☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
☒ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
2021
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 85-3227900 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification |
630 Ramona Street Palo Alto, CA | 94301 | |
(Address of principal executive offices) | (Zip Code) |
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-third of one Redeemable Warrant | EPHYU | The NASDAQ Stock Market LLC | ||
Class A Common Stock, par value $0.0001 per share | EPHY | The NASDAQ Stock Market LLC | ||
Warrants, each exercisable for one share Class A Common Stock for $11.50 per share | EPHYW | The NASDAQ Stock Market LLC |
Large accelerated filer | ☐ | Accelerated filer | ☐ | |||||||
Non-accelerated filer | ☒ | Smaller reporting company | ☒ | |||||||
Emerging growth company | ☒ |
was $395,038,000.registrant’s shares were not listed on any exchange and had noaggregate market value as of the last business day of the second fiscal quarter of 2020. The registrant’s units begin trading on the NASDAQ Stock Market on January 8, 2021 and the registrant’s shares of Class A common stock and warrants began trading separatelyoutstanding, other than shares held by persons who may be deemed affiliates of the registrant, computed by reference to the closing price for the Class A common stock on June 30, 2021, as reported on the NASDAQNasdaq Stock Market on March 1, 2021. 26, 2021,
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Item 1. | ||
Business. |
PART I
Our Company
Global venture capital investments have increased over 500% in the past decade, from $48 billion in 2010 to $295 billion in 2019, according to Crunchbase News. Those dollars are spread widely: more than 32,000 companies received venture funding in 2019 alone, according to Crunchbase News. As of late September 2020, CBInsights reported 491 unicorns globally with a cumulative valuation of $1.5 trillion.
Despite the amount of investments poured into the private market, the exit opportunity for many of these private companies has been quite narrow. Historically, private technology companies pursued one of two paths to stockholder liquidity: an initial public offering, or IPO, or a sale of the company. Unfortunately, neither of these options has kept pace with the exploding number of technology companies. In fact, the number of venture-backed companies sold has declined, from 1,081 in 2014 to only 882 for in 2019, according to PitchBook.
The number of technology company IPOs has also diminished. An average of 159 technology companies went public each year during the 1990s, but this figure dropped to only 37 between 2010 and 2019, a 77% drop, according to data from the University of Florida. That smaller IPO market has also been predominantly focused on larger, brand-name companies. The median market capitalization of a venture-backed IPO was approximately $540 million in 2010; it was $3.2 billion in 2019, based on data from the University of Florida.
Not only are the number of technology IPOs diminishing, but also we believe that the traditional technology IPO process is simply broken with habitual underpricing by the underwriters. According to a study by Professor Jay Ritter from the University of Florida, the average underpricing by the underwriters for 646 VC-backed technology IPOs over the span from July 2009 through June 2019 was 21.1%. In our opinion, this data show that these VC-backed technology companies unnecessarily incurred permanent dilution by going public through the traditional IPO path.
We believe that the current
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 |
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 our trust account distributed to our public stockholders upon the redemption of our public shares in the event we do not complete our initial business combination by January 12, 2023 may be considered a liquidating distribution under Delaware law. If the 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
Our public stockholders are entitled to receive funds from the trust account only upon the earlier to occur of: (i) the completion of our initial business combination, (ii) the redemption of any public shares properly tendered in connection with a stockholder vote to amend any provisions of our amended and restated certificate of incorporation (A) to modify the substance or timing of our obligation to allow redemption in connection with our initial business combination or certain amendments to our charter prior thereto or to redeem 100% of our public shares if we do not complete our initial business combination by January 12, 2023 or (B) with respect to any other provision relating to stockholders’ rights or
Item 1A. | Risk Factors. |
Item 1B. | Unresolved Staff Comments. |
Item 2. | Properties. |
533 Airport Blvd., Suite 400, Burlingame, CA 94010,630 Ramona Street, Palo Alto, California, 94301, and our telephone number is (619) 736-6855.
Item 5. | Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities. |
None.
(e) Recent Sales of Unregistered Securities None. (f) Purchases of Equity Securities |
None.
On January 12, 2021, we consummated our initial public offering of 40,250,000public units, including 5,250,000public units issued pursuant to the exercise of the underwriters’ over-allotment option in full. Each unit consists of one public share and one-thirdof one public warrant, with each whole public warrant entitling the holder thereof to purchase one public share for $11.50 per share. The public units were sold at a price of $10.00 per unit, generating gross proceeds to the Company of $402,500,000.
On January 12, 2021, simultaneously with the consummation of our initial public offering, we completed the private placement of an aggregate of 800,000 placement units. 450,000 of the placement units were sold to our sponsor and 350,000 placement units were sold to Cantor at a purchase price of $10.00 per placement unit, generating gross proceeds to us of $8,000,000.
