Core Insights - Zefiro Methane Corp. has launched the Zefiro Lifecycle Solution (ZLS), which utilizes artificial intelligence for advanced modeling and analytics related to methane leak measurement and environmental attributes [1][3] - The ZLS platform aims to enhance transparency and visibility for stakeholders, including clients and government agencies, by providing a user-friendly dashboard [1][3] - The company has published a whitepaper detailing the ZLS platform, its components, and its alignment with market needs in sectors such as resources, energy, and commercial banking [3][4] Company Overview - Zefiro Methane Corp. specializes in environmental services focused on methane abatement and aims to be a key player in the Active Sustainability movement [8][9] - The company is building a comprehensive toolkit to address methane leaks and their impact on air, land, and water sources [8] - Zefiro's business model includes the scalable aggregation, verification, standardization, and delivery of environmental data for carbon credit issuance [4] Leadership and Expertise - Richard Walker, the Chief Technology Officer and Head of Environmental Markets Operations, authored the ZLS whitepaper and has over 30 years of experience in enterprise technology strategy [5][7] - Walker's background includes senior leadership roles at Bain & Company, Deloitte, IBM, and BearingPoint, contributing to Zefiro's competitive advantages [5][7] Collaboration and Partnerships - Zefiro has collaborated with entities such as CarbonAi, Keynum, and Geolabe to enhance the capabilities of the ZLS platform [4] - The company is focused on building partnerships with industry operators, state agencies, and federal governments to further its environmental initiatives [10]

Business Combination and Shareholder Actions - The Business Combination Agreement with SuperBac was mutually terminated on May 3, 2023, leading to the automatic termination of related agreements[37]. - Shareholders approved four proposals during the extraordinary general meeting on July 27, 2023, including the Extension Amendment Proposal, allowing the Company to extend the Business Combination deadline to August 3, 2024[47][48]. - If a Business Combination is not completed by August 3, 2024, the Company will initiate automatic winding up and liquidation[51]. - The Company extended the period to consummate its initial business combination by one month, from October 3, 2023, to November 3, 2023, with a deposit of $100,000 into the trust account[132]. Financial Position and Performance - As of September 30, 2023, the Company reported no cash and a working capital deficit of $247,481, raising doubts about its ability to continue as a going concern[50]. - The Company had cash of $0 and $44,659 as of September 30, 2023, and December 31, 2022, respectively, indicating a significant reduction in cash reserves[72]. - The Company held $68,616,837 in the Trust Account, a decrease from $222,726,270 as of December 31, 2022, primarily due to shareholder redemptions[73]. - The Class A ordinary shares subject to possible redemption decreased from $222,726,270 at the beginning of the year to $68,616,837 as of September 30, 2023, after accounting for redemptions of $(160,732,917)[77]. - For the three months ended September 30, 2023, the net income per ordinary share was $0.04 for both Class A and Class B shares, compared to a net loss of $(0.02) for the same period in 2022[65]. - For the nine months ended September 30, 2023, the net income per ordinary share was $0.27 for both Class A and Class B shares, compared to $0.04 for the same period in 2022[65]. Costs and Expenses - The Company incurred significant costs related to acquisition plans and expects to continue incurring such costs[50]. - Offering costs related to the Initial Public Offering totaled $11,761,739, with additional costs incurred from the partial exercise of the over-allotment option amounting to $1,078,624[62][63]. - The Company recognized a remeasurement of Class A ordinary shares subject to possible redemption amounting to $6,423,484 for the nine months ended September 30, 2023[77]. - The Company derecognized the advisory fee of $7,686,396 related to the deferred underwriting fee, as it is contingent upon payment[99]. - The underwriter was entitled to a deferred fee of $7,686,396, which was formally waived by the underwriter in July 2023[122]. Shareholder Transactions - On July 10, 2023, the Former Sponsor sold 4,400,283 Class B ordinary shares and 4,261,485 Private Warrants to the new Sponsor for a total of $250,000[38]. - Following the shareholder meeting, 15,446,457 Class A Ordinary Shares were redeemed at approximately $10.41 per share, totaling $160,732,917, leaving a balance of approximately $67,790,468 in the Trust Account[49]. - The Company completed a private placement of 4,000,000 Private Warrants at a price of $1.50 per warrant, generating gross proceeds of $6,000,000[83]. Accounting and Taxation - The financial statements do not include adjustments that might result from uncertainties related to the COVID-19 pandemic and the Russia-Ukraine war[52]. - The Company has not accrued any amounts for income taxes as it is considered an exempted Cayman Islands company with no income tax obligations[61]. - The Company is currently evaluating the impact of new accounting standards effective January 1, 2024, which may affect its financial position and results of operations[78]. - The accounting treatment for the warrants requires re-measurement at each balance sheet date, with changes in fair value recognized in the statement of operations[119]. Warrants and Shares - The Company had 7,320,377 Public Warrants and 4,261,485 Private Warrants outstanding[118]. - The fair value of the Public Warrants was $454,000 and the Private Warrants was $264,000 as of September 30, 2023[126]. - The Company recorded a derivative liability for the warrants at their fair value, which was $718,000 as of September 30, 2023, down from $1,874,437 as of December 31, 2022[123]. - The Company has the right to redeem Public Warrants when the price per Class A ordinary share equals or exceeds $10.00[115]. - The Company issued additional shares of Class A ordinary shares or equity-linked securities for capital raising purposes at an issue price of less than $9.20 per share, which could trigger adjustments to the exercise price of the warrants[115]. - The Company is authorized to issue 200,000,000 Class A ordinary shares, with 6,514,674 shares issued as of September 30, 2023[107]. - The Company has 5,490,283 Founder Shares outstanding, representing 20% of the total issued ordinary shares[108]. - The Public Warrants will become exercisable 12 months after the closing of the Initial Public Offering, with specific conditions for redemption at $0.01 per warrant if the share price exceeds $18.00[111][114].

[FORM 10-Q](index=1&type=section&id=FORM%2010-Q) This Quarterly Report (Form 10-Q) for Zalatoris II Acquisition Corp. covers the period ended June 30, 2023, outlining its regulatory classifications and share structure - The document is a **Quarterly Report (Form 10-Q)** for Zalatoris II Acquisition Corp. for the period ended June 30, 2023[2](index=2&type=chunk) - The registrant is classified as a **non-accelerated filer, smaller reporting company, emerging growth company, and a shell company**[3](index=3&type=chunk)[4](index=4&type=chunk) Trading Information | Title of each class | Trading Symbol(s) | Name of each exchange on which registered | | :---------------------------------------------------------------- | :---------------- | :--------------------------------------- | | Units, each consisting of one Class A ordinary share and one-third of one redeemable warrant | ZLSWU | The Nasdaq Stock Market LLC | | Class A ordinary share, par value $0.0001 per share | ZLS | The Nasdaq Stock Market LLC | | Redeemable warrants, each whole warrant exercisable for one Class A ordinary share at an exercise price of $11.50 per whole share | ZLSWW | The Nasdaq Stock Market LLC | - As of September 1, 2023, there were **6,514,674 Class A ordinary shares** and **5,490,283 Class B ordinary shares** issued and outstanding[4](index=4&type=chunk) [PART I. FINANCIAL INFORMATION](index=4&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section presents the unaudited financial statements, management's discussion and analysis, and disclosures on market risk and controls for Zalatoris II Acquisition Corp. [Item 1. Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20%28Unaudited%29) This item provides the unaudited condensed financial statements of Zalatoris II Acquisition Corp. for the quarter ended June 30, 2023, compared to prior periods, along with detailed notes explaining the company's organization, accounting policies, and significant transactions [Condensed Balance Sheets](index=4&type=section&id=Condensed%20Balance%20Sheets) This section presents the unaudited condensed balance sheets, detailing assets, liabilities, and shareholders' deficit as of June 30, 2023, and December 31, 2022 Condensed Balance Sheet Summary | Item | June 30, 2023 | December 31, 2022 | | :------------------------------------ | :------------ | :---------------- | | Total Assets | $227,848,209 | $223,004,418 | | Investments held in Trust Account | $227,731,980 | $222,726,270 | | Total Liabilities | $8,034,396 | $15,214,566 | | Total Shareholders' Deficit | $(7,918,167) | $(14,936,418) | - Current liabilities significantly decreased from **$5,353,733** at December 31, 2022, to **$0** at June 30, 2023, primarily due to the reclassification of accounts payable, accrued expenses, and accrued offering costs to additional paid-in capital[10](index=10&type=chunk) [Condensed Statements of Operations](index=5&type=section&id=Condensed%20Statements%20of%20Operations) This section presents the unaudited condensed statements of operations, detailing net income and other comprehensive income for the three and six months ended June 30, 2023 and 2022 Condensed Statements of Operations Summary | Item | Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Formation and operating costs | $53,108 | $1,385,461 | $661,493 | $2,641,003 | | Loss from operations | $(53,108) | $(1,385,461) | $(661,493) | $(2,641,003) | | Change in fair value of warrant liabilities | $710,083 | $2,925,096 | $1,526,437 | $3,987,713 | | Gain on securities held in trust | $2,646,288 | $287,683 | $5,005,710 | $302,107 | | Total other income | $3,344,958 | $3,253,643 | $6,498,380 | $4,300,681 | | Net income | $3,291,850 | $1,868,182 | $5,836,887 | $1,659,678 | | Basic and diluted net income per share (Class A/B) | $0.12 | $0.07 | $0.21 | $0.06 | - Net income for the three months ended June 30, 2023, increased by **76.2% year-over-year**, primarily driven by a significant gain on securities held in trust[12](index=12&type=chunk) - Net income for the six months ended June 30, 2023, increased by **251.7% year-over-year**, largely due to a substantial increase in gain on securities held in trust, despite a decrease in the gain from warrant liabilities[12](index=12&type=chunk) [Condensed Statements of Changes in Shareholders' Deficit](index=6&type=section&id=Condensed%20Statements%20of%20Changes%20in%20Shareholders%27%20Deficit) This section presents the unaudited condensed statements of changes in shareholders' deficit, outlining movements in equity components for the six months ended June 30, 2023 and 2022 - Total shareholders' deficit improved from **$(14,936,418)** at December 31, 2022, to **$(7,918,167)** at June 30, 2023[14](index=14&type=chunk) - A capital contribution from the Sponsor of **$6,187,074** was recorded in additional paid-in capital during the six months ended June 30, 2023[14](index=14&type=chunk) - Net income for the six months ended June 30, 2023, contributed **$5,836,887** to the reduction of accumulated deficit[14](index=14&type=chunk) [Condensed Statements of Cash Flows](index=7&type=section&id=Condensed%20Statements%20of%20Cash%20Flows) This section presents the unaudited condensed statements of cash flows, detailing cash movements from operating, investing, and financing activities for the six months ended June 30, 2023 and 2022 Condensed Statements of Cash Flows Summary | Item | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :------------------------------------ | :----------------------------- | :----------------------------- | | Net income | $5,836,887 | $1,659,678 | | Gain on securities held in trust | $(5,005,710) | $(302,107) | | Change in fair value of warrant liabilities | $(1,526,437) | $(3,987,713) | | Net cash provided by operating activities | $3,206 | $(297,521) | | Net cash provided by financing activities | $0 | $215,588 | | Net change in cash | $3,206 | $(81,933) | | Cash at end of period | $47,865 | $270,257 | - The company generated **positive net cash from operating activities of $3,206** for the six months ended June 30, 2023, a significant improvement from a net outflow of **$(297,521)** in the prior year[17](index=17&type=chunk) - Non-cash financing activities for the six months ended June 30, 2023, included a remeasurement of ordinary shares subject to possible redemption value of **$5,005,710** and capital contributions from the Former Sponsor totaling **$6,187,074**[17](index=17&type=chunk) [Notes To Condensed Financial Statements (Unaudited)](index=8&type=section&id=Notes%20To%20Condensed%20Financial%20Statements%20%28Unaudited%29) This section provides detailed notes to the unaudited condensed financial statements, explaining the company's organization, significant accounting policies, and key transactions [NOTE 1 — ORGANIZATION AND BUSINESS BACKGROUND](index=8&type=section&id=NOTE%201%20%E2%80%94%20ORGANIZATION%20AND%20BUSINESS%20BACKGROUND) This note details the company's formation as a blank check company, its IPO, the termination of a business combination, and subsequent sponsor changes and extension approvals - Zalatoris II Acquisition Corp. (formerly XPAC Acquisition Corp.) was incorporated on **March 11, 2021**, as a blank check company to effect a Business Combination[21](index=21&type=chunk) - The company consummated its Initial Public Offering (IPO) on **August 3, 2021**, raising **$200,000,000**, and an additional **$19,611,310** from a partial over-allotment exercise, with **$219,611,310** placed in a Trust Account[24](index=24&type=chunk)[25](index=25&type=chunk)[31](index=31&type=chunk) - On **May 3, 2023**, the company mutually agreed to terminate its Business Combination Agreement with SuperBac Biotechnology Solutions S.A.[45](index=45&type=chunk) - On **July 10, 2023**, J. Streicher Holdings, LLC became the new Sponsor, acquiring **4,400,283 Class B ordinary shares** and **4,261,485 Private Warrants** from the Former Sponsor for **$250,000**[46](index=46&type=chunk) - Shareholders approved an extension of the Business Combination deadline to **August 3, 2024**, and a name change to 'Zalatoris II Acquisition Corp.' on **July 27, 2023**[57](index=57&type=chunk)[59](index=59&type=chunk)[61](index=61&type=chunk) - In connection with the extension, **15,446,457 Class A Ordinary Shares** were redeemed for approximately **$160,732,917**, leaving approximately **$67,790,468** in the Trust Account[60](index=60&type=chunk) - The company's financial needs and significant costs raise substantial doubt about its ability to continue as a going concern for the next year, relying on potential funding from its Sponsor[61](index=61&type=chunk)[62](index=62&type=chunk) [NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES](index=19&type=section&id=NOTE%202%20%E2%80%94%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note outlines the significant accounting policies used in preparing the financial statements, including those for interim reporting, emerging growth companies, and warrant liabilities - The unaudited condensed financial statements are prepared in accordance with **GAAP** for interim financial information and **SEC regulations**[65](index=65&type=chunk) - As an 'emerging growth company,' the company has elected to delay the adoption of new or revised financial accounting standards until private companies are required to comply[66](index=66&type=chunk)[67](index=67&type=chunk) - The company is an exempted Cayman Islands company and is not subject to income taxes in the Cayman Islands or the United States, resulting in a **zero tax provision**[72](index=72&type=chunk) - Offering costs totaling **$11,761,739 (IPO)** and **$1,078,624 (over-allotment)** were recognized, allocated between accumulated deficit and additional paid-in capital based on warrant values[73](index=73&type=chunk)[74](index=74&type=chunk) - Warrants for ordinary shares not indexed to the company's own shares are accounted for as liabilities at fair value and remeasured at each balance sheet date, with changes recognized in the statement of operations[81](index=81&type=chunk) - Class A ordinary shares subject to possible redemption are classified as temporary equity at redemption value due to redemption rights outside the company's control[85](index=85&type=chunk) Class A Ordinary Shares Subject to Possible Redemption | Item | June 30, 2023 | December 31, 2022 | | :------------------------------------------ | :------------ | :---------------- | | Beginning Balance | $222,726,270 | $219,617,731 | | Plus: Remeasurement of carrying value to redemption value | $5,005,710 | $3,108,539 | | Class A ordinary shares subject to possible redemption | $227,731,980 | $222,726,270 | [NOTE 3 — INITIAL PUBLIC OFFERING](index=24&type=section&id=NOTE%203%20%E2%80%94%20INITIAL%20PUBLIC%20OFFERING) This note details the company's Initial Public Offering, including the number of units sold, proceeds raised, and the investment of funds in the Trust Account - On **August 3, 2021**, the company sold **20,000,000 Units** at **$10.00 per Unit**, each consisting of one Class A ordinary share and one-third of one Public Warrant[91](index=91&type=chunk) - On **August 19, 2021**, the underwriter partially exercised the over-allotment option, purchasing an additional **1,961,131 Units** for **$19,611,310**[92](index=92&type=chunk) - An aggregate of **$10.00 per Unit** sold in the IPO was held in the Trust Account, invested in U.S. government securities or money market funds[93](index=93&type=chunk) [NOTE 4 — PRIVATE PLACEMENT](index=24&type=section&id=NOTE%204%20%E2%80%94%20PRIVATE%20PLACEMENT) This