Form 8-K - Current report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): January 8, 2025 (January 2, 2025)

ScanTech AI Systems Inc.

(Exact name of registrant as specified in its charter)

Delaware	001-42463	93-3502562
(State or other jurisdiction	(Commission File Number)	(IRS Employer
of incorporation)		Identification Number)

1735 Enterprise Drive

Buford, Georgia

30518

(Address of principal executive offices)

(Zip Code)

+1 (470) 655-0886

(Registrant’s telephone number, including area code)

Americas Tower

1177 Avenue of the Americas, Suite 5100

New York, NY 10036

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act.

Title of each class		Trading Symbol		Name of each exchange on which registered
Common Stock, par value $0.0001 per share		STAI		The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933(§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company x

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

INTRODUCTORY NOTE

Overview

Business Combination

On September 5, 2023, Mars Acquisition Corp. (“Mars”), a Cayman Island exempted company, entered into a Business Combination Agreement (as amended or supplemented, the “Business Combination Agreement”) with ScanTech AI Systems Inc., a Delaware corporation and a wholly owned subsidiary of Mars (“Pubco”), Mars Merger Sub I Corp., a Cayman Islands exempted company and a wholly owned subsidiary of Mars (“Purchaser Merger Sub”), Mars Merger Sub II LLC, a Delaware limited liability company and a wholly owned subsidiary of Pubco (“Company Merger Sub”), ScanTech Identification Beam Systems, LLC, a Delaware limited liability company (“ScanTech” or the “Company”), and Dolan Falconer in the capacity as the representative from and after the Effective Time for the Company Holder Participants as of immediately prior to the Effective (the “Seller Representative”). The transactions contemplated by the Business Combination Agreement are hereinafter referred to collectively as the “Business Combination.” Any capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in the Business Combination Agreement, as amended from time to time.

This Current Report on Form 8-K references and incorporates by reference certain sections in the definitive proxy statement/prospectus/consent solicitation dated as of, and filed by Pubco with the Securities and Exchange Commission (the “Commission”) on November 14, 2024, and as amended on December 9, 2024, relating to the Business Combination (File No. 333-280595).

At the extraordinary general meeting of Mars shareholders held on December 12, 2024 (the “Extraordinary General Meeting”), Mars shareholders considered and adopted, among other matters, the Business Combination Agreement and the other proposals related thereto described in the definitive proxy statement/prospectus/consent solicitation.

In accordance with the terms and subject to the conditions of the Business Combination Agreement:

At the closing of the Business Combination, which occurred on January 2, 2025 (“Closing”), Purchaser Merger Sub merged with and into Mars, with Mars continuing as the surviving entity (“Purchaser Merger”), and, in connection therewith, each ordinary shares of Mars (“Ordinary Share”) issued and outstanding immediately prior to the Effective Time will be cancelled in exchange for the right of the holder thereof to receive, with respect to each Ordinary Share that is not redeemed or converted at Closing, one share of common stock of Pubco (“Pubco Common Stock”). Each share of Ordinary Shares held by Mars shareholders who validly redeemed their Ordinary Shares was automatically cancelled and ceased to exist and thereafter represented only the right to be paid a pro-rata redemption price.

At the Closing, each issued and outstanding unit of Mars (“Unit”) was automatically separated into (i) one Ordinary Share, which will be cancelled in exchange for the right of the holder thereof to receive one Pubco Common Stock and, (ii) one right (“Right”) to receive two-tenths (2/10) of one share of Ordinary Share, which will be cancelled in exchange for the right of the holder thereof to receive Pubco Common Stock.

At the Closing, Company Merger Sub will merge with and into ScanTech, with ScanTech continuing as the surviving entity (“Company Merger”, and together with the Purchaser Merger, the “Mergers”), and, in connection therewith, (i) ScanTech Units issued and outstanding immediately prior to the Effective Time will be cancelled in exchange for the right of the holders thereof to receive shares of Pubco Common Stock as set forth in the Business Combination Agreement and (ii) any convertible securities of ScanTech will be terminated.

After ninety days following the Closing or such other period as may be agreed by parties to the Business Combination Agreement, Public Shareholders who elect not to redeem at the closing will receive two additional shares of Pubco Common Stock.

The merger consideration to be paid to Company Holder Participants was a number of shares of Pubco Common Stock equal to the quotient obtained by dividing (a) the sum of (i) $140.0 million minus (ii) the amount of Closing Net Debt in excess of $20.0 million, if any, as set forth in the Business Combination Agreement, as amended, by (b) $9.87, the conversion ratio set forth in the Business Combination Agreement, and rounded down to the nearest whole share. Upon Closing, holders of ScanTech Units collectively held 14,184,397 shares of Pubco Common Stock.

Additionally, the Company Holder Participants may receive up to a number of shares of Pubco Common Stock equal to 10% of the fully diluted shares of Pubco Common Stock outstanding immediately following the Closing (subject to adjustment based on stock splits and similar events) as Earnout Shares upon the achievement of the following milestones over the Earnout Period:

(1)

one-third (1/3) of the Earnout Shares will be issued if Pubco or its subsidiaries receive the TSA APSS 6.2.0 Explosive Standard Certification at any time during the Earnout Period;

(2)

one-third (1/3) of the Earnout Shares will be issued if Pubco or its subsidiaries receives Qualifying Orders for an aggregate of not less than one hundred (100) Sentinel Scanners over a six (6)-month period at any time during the Earnout Period;

(3)

one-twelfth (1/12) of the Earnout Shares will be issued if the revenue of Pubco as reported in the audited consolidated financial statements set forth in the annual report of Pubco for fiscal year 2024 as filed with the SEC is equal to or exceeds Twenty-Five Million Dollars ($25,000,000);

(4)

one-twelfth (1/12) of the Earnout Shares will be issued if the EBITDA of Pubco for fiscal year 2024 is a positive number;

(5)

one-twelfth (1/12) of the Earnout Shares will be issued if the revenue of Pubco as reported in the audited consolidated financial statements set forth in the annual report of Pubco for fiscal year 2025 filed with the SEC is equal to or exceeds Seventy-Five Million Dollars ($75,000,000); and

(6)

one-twelfth (1/12) of the Earnout Shares will be issued if the EBITDA of Pubco for fiscal year 2025 is equal to or exceeds Twenty Million Dollars ($20,000,000).

If any or all of Earnout Shares are not earned and issued pursuant to the above contingencies, any unearned Earnout Shares (up to the maximum number of Earnout Shares) will be earned in their entirety and issued to the Company Holder Participants if any one of the following milestones is achieved:

(1)

The revenue of Pubco as reported in the audited consolidated financial statements set forth in the annual report of Pubco for fiscal year 2026 filed with the SEC is equal to or exceeds One Hundred and Fifty Million Dollars ($150,000,000) and Pubco’s EBITDA for fiscal year 2026 equals or exceeds Sixty Million Dollars ($60,000,000); or

(2)

The revenue of Pubco as reported in the audited consolidated financial statements set forth in the annual report of Pubco for fiscal year 2027 filed with the SEC is equal to or exceeds Three Hundred Million Dollars ($300,000,000) and Pubco’s EBITDA for fiscal year 2027 equals or exceeds One Hundred Twenty Million Dollars ($120,000,000); or

(3)

The revenue of Pubco as reported in the audited consolidated financial statements set forth in the annual report of Pubco for fiscal year 2028 filed with the SEC is equal to or exceeds Five Hundred Million Dollars ($500,000,000) and Pubco’s EBITDA for fiscal year 2028 equals or exceeds Two Hundred Million Dollars ($200,000,000).

If there is a Change of Control (as defined in the Business Combination Agreement) of Pubco during the Earnout Period, the Company Holder Participants have the right to receive all Earnout Shares not previously earned and issued.

Upon the Closing, Mars and ScanTech each became wholly owned subsidiaries of Pubco, all upon the terms and subject to the conditions set forth in the Business Combination Agreement and in accordance with the provisions of applicable law.

The Mars Units, Ordinary Shares, and Rights under the symbols “MARXU”, “MARX” and “MARXR”, respectively, previously traded on Nasdaq Capital Market were delisted without any action needed to be taken on the part of the holders of such securities and are no longer traded following the Closing. On January 3, 2025, one business day after the Closing, the Pubco Common Stock was listed on the Nasdaq Global Market under trading symbol “STAI”.

Shares outstanding as presented in the unaudited pro forma condensed combined financial statements attached hereto as Exhibit 99.1 include 14,184,397 shares of Pubco Common Stock issued to Company Holder Participants, 2,026,806 shares of Pubco Common Stock held by Public Shareholder of Mars (reflecting the conversion of Rights and the Redemption as defined under Item 2.01 of this Current Report on Form 8-K), 2,235,600 shares of Pubco Common Stock held by Mars’ officers and directors, the Sponsor and each transferee of Founder Shares, and 276,000 shares of Pubco Common Stock held by Maxim Group LLC, as the representative of the underwriters in the IPO.

Upon the Closing and after giving effect to the Transactions (as defined under Item 2.01 of this Current Report on Form 8-K) and the Redemption, the former Company Holder Participants of ScanTech beneficially owned approximately 75.8% of the outstanding shares of Pubco Common Stock, and the former security holders of Mars beneficially owned approximately 24.2% of the outstanding shares of Pubco Common Stock.

Pubco received gross proceeds of approximately $10.27 million in connection with the Business Combination, which included $3.0 million in gross proceeds raised through the Transaction Financing (as defined below), funds held in Mars’ trust account of $7.27 million (net of Closing Redemptions in connection with the Extraordinary Shareholder Meeting), Pubco expects the proceeds from this transaction, combined with cash on hand, to fund operations into the current fiscal year.

A more detailed description of the Business Combination and the terms of the Business Combination Agreement is included in the definitive proxy statement/prospectus/consent solicitation. The foregoing description of the Business Combination Agreement is a summary only and is qualified in its entirety by the full text of the Business Combination Agreement, which is filed as Exhibits 2.1 hereto and incorporated herein by reference.

Transaction Financing

Polar Non-Redemption Agreement

On December 30, 2024, Mars and Polar Multi-Strategy Master Fund (“Polar”) entered into a non-redemption agreement. Under the agreement, Polar agrees not to redeem 200,000 Ordinary Shares and to leave $750,000 in the Trust Account as a transaction financing in connection with the Business Combination, which corresponds to the amount Polar would have received if it had redeemed the shares.

Additionally, Polar agreed to reduce its entitlement from 1,250,000 subscription shares under the Subscription Agreements dated April 4, 2024, and May 5, 2024, to 312,500 shares of Pubco Common Stock.

The foregoing description of the non-redemption agreement agreements does not purport to be complete and is qualified in its entirety by reference to the full text of the non-redemption agreement, which is filed as Exhibit 10.5 hereto and incorporated herein by reference.

Seaport Promissory Note

On December 31, 2024, Seaport Group SIBS LLC, an affiliate of Seaport Global Asset Management, LLC (“Seaport”), and Pubco entered into a senior unsecured promissory note (“Seaport Promissory Note”), pursuant to which Seaport provided Pubco with an investment of $1,000,000 as transaction financing in connection with the Business Combination. Seaport will receive 303,951 shares of Pubco Common Stock as repayment of the investment under the Seaport Promissory Note, including any and all accrued interest, with such shares being issuable and registered at the time of Pubco’s filing of a follow-on registration statement immediately following the consummation of the Business Combination.

The foregoing description of the Seaport Promissory Note does not purport to be complete and is qualified in its entirety by reference to the full text of the Seaport Promissory Note, which is filed as Exhibit 10.6 hereto and incorporated herein by reference.

Seaport Credit Faclity

On December 31, 2024, Seaport SIBS LLC, an affiliate of Seaport Global Asset Management, LLC, entered into a senior secured credit facility with Pubco (the “Seaport Credit Facility”) for a maximum of $2,000,000, with the initial advance available 15 days after execution. The principal amount and accrued interest are due upon demand no later than twelve months from the date of funding. The facility bears Payment-In-Kind (PIK) interest at 15.0% per annum, calculated on a 360-day year. Secured by the borrower’s collateral pool, the facility designates the holder as a party to the Intercreditor Agreement dated September 24, 2024.

The foregoing description of the Seaport Credit Facility does not purport to be complete and is qualified in its entirety by reference to the full text of the Seaport Credit Facility, which is filed as Exhibit 10.7 hereto and incorporated herein by reference.

Item 1.01. Entry into a Material Definitive Agreement

Indemnification Agreements

Upon the Closing, Pubco entered into indemnification agreements with each of its directors and officers. The indemnification agreements require Pubco to indemnify its directors and officers for certain reasonable expenses, including attorneys’ fees and retainers, court costs, witness and expert costs, incurred by a director or officer in any action or proceeding and any appeal to an action or proceeding arising out of their services as directors or executive officers of Pubco and any other company or enterprise to which the person provides services at the request of Pubco.

The foregoing description of the indemnification agreements does not purport to be complete and is qualified in its entirety by reference to the full text of the form of indemnification agreement, which is filed as Exhibit 10.3 hereto and incorporated herein by reference.

Equity Incentive Plan

At the Extraordinary General Meeting, Mars Shareholders approved the Equity Incentive Plan of ScanTech AI Systems Inc. (the “Equity Incentive Plan”), which became effective upon the Closing.

The Equity Incentive Plan will be administered by the Pubco Board, the Compensation Committee of the Pubco Board, or such other similar committee pursuant to the terms of the Equity Incentive Plan. The plan administrator, which initially will be the compensation committee of the Pubco Board, will have full power to select, from among the individuals eligible for awards, the individuals to whom awards will be granted, to make any combination of awards to participants, and to determine the specific terms and conditions of each award, subject to the provisions of the Equity Incentive Plan. The plan administrator may delegate to one or more officers of Pubco, the authority to grant awards to individuals who are not subject to the reporting and other provisions of Section 16 of the Exchange Act.

The number of Pubco Common Shares that may be issued under the Equity Incentive Plan is equal to 15% of the aggregate number of Pubco Common Shares issued and outstanding immediately after the Closing (calculated on a fully-diluted basis).

The foregoing description of the Equity Incentive Plan is qualified in their entirety by reference to the full text of the Equity Incentive Plan, which is filed as Exhibit 10.4 hereto and incorporated herein by reference.

Item 2.01. Completion of Acquisition of Disposition of Assets

The disclosure set forth in the “Introductory Note” above is incorporated by reference in Item 2.01 of this Current Report on Form 8-K. A more complete summary of the material provisions of the Business Combination Agreement is included in the proxy statement/prospectus/consent in the section titled “Proposal 1: The Business Combination Proposal — The Business Combination Proposal” (beginning on page 120). That summary and the description of the Business Combination Agreement included in this Current Report on Form 8-K are qualified in their entirety by reference to the full text of the Business Combination Agreement, which is filed as Exhibit 2.1 hereto and incorporated herein by reference.

Mars held the Extraordinary General Meeting held on December 12, 2024. At the Extraordinary General Meeting, Mars shareholders considered and adopted, among other matters, the Business Combination Agreement, including approval of the Business Combination and other transactions contemplated by the Business Combination Agreement and related agreements described in the definitive proxy statement/prospectus/consent solicitation. In connection with the Extraordinary General Meeting, certain Mars shareholders exercised their right to redeem 1,434,626 Ordinary Shares for cash at a price of $11.15 per share, resulting in an aggregate cash payment of approximately $17.48 million (collectively, the “Closing Redemption”), which was made after giving effect to the Non-Redemption Agreement set forth in Exhibit 10.5 hereto, incorporated herein by reference, and paid out of Mars’ trust account.

In connection with the Closing, the following transactions (collectively, the “Transactions”) were completed:

Purchaser Merger Sub merged with and into Mars, with Mars continuing as the surviving entity;

Company Merger Sub will merge with and into ScanTech, with ScanTech continuing as the surviving entity;

Each issued and outstanding Unit was automatically separated into (i) one Ordinary Share, which will be cancelled in exchange for the right of the holder thereof to receive one Pubco Common Stock and, (ii) one Right to receive two-tenths (2/10) of one share of Ordinary Share, which will be cancelled in exchange for the right of the holder thereof to receive Pubco Common Stock;

2,763,287,168 ScanTech Units held by the Company Holder Participants were cancelled and converted into 14,184,397 shares of Pubco Common Stock; and

Mars securities previously traded on Nasdaq Capital Market were delisted.

Upon the Closing and after giving effect to the Transactions (as defined under Item 2.01 of this Current Report on Form 8-K) and the Closing Redemption, the former Company Holder Participants of ScanTech beneficially owned approximately 75.8% of the outstanding shares of Pubco Common Stock, and the former security holders of Mars beneficially owned approximately 24.2% of the outstanding shares of Pubco Common Stock.

On January 3, 2025, one business day after the Closing, the Pubco Common Stock became listed on the Nasdaq Global Market under trading symbol “STAI”.

FORM 10 INFORMATION

Item 2.01(f) of Form 8-K states that if a predecessor registrant was a “shell company” (as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), as Pubco was immediately before the Business Combination, then the registrant must disclose the information that would be required if the registrant were filing a general form for registration on Form 10. As a result of the consummation of the Business Combination, Pubco ceased to be a shell company. Accordingly, Pubco is providing the information below that would otherwise be included in a Form 10 if it were to file a Form 10. Note that the information provided below relates to Pubco after the consummation of the Business Combination, unless otherwise specifically indicated or the context otherwise requires.

Upon the Closing and after the consummation of the Business Combination, Pubco became a holding company whose only assets consist of equity interests in ScanTech, its wholly-owned subsidiary.

Forward-Looking Statements

This Current Report on Form 8-K, and some of the information incorporated by reference, contains forward-looking statements within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the U.S. Securities Exchange Act of 1934, as amended (“Exchange Act”), including statements regarding Pubco’s management team’s expectations, hopes, beliefs, intentions, plans, prospects or strategies regarding the future, including possible business combinations, revenue growth and financial performance, product expansion and services. Any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. Additionally, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “may,” “will,” “could,” “would,” “should,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “project,” “potential,” “continue,” “ongoing,” “target,” “seek” or the negative or plural of these words, or other similar expressions that are predictions or indicate future events or prospects, may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking.

Forward-looking statements are not guarantees of performance. You should not place undue reliance on these statements, which speak only as of the date hereof. Forward-looking statements in this Current Report on Form 8-K may include, for example, statements about:

the projected financial information, anticipated growth rate, and market opportunities of Pubco;

the ability to maintain the listing of Pubco Common Stock on Nasdaq following the Business Combination;

Pubco’s public securities’ potential liquidity and trading;

Pubco’s ability to raise financing in the future;

Pubco’s success in retaining or recruiting, or changes required in, officers, key employees, or directors following the completion of the Business Combination;

potential effects of extensive government regulation;

Pubco’s future financial performance and capital requirements;

the impact of supply chain disruptions;

high inflation rates and interest rate increases;

factors relating to the business, operations, and financial performance of ScanTech AI, including:

the ability to achieve or maintain profitability in the future;

the availability of additional capital to support business growth;

changes in governmental regulations in our key markets;

the ability to obtain key certifications from the TSA and ECAC in a timely manner;

successful manufacturing and commercialization and commercial market acceptance of the technology

the ability to establish and maintain confidence in our long-term business prospects among customers and others within the industry

These and other factors that could cause actual results to differ from those implied by the forward-looking statements in this Current Report on Form 8-K and in any document incorporated by reference herein are more fully described in the proxy statement/prospectus/consent in the section titled “Risk Factors” (beginning on page 55). Such risk factors are not exhaustive. New risk factors emerge from time to time and it is not possible to predict all such risk factors, nor can Pubco assess the impact of all such risk factors on its business, or the extent to which any factor or combination of factors may cause actual results to differ materially from those contained in any forward-looking statements. All forward-looking statements attributable to Pubco or to persons acting on its behalf are expressly qualified in their entirety by the foregoing cautionary statements. Pubco undertakes no obligations to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Business

The business of Pubco is described in the definitive proxy statement/prospectus/consent in the section titled “Information about ScanTech” (beginning on page 220), which is incorporated herein by reference.

Risk Factors

The risk factors related to the business and operations of Pubco are described in the definitive proxy statement/prospectus/consent in the section titled “Risk Factors” (beginning on page 55), which is incorporated herein by reference.

Financial Information

Unaudited Pro Forma Condensed Combined Financial information

The unaudited pro forma condensed combined balance sheet of September 30, 2024 and December 31, 2023, the unaudited pro forma condensed combined statement of operations for the nine months ended September 30, 2024 and for the year ended December 31, 2023 are set forth in Exhibit 99.1 hereto and are incorporated herein by reference.

Unaudited Consolidated Financial Statements and Audited Financial Statements of ScanTech

The unaudited financial statements of ScanTech as of September 30, 2024, and the audited financial statements for the years ended December 31, 2023 and December 31, 2022 (as revised) are set forth in Exhibit 99.2 hereto and are incorporated herein by reference.

Unaudited Condensed Consolidated Financial Statements and Audited Financial Statements of Mars

The unaudited financial statements of Mars as of June 30, 2024, and the audited financial statements for the years ended September 30, 2023 and September 30, 2022 are set forth in Exhibit 99.4 hereto and are incorporated herein by reference.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Management’s discussion and analysis of the financial condition and results of operations of ScanTech as of and for the nine months ended September 30, 2024, and as of and for the year ended December 31, 2023 is set forth in Exhibit 99.3 hereto and is incorporated herein by reference.

Management’s discussion and analysis of the financial condition and results of operations of Mars as of and for the nine months ended June 30, 2024 and the year ended September 30, 2023 is set forth in Exhibit 99.5 and are incorporated herein by reference.

Qualitative and Quantitative Disclosures about Market Risk

As a “smaller reporting company,” Pubco is not required to provide this information.

Security Ownership of Certain Beneficial Owners and Management

The following table sets forth information regarding the beneficial ownership of Common Stock following consummation of the Business Combination by:

●

each person known by Pubco to be the beneficial owner of more than 5% of the Common Stock immediately following the consummation of the Business Combination;

●

each of the named executive officers and directors of Pubco; and

●

all of the executive officers and directors of Pubco as a group after the consummation of the Business Combination.

Beneficial ownership is determined in accordance with the rules and regulations of the Commission. A person is a “beneficial owner” of a security if that person has or shares “voting power,” which includes the power to vote or to direct the voting of the security, or “investment power,” which includes the power to dispose of or to direct the disposition of the security, or has the right to acquire such powers within 60 days. Unless otherwise indicated, Pubco believes that all persons named in the table below have sole voting and investment power with respect to the voting securities beneficially owned by them.

The beneficial ownership set forth below is based on 18,722,803 shares of Pubco Common Stock issued and outstanding as of the Closing:

	Beneficial Ownership
	Common Stock
Name and Address of Beneficial Owner	Shares		% of Class
Directors and Officers
Dolan Falconer		275,751		1.47	%
Karl Brenza		1,035,000		5.53	%
James Jenkins		51,750		0.28	%
Marion “Rocky” Starns		-		-
Dr. Christopher Green		-		-
Michael McGarrity		-		-
Bradley Buswell		-		-
Keisha Lance Bottoms		-		-
Charles McMillen		-		-
All directors and officers		1,362,501		7.28	%
5% Holders
Seaport Global Asset Management, LLC		5,554,792		29.67	%

Directors and Executive Officers

The directors and executive officers of Pubco after the consummation of the Business Combination are described in the definitive proxy statement/prospectus/consent in the section titled “Management of Pubco Following the Business Combination” (beginning on page 249), which is incorporated herein by reference.

Director Independence

Information with respect to the independence of the directors of Pubco is set forth in the definitive proxy statement/prospectus/consent the section titled “Management of Pubco Following the Business Combination – Director Independence” (beginning on page 253), which is incorporated herein by reference.

Committees of the Board of Directors

The Audit Committee is chaired by Jim Jenkins, with Kiesha Lance Bottoms and Thomas McMillen as members. The Compensation Committee is chaired by Kiesha Lance Bottoms, with Bradley Buswell and Jim Jenkins serving as members. The Nominating Committee is chaired by Thomas McMillen, with Bradley Buswell and Michael McGarrity as members.

Executive Compensation

A description of the compensation of the named executive officers of Pubco is set forth in the definitive proxy statement/prospectus/consent in the section titled “Executive Compensation” (beginning on page 254), which is incorporated herein by reference.

Employment Arrangements

Pubco will enter into employment agreements with each of its executive officers, pursuant to which each executive officer will be entitled to cash compensation and other benefits for each fiscal year, subject to review and determination by the compensation committee. In addition, the executive officers may also be entitled to participate in the Incentive Plan, as determined by the Pubco Board or its designee, acting as the administrator of the Incentive Plan. The form of the employment agreement is set forth in Exhibit 10.1 hereto and is incorporated herein by reference.

Director Compensation and Arrangement

Pubco will enter into consulting agreements with each director, pursuant to which each director and officer will be entitled to receive cash compensation and other benefits for each fiscal year, subject to review and determination by the compensation committee. Such directors may also be entitled to participate in the Incentive Plan, as determined by the Pubco Board or its designee, acting as the administrator of the Incentive Plan. The form of the consulting agreement is set forth in Exhibit 10.2 hereto and is incorporated herein by reference.

Certain Relationships and Related Party Transactions

Certain relationships and related party transactions are described in the definitive proxy statement/prospectus/consent in the section titled “Certain Relationships and Related Person Transaction - ScanTech Related Party Transactions” (beginning on page 258), which is incorporated herein by reference.

Reference is also made to the disclosure regarding the independence of the directors of Pubco in the section of the definitive proxy statement/prospectus/consent titled “Director Independence” (beginning on page 253) and the description of the indemnification agreements under Item 1.01 of this Current Report on Form 8-K, both of which are incorporated herein by reference.

Legal Proceedings

Reference is made to the disclosure regarding legal proceedings in the sections of the definitive proxy statement/prospectus/consent titled “Information about ScanTech - Legal Proceedings” (beginning on page 233), which are incorporated herein by reference.

Market Price and Dividends on the Registrant’s Common Equity and Related Stockholder Matters

Market Information and Holders

The Units, Ordinary Shares, and Rights of Mars historically traded on the Nasdaq Capital Market under the symbols “MARXU”, “MARX” and “MARXR”, respectively, until their delisting on January 2, 2025. On January 3, 2025, the Pubco Common Stock began trading on the Nasdaq Global Market under the new trading symbol “STAI”.

As of and following the Closing of the Business Combination, Pubco had 18,722,803 shares of Common Stock issued and outstanding.

Dividends

Holders of Pubco Common Stock will be entitled to receive such dividends, if any, as may be declared from time to time by the Pubco Board in its discretion out of funds legally available therefor. Any payment of cash dividends in the future will be dependent upon Pubco’s revenues and earnings, if any, capital requirements and general financial conditions. In no event will any stock dividends or stock splits or combinations of stock be declared or made on Common Stock unless the shares of Common Stock at the time outstanding are treated equally and identically.

Recent Sales of Unregistered Securities

Reference is made to the disclosure set forth below under Item 3.02 of this Current Report on Form 8-K concerning the issuance and sale by Pubco of certain unregistered securities, which is incorporated herein by reference.

Description of Registrant’s Securities

The description of the securities of Pubco is included in the definitive proxy statement/prospectus/consent in the section titled “Description of Securities” (beginning on page 263), which is incorporated herein by reference.

Indemnification of Directors and Officers

The disclosure set forth in Item 1.01 of this Current Report on Form 8-K under the section titled “Indemnification Agreements” is incorporated by reference into this Item 2.01.

Financial Statements and Supplementary Data

The information set forth under Item 9.01 of this Current Report on Form 8-K is incorporated herein by reference.

Financial Statements and Exhibits

The information set forth under Item 9.01 of this Current Report on Form 8-K is incorporated herein by reference.

Item 3.01 Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing

Item 3.02. Unregistered Sale of Equity Securities

The information set forth in the “Introductory Note — Transaction Financing” of this Current Report on Form 8-K is incorporated herein by reference.

The shares of Common Stock issued by Pubco to the Transaction Financing as of the Closing were issued in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act.

On December 31, 2024, Seaport Global Asset Management, LLC (“Seaport”) and Pubco entered into an agreement (“Seaport Agreement”) whereby Seaport invested $1,000,000 as transaction financing in connection with the Business Combination. Seaport shall receive 303,951 shares of Pubco Common Stock and such shares shall be issued promptly on the post-Closing S-1.

The foregoing description of the Seaport Agreement does not purport to be complete and is qualified in its entirety by the terms and conditions of the actual agreement, a copy of which is included as Exhibit 10.6 hereto and is incorporated herein by reference.

Item 3.03. Material Modification to Rights of Security Holders

Reference is made to the disclosure in the definitive proxy statement/prospectus/consent solicitation in the sections titled Proposal 2: The Advisory Charter Proposals” (beginning on page 168), which are incorporated herein by reference, and the disclosure set forth below in Item 5.03 of this Current Report on Form 8-K under the heading “Amendments to Articles of Incorporation or By-laws; Change in Fiscal Year,” which is incorporated herein by reference. This summary is qualified in its entirety by reference to the full text of the Amended and Restated Certificate of Incorporation and the Bylaws, which are attached as Exhibits 3.1 and 3.2 hereto, respectively, and are incorporated herein by reference.

In accordance with Rule 12g-3(a) under the Exchange Act, Pubco is the successor issuer to Mars and has succeeded to the attributes of Mars as the registrant. In addition, the shares of common stock of Pubco, as the successor to Mars, are deemed to be registered under Section 12(b) of the Exchange Act.

Item 5.01. Changes in Control of Registrant

Reference is made to the disclosure in the definitive proxy statement/prospectus/consent solicitation in the section titled “Proposal 1: The Business Combination Proposal” (beginning on page 120), which is incorporated herein by reference. The information set forth in the section titled “Introductory Note” and in the section titled “Security Ownership of Certain Beneficial Owners and Management” in Item 2.01 of this Current Report on Form 8-K is incorporated herein by reference.

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

The information set forth in the sections titled “Directors and Executive Officers”, “Certain Relationships and Related Transactions” and “Employment Arrangements” in Item 2.01 of this Current Report on Form 8-K is incorporated herein by reference.

Reference is made to the disclosure in the definitive proxy statement/prospectus/consent solicitation titled “Management of Pubco Following the Business Combination” (beginning on page 249) for biographical information about each of the directors and officers, which is incorporated herein by reference.

The information set forth in the section entitled “Entry into a Material Definitive Agreement — Indemnification Agreement” and “Equity Incentive Plan” in Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference.

Item 5.03. Amendments to Articles of Incorporation or By-laws; Change in Fiscal Year.

At the Advisory Charter Proposals, Mars shareholder considered and approved the Advisory Charter Proposals, which contain information on Proposed Amended and Restated Certificate of Incorporation and the Proposed Bylaws, and is described in the definitive proxy statement/prospectus/consent solicitation in the sections titled “Proposal 2: The Advisory Charter Proposal” (beginning on page 168). The Proposed Amended and Restated Certificate of Incorporation, which became effective upon filing with the Secretary of State of the State of Delaware on December 31, 2024, includes the amendments proposed by the Advisory Charter Proposals and approved at the Advisory Charter Proposals.

In addition, on December 31, 2024, pursuant to the approval of the Advisory Charter Proposals, the Pubco Board approved and adopted the Proposed Bylaws, which became effective as of the Effective Time.

The description of various provisions of the Proposed Amended and Restated Certificate of Incorporation and Proposed Bylaws and their general effect on the rights of stockholders of Pubco are included in the definitive proxy statement/prospectus/consent solicitation under the section titled “Proposal 2: The Advisory Charter Proposal” (beginning on page 168), which is incorporated herein by reference.

Copies of the Amended and Restated Certificate of Incorporation and the Bylaws are filed attached as Exhibit 3.1 and Exhibit 3.2 hereto, respectively, and are incorporated herein by reference.

Item 5.05. Amendments to the Registrant’s Code of Ethics, or Waiver of a Provision of the Code of Ethics

In connection with the Closing, the Pubco Board approved and adopted a new Code of Ethics applicable to directors, officers and employees (the “Code of Ethics”). The foregoing description of the Code of Ethics does not purport to be complete and is qualified in its entirety by the full text of the Code of Ethics, which is filed as Exhibit 14.1 hereto and incorporated herein by reference.

Item 5.06. Change in Shell Company Status

Upon the Closing, Pubco ceased to be a shell company. The material terms of the Business Combination are described in the definitive proxy statement/prospectus/consent solicitation under the section titled “Proposal 1: The Business Combination Proposal” (beginning on page 120), which is incorporated herein by reference.

Item 9.01. Financial Statements and Exhibits

(a) Financial statements of businesses acquired.

Unaudited Consolidated Financial Statements and Audited Financial Statements of ScanTech

Unaudited Condensed Consolidated Financial Statements and Audited Financial Statements of Mars

(b) Pro Forma financial information.

(c) Exhibits

		Incorporated by Reference
Exhibit No.	Description	Form	File No.	Exhibit No.	Filing Date
2.1*	Business Combination Agreement dated as of September 5, 2023, by and among Mars Acquisition Corp., ScanTech AI Systems Inc., Mars Merger Sub I Corp., Mars Merger Sub II LLC, ScanTech Identification Beam Systems, LLC, and Dolan Falconer, as Seller Representative.	S-4/A	333-280595	2.1	October 24, 2024
2.2	Amendment No. 1 to Business Combination Agreement, dated as of December 19, 2023, by and among Mars Acquisition Corp., ScanTech AI Systems Inc., Mars Merger Sub I Corp., Mars Merger Sub II LLC, ScanTech Identification Beam Systems, LLC, and Dolan Falconer, as Seller Representative.	S-4/A	333-280595	2.2	October 24, 2024
2.3	Amendment No. 2 to Business Combination Agreement, dated as of December 19, 2023, by and among Mars Acquisition Corp., ScanTech AI Systems Inc., Mars Merger Sub I Corp., Mars Merger Sub II LLC, ScanTech Identification Beam Systems, LLC, and Dolan Falconer, as Seller Representative.	S-4/A	333-280595	2.3	October 24, 2024
2.4	Amendment No. 3 to Business Combination Agreement, dated as of December 19, 2023, by and among Mars Acquisition Corp., ScanTech AI Systems Inc., Mars Merger Sub I Corp., Mars Merger Sub II LLC, ScanTech Identification Beam Systems, LLC, and Dolan Falconer, as Seller Representative.	S-4/A	333-280595	2.4	October 24, 2024
2.5	Amendment No. 4 to Business Combination Agreement, dated as of December 19, 2023, by and among Mars Acquisition Corp., ScanTech AI Systems Inc., Mars Merger Sub I Corp., Mars Merger Sub II LLC, ScanTech Identification Beam Systems, LLC, and Dolan Falconer, as Seller Representative.	S-4/A	333-280595	2.5	October 24, 2024
3.1	Amended and Restated Certificate of Incorporation of ScanTech AI Systems Inc.	S-4/A	333-280595	3.4	October 24, 2024
3.2	Bylaws of ScanTech AI Systems Inc.	S-4/A	333-280595	3.5	October 24, 2024
4.1	Specimen Unit Certificate of Mars Acquisition Corp.	S-4/A	333-280595	4.1	October 24, 2024
4.2	Specimen Ordinary Share Certificate of Mars Acquisition Corp.	S-4/A	333-280595	4.2	October 24, 2024
4.3	Specimen Right Certificate of Mars Acquisition Corp.	S-4/A	333-280595	4.3	October 24, 2024
4.4	Form of Right Agreement between Continental Stock Transfer & Trust Company and Mars Acquisition Corp.	S-4/A	333-280595	4.4	October 24, 2024
10.1*	Form of Employment Agreement
10.2*	Form of Consulting Agreement	S-4/A	333-280595	10.8	October 24, 2024
10.3*	Form of Director and Officer Indemnification Agreement	S-4/A	333-280595	10.7	October 24, 2024
10.4**	Form of Equity Incentive Plan of ScanTech AI Systems Inc.	S-4/A	333-280595	10.6	October 24, 2024
10.5*	Non-Redemption Agreement, dated as of December 31, 2024.
10.6	Senior Unsecured Promissory Note, dated as of December 31, 2024, between ScanTech AI Systems Inc. and Seaport Group SIBS LLC.
10.7	Senior Secured Credit Facility, dated as of December 31, 2024, between ScanTech AI Systems Inc. and Seaport SIBS LLC.
14.1	Code of Business Ethics and Conduct.
21.1	List of Subsidiaries.
99.1	Unaudited pro forma condensed combined financial information of ScanTech AI Systems Inc.
99.2	Unaudited consolidated financial statements of ScanTech as of and for the nine months ended September 30, 2024 and audited financial statements of ScanTech and for the year ended December 31, 2023 and 2022.
99.3	ScanTech’ Management’s Discussion and Analysis of Financial Condition and Results of Operations.
99.4	Unaudited consolidated financial statements of Mars as of and for the nine months ended June 30, 2024 and audited financial statements of Mars and for the year ended September 30, 2023 and 2022.
99.5	Mars’ Management’s Discussion and Analysis of Financial Condition and Results of Operations.

*	Certain schedules and exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The registrant agrees to furnish supplementally a copy of any omitted schedule or exhibit to the Commission upon request.
**	Indicates management contract or compensatory plan.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	ScanTech AI Systems Inc.

	By:	/s/ Karl Brenza
	Name:	Karl Brenza
	Title:	Director

Date: January 8, 2025

Exhibit 10.1

FORM OF EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT (the “Agreement”) is entered into as of _____by and between ScanTech AI Systems Inc. (the “Company”), a Delaware company, and _____, an individual (the “Executive”). The term “Company” as used herein with respect to all obligations of the Executive hereunder shall be deemed to include the Company and all of its direct or indirect parent companies, subsidiaries, affiliates, or subsidiaries or affiliates of its parent companies (collectively, the “Group”).

RECITALS

A.      The Company desires to employ the Executive and to assure itself of the services of the Executive during the term of Employment (as defined below).

B.       The Executive desires to be employed by the Company during the term of Employment and under the terms and conditions of this Agreement.

AGREEMENT

The parties hereto agree as follows:

1.	POSITION

The Executive hereby accepts a position of _____ (the “Employment”) of the Company.

TERM

Subject to the terms and conditions of this Agreement, the initial term of the Employment shall be_____ years, commencing on _____, 2025 (the “Effective Date”), until _____ unless terminated earlier pursuant to the terms of this Agreement. Upon expiration of the initial _____ -year term, the Employment shall be automatically extended for successive one-year terms unless either party gives the other party hereto a prior written notice to terminate the Employment prior to the expiration of such one-year term or unless terminated earlier pursuant to the terms of this Agreement.

3.	DUTIES AND RESPONSIBILITIES

The Executive’s duties at the Company will include all jobs assigned by the Company’s Chief Executive Officer. If the Executive is the Chief Executive Officer of the Company, the Executive’s duties will include all jobs assigned by the Board of Directors of the Company (the “Board”).

The Executive shall devote all of his/her working time, attention and skills to the performance of his/her duties at the Company and shall faithfully and diligently serve the Company in accordance with this Agreement and the guidelines, policies and procedures of the Company approved from time to time by the Board.

The Executive shall use his/her best efforts to perform his/her duties hereunder. The Executive shall not, without the prior written consent of the Board, become an employee of any entity other than the Company and any subsidiary or affiliate of the Company, and shall not be concerned or interested in the business or entity that competes with that carried on by the Company (any such business or entity, a “Competitor”), provided that nothing in this clause shall preclude the Executive from holding any shares or other securities of any Competitor that is listed on any securities exchange or recognized securities market anywhere. The Executive shall notify the Company in writing of his/her interest in such shares or securities in a timely manner and with such details and particulars as the Company may reasonably require.

4.	NO BREACH OF CONTRACT

The Executive hereby represents to the Company that: (i) the execution and delivery of this Agreement by the Executive and the performance by the Executive of the Executive’s duties hereunder shall not constitute a breach of, or otherwise contravene, the terms of any other agreement or policy to which the Executive is a party or otherwise bound, except for agreements that are required to be entered into by and between the Executive and any member of the Group pursuant to applicable law of the jurisdiction where the Executive is based, if any; (ii) that the Executive has no information (including, without limitation, confidential information and trade secrets) relating to any other person or entity which would prevent, or be violated by, the Executive entering into this Agreement or carrying out his/her duties hereunder; and (iii) that the Executive is not bound by any confidentiality, trade secret or similar agreement (other than this) with any other person or entity except for other member(s) of the Group, as the case may be.

5.	LOCATION

The Executive will be based in _____ or any other location as requested by the Company during the term of this Agreement.

6.	COMPENSATION AND BENEFITS

Cash Compensation. The Executive’s cash compensation (inclusive of the statutory welfare reserves that the Company is required to set aside for the Executive under applicable law) shall be provided by the Company pursuant to Schedule A hereto, subject to annual review and adjustment by the Company or the compensation committee of the Board (or the Board itself, before the formation of the compensation committee).

Equity Incentives. To the extent the Company adopts and maintains a share incentive plan, the Executive will be eligible for participating in such plan pursuant to the terms thereof as determined by the Company.

Benefits. The Executive is eligible for participation in any standard employee benefit plan of the Company that currently exists or may be adopted by the Company in the future, including, but not limited to, any retirement plan, and travel/holiday policy.

7.	TERMINATION OF THE AGREEMENT

By the Company. The Company may terminate the Employment for cause, at any time, without advance notice or remuneration, if (i) the Executive is convicted or pleads guilty to a felony or to an act of fraud, misappropriation or embezzlement, (ii) the Executive has been negligent or acted dishonestly to the detriment of the Company, (iii) the Executive has engaged in actions amounting to misconduct or failed to perform his/her duties hereunder and such failure continues after the Executive is afforded a reasonable opportunity to cure such failure, (iv) the Executive has died, or (v) the Executive has a disability which shall mean a physical or mental impairment which, as reasonably determined by the Board, renders the Executive unable to perform the essential functions of his/her employment with the Company, even with reasonable accommodation that does not impose an undue hardship on the Company, for more than 180 days in any 12-month period, unless a longer period is required by applicable law, in which case that longer period would apply.

In addition, the Company may terminate the Employment without cause, at any time, upon one-month prior written notice to the Executive. Upon termination without cause, the Company shall provide the Executive with a severance payment in cash in an amount equal to the Executive’s 3-month salary at the then current rate. Under such circumstance, the Executive agrees not to make any further claims for compensation for loss of office, accrued remuneration, fees, wrongful dismissal or any other claim whatsoever against the Company or its subsidiaries or the respective officers or employees of any of them.

By the Executive. If there is a material and substantial reduction in the Executive’s existing authority and responsibilities, the Executive may resign upon one-month prior written notice to the Company. In addition, the Executive may resign prior to the expiration of the Agreement if such resignation is approved by the Board or an alternative arrangement with respect to the Employment is agreed to by the Board.

Notice of Termination. Any termination of the Executive’s employment under this Agreement shall be communicated by written notice of termination from the terminating party to the other party. The notice of termination shall indicate the specific provision(s) of this Agreement relied upon in effecting the termination.

8.	CONFIDENTIALITY AND NONDISCLOSURE

Confidentiality and Non-disclosure. In the course of the Executive’s services, the Executive may have access to the Company and/or the Company’s customer/supplier’s and/or prospective customer/supplier’s trade secrets and confidential information, including but not limited to those embodied in memoranda, manuals, letters or other documents, computer disks, tapes or other information storage devices, hardware, or other media or vehicles, pertaining to the Company and/or the Company’s customer/supplier’s and/or prospective customer/supplier’s business. All such trade secrets and confidential information are considered confidential. All materials containing any such trade secret and confidential information are the property of the Company and/or the Company’s customer/supplier and/or prospective customer/supplier, and shall be returned to the Company and/or the Company’s customer/supplier and/or prospective customer/supplier upon expiration or earlier termination of this Agreement. The Executive shall not directly or indirectly disclose or use any such trade secret or confidential information, except as required in the performance of the Executive’s duties in connection with the Employment, or pursuant to applicable law.

Trade Secrets. During and after the Employment, the Executive shall hold the Trade Secrets in strict confidence; the Executive shall not disclose these Trade Secrets to anyone except other employees of the Company who have a need to know the Trade Secrets in connection with the Company’s business. The Executive shall not use the Trade Secrets other than for the benefits of the Company.

“Trade Secrets” means information deemed confidential by the Company, treated by the Company or which the Executive know or ought reasonably to have known to be confidential, and trade secrets, including without limitation designs, processes, pricing policies, methods, inventions, conceptions, technology, technical data, financial information, corporate structure and know-how, relating to the business and affairs of the Company and its subsidiaries, affiliates and business associates, whether embodied in memoranda, manuals, letters or other documents, computer disks, tapes or other information storage devices, hardware, or other media or vehicles. Trade Secrets do not include information generally known or released to public domain through no fault of yours.

Former Employer Information. The Executive agrees that he or she has not and will not, during the term of his/her employment, (i) improperly use or disclose any proprietary information or trade secrets of any former employer or other person or entity with which the Executive has an agreement or duty to keep in confidence information acquired by Executive, if any, or (ii) bring into the premises of Company any document or confidential or proprietary information belonging to such former employer, person or entity unless consented to in writing by such former employer, person or entity. The Executive will indemnify the Company and hold it harmless from and against all claims, liabilities, damages and expenses, including reasonable attorneys’ fees and costs of suit, arising out of or in connection with any violation of the foregoing.