A total of $402,500,000of the proceeds from our initial public offering (which amount includes $15,137,500of the underwriters’ deferred discount) and the sale of the placement units, was placed in a U.S.-based trust account, maintained by Continental, acting as trustee. The proceeds held in the trust account may be invested by the trustee only in U.S. government securities with a maturity of 185 days or less or in money market funds investing solely in U.S. government treasury obligationsIssuer and meeting certain conditions under Rule 2a-7 under the Investment Company Act.
Item 6. | Reserved. |
Item 7. | Management’s Discussion and Analysis of Financial Condition and Results of Operations. |
the foregoing.
interest earned on investments held in the trust account of $113,586, offset by transaction cost related to warrant liability of $1,029,081 and formation and operational costs of $1,192,548.
operational costs.
As of December 31, 2020, we had cash of $10,027. Until the consummation of our initial public offering, our only source of liquidity was an initial purchase of common stock by the sponsor and loans from our sponsor.
Off-Balance Sheet Financing Arrangements
2021.
policies:
Item 7A. | Quantitative and Qualitative Disclosures about Market Risk. |
Item 8. | Financial Statements and Supplementary Data. |
Item 9. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. |
Item 9A. | Controls and Procedures. |
intended effectsUnder the supervision andparticipationobjective of ensuring that information required to be disclosed in our reports filed under the Exchange Act is recorded, processed, summarized, and reported within the time period specified in the SEC’s rules and forms. Disclosure controls are also designed with the objective of ensuring that such information is accumulated and communicated to our management, including the chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure.our Chief Financial Officer (together, the “Certifying Officer”), we carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as defined in Rules 13a-15(e)of December 31, 2021. Based upon their evaluation, our Chief Executive Officer and 15d-15(e) under the Exchange Act. Based on the foregoing, our CertifyingChief Financial Officer concluded that our disclosure controls and procedures (as defined in Rulesof the end of the period covered by this Report.Disclosure controls and procedures are controls and other procedures designeddeemed necessary to ensure that information requiredour financial statements were prepared in accordance with GAAP. Accordingly, management believes that the financial statements included in this Report present fairly in all material respects our financial position, results of operations and cash flows for the period presented.disclosed in our reports filed or submitted underaccomplished over time, and we can offer no assurance that these initiatives will ultimately have the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is accumulated and communicated to management, including our Certifying Officer, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure.
JOBS Act.
Item 9B. | Other Information. |
Item 9C. | Disclosure Regarding Foreign Jurisdictions that Prevent Inspections. |
Item 10. | Directors, Executive Officers and Corporate |
Name | Age | Position | ||
Arthur Coviello | Chairman of the Board | |||
Paul Deninger | ||||
Vice Chairman of the Board | ||||
Peter Bell | ||||
Chief Executive Officer, Chief Financial Officer and Director | ||||
Kirk Arnold | ||||
Director | ||||
Paul Flanagan | 57 | Director | ||
Melissa McJannet | 50 | Director | ||
JD Sherman | 56 | Director | ||
the General Partner ofat Amity Ventures, a venture capital fund based in Silicon Valley,San Francisco, from 2018 to 2020, and Chairman of Amity Ventures since 2018.2020. Mr. Bell has spent three decades starting, building, and investing in technology businesses, which resultedresulting in investor liquidity of more than $6 billion. His thematic areas of focus include Machine Learning, Big Data, Virtual/Augmented Reality, Cybersecurity, Internet of Things, Autonomous Logistics, Data Analytics, Cloud Computing, Personal/Mobile Commerce, Payments, and Enterprise Software. Mr. Bell began his career at Price Waterhouse in Boston, and, in late 1986, Mr. Bell joined EMC and relocated to San Francisco in 1987 to help lead EMC efforts in Silicon Valley. In 1998, Mr. Bell embarked on his own entrepreneurial journey and co-founded StorageNetworks, a pioneer in cloud computing. Mr. Bell led the company as its Chief Executive Officer, and helped taketaking the company from concept to $123 million in annual revenue within three years, and also completedcompleting its IPO in 2000. After StorageNetworks, Mr. Bell formed his own investment firm, Stowe Capital, focusing on early stage investments in enterprise software, data center infrastructure, and consumer internet companies. In 2006, Mr. Bell joined Highland Capital Partners, a global venture capital firm with current AUM of $3.5 billion, where he led investments in early and growth stage technology companies, and served as the managing general partnerManaging General Partner of the firm from 2015 to 2016.
