▸ Any of these events could have a material adverse effect on our reputation, business, or financial condition, including but not limited to: loss of customers; interruptions or stoppages in our business operations; interruptions or· · · · ● 1 ▸ Certain provisions of the Merger Agreement may discourage third parties from submitting alternative takeover proposals, including proposals that may be superior to the arrangements contemplated by the Merger Agreement.· · · · ● 1 ▸ Common stock reserved for future issuance under our 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· · · · ● 1 ▸ Eachoftherisksdescribedabovemaybeexacerbatedbydelaysorotheradversedevelopmentswith respect to the· · · · ● 1 ▸ EachpartyissubjecttobusinessuncertaintiesandcontractualrestrictionswhiletheMergersarepending, which could adversely affect each party’s business and operations.· · · · ● 1 ▸ For information on the laws, regulations, rules, and standards we are, or may in the future become, subject to, and the associated risk to our business, see the section titles “Business—Government Regulation”· · · · ● 1 ▸ None of us, CCFI or Aaron’s can be sure if or when the Mergers will be completed.· · · · ● 1 ▸ Our Series A Convertible Preferred Stock and Series B Convertible Preferred Stock could further reduce the voting power and dilute the ownership of holders of our common stock and may adversely affect the market price of our common stock.· · · · ● 1 ▸ Ransomware attacks, including by organized criminal threat actors, nation-states, and nation-state-supported actors, are becoming increasingly prevalent and severe and can lead to significant interruptions in our operations, loss of· · · · ● 1 ▸ group Risks Related to our Preferred Stock· · · · ● 1 ▸ group Risks Related to our Proposed Mergers with CCFI and Aaron’s· · · · ● 1 ▸ The market price of the Company’s common stock following the Mergers may decline as a result of the Mergers.· · · · ● 1 ▸ Theparties’equityholdersmaynotrealizeabenefitfromtheMergerscommensuratewiththeownership dilution they will experience in connection with or following the Mergers.· · · · ● 1 ▸ We use AI/ML in many aspects of our business. Our AI/ML capabilities are a combination of internally developed· · · · ● 1 ▸ Our auditors have issued a going concern opinion, and we will not be able to achieve our objectives and will have to cease operations if we cannot refinance our indebtedness and adequately fund our operations.· · · ● ● 2 ▸ We have in the past, and may in the future, be accused of infringing intellectual property and other proprietary rights of third parties which may materially and adversely affect our business, financial condition, and results of operations.· · · ● ● 2 rw ▸ We rely on KPay enabled merchants to allow access to their stores through our Katapult App and our desktop and mobile websites.· · · ● ● 2 rw ▸ We will likely incur increased costs and devote additional management time to public company reporting and compliance obligations as a result of exiting “emerging growth company” status.· · · ● ● 2 ▸ If we 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.· · ● ● ● 3 ▸ We utilize AI/ML, which could expose us to liability or adversely affect our business.· · ● ● ● 3 ▸ Failure to adequately obtain, maintain, protect, defend and enforce our intellectual property and other proprietary rights could harm our business, operating results and financial condition.· ● ● ● ● 4 rw ▸ group Risks Related to Our Technology and Our Platform· ● · ● ● 3 ▸ The success of our business is dependent on customers making payments on their leases when due and other factors affecting consumer spending and default behavior that are not under our control.· ● ● ● ● 4 rw ▸ Uncertain market and economic conditions have had, and may in the future have, a material adverse effect on our business, results of operation, financial condition and share price.· ● ● ● ● 4 rw ▸ We are subject to legal proceedings and claims from time to time that may seek material damages or otherwise may have a material adverse effect on our business.· ● · ● ● 3 rw ▸ We have a history of operating losses and may not be profitable in the future.