PROOF Acquisition I(PACI) - 2022 Q2 - Quarterly Report

PART 1 - FINANCIAL INFORMATION Condensed Financial Statements PROOF Acquisition Corp I, a SPAC, reported a $0.91 million net loss for the six months ended June 30, 2022, with $281.9 million in trust assets and Class A common stock subject to redemption Condensed Balance Sheets (Unaudited) | | June 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | Total Assets | $284,245,344 | $285,094,449 | | Cash | $1,864,710 | $2,579,658 | | Investments held in Trust | $281,921,097 | $281,521,183 | | Total Liabilities | $9,875,575 | $9,819,622 | | Deferred underwriting commission | $9,660,000 | $9,660,000 | | Class A common stock subject to possible redemption | $281,661,596 | $281,520,000 | | Total Stockholders' Deficit | ($7,291,827) | ($6,245,173) | Condensed Statements of Operations (Unaudited) | | Three Months Ended June 30, 2022 | Six Months Ended June 30, 2022 | | :--- | :--- | :--- | | Formation and operating expenses | $619,518 | $1,275,111 | | Interest income - investments held in Trust Account | $373,148 | $399,913 | | Net loss | ($276,230) | ($905,058) | | Class A common stock - basic and diluted net loss per share | ($0.01) | ($0.03) | Condensed Statement of Cash Flows (Unaudited) | | Six Months ended June 30, 2022 | | :--- | :--- | | Net loss | ($905,058) | | Net cash used in operating activities | ($714,948) | | Cash at beginning of period | $2,579,658 | | Cash at end of period | $1,864,710 | Notes to Unaudited Condensed Financial Statements Notes clarify the company's SPAC status, June 3, 2023, business combination deadline raising going concern doubts, and the expected waiver of a $9.66 million deferred underwriting fee - The Company is a blank check company formed for a business combination, with all activity related to its formation and IPO, generating no operating revenues[22][23] - The company has until June 3, 2023 (18 months from IPO closing, with potential extensions) to complete a Business Combination, raising substantial doubt about its ability to continue as a going concern[35][40] - The IPO underwriter is ending its relationship and is expected to waive its deferred underwriting fee of $9,660,000[79] - The company pays its Sponsor $10,000 per month for administrative support and incurred $35,423 in consulting expenses for a board member[73][75] Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's pre-business combination status, Q2 2022 net loss, cash and trust account balances, and going concern doubts - The company has not engaged in operations or generated revenues, with all activity focused on its formation, IPO, and search for a business combination candidate[100] Net Loss Summary | Period | Net Loss | Key Drivers | | :--- | :--- | :--- | | Q2 2022 | ~$276,230 | $619,519 in operational costs, offset by $373,149 in trust interest income | | Six Months Ended June 30, 2022 | ~$905,057 | $1,275,111 in operational costs, offset by $399,914 in trust interest income | - As of June 30, 2022, the company held $1,864,710 in cash for working capital and $281,921,097 in the Trust Account[103] - The company has until June 3, 2023, to complete a Business Combination, raising substantial doubt about its ability to continue as a going concern[106] Quantitative and Qualitative Disclosures about Market Risk This section is not applicable as the company qualifies as a smaller reporting company - The company is a smaller reporting company and is not required to provide these disclosures[119] Controls and Procedures Management concluded disclosure controls and procedures were effective as of June 30, 2022, with no material changes to internal controls - Based on an evaluation as of June 30, 2022, the CEO and CFO concluded that the company's disclosure controls and procedures were effective[121] - There were no material changes to the company's internal control over financial reporting during the most recently completed fiscal quarter[122] PART II - OTHER INFORMATION Legal Proceedings As of June 30, 2022, no material litigation or governmental proceedings were pending against the company or its management - To management's knowledge, no material litigation, arbitration, or governmental proceeding was pending against the company or its management team as of June 30, 2022[124] Risk Factors The company highlights material risks from geopolitical instability, impacting its business combination search, financing, and cyber-attack threats - The company's search for a business combination and potential target operations may be materially affected by geopolitical conditions from the invasion of Ukraine by Russia and Belarus[127] - The conflict could cause market disruptions and volatility in credit and capital markets, impacting the company's ability to raise equity and debt financing for a business combination[127][129] - The geopolitical situation and related sanctions could also increase cyber-attacks against U.S. companies[130] Unregistered Sales of Equity Securities and Use of Proceeds No material change has occurred in the planned use of proceeds from the Initial Public Offering and private placement - There has been no material change in the planned use of proceeds from the Initial Public Offering and private placement[131] Defaults Upon Senior Securities The company reports no defaults upon senior securities - None reported[132] Mine Safety Disclosures This item is not applicable to the company - Not applicable[133] Other Information The company reports no other information - None[134] Exhibits This section lists exhibits filed with the Quarterly Report on Form 10-Q, covering corporate documents, agreements, and SOX certifications - The report includes a list of filed exhibits, incorporating by reference key corporate documents and agreements from previous filings[136] - Exhibits filed herewith include CEO and CFO certifications pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002, along with Inline XBRL documents[137]