Delaware (State or other jurisdiction of incorporation or organization) | | | 6770 (Primary Standard Industrial Classification Code Number) | | | 86-2707040 (I.R.S. Employer Identification No.) |
Scott D. Fisher Steptoe & Johnson LLP 1114 Avenue of the Americas New York, New York 10036 (212) 506-3900 | | | Sarah K. Solum Pamela L. Marcogliese Freshfields Bruckhaus Deringer US LLP 2710 Sand Hill Road Menlo Park, CA 94025 (650) 618-9250 |
Large accelerated filer ☐ | | | Accelerated filer ☐ | | | Non-accelerated filer ☒ |
Smaller reporting company☒ | | | | | Emerging growth company ☒ |
Title of Each Class of Security Being Registered | | | Amount Being Registered | | | Proposed Maximum Offering Price Per Security(1) | | | Proposed Maximum Aggregate Offering Price(1) | | | Amount of Registration Fee |
Units, each consisting of one share of Class A common stock, $0.0001 par value, and one-third of one redeemable warrant(2) | | | 23,000,000 units | | | $10.00 | | | $230,000,000 | | | $25,093 |
Shares of Class A common stock included as part of the units(3) | | | 23,000,000 shares | | | — | | | — | | | —(5) |
Redeemable warrants included as part of the units(3) | | | 7,666,667 warrants | | | — | | | — | | | —(5) |
Total | | | | | | | $230,000,000 | | | $25,093 |
(1) | Estimated solely for the purpose of calculating the registration fee. |
(2) | Includes 3,000,000 units, consisting of 3,000,000 shares of Class A common stock and 1,000,000 redeemable warrants underlying such units, which may be issued upon exercise of a 45-day option granted to the underwriter to cover over-allotments, if any. |
(3) | Pursuant to Rule 416(a) under the Securities Act, there are also being registered an indeterminable number of additional securities as may be offered or issued to prevent dilution resulting from share sub-division, share dividends, or similar transactions. |
(4) | Maximum number of shares of our Class A common stock and redeemable warrants, as applicable, included in the units described above, including those that may be issued upon exercise of a 45-day option granted to the underwriter. |
(5) | No fee pursuant to Rule 457(g) under the Securities Act. |
| | Per Unit | | | Total | |
Public offering price | | | $10.00 | | | $200,000,000 |
Underwriting discounts and commissions(1) | | | $0.55 | | | $11,000,000 |
Proceeds, before expenses, to us | | | $9.45 | | | $189,000,000 |
(1) | Includes $0.35 per unit, or $7,000,000 (or $8,050,000 in the aggregate if the underwriter’s over- allotment option is exercised in full), payable to the underwriter for deferred underwriting commissions upon the consummation of an initial business combination. See also “Underwriting” for a description of underwriting compensation and other items of value payable to the underwriter. |
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
| |
• | “advisors” are to those individuals who are not members of the PAC I management team but that serve as advisors to our management team either directly or as a member of the VC Advisory Board; |
• | “amended and restated certificate of incorporation” are to our certificate of incorporation to be in effect upon completion of this offering; |
• | “anchor investors” are to (i) certain funds and accounts managed by , who have committed an aggregate of $ in exchange for membership interests of our sponsor, and (ii) certain funds and accounts managed by subsidiaries of who have agreed to purchase an aggregate of private placement warrants (or up to private placement warrants if the underwriter’s over-allotment option is exercised in full) and we have agreed to issue to them an aggregate of shares of our Class B common stock (or shares if the underwriter’s over-allotment option is exercised in full) in connection with the closing of this offering, and as further described herein; |
• | “common stock” are to our Class A common stock and our Class B common stock, collectively; |
• | “founder shares” are to our shares of Class B common stock issued to our sponsor and to in private placements and the shares of Class A common stock that will be issued upon the automatic conversion of the shares of Class B common stock at the time of our initial business combination. The shares of Class A common stock issued upon the automatic conversion will not be “public shares”; |
• | “initial stockholders” are to our sponsor and other holders of our founder shares immediately following the closing of this offering (including such anchor investors acquiring founder shares contemporaneously with the closing of this offering as described in “Summary — The Offering — Expressions of Interest”) |
• | “letter agreement” are to the letter agreement between us, the sponsor and each of our directors and officers, the form of which is filed as an exhibit to the registration statement of which this prospectus forms a part; |
• | “management” or our “management team” are to our executive officers and directors; |
• | “PAC I” are to PROOF Acquisition Corp I, a Delaware corporation; |
• | “private placement warrants” are to the warrants to be issued to our sponsor and to in a private placement simultaneously with the closing of this offering and upon conversion of working capital loans, if any; |
• | “PROOF.VC” are to PROOF Fund, L.P. and PROOF Fund II, LP and their affiliates and parallel funds; |
• | “public shares” are to our shares of Class A common stock sold as part of the units in this offering (and includes those shares purchased in this offering or thereafter in the open market); |
• | “public stockholders” are to the holders of our public shares, including our initial stockholders and management team to the extent our initial stockholders or members of our management team purchase public shares, provided that our initial stockholders’ and each member of our management team’s status as a “public stockholder” will only exist with respect to the public shares; |
• | “public warrants” are to the warrants sold as part of the units in this offering (and includes those warrants purchased in this offering as part of the units or thereafter in the open market); |
• | “sponsor” are to PROOF Acquisition Sponsor I, LLC, a Delaware limited liability company; |
• | “VC Advisory Board” are to our Venture Capital Advisory Board, which will assist us in sourcing and evaluating transaction opportunities; and |
• | “we,” “us,” “our,” “company,” or “our company” are to PAC I. |
• | Beyond Meat & DailyPay (3 Board members) |
• | Skillz, Zipline, Sweetgreen, Equipment Share, Masterclass (2 Board members) |
• | Carta, Bird, Desktop Metal, Astra, Varo Money (1 Board Member) |
• | Jennifer Schretter, Partner at PROOF.VC |
• | Amos Ben Meir, Investor and Board Director at Sand Hill Angels |
• | Jai Choi, Founder of Tekton Ventures |
• | Angela Dalton, Founder of Signum Growth Capital |
• | Paul Grossinger, Co-Founder of Gaingels (Gaingels.com) |
• | Alex Gurevich, Managing Partner at Javelin Capital Partners |
