Business Context and Reporting Period
Xsolla SPAC 1 is a Cayman Islands exempted corporation incorporated on September 16, 2025, as a blank check company for the purpose of effecting a business combination. This Form 10-Q covers the quarter ended March 31, 2026. The Company consummated its Initial Public Offering (IPO) on January 30, 2026, and has not yet commenced operations or selected a specific business combination target.
Key Financial Metrics
| Metric | Value (Q1 2026) |
|---|---|
| Net Income | $1,102,874 |
| Operating Loss | ($223,362) |
| Trust Account Balance | $205,359,486 |
| Cash (Outside Trust) | $1,743,401 |
| Total Assets | $207,172,432 |
| Total Liabilities | $228,849 |
| Shares Outstanding (Class A) | 20,873,579 (20,419,385 redeemable) |
| Shares Outstanding (Class B) | 6,806,462 |
| Warrants Outstanding | 10,411,266 (Public & Private) |
Material Changes vs. Prior Period
- Capitalization: The Company transitioned from a pre-IPO shell with no assets to a post-IPO entity. Total assets increased from $223,020 (Dec 31, 2025) to $207,172,432 (Mar 31, 2026) following the IPO and partial over-allotment exercise.
- Trust Account: Funds of $204,193,850 were deposited into the Trust Account in Q1 2026, growing to $205,359,486 due to interest income of $1,165,636.
- Equity Structure: Class A ordinary shares subject to possible redemption were established at $205,359,486. The Sponsor surrendered 860,205 Founder Shares (Class B) upon the expiration of the unexercised portion of the over-allotment option.
- Profitability: The Company reported a net income of $1.1 million, driven primarily by interest income on the Trust Account and a $160,600 gain from the change in fair value of the over-allotment liability, offset by $223,362 in formation and administrative costs.
Outlook, Risks, and Management Commentary
- Business Combination Timeline: The Company has 24 months from the IPO closing (January 30, 2026) to complete a business combination. If unsuccessful, the Company will liquidate and redeem public shares.
- Liquidity: The Company holds $1.74 million in cash outside the Trust Account for working capital and transaction costs. The Sponsor has agreed to provide working capital loans if necessary, up to $1.5 million convertible into units.
- Risks: Significant risks include the inability to complete a business combination, market volatility due to geopolitical conflicts (Russia-Ukraine, Middle East), and the potential for the Trust Account value to fall below $10.00 per share if third-party claims are made against it.
- Controls and Procedures: Management concluded that disclosure controls and procedures were not effective as of March 31, 2026, though no material changes to internal controls were reported during the quarter.
- Unusual Items: The net income includes non-cash items such as the accretion of Class A shares to redemption value ($7.4 million) and the change in fair value of the over-allotment liability.
Investor Verification Checklist
- Verify the status of the 24-month deadline for completing a business combination (expires Jan 30, 2028).
- Confirm the current balance of the Trust Account and the interest rate environment affecting future accruals.
- Review the Sponsor's ability to satisfy indemnification obligations if third-party claims reduce Trust Account funds below $10.00 per share.
- Monitor the effectiveness of disclosure controls and procedures given the management's conclusion of ineffectiveness.
- Check for any updates on the forfeiture of Founder Shares or changes in the over-allotment option status.