XPAX XPAC Acquisition Corporation

NOTICE OF EXTRAORDINARY GENERAL MEETING OF
XPAC ACQUISITION CORP.

To Be Held at [●] a.m., Eastern Time, on July [●], 2023

TO THE SHAREHOLDERS OF XPAC ACQUISITION CORP.:

You are cordially invited to attend the extraordinary general meeting of XPAC Acquisition Corp., a Cayman Islands exempted company (“we,” “us,” “our,” “XPAC” or the “Company”), which will be held on July [●], 2023, at [●] a.m., Eastern Time, at the offices of XPAC, located at 55 West 46 Street, 30th Floor, New York, NY 10036, United States, and via a virtual meeting, or at such other time, on such other date and at such other place to which the meeting may be adjourned (the “Shareholder Meeting”).

The Shareholder Meeting will be conducted via live webcast, but the physical location of the Shareholder Meeting will remain at the location specified above for the purposes of our amended and restated memorandum and articles of association (the “Articles”). You will be able to attend the Shareholder Meeting online, vote and submit your questions during the Shareholder Meeting by visiting [●] and you are able to vote prior to the Shareholder Meeting by visiting [●].

The attached notice of the Shareholder Meeting and proxy statement describe the business XPAC will conduct at the Shareholder Meeting and provide information about XPAC that you should consider when you vote your shares. As more fully described in the attached proxy statement, which is dated July [●], 2023, and is first being mailed to shareholders on or about that date, the Shareholder Meeting will be held for the purpose of considering and voting on the following proposals:

Each of the Extension Amendment Proposal, the Redemption Limitation Amendment Proposal, the Name Change Amendment Proposal, the Letter Agreement Amendment Proposal and the Adjournment Proposal is more fully described in the accompanying proxy statement. Please take the time to read carefully each of the proposals in the accompanying proxy statement before you vote.

The primary purpose of the Extension Amendment Proposal is to allow XPAC additional time to consummate an initial business combination (a “Business Combination”). You are not being asked to vote on a Business Combination at this time.

The Articles provide that XPAC has until August 3, 2023 to consummate a Business Combination. The Board has determined that it is in the best interests of XPAC to seek an extension of the Original Termination Date and have XPAC’s shareholders approve the Extension Amendment Proposal to allow for a period of additional time to consummate a Business Combination. Without the Extension Amendment, XPAC believes that it will not be able to consummate a Business Combination on or before the Original Termination Date. If that were to occur, XPAC would be precluded from completing a Business Combination and would be forced to liquidate.

The Sponsor is currently negotiating with a professional investor (the “New Sponsor”) a potential transaction (the “Sponsor Handover”) whereby the New Sponsor would acquire at least a majority of the Class B ordinary shares, par value $0.0001 per share (the “Class B Ordinary Shares,” and together with the Class A Ordinary Shares, the “Ordinary Shares”) held by the Sponsor and all of the Private Placement Warrants (as defined below) held by the Sponsor and, in connection therewith, the Sponsor currently expects that new Board members and a new management team for XPAC would be appointed by the existing Board and the existing Board members and the existing management team would resign, which would be effective upon consummation of the Sponsor Handover or as soon as possible thereafter. The Sponsor currently expects to enter into a purchase agreement (the “Purchase Agreement”) in relation to the Sponsor Handover prior to the filing of a definitive version of this proxy statement with the SEC. The Sponsor currently expects that the Purchase Agreement would provide that consummation of the Sponsor Handover would be conditional on, among other things, (i) approval of the Extension Amendment Proposal, the Name Change Amendment Proposal and the Letter Agreement Amendment Proposal, and (ii) the New Sponsor joining as a party to the Letter Agreement. The Sponsor, the Board and XPAC’s management team believe that shareholders of XPAC will benefit from the Sponsor Handover as the Sponsor Handover, together with the extension of the Original Termination Date, would provide XPAC with additional time to consummate a Business Combination. As of the date hereof, neither XPAC nor the Sponsor have entered into any binding agreements in relation to the Sponsor Handover, and there can be no assurance that any such binding agreements will be entered into.

The purpose of the Letter Agreement Amendment Proposal is to allow the Sponsor to transfer Class B Ordinary Shares and the Private Placement Warrants, directly or indirectly, to [●] (which we refer to herein as the New Sponsor) or its affiliates and thereby consummate the Sponsor Handover. The Letter Agreement includes provisions prohibiting the sale or transfer, directly or indirectly, of the Class B Ordinary Shares and the Private Placement Warrants. Without the Letter Agreement Amendment, the Sponsor Handover could not be consummated. If the Sponsor Handover is consummated, the Sponsor currently expects that new Board members and a new management team for XPAC would be appointed by the existing Board and the existing Board members and the existing management team would resign, which would be effective upon consummation of the Sponsor Handover or as soon as possible thereafter.