note describes the private placement of warrants to the Former Sponsor and their subsequent transfer to the new Sponsor - Simultaneously with the IPO closing, the Former Sponsor purchased **4,000,000 Private Warrants** at **$1.50 per warrant** for **$6,000,000**[94](index=94&type=chunk) - An additional **261,485 Private Warrants** were sold to the Former Sponsor in connection with the over-allotment option exercise[96](index=96&type=chunk) - On **July 10, 2023**, the Former Sponsor sold and assigned **4,261,485 Private Warrants** to the new Sponsor as part of the Sponsor Handover transaction[97](index=97&type=chunk) [NOTE 5 — RELATED PARTY TRANSACTIONS](index=26&type=section&id=NOTE%205%20%E2%80%94%20RELATED%20PARTY%20TRANSACTIONS) This note details transactions with related parties, including the Former Sponsor's founder shares, promissory notes, and capital contributions - The Former Sponsor initially purchased **5,750,000 Founder Shares** for **$25,000**, with **5,490,283 shares** remaining outstanding after forfeiture[98](index=98&type=chunk) - On **July 10, 2023**, **4,400,283 Founder Shares** were sold by the Former Sponsor to the new Sponsor[100](index=100&type=chunk) - The Former Sponsor's **$300,000 Promissory Note** to the company was waived on **July 27, 2023**, and the balance was reclassified to additional paid-in capital as of June 30, 2023, due to expected reimbursement by Superbac or the Former Sponsor[102](index=102&type=chunk)[103](index=103&type=chunk)[105](index=105&type=chunk) - Superbac agreed to reimburse up to **$13.5 million** of Business Combination expenses to the Former Sponsor via a Reimbursement Agreement on **May 16, 2023**[112](index=112&type=chunk)[114](index=114&type=chunk) - Outstanding accounts payable, accrued expenses, Promissory Note, and due to/from Former Sponsor amounts (approximately **$6.2 million**) were de-recognized and reclassed to additional paid-in capital as an in-substance capital contribution[115](index=115&type=chunk) [NOTE 6 — SHAREHOLDERS' DEFICIT](index=30&type=section&id=NOTE%206%20%E2%80%94%20SHAREHOLDERS%27%20DEFICIT) This note outlines the company's authorized and outstanding share capital, including Class A and Class B ordinary shares, and their characteristics - The company is authorized to issue **1,000,000 preference shares** and **200,000,000 Class A ordinary shares**, with **21,961,131 Class A shares** issued (excluding those subject to redemption) as of June 30, 2023[117](index=117&type=chunk)[118](index=118&type=chunk) - There are **5,490,283 Class B ordinary shares (Founder Shares)** issued and outstanding, representing **20%** of the company's ordinary shares, which automatically convert to Class A shares upon a Business Combination[119](index=119&type=chunk)[120](index=120&type=chunk) - On **July 10, 2023**, **4,400,283 Founder Shares** were sold by the Former Sponsor to the new Sponsor[121](index=121&type=chunk) [NOTE 7 — WARRANT LIABILITIES](index=30&type=section&id=NOTE%207%20%E2%80%94%20WARRANT%20LIABILITIES) This note describes the terms and accounting treatment of the company's public and private warrants, including their exercisability, redemption features, and fair value measurement - Public Warrants become exercisable on the later of **12 months from the IPO closing** or **30 days after the completion of a Business Combination**[122](index=122&type=chunk) - The company may redeem Public Warrants at **$0.01 per warrant** if the Class A ordinary share price equals or exceeds **$18.00**, or at **$0.10 per warrant** if it equals or exceeds **$10.00** (with cashless exercise option)[126](index=126&type=chunk)[127](index=127&type=chunk)[135](index=135&type=chunk) - Private Warrants are identical to Public Warrants but are non-transferable/assignable for **30 days post-Business Combination** (with exceptions) and non-redeemable if held by initial purchasers or permitted transferees[131](index=131&type=chunk) - As of June 30, 2023, there were **7,320,377 Public Warrants** and **4,261,485 Private Warrants** outstanding[132](index=132&type=chunk) - Both Public and Private Warrants are classified as derivative liabilities at fair value, subject to remeasurement at each balance sheet date, with changes recognized in the statement of operations[132](index=132&type=chunk)[133](index=133&type=chunk) [NOTE 8 — COMMITMENTS AND CONTINGENCIES](index=34&type=section&id=NOTE%208%20%E2%80%94%20COMMITMENTS%20AND%20CONTINGENCIES) This note details the company's commitments and contingencies, including registration rights for securities and the deferred underwriting fee - Holders of Founder Shares and Private Warrants are entitled to **registration rights** for resale of their securities[134](index=134&type=chunk) - The underwriter was paid a cash underwriting discount of **$4,392,226** and was entitled to a deferred fee of **$7,686,396**[139](index=139&type=chunk) - On **July 10, 2023**, the underwriter formally waived the company's obligation to pay the deferred underwriting fee of **$7,686,396**[139](index=139&type=chunk) [NOTE 9 — RECURRING FAIR VALUE MEASUREMENTS](index=36&type=section&id=NOTE%209%20%E2%80%94%20RECURRING%20FAIR%20VALUE%20MEASUREMENTS) This note provides information on the fair value measurements of warrant liabilities and investments held in the Trust Account, including their classification within the fair value hierarchy Warrant Liabilities Fair Value | Item | June 30, 2023 | December 31, 2022 | | :-------------------- | :------------ | :---------------- | | Warrant liabilities | $348,000 | $1,874,437 | Fair Value Hierarchy | Item | As of June 30, 2023 (Level 1) | As of June 30, 2023 (Level 2) | As of December 31, 2022 (Level 1) | As of December 31, 2022 (Level 3) | | :------------------------------------ | :---------------------------- | :---------------------------- | :-------------------------------- | :-------------------------------- | | Investments held in the Trust Account | $227,731,980 | — | $222,726,270 | — | | Public Warrants | $220,000 | — | $1,184,437 | — | | Private Warrants | — | $128,000 | — | $690,000 | - Private Warrants were reclassified from Level 3 to Level 2 in the fair value hierarchy for the period ended June 30, 2023, as their value aligned with Public Warrants due to a make-whole provision[144](index=144&type=chunk) Private Warrant Liabilities Rollforward | Item | Private Warrant Liabilities | | :-------------------------------- | :------------------------ | | Fair value as of December 31, 2021 | $2,160,000 | | Change in fair value of warrant liabilities | $(1,470,000) | | Fair value as of December 31, 2022 | $690,000 | | Change in fair value of warrant liabilities | $(301,000) | | Fair value of as of March 31, 2023 | $389,000 | | Transfer out of Level 3 | $(389,000) | | Fair value of as of June 30, 2023 | $0 | [NOTE 10 — SUBSEQUENT EVENTS](index=37&type=section&id=NOTE%2010%20%E2%80%94%20SUBSEQUENT%20EVENTS) This note describes significant events occurring after the balance sheet date, including the waiver of underwriting fees, sponsor changes, and the extension of the business combination deadline - On **July 10, 2023**, the underwriter formally waived the **$7,686,396** deferred underwriting fee and the related advisory fee[149](index=149&type=chunk) - On **July 10, 2023**, J. Streicher Holdings, LLC became the new Sponsor, purchasing **4,400,283 Founder Shares** and **4,261,485 Private Warrants** from the Former Sponsor for **$250,000**[149](index=149&type=chunk) - Effective **July 27, 2023**, new directors and management were appointed, including Paul Davis as CEO and Llewellyn Farquharson as CFO, replacing the previous team[157](index=157&type=chunk)[158](index=158&type=chunk) - On **July 27, 2023**, the Former Sponsor waived its right to receive payment of the **$300,000** principal balance under the Promissory Note[156](index=156&type=chunk) - Shareholders approved proposals on **July 27, 2023**, to extend the Business Combination deadline to **August 3, 2024**, eliminate a redemption limitation, change the company's name to 'Zalatoris II Acquisition Corp.', and amend the Letter Agreement to allow Sponsor share transfers[160](index=160&type=chunk)[166](index=166&type=chunk)[167](index=167&type=chunk)[168](index=168&type=chunk)[169](index=169&type=chunk) - In connection with the Extension Amendment, **15,446,457 Class A Ordinary Shares** were redeemed for approximately **$160,732,917**, resulting in a Trust Account balance of approximately **$67,790,468**[173](index=173&type=chunk) - On **July 29, 2023**, the company entered into a **$1,500,000 non-interest bearing Working Capital Promissory Note** with the Sponsor, convertible into warrants[170](index=170&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=43&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition, results of operations, and liquidity, including an overview of its SPAC activities, recent developments such as the terminated SuperBac business combination and sponsor change, and a discussion of its going concern status [Cautionary Note Regarding Forward-Looking Statements](index=43&type=section&id=Cautionary%20Note%20Regarding%20Forward-Looking%20Statements) This section advises that the report contains forward-looking statements subject to risks and uncertainties, and actual results may differ materially from expectations - The report includes forward-looking statements subject to risks and uncertainties, and actual results may differ materially from expectations[176](index=176&type=chunk) [Overview](index=43&type=section&id=Overview) This section provides an overview of the company's formation as a blank check company, its IPO, and the initial funding of its Trust Account - The company is a blank check company formed on **March 11, 2021**, to effect a Business Combination[178](index=178&type=chunk) - The IPO on **August 3, 2021**, raised **$200,000,000** from **20,000,000 Units**, and a private placement of **4,000,000 Private Warrants** generated **$6,000,000**[179](index=179&type=chunk)[180](index=180&type=chunk) - Following the IPO, **$219,611,310** was placed in the Trust Account for public shareholders, invested in interest-bearing U.S. government securities[182](index=182&type=chunk) [Recent Developments](index=45&type=section&id=Recent%20Developments) This section details recent significant events, including the termination of a business combination agreement, the change in sponsor, and shareholder approvals for extensions and name change - The Business Combination Agreement with SuperBac Biotechnology Solutions S.A., entered into on **April 25, 2022**, was mutually terminated on **May 3, 2023**[185](index=185&type=chunk)[193](index=193&type=chunk) - SuperBac terminated the agreement due to unfavorable public market conditions, heightened volatility, and the failure to secure PIPE investments to meet the **$150,000,000 Minimum Cash Condition**[192](index=192&type=chunk) - On **July 10, 2023**, J. Streicher Holdings, LLC acquired Founder Shares and Private Warrants from the Former Sponsor for **$250,000**, becoming the new Sponsor[195](index=195&type=chunk) - Shareholders approved amendments on **July 27, 2023**, to extend the Business Combination deadline to **August 3, 2024**, eliminate a redemption limitation, change the company's name to 'Zalatoris II Acquisition Corp.', and allow Sponsor share transfers[204](index=204&type=chunk)[206](index=206&type=chunk)[207](index=207&type=chunk)[208](index=208&type=chunk) - The Former Sponsor waived its **$300,000 Promissory Note** to the company on **July 27, 2023**[203](index=203&type=chunk) [Results of Operations](index=50&type=section&id=Results%20of%20Operations) This section discusses the company's financial performance, highlighting net income drivers from trust account investments and warrant liability fair value changes - The company has not generated operating revenues; all activities relate to its formation, IPO, and search for a target business[208](index=208&type=chunk) Net Income Summary | Item | Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income | $3,291,850 | $1,868,182 | $5,836,887 | $1,659,678 | - Net income for the six months ended June 30, 2023, was primarily driven by a **$5,005,710 gain on investments held in the Trust Account** and a **$1,526,437 gain on the fair value of warrant liabilities**[209](index=209&type=chunk) [Liquidity, Capital Resources and Going Concern](index=50&type=section&id=Liquidity%2C%20Capital%20Resources%20and%20Going%20Concern) This section assesses the company's liquidity, capital resources, and its ability to continue as a going concern, given its reliance on sponsor funding and the business combination deadline - As of June 30, 2023, the company had **$47,865** in cash outside the Trust Account for working capital needs[211](index=211&type=chunk) - Significant costs incurred in acquisition plans and reliance on the Sponsor for potential working capital loans raise substantial doubt about the company's ability to continue as a going concern for the next year[215](index=215&type=chunk)[222](index=222&type=chunk) - If a Business Combination is not completed by **August 3, 2024**, the company will commence winding up, dissolution, and liquidation[223](index=223&type=chunk) - The Sponsor or its affiliates may provide Working Capital Loans, up to **$1,500,000** of which may be convertible into warrants, to fund deficiencies or transaction costs[218](index=218&type=chunk) [Off-Balance Sheet Financing Arrangements](index=54&type=section&id=Off-Balance%20Sheet%20Financing%20Arrangements) This section confirms that the company had no off-balance sheet financing arrangements as of June 30, 2023 - The company did not have any off-balance sheet arrangements as of June 30, 2023[224](index=224&type=chunk) [Contractual Obligations](index=54&type=section&id=Contractual%20Obligations) This section outlines the company's contractual obligations, noting no long-term debt or lease obligations and administrative service fees - As of June 30, 2023, the company had no long-term debt, capital, or operating lease obligations[225](index=225&type=chunk) - The Sponsor may charge a **$10,000 per month fee** for administrative services, but no amounts have been charged or accrued as of June 30, 2023[225](index=225&type=chunk) [Critical Accounting Policies](index=54&type=section&id=Critical%20Accounting%20Policies) This section highlights the critical accounting policies that require significant management judgments and estimates in the preparation of financial statements - The preparation of financial statements requires management to make significant judgments and estimates, which are inherently uncertain and may differ from actual results[226](index=226&type=chunk) [Recent Accounting Standards](index=55&type=section&id=Recent%20Accounting%20Standards) This section discusses the company's evaluation of recent accounting standards and their anticipated impact on its financial statements - The company is evaluating **ASU No. 2020-06 (Debt with Conversion and other Options)** and **ASU 2022-03 (Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions)**, both effective for fiscal years beginning after December 15, 2023, for smaller reporting companies[228](index=228&type=chunk)[229](index=229&type=chunk) - Based on current information, the company has concluded that no new accounting pronouncements will have a material impact on its results of operations, financial condition, or cash flows[230](index=230&type=chunk) [JOBS Act](index=55&type=section&id=JOBS%20Act) This section explains the company's election as an 'emerging growth company' under the JOBS Act, allowing for delayed adoption of accounting standards and reduced reporting requirements - As an 'emerging growth company' under the JOBS Act, the company has elected to delay the adoption of new or revised accounting standards to align with private company effective dates[231](index=231&type=chunk) - The company may rely on other reduced reporting requirements, including exemptions from Section 404 attestation and certain executive compensation disclosures[232](index=232&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=55&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, Zalatoris II Acquisition Corp. is not required to provide detailed quantitative and qualitative disclosures about market risk - The company is a smaller reporting company and is not required to provide quantitative and qualitative disclosures about market risk[233](index=233&type=chunk) [Item 4. Controls and Procedures](index=55&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were not effective as of June 30, 2023, due to material weaknesses in internal control over financial reporting related to the classification of redeemable ordinary shares and the recognition of business combination costs. Remediation efforts are underway - Management concluded that disclosure controls and procedures were **not effective** as of June 30, 2023, due to material weaknesses in internal control over financial reporting[237](index=237&type=chunk) - Material weaknesses included improper classification of Class A redeemable ordinary shares and improper recognition of Business Combination Costs as liabilities and expenses[240](index=240&type=chunk)[242](index=242&type=chunk) - Previously issued financial statements (as of December 31, 2021, and March 31, 2022) should no longer be relied upon and require restatement[245](index=245&type=chunk) - The company is implementing a remediation plan, including enhanced access to accounting literature and increased communication among personnel and third-party accounting professionals[246](index=246&type=chunk) [PART II. OTHER INFORMATION](index=60&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section provides additional information not covered in Part I, including legal proceedings, risk factors, unregistered sales of equity, and exhibits [Item 1. Legal Proceedings](index=60&type=section&id=Item%201.%20Legal%20Proceedings) The company reported no legal proceedings - There are no legal proceedings to report[248](index=248&type=chunk) [Item 1A. Risk Factors](index=60&type=section&id=Item%201A.%20Risk%20Factors) The company refers to the risk factors described in its annual report on Form 10-K for the year ended December 31, 2022, noting no material changes as of the date of this Quarterly Report, except as disclosed - Risk factors are described in the annual report on Form 10-K for the year ended December 31, 2022[249](index=249&type=chunk) - No material changes to the risk factors have occurred as of the date of this Quarterly Report, except as disclosed[249](index=249&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=60&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This item details the unregistered sale of Class B ordinary shares (Founder Shares) to the Former Sponsor in March 2021, which were issued to cover certain expenses - In **March 2021**, the Former Sponsor purchased **5,750,000 Class B ordinary shares** for **$25,000** to cover certain expenses[250](index=250&type=chunk) - These securities were issued pursuant to the exemption from registration contained in **Section 4(a)(2) of the Securities Act**[250](index=250&type=chunk) - In **May 2021**, the Former Sponsor transferred **30,000 Founder Shares** to each of three independent directors[250](index=250&type=chunk) [Item 3. Defaults Upon Senior Securities](index=60&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities - There are no defaults upon senior securities to report[252](index=252&type=chunk) [Item 4. Mine Safety Disclosures](index=60&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Mine Safety Disclosures are not applicable to the company[253](index=253&type=chunk) [Item 5. Other Information](index=60&type=section&id=Item%205.%20Other%20Information) The company reported no other information - There is no other information to report[254](index=254&type=chunk) [Item 6. Exhibits](index=61&type=section&id=Item%206.%20Exhibits) This item lists all exhibits filed as part of the Form 10-Q, including amendments to the memorandum and articles of association, various agreements related to the Sponsor Handover, certifications, and XBRL documents - The exhibits include amendments to the Amended and Restated Memorandum and Articles of Association, the Purchase and Sponsor Handover Agreement, amendments and joinders to the Letter Agreement, a Waiver to the Promissory Note, CEO/CFO certifications, and XBRL Instance Documents[257](index=257&type=chunk) [SIGNATURES](index=62&type=section&id=SIGNATURES) This section contains the official signatures of the Chief Executive Officer and Chief Financial Officer, certifying the report - The report was signed by Paul Davis, Chief Executive Officer, and Llewellyn Farquharson, Chief Financial Officer, on **September 1, 2023**[262](index=262&type=chunk)