• | Kent Madsen, Managing Partner of EPIC Ventures |
• | Steve Marcus, Co-Founder and General Partner of Riot Ventures |
• | Jordan Nof, Co-Founder and Managing Partner of Tusk Venture Partners |
• | Paul Willard, Silicon Valley early-stage investor |
• | been active investors in the technology sector; |
• | served on boards of directors; |
• | served on investment committees; |
• | founded companies; |
• | served as CEOs (including 3 public company CEOs); and |
• | served on public company boards. |
• | Broad experience and a track record of identifying breakout companies in targeted industries; |
• | Extensive experience consummating transactions across market cycles and in partnering with operators to drive exceptional results; |
• | Execution ability in complex acquisitions, venture capital, private equity, business operations, IPOs and post-SPAC IPO combination transactions (“deSPAC transactions”); |
• | Deep investment experience in the consumer and enterprise sectors with a focus on leveraging technology to drive transformational change in legacy industries; |
• | Track record of co-investing and collaboration by Backus, Harrison, Andrews, Suennen and Lerdal; |
• | Targeted experience screening opportunities and identifying companies with excellent management teams and partnering with them at the forefront of new industries; |
• | Broad and diverse network of operational, investment and transactional relationships, including the PROOF.VC network, to provide access to deal flow as well as experienced operators and management teams; |
• | Extensive experience operating businesses, allocating capital and managing risk across a broad array of markets; |
• | Experience managing the complexities of global public companies with a deep understanding of the interplay between macroeconomic events, global capital flows and evolving regulatory landscapes; |
• | Wide-ranging and meaningful relationships with a range of sellers such as private equity firms, entrepreneurs and companies, active and retired executives and financing providers to help source ideas and targets; |
• | Deep experience as operators, prudent risk-takers, business builders and managers at complex institutions; and |
• | History of serving on public and private boards and working with public companies to effect change. |
• | Is a good business today, with, we believe, the potential to be a great, category-leading business in the future; |
• | Has the ability to make the transition to become a public company and can benefit from being a public company with access to broader capital markets to help achieve its business strategy and capital structure needs; |
• | Has a strong position within its industry with identified competitive advantages and defensible business strategies; |
• | Can benefit from our PAC I Team’s expertise and collective capabilities in transaction sourcing, deal execution, investing, and public company management; |
• | Has the potential to capitalize on disruptive technology or a business model with the potential for attractive prospective growth; |
• | Is focused on the enterprise software, health care, fintech or consumer end markets; |
• | Has products or services focused on a large total addressable market; |
• | Is capital efficient, with the potential for attractive returns on invested capital; |
• | Has sound business metrics and the potential to generate recurring revenue from customers; |
• | Has the potential to deploy capital for strategic growth initiatives or add-on acquisitions; |
• | Demonstrates growth potential and operates in an industry with positive end market trends, secular drivers and growth dynamics; and |
• | Has a strong and innovative management team aligned with shareholder interests. |
• | one share of Class A common stock; and |
• | one-third of one redeemable warrant. |
(1) | Assumes no exercise of the underwriter’s over-allotment option and the corresponding forfeiture by our sponsor of 750,000 founder shares for no consideration. |
(2) | Founder shares are currently classified as Class B common stock, which shares will automatically convert into Class A common stock at the time of our initial business combination as described below adjacent to the caption “Founder shares conversion and anti-dilution rights” and in our amended and restated certificate of incorporation. |
(3) | Includes 750,000 founder shares that are subject to forfeiture. |
(4) | Includes 20,000,000 public shares and 5,000,000 founder shares, assuming no exercise of the underwriter’s over-allotment option and 750,000 founder shares have been forfeited. |
• | 30 days after the completion of our initial business combination; and |
• | twelve months from the closing of this offering; |
• | in whole and not in part; |
• | at a price of $0.01 per warrant; |
• | upon a minimum of 30 days’ prior written notice of redemption to each warrant holder, which we refer to as the “30-day redemption notice”; and |
• | if, and only if, the last reported sale price (the “closing price”) of our shares of Class A common stock equals or exceeds $18.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the heading “Description of Securities — Warrants — Public Stockholders’ Warrants — Anti-Dilution Adjustments”) for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which we send the notice of redemption to the warrant holders. |
• | in whole and not in part; |
• | at $0.10 per warrant upon a minimum of 30 days’ prior written notice of redemption provided that holders will be able to exercise their warrants on a cashless basis prior to redemption and receive that number of shares determined by reference to the table set forth under “Description of Securities — Warrants |
• | if, and only if, the closing price of our shares of Class A common stock equals or exceeds $10.00 per public share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the heading “Description of Securities — Warrants — Public Stockholders’ Warrants — Antidilution Adjustments”) for any 20 trading days within the 30-trading day period ending three trading days before we send the notice of redemption to the warrant holders; and |
• | if the closing price of the shares of Class A common stock for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which we send the notice of redemption to the warrant holders is less than $18.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the heading “Description of Securities — Warrants — Public Stockholders’ Warrants — Anti-dilution Adjustments”), the private placement warrants must also be concurrently called for redemption on the same terms as the outstanding public warrants, as described above. |
• | prior to our initial business combination, only holders of the founder shares have the right to vote on the appointment of directors |