Unless the Redemption Limitation Amendment Proposal is approved and implemented, we will not proceed with the Extension Amendment if redemptions of our Public Shares would cause XPAC to exceed the Redemption Limitation. If the Redemption Limitation Amendment Proposal is not approved and there are significant requests for redemption such that the Redemption Limitation would be exceeded, the Redemption Limitation would prevent XPAC from being able to consummate a Business Combination. XPAC believes that the Redemption Limitation is not needed. The purpose of such limitation was initially to ensure that XPAC did not become subject to the SEC’s “penny stock” rules. Because the Public Shares would not be deemed to be “penny stock” as such securities are listed on a national securities exchange, XPAC is presenting the Redemption Limitation Amendment Proposal to facilitate the consummation of a Business Combination. If the Redemption Limitation Amendment Proposal is not approved and there are significant requests for redemption such that XPAC’s net tangible assets would be less than $5,000,001 upon the consummation of the Business Combination, the Articles would prevent XPAC from being able to consummate the Business Combination even if all other conditions to closing are met.

Each of the Extension Amendment Proposal, the Name Change Amendment Proposal and the Letter Agreement Amendment Proposal is conditioned on the approval of each other. Unless each of the Extension Amendment Proposal, the Name Change Amendment Proposal and the Insider Letter Amendment Proposal are approved at the Shareholder Meeting, the Extension Amendment and the Sponsor Handover will not be consummated.

As contemplated by the Articles, the holders of Public Shares may elect to redeem all or a portion of their Public Shares in exchange for their pro rata portion of the funds held in a trust account (the “Trust Account”) established to hold a portion of the proceeds of the IPO and the concurrent sale of the private placement warrants (the “Private Placement Warrants”), if the Extension Amendment is implemented (the “Redemption”), regardless of how such public shareholders vote in regard to the Extension Amendment Proposal. If the Extension Amendment Proposal is approved by the requisite vote of shareholders and implemented, the holders of Public Shares remaining after the Redemption will retain their right to redeem their Public Shares for their pro rata portion of the funds available in the Trust Account upon consummation of a Business Combination or if XPAC does not consummate a Business Combination by the Articles Extension Date (which is August 3, 2024, the date which is 36 months from the closing date of XPAC’s IPO).

On July [●], 2023, the most recent practicable date prior to the date of the accompanying proxy statement, the redemption price per Class A Ordinary Share was approximately $[●], based on the aggregate amount on deposit in the Trust Account of approximately $[●] as of July [●], 2023 (including interest not previously released to XPAC to pay its taxes), divided by the total number of then outstanding Public Shares. The Redemption price per share will be calculated based on the aggregate amount on deposit in the Trust Account, including interest earned on the funds held in the Trust Account and not previously released to XPAC to pay its taxes two business days prior to the initially scheduled date of the Shareholder Meeting. The closing price of the Class A Ordinary Shares on Nasdaq on July [●], 2023 was $[●]. Accordingly, if the market price of the Class A Ordinary Shares were to remain the same until the date of the Shareholder Meeting, exercising redemption rights would result in a public shareholder receiving approximately $[●] [more] [less] per share than if the shares were sold in the open market (based on the per share redemption price as of July [●], 2023). XPAC cannot assure shareholders that they will be able to sell their Class A Ordinary Shares in the open market, even if the market price per share is lower than the redemption price stated above, as there may not be sufficient liquidity in its securities when such shareholders wish to sell their shares. XPAC believes that such redemption right enables its public shareholders to determine whether to sustain their investments for an additional period if XPAC does not consummate a Business Combination on or before the Original Termination Date.

If the Extension Amendment Proposal, the Redemption Limitation Amendment Proposal, the Name Change Amendment Proposal and the Letter Agreement Amendment Proposal are not approved, and a Business Combination is not consummated on or before the Original Termination Date, XPAC will: (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account and not previously released to XPAC (less taxes payable and up to $100,000 of interest to pay dissolution expenses and which interest shall be net of taxes payable), divided by the number of the then-outstanding Public Shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any); and (iii) as promptly as reasonably possible following such redemption, subject to the approval of XPAC’s remaining shareholders and the Board, liquidate and dissolve, subject in each case of clauses (ii) and (iii) to XPAC’s obligations under Cayman Islands law to provide for claims of creditors and to requirements of other applicable law. There will be no redemption rights or liquidating distributions from the Trust Account with respect to XPAC’s warrants, which will expire worthless in the event XPAC dissolves and liquidates the Trust Account.

XPAC reserves the right at any time to adjourn the Shareholder Meeting indefinitely and/or not to submit to its shareholders the Extension Amendment Proposal, the Redemption Limitation Amendment Proposal, the Name Change Amendment Proposal and/or the Letter Agreement Amendment Proposal, including if the Sponsor Handover is not entered into or is not expected to be consummated. In the event the Shareholder Meeting is adjourned indefinitely, and a Business Combination is not consummated prior to August 3, 2023, XPAC will dissolve and liquidate in accordance with the Memorandum and Articles of Association.

Subject to the foregoing, the approval of each of the Extension Amendment Proposal, the Redemption Limitation Amendment Proposal and the Name Change Amendment Proposal requires a special resolution under Cayman Islands law, being the affirmative vote of at least a two-thirds (2/3) majority of the votes cast by the holders of Ordinary Shares, voting as a single class, who are present in person or represented by proxy and entitled to vote thereon, and who vote thereon, at the Shareholder Meeting.