[PART I - FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) This section presents the unaudited condensed financial statements and management's discussion and analysis for the period ended March 31, 2023 [Item 1. Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents XPAC Acquisition Corp.'s unaudited condensed financial statements and comprehensive notes for Q1 2023 [Condensed Balance Sheets](index=4&type=section&id=Condensed%20Balance%20Sheets) Presents the company's financial position, including assets, liabilities, and shareholders' deficit, as of March 31, 2023, and December 31, 2022 | Metric | As of March 31, 2023 | As of December 31, 2022 | | :------------------------------------ | :------------------- | :---------------------- | | **Assets** | | | | Cash | $10,640 | $44,659 | | Investments held in Trust Account | $225,085,692 | $222,726,270 | | Total assets | $225,282,259 | $223,004,418 | | **Liabilities** | | | | Accounts payable | $122,721 | $295,328 | | Accrued expenses | $5,418,212 | $4,966,405 | | Total current liabilities | $5,902,891 | $5,353,733 | | Warrant liabilities | $1,058,083 | $1,874,437 | | Total liabilities | $14,947,370 | $15,214,566 | | **Shareholders' Deficit** | | | | Class A ordinary shares subject to possible redemption | $225,085,692 | $222,726,270 | | Total shareholders' deficit | $(14,750,803) | $(14,936,418) | | Total liabilities and shareholders' deficit | $225,282,259 | $223,004,418 | [Condensed Statements of Operations](index=5&type=section&id=Condensed%20Statements%20of%20Operations) Details the company's revenues, expenses, and net income or loss for the three months ended March 31, 2023 and 2022 | Metric | For the three months ended March 31, 2023 | For the three months ended March 31, 2022 | | :------------------------------------------------ | :---------------------------------------- | :---------------------------------------- | | Formation and operating costs | $(608,385) | $(1,255,542) | | Loss from operations | $(608,385) | $(1,255,542) | | Change in fair value of warrant liabilities | $816,354 | $1,062,617 | | Gain on securities held in trust | $2,359,422 | $14,424 | | Foreign exchange loss | $(22,366) | $(30,003) | | Total other income | $3,153,422 | $1,047,038 | | Net income (loss) | $2,545,037 | $(208,504) | | Basic and diluted net income (loss) per share, redeemable Class A ordinary shares | $0.09 | $(0.01) | | Basic and diluted net income (loss) per share, non-redeemable Class B ordinary shares | $0.09 | $(0.01) | [Condensed Statements of Changes In Shareholders' Deficit](index=6&type=section&id=Condensed%20Statements%20of%20Changes%20In%20Shareholders'%20Deficit) Outlines changes in the company's shareholders' deficit, including net income/loss and remeasurement of Class A shares, for Q1 2023 and 2022 | Metric | Balance – December 31, 2022 | Remeasurement of Class A shares | Net income | Balance – March 31, 2023 | | :-------------------------------- | :-------------------------- | :------------------------------ | :--------- | :----------------------- | | Total Shareholders' Deficit | $(14,936,418) | $(2,359,422) | $2,545,037 | $(14,750,803) | | Metric | Balance – December 31, 2021 (Restated) | Remeasurement of Class A shares | Net loss | Balance – March 31, 2022 (Restated) | | :-------------------------------- | :------------------------------- | :------------------------------ | :--------- | :-------------------------------- | | Total Shareholders' Equity (Deficit) | $(13,739,334) | $(14,424) | $(208,504) | $(13,962,262) | [Condensed Statements of Cash Flows](index=7&type=section&id=Condensed%20Statements%20of%20Cash%20Flows) Summarizes cash inflows and outflows from operating, investing, and financing activities for the three months ended March 31, 2023 and 2022 | Metric | For the three months ended March 31, 2023 | For the three months ended March 31, 2022 | | :------------------------------------ | :---------------------------------------- | :---------------------------------------- | | Net cash used in operating activities | $(34,019) | $(259,788) | | Net cash provided by financing activities | — | $215,588 | | Net change in cash | $(34,019) | $(44,200) | | Cash at beginning of period | $44,659 | $352,190 | | Cash at end of period | $10,640 | $307,990 | | Non-cash financing activities: Remeasurement of ordinary shares subject to possible redemption value | $2,359,422 | $14,423 | [Notes To Condensed Financial Statements (Unaudited)](index=8&type=section&id=Notes%20To%20Condensed%20Financial%20Statements%20(Unaudited)) Detailed notes explain the company's organization, accounting policies, IPO, related party transactions, warrant liabilities, and subsequent events [NOTE 1 — ORGANIZATION AND BUSINESS BACKGROUND](index=8&type=section&id=NOTE%201%20%E2%80%94%20ORGANIZATION%20AND%20BUSINESS%20BACKGROUND) XPAC Acquisition Corp. is a SPAC formed in March 2021 to pursue a business combination. It completed an IPO in August 2021, raising over $200 million, which is held in a Trust Account. The company recently terminated its proposed business combination with SuperBac and is now considering accelerating its liquidation - XPAC Acquisition Corp. was incorporated on March 11, 2021, as a blank check company for the purpose of entering into a business combination[20](index=20&type=chunk) - The company consummated its Initial Public Offering (IPO) on August 3, 2021, selling **20,000,000 Units** at **$10.00 per Unit**, generating gross proceeds of **$200,000,000**. An additional **1,961,131 Units** were purchased via over-allotment, generating **$19,611,310**[23](index=23&type=chunk)[24](index=24&type=chunk) - An aggregate of **$219,611,310** (**$10.00 per Unit**) from the IPO and private warrant sales was deposited into a Trust Account, invested in U.S. government treasury bills or money market funds[25](index=25&type=chunk)[28](index=28&type=chunk) - The Business Combination Agreement with SuperBac Biotechnology Solutions S.A. was mutually terminated on **May 3, 2023**[41](index=41&type=chunk) - The company's board of directors determined it is very unlikely to complete an initial business combination and plans to accelerate the Original Termination Date, filing a preliminary Accelerated Liquidation Proxy Statement on **May 8, 2023**[42](index=42&type=chunk)[45](index=45&type=chunk) [NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES](index=15&type=section&id=NOTE%202%20%E2%80%94%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) Outlines accounting principles, including GAAP, emerging growth company status, and policies for estimates, taxes, and warrant liabilities - The unaudited condensed financial statements are prepared in accordance with GAAP for interim financial information and SEC rules[47](index=47&type=chunk) - The company is an 'emerging growth company' and has elected not to opt out of the extended transition period for complying with new or revised financial accounting standards[48](index=48&type=chunk)[50](index=50&type=chunk) - The company is an exempted Cayman Islands company and is not subject to income taxes in the Cayman Islands or the United States, resulting in a **zero tax provision**[55](index=55&type=chunk) - Warrants for ordinary shares not indexed to its own shares are accounted for as liabilities at fair value and are subject to remeasurement at each balance sheet date[64](index=64&type=chunk) - Class A ordinary shares subject to possible redemption are classified as temporary equity at redemption value due to redemption rights outside the company's control[68](index=68&type=chunk) [NOTE 3 — INITIAL PUBLIC OFFERING](index=21&type=section&id=NOTE%203%20%E2%80%94%20INITIAL%20PUBLIC%20OFFERING) Details the Initial Public Offering (IPO) on August 3, 2021, where 20,000,000 Units were sold at $10.00 each, and a partial over-allotment option was exercised, bringing total proceeds to $219,611,310, which was placed in the Trust Account - On August 3, 2021, the Company sold **20,000,000 Units** at **$10.00 per Unit**, each consisting of one Class A ordinary share and one-third of one Public Warrant[73](index=73&type=chunk) - On August 19, 2021, the underwriter partially exercised the over-allotment option, purchasing an additional **1,961,131 Units** for **$19,611,310**[74](index=74&type=chunk) - An aggregate of **$10.00 per Unit** sold in the IPO was held in the Trust Account, invested in U.S. government securities or money market funds[75](index=75&type=chunk) [NOTE 4 — PRIVATE PLACEMENT](index=21&type=section&id=NOTE%204%20%E2%80%94%20PRIVATE%20PLACEMENT) The Sponsor purchased 4,000,000 Private Warrants for $6,000,000 simultaneously with the IPO, and an additional 261,485 Private Warrants for $392,228 with the over-allotment exercise. Proceeds from these sales were added to the Trust Account - The Sponsor purchased **4,000,000 Private Warrants** at **$1.50 per warrant** for **$6,000,000** simultaneously with the IPO[76](index=76&type=chunk) - An additional **261,485 Private Warrants** were sold to the Sponsor for **$392,228** with the over-allotment exercise[74](index=74&type=chunk)[76](index=76&type=chunk) - Proceeds from the sale of Private Warrants were added to the Trust Account and will be used to fund Public Share redemption if no Business Combination is completed, otherwise Private Warrants expire worthless[76](index=76&type=chunk) [NOTE 5 — RELATED PARTY TRANSACTIONS](index=21&type=section&id=NOTE%205%20%E2%80%94%20RELATED%20PARTY%20TRANSACTIONS) This note details various transactions and agreements with related parties, primarily the Sponsor, including Founder Shares, a promissory note, and advisory services - The Sponsor purchased **5,750,000 Class B ordinary shares** (Founder Shares) for **$25,000**, with **259,717 shares forfeited**, resulting in **5,490,283 outstanding**[77](index=77&type=chunk) - A non-interest bearing promissory note from the Sponsor allows the Company to borrow up to **$300,000**, with **$300,000 outstanding** as of March 31, 2023[80](index=80&type=chunk) - XP Investimentos, an affiliate of the Sponsor, received a **$1,725,443 fee** for financial consulting services and is entitled to an additional **$2,690,239** if a Business Combination is consummated[84](index=84&type=chunk)[85](index=85&type=chunk) - The Sponsor or its affiliates may provide Working Capital Loans, up to **$1,500,000** of which may be convertible into warrants, but no outstanding borrowings existed as of March 31, 2023[81](index=81&type=chunk) [NOTE 6 — SHAREHOLDERS' DEFICIT](index=24&type=section&id=NOTE%206%20%E2%80%94%20SHAREHOLDERS'%20DEFICIT) The company is authorized to issue preference shares (none outstanding), Class A ordinary shares (21,961,131 issued, none outstanding excluding those subject to redemption), and Class B ordinary shares (5,490,283 issued and outstanding, representing 20% of total outstanding shares). Class B shares convert to Class A upon business combination - The Company is authorized to issue **1,000,000 preference shares**, but none are issued or outstanding[88](index=88&type=chunk) - **200,000,000 Class A ordinary shares** are authorized, with **21,961,131 issued** and none outstanding (excluding those subject to possible redemption)[89](index=89&type=chunk) - **20,000,000 Class B ordinary shares** are authorized, with **5,490,283 issued and outstanding**, representing **20%** of the Company's issued and outstanding ordinary shares[90](index=90&type=chunk) - Class B ordinary shares will automatically convert into Class A ordinary shares on a one-for-one basis at the time of a Business Combination, subject to adjustment[91](index=91&type=chunk) [NOTE 7 — WARRANT LIABILITIES](index=24&type=section&id=NOTE%207%20%E2%80%94%20WARRANT%20LIABILITIES) This note details the terms of Public and Private Warrants, including exercise conditions, registration requirements, and redemption triggers, with warrants accounted for as derivative liabilities at fair value - Public Warrants become exercisable on the later of **12 months** from IPO closing or **30 days** after the completion of a Business Combination[93](index=93&type=chunk) - The Company may redeem Public Warrants at **$0.01 per warrant** if the Class A ordinary share price equals or exceeds **$18.00** for **20 trading days** within a **30-trading day period**[96](index=96&type=chunk) - The Company may also redeem Public Warrants at **$0.10 per warrant** if the Class A ordinary share price equals or exceeds **$10.00**, with holders able to exercise on a cashless basis[97](index=97&type=chunk) - Private Warrants are identical to Public Warrants but are non-transferable/assignable for **30 days** post-Business Combination and are non-redeemable as long as held by initial purchasers or permitted transferees[99](index=99&type=chunk) - Both Public and Private Warrants are classified as derivative liabilities at fair value and are subject to re-measurement at each balance sheet date[100](index=100&type=chunk)[101](index=101&type=chunk) [NOTE 8 — COMMITMENTS AND CONTINGENCIES](index=28&type=section&id=NOTE%208%20%E2%80%94%20COMMITMENTS%20AND%20CONTINGENCIES) This note outlines commitments including registration rights for Founder Shares and Private Warrants, and the underwriting agreement, specifying cash discount paid and a deferred fee contingent on business combination completion - Holders of Founder Shares and Private Warrants are entitled to registration rights[102](index=102&type=chunk) - A cash underwriting discount of **$4,392,226** was paid upon closing of the IPO and partial over-allotment exercise[104](index=104&type=chunk) - A deferred fee of **$7,686,396** is held in the Trust Account, to be released to the underwriter only upon completion of a Business Combination, and will be waived if no Business Combination occurs[104](index=104&type=chunk) - Of the deferred fee, **$2,690,239** will be paid to XP Investimentos, an affiliate, as an advisory fee[104](index=104&type=chunk) [NOTE 9 — RECURRING FAIR VALUE MEASUREMENTS](index=30&type=section&id=NOTE%209%20%E2%80%94%20RECURRING%20FAIR%20VALUE%20MEASUREMENTS) This note details the fair value measurement of warrant liabilities, classified as Level 1 (Public Warrants) and Level 3 (Private Warrants), with Level 3 estimated using a Monte Carlo simulation model | Metric | As of March 31, 2023 | As of December 31, 2022 | | :-------------------- | :------------------- | :---------------------- | | Warrant liabilities | $1,058,083 | $1,874,437 | - Public Warrants are classified as Level 1 (unadjusted, quoted prices on active market exchanges), while Private Warrants are classified as Level 3 (unobservable inputs, estimated using a Monte Carlo simulation model)[108](index=108&type=chunk)[109](index=109&type=chunk)[112](index=112&type=chunk) Key Inputs for Private Warrant Liabilities Valuation (Monte Carlo Model) | Input | March 31, 2023 | December 31, 2022 | | :-------------------- | :------------- | :---------------- | | Share price | $10.20 | $10.00 | | Exercise price | $11.50 | $11.50 | | Risk-free rate | 3.57% | 3.95% | | Expected term of warrants | 5.08 years | 5.08 years | | Volatility | 0.001% | 0.001% | [NOTE 10 — SUBSEQUENT EVENTS](index=32&type=section&id=NOTE%2010%20%E2%80%94%20SUBSEQUENT%20EVENTS) Subsequent to the balance sheet date, the Business Combination Agreement with SuperBac was mutually terminated on May 3, 2023. The board determined it is unlikely to complete another business combination and plans to accelerate the liquidation date, filing a preliminary proxy statement for shareholder approval on May 8, 2023 - Effective **May 3, 2023**, the Business Combination Agreement with SuperBac was mutually terminated[115](index=115&type=chunk) - The Company's board of directors determined it is very unlikely to complete an initial business combination and resolved to accelerate the Original Termination Date[115](index=115&type=chunk) - On **May 8, 2023**, the Company filed a preliminary Accelerated Liquidation Proxy Statement with the