serveserved as Northleaf Capital Partner’s (“Northleaf”) Venture Partner and Senior Advisor, providing strategic oversight of Northleaf’s venture capital program. Ms. McJannet is a member of the Investment Committees for Northleaf’s Canadian venture capital funds. Ms. McJannet previously served as a Managing Director on the private equity investment team and leading Northleaf’s corporate development activities. Prior to joining Northleaf’s predecessor, TD Capital, in 2005, Ms. McJannet was an investment professional at Mayfield, one of the leading venture capital firms in Silicon Valley from 2000, where she invested directly in early-stage technology companies and worked closely with management teams to help grow their businesses. Previously, Ms. McJannet worked in business development and finance roles for a telecommunications company in Chile and for the high-speed Internet access division of Rogers Cable in Toronto. Prior to that, from 1994 to 1996, Ms. McJannet was in the investment banking group of RBC Dominion Securities, where she worked on a variety of mergers and acquisition assignments. Ms. McJannet received a B.A. (Honours) from Queen’s University and an M.B.A. from the Graduate School of Business at Stanford University. Ms. McJannet is well qualified to serve on our Board due to her extensive financial and investing experience in the technology industry.
to start a newfound an investment bank, GCA (formerly known as Savvian LLC), which hashad grown to overapproximately 400 professionals.professionals at the time of his departure. Mr. Fletcher was a member of GCA’sGCA’ s U.S. management committee and head of the software group and Mr. Fletcher has worked on transactions with companies including some of the biggest names in the technology industry as well as hundreds of growth and middle-market technology companies. He served as an advisor to Chaserg Technology Acquisition Corp. (NASDAQ: CTAC), a blank-check company which consummated itsCTAC and APXT prior to their respective initial business combination in March 2020, andcombinations. Mr. Fletcher serves as an advisor to each of Apex Technology Acquisition Corporation (NASDAQ: APXT), a blank-check company currently in the process of consummating its initial business combination with AvePoint, Inc., a data management solutions provider of Microsoft cloud services to largeETAC, CTAQ, ENAC, ENTF and mid-market enterprises, E.Merge Technology Acquisition Corp. (NASDAQ:ETAC), a blank check company searching for a target business in the software and internet technology industries and Carney Technology Acquisition Corp. II (NASDAQ:CTAQ), a blank-check company searching for a target business in the technology industry. Mr. FletcherBIOS. He also serves on the Boardboard of Directorsdirectors of Lee Enterprises (NYSE:(Nasdaq: LEE), a USU.S. media and information company. He holds a B.A. in Economics from UCLA and an M.B.A. in Finance from The Wharton School of the University of Pennsylvania.
Director Independence
Nasdaq listing standards require that a majority of our board of directors be independent. An “independent director” is defined generally as a person other than an officer or employee of the company or its subsidiaries or any other individual having a relationship which in the opinion of the company’s board of directors, would interfere with the director’s exercise of independent judgment in carrying out the responsibilities of a director. Our board of directors has determined that Ms. Arnold and Ms. McJannet and Messrs. Flanagan and Sherman are “independent directors” as defined in the Nasdaq listing standards and applicable SEC rules. Our independent directors will have regularly scheduled meetings at which only independent directors are present.
Item 11. | Executive |
Compensation Discussion and Analysis
The compensation committee has reviewed and discussed this Compensation Discussion and Analysis with management and, based upon its review and discussions, the compensation committee recommended to the board of directors that the Compensation Discussion and Analysis be included in this Report.
Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder |
Class A Common Stock | Class B Common Stock | Approximate | ||||||||||||||||||
Name and Address of Beneficial Owner (1) | Number of Shares Beneficially Owned | Approximate Percentage of Class | Number of Shares Beneficially Owned(2) | Approximate Percentage of Class | Percentage of Outstanding Common Stock | |||||||||||||||
Epiphany Technology Sponsor LLC (3) | 450,000 | 1.1 | % | 10,062,500 | 100.0 | % | 20.6 | % | ||||||||||||
Arthur Coviello | -- | -- | -- | -- | -- | |||||||||||||||
