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.

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 December 31, 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.

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.

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.

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.

Financial Risks

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

We generated net income of approximately $22.5 million in the fiscal year ended December 31, 2020. We incurred net losses of approximately $18.8 million in the fiscal year ended December 31, 2019 and approximately $23.5 million in the fiscal year ended December 31, 2018. As of December 31, 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.

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 December 31, 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 December 31, 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 December 31, 2020, we had a $75.4 million 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 June 30, 2023 for all US dollar settings except the 1 week and the 2 month 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.

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

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.

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 December 31, 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 December 31, 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).

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.

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 December 31, 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.

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         %. Under the same assumptions and assuming that         shares 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         %. 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        , 2021, current FinServ stockholders, as a group, will own (1) if there are no redemptions,         % of New Katapult common stock expected to be outstanding immediately after the merger or (2) if there are redemptions of            of the outstanding shares of FinServ common stock (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),         % 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.

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 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 149.

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 138 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 149.

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 149.

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 131.

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 14.

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 $9.35 million in deferred underwriting fees and $6.0 million in fees related to the PIPE Investment and $9.65 million in transaction costs. Katapult estimates that it will incur approximately $20.0 million 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 119.

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 December 18, 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 November 5, 2021. If FinServ is unable to complete an initial business combination before November 5, 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 24 month 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.

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.

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.

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. 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 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 December 31, 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 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 November 5, 2024, (b) in which New Katapult has total annual gross revenue of at least $1.07 billion, 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 $700 million as of the prior June 30th, and (2) the date on which New Katapult has issued more than $1.0 billion 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 12,832,500 shares of New Katapult common stock will become exercisable on the later of 30 days after the completion of the merger or 12 months 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.

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, 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 $5.0 million 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;

•        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.

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             , and subject to the assumptions set forth in “Basis of Presentation and Glossary”, New Katapult would have a total of approximately           million 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 certain substantial holders of Katapult’s common stock (determined on an as-converted basis) (the “Investors”) 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 the Investors and certain other stockholders of New Katapult will be eligible for resale, 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               % 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 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.

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.

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)			—
Income (loss) before provision for income taxes			350				23,018				(10,704	)					12,664
Provision for income taxes			(196	)			(487	)			226			6(c)			(457	)
Net income (loss)		$	154			$	22,531			$	(10,478	)				$	12,207
Net income (loss) available to common stockholders		$	(584	)		$	1,933									$	12,207
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										117,922,581			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										118,010,211			6(d)
Earnings (loss) per common share (no and maximum redemptions)
Basic		$	(0.08	)		$	0.22									$	0.12			6(d)
Diluted		$	(0.08	)		$	0.08									$	0.10			6(d)

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

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) $833.0 million (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 December 31, 2020 gives effect to the merger and the PIPE Investment as if they occurred on December 31, 2020. The unaudited pro forma condensed combined statement of operations for the year ended December 31, 2020 gives effect to the merger and the PIPE Investment as if they occurred on January 1, 2020.

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.

Katapult is currently evaluating the accounting treatment related to the FinServ warrants. For purposes of the unaudited pro forma condensed combined financial information, all warrants are classified as equity instruments. However, the evaluation and finalization of accounting conclusions regarding the classification are ongoing and subject to change. If the above arrangements are determined to be classified as liability instruments, then the warrants will be recorded as a liability at fair value upon the completion of the merger and remeasured in future reporting periods through the statement of operations.

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 17,537,289 shares 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 $225 million in available distributable cash. This scenario gives effect to redemptions of 17,537,289 share of Class A Common Stock 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).

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 December 31, 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 December 31, 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 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 $225 million. As such, the maximum number of shares that can be redeemed by FinServ public stockholders is 17,537,289 for aggregate redemption payments of $176.2 million 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.

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 $326.2 million and Stock Consideration of 58,175,081 shares 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 17,537,289 shares of Class A Common Stock 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).

(3)      Includes 1,543,750 shares 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 $150 million, with 15,000,000 shares of Class A Common Stock issued to the PIPE Investors.

5.      Adjustments to Unaudited Pro Forma Condensed Combined Balance Sheet as of December 31, 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 December 31, 2020.

(B)    Derived from the audited consolidated balance sheet of Katapult as of December 31, 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)).

(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 $237,854 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			237,854				237,854			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		$	89,638			$	89,638

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 December 31, 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 December 31, 2020.

(B)    Derived from the audited consolidated statement of operations of Katapult for the year ended December 31, 2020.

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 January 1, 2020.

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           , 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        , 2021, at            Eastern Time, via a virtual meeting. On or about        , 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               , 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         shares of common stock outstanding, of which               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

if no business combination is effected by FinServ by November 5, 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,          shares 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 November 5, 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 November 5, 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 $            based upon the closing price of $          per public share on the Nasdaq on          , 2021, the record date for the Special Meeting.

•        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 $            based on the closing price of $            per warrant on the Nasdaq on            , 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 November 5, 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 November 5, 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.

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 December 31, 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.

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             , 2021, the record date for the Special Meeting, was $            . The cash held in the Trust Account on such date was approximately $            million ($            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 172. 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 to           a fee of $            , plus disbursements.

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         , 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.

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 0.11 shares for each share of Class B Common Stock outstanding, resulting in the Sponsor holding an aggregate of 6,325,000 Founder Shares.

On November 5, 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 $250 million. 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 $6.65 million 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 $250.0 million 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

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 November 5, 2021 to complete any initial business combination. If FinServ is unable to complete an initial business combination before November 5, 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 24 month 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 November 5, 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 November 5, 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 December 31, 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

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

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 December 31, 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 November 5, 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 November 5, 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.