• | the founder shares are shares of Class B common stock that automatically convert into shares of our Class A common stock at the time of our initial business combination on a one-for-one basis, subject to adjustment pursuant to anti-dilution rights, as described herein; |
• | the founder shares are subject to transfer restrictions, as described in more detail below; |
• | our sponsor, officers, and directors have entered into a letter agreement with us, pursuant to which they have agreed (i) to waive their redemption rights with respect to any founder shares and public shares held by them in connection with the completion of our initial business combination and a stockholder vote to approve an amendment to our amended and restated certificate of incorporation (A) that would modify the substance or timing of our obligation to provide holders of shares of Class A common stock the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering or (B) with respect to any other provision relating stockholders’ rights or pre-initial business combination activity and (ii) to waive their rights to liquidating distributions from the trust account with respect to any founder shares they hold if we fail to consummate an initial business combination within 24 months from the closing of this offering (although they will be entitled to liquidating distributions from the trust account with respect to any public shares they hold if we fail to complete our initial business combination within the prescribed time frame). If we submit our initial business combination to our public stockholders for a vote, we will complete our initial business combination only if a majority of the outstanding shares of common stock voted are voted in favor of the initial business combination. Our initial stockholders, directors and officers and their respective affiliates have agreed to vote any founder shares held by them and have agreed to vote |
• | the founder shares are entitled to registration rights. |
• | the net proceeds from the sale of the private placement warrants, which will be approximately $1,000,000 in working capital after the payment of approximately $6,500,000 in expenses relating to this offering; and |
• | any loans or additional investments from our sponsor or an affiliate of our sponsor or certain of our officers and directors, although they are under no obligation to advance funds to us in such circumstances, and provided that any such loans will not have any claim on the proceeds held in the trust account unless such proceeds are released to us upon completion of our initial business combination. |
• | conduct the redemptions in conjunction with a proxy solicitation pursuant to Regulation 14A of the Exchange Act, which regulates the solicitation of proxies, and not pursuant to the tender offer rules; and |
• | file proxy materials with the SEC. |
• | conduct the redemptions pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, which regulate issuer tender offers; and |
• | file tender offer documents with the SEC prior to completing our initial business combination which contain substantially the same financial and other information about our initial business combination and the redemption rights as is required under Regulation 14A of the Exchange Act, which regulates the solicitation of proxies. |
• | Repayment of up to an aggregate of $300,000 in loans made to us by our sponsor to cover offering-related and organizational expenses; |
• | Reimbursement for any out-of-pocket expenses related to identifying, investigating, negotiating and completing an initial business combination; |
• | Reimbursement of an affiliate of our sponsor for office space, secretarial and administrative services provided to members of our management team, in the amount of $10,000 per month pursuant to an administrative services agreement among us, our sponsor, and an affiliate of our sponsor; and |
• | Repayment of loans which may be made by our sponsor or an affiliate of our sponsor or certain of our officers and directors to fund working capital deficiencies or finance transaction costs in connection with an intended initial business combination. Up to $1,500,000 of such loans may be convertible into warrants at a price of $1.50 per warrant at the option of the lender. The warrants would be identical to the private placement warrants. Except for the foregoing, the terms of such loans, if any, have not been determined and no written agreements exist with respect to such loans. |
• | We are a newly formed company with no operating history and no revenues, and you have no basis on which to evaluate our ability to achieve our business objective. |
• | Past performance by our management team is not indicative of future performance of an investment in us. In addition, our management team and their respective affiliates have been involved with a large number of public and private companies in addition to those identified above, not all of which have achieved similar performance levels. |
• | Our public stockholders may not be afforded an opportunity to vote on our proposed business combination, which means we may complete our initial business combination even though a majority of our public stockholders do not support our initial business combination. |
• | Your only opportunity to affect the investment decision regarding a potential business combination may be limited to the exercise of your right to redeem your shares from us for cash. |
• | If we seek stockholder approval of our initial business combination, our initial stockholders, officers and directors have agreed to vote any founder shares held by them and their respective affiliates, and have agreed to vote any public shares held by them in favor of the initial business combination, regardless of how our public stockholders may vote. |
• | The ability of our public stockholders to redeem their shares for cash may make our financial condition unattractive to potential business combination targets, which may make it difficult for us to enter into a business combination with a target. |
• | The ability of our public stockholders to exercise redemption rights with respect to a large number of our shares may not allow us to complete the most desirable business combination or optimize our capital structure. |
• | The ability of our public stockholders to exercise redemption rights with respect to a large number of our shares could increase the probability that our initial business combination would be unsuccessful and that you would have to wait for liquidation in order to redeem your stock. |
• | The requirement that we complete our initial business combination within 24 months after the closing of this offering may give potential target businesses leverage over us in negotiating a business combination and may limit the time we have to conduct due diligence on potential business combination targets as we approach our dissolution deadline, which could undermine our ability to complete our initial business combination on terms that would produce value for our stockholders. |