Paul Deninger | -- | -- | -- | -- | -- | |||||||||||||||
Peter Bell | -- | -- | -- | -- | -- | |||||||||||||||
Kirk Arnold | -- | -- | -- | -- | -- | |||||||||||||||
Paul Flanagan | -- | -- | -- | -- | -- | |||||||||||||||
Melissa McJannet | -- | -- | -- | -- | -- | |||||||||||||||
JD Sherman | -- | -- | -- | -- | -- | |||||||||||||||
All executive officers and directors as a group (7 individuals) | 450,000 | 1.1 | % | 10,062,500 | 100.0 | % | 20.6 | % | ||||||||||||
BlueCrest Capital Management Limited (4) | 2,500,000 | 6.1 | % | -- | -- | 4.9 | % | |||||||||||||
Integrated Core Strategies (US) LLC (5) | 2,239,649 | 5.5 | % | -- | -- | 4.4 | % |
Class A Common Stock | Class B Common Stock | Approximate | ||||||||||||||||||
Name and Address of Beneficial Owner (1) | Number of Shares Beneficially Owned | Approximate Percentage of Class | Number of Shares Beneficially Owned(2) | Approximate Percentage of Class | Percentage of Outstanding Common Stock | |||||||||||||||
Epiphany Technology Sponsor LLC (3) | 450,000 | 1.1 | % | 10,062,500 | 100.0 | % | 20.6 | % | ||||||||||||
Arthur Coviello | — | — | — | — | — | |||||||||||||||
Paul Deninger | — | — | — | — | — | |||||||||||||||
Peter Bell | — | — | — | — | — | |||||||||||||||
Kirk Arnold | — | — | — | — | — | |||||||||||||||
Paul Flanagan | — | — | — | — | — | |||||||||||||||
Melissa McJannet | — | — | — | — | — | |||||||||||||||
JD Sherman | — | — | — | — | — | |||||||||||||||
All executive officers and directors as a group (7 individuals) | 450,000 | 1.1 | % | 10,062,500 | 100.0 | % | 20.6 | % | ||||||||||||
Saba Capital Management L.P. (4) | 2,373,295 | 5.8 | % | — | — | 4.6 | % | |||||||||||||
Highbridge Capital Management, LLC (5) | 2,520,565 | 6.1 | % | — | — | 4.9 | % |
* | less than 1% |
(1) | Unless otherwise noted, the business address of each of the following entities or individuals is c/o Epiphany Technology Acquisition Corp., |
(2) | Interests shown consist solely of founder shares, classified as shares of Class B common stock, as well as placement shares after our initial public offering. Founder shares are convertible into shares of Class A common stock on a one-for-one |
(3) | Our sponsor, Epiphany Technology Sponsor LLC, is the record holder of the securities reported herein. Paul Deninger, our Vice Chairman, Alex Vieux and Steven Fletcher are the managing members of our sponsor. Each of our officers, directors and advisors is or will also be, directly or indirectly, a member of our sponsor. In addition, Explorer Parent LLC is a member of our sponsor. Messrs. Vieux and Fletcher are managing members of Founder Holdings LLC, which is the managing member of Explorer Parent LLC. By virtue of these relationships, each of the entities and individuals named in this footnote may be deemed to share beneficial ownership of the securities held of record by our sponsor. Each of them disclaims any such beneficial ownership except to the extent of their pecuniary interest. |
(4) | According to a Schedule 13G filed on January 21, 2022, the shares |
(5) | According to a Schedule 13G filed on February 3, 2022, the shares are held by certain funds advised by Highbridge Capital Management, LLC. The |
Item 13. | Certain Relationships and Related Transactions, and Director |
Item 14 . | Principal Accountant Fees and Services. |
Report.
Item 15. | Exhibit and Financial Statement |
(1) | Financial Statements: |
Page | ||||
F-2 | ||||
F-3 | ||||
F-4 | ||||
F-5 | ||||
F-6 | ||||
F-7 to F-21 |
(2) | Financial Statement Schedules: |
(3) | Exhibits |
www.sec.gov. www.sec.gov. Summary41TECHNOLOGYTECHNOLOY ACQUISITION CORP.F-2 Financial Statements: F-3 F-4 F-5 F-6 F-7 to F-14F-21F-1sheetsheets of Epiphany Technology Acquisition Corp. (the “Company”) as of December 31, 2021 and 2020, the related statements of operations, changes in stockholder’sstockholders’ (deficit) equity and cash flows for the year ended December 31, 2021 and the period from September 28, 2020 (inception) through December 31, 2020, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for the year ended December 31, 2021 and the period from September 28, 2020 (inception) through December 31, 2020, in conformity with accounting principles generally accepted in the United States of America.audit.audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.auditaudits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the auditaudits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our auditaudits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.auditaudits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our auditaudits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit providesaudits provide a reasonable basis for our opinion.