Approval of each of the Letter Agreement Amendment Proposal and the Adjournment Proposal requires an ordinary resolution under Cayman Islands law, being the affirmative vote of at least a majority of the votes cast by the holders of the issued Ordinary Shares, voting as a single class, who are present in person or represented by proxy and entitled to vote thereon, and who vote thereon, at the Shareholder Meeting. The Adjournment Proposal will only be put forth for a vote if there are not sufficient votes to approve the Extension Amendment Proposal, the Redemption Limitation Amendment Proposal, the Name Change Amendment Proposal or the Letter Agreement Amendment Proposal at the Shareholder Meeting or if due to redemptions in connection with the Extension Amendment, XPAC would not adhere to the continued listing requirements of Nasdaq, or if XPAC determines before the Shareholder Meeting that it is not necessary or no longer desirable to proceed with the other proposals.

The Board has fixed the close of business on June 29, 2023 as the date for determining the XPAC shareholders that are entitled to receive notice of and vote at the Shareholder Meeting and any adjournment thereof. Only holders of record of Ordinary Shares on that date are entitled to have their votes counted at the Shareholder Meeting or any adjournment thereof.

The Board believes that it is in the best interests of XPAC that XPAC obtain the Extension Amendment, the Redemption Limitation Amendment, the Name Change Amendment Proposal and the Letter Agreement Amendment Proposal. After careful consideration of all relevant factors, the Board has determined that the Extension Amendment Proposal, the Redemption Limitation Amendment Proposal, the Name Change Amendment Proposal, the Letter Agreement Amendment Proposal and the Adjournment Proposal are in the best interests of XPAC and its shareholders, has declared it advisable and recommends that you vote or give instruction to vote “FOR” the Extension Amendment proposal, “FOR” the Redemption Limitation Amendment Proposal, “FOR” the Name Change Amendment Proposal, “FOR” the Letter Agreement Amendment Proposal, and “FOR” the Adjournment Proposal.

Your vote is very important. Whether or not you plan to attend the Shareholder Meeting, please vote as soon as possible by following the instructions in the accompanying proxy statement to make sure that your shares are represented and voted at the Shareholder Meeting. If you hold your shares in “street name” through a bank, broker or other nominee, you will need to follow the instructions provided to you by your bank, broker or other nominee to ensure that your shares are represented and voted at the Shareholder Meeting. The approval of each of the Extension Amendment Proposal, the Redemption Limitation Amendment Proposal, and the Name Change Amendment Proposal requires a special resolution under Cayman Islands law, the affirmative vote of at least a two-thirds (2/3) majority of the votes cast by the holders of the issued Ordinary Shares who are present in person or represented by proxy and entitled to vote thereon, and who vote thereon, at the Shareholder Meeting. Approval of each of the Letter Agreement Amendment Proposal and the Adjournment Proposal requires an ordinary resolution under Cayman Islands law, being the affirmative vote of at least a majority of the votes cast by the holders of the issued Ordinary Shares who are present in person or represented by proxy and entitled to vote thereon, and who vote thereon, at the Shareholder Meeting. Accordingly, if you fail to vote in person or by proxy at the Shareholder Meeting, your shares will not be counted for the purposes of determining whether the Extension Amendment Proposal, the Redemption Limitation Amendment Proposal, the Name Change Amendment Proposal, the Letter Agreement Amendment Proposal and the Adjournment Proposal are approved by the requisite majorities. Each of the Extension Amendment Proposal, the Name Change Amendment Proposal and the Letter Agreement Amendment Proposal is conditioned on the approval of each other. Unless each of the Extension Amendment Proposal, the Name Change Amendment Proposal and the Insider Letter Amendment Proposal are approved at the Shareholder Meeting, the Extension Amendment and the Sponsor Handover will not be consummated.

If you sign, date and return your proxy card without indicating how you wish to vote, your proxy will be voted FOR each of the proposals presented at the Shareholder Meeting. If you fail to return your proxy card or fail to instruct your bank, broker or other nominee how to vote, and do not attend the Shareholder Meeting in person, the effect will be that your shares will not be counted for purposes of determining whether a quorum is present at the Shareholder Meeting but will otherwise not have any effect on whether the proposals are approved. If you are a shareholder of record and you attend the Shareholder Meeting and wish to vote in person, you may withdraw your proxy and vote in person.

