Katapult Holdings, Inc 10-K, filed Mar 27, 2020

Katapult Holdings, Inc. (KPLT)

10-K 2020-03-27 For: 2019-12-31

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Added on April 11, 2026

About this 10-K

Katapult Holdings, Inc filed this 10-K on March 27, 2020, covering the fiscal year ended December 31, 2019.

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Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
Units, each consisting of one share of Class A Common Stock and one –half of one Redeemable Warrant	FSRVU	The Nasdaq Stock Market LLC
Class A Common Stock, par value $0.0001 per share	FSRV	The Nasdaq Stock Market LLC
Warrants to purchase one share of Class A Common Stock	FSRVW	The Nasdaq Stock Market LLC

Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer ☒	Smaller reporting company ☒
	Emerging growth company ☒

		PAGE
PART I
Item 1.	Business	1
Item 1A.	Risk Factors	17
Item 1B.	Unresolved Staff Comments	44
Item 2.	Properties	44
Item 3.	Legal Proceedings	44
Item 4.	Mine Safety Disclosures	44

PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	45
Item 6.	Selected Financial Data	45
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	46
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	50
Item 8.	Financial Statements and Supplementary Data	50
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	50
Item 9A.	Controls and Procedures	50
Item 9B.	Other Information	51

PART III
Item 10.	Directors, Executive Officers and Corporate Governance	52
Item 11.	Executive Compensation	58
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	59
Item 13.	Certain Relationships and Related Transactions, and Director Independence	61
Item 14.	Principal Accounting Fees and Services	63

PART IV
Item 15.	Exhibits and Financial Statement Schedules	64
Item 16.	Form 10-K Summary	64

Type of Transaction		Whether Stockholder Approval is Required
Purchase of assets		No
Purchase of stock of target not involving a merger with the company		No
Merger of target into a subsidiary of the company		No
Merger of the company with a target		Yes

Name	Age	Position
Lee Einbinder	59	Chief Executive Officer and Director
Howard Kurz	62	President, Chief Financial Officer and Director
Jay N. Levine	58	Director
Robert Matza	63	Director
Diane B. Glossman	64	Director
Ares Kekedjian	53	Director

	Class A Common Stock					Class B Common Stock
Name and Address of Beneficial Owner ⁽¹⁾	Number of Shares Beneficially Owned		% of Class			Number of Shares Beneficially Owned		% of Class
FinServ Holdings LLC^{(2) (3)}		—		—			6,250,000		100	%
Lee Einbinder		—		—			6,250,000		100	%
Howard Kurz		—		—			6,250,000		100	%
Jay N. Levine		—		—			—		—
Robert Matza		—		—			—		—
Diane B. Glossman		—		—			—		—
Aris Kekedjian		—		—			—		—
All executive officers and directors as a group (6 individuals)		—		—			6,250,000		100	%
Linden Advisors LP⁽⁴⁾		1,400,786		5.5	%
Millennium Management LLC⁽⁵⁾		1,881,689		7.3	%		—		—
UBS O’Connor LLC⁽⁶⁾		1,800,000		7.0	%		—		—
RP Investment Advisors⁽⁷⁾		1,400,000		5.5	%		—		—
HGC Investment Management Inc. ⁽⁸⁾		1,400,000		5.5	%		—		—
Magnetar Financial LLC⁽⁹⁾		1,400,000		5.5	%		—		—

Exhibit No.		Description

3.1		Certificate of Incorporation. (2)

3.2		Amended and Restated Certificate of Incorporation. (1)

3.3		Bylaws. (2)

4.1		Warrant Agreement, dated October 31, 2019, between Continental Stock Transfer & Trust Company and the Company. (1)

4.2		Description of Securities.*

10.1		Investment Management Trust Account Agreement, dated October 31, 2019, between Continental Stock Transfer & Trust Company and the Company. (1)

10.2		Registration Rights Agreement, dated October 31, 2019, between the Company and Sponsor. (1)

10.3		Letter Agreement, dated October 31, 2019, by and among the Company, its officers, its directors and Sponsor. (1)

10.4		Administrative Services Agreement, dated October 31, 2019, between the Company and Sponsor. (1)

10.5		Unit Subscription Agreement, dated October 31, 2019, between the Company and Sponsor. (2)

10.6		Underwriting Agreement, dated October 31, 2019, between the Company, Barclays Capital Inc. and Cantor Fitzgerald & Co. (1)

31.1		Certification of the Chief Executive Officer required by Rule 13a-14(a) or Rule 15d-14(a).*

31.2		Certification of the Chief Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a).*

32.1		Certification of the Chief Executive Officer required by Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C. 1350.**

32.2		Certification of the Chief Executive Officer required by Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C. 1350.**

101.INS		XBRL Instance Document*

101.SCH		XBRL Taxonomy Extension Schema*

101.CAL		XBRL Taxonomy Calculation Linkbase*

101.LAB		XBRL Taxonomy Label Linkbase*

101.PRE		XBRL Definition Linkbase Document*

101.DEF		XBRL Definition Linkbase Document*

Report of Independent Registered Public Accounting Firm	F-2
Financial Statements:
Balance Sheet	F-3
Statement of Operations	F-4
Statement of Changes in Stockholders’ Equity	F-5
Statement of Cash Flows	F-6
Notes to Financial Statements	F-7 to F-17

ASSETS
Current assets
Cash and cash equivalents	$	1,578,075
Prepaid expenses and other current assets		126,022
Total Current Assets		1,704,097

Marketable securities held in Trust Account		250,567,358
Total Assets	$	252,271,455

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable and accrued expenses	$	118,805
Income taxes payable		102,450
Total Current Liabilities		221,255