• | Our search for a business combination, and any target business with which we ultimately consummate a business combination, may be materially adversely affected by the recent Coronavirus disease 2019 (COVID-19) outbreak and the status of debt and equity markets. |
• | We may not be able to complete our initial business combination within the 24 months after the closing of this offering, in which case we would cease all operations except for the purpose of winding up and we would redeem our public shares and liquidate, in which case our public stockholders may receive only their pro rata portion of the funds in the trust account that are available for distribution to public stockholders, and our warrants will expire worthless. |
• | If we seek stockholder approval of our initial business combination, our initial stockholders, directors, officers, advisors, and their affiliates may elect to purchase shares from public stockholders, which may influence a vote on a proposed business combination and reduce the public “float” of our Class A common stock or public warrants. |
• | If a stockholder fails to receive notice of our offer to redeem our public shares in connection with our business combination, or fails to comply with the procedures for tendering its shares, the stockholder’s shares may not be redeemed. |
• | You will not have any rights or interests in funds from the trust account, except under certain limited circumstances. Therefore, to liquidate your investment, you may be forced to sell your public shares or warrants, potentially at a loss. |
• | If our securities are approved for listing, NYSE 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. |
• | You will not be entitled to protections normally afforded to investors of many other blank check companies. |
• | If we seek stockholder approval of our initial business combination and we do not conduct redemptions pursuant to the tender offer rules, and if you or a “group” of stockholders are deemed to hold in excess of 15% of our Class A common stock, you will lose the ability to redeem all such shares in excess of 15% of our Class A common stock. |
• | Because of our limited resources and the significant competition for business combination opportunities, it may be more difficult for us to complete our initial business combination. If we have not completed our initial business combination, our public stockholders may receive only their pro rata portion of the funds in the trust account that are available for distribution to public stockholders, and our warrants will expire worthless. |
• | We may be unable to complete our initial business combination, in which case our public stockholders may only receive $10.00 per share, or less than such amount in certain circumstances, and our warrants will expire worthless. |
• | We are not required to obtain an opinion from an independent investment banking firm or from a valuation or appraisal firm regarding fairness. Consequently, you may have no assurance from an independent source that the price we are paying for the business is fair to our company from a financial point of view. |
• | Subject to his or her fiduciary duties under applicable law, none of the members of our management team who are also employed by our sponsor or its affiliates have any obligation to present us with any opportunity for a potential business combination of which they become aware. Our sponsor and directors and officers are also not prohibited from sponsoring, investing or otherwise becoming involved with, any other blank check companies, including in connection with their initial business combinations, prior to us completing our initial business combination. |
• | Our management team will allocate their time to other businesses thereby causing conflicts of interest in their determination as to how much time to devote to our affairs. This conflict of interest could have a negative impact on our ability to complete our initial business combination. |
• | We may have limited ability to assess the management of a prospective target business and, as a result, may affect our initial business combination with a target business whose management may not have the skills, qualifications or abilities to manage a public company. |
• | The holders of our founder shares will control the election of our board of directors until consummation of our initial business combination and will hold a substantial interest in us. As a result, they will appoint all of our directors prior to our initial business combination and may exert a substantial influence on actions requiring stockholder vote, potentially in a manner that you do not support. |
• | Certain key agreements related to this offering may be amended without your consent. |
• | The other risks and uncertainties discussed in “Risk Factors” and elsewhere in this prospectus. |
• | default and foreclosure on our assets if our operating revenues after an initial business combination are insufficient to repay our debt obligations; |
• | acceleration of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant; |
• | our immediate payment of all principal and accrued interest, if any, if the debt security is payable on demand; |
• | our inability to obtain necessary additional financing if the debt security contains covenants restricting our ability to obtain such financing while the debt security is outstanding; |
• | our inability to pay dividends on our common stock; |
• | using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on our common stock if declared, our ability to pay expenses, make capital expenditures and acquisitions and fund other general corporate purposes; |
• | limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate; |
• | increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation; |
• | limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, and execution of our strategy; and |
• | other disadvantages compared to our competitors who have less debt. |
• | solely dependent upon the performance of a single business, property or asset; or |
• | dependent upon the development or market acceptance of a single or limited number of products, processes or services. |
• | a limited availability of market quotations for our securities; |
• | reduced liquidity for our securities; |
• | a determination that our Class A common stock is a “penny stock” which will require brokers trading in our Class A common stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities; |
• | a limited amount of news and analyst coverage; and |
• | a decreased ability to issue additional securities or obtain additional financing in the future. |
• | restrictions on the nature of our investments; and |
• | restrictions on the issuance of securities, |
• | registration as an investment company with the SEC; |
• | adoption of a specific form of corporate structure; and |
