
Cost of revenue		(167,412	)		(71,220	)		(38,710	)
Gross profit		79,788			20,657			4,436			59,131	286.3	%		16,221	365.7	%
Less:
Servicing costs		(4,077	)		(2,934	)		(1,879	)
Underwriting fees		(2,344	)		(2,562	)		(843	)
Bad debt expense		(16,064	)		(9,163	)		(4,281	)
Adjusted gross profit	$	57,303		$	5,998		$	(2,567	)	$	51,305	855.4	%	$	8,565	(1	)

____________

(1)      Not meaningful.

The reconciliations of net income (loss) to adjusted EBITDA for the years ended December31, 2020, 2019, and 2018 are as follows:

	YearsEndedDecember31,
Adjusted EBITDA	2020		2019			2018
Net income (loss)	$	22,531	$	(18,792	)	$	(23,509	)
Add back:
Interest expense and other fees		13,588		8,577			4,986
Loss on extinguishment of debt		402		823			1,650
Provision for income taxes		487		—			—
Depreciation and amortization on fixed assets		83		65			64
Impairment on property held for lease		1,433		4,119			1,752
Stock compensation expense		350		315			181
Employee recruiting costs		232		39			113
Legal fees associated with investor transactions(a)		362		—			—
Transaction costs associated with merger(b)		1,040		—			—
Adjusted EBITDA	$	40,508	$	(4,854	)	$	(14,763	)

____________

(a)      Consists of legal expenses incurred in connection with various investor-related matters including stock transfers, sale of founder shares, and warrant exercises.

(b)      Consists of non-capitalizable transaction cost associated with the pending FinServ merger.

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Liquidity and Capital Resources

To date, the funds received from previous common stock and preferred stock equity financings, as well as the Company’s ability to obtain lending commitments, have provided the liquidity necessary for the Company to fund its operations. The additional financing, as described elsewhere in this proxy statement/prospectus, would provide additional equity capital and liquidity. If the Company is unable to generate positive operating cash flows, additional debt and equity financings may be necessary to sustain future operations.

Since 2018, the Company’s liquidity profile has improved each period due to increased earnings, increased liquidity from debt providers and decreased cost of debt as our credit profile has improved. We expect our effective interest rate and incremental borrowing rates to continue to decrease as a result of achieving profitability in 2020 and our expected profitability in the future. Additionally, the Company would receive a cash infusion of $50million upon the closing of the contemplated merger with FinServ. We expect to be able to service our existing borrowing arrangements via our continuously improving operating cash flows and the ability to refinance or borrow additional capital, if needed.

The following table presents the Company’s cash, restricted cash, and accounts receivable, net, as of December31, 2020 and 2019:

	As of December 31,
	2020		2019
Cash	$	65,622	$	7,507
Restricted cash		3,975		4,739
Accounts receivable, net		1,636		924

Cash Flows

The following table presents cash provided by (used in) operating, investing, and financing activities during the years ended December31, 2020, 2019, and 2018:

	Year Ended December 31,
	2020			2019			2018
Net cash used in operating activities	$	(2,142	)	$	(31,584	)	$	(25,477	)
Net cash provided by (used in) investing activities		(402	)		91			(58	)
Net cash provided by financing activities		59,895			40,777			25,654
Net increase in cash and restricted cash	$	57,351		$	9,284		$	119

Operating Activities

Net cash used in operating activities was $2,142 for the year ended December31, 2020, a decrease of $29,442 from $31,584 used in operating activities for the year ended December31, 2019. This reflects our net income of $22,531, adjusted for non-cash charges of $177,120 and net cash outflows of $201,793 from changes in our operating assets and liabilities. Non-cash charges consisted primarily of depreciation and amortization, which increased $64,364; net book value of property buyouts, which increased $19,403; impairment expense, which increased $7,085; and bad debt expense, which increased $6,901. Each of these increases were driven by the increased customer origination and lease-purchase activity discussed above.

Net cash used in operating activities was $31,584 for the year ended December31, 2019 and was primarily due to the net loss of $18,792 and purchases of property held for lease of $87,809 during the period, offset by depreciation and amortization of $47,083, net book value of property buyouts of $11,737, and impairment expense of $9,979. Net cash used in operating activities was $25,477 for the year ended December31, 2018 and was primarily due to the net loss of $23,509 during the period.

Investing Activities

Net cash used in investing activities was $402 for the year ended December31, 2020 and was primarily due to purchases of property and equipment of $234 and purchases of capitalized software of $202.

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Net cash provided by investing activities was $91 for the year ended December31, 2019 and was due to decreases in other assets and security deposits of $173, offset by purchases of property and equipment of $82. Net cash used in investing activities was $58 and was due to purchases of property and equipment of $24 and decreases in other assets and security deposits of $34.

Financing Activities

Net cash provided by financing activities was $59,895 for the year ended December31, 2020 and was primarily due to proceeds from revolving line of credit of $39,913 and proceeds from term loan of $49,102, which was offset by principal repayment on the revolving line of credit of $4,801, principal repayment of long term debt of $7,500, and principal repayment of the non-revolving line of credit of $16,000.

Net cash provided by financing activities was $40,777 for the year ended December31, 2019 and was primarily due to proceeds from the revolving line of credit of $22,845, proceeds from the non-revolving line of credit of $8,937, and proceeds from redeemable convertible preferred stock issuance of $9,339. Net cash provided by financing activities was $25,654 for the year ended December31, 2018 and was primarily due to proceeds from the non-revolving line of credit of $14,925, proceeds from convertible notes of $7,500, and proceeds from redeemable convertible preferred stock issuance of $3,218.

Financing Arrangements

From January1, 2016, Katapult completed the following transactions, each of which has provided liquidity and cash resources.

Revolving and Non-Revolving Lines of Credit

•        During 2016, the Company obtained a non-revolving line of credit facility with a lender holding shares of preferred stock, in which it may borrow a maximum of $100,000 subject to certain covenants and an 85% advance rate on eligible accounts receivable. At December31, 2018, $19,603 was outstanding on this line of credit. At December31, 2018, no additional borrowings were available. The note was secured by all assets of the Company and subsidiaries. The annual interest rate on the principal was the greater of 18% or the sum of 17% plus the greater of 1% or the three-month average LIBOR rate. This facility was also subject to certain debt covenants as set forth in the loan agreement, which consist of maintaining lease performance metrics, financial ratios related to operating results, and lease delinquency ratios. The outstanding line of credit including unpaid principal and interest was due in November 2018 to the lender, but was extended to May 2019, unless there was an earlier event of default such as bankruptcy, default on interest payments, or a change of control. This line of credit was repaid in May 2019.

•        During 2017, the Company obtained a second non-revolving line of credit facility with a lender holding shares of preferred stock, in which it may borrow a maximum of $6,000, which was raised to $6,800 in 2018, subject to certain covenants and a 35% advance rate on eligible accounts receivable. In 2019, the maximum balance was raised to $16,000. At December31, 2018, the total outstanding on this facility was $6,800. At December31, 2019, the total outstanding on this facility was $16,000 less issuance costs of $197, netting to a total of $15,803. The issuance costs are amortized throughout the life of the loan through interest expense. The note was secured by all assets of the Company. The annual interest rate on the principal was 25% through August 2020. Beginning in September 2020, the annual interest rate stepped down to 19%. This facility was also subject to certain debt covenants as set forth in the loan agreement, which consisted of maintaining lease performance metrics, financial ratios related to operating results, and lease delinquency ratios. The outstanding line of credit including unpaid principal and interest was repaid in December 2020.

•        During 2019, the Company refinanced the first revolving line of credit facility with Midtown Madison Management, LLC as agent for various funds of Atalaya Capital Management (“Atalaya”), which resulted in a maximum of $50,000 for the initial commitment, with the lender having the right to increase to a maximum of $150,000 over time. The Company drew down the $50,000 facility upon the date of the refinancing. This is subject to certain covenants and an 85% advance rate on eligible accounts receivable. At December31, 2019, the total outstanding on this line of credit was $40,280 less issuance costs of $582, netting to a total of $39,698. The issuance costs are amortized over the life of the loan through interest

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expense. The note is secured by all assets of the Company. The annual interest rate on the principal was the one-month LIBOR Rate plus 11% per annum through July 2020. Beginning in August 2020, the interest rate stepped down to one-month LIBOR plus 7.5% per annum. This facility is also subject to certain debt covenants as set forth in the loan agreement, which consist of maintaining lease performance metrics, financial ratios related to operating results, and lease delinquency ratios. The outstanding line of credit, including unpaid principal and interest, is due December4, 2023 unless there is an earlier event of default such as bankruptcy, default on interest payments, or a change of control (excluding an acquisition by a Special Purpose Acquisition Company), at which point the facility may become due earlier. On September28, 2020, the maximum commitment was increased to a total of $125,000.

•        On December4, 2020, theCompanyentered into the ninth amendment to its first revolving line of credit facility with Atalaya. This amendment provided the lenders with the right to increase the revolving commitment amount from $125,000 to $250,000. This right has not yet been exercised by the lender as of the date of this registration statement. The amendment also provided the Company with a senior secured term loan facility commitment of up to $50,000. The Company drew down the full $50,000 of this term loan on December4, 2020. In conjunction with the amended loan and security agreement, the Company issued a warrant to purchase up to 4,988,719 Series C-1 Convertible Preferred Stock at an exercise price of $0.01 per share.

Long Term Debt

•        In September 2018, the Company obtained a bridge loan from a related party lender for $5,500. In November 2018, the Company amended this loan, which resulted in the Company increasing the principal amount by $2,000 for a total of $7,500. At December31, 2018, the total outstanding balance on this loan was carried at $7,476, which is offset by issuance costs totaling $796, netting to a total of $6,680. At December31, 2019, the total outstanding balance on this loan was carried at $7,492, which is offset by issuance costs totaling $298, netting to a total of $7,195. In May 2019, the Company amended the outstanding long-term debt of $7,500 which extended the maturity date from September13, 2019 to December31, 2021. The loan was repaid in December 2020.

Convertible Notes

•        As a condition of the Company’s $5,500 bridge loan, the lender required the loan to be guaranteed by current investors in the Company. In exchange for this guarantee, the Company issued $1,650 of convertible notes, which had a pricing feature to convert at a 20% discount to the share price of the next round of equity financing. In conjunction with the Company’s amendment of its $5,500 bridge loan (to increase the principal amount by $2,000), the Company issued an additional $600 of convertible notes with the same features mentioned above.

•        In February and March 2019, the Company issued an additional $2,500 in convertible notes for cash consideration. These convertible notes had stock warrants attached. Additional details pertaining to the stock warrants can be found in Note 10 to the consolidated financial statements for the year ended December31, 2020.

•        In April 2019, all of the Company’s convertible notes converted to 17,061,472shares of Preferred Stock Series C shares at a price of $0.3553 less 20%. This conversion event qualified as a non-qualified financing feature per the executed agreements. In conjunction with this event, the Company also recapitalized all preferred share classes into Series C preferred stock.