TO EXERCISE YOUR REDEMPTION RIGHTS, YOU MUST DEMAND IN WRITING THAT YOUR CLASS A ORDINARY SHARES ARE REDEEMED FOR A PRO RATA PORTION OF THE FUNDS HELD IN THE TRUST ACCOUNT AND TENDER YOUR SHARES TO THE TRANSFER AGENT AT LEAST TWO BUSINESS DAYS PRIOR TO THE INITIALLY SCHEDULED DATE OF THE SHAREHOLDER MEETING. IN ORDER TO EXERCISE YOUR REDEMPTION RIGHT, YOU NEED TO IDENTIFY YOURSELF AS A BENEFICIAL HOLDER AND PROVIDE YOUR LEGAL NAME, PHONE NUMBER AND ADDRESS IN YOUR WRITTEN DEMAND. YOU MAY TENDER YOUR SHARES BY EITHER TENDERING OR DELIVERING YOUR SHARES (AND CERTIFICATES (IF ANY) AND OTHER REDEMPTION FORMS) TO THE TRANSFER AGENT OR BY TENDERING OR DELIVERING YOUR SHARES (AND SHARE CERTIFICATES (IF ANY) AND OTHER REDEMPTION FORMS) ELECTRONICALLY USING THE DEPOSITORY TRUST COMPANY’S DWAC (DEPOSIT WITHDRAWAL AT CUSTODIAN) SYSTEM. IF YOU HOLD THE SHARES IN STREET NAME, YOU WILL NEED TO INSTRUCT THE ACCOUNT EXECUTIVE AT YOUR BANK OR BROKER TO WITHDRAW THE SHARES FROM YOUR ACCOUNT IN ORDER TO EXERCISE YOUR REDEMPTION RIGHTS.

Enclosed is the proxy statement containing detailed information about the Shareholder Meeting, the Extension Amendment Proposal, the Redemption Limitation Amendment Proposal, the Name Change Amendment Proposal, the Letter Agreement Amendment Proposal and the Adjournment Proposal. Whether or not you plan to attend the Shareholder Meeting, XPAC urges you to read this material carefully and vote your shares.

By Order of the Board of Directors of XPAC ACQUISITION CORP.

XPAC ACQUISITION CORP.
A Cayman Islands Exempted Company
55 West 46 Street, 30th Floor
New York, NY 10036, United States

EXTRAORDINARY GENERAL MEETING
OF XPAC ACQUISITION CORP.

To Be Held at [●] a.m., Eastern Time, on July [●], 2023

This proxy statement and the enclosed form of proxy are furnished in connection with the solicitation of proxies by our board of directors (the “Board”) for use at the extraordinary general meeting of XPAC ACQUISITION CORP., a Cayman Islands exempted company (“XPAC,” the “Company,” “we,” “us” or “our”), which will be held on July [●], 2023, at [●] a.m., Eastern Time, at the offices of XPAC located at 55 West 46 Street, 30th Floor, New York, NY 10036, United States, and via a virtual meeting, or at such other time, on such other date and at such other place to which the meeting may be adjourned (the “Shareholder Meeting”).

YOUR VOTE IS IMPORTANT. It is important that your shares be represented at the Shareholder Meeting, regardless of the number of shares that you hold. You are, therefore, urged to execute and return, at your earliest convenience, the enclosed proxy card in the envelope that has also been provided.

Cautionary Note Regarding Forward-Looking Statements

Some of the statements contained in this proxy statement constitute forward-looking statements within the meaning of the federal securities laws. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. Forward-looking statements reflect the current views of XPAC Acquisition Corp. with respect to, among other things, XPAC’s capital resources and results of operations. Statements regarding market conditions and results of operations also are forward-looking statements. In some cases, you can identify these forward-looking statements by the use of terminology such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “could,” “seeks,” “approximately,” “predicts,” “intends,” “plans,” “estimates,” “anticipates” or the negative version of these words or other comparable words or phrases.

The forward-looking statements contained in this proxy statement reflect XPAC’s current views about future events and are subject to numerous known and unknown risks, uncertainties, assumptions and changes in circumstances that may cause its actual results to differ significantly from those expressed in any forward-looking statement. XPAC does not guarantee that the transactions and events described will happen as described (or that they will happen at all). The following factors, among others, could cause actual results and future events to differ materially from those set forth or contemplated in the forward-looking statements:

While forward-looking statements reflect XPAC’s good faith beliefs, they are not guarantees of future performance. XPAC disclaims any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, new information, data or methods, future events or other changes after the date of this proxy statement, except as required by applicable law. For a further discussion of these and other factors that could cause XPAC’s future results, performance or transactions to differ significantly from those expressed in any forward-looking statement, please see the section titled “Risk Factors” in XPAC’s final prospectus, dated July 29, 2021, as filed with the Securities and Exchange Commission (the “SEC”) on August 2, 2021 and in other reports filed by XPAC with the SEC from time to time, including our Annual Reports on Forms 10-K. You should not place undue reliance on any forward-looking statements, which are based only on information currently available to XPAC (or to third parties making the forward-looking statements).

Risk Factors

You should consider carefully all of the risks described in our (i) XPAC’s final prospectus, dated July 29, 2021, as filed with the SEC on August 2, 2021, (ii) Annual Report on Form 10-K for the year ended December 31, 2022, as filed with the SEC on March 31, 2023 and (iii) other reports we file with the SEC, before making a decision to invest in our securities. Furthermore, if any of the following events occur, our business, financial condition and operating results may be materially adversely affected or we could face liquidation. In that event, the trading price of our securities could decline, and you could lose all or part of your investment. The risks and uncertainties described in the aforementioned filings and below are not the only ones we face. Additional risks and uncertainties that we are unaware of, or that we currently believe are not material, may also become important factors that adversely affect our business, financial condition and operating results or result in our liquidation.