• | reporting, record keeping, voting, proxy and disclosure requirements and other rules and regulations that we are currently not subject to. |
• | may significantly dilute the equity interest of investors in this offering; |
• | may subordinate the rights of holders of common stock if preferred stock is issued with rights senior to those afforded our common stock; |
• | could cause a change in control if a substantial number of shares of our common stock are issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors; |
• | may have the effect of delaying or preventing a change of control of us by diluting the stock ownership or voting rights of a person seeking to obtain control of us; |
• | may adversely affect prevailing market prices for our units, Class A common stock and/or warrants; and |
• | may not result in adjustment to the exercise price of our warrants. |
• | the history and prospects of companies whose principal business is the acquisition of other companies; |
• | prior offerings of those companies; |
• | our prospects for acquiring an operating business at attractive value; |
• | a review of debt-to-equity ratios in leveraged transactions; |
• | our capital structure; |
• | an assessment of our management and their experience in identifying operating companies; |
• | general conditions of the securities markets at the time of this offering; and |
• | other factors as were deemed relevant. |
• | higher costs and difficulties inherent in managing cross-border business operations and complying with different commercial and legal requirements of overseas markets; |
• | rules and regulations regarding currency redemption; |
• | imposition of withholding taxes; |
• | laws governing the manner in which future business combinations may be effected; |
• | exchange listing and/or delisting requirements; |
• | tariffs and trade barriers; |
• | regulations related to customs and import/export matters; |
• | local or regional economic policies and market conditions; |
• | unexpected changes in regulatory requirements; |
• | longer payment cycles; |
• | tax issues, such as tax law changes and variations in tax laws as compared to the United States; |
• | currency fluctuations and exchange controls; |
• | rates of inflation; |
• | challenges in collecting accounts receivable; |
• | cultural and language differences; |
• | employment regulations; |
• | underdeveloped or unpredictable legal or regulatory systems; |
• | corruption; |
• | protection of intellectual property; |
• | social unrest, crime, strikes, riots and civil disturbances; |
• | regime changes and political upheaval; |
• | terrorist attacks and wars; and |
• | deterioration of political relations with the United States. |
• | we have a board that includes a majority of ‘independent directors,’ as defined under the rules of the NYSE; |
• | we have a compensation committee of our board that is comprised entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities; and |
• | we have a nominating and corporate governance committee of our board that is comprised entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities. |
• | our ability to select an appropriate target business or businesses; |
• | our ability to complete our initial business combination; |
• | our expectations around the performance of a prospective target business or businesses; |
• | our success in retaining or recruiting, or changes required in, our officers, key employees or directors following our initial business combination; |
• | our officers and directors allocating their time to other businesses and potentially having conflicts of interest with our business or in approving our initial business combination; |
• | conflicts of interest arising with entities affiliated with our sponsor; |
• | our potential ability to obtain additional financing to complete our initial business combination; |
• | our pool of prospective target businesses; |
• | our ability to consummate an initial business combination due to the uncertainty resulting from the COVID-19 pandemic; |
• | the ability of our officers and directors to generate a number of potential business combination opportunities; |
• | our public securities’ potential liquidity and trading; |
• | the lack of a market for our securities; |
• | the use of proceeds not held in the trust account or available to us from interest income on the trust account balance; |
• | the trust account not being subject to claims of third parties; or |
• | our financial performance following this offering. |
| | Without Over-allotment Option | | | Over-allotment Option Exercised | |
Gross proceeds | | | | | ||
Gross proceeds from units offered to public(1) | | | $200,000,000 | | | $230,000,000 |
Gross proceeds from private placement warrants offered in the private placement | | | 7,500,000 | | | 8,625,000 |
Total gross proceeds | | | $207,500,000 | | | $ |
Estimated offering expenses(2) | | | | | ||
Underwriting commissions (2.0% of gross proceeds from units offered to public, excluding deferred portion)(3) | | | $4,000,000 | | | $4,600,000 |
Legal fees and expenses | | | | | ||
Printing and engraving expenses | | | | | ||
Accounting fees and expenses | | | | | ||
SEC/FINRA Expenses | | | 60,000 | | | 60,000 |
Travel and road show | | | | | ||
NYSE listing and filing fees | | | | | ||
Director and officer liability insurance premiums(4) | | | | | ||
Miscellaneous | | | | | ||
Total estimated offering expenses (other than underwriting commissions) | | | | | ||
Proceeds after estimated offering expenses | | | $ | | | |
Held in trust account(3) | | | $200,000,000 | | | $230,000,000 |
% of public offering size | | | 100% | | | 100% |
Not held in trust account | | | $ | | | $ |
| | Amount | | | % of Total | |
Legal, accounting, due diligence, travel, and other expenses in connection with any business combination | | | $400,000 | | | 40% |
Legal and accounting fees related to regulatory reporting obligations | | | 150,000 | | | 15% |
Payment for office space, administrative and support services | | | 240,000 | | | 24% |
NYSE continued listing fees | | | 58,000 | | | 6% |
Working capital to cover miscellaneous expenses and reserves | | | 152,000 | | | 15% |
Total | | | $1,000,000 | | | 100.0% |
(1) | Includes amounts payable to public stockholders who properly redeem their shares in connection with our successful completion of our initial business combination. |
(2) | A portion of the offering expenses will be paid from the proceeds of loans from our sponsor of up to $300,000 as described in this prospectus. As of March 31, 2021, we had $0 borrowings outstanding under the promissory note with our sponsor. These amounts will be repaid upon completion of this offering out of the proceeds from the sale of the private placement warrants. In the event that offering expenses are less than as set forth in this table, any such amounts will be used for post-closing working capital expenses. In the event that the offering expenses are more than as set forth in this table, we may fund such excess with the remaining funds from the sale of the private placement warrants or from borrowings from our sponsor. |