Equity

•        During 2019, the Company converted all outstanding Series A, Series A-1, Series A-2, Series B, Series B-1, and Series B-2shares to Series C shares by issuing on a 1:1 ratio 24,773,767 Series C Preferred Shares. Additionally, the Company issued 17,061,472 Series C Preferred Shares valued at $6,062 to execute the conversion feature of the outstanding convertible notes. Furthermore, the Company raised additional equity of $9,506 by issuing 26,754,674 of Series C Preferred Shares.

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•        The Company has issued warrants to purchase common stock to current and former lenders and investors between 2014 and 2019. The exercise prices of these warrants range from $0.01 per share to $1.7084 per share. The warrants do not convey any voting privileges or rights on declared dividends until they are converted into common stock by the holder. 5,480,831 warrants were outstanding as of December31, 2020.

Contractual Obligations

The table below summarizes debt, lease and other minimum cash obligations outstanding as of December31, 2020:

		Payments Due by Period
		Total		2021		2022 – 2023		2024 – 2025		Thereafter
		(in thousands)
Line of credit	(i)		93,200		7,262		85,938		—		—
Long-term debt	(ii)		73,436		6,190		67,246		—		—
Operating lease commitments			1,919		497		918		504		—
Total		$	168,555	$	13,949	$	154,102	$	504	$	—

____________

(i)      Future cash obligations include scheduled interest payments due based on the interest rate of 9.5% as of December 31, 2020.

(ii)     Future cash obligations include scheduled interest payment due based on the interest rate of 9.0%, plus 3.0% paid-in-kind interest, as of December 31, 2020.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements, as defined by applicable rules and regulations of the SEC, that are reasonably likely to have a current or future material effect on our financial condition, results of operations, liquidity, capital expenditures or capital resources.

Critical Accounting Policies

The preparation of our consolidated financial statements in conformity with U.S. GAAP requires our management to make a number of estimates and assumptions relating to the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the periods presented. We evaluate our significant estimates on an ongoing basis. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates under different assumptions or conditions, impacting our reported results of operations and financial condition.

We believe that the accounting policies described below involve a significant degree of judgment and complexity and have the greatest potential effect on our consolidated financial statements. Accordingly, we believe these are the most critical to aid in fully understanding and evaluating our consolidated financial condition and results of operations. For further information, see Note 2 to our consolidated financial statements included elsewhere in this prospectus.

Rental Revenue Recognition

Property held for lease is leased to customers pursuant to lease purchase agreements with a minimum term: typically one week, two weeks, or one month, with non-refundable lease payments. Generally, the customer has the right to acquire title and ownership either through a 90-day purchase option, an early purchase option (buyout) available prior to completion of the full agreement, or by completing all required lease payments, generally 12 or 18months, for ownership. On any current lease, customers have the option to terminate the agreement at any time without penalty in accordance with lease-purchase agreement terms. Accordingly, customer agreements are accounted for as operating leases with lease revenues recognized in the month they are earned based on the accrual basis of accounting. Amounts received from customers who elect purchase options (buyouts) are included in rental revenue, when earned. Lease payments received prior to their due dates are deferred and recorded as

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unearned revenue and are recognized as revenue in the period in which they are earned. Rental revenue also includes agreed-upon charges assessed to 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. The Company also may assess fees for missed or late payments, which are recognized as revenue in the billing period in which they are assessed if collectability is reasonably assured. Revenues from leases are reported net of sales taxes.

There are uncertainties involved with applying rental revenue recognition due to the non-prime nature of our consumers, and the conclusion about likelihood to pay after a customer goes delinquent.

Accounts Receivable and Allowance for Doubtful Accounts

Accounts receivable are recorded net of allowances for doubtful accounts. Accounts receivable consist primarily of lease receivables due from customers incurred during the normal course of business for lease payments earned not yet received from the customer. On a periodic basis, management evaluates its accounts receivable and determines whether to provide an allowance for doubtful accounts or if any accounts should be written off based on past history of write-offs, collections, and current credit conditions. The Company maintains an allowance for doubtful accounts to provide for uncollected amounts based on historical collection experience and an analysis of the aging of receivables per the following categories: 1-30 days, 31-60 days, 61-90 days. This analysis results in the determination of loss rate percentages that are applied to outstanding receivables in each of these categories as of period end. The Company writes off accounts receivables that are over 90 days contractually past due. Bad debt expense is classified in operating expenses within the consolidated statements of operations and comprehensive loss. The Company does not require any security or collateral to support its receivables.

There are uncertainties involved in estimating the allowance for doubtful accounts due to unanticipated changes in the business environment, as well as factors and risks associated with our customers’ behaviors.

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-based awards. The Black-Scholes option-pricing model requires estimates of highly subjective assumptions, such as expected term, common share price, and volatility, which affect the fair value of each stock option. Forfeitures are accounted for as they are incurred. See Note 2 of the Company’s consolidated financial statements for the year ended December31, 2020 for further details on the assumptions used in the Black-Scholes model.

There are uncertainties involved when recognizing stock-based compensation expense due to the lack of publicly available share price and volatility data for the Company’s common stock. Our valuation utilizes peer company volatility data as well as internally developed valuation models for the common share price which could vary from actual market results.

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 future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is recorded for deferred tax assets if it is more likely than not that some portion or all of the deferred tax assets will not be realized based on all available positive and negative evidence. The determination of whether a deferred tax asset will be realizable is a highly subjective decision based upon estimated future taxable income and could vary from actual

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results. The Company recognizes a tax benefit only if it is more likely than not the tax position will be sustained on examination by the local taxing authorities, based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from such positions are then measured based on the largest benefit greater than 50% likelihood of being realized upon settlement with the related tax authority. The changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The Company records interest and penalties related to unrecognized tax benefits in the provision for income taxes.

Property Held for Lease, Net

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 term; typically one week, two weeks, or one month. The contemplated length of the agreement is typically 12 or 18months. Consumers may terminate a lease agreement at any time without penalty. The average consumer continues to lease the property for 7months because the consumer either exercises the buyout (early purchase) options or terminates the lease purchase agreement prior to the end of the 12 or 18month lease term. As a result, property held for lease is classified as a current asset on the consolidated balance sheets.

Property held for lease is carried at net book value. Depreciation for property held for lease is generally provided 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 related assets and accumulated depreciation are written-off.

There are uncertainties involved when recognizing expenses related to property held for lease due to the subjective nature of the income forecasting method and estimated salvage value, which could vary from actual results.

Recently Issued and Adopted Accounting Pronouncements

See Note 2 to our consolidated financial statements included elsewhere in this prospectus for a discussion of accounting pronouncements recently adopted and recently issued accounting pronouncements not yet adopted and their potential impact to our consolidated financial statements.

Material Agreements

Wayfair

The Company is party to a provider agreement with Wayfair Inc. dated November24, 2020, whereby we provide Wayfair customers with lease-purchase options for certain Wayfair products directly on Wayfair’s customer website. We originated approximately 58% of our origination dollars for the year ended December31, 2019 and 72% of our origination dollars for the year ended December31, 2020 through the Wayfair provider agreement. The Company originally entered into a retailer agreement with Wayfair in September 2018, which was superseded by the Wayfair provider agreement. The Wayfair provider agreement continues for successive two-year terms until terminated by either party. The agreement may be terminated at any time and for any reason provided that the terminating party provides written notice sixty days prior to the date of termination. Our provider agreement with Wayfair does not prohibit Wayfair from offering competing options from our competitors. Our provider agreement with Wayfair allows us to benefit from Wayfair’s product offering and market ourselves to a larger audience of consumers who may seek alternative payment options.

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Emerging Growth Company

FinServ Acquisition Corp. is an emerging growth company, as defined in the JOBS Act. The JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards applicable to public companies, allowing them to delay the adoption of those standards until those standards would otherwise apply to private companies. FinServ Acquisition Corp. has elected to use this extended transition period under the JOBS Act. As a result, following the merger, our consolidated financial statements may not be comparable to the financial statements of companies that are required to comply with the effective dates for new or revised accounting standards that are applicable to public companies, which may make common stock less attractive to investors.

Quantitative and Qualitative Disclosures About Market Risk

We are exposed to a variety of market and other risks, including the effects of changes in interest rates, and inflation, as well as risks to the availability of funding sources, hazard events, and specific asset risks.

Interest Rate Risk

The market risk inherent in our financial instruments and our financial position represents the potential loss arising from adverse changes in interest rates. As of December31, 2020, and December31, 2019, we have interest bearing debt with a principal amount of $126million and $64million, respectively.

Our revolving line of credit as of December31, 2020 is a variable rate loan that accrues interest at a variable rate of interest based on the one month LIBOR rate, subject to a 2% floor, plus 7.5% per annum. As of December31, 2020, the calculated interest rate is 9.5%.

A one percent (1%) increase subject to the floor in interest rates in our variable rate indebtedness would result in approximately $744,000 in additional annual interest expense.

Inflation Risk

Katapult does not believe that inflation has had, or currently has, a material effect on its business.

Foreign Currency Risk

There was no material foreign currency risk for the years ended December31, 2020, 2019, and 2018. Katapult’s activities to date have been limited and were conducted in the United States.

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT OF NEW KATAPULT

The following table sets forth information regarding (i) unless otherwise indicated in the footnotes below, the actual beneficial ownership of FinServ common stock as of December31, 2020 (the “Ownership Date”), which is prior to the consummation of the merger and the other transactions contemplated by the merger agreement (“pre-business combination”) and (ii) expected beneficial ownership of New Katapult common stock immediately following the consummation of the merger and the other transactions contemplated by the merger agreement (“post-business combination”), assuming that (x) no shares of Class A Common Stock are redeemed and (y) 17,538,092shares of Class A Common Stock are redeemed for an aggregate payment of approximately $176.3million from the Trust Account, which is the maximum amount of redemptions that, after giving effect to the PIPE Investment, would result in the satisfaction of the Minimum Cash Condition, by:

•        each person who is, or is expected to be, the beneficial owner of more than 5% of issued and outstanding shares of FinServ common stock or of New Katapult common stock;

•        each of our current executive officers and directors;

•        each person who will (or is expected to) become an executive officer or director of New Katapult following the consummation of the merger; and

•        all executive officers and directors of FinServ as a group pre-business combination and all executive officers and directors of New Katapult post-business combination.

Beneficial ownership is determined according to the rules of the SEC, which generally provide that a person has beneficial ownership of a security if he, she or it possesses sole or shared voting or investment power over that security, including options and warrants that are currently exercisable or exercisable within 60 days.

The beneficial ownership of shares of FinServ common stock pre-business combination is based on 31,915,000 outstanding shares of FinServ common stock (including 25,665,000shares of Class A Common Stock and 6,250,000shares of Class B Common Stock) issued and outstanding as of the Ownership Date. The ownership percentages listed below do not include any such shares of Class A Common Stock that may be purchased after the Ownership Date.

See “Basis of Presentation and Glossary” for information with respect to assumptions underlying New Katapult share calculations and ownership percentages.

The expected beneficial ownership of shares of New Katapult common stock post-business combination in the “No Redemptions” column in the table below has been determined based upon the following additional assumptions: (i) no holders of Class A Common Stock exercise their redemption rights and (ii) that there are 105,087,377shares of New Katapult common stock outstanding.