Deferred underwriting fee payable		9,350,000
Total Liabilities		9,571,255

Commitments

Class A Common stock subject to possible redemption, 23,770,019 shares at redemption value at $10.00 per share		237,700,190

Stockholders’ Equity
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding		—
Class A common stock, $0.0001 par value; 100,000,000 shares authorized; 1,894,981 issued and outstanding (excluding 23,770,019 shares subject to possible redemption)		189
Class B common stock, $0.0001 par value; 10,000,000 shares authorized; 6,250,000 shares issued and outstanding		625
Additional paid-in capital		4,706,234
Retained earnings		292,962
Total Stockholders’ Equity		5,000,010
Total Liabilities and Stockholders’ Equity	$	252,271,455

General and administrative expenses	$	171,946
Loss from operations		(171,946	)

Other income:
Interest earned on marketable securities held in Trust Account		567,358

Income before provision for income taxes		395,412
Provision for income taxes		(102,450	)
Net income	$	292,962

Weighted average shares outstanding of Class A redeemable common stock		25,000,000
Basic and diluted income per share, Class A	$	0.02

Weighted average shares outstanding of Class A and Class B non-redeemable common stock		6,513,229
Basic and diluted net loss per share, Class A and Class B	$	(0.01	)

	Class A						Class B						Additional					Total
	Common Stock						Common Stock						Paid in			Retained		Stockholders’
	Shares			Amount			Shares			Amount			Capital			Earnings		Equity
Balance – August 9, 2019 (inception)		—		$	—			—		$	—		$	—		$	—	$	—

Issuance of Class B common stock to Sponsor ⁽¹⁾		—			—			6,325,000			633			24,367			—		25,000

Forfeiture of Class B common stock		—			—			(75,000	)		(8	)		8			—		—

Sale of 25,000,000 Units, net of underwriting discount and offering costs		25,000,000			2,500			—			—			235,729,738			—		235,732,238

Sale of 665,000 Placement Units		665,000			66			—			—			6,649,934			—		6,650,000

Common stock subject to possible redemption		(23,770,019	)		(2,377	)		—			—			(237,697,813	)		—		(237,700,190	)

Net income		—			—			—			—			—			292,962		292,962

Balance – December 31, 2019		1,894,981		$	189			6,250,000		$	625		$	4,706,234		$	292,962	$	5,000,010

Cash Flows from Operating Activities:
Net income	$	292,962
Adjustments to reconcile net income to net cash used in operating activities:
Formation cost paid through advances from related party		1,000
Interest earned on marketable securities held in Trust Account		(567,358	)
Changes in operating assets and liabilities:
Prepaid expenses and other current assets		(104,022	)
Accounts payable and accrued expenses		118,805
Income taxes payable		102,450
Net cash used in operating activities		(156,163	)

Cash Flows from Investing Activities:
Investment of cash into Trust Account		(250,000,000	)
Net cash used in investing activities		(250,000,000	)

Cash Flows from Financing Activities
Proceeds from sale of Units, net of underwriting discounts paid		245,600,000
Proceeds from sale of Placement Units		6,650,000
Proceeds from promissory note – related party		11,000
Repayment of promissory note – related party		(282,244	)
Repayment of advances		(230,350	)
Payment of offering costs		(14,168	)
Net cash provided by financing activities		251,734,238

Net Change in Cash		1,578,075
Cash – Beginning of period		—
Cash – End of period	$	1,578,075

Supplemental Disclosure of Non-Cash Investing and Financing Activities:
Initial classification of common stock subject to possible redemption	$	237,406,230
Change in value of common stock subject to possible redemption	$	293,960
Payment of offering costs through promissory note and advances	$	478,594
Deferred offering costs paid directly by stockholder in exchange for the issuance of Class B common stock to stockholder	$	25,000
Deferred underwriting fee payable	$	9,350,000
Prepaid expenses paid through advances from related party	$	22,000

	December 31, 2019
Deferred tax asset
Organizational/Start-up costs	$	19,413
Total deferred tax asset		19,413
Valuation allowance		(19,413	)
Deferred tax asset, net of allowance	$	—

	For the period from August 9, 2019 (inception) through December 31, 2019
Federal
Current	$	102,450
Deferred		(19,413	)

State
Current	$	—
Deferred		—
Change in valuation allowance		19,413
Income tax provision	$	102,450

Statutory federal income tax rate	21.0	%
State taxes, net of federal tax benefit	0.0	%
Change in valuation allowance	4.9	%
Income tax provision	25.9	%

	Level 1:	Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.

	Level 2:	Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active.

	Level 3:	Unobservable inputs based on our assessment of the assumptions that market participants would use in pricing the asset or liability.

Description	Level		December 31, 2019
Assets:
Marketable securities held in Trust Account – U.S. Treasury Securities Money Market Fund		1	$	250,567,358

March 27, 2020	FINSERV ACQUISITION CORP.

	By:	/s/ Lee Einbinder
		Name: Lee Einbinder
		Title: Chief Executive Officer
		(Principal Executive Officer)

Name	Position	Date

/s/ Lee Einbinder	Chief Executive Officer and Director	March 27, 2020
Lee Einbinder	(Principal Executive Officer)

/s/ Howard Kurz	Chief Financial Officer and Director	March 27, 2020
Howard Kurz	(Principal Financial and Accounting Officer)

/s/ Jay N. Levine	Director	March 27, 2020
Jay N. Levine

/s/ Robert Matza	Director	March 27, 2020
Robert Matza

/s/ Diane B. Glossman	Director	March 27, 2020
Diane B. Glossman

/s/ Aris Kekedjian	Director	March 27, 2020
Aris Kekedjian

Date: March 27, 2020	By:	/s/ Lee Einbinder
		Lee Einbinder
		Chief Executive Officer
		(Principal Executive Officer)