(3) | The underwriter has agreed to defer underwriting commissions equal to 3.5% of the gross proceeds of this offering. Upon and concurrently with the completion of our initial business combination, $7,000,000, which constitutes the underwriter’s deferred commissions (or $8,050,000 if the underwriter’s over-allotment option is exercised in full) will be paid to the underwriter from the funds held in the trust account. See “Underwriting.” The remaining funds, less amounts released to the trustee to pay redeeming stockholders, will be released to us and can be used to pay all or a portion of the purchase price of the business or businesses with which our initial business combination occurs or for general corporate purposes, including payment of principal or interest on indebtedness incurred in connection with our initial business combination, to fund the purchases of other companies or for working capital. The underwriter will not be entitled to any interest accrued on the deferred underwriting discounts and commissions. |
(4) | This amount represents the approximate amount of annual director and officer liability insurance premiums we anticipate paying following the completion of this offering and until we complete our initial business combination. |
(5) | These expenses are estimates only. Our actual expenditures for some or all of these items may differ from the estimates set forth herein. For example, we may incur greater legal and accounting expenses than our current estimates in connection with negotiating and structuring our initial business combination based upon the level of complexity of such business combination. In the event we identify a business combination target in a specific industry subject to specific regulations, we may incur additional expenses associated with legal due diligence and the engagement of special legal counsel. In addition, our staffing needs may vary and as a result, we may engage a number of consultants to assist with legal and financial due diligence. We do not anticipate any change in our intended use of proceeds, other than fluctuations among the current categories of allocated expenses, which fluctuations, to the extent they exceed current estimates for any specific category of expenses, would not be available for our expenses. The amount in the table above does not include interest available to us from the trust account. The proceeds held in the trust account will be invested only in U.S. government treasury obligations with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act which invest only in direct U.S. government treasury obligations. Assuming an interest rate of 0.1% per year, we estimate the interest earned on the trust account will be approximately $200,000 per year; however, we can provide no assurances regarding this amount. |
(6) | Includes estimated amounts that may also be used in connection with our initial business combination to fund a “no shop” provision and commitment fees for financing. |
| | Without Over-allotment | | | With Over-allotment | |
Public offering price | | | $10.00 | | | $10.00 |
Net tangible book deficit before this offering | | | | | ||
Increase attributable to public stockholders | | | | | ||
Pro forma net tangible book value after this offering and the sale of the private placement warrants | | | | | ||
Dilution to public stockholders | | | $ | | | $ |
Percentage of dilution to public stockholders | | | | | % |
| | Shares Purchased | | | Total Consideration | | | Average Price per Share | |||||||
| | Number | | | Percentage | | | Amount | | | Percentage | | |||
Class B common stock(1)(2) | | | 5,000,000 | | | 20.0% | | | $25,000 | | | 0.01% | | | $0.005 |
Public Stockholders | | | 20,000,000 | | | 80.0% | | | 200,000,000 | | | 99.99% | | | $10.00 |
| | 25,000,000 | | | 100.0% | | | $200,025,000 | | | 100.0% | | |
(1) | Assumes no exercise of the underwriter’s over-allotment option and the corresponding forfeiture of 750,000 shares of Class B common stock held by our sponsor. |
(2) | Assumes conversion of Class B common stock into Class A common stock on a one-for-one basis. The dilution to the public stockholders would increase to the extent that the anti-dilution provisions of the Class B common stock result in the issuance of shares of Class A common stock on a greater than one-to-one basis upon such conversion. |
| | Without Over-allotment | | | With Over-allotment | |
Numerator: | | | | | ||
Net tangible book deficit before this offering | | | $ | | | $ |
Net proceeds from this offering and sale of the private placement warrants(1) | | | | | ||
Plus: Offering costs accrued or paid in advance, excluded from tangible book value before this offering | | | | | ||
Less: Warrant Liability(2) | | | | | ||
Less: Deferred underwriting commissions | | | | | ||
Less: Proceeds held in trust subject to redemption | | | | | ||
| | $ | | | $ | |
Denominator: | | | | | ||
Class B common stock outstanding prior to this offering | | | | | ||
Class B forfeited if over-allotment option is not exercised | | | | | ||
Class A common stock included in the units offered | | | | | ||
Less: common stock subject to redemption | | | | | ||
| | | |
(1) | Expenses applied against gross proceeds include offering expenses of $2,500,000 and underwriting commissions of $4,000,000 or $4,600,000 if the underwriter exercises its over-allotment option (excluding deferred underwriting fees). See “Use of Proceeds.” |
(2) | The company will account for the 11,666,667 warrants to be issued in connection with this offering (including 5,000,000 public warrants and 6,666,667 private placement warrants assuming the underwriter’s over-allotment option is not exercised) in accordance with the guidance contained in ASC 815-40. Such guidance provides that because the warrants do not meet the criteria for equity treatment thereunder, each warrant must be recorded as a liability. |
| | March 31, 2021 | ||||
| | Actual | | | As Adjusted | |
Note payable to related party(2) | | | $— | | | $— |
Deferred underwriting commissions | | | —(1) | | | 7,000,000 |
Warrant liability(3) | | | | | ||
Class A common stock subject to possible redemption; actual and as adjusted, respectively(4) | | | —(1) | | | |
Stockholders’ equity: | | | | | ||
Preferred stock, $0.0001 par value per share, 1,000,000 preference shares authorized, actual and as adjusted; 0 preference shares issued and outstanding, actual and as adjusted | | | — | | | — |
Class A common stock, $0.0001 par value, 70,000,000 shares authorized (actual and as adjusted); no shares issued and outstanding (actual); shares issued and outstanding (excluding shares subject to redemption) (as adjusted) | | | — | | | |