The expected beneficial ownership of shares of New Katapult common stock post-business combination in the “Maximum Redemption” column in the table below has been determined based upon the following additional assumptions: (i) 17,538,092shares of Class A Common Stock are redeemed for an aggregate payment of approximately $176.3million from the Trust Account, which is the maximum amount of redemptions that, after giving effect to the PIPE Investment, would result in the satisfaction of the Minimum Cash Condition; and (ii) that there are 105,176,908shares of New Katapult common stock outstanding.

The expected beneficial ownership of shares of New Katapult common stock post-business combination has been determined based upon the assumption that there is no re-allocation of merger consideration among Katapult management and certain Katapult stockholders pursuant to the management allocation letter. See “Certain Relationships and Related Party Transactions — Katapult — Management Allocation Letter.”

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					After the Business Combination
	Before the Business Combination				No Redemptions		Maximum Redemption
Name and Address of Beneficial Owner(1)	Number of shares of FinServ Class A Common Stock	%	Number of shares of FinServ Class B Common Stock	%	Number of shares of New Katapult Common Stock	%	Number of shares of New Katapult Common Stock	%
Directors and Executive Officers of FinServ:
FinServ Holdings LLC(2)(3)	665,000	2.6	6,250,000	100.0	6,915,000	6.6	6,915,000	6.6
Lee Einbinder	665,000	2.6	6,250,000	100.0	6,915,000	6.6	6,915,000	6.6
Howard Kurz	665,000	2.6	6,250,000	100.0	6,915,000	6.6	6,915,000	6.6
Robert Matza	—	—	—	—	—	—	—	—
Diane Glossman	—	—	—	—	—	—	—	—
Aris Kekedjian	—	—	—	—	—	—	—	—
All Directors and Executive Officers of FinServ as a Group (5 Individuals)	665,000	2.6	6,250,000	100.0	6,915,000	6.6	6,915,000	6.6
Five Percent Holders of FinServ:
FinServ Holdings LLC(2)(3)	665,000	2.6	6,250,000	100.0	6,915,000	6.6	6,915,000	6.6
Suvretta Capital Management, LLC(4)	2,100,000	6.6	—	—	2,100,000	2.0	2,100,000	2.0
Directors and Executive Officers of New Katapult After Consummation of the business combination
Lee Einbinder	665,000	2.6	6,250,000	100.0	6,915,000	6.6	6,915,000	6.6
Orlando Zayas(5)	—	—	—	—	3,756,596	3.6	4,894,935	4.7
Karissa Cupito(6)	—	—	—	—	1,328,594	1.3	1,731,190	1.6
Derek Medlin(7)	—	—	—	—	1,060,390	1.0	1,381,714	1.3
Bruce Taragin(8)	—	—	—	—	6,662,361	6.3	8,681,216	8.3
Brian Hirsch(9)	—	—	—	—	4,706,819	4.5	6,133,097	5.8
Don Gayhardt(10)	—	—	—	—	23,339,000	22.2	30,411,276	28.9
Chris Masto(10)	—	—	—	—	23,339,000	22.2	30,411,276	28.9
All Directors and Executive Officers of New Katapult as a Group (9 Individuals)	665,000	2.6	6,250,000	100.0	47,768,760	45.5	60,148,428	57.2
Five Percent Holders of New Katapult After Consummation of the Business Combination:
CURO Group Holdings Corp.(11)	—	—	—	—	23,339,000	22.2	30,411,276	28.9
Blumberg Capital III, L.P.(12)	—	—	—	—	6,662,361	6.3	8,681,216	8.3
TriBeca Venture Partners(13)	—	—	—	—	4,706,819	4.5	6,133,097	5.8
FinServ Holdings LLC(2)(3)	665,000	2.6	6,250,000	100.0	6,915,000	7.1	6,915,000	7.1

____________

*   Less than one percent.

(1)      Unless otherwise noted, the business address of each of the following entities or individuals is c/o Ellenoff Grossman & Schole LLP, 1345 Avenue of the Americas, New York, New York 10105.

(2)      FinServ Holdings LLC, our sponsor, is the record holder of the shares reported herein. Lee Einbinder, our Chief Executive Officer and Howard Kurz, our President, are the managing members of our sponsor and have voting and investment discretion with respect to the common stock held by our sponsor. As such, they may be deemed to have beneficial ownership of the common stock held directly by our sponsor. Each such person disclaims any beneficial ownership of the

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reported shares other than to the extent of any pecuniary interest they may have therein, directly or indirectly. Each of our officers and directors is, directly or indirectly, a member of our sponsor. Two limited liability companies in which Daniel Cohen has or will have a pecuniary interest is a member of our sponsor. Our advisor, Shami Patel, has a pecuniary interest in one of these limited liability companies.

(3)      Interests shown consist of (i) Founder Shares, classified as shares of Class B Common Stock and (ii) shares of Class A Common Stock underlying Private Placement Units. Founder Shares are convertible into shares of Class A Common Stock on a one-for-one basis, subject to adjustment.

(4)      According to the Schedule 13G filed with the SEC on February 16, 2021 by Suvretta Capital Management, LLC, Suvretta Master Fund, Ltd. and Aaron Cowen. The business address of Suvretta Capital Management, LLC and Aaron Cowen is c/o Suvretta Capital Management, LLC, 540 Madison Avenue, 7th Floor, New York, New York 10022. The business address of Suvretta Master Fund, Ltd. is c/o Maples Corporate Services Limited, P.O. Box 309, Ugland House, Grand Cayman KY1-1104, Cayman Islands.

(5)      Assumes (i) all outstanding options held by Mr.Zayas are exercised at or prior to First Effective Time, and (ii) 1,350,000shares of restricted stock vest in connection with the merger. The business address of Mr.Zayas is 5204 Tennyson Parkway, Suite 500, Plano, TX 75024.

(6)      Assumes (i) all outstanding options held by Ms. Cupito are exercised at or prior to First Effective Time, and (ii) 637.500shares of restricted stock vest at in connection with the merger. The business address of Ms. Cupito is 5204 Tennyson Parkway, Suite 500, Plano, TX 75024.

(7)      Assumes (i) all outstanding options held by Mr.Medlin are exercised at or prior to First Effective Time, and (ii) 637.500shares of restricted stock vest in connection with the merger. The business address of Mr.Medlin is 5204 Tennyson Parkway, Suite 500, Plano, TX 75024.

(8)      Includes shares held by Blumberg Capital III, L.P., of which Mr.Taragin is a Managing Director. Mr.Taragin disclaims any beneficial ownership of the reported shares other than to the extent of any pecuniary interest they may have therein, directly or indirectly. The business address of Mr.Taragin is 432 Bryant Street, San Francisco, CA 94107.

(9)      Includes shares held by Tribeca Venture Fund I (NY), L.P., Tribeca Venture Fund I, L.P. and Tribeca Annex Fund, of which Mr.Hirsch is the Managing Partner. Mr.Hirsch disclaims any beneficial ownership of the reported shares other than to the extent of any pecuniary interest they may have therein, directly or indirectly. The business address of Mr.Hirsch is 99 Hudson Street, 15th Floor, New York, NY 10013.

(10)    Includes shares held by CURO Group Holdings Corp., of which Mr.Gayhardt is a director and Chief Executive Officer and Mr.Masto is a director, and who may share voting or dispositive power over such shares. Mr.Gayhardt and Mr.Masto disclaim any beneficial ownership of the reported shares other than to the extent of any pecuniary interest they may have therein, directly or indirectly. The business address of Mr.Gayhardt and Mr.Masto is 3527 North Ridge Road, Wichita, KS 67205.

(11)    The business address of CURO Group Holdings Corp. is 3527 North Ridge Road, Wichita, KS 67205.

(12)    Includes shares held by Blumberg Capital III, L.P. The business address of Blumberg Capital III, L.P. is 432 Bryant Street, San Francisco, CA 94107.

(13)    Includes shares held by Tribeca Venture Fund I (NY), L.P., Tribeca Venture Fund I, L.P. and Tribeca Annex Fund. The business address of Tribeca Venture Fund I (NY), L.P., Tribeca Venture Fund I, L.P. and Tribeca Annex Fund is 99 Hudson Street, 15th Floor, New York, NY 10013.

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MANAGEMENT OF KATAPULT AFTER THE MERGER

References in this section to “we,” “our,” “us,” “Katapult” and the “Company” generally refer to Katapult Holdings, Inc. and its consolidated subsidiaries, prior to the merger and New Katapult and its consolidated subsidiaries after giving effect to the merger.

Management and Board of Directors

The following persons are expected to serve as New Katapult’s executive officers and directors following the merger. For biographical information concerning the executive officers and directors, see below.

Name	Age	Position
Orlando Zayas	58	Chief Executive Officer and Class III Director
Karissa Cupito	40	Chief Financial Officer
Derek Medlin	38	Chief Operating Officer and Secretary
Chris Masto	53	Class I Director
Joanne Bradford	57	Class I Director
Bruce Taragin	51	Class II Director
Lee Einbinder	61	Class II Director
Brian Hirsch	47	Class III Director
Don Gayhardt	56	Class III Director

Executive Officers

Orlando Zayashas been the Chief Executive Officer of Katapult since September 2017. Prior to that, Mr.Zayas was the Chief Executive Officer of DRB Capital from January 2017 to September 2017. Prior to DRB Capital, Mr.Zayas was the President of TEMPOE, LLC. Mr.Zayas has a B.B.A. from the University of Houston and a M.B.A. from the University of Texas. We believe Mr.Zayas is qualified to serve on our board of directors due to his deep knowledge of the Company and executive leadership experience.

Karissa Cupitohas been the Chief Financial Officer for Katapult since November 2017 and oversees the financial operations including accounting, tax, treasury, financial planning, reporting, and capital markets. Prior to joining Katapult, Ms. Cupito oversaw all accounting functions for CaaStle, a NYC-based start-up subscription fashion business, from March 2017 through November 2017. Prior to that, Ms. Cupito was the Chief Financial Officer for TEMPOE, LLC from January 2016 through March 2017. Ms. Cupito has a B.S. and Masters of Accountancy from Miami University.

Derek Medlin has been the Chief Operating Officer and Secretary of Katapult since July 2018. Prior to that, Mr.Medlin was the Executive Vice President of Operations for Katapult from July 2017 to July 2018. Before joining Katapult, Mr.Medlin was an Executive Director at JPMorgan Chase from 2014 to 2017, Vice President at Elavon (U.S. Bank) from 2009 to 2014, and a Senior Analyst at Pyramid Research from 2006 to 2009. Mr.Medlin has a B.A. and M.I.B. from Georgia State University.

Non-Employee Directors

Don Gayhardt has been a director of Katapult since April 2017. Mr.Gayhardt has been the Chief Executive Officer of CURO Group Holdings Corp., or CURO, since January 2012, President since July 2013 and on the CURO board of directors since December 2012. Prior to joining CURO, Mr. Gayhardt served in various capacities at Dollar Financial Corp. (now known as DFC Global Corp.) from 1990 to 2008, including President and a member of the board of directors from 1998 to 2008. During his time with Dollar Financial, the company expanded from 60 stores to over 1,100 and revenue increased from $14 million to over $550 million. Since 2008, Mr. Gayhardt has been an investor and advisor to a number of finance, financial technology and retail businesses. Mr. Gayhardt served on the board of directors of Beneficial Bancorp Inc. until March 2019 when it merged into WSFS Financial Corporation. We believe Mr.Gayhardt is qualified to serve on our board of directors due to his extensive executive leadership background in the financial services industry and financial experience with publicly-traded companies.

