10-K 1 brhc10035657_10k.htm 10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

☒	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2021

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM __________ TO ________

COMMISSION FILE NUMBER 001-41104

PROOF ACQUISITION CORP I

(Exact name of registrant as specified in its charter)

Delaware		86-2707040
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)


11911 Freedom Drive, Suite 1080 Reston, VA		20190
(Address of principal executive offices)		(Zip Code)

(571) 310-4949

(Registrant’s telephone number, including area code)

Not applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

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	PACI.U	The New York Stock Exchange
Class A common stock, par value $0.0001 per share (included as part of the Units)	PACI	The New York Stock Exchange
Redeemable Warrants (included as part of the Units)	PACI.WS	The New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant (1) has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

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

			Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. Yes ☐ No ☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☒ No ☐

The registrant was not a public company as June 30, 2021 and therefore it cannot calculate the aggregate market value of its voting and non-voting common equity held by non-affiliates as of such date.

As of March 28, 2022, the Registrant had 27,600,000 shares of its Class A common stock, $0.0001 par value per share, and 6,900,000 shares of its Class B common stock, $0.0001 par value per share, outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

None.

TABLE OF CONTENTS

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

PART I

	ITEM 1. BUSINESS	2
	ITEM 1A. RISK FACTORS	8
	ITEM IB. UNRESOLVED STAFF COMMENTS	37
	ITEM 2. PROPERTIES	37
	ITEM 3. LEGAL PROCEEDINGS	37
	ITEM 4. MINE SAFETY DISCLOSURES	37

PART II

	ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES	38
	ITEM 6. SELECTED FINANCIAL DATA	38
	ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	39
	ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	43
	ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	43
	ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	43
	ITEM 9A. CONTROLS AND PROCEDURES	43
	ITEM 9B. OTHER INFORMATION	44

PART III

	ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE	45
	ITEM 11. EXECUTIVE COMPENSATION	50
	ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS	51
	ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE	52
	ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES	53

PART IV

	ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES	55

SIGNATURES

Name	Age	Position
John C. Backus, Jr.	63	Chief Executive Officer and Member of the Board
Steven P. Mullins	55	Chief Financial Officer
Michael W. Zarlenga	54	General Counsel and Corporate Secretary
Peter C. Harrison	59	Chairman of the Board
Coleman Andrews	67	Member of the Board (Lead Independent Director)
Mark Lerdal	63	Member of the Board
Lisa Suennen	56	Member of the Board

Name and Address of Beneficial Owner⁽¹⁾	Number of Shares Beneficially Owned			Percentage of Shares Beneficially Owned
PROOF Acquisition Sponsor I, LLC (our sponsor)⁽²⁾		6,440,000	⁽³⁾⁽⁴⁾		18.67	%
John C. Backus, Jr.⁽⁴⁾⁽⁵⁾		—
Steven P. Mullins⁽⁴⁾⁽⁵⁾		—
Michael W. Zarlenga⁽⁴⁾⁽⁵⁾		—
Peter C. Harrison⁽⁵⁾		—
Coleman Andrews⁽⁵⁾		—
Mark Lerdal⁽⁵⁾		—
Lisa Suennen⁽⁵⁾		—
All officers and directors as a group (7 individuals)		6,440,000			18.67	%

Audited Financial Statements of PROOF Acquisition Corp I:		Page
Report of Independent Registered Public Accounting Firm (PCAOB Firm ID# 688)		F-2
Balance Sheet as of December 31, 2021		F-3
Statement of Operations for the period from March 16, 2021 (inception) through December 31, 2021		F-4
Statement of Changes in Stockholders’ Deficit for the period from March 16, 2021 (inception) through December 31, 2021		F-5
Statement of Cash Flows for the period from March 16, 2021 (inception) through December 31, 2021		F-6
Notes to Financial Statements		F-7

	December 31, 2021

ASSETS
Current assets:
Cash	$	2,579,658
Prepaid expenses		993,608
Total current assets		3,573,266
Investments held in Trust		281,521,183
Total Assets	$	285,094,449

LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current Liabilities:
Accrued expenses	$	159,622
Total current liabilities		159,622
Deferred underwriting commission		9,660,000
Total Liabilities		9,819,622

Commitments and contingencies (Note 5)

Temporary Equity:
Class A common stock subject to possible redemption; 27,600,000 shares at redemption value ($10.20 per share)		281,520,000