Third Party Information. The Executive recognizes that the Company may have received, and in the future may receive, from third parties their confidential or proprietary information subject to a duty on the Company’s part to maintain the confidentiality of such information and to use it only for certain limited purposes. The Executive agrees that the Executive owes the Company and such third parties, during the Executive’s employment by the Company and thereafter, a duty to hold all such confidential or proprietary information in the strictest confidence and not to disclose it to any person or firm and to use it in a manner consistent with, and for the limited purposes permitted by, the Company’s agreement with such third party.

This Section 8 shall survive the termination of this Agreement for any reason. In the event the Executive breaches this Section 8, the Company shall have right to seek remedies permissible under applicable law.

9.	INVENTIONS

Inventions Retained and Licensed. The Executive has attached hereto, as Schedule B, a list describing all inventions, ideas, improvements, designs and discoveries, whether or not patentable and whether or not reduced to practice, original works of authorship and trade secrets made or conceived by or belonging to the Executive (whether made solely by the Executive or jointly with others) that (i) were developed by Executive prior to the Executive’s employment by the Company (collectively, “Prior Inventions”), (ii) relate to the Company’ actual or proposed business, products or research and development, and (iii) are not assigned to the Company hereunder; or, if no such list is attached, the Executive represents that there are no such Prior Inventions. Except to the extent set forth in Schedule B, the Executive hereby acknowledges that, if in the course of his/her service for the Company, the Executive incorporates into a Company product, process or machine a Prior Invention owned by the Executive or in which he has an interest, the Company is hereby granted and shall have a nonexclusive, royalty-free, irrevocable, perpetual, worldwide right and license (which may be freely transferred by the Company to any other person or entity) to make, have made, modify, use, sell, sublicense and otherwise distribute such Prior Invention as part of or in connection with such product, process or machine.

Disclosure and Assignment of Inventions. The Executive understands that the Company engages in research and development and other activities in connection with its business and that, as an essential part of the Employment, the Executive is expected to make new contributions to and create inventions of value for the Company.

From and after the Effective Date, the Executive shall disclose in confidence to the Company all inventions, improvements, designs, original works of authorship, formulas, processes, compositions of matter, computer software programs, databases, mask works and trade secrets (collectively, the “Inventions”), which the Executive may solely or jointly conceive or develop or reduce to practice, or cause to be conceived or developed or reduced to practice, during the period of the Executive’s Employment at the Company. The Executive acknowledges that copyrightable works prepared by the Executive within the scope of and during the period of the Executive’s Employment with the Company are “works for hire” and that the Company will be considered the author thereof. The Executive agrees that all the Inventions shall be the sole and exclusive property of the Company and the Executive hereby assign all his/her right, title and interest in and to any and all of the Inventions to the Company or its successor in interest without further consideration.

Patent and Copyright Registration. The Executive agrees to assist the Company in every proper way to obtain for the Company and enforce patents, copyrights, mask work rights, trade secret rights, and other legal protection for the Inventions. The Executive will execute any documents that the Company may reasonably request for use in obtaining or enforcing such patents, copyrights, mask work rights, trade secrets and other legal protections. The Executive’s obligations under this paragraph will continue beyond the termination of the Employment with the Company, provided that the Company will reasonably compensate the Executive after such termination for time or expenses actually spent by the Executive at the Company’s request on such assistance. The Executive appoints the Secretary of the Company as the Executive’s attorney-in-fact to execute documents on the Executive’s behalf for this purpose.

Return of Confidential Material. In the event of the Executive’s termination of employment with the Company for any reason whatsoever, Executive agrees promptly to surrender and deliver to the Company all records, materials, equipment, drawings, documents and data of any nature pertaining to any confidential information or to his/her employment, and Executive will not retain or take with him or her any tangible materials or electronically stored data, containing or pertaining to any confidential information that Executive may produce, acquire or obtain access to during the course of his/her employment.

This Section 9 shall survive the termination of this Agreement for any reason. In the event the Executive breaches this Section 9, the Company shall have right to seek remedies permissible under applicable law.

10.

CONFLICTING EMPLOYMENT.

The Executive hereby agrees that, during the term of his/her employment with the Company, he will not engage in any other employment, occupation, consulting or other business activity related to the business in which the Company is now involved or becomes involved during the term of the Executive’s employment, nor will the Executive engage in any other activities that conflict with his/her obligations to the Company without the prior written consent of the Company.

11.

NON-COMPETITION AND NON-SOLICITATION

In consideration of the compensation provided to the Executive by the Company hereunder, the adequacy of which is hereby acknowledged by the parties hereto, the Executive agree that during the term of the Employment and for a period of two years following the termination of the Employment for whatever reason:

The Executive will not approach clients, customers or contacts of the Company or other persons or entities introduced to the Executive in the Executive’s capacity as a representative of the Company for the purposes of doing business with such persons or entities which will harm the business relationship between the Company and such persons and/or entities;

unless expressly consented to by the Company, the Executive will not assume employment with or provide services as a director or otherwise for any Competitor, or engage, whether as principal, partner, licensor or otherwise, in any Competitor; and

unless expressly consented to by the Company, the Executive will not seek directly or indirectly, by the offer of alternative employment or other inducement whatsoever, to solicit the services of any employee of the Company employed as at or after the date of such termination, or in the year preceding such termination.

The provisions contained in Section 11 are considered reasonable by the Executive and the Company. In the event that any such provisions should be found to be void under applicable laws but would be valid if some part thereof was deleted or the period or area of application reduced, such provisions shall apply with such modification as may be necessary to make them valid and effective.

This Section 11 shall survive the termination of this Agreement for any reason. In the event the Executive breaches this Section 11, the Executive acknowledges that there will be no adequate remedy at law, and the Company shall be entitled to injunctive relief and/or a decree for specific performance, and such other relief as may be proper (including monetary damages if appropriate). In any event, the Company shall have right to seek all remedies permissible under applicable law.

12.

WITHHOLDING TAXES

Notwithstanding anything else herein to the contrary, the Company may withhold (or cause there to be withheld, as the case may be) from any amounts otherwise due or payable under or pursuant to this Agreement such national, provincial, local or any other income, employment, or other taxes as may be required to be withheld pursuant to any applicable law or regulation.

13.

ASSIGNMENT

This Agreement is personal in its nature and neither of the parties hereto shall, without the consent of the other, assign or transfer this Agreement or any rights or obligations hereunder; provided, however, that (i) the Company may assign or transfer this Agreement or any rights or obligations hereunder to any member of the Group without such consent, and (ii) in the event of a merger, consolidation, or transfer or sale of all or substantially all of the assets of the company with or to any other individual(s) or entity, this Agreement shall, subject to the provisions hereof, be binding upon and inure to the benefit of such successor and such successor shall discharge and perform all the promises, covenants, duties, and obligations of the Company hereunder.

14.

SEVERABILITY

If any provision of this Agreement or the application thereof is held invalid, the invalidity shall not affect other provisions or applications of this Agreement which can be given effect without the invalid provisions or applications and to this end the provisions of this Agreement are declared to be severable.

15.

ENTIRE AGREEMENT

This Agreement constitutes the entire agreement and understanding between the Executive and the Company regarding the terms of the Employment and supersedes all prior or contemporaneous oral or written agreements concerning such subject matter. The Executive acknowledges that he has not entered into this Agreement in reliance upon any representation, warranty or undertaking which is not set forth in this Agreement. Any amendment to this Agreement must be in writing and signed by the Executive and the Company.

16.

GOVERNING LAW

This Agreement shall be governed by and construed in accordance with the law of the State of New York, USA, without regard to the conflicts of law principles.

17.

AMENDMENT

This Agreement may not be amended, modified or changed (in whole or in part), except by a formal, definitive written agreement expressly referring to this Agreement, which agreement is executed by both of the parties hereto.

18.

WAIVER

Neither the failure nor any delay on the part of a party to exercise any right, remedy, power or privilege under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any right, remedy, power or privilege preclude any other or further exercise of the same or of any right, remedy, power or privilege, nor shall any waiver of any right, remedy, power or privilege with respect to any occurrence be construed as a waiver of such right, remedy, power or privilege with respect to any other occurrence. No waiver shall be effective unless it is in writing and is signed by the party asserted to have granted such waiver.

19.

NOTICES

All notices, requests, demands and other communications required or permitted under this Agreement shall be in writing and shall be deemed to have been duly given and made if (i) delivered by hand, (ii) otherwise delivered against receipt therefor, (iii) sent by a recognized courier with next-day or second-day delivery to the last known address of the other party; or (iv) sent by e-mail with confirmation of receipt.

20.

COUNTERPARTS

This Agreement may be executed in any number of counterparts, each of which shall be deemed an original as against any party whose signature appears thereon, and all of which together shall constitute one and the same instrument. This Agreement shall become binding when one or more counterparts hereof, individually or taken together, shall bear the signatures of all of the parties reflected hereon as the signatories. Photographic copies of such signed counterparts may be used in lieu of the originals for any purpose.

21.

NO INTERPRETATION AGAINST DRAFTER

Each party recognizes that this Agreement is a legally binding contract and acknowledges that such party has had the opportunity to consult with legal counsel of choice. In any construction of the terms of this Agreement, the same shall not be construed against either party on the basis of that party being the drafter of such terms.

[Remainder of this page has been intentionally left blank.]

IN WITNESS WHEREOF, this Agreement has been executed as of the date first written above.

	ScanTech AI Systems Inc.

	By:
	Name:
	Title:

	Executive

	Signature:
	Name:

Schedule A

Cash Compensation

Schedule B

List of Prior Inventions

Exhibit 10.5

NON-REDEMPTION AGREEMENT

This NON-REDEMPTION AGREEMENT, dated as of December 31, 2024 (this “Agreement”), is entered into by Polar Multi-Strategy Master Fund (“Shareholder”) and Mars Acquisition Corp., a Cayman Islands Company (“SPAC”). Capitalized terms used but not defined in this Agreement shall have the meanings ascribed to them in the Merger Agreement (as defined below).

WHEREAS, SPAC has entered into a Business Combination Agreement, dated as of September 5, 2023 (as it has been amended from time to time, the “Merger Agreement”), with ScanTech AI Systems Inc., a Delaware corporation and a wholly owned subsidiary of Mars (“Pubco”), Mars Merger Sub I Corp., a Cayman Islands exempted company and a wholly owned subsidiary of Pubco (“Purchaser Merger Sub”), Mars Merger Sub II LLC, a Delaware limited liability company and a wholly owned subsidiary of Pubco (“Company Merger Sub”), ) ScanTech Identification Beam Systems, LLC, a Delaware limited liability company (the “Company” or “ScanTech”), and Dolan Falconer in the capacity as the representative, pursuant to which, among other things, Pubco will become the parent of the Company and a publicly traded company (the “Merger”).

WHEREAS, Shareholder owns 200,000 ordinary shares, par value $0.0001 per share (the “Shares”), of SPAC (the “Ordinary Shares”).

WHEREAS, Shareholder previously entered into two Subscription Agreements dated April 4, 2024 and May 5, 2024 (the “Subscription Agreements”), between the Shareholder, the SPAC, Mars Capital Holdings Corporation, a British Virgin Islands business company (“Sponsor”), and the Company, pursuant to which the Shareholder wired $1,250,000 to SPAC in consideration for which it was to be repaid $1,250,000 (the “Cash Payment”) at the closing of the Merger and receive 1,250,000 ordinary shares (the “Subscription Shares”) of Pubco at the closing of the Merger.

WHEREAS, Shareholder and PubCo desire to reduce the amount of Subscription Shares to 312,500 ordinary shares.

NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants and agreements contained herein, and intending to be legally bound hereby, the parties hereby agree as follows:

1.             Redemption Rights. During the period (such period, the “Term”) commencing on the date hereof and ending on the earlier to occur of (a) the closing of the Merger, and (b) such date and time as the Merger Agreement is terminated in accordance with its terms (the “Expiration Time”), Shareholder agrees that it will not exercise (or will rescind the exercise of) its right to redeem all or a portion of the Shares as set forth in the organizational documents of SPAC in connection with any vote on the Merger (as defined below).

2.             Subscription Agreement. Concurrently with the closing of the Merger, Shareholder agrees to extend the terms of the Cash Payment to Pubco pursuant to the terms of the promissory note and intercreditor agreement between, among others, the Shareholder and Pubco (the “Credit Agreement”) executed concurrently herewith. Concurrently with the closing of the Merger, the SPAC and the Shareholder agree that the number of Subscription Shares shall be reduced to 312,500, and the Subscription Shares shall be issued to the Shareholder as consideration for the Shareholder entering into this Agreement and the Credit Agreement. If Pubco fails to issue the Subscription Shares at the closing of the Merger, it shall be considered an event of default under the Credit Agreement. The parties acknowledge and agree that the terms of the Section entitled “Registration” in each of the Subscription Agreements remain in full force and effect with respect to the Subscription Shares. The parties agree that, following the Merger, the parties shall in good faith negotiate to amend the terms of the Credit Agreement such that such amended Credit Agreement will have rights and protections equivalent to the rights and protections granted to the Credit Agreement Creditors (as defined in the Intercreditor Agreement (as defined in the Credit Agreement)), provided that such amendment shall be entered into no later than January 31, 2025.

3.             Operating Agreement. Immediately prior to the Merger, the Shareholder will enter into the Seventh Amended and Restated Limited Liability Company Agreement of ScanTech Identification Beam Systems, LLC, the form of which is attached hereto as Exhibit A (the “LLC Agreement”). The LLC Agreement shall not be modified or amended from the form attached hereto without the prior written consent of the Shareholder. The persons on the signature page hereto hereby agree to comply with the terms of the LLC Agreement, including the issuance of the securities specified in Section 3.01(b) thereof by ScanTech AI Systems Inc. to the Shareholder within the time specified in the LLC Agreement.

4.             Transfer of Shares. During the Term, Shareholder agrees that it shall not, directly or indirectly, sell, assign, transfer (including by operation of law), allow the creation of a lien, pledge, distribute, dispose of or otherwise encumber any of the Shares, either voluntarily or involuntarily (collectively, “Transfer”), or otherwise agree or offer to do any of the foregoing; provided, that, Transfers by Shareholder are permitted to ~~an affiliate of Shareholder~~ (a “Permitted Transfer”) only if, as a precondition to such Transfer, the transferee also agrees in a writing, reasonably satisfactory in form and substance to the SPAC, to assume all of the obligations of Shareholder under, and be bound by all of the terms of, this Agreement. Any Transfer in violation of this Section 3 with respect to the Shares shall be null and void. Nothing in this Agreement shall prohibit direct or indirect transfers of equity or other interests in a Shareholder.

5.             Cash Payment. At the closing of the Merger, the SPAC shall pay the Shareholder, directly from the SPAC’s trust account, an amount in cash equal to (i) the amount the Shareholder would have received had it redeemed the Shares, minus (ii) $750,000 (the “Closing Payment”). If the SPAC or Pubco fails to make the Closing Payment directly from the SPAC’s trust account at the closing of the Merger, such failure shall be considered an event of default under the Credit Agreement.

6.             Covenants of Shareholder. Shareholder hereby agrees to permit SPAC to publish and disclose Shareholder’s identity, ownership of the Shares and the nature of Shareholder’s commitments, arrangements and understandings under this Agreement, and, if deemed appropriate by SPAC or the Company, a copy of this Agreement, in (i) any Form 8-K filed by SPAC relating to the transactions contemplated herein, and (ii) any other documents or communications provided by SPAC or the Company to any Governmental Authority or to securityholders of SPAC, in each case, to the extent required by the federal securities laws or the SEC or any other securities authorities. The parties to this Agreement shall cooperate with one another to assure that such disclosure is accurate, and SPAC will provide Shareholder with sufficient time to review and comment any disclosures prior to the dissemination thereof

7.             No Ownership Interest. Nothing contained in this Agreement will be deemed to vest in the SPAC any direct or indirect ownership or incidents of ownership of or with respect to the Shares. All rights, ownership and economic benefits of and relating to the Shares shall remain vested in and belong to Shareholder, and the SPAC shall have no authority to manage, direct, superintend, restrict, regulate, govern or administer any of the policies or operations of Shareholder or exercise any power or authority to direct Shareholder in the voting of any of the Shares, except as otherwise provided herein with respect to the Shares.

8.             Termination. This Agreement and the obligations of Shareholder under this Agreement shall automatically terminate upon the earliest of: (a) the termination of the Merger Agreement; and (b) the mutual agreement of the Shareholder and SPAC. Upon termination or expiration of this Agreement, no party shall have any further obligations or liabilities under this Agreement; provided, however, such termination or expiration shall not relieve any party from liability for any willful breach of this Agreement occurring prior to its termination.

9.             Indemnification. The parties hereby acknowledge and agree that under no event shall the officers, directors, members or controlling persons of the SPAC, ScanTech or the Company be subject to any claim by or have any personal obligations or liability to any other party, any affiliate of any other party, or to any third party in connection with this Agreement. The Parties hereby acknowledge and agree, for the avoidance of doubt, that no Party shall have any right, obligation, or liability whatsoever under this Agreement in the event of a Termination, or unless and until the Closing has occurred, the Business Combination has been consummated, and then this Agreement is deemed effective as set forth therein.

10.           Trust Waiver. Reference is made to the final prospectus of SPAC, dated as of February 13, 2023, and filed with the Securities and Exchange Commission (File No. 333-265240) on February 14, 2023 (the “Prospectus”). Holder understands that the SPAC has established a trust account (the “Trust Account” ) containing the proceeds of its initial public offering (the “ IPO” ) and the overallotment securities acquired by its underwriters and from certain private placements occurring simultaneously with the IPO (including interest accrued from time to time thereon) for the benefit of the SPAC’s public stockholders (including overallotment shares acquired by SPAC’s underwriters), and that, SPAC may disburse monies from the Trust Account only as described in the Prospectus, its organizational documents or the Investment Management Trust Agreement entered into in connection with the IPO. For and in consideration of the SPAC entering into this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Holder hereby agrees on behalf of itself and its affiliates that, notwithstanding anything to the contrary in this Agreement, neither Holder nor any of its affiliates do now or shall at any time hereafter have any right, title, interest or claim of any kind in or to any monies in the Trust Account or distributions therefrom, or make any claim against the Trust Account (including any distributions therefrom), regardless of whether such claim arises as a result of, in connection with or relating in any way to, this Term Sheet or any proposed or actual business relationship between the SPAC or its representatives, on the one hand, and Holder or its representatives, on the other hand, or any other matter, and regardless of whether such claim arises based on contract, tort, equity or any other theory of legal liability (collectively, the “Released Claims”), provided that the foregoing shall not apply to any redemption requested by the Holder or liquidating distribution from the Trust Account. Holder on behalf of itself and its affiliates hereby irrevocably waives any Released Claims that Holder or any of its affiliates may have against the Trust Account (including any distributions therefrom) now or in the future as a result of, or arising out of, this Agreement and will not seek recourse against the Trust Account (including any distributions therefrom) for any reason whatsoever (including for an alleged breach of this Term Sheet or any other agreement with Mars or its affiliates). Holder agrees and acknowledges that such irrevocable waiver is material to this Term Sheet and specifically relied upon by Mars and its affiliates to induce Mars to enter in this Agreement, and Holder further intends and understands such waiver to be valid, binding and enforceable against Holder and each of its affiliates under applicable law. The provisions of this section shall survive any expiration or termination of this Agreement and continue indefinitely.

11.           Governing Law; Jurisdiction; Jury Trial Waiver. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of New York, without giving effect to its principles or rules of conflict of laws to the extent such principles or rules would require or permit the application of the laws of another jurisdiction. The parties hereto hereby waive any right to a jury trial in connection with any litigation pursuant to this Agreement and the transactions contemplated hereby. With respect to any suit, action or proceeding relating to the transactions contemplated hereby, the undersigned irrevocably submit to the jurisdiction of the United States District Court or, if such court does not have jurisdiction, the New York state courts located in the Borough of Manhattan, State of New York, which submission shall be exclusive.

12.           Disclosure; Waiver. As soon as practicable, but in no event later than 9:30 a.m., New York City time, on the business day after the date of this Agreement (such date and time, the “Disclosure Time”), SPAC will issue one or more press releases or file a Current Report on Form 8-K under the Exchange Act reporting the material terms of this Agreement and any other material, nonpublic information that SPAC, Pubco or any of their respective officers, directors, employees or representatives has provided to Shareholder at any time prior to the Disclosure Time. SPAC shall make such disclosures to ensure that, as of the Disclosure Time, Shareholder shall not be in possession of any material nonpublic information received from SPAC, Pubco, or any of their respective officers, directors, employees or representatives. The parties to this Agreement shall cooperate with one another to assure that such disclosure is accurate, and SPAC will provide Shareholder with sufficient time to review and comment any disclosures prior to the dissemination thereof. Shareholder (i) acknowledges that the other parties hereto may possess or have access to material non-public information which has not been communicated to the Shareholder; (ii) hereby waives any and all claims, whether at law, in equity or otherwise, that he, she, or it may now have or may hereafter acquire, whether presently known or unknown, against the officers, directors, employees, agents, affiliates, subsidiaries, successors or assigns of the other parties hereto relating to any failure to disclose any non-public information in connection with the transaction contemplated by this Agreement, including without limitation, any claims arising under Rule 10b-5 of the Exchange Act; and (iii) is aware that the SPAC and Pubco are relying on the truth of the foregoing acknowledgement and waiver in connection with the transactions contemplated by this Agreement.

13.           Counterpart. This Agreement may be executed and delivered (including by facsimile or portable document format (pdf) transmission) in one or more counterparts, and by the different parties hereto in separate counterparts, of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same agreement.

14.           Amendment. This Agreement may not be amended, changed, supplemented, waived or otherwise modified or terminated, except upon the execution and delivery of a written agreement executed by SPAC, the Company, Pubco and Shareholder.

15.           No Third Party Beneficiary. No person shall be a third party beneficiary of this Agreement.

[Signature Page Follows]

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.

	Polar Multi-Strategy Master Fund by its investment advisor, Polar Asset Management Partners Inc

	By:	/s/ Ryan Hickey
	Name: Ryan Hickey
	Title: Director, Legal

	By:	/s/ Kirstie Moore
	Name: Kirstie Moore
	Title: Legal Counsel

	Mars Acquisition Corp.

	By:	/s/ Karl Brenza
	Name: Karl Brenza
	Title: CEO and CFO

	Acknowledged and Agreed:

	SCANTECH AI SYSTEMS INC.

	By:	/s/ Karl Brenza
	Name: Karl Brenza
	Title: Chairman and Director

	MARS CAPITAL HOLDINGS CORPORATION

	By:	/s/ Iris Zhao
	Name: Iris Zhao
	Title: Director

Exhibit 10.6

SENIOR UNSECURED PROMISSORY NOTE

December 31, 2024

FOR VALUE RECEIVED, SCANTECH AI SYSTEMS INC, a Delaware corporation (the “Company” or “Pubco”), hereby promises to pay to the order of SEAPORT GROUP SIBS LLC (the “Lender”) the Principal Amount (as defined below) in the amounts and on the dates set forth herein, together with interest on the unpaid Principal Amount outstanding from time to time from the date each such amount is advanced as provided herein, at a rate of fifteen percent (5.0%) per annum, paid quarterly.

WHEREAS, ScanTech Identification Beam Systems, LLC, a Delaware limited liability company (“ScanTech”), has entered into a Business Combination Agreement, dated as of September 5, 2023 (as it has been amended from time to time, the “Business Combination Agreement”), with Lender, Mars Merger Sub I Corp., a Cayman Islands exempted company and a wholly owned subsidiary of Pubco (“Purchaser Merger Sub”), Mars Merger Sub II LLC, a Delaware limited liability company and a wholly owned subsidiary of Pubco (“Company Merger Sub”), pursuant to which, among other things, Pubco will become the parent of the Company and a publicly traded company (the “Business Combination”).

WHEREAS, in connection with the Business Combination Lender invested $1,000,000 into the Company (“Closing Investment”);

WHEREAS, Lender and Company agree to settle the Closing Investment in shares of Pubco;

NOW, THEREFORE, in consideration of the mutual agreements, provisions and covenants contained herein, the parties hereto agree as follows:

1.            Principal Amount. As used herein, the term “Principal Amount” means $1,000,000.00 (One Million Dollars).

2.            Maturity Date. The Principal Amount and all accrued interest under this Facility shall be due and payable upon demand by the Lender one-hundred and eithty (180) days from the date funds are released to the Company (the “Maturity Date”). Notwithstanding the foregoing, the entire unpaid Principal Amount, together with all accrued interest thereon, shall become immediately due and payable upon the occurrence of an Event of Default (as hereinafter defined).

3.            Interest Rate and Calculation. The note shall accumulate interest in kind at a rate of 15.0% per annum on the outstanding Principal Amount computed by multiplying the actual number of days in such period by a daily interest rate based on a 360-day year, which such interest shall be due and payable at the Maturity Date.

4.            Settlement in Shares. The Company agrees, and Lender accepts, repayment of the note, including any and all accrued interest, in the form of 303,951 ordinary shares of the Company (the “Shares”). The Shares shall be issuable and registered at the time of the Company’s filing of its follow on registration statement immediately following the consummation of the Business Combination.

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5.            Security and Seniority. This Facility shall be considered senior unsecured.

6.            Events of Default. The occurrence of any of the following shall constitute an “Event of Default” hereunder:

(a)            Failure to Pay. The Company shall fail to pay the outstanding Principal Amount and accrued interest on any date when due hereunder; or

(10) business days after the Company’s receipt of written notice from the Lender orits representatives of such failure; or

(c)            Representations and Warranties. Any representation, warranty, certificate,or other statement (financial or otherwise) made or furnished by or on behalf of the Company to the Lender in writing in connection with this Facility, or as an inducement to the Lender to enter into this Facility, shall be false, incorrect, incomplete or misleading in any material respect when made or furnished; or

(d)            Voluntary Bankruptcy or Insolvency Proceedings. The Company or any of its Affiliates (“Affiliate” shall mean any entity in which the Company owns at least fifty percent (50%) of the equity) shall (i) apply for or consent to the appointment of a receiver, trustee, liquidator or custodian for itself, or of all or a substantial part of its assets or property, (2) be unable, or admit in writing its inability, to pay its debts generally as they mature, (3) make a general assignment for the benefit of its creditors, (4) become insolvent (as such term may be defined or interpreted pursuant to any applicable statute), (5) commence a voluntary case or other proceeding seeking liquidation, reorganization or other relief with respect to itself or its debts pursuant to any bankruptcy, insolvency or other similar law now or hereafter in effect or consent to any such reliefor to the appointment of or taking possession of its property by any official in an involuntary case or other proceeding commenced against it, or (6) take any action for the purpose of effecting any of the foregoing; or

(e)            Involuntary Bankruptcy or Insolvency Proceedings. Proceedings for the appointment of a receiver, trustee, liquidator or custodian of the Company, any of its Affiliates, or of all or a substantial part of its property, or an involuntary case or other proceedings seeking liquidation, reorganization or other relief with respect to the Company, any of its affiliates, or the debts thereof pursuant to any bankruptcy, insolvency or other similar law now or hereafter in effect shall be commenced and an order for relief entered or such proceeding shall not be dismissed or discharged within thirty (30) days of commencement; or

(f)             Other Defaults. Any default not specified herein shall be specified and governed by the Intercreditor Agreement.

7.            Transfer, Successors and Assigns. The terms and conditions of this Facility shall inure to the benefit of and be binding upon the respective successors and assigns of the parties. The Lender may not assign, pledge, or otherwise transfer this Facility without the prior written consent of the Company. Subject to the preceding sentence, this Facility may be transferred only upon surrender of the original Facility for registration of transfer, duly endorsed, or accompanied by a duly executed written instrument of transfer. Interest and principal are payable only to the registered holder of this Facility. Neither this Facility nor any of the rights, interests or obligations hereunder may be assigned, by operation of law or otherwise, in whole or in part, by the Company without the priorwritten consent of Lender.

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8.            Expenses. The Lender is responsible for all cost of its due diligence, legal and other expenses related to the signing and enforcement of this Facility.

9.            Indemnity. The Company agrees to promptly pay, indemnify and hold the Lender harmless from all state and federal taxes of any kind and other liabilities assessed against the Companywith respect to or resulting from the execution and/or delivery of this Facility.

10.          Further Assurances. The Company shall execute and acknowledge (or cause to be executed and acknowledged) and deliver to the Lender all reasonable documents, and take all actions, reasonably required by the Lender from time to time to confirm the rights created or now or hereafter intended to be created under this Facility, to protect and further the validity, priority and enforceability of this Facility, or otherwise carry out the purposes of this Facility and the transactions contemplated hereunder.

11.          Costs of Collection. The Company agrees to pay all reasonable costs and expenses of collection incurred by the Lender, in addition to principal and interest (including, without limitation, reasonable attorneys’ fees and disbursements) and including all reasonable costs and expenses incurred in connection with the pursuit by the Lender of any of its rights or remedies referred to in this Facility, whether or not suit on this Facility is commenced, and all such reasonable costs and expenses shall be payable on demand, together with interest thereon.

12.          Governing Law/Venue/Jurisdiction/Wavier of Jury Trial. This Facility and the rights and obligations of the Company and the Lender shall be governed by and interpreted in accordance with the law of the State of New York (without regard to any conflicts of law rule that would require the application of the law of any other jurisdiction). In any litigation in connection with orto enforce this Facility or any endorsement or guaranty of this Facility, the Company irrevocably consents to personal jurisdiction on the courts of the State of New York or the United States located within the State of New York and expressly waive any objections as to venue in any such courts. Nothing contained herein shall, however, prevent the Lender from bringing any action or exercising any rights within any other state or jurisdiction or from obtaining personal jurisdiction by any other means available under applicable law. The parties irrevocably and voluntarily agreeto waive any right to a trial by jury in respect of such claim.

13.          Waiver. The Company hereby expressly and unconditionally waives presentment, demand, protest, notice of protest or notice of any kind, including, without limitation, any notice of intention to accelerate and notice of acceleration, except as expressly provided herein, and in connection with any suit, action or proceeding brought by the Lender on this Facility, any and every right it may have to (a) a trial by jury, (b) interpose any counterclaim therein (other than a counterclaim that can only be asserted in the suit, action or proceeding brought by the Lender on this Facility and cannot be maintained in a separate action) and (c) have the same consolidated with any other or separate suit, action or proceeding.

14.          Severability. Wherever possible, each provision of this Facility shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Facility shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Facility.

15.          Counterparts. This Facility may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, shall be deemed to be an original, and all of which, when taken together, shall constitute but one and the same Facility.

[The remainder of this page is left intentionally blank.]

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.

	SCANTECH AI SYSTEMS INC. (COMPANY)

	By:	/s/ Karl Brenza
	Name: Karl Brenza
	Title: Chairman and Director

	SEAPORT SIBS LLC (LENDER)

	By:	/s/ Stephen Smith
	Name: Stephen Smith
	Title: Authorized Signatory

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Exhibit 10.7

SENIOR SECURED CREIDT FACILITY

December 31, 2024

FOR VALUE RECEIVED, SCANTECH AI SYSTEMS INC, a Delaware corporation (the “Company”), hereby promises to pay to the order of SEAPORT SIBS LLC (the “Lender” or “PubCo”) the Principal Amount (as defined below) in the amounts and on the dates set forth herein, together with interest on the unpaid Principal Amount outstanding from time to time from the date each such amount is advanced as provided herein, at a rate of fifteen percent (15.0%) per annum, paid quarterly.

WHEREAS, the Company has requested, and the Lender has agreed to make available to the Company, a credit facility in the amount of $2,000,000.00 (the “Facility”);

WHEREAS, the Company has agreed to enter into this Facility with the Lender and the Lender has agreed to the advance based on the terms and conditions contained herein;

NOW, THEREFORE, in consideration of the mutual agreements, provisions and covenants contained herein, the parties hereto agree as follows:

1.            Principal Amount. As used herein, the term “Principal Amount” means the aggregate amount of all advances made by the Lender to the Company pursuant to this Facility (each, an “Advance”), less all repayments on account of principal from time to time with respect to the Principal Amount, up to the maximum principal amount of $2,000,000.00 (Two Million Dollars). The initial advance of this Facility is available 15 days from the execution of this agreement. The Company shall record, using a form substantially similar to Schedule I attached to this Facility, (i) the date and amount of each Advance made by the Lender to the Company, (ii) the date and amount of each payment on account of principal made by the Company to the Lender, and (iii) the resulting outstanding Principal Amount. Entries made in good faith by the Company shall be binding and conclusive on the parties absent manifest error.

2.            Maturity Date. The Principal Amount and all accrued interest under this Facility shall be due and payable upon demand by the Lender twelve months from the date funds are released to the Company (the “Maturity Date”). Notwithstanding the foregoing, the entire unpaid Principal Amount, together with all accrued interest thereon, shall become immediately due and payable upon the occurrence of an Event of Default (as hereinafter defined). The Company may redeem the Facility, in whole or in part, at any time during the term of the Facility, at 115% of the then Principal Amount of the Facility being redeemed including interest prior to the Maturity Date.

3.            Interest Rate and Calculation. The Company shall pay Payment In Kind (PIK) interest at a rate of 15.0% per annum on the outstanding Principal Amount computed by multiplying the actual number of days in such period by a daily interest rate based on a 360-day year, which such interest shall be due and payable each quarter.

4.            Security and Seniority. This Facility shall be considered senior secured by the collateral pool of the Borrower and the Holder shall become a party to the Intercreditor Agreement dated September 24, 2024 (the “Intercreditor Agreement”). In connection with the consummation of the Business Combination, the Collateral Agent (as defined in the Intercreditor Agreement) shall sign an acknowledgement confirming Holder’s joinder to the Intercreditor Agreement and Holder’s senior secured status.

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5.            Events of Default. The occurrence of any of the following shall constitute an “Event of Default” hereunder:

(a)            Failure to Pay. The Company shall fail to pay the outstanding Principal Amount and accrued interest on any date when due hereunder; or

(b)            Breaches of Covenants. The Company shall fail to observe or perform any other covenant, obligation, condition or agreement contained in this Facility and such failure shall continue for (10) business days after the Company’s receipt of written notice from the Lender or its representatives of such failure; or

(c)            Representations and Warranties. Any representation, warranty, certificate, or other statement (financial or otherwise) made or furnished by or on behalf of the Company to the Lender in writing in connection with this Facility, or as an inducement to the Lender to enter into this Facility, shall be false, incorrect, incomplete or misleading in any material respect when made or furnished; or

(d)            Voluntary Bankruptcy or Insolvency Proceedings. The Company or any of its Affiliates (“Affiliate” shall mean any entity in which the Company owns at least fifty percent (50%) of the equity) shall (i) apply for or consent to the appointment of a receiver, trustee, liquidator or custodian for itself, or of all or a substantial part of its assets or property, (2) be unable, or admit in writing its inability, to pay its debts generally as they mature, (3) make a general assignment for the benefit of its creditors, (4) become insolvent (as such term may be defined or interpreted pursuant to any applicable statute), (5) commence a voluntary case or other proceeding seeking liquidation, reorganization or other relief with respect to itself or its debts pursuant to any bankruptcy, insolvency or other similar law now or hereafter in effect or consent to any such relief or to the appointment of or taking possession of its property by any official in an involuntary case or other proceeding commenced against it, or (6) take any action for the purpose of effecting any of the foregoing; or

(f)            Other Defaults. Any default not specified herein shall be specified and governed by the Intercreditor Agreement.

6.            Transfer, Successors and Assigns. The terms and conditions of this Facility shall inure to the benefit of and be binding upon the respective successors and assigns of the parties. The Lender may not assign, pledge, or otherwise transfer this Facility without the prior written consent of the Company. Subject to the preceding sentence, this Facility may be transferred only upon surrender of the original Facility for registration of transfer, duly endorsed, or accompanied by a duly executed written instrument of transfer. Interest and principal are payable only to the registered holder of this Facility. Neither this Facility nor any of the rights, interests or obligations hereunder may be assigned, by operation of law or otherwise, in whole or in part, by the Company without the prior written consent of Lender.

7.            Expenses. The Lender is responsible for all cost of its due diligence, legal and other expenses related to the signing and enforcement of this Facility.

8.            Termination. In the event there has been no Advances made to the Company, the Facility may be terminated by written mutual agreement from the Company and the Lender without penalty

9.            Indemnity. The Company agrees to promptly pay, indemnify and hold the Lender harmless from all state and federal taxes of any kind and other liabilities assessed against the Company with respect to or resulting from the execution and/or delivery of this Facility.

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12.          Governing Law/Venue/Jurisdiction/Wavier of Jury Trial. This Facility and the rights and obligations of the Company and the Lender shall be governed by and interpreted in accordance with the law of the State of New York (without regard to any conflicts of law rule that would require the application of the law of any other jurisdiction). In any litigation in connection with or to enforce this Facility or any endorsement or guaranty of this Facility, the Company irrevocably consents to personal jurisdiction on the courts of the State of New York or the United States located within the State of New York and expressly waive any objections as to venue in any such courts. Nothing contained herein shall, however, prevent the Lender from bringing any action or exercising any rights within any other state or jurisdiction or from obtaining personal jurisdiction by any other means available under applicable law. The parties irrevocably and voluntarily agree to waive any right to a trial by jury in respect of such claim.

13.         Waiver. The Company hereby expressly and unconditionally waives presentment, demand, protest, notice of protest or notice of any kind, including, without limitation, any notice of intention to accelerate and notice of acceleration, except as expressly provided herein, and in connection with any suit, action or proceeding brought by the Lender on this Facility, any and every right it may have to (a) a trial by jury, (b) interpose any counterclaim therein (other than a counterclaim that can only be asserted in the suit, action or proceeding brought by the Lender on this Facility and cannot be maintained in a separate action) and (c) have the same consolidated with any other or separate suit, action or proceeding.

15.         Counterparts. This Facility may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, shall be deemed to be an original, and all of which, when taken together, shall constitute but one and the same Facility.

[The remainder of this page is left intentionally blank.]

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	SCANTECH AI SYSTEMS INC. (COMPANY)

	By:	/s/ Karl Brenza
	Name: Karl Brenza
	Title: Chairman and Director

	SEAPORT SIBS LLC (LENDER)

	By:	/s/ Stephen Smith
	Name: Stephen Smith
	Title: Authorized Signatory

Exhibit 14.1

ScanTech AI Systems Inc.

CODE OF BUSINESS CONDUCT AND ETHICS

I. PURPOSE

This Code of Business Conduct and Ethics (the “Code”) contains general guidelines for conducting the business of ScanTech AI Systems Inc., Delaware corporation, and its subsidiaries and affiliates (collectively, the “Company”), and is intended to qualify as a “code of ethics” within the meaning of Section 406(c) of the Sarbanes-Oxley Act of 2002 and the rules promulgated thereunder. To the extent this Code requires a higher standard than required by commercial practice or applicable laws, rules or regulations, we adhere to these higher standards.

This Code is designed to deter wrongdoing and to promote:

honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships;

full, fair, accurate, timely, and understandable disclosure in reports and documents that the Company files with, or submits to, the U.S. Securities and Exchange Commission (the “SEC”) and in other public communications made by the Company;

compliance with applicable laws, rules and regulations;

prompt internal reporting of violations of the Code; and

accountability for adherence to the Code.

II. APPLICABILITY

This Code applies to all directors, officers and employees of the Company, whether they work for the Company on a full-time, part-time, consultative or temporary basis (each, an “employee” and collectively, the “employees”). Certain provisions of the Code apply specifically to our chief executive officer, chief financial officer, senior finance officer and any other persons who perform similar functions for the Company (each, a “senior officer,” and collectively, the “senior officers”).

The Board of Directors of the Company (the “Board”) has appointed the Company’s Chief Financial Officer as the Compliance Officer for the Company (the “Compliance Officer”). If you have any questions regarding the Code or would like to report any violation of the Code, please contact the Compliance Officer.

This Code has been adopted by the Board. The Board and the Compliance Officer, as well as any duly appointed committee charged with enforcing this Code, shall be entitled to enforce this Code to the full extent permitted by law.

III. CONFLICTS OF INTEREST

Identifying Conflicts of Interest

A conflict of interest occurs when an employee’s private interest interferes, or appears to interfere, in any way with the interests of the Company as a whole. An employee should actively avoid any private interest that may impact such employee’s ability to act in the interests of the Company or that may make it difficult to perform the employee’s work objectively and effectively. In general, the following should be considered conflicts of interest:

Competing Business. No employee may be employed by a business that competes with the Company or deprives it of any business.

Corporate Opportunity. No employee should use corporate property, information or his/her position with the Company to secure a business opportunity that would otherwise be available to the Company. If an employee discovers a business opportunity that is in the Company’s line of business through the use of the Company’s property, information or position, the employee must first present the business opportunity to the Company and obtain approval from the Company’s Audit Committee before pursuing the opportunity in his/her individual capacity.

Financial Interests

No employee may have any financial interest (ownership or otherwise), either directly or indirectly through a spouse or other family member, in any other business or entity if such interest adversely affects the employee’s performance of duties or responsibilities to the Company, or requires the employee to devote time to it during such employee’s working hours at the Company; provided, however that an officer or director may devote time to such other interest during working hours so long as it does not interfere with his/her ability to carry out his/her duties at the Company;

ii.

No employee may hold any ownership interest in a privately held company that is in competition with the Company;

iii.

An employee may hold up to 5% ownership interest in a publicly traded company that is in competition with the Company; provided that if the employee’s ownership interest in such publicly traded company increases to more than 5%, the employee must immediately report such ownership to the Compliance Officer;

iv.

No employee may hold any ownership interest in a company that has a business relationship with the Company if such employee’s duties at the Company include managing or supervising the Company’s business relations with that company; and

Notwithstanding the other provisions of this Code,

(a)

a director or any immediate family member of such director (collectively, “Director Affiliates”) or a senior officer or any immediate family member of such senior officer (collectively, “Officer Affiliates”) may continue to hold his/her investment or other financial interest in a business or entity (an “Interested Business”) that:

(1)

was made or obtained either (x) before the Company invested in or otherwise became interested in such business or entity; or (y) before the director or senior officer joined the Company (for the avoidance of doubt, regardless of whether the Company had or had not already invested in or otherwise become interested in such business or entity at the time the director or senior officer joined the Company); or

(2)

may in the future be made or obtained by the director or senior officer, provided that at the time such investment or other financial interest is made or obtained, the Company has not yet invested in or otherwise become interested in such business or entity;

provided that such director or senior officer shall disclose such investment or other financial interest to the Board;

(b)

an interested director or senior officer shall refrain from participating in any discussion among senior officers of the Company relating to an Interested Business and shall not be involved in any proposed transaction between the Company and an Interested Business; and

(c)

before any Director Affiliate or Officer Affiliate (i) invests, or otherwise acquires any equity or other financial interest, in a business or entity that is in competition with the Company; or (ii) enters into any transaction with the Company, the related director or senior officer shall obtain prior approval from the Audit Committee of the Board.

For purposes of this Code, a company or entity is deemed to be “in competition with the Company” if it competes with the Company’s business of providing corporate business training services, corporate consulting services, advisory and transaction services, and/or any other business in which the Company is engaged.

Loans or Other Financial Transactions. No employee may obtain loans or guarantees of personal obligations from, or enter into any other personal financial transaction with, any company that is a material customer, supplier or competitor of the Company. This guideline does not prohibit arms-length transactions with recognized banks or other financial institutions.

Service on Boards and Committees. No employee shall serve on a board of directors or trustees or on a committee of any entity (whether profit or not-for-profit) whose interests could reasonably be expected to conflict with those of the Company. Employees must obtain prior approval from the Board or the Company’s Audit Committee, as required by the rules of Nasdaq, before accepting any such board or committee position. The Company may revisit its approval of any such position at any time to determine whether an employee’s service in such position is still appropriate.

The above is in no way a complete list of situations where conflicts of interest may arise. The following questions might serve as a useful guide in assessing a potential conflict of interest situation not specifically addressed above:

Is the action to be taken legal?

Is it honest and fair?

Is it in the best interests of the Company?

Disclosure of Conflicts of Interest

The Company requires that employees fully disclose any situations that could reasonably be expected to give rise to a conflict of interest. If an employee suspects that he/she has a conflict of interest, or a situation that others could reasonably perceive as a conflict of interest, the employee must report it immediately to the Compliance Officer. Conflicts of interest may only be waived by the Board, the appropriate committee of the Board and in some cases, as in accordance with Nasdaq rules, only by the Company’s Audit Committee, and will be promptly disclosed to the public to the extent required by law and applicable rules of Nasdaq.

Family Members and Work

The actions of family members outside the workplace may also give rise to conflicts of interest because they may influence an employee’s objectivity in making decisions on behalf of the Company. If a member of an employee’s family is interested in doing business with the Company, the criteria as to whether to enter into or continue the business relationship and the terms and conditions of the relationship must be no less favorable to the Company compared with those that would apply to an unrelated party seeking to do business with the Company under similar circumstances.