Chris Masto is Co-Founder and Senior Advisor at FFL Partners, a private equity firm, which he co-founded in 1997 and where, until 2017, he served as a Partner, member of the Investment Committee and member of firm leadership. Mr.Masto transitioned to a Senior Advisor role in 2017. Prior to co-founding FFL Partners, Mr.Masto

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worked as a management consultant with Bain & Company and an investment banker at Morgan Stanley & Co.. Mr.Masto also currently serves on the board of directors of CURO Group Holdings Corp. (Lead Independent Director), Resident Home (Co-Chair) and VolunteerMatch.org, and is an Advisory Board Member of Valo Ventures. He was previously a Director of Tempur Sealy International (NYSE: TPX) and Chairman of TriTech Software Systems. Mr.Masto graduated magna cum laude from Brown University with an Sc.B. in Electrical Engineering, and received an MBA from Harvard Business School. We believe Mr.Masto is qualified to serve on our board of directors due to his extensive background in private equity and investment banking and considerable experience in strategic planning and finance.

Lee Einbinderhas been the Chief Executive Officer and a Director of FinServ since inception. Mr.Einbinder has over 30 years’ experience as an M&A and capital markets advisor to financial services and FinTech companies. Previously, until August 2019, Mr.Einbinder was a Vice Chairman at Barclays and was responsible for senior client relationships across the financial services industry, including Banks, Specialty Finance, Financial Technology, Asset Management and Financial Sponsors. Mr. Einbinder was at Barclays since the acquisition of Lehman Brothers in 2008, and during that time was also co-Head of the Financial Institutions Group and a member of the Investment Banking Operating Committee. Prior to joining Barclays, Mr. Einbinder worked at Lehman Brothers from 1996 to 2008, where he was Head of the Specialty Finance group and founded the Financial Technology group. He previously worked in similar capacities at CS First Boston and Salomon Brothers. He received his M.B.A. with Distinction from the Wharton School and his B.S.E. cum laude from Princeton University. We believe Mr. Einbinder is qualified to serve on our board of directors due to his extensive finance and investment experience.

Bruce Taragin has been a director of Katapult since March 2019. Since 1998, Mr.Taragin has been a Managing Director of Blumberg Capital, an early stage venture capital firm that focuses primarily on emerging technology companies. Prior to joining Blumberg Capital, Mr.Taragin co-founded and held several senior management positions within technology companies including Charles River Computers. Mr.Taragin also structured and managed early-stage technology transactions at Hambrecht & Quist, Mayer Brown & Platt and Bankers Trust Company. Mr.Taragin has a B.A. from Yeshiva University, and a M.B.A. and J.D. from Fordham University. We believe that Mr.Taragin is qualified to serve on our board of directors due to his more than 25 years of experience as a venture capital investor, entrepreneur, technology investment banker and corporate attorney.

Brian Hirschhas been a director of Katapult since November 2016. He is a Co-Founder and Managing Partner of Tribeca Venture Partners, or TVP, which he formed in 2011, where his investment interests include entrepreneurial startups and high growth companies in numerous sectors, including marketplaces, fintech, SaaS, edtech and consumer related businesses. Prior to founding TVP, Mr.Hirsch was a founder and Managing Director of Greenhill SAVP, the venture capital arm of Greenhill & Co., Inc., from 2006 to 2011. In total, Mr.Hirsch has been a venture capitalist and early stage tech investor for over twenty-three years. He currently serves on the board of directors of numerous private technology companies. Mr.Hirsch holds a B.A. in economics and American studies from Brandeis University. We believe that Mr.Hirsch is qualified to serve on our board of directors due to his experience providing guidance and counsel to, including serving on the boards of directors of, a wide variety of companies across different sectors, as well as his experience as a venture capitalist.

Joanne Bradford was most recently through May of 2021 the President of Honey Science Corporation, an e-commerce technology platform acquired by PayPal in January 2020. Before joining Honey, Ms. Bradford served as chief operating officer and chief marketing officer of SoFi, a leading FinTech company from July 2015 to July 2019. Prior to that, Ms. Bradford joined Pinterest in 2013, where she served as head of partnerships and led global commercial and content partnerships, platform adoption and monetization efforts. Earlier in her career, she was senior vice president at Yahoo! where she led all sales, marketing, and operations across North America, and also served as the chief revenue officer at Microsoft. Additionally, Ms. Bradford has held executive leadership positions at The San Francisco Chronicle and BusinessWeek. Throughout her career, she has had significant impact leading product marketing, business development and programming, as well as building global sales and marketing teams. Ms. Bradford’s achievements include Forbes Top CMO list, Ad Age 100 Most Influential Women in Advertising and Recipient of the Bill Gates Chairman’s Award at Microsoft. Ms. Bradford has served on the executive board of a number of organizations, including Wave, Comscore, anti-poverty charity CARE and currently the Unified Access Management provider OneLogin and game-based learning platform Kahoot!. She is also a founding advisor to Lean In. Joanne has a Bachelor of Arts in journalism with an emphasis in advertising from San Diego State University. We believe that Ms. Bradford is qualified to serve on our board of directors due to her extensive experience in the technology sector, including FinTech.

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Corporate Governance

We will structure our corporate governance in a manner Katapult and FinServ believe will closely align our interests with those of our stockholders following the merger. Notable features of this corporate governance include:

•        we will have independent director representation on our audit, compensation and nominating and corporate governance committees immediately at the time of merger, and our independent directors will meet regularly in executive sessions without the presence of our corporate officers or non-independent directors;

•        at least one of our directors will qualify as an “audit committee financial expert” as defined by the SEC; and

•        we will implement a range of other corporate governance best practices, including placing limits on the number of directorships held by its directors to prevent “overboarding” and implementing a robust director education program.

Role of Board in Risk Oversight

The board of directors has extensive involvement in the oversight of risk management related to us and our business and accomplishes this oversight through the regular reporting to the board of directors by the audit committee. The audit committee represents the board of directors by periodically reviewing our accounting, reporting and financial practices, including the integrity of our financial statements, the surveillance of administrative and financial controls and our compliance with legal and regulatory requirements. Through its regular meetings with management, including the finance, legal, internal audit and information technology functions, the audit committee reviews and discusses all significant areas of our business and summarizes for the board of directors all areas of risk and the appropriate mitigating factors. In addition, our board of directors receives periodic detailed operating performance reviews from management.

Composition of the New Katapult Board of Directors After the Merger

Our business and affairs are managed under the direction of our board of directors. In connection with the merger, we will amend and restate FinServ’s existing charter to provide for a classified board of directors, with two (2) directors in Class I, two (2) directors in Class II and three (3) directors in Class III. See “Description of New Katapult Capital Stock — Anti-Takeover Effects of New Katapult’s Proposed Charter and Bylaws and Certain Provisions of Delaware Law — Classified Board of Directors.”

Board Committees

After the completion of the merger, the standing committees of our board of directors will consist of an audit committee, a compensation committee and a nominating and corporate governance committee. Our board of directors may from time to time establish other committees.

Our Chief Executive Officer, Chief Financial Officer and other executive officers will regularly report to the non-executive directors and the audit, the compensation and the nominating and corporate governance committees to ensure effective and efficient oversight of our activities and to assist in proper risk management and the ongoing evaluation of management controls.

Audit Committee

Upon the completion of the merger, we expect to have an audit committee, consisting of Messrs. Gayhardt, Einbinder and Taragin, with Mr.Garyhardt serving as Chairperson. Each proposed member of the audit committee will qualify as an independent director under the Nasdaq corporate governance standards and the independence requirements of Rule 10A-3 of the Exchange Act. Following the merger, our board of directors will determine which member of our audit committee qualifies as an “audit committee financial expert” as such term is defined in Item 407(d)(5) of Regulation S-K and possesses financial sophistication, as defined under the rules of the Nasdaq.

The purpose of the audit committee will be to prepare the audit committee report required by the SEC to be included in our proxy statement and to assist our board of directors in overseeing and monitoring (1) the quality and

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integrity of our financial statements, (2) our compliance with legal and regulatory requirements, (3) our independent registered public accounting firm’s qualifications and independence, (4) the performance of our internal audit function and (5) the performance of our independent registered public accounting firm.

Our board of directors will adopt a written charter for the audit committee which will be available on our website upon the completion of the merger.

Compensation Committee

Upon the completion of the merger, we expect to have a compensation committee, consisting of Ms. Bradford and Messrs. Hirsch and Gayhardt, with Ms. Bradford serving as Chairperson.

The purpose of the compensation committee is to assist our board of directors in discharging its responsibilities relating to (1) setting our compensation program and compensation of our executive officers and directors, (2) monitoring our incentive and equity-based compensation plans and (3) preparing the compensation committee report required to be included in our proxy statement under the rules and regulations of the SEC.

Our board of directors will adopt a written charter for the compensation committee which will be available on our website upon the completion of the merger.

Nominating and Corporate Governance Committee

Upon the completion of the merger, we expect to have a nominating and corporate governance committee, consisting of Messrs. Taragin, Einbinder and Masto, with Mr.Taragin serving as Chairperson. The purpose of our nominating and corporate governance committee will be to assist our board of directors in discharging its responsibilities relating to (1) identifying individuals qualified to become new board of directors members, consistent with criteria approved by the board of directors, (2) reviewing the qualifications of incumbent directors to determine whether to recommend them for reelection and selecting, or recommending that the board of directors select, the director nominees for the next annual meeting of stockholders, (3) identifying board of directors members qualified to fill vacancies on any board of directors committee and recommending that the board of directors appoint the identified member or members to the applicable committee, (4) reviewing and recommending to the board of directors corporate governance principles applicable to us, (5) overseeing the evaluation of the board of directors and management and (6) handling such other matters that are specifically delegated to the committee by the board of directors from time to time.

Our board of directors will adopt a written charter for the nominating and corporate governance committee which will be available on our website upon completion of the merger.

Code of Business Conduct

We will adopt a new code of business conduct that applies to all of our directors, officers and employees, including our principal executive officer, principal financial officer and principal accounting officer, which will be available on our website upon the completion of the merger. Our code of business conduct is a “code of ethics,” as defined in Item 406(b) of Regulation S-K. Please note that our Internet website address is provided as an inactive textual reference only. We will make any legally required disclosures regarding amendments to, or waivers of, provisions of our code of ethics on our Internet website.

Compensation Committee Interlocks and Insider Participation

None of our executive officers currently serves, or has served during the last year, as a member of the board of directors or compensation committee of any entity that has one or more executive officers that will serve as a member of our board of directors or compensation committee.

Director Compensation

For fiscal year 2020, we did not provide director compensation to our non-employee directors. However, all of our non-employee directors are reimbursed for their reasonable out-of-pocket expenses related to their services as a member of our board of directors. In connection with the merger, we intend to approve and implement a non-employee director compensation policy.