There are no assurances that the Extension Amendment will enable XPAC to consummate a Business Combination.

Approving the Extension Amendment (as defined below) involves a number of risks. Even if the Extension Amendment is approved and implemented and the Sponsor Handover is entered into and consummated, XPAC can provide no assurances that a Business Combination will be consummated prior to the Articles Extension Date (as defined below). Our ability to consummate any Business Combination is dependent on a variety of factors, many of which are beyond our control. If the Extension Amendment is approved and implemented, XPAC expects to seek shareholder approval of a Business Combination. We are required to offer shareholders the opportunity to redeem shares in connection with the Extension Amendment, and we will be required to offer shareholders redemption rights again in connection with any shareholder vote to approve a Business Combination. Even if the Extension Amendment or a Business Combination are approved by our shareholders, it is possible that redemptions will leave us with insufficient cash to consummate a Business Combination on commercially acceptable terms, or at all. The fact that we will have separate redemption periods in connection with the Extension Amendment and a Business Combination vote could exacerbate these risks. Other than in connection with a redemption offer or liquidation, our shareholders may be unable to recover their investment except through sales of our shares on the open market. The price of our shares may be volatile, and there can be no assurance that shareholders will be able to dispose of our shares at favorable prices, or at all.

In the event the Extension Amendment Proposal is approved and implemented, the ability of our public shareholders to exercise redemption rights with respect to a large number of our Public Shares may adversely affect the liquidity of our securities.

A public shareholder may request that XPAC redeem all or a portion of such public shareholder’s ordinary shares for cash. The ability of our public shareholders to exercise such redemption rights with respect to a large number of our Public Shares (as defined below) may adversely affect the liquidity of our Class A Ordinary Shares. As a result, you may be unable to sell your Class A Ordinary Shares even if the market price per share is higher than the per-share redemption price paid to public shareholders who elect to redeem their shares.

A future potential Business Combination may be subject to U.S. foreign investment regulations, including regulations relating to the Committee on Foreign Investment in the United States, which may, among other things, impose conditions on, delay or prevent the consummation of such future potential Business Combination, if any.

If any material regulatory approvals, clearances or actions are required for completion of a future potential Business Combination, there can be no assurance that any such approval or clearance would be obtained, or any such action taken, within the required time period. This includes any potential review of a future Business Combination, if any, by a U.S. government entity, such as the Committee on Foreign Investment in the United States (“CFIUS”) on account of certain restrictions on the acquisition of, or an investment in, a U.S. business by non-U.S. investors. If a potential Business Combination falls within CFIUS’s jurisdiction to review the transaction in order to determine the effect of such transactions on the national security of the U.S., we may be required to make a mandatory filing or we may determine to submit a voluntary notice to CFIUS, or we may determine to proceed with such potential Business Combination without notifying CFIUS and risk CFIUS intervention, before or after closing such potential Business Combination. CFIUS can contact parties to transactions within its jurisdiction that did not notify CFIUS and request that the parties submit a CFIUS notice and can self-initiate national security reviews. If a potential Business Combination falls within the scope of foreign ownership restrictions, CFIUS may impose conditions or limitations on such potential Business Combination or we may be prevented from, or be unable to, consummate such potential Business Combination, if any.

Whether CFIUS has jurisdiction to review an acquisition or investment transaction depends on, among other factors, (i) whether the investor/acquiror of the U.S. business is a “foreign person” or ‘‘foreign entity,” (ii) the nature and structure of the transaction, (iii) the level of beneficial ownership interest, and (iv) the nature of any information or governance rights involved. Some transactions within the jurisdiction of CFIUS trigger a mandatory CFIUS filing requirement. Otherwise, notifying CFIUS of a transaction within its jurisdiction is voluntary. For example, investments that result in “control” of a “U.S. business” by a “foreign person” (in each case, as such terms are defined in 31 C.F.R. Part 800) are always subject to CFIUS jurisdiction. The Foreign Investment Risk Review Modernization Act of 2018, which was fully implemented through regulations that became effective in 2020, significantly expanded the scope of CFIUS’s jurisdiction to investments that do not result in control of a U.S. business by a foreign person, but afford certain foreign investors certain information or governance rights in a U.S. business that has a nexus to “critical technologies,” “covered investment critical infrastructure,” and/or “sensitive personal data” (in each case, as such terms are defined in 31 C.F.R. Part 800).

As of the date of this proxy statement, XPAC Sponsor LLC (the “Sponsor”) is a limited liability company formed and registered under the laws of the Cayman Islands and each manager of the Sponsor is a non-U.S. person and, thus, a foreign person. The Sponsor is controlled by XP Inc., a publicly traded Cayman Islands exempted company whose Class A common shares are listed on Nasdaq and whose principal place of business is Brazil. The controlling shareholder of XP Inc. is XP Control LLC, which owns 66.2% of the aggregate voting power of the Class A common shares and Class B common shares of XP Inc. XP Control LLC is a limited liability company formed and registered under the laws of the Cayman Islands and each manager of XP Control LLC is a non-U.S. person and, thus, a foreign person. Therefore, XP Control LLC is controlled by non-U.S. persons and, thus, foreign persons. While XPAC and the Sponsor are controlled by, and have substantial ties with non-U.S. persons, and if the Sponsor Handover is implemented, the New Sponsor may have substantial ties with non-U.S. persons, we believe that it is unlikely that any of the facts or relationships with respect to a potential future Business Combination that we may pursue, would subject such potential Business Combination to regulatory review by a U.S. government entity or authority, including review by CFIUS. Nor do we believe that a potential future Business Combination would ultimately be prohibited if such review was conceivable.