SEC for shareholder approval of the accelerated termination[115](index=115&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=33&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition and operational results, covering its SPAC overview, recent developments, liquidity, and accounting policies [Overview](index=33&type=section&id=Overview) Provides a general overview of XPAC Acquisition Corp. as a blank check company, its IPO, and the recent decision to accelerate liquidation - XPAC Acquisition Corp. is a blank check company incorporated on **March 11, 2021**, for the purpose of effecting a Business Combination, with a focus on Brazil[118](index=118&type=chunk) - The company consummated its IPO on **August 3, 2021**, selling **20,000,000 Units** at **$10.00 per Unit**, and completed a private placement of **4,000,000 Private Warrants** to its Sponsor for **$1.50 per warrant**[120](index=120&type=chunk)[121](index=121&type=chunk) - Following the IPO, **$219,611,310** was placed in the Trust Account for the benefit of Public Shareholders[124](index=124&type=chunk) - On **May 3, 2023**, the board determined it is very unlikely to complete an initial business combination before the Original Termination Date[119](index=119&type=chunk) [Recent Developments](index=35&type=section&id=Recent%20Developments) The proposed business combination with SuperBac was mutually terminated on May 3, 2023, due to unfavorable market conditions, leading the board to resolve to accelerate the company's liquidation [Terminated SuperBac Business Combination](index=35&type=section&id=Terminated%20SuperBac%20Business%20Combination) Details the mutual termination of the SuperBac Business Combination Agreement on May 3, 2023, citing unfavorable market conditions and failure to meet the Minimum Cash Condition - The Business Combination Agreement with SuperBac, entered into on **April 25, 2022**, was mutually terminated on **May 3, 2023**[127](index=127&type=chunk)[135](index=135&type=chunk) - Reasons for termination included prevailing unfavorable public market conditions, heightened volatility, and the fact that no PIPE investments had been secured to meet the **$150,000,000 Minimum Cash Condition**[134](index=134&type=chunk) - Upon termination, related agreements such as the Sponsor Support Agreement, Voting and Support Agreement, Lock-up Agreements, and Investment Agreement were automatically terminated[135](index=135&type=chunk) [Proposed Extraordinary General Meeting to Consider the Accelerated Shareholder Termination Matters](index=36&type=section&id=Proposed%20Extraordinary%20General%20Meeting%20to%20Consider%20the%20Accelerated%20Shareholder%20Termination%20Matters) The board resolved to accelerate the termination date, and an Extraordinary General Meeting will be convened for shareholders to vote on amending governing documents and the Trust Agreement - On **May 3, 2023**, the Company's board of directors resolved to accelerate the Original Termination Date to a date to be determined in due course, deeming it unlikely to complete another business combination[137](index=137&type=chunk) - An Extraordinary General Meeting will be convened for shareholders to vote on amending the company's governing documents and the Trust Agreement to accelerate the termination date[139](index=139&type=chunk)[141](index=141&type=chunk) - If approved, the company will cease operations, redeem Public Shares, liquidate, and voluntarily delist from Nasdaq; Public and Private Warrants would expire worthless[139](index=139&type=chunk) - A preliminary Accelerated Liquidation Proxy Statement was filed with the SEC on **May 8, 2023**[141](index=141&type=chunk) [Results of Operations](index=40&type=section&id=Results%20of%20Operations) Analyzes the company's financial performance, noting no operating revenues and non-operating income from trust account interest and warrant fair value changes - The company has not generated any operating revenues to date, with activities focused on formation, IPO, and searching for a target business[145](index=145&type=chunk) - Non-operating income is generated from interest income from Trust Account proceeds and changes in the fair value of warrant liabilities[145](index=145&type=chunk) Net Income (Loss) Comparison | Metric | For the three months ended March 31, 2023 | For the three months ended March 31, 2022 | | :------------------------------------ | :---------------------------------------- | :---------------------------------------- | | Net income (loss) | $2,545,037 | $(208,504) | | Gain on fair value of warrant liabilities | $816,354 | $1,062,617 | | Gain on securities held in trust | $2,359,422 | $14,424 | | Foreign exchange loss | $(22,366) | $(30,003) | | Formation and operating costs | $(608,385) | $(1,255,542) | [Liquidity, Capital Resources and Going Concern](index=40&type=section&id=Liquidity,%20Capital%20Resources%20and%20Going%20Concern) Assesses the company's liquidity, capital resources, and going concern status, highlighting limited cash and a significant working capital deficit Liquidity Snapshot (March 31, 2023) | Metric | Amount | | :-------------------------- | :------- | | Cash outside Trust Account | $10,640 | | Working Capital Deficit | $(5,706,324) | - The company's limited cash and significant working capital deficit, coupled with the terminated business combination, raise substantial doubt about its ability to continue as a going concern[152](index=152&type=chunk)[159](index=159&type=chunk) - The Sponsor or its affiliates may provide Working Capital Loans, but are not obligated to do so[152](index=152&type=chunk)[155](index=155&type=chunk) - If a Business Combination is not completed by **August 3, 2023** (or an accelerated date), the company will commence winding up, dissolution, and liquidation[160](index=160&type=chunk) [Off-Balance Sheet Financing Arrangements](index=44&type=section&id=Off-Balance%20Sheet%20Financing%20Arrangements) Confirms the absence of any off-balance sheet financing arrangements as of March 31, 2023 - The company did not have any off-balance sheet arrangements as of **March 31, 2023**[161](index=161&type=chunk) [Contractual Obligations](index=44&type=section&id=Contractual%20Obligations) States that the company had no long-term debt, capital, or operating lease obligations as of March 31, 2023, and the Sponsor waived administrative service fees - As of **March 31, 2023**, the company had no long-term debt, capital, or operating lease obligations[162](index=162&type=chunk) - The Sponsor has not charged, and does not intend to charge, the **$10,000 per month** fee for administrative services under the administrative services agreement[162](index=162&type=chunk) [Critical Accounting Policies](index=44&type=section&id=Critical%20Accounting%20Policies) Highlights that management's discussion and analysis are based on unaudited condensed financial statements prepared under U.S. GAAP, requiring significant judgments and estimates - Management's discussion and analysis are based on unaudited condensed financial statements prepared in accordance with U.S. GAAP, requiring significant judgments and estimates[163](index=163&type=chunk) [Recent Accounting Standards](index=45&type=section&id=Recent%20Accounting%20Standards) Discusses the company's evaluation of new accounting standards, ASU No. 2020-06 and ASU 2022-03, and the expectation of no material impact from other pronouncements - The company is evaluating the effect of ASU No. 2020-06 (Debt with Conversion and other Options) and ASU 2022-03 (Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions), both effective for fiscal years beginning after **December 15, 2023**[164](index=164&type=chunk)[165](index=165&type=chunk) - No other new accounting pronouncements are expected to have a material impact on the company's financial position, results of operations, or cash flows[166](index=166&type=chunk) [JOBS Act](index=45&type=section&id=JOBS%20Act) Explains the company's status as an 'emerging growth company' under the JOBS Act, allowing for delayed adoption of accounting standards and reduced reporting requirements - The company qualifies as an 'emerging growth company' under the JOBS Act[167](index=167&type=chunk) - The company elects to delay the adoption of new or revised accounting standards, aligning with effective dates for private companies[167](index=167&type=chunk) - The company may rely on reduced reporting requirements, including exemptions from independent registered public accounting firm attestation reports on internal control and certain executive compensation disclosures[168](index=168&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=45&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As of March 31, 2023, the company was not subject to material market or interest rate risk, with Trust Account funds invested in short-term U.S. government treasury obligations or money market funds - As of **March 31, 2023**, the company was not subject to any material market or interest rate risk[169](index=169&type=chunk) - Net proceeds in the Trust Account are invested in short-term U.S. government treasury obligations or money market funds, resulting in no material exposure to interest rate risk[169](index=169&type=chunk) - The company has not engaged in, and does not expect to engage in, any hedging activities[170](index=170&type=chunk) [Item 4. Controls and Procedures](index=47&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were not effective as of March 31, 2023, due to material weaknesses in internal control over financial reporting related to share classification and business combination costs - Management concluded that disclosure controls and procedures were not effective as of **March 31, 2023**, due to material weaknesses in internal control over financial reporting[172](index=172&type=chunk) - Material weaknesses identified include improper classification of Class A redeemable ordinary shares and improper recognition of Business Combination Costs[175](index=175&type=chunk)[177](index=177&type=chunk) - The company is devoting significant effort and resources to remediation, including enhanced access to accounting literature, research materials, and increased communication among personnel and third-party accounting professionals[180](index=180&type=chunk) [PART II - OTHER INFORMATION](index=50&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) This section provides additional information including legal proceedings, risk factors, equity sales, and exhibits [Item 1. Legal Proceedings](index=50&type=section&id=Item%201.%20Legal%20Proceedings) The company reported no legal proceedings - The company has no legal proceedings[182](index=182&type=chunk) [Item 1A. Risk Factors](index=50&type=section&id=Item%201A.%20Risk%20Factors) The company's actual results could differ materially from forward-looking statements due to factors described in its 2022 Form 10-K, with a new significant risk being the high unlikelihood of completing an initial Business Combination, leading to expected accelerated liquidation - Actual results could differ materially from forward-looking statements due to risk factors described in the **2022 Form 10-K**[183](index=183&type=chunk) - A key new risk factor is the high unlikelihood of completing an initial Business Combination before the Original Termination Date, leading to an expected accelerated liquidation[184](index=184&type=chunk) - If liquidation occurs, all Public Warrants and Private Warrants would expire worthless[185](index=185&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=52&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) In March 2021, the Sponsor purchased 5,750,000 Class B ordinary shares for $25,000, and later transferred 90,000 Founder Shares to independent directors. These sales were exempt from registration under Section 4(a)(2) of the Securities Act - In **March 2021**, the Sponsor purchased **5,750,000 Class B ordinary shares** for an aggregate price of **$25,000**[188](index=188&type=chunk) - The Sponsor transferred **90,000 Founder Shares** to independent directors[188](index=188&type=chunk) - These securities were issued pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act[188](index=188&type=chunk) [Item 3. Defaults Upon Senior Securities](index=52&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities - The company has no defaults upon senior securities[190](index=190&type=chunk) [Item 4. Mine Safety Disclosures](index=52&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Not applicable to the company - Mine Safety Disclosures are not applicable to the company[191](index=191&type=chunk) [Item 5. Other Information](index=52&type=section&id=Item%205.%20Other%20Information) The company reported no other information - The company has no other information to report[192](index=192&type=chunk) [Item 6. Exhibits](index=53&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including the Business Combination Agreement, organizational documents, warrant agreement, trust agreement, and various certifications - Exhibits include the Business Combination Agreement and its amendments (**2.1, 2.2, 2.3**), Amended and Restated Memorandum and Articles of Association (**3.1**), and Warrant Agreement (**4.1**)[195](index=195&type=chunk) - Other exhibits include the Investment Management Trust Agreement (**10.2**), Registration Rights Agreement (**10.3**), Administrative Services Agreement (**10.4**), and the Termination Agreement (**10.22**)[195](index=195&type=chunk) - Certifications from the Principal Executive Officer and Principal Financial Officer (**31.1, 31.2, 32.1, 32.2**) are also furnished[195](index=195&type=chunk) [SIGNATURES](index=56&type=section&id=SIGNATURES) This section contains the official signatures of the company's executive officers, certifying the accuracy of the report - The report was signed by Chu Chiu Kong, Chief Executive Officer, and Fabio Kann, Chief Financial Officer, on **May 11, 2023**[203](index=203&type=chunk)

Part I [Item 1. Business.](index=5&type=section&id=Item%201.%20Business.) XPAC Acquisition Corp. is a blank check company formed in March 2021, focused on business combinations in Brazil, with a proposed merger with SuperBac Biotechnology Solutions S.A. - XPAC Acquisition Corp. was incorporated on March 11, 2021, as a blank check company to effect a business combination[17](index=17&type=chunk)[443](index=443&type=chunk) - The company intends to capitalize on the XP Inc. platform in Brazil, focusing on healthcare, financial services, education, consumer goods & retail, and technology industries for its initial Business Combination[17](index=17&type=chunk)[32](index=32&type=chunk) Initial Public Offering (IPO) Details | Event | Date | Gross Proceeds | | :-------------------------------- | :--------- | :------------- | | Initial Public Offering | Aug 3, 2021 | $200 million | | Over-Allotment Option Exercise | Aug 19, 2021 | $19.61 million | | Total Funds in Trust Account | Post-IPO | $219.61 million | - A Business Combination Agreement was entered into on April 25, 2022, with SuperBac Biotechnology Solutions S.A., a pioneering biotechnology company in Brazil, for a proposed merger[27](index=27&type=chunk)[30](index=30&type=chunk)[307](index=307&type=chunk) [Item 1.A. Risk Factors.](index=17&type=section&id=Item%201.A.%20Risk%20Factors.) The company faces risks related to business combination completion, conflicts of interest, internal control weaknesses, and operating in Brazil. - The company faces risks related to its ability to complete an initial Business Combination within 24 months from the IPO, with potential for liquidation if unsuccessful[68](index=68&type=chunk)[71](index=71&type=chunk)[72](index=72&type=chunk) - Potential conflicts of interest exist due to directors and officers allocating time to other businesses and their affiliations with XP Inc. and other entities, which may compete for acquisition opportunities[51](index=51&type=chunk)[52](index=52&type=chunk)[130](index=130&type=chunk)[221](index=221&type=chunk)[222](index=222&type=chunk) - Material weaknesses were identified in internal control over financial reporting related to accounting for liabilities and the classification of Class A redeemable ordinary shares, leading to restatements of prior financial statements[191](index=191&type=chunk)[192](index=192&type=chunk)[195](index=195&type=chunk)[196](index=196&type=chunk)[340](index=340&type=chunk)[343](index=343&type=chunk) - The company's independent registered public accounting firm's report expresses substantial doubt about its ability to continue as a 'going concern' due to limited cash and dependence on completing a business combination[253](index=253&type=chunk)[425](index=425&type=chunk)[478](index=478&type=chunk)[479](index=479&type=chunk) - Operating in Brazil introduces additional risks, including economic, political, and social instability, currency fluctuations, and changes in government policies[187](index=187&type=chunk)[203](index=203&type=chunk)[204](index=204&type=chunk)[205](index=205&type=chunk) [Item 1.B. Unresolved Staff Comments.](index=88&type=section&id=Item%201.B.%20Unresolved%20Staff%20Comments.) The company has no unresolved staff comments from the Securities and Exchange Commission. - No unresolved staff comments[262](index=262&type=chunk) [Item 2. Properties.](index=88&type=section&id=Item%202.%20Properties.) The company's executive offices are in New York, NY; the Sponsor has an administrative services agreement but has not charged a monthly fee. - Executive offices are located at 55 West 46th Street, 30th floor, New York, NY 10036[263](index=263&type=chunk) - Sponsor may charge a **$10,000 per month** fee for office space and administrative services, but has not charged any amount as of December 31, 2022[263](index=263&type=chunk) [Item 3. Legal Proceedings.](index=88&type=section&id=Item%203.%20Legal%20Proceedings.) The company is not currently a party to any material legal proceedings, nor is it aware of any threatened against it. - No material legal proceedings are currently active or threatened against the company or its officers/directors[264](index=264&type=chunk) [Item 4. Mine Safety Disclosures.](index=88&type=section&id=Item%204.