Stockholders’ Deficit:
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding		—
Class A common stock, $0.0001 par value; 70,000,000 shares authorized; none issued and outstanding (excluding 27,600,000 shares subject to possible redemption)		—
Class B common stock, $0.0001 par value; 12,500,000 shares authorized; 6,900,000 shares issued and outstanding		690
Accumulated deficit		(6,245,863	)
Total Stockholders’ Deficit		(6,245,173	)
Total Liabilities, Temporary Equity and Stockholders’ Deficit	$	285,094,449

	For the Period From March 16, 2021 (inception) Through December 31, 2021

Formation and operating costs	$	383,077
Operating loss		(383,077	)

Interest income – investments held in the Trust Account		1,183
Other income		1,183

Net loss	$	(381,894	)

Class A common stock - weighted average shares outstanding, basic and diluted		2,810,182

Class A common stock - basic and diluted net loss per share	$	(0.04	)

Class B common stock - weighted average shares outstanding, basic and diluted ⁽¹⁾		6,091,636

Class B common stock - basic and diluted net loss per share	$	(0.04	)

	Class B Common Stock				Additional Paid-in Capital			Accumulated Deficit			Total Stockholders’ Deficit
	Shares		Amount		Additional Paid-in Capital			Accumulated Deficit			Total Stockholders’ Deficit
Balance, March 16, 2021 (inception)		—	$	—	$	—		$	—		$	—
Issuance of Class B common stock to Sponsor⁽¹⁾		6,900,000		690		24,310			—			25,000
Private placement warrants proceeds in excess of fair value		—		—					5,411,275			5,411,275
Re-measurement of Class A common stock subject to possible redemption to redemption value		—		—		(24,310	)		(11,275,244	)		(11,299,554	)
Net loss		—		—		—			(381,894	)		(380,997	)
Balance, December 31, 2021		6,900,000	$	690	$	—		$	(6,245,863	)	$	(6,245,173	)

	For The Period From March 16, 2021 (inception) Through December 31, 2021

Cash flows from operating activities:
Net loss	$	(381,894	)
Adjustments to reconcile net loss to net cash used in operating activities:
Income earned on Trust assets		(1,183	)
Changes in current assets and liabilities:
Changes in prepaid expenses		(993,608	)
Changes in accrued expenses		159,622
Net cash used in operating activities		(1,217,063	)

Cash flows from investing activities:
Funds deposited into Trust account		(281,520,000	)
Net cash used in investing activities		(281,520,000	)

Cash flows from financing activities:
Proceeds from issuance of Class B ordinary shares to Sponsor		25,000
Proceeds from sale of units		276,000,000
Proceeds from sale of warrants		15,226,000
Offering costs		(5,934,279	)
Proceeds from sponsor note		110,000
Repayment of sponsor note		(110,000	)
Net cash provided by financing activities		285,316,721

Net change in cash		2,579,658
Cash at beginning of period		—
Cash at end of period	$2,579,658

Non-cash financing activities:
Deferred underwriting fee	$	9,660,000
Re-measurement of Class A ordinary shares subject to possible redemption	$	(11,299,554	)
Initial value of Class A common stock subject to possible redemption	$281,520,000

	For the period from March 16, 2021 (inception) through December 31, 2021
	Class A Common Stock			Class B Common Stock
Basic and diluted net loss per common share
Numerator:
Allocation of net loss	$	(120,559	)	$	(261,335	)
Denominator:
Basic and diluted weighted average shares outstanding		2,810,182			6,091,636

Basic and diluted net loss per common share	$	(0.04	)	$	(0.04	)

Gross proceeds	$	276,000,000
Less:
Offering costs allocated to Class A common stock subject to possible redemption		(368,276	)
Private placement warrants proceeds in excess of fair value		(5,411,275	)
Plus:
Re-measurement of carrying value to redemption value		11,299,544

Class A common stock subject to possible redemption	$	281,520,000

Description	Level		December 31, 2021
Assets:
Marketable securities held in the Trust Account		1	$	281,521,183

	For the Period From March 16, 2021 (Inception) Through December 31, 2021
Deferred tax assets:
Net operating losses	$	127,274
Start-up costs		47,076
Total deferred tax assets		174,350

Valuation Allowance		(174,350	)