Employees should report any situation involving family members that could reasonably be expected to give rise to a conflict of interest to their supervisor or the Compliance Officer. For purposes of this Code, “family members” or “members of employee’s family” include an employee’s spouse, parents, children, siblings, mothers and fathers-in-law, sons and daughters-in-law, brothers and sisters-in-law, and anyone (other than domestic employees) who shares such employee’s home.

IV. GIFTS AND ENTERTAINMENT

The giving and receiving of appropriate gifts may be considered common business practice. Appropriate business gifts and entertainment are welcome courtesies designed to build relationships and understanding among business connections. However, gifts and entertainment should never compromise, or appear to compromise, an employee’s ability to make objective and fair business decisions.

It is the responsibility of employees to use good judgment in this area. As a general rule, employees may give or receive gifts or entertainment to or from customers or suppliers only if the gift or entertainment is in compliance with applicable law, insignificant in amount and not given in consideration or expectation of any action by the recipient. All gifts and entertainment expenses made on behalf of the Company must be properly accounted for on expense reports.

We encourage employees to submit gifts received to the Company. While it is not mandatory to submit small gifts, gifts of over USD 100 must be submitted immediately to the Compliance Officer.

Bribes and kickbacks are criminal acts, strictly prohibited by law. An employee must not offer, give, solicit or receive any form of bribe or kickback anywhere in the world.

V. FCPA COMPLIANCE

The U.S. Foreign Corrupt Practices Act (“FCPA”) prohibits giving anything of value, directly or indirectly, to officials of foreign governments or foreign political candidates in order to obtain or retain business. A violation of FCPA does not only violate the Company’s policy but also constitute a civil or criminal offense under FCPA which the Company is subject to after the Effective Time. No employee shall give or authorize directly or indirectly any illegal payments to government officials of any country. While the FCPA does, in certain limited circumstances, allow nominal “facilitating payments” to be made, any such payment must be discussed with and approved by an employee’s supervisor in advance before it can be made.

VI. PROTECTION AND USE OF COMPANY ASSETS

Employees should protect the Company’s assets and ensure their efficient use for legitimate business purposes only. Theft, carelessness and waste have a direct impact on the Company’s profitability. Any use of the funds or assets of the Company, whether for personal gain or not, for any unlawful or improper purpose is strictly prohibited.

To ensure the protection and proper use of the Company’s assets, each employee should:

Exercise reasonable care to prevent theft, damage or misuse of Company property;

Promptly report any actual or suspected theft, damage or misuse of Company property;

Safeguard all electronic programs, data, communications and written materials from unauthorized access; and

Use Company property only for legitimate business purposes.

Except as approved in advance by the Chief Executive Officer or Chief Financial Officer of the Company, the Company prohibits political contributions (directly or through trade associations) by any employee on behalf of the Company. Prohibited political contributions include:

any contributions of the Company’s funds or other assets for political purposes;

encouraging individual employees to make any such contribution; and

reimbursing an employee for any political contribution.

VII. INTELLECTUAL PROPERTY AND CONFIDENTIALITY

Employees should abide by the Company’s rules and policies in protecting the intellectual property and confidential information, including the following:

All inventions, creative works, computer software, and technical or trade secrets developed by an employee in the course of performing the employee’s duties or primarily through the use of the Company’s assets or resources while working at the Company shall be the property of the Company.

Employees should maintain the confidentiality of information entrusted to them by the Company or entities with which the Company has business relations, except when disclosure is authorized or legally mandated. Confidential information includes all non-public information that might be of use to competitors, or harmful to the Company or its business associates, if disclosed.

The Company maintains a strict confidentiality policy. During an employee’s term of employment with the Company, the employee shall comply with any and all written or unwritten rules and policies concerning confidentiality and shall fulfill the duties and responsibilities concerning confidentiality applicable to the employee.

In addition to fulfilling the responsibilities associated with his/her position in the Company, an employee shall not, without obtaining prior approval from the Company, disclose, announce or publish trade secrets or other confidential business information of the Company, nor shall an employee use such confidential information outside the course of his/her duties to the Company.

Even outside the work environment, an employee must maintain vigilance and refrain from disclosing important information regarding the Company or its business, business associates or employees.

An employee’s duty of confidentiality with respect to the confidential information of the Company survives the termination of such employee’s employment with the Company for any reason until such time as the Company discloses such information publicly or the information otherwise becomes available in the public sphere through no fault of the employee.

Upon termination of employment, or at such time as the Company requests, an employee must return to the Company all of its property without exception, including all forms of medium containing confidential information, and may not retain duplicate materials.

VIII. ACCURACY OF FINANCIAL REPORTS AND OTHER PUBLIC COMMUNICATIONS

The Company is required to report its financial results and other material information about its business to the public and the SEC. It is the Company’s policy to promptly disclose accurate and complete information regarding its business, financial condition and results of operations. Employees must strictly comply with all applicable standards, laws, regulations and policies for accounting and financial reporting of transactions, estimates and forecasts. Inaccurate, incomplete or untimely reporting will not be tolerated and can severely damage the Company and result in legal liability.

Employees should be on guard for, and promptly report, any possibility of inaccurate or incomplete financial reporting. Particular attention should be paid to:

Financial results that seem inconsistent with the performance of the underlying business;

Transactions that do not seem to have an obvious business purpose; and

Requests to circumvent ordinary review and approval procedures.

The Company’s senior financial officers and other employees working in the finance department have a special responsibility to ensure that all of the Company’s financial disclosures are full, fair, accurate, timely and understandable. Any practice or situation that might undermine this objective should be reported to the Compliance Officer.

Employees are prohibited from directly or indirectly taking any action to coerce, manipulate, mislead or fraudulently influence the Company’s independent auditors for the purpose of rendering the financial statements of the Company materially misleading. Prohibited actions include but are not limited to:

issuing or reissuing a report on the Company’s financial statements that is not warranted in the circumstances (due to material violations of U.S. GAAP, generally accepted auditing standards or other professional or regulatory standards);

not performing audit, review or other procedures required by generally accepted auditing standards or other professional standards;

not withdrawing an issued report when withdrawal is warranted under the circumstances; or

not communicating matters required to be communicated to the Company’s Audit Committee.

IX. COMPANY RECORDS

Accurate and reliable records are crucial to the Company’s business and form the basis of its earnings statements, financial reports and other disclosures to the public. The Company’s records are a source of essential data that guides business decision-making and strategic planning. Company records include, but are not limited to, booking information, payroll, timecards, travel and expense reports, e-mails, accounting and financial data, measurement and performance records, electronic data files and all other records maintained in the ordinary course of business.

All Company records must be complete, accurate and reliable in all material respects. There is never an acceptable reason to make false or misleading entries. Undisclosed or unrecorded funds, payments or receipts are strictly prohibited. An employee is responsible for understanding and complying with the Company’s recordkeeping policy. An employee should contact the Compliance Officer if he/she has any questions regarding the recordkeeping policy.

X. COMPLIANCE WITH LAWS AND REGULATIONS

Each employee has an obligation to comply with the laws of the cities, provinces, regions and countries in which the Company operates. This includes, without limitation, laws covering commercial bribery and kickbacks, patent, copyrights, trademarks and trade secrets, information privacy, insider trading, offering or receiving gratuities, employment harassment, environmental protection, occupational health and safety, false or misleading financial information, misuse of corporate assets and foreign currency exchange activities. Employees are expected to understand and comply with all laws, rules and regulations that apply to their positions at the Company. If any doubt exists about whether a course of action is lawful, the employee should seek advice immediately from the Compliance Officer.

XI. DISCRIMINATION AND HARASSMENT

The Company is firmly committed to providing equal opportunity in all aspects of employment and will not tolerate any illegal discrimination or harassment based on race, ethnicity, religion, gender, age, national origin or any other protected class. For further information, employees should consult the Compliance Officer.

XII. FAIR DEALING

Each employee should endeavor to deal fairly with the Company’s customers, suppliers, competitors and employees. None should take unfair advantage of anyone through manipulation, concealment, abuse of privileged information, misrepresentation of material facts, or any other unfair-dealing practice.

XIII. HEALTH AND SAFETY

The Company strives to provide employees with a safe and healthy work environment. Each employee has responsibility for maintaining a safe and healthy workplace for other employees by following environmental, safety and health rules and practices and reporting accidents, injuries and unsafe equipment, practices or conditions. Violence or threats of violence are not permitted.

Each employee is expected to perform his/her duty to the Company in a safe manner, not under the influence of alcohol, illegal drugs or other controlled substances. The use of illegal drugs or other controlled substances in the workplace is prohibited.

XIV. VIOLATIONS OF THE CODE

All employees have a duty to report any known or suspected violation of this Code, including any violation of laws, rules, regulations or policies that apply to the Company. Reporting a known or suspected violation of this Code by others will not be considered an act of disloyalty, but an action to safeguard the reputation and integrity of the Company and its employees.

If an employee knows of or suspects a violation of this Code, it is such employee’s responsibility to immediately report the violation to the Compliance Officer, who will work with the employee to investigate his/her concern. All questions and reports of known or suspected violations of this Code will be treated with sensitivity and discretion. The Compliance Officer and the Company will protect the employee’s confidentiality to the extent possible, consistent with the law and the Company’s need to investigate the employee’s concern.

It is the Company’s policy that any employee who violates this Code will be subject to appropriate disciplinary action, including termination of employment, based upon the facts and circumstances of each particular situation. An employee’s conduct, if it does not comply with the law or with this Code, can result in serious consequences for both the employee and the Company.

The Company strictly prohibits retaliation against an employee who, in good faith, seeks help or reports known or suspected violations. An employee inflicting reprisal or retaliation against another employee for reporting a known or suspected violation will be subject to disciplinary action, including termination of employment.

XV. WAIVERS OF THE CODE

Waivers of this Code will be granted on a case-by-case basis and only in extraordinary circumstances. Waivers of this Code may be made only by the Board, or the appropriate committee of the Board, and may be promptly disclosed to the public if so required by applicable laws and regulations and rules of the Nasdaq. Notwithstanding the foregoing, any waiver of this Code for a senior officer or a director may only be granted by the Board and must be publicly disclosed in accordance with the applicable rules of the Nasdaq.

XVI. CONCLUSION

This Code contains general guidelines for conducting the business of the Company consistent with the highest standards of business ethics. If employees have any questions about these guidelines, they should contact the Compliance Officer. We expect all employees to adhere to these standards. Each employee is separately responsible for his/her actions. Conduct that violates the law or this Code cannot be justified by claiming that it was ordered by a supervisor or someone in higher management positions. If an employee engages in conduct prohibited by the law or this Code, such employee will be deemed to have acted outside the scope of his/her employment. Such conduct will subject the employee to disciplinary action, including termination of employment.

* * * * * * * * * * * * *

Exhibit 21.1

SUBSIDIAIRES OF SCANTECH AI SYSTEMS INC.

Subsidiaries	Place of Incorporation	Incorporation Time	Percentage Ownership
ScanTech Identification Beam Systems, LLC	Delaware	May 13, 2011		100	%
Mars Acquisition Corp.	Cayman Islands	April 23, 2021		100	%

Exhibit 99.1

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

Defined terms included below shall have the same meaning as terms defined and included elsewhere in this proxy statement/prospectus/consent solicitation.

Introduction

We are providing the following unaudited pro forma condensed combined financial information to aid you in your analysis of the financial aspects of the Business Combination. Unless the context otherwise requires, the terms “we,” “us,” “our,” “Mars,” and the “Company” refers to Mars Acquisition Corp. following the Closing Date, and references to “ScanTech” refer to ScanTech Identification Beam Systems, LLC and its subsidiaries at or prior to the Closing Date.

The unaudited pro forma condensed combined financial information is prepared in accordance with Article 11 of Regulation S-X. The unaudited pro forma condensed combined financial information presents the pro forma effects of the Business Combination and the pre-listing financing described herein (collectively, the “Transactions”).

The Unaudited Pro Forma Condensed Combined Financial Statements

The following unaudited pro forma condensed combined balance sheet as of September 30, 2024 assumes that the Transactions occurred on September 30, 2024. The unaudited pro forma condensed combined statement of operations for the nine months ending September 30, 2024 assumes that the Transactions had been completed on October 1, 2022. The unaudited pro forma condensed combined statement of operations for the year ending September 30, 2023 assumes that the Transactions had been completed on October 1, 2022.

Management has made estimates and assumptions in its determination of the pro forma transaction accounting adjustments. As the unaudited pro forma condensed combined financial information has been prepared based on these preliminary estimates, the final amounts recorded may differ materially from the information presented. The unaudited pro forma condensed combined financial information does not give effect to any anticipated synergies, operating efficiencies, tax savings or cost savings that may be associated with the Transactions.

The unaudited pro forma transaction accounting adjustments reflecting the completion of the Transactions are based on certain currently available information and certain assumptions and methodologies that Mars believes are reasonable under the circumstances. The unaudited pro forma transaction accounting adjustments, which are described in the accompanying notes, may be revised as additional information becomes available and is evaluated. Therefore, it is likely that the actual adjustments will differ from the unaudited pro forma transaction accounting adjustments, and it is possible the difference may be material. Mars believes that its assumptions and methodologies provide a reasonable basis for presenting all of the significant effects of the Transactions based on information available to management at this time and that the unaudited pro forma transaction accounting adjustments give appropriate effect to those assumptions and are properly applied in the unaudited pro forma condensed combined financial information.

The unaudited pro forma condensed combined financial statements do not necessarily reflect what ScanTech’s financial condition or results of operations would have been had the Transactions occurred on the dates indicated. The unaudited pro forma condensed combined financial information also may not be useful in predicting the future financial condition and results of operations of the post-combination company. The actual financial position and results of operations may differ significantly from the pro forma amounts reflected herein due to a variety of factors.

Mars and ScanTech have different fiscal year ends. Mars is September 30 and ScanTech is December 31. The historical financial information of Mars was derived from:

(i)

the unaudited financial statements of Mars as of and for the nine months ended June 30, 2024 included in Mars’s Quarterly Report on Form 10-Q filed with the SEC on August 14, 2024, which is included in the proxy statement/prospectus/consent solicitation, and

(ii)

the audited financial statements of Mars as of and for the year ended September 30, 2023 included in Mars’s Annual Report on Form 10-K filed with the SEC on December 28, 2023, which is included in the proxy statement/prospectus/consent solicitation.

The historical financial information of ScanTech was derived from:

(i)

the unaudited condensed financial statements of ScanTech as of and for the nine months ending September 30, 2024, incorporated in the Form 8-K filed on January 8, 2025 by reference, and

(ii)

the audited condensed financial statements of ScanTech as of and for the year ending December 31, 2023, incorporated in the Form 8-K filed on January 8, 2025 by reference.

The unaudited pro forma condensed combined financial information is qualified in its entirety by reference to, and should be read together with ScanTech’s and Mars’s audited financial statements and related notes, which is incorporated in the Form 8-K filed on January 8, 2025 by reference..

Description of the Business Combination

In accordance with the terms and subject to the conditions of the Business Combination Agreement:

At the closing of the Business Combination, which occurred on January 2, 2025 (“Closing”), Purchaser Merger Sub merged with and into Mars, with Mars continuing as the surviving entity (“Purchaser Merger”), and, in connection therewith, each ordinary shares of Mars (“Ordinary Share”) issued and outstanding immediately prior to the Effective Time will be cancelled in exchange for the right of the holder thereof to receive, with respect to each Ordinary Share that is not redeemed or converted at Closing, one share of common stock of Pubco (“Pubco Common Stock”), and two additional shares of Pubco Common Stock that will be issued to Public Shareholders who elect not to redeem at the Redemption that will be issued, after 90 days following the Closing or such other period as may be agreed by parties to the Business Combination Agreement. Each share of Ordinary Shares held by Mars shareholders who validly redeemed their Ordinary Shares was automatically cancelled and ceased to exist and thereafter represented only the right to be paid a pro-rata redemption price.

The merger consideration to be paid to Company Holder Participants will be a number of shares of Pubco Common Stock equal to the quotient obtained by dividing (a) the sum of (i) $140.0 million minus (ii) the amount of Closing Net Debt in excess of $20.0 million, if any, as set forth in the Business Combination Agreement, as amended, by (b) $9.87, the conversion ratio set forth in the Business Combination Agreement, and rounded down to the nearest whole share. Upon Closing, holders of ScanTech Units are expected to collectively hold 14,184,397 shares of Pubco Common Stock.

(1)

one-third (1/3) of the Earnout Shares will be issued if Pubco or its subsidiaries receive the TSA APSS 6.2.0 Explosive Standard Certification at any time during the Earnout Period;

(2)

(3)

(4)

one-twelfth (1/12) of the Earnout Shares will be issued if the EBITDA of Pubco for fiscal year 2024 is a positive number;

(5)

one-twelfth (1/12) of the Earnout Shares will be issued if the revenue of Pubco as reported in the audited consolidated financial statements set forth in the annual report of Pubco for fiscal year 2025 filed with the SEC is equal to or exceeds Seventy-Five Million Dollars ($75,000,000); and

(6)

one-twelfth (1/12) of the Earnout Shares will be issued if the EBITDA of Pubco for fiscal year 2025 is equal to or exceeds Twenty Million Dollars ($20,000,000).

(1)

(2)

(3)

Transaction Financing

Polar Non-Redemption Agreement

Seaport Promissory Note

Seaport Credit Faclity

On December 31, 2024, Seaport SIBS LLC, an affiliate of Seaport Global Asset Management, LLC, entered into a senior secured credit facility with Pubco (the “Seaport Credit Facility”) for up to $2,000,000, with the initial advance available 15 days after execution. The principal amount and accrued interest are due upon demand no later than twelve months from the date of funding. The facility bears Payment-In-Kind (PIK) interest at 15.0% per annum, calculated on a 360-day year. Secured by the borrower’s collateral pool, the facility designates the holder as a party to the Intercreditor Agreement dated September 24, 2024.

The following table shows the basic and diluted outstanding shares of Pubco after giving effect to the Business Combination and post-closing dilution:

	Pro Forma Outstanding Pubco Common Stock
Basic	Actual Redemptions
Former ScanTech members ⁽¹⁾		14,184,397
Public Investors ^(2)(3)(4)(5)		3,683,094
Insiders ⁽⁶⁾⁽⁴⁾		6,550,400
Maxim ⁽⁴⁾		828,000
Shares repurchased by RiverNorth pursuant to the Prepaid Forward Purchase Agreement ⁽⁶⁾		400,000
Shares issued to Polar Multi-Strategy Master Fund pursuant to Subscription Agreement ⁽⁷⁾		312,500
Shares issued to Polar Multi-Strategy Master Fund pursuant to Special unit issuance from ScanTech ⁽⁸⁾		1,187,500
Shares issued to Roth Capital Partners for transaction advisory services		100,000
Earnout shares		1,872,280
Shares issued pursuant to the Equity Incentive Plan		2,808,420
Shares issued to Seaport ^{(9)(12)(13)(14)}		2,552,481
Extension Waiver ⁽¹¹⁾		200,000
Shares issued to Aegus ⁽¹⁰⁾		304,380
Total basic shares		34,134,369

(1)	Number of Pubco Common Stock were calculated based on the valuation of $140,000,000 and using a share price of $9.87 based on the fair value ascribed to Mars’ issued representative shares.

(2)	Includes the 362,676 Pubco Common Stock to be issued to Public Shareholders in connection with the Non-Redemption Agreements.

(3)	Inclusing (i) the maximum redemption scenario assumes the redemption of all Public Shares outstanding, and the 1,380,000 Mars ordinary shares shown outstanding in such scenario are those issued upon conversion of Public Rights and (ii) 646,806 remaining Public Shares, both of which are converted into Pubco Common Stock at Closing.

(4)	Includes the two additional shares of Pubco Common Stock for each Ordinary Share not redeemed upon Closing, pursuant to Amendment No. 4 to the Business Combination Agreement.

(5)	Represents the 400,000 shares purchased and not redeemed by RiverNorth pursuant to the Prepaid Forward Purchase Agreement.

(6)	Including (i) 2,116,000 Ordinary Shares, (ii) 78,200 Ordinary Shares underlying the Private Rights, both of which are converted into Pubco Common Stock at Closing, and (iii) 41,400 Pubco Common Stock issued in connection with the the promissory notes for working capital loans.


(7)	Pursuant to a non redemption agreement dated December 31, 2024 between Polar Multi-Strategy Fund, Mars and Pubco, Polar agreed to among other things reduce the number of shares issuable under the Subscription Agreement to 312,500.

(8)	Pursuant to SIBS Seventh Amended and Restated Operating Agreement, Polar Multi-Strategy Fund was issued a special membership interest exchangeable for 1,187,500 ordinary shares of Pubco following the consummation of the business combination.

(9)	Includes 1,149,230 Pubco Common Stock to be issued to Seaport Group SIBS LLC following the Closing, in connection with the Promissory Bridge Note dated March 27, 2024.

(10)	Includes 234,380 Pubco Common Stock to be issued to Aegus Corp. following the Closing, in connection with the Promissory Bridge Note dated May 7, 2024, and 70,000 shares of Pubco common stock pursuant to an Acknowledgement Agreement dated December 31, 2024 between Aegus, Pubco and SIBS.

(11)	Shares issued pursuant to waiver agreements with certain former creditors of SIBS in exchange for an extension of time to consummate the business combination beyond December 31, 2024. ScanTech, Mars and Pubco continue to negotiate waivers with several creditors that have expressed an interest in such waiver. The negotiated settlements are expected to largely mirror those completed as of this filing. There is no guarantee any further extension agreements will be reached.

(12)	Includes 303,951 shares pursuant to an agreement between Pubco and Seaport whereby in exchange for Seaport investing $1,000,000 at the Closing, Pubco was to issue Seaport such shares upon the follow on registration statement.

(13)	Includes 1,000,000 shares issuable to Seaport upon the exercise of a $10.00 option to acquire 1,000,000 shares of Pubco common stock pursuant to a November 2024 financing agreement between Pubco, Seaport and SIBS

The foregoing table does not account for any issuance of Earnout Shares to holders of ScanTech membership units at the Closing. It also assumes no positive adjustment for the number of shares of Pubco Common Stock issued at the Closing based on Pubco’s achievement of certain milestones.

The foregoing table assumes no positive adjustment for the number of shares of Pubco Common Stock issued to ScanTech members at the Closing as a result of ScanTech’s Closing Net Debt and do not reflect the impact of any other equity or equity-linked issuances on the beneficial ownership levels of Pubco, which may be material to relative ownership and voting percentages that non-redeeming Public Shareholders own and hold in Pubco and which may include, but not be limited to:

	·	the issuance, if any, in accordance with the terms of the Business Combination Agreement, to ScanTech members of any Earnout Shares;

	·	the vesting and settlement or exercise of equity or equity-linked securities issued or granted pursuant to the Incentive Plan (a summary of which is set forth in the “Proposal 5 — The Equity Incentive Plan Proposal” section of this proxy statement/prospectus), assuming approval thereof by Mars Stockholders at the Mars Special Meeting and contingent upon the Closing, in connection with which shares of Pubco Common Stock representing 15% of the total number of shares of Pubco Common Stock issued and outstanding as of immediately following the Closing are expected to be reserved and available for issuance for each fiscal year until and including January 1, 2033.

The aforementioned equity issuances are not the only sources of potential dilution to the relative ownership and associated voting percentage associated with Pubco shares held by non-redeeming Public Shareholders after the Closing; any additional equity and equity-linked issuances by Pubco may result in additional dilution to Public Shareholders’ percentage ownership in Pubco, potentially significantly, which, in turn, may limit or decrease Public Shareholders’ voting power and ability to influence decision-making with regard to Pubco and may have other effects, as described above and as further described in the “Risk Factors” section of this proxy statement/prospectus.

Should one or more of the assumptions prove incorrect, actual ownership percentages (and associated percentage voting power) may vary, potentially materially, from those described in this proxy statement/prospectus as anticipated, believed, estimated, expected or intended.

Accounting for the Business Combination

Notwithstanding the legal form of the Business Combination pursuant to the Business Combination agreement, the Business Combination will be accounted for as a recapitalization in accordance with U.S. GAAP. Under this method of accounting, Mars will be treated as the “acquiree” for financial reporting purposes. Accordingly, for accounting purposes, the Business Combination will be treated as the equivalent of ScanTech issuing shares in the Business Combination for the net assets of Mars, accompanied by a recapitalization. The net assets of Mars will be stated at historical cost, with no goodwill or other intangible assets recorded.

ScanTech has been determined to be the accounting acquirer based on evaluation of the following facts and circumstances:

	·	ScanTech’s existing members will have the greatest voting interest in the combined entity under all redemption scenarios;

	·	ScanTech’s senior management will be the senior management of the combined entity following the consummation of the Business Combination; and

	·	ScanTech’s operations prior to the acquisition will compromise the only ongoing operations of the combined entity.

The business combination is not within the scope of ASC 805 (“Business Combinations”) because Mars does not meet the definition of a business in accordance with ASC 805. As such, it will be accounted for as a recapitalization with any difference between the fair value of ScanTech membership units issued and the fair value of Mars’s identifiable net assets should be recorded as additional paid-in capital.

Accounting Policies and Reclassifications

The Prepaid Forward Purchase Agreement was signed on September 4, 2023. The agreement was evaluated under ASC 480, Distinguishing Liabilities from Equity. Under ASC 480, it was determined that the prepaid forward purchase agreement was a liability, as Pubco is required to remit cash to RiverNorth upon closing of the Business Combination based on the number of shares purchased by RiverNorth in the open market. Mars utilizes a Monte Carlo simulation model to value the forward purchase agreement at inception and at each reporting period. Inherent in the model are assumptions related to share price on valuation date, volatilities, expected life, risk-free rate and probability of business combination. Based on this valuation, the fair value of the forward purchase liability was $293,000 as of September 30, 2024. At each reporting period, Mars will re-evaluate the forward purchase liability, and any changes in fair value will be recognized in the statement of operations.

The Business Combination Agreement was signed on September 5, 2023, but the Earnout Shares were reflected in the pro forma condensed combined balance sheet as if the agreement was effective as of September 30, 2024. The agreement was evaluated under ASC 480, Distinguishing Liabilities from Equity, and ASC 815, Derivatives and Hedging. Under ASC 480, it was determined that as of September 30, 2024, the shares issued pursuant to the Earnout Agreement should be classified as a liability, as the shares to be issued pursuant to the Earnout Agreement are not indexed to Pubco’s own stock. Therefore, a pro forma adjustment will be made to reflect the liability as of September 30, 2024 using a probability-weighted analysis for each of the milestones set forth in the Earnout Agreement.

The Business Combination Agreement states that Mars and ScanTech agree to use commercially reasonable efforts to cause Pubco or ScanTech, as applicable, to agree upon definitive terms relating to the Specified Indebtedness. ScanTech has secured agreements or is in the final stages of discussions to secure signed agreements, from holders of promissory indebtedness that converts such indebtedness to common shares of Pubco upon the closing of the Business Combination. ScanTech evaluated its debt agreements, as well as the agreements to convert its indebtedness to shares of Pubco, and determined these transactions qualify as troubled debt restructurings under ASC 470-60, “Debt — Troubled Debt Restructurings by Debtors”. ScanTech has experienced financial difficulties, and concessions have been received from certain creditors, including NACS and Azure. Under ASC 470-60, gains from debtors who are also equity holders of ScanTech will be classified as additional capital contributions. All other gains and losses related to the extinguishment of these debt agreements will be recognized on the pro forma statements of operations.

Based on management’s initial analysis of the accounting policies of ScanTech and Mars, there were no other significant differences identified that would have an impact on the unaudited pro forma condensed combined financial information or that would require adjustments to the unaudited pro forma condensed combined statements. Currently, management is performing a comprehensive review of the accounting policies of ScanTech and Mars. As a result of the comprehensive review, management may identify differences between the accounting policies of these entities, which, when conformed, could have a material impact on the financial statements of the post-combination company.

The following unaudited pro forma condensed combined balance sheet as of September 30, 2024 and the unaudited pro forma condensed combined statements of operations for the nine months ended of September 30, 2024 are based on the historical financial statements of ScanTech and Mars. The unaudited pro forma transaction accounting adjustments are based on information currently available, and assumptions and estimates underlying the unaudited pro forma transaction accounting adjustments are described in the accompanying notes. Actual results may differ materially from the assumptions used to present the accompanying unaudited pro forma condensed combined financial information.

MARS ACQUISITION CORP.

UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET

AS OF SEPTEMBER 30, 2024

					ACTUAL REDEMPTIONS
	ScanTech Identification Beam Systems, LLC		Mars Acquisition Corp.		Transaction Accounting Adjustments				Pro Forma Condensed Combined
ASSETS
Current assets:
Cash and cash equivalents	$	181,432	$	206,762	$	7,273,513		A	$	2,247,354
						(6,963,155	)	D
						1,000,010		M
						548,792		X
Prepaid expenses		206,632		57,792		—				264,424
Investments held in trust account		—		22,836,871		(22,836,871	)	A		—
R&D tax credit receivable		194,535		—		—				194,535
Inventory		1,020,100		—		—				1,020,100
Other current assets		142,346		—		—				142,136
Total current assets		1,745,045		23,101,425		(20,977,711	)			3,868,759
Noncurrent assets:
Other long term assets		36,333		—		—				36,333
Property and equipment, net		58,761		—		—				58,761
Total noncurrent assets		95,094		—		—				95,094
Total assets	$	1,840,139	$	23,101,425	$	(20,977,711	)		$	3,963,853
Liabilities and stockholder’s deficit
Current liabilities:
Accounts payable	$	3,950,652	$	—	$	—			$	3,950,652
Accrued expenses and other current liabilities		9,384,736		146,477		(9,231,070	)	G		300,143
Accrued compensation		1,669,546		—		—				1,669,546
Accrued federal tax liability, penalties and interest		6,148,068		—		—				6,148,068
Interest payable		16,426,277		—		(16,341,423	)	G		—
Interest payable to related parties		37,850,832		—		(37,765,978	)	G		84,854
Dividend payable		414,467		—		(414,467	)	G		—
Deferred revenue		932,066		—		—				932,066
Derivative liabilities		2,027,773		—		(2,027,773	)	G		9,870,000
						9,870,000		M
Warrant liabilities		52,955,510		—		(52,955,510	)	G		—
Payable to related parties		1,512,855		—		(1,289,255	)	G		223,600
Forward Purchase Agreement liability		—		293,000		(293,000	)	L		—
Earnout liability		—		—		2,247,000		F		2,247,000
Share issuance liability		—		—		22,783,227		Z		22,783,227
Short-term debt from related parties, net		—		—		6,117,809		G		7,481,959
						557,150		X
						1,000,000		M
Short-term debt, net		26,300,469		—		(26,300,809	)	G		—
Short-term debt from related parties, net		22,346,055		452,088		(22,346,055	)	G		—
						(452,088	)	I
Total current liabilities	$	181,919,306	$	891,565	$	(117,088,256	)		$	55,852,615
Noncurrent liabilities:
Long-term debt from related party, net		—		—		17,296,909		G		17,296,909
Total noncurrent liabilities		—		—		17,296,909				17,296,909
Total liabilities		181,919,306		891,565		(109,822,847	)			72,988,024

MARS ACQUISITION CORP.

UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET (continued)

AS OF SEPTEMBER 30, 2024

							ACTUAL REDEMPTIONS
	ScanTech Identification Beam Systems, LLC			Mars Acquisition Corp.			Transaction Accounting Adjustments				Pro Forma Condensed Combined
Temporary equity
Ordinary shares subject to possible redemption, 2,081,432 shares at redemption value of $10.97 per share		—			22,836,871			(22,836,871	)	B		—
Series A units subject to possible redemption, 9,965,000 units at a redemption value of $2.79 per share		28,323,419			—			(28,323,429	)	H		—
Stockholders’ equity/(deficit)
Ordinary shares, $0.000125 par value; 800,000,000 shares authorized; 2,392,000 shares issued and outstanding, respectively		—			299			—				2,751
								150		B
								1,773		C
								5		I
								156		J
								654		K
								13		N
Additional paid-in capital		—			—			(15,536,358	)	A		174,732,680
								22,836,721		B
								(1,773	)	C
								(6,963,155	)	D
								(627,310	)	E
								(2,247,000	)	F
								174,149,830		G
								10,000,000		H
								452,083		I
								14,062,344		J
								(654	)	K
								293,000		L
								(22,783,227	)	Z
								1,124,987		N
Accumulated deficit		(208,402,586	)		(627,310	)		627,310		E		(243,759,709	)
								(28,614,694	)	G
								18,323,419		H
								(14,062,500	)	J
								(9,869,990	)	M
								(8,358	)	X
								(1,125,000	)	N
Total stockholders’ equity/(deficit)		(208,402,586	)		(627,011	)		140,005,426				(69,024,171	)

Total liabilities and stockholders’ equity/ (deficit)	$	1,840,139		$	23,101,425		$	(20,977,711	)		$	3,963,853

MARS ACQUISITION CORP.

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2024

		For the nine months ended September 30, 2024			For the nine months ended June 30, 2024			ACTUAL REDEMPTIONS
		ScanTech Identification Beam Systems, LLC			Mars Acquisition Corp.			Transaction Accounting Adjustments				Pro Forma Condensed Combined
Revenue	$	522,166		$	—		$	—			$	522,166
Less: Cost of goods sold		(448,095	)		—			—				(448,095	)
Gross profit		74,071			—			—				74,071
Operating expenses:
General and administrative expenses	$	3,863,403		$	538,440		$	11,153,987		V	$	15,555,830
Research and development expenses		2,604,500			—			—				2,604,500
Depreciation and amortization		24,376			—			—				24,376
Total operating expenses		6,492,279			538,440			11,948,886				18,184,706
Other income (expense):
Investment income on Trust Account		—			1,865,297			(1,865,297	)	O		—
Interest expense		(9,106,317	)		—			9,106,317		T		(1,175,899	)
								(1,167,541	)	U
								(8,358	)	X
Change in fair value of derivative liabilities		(1,104,939	)		—			1,104,939		S		—
Change in fair value of warrant liabilities		(30,931,345	)		—			30,931,345		S		—
Fair value adjustment for Forward Purchase Agreement liability		—			(293,000	)		—				(293,000	)
Fair value adjustment for convertible note		—			(107,165	)		—				(107,165	)
Other income (expense), net		(16,176	)		—			—				(16,176	)
Total other income (expense)		(47,576,985	)		1,465,132			38,101,405				(19,702,875	)
Net income (loss)	$	(47,576,985	)	$	926,692		$	26,947,418			$	(19,702,875	)
Weighted average shares outstanding, basic												18,722,803
Weighted average shares outstanding, diluted												34,134,369
Net income per share, basic											$	(0.7291	)
Net income per share, diluted											$	(0.50	)

MARS ACQUISITION CORP.

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

FOR THE YEAR ENDED SEPTEMBER 30, 2023

	For the year ended December 31, 2023			For the year ended September 30, 2023		ACTUAL REDEMPTIONS
	ScanTech Identification Beam Systems, LLC			Mars Acquisition Corp.		Transaction Accounting Adjustments				Pro Forma Condensed Combined
Operating expenses:
General and administrative expenses	$	6,283,770		$	521,582	$	13,597,118		V	$	22,737,200		V
Research and development expenses		3,238,925			—		—				3,238,925
Depreciation and amortization		36,634			—		—				36,634
Total operating expenses		9,559,329			521,582		15,931,848				26,012,759
Other income (expense):
Investment income on Trust Account		—			2,207,820		(2,207,820	)	O		—
Interest expense		(10,251,094	)		—		10,251,094		T		(2,179,955	)
							(2,179,955	)	U
Change in fair value of derivative liabilities		649,244			—		(649,244	)	S		—
Change in fair value of warrant liabilities		(16,371,612	)		—		16,371,612		S		—
Other income (expense), net		—			—		(90,967,813	)	P		(105,030,157	)
							(14,062,344	)	R
Total other income (expense)		(25,973,462	)		2,207,820		(82,821,237	)			(107,210,111	)
Non-recurring income:
Gains from extinguishment of temporary equity		—			—		14,651,442		Q		14,651,442
Net income (loss)	$	(35,532,791	)	$	1,686,238	$	(68,326,654	)		$	(116,236,698	)
Weighted average shares outstanding, basic											18,722,803
Weighted average shares outstanding, diluted											34,134,369
Net income per share, basic										$	(6.04	)
Net income per share, diluted										$	(3.32	)

Adjustments to Unaudited Pro Forma Condensed Combined Financial Information

The unaudited pro forma condensed combined financial information has been prepared to illustrate the effect of the Business Combination and related transactions and has been prepared for informational purposes only.

The following unaudited pro forma condensed combined financial information has been prepared in accordance with Article 11 of Regulation S-X as amended by the final rule, Release No. 33-10786 “Amendments to Financial Disclosures about Acquired and Disposed Businesses.” Release No. 33-10786 replaces the existing pro forma adjustment criteria with simplified requirements to depict the accounting for the transaction (“Transaction Accounting Adjustments”) and present the reasonably estimable synergies and other transaction effects that have occurred or are reasonably expected to occur (“Management’s Adjustments”). Only Transaction Accounting Adjustments, and not Management’s Adjustments, are presented in the unaudited pro forma condensed combined financial information. Mars and ScanTech have not had any historical relationship prior to the Business Combination. Accordingly, no pro forma adjustments were required to eliminate activities between the companies.

The unaudited pro forma condensed combined statement of operations includes $538,440 and $521,582 of expenses incurred by Mars for the nine months ended June 30, 2024 and for the year ended September 30, 2023, respectively, as well as $1,865,297 and $2,207,820 of interest earned in Mars’s Trust Account for the nine months ended June 30, 2024 and for the year ended September 30, 2023, respectively. These items are directly related to the Business Combination and are not expected to recur.

The unaudited pro forma basic and diluted earnings per share amounts presented in the unaudited pro forma condensed combined statements of operations are based upon the number of shares outstanding, assuming the Business Combination occurred on October 1, 2022.

The unaudited pro forma transaction accounting adjustments included in the unaudited pro forma condensed combined balance sheet as of June 30, 2024, and the unaudited pro forma condensed combined statements of operations for the nine months ending June 30, 2024 and for the year ending September 30, 2023, are as follows:

Adjustments to Unaudited Pro Forma Condensed Combined Balance Sheet

Represents the reclassification of cash and investments held in the Trust Account that become available at the closing of Business Combination, net of cash paid for 1,500,000 shares purchased by RiverNorth pursuant to the Prepaid Forward Purchase Agreement, cash paid for redemptions pursuant to the special meeting on January 30, 2024, and any cash paid for redemptions. Redemption and forward purchase share amounts are calculated by multiplying the number of shares redeemed by the redemption price of $10.97 per share.

B.	Represents the reclassification of the redeemable portion of the Public Shares to permanent equity, net of any redemptions under both scenarios.

C.	Represents the close out of the equity of ScanTech, which becomes part of additional paid-in capital.

Represents estimated transaction costs of $6,963,155 incurred in aggregate by Mars and ScanTech, which include shares issued to Polar pursuant to the Subscription Agreements, as well as shares issued to Seaport pursuant to the Promissory Note issued on January 24, 2024. Any costs that have not been paid with the Company’s cash on hand will be recorded as accounts payable upon closing of the Business Combination. Mars and ScanTech have agreed to use commercially reasonable efforts to enter into financing agreements to obtain cash to pay the estimated transaction costs. However, no such transaction financing has been obtained as of the date of this prospectus.

E.	Represents the elimination of Mars’s historical accumulated deficit at the time of the common control reverse acquisition.

Represents the liability for the Earnout Shares to be issued upon achievement of each milestone set forth in the Business Combination Agreement. Management utilized a probability-weighted analysis for each milestone to calculate the liability. As of September 30, 2024 and September 30, 2023, the fair value of the liability for the Earnout Shares under the no redemption scenario was $1,872,280.

Represents the extinguishment of ScanTech debt and related conversion to equity pursuant to Section 6.28 of the Business Combination agreement, which states, “The Parties agree to use commercially reasonable efforts to cause Pubco or the Company, as applicable, prior to the filing of the Registration Statement, to agree upon definitive terms relating to the Indebtedness set forth on Schedule 6.28 (the “Specified Indebtedness”), which Specified Indebtedness shall become effective as of and be contingent upon the Closing.” ScanTech has secured agreements or is in the final stages of discussions to secure signed agreements, from holders of promissory indebtedness that converts such indebtedness to common shares of PubCo upon the closing of the Business Combination.

In addition, ScanTech has secured agreements with holders of warrants and other derivatives for the cancellation of such derivatives upon the closing of the Business Combination. See adjustment P to the Unaudited Pro Forma Condensed Combined Statement of Operations for the effect to net income. Any shares issued as part of this debt extinguishment are included in the 14,184,397 shares issued to ScanTech members. No additional shares will be issued as a result of this debt conversion. See below for a breakdown of the liabilities to be extinguished.

As of this filing, although ScanTech has secured agreements from creditors to exchange indebtedness into shares of Pubco, those agreements do not specify the number of shares to be delivered to creditors. As of this filing, ScanTech has also secured agreements with those holders of warrants and other derivatives to cancel such warrants and derivatives.

					Other						Fair Value		Long-term
	Derivative		Warrant		Short-term		Total		Shares		of Shares		Debt to be
	Liabilities		Liabilities		Liabilities		Liabilities		Issued⁽¹⁾		Issued⁽²⁾		Issued
_NACS(3)	$	—	$	—	$	48,587,078	$	48,587,078		745,444	$	8,386,245	$	—
Taylor Freres⁽⁴⁾		—		—		7,625,000		7,625,000		595,000		6,693,750		—
Seaport⁽⁵⁾		247,790		52,389,543		15,372,569		68,003,902		7,554,792		84,991,410		14,296,909
Bay Point⁽⁶⁾		754,039		—		2,917,034		3,671,073		402,745		4,530,881		—
Azure⁽⁷⁾		—		64,389		9,615,686		9,680,075		743,920		8,369,100		—
Catalytic⁽⁸⁾		718,052		—		2,362,191		3,080,243		391,712		4,406,760		—
Steele⁽⁹⁾		—		342,955		9,965,692		10,308,647		800,000		9,000,000		3,000,000
Stephen Sale⁽¹⁰⁾		—		26,328		780,598		806,836		37,994		427,433		—
John Quinn⁽¹¹⁾		—		17,493		520,399		537,892		2,106		23,693		—
Other Lenders(12)(13)		313,892		114,892		14,422,369		14,851,153		436,902		4,915,148		—
	$	2,027,773	$	52,955,510	$	112,168,616	$	167,151,899		11,710,615	$	115,583,769	$	17,296,909

	Total				Long-term									To
	Liabilities		Fair Value of		Debt to be		Total		Gain / (Loss) on					Accumulated
	Extinguished		Shares Issued		Issued		Compensation		Extinguishment			To APIC		Deficit
NACS⁽³⁾	$	48,587,078	$	8,386,245	$	—	$	8,386,245		40,200,833		$	40,200,833	$	—
Taylor Freres⁽⁴⁾		7,625,000		6,693,750		—		6,693,750		931,250			—		931,250
Seaport⁽⁵⁾		68,003,902		84,991,410		14,296,909		99,288,319		(31,284,417	)		—		(31,284,417	)
Bay Point⁽⁶⁾		3,671,073		4,530,881		—		4,530,881		(859,808	)		—		(859,808	)
Azure⁽⁷⁾		9,680,075		8,369,100		—		8,369,100		1,310,975			1,310,975		—
Catalytic⁽⁸⁾		3,080,243		4,406,760		—		4,406,760		(1,326,517	)		—		(1,326,517	)
Steele⁽⁹⁾		10,308,647		9,000,000		3,000,000		12,000,000		(1,691,353	)		—		(1,691,353	)
Stephen Sale⁽¹⁰⁾		806,836		427,433		—		427,433		379,404			379,404		—
John Quinn⁽¹¹⁾		537,892		23,693		—		23,693		514,200			514,200		—
Other Lenders^(12)(13)		14,851,153		4,915,148		—		4,915,148		9,936,006			—		9,936,006
	$	167,151,899	$	115,583,769	$	17,296,909	$	149,041,328		18,110,571		$	42,405,411	$	(24,294,840	)

	(1)	The shares issued for each party are based on the calculations provided by ScanTech. The totals are inclusive only of the indebtedness exchange and warrant and derivative liability and do not include other holders of ScanTech units that will also be receiving Pubco shares at the consummation of the business combination.

		On June 18, 2024, through the Settlement Agreement and Mutual Release, NACS, LLC agreed to provide Taylor Freres 3% of NACS, LLC Series B Units of ScanTech which the transfer of these shares is reflected in the “Share Issued” in the table above.

(2)

Assumes a share price of $9.87 based on the fair value ascribed to Mars’ issued representative shares.

(3)

On January 29, 2024, NACS signed a Creditor Conversion Agreement whereby NACS agreed to exchange all of its indebtedness, including its accrued interest, for shares in Pubco, immediately following an exchange for B units in ScanTech. In addition, NACS agreed to cancel any warrants it held as part of the conversion. NACS agreement expired May 1, 2024 and was extended to September 30, 2024.