%20Mine%20Safety%20Disclosures.) This item is not applicable to the company's operations. - Mine Safety Disclosures are not applicable to the company[265](index=265&type=chunk) Part II [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.](index=89&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities.) XPAC Acquisition Corp.'s securities trade on Nasdaq; the company has not paid cash dividends and does not intend to prior to its initial Business Combination. - Units (XPAXU), Class A ordinary shares (XPAX), and redeemable warrants (XPAXW) are traded on the Nasdaq Stock Market LLC[268](index=268&type=chunk) - The company has not paid cash dividends and does not intend to prior to the completion of its initial Business Combination[270](index=270&type=chunk) Unregistered Securities Sales | Security | Purchaser | Quantity | Purchase Price | | :---------------- | :-------- | :--------- | :------------- | | Founder Shares | Sponsor | 5.75 million | $25,000 | | Founder Shares | Independent Directors | 90,000 | $0.004 per share | | Private Warrants | Sponsor | 4 million | $1.50 per warrant | | Additional Private Warrants | Sponsor | 261,485 | $1.50 per warrant | - Founder Shares and Private Warrants are subject to transfer restrictions, generally until one year after the Business Combination or 30 days after, respectively, with certain exceptions[274](index=274&type=chunk)[410](index=410&type=chunk)[517](index=517&type=chunk) [Item 6. [Reserved].](index=91&type=section&id=Item%206.%20%5BReserved%5D.) This item is reserved and contains no information. - This item is reserved[281](index=281&type=chunk) [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.](index=91&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations.) This section reviews the company's financial condition and operations as a blank check company, detailing the proposed SuperBac Business Combination and liquidity challenges. - The company is a blank check company with no operating history or revenues, with all activities focused on its formation, IPO, and search for a target business[283](index=283&type=chunk)[309](index=309&type=chunk)[445](index=445&type=chunk) - The proposed SuperBac Business Combination involves a series of mergers resulting in PubCo indirectly owning at least 95% of SuperBac, a Brazilian biotechnology company[291](index=291&type=chunk)[294](index=294&type=chunk)[307](index=307&type=chunk) Key Financial Results | Metric | Year Ended Dec 31, 2022 | Period from Inception (Mar 11, 2021) through Dec 31, 2021 | | :-------------------------------- | :---------------------- | :------------------------------------------------------ | | Net Income | $1.91 million | $5.34 million | | Gain on fair value of warrant liabilities | $3.95 million | $7.86 million | | Gain on investments held in Trust Account | $3.11 million | $6,421 | | Operating, general & administrative expenses | $5.16 million | $2.01 million | - As of December 31, 2022, the company had **$44,659** in cash outside the Trust Account and a working capital deficit of **$5.08 million**, raising substantial doubt about its ability to continue as a going concern[312](index=312&type=chunk)[321](index=321&type=chunk)[478](index=478&type=chunk) - The Business Combination Agreement was amended twice, extending the termination date to February 28, 2023, and can be terminated by either party if not consummated by then[304](index=304&type=chunk)[306](index=306&type=chunk)[554](index=554&type=chunk) [Item 7.A. Quantitative and Qualitative Disclosure About Market Risk.](index=103&type=section&id=Item%207.A.%20Quantitative%20and%20Qualitative%20Disclosure%20About%20Market%20Risk.) As of December 31, 2022, the company was not exposed to material market or interest rate risk, with Trust Account funds invested in short-term U.S. government obligations. - The company was not subject to any material market or interest rate risk as of December 31, 2022[332](index=332&type=chunk) - Funds in the Trust Account are invested in U.S. government treasury obligations with a maturity of 1

[Front Matter / General Information](index=1&type=section&id=Front%20Matter%20/%20General%20Information) [Registrant Information and Filing Status](index=1&type=section&id=Registrant%20Information%20and%20Filing%20Status) XPAC Acquisition Corp. filed Form 10-Q, classified as a non-accelerated, smaller reporting, emerging growth, and shell company - Filing Type: **Quarterly Report (Form 10-Q)** for the quarterly period ended September 30, 2022[2](index=2&type=chunk) - Registrant: **XPAC ACQUISITION CORP.**, incorporated in the Cayman Islands[2](index=2&type=chunk) Filer Status | Filer Status | | | | :--- | :--- | :--- | | Large Accelerated Filer | ☐ | | | Accelerated Filer | ☐ | | | Non-Accelerated Filer | ☒ | | | Smaller Reporting Company | ☒ | | | Emerging Growth Company | ☒ | | | Shell Company | ☒ | | Shares Outstanding | Share Class | Shares Outstanding (as of Nov 10, 2022) | | :--- | :--- | | Class A ordinary shares | 21,961,131 | | Class B ordinary shares | 5,490,283 | [PART I - FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents XPAC Acquisition Corp.'s unaudited condensed financial statements, including balance sheets, statements of operations, changes in equity, cash flows, and notes [Condensed Balance Sheets](index=4&type=section&id=Condensed%20Balance%20Sheets) Condensed balance sheets show XPAC Acquisition Corp.'s financial position, with slight asset increase and significant current liability rise Key Balance Sheet Data | Metric | Sep 30, 2022 ($) | Dec 31, 2021 ($) | | :--- | :--- | :--- | | Total assets | 221,471,083 | 220,614,902 | | Investments held in Trust Account | 220,891,656 | 219,617,731 | | Total current liabilities | 4,819,009 | 1,139,725 | | Warrant liabilities | 1,679,455 | 5,825,972 | | Total shareholders' deficit | (13,905,433) | (13,739,334) | [Condensed Statements of Operations](index=5&type=section&id=Condensed%20Statements%20of%20Operations) Statements of operations show a net loss for the three months ended September 30, 2022, primarily due to warrant liability changes and operating costs Net Income (Loss) and Key Drivers | Metric | 3 months ended Sep 30, 2022 ($) | 3 months ended Sep 30, 2021 ($) | 9 months ended Sep 30, 2022 ($) | Inception through Sep 30, 2021 ($) | | :--- | :--- | :--- | :--- | :--- | | Formation and operating costs | 1,697,156 | 589,667 | 4,338,159 | 600,920 | | Change in fair value of warrant liabilities | 158,804 | 5,553,385 | 4,146,517 | 5,553,385 | | Gain on securities held in trust | 971,818 | 2,008 | 1,273,925 | 2,008 | | Net income (loss) | (551,852) | 4,446,228 | 1,107,826 | 4,434,975 | | Basic and diluted net income (loss) per share, redeemable Class A ordinary shares | (0.02) | 0.23 | 0.04 | 0.38 | [Condensed Statements of Changes In Shareholders' Equity (Deficit)](index=6&type=section&id=Condensed%20Statements%20of%20Changes%20In%20Shareholders'%20Equity%20(Deficit)) Shareholders' deficit decreased from **$(13.7 million)** to **$(13.9 million)** due to net losses and Class A share remeasurement Shareholders' Deficit | Date | Total Shareholders' Deficit ($) | | :--- | :--- | | Sep 30, 2022 | (13,905,433) | | Dec 31, 2021 | (13,739,334) | | Sep 30, 2021 | (15,159,057) | - The accumulated deficit increased from **$(13,739,883)** at December 31, 2021, to **$(13,905,982)** at September 30, 2022[17](index=17&type=chunk) [Condensed Statements of Cash Flows](index=7&type=section&id=Condensed%20Statements%20of%20Cash%20Flows) Cash flow statements show net cash used in operating activities, with negative net cash change for the nine months ended September 30, 2022 Cash Flow Summary | Metric | 9 months ended Sep 30, 2022 ($) | Inception through Sep 30, 2021 ($) | | :--- | :--- | :--- | | Net cash used in operating activities | (336,768) | (799,135) | | Net cash used by investing activities | — | (219,611,310) | | Net cash provided by financing activities | 215,588 | 221,416,571 | | Net change in cash | (121,180) | 1,006,126 | | Cash at end of period | 231,010 | 1,006,126 | [Notes To Condensed Financial Statements (Unaudited)](index=8&type=section&id=Notes%20To%20Condensed%20Financial%20Statements%20(Unaudited)) Notes detail SPAC organization, accounting policies, financial instruments, proposed SuperBac business combination, and going concern considerations [NOTE 1 — ORGANIZATION AND BUSINESS BACKGROUND](index=8&type=section&id=NOTE%201%20%E2%80%94%20ORGANIZATION%20AND%20BUSINESS%20BACKGROUND) XPAC Acquisition Corp., a SPAC formed on March 11, 2021, for a business combination, faces going concern issues due to costs and deadlines - Company Formation: Incorporated **March 11, 2021**, as a SPAC for the purpose of entering into a business combination[22](index=22&type=chunk) - Initial Public Offering (IPO): Consummated on **August 3, 2021**, selling **20,000,000 Units** at **$10.00 per Unit**, generating gross proceeds of **$200,000,000**[25](index=25&type=chunk) - Proposed Business Combination: Entered into a Business Combination Agreement with SuperBac on **April 25, 2022**, which would result in PubCo becoming a publicly-traded company listed on the Nasdaq Capital Market[39](index=39&type=chunk) - Going Concern: Substantial doubt exists about the Company's ability to continue as a going concern due to significant acquisition costs and the requirement to complete a Business Combination by **August 3, 2023**, or face automatic winding up and liquidation[55](index=55&type=chunk)[56](index=56&type=chunk) [NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES](index=18&type=section&id=NOTE%202%20%E2%80%94%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note outlines GAAP-compliant accounting principles, the company's emerging growth status, and policies for warrant liabilities as derivatives - Basis of Presentation: Unaudited condensed financial statements prepared in accordance with **GAAP** for interim financial information and SEC rules[59](index=59&type=chunk) - Emerging Growth Company: The Company is an **"emerging growth company"** and has elected not to opt out of the extended transition period for complying with new or revised financial accounting standards[60](index=60&type=chunk)[61](index=61&type=chunk) - Warrant Liabilities: Warrants for ordinary shares not indexed to its own shares are accounted for as liabilities at fair value, subject to remeasurement at each balance sheet date[76](index=76&type=chunk) [NOTE 3 — INITIAL PUBLIC OFFERING](index=23&type=section&id=NOTE%203%20%E2%80%94%20INITIAL%20PUBLIC%20OFFERING) Details the IPO, including the sale of **20,000,000 Units** at **$10.00** each, partial over-allotment exercise, and proceeds deposited into the Trust Account - IPO Date: **August 3, 2021**, selling **20,000,000 Units** at **$10.00 per Unit**[85](index=85&type=chunk) - Over-Allotment: Underwriter purchased an additional **1,961,131 Units** on August 19, 2021, for **$19,611,310**[86](index=86&type=chunk) - Trust Account: An aggregate of **$10.00 per Unit** sold in the IPO was held in the Trust Account, invested in U.S. government securities or money market funds[87](index=87&type=chunk) [NOTE 4 — PRIVATE PLACEMENT](index=23&type=section&id=NOTE%204%20%E2%80%94%20PRIVATE%20PLACEMENT) The Sponsor purchased **4,000,000 Private Warrants** for **$6,000,000** and an additional **261,485 Private Warrants** for **$392,228**, with proceeds added to the Trust Account - Private Warrants Purchased: Sponsor purchased **4,000,000 Private Warrants** for **$6,000,000**, and an additional **261,485 Private Warrants** for **$392,228**[88](index=88&type=chunk) - Proceeds from Private Warrants: Added to the Trust Account[88](index=88&type=chunk) - Expiration: Private Warrants will expire worthless if the Company does not complete a Business Combination within the Combination Period[90](index=90&type=chunk) [NOTE 5 — RELATED PARTY TRANSACTIONS](index=25&type=section&id=NOTE%205%20%E2%80%94%20RELATED%20PARTY%20TRANSACTIONS) This note details related party transactions, including Founder Shares, a promissory note from the Sponsor, and an advisory fee to an affiliate - Founder Shares: Sponsor purchased **5,750,000 Class B ordinary shares** for **$25,000**; **259,717 shares** were forfeited, resulting in **5,490,283 Class B shares** outstanding[91](index=91&type=chunk) - Promissory Note: An unsecured, non-interest bearing promissory note from the Sponsor, with **$300,000** outstanding as of September 30, 2022[94](index=94&type=chunk) - Advisory Fee: XP Investimentos (an affiliate of the Sponsor) is entitled to **$2,690,239** upon the consummation of the Business Combination[99](index=99&type=chunk) [NOTE 6 — SHAREHOLDERS' DEFICIT](index=27&type=section&id=NOTE%206%20%E2%80%94%20SHAREHOLDERS'%20DEFICIT) Outlines authorized and outstanding share capital, including preference, Class A, and Class B ordinary shares, with Class B converting to Class A upon a Business Combination - Authorized Shares: **1,000,000 preference shares**, **200,000,000 Class A ordinary shares**, and **20,000,000 Class B ordinary shares**[100](index=100&type=chunk)[101](index=101&type=chunk)[102](index=102&type=chunk) - Outstanding Shares (Sep 30, 2022): **21,961,131 Class A ordinary shares** (excluding those subject to redemption) and **5,490,283 Class B ordinary shares**[101](index=101&type=chunk)[102](index=102&type=chunk) - Class B Conversion: Class B ordinary shares will automatically convert into Class A ordinary shares on a one-for-one basis at the time of a Business Combination, subject to adjustment[104](index=104&type=chunk) [NOTE 7 — WARRANT LIABILITIES](index=28&type=section&id=NOTE%207%20%E2%80%94%20WARRANT%20LIABILITIES) Describes Public and Private Warrants, their exercisability, redemption conditions, and classification as derivative liabilities at fair value - Public Warrants Exercisability: Later of **12 months from IPO closing** or **30 days after the completion of a Business Combination**[106](index=106&type=chunk) - Redemption of Public Warrants: Redeemable at **$0.01 per warrant** if Class A ordinary share price equals or exceeds **$18.00**, or at **$0.10 per warrant** if price equals or exceeds **$10.00** (with cashless exercise option)[109](index=109&type=chunk)[114](index=114&type=chunk) - Private Warrants: Identical to Public Warrants but non-transferable/assignable for 30 days post-Business Combination (with exceptions), exercisable for cash or cashless, and non-redeemable while held by initial purchasers/permitted transferees[113](index=113&type=chunk) - Warrant Classification: Both Public and Private Warrants are classified as derivative liabilities at fair value, subject to re-measurement at each balance sheet date[114](index=114&type=chunk)[115](index=115&type=chunk) [NOTE 8 — COMMITMENTS AND CONTINGENCIES](index=32&type=section&id=NOTE%208%20%E2%80%94%20COMMITMENTS%20AND%20CONTINGENCIES) Covers registration rights for certain shareholders and a deferred underwriting fee of **$7,686,396** held in the Trust Account, released upon Business Combination completion or waived - Registration Rights: Holders of Founder Shares and Private Warrants are entitled to registration rights[116](index=116&type=chunk) - Deferred Underwriting Fee: **$7,686,396** (or **$0.35 per Unit**) is held in the Trust Account and will be released upon completion of a Business Combination, or waived if not completed[118](index=118&type=chunk) [NOTE 9 — RECURRING FAIR VALUE MEASUREMENTS](index=32&type=section&id=NOTE%209%20%E2%80%94%20RECURRING%20FAIR%20VALUE%20MEASUREMENTS) Details fair value measurements of warrant liabilities, totaling **$1,679,455** as of September 30, 2022, with Public Warrants as Level 1 and Private Warrants as Level 3 Warrant Liabilities Fair Value | Date | Amount ($) | | :--- | :--- | | Sep 30, 2022 | 1,679,455 | | Dec 31, 2021 | 5,825,972 | - Fair Value Hierarchy: Public Warrants are **Level 1** (based on market trade price), and Private Warrants are **Level 3** (valued using a Monte Carlo simulation model)[122](index=122&type=chunk)[123](index=123&type=chunk)[126](index=126&type=chunk) Key Inputs for Private Warrant Valuation (Monte Carlo Model) | Input | Sep 30, 2022 | | :--- | :--- | | Share price ($) | 9.69 | | Exercise price ($) | 11.50 | | Risk-free rate (%) | 4.01 | | Expected term of warrants (years) | 5.25 | | Volatility (%) | 0.001 | [NOTE 10 — SUBSEQUENT EVENTS](index=34&type=section&id=NOTE%2010%20%E2%80%94%20SUBSEQUENT%20EVENTS) The company identified no subsequent events as of the date the financial statements were issued - No subsequent events identified as of the financial statement issuance date[130](index=130&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=24&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition, operations, liquidity, capital resources, and going concern considerations [Overview](index=24&type=section&id=Overview) XPAC Acquisition Corp. is a blank check company formed for a Business Combination, completing its IPO and private placement in August 2021, placing **$219,611,310** in a Trust Account - Company Purpose: Blank check company (SPAC) incorporated on **March 11, 2021**, for a Business Combination, with an initial focus on Brazil[134](index=134&type=chunk) - IPO and Private Placement: Consummated on **August 3, 2021**, raising **$200,000,000** from IPO Units and **$6,000,000** from Private Warrants, with an additional **$19,611,310** from over-allotment units[136](index=136&type=chunk)[137](index=137&type=chunk)[138](index=138&type=chunk) - Trust Account: **$219,611,310** from IPO and Private Warrants proceeds placed in a Trust Account, invested in interest-bearing U.S. government securities[140](index=140&type=chunk) [Recent Developments](index=27&type=section&id=Recent%20Developments) XPAC entered a Business Combination Agreement with SuperBac on April 25, 2022, aiming for PubCo to become a Nasdaq-listed company, subject to a **$150,000,000** minimum cash condition - Business Combination Agreement: Entered with SuperBac on **April 25, 2022**, to combine, leading to PubCo becoming a Nasdaq-listed company[143](index=143&type=chunk)[146](index=146&type=chunk) - Sponsor Support Agreement: Sponsor agreed to vote in favor of the Mergers, waive anti-dilution rights, not redeem shares, and a lock-up of PubCo shares/warrants[147](index=147&type=chunk) - Minimum Cash Condition: The Post-Redemption Trust Account Balance plus PIPE Gross Proceeds must be at least **$150,000,000** for SuperBac to consummate the Transactions[153](index=153&type=chunk) - SuperBac Profile: A pioneering Brazilian biotechnology company focused on sustainable, biologically-based