, 202
ASSETS | ||||
Current asset - cash | $ | 10,027 | ||
Deferred offering costs | 184,973 | |||
TOTAL ASSETS | $ | 195,000 | ||
LIABILITIES AND STOCKHOLDER’S EQUITY | ||||
Liabilities | ||||
Current liabilities | ||||
Accrued expenses | $ | 1,465 | ||
Accrued offering costs | 30,000 | |||
Promissory note — related party | 140,000 | |||
Total Current Liabilities | 171,465 | |||
Commitments and Contingencies | ||||
Stockholder’s Equity | ||||
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; no shares issued and outstanding | — | |||
Class A common stock, $0.0001 par value; 200,000,000 shares authorized; no shares issued and outstanding | — | |||
Class B common stock, $0.0001 par value; 20,000,000 shares authorized; 10,062,500 shares issued and outstanding (1) | 1,006 | |||
Additional paid-in capital | 23,994 | |||
Accumulated deficit | (1,465 | ) | ||
Total Stockholder’s Equity | 23,535 | |||
TOTAL LIABILITIES AND STOCKHOLDER’S EQUITY | $ | 195,000 |
SHEETS
December 31, | December 31, | |||||||
2021 | 2020 | |||||||
ASSETS | ||||||||
Current Assets | ||||||||
Cash | $ | 353,094 | $ | 10,027 | ||||
Prepaid expenses | 325,604 | — | ||||||
Total Current Assets | 678,698 | 10,027 | ||||||
Deferred offering costs | — | 184,973 | ||||||
Investments held in Trust Account | 402,613,586 | — | ||||||
TOTAL ASSETS | $ | 403,292,284 | $ | 195,000 | ||||
LIABILITIES, CLASS A COMMON STOCK SUBJECT TO POSSIBLE REDEMPTION AND STOCKHOLDERS’ (DEFICIT) EQUITY | ||||||||
Current Liabilities: | ||||||||
Accounts payable and accrued expenses | $ | 307,293 | $ | 1,465 | ||||
Accrued offering costs | — | 30,000 | ||||||
Advance from related parties | 1,000 | — | ||||||
Promissory note – related party | — | 140,000 | ||||||
Total Current Liabilities | 308,293 | 171,465 | ||||||
Warrant liabilities | 10,262,500 | — | ||||||
Deferred underwriting commissions | 15,137,500 | — | ||||||
TOTAL LIABILITIES | 25,708,293 | 171,465 | ||||||
Commitments and contingencies | ||||||||
Class A, common stock subject to possible redemption, 40,250,000 and 0 shares at $10.00 per share, value as of December 31, | 402,500,000 | — | ||||||
Stockholders’ (Deficit) Equity | ||||||||
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; NaN issued and outstanding | 0— | — | ||||||
Class A common stock, $0.0001 par value; 200,000,000 shares authorized, | 80 | — | ||||||
Class B common stock, $0.0001 par value; 20,000,000 shares authorized; 10,062,500 shares issued and outstanding- at December 31, 2021 and 2020 | 1,006 | 1,006 | ||||||
Additional paid-in capital | 0 | 23,994 | ||||||
Accumulated deficit | (24,917,095 | ) | (1,465 | ) | ||||
Total Stockholders’ (Deficit) Equity | (24,916,009 | ) | 23,535 | |||||
LIABILITIES, CLASS A COMMON STOCK SUBJECT TO POSSIBLE REDEMPTION AND STOCKHOLDERS’ (DEFICIT) EQUITY | $ | 403,292,284 | $ | 195,000 | ||||
Formation and operating costs | $ | 1,465 | ||
Net Loss | $ | (1,465 | ) | |
Weighted average common shares outstanding, basic and diluted (1) | 8,750,000 | |||
Basic and diluted net loss per common share | $ | (0.00 | ) |
Year Ended December 31, | For the Period from September 28, 2020 (Inception) through December 31, | |||||||
2021 | 2020 | |||||||
Formation and operational costs | $ | 1,192,548 | $ | 1,465 | ||||
Loss from operations | (1,192,548 | ) | (1,465 | ) | ||||
Other income: | ||||||||
Interest earned on investments held in Trust Account | 113,586 | 0 | ||||||
Change in fair value of warrant liabilities | 9,315,334 | 0 | ||||||
Transaction cost related to warrant liability | (1,029,081 | ) | 0 | |||||
Total other income, net | 8,399,839 | 0 | ||||||
Net income (loss) | $ | 7,207,291 | $ | (1,465 | ) | |||
Weighted average shares outstanding of Class A common stock | 39,700,411 | 0 | ||||||
Basic and diluted net income (loss) per share of Class A common stock | $ | 0.14 | $ | 0 | ||||
Weighted average shares outstanding of Class B common stock | 10,043,322 | 8,750,000 | ||||||
Basic net income (loss) per share of Class B common stock | $ | 0.14 | $ | 0 | ||||
Weighted average shares outstanding of Class B common stock | 10,062,500 | 0 | ||||||
Diluted net income (loss) per share of Class B common stock | $ | 0.14 | $ | 0 | ||||
Class B | Additional Paid-in | Accumulated | Total Stockholder’s | |||||||||||||||||