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THE MERGER

The following is a discussion of the merger and the material terms of the merger agreement among FinServ, Merger Sub1, Merger Sub2, Katapult and Orlando Zayas, in his capacity as the representative of all Pre-Closing Holders (as defined in the merger agreement). You are urged to read carefully the merger agreement in its entirety, a copy of which is attached as Annex A to this proxy statement/prospectus. This summary does not purport to be complete and may not contain all of the information about the merger agreement that is important to you. We encourage you to read the merger agreement carefully and in its entirety. This section is not intended to provide you with any factual information about FinServ or Katapult. Such information can be found elsewhere in this proxy statement/prospectus.

Terms of the Merger

Transaction Structure

FinServ’s and Katapult’s boards of directors have approved the merger agreement. The merger agreement provides for the merger of Merger Sub 1 with and into Katapult, with Katapult surviving the First Merger as a wholly owned subsidiary of FinServ, followed immediately by the merger of the resulting company with and into Merger Sub2, with Merger Sub 2 surviving the Second Merger as a wholly owned subsidiary of FinServ.

Merger Consideration

Immediately prior to the First Effective Time, each share of Katapult preferred stock issued and outstanding will be converted into a number of shares of Katapult common stock in accordance with the (i) Conversion Written Consent and (ii) Katapult charter.

At the First Effective Time, each share of Katapult common stock (including common stock to be issued as a result of the conversion of Katapult preferred stock in connection with the merger) that is issued and outstanding immediately prior to the First Effective Time (other than dissenting shares and Unvested Katapult Restricted Shares) will be cancelled and converted into the right to receive the applicable portion of the merger consideration, in accordance with the Allocation Schedule, consisting of (i) cash consideration, as determined under the merger agreement and further described herein, (ii) a number of shares of New Katapult common stock equal to (a) $833.0million (subject to adjustment in accordance with the terms of the merger agreement and net of the value of all Katapult Options to be converted into New Katapult options), minus the aggregate amount of cash paid in clause (i), divided by (b) 10 and (iii) the applicable portion of the 7,500,000 restricted shares of New Katapult common stock that will vest upon, among other things, the achievement of certain earn-out thresholds prior to the sixth anniversary of the closing of the merger. The following chart sets forth the merger consideration (excluding earn-out shares) per share of Katapult common stock and each series of Katapult preferred stock immediately prior to execution of the Merger Agreement and as of March30, 2021, assuming that (i) no shares of Class A Common Stock are redeemed, and (ii) Acquiror Expenses (as defined in the merger agreement) are equal to $25million, and (iii) there are no other adjustments to the aggregate consideration pursuant to the terms of the merger agreement:

Class or Series of Stock	Cash Consideration Per Share ($)				Stock Consideration Per Share (shares of New Katapult Common Stock)
	As of December 17, 2020		As of March 30, 2021		As of December 17, 2020	As of March 30, 2021
Katapult Common Stock	$	3.6154	$	3.6038	0.4628	0.4639
Katapult Series C-1 Preferred Stock	$	3.6154	$	3.6038	0.4628	0.4639
Katapult Series C Preferred Stock	$	3.6154	$	3.6038	0.4628	0.4639
Katapult Series C/A Preferred Stock	$	3.7363	$	3.7243	0.4783	0.4794
Katapult Series C/A-1 Preferred Stock	$	3.7421	$	3.7301	0.4790	0.4802
Katapult Series C/A-2 Preferred Stock	$	3.7384	$	3.7264	0.4786	0.4797
Katapult Series C/B Preferred Stock	$	3.7308	$	3.7189	0.4776	0.4787

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Conversion of Shares; Exchange Procedures

The conversion of Katapult common stock outstanding immediately prior to First Effective Time into the right to receive the applicable portion of the merger consideration will occur automatically at the First Effective Time. As soon as reasonably practicable after the First Effective Time, New Katapult will exchange certificates representing shares of Katapult common stock for the applicable portion of the merger consideration to be received in the merger pursuant to the terms of the merger agreement.

Certificates and Letters of Transmittal

Concurrently with the mailing of this proxy statement/prospectus, Katapult will send a letter of transmittal to each holder of record of a certificate that represented shares of Katapult common stock immediately prior to the First Effective Time. This mailing will contain instructions on how to surrender certificates representing Katapult capital stock in exchange for the applicable portion of the merger consideration the holder is entitled to receive under the merger agreement. From and after the First Effective Time, Katapult stockholders who properly surrender their certificates to New Katapult, together with a properly completed and duly executed letter of transmittal, and such other documents as may be required pursuant to such instructions, will receive for each share of Katapult common stock the applicable portion of the merger consideration.

Dissenting Shares

Shares held by Katapult stockholders who have perfected and not lost their right to demand appraisal of their shares in accordance with the procedures and requirements of Section 262 of the DGCL will not be converted into the right to receive the applicable portion of the merger consideration, and such Katapult stockholders will instead be entitled only to the rights granted by Section 262 of the DGCL. If any such Katapult stockholder withdraws or loses his or her appraisal rights under Section 262 of the DGCL, the shares of Katapult capital stock held by such Katapult stockholder will be deemed to be converted, as of the First Effective Time, into the right to receive the applicable portion of the merger consideration.

Lost, Stolen or Destroyed Stock Certificates

If a certificate for Katapult capital stock has been lost, stolen or destroyed, upon receipt of a duly executed affidavit as to that loss, theft or destruction, any other appropriate evidence as to the ownership of that certificate by the claimant and appropriate and customary indemnification as may be requested by New Katapult, the holder of such lost, stolen or destroyed certificate shall be entitled to receive the applicable portion of the merger agreement.

Unaudited Prospective Financial Information of Katapult

Katapult does not as a matter of course make public projections as to future sales, earnings, or other results. However, the management of Katapult prepared the prospective financial information set forth below to present the potential originations, revenue, net income, and Adjusted EBITDA, which was provided to Katapult’s board of directors, Katapult’s financial advisors and FinServ in connection with the evaluation of the merger. Katapult’s senior management prepared such financial information based on Katapult’s senior management’s judgement and assumptions regarding the future financial performance of Katapult. The inclusion of the below information should not be regarded as an indication that Katapult or any other recipient of this information considered — or now considers — it to be necessarily predictive of actual future results.

The unaudited prospective financial information of Katapult is subjective in many respects and is thus susceptible to multiple interpretations and periodic revisions based on actual experience and business developments. As a result, there can be no assurance that the prospective results will be realized or that actual results will not be significantly higher or lower than estimated. Since the unaudited prospective financial information covers multiple years, that information by its nature becomes less predictive with each successive year.

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While presented in this proxy statement/prospectus with numeric specificity, the information set forth in the summary below was based on numerous variables and assumptions that are inherently uncertain and may be beyond the control of Katapult’s senior management, including, among other things, the matters described in the sections entitled “Forward-Looking Statements; Market, Ranking and Other Industry Data,” “Risk Factors” and “Katapult’s Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Katapult believes the assumptions in the prospective financial information were reasonable at the time the financial information was prepared, given the information Katapult had at the time. However, important factors that may affect actual results and cause the results reflected in the prospective financial information not to be achieved include, among other things, risks and uncertainties relating to Katapult’s business, industry performance, the regulatory environment and general business and economic conditions. The prospective financial information also reflects assumptions as to certain business decisions that are subject to change, including with respect to potential future acquisitions. The prospective financial information assumes acquisitions based on past experience and assumes that the organic growth rate of any acquired businesses match the growth rate of the standalone Katapult business. The accompanying prospective financial information was not prepared with a view toward public disclosure or with a view toward complying with the guidelines established by the American Institute of Certified Public Accountants with respect to prospective financial information but, in the view of Katapult’s management, was prepared on a reasonable basis, reflects the best currently available estimates and judgments, and presents, to the best of management’s knowledge and belief, the expected course of action and the expected future financial performance of Katapult. However, this information is not fact and should not be relied upon as being necessarily indicative of future results, and readers of this proxy statement/prospectus are cautioned not to place undue reliance on the prospective financial information.

Neither Katapult’s independent auditors, nor any other independent accountants have compiled, examined, or performed any procedures with respect to the prospective financial information contained herein, nor have they expressed any opinion or any other form of assurance on such information or its achievability, and assume no responsibility for, and disclaim any association with, the prospective financial information.

EXCEPT TO THE EXTENT REQUIRED BY APPLICABLE FEDERAL SECURITIES LAWS, NEITHER KATAPULT NOR FINSERV INTENDS TO MAKE PUBLICLY AVAILABLE ANY UPDATE OR OTHER REVISION TO THE PROSPECTIVE FINANCIAL INFORMATION. THE PROSPECTIVE FINANCIAL INFORMATION DOES NOT TAKE INTO ACCOUNT ANY CIRCUMSTANCES OR EVENTS OCCURRING AFTER THE DATE THAT INFORMATION WAS PREPARED. READERS OF THIS PROXY STATEMENT/PROSPECTUS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON THE UNAUDITED PROSPECTIVE FINANCIAL INFORMATION SET FORTH BELOW AND NOT TO RELY ON SUCH FINANCIAL INFORMATION IN MAKING A DECISION REGARDING THE ANY OF THE PROPOSALS HEREIN, AS SUCH FINANCIAL INFORMATION MAY BE MATERIALLY DIFFERENT THAN ACTUAL RESULTS. NONE OF KATAPULT, FINSERV NOR ANY OF THEIR RESPECTIVE AFFILIATES, OFFICERS, DIRECTORS, ADVISORS OR OTHER REPRESENTATIVES HAS MADE OR MAKES ANY REPRESENTATION TO ANY KATAPULT STOCKHOLDER, FINSERV STOCKHOLDER OR ANY OTHER PERSON REGARDING ULTIMATE PERFORMANCE COMPARED TO THE INFORMATION CONTAINED IN THE PROSPECTIVE FINANCIAL INFORMATION OR THAT FINANCIAL AND OPERATING RESULTS WILL BE ACHIEVED. FINSERV DOES NOT INTEND TO REFERENCE THESE FINANCIAL PROJECTIONS IN ITS FUTURE PERIODIC REPORTS TO BE FILED UNDER THE EXCHANGE ACT.

Certain of the measures included in the prospective financial information may be considered non-GAAP financial measures. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information presented in compliance with GAAP, and non-GAAP financial measures as used by Katapult may not be comparable to similarly titled amounts used by other companies. Financial measures provided to a financial advisor in connection with a business combination transaction are excluded from the definition of non-GAAP financial measures and therefore are not subject to SEC rules regarding disclosures of non-GAAP financial measures, which would otherwise require a reconciliation of a non-GAAP financial measure to a GAAP financial measure. Accordingly, we have not provided a reconciliation of the financial measures.

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The following table sets forth certain summarized prospective financial information regarding Katapult for 2020, 2021, 2022 and 2023:

	Year Ending December 31,
(USD in millions)	2020E		2021E		2022E(1)		2023E
Originations(2)	$	201	$	402	$	606	$	867
Revenue(5)	$	250	$	455	$	799	$	1,133
Adjusted EBITDA(3)(4)	$	40	$	70	$	151	$	216
Net Income(4)	$	27	$	47	$	95	$	142

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(1)      Includes 53 weeks.