alternatives for various applications[157](index=157&type=chunk) [Results of Operations](index=28&type=section&id=Results%20of%20Operations) The company reported no operating revenues, a net loss of **$551,852** for the three months ended September 30, 2022, but a net income of **$1,107,826** for the nine months - No Operating Revenues: The company has not engaged in significant business operations or generated operating revenues to date[159](index=159&type=chunk) Net Income (Loss) Summary | Period | Net Income (Loss) ($) | | :--- | :--- | | 3 months ended Sep 30, 2022 | (551,852) | | 9 months ended Sep 30, 2022 | 1,107,826 | | 3 months ended Sep 30, 2021 | 4,446,228 | | Inception through Sep 30, 2021 | 4,434,975 | - Key Drivers (3 months ended Sep 30, 2022): **$1,697,156** in operating expenses, offset by a **$158,804** gain on warrant fair value and a **$971,818** gain on trust account investments[160](index=160&type=chunk) [Liquidity, Capital Resources and Going Concern](index=28&type=section&id=Liquidity,%20Capital%20Resources%20and%20Going%20Concern) As of September 30, 2022, the company had **$231,010** cash outside the Trust Account and faces substantial doubt about its going concern ability due to acquisition costs and the August 3, 2023, Business Combination deadline - Cash Outside Trust Account (Sep 30, 2022): **$231,010** available for working capital needs[162](index=162&type=chunk) - Promissory Note: **$300,000** outstanding under a promissory note from the Sponsor as of September 30, 2022[166](index=166&type=chunk) - Going Concern: Substantial doubt about the Company's ability to continue as a going concern due to significant acquisition costs and the deadline to complete a Business Combination by **August 3, 2023**[167](index=167&type=chunk) Estimated Liquidity Requirements (Prior to Business Combination) | Expense Category | Estimated Amount ($) | | :--- | :--- | | Legal, accounting, due diligence, travel for Business Combination | 350,000 | | Legal and accounting for regulatory reporting | 150,000 | | Nasdaq continued listing fees | 58,000 | | General working capital | 442,000 | [Off-Balance Sheet Arrangements](index=29&type=section&id=Off-Balance%20Sheet%20Arrangements) As of September 30, 2022, the company did not have any off-balance sheet arrangements - No off-balance sheet arrangements as of September 30, 2022[175](index=175&type=chunk) [Contractual Obligations](index=29&type=section&id=Contractual%20Obligations) The company had no long-term debt, capital, or operating lease obligations as of September 30, 2022, and the Sponsor does not intend to charge for administrative services - No long-term debt, capital, or operating lease obligations as of September 30, 2022[176](index=176&type=chunk) - Administrative Services Agreement: Sponsor may charge **$10,000 per month** for services, but has not charged and does not intend to[176](index=176&type=chunk) [Critical Accounting Policies](index=29&type=section&id=Critical%20Accounting%20Policies) Management's discussion is based on unaudited condensed financial statements prepared in accordance with U.S. GAAP, requiring significant judgments and estimates, with ASU No. 2020-06 under evaluation - Financial statements prepared in accordance with **U.S. GAAP**, requiring significant management judgments and estimates[177](index=177&type=chunk) - Evaluating **ASU No. 2020-06**, Debt with Conversion and other Options, for its effect on financial position, results of operations, or disclosures[178](index=178&type=chunk) [JOBS Act](index=29&type=section&id=JOBS%20Act) As an "emerging growth company" under the JOBS Act, the company elects to delay new accounting standard adoption and evaluates reduced reporting requirements - Emerging Growth Company: Qualifies under the **JOBS Act**[180](index=180&type=chunk) - Accounting Standards Adoption: Elects to delay the adoption of new or revised accounting standards to align with private companies' effective dates[180](index=180&type=chunk) - Reduced Reporting Requirements: Evaluating benefits of relying on exemptions from independent registered public accounting firm attestation, certain compensation disclosures, and PCAOB requirements[182](index=182&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=30&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As of September 30, 2022, XPAC Acquisition Corp. was not subject to any material market or interest rate risk, with Trust Account investments minimizing exposure - No Material Market or Interest Rate Risk: As of September 30, 2022[183](index=183&type=chunk) - Trust Account Investments: Invested in U.S. government treasury obligations with a maturity of **185 days or less** or in money market funds, minimizing interest rate risk[183](index=183&type=chunk) - No Hedging Activities: The company has not engaged in and does not expect to engage in any hedging activities[184](index=184&type=chunk) [Item 4. Controls and Procedures](index=30&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were not effective as of September 30, 2022, due to material weaknesses in internal control over financial reporting, with remediation efforts underway [Evaluation of Disclosure Controls and Procedures](index=30&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were not effective as of September 30, 2022, due to identified material weaknesses, necessitating additional analysis for fair financial statement presentation - Disclosure Controls Effectiveness: Not effective as of September 30, 2022, due to material weaknesses in internal control over financial reporting[186](index=186&type=chunk) - Mitigation: Management performed additional analysis to ensure financial statements were prepared in accordance with GAAP[186](index=186&type=chunk) [Changes in Internal Control over Financial Reporting](index=31&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) Material weaknesses were identified concerning Class A redeemable ordinary shares classification and Business Combination Costs recognition, leading to restatements and ongoing remediation plans - Material Weakness 1: Improper classification of Class A redeemable ordinary shares[190](index=190&type=chunk)[191](index=191&type=chunk) - Material Weakness 2: Improper recognition of Business Combination Costs as liabilities and expenses[192](index=192&type=chunk) - Restatements: Previously issued audited financial statements (Form 10-K and 10-Q) were restated due to these material weaknesses[193](index=193&type=chunk) - Remediation Plan: Includes enhanced access to accounting literature, research materials, industry best practices, and increased communication among personnel and third-party accounting professionals[194](index=194&type=chunk) [PART II - OTHER INFORMATION](index=32&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=32&type=section&id=Item%201.%20Legal%20Proceedings) The company reported no legal proceedings - No legal proceedings reported[195](index=195&type=chunk) [Item 1A. Risk Factors](index=32&type=section&id=Item%201A.%20Risk%20Factors) No material changes to previously disclosed risk factors were reported, with reference to prior filings and the Form F-4 for SuperBac Business Combination risks - No material changes to risk factors disclosed in previous filings (10-K/A, 10-Q/A)[196](index=196&type=chunk) - For risks related to the proposed SuperBac Business Combination, refer to the "Risk Factors" section of the preliminary prospectus/proxy statement in the Registration Statement on Form F-4[196](index=196&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=32&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Details the unregistered sale of Class B ordinary shares (Founder Shares) to the Sponsor in March 2021 for **$25,000**, and subsequent transfers to independent directors, exempt under Section 4(a)(2) of the Securities Act - Founder Shares Sale: Sponsor purchased **5,750,000 Class B ordinary shares** for **$25,000** in March 2021[197](index=197&type=chunk) - Director Shares Transfer: **90,000 Founder Shares** were transferred to independent directors in May 2021[197](index=197&type=chunk) - Exemption: Securities were issued pursuant to the exemption from registration contained in **Section 4(a)(2)** of the Securities Act[197](index=197&type=chunk) [Item 3. Defaults Upon Senior Securities](index=32&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities - No defaults upon senior securities reported[199](index=199&type=chunk) [Item 4. Mine Safety Disclosures](index=32&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[200](index=200&type=chunk) [Item 5. Other Information](index=32&type=section&id=Item%205.%20Other%20Information) The company reported no other information - No other information reported[201](index=201&type=chunk) [Item 6. Exhibits](index=33&type=section&id=Item%206.%20Exhibits) Provides a list of exhibits filed with the Form 10-Q, including the Business Combination Agreement, Sponsor Support Agreement, Lock-up Agreement, and various certifications - Key Exhibits include the Business Combination Agreement, Sponsor Support Agreement, Voting and Support Agreement, Lock-up Agreement, Investment Agreement, and various certifications (e.g., 31.1, 31.2, 32.1, 32.2)[203](index=203&type=chunk) [SIGNATURES](index=34&type=section&id=SIGNATURES) [Signatures](index=34&type=section&id=Signatures) The report is duly signed on behalf of XPAC Acquisition Corp. by its Chief Executive Officer, Chu Chiu Kong, and Chief Financial Officer, Fabio Kann, on November 10, 2022 - Report signed by Chu Chiu Kong (Chief Executive Officer) and Fabio Kann (Chief Financial Officer) on **November 10, 2022**[208](index=208&type=chunk)

IPO and Fundraising - The company completed its Initial Public Offering on August 3, 2021, raising gross proceeds of $200 million from the sale of 20,000,000 Units at $10.00 per Unit[130]. - Following the IPO, $219,611,310 was placed in a Trust Account for the benefit of Public Shareholders, invested in interest-bearing U.S. government securities[134]. - The underwriter partially exercised the over-allotment option, generating additional gross proceeds of $19,611,310 from the sale of 1,961,131 Units[132]. - The company generated gross proceeds of $6,000,000 from the sale of 4,000,000 Private Warrants at a price of $1.50 per Private Unit[156]. - The company has broad discretion in applying the net proceeds from the IPO and Private Placement towards consummating a Business Combination[135]. Business Combination and Strategy - The company entered into a Business Combination Agreement with SuperBac on April 25, 2022, aiming to merge and create a national leader in crop nutrition in Brazil[137]. - Upon completion of the merger, SuperBac will become an indirect subsidiary of PubCo, with PubCo owning at least 95% of SuperBac's equity interests[140]. - The Business Combination Agreement includes a Minimum Cash Condition of at least $150 million available to PubCo at the Acquisition Closing[146]. - SuperBac has over two decades of experience in developing biologically-based alternatives to synthetic chemicals for agricultural and industrial applications[150]. - The company plans to diversify into crop protection and other industry sectors, leveraging its proprietary biotech development platform[150]. Financial Performance and Expenses - For the three months ended June 30, 2022, the company reported a net income of $1,868,182, driven by a $2,925,096 gain on the fair value of warrant liabilities[153]. - The company incurred $1,385,461 in operating, general, and administrative expenses for the three months ended June 30, 2022[153]. - The company expects to use approximately $350,000 for legal, accounting, due diligence, and other expenses associated with structuring and negotiating the Business Combination[162]. - As of June 30, 2022, the company had cash outside the Trust Account amounting to $270,257, available for working capital needs[155]. - The company had a net loss of $183 for the three months ended June 30, 2021, entirely due to operating expenses[154]. Going Concern and Future Outlook - The company expects to incur significant costs in pursuing its initial Business Combination, with no assurance of success in raising capital[129]. - The company anticipates significant costs in pursuit of its acquisition plans, raising concerns about its ability to continue as a going concern within one year after the financial statements are issued[158]. - As of June 30, 2022, the company had no long-term debt or capital lease obligations[167]. Risk Management - The company has not engaged in any hedging activities since inception and does not expect to do so in the future[175].

PART I FINANCIAL INFORMATION [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents XPAC Acquisition Corp.'s unaudited condensed financial statements as of March 31, 2022, detailing assets, operations, and cash flows, with notes on warrant accounting and the SuperBac business combination [Condensed Balance Sheets](index=4&type=section&id=Condensed%20Balance%20Sheets) As of March 31, 2022, total assets were $220.5 million, primarily trust account investments, with $13.4 million in liabilities and a $12.5 million shareholders' deficit Condensed Balance Sheet Data (As of March 31, 2022 vs. December 31, 2021) | Account | March 31, 2022 | December 31, 2021 | | :--- | :--- | :--- | | **Assets** | | | | Cash | $307,990 | $352,190 | | Investments held in Trust Account | $219,632,154 | $219,617,731 | | **Total Assets** | **$220,518,436** | **$220,614,902** | | **Liabilities & Shareholders' Deficit** | | | | Warrant liabilities | $4,763,355 | $5,825,972 | | Total Liabilities | $13,360,983 | $14,124,256 | | Class A ordinary shares subject to possible redemption | $219,632,154 | $219,617,731 | | Total shareholders' deficit | $(12,474,701) | $(13,127,085) | [Condensed Statements of Operations](index=5&type=section&id=Condensed%20Statements%20of%20Operations) For Q1 2022, the company reported a net income of $666,808, driven by a $1.06 million gain on warrant liabilities offsetting operating costs Statement of Operations Highlights | Item | Three months ended March 31, 2022 | Period from March 11, 2021 (inception) to March 31, 2021 | | :--- | :--- | :--- | | Formation and operating costs | $410,233 | $11,069 | | Loss from operations | $(410,233) | $(11,069) | | Change in fair value of warrant liabilities | $1,062,617 | — | | **Net income (loss)** | **$666,808** | **$(11,069)** | [Condensed Statements of Cash Flows](index=7&type=section&id=Condensed%20Statements%20of%20Cash%20Flows) For Q1 2022, net cash used in operations was $259,788, offset by $215,588 from financing, resulting in a $44,200 net cash decrease Cash Flow Summary | Cash Flow Activity | Three months ended March 31, 2022 | | :--- | :--- | | Net cash used in operating activities | $(259,788) | | Net cash provided by financing activities | $215,588 | | **Net change in cash** | **$(44,200)** | | **Cash at end of period** | **$307,990** | [Notes to Condensed Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Financial%20Statements) Notes detail the company's SPAC formation, IPO, SuperBac business combination, warrant accounting, related-party transactions, and going concern uncertainty - The company is a **special purpose acquisition company (SPAC)** focused on a business combination, with activities centered on its formation, IPO, and target search[19](index=19&type=chunk)[21](index=21&type=chunk) - On April 25, 2022, the company entered a **Business Combination Agreement with SuperBac Biotechnology Solutions S.A.**, a Brazilian biotech firm[33](index=33&type=chunk)[105](index=105&type=chunk) - Management identified conditions raising **substantial doubt about the company's ability to continue as a going concern**, primarily due to significant acquisition-related costs[34](index=34&type=chunk)[36](index=36&type=chunk) - Warrants are accounted for as **liabilities at fair value**, subject to remeasurement with changes recognized in the statement of operations[55](index=55&type=chunk)[89](index=89&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=29&type=section&id=Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial condition and operations, highlighting its blank check status, the SuperBac business combination, Q1 2022 net income drivers, and liquidity challenges including going concern uncertainty [Overview and Recent Developments](index=29&type=section&id=Overview%20and%20Recent%20Developments) XPAC, a blank check company, completed its IPO in August 2021 and entered a definitive Business Combination Agreement with SuperBac on April 25, 2022 - The company is a **blank check company** formed to effect a business combination, initially focusing on Brazilian sectors[112](index=112&type=chunk) - On April 25, 2022, the company entered a **Business Combination Agreement with SuperBac Biotechnology Solutions S.A.**, aiming for SuperBac to become a Nasdaq-listed public company via PubCo[120](index=120&type=chunk)[123](index=123&type=chunk) - The transaction is subject to customary conditions, including a **Minimum Cash Condition of $150 million** (net of certain expenses) for PubCo at closing[130](index=130&type=chunk) [Results of Operations](index=33&type=section&id=Results%20of%20Operations) The company reported a Q1 2022 net income of $666,808, primarily from a non-cash gain on warrant liabilities and trust account interest income Net Income (Loss) Summary | Period | Net Income / (Loss) | Key Drivers | | :--- | :--- | :--- | | Three months ended March 31, 2022 | $666,808 | Gain on fair value of warrant liabilities ($1,062,617), offset by operating expenses ($410,233) | | March 11, 2021 (inception) to March 31, 2021 | $(11,069) | Consisted entirely of operating, general and administrative expenses | [Liquidity, Capital Resources and Going Concern](index=35&type=section&id=Liquidity%2C%20Capital%20Resources%20and%20Going%20Concern) As of March 31, 2022, the company had $307,990 cash for working capital, with liquidity from IPO proceeds and a Sponsor promissory note, but faces going concern uncertainty - As of March 31, 2022, **cash outside the Trust Account was $307,990**[138](index=138&type=chunk) - Liquidity needs were met by IPO proceeds outside the trust and a **fully drawn $300,000 promissory note from the Sponsor**[140](index=140&type=chunk) - Significant incurred and expected costs raise **substantial doubt about the company's ability to continue as a going concern** within one year[141](index=141&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=38&type=section&id=Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces no material market or interest rate risk due to its trust account funds being invested in short-term U.S. government securities or money market funds - The company is **not subject to material market or interest rate risk**, as trust account funds are in short-term U.S. government securities or money market funds[158](index=158&type=chunk) [Controls and Procedures](index=40&type=section&id=Controls%20and%20Procedures) Management concluded disclosure controls were ineffective as of March 31, 2022, due to a material weakness in Class A ordinary share classification, with remediation plans underway - Management concluded that **disclosure controls and procedures were not effective** as of March 31, 2022[162](index=162&type=chunk) - A **material weakness** was identified regarding the improper classification of Class A redeemable ordinary shares outside of permanent equity[165](index=165&type=chunk)[166](index=166&type=chunk) - Remediation plans include enhancing access to accounting literature and increasing communication with professionals on complex accounting matters[167](index=167&type=chunk) PART II OTHER INFORMATION [Item 1. Legal Proceedings](index=42&type=section&id=Item%201.%20Legal%20Proceedings) The company reported no legal proceedings - The company has **no legal proceedings** to report[168](index=168&type=chunk) [Item 1A. Risk Factors](index=42&type=section&id=Item%201A.%20Risk%20Factors) This section highlights material risks, including potential adverse effects from proposed SEC SPAC rules and geopolitical instability impacting business combination efforts - Proposed **SEC rules for SPACs** (March 30, 2022) could increase disclosure requirements and liability, potentially hindering business combination completion[171](index=171&type=chunk) - Geopolitical instability, including the **Ukraine conflict and sanctions**, could cause market disruptions and supply chain issues, adversely affecting business combination efforts[173](index=173&type=chunk)[174](index=174&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=43&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) In March 2021, the Sponsor purchased **5,750,000 Founder Shares** for $25,000 in an unregistered private placement exempt under Section 4(a)(2) - In March 2021, the Sponsor acquired **5,750,000 Founder Shares for $25,000** in an unregistered sale[176](index=176&type=chunk)