Based on the facts and circumstances related to NACS, the gain on extinguishment of NACS’s liabilities will be treated as a troubled debt restructuring, as NACS is granting a concession in this case. Since NACS also holds equity in ScanTech as of June 30, 2024, the gain will be treated as an additional capital contribution.

(4)

ScanTech and Taylor Frères have agreed to amend the settlement agreement such that Taylor Frères shall receive 595,000 shares of PubCo at the consummation of the Business Combination, although the parties have not yet signed an amended settlement agreement.

(5)

On December 1, 2023, Seaport entered into a promissory note that contains a $10.00 option to acquire an amount of equity of ScanTech equal to the dollar value of the loan, including all accrued interest, divided by $20,010,000. It is anticipated that Seaport will exercise this option prior to the consummation of the Business Combination. In addition, On September 23, 2024, Seaport signed a new agreement whereby it agreed to be issued a new, Senior Secured Promissory Note with Pubco at the consummation of the Business Combination.

(6)

On September 20, 2024, Bay Point entered into a creditor conversion agreement whereby Bay Point agreed to convert all of its outstanding indebtedness, including all fees and penalties, into shares of the Company, immediately following an exchange for B units in ScanTech, as well as cancel any warrants associated with the indebtedness or held by Bay Point.

(7)

On January 29, 2024, Azure signed Creditor Conversion Agreement nearly identical to that of NACS. This agreement expired May 1, 2024 and was subsequently extended to September 30, 2024.

Based on the facts and circumstances related to Azure, the gain on extinguishment of Azure’s liabilities will be treated as a troubled debt restructuring, as Azure is granting a concession in this case. Since Azure also holds equity in ScanTech as of June 30, 2024, the gain will be treated as an additional capital contribution.

(8)

On September 20, 2024, Catalytic entered into a creditor conversion agreement whereby Catalytic agreed to convert all of its outstanding indebtedness, including all fees and penalties, into shares of the Company, immediately following an exchange for B units in ScanTech, as well as cancel any warrants associated with the indebtedness or held by Catalytic.

(9)

On September 25, 2024, Steele entered into a creditor conversion agreement whereby Steele agreed to convert a portion of its outstanding indebtedness, including all fees and penalties, into shares of the Company, immediately following an exchange for B units in ScanTech, as well as cancel any warrants associated with the indebtedness or held by Steele. Steele also agreed to be issued a new, Senior Secured Promissory Note with Pubco.

(10)

Stephen Sale and John Redmond entered into an agreement whereby John Redmond would assume Stephen Sale’s indebtedness. Since John Redmond also holds equity in ScanTech as of June 30, 2024, the gain will be treated as an additional capital contribution.

(11)

John Quinn and John Redmond entered into an agreement whereby John Redmond would assume John Quinn’s indebtedness. Since John Redmond also holds equity in ScanTech as of June 30, 2024, the gain will be treated as an additional capital contribution.

(12)

Various other lenders, including the lenders under Seed Financing Notes, in the fourth quarter 2023 and first quarter 2024, signed Creditor Conversion Agreements nearly identical to that of NACS and Azure. These lenders also agreed to cancel any warrants held by them. These agreements expired May 1, 2024 and were subsequently extended to September 30, 2024. The Seed Financing Note lenders signed new Creditor Conversion Agreements on September 20, 2024 superseding any prior signed agreements, providing for the conversion of existing indebtedness into an aggregate of 425,570 common shares of PubCo and the cancellation of any warrants or derivatives as of the consummation of the Business Combination.

Represents the reclassification of ScanTech’s redeemable Series A shares to permanent equity. Pursuant to this conversion, John Redmond’s initial investment of $10,000,000 will convert to an equivalent number of shares at a fair value of $9.87 pursuant to the Business Combination. These shares are included in the 14,184,397 shares issued to ScanTech members.

I.	Represents the conversion of Mars’ working capital loans to equity upon consummation of the Business Combination.

Represents the shares issued to Polar pursuant to the Subscription Agreements dated April 2, 2024 and May 29, 2024 whereby Polar will provide ScanTech up to $1,250,000 in funding for working capital expenses. At closing, Pubco will pay Polar a fee of $1,750,000 In addition to the repayment, Pubco will issue up to 1,250,000 shares of Pubco Common Stock upon consummation of the Business Combination. The share price of $9.87 is based on the fair value ascribed to Mars’ issued representative shares.

K.	Represents the par value of the additional shares issued to non-redeeming shareholders pursuant to Amendment 2 of the Business Combination Agreement.

L.	Represents the settlement of the forward purchase liability with RiverNorth upon consummation of the Business Combination.

M.	Represents Seaport investing $1,000,000 at closing in exchange for 303,951 shares and the exercise of a $10.00 option to acquire 1,000,000 shares of Pubco common stock pursuant to a November 2024 financing agreement between Pubco, Seaport and SIBS

N.	Represents the shares issued to Roth Capital Partners for transaction advisory services related to the Business Combination. The share price of $9.87 is based on the fair value ascribed to Mars’ issued representative shares.

Adjustments to Unaudited Pro Forma Condensed Combined Statement of Operations

O.	Represents the elimination of unrealized and realized gains and losses on Mars’s Trust Account, which would not have been incurred had the Business Combination occurred as of the beginning of the period presented.

Represents the losses on extinguishment of ScanTech’s warrant, derivative, and other liabilities pursuant to a recapitalization assuming the Business Combination occurred as of the beginning of the period presented. The loss for ScanTech’s year ended December 31, 2023 was calculated utilizing ScanTech’s liability balances as of January 1, 2023, which is the beginning of ScanTech’s income statement period presented in this pro forma income statement. The liabilities to be extinguished were less than the fair value of shares to be issued as of the most recent calculations provided by ScanTech.

See below for a detailed breakdown of the loss on extinguishment of these liabilities for ScanTech’s year ended December 31, 2023.

For the year ended September 30, 2024

	Derivative Liabilities		Warrant Liabilities		Other Liabilities		Total Liabilities		Shares Issued⁽¹⁾		Fair Value of Shares Issued⁽²⁾		Long-term Debt to be Issued
NACS⁽³⁾⁽⁴⁾	$	—	$	—	$	39,425,021	$	39,425,021		745,444	$	8,386,245	$	—
Taylor Freres		—		—		7,625,000		7,625,000		595,000		6,693,750		—
Seaport		—		5,295,578		6,252,014		11,547,592		7,554,792		84,991,410		14,296,909
Bay Point		765,907		—		2,686,280		3,452,187		402,745		4,530,881		—
Azure⁽⁴⁾		—		43,805		7,447,120		7,490,925		743,920		8,369,100		—
Catalytic		806,171		—		1,983,322		2,789,493		391,712		4,406,760		—
Steele		—		174,891		7,677,358		7,852,249		800,000		9,000,000		3,000,000
Stephen Sale⁽⁴⁾		—		13,752		601,356		615,108		37,994		427,433		—
John Quinn⁽⁴⁾		—		9,168		400,904		410,072		2,106		23,693		—
Other Lenders		—		115,361		7,485,163		7,600,524		436,902		4,915,458		—
	$	1,572,078	$	5,652,555	$	81,583,538	$	88,808,171		11,710,615	$	131,744,419	$	17,296,909

For the year ended September 30, 2024

	Total Liabilities Extinguished		Fair Value of Shares Issued		Long-term Debt to be Issued		Total Compensation		Gain / (Loss) on Extinguishment			To APIC			To Accumulated Deficit
NACS⁽³⁾⁽⁴⁾	$	39,425,021	$	8,386,245	$	—	$	8,386,245		31,038,776			31,038,776		$	—
Taylor Freres		7,625,000		6,693,750		—		6,693,750		931,250			—			931,250
Seaport		11,547,592		84,991,410		14,296,909		99,288,319		(87,740,727	)		—			(87,740,727	)
Bay Point		3,452,187		4,530,881		—		4,530,881		(1,078,694	)		—			(1,078,694	)
Azure⁽⁴⁾		7,490,925		8,369,100		—		8,369,100		(878,175	)		(878,175	)		—
Catalytic		2,789,493		4,406,760		—		4,406,760		(1,617,267	)		—			(1,617,267	)
Steele		7,852,249		9,000,000		3,000,000		12,000,000		(4,147,751	)		—			(4,147,751	)
Stephen Sale⁽⁴⁾		615,108		427,433		—		427,433		187,676			187,676			—
John Quinn⁽⁴⁾		410,072		23,693		—		23,693		386,380			386,380			—
Other Lenders		7,600,524		4,915,458		—		4,915,148		2,685,377			—			2,685,377
	$	88,808,171	$	131,744,419	$	17,296,909	$	132,880,678		(60,233,157	)	$	30,734,656		$	(90,967,813	)

(1)

The shares issued for each party are based on the calculations provided by ScanTech. The totals are inclusive only of the indebtedness exchange and warrant and derivative liability and do not include other holders of ScanTech units that will also be receiving Pubco shares at the consummation of the business combination.

On June 18, 2024, through the Settlement Agreement and Mutual Release, NACS, LLC agreed to provide Taylor Freres 3% of NACS, LLC Series B Units of ScanTech which the transfer of these shares is reflected in the “Share Issued” in the table above. The pro forma adjustment has not been incorporated to reflect the impacts of SAB Topic 5.T, if any, as the executed agreement was subsequent to the June 30, 2024 balance sheet date.

(2)

Assumes a share price of $11.25 based on the fair value ascribed to Mars’ issued representative shares.

(3)

Includes NACS Assumed. The original NACS and Azure agreements expired May 1, 2024. On July 28, 2024, both parties, which are controlled by John Redmond, extended these agreements through September 30, 2024.

(4)

As noted in Adjustment G, the gains on extinguishment of the liabilities for NACS, Azure, and John Redmond will be treated as troubled debt restructurings, as all parties are granting concessions in this case. Since both parties also hold equity in ScanTech as of June 30, 2024, the gains will be treated as additional capital contributions.

Represents the gains related to the reclassification of ScanTech’s redeemable Series A shares to permanent equity. Pursuant to this conversion, John Redmond’s initial investment of $10,000,000 will convert to an equivalent number of shares at a fair value of $9.87 pursuant to the Business Combination, and the remaining amount will be extinguished. As of December 31, 2022, the value of ScanTech’s redeemable Series A shares was $24,651,442, which results in a gain of $14,651,442.

R.	Represents the fair value of the shares issued to Polar pursuant to their Subscription Agreements as detailed in adjustment J.

S.	Represents the elimination of any fair value adjustments to the derivative and warrant liabilities, which would not have been incurred had the Business Combination occurred as of the beginning of the period presented.

T.	Represents the elimination of interest expense on ScanTech’s indebtedness, which would have been extinguished on October 1, 2022 had the Business Combination occurred as of the beginning of the period presented.

U.	Represents the interest expense to be accrued on the new Senior Secured Promissory Notes issued to Seaport and Steele pursuant to adjustment G. These notes bear interest at 9% per year.

Represents the shares issued pursuant to the Equity Incentive Plan included in Section 6.11 of the Business Combination Agreement. Per the Equity Incentive Plan, 15% of the aggregate number of shares of Pubco Common Stock issued and outstanding immediately after the Closing will be available upon consummation of the Business Combination. Each share in the Equity Incentive Plan shall vest over a three (3) year period, with one-third (1/3) of the shares vesting on the first annual anniversary of the date of grant and the remaining portion vesting quarterly thereafter. The share price of $9.87 is based on the fair value ascribed to Mars’ issued representative shares. As of June 30, 2024, no formal agreement has been signed related to the Equity Incentive Plan.

Comparative Historical and Unaudited Pro Forma Per Share Financial Information

The following table sets forth the historical comparative share information for Mars and ScanTech on a stand-alone basis and the unaudited pro forma combined share information for the nine months ended June 30, 2024 and for the year ended September 30, 2023, after giving effect to the Business Combination, assuming (i) no additional Public Stockholders — aside from the shares redeemed in connection with the Shareholder Meeting on January 30, 2024 — exercise redemption rights with respect to their Public Shares upon the consummation of the Business Combination; and (ii) the Public Shareholders exercise their redemption rights with respect to a maximum of 2,081,432 remaining Public Shares. This leads to a total 100% redemption value of $22.8 million calculated by multiplying the maximum of 2,081,432 remaining Public Shares by the redemption price of approximately $10.97 per share. The estimated per share redemption value of $10.97 was calculated by dividing the amount of $22.8 million in the Trust Account as of June 30, 2024 by the 2,081,432 remaining Public Shares. The 100% redemption amount reflects the maximum number of Public Shares that can be redeemed without violating the conditions of the Business Combination Agreement. This scenario includes all adjustments contained in the “no redemption” scenario and presents additional adjustments to reflect the effect of 100% redemptions.

This information is only a summary and should be read together with the selected historical financial information summary of Mars and ScanTech and the historical financial statements and related notes of each of Mars and ScanTech, in each case, that are included elsewhere in this proxy statement. The unaudited pro forma combined per share information of Mars and ScanTech is derived from, and should be read in conjunction with, the unaudited pro forma condensed combined financial statements and related notes included elsewhere in this proxy statement.

The unaudited pro forma combined earnings per share information below does not purport to represent the earnings per share which would have occurred had Mars and ScanTech consummated a business combination during the periods presented, nor earnings per share for any future date or period. The unaudited pro forma combined book value per share information below does not purport to represent what the value of Mars and ScanTech would have been had Mars and ScanTech consummated a business combination during the period presented. Finally, in the unaudited pro forma combined earnings per share information below, the Company assumes in a maximum redemption scenario that the FPA with River North is triggered, even though River North has no obligation to purchase the shares under the existing FPA.

	Nine Months ended September 30, 2024
		ScanTech Identification Beam Systems, LLC			Mars Acquisition Corp.		Assuming No Additional Redemptions			Assuming Maximum Redemptions
Pro forma net income/(loss) attributable to common shareholders	$	(31,571,142	)	$	926,692	$	(22,895,430	)	$	(21,139,446	)
Weighted average non-redeemable common shares outstanding, basic		295,914,780			2,392,000		35,667,686			30,211,745
Weighted average non-redeemable common shares outstanding, diluted		295,914,780			2,392,000		35,667,686			30,211,745
Net income/(loss) per non-redeemable share, basic	$	(0.09	)	$	0.10	$	(0.64	)	$	(0.70	)
Net income/(loss) per non-redeemable share, diluted	$	(0.09	)	$	0.10	$	(0.64	)	$	(0.70	)
Pro forma weighted average shares calculation:
Former ScanTech members							14,184,397			14,184,397
Public Investors							11,425,540			7,262,676
Insiders							6,472,200			6,472,200
Maxim							828,000			828,000
Shares issued to Polar Multi-Strategy Master Fund pursuant to Subscription Agreement							1,250,000			1,250,000
Shares repurchased by RiverNorth pursuant to the Prepaid Forward Purchase Agreement							—			1,500,000
Shares issued to Roth Capital Partners for transaction advisory services							100,000			100,000
Shares issued to Seaport							1,149,230			1,149,230
Shares issued to Aegus							234,380			234,380
Shares issued pursuant to the Equity Incentive Plan							4,842,507			4,130,862
Share redemptions							(4,818,568	)		(6,900,000	)
Weighted average common shares outstanding, basic and diluted							35,667,686			30,211,745

	Year ended September 30, 2023
		ScanTech Identification Beam Systems, LLC⁽¹⁾			Mars Acquisition Corp.		Assuming No Additional Redemptions			Assuming Maximum Redemptions
Pro forma net income/(loss) attributable to common shareholders	$	(35,532,791	)	$	1,686,238	$	(115,497,707	)	$	(113,156,395	)
Weighted average non-redeemable common shares outstanding, basic		188,579,085			2,059,414		35,667,686			30,211,745
Weighted average non-redeemable common shares outstanding, diluted		188,579,085			2,059,414		35,667,686			30,211,745
Net income/(loss) per non-redeemable share, basic	$	(0.20	)	$	0.27	$	(3.24	)	$	(3.75	)
Net income/(loss) per non-redeemable share, diluted	$	(0.20	)	$	0.27	$	(3.24	)	$	(3.75	)
Pro forma weighted average shares calculation:
Former ScanTech members							14,184,397			14,184,397
Public Investors							11,425,540			7,262,676

Exhibit 99.2

SCANTECH IDENTIFICATION BEAM SYSTEMS, LLC

BALANCE SHEETS

	September 30, 2024			December 31, 2023
	(Unaudited)			(Audited)
ASSETS
Current assets:
Cash	$	181,432		$	333,084
Prepaid expenses		206,632			244,030
R&D tax credit receivable		194,535			276,705
Inventory		1,020,100			249,844
Other current assets		142,346			163,512
Total current asset		1,745,044			1,267,175
Property and equipment, net		58,761			82,038
Other long term assets		36,333
Total assets	$	1,840,139		$	1,349,213
LIABILITIES AND MEMBERS' DEFICIT
Current liabilities:
Accounts payable	$	3,950,652		$	3,173,677
Accrued expenses and other current liabilities		9,384,736			9,421,258
Accrued compensation		1,669,546			1,610,052
Accrued federal tax liability, penalties and interest		6,148,068			5,415,149
Interest payable		16,426,277			12,749,929
Interest payable to related parties		37,850,832			32,599,048
Dividend payable		414,467			376,399
Deferred revenue		932,066			1,023,007
Derivative liabilities		2,027,773			922,834
Warrant liabilities		52,955,510			22,024,165
Related parties payable		1,512,855			885,041
Short-term debt, net		26,300,469			21,301,085
Short-term debt from related parties, net		22,346,055			22,346,055
Total current liabilities		181,919,306			133,847,699
Total liabilities	$	181,919,306		$	133,847,699
Commitments and contingencies (Note 12)
Series A units subject to possible redemption, 9,965,000 units at a redemption value of $2.84 per unit and $2.68 per unit as of September 30, 2024 and December 31, 2023, respectively		28,323,419			26,686,397
Members’ deficit
Series A units, 245,300 units authorized, issued and outstanding as of September 30, 2024 and December 31, 2023 respectively		—			—
Series B units, 321,593,463 units authorized, 9,906,827 units issued and outstanding as of September 30, 2024 and December 31, 2023, respectively		—			—
Series C units, 1,748,264 units authorized, 1,584,327 units issued and outstanding as of September 30, 2024 and December 31, 2023, respectively		—			—
Additional paid-in capital		—			—
Accumulated deficit		(208,402,586	)		(159,184,883	)
Total members’ deficit		(208,402,586	)		(159,184,883	)
Total liabilities and members’ deficit	$	1,840,139		$	1,349,213

The accompanying notes are an integral part of these financial statements.

F-1

SCANTECH IDENTIFICATION BEAM SYSTEMS, LLC

STATEMENTS OF OPERATIONS

(UNAUDITED)

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2024			2023			2024			2023
Revenue	$	-		$	-		$	522,166		$	-
Cost of Goods Sold		-			-			448,095			-
Operating expenses:
General and administrative expenses		1,378,388			2,142,618			3,863,403			3,523,743
Research and development expenses		814,539			778,680			2,604,500			2,464,306
Depreciation and amortization		8,137			8,668			24,376			28,733
Total operating expenses		2,201,064			2,929,966			6,492,279			6,016,782
Loss from operations		(2,201,064	)		(2,929,966	)		(6,418,208	)		(6,016,782	)
Other income (expense):
Interest expense		(3,249,134	)		(2,627,510	)		(9,106,317	)		(7,427,555	)
Change in fair value of derivative liabilities		(529,546	)		281,783			(1,104,939	)		(1,605,819	)
Change in fair value of warrant liabilities		(17,452,684	)		(2,638,645	)		(30,931,345	)		(14,120,580	)
Other income (expense), net		-			-			(16,176	)		-
Total other income (expense):		(21,231,364	)		(4,984,372	)		(41,158,777	)		(23,153,954	)
Net loss	$	(23,432,428	)	$	(7,914,338	)	$	(47,576,985	)	$	(29,170,736	)

Net loss per unit:
Basic and diluted	$	(0.08	)	$	(0.13	)	$	(0.15	)	$	(0.48	)
Weighted average number of units:
Basic and diluted		318,340,442			64,319,210			318,340,442			64,024,061

The accompanying notes are an integral part of these financial statements.

F-2

SCANTECH IDENTIFICATION BEAM SYSTEMS, LLC

STATEMENTS OF MEMBERS’ DEFICIT

(UNAUDITED)

	Series A Preferred Nonvoting Units								Series C Profit
	Non redeemable				Series B Units				Interest Nonvoting				Additional Paid-In			Accumulated			Members’
Three Months Ended September 30, 2024	Units		Amount		Units		Amount		Units		Amount		Capital			Deficit			Deficit
Balance as of June 30, 2024		245,300	$	—		9,906,827	$	—		1,584,327	$	—	$	—		$	(184,393,971	)	$	(184,393,971	)
Adjustment to shareholder receivables		—		—		—		—		—		—		(2,625	)		—			(2,625	)
Unit-based compensation		—		—		—		—		—		—		—			—			—
Preferred A Unit dividend		—		—		—		—		—		—		2,625			(576,187	)		(573,562	)
Net loss		—		—		—		—		—		—		—			(23,432,428	)		(23,432,428	)
Balance as of September 30, 2024		245,300	$	—		9,906,827	$	—		1,584,327	$	—	$	—		$	(208,402,586	)	$	(208,402,586	)

	Series A Preferred Nonvoting Units								Series C Profit
	Non redeemable				Series B Units				Interest Nonvoting				Additional Paid-In			Accumulated			Members’
Three Months Ended September 30, 2023	Units		Amount		Units		Amount		Units		Amount		Capital			Deficit			Deficit
Balance as of June 30, 2023		245,300	$	—		9,906,827	$	—		1,584,327	$	—	$	—		$	(143,824,666	)	$	(143,824,666	)
Adjustment to shareholder receivables		—		—		—		—		—		—		(8,382	)		—			(8,382	)
Unit-based compensation		—		—		—		—		—		—		(6,109	)		—			(6,109	)
Preferred A Unit dividend		—		—		—		—		—		—		14,491			(544,261	)		(529,770	)
Net loss		—		—		—		—		—		—		—			(7,914,338	)		(7,914,338	)
Balance as of September 30, 2023		245,300	$	—		9,906,827	$	—		1,584,327	$	—	$	—		$	(152,283,265	)	$	(152,283,265	)

	Series A Preferred Nonvoting Units								Series C Profit
	Non redeemable				Series B Units				Interest Nonvoting				Additional Paid-In			Accumulated			Members’
Nine Months Ended September 30, 2024	Units		Amount		Units		Amount		Units		Amount		Capital			Deficit			Deficit
Balance as of December 31, 2023		245,300	$	—		9,906,827	$	—		1,584,327	$	—	$	—		$	(159,184,883	)	$	(159,184,883	)
Adjustment to shareholder receivables		—		—		—		—		—		—		(4,113	)		—			(4,113	)
Unit-based compensation		—		—		—		—		—		—		38,486			—			38,486
Preferred A Unit dividend		—		—		—		—		—		—		(34,373	)		(1,640,718	)		(1,675,091	)
Net loss		—		—		—		—		—		—		—			(47,576,985	)		(47,576,985	)
Balance as of September 30, 2024		245,300	$	—		9,906,827	$	—		1,584,327	$	—	$	—		$	(208,402,586	)	$	(208,402,586	)

	Series A Preferred Nonvoting Units								Series C Profit
	Non redeemable				Series B Units				Interest Nonvoting				Additional Paid-In			Accumulated			Members’
Nine Months Ended September 30, 2023	Units		Amount		Units		Amount		Units		Amount		Capital			Deficit			Deficit
Balance as of December 31, 2022		245,300	$	—		9,590,106	$	—		1,336,067	$	—	$	—		$	(121,659,065	)	$	(121,659,065	)
Adjustment to shareholder receivables		—		—		—		—		—		—		(11,068	)		—			(11,068	)
Unit-based compensation		—		—		316,721		—		248,260		—		99,365			—			99,365
Preferred A Unit dividend		—		—		—		—		—		—		(88,297	)		(1,453,464	)		(1,541,761	)
Net loss		—		—		—		—		—		—		—			(29,170,736	)		(29,170,736	)
Balance as of September 30, 2023		245,300	$	—		9,906,827	$	—		1,584,327	$	—	$	—		$	(152,283,265	)	$	(152,283,265	)

The accompanying notes are an integral part of these financial statements.

F-3

SCANTECH IDENTIFICATION BEAM SYSTEMS, LLC

STATEMENTS OF CASH FLOWS

(UNAUDITED)

	Nine Month Ended September 30,
	2024			2023
OPERATING ACTIVITIES
Net loss	$	(47,576,985	)	$	(29,170,736	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		24,377			28,733
Unit-based compensation expense		38,486			99,365
Amortization of debt issuance cost		444			111,962
Change in fair value of derivative liabilities		1,104,939			1,605,819
Change in fair value of warrant liabilities		30,931,345			14,120,580
Change in operating assets and liabilities:
R&D tax credit receivable		82,170			91,560
Prepaid and other current assets		(240,439	)		(111,845	)
Inventory		(770,256	)		—
Long term assets		(36,333	)		—
Accounts payable		776,975			1,354,982
Accrued liabilities		(36,523	)		(25,616	)
Accrued compensation		59,494			(279,079	)
Accrued federal tax liability, penalties and interest		732,919			718,252
Interest payable		3,676,348			2,601,594
Interest payable to related parties		5,251,784			4,645,303
Deferred revenue		208,062			—
Payable to related parties		627,814			114,097
Net cash used in operating activities		(5,145,379	)		(4,095,029	)
INVESTING ACTIVITIES
Purchases of property, plant and equipment		(1,100	)		—
Net cash used in investing activities		(1,100	)		—
FINANCING ACTIVITIES
Proceeds from loans		5,018,940			4,070,110
Loan origination fees		(20,000	)		—
Principal payments on finance lease liabilities		—			(6,650	)
Repayment of loans		—			(15,150	)
Adjustment to shareholder receivables		(4,113	)		(11,067	)
Net cash provided by financing activities		4,994,827			4,037,243
Net decrease in cash during period		(151,652	)		(57,786	)
Cash, beginning of period		333,084			92,975
Cash, end of period	$	181,432		$	35,189
SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING ACTIVITIES
Conversion of interest payable to debt	$	—		$	2,164,743
349,871 series B units transfer from NACS to Taylor Freres	$	38,486		$	—

The accompanying notes are an integral part of these financial statements.

F-4

SCANTECH IDENTIFICATION BEAM SYSTEMS, LLC NOTES TO FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 1 — Description of Organization and Business Operations

Organization and Nature of Operations

ScanTech Identification Beam Systems, LLC (the “Company”, “we”, “our”, or “us”), formed in 2011, is developing and deploying security screening systems that protect travelers and other members of the public from criminals, terrorists and other bad actors. It has developed a proprietary Computed Tomography scanning system that uses fixed-gantry technology to detect explosives, weapons, narcotics and other contraband.

Since inception, the Company’s operations have been focused primarily on research and development, product testing, sales and marketing, as well as raising capital to support its domestic and international certification efforts.

On September 8, 2023, the Company signed a definitive Business Combination Agreement with Mars Acquisition Corp..(“Mars”) (Nasdaq: MARX). The combined company is expected to have an estimated post- transaction enterprise value of $110 million, consisting of an estimated equity value of $197.5 million and $48 million in net cash, assuming no redemptions by Mars’ public shareholders. On January 24, 2024, Mars asked Mars’ shareholders to approve an extension of time for Mars to consummate an initial business combination. As of January 24, 2024, Mars Capital Holding Corporation and Mars have entered into Non-Redemption Agreements with several unaffiliated third parties (the “Investors”) on substantially the same terms in exchange for their agreement to not redeem an aggregate of 200,000 ordinary shares in Mars at the Shareholder Meeting. In exchange for the foregoing commitment not to redeem such shares, the Sponsor has agreed to cause ScanTech AI Systems Inc. (“Pubco”) to issue to such Investors an aggregate of 40,000 common Unit of Pubco immediately following the consummation of the initial business combination if they continue to hold such Non-Redeemed Shares through the Shareholder Meeting. Net cash will come from Mars’ approximately $22 million of cash in trust (assuming no additional shareholder redemptions) and any third-party capital the Company is able to raise through the SPAC transaction.

Going Concern Consideration

As of September 30, 2024, the Company had $181,432 in cash, a significant working capital deficit of $180,174,261 and accumulated deficit of $208,402,586. For the nine months ended September 30, 2024, the cash flow used in operating activities was $5,145,379. The Company’s business plan is dependent on several factors, including securing customer agreements, achieving the Transportation Safety Administration’s APSS 6.2 certification, of which are uncertain to occur, and raising capital to fund operations. On September 8, 2023, the Company signed a business combination agreement (“Merger Agreement”) with Mars, a special purpose acquisition company. The Company’s strategic plan includes its business combination with Mars to assist the Company in its efforts to raise capital and grow its business.

The Company expects to continue to incur significant expenditures in pursuit of its growth, merger and capital raising plans and there are no assurances that any of those plans will be successful.

As discussed in Note 11, most of our indebtedness is in default or matures in less than twelve months and is presented as short-term debt in the Balance Sheets. Our operating losses raise substantial doubt about our ability to continue as a going concern for one year from the date the financial statements are issued or available to be issued.

We currently have almost no cash resources and significantly greater current liabilities than current assets. The majority of our funding has been advances from Seaport Group LLC Profit Sharing Plan (“Seaport”). Should Seaport cease to make such advances prior to us obtaining other sources of financing sufficient to pay its expenses and current liabilities, we would be unable to continue in business.

Historically, we have financed operations primarily through cash generated from debt offerings and equity raises. Our primary short-term requirements for liquidity and capital are to fund general working capital and capital expenditures. Our principal long-term working capital uses primarily include research and development expenses, operational payroll and development of scanning for customers.

F-5

Our liquidity needs will be dependent both on the performance of our business and on the amount of proceeds we realize through the Business Combination. If we do not realize sufficient proceeds from the Business Combination to carry out our business plan or if our business does not perform as we expect, we may be required to pursue additional financing sources or take other measures to improve our liquidity. See “Risk Factors — ScanTech may require substantial additional funding to finance our operations, but adequate additional financing may not be available when we need it, on acceptable terms or at all.”

As a result of the foregoing, Management has determined that there is substantial doubt about the Company’s ability to continue as a going concern for at least one year from the date the financial statements are available for issuance.

NOTE 2 — Summary of Significant Accounting Policies

Basis of Presentation

The Company’s financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”), as determined by the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”).

Emerging Growth Company

Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non- emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when an accounting standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised accounting standard at the time private companies adopt the new or revised standard.

Recently adopted accounting pronouncements

In June 2016, the Financial Accounting Standards Board (the “FASB”) issued ASU No. 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” which introduced an expected credit loss model for the impairment of financial assets measured at amortized cost. The model replaces the probable, incurred loss model for those assets and broadens the information an entity must consider in developing its expected credit loss estimate for assets measured at amortized cost. On January 1, 2023, we adopted ASU No. 2016-13 using the modified retrospective method with no material impact to our financial condition, results of operations or cash flows. To estimate expected credit losses on trade accounts receivable, we use a combination of historical loss data, current conditions, and reasonable and supportable forecasts. Loss rates are calculated based on historical experience and adjusted for any changes in current and future economic conditions.

In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting, which expands annual and interim disclosure requirements for reportable segments, primarily through enhanced disclosures about significant segment expenses. The updated standard is effective for our annual periods beginning in fiscal 2025 and interim periods beginning in the first quarter of fiscal 2026.

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes, which prescribes standardized categories and disaggregation of information in the reconciliation of provision for income taxes, requires disclosure of disaggregated income taxes paid, and modifies other income tax-related disclosure requirements. The updated standard is effective for us beginning with our fiscal year 2026 annual reporting period.

F-6

In November 2024, the FASB issued ASU No. 2024-03, Disaggregation of income statement expenses, which requires disclosures of certain additional expense information on an annual and interim basis, including, among other items, the amounts of purchases of inventory, employee compensation, depreciation and intangible asset amortization included within each income statement expense caption, as applicable. We expect to adopt this standard in our fiscal year 2028 annual report.

Changes in Accounting Policies

The Company has consistently applied the accounting policies described in this Note 2 to all periods presented in these financial statements.

Risks and Uncertainties

The Company is currently in the development stage and has commenced principal operations and generated revenue in the second quarter of 2024. The development of the Company’s projects is subject to a number of risks and uncertainties including, but not limited to, the receipt of the necessary permits and regulatory approvals, the availability and ability to obtain the necessary financing for the manufacturing and development of projects.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. The Company bases its estimates on historical experience, known or expected trends, and various other assumptions that are believed to be reasonable given the quality of information available as of the date of these financial statements. The results of these assumptions provide the basis for making estimates about the carrying amounts of assets and liabilities that are not readily apparent from other sources. Actual results could differ from these estimates.

Cash and cash equivalents

The Company considers all highly liquid temporary cash investments with an original maturity of three months or less to be cash equivalents. The Company maintains its cash deposits with major financial institutions over the FDIC limit. There were no cash equivalents as of September 30, 2024 or December 31, 2023. The Company’s exposure as of September 30, 2024 and December 31, 2023 were $0 and $43,949, respectively.

Fair Value Measurement

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants as of the measurement date. Applicable accounting guidance provides an established hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in valuing the asset or liability and are developed based on market data obtained from sources independent of us. Unobservable inputs are inputs that reflect our assumptions about the factors that market participants would use in valuing the asset or liability. There are three levels of inputs that may be used to measure fair value:

Level 1 Quoted prices in active markets for identical assets or liabilities that the entity has the ability to access.

Level 2 Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets and liabilities.

F-7

Level 3 Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets and liabilities.

Assets and liabilities measured at fair value are classified based on the lowest level of input that is significant to the fair value measurement. The Company reviews the fair value hierarchy classification on an as needed basis. Changes in the observability of valuation inputs may result in a reclassification of levels for certain securities within the fair value hierarchy. The Company recognizes transfers into and out of levels within the fair value hierarchy in the appropriate period in which the actual event or change in circumstances that caused the transfer to occur.

Prepaid expenses and other current assets

Prepaid expenses consist primarily of prepaid insurance premiums and retainers for services. Other current assets consist primarily of employee cash advances.

Property and Equipment

Property and equipment are stated at cost less accumulated depreciation. Maintenance, repairs, and minor replacements are charged to expense as incurred. Depreciation on property and equipment is recorded using the straight-line method over the estimated useful lives of the related assets. When assets are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gain or loss is reflected in the accompanying statements of operations in the period realized.

We evaluate our long-lived assets each quarter for indicators of potential impairment. Indicators of impairment include current period losses combined with a history of losses, or when changes in other circumstances indicate the carrying amount of an asset may not be recoverable. The evaluation for long-lived assets is performed at the lowest level of identifiable cash flows, which is the enterprise level (“the Company”). The assets of the Company with indicators of impairment are evaluated for recoverability by comparing its undiscounted future cash flows with its carrying value. If the carrying value is greater than the undiscounted future cash flows, we then measure the asset’s fair value to determine whether an impairment loss should be recognized. If the resulting fair value is less than the carrying value, an impairment loss is recognized for the difference between the carrying value and the estimated fair value. There are no impairment charges for the nine months ended September 30, 2024 and the year ended December 31, 2023.

Inventories

Inventory is valued at the lower cost or net realizable value. Costs include materials and direct labor on a first-in-first-out basis. We review inventory quantities on hand and record provisions for estimated excess, slow moving, and obsolete inventory. The evaluation of the carrying value of our inventories takes into consideration such factors as historical and anticipated future sales compared to quantities on hand and the prices we expect to obtain for products. We adjust excess and obsolete inventories to net realizable value, and write-downs of excess and obsolete inventories are recorded as a component of cost of revenues. See Note 8 - Inventories for further details.

Leases

The Company accounts for leases under Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842). The core principle of this standard is that a lessee should recognize the assets and liabilities that arise from leases, by recognizing in the Balance Sheets a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. The Company elected the package of practical expedients permitted within the standard, which allow an entity to forgo reassessing (i) whether a contract contains a lease, (ii) classification of leases, and (iii) whether capitalized costs associated with a lease meet the definition of initial direct costs. Also, the Company elected the expedient allowing an entity not have to separate lease and non-lease components. The Company has also elected the short-term lease accounting policy under which the Company would not recognize a lease liability or ROU asset for any lease that at the commencement date has a lease term of twelve months or less and does not include a purchase option that the Company is more than reasonably certain to exercise.

F-8

The Company recognizes right-of-use (ROU) assets and lease liabilities for leases with terms greater than 12 months. Leases are classified as either finance or operating leases. This classification dictates whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease.

The Company’s leases are capitalized at the present value of the minimum lease payments not yet paid. The Company uses either the rate implicit in the lease, if readily determinable, or the Company’s incremental borrowing rate for a period comparable to the lease term in order to calculate net present value of the lease liability.

Short-term leases (leases with an initial term of 12 months or less or leases that are cancelable by the lessee and lessor without significant penalties) are not capitalized but are expensed on a straight-line basis over the lease term. The Company has one short term operating lease for the Company’s combined office and warehouse facility located in Buford, Georgia.

Revenue Recognition

Overview

The Company’s sales revenue includes revenues related to deliveries of new CT Sentinel scanning systems, and specific other products and services that meet the definition of a performance obligation under ASC 606, Revenue from Contracts with Customers, including when-and-if-available operating system updates and bins. We recognize revenue on CT Sentinel scanning systems upon customer acceptance. Customer acceptance occurs at the earlier of when the customer provides notice or within 30 days of customer receipt of goods. We recognize revenue on bins once goods are at the shipping points. Revenue attributable to when-and-if-available operating system updates, if material, are recognized on a straight-line basis over the expected ownership life of the CT Sentinel scanning systems, as we have a stand-ready obligation to deliver such services to the customer. All of our revenue for the three and nine months ended September 30, 2024 was recognized at a point-in-time.

For our performance obligations, we allocate the transaction price using the expected cost plus a margin approach. Standalone selling prices are estimated by considering costs used to develop and deliver the service, third-party pricing of similar options and other information that may be available. The Company recognizes its revenues net of any value-added or sales tax. Payments are received at three milestone dates including at contract inception, upon delivery and after customer acceptance.

The Company currently has one customer to whom it sells its baggage scanning systems, which is a distributor. We act as principal in this transaction as we are primarily responsible for fulfilling the contract and have inventory risk, and thus record the gross amount earned within total revenue. Baggage scanning systems including fixed gantry detector, image-processing units and conveyance systems are sold as a combined baggage scanning system. Training services designed to enable distributor customers to service baggage scanning systems they sell to end users of such systems are deemed to be immaterial in the context of the contract.

Restocking fees

Restocking fees for goods expected to be returned are included in the estimate of the transaction price at contract inception and recorded as revenue when control of the good transfers. Restocking costs are recorded as a reduction of the amount of the return asset when control of the good is transferred to the customer. There were no goods expected to be returned at contract inception. No restocking fees have been incurred for the period ended September 30, 2024.

F-9

Disaggregation of Revenue

The Company has one reportable operating segment. Revenue is disaggregated from contracts by geography, which the Company believes best depicts how the nature, amount, timing, and uncertainty of revenues and cash flows are affected by economic factors. Currently the Company has only one revenue contract, all of which relates to a customer located in North America.

Contract Balances

Contract liabilities are included within the deferred revenues in the Balance Sheets. The Company does not have any material contract assets.

Deferred revenue represents the Company's obligation to transfer goods or services to its customers for which it has already received consideration (or the amount is due) from the customer. The Company's deferred revenue balance primarily relates to contract advances. Deferred revenue in the amount of $1,231,069 and $1,023,007 were recorded in the Balance Sheet as of September 30, 2024 and December 31, 2023, respectively.

The Company recognized revenue in the amount of $522,166 for the nine months ended September 30, 2024. No revenue was recognized for the three months ended September 30, 2024.

Research and Development

Research and development costs for prototype scanning machines were expensed as incurred because they have no alternative future use beyond their current testing programs and therefore no economic benefit in the future. Labor costs, including salaries, employee benefits, payroll taxes, third-party contractor expenses, were expensed as incurred.

Unit-Based Compensation

The Company’s 2012 Equity Incentive Plan (the “2012 Plan”) as revised by the 2018 Equity Incentive Plan provide for noncash equity-based compensation through the grant of Series C units. In addition, the Company has issued Series B units as compensation to advisors and vendors. Unit-based compensation is based on the fair value of the member units on the grant date, as determined using an option pricing method (“OPM”). The OPM considers the various terms that would affect the distributions to each class of equity based upon the estimated total equity value of the Company on the grant date, the estimated timing of a future liquidity event including probabilities of different events occurring, the level of seniority among the different classes of securities, dividend policy, and the contractual conversion ratios. In addition, the method implicitly considers the effect of the liquidation preferences as of the estimated future liquidation event and date. Under the OPM, each class of equity is modeled as a call option with a distinct claim on the total equity value of the Company. The characteristics of each class of security, including but not limited to any liquidation preference of the preferred units, determine the class of security’s’ claim on the equity value.

Net loss per unit

The Company computes basic net loss per unit by dividing net loss attributable to members by the weighted average number of units outstanding. Diluted loss per unit is computed by giving effect to all potentially dilutive issuances of units using the treasury Unit method for warrants and the if-converted method for convertible notes. When the Company incurs a net loss, the effect of the Company’s outstanding warrants and convertible notes are not included in the calculation of diluted loss per unit as the effect would be anti-dilutive. Accordingly, basic and diluted net loss per unit is identical.

Research and Development (R&D) Tax Credit

The Company accounts for Georgia R&D tax credits as current assets on its Balance Sheets. Georgia R&D tax credits are calculated at the time of annual state income tax filing and considers R&D tax credits to be assets once the Georgia Department of Revenue approves the R&D tax credit calculation. The Company is permitted to elect to apply credits to future state employer payroll withholding or income taxes. When the Company elects to apply R&D tax credits to employer payroll withholding, application of R&D tax credits reduces the liability for employer payroll withholding for the quarter in which such tax credits are applied.

F-10

NOTE 3 — Net Loss Per Unit

The Company has issued Series A, Series B and Series C units, as discussed in Note 15 — Members’ Deficit. Series A units are entitled to a preferred rate of return and Series C units are equivalent to profits interests. Only Series B units have voting rights. All Series B and Series C units are used in the computation of net loss per unit.

The Company has issued a number of warrants, exercisable at $0.01 per unit at any time from the warrant agreement execution dates to the exercise period end dates. Depending on the warrant agreement, the exercise period varies from seventh to tenth anniversary of the warrant agreement execution date. There were 311,686,636 and 181,148,044 warrants outstanding as of September 30, 2024 and December 31, 2023, respectively. Given the nominal exercise price, penny warrants are considered to be outstanding in the context of basic earnings per share, and thus the units are included in the computation of basic and diluted earnings per unit as of September 30, 2024 and December 31, 2023, respectively. However, the puttable warrants associated with the Bay Point note in the amounts of 4,837,348 and 3,839,359 are anti-dilutive for the nine months ended September 30, 2024 and for the year ended December 31, 2023, respectively. Therefore, the Bay Point warrants are excluded from the calculation of diluted net loss per unit for the nine months ended September 30, 2024 and for the year ended December 31, 2023, respectively.

The Company had 9,906,827 weighted average series B units for the three and nine months ended September 30, 2024, 9,906,827 and 9,748,995 weighted average series B units for the three and nine months ended September 30, 2023, respectively. In addition, the Company also had 1,584,327 weighted average series C units for the three and nine months ended September 30, 2024, 1,584,327 and 1,447,011 weighted average series C units for the three and nine months ended September 30, 2023, respectively. Together with the exercisable warrants outstanding, the Company had 318,340,442 weighted average common series B and C units for the three and nine months ended September 30, 2024, 64,319,210 and 64,024,061 weighted average common series B and C units for the three and nine months ended September 30, 2023.

The dividend calculation in the numerator represents the dividend expenses accrued but not yet paid for the periods indicated to the various owners of Series A units. Series A Units entitle the holder to receive an eight percent (8%) per annum rate of return on the unrecovered capital contribution of such holder.

Series A units, some of which are redeemable and some of which are nonredeemable, are excluded in the net loss per unit calculation below as they are not participating units. Series C units are non-voting units. These units are included in the basic and diluted weighted Series B units and Series C units outstanding calculation below. Warrants are also included in the below calculation of basic and diluted weighted average Series B units and Series C units outstanding because they are fully exercisable at any time by the holders.

The following table sets forth the computation of the Company’s basic and diluted loss per unit:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2024			2023			2024			2023
Numerator:
Net loss	$	(23,432,428	)	$	(7,914,338	)	$	(47,576,985	)	$	(29,170,736	)
Dividend		(573,562	)		(529,770	)		(1,675,090	)		(1,541,762	)
Earnings available for common units	$	(24,005,990	)	$	(8,444,108	)	$	(49,252,075	)	$	(30,712,498	)
Denominator:
Weighted average common units outstanding (basic)		318,340,442			64,319,210			318,340,442			64,024,061
Dilutive effect of potential membership units		—			—			—			—
Weighted average common units outstanding (diluted)		318,340,442			64,319,210			318,340,442			64,024,061
Basic earnings per unit	$	(0.08	)	$	(0.13	)	$	(0.15	)	$	(0.48	)
Diluted earnings per unit	$	(0.08	)	$	(0.13	)	$	(0.15	)	$	(0.48	)

F-11

NOTE 4 — Property and Equipment, Net

Property and equipment, net as of September 30, 2024 and December 31, 2023 consists of the following:

	Estimated useful life	September 30, 2024			December 31, 2023
Finance lease ROU asset	4-5 years		33,662			33,662
Computers and equipment	3-5 years		163,486			162,386
Less: Accumulated depreciation and amortization			(138,387	)		(114,010	)
Property and equipment, net			58,761			82,038

Depreciation and amortization were $8,137 and $24,376 for the three and nine months ended September 30, 2024, respectively. For the nine months ended September 30, 2024 and for the year ended December 31, 2023, the Company focused primarily on research and development which were expensed as incurred as the costs had no alternative future use.