(2)      Originations are defined as the dollar amount of leases originated.

(3)      Adjusted EBITDA is defined as earnings before interest expense and other fees, provision for income taxes, depreciation and amortization on fixed assets, loss on extinguishment of debt, impairment on leased assets, stock compensation expense, and other one time nonrecurring expenses.

(4)      Net Income excludes the impact of stock compensation, loss on extinguishment of debt, non-cash income tax provision, and other one time nonrecurring expenses.

(5)      Prospective revenue has been determined in accordance with ASC 840 and ASC 606. Katapult expects to adopt ASU 2016-02, Leases (Topic 842), as amended, on January 1, 2022 pursuant to the deferral of the effective date provided for in ASU 2020-05, Revenue from Contracts with Customers (Topic 606) and Leases (Topic 842) — Effective Dates for Certain Entities, unless a change in filer status (i.e. no longer qualifying as an emerging growth company as of June 30, 2021) requires earlier adoption for the year ending December 31, 2021. The Company is evaluating the impact of adopting this new accounting guidance on its summarized prospective financial information.

Certain Financial Analysis

FinServ’s management primarily relied upon a comparable company analysis to assess the value that the public markets would likely ascribe to FinServ following a business combination with Katapult and this analysis was presented to the FinServ board of directors. The relative valuation analysis was based on selected companies with publicly available information and with businesses similar or adjacent to Katapult’s business. The selected companies were chosen because they were determined by FinServ’s management to be the most relevant in their particular sector (but, for the avoidance of doubt, each of the selected companies is not necessarily a direct competitor of Katapult). The comparable companies the FinServ board of directors reviewed were:

•        Afterpay Ltd, an Australian public company with technology-driven payment solutions that targets millennials;

•        Sezzle Inc., an Australian public company with a buy now, pay later e-commerce payment platform;

•        PayPal Holdings, Inc. a technology platform for digital payments;

•        Repay Holdings Corporation, an integrated payment processing platform; and

•        PROG Holdings, Inc., a lease-to-own company offering services through kiosks and retail stores.

In addition, FinServ’s management discussed potential valuations of Affirm Holdings, Inc. with its financial advisors although no public data was yet available for Affirm Holdings, Inc. These companies were selected by FinServ as the companies with publicly available data having businesses with similar (or, in the case of margins and growth rates, similar or reasonably achievable) end markets, business models, go-to-market strategies, transaction volumes, margins and growth rates. While these companies may share certain characteristics that are similar to those of Katapult, the FinServ board of directors recognized that no company was identical in nature to Katapult.

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Using publicly available information, FinServ’s management reviewed with the FinServ board of directors, among other things, the revenue compound annual growth rate percentage with respect to each such selected comparable company over the period from 2020 (projected) through 2022 (projected). The percentages for the selected comparable companies as of December15, 2020, are summarized in the table below:

Selected Company	2020E – 2022E Revenue CAGR
Afterpay Ltd	52	%
Sezzle Inc.	47	%
PayPal Holdings, Inc.	19	%
Repay Holdings Corporation	20	%
PROG Holdings, Inc.	12	%

Based on the review of these selected comparable companies as of December15, 2020, the FinServ board of directors concluded that Katapult’s pro forma revenue compound annual growth rate percentage over the period from 2020 (projected) through 2022 (projected) of 79.0% (based upon Katapult’s projected 2020, 2021 and 2022 revenue of $250million, $455million and $799million, respectively, as described above in “Unaudited Prospective Financial Information”) was attractive relative to the 2020E-2022E revenue compound annual growth rate of such selected comparable companies.

Using publicly available information, FinServ’s management reviewed with the FinServ board of directors, among other things, the adjusted EBITDA compound annual growth rate percentage with respect to each such selected comparable company over the period from 2020 (projected) through 2022 (projected). The percentages for the selected comparable companies as of December15, 2020, are summarized in the table below:

Selected Company	2020E – 2022E Adjusted EBITDA CAGR
Afterpay Ltd	108	%
Sezzle Inc.	NM	​(1)
PayPal Holdings, Inc.	20	%
Repay Holdings Corporation	21	%
PROG Holdings, Inc.	8	%

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(1)      Not meaningful.

Based on the review of these selected comparable companies as of December15, 2020, the FinServ board of directors concluded that Katapult’s pro forma adjusted EBITDA compound annual growth rate percentage over the period from 2020 (projected) through 2022 (projected) of 93.0% (based upon Katapult’s projected 2020, 2021 and 2022 adjusted EBITDA of $40million, $70million and $151million, respectively, as described above in “Unaudited Prospective Financial Information”) was attractive relative to the 2020E-2022E adjusted EBITDA compound annual growth rate of such selected comparable companies.

Using publicly available information, FinServ management also reviewed with the FinServ board of directors, among other things, the enterprise values (defined as market capitalization plus net debt plus minority investments minus unconsolidated investments) as a multiple of adjusted EBITDA for 2021 (projected) and 2022 (projected) with respect to each such selected comparable company. The multiples for the selected comparable companies as of December15, 2020, are summarized in the table below:

Selected Company	Enterprise Value/ 2021E Adjusted EBITDA		Enterprise Value/ 2022E Adjusted EBITDA
Afterpay Ltd	>50.0x		>50.0x
Sezzle Inc.	(1	)	(1	)
PayPal Holdings, Inc.	35.3x		29.4x
Repay Holdings Corporation	27.2x		23.2x
PROG Holdings, Inc.	10.1x		8.9x

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(1)      Cannot be calculated due to negative projected adjusted EBITDA.

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Based on the review of these selected comparable companies as of December15, 2020, the FinServ board of directors concluded that Katapult’s enterprise value as a multiple of adjusted EBITDA for estimated calendar year 2021 and estimated calendar year 2022 of 14.1x and 6.6x, respectively, (based upon Katapult’s estimated adjusted EBITDA of $70million and $151million, respectively, as described above in “Unaudited Prospective Financial Information”) was an attractive valuation relative to the estimated calendar year enterprise values as a multiple of adjusted EBITDA of such selected comparable companies.

Using publicly available information, FinServ management also reviewed with the FinServ board of directors, among other things, the enterprise values as a multiple of revenue for 2021 (projected) and 2022 (projected) with respect to each such selected comparable company. The multiples for the selected comparable companies as of December15, 2020, are summarized in the table below:

Selected Company	Enterprise Value/ 2021E Revenue	Enterprise Value/ 2022E Revenue
Afterpay Ltd	30.4x	21.2x
Sezzle Inc.	8.7x	6.3x
PayPal Holdings, Inc.	10.2x	8.6x
Repay Holdings Corporation	11.9x	10.1x
PROG Holdings, Inc.	1.3x	1.1x

FinServ’s board of directors did not deem enterprise value as a multiple of revenue to be as pertinent to the implied valuation of Katapult as enterprise value as a multiple of adjusted EBITDA. However, based on the review of these selected comparable companies as of December15, 2020, the FinServ board of directors concluded that Katapult’s enterprise value as a multiple of revenue for estimated calendar year 2021 and estimated calendar year 2022 of 2.2x and 1.2x, respectively, (based upon Katapult’s estimated revenue of $455million and $799million, respectively, as described above in “Unaudited Prospective Financial Information”) was an attractive valuation relative to the estimated calendar year enterprise values as a multiple of revenue of such selected comparable companies.

The FinServ board of directors viewed Katapult’s revenue compound annual growth rate and adjusted EBITDA compound annual growth rate as the most relevant operational measures on which to evaluate Katapult’s performance relative to comparable companies based on their belief that revenue and adjusted EBITDA growth are the appropriate metrics to evaluate a company in Katapult’s stage of growth. Furthermore, the FinServ board of directors viewed Katapult’s enterprise value as a multiple of both revenue and adjusted EBITDA as the most relevant valuation measures on which to evaluate Katapult’s value based on their belief that these multiples are the most prevalent and relevant metrics for the companies that operate in Katapult’s industry and adjacent sectors. The results of this analysis (as described above) supported the FinServ board of directors’ determination, based on a number of factors, that the terms of the merger were fair to and in the best interests of FinServ and its stockholders.

Background of the Merger

FinServ is a blank check company incorporated as a corporation in Delaware on August9, 2019 and formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. The business combination with Katapult is the result of an extensive search for a transaction, whereby FinServ evaluated a number of potential targets utilizing FinServ’s network and the investing, operating and transaction experience of FinServ’s management team and FinServ’s board of directors. The terms of the transactions contemplated by the Merger Agreement (the “Transactions”) are the result of arm’s-length negotiations between representatives of FinServ and representatives of Katapult over the course of approximately three months. The following is a discussion of the background of these negotiations, the Merger Agreement and the Transactions.

On November5, 2019, FinServ completed its initial public offering of 25million units, which included the partial exercise of the underwriters’ over-allotment option to purchase an additional 3million units. Each unit consists of one share of FinServ Class A Common Stock and one-half of one redeemable warrant to purchase one share of FinServ Class A Common Stock. The units were sold at an offering price of $10.00 per unit, generating gross proceeds of $250,000,000 (before underwriting discounts and commissions and offering expenses). Simultaneously with the consummation of the FinServ IPO and the sale of the units, FinServ consummated a private placement of 665,000 units at a price of $10.00 per unit, issued to the Sponsor, with each unit consisting of one share

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of Class A Common Stock and one-half of one warrant to purchase one share of Class A Common Stock, generating total proceeds of $6,650,000. The net proceeds from the FinServ IPO and the private placement with the Sponsor (other than limited funds held outside the trust for the purposes detailed in FinServ’s filings with the SEC) were deposited in a trust account established for the benefit of FinServ’s public stockholders. Prior to the consummation of the FinServ IPO, neither FinServ, nor anyone on its behalf, contacted any prospective target business or had any substantive discussions, formal or otherwise, with respect to a potential transaction with FinServ.

After the initial public offering, FinServ commenced an active search for businesses and assets to acquire. Representatives of FinServ contacted and were contacted by numerous individuals, financial advisors and other entities with respect to acquisition opportunities. FinServ had contact with more than 100 potential targets and/or their advisors, focusing on businesses in the FinTech and financial services sectors which (i) had estimated equity values ranging from $500million to $2billion, (ii) were positioned, operationally and financially, to be successful as a public company and would benefit from the increased ability to access capital that a public listing would provide, (iii) had a significant total addressable market (TAM) and growth expansion opportunities, (iv) were profitable or had a clear path to profitability, and the potential to improve margins, (iv) had a strong and experienced management team, and (v) had a business model in place to deal with risks and uncertainties associated with a changing economic environment.

FinServ entered into non-disclosure agreements with 32 potential target companies, in addition to Katapult, and engaged in varying levels of discussions, negotiations and due diligence with respect to those potential targets based on, among other factors, interest from, and due diligence access granted by, the potential target and the terms on which the potential target was willing to consider a potential transaction (including with respect to valuation). FinServ’s diligence on potential targets (which included, in many instances, meetings with the senior management of those potential targets and their advisors) included investigation into one or more of the following areas (depending on the potential target): financial projections (including testing sensitivities); historical financial performance; macroeconomic trends impacting the business; competitive positioning vs. peer group; operating margins; growth opportunities; performance history of the senior management team; current technology and potential impact from technology disruption; regulatory environment; and benefits/challenges to the potential target of being a public company.