Class B common stock, $0.0001 par value, 12,500,000 shares authorized, actual and as adjusted; 5,750,000 and 5,000,000 shares of Class B common stock issued and outstanding, actual and as adjusted, respectively(4) | | | 575 | | | 500 |
Additional paid-in capital(5) | | | | | ||
Accumulated deficit | | | | | ||
Total stockholders’ equity | | | | | ||
Total capitalization | | | $ | | | $ |
(1) | Assumes no exercise of the underwriter’s over-allotment option and the corresponding forfeiture of 750,000 shares of Class B common stock held by our sponsor. The proceeds of the sale of such shares will not be deposited into the trust account, the shares will not be eligible for redemption from the trust account nor will they be eligible to vote upon the initial business combination. |
(2) | Our sponsor has agreed to loan us up to $300,000 to be used for a portion of the expenses of this offering. As of March 31, 2021, we had $0 borrowings outstanding under the promissory note with our sponsor. |
(3) | The company will account for the 11,666,667 warrants to be issued in connection with this offering (including 5,000,000 public warrants and 6,666,667 private placement warrants assuming the underwriter’s over-allotment option is not exercised) in accordance with the guidance contained in ASC 815-40. Such guidance provides that because the warrants do not meet the criteria for equity treatment thereunder, each warrant must be recorded as a liability. The accounting treatment of derivative financial instruments requires that the company record a derivative liability upon the closing of this offering. Accordingly, the company will classify each warrant as a liability at its fair value and the warrants will be allocated a portion of the proceeds from the issuance of the units equal to its fair value determined by the Monte Carlo simulation. This liability is subject to re-measurement at each balance sheet date. With each such re-measurement, the warrant liability will be adjusted to fair value, with the change in fair value recognized in the company’s statement of operations. The company will reassess the classification at each balance sheet date. If the classification changes as a result of events during the period, the warrants will be reclassified as of the date of the event that causes the reclassification. |
(4) | Upon the completion of our initial business combination, we will provide our public stockholders with the opportunity to redeem their public shares for cash at a per share price equal to the aggregate amount then on deposit in the trust account calculated as of two business days prior to the consummation of the initial business combination, including interest earned on the funds held in the trust account and not previously released to us to pay our taxes, including franchise and income taxes, divided by the number of the then-outstanding public shares, subject to the limitations described herein whereby redemptions cannot cause our net tangible assets to be less than $5,000,001 following such redemptions, and any limitations (including, but not limited to, cash requirements) created by the terms of the proposed business combination. The “as adjusted” amount of our common stock subject to redemption equals the “as adjusted” total assets of $ , less the “as adjusted” total liabilities of $ , less the “as adjusted” total stockholders’ equity of $ . The value of shares of our Class A common stock that may be redeemed is equal to $10.00 per share (which is the assumed redemption price) multiplied by shares of our Class A common stock, which is the maximum number of shares of our Class A common stock that may be redeemed for a $10.00 purchase price per share and still allow us to maintain at least $5,000,001 of net tangible assets. |
(5) | The “as adjusted” additional paid-in capital calculation is equal to the “as adjusted” total stockholders’ equity of $ , minus Class A common stock (par value) of $ , minus Class B common stock (par value) of $ , plus the accumulated deficit of $ . |
• | may significantly dilute the equity interest of investors in this offering, which dilution would increase if the anti-dilution provisions in the Class B common stock resulted in the issuance of shares of Class A common stock on a greater than one-to-one basis upon conversion of the Class B common stock; |
• | may subordinate the rights of holders of our common stock if preferred stock is issued with rights senior to those afforded our common stock; |
• | could cause a change in control if a substantial number of shares of our common stock are issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors; |
• | may have the effect of delaying or preventing a change of control of us by diluting the stock ownership or voting rights of a person seeking to obtain control of us; |
• | may adversely affect prevailing market prices for our units, Class A common stock and/or warrants; and |
• | may not result in adjustment to the exercise price of the warrants. |
• | default and foreclosure on our assets if our operating revenues after an initial business combination |
• | are insufficient to repay our debt obligations; |
• | acceleration of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant; |
• | our immediate payment of all principal and accrued interest, if any, if the debt security is payable on demand; |
• | our inability to obtain necessary additional financing if the debt security contains covenants restricting our ability to obtain such financing while the debt security is outstanding; |
• | our inability to pay dividends on our common stock; |
• | using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on our common stock if declared, our ability to pay expenses, make capital expenditures and acquisitions and fund other general corporate purposes; |
• | limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate; |
• | increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation; |
• | limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, and execution of our strategy; and |
• | other purposes and other disadvantages compared to our competitors who have less debt. |
• | staffing for financial, accounting and external reporting areas, including segregation of duties; |
• | reconciliation of accounts; |
• | proper recording of expenses and liabilities in the period to which they relate; |
• | evidence of internal review and approval of accounting transactions; |
• | documentation of processes, assumptions and conclusions underlying significant estimates; and |
• | documentation of accounting policies and procedures. |
• | Beyond Meat & DailyPay (3 Board members) |
• | Skillz, Zipline, Sweetgreen, Equipment Share, Masterclass (2 Board members) |
• | Carta, Bird, Desktop Metal, Astra, Varo Money (1 Board Member) |
• | Jennifer Schretter, Partner at PROOF.VC |
• | Amos Ben Meir, Investor and Board Director at Sand Hill Angels |
• | Jai Choi, Founder of Tekton Ventures |