However, there can be no assurances that CFIUS or another U.S. governmental agency will not take a different view of a potential Business Combination or will not choose to review such potential Business Combination, if any. If a potential Business Combination falls within CFIUS’s jurisdiction, we may be required to make a mandatory filing or determine to submit a voluntary notice to CFIUS, or to proceed with such potential Business Combination without notifying CFIUS and risk CFIUS intervention, before or after the consummation of such potential Business Combination. In addition, for so long as the Sponsor retains a material ownership interest in XPAC, XPAC may be deemed a “foreign person” under the regulations relating to CFIUS and any potential Business Combination with a U.S. business or foreign business with U.S. subsidiaries that XPAC may wish to pursue may be subject to CFIUS review. In connection with a potential Business Combination, CFIUS could, among other things, (i) decide to block or delay such potential Business Combination, (ii) impose conditions, limitations or restrictions with respect to such potential Business Combination (including, but not limited to, limits on information sharing with investors, requiring a voting trust, governance modifications, or forced divestiture, among other things), or (iii) request the President of the United States to order XPAC to divest all or a portion of any U.S. target business of such potential Business Combination that XPAC acquired without first obtaining CFIUS clearance. In addition, CFIUS may impose penalties if CFIUS believes that the mandatory notification requirement applied to such potential Business Combination. The risk of review by CFIUS may force XPAC’s management to limit the pool of potential target companies to companies that XPAC’s management believes are not subject to CFIUS’s jurisdiction, in which case XPAC’s ability to find a target may be limited. In this regard please see also “Risk Factors — Risks Relating to Our Search for, and Consummation of or Inability to Consummate, a Business Combination — Because of our limited resources and the significant competition for Business Combination opportunities, it may be more difficult for us to complete a Business Combination. If we have not consummated a Business Combination within the required time period, our Public Shareholders may receive only approximately $10.00 per share, or less in certain circumstances, on our redemption of their shares, and our warrants will expire worthless.,” in our Form 10-K for the year ended December 31, 2022 filed with the SEC on March 31, 2023.

The process of government review, whether by CFIUS or otherwise, could be lengthy. If we are unable to consummate a potential Business Combination within 24 months from August 3, 2021 (i.e., August 3, 2023), we would, as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account and not previously released to us to pay our taxes (less up to $100,000 of interest income to pay dissolution expenses and which interest shall be net of taxes payable), divided by the number of then outstanding public shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any), subject to applicable law. In such event, XPAC’s shareholders would miss the opportunity to benefit from an investment in any other target company in a Business Combination and the appreciation in value of such investments. Additionally, XPAC’s warrants would expire worthless.

In addition, CFIUS could choose to review past or proposed transactions involving new or existing foreign investors in XPAC or in the Sponsor, even if a filing with CFIUS is or was not required at the time of the potential Business Combination. Any review and clearance of an investment or transaction by CFIUS may have outsized impacts on transaction certainty, timing, feasibility, and cost, among other things. CFIUS policies and agency practices are rapidly evolving, and, in the event that CFIUS reviews a potential Business Combination or one or more proposed or existing investments by investors, there can be no assurances that such investors will be able to maintain, or proceed with, such investments on terms acceptable to the parties to such potential Business Combination or such investors.

In the event the Extension Amendment Proposal is approved and implemented, Nasdaq may delist our securities from trading on its exchange following shareholder redemptions in connection with such amendment, which could limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions.

Our Class A Ordinary Shares, Units (as defined below) and warrants are listed on the Nasdaq Capital Market of Nasdaq. We are subject to compliance with Nasdaq’s continued listing requirements in order to maintain the listing of our securities on the Nasdaq Capital Market, which requirements are set forth in Nasdaq Rule 5550. Generally, we must maintain a minimum amount in shareholders’ equity (generally $2,500,000) and a minimum number of holders of our securities (generally 300 public holders of “round lots” of 100 shares), among other requirements. Pursuant to the terms of the Articles, in the event that the Extension Amendment Proposal is approved and implemented, public shareholders may elect to redeem their public shares and, as a result, we may not be in compliance with Nasdaq’s continued listing requirements.

We expect that if our Class A Ordinary Shares fail to meet the continued listing requirements applicable to the Nasdaq Capital Market of Nasdaq, our Units and warrants will also fail to meet the continued listing requirements for those securities. We cannot assure you that any of our ordinary shares, Units or warrants will be able to meet any of Nasdaq’s continued listing requirements following any shareholder redemptions of our public shares in connection with the amendment of our Articles. If our securities do not meet Nasdaq’s continued listing requirements, Nasdaq may delist our securities from trading on its exchange.

