Katapult Holdings, Inc. current report, 18 December 2020

Vollständiges Dokument

Filing Overview

Registrant: FinServ Acquisition Corp. (Nasdaq: FSRV, FSRVU, FSRVW). Form 8-K date: December 18, 2020; signed December 21, 2020. The filing reports a definitive agreement to combine FinServ with Katapult Holdings, Inc. through a two-step merger. This is a transaction announcement, not a quarterly or annual operating-results filing.

Business Context and Transaction Terms

FinServ entered into an Agreement and Plan of Merger with Katapult, two wholly owned merger subsidiaries, and the representative of Katapult’s pre-closing holders. Katapult would become a wholly owned subsidiary of FinServ following the mergers.

  • Aggregate merger consideration: $833 million, subject to adjustments under the merger agreement, payable in a combination of cash and FinServ common stock.
  • Additional earn-out consideration: 7.5 million restricted FinServ common shares.
  • One-half of the earn-out shares would vest if FinServ’s closing price reaches at least $12.00 over the specified trading-day threshold; the other half would vest at $14.00, subject to the agreement’s terms and adjustments.
  • FinServ intends to adopt a new equity incentive plan, subject to stockholder approval.

Financial Metrics, Financing, and Liquidity

The filing does not provide Katapult or FinServ revenue, profit, cash flow, margins, debt balances, or historical liquidity metrics for a reporting period.

  • PIPE financing: investors agreed to purchase 15 million FinServ common shares for aggregate proceeds of $150 million, or $10.00 per share, at closing, subject to customary conditions.
  • Katapult may decline to consummate the mergers if available cash in FinServ’s trust account, plus closing financing proceeds including the PIPE, is less than $225 million after redemptions.
  • The PIPE shares are to be issued in an unregistered offering under Section 4(a)(2) and/or Regulation D.
  • The filing does not state the amount of trust-account cash, expected redemptions, transaction expenses, or post-closing capitalization.

Material Changes and Conditions

  • FinServ’s sponsor agreed to vote in favor of the transaction and waive certain Class B share conversion-ratio adjustments related to the PIPE financing.
  • Certain Katapult stockholders were expected to enter into support agreements committing them to vote for the merger.
  • Closing conditions include required stockholder approvals, effectiveness of the Form S-4 registration statement and proxy statement, Nasdaq listing of issued shares, expiration or termination of applicable Hart-Scott-Rodino waiting periods, and the absence of legal restraints.
  • The agreement may be terminated in specified circumstances, including if the transaction is not completed by July 31, 2021.

Outlook, Risks, and Unusual Items

Management provided no formal revenue or earnings guidance in this filing. The filing contains forward-looking statements regarding the proposed transaction, anticipated benefits, future opportunities, and the combined company’s prospects; these statements are not guarantees of performance.

  • Completion depends on regulatory clearance, stockholder approvals, financing, registration effectiveness, Nasdaq listing, and satisfaction of other closing conditions.
  • Identified risks include failure or delay in completing the transaction, inability to obtain financing, redemption levels, uncertainty in Katapult’s projected financial information, merchant concentration, competition, COVID-19 effects, and the ability to realize anticipated benefits.
  • The transaction consideration, earn-out shares, PIPE issuance, and potential dilution are material unusual items for investors to evaluate.

Key Facts to Verify

  • Whether the Form S-4 and proxy statement were filed and declared effective, and the final terms disclosed therein.
  • Required FinServ and Katapult stockholder approvals and the status of HSR or other regulatory clearances.
  • Actual trust-account cash, redemption levels, PIPE funding, transaction expenses, and whether the $225 million minimum cash condition was satisfied.
  • Final allocation of the $833 million consideration between cash and stock, including adjustments and assumed options.
  • Post-closing ownership, dilution from the PIPE and earn-out shares, and the terms of the new equity incentive plan.
  • Whether the transaction closed by July 31, 2021 or was terminated or amended.