· ● ● ● ● 4 ▸ We cannot determine with any degree of certainty whether any new laws or regulations will be enacted, or whether government agencies will initiate new or different interpretations of existing laws. The impact of new laws and· · · ● · 1 ▸ We depend on KPay enabled merchants to continue to allow our customers to utilize our platform, including our websites and mobile app, to access and buy goods at their stores. As a result, there can be no assurance that we will· · · ● · 1 ▸ Our failure to meet the continued listing requirement of Nasdaq could result in delisting of our securities, which could limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions.· · ● · · 1 ▸ Our results depend on continued integration and support of our platforms (both the Katapult App and our direct and/or waterfall integration technologies) by our merchant partners.· · ● · · 1 ▸ The ultimate effect of the Reverse Stock Split on the market price of our common stock cannot be predicted with any certainty.· · ● · · 1 ▸ We rely on third-party merchants to allow access to their stores through our mobile app.· · ● · · 1 ▸ Any real or perceived errors, failures, bugs, defects, or outages in such 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· ● · · · 1 ▸ 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· ● · · · 1 ▸ A Change of Control as defined by our Credit Agreement could accelerate our obligation to pay our outstanding indebtedness, and we may not have sufficient liquid assets at that time to repay these amounts.● ● ● ● · 4 rw ▸ Company will not be included in future actions of the same or similar nature and, if it is, that it would not lead to an enforcement action, consent order, or substantial costs, including legal fees, fines, penalties, and remediation expenses.● ● · · · 2 ▸ Federal and state agencies have increased their focus on consumer financial products and services. State law enforcement agencies and regulators appear to have increased their scrutiny of entities operating within the● · · · · 1 ▸ If Wayfair or another key merchant partner chooses to no longer partner with us or choose to partner with a competitor, this loss would materially and adversely affect our business, results of operations, financial condition and future prospects.● · · · · 1 ▸ If any specified Change of Control occurs and the Lender accelerates these obligations, we may not have sufficient liquid assets to repay amounts outstanding under the Credit Agreement.● ● ● ● · 4 rw ▸ If we are unable to attract new consumers and retain and grow our relationships with our existing consumers, our results of operations, financial condition, and prospects would be materially and adversely affected.● ● · · · 2 ▸ Nasdaq may delist our securities from trading on its exchange, which could limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions.● ● · · · 2 ▸ group Risks Relating to Our Business and Industry● ● ● · · 3 ▸ group Risks Relating to Our Technology and Our Platform● ● ● · · 3 ▸ 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.● · · · · 1 ▸ The JOBS Act permits “emerging growth companies” like us to take advantage of certain exemptions from various reporting requirements applicable to other public companies that are not emerging growth companies.● ● ● · · 3 ▸ The majority of our management has limited experience in operating a public company.● ● ● · · 3 rw ▸ The phase-out, replacement or unavailability of LIBOR and/or other interest rate benchmarks could adversely affect our indebtedness.● · · · · 1 ▸ The success of our business is dependent on factors affecting consumer spending that are not under our control.● · · · · 1 ▸ We are subject to securities litigation, which is expensive and could divert management attention and adversely impact our business.● · · · · 1 ▸ We have a history of operating losses and may not sustain profitability in the future.● · · · · 1 ▸ Our results depend on continued integration and support of our platforms, including our integration with direct merchants.● ● · ● ● 4 rw ▸ group Additional Risks Relating to Ownership of Company Securities● ● ● ● ● 5 ▸ Anti-takeover provisions in our organizational documents could delay or prevent a change of control.● ● ● ● ● 5 ▸ Because there are no current plans to pay cash dividends on our 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.● ● ● ● ● 5 ▸ Changes to tax laws or exposure to additional tax liabilities may have a negative impact on our operating results.● ● ● ● ● 5 ▸ Failure to effectively manage our costs could have a material adverse effect on our profitability.