NOTE 5 — Related Party Transactions

ScanTech/IBS IP Holding Company, LLC

The Company licenses certain key intellectual property from ScanTech/IBS IP Holding Company, LLC (“ScanTech IP Holdco”). The license agreement between ScanTech IP Holdco and the Company provides for a perpetual, royalty free license and survivability in the event of a Chapter 11 bankruptcy of ScanTech IP Holdco. ScanTech IP Holdco has no employees and is a manager-managed LLC. John Redmond and Dolan Falconer are the controlling managers of ScanTech IP Holdco. As of September 30, 2024 and December 31, 2023, there were no liabilities or payables owed to ScanTech IP Holdco from the Company and there were no receivables due to the Company from ScanTech IP Holdco.

John Redmond

Azure, LLC (“Azure”) and NACS, LLC (“NACS”) have certain outstanding notes with the Company, all of which are secured by the assets of the Company. Azure and NACS are controlled by Mr. Redmond, the Chairman of the Board of Directors. As of September 30, 2024 and December 31, 2023, the Company’s outstanding loan balances with these entities, including accrued interest, were approximately $59.5 million and $54.3 million, respectively.

The conversion feature did not meet the definition of a derivative and did not contain a significant premium. Therefore, the Company did not account for the conversion feature separately. John Redmond also has an intercreditor agreement with the Seed financing noteholders which provides for drag-along conversion and certain collateral agency rights under certain terms and conditions. The drag-along conversion rights were deemed to be a contingent conversion feature, which would not require recognition until the contingency is met. The drag-along conversion rights also did not meet the definition of a derivative.

F-12

The following table lists the accrued interest and principal balances of the notes issued to related parties associated with John Redmond, the Company’s Chairman. (See Note 11 – Debt and Warrant Liabilities for terms and details of John Redmond series of notes)

	As of September 30, 2024						As of December 31, 2023
	Interest		Principal				Interest		Principal
Entity	Payable		Payable		Total		Payable		Payable		Total
Azure, LLC	$	2,783,599	$	6,831,987	$	9,615,586	$	1,904,740	$	6,831,987	$	8,736,727
NACS, LLC		23,977,923		11,493,949		35,471,872		20,939,396		11,493,949		32,433,345
Assumed notes		10,646,083		3,770,119		14,416,202		9,385,014		3,770,119		13,155,133
Total	$	37,407,605	$	22,096,055	$	59,503,660	$	32,229,150	$	22,096,055	$	54,325,205

Mr. Redmond also paid expenses on behalf of the Company which were not included as principal balance in any of Mr. Redmond’s outstanding loans. As of September 30, 2024 and December 31, 2023, Mr. Redmond’s outstanding expense advances were $1.3 million and $0.7 million, respectively. These items are presented in the Balance Sheets under the caption of related parties payables.

As of September 30, 2024, the Company was in default on all notes held by NACS, Azure assumed notes and Mr. Redmond. As of December 31, 2023, the Company was in default on all notes held by NACS and Mr. Redmond but was not in default on the notes held by Azure.

For the nine months ended September 30, 2024, Mr. Redmond provided short term funding to the Company in the amount of $316,000. These short term fundings had interest rates of 0% per annum. On April 4, 2024, the $25,000 of the short term funding was repaid to Azure LLC.

On October 24, 2024 , the Company entered into a settlement and mutual release agreement with Taylor Frères Americas LLP (“TFA”) which replaced the agreement executed on June 18, 2024 and expired on September 30, 2024. In connection with the Company’s ongoing restructuring and reorganization activities, the parties wish to settle and resolve any and all claims arising from or related to the engagement letter and the TFA’s other dealings with NACS, ScanTech, John Redmond (the controlling member of NACS and the Chairman of ScanTech) and their affiliates. Pursuance to the June 18, 2024 agreement, the Company agreed to pay to TFA a good faith deposit in the amount of $50,000, which was paid in full by July 2024.

In connection with the June 18, 2024 agreement, 349,871 units of series B were transferred from NACS to TFA. As of September 30, 2024, TFA owned 8% of all outstanding Series B Units as a result of the transfer. The series B unit was valued at 0.11/unit as of September 30, 2024. The Company subsequently recorded a unit-based compensation in the amount of $38,486 and an increase in additional paid in capital of $38,486.

Dolan Falconer

Mr. Falconer, the CEO of the Company, paid for certain expenses on behalf of the Company. In addition, the Company owes Mr. Falconer deferred compensation of $721,987 and $697,422 as of September 30, 2024 and December 31, 2023, respectively. The amounts were presented on the Balance Sheets under the caption of accrued compensation.

The Company owed Mr. Falconer for deferred compensation and late fees amounting to $277,904 and $214,712 as of September 30, 2024 and December 31, 2023, respectively. These items are presented in the Balance Sheets under the caption of accrued compensation.

On June 1, 2023, the Board of Director of the Company approved the accelerated vesting of the remaining unvested 2.25% of Series C membership interests previously approved and awarded to Mr. Falconer in 2014. As a result of this decision, 248,260 units of Series C membership interests were fully vested to Mr. Falconer. The 248,260 units were valued at $0.41 per unit at the grant date of April 1, 2014, resulting in a total value of $101,787. This amount was recorded as Unit compensation expense on June 1, 2023.

F-13

Ben DeCosta

Mr. DeCosta is a member of the Board of Directors of the Company. Mr. DeCosta has an outstanding promissory note with the Company with a principal balance of $250,000 and a stated interest rate of 15% per annum. As of September 30, 2024 and December 31, 2023, the balance of Mr. DeCosta’s promissory note were $693,227 and $619,897, respectively, including all principal and unpaid accrued interest. The principal of $250,000 was presented in the Balance Sheets under the caption of short-term debt from related parties, net. The interest payables in the amount of $443,227 and $369,897 as of September 30, 2024 and December 31, 2023, respectively, were presented in the Balance Sheets under the caption of interest payable to related parties.

Alice Wilson

Mrs. Wilson is the sister of Mr. Falconer. Mrs. Wilson has extended an expense advance on behalf of the Company. The balance of Mrs. Wilson’s expense advance as of September 30, 2024 and December 31, 2023 was $20,000. The amount was presented in the Balance Sheets under the caption of related parties payable.

NOTE 6 — Leases

The Company has two finance leases for forklifts, with one lease expired in September 2022 and the other expired in August 2023. Both leases had bargain purchase options that were exercised at the end of the leases. The two forklift leases as of the effective date were classified as finance leases.

On June 27, 2023, the Company entered into a twelve-month operating lease. As of September 30, 2024, the Company had one operating lease. The Company currently pays a rent of $15,167 per month for the leased space. Since this lease has a lease term of 12 months and does not include an option to purchase the underlying asset that the Company is reasonably certain to exercise, it is considered a short-term lease. The Company elects not to apply the recognition requirements of ASC 842 to short-term leases. By electing this practical expedient, short-term leases do not need to be reported on the Balance Sheets.

The components of lease cost were as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Short-term Lease Cost	$	45,501	$	35,250	$	133,086	$	105,750

NOTE 7 — Inventories

The following table summarizes the Company’s inventories, net for the nine months ended September 30, 2024 and for the year ended December 31, 2023:

	September 30, 2024		December 31, 2023
Raw materials and parts	$	930,651	$	182,455
Work-in-progress	$	-	$	-
Finished goods	$	89,449	$	67,389
Total inventories	$	1,020,100	$	249,844

F-14

NOTE 8 — Federal Tax Liability, Penalties and Interest

From the first quarter of 2017 through October 31, 2023, the Company failed to remit U.S. federal taxes from amounts withheld from employee wages, and failed to remit the employer portion of such taxes. In addition, during the same period, the Company did not file quarterly federal tax returns on Form 941 to report income taxes and payroll taxes withheld from employee wages. As a result, the Company has an accrued payroll tax liability on its Balance Sheets that amounted to $6.15 million and $5.42 million as of September 30, 2024 and December 31, 2023, respectively. The Company has devised and implemented a plan to become compliant in its obligations, including hiring appropriate counsel, preparing and filing appropriate historical filings, making payments, and engaging in discussions with appropriate parties, including the IRS. There can be no assurance that that the IRS will agree to the terms of a settlement and not instead demand immediate payment of the amounts due. Even if a settlement offer is accepted, the terms of any settlement may require substantial upfront payments, which we may not have sufficient funds available for. In addition, willful failure to comply with statutory obligations to collect, account for and pay over taxes imposed on employees is a federal criminal offense. There can be no assurance that the Department of Justice will not commence criminal charges against the Company and management for failure to remit payroll taxes to the IRS.

The Company remitted payments to IRS for the employee income taxes withheld and the employee and employer portion of the payroll taxes. The payroll taxes and income taxes withheld were remitted to IRS in full for the payroll periods from November 1, 2023 to September 30, 2024. The Company paid four payroll cycles late and accrued associated penalties and interests for these four cycles.

The employee income taxes withheld and the payroll taxes prior to November 1, 2023 were not remitted to IRS yet. The failure to deposit penalty and associated interest was calculated and recorded in Balance Sheets under the caption of accrued federal tax liability, penalties and interest.

NOTE 9 — Unit-Based Compensation

The 2012 Plan has an aggregate authorized limit of 15% of Series C units outstanding at any given time. The total authorized Series C units were 1,748,264 as of September 30, 2024 and December 31, 2023. As of September 30, 2024 and December 31, 2023, there were 1,584,327 units of Series C membership interests issued and outstanding, respectively.

On June 1, 2023, the Company’s Board of Directors approved the accelerated vesting of 248,260 Plan units to its CEO, Mr. Dolan Falconer, and the 248,260 units were fully vested immediately.

On June 18, 2024, NACS agreed to transfer the ownership of its series B units to TFA which equals to 3% of all outstanding Series B Units of the Company. In connection with this agreement, 349,871 units of series B were transferred from NACS to TFA. As of September 30, 2024, TFA owned 8% of all outstanding Series B Units as a result of the transfer. The Company accounts for unit-based compensation under SAB Topic 5.T. The value of the shares transferred should be reflected as an expense in the company's financial statements with a corresponding credit to contributed (paid-in) capital. The series B unit was valued at 0.11/unit as of June 30, 2024. The Company subsequently recorded a unit-based compensation in the amount of $38,486 and an increase in additional paid in capital of $38,486.

NOTE 10 — Fair Value Measurements

Derivative Instruments: Derivative instruments that are not traded on an exchange are valued using conventional calculations/models that are primarily based on unobservable inputs such as private company unit price and volatilities, and therefore, such derivative instruments are included in Level 3.

Warrant Liabilities: Warrant liabilities that are not traded on an exchange are valued using conventional calculations/models that are primarily based on unobservable inputs such as private company unit price and volatilities, and therefore, such warrant instruments are included in Level 3.

F-15

The following table presents information about the Company’s assets and liabilities that are measured at fair value on a recurring basis as of September 30, 2024 and December 31, 2023, respectively, and indicates the fair value hierarchy of the valuation inputs the Company utilized.

Description	Level		September 30, 2024		December 31, 2023
Liabilities
Warrant liabilities		3	$	52,955,510	$	22,024,165
Derivative liabilities		3	$	2,027,773	$	922,834

The Company has determined that the warrants associated with notes are subject to treatment as a liability as the warrants for units of the Company are not indexed to its own membership interests. The warrants are subject to remeasurement at each Balance Sheet date and any change in fair value is recognized as a component of other expense on the statements of operations. The Company will continue to adjust the liability for changes in fair value until the earlier of the exercise or expiration of the warrants. At that time, the portion of the warrant liability related to the common unit warrants will be reclassified to additional paid-in capital.

The following tables present information about the change in fair value of the Company’s Level 3 warrant liabilities and derivative liabilities for the three and nine months ended September 30, 2024:

Warrant liabilities	Three months ended September 30, 2024		Nine months ended September 30, 2024
Fair Value - beginning of period	$	35,502,826	$	22,024,165
Addition		3,432,870		18,674,089
Change in fair value		14,019,814		12,257,256
Fair Value - end of period	$	52,955,510	$	52,955,510

Derivative liabilities	Three months ended September 30, 2024		Nine months ended September 30, 2024
Fair Value - beginning of period	$	1,498,227	$	922,834
Addition		-		555,682
Change in fair value		529,546		549,257
Fair Value - end of period	$	2,027,773	$	2,027,773

NOTE 11 — Debt and Warrant Liabilities

All of our indebtedness is in default or matures in less than twelve months and is presented as short-term debt in the Balance Sheets as of September 30, 2024 and December 31, 2023. Interest expense includes the interest on the notes and amortization of any original issue discounts, which includes debt issuance costs and the relative fair value of warrants issued contemporaneously with certain notes.

All of our indebtedness is secured by a continuing security interest in all of our property and assets.

	Maturities		Effective Rate	September 30, 2024		December 31, 2023
John Redmond notes		2018 - 2024	12.00% -14.50%		22,096,055		22,096,055
Seaport notes		2024	12%		16,264,584		12,670,200
Catalytic notes		2020	12%		1,563,796		1,563,796
Seed financing notes		2024	12%		7,908,456		6,503,456
Bay Point notes		2023	15%		813,633		813,633
Total Principal				$	48,646,524	$	43,647,140
Accrued interest (compounded)					54,277,109		45,348,977
Total debt				$	102,923,633	$	88,996,117
Reported as:
Short-term debt					102,923,633	$	88,996,117
Total				$	102,923,633	$	88,996,117

F-16

John Redmond notes

NACS note

On October 11, 2013, the Company issued NACS a note with an interest rate of 8% and a default interest rate of 12% (the “2013 Note”). Principal and accrued interest may be prepaid in whole or in part at any time without penalty. The 2013 Note was amended on June 1, 2016 to provide NACS with the right to convert principal and accrued interest on the note into Series A and Series B units of the Company at a conversion price of $1 and $0.47, respectively. As amended, the 2013 Note had a maturity date of December 31, 2018. FASB ASC 815 generally requires an analysis of embedded terms and features that have characteristics of derivatives to be evaluated for bifurcation and separate accounting in instances where their economic risks and characteristics are not clearly and closely related to the risks of the host contract. The Company identified certain conversion features which it evaluated for bifurcation and determined that no bifurcation of these embedded or conversion features was required as the net settlement provision was not met.

The principal and accrued interest on the NACS note was $35,471,872 and $32,433,345 as of September 30, 2024 and December 31, 2023, respectively.

Azure notes

The Company has issued multiple notes to Azure, which is an affiliate of and controlled by John Redmond:

						Principal and Accrued Interest
Issuance date	Maturities		Interest Rate			As of September 30, 2024		As of December 31, 2023
January 1, 2021		March 31, 2024		12.00	%	$	1,077,528	$	985,227
January 1, 2021		March 31, 2024		12.00	%		5,253,215		4,803,224
October 25, 2021		March 31, 2024		14.50	%		610,489		547,938
October 25, 2021		March 31, 2024		14.50	%		1,373,600		1,232,860
October 1, 2022		March 31, 2024		14.50	%		1,300,754		1,167,478
				Total		$	9,615,586	$	8,736,727

Assumed notes

On September 12, 2012, the Company issued to another party a note with a principal balance of $3,270,119, an interest rate of 8% per annum, a default interest rate of 12% and a maturity date of December 31, 2018. The note was subsequently acquired from the original noteholder by NACS. Principal and accrued interest on the note as of September 30, 2024 and December 31, 2023 were $13,115,206 and $11,991,755, respectively.

On October 2, 2019, Mr. Redmond purchased from another party (i) a secured note with a principal amount of $300,000 and an interest rate of 12% per annum and (ii) a warrant to acquire 2.26% of issued and outstanding Series B units for each $1,000,000 of initial principal and accrued unpaid interest, with an exercise price of $0.01. Mr. Redmond may exercise the warrant at any time and from time to time, in whole or in part (but not as to a fractional unit). If at any time any of the principal and interest outstanding on the senior secured promissory notes issued by the Company and held by NACS is converted into any equity membership interests in the Company, the warrant will be deemed to have opted to exercise, without any further action on its part, the same proportionate amount of this warrant as that portion of the NACS notes converted by NACS. Principal and accrued interest on the note as of September 30, 2024 and December 31, 2023 were $780,598 and $698,027, respectively.

F-17

On October 2, 2019, Mr. Redmond also purchased from another party (i) a secured note with a principal amount of $200,000 and an interest rate of 12% per annum and (ii) a warrant to acquire 2.26% of issued and outstanding Series B units for each $1,000,000 of initial principal and accrued unpaid interest, with an exercise price of $0.01 per unit. Principal and accrued interest on the note as of September 30, 2024 and December 31, 2023 were $520,399 and $465,351, respectively.

Seaport notes

On July 17, 2019, the Company issued a note to Seaport Group LLC Profit Sharing Plan (“Seaport”) with an interest rate of 12% and a maturity date of August 31, 2019. As subsequently amended, the note provides for a maximum principal amount of $4,500,000. As amended, the note contains a $10.00 option to purchase a percentage of membership interests of the Company (determined on a fully diluted basis at the time of such exercise) equal to (i) the outstanding principal amount under such note, plus accrued and unpaid interest by (ii) $22,500,000.

On June 13, 2023, the Company amended and restated its note with Seaport (the “2023 Seaport Note”). The 2023 Seaport Note provides for a new principal loan amount of $7,853,008, a maximum loan amount of $10,000,000, a 12% annual interest rate a maturity date of March 31, 2024, and is senior secured indebtedness. In addition to principal and interest payable under the note, the note grants Seaport an option to purchase a percentage of membership interests of the Company (determined on a fully diluted basis at the time of such exercise) equal to (i) the outstanding principal amount under such note, plus accrued and unpaid interest by (ii) $20,010,000. The option has no expiration date and will be in full force and effect until it is exercised, or the principal and accrued interest of the Seaport Note are paid in full.

Pursuant to the loan amendment agreement executed on December 1, 2023, on September 28, 2023, the total accrued and unpaid interests in the amount of $500,853 were rolled into the principal in the amount of $10,170,000 at the time to reach at an aggregate principal amount of $10,670,853. On December 31, 2023, the total accrued and unpaid interests in the amount of $352,725 were rolled into the principal in the amount of $12,317,475 at the time to reach at an aggregate principal amount of $12,670,200 as of December 31, 2023.

Pursuant to an intercreditor agreement, Seaport note is senior in priority of payment to notes issued to NACS and John Redmond. The principal and accrued interest on the note were $14,299,442 and $12,670,200 as of September 30, 2024 and December 31, 2023, respectively.

Seaport bridge financing

On March 24, 2024, the Company signed a bridge financing note with Seaport Group SIBS, LLC, with an initial principal amount of $421,200. The terms of the bridge financing are separate from the existing Seaport financing already in place with the Company. The Bridge Financing has a maximum principal draw amount of up to $1,000,000, a maturity date of September 30, 2024, an annual interest rate of 12%, and is pari-passu in seniority to the existing Seaport financing. In addition, at the consummation of the Business Combination, the note is to be repaid in full out of the proceeds of the transaction and Seaport Group SIBS, LLC is to be issued 1 share for every $1 lent to the Company under the terms of the bridge financing. In the event the business combination does not close, Seaport Group SIBS, LLC has a purchase option of $10 to purchase membership interest in the Company based upon the principal and accrued and unpaid interest divided by $15,000,000. The Company concluded that the features in the Bridge Financing are embedded derivatives which are included in the Derivative Liability balance on the September 30, 2024 balance sheet in the amount of $241,790. As of September 30, 2024, the principal and accrued interest on the note were $1,073,127.

F-18

Seaport purchase order loan

On June 27, 2024, the Company executed a purchase order purchase agreement with Seaport Group SIBS, LLC. In the agreement, the Company agreed to sell and Seaport Group SIBS, LLC agreed to buy certain purchase orders that the Company is entitled to bill to its customer in the future. Two purchase orders amounted to $3,410,023 were approved by the customer in October 2023. For the nine months ended September 30, 2024, the Company has sold invoices in the amount of $364,780 collectively to Seaport Group in exchange for cash payments of $350,000.

As of September 30, 2024, Seaport Group SIBS, LLC has paid the Company in the amount of $1,777,400 in exchange for the right to receive the full balance of $1,955,140 on the invoice to be billed to the customer in the future. Because the invoices were not billed to the customer at the time of the agreements, the Company concluded that the total balance of $1,955,140 is considered a series of collateral purchase order loans from Seaport Group SIBS, LLC to the Company by using the underlying cash receipt of the future invoices as collaterals.

The following table presents the transactions on the purchase order loan and invoice factoring services between the Company and Seaport for three and nine months ended September 30, 2024.

	Three months ended September 30, 2024		Nine months ended September 30, 2024
Total invoices sold to Seaport	$	-	$	364,780
Total cash received from Seaport		-		350,000
Total factoring amount		-		14,780

Total PO loan from Seaport		1,627,400		1,777,400
Interest paid to Seaport		162,740		177,740
Total amount in exchange for PO loan	$	1,790,140	$	1,955,140

Seaport working capital loan

On September 27, the Company issued a promissory note to Seaport Group SIBS, LLC with an interest rate of 12.0% accruing from September 27, 2024 and a principal amount of $220,000. The principal amount of this note is subject to a $20,000 original issue discount. The outstanding principal amount and any accrued interest shall be due and payable on the earlier of: (i) The date on which the Company receives proceeds from customer purchases tied to new purchase orders or invoices (which is separate from the $3,410,023 purchase order loan); (ii) March 26, 2025. As of September 30, 2024, the principal and accrued interest on the note, net of unamortized original issue discount, were $200,738.

Catalytic note and warrant

On January 23, 2019, the Company issued a note to Catalytic Holdings I LLC (“Catalytic”) with an interest rate of 12.0% accruing from March 15, 2019, a principal amount of $1,080,000 and a maturity date of April 30, 2019. The principal amount of this note is subject to a 20% original issue discount. As a result, the Company received cash in the amount of $900,000. Principal and accrued interest on the note as of September 30, 2024 and December 31, 2023 were $2,362,191 and $2,221,321, respectively.

F-19

In January 2019, the Company also issued a warrant to Catalytic. As amended, the warrant entitles Catalytic to purchase 2.0% of the units of the Company on a fully diluted basis at an exercise price of $0.01 per unit. The warrant expires on the tenth anniversary of the warrant issue date.

On June 26, 2019, the Company entered into a consulting agreement with Alchemy Advisory LLC (“Alchemy”), a subsidiary of Catalytic. In exchange for the business and strategic advice service from Alchemy, the Company agreed to issue to Alchemy warrants which grant Alchemy the ten-year right to purchase membership interests representing voting common Unit of the Company with a per share exercise price of $0.01 per unit and representing 1.0% of the outstanding common membership interests and membership interest equivalents of the Company.

On May 18, 2023, Catalytic Holdings I LC was awarded a summary judgment against the Company in Company Kings County New York state court. On July 14, 2023, Catalytic notified the Company that it would be presenting the court a proposed order for settlement of its summary judgment, scheduled with the court on August 7, 2023. The proposed order was in the amount of $1,563,796 in satisfaction of Catalytic’s indebtedness with the Company. On September 7, 2023, the court granted Catalytic both the order and judgment amount of $1,563,796 plus accruing interest at a rate of 12% per annum from October 6, 2020. These amounts are incorporated with the amounts on the Company’s Balance Sheets plus accrued interest since the summary judgment.

Bay Point note and warrant

On August 22, 2018, the Company issued a promissory note to Bay Point Capital Partners, LP (“Bay Point”), with an interest rate of 15%, a default interest rate of 20%, a principal amount of $670,000 and a maturity date of December 1, 2023. Principal and accrued interest on the note as of September 30, 2024 and December 31, 2023 were $1,310,965 and $1,188,921, respectively. The Bay Point note is in default.

On August 22, 2018, John Redmond executed an unconditional guaranty of payment agreement with Bay Point. For and in consideration of $10.00, John Redmond unconditionally and irrevocably guarantees to Bay Point the complete payment of the principal in the amount of $420,000 and all other obligations of the Company to Bay Point under the terms of the note or any other documents evidencing, securing or otherwise relating to the note.

In July 2019, the Company issued Bay Point a warrant to purchase 3.5% of the Series B units of the Company on a fully diluted basis at an exercise price of $0.01 per unit. The warrant expires on the tenth anniversary of the issue date. The warrant may also be converted, in whole or in part, into a number of units (rounded down to the nearest whole number) equal to (i) the fair market value of the warrant or portion thereof being converted divided by (ii) (A) 70% of the most recent pre-money Company valuation that pertains to securities issued in exchange for raising capital, divided by (B) all issued and outstanding Company units or securities at the time the warrant is converted to units. Bay Point has a right to put the warrant to the Company at any time.

In November 2023, the Company amended its forbearance agreement date December 15, 2022 and agreed to pay $1,400,000 exit fees, $116,850 legal fees and $89,220 late fees on unpaid interests and principal. The exit fees, legal fees and late fees amounted to $1,606,070 as of September 30, 2024 and December 31, 2023 was recorded in accrued expenses and other current liabilities in Balance Sheets.

On April 24, 2024, the Company signed a term sheet agreement with Bay Point Capital Partners, LP, defining the terms of the conversion of Bay Point’s indebtedness with the Company into equity simultaneous with the consummation of the Business Combination. Per the term sheet, Bay Point is to convert its total indebtedness, including any accrued interest and fees, into equity equal to 120% of its total indebtedness as of the date of the consummation of the Business Combination. Successful conversion also releases the Company from any and all claims Bay Point may have.

F-20

Mars capital loans

On April 2, 2024, Polar Multi-Strategy Master Fund (the “Investor”), Mars Acquisition Corp., a Cayman Islands exempted company (the “SPAC”), Mars Capital Holdings Corporation, a British Virgin Islands business company (the “Sponsor”), and the Company entered into a subscription agreement. The Sponsor seek to raise funds from existing SPAC investors which will in turn be loaned by the Sponsor to the Company for working capital expenses (“Mar capital loan”). The investor has agreed to fund an amount up to $1,000,000 to the Sponsor as a capital contribution in return for subscription shares. The Company will pay all principal under the Mar capital loan to the Sponsor at the closing of the De-SPAC transaction (the “De-SPAC Closing”). The investor will be entitled to receive from the Sponsor an amount equal to the amount funded as a return of capital. In consideration of the capital calls funded by the Investor and received by the Sponsor (such funded amounts, being the Investor’s “Capital Investment”), SPAC (or the surviving entity following the De-SPAC Closing) will issue 1 share of the surviving entity’s common Unit for each dollar of the Capital Investment that has been funded as of or prior to the De-SPAC Closing at the close of the Business Combination.

The Mar capital loan shall not accrue interest and shall be repaid by the Company to the Sponsor upon the De-SPAC Closing. Upon such repayment from the Company to the Sponsor, an amount equal to the Capital Investment will be paid by the Sponsor (or by the SPAC (or surviving entity following De-SPAC closing) on behalf of the Sponsor) to the Investor as a return of capital within 5 business days of the De-SPAC Closing.

In the event that, following the Closing, (i) the Business Combination Agreement is terminated or (ii) the Business Combination does not close by November 16, 2024 (or such other date as the parties shall agree) (the “Termination”), the Company agrees that within ten (10) business days of the Termination, (a) it will issue, to the Sponsor, a promissory note with a principal amount equal to the Capital Contribution with terms, rights, and obligations that mirror the Seaport Bridge Note (“Sponsor Note”) and Sponsor shall promptly assign such Sponsor Note to Investor within five (5) business days of its receipt; and (b) it will provide Investor with any further approvals required for the issuance of the Sponsor Note and any subordination agreement necessary to ensure that Investor has all the same rights as Seaport.

On April 2, 2024, the Sponsor and the Company also executed a fund transfer agreement simultaneously, in which the Sponsor agreed to transfer funds received from the Investor to the Company upon receipt. In consideration for the drawdown requests and the transfer of funds from Sponsor to the Company, Sponsor shall receive consideration in the form of securities, either as Transaction Closing Shares or ScanTech Units as specified below:

(a) Upon closing of the de-SPAC transaction, Sponsor shall be entitled to 10,000 shares of Pubco Common Unit (“Transaction Closing Shares”). “Pubco Common Unit” means the shares of common Unit, par value of $0.0001 per share, of ScanTech AI Systems Inc.

(b) In the event that the de-SPAC transaction does not consummate, the Sponsor shall be entitled to 0.1% of the total outstanding units of ScanTech as of the date when the Business combination Agreement is terminated (“ScanTech Units”).

On May 29, 2024, the Investor, the Sponsor and the Company executed another subscription agreement to increase the total Capital Investment amount from $1,000,000 to $1,250,000.

The Company made the first draw request and the Sponsor transferred in the amount of $500,000 on April 3, 2024. The Company made the second draw request and the Sponsor transferred in the amount of $500,000 on April 5, 2024. The Company made the third draw request in the amount of $250,000 and the Sponsor transferred $175,000 on May 31, 2024. The remaining $75,000 in the third draw request was kept by the Sponsor to pay for the shared transaction expenses related to the business combination.

The Company concluded that the features in the Mars capital loans are embedded derivatives which are included in the derivative liability balance in the September 30, 2024 Balance Sheet in the amount of $264,745. As of September 30, 2024, the principal on the note were $1,175,000 and no interest was accrued.

F-21

Aegus bridge financing notes

On May 7, 2024, the Company signed a bridge financing note with Aegus Corp, with an initial principal amount of $230,000. The bridge financing note has a maximum principal draw amount of up to $500,000, a maturity date of November 15, 2024, and an annual interest rate of 12%, In addition, at the consummation of the Business Combination, the note is to be repaid in full out of the proceeds of the transaction and Aegus Corp is to be issued 1 share for every $1 lent to the Company under the terms of the bridge financing. In the event the Business Combination does not occur, the Company grants Aegus Corp the right to acquire, at any time at the Aegus’s option and upon written notice to the Company, for a purchase price of ten dollars ($10.00), membership interests representing a percentage of the total outstanding equity interests in the Company (determined on a fully diluted basis at the time of such exercise) equal to the percentage determined by dividing (i) the outstanding Principal Amount due under this Note as of the date of such exercise by (ii) $20,010,000.

The Company concluded that the features in the bridge financing are embedded derivatives which are included in the derivative liability balance in the September 30, 2024 Balance Sheet in the amount of $49,148. As of September 30, 2024, the principal and accrued interest on the note were $241,433.

Seed financing notes

The Company obtained financing from individual lenders in a principal amount of approximately $7.5 million as of September 30, 2024 and $6.5 million as of December 31, 2023, and issued notes to lenders with stated interest rates between 7.8% and 12% and default interest rates between 15% and 18% between 2014 and 2024. Each noteholder has a continuing security interest in all of the Company’s property and assets. All such notes were in default as of September 30, 2024 and December 31, 2023, except for a note with a small noteholder that matures on September 30, 2024.

Contemporaneously with the issuance of the seed financing notes, the Company issued warrants to purchase Series B units at an exercise price of $0.01 per unit. The warrants typically expire ten years after issuance and are each exercisable for up to approximately 3.0% of the total issued and outstanding Series B units. See Note 16 — Members’ Deficit for further discussion of Series B warrants.

John Redmond also has an intercreditor agreement with the Seed Financing noteholders which provides for drag-along conversion and certain collateral agency rights under certain terms and conditions.

NOTE 12 — Commitments and Contingencies

From time to time, we may be subjected to claims or lawsuits which arise in the ordinary course of business, including the matters described below. Estimates for resolution of legal and other contingencies are accrued when losses are probable and reasonably estimable in accordance with ASC 450, Contingencies.

Tax Matters

From the first quarter of 2017 until October 31 , 2023, the Company failed to remit U.S. federal taxes from amounts withheld from employee wages, and also failed to remit the employer portion of such taxes. In addition, during the same period, the Company did not file quarterly federal tax returns on Form 941 to report income taxes and payroll taxes withheld from employee wages. As a result, the Company has an accrued payroll tax liability on its Balance Sheets that amounted to $6.15 million and $5.42 million as of September 30, 2024 and December 31, 2023, respectively.

F-22

The Company is subject to a state tax lien from the State of Georgia, Gwinnett County, for the tax years 2019 to 2022, for a total lien amount of $71,486. These liens are secured by business inventory and equipment. The Company intends to settle this amount in full.

The Company is subject to a city tax lien from the City of Buford, Georgia, for the tax years 2018 and 2019, and 2022, in the amounts of $975, $9,955 and $403, respectively.

Charging Order

On August 15, 2019, the Superior Court of Fulton County Georgia issued its Order Charging Judgment Debtors (the “Charging Order”). This Charging Order pertained to Judgment Debtors ScanTech Holdings and ScanTech Security and prohibited certain related entities, including the Company, from making distributions to ScanTech Holdings or ScanTech Security.

The Charging Order specifically mandated that all distributions that would otherwise be made to or on behalf of ScanTech Holdings or ScanTech Security shall be paid to Epstein, Becker & Green, PC (“EBG”) instead of being paid to ScanTech Holdings or ScanTech Security until the Judgments are paid in full with interest. EBG was legal counsel to ScanTech Holdings and ScanTech Security, two entities that are not related parties for disclosure purposes but have common ownership with ScanTech.

Subsequent to the issuance of the Charging Order, the Company made a series of payments to third parties on behalf of ScanTech Holdings and ScanTech Security. These payments, which totaled at least $54,000, included the payment of legal fees incurred by ScanTech Holdings and ScanTech Security to defend themselves in the ongoing legal action. The Company intends to address this matter in accordance with the legal process and is taking steps to rectify the situation by working with the Court to ensure full compliance with the Charging Order.

Payments Triggerable by Business Combination

In addition to the above, the Company has certain agreements that provide for payments upon completion of a business combination transaction such as that contemplated by the Business Combination Agreement (“BCA”).

On February 4, 2020, the Company engaged Aegus Corporation (“Aegus”) as a consultant. As amended August 31, 2021 and September 28, 2022, the agreement with Aegus provides for a fee of (i) $180,000 (which has not yet been paid) and (ii) a portion of future capital raised through the efforts, introductions and/or advisory work or Aegus, provided that a merger or sale of the Company takes place on or prior to September 28, 2024. Specifically, the Company must pay $5,000 for every $1.0 million of capital raised up to $5.5 million, but not to exceed a total of 2.5%, of the total proceeds or consideration received from the merger or sale of the Company. Aegus is also entitled to 5% of any non-M&A equity or debt financing received by the Company on or prior to September 28, 2024 from investors referred by Aegus.

F-23

Pursuant to the ScanTech Operating Agreement, if the Company receives, or the debt or equity holders of the Company receive as a distribution from the Company or as proceeds relating to the sale of their interests, $20 million in proceeds or other consideration, including Unit or other securities, in respect of their equity or debt interests in the Company, whether in connection with the liquidation, sale, recapitalization, merger, initial public offering or other transaction, the distribution of profits or other proceeds or otherwise, the Company shall pay to (“York Capital) (i) 20% of all such amounts in excess of $20.0 million but less than $100.0 million, and (ii) 10% of all such amounts equal to or in excess of $100.0 million but less than $200.0 million. The Company has no payment obligation to York with respect to (i) proceeds or other consideration used solely for working capital purposes, including, without limitation, proceeds received in connection with a debt or equity investment in the Company.

On January 8, 2020, the Company entered into a consulting agreement with MG Partners, LLC (the “Consultant”). The Consultant was engaged to provide certain referral and other strategic financing consulting services for a term of one year. Thereafter, the MG Partners, LLC consulting agreement automatically renewed for subsequent six month terms, until terminated by either party. As compensation for such services, the Consultant was entitled to receive a fee for any debt or equity financing procured by MG Partners, LLC. No such amount was payable to the Consultant as of September 30, 2024 and December 31, 2023. Between 2.5% - 5.0% of the proceeds of the Business Combination may be due to the Consultant in the event of sale of the Company during the term of the agreement, and for a period of two years thereafter.

During the fourth quarter 2023, Ellenoff Grossman and Schole LLP (“EGS”), the Company’s legal counsel, agreed to receive delay payments on the service fees for services provided to the Company. As of December 31, 2023, the outstanding payment due was $256,869 and deferral service fee of $553,554. As of September 30, 2024, the outstanding payment due was $26,716 and deferral service fee of $911,717. The deferral service fees are contingent upon the Company’s ability to successfully complete the business combination. In the event that the Company is unable to complete the business combination, EGS will not be paid for the deferred services provided.

Taylor Freres Settlement Agreements

On June 18, 2024, the Company entered into a settlement and mutual release agreement with Taylor Frères Americas LLP (“TFA”). In connection with the Company’s ongoing restructuring and reorganization activities, the parties wish to settle and resolve any and all claims arising from or related to the engagement letter and the TFA’s other dealings with NACS, ScanTech, John Redmond (the controlling member of NACS and the Chairman of ScanTech) and their affiliates. Pursuance to the agreement, the Company agreed to pay to TFA a good faith deposit in the amount of $50,000, which was paid in full by July 2024.

In addition, NACS agreed to transfer the ownership of its series B units to TFA which equals to 3% of all outstanding Series B Units of the Company. In connection with this agreement, 349,871 units of series B were transferred from NACS to TFA. As of September 30, 2024, TFA owned 8% of all outstanding Series B Units as a result of the transfer.

On October 24, 2024, the Company entered into a settlement agreement with Taylor Freres to replace the expired June 18, 2024 agreement. Pursuance to the agreement, the Company agreed to make its best effort to reimburse TFGS VII Gestion LLC $222,837 for legal costs related to the settlement agreements. In addition, the Taylor Freres parties agreed to convert all of its TF ScanTech equities and liabilities into 1,445,000 shares of the combined company’s common stock at the closing of the business combination.

NOTE 13 — Income Taxes

The Company is a limited liability company that is treated as a partnership for federal and state tax return purposes, in which the responsibility for determining and paying income tax is passed through to its members. The Company analyzes its tax filing positions for all open tax years in all of the U.S. federal, state and local tax jurisdictions where it is required to file income tax returns.

F-24

Tax laws are complex and subject to different interpretations by the taxpayer and respective governmental taxing authorities. Significant judgment is required in determining tax expenses and in evaluating tax positions, including evaluating uncertainties. The Company reviews its tax positions quarterly and adjusts its tax balances as new information becomes available.

NOTE 14 — Series A Units

Series A Units

As of September 30, 2024 and December 31, 2023, the Company had 9,965,000 Series A units authorized and outstanding with a stated value of $1 per unit. Series A Units entitle the holder to receive an eight percent (8%) per annum rate of return on the unrecovered capital contribution of such holder.

Mezzanine Classification

Series A units held by NACS are redeemable at any time if the Company has not carried out either a Qualified IPO or Change of Control (as defined in the ScanTech Operating Agreement). These Series A units are classified as “mezzanine” and are accounted for under the ASC accounting topics as Debt — Debt With Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity.

S99-3A(2) of the SEC’s Accounting Series Release No. 268 (“ASR 268”) requires preferred securities that are redeemable for cash or other assets to be classified outside of permanent equity if they are redeemable (i) at a fixed or determinable price on a fixed or determinable date, (ii) at the option of the holder or (iii) upon the occurrence of an event that is not solely within the control of the issuer. Preferred securities that are mandatorily redeemable are required to be classified by the issuer as liabilities whereas under ASR 268, an issuer should classify a preferred security whose redemption is contingent on an event not entirely in control of the issuer as mezzanine equity. If the Company has not carried out either a qualified IPO or a change of control within five years after the date of the NACS Purchase Agreement, which was dated August 2013, NACS may require the Company to redeem any portion of its Series A Units at any time. Accordingly, as the contingent redemption is not solely in control of the Company, the Company determined that the Series A units should be treated as mezzanine equity.

Liquidation Preference

The Series A units rank, with respect to distribution rights and rights on liquidation, winding-up and dissolution, (i) senior and in priority of payment to the Company’s Series B and C units and (ii) junior in priority of payment to the Company’s creditors.

Voting

The Series A units confer no voting rights, except as otherwise required by applicable law.

Other Accounting Matters

FASB ASC 815 generally requires an analysis of embedded terms and features that have characteristics of derivatives to be evaluated for bifurcation and separate accounting in instances where their economic risks and characteristics are not clearly and closely related to the risks of the host contract. The Company performed an evaluation and determined the Series A and the host instrument is more akin to equity. The Company identified certain embedded redemption features which it evaluated for bifurcation and determined no bifurcation of these embedded or conversion features was required.

F-25

Dividends on redeemable Series A units are included in Accumulated Deficit and accrued in Series A units subject to possible redemption.

As of September 30, 2024 and December 31, 2023, the Company had Series A units subject to possible redemption of $28,323,419 and $26,686,397, respectively. This includes the original investment in the amount of $10,000,000.

NOTE 15 — Members’ Deficit

Series A Units

The Company has 245,300 units of Series A units authorized and outstanding as of September 30, 2024 and December 31, 2023. Series A units entitle the holder to receive an eight percent (8%) per annum rate of return on the unrecovered capital contribution of such holder, and such holder shall receive priority in distributions with respect to such preferred return.

Holders of the Series A units are not entitled to vote on, or consent to, any matter reserved for vote, or presented for vote, of the members. Series A units are not entitled to receive any distributions other than the preferred return and a return of the capital contributions. Accrued dividends on Series A units are included in Accumulated Deficit and accrued in Dividend Payable.

As of September 30, 2024 and December 31, 2023, the Company had accrued dividends payable to Series A unit holders of $414,467 and $376,399, respectively.

Series B Units

The Company has authorized 321,593,463 Series B units. The Series B units entitle the holder to receive a proportionate share of all distributions after payment of the preferred return and the return of capital on the Series A units.

As of September 30, 2024 and December 31, 2023, the Company had 9,906,827 Series B units outstanding.

Series C Units

The Series C units are “profits interests” granted to directors, employees and consultants from time to time under the 2012 Plan. Holders of the Series C units do not have voting rights. A number of Series C units equal to fifteen percent (15%) of the total outstanding Series B units and Series C units are reserved for grants under the plan. The allocation and vesting terms of grants of Series C units are determined by the Board of Directors.

As of September 30, 2024 and December 31, 2023, there were 1,748,264 of Series C membership interests authorized, and 1,584,327 units of Series C membership interests issued and outstanding.

Warrants and Options

The Company has issued warrants in connection with notes issued between 2014 and 2021. Each warrant entitles the holder to one Series B unit at an exercise price of $0.01 per unit.

Pursuant to a note issued to Seaport in October 2019, as subsequently amended, Seaport has a $10.00 option to purchase a percentage of membership interests of the Company (determined on a fully diluted basis at the time of such exercise) equal to (i) the outstanding principal amount under such note, plus accrued and unpaid interest by (ii) $22,500,000. On June 13, 2023, the Company amended and restated its note with Seaport (the “2023 Seaport Note”). The 2023 Seaport Note provides for a maximum loan amount of $13,000,000, a 12% annual interest rate a maturity date of March 31, 2024, and is senior secured indebtedness. In addition to principal and interest payable under the note, the note grants Seaport an option to purchase a percentage of membership interests of the Company (determined on a fully diluted basis at the time of such exercise) equal to (i) the outstanding principal amount under such note, plus accrued and unpaid interest by (ii) $20,010,000. The option has no expiration date and will be in full force and effect until it is exercised or the principal and accrued interest of the Seaport Note are paid in full.

F-26

As of September 30, 2024 and December 31, 2023, the Company had 11,491,154 B and C units outstanding. See Note 12 — Debt and Warrant Liabilities, for further discussion of warrants.

NOTE 16 — Subsequent Events

On October 10, 2024, the Company’s customer, VisionTec, issued a change order to modify the original purchase order.

The Company issued working capital promissory notes to Seaport Group SIBS, LLC on October 15, October 22, and October 30, 2024, with an interest rate of 12.0% accruing from the effective date and a principal amount of $187,000, $67,650 and $302,500, respectively. The principal amount of this note is subject to a $17,000, $6,150 and $27,500 original issue discount, respectively. The outstanding principal amount and any accrued interest shall be due and payable on the earlier of: (i) The date on which the Company receives proceeds from customer purchases tied to new purchase orders or invoices (which is separate from the $3,410,023 purchase order loan); (ii) 6 months after the effective date.

On November 14, 2024, ScanTech, Pubco and Seaport entered into a a drawable, Senior Unsecured Promissory Note agreement in an amount of up to $1,000,000 with an annual interest rate of 9% compounding daily. The note is due 90 days from its issuance with a default interest rate of 18%. The note contained a $10.00 option for Seaport to acquire shares in Pubco equal to the dollar amount drawn under the agreement (in this case, 1,000,000 shares).