If Nasdaq delists any of our securities from trading on its exchange and we are not able to list such securities on another national securities exchange, we expect such securities could be quoted on an over-the-counter market. If this were to occur, we could face significant material adverse consequences, including:

The National Securities Markets Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating the sale of certain securities, which are referred to as “covered securities.” Our Class A Ordinary Shares, Units and warrants qualify as covered securities under such statute. Although the states are preempted from regulating the sale of covered securities, the federal statute does allow the states to investigate companies if there is a suspicion of fraud, and, if there is a finding of fraudulent activity, then the states can regulate or bar the sale of covered securities in a particular case. While we are not aware of a state having used these powers to prohibit or restrict the sale of securities issued by special purpose acquisition companies, certain state securities regulators view blank check companies unfavorably and might use these powers, or threaten to use these powers, to hinder the sale of securities of blank check companies in their states. Further, if we were no longer listed on Nasdaq, our securities would not qualify as covered securities under such statute and we would be subject to regulation in each state in which we offer our securities.

Questions and Answers About the Shareholder Meeting

The questions and answers below highlight only selected information from this proxy statement and only briefly address some commonly asked questions about the Shareholder Meeting (as defined below) and the proposals to be presented at the Shareholder Meeting. The following questions and answers do not include all the information that is important to XPAC shareholders. Shareholders are urged to read carefully this entire proxy statement, including the other documents referred to herein, to fully understand the proposal to be presented at the Shareholder Meeting and the voting procedures for the Shareholder Meeting, which will be held on July [●], 2023, at [●] a.m., Eastern Time. The Shareholder Meeting will be held at the offices of XPAC located at 55 West 46 Street, 30th Floor, New York, NY 10036, United States, and via a virtual meeting, or at such other time, on such other date and at such other place to which the meeting may be adjourned. You can participate in the meeting, vote, and submit questions via live webcast by visiting [●] and you are able to vote prior to the Shareholder Meeting by visiting [●].

Following the closing of XPAC’s initial public offering (the “IPO”) on August 3, 2021 and the partial exercise of the underwriter’s, over-allotment option on August 16, 2021, and the respective concurrent sales of private placement warrants to the Sponsor (the “Private Placement Warrants”), after deducting the underwriting discounts and commissions and IPO expenses, $219,611,310 of the net proceeds from our IPO and certain of the proceeds from the sale of the Private Placement Warrants was placed in a trust account established at the consummation of the IPO that holds the proceeds of the IPO (the “Trust Account”).

Like most blank check companies, XPAC’s Articles provide for the return of the IPO proceeds held in the Trust Account to the holders of Class A Ordinary Shares, par value $0.0001 per share (the “Class A Ordinary Shares” or the “Public Shares”) sold in the IPO if there is no qualifying Business Combination is consummated within 24 months after the date of the closing of the IPO (i.e., by August 3, 2023).

Without the Extension Amendment, XPAC believes that it will not be able to consummate a Business Combination on or before August 3, 2023. The Board believes that it is in the best interests of XPAC’s shareholders to continue XPAC’s existence until August 3, 2024 (the date which is 36 months from the closing date of the XPAC’s IPO), if necessary, in order to allow XPAC additional time to consummate a Business Combination and is therefore holding this Shareholder Meeting.

The Sponsor is currently negotiating a potential Sponsor Handover transaction. The Sponsor currently expects that consummation of the Sponsor Handover would be conditional on, among other things, approval of the Extension Amendment Proposal, the Name Change Amendment Proposal and the Letter Agreement Amendment Proposal. If the Sponsor Handover is consummated, the Sponsor currently expects that new Board members and a new management team for XPAC would be appointed by the existing Board and the existing Board members and the existing management team would resign, which would be effective upon consummation of the Sponsor Handover or as soon as possible thereafter. See “What is the Sponsor Handover?” and “Am I being asked to vote on a proposal to elect directors?” below.

Shareholders may attend the Shareholder Meeting in person. However, we encourage you to attend the Shareholder Meeting virtually. You can participate in the meeting, vote, and submit questions via live webcast by visiting [●] and entering the control number found on your proxy card, voting instruction form or notice included in the proxy materials.

Voting by Mail. By signing and dating the proxy card and returning it in the enclosed prepaid and addressed envelope, you are authorizing the individual(s) named on the proxy card to vote your shares at the Shareholder Meeting in the manner you indicate. You are encouraged to sign, date and return the proxy card even if you plan to attend the Shareholder Meeting so that your shares will be voted if you are unable to attend the Shareholder Meeting. If you receive more than one proxy card, it is an indication that your shares are held in multiple accounts. Please sign, date and return all proxy cards to ensure that all of your shares are voted. Votes submitted by mail must be received by [●] a.m., Eastern Time, on July [●], 2023, being 48 hours before the time appointed for the holding of the Shareholder Meeting (or, in the case of an adjournment, no later than 48 hours before the time appointed for the holding of the adjourned meeting).