Shares | Amount | Capital | Deficit | Equity | ||||||||||||||||
Balance — September 28, 2020 (inception) | — | $ | — | $ | — | $ | — | $ | — | |||||||||||
Issuance of Class B common stock to Sponsor (1) | 10,062,500 | 1,006 | 23,994 | — | 25,000 | |||||||||||||||
Net loss | — | — | — | (1,465 | ) | (1,465 | ) | |||||||||||||
Balance — December 31, 2020 | 10,062,500 | $ | 1,006 | $ | 23,994 | $ | (1,465 | ) | $ | 23,535 |
Class A Common Stock | Class B Common Stock | Additional Paid-in Capital | Accumulated Deficit | Total Stockholders’ Equity (Deficit) | ||||||||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||||||||||
Balance – September 28, 2020 (inception) | 0 | $ | 0 | 0 | $ | 0 | 0 | — | 0 | |||||||||||||||||||
Issuance of Class B common stock to initial stockholders | — | $ | — | 10,062,500 | $ | 1,006 | 23,994 | — | 25,000 | |||||||||||||||||||
Net loss | — | — | — | — | — | (1,465 | ) | (1,465 | ) | |||||||||||||||||||
Balance – December 31, 2020 | 0 | $ | 0 | 10,062,500 | $ | 1,006 | $ | 23,994 | $ | (1,465 | ) | $ | 23,535 | |||||||||||||||
Sale of 800,000 Private Placement Units, net of warrant liability | 800,000 | 80 | — | — | 7,607,920 | — | 7,608,000 | |||||||||||||||||||||
Accretion for Class A common stock to redemption amount | — | — | — | — | (7,631,914 | ) | (32,122,921 | ) | (39,754,835 | ) | ||||||||||||||||||
Net income | — | — | — | — | — | 7,207,291 | 7,207,291 | |||||||||||||||||||||
Balance – December 31, 2021 | 800,000 | $ | 80 | 10,062,500 | $ | 1,006 | $ | 0 | $ | (24,917,095 | ) | $ | (24,916,009 | ) | ||||||||||||||
Cash Flows from Operating Activities: | ||||
Net loss | $ | (1,465 | ) | |
Adjustments to reconcile net loss to net cash used in operating activities: | ||||
Changes in operating assets and liabilities: | ||||
Accrued expenses | 1,465 | |||
Net cash used in operating activities | — | |||
Cash Flows from Financing Activities: | ||||
Proceeds from issuance of Class B common stock to the Sponsor | 25,000 | |||
Proceeds from promissory note — related party | 140,000 | |||
Payment of offering costs | (154,973 | ) | ||
Net cash provided by financing activities | 10,027 | |||
Net Change in Cash | 10,027 | |||
Cash – Beginning | — | |||
Cash – Ending | $ | 10,027 | ||
Non-cash investing and financing activities: | ||||
Deferred offering costs included in accrued offering costs | $ | 30,000 |
Year Ended December 31, | For The Period from September 28, 2020 (Inception) Through December 31, | |||||||
2021 | 2020 | |||||||
Cash Flows from Operating Activities: | ||||||||
Net income (loss) | $ | 7,207,291 | $ | (1,465 | ) | |||
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||||||||
Change in fair value of warrant liabilities | (9,315,334 | ) | — | |||||
Interest earned on investments held in Trust Account | (113,586 | ) | — | |||||
Transaction costs allocated to warrants | 1,029,081 | — | ||||||
Changes in operating assets and liabilities: | ||||||||
Prepaid expenses | (325,604 | ) | — | |||||
Accounts payable and accrued expenses | 305,828 | 1,465 | ||||||
Net cash used in operating activities | (1,212,324 | ) | — | |||||
Cash Flows from Investing Activities: | ||||||||
Investment of cash into trust Account | (402,500,000 | ) | — | |||||
Net cash used in investing activities | (402,500,000 | ) | 0 | |||||
Cash Flows from Financing Activities: | ||||||||
Proceeds from issuance of Class B common stock to Sponsor | — | 25,000 | ||||||
Proceeds from sale of Units, net of underwriting discounts paid | 396,500,000 | — | ||||||
Proceeds from sale of Private Placement Units | 8,000,000 | — | ||||||
Advance from related party | 1,000 | — | ||||||
Repayment of promissory note – related party | (140,000 | ) | — | |||||
Proceeds from promissory note—related party | — | 140,000 | ||||||
Payment of offering costs | (305,609 | ) | (154,973 | ) | ||||
Net cash provided by financing activities | 404,055,391 | 10,027 | ||||||
Net Change in Cash | 343,067 | 10,027 | ||||||
Cash – Beginning of period | 10,027 | 0 | ||||||
Cash – End of period | $ | 353,094 | $ | 10,027 | ||||
Non-Cash investing and financing activities: | ||||||||
Offering costs included in accrued offering costs | $ | — | $ | 30,000 | ||||
Deferred underwriting fee payable | $ | 15,137,500 | $ | — | ||||
companies
4.