On December 4, 2024, ScanTech along with Mars (the Clients) entered into a Capital Markets Advisory Agreement with BENJAMIN SECURITIES, INC. (“Benjamin”). Under the agreement, Benjamin will provide Capital Markets Advisory services on an as needed basis as determined by the mutual agreement of both Parties, in exchange for a payment of $250,000 paid at the Closing. In addition to the service fee, the Clients shall also pay to Benjamin a premium payment of $150,000.00, which following receipt Benjamin may in its sole discretion apply to benefit the holders of the Purchased Shares. The Premium Payment due at execution of the agreement is $25,000.00 and $125,000 at the closing of the deSPAC merger.

On December 31, 2024, ScanTech approved the Seventh Amended and Restated Operating Agreement. The primary amendments to the operating agreement included facilitating the membership unit issuances to the creditor conversions as well as the issuance of the P Units to Polar.

On January 2, 2025, the ScanTech successfully consummated its merger with Mars Acquisition Corp.

On January 2, 2025, ScanTech, Mars and Pubco entered into a Supplemental Agreement with Bay Point wherein Bay Point extended the termination date of its conversion agreement to January 2, 2025 in exchange for an issuance of 100,000 shares issued to Bay Point.

On January 2, 2025, ScanTech, Mars and Pubco entered into a Supplemental Agreement with Catalytic wherein Catalytic extended the termination date of its conversion agreement to January 2, 2025 in exchange for 100,000 shares issued to Catalytic.

ScanTech, Mars and Pubco continue to negotiate waivers with several creditors that have expressed an interest in such waiver. The negotiated settlements are expected to largely mirror those completed as of this filing. There is no guarantee any further extension agreements will be reached.

F-27

SCANTECH IDENTIFICATION BEAM SYSTEMS, LLC

BALANCE SHEETS

	December 31, 2023			December 31, 2022
ASSETS
Current assets:
Cash	$	333,084		$	92,975
Prepaid expenses		244,030			32,356
R&D tax credit receivable		276,705			398,718
Inventory		249,844			—
Other current assets		163,512			163,215
Total current asset		1,267,175			687,264
Property and equipment, net		82,038			113,439
Total assets	$	1,349,213		$	800,703
LIABILITIES AND MEMBERS’ DEFICIT
Current liabilities:
Accounts payable	$	3,173,677		$	2,141,689
Accrued expenses and other current liabilities		9,421,258			7,847,647
Accrued compensation		1,610,052			2,000,783
Accrued federal tax liability, penalties and interest		5,415,149			4,628,681
Interest payable		12,749,929			11,672,255
Interest payable to related parties		32,599,048			26,307,393
Dividend payable		376,399			329,077
Deferred revenue		1,023,007			—
Derivative liabilities		922,834			1,572,078
Warrant liabilities		22,024,165			5,652,553
Related parties payable		885,041			750,872
Short-term debt, net		21,301,085			12,763,418
Short-term debt from related parties, net		22,346,055			15,514,068
Short-term finance lease liabilities		—			6,356
Total current liabilities		133,847,699			91,186,870
Long-term debt, net		—			34,470
Long-term debt from related parties, net		—			6,586,987
Total liabilities	$	133,847,699		$	97,808,327
Commitments and contingencies (Note 14)
Series A units subject to possible redemption, 9,965,000 units at a redemption value of $2.68 per unit and $2.47 per unit as of December 31, 2023 and 2022, respectively		26,686,397		$	24,651,442
Members’ deficit
Series A units, 245,300 units authorized, 245,300 units issued and outstanding as of December 31, 2023 and 2022, respectively		—			—
Series B units, 191,054,871 units authorized, 9,906,827 and 9,590,106 units issued and outstanding as of December 31, 2023 and 2022, respectively		—			—
Series C units, 1,748,264 units authorized, 1,584,327 and 1,336,067 units issued and outstanding as of December 31, 2023 and 2022, respectively		—			—
Additional paid-in capital		—			—
Accumulated deficit		(159,184,883	)		(121,659,065	)
Total members’ deficit		(159,184,883	)		(121,659,065	)
Total liabilities and members’ deficit	$	1,349,213		$	800,703

The accompanying notes are an integral part of these financial statements.

F-28

SCANTECH IDENTIFICATION BEAM SYSTEMS, LLC

STATEMENTS OF OPERATIONS

	For the Year Ended December 31,
	2023			2022
Operating expenses:
General and administrative expenses	$	6,283,770		$	1,503,506
Research and development expenses		3,238,925			2,894,864
Depreciation and amortization		36,634			52,545
Total operating expenses		9,559,329			4,450,915
Loss from operations		(9,559,329	)		(4,450,915	)
Other income (expense):
Interest expense		(10,251,094	)		(8,682,782	)
Change in fair value of derivative liabilities		649,244			(281,845	)
Change in fair value of warrant liabilities		(16,371,612	)		(1,873,658	)
Gains from extinguishment of debt		—			9,712
Total other income (expense):		(25,973,462	)		(10,828,573	)
Net loss	$	(35,532,791	)	$	(15,279,488	)
Net loss per unit:
Basic and diluted	$	(0.20	)	$	(0.26	)
Weighted average number of units:
Basic and diluted		188,579,085			67,134,921

The accompanying notes are an integral part of these financial statements.

F-29

SCANTECH IDENTIFICATION BEAM SYSTEMS, LLC

STATEMENTS OF MEMBERS’ DEFICIT

	Series A Preferred Nonvoting Units
	Non redeemable				Series B Units				Series C Profit Interest Nonvoting				Additional Paid-In			Accumulated			Members’
	Units		Amount		Units		Amount		Units		Amount		Capital			Deficit			Deficit
Balance as of December 31, 2021		245,300	$	—		9,472,482	$	—		1,336,067	$	—	$	—		$	(104,463,427	)	$	(104,463,427	)
Adjustment to shareholder receivables		—		—		—		—		—		—		(5,715	)		—			(5,715	)
Stock-based compensation		—		—		117,624		—		—		—		17,395			—			17,395
Preferred A Unit dividend		—		—		—		—		—		—		(11,680	)		(1,916,150	)		(1,927,830	)
Net loss		—		—		—		—		—		—		—			(15,279,488	)		(15,279,488	)
Balance as of December 31, 2022		245,300	$	—		9,590,106	$	—		1,336,067	$	—	$	—		$	(121,659,065	)	$	(121,659,065	)
Adjustment to shareholder receivables		—		—		—		—		—		—		(10,116	)		—			(10,116	)
Stock-based compensation		—		—		316,722		—		248,260		—		99,365			—			99,365
Preferred A Unit dividend		—		—		—		—		—		—		(89,250	)		(1,993,027	)		(2,082,277	)
Net loss		—		—		—		—		—		—		—			(35,532,791	)		(35,532,791	)
Balance as of December 31, 2023		245,300	$	—		9,906,827	$	—		1,584,327	$	—	$	—		$	(159,184,883	)	$	(159,184,883	)

The accompanying notes are an integral part of these financial statements.

F-30

SCANTECH IDENTIFICATION BEAM SYSTEMS, LLC

STATEMENTS OF CASH FLOWS

	Year Ended December 31,
	2023			2022
OPERATING ACTIVITIES
Net loss	$	(35,532,791	)	$	(15,279,488	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		36,634			52,545
Stock-based compensation expense		99,365			17,395
Gain from extinguishment of debt		—			(9,712	)
Interest expense		149,184			150,775
Change in fair value of derivative liabilities		(649,244	)		281,845
Change in fair value of warrant liabilities		16,371,612			1,873,658
Change in operating assets and liabilities:
R&D tax credit receivable		122,013			119,735
Prepaid and other current assets		(211,971	)		(1,413	)
Inventory		(249,844	)		—
Accounts payable		1,031,988			42,654
Accrued liabilities		1,815,775			(29,371	)
Accrued compensation		(390,730	)		(462,604	)
Accrued federal tax liability, penalties and interest		786,468			952,190
Interest payable		3,595,142			3,207,417
Interest payable to related parties		6,435,287			5,323,309
Deferred revenue		1,023,007			—
Payable to related parties		134,169			82,051
Net cash (used in) operating activities		(5,433,935	)		(3,679,014	)
INVESTING ACTIVITIES
Purchases of property, plant and equipment		(5,233	)		(53,932	)
Net cash (used in) investing activities		(5,233	)		(53,932	)
FINANCING ACTIVITIES
Proceeds from loans		6,216,732			3,855,000
Principal payments on finance lease liabilities		(6,651	)		(12,519	)
Repayment of loans		(520,688	)		(26,855	)
Adjustment to shareholder receivables		(10,116	)		(5,715	)
Net cash provided by financing activities		5,679,277			3,809,911
Net increase in cash during period		240,109			76,965
Cash, beginning of period		92,975			16,010
Cash, end of period	$	333,084		$	92,975
SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING ACTIVITIES
Conversion of interest payable to debt	$	2,661,100		$	(88,000	)

The accompanying notes are an integral part of these financial statements.

F-31

SCANTECH IDENTIFICATION BEAM SYSTEMS, LLC

NOTES TO FINANCIAL STATEMENTS

NOTE 1 — Description of Organization and Business Operations

Organization and Nature of Operations

ScanTech Identification Beam Systems, LLC (the “Company”), formed in 2011, is developing and deploying security screening systems that protect travelers and other members of the public from criminals, terrorists and other bad actors. It has developed a proprietary Computed Tomography scanning system that uses fixed-gantry technology to detect explosives, weapons, narcotics and other contraband.

On September 8, 2023, the Company signed a definitive Business Combination Agreement with Mars Acquisition Corp. (“Mars”) (Nasdaq: MARX). The combined company is expected to have an estimated post- transaction enterprise value of $110 million, consisting of an estimated equity value of $197.5 million and $48 million in net cash, assuming no redemptions by Mars’ public shareholders. On January 24, 2024, Mars experienced a partial redemption of $51 million. Net cash will come from Mars’ approximately $22 million of cash in trust (assuming no additional shareholder redemptions) and any third-party capital the Company is able to raise through the SPAC transaction.

Going Concern Consideration

As of December 31, 2023, the Company had $333,084 in cash, a significant working capital deficit of $132,580,524 and accumulated deficit of $159,184,883. For the year ended December 31, 2023, the cash flow used in operating activities was $5,433,935. The Company has no revenue as of the balance sheet date. The Company’s business plan is dependent on several factors, including securing customer agreements, achieving the Transportation Safety Administration’s APSS 6.2 certification, of which are uncertain to occur, and raising capital to fund operations. On September 8, 2023, the Company signed a business combination agreement (“Merger Agreement”) with Mars, a special purpose acquisition company. The Company’s strategic plan includes its business combination with Mars to assist the Company in its efforts to raise capital and grow its business.

The Company expects to continue to incur significant expenditures in pursuit of its growth, merger and capital raising plans and there are no assurances that any of those plans will be successful.

As discussed in Note 12, most of our indebtedness is in default or matures in less than twelve months and is presented as short-term debt in the Balance Sheets. Our operating losses raise substantial doubt about our ability to continue as a going concern for one year from the date the financial statements are issued or available to be issued. As a result, our independent registered public accounting firm included an explanatory paragraph in its report on our financial statements as of and for the years ended December 31, 2023 and 2022 with respect to this uncertainty.

We currently have almost no cash resources and significantly greater current liabilities than current assets. For 30 months, the majority of our funding has been advances from Seaport Group LLC Profit Sharing Plan (“Seaport”). Should Seaport cease to make such advances prior to us obtaining other sources of financing sufficient to pay its expenses and current liabilities, we would be unable to continue in business.

F-32

As of December 31, 2023 and 2022, our cash balance was $333,084 and $92,975, respectively. Our liquidity needs will be dependent both on the performance of our business and on the amount of proceeds we realize through the Business Combination. If we do not realize sufficient proceeds from the Business Combination to carry out our business plan or if our business does not perform as we expect, we may be required to pursue additional financing or take other measures to improve our liquidity. See “Risk Factors — ScanTech may require substantial additional funding to finance our operations, but adequate additional financing may not be available when we need it, on acceptable terms or at all.”

As a result of the foregoing, Management has determined that there is substantial doubt about the Company’s ability to continue as a going concern for one year from the date the financial statements are issued.

NOTE 2 — Restatement and Other Corrections of Previously Issued Financial Statements

The Company’s management completed an analysis in June 2024 and concluded $7,625,000 of the accrued expenses relating to the fiscal year ended December 31, 2019, were improperly excluded during the year ended December 31, 2019. Through this analysis, the Company concluded that a liability to a vendor was probable and reasonably estimable, and therefore it should have been accrued as at year ended December 31, 2019. Management prepared a quantitative and qualitative analysis of this error, in accordance with the U.S. SEC Staff’s Accounting Bulletin Nos. 99, Materiality, and 108, Quantifying Misstatements, and concluded the impact of the error is material to the Company’s previously reported interim financial statements as of the periods ended June 30, 2023 and September 30, 2023 and the annual financial statements as of and for the years ended December 31, 2023, 2022 and 2021. As a result, the accompanying financial statements as of and for the years ended December 31, 2023 and 2022 and related notes thereto, have been restated or revised, as applicable, to correct the error.

A description of the errors and their impacts on the previously issued financial statements are included below. The correction of the error had no impact on the statements of operations or statements of cash flows previously presented. The statements of members’ equity for the periods previously reported where impacted by the change in accumulated deficit and total members’ deficit as shown in the tables below.

	Year Ended December 31, 2023
	As Previously Reported			Adjustment			As Restated
Total assets	$	1,349,213		$	—		$	1,349,213
Accrued expenses and other current liabilities		1,796,258			7,625,000			9,421,258
Total current liabilities		126,222,699			7,625,000			133,847,699
Total liabilities		126,222,699			7,625,000			133,847,699
Accumulated deficit		(151,559,883	)		(7,625,000	)		(159,184,883	)
Total members’ deficit		(151,559,883	)		(7,625,000	)		(159,184,883	)

	Year Ended December 31, 2022
	As Previously Reported			Adjustment			As Restated
Total assets	$	800,703		$	—		$	800,703
Accrued expenses and other current liabilities		222,647			7,625,000			7,847,647
Total current liabilities		83,561,870			7,625,000			91,186,870
Total liabilities		90,183,327			7,625,000			97,808,327
Accumulated deficit		(114,034,065	)		(7,625,000	)		(121,659,065	)
Total members’ deficit		(114,034,065	)		(7,625,000	)		(121,659,065	)

F-33

	Year Ended December 31, 2021
	As Previously Reported			Adjustment			As Restated
Total assets	$	840,673		$	—		$	840,673
Accrued expenses and other current liabilities		252,018			7,625,000			7,877,018
Total current liabilities		71,823,322			7,625,000			79,448,322
Total liabilities		74,911,664			7,625,000			82,536,664
Accumulated deficit		(96,838,428	)		(7,625,000	)		(104,463,428	)
Total members’ deficit		(96,838,428	)		(7,625,000	)		(104,463,428	)

	Nine Months Ended September 30, 2023 (unaudited)
	As Previously Reported			Adjustment			As Restated
Total assets	$	734,469		$	—		$	734,469
Accrued expenses and other current liabilities		197,030			7,625,000			7,822,030
Total current liabilities		119,234,564			7,625,000			126,859,564
Total liabilities		119,234,564			7,625,000			126,859,564
Accumulated deficit		(144,658,261	)		(7,625,000	)		(152,283,261	)
Total members’ deficit		(144,658,261	)		(7,625,000	)		(152,283,261	)

	Six Months Ended June 30, 2023 (unaudited)
	As Previously Reported			Adjustment			As Restated
Total assets	$	824,638		$	—		$	824,638
Accrued expenses and other current liabilities		204,479			7,625,000			7,829,479
Total current liabilities		111,435,401			7,625,000			119,060,401
Total liabilities		111,452,518			7,625,000			119,077,518
Accumulated deficit		(136,268,316	)		(7,625,000	)		(143,893,316	)
Total members’ deficit		(136,268,316	)		(7,625,000	)		(143,893,316	)

NOTE 3 — Summary of Significant Accounting Policies

Basis of Presentation

Emerging Growth Company

F-34

Recently adopted accounting pronouncements

In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” which introduced an expected credit loss model for the impairment of financial assets measured at amortized cost. The model replaces the probable, incurred loss model for those assets and broadens the information an entity must consider in developing its expected credit loss estimate for assets measured at amortized cost. On January 1, 2023, we adopted ASU No. 2016-13 with no material impact to our financial condition, results of operations or cash flows.

Changes in Accounting Policies

The Company has consistently applied the accounting policies described in this Note 3 to all periods presented in these financial statements.

Risks and Uncertainties

The Company is currently in the development stage and has not yet commenced principal operations or generated revenue. The development of the Company’s projects is subject to a number of risks and uncertainties including, but not limited to, the receipt of the necessary permits and regulatory approvals, the availability and ability to obtain the necessary financing for the manufacturing and development of projects.

Use of Estimates

Cash and cash equivalents

The Company considers all highly liquid temporary cash investments with an original maturity of three months or less to be cash equivalents. The Company maintains its cash deposits with major financial institutions over the FDIC limit. There were no cash equivalents as of December 31, 2022. The Company’s exposure as of December 31, 2023 was $43,949.

Fair Value Measurement

	Level 1	Quoted prices in active markets for identical assets or liabilities that the entity has the ability to access.

	Level 2	Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets and liabilities.

F-35

Level 3

  Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets and liabilities.

Unless otherwise disclosed, the fair value of the Company’s financial instruments, including cash, prepaid expenses and other current assets, R&D tax credit receivable, accounts and other payables, accrued expenses, related parties payable, short-term bank borrowings, and current finance lease liabilities, approximate their recorded values due to their short-term maturities.

Prepaid expenses and other current assets

Prepaid expenses consist primarily of prepaid insurance premiums and retainers for services. Other current assets consist primarily of employee cash advances and security deposits.

Property and Equipment

We evaluate our long-lived assets each quarter for indicators of potential impairment. Indicators of impairment include current period losses combined with a history of losses, or when changes in other circumstances indicate the carrying amount of an asset may not be recoverable. The evaluation for long-lived assets is performed at the lowest level of identifiable cash flows, which is the enterprise level (“the Company”). The assets of the Company with indicators of impairment are evaluated for recoverability by comparing its undiscounted future cash flows with its carrying value. If the carrying value is greater than the undiscounted future cash flows, we then measure the asset’s fair value to determine whether an impairment loss should be recognized. If the resulting fair value is less than the carrying value, an impairment loss is recognized for the difference between the carrying value and the estimated fair value. Impairment losses on property and equipment are recorded as a component of SG&A. There are no impairment charges for the years ended December 31, 2023, and December 31, 2022.

Inventories

Inventory is valued at the lower of cost or net realizable value. Costs include materials and direct labor on a first-in-first-out basis. We review inventory quantities on hand and record provisions for estimated excess, slow moving, and obsolete inventory. The evaluation of the carrying value of our inventories takes into consideration such factors as historical and anticipated future sales compared to quantities on hand and the prices we expect to obtain for products. We adjust excess and obsolete inventories to net realizable value, and write-downs of excess and obsolete inventories are recorded as a component of cost of revenues. See Note 9 — Inventories for further details.

Leases

The Company recognizes right-of-use (ROU) assets and lease liabilities for leases with terms greater than 12 months. Leases are classified as either finance or operating leases. This classification dictates whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease. As of December 31, 2023, the Company has only an operating lease. As of December 31, 2022, the Company has both finance and operating leases.

F-36

The Company’s right-of-use asset relates to two forklifts, which include an option to purchase at the end of the leases. Both leases had bargain purchase options that were exercised. The Company’s lease agreement does not contain residual value guarantees or material restrictions or covenants.

Revenue Recognition

The Company’s revenues are derived primarily from the sale of hardware. The Company recognizes its revenues net of any value-added or sales tax.

The Company sells a high proportion of its baggage scanning systems to a limited number of distributor customers. Baggage scanning systems including fixed gantry detector and image-processing units and conveyance systems are sold as a combined baggage scanning system. Training services designed to enable distributor customers to service baggage scanning systems they sell to end users of such systems. Distributor agreements also include a restocking fee which is applicable until control of goods transfers (at shipping point).

	The Company determines revenue recognition through the following steps:

	·  Identification of the contract, or contracts, with a customer

	·  Identification of the performance obligations in the contract

	·  Determination of the transaction price

	·  Allocation of the transaction price to the performance obligations in the contract

	·  Recognition of revenue when, or as, a performance obligation is satisfied.

	Contracts and Performance Obligations

The Company accounts for a contract with a customer when there is an approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of the consideration is probable. The Company’s performance obligations consist mainly of transferring control of products identified in the contracts or purchase orders. For each contract, the Company considers the obligation to transfer products and services to the customer, which are distinct, to be performance obligations.

Transaction Price and Allocation to Performance Obligation. Transaction prices of products or services are typically based on contracted rates.

If a contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price based on the estimated relative standalone selling prices of the promised products or services underlying each performance obligation. The Company determines standalone selling prices based on the price at which the performance obligation could be sold separately.

F-37

Recognition of Revenue

Revenue is recognized when, or as, obligations under the terms of a contract are satisfied, which occurs when control of the promised products or services is transferred to customers. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring products or services to a customer.

Product revenue is generally recognized when the customer obtains control of the Company’s product, which occurs at a point in time, upon shipment based on criteria evaluated below:


	·  The customer does not simultaneously receive and consumes the benefits provided by the entity’s performance as the entity performs.

	·  The Company’s performance does not create or enhance an asset that the customer controls as the asset is created or enhanced.

	·  The Company’s performance creates an asset with an alternative use to the entity.

Principal vs. Agent

When our products and services are sold to distributors, we assess whether or not we are acting as a principal or an agent in the arrangement. The assessment is based on whether we control the specified products and services at any time before they are transferred to the customer. We have determined that in our transactions with distributors, we act as a principal based on criteria evaluated below:

	·,.	The entity is primarily responsible for fulfilling the promise to provide the specified good or service.

	·	The entity has inventory risk before the specified good or service has been transferred to a customer or after transfer of control to the customer.
	·	The entity has discretion in establishing the price for the specified good or service. Establishing the price that the customer pays for the specified good or service may indicate that the entity has the ability to direct the use of that good or service and obtain substantially all of the remaining benefits.
		We act as principal in all transactions and thus record the gross amount when earned.

Restocking fees

Disaggregation of Revenue

Revenue is disaggregated from contracts between geography and by reportable operating segment, which the Company believes best depicts how the nature, amount, timing, and uncertainty of revenues and cash flows are affected by economic factors.

Contract Balances

Contract liabilities are included within the deferred revenues in the Balance Sheets. The Company does not have any material contract assets.

Contract liabilities	In US$
Balance as of December 31, 2022		—
Additions during the year		1,023,007
Balance as of December 31, 2023		1,023,007

Deferred revenue represents the Company’s obligation to transfer goods or services to its customers for which it has already received consideration (or the amount is due) from the customer. The Company’s deferred revenue balance primarily relates to contract advances.

F-38

The Company has not recognized any revenue from contracts with customers during the years ended December 31, 2023 and 2022.

Research and Development

Unit-Based Compensation

The Company’s 2012 Equity Incentive Plan (the “2012 Plan”) and 2018 Equity Incentive Plan provide for noncash equity-based compensation through the grant of Series C units. In addition, the Company has issued Series B units as compensation to advisors and vendors. Unit-based compensation is based on the fair value of the member units on the grant date, as determined using an option pricing method (“OPM”). The OPM considers the various terms that would affect the distributions to each class of equity based upon the estimated total equity value of the Company on the grant date, the estimated timing of a future liquidity event including probabilities of different events occurring, the level of seniority among the different classes of securities, dividend policy, and the contractual conversion ratios. In addition, the method implicitly considers the effect of the liquidation preferences as of the estimated future liquidation event and date. Under the OPM, each class of equity is modeled as a call option with a distinct claim on the total equity value of the Company. The characteristics of each class of security, including but not limited to any liquidation preference of the preferred units, determine the class of security’s’ claim on the equity value.

Net loss per unit

The Company computes basic net loss per unit by dividing net loss attributable to members by the weighted average number of units outstanding. Diluted loss per unit is computed by giving effect to all potentially dilutive issuances of units using the treasury stock method for warrants and the if-converted method for convertible notes. When the Company incurs a net loss, the effect of the Company’s outstanding warrants and convertible notes are not included in the calculation of diluted loss per unit as the effect would be anti-dilutive. Accordingly, basic and diluted net loss per unit is identical.

NOTE 4 — Net Loss Per Unit

The Company has issued Series A, Series B and Series C units, as discussed in Note 16 — Members’ Deficit. Series A units are entitled to a preferred rate of return and Series C units are equivalent to profits interests. Only Series B units have voting rights. All Series B and Series C units are used in the computation of net loss per unit.

The Company has issued a number of warrants, exercisable at $0.01 per unit at any time from the warrant agreement execution dates to the exercise period end dates. Depending on the warrant agreement, the exercise period varies from seventh to tenth anniversary of the warrant agreement execution date. There were 181,148,044 and 62,828,562 warrants outstanding as of December 31, 2023, and 2022, respectively. Given the nominal exercise price, penny warrants are considered to be outstanding in the context of basic earnings per share, and thus the units are included in the computation of basic and diluted earnings per unit as of December 31, 2023, and 2022, respectively. However, the puttable warrants associated with the Bay Point note in the amounts of 3,839,359 and 6,562,642 are anti-dilutive for the year ended December 31, 2023, and 2022, respectively. Therefore, the Bay Point warrants are excluded from the calculation of diluted net loss per unit for the years ended December 31, 2023, and 2022, respectively.

F-39

The following table sets forth the computation of the Company’s basic and diluted loss per unit:

	Year Ended December 31,
	2023			2022
Numerator:
Net (loss)	$	(35,532,791	)	$	(15,279,488	)
Dividend		(2,082,277	)		(1,927,830	)
Earnings available for common units	$	(37,615,068	)	$	(17,207,318	)
Denominator:
Weighted average common units outstanding (basic)		188,579,085			67,134,921
Dilutive effect of potential membership units		—			—
Weighted average common units outstanding (diluted)		188,579,085			67,134,921
Basic earnings per unit	$	(0.20	)	$	(0.26	)
Diluted earnings per unit	$	(0.20	)	$	(0.26	)

Series A units, some of which are redeemable and some of which are nonredeemable, are excluded in the net loss per unit calculation above as they are not participating units. Series C units are non-voting units. These units are included in the basic and diluted weighted Series B units and Series C units outstanding calculation above. Warrants are also included in the above calculation of basic and diluted weighted average Series B units and Series C units outstanding because they are fully exercisable at any time by the holders.

NOTE 5 — Property and Equipment, Net

Property and equipment, net as of December 31, 2023 and 2022 consists of the following:

	Estimated useful life	December 31, 2023			December 31, 2022
Finance lease ROU asset	4 – 5 years	$	33,662		$	33,662
Computers and equipment	3 – 5 years		162,386			175,011
Less: Accumulated depreciation and amortization			(114,010	)		(95,234	)
Property and equipment, net		$	82,038		$	113,439

Depreciation and amortization were $36,634 and $52,545 for the years ended December 31, 2023, and 2022, respectively. Two assets in the amount of $17,858 were disposed of in the year ended December 31, 2023. Three assets in the amount of $132,281 were disposed of in the year ended December 31, 2022. During the years ended December 31, 2023, and 2022, the Company focused primarily on research and development which were expensed as incurred as the costs had no alternative future use.

NOTE 6 — Research and Development (R&D) Tax Credit Receivable

The Company accounts for Georgia R&D tax credits as current assets on its Balance Sheets. Georgia R&D tax credits are calculated at the time of annual state income tax filing and considers R&D tax credits to be assets once the Georgia Department of Revenue approves the R&D tax credit calculation. The Company is permitted to elect to apply credits to future state employee payroll withholding or income taxes. When the Company elects to apply R&D tax credits to employee payroll withholding, application of R&D tax credits reduces the liability for employee payroll withholding for the quarter in which such tax credits are applied.

F-40

The following table summarizes the activity related to the Company’s R&D tax credits:

Balance as of January 1, 2022	$	518,453
Additions for current year tax credits earned		—
Tax credits applied		(119,735	)
Balance as of December 31, 2022	$	398,718
Additions for current year tax credits earned		—
Tax credits applied		(122,013	)
Balance as of December 31, 2023	$	276,705

NOTE 7 — Related Party Transactions

ScanTech/IBS IP Holding Company, LLC

The Company licenses certain key intellectual property from ScanTech/IBS IP Holding Company, LLC (“ScanTech IP Holdco”). The license agreement between ScanTech IP Holdco and the Company provides for a perpetual, royalty free license and survivability in the event of a Chapter 11 bankruptcy of ScanTech IP Holdco. ScanTech IP Holdco has no employees and is a manager-managed LLC. John Redmond and Dolan Falconer are the controlling managers of ScanTech IP Holdco. As of December 31, 2023, and 2022, there were no liabilities or payables owed to ScanTech IP Holdco from the Company and there were no receivables due to the Company from ScanTech IP Holdco.

John Redmond

Azure, LLC (“Azure”) and NACS, LLC (“NACS”) have certain outstanding notes with the Company, all of which are secured by the assets of the Company. Azure and NACS are controlled by Mr. Redmond, the Chairman of the Board of Directors. As of December 31, 2023, and 2022, the Company’s outstanding loan balances with these entities, including accrued interest, were approximately $54.3 million and $47.9 million, respectively.

On October 11, 2013, the Company issued NACS a note with an interest rate of 8% and a default interest rate of 12% (the “2013 Note”). The 2013 Note was amended on June 1, 2016, to provide NACS with the right to convert principal and accrued interest on the note into Series A and Series B units of the Company at a conversion price of $1.00 and $0.47, respectively. As amended, the 2013 Note had a maturity date of December 31, 2018.

The following table lists the accrued interest and principal balances of the notes issued to related parties associated with John Redmond, the Company’s Chairman.

	As of December 31, 2023						As of December 31, 2022
Entity	Interest Payable		Principal Payable		Total		Interest Payable		Principal Payable		Total
Azure, LLC	$	1,904,740	$	6,831,987	$	8,736,727	$	860,133	$	6,586,987	$	7,447,120
NACS, LLC		20,939,396		11,493,949		32,433,345		17,288,998		11,493,949		28,782,947
Assumed notes		9,385,014		3,770,119		13,155,133		7,874,215		3,770,119		11,644,334
Total	$	32,229,150	$	22,096,055	$	54,325,205	$	26,023,346	$	21,851,055	$	47,874,401

F-41

Mr. Redmond also paid expenses on behalf of the Company which were not included as principal balance in any of Mr. Redmond’s outstanding loans. As of December 31, 2023, and 2022, Mr. Redmond’s outstanding expense advances were $0.7 million and $0.6 million, respectively. These items are presented in the Balance Sheets under the caption of related parties payables.

On October 25, 2021, the Company issued Mr. Redmond a warrant to acquire a number of membership interests equal to 3.0% of issued and outstanding Series B units at a purchase price of $0.01 per unit. On the same date, the Company issued Mr. Redmond a warrant to acquire 1.333% of issued and outstanding Series B units at a purchase price of $0.01 per unit. The Company determined that neither of the warrants was indexed to the entity’s own equity, and therefore they should not be classified as equity. As such, these warrants were accounted for as liabilities.

On October 2, 2019, Mr. Redmond also purchased from another party (i) a secured note with a principal amount of $200,000 and an interest rate of 12% per annum and (ii) a warrant to acquire 2.26% of issued and outstanding Series B units for each $1,000,000 of initial principal and accrued unpaid interest, with an exercise price of $0.01 per unit. Principal and accrued interest on the note were $465,351 and 400,904 as of December 31, 2023, and 2022, respectively.

As of December 31, 2023, and 2022, the Company was in default on all notes held by NACS and Mr. Redmond but was not in default on the notes held by Azure.

Dolan Falconer

Mr. Falconer, the CEO of the Company, paid for certain expenses on behalf of the Company. In addition, the Company owes Mr. Falconer deferred compensation of $929,646 and $840,134 as of December 31, 2023 and 2022, respectively and related party expenses of $188,136 and $132,732 as of December 31, 2023 and 2022, respectively. The amounts were presented in the Balance Sheets under the caption of accrued compensation.

Ben DeCosta

Mr. DeCosta is a member of the Board of Directors of the Company. Mr. DeCosta has an outstanding promissory note with the Company with a principal balance of $250,000 and a stated interest rate of 15% per annum. As of December 31, 2023, and 2022, the balance of Mr. DeCosta’s promissory note were $619,897 and $534,047, respectively, including all principal and unpaid accrued interest. The principal of $250,000 was presented in the Balance Sheets under the caption of short-term debt from related parties, net. The interest payables in the amount of $369,897 and $284,047 as of December 31, 2023, and 2022, respectively, were presented in the Balance Sheets under the caption of interest payable to related parties.

Alice Wilson

Mrs. Wilson is the sister of Mr. Falconer. Mrs. Wilson has extended an expense advance on behalf of the Company. The balance of Mrs. Wilson’s expense advance as of December 31, 2023 and 2022 was $20,000. The amount was presented in the Balance Sheets under the caption of related parties payable.

NOTE 8 — Leases

F-42

Management utilized a valuation specialist to determine the Company’s incremental borrowing rate. The valuation analysis looked at preferred return rates for the Series A units (which are a debt-like security similar to mezzanine financing) and the Company’s cost of borrowing and adjusted for the spread between CCC and B rated corporate bonds. This resulted in an incremental borrowing rate of 16.45%.

On June 27, 2023, the Company entered into a twelve-month operating lease with VJ Properties, LLC for combined office, workshop, manufacturing and warehouse space located in Buford, Georgia. As of December 31, 2023, the Company had one operating lease. The Company currently pays a rent of $11,750 per month for the leased space located in Buford, Georgia. Since this lease has a lease term of 12 months and does not include an option to purchase the underlying asset that the Company is reasonably certain to exercise, it is considered a short-term lease. The Company elects not to apply the recognition requirements of ASC 842 to short-term leases. By electing this practical expedient, short-term leases do not need to be reported on the Balance Sheets.

The components of lease expense were as follows:

	December 31, 2023		December 31, 2022
Amortization of ROU Assets – Finance Leases	$	5,160	$	9,305
Interest on Lease Liabilities – Finance Leases		294		1,886
Short-term Lease Cost		141,000		125,700
Total Lease Cost	$	146,454	$	136,891

Supplemental Balance Sheets information related to leases was as follows:

	December 31, 2023			December 31, 2022
Finance lease ROU assets, gross	$	33,662		$	33,662
Accumulated amortization		(33,662	)		(28,503	)
Finance lease ROU assets, net		—			5,159
Finance lease liabilities, current portion		—			6,355
Finance lease liabilities, less current portion		—			—
Total financing lease liabilities	$	—		$	6,355

	December 31, 2023			December 31, 2022
Weighted Average Lease Term – Finance Leases		0.00 year			0.61 year
Weighted Average Discount Rate – Finance Leases		0.00	%		16.45	%

NOTE 9 — Inventories

Inventory is valued at the lower of cost or net realizable value. Costs include materials and direct labor, and is computed on a first-in-first-out basis. The Company evaluates the carrying value of its inventories taking into consideration of anticipated future sales compared to quantities on hand and the prices the Company expects to obtain for products in its various markets. The Company adjusts excess and obsolete inventories to net realizable value and write-downs of excess and obsolete inventories are recorded as a component of cost of revenues. As of December 31, 2023, there was no revenue recognized and the associated cost of revenues was also equal to zero based on the matching principle under the U.S.GAAP.

F-43

The following table summarizes the Company’s inventories, net:

	December 31, 2023		December 31, 2022
Raw materials and parts	$	182,455	$	—
Work-in-progress	$	—	$	—
Finished goods	$	67,389	$	—
Total inventories	$	249,844	$	—

NOTE 10 — Federal Tax Liability, Penalties and Interest

From the first quarter of 2017 through October 31, 2023, the Company failed to remit U.S. federal taxes from amounts withheld from employee wages, and also failed to remit the employer portion of such taxes. In addition, during the same period, the Company did not file quarterly federal tax returns on Form 941 to report income taxes and payroll taxes withheld from employee wages. As a result, the Company has an accrued payroll tax liability on its Balance Sheets that amounted to $5.42 million and $4.63 million as of December 31, 2023 and 2022, respectively. The Company has devised and implemented a plan to become compliant in its obligations, including hiring appropriate counsel, preparing and filing appropriate historical filings, making payments, and engaging in discussions with appropriate parties, including the IRS. There can be no assurance that that the IRS will agree to the terms of a settlement and not instead demand immediate payment of the amounts due. Even if a settlement offer is accepted, the terms of any settlement may require substantial upfront payments, which we may not have sufficient funds available for. In addition, willful failure to comply with statutory obligations to collect, account for and pay over taxes imposed on employees is a federal criminal offense. There can be no assurance that the Department of Justice will not commence criminal charges against the Company and management for failure to remit payroll taxes to the IRS.

The failure to deposit penalty and associated interest was calculated and recorded in Balance Sheets under the caption of accrued federal tax liability, penalties and interest.

From December 15, 2023 to December 31, 2023, the Company filed the federal tax returns on time on form 941, 943 and 944 to report income taxes withheld and payroll taxes withheld from employee wages and paid in full to IRS for the employee taxes withheld and the employer portion of the payroll taxes for the then current payroll periods.

Please see Note 18 — Subsequent Events for more information.

NOTE 11 — Unit-Based Compensation

The 2012 Plan has an aggregate authorized limit of 15% of Series C units outstanding at any given time. The total authorized Series C units were 1,748,264 and 1,670,724 as of December 31, 2023 and 2022, respectively. As of December 31, 2023 and 2022, there were 1,584,327 and 1,336,067 units of Series C membership interests issued and outstanding, respectively.

On June 1, 2023, the Company’s Board of Directors approved the accelerated vesting of 248,260 Plan units to its CEO, Mr. Dolan Falconer, and the 248,260 units were fully vested immediately. No units were awarded under the Plan as of December 31, 2022.

F-44

The following table presents a summary regarding Series B units issued as compensation to advisors and vendors:

	Total Units			Weight-Average Grant Date Fair Value Per Share
Nonvested as of December 31, 2021		—		$	—
Granted		353,203			0.01
Vested		(117,624	)		0.01
Forfeited		—			—
Nonvested as of December 31, 2022		235,580		$	—
Granted		81,142			0.14
Vested		(316,722	)		0.04
Forfeited		—			—
Nonvested as of December 31, 2023		—		$	—

NOTE 12 — Fair Value Measurements

The following table presents information about the Company’s assets and liabilities that are measured at fair value on a recurring basis as of December 31, 2023 and 2022, respectively, and indicates the fair value hierarchy of the valuation inputs the Company utilized.

Description	Level		December 31, 2023		December 31, 2022
Liabilities
Warrant liabilities		3	$	22,024,165	$	5,652,553
Derivative Liabilities		3	$	922,834	$	1,572,078

NOTE 13 — Debt and Warrant Liabilities

All of our indebtedness is in default or matures in less than twelve months and is presented as short-term debt in the Balance Sheets as of December 31, 2023. A few notes issued by a certain service provider in exchange for a payable for services, and certain indebtedness issued to Azure, Bay Point Capital Partners, LP and aforementioned service provider were long-term debt as of December 31, 2022. Long-term debt was amounted to $6,621,457 in aggregate on principal and accrued interest as of December 31, 2022. Interest expense includes the interest on the notes and amortization of any original issue discounts, which includes debt issuance costs and the relative fair value of warrants issued contemporaneously with certain notes.

F-45

All of our indebtedness is secured by a continuing security interest in all of our property and assets.

	Maturities		Effective Rate		For the Year Ended December 31, 2023		For the Year Ended December 31, 2022
Seaport notes		2023		12%		12,670,200		4,681,000
John Redmond notes		2018 – 2024		12.00% – 14.50%		22,096,055		21,851,055
Catalytic notes		2020		12%		1,563,796		1,421,633
Seed financing notes		2024		12%		6,503,456		6,424,145
Bay Point notes		2023		15%		813,633		670,000
Total Principal					$	43,647,140	$	35,047,833
Unamortized discount, including debt issuance costs						—		(148,890	)
Accrued interest (compounded)						45,348,977		37,979,648
Total debt					$	88,996,117	$	72,878,591
Reported as:
Short-term debt					$	88,996,117	$	66,257,134
Long-term debt						—		6,621,457
Total					$	88,996,117	$	72,878,591

John Redmond notes

NACS note

The NACS note is subordinated to Seaport and has collateral security rights with ScanTech.

The principal and accrued interest on the NACS note was $32,433,345 and $28,782,947 as of December 31, 2023 and 2022, respectively.

Azure notes

The Company has issued multiple notes to Azure, which is an affiliate of and controlled by John Redmond. These notes are pari-passu in capital seniority with NACS:

						Principal and Accrued Interest
						For the Year Ended		For the Year Ended
Issuance date	Maturities		Interest Rate			December 31, 2023		December 31, 2022
January 1, 2021		March 31, 2024		12.00	%	$	985,227	$	874,339
January 1, 2021		March 31, 2024		12.00	%	$	4,803,224	$	4,020,239
October 25, 2021		March 31, 2024		14.50	%	$	547,938	$	474,391
October 25, 2021		March 31, 2024		14.50	%	$	1,232,860	$	1,067,379
October 1, 2022		March 31, 2024		14.50	%	$	1,167,478	$	1,010,773

F-46

Assumed notes

On September 12, 2012, the Company issued to another party a note with a principal balance of $3,270,119, an interest rate of 8% per annum, a default interest rate of 12% and a maturity date of December 31, 2018. The note was subsequently acquired from the original noteholder by NACS. Principal and accrued interest on the note as of December 31, 2023 and 2022 were $11,991,755 and $10,642,073, respectively.

On October 2, 2019, Mr. Redmond purchased from another party (i) a secured note with a principal amount of $300,000 and an interest rate of 12% per annum and (ii) a warrant to acquire 2.26% of issued and outstanding Series B units for each $1,000,000 of initial principal and accrued unpaid interest, with an exercise price of $0.01. Mr. Redmond may exercise the warrant at any time and from time to time, in whole or in part (but not as to a fractional unit). If at any time any of the principal and interest outstanding on the senior secured promissory notes issued by the Company and held by NACS is converted into any equity membership interests in the Company, the warrant will be deemed to have opted to exercise, without any further action on its part, the same proportionate amount of this warrant as that portion of the NACS notes converted by NACS. Principal and accrued interest on the note as of December 31, 2023 and 2022 were $698,027 and $601,356, respectively.

On October 2, 2019, Mr. Redmond also purchased from another party (i) a secured note with a principal amount of $200,000 and an interest rate of 12% per annum and (ii) a warrant to acquire 2.26% of issued and outstanding Series B units for each $1,000,000 of initial principal and accrued unpaid interest, with an exercise price of $0.01 per unit. Principal and accrued interest on the note as of December 31, 2023 and 2022 were $465,351 and $400,904, respectively.

Seaport notes

Pursuant to an intercreditor agreement, Seaport note is senior in priority of payment to notes issued to NACS and John Redmond. The principal and accrued interest on the note were $12,670,200 and $6,252,014 as of December 31, 2023, and 2022, respectively.

Catalytic note and warrant

On January 23, 2019, the Company issued a note to Catalytic Holdings I LLC (“Catalytic”) with an interest rate of 12.0% accruing from March 15, 2019, a principal amount of $1,080,000 and a maturity date of April 30, 2019. The principal amount of this note is subject to a 20% original issue discount. As a result, the Company received cash in the amount of $900,000. Principal and accrued interest on the note as of December 31, 2023 and 2022 were $2,221,321 and $1,983,322, respectively.

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On June 26, 2019, the Company entered into a consulting agreement with Alchemy Advisory LLC (“Alchemy”), a subsidiary of Catalytic. In exchange for the business and strategic advice service from Alchemy, the Company agreed to issue to Alchemy warrants which grant Alchemy the ten-year right to purchase membership interests representing voting common stock of the Company with a per share exercise price of $0.01 per unit and representing 1.0% of the outstanding common membership interests and membership interest equivalents of the Company.

On May 18, 2023, Catalytic Holdings I LC was awarded a summary judgment against the Company in Company Kings County New York state court. On July 14, 2023, Catalytic notified ScanTech that it would be presenting the court a proposed order for settlement of its summary judgment, scheduled with the court on August 7, 2023. The proposed order was in the amount of $1,563,796 in satisfaction of Catalytic’s indebtedness with the Company. On September 7, 2023, the court granted Catalytic both the order and judgment amount of $1,563,796 plus accruing interest at a rate of 12% per annum from October 6, 2020. These amounts are consistent with the amounts on the Company’s Balance Sheets.

Bay Point note and warrant

On August 22, 2018, the Company issued a promissory note to Bay Point Capital Partners, LP (“Bay Point”), with an interest rate of 15%, a default interest rate of 20%, a principal amount of $670,000 and a maturity date of December 1, 2023. Principal and accrued interest on the note as of December 31, 2023 and 2022 were $1,188,921 and $1,080,210, respectively. The Bay Point note is in default.