PART I. Business and Risk Factors Outlines the company's blank check business, acquisition strategy, competitive environment, and critical risk factors [Item 1. Business Overview](index=5&type=section&id=Item%201.%20Business%20Overview) XPAC Acquisition Corp. is a blank check company seeking a Brazilian business combination, leveraging XP Inc.'s platform - XPAC Acquisition Corp. is a blank check company incorporated on March 11, 2021, aiming to effect a Business Combination, primarily in Brazil's healthcare, financial services, education, consumer goods & retail, and technology sectors, leveraging the XP Inc. platform[15](index=15&type=chunk) Initial Public Offering and Private Placement Details | Event | Date | Units/Warrants | Price per Unit/Warrant | Gross Proceeds | |---|---|---|---|---| | Initial Public Offering | Aug 3, 2021 | 20,000,000 Units | $10.00 | $200,000,000 | | Private Placement | Aug 3, 2021 | 4,000,000 Private Warrants | $1.50 | $6,000,000 | | Over-Allotment Exercise | Aug 19, 2021 | 1,961,131 Units | $10.00 | $19,611,310 | | Additional Private Warrants | Aug 19, 2021 | 261,485 Private Warrants | $1.50 | $392,228 | | Total Funds in Trust Account | N/A | N/A | N/A | $219,611,310 | - The company must complete a Business Combination with one or more operating businesses or assets that together have an aggregate fair market value equal to at least **80% of the net assets** held in the Trust Account[21](index=21&type=chunk) [Overview](index=5&type=section&id=Overview) [Effecting a Business Combination](index=7&type=section&id=Effecting%20a%20Business%20Combination) [Our Business Strategy](index=7&type=section&id=Our%20Business%20Strategy) - The company's strategy is to create shareholder value by identifying and completing an initial Business Combination with a company in Brazil's focus sectors, leveraging the XP group's extensive network and expertise[25](index=25&type=chunk)[26](index=26&type=chunk) - Management aims to work with acquisition candidates to access capital markets, attract top-tier management, and execute tailored value-creation business plans for growth[26](index=26&type=chunk) [Business Combination Criteria](index=9&type=section&id=Business%20Combination%20Criteria) - Key criteria for target businesses include being leading players in the Brazilian economy with strong growth potential, resilient business models, consistent operational and financial performance, and strong, experienced management teams[31](index=31&type=chunk) - The company also seeks targets with defensible market positions, diversified customer bases, potential for strategic add-on acquisitions or international expansion, attractive risk-adjusted returns, and a strong corporate governance and ESG framework[31](index=31&type=chunk)[37](index=37&type=chunk) [Acquisition Process](index=11&type=section&id=Acquisition%20Process) - The acquisition process involves thorough due diligence, including document reviews, financial analysis, management meetings, and consultations with industry experts[36](index=36&type=chunk) - Potential conflicts of interest may arise due to the management team's affiliations with XP Inc. and its subsidiaries, which are active in investment banking, asset management, and financial services, and may compete for acquisition opportunities[37](index=37&type=chunk)[38](index=38&type=chunk)[41](index=41&type=chunk)[43](index=43&type=chunk) [Initial Business Combination](index=15&type=section&id=Initial%20Business%20Combination) - The initial Business Combination must meet Nasdaq's **80% fair market value test**, based on the value of the Trust Account's net assets[48](index=48&type=chunk) - The company aims to acquire **100% of a target's equity or assets**, but may acquire less, provided it secures a controlling interest (**50% or more of voting securities**) to avoid Investment Company Act registration[49](index=49&type=chunk) [Competition](index=17&type=section&id=Competition) - The company faces intense competition from other entities, including private investors and other blank check companies, many of whom possess greater technical, human, and financial resources[51](index=51&type=chunk) - The increasing number of SPACs has intensified competition for attractive targets, potentially leading to higher costs and difficulty in finding suitable acquisition opportunities[83](index=83&type=chunk)[84](index=84&type=chunk) [Employees](index=17&type=section&id=Employees) - The company currently has three officers and no full-time employees, with management dedicating time as necessary until the initial Business Combination is completed[52](index=52&type=chunk) [Item 1.A. Risk Factors](index=17&type=section&id=Item%201.A.%20Risk%20Factors) Details risks for business combination, post-acquisition, management conflicts, securities, and going concern status - Public shareholders may not have the opportunity to vote on the proposed Business Combination, as the company may complete it without shareholder approval unless required by law or stock exchange rules[54](index=54&type=chunk)[56](index=56&type=chunk)[58](index=58&type=chunk) - Failure to complete a Business Combination within **24 months** from the IPO closing will lead to liquidation, redemption of public shares at approximately **$10.00 per share** (or less), and warrants expiring worthless[63](index=63&type=chunk)[64](index=64&type=chunk) - The independent auditor's report expresses substantial doubt about the company's ability to continue as a 'going concern' due to limited cash and significant expected costs for acquisition plans[217](index=217&type=chunk) - The company may be classified as a Passive Foreign Investment Company (PFIC), which could result in adverse U.S. federal income tax consequences for U.S. investors[220](index=220&type=chunk)[223](index=223&type=chunk)[224](index=224&type=chunk) [Risks Relating to Our Search for, and Consummation of or Inability to Consummate, a Business Combination](index=17&type=section&id=Risks%20Relating%20to%20Our%20Search%20for,%20and%20Consummation%20of%20or%20Inability%20to%20Consummate,%20a%20Business%20Combination) [Risks Relating to the Post-Business Combination Company](index=54&type=section&id=Risks%20Relating%20to%20the%20Post-Business%20Combination%20Company) [Risks Relating to Our Management Team](index=58&type=section&id=Risks%20Relating%20to%20Our%20Management%20Team) [Risks Relating to Our Securities](index=62&type=section&id=Risks%20Relating%20to%20Our%20Securities) [General Risk Factors](index=73&type=section&id=General%20Risk%20Factors) [Item 1.B. Unresolved Staff Comments](index=75&type=section&id=Item%201.B.%20Unresolved%20Staff%20Comments) No unresolved staff comments from the SEC - There are no unresolved staff comments[228](index=228&type=chunk) [Item 2. Properties](index=77&type=section&id=Item%202.%20Properties) Executive offices in New York, NY; no administrative fees charged by Sponsor as of December 31, 2021 - The company's executive offices are located at 55 West 46th Street, 30th floor, New York, NY 10036[230](index=230&type=chunk) - The Sponsor may charge a **$10,000 monthly fee** for office and administrative services, but has not charged and does not intend to charge for these services as of December 31, 2021[230](index=230&type=chunk) [Item 3. Legal Proceedings](index=77&type=section&id=Item%203.%20Legal%20Proceedings) No material legal proceedings are currently active or threatened against the company or its officers - The company is not currently involved in any material legal proceedings, nor are any threatened against it or its officers or directors[231](index=231&type=chunk) [Item 4. Mine Safety Disclosures](index=77&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) No mine safety disclosures are applicable to the company - No mine safety disclosures are applicable to the company[232](index=232&type=chunk) PART II. Financial Information Covers market, equity, management's financial analysis, market risk, and financial statements [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=78&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity,%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Units and shares trade on Nasdaq; few holders; no dividends; Sponsor purchased Founder Shares and Private Warrants - The company's Units (XPAXU) began trading on Nasdaq on July 30, 2021, with Class A ordinary shares (XPAX) and redeemable warrants (XPAXW) commencing separate trading on September 20, 2021[235](index=235&type=chunk) - As of March 29, 2022, the company had approximately **one holder of record** for its Units, **one for Class A ordinary shares**, and **two for redeemable warrants**[236](index=236&type=chunk) - The company has not paid cash dividends and does not intend to prior to completing its initial Business Combination[237](index=

[PART I FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) Presents unaudited condensed financial statements for September 30, 2021, including balance sheet, operations, equity, cash flows, and notes [Condensed Balance Sheet as of September 30, 2021 (unaudited)](index=4&type=section&id=Condensed%20Balance%20Sheet%20as%20of%20September%2030%2C%202021%20%28unaudited%29) Condensed Balance Sheet | Assets/Liabilities/Equity | Amount ($) | | :------------------------ | :--------- | | **Assets** | | | Cash | 1,006,126 | | Total Current Assets | 1,420,376 | | Cash & marketable securities in trust account | 219,613,318 | | Total Noncurrent Assets | 219,946,860 | | **Total Assets** | **221,367,236** | | **Liabilities** | | | Total Current Liabilities | 1,007,165 | | Promissory note payable - related party | 84,412 | | Deferred underwriter's commission fee | 7,686,396 | | Warrant liability | 8,135,002 | | **Total Liabilities** | **16,912,975** | | **Shareholders' Deficit** | | | Class A ordinary shares subject to possible redemption | 219,613,318 | | Total Shareholders' Deficit | (15,159,057) | | **Total Liabilities and Shareholders' Deficit** | **221,367,236** | [Condensed Statements of Operations for the Three Months Ended September 30, 2021 and for the Period from March 11, 2021 (Inception) Through September 30, 2021 (unaudited)](index=5&type=section&id=Condensed%20Statements%20of%20Operations%20for%20the%20Three%20Months%20Ended%20September%2030%2C%202021%20and%20for%20the%20Period%20from%20March%2011%2C%202021%20%28Inception%29%20Through%20September%2030%2C%202021%20%28unaudited%29) Condensed Statements of Operations | Metric | Three Months Ended Sep 30, 2021 ($) | Inception Through Sep 30, 2021 ($) | | :-------------------------- | :---------------------------------- | :--------------------------------- | | Formation and operating costs | (589,667) | (600,920) | | Loss from operations | (589,667) | (600,920) | | Total Other Income | 5,035,895 | 5,035,895 | | **Net Income** | **4,446,228** | **4,434,975** | | Basic and diluted net income per share, Redeemable Class A ordinary shares | 0.23 | 0.38 | | Basic and diluted net income per share, Non-Redeemable Class B ordinary shares | 0.23 | 0.38 | [Condensed Statement of Changes in Shareholders' Deficit for the Period from March 11, 2021 (Inception) Through September 30, 2021 (unaudited)](index=6&type=section&id=Condensed%20Statement%20of%20Changes%20in%20Shareholders%27%20Deficit%20for%20the%20Period%20from%20March%2011%2C%202021%20%28Inception%29%20Through%20September%2030%2C%202021%20%28unaudited%29) Condensed Statement of Changes in Shareholders' Deficit | Item | Class A Shares | Class B Shares | Additional Paid-in Capital | Accumulated Deficit | Total Shareholders' Deficit | | :------------------------ | :------------- | :------------- | :------------------------- | :------------------ | :-------------------------- | | Balance - March 11, 2021 (inception) | — | — | — | — | — | | Issuance of founder shares | — | 575,000 ($575) | $24,425 | — | $25,000 | | Net loss (March 31, 2021) | — | — | — | $(11,069) | $(11,069) | | Balance - March 31, 2021 | — | 575,000 ($575) | $24,425 | $(11,069) | $13,931 | | Net loss (June 30, 2021) | — | — | — | $(183) | $(183) | | Balance - June 30, 2021 | — | 575,000 ($575) | $24,425 | $(11,252) | $13,748 | | Forfeiture of founder shares | — | (259,717) ($(26)) | $26 | — | — | | Redeemable Share accretion | — | — | $(24,451) | $(19,594,582) | $(19,619,033) | | Net income (Sep 30, 2021) | — | — | — | $4,446,228 | $4,446,228 | | Balance - September 30, 2021 | — ($—) | 5,490,283 ($549) | $— | $(15,159,606) | $(15,159,057) | [Condensed Statement of Cash Flows for the Period from March 11, 2021 (Inception) Through September 30, 2021 (unaudited)](index=7&type=section&id=Condensed%20Statement%20of%20Cash%20Flows%20for%20the%20Period%20from%20March%2011%2C%202021%20%28Inception%29%20Through%20September%2030%2C%202021%20%28unaudited%29) Condensed Statement of Cash Flows | Cash Flow Activity | Amount ($) | | :-------------------------- | :--------- | | Net cash used in operating activities | (799,135) | | Net cash used in investing activities | (219,611,310) | | Net cash provided by financing activities | 221,416,571 | | Net change in cash | 1,006,126 | | Cash at beginning of period | — | | Cash at end of period | 1,006,126 | [Notes to Condensed Financial Statements (unaudited)](index=8&type=section&id=Notes%20to%20Condensed%20Financial%20Statements%20%28unaudited%29) [NOTE 1 — ORGANIZATION AND BUSINESS BACKGROUND](index=8&type=section&id=NOTE%201%20%E2%80%94%20ORGANIZATION%20AND%20BUSINESS%20BACKGROUND) - **XPAC Acquisition Corp.