5
Balance Sheet as of January 12, 2021 | As Reported IPO | Warrant Adjustment | As Revised | Temp Equity Adjustment | As Restated | |||||||||||||||
Warrant L iabilities | $ | 0 | $ | 19,577,834 | $ | 19,577,834 | $ | — | $ | 19,577,834 | ||||||||||
Total L | $ | 15,137,965 | $ | 19,577,834 | $ | 34,715,799 | $ | — | $ | 34,715,799 | ||||||||||
Class A ordinary shares subject to possible redemption | $ | 383,925,450 | $ | (19,577,840 | ) | $ | 364,347,610 | $ | 38,152,390 | $ | 402,500,000 | |||||||||
Class A ordinary shares | $ | 266 | $ | 196 | $ | 462 | $ | (382 | ) | $ | 80 | |||||||||
Additional paid-in capital | $ | 5,000,196 | $ | 1,028,891 | $ | 6,029,087 | $ | (6,029,087 | ) | $ | — | |||||||||
Accumulated deficit | $ | (1,465 | ) | $ | (1,029,081 | ) | $ | (1,030,546 | ) | $ | (32,122,921 | ) | $ | (33,153,467 | ) | |||||
Total shareholders’ equity (deficit) | $ | 5,000,003 | $ | 0 | $ | 5,000,003 | $ | (38,152,390 | ) | $ | (33,152,387 | ) |
Deferred
Gross proceeds | $ | 402,500,000 | ||
Less: | ||||
Proceeds allocated to Public Warrants | (19,185,834 | ) | ||
Class A common stock issuance costs | (20,569,001 | ) | ||
Plus: | ||||
Accretion of carrying value to redemption value | 39,754,835 | |||
Class A common stock subject to possible redemption | $ | 402,500,000 | ||
Deferred offering
The Company’s effective tax rate ofstatement’sstatements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. Deferred taxes were deemed to be de minimus as
The provision for income taxes was deemed to be de minimus as for the period from September 28, 2020 (inception) through December 31, 2020.
Year Ended December 31, 2021 | For The Period from September 28, 2020 (Inception) Through December 31, 2020 | |||||||||||||||
Class A | Class B | Class A | Class B | |||||||||||||
Basic net income (loss) per common stock | ||||||||||||||||
Numerator: | ||||||||||||||||
Allocation of net income (loss), as adjusted | $ | 5,752,130 | $ | 1,455,161 | $ | — | $ | (1,465 | ) | |||||||
Denominator: | ||||||||||||||||
Basic weighted average shares outstanding | 39,700,411 | 10,043,322 | — | 8,750,000 | ||||||||||||
Basic net income (loss) per common stock | $ | 0.14 | $ | 0.14 | $ | — | $ | (0.00 | ) | |||||||
Year Ended December 31, 2021 | For The Period from September 28, 2020 (Inception) Through December 31, 2020 | |||||||||||||||
Class A | Class B | Class A | Class B | |||||||||||||
Diluted net income (loss) per common stock | ||||||||||||||||
Numerator: | ||||||||||||||||
Allocation of net income (loss), as adjusted | $ | 5,749,913 | $ | 1,457,378 | $ | — | $ | — | ||||||||
Denominator: | ||||||||||||||||
Diluted weighted average shares outstanding | 39,700,411 | 10,062,500 | — | — | ||||||||||||
Diluted net income (loss) per common stock | $ | 0.14 | $ | 0.14 | $ | — | $ | — | ||||||||
nature, except for the Warrants (see Note 1
For the year ended December 31, 2021 and for the period from September 28, 2020 (inception) through December 31, 2020, the Company incurred $180,000 and $0 in fees for such services, respectively. At December 31, 2021, fees amounting to $15,000 are included in accounts payable and accrued expenses in the accompanying balance sheets. There were 0 amounts accrued as of December 31, 2020.
0 longer available to withdraw from.
Warrants
In addition, if (x) the Company issues additional shares of Class A common stock or equity-linked securities for capital raising purposes in connection with the closing of its initial Business Combination at an issue price or effective issue price of less than $9.20 per share of Class A common stock (with such issue price or effective issue price to be determined in good faith by the Company’s board of directors and, in the case of any such issuance to the Sponsor or its affiliates, without taking into account any Founder Shares held by the Sponsor or such affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of the Company’s initial Business Combination on the date of the consummation of such initial Business Combination (net of redemptions), and (z) the volume weighted average trading price of the Company’s common stock during the 20 trading day period starting on the trading day prior to the day on which the Company consummates its initial Business Combination (such price, the “Market Value”) is below $9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the greater of the Market Value and the Newly Issued Price and the $18.00 per share redemption trigger price described above will be adjusted (to the nearest cent) to be equal to 180% of the greater of the Market Value and the Newly Issued Price.