On December 15, 2022, the company executed a forbearance agreement with Bay Point. In this agreement, the Company agreed to increase the principal amount owing to Bay Point from $670,000 to $813,633 as of November 20, 2022. In addition to the interest accrued, the Company also agreed to pay Bay Point cumulative legal fees in the amount of $115,000.

In November 2023, the Company further agreed to pay $1,400,000 exit fees, $116,850 legal fees and $89,220 late fees on unpaid interests and principal. The exit fees, legal fees and late fees amounted to $1,606,070 as of December 31, 2023 was recorded in accrued expenses and other current liabilities in Balance Sheets.

Seed financing notes

The Company obtained financing from individual lenders in a principal amount of approximately $6.5 million and issued notes to said lenders with stated interest rates between 7.8% and 12% and default interest rates between 15% and 18% between 2014 and 2022. Each noteholder has a continuing security interest in all of the Company’s property and assets. All such notes were in default as of December 31, 2023 and 2022, except for a note with a small noteholder that matures on September 30, 2024.

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Contemporaneously with the issuance of the seed financing notes, the Company issued warrants to purchase Series B units at an exercise price of $0.01 per unit. The warrants typically expire ten years after issuance and are each exercisable for up to approximately 3.0% of the total issued and outstanding Series B units. See Note 17 — Members’ Deficit for further discussion of Series B warrants.

John Redmond also has an intercreditor agreement with the Seed Financing noteholders which provides for drag-along conversion and certain collateral agency rights under certain terms and conditions.

NOTE 14 — Commitments and Contingencies

Tax Matters

From the first quarter of 2017 until October 31, 2023, the Company failed to remit U.S. federal taxes from amounts withheld from employee wages, and also failed to remit the employer portion of such taxes. In addition, during the same period, the Company did not file quarterly federal tax returns on Form 941 to report income taxes and payroll taxes withheld from employee wages. As a result, the Company has an accrued payroll tax liability on its Balance Sheets that amounted to $5.42 million and $4.63 million as of December 31, 2023 and 2022, respectively.

For the payroll period from November 1, 2023, to November 30, 2023, the payments on income taxes withheld and the employee and employer portion of the payroll taxes were made on December 15, 2023. The failure to deposit penalty and associated interest was calculated and recorded in Balance Sheets under the caption of accrued federal tax liability, penalties and interest.

From December 15, 2023, to December 31, 2023, the Company filed the federal tax returns on time on form 941, 943 and 944 to report income taxes withheld and payroll taxes withheld from employee wages and paid in full to IRS for the employee taxes withheld and the employer portion of the payroll taxes for the then current payroll periods.

The Company is subject to a city tax lien from the City of Buford, Georgia, for the tax years 2018 and 2019, and 2022, in the amounts of $975, $9,955 and $403, respectively.

Charging Order

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Payments Triggerable by Business Combination

In addition to the above, the Company has certain agreements that provide for payments upon completion of a business combination transaction such as that contemplated by the BCA.

Pursuant to the ScanTech Operating Agreement, if the Company receives, or the debt or equity holders of the Company receive as a distribution from the Company or as proceeds relating to the sale of their interests, $20 million in proceeds or other consideration, including stock or other securities, in respect of their equity or debt interests in the Company, whether in connection with the liquidation, sale, recapitalization, merger, initial public offering or other transaction, the distribution of profits or other proceeds or otherwise, the Company shall pay to York Capital (“York Capital”) (i) 20% of all such amounts in excess of $20.0 million but less than $100.0 million, and (ii) 10% of all such amounts equal to or in excess of $100.0 million but less than $200.0 million. The Company has no payment obligation to York with respect to (i) proceeds or other consideration used solely for working capital purposes, including, without limitation, proceeds received in connection with a debt or equity investment in the Company.

On January 8, 2020, the Company entered into a consulting agreement with MG Partners, LLC (the “Consultant”). The Consultant was engaged to provide certain referral and other strategic financing consulting services for a term of one year. Thereafter, the MG Partners, LLC consulting agreement automatically renewed for subsequent six month terms, until terminated by either party. As compensation for such services, the Consultant was entitled to receive a fee for any debt or equity financing procured by MG Partners, LLC. No such amount was payable to the Consultant as of December 31, 2023 or 2022. Between 2.5% – 5.0% of the proceeds of the Business Combination may be due to the Consultant in the event of sale of the Company during the term of the agreement, and for a period of two years thereafter.

During the fourth quarter 2023, Ellenoff Grossman and Schole LLP (“EGS”), the Company’s legal counsel, agreed to receive delay payments on the service fees for services provided to the Company. As of December 31, 2023, the outstanding payment due was $256,869 and deferral service fee of $553, 554. The fees are contingent upon the Company’s ability to successfully complete the business combination. In the event that the Company is unable to complete the business combination, EGS will not be paid for the services provided.

NOTE 15 — Income Taxes

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NOTE 16 — Series A Units

Series A Units

As of December 31, 2023 and 2022, the Company had 9,965,000 Series A units authorized and outstanding with a stated value of $1 per unit. Series A Units entitle the holder to receive an eight percent (8%) per annum rate of return on the unrecovered capital contribution of such holder.

Mezzanine Classification

Liquidation Preference

Voting

The Series A units confer no voting rights, except as otherwise required by applicable law.

Other Accounting Matters

Dividends on redeemable Series A units are included in Accumulated Deficit and accrued in Series A units subject to possible redemption.

As of December 31, 2023 and 2022, the Company had Series A units subject to possible redemption of $26,686,397 and $24,651,442, respectively. This includes the original investment in the amount of $10,000,000.

NOTE 17 — Members’ Deficit

Series A Units

The Company has 245,300 units of Series A units authorized and outstanding as of December 31, 2023 and 2022. Series A units entitle the holder to receive an eight percent (8%) per annum rate of return on the unrecovered capital contribution of such holder, and such holder shall receive priority in distributions with respect to such preferred return.

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As of December 31, 2023 and 2022, the Company had accrued dividends payable to Series A unit holders of $376,399 and $329,077, respectively.

Series B Units

The Company has authorized 191,054,871 Series B units. The Series B units entitle the holder to receive a proportionate share of all distributions after payment of the preferred return and the return of capital on the Series A units.

As of December 31, 2023 and 2022, the Company had 9,906,827 and 9,590,106 Series B units outstanding, respectively.

Series C Units

As of December 31, 2023 and 2022, there were 1,748,264 of Series C membership interests authorized, and 1,584,327 and 1,336,067 units of Series C membership interests issued and outstanding, respectively.

Warrants and Options

The Company has issued warrants in connection with notes issued between 2014 and 2021. Each warrant entitles the holder to one Series B unit at an exercise price of $0.01 per unit.

As of December 31, 2023 and 2022, the Company had 11,491,154 and 10,926,198 B and C units outstanding, respectively. See Note 13 — Debt and Warrant Liabilities, for further discussion of warrants.

NOTE 18 — Subsequent Events

Federal Payroll Tax Liability

From January 1, 2024 to the April 15, 2024, the Company filed the federal tax returns on Form 941, 943 and 944 to report income taxes withheld and payroll taxes withheld from employee wages and paid in full to IRS for the employee taxes withheld and the employer portion of the payroll taxes for the then current payroll periods.

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Business Combination Agreement

On April 2, 2024, the Company entered into Amendment No. 2 to the Business Combination Agreement, which provides that the merger consideration will be a number of shares of Pubco Common Stock with an aggregate value equal to One Hundred Ten Million U.S. Dollars ($110,000,000) minus (or plus, if negative) the amount of the Closing Net Debt that exceeds Twenty Million U.S. Dollars ($20,000,000). In addition, every issued and outstanding Ordinary Share that is not redeemed shall be converted automatically to (i) one share of Pubco Common Stock and (ii) one additional (1) share of Pubco Common Stock, or a convertible security convertible or exercisable for one (1) share of Pubco Common Stock upon consummation of the Business Combination.

On April 2, 2024, Mars entered into a definitive subscription agreement (the “Subscription Agreement”) with Polar Multi-Strategy Master Fund (the “Investor”), Mars Capital Holdings Corporation (the “Sponsor”), and ScanTech for Investor to provide ScanTech up to $1,000,000 in funding for working capital expenses in connection with the Business Combination. Per the terms of the Subscription Agreement, Investor is entitled to receive repayment of any amounts funded under the Subscription Agreement in addition to one newly issued share of ScanTech AI Systems Inc. per dollar provided under the Subscription Agreement upon the closing of the business combination. ScanTech received $1M that was drawn from the Polar note via transfer from the SPAC sponsor with a contingent liability of 10,000 PubCo shares due to the sponsor, if the business combination closes. If the transaction does not close, ScanTech must issue 0.1% of the total outstanding units to the sponsor.

In order to facilitate the completion of the Business Combination, on April 17, 2024, ScanTech entered into Amendment No. 3 to the Business Combination Agreement to extend the outside date for a second time to September 30, 2024. No other changes to the Business Combination Agreement were made in Amendment No. 3.

Subsequent to December 31, 2023, in various dates in January 2024, ScanTech secured agreements from NACS, Azure, and the majority of its Series A seed financing holders to convert their outstanding indebtedness to equity upon the consummation of the business combination, but the specific terms of such conversion have not yet been agreed upon. The Company is continuing to secure conversion term sheets for the remaining holders including Catalytic, and Steele Interests which are the only Series A seed financing holders to not yet sign a conversion agreement.

Seaport Bridge Financing

On March 24, 2024, the Company signed a bridge financing note with Seaport Group SIBS, LLC, with a principal amount of $421,200. The terms of the bridge financing are separate from the existing Seaport financing already in place with the Company. The Bridge Financing has a maximum principal draw amount of up to $1,000,000, has a maturity date of June 30, 2024, an annual interest rate of 12%, and is pari-passu in seniority to the existing Seaport financing. In addition, at the consummation of the Business Combination, the note is to be repaid in full out of the proceeds of the transaction and Seaport Group SIBS, LLC is to be issued 1 share for every $1 lent to the Company under the terms of the bridge financing.

Bay Point Term Sheet

On April 24, 2024, the Company signed a term sheet agreement with Bay Point Capital Partners, LP, defining the terms of the conversion of Bay Point’s indebtedness with the Company into equity simultaneous with the consummation of the Business Combination. Per the term sheet, Bay Point is to convert its total indebtedness, including any accrued interest and fees, into equity equal to 120% its total indebtedness as of the date of the consummation of the Business Combination. Successful conversion also releases the Company from any and all claims Bay Point may have.

NOTE 19 — Events (Unaudited) Subsequent to the Date of the Independent Auditors Report

Settlement and Release Agreement

On June 18, 2024, the Company signed a definitive Settlement Agreement and Mutual Release Agreement with a vendor. Upon execution of the agreement, the Company shall pay to the vendor a deposit totaling $50,000 in two payments. Upon a business combination before September 30, 2024, the vendor shall receive 742,049 common shares of Pubco in exchange for a full release of all claims, which includes a $7.625 million outstanding balance, which is recorded in accrued expenses as of December 31, 2023 and 2022. In addition, upon the business combination the Company shall pay to an affiliate of the vendor $161,787. In the event the business combination does not consummate before September 30, 2024, the vendor shall retain all of its rights as prior to the execution of the Settlement Agreement and Mutual Release Agreement.

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On September 20, 2024, certain lenders, including Catalytic and Bay Point have agreed to material economic arrangements under the Conversion and Mutual Release Agreement which provides for the debt conversion at the Closing of its existing indebtedness, including principal and accrued interest, into a predetermined number of Pubco Common Stock upon the consummation of the Business Combination. This Agreement also provides for the cancellation of any existing indebtedness, warrants or derivatives held by the investor, upon the consummation of the Business Combination. In the event the Closing of the Company Merger and listing of the Pubco Common Stock on NASDAQ does not occur on or before December 31, 2024, this Agreement is automatically terminated.

On September 25, 2024, Steele and its affiliates have agreed to material economic arrangements under the Loan Exchange and Release Agreement which provides for the exchange of its existing warrants into a predetermined number of Pubco Common Stock upon the consummation of the Business Combination. In the event the Closing of the Company Merger and listing of the Pubco Common Stock on NASDAQ does not occur on or before December 31, 2024, this Agreement is automatically terminated.

On September 25, 2024, Steele and Seaport have agreed to material economic arrangements under the Credit and Security Agreement that provides for the exchange of its existing indebtedness, including principal and accrued interest, for a senior secured term loan totaling $3,000,000 for 36 months and a senior secured term loan totaling $14,296,909 for 60 months, respectively effective upon the closing of the Business Combination Agreement. All outstanding principal and accrued and unpaid interest is due and payable in full on the Maturity Date. Interest shall accrue at a fixed per annum rate of 9.00%. The aggregate principal amount of the term loan, including any additional advances, plus all other permitted indebtedness, shall not exceed $20,000,000 on the Closing Date without the prior written consent of all of the parties.

On September 22, 2024, the Seed Financing note holders have agreed to material economic arrangements under the Creditor Conversion Agreement which provides for the debt conversion at the Closing of its existing indebtedness, including principal and accrued interest, into a predetermined number of Pubco Common Stock upon the consummation of the Business Combination. This Agreement also provides for the cancellation of any existing indebtedness, warrants or derivatives held by the investor, upon the consummation of the Business Combination. In the event the Closing of the Company Merger and listing of the Pubco Common Stock on NASDAQ does not occur on or before December 31, 2024, this Agreement is automatically terminated.

On September 25, 2024, Seaport and Steele also have agreed to material economic arrangements under the intercreditor agreement that provides for certain governance and intercreditor relationship agency between Seaport and Steele, both as senior lenders to Pubco, to take effect simultaneous to the consummation of the business combination.

On September 30, 2024, Mars and ScanTech, among other parties, have entered into Amendment No. 4 to the Business Combination Agreement, which sets forth that every issued and outstanding ordinary share that is not redeemed and sold between the Closing and the 90th day after the Closing, shall receive two (2) extra shares of Pubco Common Stock ninety days following the Closing or such other period as may be agreed by parties to the Business Combination Agreement. See the subsection entitled “The Business Combination Proposal — Amendments to the Business Combination Agreement” for additional information.

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On October 10, 2024, the Company’s customer, VisionTec, issued a change order to modify the original purchase order.

On January 2, 2025, the ScanTech successfully consummated its merger with Mars Acquisition Corp.

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Exhibit 99.3

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF SCANTECH

You should read the following discussion in conjunction with our financial statements and related notes included elsewhere in this proxy statement/prospectus/consent solicitation. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results and the timing of selected events could differ materially from those anticipated in these forward-looking statements as a result of various factors, including, but not limited to, those set forth under “Risk Factors” and elsewhere in this proxy statement/prospectus/consent solicitation.

Overview

Our mission is to develop and deploy security screening systems that protect travelers and other members of the public from criminals, terrorists and other bad actors. We have developed a proprietary fixed- gantry Computed Tomography scanning system that detects explosives, weapons, narcotics and other contraband.

Our initial market focus is domestic and international aviation checkpoints. However, we believe a significant global market opportunity also exists for deploying our scanners in (i) other government facilities such as border crossings, seaports, military bases, embassies, federal buildings, prisons and postal facilities and (ii) the private sector at manufacturing plants, entertainment facilities, power plants, petrochemical facilities, convention centers, schools, sports stadiums and other highly-trafficked public buildings or venues.

Our SENTINEL fixed-gantry scanner has already achieved several third-party certifications, including the TSA’s Tier 2 Explosive Detection Certification. Certification to the TSA’s Accessible Property Screening System 6.2.0 Explosive Detection Standard and to the European Civil Aviation Conference Explosive Detection System for Cabin Baggage Certification are in advanced stages.

We believe that our scanner systems and fixed-gantry CT technology have advantages and improved threat detection capacity as compared to traditional rotating-gantry systems.

Our SENTINEL scanners are designed to be deployed at security checkpoints. They can be quickly installed and easily maintained without major infrastructure modifications to existing checkpoints.

Most CT security scanners on the market are based on rotating-gantry technology, which was first developed in the 1970s for use in medical imaging. Rotating gantry involves a single X-ray tube and detectors opposite this tube. These revolve around the object being scanned, generating images which are reconstructed to produce a three-dimensional image.

SENTINEL Scanner Description

SENTINEL’s fix-gantry CT architecture incorporates four (4) discrete pairs of fixed multi-energy X-ray generators and detector arrays. Each generator/ detector pair is optimally configured to provide non- traditional planar slices significantly expanding the robustness, reliability and repeatability of image data reconstruction and improving the system’s ability to discriminate/interrogate threat materials and hidden objects. The orientation of the generators/detectors yield three (3) discrete slices of the target for interrogation: 1) Perpendicular to the tunnel; 2) 45° angle along the Belt from Entrance to Exit, and; 3) 45° angle backwards along the Belt from Exit to Entrance. The three slices of metadata are used to reconstruct a three- dimensional map of the effective atomic numbers (Zeff) and mass densities of the scanned contents. The projections in this innovative geometry provide three unique planes while the projections of conventional CT systems are essentially in a single plane. Three integrated & interlaced slices through an object versus the typical single plane slice of data in rotating-gantry CT improves spatial recognition, particularly in high clutter situations, as the four (4) X-ray projections are traveling through unique paths for a given area of interest. Coupled with few-view CT reconstruction and advanced threat detection algorithms, SENTINEL’S architecture expands the robustness, reliability and repeatability of the measurement data.

The figure below depicts the SENTINEL’s fixed-gantry projection geometry showing the four X-ray sources tunnel entrance, exit, top and side projections. The red box depicts the traditional 90° planer slice perpendicular to the conveyor. Two additional 45° planar slices (not shown) are also created.

SENTINEL Scanner Installation

First and foremost, the SENTINEL has been designed for easy deployment and installation at domestic and international checkpoints. Following production, assembly and factory acceptance testing, SENTINEL systems, simulators and peripheral equipment are packaged and marked in accordance with TSA packaging and marking requirements for transportation security screening equipment. The system is shipped directly to the customer’s site in one piece along with ingress and egress conveyors, primary and auxiliary viewing stations and peripheral equipment in three simple shipping crates. We assign an installation site lead to coordinate system receipt, rigging unloading, installation and start-up. For installed systems, the installation site lead collects data, performs on-site functional testing, and prepares a commissioning report. For each system installed, the commissioning report will document i) Visual Inspection; ii) Operational/ Functional Test; iii) Image Quality Test; and, iv) Explosive Simulant Detection Test. Because the system is delivered to the site in one piece, the installation, setup, startup and functional test process is typically completed in four to six hours if the checkpoint has been prepared for system setting.

SENTINEL Scanner Maintenance

Modular construction of SENTINEL plays a major role in the system’s serviceability and ensures fast field service to get the machine back on line. Furthermore, as system upgrades and enhancements are designed, engineered, tested and approved, respective modules can easily be changed-out in the field. System electrical and control components are mounted on four (4) back-plates that are easy to inspect, basic troubleshoot, and remove & replace if necessary. All modules are individually certified by Underwriter’s Laboratory (UL) in addition to the entire machine being UL certified. The four back-plate modules are located behind the same exterior panel and can easily be accessed by an authorized service technician. If a module is diagnosed with a problem, the entire module is removed by unplugging the wiring harness connectors, unscrewing four (4) nuts, removing the module and simply installing a new module, which takes five to ten minutes to complete. The defective module is then returned to ScanTech for detailed troubleshooting, evaluation and if economical, repair. Likewise, X-ray generators are a modular monoblock design hermetically enclosing the X-ray tube, high-voltage power supply, collimator, and cooling system. The replacement of an X-ray generator takes less than an hour as the monoblock is mounted on a factory laser- aligned mounting frame. The monoblock is removed by unbolting four (4) bolts plus two (2) connectors. Simply remove and replace the unit with a new X-ray monoblock and the system is ready to scan. No alignment of the X-ray monoblock is required because of the pre-aligned precision of the X-ray generator and detector array mounting frames, so an X-ray monoblock change out is simply a ‘pull-plug-scan’ service call. Detector Arrays can also be easily replaced. Each array is a modular unit mounted on a precision mounting bracket or frame. To replace the detector board(s), one must merely remove the access plate(s), unplug the communication & power connectors, remove the array bracket or frame, and repeat the process to reinstall. SENTINEL’s modular design provides a low-cost component upgrade path, reduced system downtime, faster field service and troubleshooting, and lower maintenance costs.

SENTINEL Scanner Operation

In similar fashion to current protocols at aviation checkpoint security stations, ‘carry-on’ baggage and other approved ‘carry-on’ items are loaded onto the SENTINEL’s conveyor and queued for scanning through the system’s tunnel. Once loaded onto the conveyor belt, each item passes through the system’s X-ray inspection tunnel, and within a matter of seconds, reappears at the opposite end. Instead of a rotating gantry, SENTINEL’s four fixed independent and synchronized X-ray sources project X-ray images of scanned items onto the system’s four independent arrays of detectors where various signatures associated with the materials the X-rays interact with inside of the tunnel are measured or calculated. Advanced and proprietary algorithms provide highly reliable automatic threat detection, not only differentiating between threatening and non-threatening materials, but also specifically identifying the items as benign (such as face cream,) or dangerous (such as explosives), as well as drugs and other hazardous materials. During a scan, four separate high-definition visual images are generated and displayed on the system’s high definition monitor. Operators can access vertical, horizontal and ±45o snapshots of each item being scanned and will also be able to access a 3D reconstructed image of the scanned item. This supplies the operator with the necessary visual tools to identify threats which otherwise would be difficult to distinguish. During the inspection process, the image scrolls in the direction of conveyor travel to simulate the conveyor moving a target through the inspection tunnel. The system provides real time storage of a selectable number of individual scanned items, which are maintained in a historical memory buffer depicted at the bottom of the screen. Touch screen access allows screeners to easily move back and forth between items in the system’s immediate memory. In addition, item scans can easily be saved to permanent storage and subsequently re-loaded and analyzed as if the scan was just made. SENTINEL also has the ability to wirelessly transmit large bits of data in real time to any number of on- and off-site ancillary locations. Systems can be connected to a network in a matrix networked architecture allowing remote system threat reporting and operation, remote management of diagnostics, remote reporting of operator performance, remote handling of the data of interest and even remote and automatic software upgrades. Any supervisor, manager or regulatory agency, and any number of other off-site personnel can look in on any particular system in action as dictated by conduct of operations.

SENTINEL systems are based on the company’s proprietary fixed-gantry CT technology, which employs four fixed X-ray generators and detector arrays to create a three-dimensional visualization of the object being scanned. Each generator/detector array is optimally configured to provide planar projections that significantly expand the robustness, reliability and repeatability of image data and volumetric reconstruction to improve the discrimination and interrogation of threat materials and hidden objects.

While nearly identical in size and overall appearance to traditional rotating-gantry scanners, we believe that SENTINEL has several important advantages, including modular design, improved image quality, increased throughput, operation on simple 120V power and plug and play installation.

Our proprietary operator-friendly SENTINEL software, which includes modules that we refer to as Automatic Threat Identification and Ray Trace Biopsy, enables SENTINEL to automatically identify materials and substances hidden inside a scanned bag or parcel, by measuring X-ray attenuation data and calculating Zeff number and mass densities by volumetric element and then comparing these calculated values to values of known materials. Potential threat materials are then highlighted on the operator’s screen and flagged for further action by a screener. ATI and RTB data can be provided to the operator or alternatively directed to remote auxiliary viewing or centralized monitoring stations.

SENTINEL successfully completed TSA’s Tier 2 Explosive Detection Standard testing in March 2018. Our application for APSS 6.2 certification is in advanced stages, and we currently anticipate receiving APSS 6.2 certification in the first quarter of 2025. We were invited by ECAC to submit SENTINEL for ECAC certification in 2021, and we expect to commence EDSCB certification testing and receive certification in early 2024. We have applied for certification of our SENTINEL CT scanner for placement on TSA’s Air Cargo Screening Technology List as a small bore air cargo visual inspection system for inspecting small parcels and packages, and expect to receive such certification in late 2025. We are also designing and developing a large bore fixed gantry CT scanner for air cargo screening of break-bulk cargo and larger packages and parcels, and except to receive ACSTL certification of this scanner in 2025.

CRITICAL ACCOUNTING POLICIES AND APPLICATION OF CRITICAL ACCOUNTING ESTIMATES AND ASSUMPTIONS

Following is a discussion about the critical accounting estimates and assumptions impacting our consolidated financial statements.

For a description of our significant accounting policies, see Note 3 in our amended and restated audited financial statements for the years ended December 31, 2023 and 2022, and Note 2 in our unaudited financial statements for the period ending June 30, 2024.

Of these policies, the following are considered critical to an understanding of our consolidated financial statements as they require the application of the most subjective and the most complex judgments: Use of estimates, Fair value measurements, Inventories, Revenue recognition and Research and Development.

For a discussion of recently adopted accounting standards, see Note 3 in our amended and restated audited financial statements for the years ended December 31, 2023 and 2022, and Note 2 in our unaudited financial statements for the period ending June 30, 2024.

Use of Estimates

Fair Value Measurement

Level 1

Quoted prices in active markets for identical assets or liabilities that the entity has the ability to access.

Level 2

Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets and liabilities.

Level 3

Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets and liabilities.

Inventories

Revenue Recognition

The Company’s revenues are derived primarily from the sale of hardware. The Company recognizes its revenues net of any value-added or sales tax.

The Company expects to sell a high proportion of its baggage scanning systems to a limited number of distributor customers. Baggage scanning systems including fixed gantry detector and image-processing units and conveyance systems are sold as a combined baggage scanning system. Training services designed to enable distributor customers to service baggage scanning systems they sell to end users of such systems. Distributor agreements also include a three percent restocking fee which is applicable until control of goods transfers (at shipping point).

The Company determines revenue recognition through the following steps:

Identification of the contract, or contracts, with a customer

Identification of the performance obligations in the contract

Determination of the transaction price

Allocation of the transaction price to the performance obligations in the contract

Recognition of revenue when, or as, a performance obligation is satisfied. Contracts and Performance Obligations

Transaction Price and Allocation to Performance Obligation. Transaction prices of products or services are typically based on contracted rates.

Recognition of Revenue

Product revenue is generally recognized when the customer obtains control of the Company’s product, which occurs at a point in time, upon shipment based on criteria evaluated below:

The customer does not simultaneously receive and consumes the benefits provided by the entity’s performance as the entity performs.

The Company’s performance does not create or enhance an asset that the customer controls as the asset is created or enhanced.

The Company’s performance creates an asset with an alternative use to the entity.

Principal vs. Agent

When our products and services are sold to distributors, during the sales process, we assess whether or not we are acting as a principal or an agent in the arrangement. The assessment is based on whether we control the specified products and services at any time before they are transferred to the customer. We have determined that in our transactions with distributors, we act as a principal based on criteria evaluated below:

The entity is primarily responsible for fulfilling the promise to provide the specified good or service.

The entity has inventory risk before the specified good or service has been transferred to a customer or after transfer of control to the customer.

The entity has discretion in establishing the price for the specified good or service. Establishing the price that the customer pays for the specified good or service may indicate that the entity has the ability to direct the use of that good or service and obtain substantially all of the remaining benefits.

We act as principal in all transactions and thus record the gross amount earned within total revenue.

Restocking fees

Disaggregation of Revenue

Contract Balances

Contract liabilities are included within the deferred revenues in the Balance Sheets. The Company does not have any material contract assets.

Deferred revenue that is estimated to be recognized during the following twelve-month period is recorded as deferred revenues in the Consolidated Balance Sheets.

The Company recorded its first revenue from contracts with customers during the three and six months ended June 30, 2024, and had no revenue from contracts with customers in the three and six months ended June 30, 2023.

The Company did not recognize any revenue from contracts with customers during the years ended December 31, 2023 and 2022.

Research and Development

Components of Results of Operations

We have not been profitable since inception, and as of June 30, 2024, our accumulated deficit was $(184.4) million and as of December 31, 2023, our accumulated deficit was $(159.2) million. Since inception, we have financed our operations primarily through different forms of debt, primarily promissory notes.

Operating expenses primarily include general and administrative, which includes payroll, and research and development expense. As of September 30, 2024 and December 31, 2023, the largest component of our operating expenses is general and administrative which has increased meaningfully in the last twelve months resulting primarily from expenses related to capital markets activities for the business combination.

During the three months ended September 30, 2024 and 2023, operating expenses were $2.2 million $2.9 million, respectively, an decrease of 24% during the period.

During the nine months ended September 30, 2024 and 2023, operating expenses were and $6.5 million and $6.0 million, respectively, an increase of 8% during the period.

	Three Months Ended September 30,
	2024		2023
Operating expenses:
General and administrative expenses	$	1,378,388	$	2,142,618
Research and development expenses		814,539		778,680
Depreciation and amortization		8,137		8,668
Total operating expenses	$	2,201,064	$	2,929,966

	Nine Months Ended September 30,
	2024		2023
Operating expenses:
General and administrative expenses	$	3,863,403	$	3,523,743
Research and development expenses		2,604,500		2,464,306
Depreciation and amortization		24,376		28,733
Total operating expenses	$	6,492,279	$	6,016,782

	Twelve Months Ended December 31,
	2023		2022
Operating expenses:
General and administrative expenses	$	6,283,770	$	1,503,506
Research and development expenses		3,285,925		2,894,864
Depreciation and amortization		36,634		52,545
Total operating expenses	$	9,559,329	$	4,450,915

Research and Development Expense

Research and development expenses consist primarily of engineering and regulatory activities.

We expense R&D costs as incurred. We recognize expenses for certain development activities, such as software and hardware development and manufacturing, based on an evaluation of the progress to completion of specific tasks using data or other information provided to us by our vendors. Payments for these activities are based on the terms of the individual agreements, which may differ from the pattern of expenses incurred. Nonrefundable advance payments for goods or services to be received in the future for use in R&D activities are recorded as prepaid expenses. These amounts are recognized as an expense as the goods are delivered or the related services are performed, or until it is no longer expected that the goods will be delivered, or the services rendered. R&D activities account for a significant portion of our operating expenses. We expect our R&D expenses to increase significantly in future periods as we continue to implement our business strategy, which includes advancing our business plan, expanding our R&D efforts, including hiring additional personnel to support our R&D efforts, and seeking regulatory approvals.

General and Administrative Expense

General and administrative expenses consist primarily of personnel-related expenses for our finance, legal, human resources and administrative personnel, as well as the costs of information technology, professional services, insurance, travel, and other administrative expenses. We expect to invest in our corporate organization and incur additional expenses associated with transitioning to, and operating as, a public company, including increased legal, audit, tax and accounting costs, investor relations costs, higher insurance premiums and compliance costs. As a result, we expect that general and administrative expenses will increase in absolute dollars in future periods. General and administrative expenses consist primarily of personnel-related expenses for our finance, legal, human resources and administrative personnel, as well as the costs of information technology, professional services, insurance, travel, and other administrative expenses.

We expect to invest in our corporate organization and incur additional expenses associated with transitioning to, and operating as, a public company, including increased legal, audit, tax and accounting costs, investor relations costs, higher insurance premiums and compliance costs. As a result, we expect that general and administrative expenses will increase in absolute dollars in future periods.

Interest Expense

Interest expense consists of accrued and unpaid interest, including default interest, due on the Company’s outstanding promissory notes. Interest expense consists of accrued and unpaid interest, including default interest, due on the Company’s outstanding promissory notes.

Results of Operations

The results of operations presented below should be reviewed in conjunction with ScanTech’s unaudited financial statements as of three and six months ended September 30, 2024 and 2023, and audited financial statements for the years ended December 31, 2023 and 2022, and other information included elsewhere in this proxy statement/prospectus/consent solicitation.

The following table sets forth our statement of operations for the three and nine months ended September 30, 2024 and 2023 and the years ended December 31, 2023 and 2022 and the change between the two periods.

During the three months ended September 30, 2024 and 2023, our net loss was $(23.4) million and $(7.9) million, respectively. For the nine months ended September 30, 2024 and 2023, our net loss was $(47.6) million and $(23.1) million, respectively. For the years ended December 31, 2023 and 2022, our net loss was $(35.4) million and $(15.3) million, respectively. Our net losses during the respective periods all widened primarily resulting from an increase in all of our key operating expense line items. Our general and administrative expenses increased year over year primarily resulting from an increase in expenses related to the business combination, as well as additional costs associated with parts and labor associated with our Visiontec order. Changes in interest expense (increases year over year due to more debt and interest) and fair value changes in our warrant and derivative liabilities also impacted year over year results.

	Twelve Months Ended December 31,
	2023			2022
Other income (expense):
Interest expense	$	(10,251,094	)	$	(8,682,782	)
Change in fair value of derivative liabilities		649,244			(281,845	)
Change in fair value of warrant liabilities		(16,371,612	)		(1,873,658	)
Gains from extinguishment of debt		—			9,712
Total other income (expense):	$	(25,973,462	)	$	(10,828,573	)

	Three Months Ended September 30,
	2024			2023
Interest expense	$	(3,249,134	)	$	(2,627,510	)
Change in fair value of derivative liabilities		(529,546	)		281,783	)
Change in fair value of warrant liabilities		(17,452,684	)		(2,638,645	)
Other income (expense), net		—	)		—
Total other income (expense):	$	(21,231,364	)	$	(4,984,372	)

	Nine Months Ended September 30,
	2024			2023
Interest expense	$	(9,106,317	)	$	(7,427,555	)
Change in fair value of derivative liabilities		(1,104,939	)		(1,605,819	)
Change in fair value of warrant liabilities		(13,478,661	)		(14,120,580	)
Other income (expense), net.		(16,176	)		—
Total other income (expense):	$	(19,927,413	)	$	(23,153,954	)

General and Administrative Expense

During the three months ended September 30, 2024 and 2023, general and administrative costs were $1.3 million and $2.1 million, respectively, a year over year increase of 38%. During the nine months ended September 30, 2024 and 2023, general and administrative costs were $3.9 million and $3.5 million, respectively, an increase of 11% during the period. The increase during these periods was primarily due to an increase in expenses attributable to transaction related expenses in the form of professional services related to the business combination as well as expenses related to the Company’s production and delivery of units under its Visiontec order.

During years ended December 31, 2023 and 2022, general and administrative costs were $6.3 million and $1.5 million, respectively, a year over year increase of 320% during the period.

The increase during the comparable periods ended December 31, 2023 was due primarily to increased salary and overhead adjustments during the period.

In addition, during the years ended December 31, 2023 and 2022, the majority of the increase in expenses is attributable to an increase in transaction related expenses in the form of professional services related to the business combination. During the prior year period the Company was not involved in capital markets activities so our general and administrative expense was primarily for personnel expenses, travel and related costs.

Research and Development Expense

During the three months ended September 30, 2024 and 2023, research and development expenses were $0.8 million and $0.8 million respectively, with not a meaningful change year over year.

During the nine months ended September 30, 2024 and 2023, research and development expenses were $2.6 million and $2.4 million, respectively, a 6% increase.

During the years ended December 31, 2023 and 2022, research and development expenses were $3.2 million and $2.9 million, respectively, a 7% increase during the period.

The increase in research and development expense was attributable primarily to an increase in investment in the Company’s artificial intelligence software and continued investment in its proprietary algorithms with the anticipation of filing additional patents in the future.

Depreciation and Amortization

Depreciation and amortization was $0.008 million for the three months ended September 30, 2024 and $0.008 million for the three months ended September 30, 2023, a zero% decrease year over year. The change on an absolute basis was not meaningful.

Depreciation and amortization was $0.024 million and $0.028 million for the nine months ended September 30, 2024 and 2023, respectively, a 7% decrease year over year. The change on an absolute basis was not meaningful.

Depreciation and amortization was $0.04 million for year ended December 31, 2023, which was not a meaningful change compared to the year ended December 31, 2022.

Interest Expense

During the three months ended September 30, 2024 and 2023, interest expense was $(3.2) million and $(2.6) million, respectively, a 20% increase year over year.

During the nine months ended September 30, 2024 and 2023, interest expense was $(9.1) million and $(7.4) million, respectively, a 22% increase year over year.

During the years ended December 31, 2023 and 2022, interest expense was $(10.2) million and $(8.7) million, an increase of 17% during the period.

Interest expense during the periods includes all interest and any penalties — including default interest — accrued on our outstanding promissory notes. Some of our promissory notes that are in default are accruing default interest, which we characterize here as “penalties.” Interest expense in the relevant periods also increased resulting from an increase in the balance of our outstanding principal indebtedness particularly from Seaport during the periods.

Other Expense

Other expense during the three months ended September 30, 2024 and 2023 was $(0.5) million and $(6.9) million, a decrease of 93% during the period. During the period, the change in fair value of the warrant liability decreased 93%, accounting for the majority of the change during the period.

During the nine months ended September 30, 2024 and 2023, other expenses were $(14.1) million and $(13.4) million, a change of 5% during the period.

Other expense during the years ended December 31, 2023 was $(26.0) million and $(10.8) million, respectively, an increase of 142%. During the period, warrant liabilities increased 773%, the primary driver of the increase in other expense.

Trend Information

Other than as disclosed elsewhere in this proxy statement/prospectus/consent solicitation, we are not aware of any trends, uncertainties, demands, commitments or events that are reasonably likely to have a material effect on our revenues, net income, profitability, liquidity or capital resources, or that would cause reported financial information not necessarily to be indicative of future operating results or financial condition.

Liquidity and Capital Resources

To date, we have financed our operations primarily through the issuance of debt. Since our inception, we have incurred significant operating losses and negative cash flows. As of September 30, 2024 and December 31, 2023, we had an accumulated deficit of $(184.4) million and $(159.2) million, respectively. As of September 30, 2024 and December 31, 2023, the Company’s liabilities were significantly greater than its assets.

As of September 30, 2024 and December 31, 2023, we had cash of $0.1 million and $0.3 million respectively

We may not receive sufficient proceeds from the Business Combination to fund our operating expenses until at least 12 months after the date of our audited financial statements included in this proxy statement/ prospectus/consent solicitation. As a result of the foregoing, management has determined that there is substantial doubt about our ability to continue as a going concern.

In addition, on May 18, 2023, Catalytic Holdings I LLC was awarded summary judgement against the Company in Company Kings County New York state court. On July 14, 2023, Catalytic noticed ScanTech that it would be presenting the court a proposed order for settlement of its summary judgement, scheduled with the court on August 7, 2023. The proposed order was in the amount of $1,563,796 in satisfaction of Catalytic’s indebtedness with the Company. On September 7, 2023, the court granted Catalytic both the order and judgement amount of $1,563,796 plus accruing interest at a rate of 12% per annum from October 6, 2020. To date, this judgement has not had a meaningful impact on our liquidity or ability to obtain financing, although it could do so in the future.

We expect to incur significant expenses in connection with our ongoing activities as we continue to implement our business strategy. We will need additional funding in connection with these activities. Our future funding requirements, both short-term and long-term, will depend on many factors, including the level of sales, the expansion of our sales and marketing activities, the timing and extent of our spending to support our research and development efforts, investments in infrastructure, operating costs, expansion into other markets, and the costs of operating as a public company (including hiring additional personnel as well as increased director and officer insurance premiums, audit and legal fees, investor relations fees and expenses related to compliance with public company reporting requirements under the Exchange Act and rules implemented by the SEC and Nasdaq).

For the foreseeable future, we expect to continue financing our operations through the sale of equity, debt, borrowings under credit facilities or through potential collaborations with other companies, other strategic transactions or government or other grants. Adequate capital may not be available to us when needed or on acceptable terms. We do not currently have any committed external source of funds beyond the Business Combination. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our shareholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of shareholders. Debt financing and preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making acquisitions or capital expenditures. Debt financing would also result in fixed payment obligations. If we are unable to raise additional funds through equity or debt financings or other arrangements when needed, we may be required to delay, reduce, suspend or cease our research and development programs or any future commercialization efforts, which would have a negative impact on our business, prospects, operating results and financial condition. See the section entitled “Risk Factors” for additional risks associated with our substantial capital requirements.

Our operating losses raise substantial doubt about our ability to continue as a going concern for one year from the date the financial statements are issued or available to be issued. As a result, our independent registered public accounting firm included an explanatory paragraph in its report on our financial statements as of June 30, 2024 and 2023, and for the years ended December 31, 2023 and 2022 with respect to this uncertainty.

We currently have almost no cash resources and significantly greater current liabilities than current assets. For approximately 36 months, the majority of our funding has been advances from Seaport Group SIBS LLC, an affiliate of Seaport Global Asset Management, LLC (“Seaport”). Should Seaport cease to make such advances prior to us obtaining other sources of financing sufficient to pay its expenses and current liabilities, we would be unable to continue in business. Seaport may, at any time, terminate its funding arrangements and/or demand repayment of its advances, which amounted to approximately $14.7 million including accrued interest and principal as of September 30, 2024. Although we expect to enter into a term loan facility with Seaport, there can be no assurance that we will do so. In addition to the loan repayment obligations to Seaport, Seaport has the ability, for a nominal amount, to purchase Series B Units of ScanTech. As of June 30, 2024, Seaport had the right to acquire approximately 70% of the Series B Units of ScanTech as of such date. In addition to the obligation to repay Seaport, the Company has significant other current obligations, including, without limitation, approximately $6.0 million owed to the IRS with respect to unpaid employment taxes.

Seaport has agreed in principle with both Mars and ScanTech to exchange its current secured promissory note for long-term senior secured debt upon the consummation of the business combination. Documentation for the specific terms of this new long-term indebtedness has not yet been prepared and finalized by the parties.

ScanTech has issued several promissory notes to Azure LLC and NACS LLC, entities controlled by John Redmond, chairman of ScanTech’s board of directors. As of June 30, 2024 and December 31, 2023, approximately $57.7 million and $54.3 million of principal and interest was accrued under these notes. Azure and NACS have agreed to convert their existing indebtedness to equity upon the consummation of the Business Combination and to cancel any of their warrants at the time of the consummation, but the specific terms of such conversion have not yet been agreed upon. It is finalizing the terms of a conversion agreement with Catalytic and Bay Point. If ScanTech is unable to secure all of these conversion agreements, it will be difficult to consummate the Business Combination.

As of June 30, 2024 and December 31, 2023, our cash balance was $0.1 million and $0.3 million, respectively.

Our liquidity needs will be dependent both on the performance of our business and on the amount of proceeds we realize through the Business Combination. If we do not realize sufficient proceeds from the Business Combination to carry out our business plan or if our business does not perform as we expect, we may be required to pursue additional financing or take other measures to improve our liquidity. See “Risk Factors — ScanTech may require substantial additional funding to finance our operations, but adequate additional financing may not be available when we need it, on acceptable terms or at all.”

Comparison of the Three and Six Months Ended June 30, 2024 and 2023 and the Years Ended December 31, 2023 and 2022

The following table shows ScanTech’s cash flows provided by (used in) operating activities, investing activities and financing activities for the stated periods (dollars in millions):

	For the nine months ended September 30,			For the nine months ended September 30,
	2024			2023			Variance
Operating activities	$	(5.1	)	$	(4.1	)		(25)	%
Investing activities		—			—			NM
Financing activities		4.9			4.0			22	%

	For the year ended December 31,			For the year ended December 31,
	2023			2022			Variance
Operating activities	$	(5.4	)	$	(3.6	)		(50	)%
Investing activities		(.005	)		(0.05	)		(100	)%
Financing activities		5.7			3.8			50	%

Operating Activities

Net cash used in operating activities for the six months ended September 30, 2024 and 2023 was $(5.1) million and $(4.0) million, respectively. The increase was primarily due to an $3.0 million decrease in net income, offset by a $2.0 million increase in fair value of warrant liabilities, and $1.5 million change in assets and liabilities in the year over year period.

For the years ended December 31, 2023 and 2022 net cash used in operations was $(5.4) and $(3.6) million changed by $1.8 million, respectively. The increase was primarily due to a $20.0 million decrease in net income, offset by an $14 million change in fair value of the Company’s outstanding warrants, $(0.4) million decrease in inventory $(0.7) million decrease in the change in fair value of other derivatives, and a $4.7 million increase in changes in operating assets and liabilities, which included a $1.2 million increase interest payable to both related and unrelated parties and $1.0 million increase in accounts payable.

Investing Activities

No meaningful cash was used or generated during the September 30, 2024 and 2023 three month periods.

Net cash used in investing activities for the years ended December 31, 2023 and 2022 was $(5,233) and $(53,932), respectively.

Financing Activities

Net cash provided by financing activities for the nine months ended September 30, 2024 and 2023 was $4.9 million and $4.0 million, both driven by proceeds from new financings. These proceeds were used to fund operational cash needs.

Net cash provided by financing activities for the year ended December 31, 2023 was $5.7 million compared to $3.8 million for the year ended December 31, 2022, an increase of $1.9 million due primarily to the same increase in proceeds from new loans.

Indebtedness Conversion

ScanTech is working with its creditors to secure agreements to convert its existing indebtedness to equity upon the consummation of the Business Combination. ScanTech has secured agreements from the majority of its Series A investors, Azure, NACS, but the specific terms of such conversion have not yet been agreed upon. Bay Point has signed a definitive term sheet outlining the terms of its conversion. ScanTech is finalizing the terms of an additional agreement with Catalytic. If ScanTech is unable to secure all of these conversion agreements it may be difficult to consummate the Business Combination.