Deferred tax asset, net of allowance	$	-

	For the Period From March 16, 2021 (Inception) Through December 31, 2021
Federal
Current	$	-
Deferred		(174,350	)
State and local
Current		-
Deferred		-
Change in valuation allowance		174,350
Income tax provision	$	-

	For the Period From March 16, 2021 (Inception) Through December 31, 2021
U.S. federal statutory rate		21.0%
Valuation allowance		(21.0)%
Income tax provision		-

Exhibit		Description
3.1		Amended and Restated Certificate of Incorporation (Incorporated by reference to the corresponding exhibit to the Company’s Current Report on Form 8-K (File No. 001-41104), filed with the SEC on December 6, 2021).

3.2		Amended and Restated Bylaws (Incorporated by reference to the corresponding exhibit to the Company’s Current Report on Form 8-K (File No. 001-41104), filed with the SEC on December 6, 2021).

4.1		Specimen Unit Certificate (Incorporated by reference to the corresponding exhibit the Company’s Registration Statement on Form S-l (File No. 333-261015), filed with the SEC on November 12, 2021).

4.2		Specimen Class A common stock Certificate (Incorporated by reference to the corresponding exhibit the Company’s Registration Statement on Form S-l (File No. 333-261015), filed with the SEC on November 12, 2021).

4.3		Specimen Warrant Certificate (Incorporated by reference to the corresponding exhibit the Company’s Registration Statement on Form S-l (File No. 333-261015), filed with the SEC on November 12, 2021).

4.4		Warrant Agreement between the Company and Continental Stock Transfer & Trust Company, dated as of December 17, 2020 (Incorporated by reference to exhibit 4.1 to the Company’s Current Report on Form 8-K (File No. 001-41104), filed with the SEC on December 6, 2021).

4.5		Description of Securities

10.1		Private Placement Warrants Purchase Agreement, dated November 30, 2021, by and among the Company and PROOF Acquisition Sponsor I, LLC (Incorporated by reference to the corresponding exhibit to the Company’s Current Report on Form 8-K (File No. 001-41104), filed with the SEC on December 6, 2021).

10.2		Investment Management Trust Agreement, dated November 30, 2021, by and between the Company and Continental Stock Transfer & Trust Company, as trustee. (Incorporated by reference to the corresponding exhibit to the Company’s Current Report on Form 8-K (File No. 001-41104), filed with the SEC on December 6, 2021).

10.3		Registration Rights Agreement, dated November 30, 2020, by and among the Company, PROOF Acquisition Sponsor I, LLC, and the other holders party thereto (Incorporated by reference to the corresponding exhibit to the Company’s Current Report on Form 8-K (File No. 001-41104), filed with the SEC on December 6, 2021).

10.4		Letter Agreement, dated November 30, 2020, by and among the Company, PROOF Acquisition Sponsor I, LLC and Officers and Directors of the Company (Incorporated by reference to the corresponding exhibit to the Company’s Current Report on Form 8-K (File No. 001-41104), filed with the SEC on December 6, 2021).

10.5		Administrative Services Agreement between PROOF Acquisition Sponsor I, LLC and the Company, dated November 30, 2021. (Incorporated by reference to the corresponding exhibit to the Company’s Current Report on Form 8-K (File No. 001-41104), filed with the SEC on December 6, 2021).

31.1		Certification of Principal Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2		Certification of Principal Financial and Accounting Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1		Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2		Certification of Principal Financial and Accounting Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

March 28, 2022

	PROOF ACQUISITION CORP I

	By:	/s/ John C. Backus, Jr.
		Name:	John C. Backus, Jr.
		Title:	Chief Executive Officer

Name	Title	Date

/s/ John C. Backus, Jr.	Chief Executive Officer and Director	March 28, 2022
John C. Backus, Jr.	(Principal Executive Officer)

/s/ Steven P. Mullins	Chief Financial Officer	March 28, 2022
Steven P. Mullins	(Principal Financial and Accounting Officer)

/s/ Peter C. Harrison	Director	March 28, 2022
Peter C. Harrison

/s/ Coleman Andrews	Director	March 28, 2022
Coleman Andrews

/s/ Mark Lerdal	Director	March 28, 2022
Mark Lerdal

/s/ Lisa Suennen	Director	March 28, 2022
Lisa Suennen

SEC Form 10-K filed by PROOF Acquisition Corp I