UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarter ended September 30, 2022

☐ 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 No.)

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

(571) 310-4949

(Issuer’s telephone number, including area code)

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

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). 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 definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.

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 is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☒ No ☐

As of November 9, 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.

PROOF ACQUISITION CORP I

FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 2022

TABLE OF CONTENTS

		Page
PART 1 - FINANCIAL INFORMATION

Item 1.	Condensed Financial Statements

	Condensed Balance Sheets as of September 30, 2022 (unaudited) and December 31, 2021 (audited)	1

	Unaudited Condensed Statements of Operations for the Three and Nine Months Ended September 30, 2022 and for the Three Months Ended September 30, 2021 and for the period from March 16, 2021 (inception) through September 30, 2021	2

	Unaudited Condensed Statements of Changes in Stockholders’ Equity (Deficit) for the Three and Nine Months Ended September 30, 2022 and for the Three Months Ended September 30, 2021 and for the period from March 16, 2021 (inception) through September 30, 2021	3

	Unaudited Condensed Statements of Cash Flows for the Nine Months Ended September 30, 2022 and for the period from March 16, 2021 (inception) through September 30, 2021	4

	Notes to Unaudited Condensed Financial Statements	5

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	21

Item 4.	Controls and Procedures	21

PART II - OTHER INFORMATION		21

Item 1.	Legal Proceedings	21

Item 1A.	Risk Factors	21

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	22

Item 3.	Defaults Upon Senior Securities	22

Item 4.	Mine Safety Disclosures	22

Item 5.	Other Information	22

Item 6.	Exhibits	23

SIGNATURES		24

	September 30, 2022 (unaudited)			December 31, 2021

ASSETS
Current assets:
Cash	$	1,521,867		$	2,579,658
Prepaid expenses		182,315			993,608
Total current assets		1,704,182			3,573,266
Investments held in Trust		282,677,920			281,521,183
Total Assets	$	284,382,102		$	285,094,449

LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current Liabilities:
Accrued expenses	$	231,548		$	159,622
Total current liabilities		231,548			159,622
Deferred underwriting commission		9,660,000			9,660,000
Total Liabilities		9,891,548			9,819,622

Commitments and contingencies (Note 5)

Temporary Equity:
Class A common stock subject to possible redemption; $0.0001 par value; 27,600,000 shares at redemption value of $10.22 at September 30, 2022 and $10.20 at December 31, 2021		282,191,951			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			690
Accumulated deficit		(7,702,087	)		(6,245,863	)
Total Stockholders’ Deficit		(7,701,397	)		(6,245,173	)
Total Liabilities, Temporary Equity and Stockholders’ Deficit	$	284,382,102		$	285,094,449

	Three Months Ended September 30, 2022			Three Months Ended September 30, 2021			Nine Months Ended September 30, 2022			For the period from March 16, 2021 (inception) through September 30, 2021

Formation and operating expenses	$	489,430		$	(117	)	$	1,764,541		$	(897	)
Operating loss		(489,430	)		(117	)		(1,764,541	)		(897	)

Interest income - investments held in Trust Account		756,823			—			1,156,737			—
Other income		756,823			—			1,156,737			—
Income (Loss) before income tax		267,393			(117	)		(607,804	)		(897	)
Income tax expense		(146,608	)		—			(176,468	)		—
Net income (loss)	$	120,785		$	(117	)	$	(784,272	)	$	(897	)
Class A common stock - weighted average shares outstanding, basic and diluted		27,600,000			—			27,600,000			—
Class A common stock - basic and diluted net income (loss) per share	$	0.00		$	—		$	(0.02	)	$	—
Class B common stock - weighted average shares outstanding, basic and diluted ⁽¹⁾		6,900,000			5,000,000			6,900,000			5,000,000
Class B common stock - basic and diluted net income (loss) per share	$	0.00		$	(0.00	)	$	(0.02	)	$	(0.00	)

	Class B Common Stock				Additional Paid-in		Accumulated			Total Stockholders’
	Shares		Amount		Capital		Deficit			Deficit
Balance, December 31, 2021		6,900,000	$	690	$	—	$	(6,245,863	)	$	(6,245,173	)
Net loss		—		—		—		(628,828	)		(628,828	)
Balance, March 31, 2022		6,900,000		690		—		(6,874,691	)		(6,874,001	)
Remeasurement of Class A Common Stock to redemption value		—		—		—		(141,596	)		(141,596	)
Net loss		—		—		—		(276,230	)		(276,230	)
Balance, June 30, 2022		6,900,000		690		—		(7,292,517	)		(7,291,827	)
Remeasurement of Class A Common Stock to redemption value		—		—		—		(530,355	)		(530,355	)
Net income		—		—		—		120,785			120,785
Balance, September 30, 2022		6,900,000	$	690	$	—	$	(7,702,087	)	$	(7,701,397	)

	Nine Months ended September 30, 2022			Period From March 16, 2021 (inception) Through September 30, 2021

Cash flows from operating activities:
Net loss	$	(784,272	)	$	(897	)
Adjustments to reconcile net loss to net cash used in operating activities:
Income earned on Trust assets		(1,156,737	)		—
Formation and organization costs paid by related party		—			716
Changes in operating assets and liabilities:
Deferred offering costs		—			(146,468	)
Accrued formation and offering costs		—			35,719
Prepaid expenses		811,292			—
Accrued expenses		71,926			—
Net cash used in operating activities		(1,057,791	)		(110,930	)

Cash flows from financing activities:
Proceeds from issuance of Class B common stock to Sponsor		—			25,000
Proceeds from Promissory Note		—			110,000
Net cash provided by activities		—			135,000

Net change in cash		(1,057,791	)		24,070
Cash at beginning of period		2,579,658			—
Cash at end of period	$	1,521,867		$	24,070

Non-cash financing activities:
Remeasurement of Class A common stock to redemption value	$	671,951		$	—
Deferred offering costs included in accrued offering cost	$	—		$	340,869

	For the Three Months				For the Nine Months
	Ended September 30, 2022				Ended September 30, 2022
	Class A		Class B		Class A			Class B
Basic and diluted net income (loss) per share
Numerator:
Allocation of net income (loss)	$	96,628	$	24,157	$	(627,418	)	$	(156,854	)
Denominator:
Basic and diluted weighted average shares outstanding		27,600,000		6,900,000		27,600,000			6,900,000
Basic and diluted net income (loss) per share	$	0.00	$	0.0	$	(0.02	)	$	(0.02	)

Description	Level		September 30, 2022		December 31, 2021
Assets:
Marketable securities held in the Trust Account		1	$	282,677,920	$	281,521,183

No.	Description of Exhibit
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 November 30, 2021 (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).
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, 2021, 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, 2021, 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 Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*	Certification of Principal Financial Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), 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 Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS*	Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document).
101.CAL*	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.SCH*	Inline XBRL Taxonomy Extension Schema Document
101.DEF*	Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*	Inline XBRL Taxonomy Extension Labels Linkbase Document
101.PRE*	Inline XBRL Taxonomy Extension Presentation Linkbase Document
104	Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

	PROOF ACQUISITION CORP I

November 9, 2022	By:	/s/ John C. Backus, Jr.
		Name:	John C. Backus, Jr.
		Title:	Chief Executive Officer
			(Principal Executive Officer)

November 9, 2022	By:	/s/ Steven P. Mullins
		Name:	Steven P. Mullins
		Title:	Chief Financial Officer
			(Principal Financial and Accounting Officer)

SEC Form 10-Q filed by PROOF Acquisition Corp I