December 31, | December 31, | |||||||
2021 | 2020 | |||||||
Deferred tax asset (liability) | ||||||||
Net operating loss carryforward | $ | 18,487 | $ | 308 | ||||
Startup/Organization Expenses | 208,403 | 0 | ||||||
Total deferred tax assets, net | 226,890 | 308 | ||||||
Valuation Allowance | (226,890 | ) | (308 | ) | ||||
Deferred tax liability, net of valuation allowance | $ | 0 | $ | 0 | ||||
December 31, | December 31, | |||||||
2021 | 2020 | |||||||
Federal | ||||||||
Current | $ | 0 | $ | 0 | ||||
Deferred | (226,582 | ) | (308 | ) | ||||
State and Local | ||||||||
Current | 0 | 0 | ||||||
Deferred | 0 | 0 | ||||||
Change in valuation allowance | 226,582 | 308 | ||||||
Income tax provision | $ | 0 | $ | 0 | ||||
December 31, 2021 | December 31, 2020 | |||||||
Statutory federal income tax rate | 21.0 | % | 21.0 | % | ||||
State taxes, net of federal tax benefit | 0.0 | % | 0.0 | % | ||||
Change in fair value of warrants | (27.1 | )% | 0.0 | % | ||||
Transaction costs allocated to warrants | 3.0 | % | 0.0 | % | ||||
Change in valuation allowance | 3.1 | % | (21.0 | )% | ||||
Income tax provision | 0.0 | % | 0.0 | % | ||||
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. |
Held-To-Maturity | Level | Amortized Cost | Gross Holding Gain (Loss) | Fair Value | ||||||||||||||
December 31, 2021 | U.S. Treasury Securities (Matures on 01/13/2022) | 1 | $ | 201,343,000 | $ | 0 | $ | 201,343,000 | ||||||||||
Description | Level | December 31, 2021 | ||||||
Assets: | ||||||||
Investments – Money market funds | 1 | $ | 201,269,466 | |||||
Liabilities: | ||||||||
Warrant Liability – Public Warrants | 1 | $ | 10,062,500 | |||||
Warrant Liability – Private Placement Warrants | 3 | $ | 200,000 |
Input: | December 31, 2021 | |||
Risk-free interest rate | 1.18 | % | ||
Expected term (years) | 5.5 | |||
Expected volatility | 14.5 | % | ||
Exercise price | $ | 11.50 | ||
Stock price | $ | 9.76 |
Private Placement | Public | Warrant Liabilities (Level 3) | ||||||||||
Fair value as of December 31, 2020 | $ | — | $ | — | $ | — | ||||||
Initial classification on January 12, 2021 (Initial Public Offering) | 392,000 | 19,185,834 | 19,577,834 | |||||||||
Transfers to Level 1 | — | (14,892,500 | ) | (14,892,500 | ) | |||||||
Change in fair value | (192,000 | ) | (4,293,334 | ) | (4,485,334 | ) | ||||||
Fair value as of December 31, 2021 | $ | 200,000 | $ | — | $ | 200,000 | ||||||
EXHIBIT INDEX
Exhibit No. | Description | ||
1.1 | |||
3.1 | |||
3.2 | |||
4.1 | |||
4.2 | |||
4.3 | |||
4.4 | |||
4.5 | |||
10.1 | |||
10.2 | |||
10.3 | |||
10.4 | |||
10.5 | |||
10.6 | |||
10.7 | |||
31.1 | |||
31.2 | |||
32.1 | |||
32.2 | |||
101.INS | Inline XBRL Instance Document* | ||
101.SCH | Inline XBRL Taxonomy Extension Schema* | ||
101.CAL | Inline XBRL Taxonomy Calculation Linkbase* | ||
101.LAB | Inline XBRL Taxonomy Label Linkbase* | ||
101.PRE | Inline XBRL Definition Linkbase Document* | ||
101.DEF | Inline XBRL Definition Linkbase Document* | ||
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) * |
* | Filed herewith. |
** | Furnished herewith. |
(1) | Incorporated by reference to the Company’s Form S-1, filed with the SEC on December 15, 2020. |
(2) | Incorporated by reference to the Company’s Form S-1/A, filed with the SEC on December 30, 2020. |
(3) | Incorporated by reference to the Company’s Form 8-K, filed with the SEC on January 13, 2021. |
Incorporated by reference to the Company’s Form 10-K, filed with the SEC on March 26, 2021. |
March 30 , 2022 | Epiphany Technology Acquisition Corp. | |||
By: | /s/ Peter Bell | |||
Name: | Peter Bell | |||
Title: | Chief Executive Officer and Chief Financial Officer | |||
(Principal Executive Officer and Principal Financial and Accounting Officer) |
Name | Position | Date | ||||
/s/ Peter Bell | Chief Executive Officer, Chief Financial Officer and Director | March 30 , 2022 | ||||
Peter Bell | (Principal Executive Officer and Principal Financial and Accounting Officer) | |||||
/s/ Arthur Coviello | Chairman of the Board | March 30 , 2022 | ||||
Arthur Coviello | ||||||
/s/ Paul Deninger | Vice Chairman of the Board | March 30 , 2022 | ||||
Paul Deninger | ||||||
/s/ Kirk Arnold | Director | March 30 , 2022 | ||||
Kirk Arnold | ||||||
/s/ Paul Flanagan | Director | March 30 , 2022 | ||||
Paul Flanagan | ||||||
/s/ Melissa McJannet | Director | March 30 , 2022 | ||||
Melissa McJannet | ||||||
/s/ JD Sherman | Director | March 30 , 2022 |
JD Sherman |