FinServ ultimately determined not to proceed with each of its other potential acquisition opportunities for a variety of reasons, including because (i) the potential target pursued an alternative transaction or strategy, (ii) the potential target did not meet the valuation expectations of FinServ or (iii) FinServ concluded that the potential target’s business would not be a suitable business combination opportunity for FinServ, including for some as compared to a combination with Katapult.

On August14, 2020 Katapult engaged PJT Partners LP (“PJT”) to act as financial advisor to the board of directors of Katapult in connection with the potential business combination. During the target evaluation process described above, a representative of PJT contacted FinServ on September17, 2020 to express Katapult’s interest in evaluating a potential transaction with FinServ and providing preliminary information on Katapult. Following additional telephonic discussions, on September24, 2020 Katapult and FinServ executed a non-disclosure agreement to facilitate a due diligence review of Katapult’s business.

Between late September 2020 and mid October 2020, Mr.Lee Einbinder, FinServ’s Chief Executive Officer and a member of FinServ’s board of directors, Mr.Howard Kurz, FinServ’s President and Chief Financial Officer and a member of FinServ’s board of directors, and Mr.Steven Handwerker, Consultant to FinServ and Head of Business Development, held discussions with members of Katapult’s management team, including Mr.Orlando Zayas, Katapult’s chief executive officer and a member of the Katapult board of directors, Ms. Karissa Cupito, Katapult’s chief financial officer, Mr.Derek Medlin, Katapult’s chief operating officer, and Ms. Fangqiu Sun, Katapult’s chief credit officer, regarding a potential strategic transaction involving Katapult and FinServ. During this period, Katapult also provided initial due diligence materials, including a management presentation and financial model.

On October22, 2020, FinServ submitted to Katapult a non-binding indication of interest (the “IOI”) with key transaction terms, including (i) consideration of $833million payable in a mix of cash and stock and (ii) an earnout for Katapult shareholders of 5million shares of FinServ common stock (50% of which would vest upon FinServ stock reaching $12 per share, and the remaining 50% would vest upon FinServ’s stock reaching $14 per share). The valuation was based on 13x Katapult’s projected 2021 adjusted EBITDA of $76.6million, and assumed certain levels

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of debt, cash and transaction expenses. FinServ’s use of the 13x multiple was based on its review of comparable companies, its view of Katapult’s appropriate trading range, diligence to date, and the M&A and capital markets expertise of FinServ’s officers. The total consideration included $425million in cash and $408million in FinServ common stock (based on a $10 per share value of FinServ’s stock), which assumed proceeds from a $200million PIPE. The IOI also proposed a deferral of 25% of FinServ’s sponsor shares, 50% of which would vest upon FinServ stock reaching $12 per share, and the remaining 50% would vest upon FinServ’s stock reaching $14 per share.

From October26, 2020 to November1, 2020, FinServ held further telephonic discussions with PJT to discuss the terms of the IOI. The topics discussed included (i) justification of the valuation proposed by FinServ, (ii) the cash/stock mix and the size of the PIPE, (iii) adjustment mechanisms for changes in net debt prior to closing, (iv) lock-up provisions for FinServ’s Sponsor and Katapult’s existing equityholders, (v) minimum cash required at closing, (vi) board composition, (vii) the size and term of the earnout for Katapult’s existing equityholders, and (viii) additional due diligence required and overall timing required to sign a definitive transaction. PJT, on behalf of Katapult, and FinServ negotiated the terms of an acceptable consideration package, which was reflected in the Term Sheet described below.

On November2, 2020, FinServ’s board of directors met telephonically to discuss and evaluate a potential business combination with four potential targets (including Katapult). Mr.Einbinder, Mr.Kurz and Mr.Handwerker reviewed with FinServ’s board of directors the material terms of the potential transactions with each of the four potential targets, as well as legal, governance, business, operational and other relevant key areas for consideration of each of the four potential targets, including, among other things, the historical and projected growth and their perspective on the probability of achieving projected financial goals, the expected PIPE, the experience and performance history of the various management teams, and the expected market receptivity to a transaction with each of the targets. FinServ’s board of directors discussed and evaluated the various factors and key considerations of each of the potential transactions, including the benefits and risks to FinServ’s stockholders of consummating each of the potential transactions.

On November5, 2020, FinServ’s board of directors participated in a due diligence Zoom meeting with Katapult’s management. FinServ’s board of directors also held management due diligence meetings with two other potential targets.

On November6, 2020, FinServ’s board of directors met telephonically to further discuss and evaluate a potential business combination with the four potential targets. FinServ’s board of directors continued its discussion from November2, 2020 on the various factors and key considerations of each of the potential transactions, including the potential benefits and risks to FinServ’s stockholders of consummating each of the potential transactions. The Board also discussed the Term Sheet (as described below) and authorized submission of the same to Katapult.

On November6, 2020, FinServ submitted to Katapult a non-binding term sheet (the “Term Sheet”), which reflected the same $833million consideration (excluding earnout shares) as the IOI but, following the discussions between FinServ and PJT, on behalf of Katapult, reflected a mix of consideration of $375million in cash and $458million in stock (based on a $10 per share value of FinServ’s stock) and an increase of the earnout to 7.5million FinServ shares (50% of which would vest upon FinServ stock reaching $12 per share, and the remaining 50% would vest upon FinServ’s stock reaching $14 per share, in each case during a 6-year earnout period) in order to address Katapult’s requirement for additional value. The Term Sheet also provided for (i) FinServ’s board of directors to be comprised of between 7 and 9 directors, consisting of two directors appointed by FinServ, (ii) a six-month lock-up period for key post-closing equityholders, (iii) a reduction in the PIPE to $150million, reflecting the decrease in the cash portion of the consideration, (iv) an adjustment to the cash consideration if Katapult’s net debt was greater than expected, (v) an adjustment to the cash/stock mix in the event of redemptions by FinServ’s stockholders which reduce cash available to FinServ and (vi) binding mutual exclusivity through December18, 2020 (although, pursuant to such exclusivity provision, FinServ was permitted to continue to evaluate and hold discussions with potential targets but could not enter into any binding agreement with them with respect to a transaction).

On November9, 2020, FinServ’s board of directors met telephonically to, among other matters, discuss the potential business combination with Katapult. Mr.Einbinder, Mr.Kurz and Mr.Handwerker updated FinServ’s board of directors on the discussions with Katapult regarding a potential business combination, including the status of FinServ’s due diligence to date and the contemplated transaction structure and terms. Following this discussion, FinServ’s board of directors directed management to continue to explore the potential business combination with Katapult and to update the board as the discussions progressed.

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On November10, PJT, on behalf of Katapult, provided a markup to the Term Sheet which reflected minor clarifying changes and agreed to FinServ’s valuation, cash/stock split and earnout proposal.

On November11, 2020, FinServ’s board of directors met telephonically to further discuss the potential transaction with Katapult and to receive an update on the status of FinServ’s due diligence of Katapult. During the discussions it was concluded that based on, among other considerations, the experience and performance history of Katapult’s senior management team, Katapult’s high historical and projected growth and profitability, Katapult’s large TAM and industry leading technology, Katapult’s strong affiliate partnerships with successful e-commerce companies and a general market shift to e-commerce (which had been accelerated by COVID-19) which was likely to benefit Katapult, that a transaction with Katapult was the most attractive opportunity of the various potential targets. Following the discussions, FinServ’s board of directors approved entry into the Term Sheet with Katapult. On November13, 2020, the Term Sheet was executed by both parties.

On November11, Katapult opened a virtual data room with diligence materials to FinServ and its advisors.

During the remainder of November through December17, 2020, FinServ and its advisors, including Kirkland & Ellis LLP (“Kirkland”), FinServ’s legal counsel, continued a due diligence review of Katapult’s business, including holding numerous diligence calls among FinServ management, Katapult management and their respective advisors, including DLA Piper LLP (US) (“DLA”), Katapult’s legal counsel. As part of the on-going dialogue, on November24, 2020, FinServ sent an initial business due diligence request list to Katapult. During this period, FinServ’s management kept FinServ’s board of directors updated as to the status of negotiations with Katapult, the status of the proposed PIPE and the timeline for consummating the Transactions.

On November27, 2020, FinServ engaged Barclays Capital Inc. (“Barclays”) as its financial advisor and lead placement agent for the PIPE Investment. On November29, 2020, FinServ also engaged PJT as co-placement agent for the PIPE Investment given PJT’s knowledge of Katapult and notwithstanding PJT’s existing role as financial adviser to Katapult in connection with the proposed business combination.

On December10, 2020, Kirkland and DLA exchanged drafts of the form of Subscription Agreement for the PIPE, which including the terms of the closing process, the conditions to closing the subscription, the representations and warranties of FinServ and the subscriber, the registration rights to be granted to subscribers and provisions related to the termination of the Subscription Agreement.

On December11, 2020, Kirkland distributed the first draft of the Merger Agreement to DLA. Between December11, 2020 and December18, 2020, Kirkland and FinServ, on the one hand, and DLA and Katapult, on the other hand, exchanged drafts of the Merger Agreement and the other transaction documents, and engaged in negotiations of such documents and agreements. The various revised drafts reflected the parties’ respective positions on, among other matters (i) FinServ’s post-closing governance (which resulted in a board of 7 persons, with FinServ’s representation being reduced from two people, as included in the Term Sheet, to one person), (ii) the overall suite of representations, warranties and covenants to be provided by each party under the Merger Agreement and the related ancillary documents, (iii) the transaction structure, (iv) that $50million of the cash proceeds from the PIPE would be utilized to fund cash to FinServ’s balance sheet, and (v) the closing condition relating to available cash at closing (after taking into account redemptions of FinServ’s stock). For further information related to the final resolution of the foregoing items, please see the section entitled “The Merger Agreement.” The negotiations also included counsel to certain of the key equityholders in Katapult, including Willkie, Farr & Gallagher LLP as counsel to CURO Group Holdings Corp., with respect to the terms of their voting and support agreements, their consent rights with respect to amendments and waivers with respect to the Merger Agreement and certain other matters (including representation on FinServ’s board of directors).

From December10, 2020 through December17, 2020, Barclays and PJT, as co-placement agents for the PIPE, at the request of FinServ, distributed draft documentation to prospective PIPE investors with respect to the PIPE. Kirkland and DLA collectively negotiated the terms of the Subscription Agreements with the prospective investors, including with respect to the registration rights set forth therein, and responded to follow up questions and comments related thereto, particularly with respect to the closing process and the expected timeline for consummating the Transactions. During this time, the prospective investors conveyed to Barclays and PJT their initial proposed subscription amounts. Between December13, 2020 and December15, 2020, FinServ held conversations with Barclays and PJT to determine the proposed size of the PIPE and the proposed allocations. On December17, 2020, a final version of the Subscription Agreement was distributed to the prospective investors, which reflected the

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outcome of negotiations between the parties and the prospective investors. On December17, 2020, the prospective investors that had chosen to participate in the PIPE indicated their final subscription amounts and delivered executed Subscription Agreements.