** was incorporated on March 11, 2021, as a blank check company to effect a **Business Combination**, without limiting itself to a particular industry or sector[20](index=20&type=chunk)[21](index=21&type=chunk) - The Company consummated its **Initial Public Offering** (**IPO**) on August 3, 2021, selling **20,000,000 Units** at **$10.00** per **Unit**, generating gross proceeds of **$200,000,000**. An additional **1,961,131 Units** were purchased on August 19, 2021, from an over-allotment option, generating **$19,611,310**[23](index=23&type=chunk)[24](index=24&type=chunk) - Substantially all net proceeds from the Public Offering and **Private Placement Warrants** are held in a **Trust Account**, invested in **U.S. government treasury bills** or **money market funds**, to be used for a **Business Combination** or distributed to shareholders if no combination is completed within **24 months**[26](index=26&type=chunk)[33](index=33&type=chunk) - As of September 30, 2021, the Company had **$1,006,126** in cash and working capital of **$413,211**, but expects to incur significant costs, raising substantial doubt about its ability to continue as a going concern[36](index=36&type=chunk) [NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES](index=13&type=section&id=NOTE%202%20%E2%80%94%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) - The financial statements are presented in conformity with **GAAP** for interim financial information and in accordance with **SEC** rules for interim reporting, with certain disclosures condensed or omitted[39](index=39&type=chunk) - The Company is an 'emerging growth company' and has elected to use the extended transition period for complying with new or revised financial accounting standards, meaning it will adopt new standards at the time private companies do[40](index=40&type=chunk)[41](index=41&type=chunk) - The Company is considered an exempted **Cayman Islands** company and is not subject to income taxes in the **Cayman Islands** or the United States, resulting in a zero tax provision for the period[46](index=46&type=chunk) - Offering costs totaling **$11,761,739** from the **IPO** were recognized, with **$477,711** allocated to accumulated deficit for warrants and **$11,284,028** to additional paid-in capital. An additional **$1,078,624** in offering costs from the over-allotment was similarly allocated[47](index=47&type=chunk)[48](index=48&type=chunk) - The Company applies the two-class method for calculating net income per share, allocating net income pro-rata between **Class A redeemable** and **Class B non-redeemable shares**[49](index=49&type=chunk) - Warrants not indexed to the Company's own shares are accounted for as liabilities at fair value, subject to remeasurement at each balance sheet date, with changes recognized in the statement of operations[54](index=54&type=chunk) - **Class A ordinary shares** subject to possible redemption are classified as temporary equity at redemption value, outside of the shareholder's equity section[58](index=58&type=chunk) [NOTE 3 — INITIAL PUBLIC OFFERING](index=19&type=section&id=NOTE%203%20%E2%80%94%20INITIAL%20PUBLIC%20OFFERING) - On August 3, 2021, the Company sold **20,000,000 Units** at **$10.00** per **Unit**, each consisting of one **Class A ordinary share** and one-third of one **Public Warrant**[62](index=62&type=chunk) - On August 19, 2021, an additional **1,961,131 Over-Allotment Units** were purchased, generating gross proceeds of **$19,611,310**[63](index=63&type=chunk) - An aggregate of **$10.00** per **Unit** sold in the **IPO** was held in the **Trust Account**, invested in U.S. government securities or **money market funds**[64](index=64&type=chunk) [NOTE 4 — PRIVATE PLACEMENT](index=19&type=section&id=NOTE%204%20%E2%80%94%20PRIVATE%20PLACEMENT) - Simultaneously with the **IPO**, the **Sponsor** purchased **4,000,000 Private Placement Warrants** at **$1.50** each, totaling **$6,000,000**. An additional **261,485 Private Placement Warrants** were sold for **$392,228** with the over-allotment[65](index=65&type=chunk) - Proceeds from **Private Placement Warrants** were added to the **Trust Account**. If a **Business Combination** is not completed, these warrants will expire worthless[65](index=65&type=chunk) [NOTE 5 — RELATED PARTY TRANSACTIONS](index=20&type=section&id=NOTE%205%20%E2%80%94%20RELATED%20PARTY%20TRANSACTIONS) - The **Sponsor** purchased **5,750,000 Class B ordinary shares** (Founder Shares) for **$25,000** in March 2021. Due to partial exercise of the over-allotment option, the **Sponsor** forfeited **259,717 Class B ordinary shares**, resulting in **5,490,283 Class B shares** outstanding[66](index=66&type=chunk) - The **Sponsor** issued an unsecured promissory note to the Company, allowing borrowing up to **$300,000**. As of September 30, 2021, **$84,412** was drawn down for offering expenses and remains owed, non-interest bearing[68](index=68&type=chunk) - The Company has an administrative support agreement to pay an affiliate of the **Sponsor** **$10,000** per **month** for office space and administrative support, but no expenses were incurred or accrued as of September 30, 2021[70](index=70&type=chunk) - XP Investimentos Corretora de Câmbio, Títulos e Valores Mobiliários S.A., an affiliate of the **Sponsor**, received a financial consulting fee of **$1,725,443.24** for advisory services related to the offering[71](index=71&type=chunk) [NOTE 6 — SHAREHOLDER'S EQUITY](index=22&type=section&id=NOTE%206%20%E2%80%94%20SHAREHOLDER%27S%20EQUITY) - The Company is authorized to issue **1,000,000 preference shares** (none issued) and **200,000,000 Class A ordinary shares** (**21,961,131** issued, none outstanding excluding those subject to redemption)[72](index=72&type=chunk)[73](index=73&type=chunk) - **20,000,000 Class B ordinary shares** are authorized, with **5,490,283 shares** issued and outstanding as of September 30, 2021, representing **20%** of outstanding ordinary shares after the **IPO**[74](index=74&type=chunk) - **Class B ordinary shares** automatically convert into **Class A ordinary shares** on a one-for-one basis at the time of a **Business Combination**, subject to adjustment to maintain a **20%** ownership stake[75](index=75&type=chunk) [NOTE 7 — WARRANT LIABILITIES](index=22&type=section&id=NOTE%207%20%E2%80%94%20WARRANT%20LIABILITIES) - **Public Warrants** become exercisable on the later of **12 months** from the **IPO** closing or **30 days** after a **Business Combination**, entitling holders to purchase one **Class A ordinary share** at **$11.50**[77](index=77&type=chunk) - The Company may redeem **Public Warrants** in whole at **$0.01** per **warrant** if the **Class A ordinary share** price equals or exceeds **$18.00** for **20 trading days** within a **30-day period**[80](index=80&type=chunk) - The Company may also redeem **Public Warrants** at **$0.10** per **warrant** if the **Class A ordinary share** price equals or exceeds **$10.00**, provided holders can exercise on a cashless basis prior to redemption[82](index=82&type=chunk) - **Private Placement Warrants** are identical to **Public Warrants** but are non-transferable, non-assignable, and non-saleable until **30 days** after a **Business Combination**, and are exercisable for cash or on a cashless basis, and non-redeemable as long as held by initial purchasers or permitted transferees[82](index=82&type=chunk) - As of September 30, 2021, there were **7,320,377 Public Warrants** and **4,261,485 Private Placement Warrants** outstanding. Both are classified as derivative liabilities at fair value due to potential net cash settlement[83](index=83&type=chunk)[84](index=84&type=chunk) [NOTE 8 — COMMITMENTS AND CONTINGENCIES](index=25&type=section&id=NOTE%208%20%E2%80%94%20COMMITMENTS%20AND%20CONTINGENCIES) - Holders of Founder Shares and **Private Placement Warrants** are entitled to registration rights, requiring the Company to register such securities for resale after conversion to **Class A ordinary shares**[85](index=85&type=chunk) - Underwriters received a cash underwriting discount of **$4,392,226** and are entitled to a deferred fee of **$7,686,396**, which is held in the **Trust Account** and released upon completion of a **Business Combination**, or waived if no combination occurs[87](index=87&type=chunk) [NOTE 9 — RECURRING FAIR VALUE MEASUREMENTS](index=26&type=section&id=NOTE%209%20%E2%80%94%20RECURRING%20FAIR%20VALUE%20MEASUREMENTS) - As of September 30, 2021, the Company's warrant liability was valued at **$8,135,002**, with **Public Warrants** reclassified from Level 3 to Level 1 due to observable trading prices, and **Private Placement Warrants** remaining Level 3[88](index=88&type=chunk)[89](index=89&type=chunk) Fair Value Measurements | Assets/Liabilities | Level 1 ($) | Level 2 ($) | Level 3 ($) | | :----------------- | :---------- | :---------- | :---------- | | **Assets** | | | | | Cash and marketable securities held in trust account | 219,613,318 | — | — | | **Liabilities** | | | | | Public Warrants | 5,124,264 | — | — | | Private Placement Warrants | — | — | 3,010,738 | - The initial fair value for warrants on August 3, 2021, was established using a **Black-Scholes-Merton formula model**. As of September 30, 2021, **Public Warrants** were valued based on publicly traded prices, while **Private Warrants** were estimated using a **Monte Carlo simulation model**[91](index=91&type=chunk)[92](index=92&type=chunk) Fair Value Measurements | Metric | Private Warrant | Public Warrant | | :-------------------------- | :-------------- | :------------- | | Fair Value as of August 3, 2021 (IPO date) | $4,770,000 | $7,838,000 | | Change in fair value of warrant liabilities | $311,820 | $768,567 | | Fair Value as of August 19, 2021 (over-allotment date) | $5,081,820 | $8,606,567 | | Transfer out of Level 3 | — | $(8,606,567) | | Change in fair value of warrant liabilities | $(2,071,081) | — | | Fair Value as of September 30, 2021 | $3,010,738 | $— | [NOTE 10 – RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS](index=28&type=section&id=NOTE%2010%20%E2%80%93%20RESTATEMENT%20OF%20PREVIOUSLY%20ISSUED%20FINANCIAL%20STATEMENTS) - Management identified errors in the August 3, 2021 Balance Sheet and Pro Forma Balance Sheet related to the classification of **Class A ordinary shares** subject to possible redemption[95](index=95&type=chunk)[97](index=97&type=chunk) - The reclassification error resulted in an adjustment to the initial carrying value of **Class A ordinary shares** subject to possible redemption, with an offset to **Class A ordinary shares** and additional paid-in capital[97](index=97&type=chunk) Restatement of Financial Statements | Balance Sheet Item (August 3, 2021) | As Previously Reported ($) | Adjustment ($) | As Restated ($) | | :---------------------------------- | :------------------------- | :------------- | :-------------- | | Class A ordinary shares subject to possible redemption | 176,643,160 | 23,356,840 | 200,000,000 | | Class A ordinary shares | 237 | (237) | — | | Additional paid-in capital | 5,489,003 | (5,489,003) | — | | Accumulated deficit | (489,807) | (17,867,600) | (18,357,407) | | Total Shareholders' Equity (Deficit) | 5,000,005 | (23,356,840) | (18,356,835) | [NOTE 11 — SUBSEQUENT EVENTS](index=28&type=section&id=NOTE%2011%20%E2%80%94%20SUBSEQUENT%20EVENTS) - The Company identified no subsequent events as of the date the financial statements were issued[100](index=100&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=29&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management's discussion and analysis of financial condition, operations, liquidity, capital, accounting policies, and JOBS Act impact [Overview](index=29&type=section&id=Overview) - **XPAC Acquisition Corp.** was formed on March 11, 2021, as a blank check company to pursue a **Business Combination**, with an initial focus on high-growth target businesses[102](index=102&type=chunk) - The Company expects to incur significant costs in pursuit of its initial **Business Combination** and cannot assure success in raising capital or completing the combination[103](index=103&type=chunk) [Results of Operations and Known Trends or Future Events](index=29&type=section&id=Results%20of%20Operations%20and%20Known%20Trends%20or%20Future%20Events) - The Company has not generated any operating revenues to date, with all activities related to its formation and **initial public offering**. Operating revenues are not expected until after a **Business Combination**[104](index=104&type=chunk) - For the period from inception (March 11, 2021) through September 30, 2021, the Company reported a net income of **$4,434,975**, primarily from a gain on the fair value of warrant liabilities and securities held in trust, offset by formation and operating costs[105](index=105&type=chunk) [Liquidity and Capital Resources](index=31&type=section&id=Liquidity%20and%20Capital%20Resources) Cash Flow Activity | Cash Flow Activity (Inception through Sep 30, 2021) | Amount ($) | | :-------------------------------------------------- | :--------- | | Net cash used in operating activities | (799,135) | | Net cash used in investing activities | (219,611,310) | | Net cash provided by financing activities | 221,416,571 | | Net change in cash | 1,006,126 | - The Company intends to use substantially all funds in the **Trust Account** to complete its initial **Business Combination**, with interest income (less taxes) potentially used for income taxes[113](index=113&type=chunk) - As of September 30, 2021, the Company had **$1,006,126** cash and working capital of **$413,211**. The expectation of significant future costs raises substantial doubt about the Company's ability to continue as a going concern[119](index=119&type=chunk) [Off-Balance Sheet Arrangements](index=33&type=section&id=Off-Balance%20Sheet%20Arrangements) - The Company did not have any off-balance sheet arrangements as of September 30, 2021[120](index=120&type=chunk) [Contractual Obligations](index=33&type=section&id=Contractual%20Obligations) - As of September 30, 2021, the Company had no long-term debt, capital, or operating lease obligations. It has an administrative services agreement to pay an affiliate of a director up to **$10,000** per **month** for office and administrative support[121](index=121&type=chunk) [Critical Accounting Policies](index=33&type=section&id=Critical%20Accounting%20Policies) - Management's discussion and analysis are based on unaudited financial information prepared in accordance with U.S. **GAAP**, requiring significant judgments and estimates that could differ from actual results[122](index=122&type=chunk)[124](index=124&type=chunk) [Recent Accounting Standards](index=35&type=section&id=Recent%20Accounting%20Standards) - The Company is evaluating the effect of **ASU No. 2020-06** (Debt with Conversion and other Options and Derivatives and Hedging – Contracts in Entity's Own Equity), effective January 1, 2022, on its financial position, results of operations, or disclosures[125](index=125&type=chunk) - The Company has concluded that no other new accounting pronouncements will have a material impact on its financial statements[126](index=126&type=chunk) [JOBS Act](index=35&type=section&id=JOBS%20Act) - As an 'emerging growth company' under the **JOBS Act**, the Company has elected to delay the adoption of new or revised accounting standards, potentially making its financial statements not comparable to non-emerging growth companies[127](index=127&type=chunk) - The Company is evaluating other reduced reporting requirements provided by the **JOBS Act**, which could exempt it from certain **Sarbanes-Oxley** and Dodd-Frank provisions for up to **five years**[128](index=128&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=35&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Addresses market risks, specifically interest rate risk, concluding no material exposure due to short-term government investments - The net proceeds held in the **Trust Account** are invested in U.S. government treasury obligations with a maturity of **185 days** or less or in **money market funds**, resulting in no material exposure to interest rate risk due to their short-term nature[129](index=129&type=chunk) [Item 4. Controls and Procedures](index=36&type=section&id=Item%204.%20Controls%20and%20Procedures) Discusses internal controls, disclosure controls evaluation, and remediation plan for identified material weakness in financial reporting [Evaluation of Disclosure Controls and Procedures](index=36&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) - As of September 30, 2021, the Company's disclosure controls and procedures were not effective due to a material weakness[134](index=134&type=chunk) [Changes in Internal Control over Financial Reporting](index=38&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) - A material weakness was identified in the internal control over financial reporting, specifically regarding the improper classification of **Class A redeemable ordinary shares** in previously issued balance sheets[139](index=139&type=chunk)[140](index=140&type=chunk) - The Company plans to enhance its system for evaluating and implementing complex accounting standards, including improved access to accounting literature and increased communication among personnel and third-party professionals, to remediate this material weakness[141](index=141&type=chunk) [PART II OTHER INFORMATION](index=39&type=section&id=PART%20II%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=39&type=section&id=Item%201.%20Legal%20Proceedings) Confirms the Company is not currently involved in any legal proceedings - The Company has no legal proceedings[144](index=144&type=chunk) [Item 1A. Risk Factors](index=39&type=section&id=Item%201A.%20Risk%20Factors) Refers to previously disclosed risk factors, confirming no material changes as of the report date - There have been no material changes to the risk factors disclosed in the Company's S-1 filing as of the date of this report[145](index=145&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=39&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Details unregistered sales of equity securities, including Class B ordinary shares to the sponsor and independent directors - In March 2021, the **Sponsor** purchased **5,750,000 Class B ordinary shares** for **$25,000**. In May 2021, **30,000 founder shares** were transferred to each of the independent directors[146](index=146&type=chunk) - These securities were issued under the exemption from registration in Section **4(a)(2)** of the Securities Act, with no underwriting discounts or commissions paid[146](index=146&type=chunk)[147](index=147&type=chunk) [Item 3. Defaults Upon Senior Securities](index=39&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) Confirms no defaults occurred upon senior securities - There were no defaults upon senior securities[148](index=148&type=chunk) [Item 4. Mine Safety Disclosures](index=39&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) States that mine safety disclosures are not applicable to the Company - Mine safety disclosures are not applicable to the Company[149](index=149&type=chunk) [Item 5. Other Information](index=39&type=section&id=Item%205.%20Other%20Information) Indicates no other information to report - There is no other information to report[150](index=150&type=chunk) [Item 6. Exhibits](index=40&type=section&id=Item%206.%20Exhibits) Provides a list of exhibits filed with Form 10-Q, including certifications and XBRL documents Exhibits List | Exhibit Number | Description | | :------------- | :---------- | | 31.1* | Certification of the Principal Executive Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934. | | 31.2* | Certification of the Principal Financial Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934. | | 32.1*(1) | Certification of the 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*(1) | Certification of the Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant t o Section 906 of the Sarbanes-Oxley Act of 2002. | | 101.INS* | XBRL Instance Document | | 101.SCH* | XBRL Taxonomy Extension Schema Document | | 101.CAL* | SXRL Taxonomy Extension Calculation Linkbase Document | | 101.DEF* | XBRL Taxonomy Extension Definition Linkbase Document | | 101.LAB* | XBRL Taxonomy Extension Label Linkbase Document | | 101.PRE* | XBRL Taxonomy Extension Presentation Linkbase Document | | 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) | [Signatures](index=41&type=section&id=Signatures) Contains signatures of principal executive and financial officers, certifying the report - The report was signed by Chu Chiu Kong, Chief Executive Officer, and Fabio Kann, Chief Financial Officer, on November 12, 2021[158](index=158&type=chunk)