Voting in Person at the Meeting. If you attend the Shareholder Meeting and plan to vote in person, you will be provided with a ballot at the Shareholder Meeting. If your shares are registered directly in your name, you are considered the shareholder of record and you have the right to attend and vote in person at the Shareholder Meeting. If you hold your shares in “street name,” which means your shares are held of record by a bank, broker or other nominee, you should follow the instructions provided by your bank, broker or nominee to ensure that votes related to the shares you beneficially own are properly counted. In this regard, you must provide the record holder of your shares with instructions on how to vote your shares or, if you wish to attend the Shareholder Meeting and vote in person, you will need to bring to the Shareholder Meeting a legal proxy from your bank, broker or nominee authorizing you to vote these shares.

Voting Electronically. If your shares are held in “street name” by a broker or other agent, you have the right to direct your broker or other agent on how to vote at the Shareholder Meeting by visiting [●] and entering the control number found on your proxy card, voting instruction form or notice included in the proxy materials and you are able to vote prior to the Shareholder Meeting by visiting [●]. Please see the question “How do I attend the virtual Shareholder Meeting” below for further information on how to attend the Shareholder Meeting virtually over the Internet via live webcast.

You can pre-register to attend the virtual Shareholder Meeting starting on July [●], 2023 at [●] a.m., Eastern Time (five business days prior to the meeting date) by entering the URL address into your browser [●] and entering your control number, name and email address. Once you pre-register you can vote or enter questions in the chat box during the Shareholder Meeting. At the start of the Shareholder Meeting, you will need to log in again using your control number and will also be prompted to enter your control number if you vote during the Shareholder Meeting.

If you hold your shares in “street name,” which means your shares are held of record by a bank, broker or other nominee, you will need to contact the Transfer Agent to receive a control number. If you plan to vote at the Shareholder Meeting, you will need to have a legal proxy from your bank, broker or other nominee or if you would like to join and not vote, the Transfer Agent will issue you a guest control number with proof of ownership. In either case, you must contact the Transfer Agent for specific instructions on how to receive the control number. The Transfer Agent can be contacted at the number or email address above. Please allow up to 72 hours prior to the meeting for processing your control number. Investors should contact their bank, broker or nominee for instructions regarding obtaining a legal proxy.

Whether or not you participate in the Shareholder Meeting, it is important that you vote your shares. We encourage you to access the virtual Shareholder Meeting prior to the start time and you should allow reasonable time for the check-in procedures.

The Articles provide that XPAC has until August 3, 2023 to consummate a Business Combination. If the Extension Amendment Proposal, the Redemption Limitation Amendment Proposal, the Name Change Amendment Proposal and the Letter Agreement Amendment Proposal are not approved and we do not consummate a Business Combination by August 3, 2023, in accordance with the Articles, we will: (1) cease all operations except for the purpose of winding up; (2) as promptly as reasonably possible but not more than 10 business days thereafter, redeem the Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest (less up to $100,000 of interest to pay dissolution expenses and which interest shall be net of taxes payable), divided by the number of then issued and outstanding Public Shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidating distributions, if any); and (3) as promptly as reasonably possible following such redemption, subject to the approval of XPAC’s remaining shareholders and the Board, liquidate and dissolve, subject in each case to our obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to our warrants, which will expire worthless in the event of our winding up.

Unless the Redemption Limitation Amendment Proposal is approved and implemented, we will not proceed with the Extension Amendment if redemptions of our Public Shares would cause XPAC’s net tangible assets to be less than $5,000,001.

For more information, please see “Proposal No. 1 — The Extension Amendment Proposal,” “Proposal No. 2 — The Redemption Limitation Amendment Proposal,” “Proposal No. 3 — The Name Change Amendment Proposal,” “Proposal No. 4 — The Letter Agreement Amendment Proposal” and “Proposal No. 5 — The Adjournment Proposal.”

After careful consideration, the Board has determined that the Extension Amendment Proposal, the Redemption Limitation Amendment Proposal, the Name Change Amendment Proposal, the Letter Agreement Amendment Proposal and the Adjournment Proposal are in the best interests of XPAC and its shareholders and recommends that you vote “FOR” or give instruction to vote “FOR” each of these proposals.

The existence of financial and personal interests of our directors and officers may result in conflicts of interest, including a conflict between what may be in the best interests of XPAC and its shareholders and what may be best for a director’s personal interests when determining to recommend that shareholders vote for the proposals. See the sections titled “Proposal No. 1 — The Extension Amendment Proposal — Interests of the Sponsor and XPAC’s Directors and Officers,” “Proposal No. 2 — The Redemption Limitation Amendment Proposal — Interests of the Sponsor and XPAC’s Directors and Officers,” “Proposal No. 3 — The Name Change Amendment Proposal — Interests of the Sponsor and XPAC’s Directors and Officers,” “Proposal No. 4 — The Letter Agreement Amendment Proposal — Interests of the Sponsor and XPAC’s Directors and Officers” and “Beneficial Ownership of Securities” for a further discussion of these considerations.

THE VOTE OF SHAREHOLDERS IS IMPORTANT. SHAREHOLDERS ARE URGED TO SUBMIT THEIR PROXIES AS SOON AS POSSIBLE AFTER CAREFULLY REVIEWING THIS PROXY STATEMENT.