On December16, 2020, representatives of Kirkland and Buckley LLP (“Buckley”), FinServ’s regulatory counsel, discussed with FinServ the results of their legal and regulatory due diligence review.

On December16, 2020, FinServ’s board of directors met telephonically to discuss and evaluate the potential business combination with Katapult, with representatives of Kirkland in attendance. Representatives of Kirkland reviewed with FinServ’s board of directors its fiduciary duties in connection with a potential business combination with Katapult, including the obligations of board members to disclose any actual or potential conflicts of interest in a proposed transaction with Katapult (with no such conflicts being raised) and summarized the material terms of the Transactions, including those contained in the Merger Agreement and related transaction documents, as well as those related to the PIPE. Mr.Einbinder, Mr.Kurz and Mr.Handwerker then reviewed with FinServ’s board of directors the strategic rationale for the transaction, as well as their perspective on Katapult’s valuation as implied by the terms of the proposed transactions, including the PIPE Investment, and how that valuation compared to similar companies (see “Certain Financial Analysis”), the benefits to FinServ’s stockholders of consummating such a transaction and the potential market reaction to the Transactions, including the potential impact on FinServ’s stock price as a result of consummating such a transaction. FinServ management also presented to FinServ’s board of directors the results of the third party diligence conducted on Katapult. A discussion ensued, which included questions from board members to FinServ management and Kirkland.

On December17, 2020, FinServ’s board of directors met telephonically to continue the discussion and evaluation of the potential business combination with Katapult, with representatives of Kirkland in attendance. Following that discussion, upon a motion duly made and seconded at the December17, 2020 meeting, FinServ’s board of directors unanimously (i) determined that it is in the best interests of FinServ and its stockholders, and declared it advisable, to enter into the Merger Agreement, (ii) approved the Merger Agreement and the Transactions, including the Merger, on the terms and subject to the conditions of the Merger Agreement and (iii) adopted a resolution recommending the Merger be adopted by FinServ’s stockholders.

On December18, 2020, the Katapult board of directors unanimously adopted resolutions approving the execution and delivery of the Merger Agreement, the ancillary agreements and the transactions contemplated thereby.

On December18, 2020, the parties executed the Merger Agreement and all transaction documents (including the PIPE agreements and voting support agreements). On the morning of December18, 2020, before the stock market opened, FinServ and Katapult announced the execution of the Merger Agreement and the Transactions.

Recommendation of the FinServ Board of Directors and Reasons for the Merger

FinServ’s board of directors, in evaluating the merger, consulted with FinServ’s management and legal advisors. In reaching its unanimous resolution (i) that the merger agreement and the transactions contemplated thereby are advisable and in the best interests of FinServ and its stockholders and (ii) to approve the merger agreement and the transactions contemplated thereby, FinServ’s board of directors considered a range of factors, including, but not limited to, the factors discussed below. In light of the number and wide variety of factors considered in connection with its evaluation of the merger, FinServ’s board of directors did not consider it practicable to, and did not attempt to, quantify or otherwise assign relative weights to the specific factors that it considered in reaching its determination and supporting its decision. FinServ’s board of directors viewed its decision as being based on all of the information available and the factors presented to and considered by it. In addition, individual directors may have given different weight to different factors. This explanation of FinServ’s reasons for the merger and all other information presented in this section is forward-looking in nature and, therefore, should be read in light of the factors discussed under “Forward-Looking Statements; Market, Ranking and Other Industry Data.”

In approving the merger, FinServ’s board of directors determined not to obtain a fairness opinion. The officers and directors of FinServ have substantial experience in evaluating the operating and financial merits of companies from a wide range of industries and concluded that their experience and background enabled them to make the necessary analyses and determinations regarding the merger. In addition, FinServ’s officers and directors and FinServ’s advisors have substantial experience with mergers and acquisitions.

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FinServ’s board of directors considered a number of factors pertaining to the merger as generally supporting its decision to enter into the merger agreement and the transactions contemplated thereby, including, but not limited to, the following material factors:

•        Growth Prospects.    Katapult is a market leader in an attractive and growing industry with an already successful business and with strong growth prospects within the e-commerce sector of the fintech industry;

•        Large Addressable Market.    Katapult competes in a total U.S. addressable market estimated currently at approximately $40-50billion. Supported by powerful consumer and retail trends, Katapult’s potential addressable market will continue to grow;

•        Proprietary Technology Platform with Compelling Value Proposition.    Katapult has innovated with a proprietary platform that provides scalability, operational efficiency and competitive differentiation and a two-sided value proposition to both merchants and consumers;

•        Due Diligence.    Due diligence examinations of Katapult and discussions with Katapult’s management and FinServ’s legal advisors concerning FinServ’s due diligence examination of Katapult;

•        Financial Condition.    FinServ’s board of directors also considered factors such as Katapult’s historical financial results, outlook, financial plan and debt structure, as well as the financial profiles of publicly traded companies in the fintech industry and adjacent markets, and certain relevant information with respect to companies that had been acquisition targets or received equity financings in transactions similar to the merger. In considering these factors, FinServ’s board of directors reviewed Katapult’s recent growth in certain key financial metrics (including merchants, consumers, revenue and adjusted EBITDA metrics), the current prospects for growth if Katapult achieved its business plans and various historical and current balance sheet items for Katapult. In reviewing these factors, FinServ’s board of directors noted that Katapult was well-positioned in its industry for strong future growth;

•        Experienced and Proven Management Team.    Katapult has a strong management team and the senior management of Katapult intend to remain with New Katapult in the capacity of officers and/or directors, which will provide helpful continuity in advancing Katapult’s strategic and growth goals;

•        Lock-Up.    The Chief Executive Officer and certain other significant Pre-Closing Holders of Katapult have agreed to be subject to a six-month lock-up in respect of their shares of New Katapult common stock (subject to certain customary exceptions);

•        Other Alternatives.    FinServ’s board of directors believes, after a thorough review of other business combination opportunities reasonably available to FinServ, that the proposed merger represents the best potential business combination for FinServ and the most attractive opportunity for FinServ’s management to accelerate its business plan based upon the process utilized to evaluate and assess other potential acquisition targets, and FinServ’s board of directors’ belief that such process has not presented a better alternative; and

•        Negotiated Transaction.    The financial and other terms of the merger agreement and the fact that such terms and conditions are reasonable and were the product of arm’s length negotiations between FinServ and Katapult.

FinServ’s board of directors also considered a variety of uncertainties and risk and other potentially negative factors concerning the merger including, but not limited to, the following:

•        Macroeconomic Risks.    Macroeconomic uncertainty and the effects it could have on the combined company’s revenues and adjusted EBITDA;

•        Redemption Risk.    The potential that a significant number of FinServ stockholders elect to redeem their shares prior to the consummation of the merger and pursuant to FinServ’s Existing Charter, which would potentially make the merger more difficult or impossible to complete;

•        Stockholder Vote.    The risk that FinServ’s stockholders may fail to provide the respective votes necessary to effect the merger;

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•        Closing Conditions.    The fact that the completion of the merger is conditioned on the satisfaction of certain closing conditions that are not within FinServ’s control;

•        Litigation.    The possibility of litigation challenging the merger or that an adverse judgment granting permanent injunctive relief could indefinitely enjoin consummation of the merger;

•        Listing Risks.    The challenges associated with preparing Katapult, a private entity, for the applicable disclosure and listing requirements to which FinServ will be subject as a publicly traded company on the Nasdaq;

•        Benefits May Not Be Achieved.    The risks that the potential benefits of the merger may not be fully achieved or may not be achieved within the expected timeframe;

•        Liquidation of FinServ.    The risks and costs to FinServ if the merger is not completed, including the risk of diverting management focus and resources from other business combination opportunities, which could result in FinServ being unable to effect a business combination by November5, 2021;

•        Growth InitiativesMay Not be Achieved.    The risk that the growth initiatives may not be fully achieved or may not be achieved within the expected timeframe;

•        No Third-Party Valuation.    The risk that FinServ did not obtain a third-party valuation or fairness opinion in connection with the merger;

•        FinServ Stockholders Receiving a Minority Position in Katapult.The risk that FinServ stockholders will hold a minority position in Katapult; and

•        Fees and Expenses.    The fees and expenses associated with completing the merger.

In addition to considering the factors described above, FinServ’s board of directors also considered other factors including, without limitation:

•        Interests of Certain Persons.    Some officers and directors of FinServ may have interests in the merger. See the section titled “— Interests of FinServ’s Directors and Officers in the Merger” beginning on page 139 of this proxy statement/prospectus.

•        Other Risks Factors.    Various other risk factors associated with the business of Katapult, as described in the section entitled “Risk Factors” appearing elsewhere in this proxy statement.

FinServ’s board of directors concluded that the potential benefits that it expected FinServ and its stockholders to achieve as a result of the merger outweighed the potentially negative and other factors associated with the merger. FinServ’s board of directors also noted that the FinServ stockholders would have a substantial economic interest in the combined company (depending on the level of FinServ stockholders that sought redemption of their Class A Common Stock into cash). Accordingly, FinServ’s board of directors unanimously determined that the merger and the transactions contemplated by the merger agreement, were advisable and in the best interests of FinServ and its stockholders.

Satisfaction of 80% Test

The Nasdaq rules require that FinServ’s initial business combination must occur with one or more operating businesses or assets with a fair market value equal to at least 80% of the net assets held in the Trust Account (net of amounts disbursed to management for working capital purposes and excluding the amount of any deferred underwriting discount held in the Trust Account) at the time of FinServ’s signing a definitive agreement in connection with its initial business combination. As of December18, 2020, the date of the execution of the merger agreement, the value of the net assets held in the Trust Account was approximately $251.25million (excluding approximately $9.35million of deferred underwriting discount held in the Trust Account) and 80% thereof represents approximately $201million. In reaching its conclusion that the merger meets the 80% asset test, FinServ’s board of directors used as a fair market value the enterprise value of approximately $1.0billion, which was implied based on the terms of the transactions agreed to by the parties in negotiating the merger agreement. The enterprise value consists of an implied equity value of approximately $962million and approximately $32million of net cash. In determining whether the enterprise value described above represents the fair market

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value of Katapult, FinServ’s board of directors considered all of the factors described in this section and the section of this proxy statement/prospectus entitled “The Merger Agreement” and the fact that the purchase price for Katapult was the result of an arm’s length negotiation. As a result, FinServ’s board of directors concluded that the fair market value of the business acquired was significantly in excess of 80% of the net assets held in the Trust Account (net of amounts disbursed to management for working capital purposes and excluding the amount of any deferred underwriting discount held in the Trust Account).

Interests of FinServ’s Directors and Officers in the Merger

In considering the recommendation of the board of directors of FinServ to vote in favor of approval of the Business Combination Proposal, the Charter Proposals and the other proposals, stockholders should keep in mind that certain members of the board of directors and executive officers of FinServ and the Sponsor, including their directors and executive officers, have interests in su