● ● ● ● ● 5 ▸ group Financial Risks Related to Our Business● ● ● ● ● 5 ▸ Future sales, or potential future sales, by us or our stockholders in the public market could cause the market price for our common stock to decline.● ● ● ● ● 5 rw ▸ If securities analysts do not publish research or reports about our business or if they downgrade our stock or our sector, our stock price and trading volume could decline.● ● ● ● ● 5 ▸ If we are unable to attract additional direct merchants and retain and grow our relationships with our existing direct merchants, our business, results of operations, financial condition, and prospects would be materially and adversely affected.● ● ● ● ● 5 rw ▸ If we fail to maintain customer satisfaction and trust in our brand, our business, results of operations, financial condition, and prospects would be materially and adversely affected.● ● ● ● ● 5 ▸ group Legal and Compliance Risks● ● ● ● ● 5 ▸ Misconduct and errors by our employees, vendors, and service providers could harm our business and reputation.● ● ● ● ● 5 ▸ Negative publicity about us or our industry could adversely affect our business, results of operations, financial condition, and prospects.● ● ● ● ● 5 rw ▸ group Operational Risks Related to Our Business● ● ● ● ● 5 ▸ Our ability to timely raise capital in the future may be limited, or may be unavailable on acceptable terms, if at all.● ● ● ● ● 5 ▸ Our ability to use our net operating loss carry forwards and certain other tax attributes may be limited.● ● ● ● ● 5 ▸ Our business depends on our ability to attract and retain highly skilled employees.● ● ● ● ● 5 ▸ 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 its forecasted growth, our business could fail to grow at similar rates, if at all.● ● ● ● ● 5 rw ▸ Our revenue and operating results may fluctuate, which could result in a decline in our profitability and make it more difficult for us to grow our business.● ● ● ● ● 5 ▸ Our success depends on the effective implementation and continued execution of our strategies.● ● ● ● ● 5 ▸ Outstanding warrants are exercisable for, shares of our common stock, which would increase the number of shares eligible for future resale in the public market and result in dilution to our existing stockholders.● ● ● ● ● 5 rw ▸ Real or perceived software errors, failures, bugs, defects, or outages could adversely affect our business, results of operations, financial condition, and prospects.● ● ● ● ● 5 rw ▸ group Risks Related to Our Business, Strategy and Growth● ● ● ● ● 5 ▸ group Risks Related to the Loan Agreement and our Indebtedness● ● ● ● ● 5 rw ▸ The loss of the services of any of our leadership team could materially and adversely affect our business, results of operations, financial condition, and prospects.● ● ● ● ● 5 rw ▸ The price of our securities may change significantly in the future and stockholders could lose all or part of their investment as a result.● ● ● ● ● 5 rw ▸ The success and growth of our business depends upon our ability to continuously innovate and develop new products and technologies.● ● ● ● ● 5 ▸ 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.● ● ● ● ● 5 ▸ Unexpected changes to consumer behavior could cause our proprietary algorithms and decisioning tools used in approving customers to no longer be indicative of our customer’s ability to perform.● ● ● ● ● 5 rw ▸ We are focused on our mission to provide innovative lease financing solutions to non-prime customers and to enable everyday essential transactions at the merchant point of sale.● ● ● ● ● 5 rw ▸ We have substantial indebtedness, which may reduce our capability to withstand adverse developments or business conditions.● ● ● ● ● 5 rw ▸ We operate in a highly competitive industry, and our inability to compete successfully would materially and adversely affect our results of operations, financial condition, and prospects.● ● ● ● ● 5 rw ▸ We rely on the accuracy of third-party data, and inaccuracies in such data could adversely impact our approval process.● ● ● ● ● 5 ▸ We will continue to incur significant costs as a result of operating as a public company, and our management will continue to devote substantial time to managing new compliance initiatives.● ● ● ● ● 5 rw ▸ While we take precautions to prevent customer identity fraud, it is possible that identity fraud may still occur or has occurred, which may adversely affect the performance of the LTO transactions facilitated through our platform.● ● ● ● ● 5 rw 