• | Angela Dalton, Founder of Signum Growth Capital |
• | Paul Grossinger, Co-Founder of Gaingels (Gaingels.com) |
• | Alex Gurevich, Managing Partner at Javelin Capital Partners |
• | Kent Madsen, Managing Partner of EPIC Ventures |
• | Steve Marcus, Co-Founder and General Partner of Riot Ventures |
• | Jordan Nof, Co-Founder and Managing Partner of Tusk Venture Partners |
• | Paul Willard, Silicon Valley early-stage investor |
• | been active investors in the technology sector; |
• | served on boards of directors; |
• | served on investment committees; |
• | founded companies; |
• | served as CEOs (including 3 public company CEOs); and |
• | served on public company boards. |
• | Broad experience and a track record of identifying breakout companies in targeted industries; |
• | Extensive experience consummating transactions across market cycles and in partnering with operators to drive exceptional results; |
• | Execution ability in complex acquisitions, venture capital, private equity, business operations, IPOs and post-SPAC IPO combination transactions (“deSPAC transactions”); |
• | Deep investment experience in the consumer and enterprise sectors with a focus on leveraging technology to drive transformational change in legacy industries; |
• | Track record of co-investing and collaboration by Backus, Harrison, Andrews, Suennen and Lerdal; |
• | Targeted experience screening opportunities and identifying companies with excellent management teams and partnering with them at the forefront of new industries; |
• | Broad and diverse network of operational, investment and transactional relationships, including the PROOF.VC network, to provide access to deal flow as well as experienced operators and management teams; |
• | Extensive experience operating businesses, allocating capital and managing risk across a broad array of markets; |
• | Experience managing the complexities of global public companies with a deep understanding of the interplay between macroeconomic events, global capital flows and evolving regulatory landscapes; |
• | Wide-ranging and meaningful relationships with a range of sellers such as private equity firms, entrepreneurs and companies, active and retired executives and financing providers to help source ideas and targets; |
• | Deep experience as operators, prudent risk-takers, business builders and managers at complex institutions; and |
• | History of serving on public and private boards and working with public companies to effect change. |
• | Is a good business today, with, we believe, the potential to be a great, category-leading business in the future; |
• | Has the ability to make the transition to become a public company and can benefit from being a public company with access to broader capital markets to help achieve the its business strategy and capital structure needs; |
• | Has a strong position within its industry with identified competitive advantages and defensible business strategies; |
• | Can benefit from our PAC I Team’s expertise and collective capabilities in transaction sourcing, deal execution, investing, and public company management; |
• | Has the potential to capitalize on disruptive technology or a business model with the potential for attractive prospective growth; |
• | Is focused on the enterprise software, health care, fintech or consumer end markets; |
• | Has products or services focused on a large total addressable market; |
• | Is capital efficient, with the potential for attractive returns on invested capital; |
• | Has sound business metrics and the potential to generate recurring revenue from customers; |
• | Has the potential to deploy capital for strategic growth initiatives or add-on acquisitions; |
• | Demonstrates growth potential and operates in an industry with positive end market trends, secular drivers and growth dynamics; and |
• | Has a strong and innovative management team aligned with shareholder interests. |
• | subject us to negative economic, competitive and regulatory developments, any or all of which may have a substantial adverse impact on the particular industry in which we operate after our initial business combination; and |
• | cause us to depend on the marketing and sale of a single product or limited number of products or services. |
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 |
• | We issue common stock that will be equal to or in excess of 20% of the number or voting power of our common stock then-outstanding (other than in a public offering); |
• | Any of our directors, officers or substantial security holders (as defined by the rules of the NYSE) has a 5% or greater interest, directly or indirectly, in the target business or assets to be acquired and if the number of shares of common stock to be issued, or if the number of shares of common stock into which the securities may be convertible or exercisable, exceeds either (a) 1% of the number of shares of common stock or 1% of the voting power outstanding before the issuance in the case of any of our directors and officers or (b) 5% of the number of shares of common stock or 5% of the voting power outstanding before the issuance in the case of any substantial security holders; or |
• | The issuance or potential issuance of common stock will result in our undergoing a change of control. |
• | the timing of the transaction, including in the event we determine stockholder approval would require additional time and there is either not enough time to seek stockholder approval or doing so would place the company at a disadvantage in the transaction or result in other additional burdens on the company; |
• | the expected cost of holding a stockholder vote; |
• | the risk that the stockholders would fail to approve the proposed business combination; |
• | other time and budget constraints of the company; and |
• | additional legal complexities of a proposed business combination that would be time-consuming and burdensome to present to stockholders. |
• | conduct the redemptions in conjunction with a proxy solicitation pursuant to Regulation 14A of the Exchange Act, which regulates the solicitation of proxies, and not pursuant to the tender offer rules; and |
• | file proxy materials with the SEC. |
• | conduct the redemptions pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, which regulate issuer tender offers; and |
• | file tender offer documents with the SEC prior to completing our initial business combination which contain substantially the same financial and other information about the initial business combination and the redemption rights as is required under Regulation 14A of the Exchange Act, which regulates the solicitation of proxies. Although we are not required to do so, we currently intend to comply with the substantive and procedural requirements of Regulation 14A in connection with any stockholder vote even if we are not able to maintain our NYSE listing or Exchange Act registration. |