Seaport has agreed with both Mars and ScanTech to exchange its current secured promissory note for long-term senior secured debt upon the consummation of the business combination. Documentation for the specific terms of this new long-term indebtedness has not yet been finalized by the parties.

Off-Balance Sheet Arrangements

We did not have any off-balance sheet arrangements, as defined in the rules and regulations of the SEC, over the past three fiscal years, as of June 30, 2024 and for the fiscal year ending December 31, 2023.

Exhibit 99.4

MARS ACQUISITION CORP.

BALANCE SHEETS

	September 30, 2023		September 30, 2022
ASSETS
Current Assets
Cash	$	178,793	$	—
Prepaid expenses		149,164		—
Investments held in Trust Account .		72,587,820		—
Deferred offering costs associated with initial public offering		—		205,260
Total Assets	$	72,915,777	$	205,260
LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT)
Current Liabilities
Accrued expenses	$	16,363	$	2,224
Note payable – related party		—		228,246
Total Liabilities		16,363		230,470
COMMITMENTS AND CONTINGENCIES
Ordinary shares subject to possible redemption, 6,900,000 shares at redemption value of $10.52 per share		72,587,820		—
SHAREHOLDERS’ EQUITY (DEFICIT)
Ordinary shares, $0.000125 par value; 800,000,000 shares authorized; 2,392,000 and 1,725,000 shares issued and outstanding, respectively⁽¹⁾		299		216
Additional paid-in capital		—		24,784
Retained earnings (accumulated deficit)		311,295		(50,210	)
Total Shareholders’ Equity (Deficit)		311,594		(25,210	)
Total Liabilities and Shareholders’ Equity (Deficit)	$	72,915,777	$	205,260

(1) Excludes 6,900,000 shares subject to possible redemption as of September 30, 2023.

The accompanying notes are an integral part of these financial statements.

F-1

MARS ACQUISITION CORP.

STATEMENTS OF OPERATIONS

	Year ended September 30,
	2023			2022
Operating Expenses
General and administrative costs	$	521,582		$	2,718
Net loss from operations		(521,582	)		(2,718	)
Other Income
Investment income on Trust Account		2,207,820			—
Total other income		2,207,820			—
Net income (loss)	$	1,686,238		$	(2,718	)
Weighted average shares outstanding, basic and diluted
Redeemable Ordinary Shares – basic and diluted		4,272,329			—
Non-redeemable Ordinary Shares – basic and diluted		2,059,414			1,472,603
Basic and diluted net income (loss) per share
Redeemable Ordinary Shares – basic and diluted	$	0.27		$	(0.00	)
Non-redeemable Ordinary Shares – basic and diluted	$	0.27		$	(0.00	)

The accompanying notes are an integral part of these financial statements.

F-2

MARS ACQUISITION CORP.

STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (DEFICIT)

	ORDINARY SHARES				ADDITIONAL PAID-IN			RETAINED EARNINGS (ACCUMULATED			TOTAL SHAREHOLDERS’
	SHARES		AMOUNT		CAPITAL			DEFICIT)			EQUITY (DEFICIT)
Balance – September 30, 2021		1,000,000	$	125	$	—		$	(47,492	)	$	(47,367	)
Issuance of Founder shares		725,000		91		24,784			—			24,875
Net loss		—		—		—			(2,718	)		(2,718	)
Balance – September 30, 2022		1,725,000		216		24,784			(50,210	)		(25,210	)
Issuance of Private Placement shares		391,000		49		3,909,951			—			3,910,000
Issuance of representative shares		276,000		34		2,724,893			—			2,724,927
Fair value of rights		—		—		876,833			—			876,833
Offering costs		—		—		(430,921	)		—			(430,921	)
Remeasurement of Ordinary Shares subject to redemption		—		—		(7,105,540	)		(1,324,733	)		(8,430,273	)
Net income		—		—		—			1,686,238			1,686,238
Balance – September 30, 2023		2,392,000	$	299	$	—		$	311,295		$	311,594

The accompanying notes are an integral part of these financial statements.

F-3

MARS ACQUISITION CORP.

STATEMENTS OF CASH FLOWS

	Year ended September 30,
	2023			2022
Cash flows from operating activities
Net income (loss)	$	1,686,238		$	(2,718	)
Adjustments to reconcile net loss to net cash used in operating activities:
General and administrative costs paid by related party		—			2,718
Investment income received in Trust Account		(2,207,820	)		—
Change in operating assets and liabilities
Accrued liabilities		14,139			—
Prepaid Expenses		(149,164	)		—
Net cash used in operating activities		(656,607	)		—
Cash flows from investing activities
Cash deposited in Trust Account		(70,380,000	)		—
Net cash used in investing activities		(70,380,000	)		—
Cash flows from financing activities
Proceeds from note payable with related party		41,213			143,161
Payment of deferred offering costs by related party		—			(168,036	)
Extinguishment of note payable with related party		(269,459	)		—
Payment of underwriting fee and other offering costs		(1,466,354	)		—
Proceeds from sale of Units in IPO, including over-allotment		69,000,000			—
Proceeds from issuance of Founder shares		3,910,000			24,875
Net cash provided by financing activities		71,215,400			—
Net increase in cash		178,793			—
Cash – beginning of the year		—			—
Cash – end of the year	$	178,793		$	—
Supplemental disclosure of noncash activities
Deferred offering costs included in accrued expenses	$	—		$	2,224
Issuance of representative shares	$	2,724,927		$	—
Reclassification of offering costs related to public shares	$	(243,964	)	$	—
Remeasurement adjustment on public shares subject to possible redemption	$	(8,430,273	)	$	—

The accompanying notes are an integral part of these financial statements.

F-4

MARS ACQUISITION CORP.

NOTES TO THE FINANCIAL STATEMENTS

NOTE 1 — DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS

Mars Acquisition Corp. (“Mars”) is a Cayman Islands exempted company incorporated as a blank check company on April 23, 2021. Mars was incorporated for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses (“Business Combination”). Although Mars is not limited to a particular industry or geographic region for purposes of consummating a Business Combination, Mars intends to focus on opportunities in cryptocurrency and blockchain, automobiles, healthcare, financial technology, cyber security, cleantech, software, Internet and artificial intelligence, specialty manufacturing and any other related technology innovations market. On September 5, 2023, a Business Combination Agreement was entered into by Mars and ScanTech Identification Beam Systems, LLC (“ScanTech”), among others (see Note 6).

At September 30, 2023, Mars had not yet commenced operations. All activity through September 30, 2023 relates to Mars’ formation and initial public offering (the “Initial Public Offering” or “IPO”), which is described below. Mars will not generate any operating revenues until after the completion of an initial Business Combination, at the earliest. Mars will generate non-operating income in the form of interest income from the proceeds derived from the Initial Public Offering. Mars has selected September 30 as its fiscal year end date.

The registration statement for Mars’ Initial Public Offering was declared effective on February 9, 2023. On February 16, 2023, Mars consummated its Initial Public Offering of 6,900,000 Units (“Units” and, with respect to the Ordinary Shares included in the Units being offered, the “Public Shares”) at $10.00 per Unit, including 900,000 Units that were issued pursuant to the underwriters’ full exercise of their over-allotment option, generating gross proceeds of $69,000,000.

Simultaneously with the closing of the Initial Public Offering, Mars consummated the Private Placement (“Private Placement”) of 391,000 Units at a price of $10.00 per Unit to Mars’ sponsor, Mars Capital Holding Corporation, a British Virgin Islands company (“Sponsor”), generating gross proceeds of $3,910,000 (see Note 4).

Offering costs amounted to $4,398,891 consisting of $1,430,000 of cash underwriting fees, non-cash underwriting fees of $2,724,927 represented by the fair value of 276,000 representative shares issued to the underwriter (see Note 6), and $243,964 of other offering costs.

Upon the closing of the Initial Public Offering and Private Placement, $70,380,000 of the net proceeds of the sale of the Units in the Initial Public Offering and the Private Placement was placed in a Trust Account (the “Trust Account”) and may be invested by the trustee only in U.S. government treasury bills with a maturity of 185 days or less or in money market funds investing solely in U.S. Treasuries and meeting certain conditions under Rule 2a-7 under the Investment Company Act, and will not be released from the Trust Account until the earlier of: (i) the completion of a Business Combination or (ii) the distribution of the Trust Account.

Mars’ management has broad discretion with respect to the specific application of the net proceeds of its Initial Public Offering and Private Placement Units, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. Mars’ initial Business Combination must be with one or more operating businesses or assets with a fair market value equal to at least 80% of the net assets held in the Trust Account (excluding taxes payable on interest earned in the Trust Account) at the time Mars signs a definitive agreement in connection with the initial Business Combination. However, Mars will only complete a Business Combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act 1940, as amended, or the Investment Company Act.

F-5

Mars will provide holders of its Public Shares (the “Public Shareholders”) with the opportunity to redeem all or a portion of their Public Shares upon the completion of a Business Combination either (i) in connection with a shareholder meeting called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether Mars will seek shareholder approval of a Business Combination or conduct a tender offer will be made by Mars, solely in its discretion. The Public Shareholders will be entitled to redeem their Public Shares for a pro rata portion of the amount then in the Trust Account (initially approximately $10.20 per share, plus any pro rata interest earned on the funds held in the Trust Account and not previously released to Mars to pay its tax obligations).

If a shareholder vote is not required and Mars does not decide to hold a shareholder vote for business or other legal reasons, Mars will, pursuant to its amended and restated memorandum and articles of association:

(1)

conduct the redemptions pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, which regulate issuer tender offers; and

(2)

file tender offer documents with the SEC prior to completing our initial Business Combination which contain substantially the same financial and other information about the initial Business Combination and the redemption rights as is required under Regulation 14A of the Exchange Act, which regulates the solicitation of proxies.

Such provisions may be amended if a special resolution passed by holders of at least two-thirds of our issued and outstanding Ordinary Shares who, being entitled to do so, attend and vote at a general meeting for which notice specifying the intention to propose the resolution as a special resolution has been given or by way of unanimous written resolution of all of our shareholders. Whether or not Mars maintains its registration under the Exchange Act or our listing on Nasdaq, Mars will provide its Public Shareholders with the opportunity to redeem their Public Shares by one of the two methods listed above. Upon the public announcement of our initial Business Combination, if Mars elects to conduct redemptions pursuant to the tender offer rules, Mars or our Sponsor will terminate any plan established in accordance with Rule 10b5-1 to purchase our Ordinary Shares in the open market, in order to comply with Rule 14e-5 under the Exchange Act.

In the event Mars conducts redemptions pursuant to the tender offer rules, our offer to redeem will remain open for at least 20 business days, in accordance with Rule 14e-1(a) under the Exchange Act, and Mars will not be permitted to complete its initial Business Combination until the expiration of the tender offer period. In addition, the tender offer will be conditioned on Public Shareholders not tendering more than a specified number of Public Shares, which number will be based on the requirement that we will only redeem our Public Shares so long as (after such redemption) our net tangible assets will be at least $5,000,001 either immediately prior to or upon consummation of our initial Business Combination and after payment of underwriters’ fees and commissions (so that we are not subject to the SEC’s “penny stock” rules) or any greater net tangible asset or cash requirement which may be contained in the agreement relating to our initial Business Combination. If the Public Shareholders tender more shares than Mars has offered to purchase, Mars will withdraw the tender offer and not complete the initial Business Combination.

If, however, shareholder approval of the transaction is required by law or stock exchange listing requirements, or Mars decides to obtain shareholder approval for business or other legal reasons, Mars will conduct the redemptions in conjunction with a proxy solicitation pursuant to Regulation 14A of the Exchange Act, which regulates the solicitation of proxies, and not pursuant to the tender offer rules; and file proxy materials with the SEC.

Notwithstanding the foregoing, if Mars seeks shareholder approval of the Business Combination and Mars does not conduct redemptions pursuant to the tender offer rules, a Public Shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from redeeming its shares with respect to more than an aggregate of 15% of the Public Shares without the Mars’ prior written consent.

F-6

Mars will have only 12 months from the closing of this offering (or 18 months from the closing of this offering, if Mars extends the period of time to consummate a Business Combination) to complete its initial Business Combination. If Mars is unable to complete its initial Business Combination within such 12-month period (or 18-month period), Mars 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 us to pay our income taxes (less up to $50,000 of interest to pay dissolution expenses), 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 liquidating distributions, if any), subject to applicable law; and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law.

Mars’ Sponsor, officers and directors have entered into a letter agreement with Mars, pursuant to which they have agreed to waive their redemption rights with respect to any Founder Shares and any Public Shares held by them in connection with the completion of our initial Business Combination. In addition, Mars’ initial shareholders have agreed to waive their rights to liquidating distributions from the Trust Account with respect to any Founder Shares held by them if Mars fails to complete its initial Business Combination within the prescribed time frame. However, if Mars’ Sponsor or any of its officers, directors or affiliates acquires Public Shares in or after this offering, they will be entitled to liquidating distributions from the Trust Account with respect to such Public Shares if Mars fails to complete its initial Business Combination within the prescribed time frame.

Liquidity and management’s plan

In connection with Mars’s assessment of going concern considerations in accordance with Accounting Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” management believes that the funds which Mars has available following the completion of the Initial Public Offering and Private Placement may not be enough to sustain operations for a period of one year from the issuance date of these financial statements. If Mars is unable to complete the Extension or the Business Combination due to a lack of sufficient funds, Mars may be forced to cease operations and liquidate the Trust Account. In addition, following the Business Combination, if cash on hand is insufficient, Mars may need to obtain additional financing in order to meet our obligations. There is no assurance that Mars’ plans to consummate a business combination will be successful within the Combination Period as described above. As a result, there is substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the financial statement are issued or are available to be issued. The financial statements do not include any adjustments that might result from the outcome of the uncertainty.

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation

The accompanying unaudited financial statements have been prepared in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”) for interim financial information and pursuant to the rules and regulations of the SEC. In the opinion of management, all adjustments, consisting of normal recurring accruals, considered necessary for a fair presentation have been included. Operating results for the period from October 1, 2022 through September 30, 2023 are not necessarily indicative of the results that may be expected for the period ending September 30, 2023, or any future period.

Cash and cash equivalents

Mars considers all short-term investments with an initial maturity of three months or less when purchased to be cash equivalents. As of September 30, 2023 and September 30, 2022, there were $178,793 and $0 of cash and cash equivalents, respectively.

F-7

Investments in Trust Account

The funds held in the Trust Account can be invested in United States government treasury bills, notes or bonds having a maturity of 185 days or less or in money market funds meeting the applicable conditions under Rule 2a-7 promulgated under the Investment Company Act of 1940, as amended, until the earlier of the consummation of its first business combination and Mars’ failure to consummate a business combination within 12 months (or 18 months as applicable) from the consummation of the IPO.

Mars’ investments held in the Trust Account are classified as trading securities. Trading securities are presented on the balance sheet at fair value at the end of each reporting period. Gains and losses resulting from the change in fair value of investments held in Trust Account are included in investment income on Trust Account in the accompanying statements of operations. The estimated fair values of investments held in Trust Account are determined using available market information (see Note 8).

As of September 30, 2023 and September 30, 2022, Mars had $72,587,820 and $0 held in the Trust Account, respectively.

Emerging growth company

Mars is an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended, (the “Securities Act”), as modified by the Jumpstart our Business Startups Act of 2012, (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes- Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.

Further, section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Securities Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. Mars has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, Mars, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of Mars’ financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accountant standards used.

Use of estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statement.

Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statement, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates.

F-8

Ordinary shares subject to possible redemption

The Company accounts for its Ordinary Shares subject to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” Conditionally redeemable Ordinary Shares (including Ordinary Shares that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) are classified as temporary equity. The Company’s Public Shares feature certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, as of September 30, 2023, Ordinary Shares subject to possible redemption are presented at redemption value of $10.52 per share as temporary equity, outside of the shareholders’ equity section of the Company’s balance sheet. The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable Ordinary Shares to equal the redemption value at the end of each reporting period. Increases or decreases in the carrying amount of redeemable Ordinary Shares are affected by charges against additional paid in capital or retained earnings (accumulated deficit) if additional paid in capital equals to zero.

Offering costs associated with the Initial Public Offering

Mars complies with the requirements of the Financial Accounting Standard Board (the “FASB”) ASC 340-10-S99-1 and SEC Staff Accounting Bulletin Topic 5A — “Expenses of Offerings.” Offering costs, consist of legal, accounting, underwriting fees and other costs incurred through the balance sheet date that are directly related to the Initial Public Offering, were charged to shareholders’ equity upon the completion of the Initial Public Offering.

Mars allocates offering costs between Public Shares, public warrants and public rights based on the estimated fair values of them at the date of issuance.

Deferred offering costs

Deferred offering costs consist of costs incurred in connection with preparation for the Initial Public Offering. These costs, together with the underwriting discounts and commissions, were be charged to additional paid in capital upon completion of the Initial Public Offering. As of September 30, 2022, Mars had deferred offering costs of $205,260. Upon consummation of the IPO on February 16, 2023, total offering costs related to the IPO were $4,398,891, and were allocated between the Public Shares and public rights based on their relative fair values at the date of issuance. Accordingly, $2,724,927 was allocated to the Public Shares and charged to temporary equity (see Note 3).

Income taxes

Mars complies with the accounting and reporting requirements of ASC Topic 740, “Income Taxes,” which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will result in future taxable or deductible amounts, based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

ASC Topic 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities.

Mars’ management determined that the Cayman Islands is the Mars’ only major tax jurisdiction. There is currently no taxation imposed on income by the Government of the Cayman Islands. In accordance with Cayman income tax regulations, income taxes are not levied on Mars. Consequently, income taxes are not reflected in the Mars’ financial statement. Mars’ management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months.

Net income (loss) per share

Mars complies with accounting and disclosure requirements of ASC Topic 260, “Earnings Per Share.” Net income (loss) per share is computed by dividing net loss by the weighted average number of Ordinary Shares outstanding during the period. Mars applies the two-class method in calculating income (loss) per ordinary share. At September 30, 2023 and September 30, 2022, Mars did not have any dilutive securities and other contracts that could, potentially, be exercised or converted into shares of Ordinary Shares and then shares in the earnings of Mars. As a result, diluted income (loss) per share is the same as basic income (loss) per share for the periods presented.

F-9

The following tables reflect the calculation of basic and diluted net income (loss) per ordinary share (in dollars, except per share amounts):

	For the years ended September 30,
	2023		2023		2022
	Ordinary Shares Subject to Redemption		Ordinary Shares Not Subject to Redemption		Ordinary Shares Not Subject to Redemption
Basic and diluted net income (loss) per share
Numerator:
Allocation of net income (loss)	$	1,137,785	$	548,453	$	(2,718	)
Denominator
Basic and diluted weighted average shares outstanding		4,272,329		2,059,414		1,472,603
Basic and diluted net income per share	$	0.27	$	0.27	$	(0.00	)

Fair value of financial instruments

See Note 8 for discussion of short-term marketable securities. The fair value of Mars’ assets and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value Measurements and Disclosures,” approximates the carrying amounts represented in the accompanying balance sheet, primarily due to their short-term nature.

Fair value is defined as the price that would be received for sale of an asset or paid to transfer of a liability, in an orderly transaction between market participants at the measurement date. US GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers include:

Level 1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets;

Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and

Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

Recent accounting pronouncements

Management does not believe that any other recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have an effect on the Mars’ financial statement.

Concentration of credit risk

Financial instruments that potentially subject Mars to concentration of credit risk consist of cash accounts in a financial institution which, at times may exceed the federal depository insurance coverage of $250,000. Mars has not experienced losses on these accounts and management believes Mars is not exposed to significant risks on such accounts.

NOTE 3 — INITIAL PUBLIC OFFERING

On February 16, 2023, Mars consummated its Initial Public Offering of 6,900,000 Units, including 900,000 Units that were issued pursuant to the underwriters’ full exercise of their over-allotment option. The Units were sold at a price of $10.00 per Unit, generating gross proceeds to Mars of $69,000,000.

F-10

Each Unit consists of one ordinary share and one right to receive two-tenths (2/10) of one ordinary share upon consummation of our initial Business Combination (“Right”). The holder must hold Rights in multiples of 5 in order to receive shares for all of their Rights upon closing of a Business Combination (see Note 7).

All of the 6,900,000 public shares sold as part of the public Units in the Initial Public Offering contain a redemption feature which allows for the redemption of such public shares if there is a stockholder vote or tender offer in connection with the Business Combination and in connection with certain amendments to Mars’ amended and restated certificate of incorporation, or in connection with Mars’ liquidation. In accordance with the SEC and its staff’s guidance on redeemable equity instruments, which has been codified in ASC 480-10-S99, redemption provisions not solely within the control of Mars require Ordinary Shares subject to redemption to be classified outside of permanent equity.

As of September 30, 2023, the Ordinary Shares subject to possible redemption reflected on the balance sheet are reconciled in the following table.

Gross proceeds	$	69,000,000
Proceeds allocated to public rights		(876,833	)
Offering costs allocated to Ordinary Shares subject to possible redemption		(3,965,620	)
Remeasurement of Ordinary Shares subject to possible redemption		8,430,273
Ordinary shares subject to possible redemption	$	72,587,820

NOTE 4 — PRIVATE PLACEMENT

On February 16, 2023, Mars sold 391,000 Private Placement Units, including 36,000 Private Placement Units that were issued pursuant to the underwriters’ full exercise of the over-allotment option, at $10.00 per Unit, generating gross proceeds of $3,910,000 in the Private Placement. The proceeds from the Private Placement were added to the proceeds from the Initial Public Offering held in the Trust Account. Mars will have until 12 months (or 18 months as applicable) from the closing of this Initial Public Offering to consummate a Business Combination (the “Combination Period”). If Mars does not complete a Business Combination within the Combination Period, the Rights contained within the Private Placement Units will expire worthless.

NOTE 5 — RELATED PARTY TRANSACTIONS

Founder shares

During the period ended September 30, 2021, Mars issued 1,000,000 shares to the Sponsor at par value (“Founder Shares”). On October 20, 2021, Mars issued an additional 138,500 Founder Shares to the Sponsor to bring the aggregate owned by the Sponsor up to 1,138,500 Founder Shares. On the same day, Mars issued 586,500 Founder Shares to officers and directors of Mars. As of September 30, 2023, and September 30, 2022, there were 1,725,000 Founder Shares outstanding.

Mars’ initial shareholders have agreed not to transfer, assign, or sell any of their Founder Shares until the earlier to occur of: (i) six months after the date of the consummation of our initial Business Combination; or (ii) the date on which Mars consummates a liquidation, merger, stock exchange, or other similar transaction that results in all of our shareholders having the right to exchange their shares for cash, securities, or other property. Any permitted transferees will be subject to the same restrictions and other agreements of our initial shareholders with respect to any Founder Shares. Notwithstanding the foregoing, if the closing price of our Ordinary Shares equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalization, and the like) for any 20 trading days within any 30-trading day period commencing 60 days after our initial Business Combination, the Founder Shares will no longer be subject to such transfer restrictions.

F-11

Note payable

Mars’ Sponsor had agreed to loan Mars up to $300,000 to be used for the payment of costs related to the Initial Public Offering (the “Note”). The Note was non-interest bearing, unsecured, and was due on the closing of the Initial Public Offering. As of September 30, 2022, the outstanding balance of note payable to the affiliate was $228,246, and no interest was accrued. As of February 16, 2023, the Sponsor agreed to apply the Note in its entirety to the Private Placement with Mars, and the note was extinguished.

Working capital loans

In order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor or certain of Mars’ directors and officers may, but are not obligated to, loan Mars funds as may be required (“Working Capital Loans”). If Mars completes a Business Combination, Mars would repay the Working Capital Loans out of the proceeds of the Trust Account released to Mars. Otherwise, the Working Capital Loans would be repaid only out of funds held outside the Trust Account. In the event that a Business Combination does not close, Mars may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans, but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. Except for the foregoing, the terms of such Working Capital Loans, if any, have not been determined and no written agreements exist with respect to such loans. The Working Capital Loans would either be repaid upon consummation of a Business Combination, without interest, or, at the lender’s discretion, up to $1,500,000 of such Working Capital Loans may be convertible into Units of the post-Business Combination entity at a price of $10.00 per Unit. The Units would be identical to the Private Placement Units.

Administrative service fee

Mars initially had an informal agreement (the “Administrative Services Agreement”) to pay affiliates of the Sponsor for office space, utilities, secretarial, and administrative support of $15,000 per month which was paid through May 2023 for a total of $60,000 during the year ended September 30, 2023. Subsequent to May 2023, we have not paid any amounts under this informal agreement and the affiliates have chosen not to seek compensation for such support.

NOTE 6 — COMMITMENTS AND CONTINGENCIES

Registration rights

The holders of the Founder Shares and Private Placement Units are entitled to registration rights pursuant to a registration rights agreement signed February 16, 2023. The holders of these securities are entitled to make up to three demands, excluding short form demands, that Mars register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the consummation of a Business Combination. Mars will bear the expenses incurred in connection with the filing of any such registration statements.

Underwriting agreement

Mars had engaged Maxim Group LLC (“Maxim”) as its underwriter. Mars granted the underwriters a 45- day option until March 26, 2023 to purchase up to 900,000 additional Units to cover over-allotments, if any, at the Initial Public Offering price less the underwriting discounts and commissions. On February 16, 2023, the underwriters fully exercised this option in respect of 900,000 Units.

The underwriters were entitled to an underwriting discount of $0.20 per Unit, or $1,380,000 in the aggregate, which was paid upon the closing of the Initial Public Offering.

Representative shares

Mars has issued to Maxim and/or its designees, 276,000 shares of Ordinary Shares upon the consummation of the Initial Public Offering (the “Representative Shares”). Mars accounted for the Representative Shares as an offering cost associated with the Initial Public Offering, with a corresponding credit to shareholders’ equity. Mars estimated the fair value of the Representative Shares to be $2,724,927. Maxim has agreed not to transfer, assign, or sell any such shares until the completion of the Business Combination. In addition, Maxim has agreed: (i) to waive its redemption rights with respect to such shares in connection with the completion of the Business Combination; and (ii) to waive its rights to liquidating distributions from the Trust Account with respect to such shares if Mars fails to complete its Business Combination within 12 months (or 18 months, as applicable) from the closing of the Initial Public Offering.

F-12

The shares have been deemed compensation by FINRA and were therefore subject to a lock-up for a period of 180 days immediately following the date of the effectiveness of the registration statement of which this prospectus forms a part pursuant to Rule 5110(e)(1) of FINRA’s NASD Conduct Rules. Pursuant to FINRA Rule 5110(e)(1), these securities were not to be the subject of any hedging, short sale, derivative, put, or call transaction that would result in the economic disposition of the securities by any person prior to August 8, 2023, nor were they sold, transferred, assigned, pledged, or hypothecated prior to August 8, 2023 except to any underwriter and selected dealer participating in the offering and their bona fide officers or partners.

Subject to certain conditions, Mars granted Maxim, for a period beginning on February 16, 2023 and ending 12 months after the date of the consummation of the Business Combination, a right of first refusal to act as book-running managing underwriter or placement agent for any and all future public and private equity, equity-linked, convertible and debt offerings for Mars or any of its successors or subsidiaries. In accordance with FINRA Rule 5110(g)(6), such right of first refusal shall not have a duration of more than three years from February 9, 2023.

Business Combination Agreement

On September 5, 2023, Mars entered into a Business Combination Agreement (the “Business Combination Agreement”) with ScanTech AI Systems Inc., a Delaware corporation and a wholly owned subsidiary of Mars (“Pubco”), Mars Merger Sub I Corp., a Cayman Islands exempted company and a wholly owned subsidiary of Mars (“Purchaser Merger Sub”), Mars Merger Sub II LLC, a Delaware limited liability company and a wholly owned subsidiary of Pubco (“Company Merger Sub”), ScanTech Identification Beam Systems, LLC, a Delaware limited liability company (“ScanTech”), and Dolan Falconer in the capacity as the representative (the “Seller Representative”). The aggregate consideration to be paid to ScanTech shall be a number of shares of Pubco Common Stock with an aggregate value equal to one hundred ten million U.S. Dollars ($110,000,000) minus the closing net debt as set forth in the Business Combination Agreement. Additionally, after the Closing, subject to the terms and conditions set forth in the Business Combination Agreement, the ScanTech Holder Participants will have the contingent right to receive up to a number of shares of Pubco Common Stock equal to ten percent (10%) of the fully diluted shares of Pubco Common Stock outstanding immediately following the Closing (subject to adjustment based on stock splits and similar events) based on Pubco’s achievement of certain milestones, including commercial milestones and revenue and EBITDA milestones, as more particularly set forth in the Business Combination Agreement.

The Closing is subject to certain customary conditions. For a more detailed description of the Business Combination Agreement and the transactions contemplated therein, see Mars’ Current Report on Form 8-K filed with the SEC on September 8, 2023 (the “Form 8-K”).

NOTE 7 — SHAREHOLDERS’ EQUITY

Ordinary Shares — Mars is authorized to issue 800,000,000 Ordinary Shares with a par value of $0.000125 per share. Holders of Mars’ Ordinary Shares are entitled to one vote for each share. As of September 30, 2023 and September 30, 2022, there were 2,392,000 and 1,725,000 Ordinary Shares outstanding, respectively.

Rights — Each holder of a Right will automatically receive two-tenths (2/10) of one share of Ordinary Shares upon consummation of a Business Combination, except in cases where Mars not the surviving company in a Business Combination, and even if the holder of such Right redeemed all shares of Ordinary Shares held by it in connection with a Business Combination. No additional consideration will be required to be paid by a holder of a Right in order to receive its additional shares upon consummation of a Business Combination, as the consideration related thereto has been included in the Unit purchase price paid for by investors in the Initial Public Offering. If Mars enters into a definitive agreement for a Business Combination in which Mars will not be the surviving entity, the definitive agreement will provide for the holders of Right to receive the same per share consideration the holders of shares of Ordinary Shares will receive in the transaction on an as-exchanged for Ordinary Shares basis, and each holder of a Right will be required to affirmatively exchange its Rights in order to receive the 2/10 share underlying each Right (without paying any additional consideration) upon consummation of a Business Combination. More specifically, the Rights holder will be required to indicate its election to exchange the Right for the underlying shares within a fixed period of time after which period the Rights will expire worthless.

F-13

Pursuant to the Rights agreement, a Rights holder may exchange Rights only for a whole number of shares of Ordinary Shares. This means that Mars will not issue fractional shares in connection with an exchange of Rights, and Rights may be exchanged only in multiples of 5 Rights (subject to adjustment for stock splits, stock dividends, reorganizations, recapitalization and the like). Fractional shares will either be rounded down to the nearest whole share or otherwise addressed in accordance with the applicable provisions of the Cayman Islands Law.

If Mars is unable to complete a Business Combination within the Combination Period and Mars liquidates the funds held in the Trust Account, holders of Rights will not receive any such funds with respect to their Rights, nor will they receive any distribution from Mars’ assets held outside of the Trust Account with respect to such Rights, and the Rights will expire worthless. Further, there are no contractual penalties for failure to deliver securities to holders of the Rights upon consummation of a Business Combination. Additionally, in no event will Mars be required to net cash settle the Rights. Accordingly, the Rights may expire worthless.

NOTE 8 — FAIR VALUE MEASUREMENTS

The following table presents information about the Mars’ assets that are measured at fair value on a recurring basis at September 30, 2023 and indicates the fair value hierarchy of the valuation inputs Mars utilized to determine such fair value:

Description	Level	September 30, 2023		September 30, 2022
Assets:
Marketable securities held in Trust Account	1	$	72,587,820	$	—

Except for the foregoing, Mars does not have any assets measured at fair value on a recurring basis at September 30, 2023 and September 30, 2022, respectively.

NOTE 9 — SUBSEQUENT EVENTS

Mars evaluated subsequent events and transactions that occurred after the balance sheet date, up to the date that the financial statements were issued. Mars did not identify any subsequent events that would have required adjustment or disclosure in the financial statements.

F-14

MARS ACQUISITION CORP.

PART I — FINANCIAL INFORMATION

MARS ACQUISITION CORP.
BALANCE SHEETS

	June 30, 2024			September 30, 2023
	(Unaudited)
ASSETS
Current Assets
Cash	$	206,762		$	178,793
Prepaid expenses		57,792			149,164
Investments held in trust account		22,836,871			72,587,820
Total Assets	$	23,101,425		$	72,915,777
LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT)
Current Liabilities
Accrued expenses	$	146,477		$	16,363
Note payable – related party		452,088			—
Forward Purchase Agreement liability		293,000			—
Total current liabilities		891,565			16,363
Total Liabilities		891,565			16,363
COMMITMENTS AND CONTINGENCIES
Ordinary shares subject to possible redemption, 2,081,432 and 6,900,000 shares, respectively, at redemption value of $10.97 and $10.52 per share, respectively		22,836,871			72,587,820
SHAREHOLDERS’ EQUITY (DEFICIT)
Ordinary shares, $0.000125 par value; 800,000,000 shares authorized; 2,392,000 shares issued and outstanding(1)		299			299
Additional paid-in capital		—			—
(Accumulated deficit)/retained earnings		(627,310	)		311,295
Total Shareholders’ Equity (Deficit)		(627,011	)		311,594
Total Liabilities and Shareholders’ Equity (Deficit)	$	23,101,425		$	72,915,777

(1)

Excludes 2,081,432 and 6,900,000 shares subject to possible redemption as of June 30, 2024 and September 30, 2023, respectively.

The accompanying notes are an integral part of these unaudited financial statements

F-15

MARS ACQUISITION CORP.

STATEMENTS OF OPERATIONS (UNAUDITED)

	Three months ended June 30,						Nine months ended June 30,
	2024			2023			2024			2023
Operating Expenses
General and administrative costs	$	322,770		$	155,416		$	538,440		$	391,047
Net loss from operations		(322,770	)		(155,416	)		(538,440	)		(391,047	)
Other Income (Expense)
Investment income on Trust Account		301,932			876,604			1,865,297			1,252,401
Fair value adjustment for Forward Purchase Agreement liability		(30,000	)		—			(293,000	)		—
Fair value adjustment for convertible notes		(51,008	)					(107,165	)		—
Total other income (expense)		220,924			876,604			1,465,132			1,252,401
Net income (loss)	$	(101,846	)	$	721,188		$	926,692		$	861,354
Weighted average shares outstanding, basic and diluted
Redeemable ordinary shares – basic and diluted		2,081,432			6,900,000			4,209,340			3,386,813
Non-redeemable ordinary shares – basic and diluted		2,392,000			2,392,000			2,392,000			2,052,392
Basic and diluted net income (loss) per share
Redeemable ordinary shares – basic and diluted	$	(0.02	)	$	0.08		$	0.17		$	0.18
Non-redeemable ordinary shares – basic and diluted	$	(0.02	)	$	0.08		$	0.10		$	0.13

The accompanying notes are an integral part of these unaudited financial statements

F-16

MARS ACQUISITION CORP.

STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (DEFICIT) (UNAUDITED)

	ORDINARY SHARES				ADDITIONAL PAID-IN			RETAINED EARNINGS (ACCUMULATED			TOTAL SHAREHOLDERS’
	SHARES		AMOUNT		CAPITAL			DEFICIT)			EQUITY (DEFICIT)
Balance – September 30, 2022		1,725,000	$	216	$	24,784		$	(50,210	)	$	(25,210	)
Issuance of Founder shares		—		—		—			—			—
Net loss		—		—		—			(195	)		(195	)
Balance – December 31, 2022		1,725,000		216		24,784			(50,405	)		(25,405	)
Issuance of private placement shares		391,000		49		3,909,951			—			3,910,000
Issuance of representative shares		276,000		34		2,724,893			—			2,724,927
Fair value of rights		—		—		876,833			—			876,833
Offering costs		—		—		(430,921	)		—			(430,921	)
Remeasurement of ordinary shares subject to redemption		—		—		(6,598,251	)		—			(6,598,251	)
Net income		—		—		—			140,362			140,362
Balance – March 31, 2023		2,392,000		299		507,289			89,957			597,545
Remeasurement of ordinary shares subject to redemption		—		—		(507,289	)		(369,314	)		(876,603	)
Net income		—		—		—			721,188			721,188
Balance – June 30, 2023		2,392,000		299		—			441,831			442,130
Balance – September 30, 2023		2,392,000	$	299	$	—		$	311,295		$	311,594
Remeasurement of ordinary shares subject to redemption		—		—		—			(989,905	)		(989,905	)
Net income		—		—		—			900,522			900,522
Balance – December 31, 2023		2,392,000		299		—			221,912			222,211
Remeasurement of ordinary shares subject to redemption		—		—		—			(573,460	)		(573,460	)
Net income		—		—		—			128,016			128,016
Balance – March 31, 2024		2,392,000	$	299	$	—		$	(223,532	)	$	(223,233	)
Remeasurement of ordinary shares subject to redemption		—		—		—			(301,932	)		(301,932	)
Net loss		—		—		—			(101,846	)		(101,846	)
Balance – June 30, 2024		2,392,000		299		—			(627,310	)		(627,011	)

The accompanying notes are an integral part of these unaudited financial statements

F-17

MARS ACQUISITION CORP.

STATEMENTS OF CASH FLOWS (UNAUDITED)

	Nine months ended June 30,
	2024			2023
Cash flows from operating activities
Net income	$	926,692		$	861,355
Adjustments to reconcile net income to net cash used in operating activities:
Change in fair value of Forward Purchase Agreement liability		293,000			—
Fair value adjustment for convertible notes		107,165			—
Investment income received in Trust Account		(1,865,297	)		(1,252,401	)
Change in operating assets and liabilities
Accrued liabilities		130,114			(2,224	)
Prepaid expenses		91,372			(204,185	)
Net cash used by operating activities		(316,954	)		(597,455	)
Cash flows from investing activities
Cash deposited in Trust Account		—			(70,380,000	)
Proceeds from sales of cash and cash equivalents in trust account		51,616,246			—
Net cash provided by (used in) investing activities		51,616,246			(70,380,000	)
Cash flows from financing activities
Proceeds from note payable with related party		344,923			41,213
Payment for redemption of ordinary shares		(51,616,246	)		—
Extinguishment of note payable with related party		—			(269,459	)
Payment of underwriting fee and other offering costs		—			(1,466,354	)
Proceeds from sale of units in IPO, including over-allotment		—			69,000,000
Proceeds from issuance of private placement ordinary shares		—			3,910,000
Net cash (used in) provided by financing activities		(51,271,323	)		71,215,400
Net increase in cash		27,969			237,945
Cash – beginning of the period		178,793			—
Cash – end of the period	$	206,762		$	237,945
Supplemental disclosure of noncash activities
Issuance of representative shares	$	—		$	2,724,927
Reclassification of offering costs related to public shares	$	—		$	(243,964	)
Remeasurement adjustment on public shares subject to possible redemption	$	(1,865,297	)	$	(7,474,854	)

The accompanying notes are an integral part of these unaudited financial statements

F-18

MARS ACQUISITION CORP.

NOTES TO THE UNAUDITED FINANCIAL STATEMENTS

NOTE 1 — DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS

Mars Acquisition Corp. (the “Company”) is a Cayman Islands exempted company incorporated as a blank check company on April 23, 2021. The Company was incorporated for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses that the Company has not yet identified (“Business Combination”). Although the Company is not limited to a particular industry or geographic region for purposes of consummating a Business Combination, the Company intends to focus on opportunities in cryptocurrency and blockchain, automobiles, healthcare, financial technology, cyber security, cleantech, software, Internet and artificial intelligence, specialty manufacturing and any other related technology innovations market. On September 5, 2023, a Business Combination Agreement was entered into by the Company and ScanTech Identification Beam Systems, LLC (“ScanTech”), among others (see Note 6).

At June 30, 2024, the Company had not yet commenced operations. All activity through June 30, 2024 relates to the Company’s formation and initial public offering (the “Initial Public Offering” or “IPO”), which is described below. The Company will not generate any operating revenues until after the completion of an initial Business Combination, at the earliest. The Company will generate non-operating income in the form of interest income from the proceeds derived from the Initial Public Offering. The Company has selected September 30 as its fiscal year end date.

The registration statement for the Company’s Initial Public Offering was declared effective on February 9, 2023. On February 16, 2023, the Company consummated its Initial Public Offering of 6,900,000 units (“Units” and, with respect to the ordinary shares included in the Units being offered, the “Public Shares”) at $10.00 per Unit, including 900,000 Units that were issued pursuant to the underwriters’ full exercise of their over-allotment option, generating gross proceeds of $69,000,000.

Simultaneously with the closing of the Initial Public Offering, the Company consummated the private placement (“Private Placement”) of 391,000 Units at a price of $10.00 per Unit to the Company’s sponsor, Mars Capital Holding Corporation, a British Virgin Islands company (“Sponsor”), generating gross proceeds of $3,910,000 (see Note 4).

Upon the closing of the Initial Public Offering and Private Placement, $70,380,000 of the net proceeds of the sale of the Units in the Initial Public Offering and the Private Placement was placed in a trust account (the “Trust Account”) and may be invested by the trustee only in U.S. government treasury bills with a maturity of 185 days or less or in money market funds investing solely in U.S. Treasuries and meeting certain conditions under Rule 2a-7 under the Investment Company Act, and will not be released from the Trust Account until the earlier of: (i) the completion of a Business Combination or (ii) the distribution of the Trust Account.

The Company’s management has broad discretion with respect to the specific application of the net proceeds of its Initial Public Offering and Private Placement Units, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. The Company’s initial Business Combination must be with one or more operating businesses or assets with a fair market value equal to at least 80% of the net assets held in the Trust Account (excluding taxes payable on interest earned in the trust account) at the time the Company signs a definitive agreement in connection with the initial Business Combination. However, the Company will only complete a Business Combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act 1940, as amended, or the Investment Company Act.

F-19

The Company will provide holders of its Public Shares (the “Public Shareholders”) with the opportunity to redeem all or a portion of their Public Shares upon the completion of a Business Combination either (i) in connection with a shareholder meeting called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek shareholder approval of a Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The Public Shareholders will be entitled to redeem their Public Shares for a pro rata portion of the amount then in the Trust Account (initially approximately $10.20 per share, plus any pro rata interest earned on the funds held in the Trust Account and not previously released to the Company to pay its tax obligations).

If a shareholder vote is not required and the Company does not decide to hold a shareholder vote for business or other legal reasons, the Company will, pursuant to its amended and restated memorandum and articles of association:

conduct the redemptions pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, which regulate issuer tender offers; and

file tender offer documents with the SEC prior to completing the Company’s initial Business Combination which contain substantially the same financial and other information about the initial Business Combination and the redemption rights as is required under Regulation 14A of the Exchange Act, which regulates the solicitation of proxies.

Such provisions may be amended if a special resolution passed by holders of at least two-thirds of the Company’s issued and outstanding ordinary shares who, being entitled to do so, attend and vote at a general meeting for which notice specifying the intention to propose the resolution as a special resolution has been given or by way of unanimous written resolution of all of the Company’s shareholders. Whether or not the Company maintains its registration under the Exchange Act or the Company’s listing on Nasdaq, the Company will provide its Public Shareholders with the opportunity to redeem their Public Shares by one of the two methods listed above. Upon the public announcement of the Company’s initial Business Combination, if the Company elects to conduct redemptions pursuant to the tender offer rules, the Company or the Company’s Sponsor will terminate any plan established in accordance with Rule 10b5-1 to purchase the Company’s ordinary shares in the open market, in order to comply with Rule 14e-5 under the Exchange Act.

In the event the Company conducts redemptions pursuant to the tender offer rules, the Company’s offer to redeem will remain open for at least 20 business days, in accordance with Rule 14e-1(a) under the Exchange Act, and the Company will not be permitted to complete its initial Business Combination until the expiration of the tender offer period. In addition, the tender offer will be conditioned on Public Shareholders not tendering more than a specified number of Public Shares, which number will be based on the requirement that the Company will only redeem its Public Shares so long as (after such redemption) the Company’s net tangible assets will be at least $5,000,001 either immediately prior to or upon consummation of the Company’s initial Business Combination and after payment of underwriters’ fees and commissions (so that the Company is not subject to the SEC’s “penny stock” rules) or any greater net tangible asset or cash requirement which may be contained in the agreement relating to the Company’s initial Business Combination. If the Public Shareholders tender more shares than the Company has offered to purchase, the Company will withdraw the tender offer and not complete the initial Business Combination.

If, however, shareholder approval of the transaction is required by law or stock exchange listing requirements, or the Company decides to obtain shareholder approval for business or other legal reasons, the Company will conduct the redemptions in conjunction with a proxy solicitation pursuant to Regulation 14A of the Exchange Act, which regulates the solicitation of proxies, and not pursuant to the tender offer rules; and file proxy materials with the SEC.

Notwithstanding the foregoing, if the Company seeks shareholder approval of the Business Combination and the Company does not conduct redemptions pursuant to the tender offer rules, a Public Shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from redeeming its shares with respect to more than an aggregate of 15% of the Public Shares without the Company’s prior written consent.

F-20

The Company initially had until 12 months from the closing of the Initial Public Offering to consummate an initial Business Combination. However, if the Company anticipated that it may not be able to consummate the initial Business Combination within 12 months, it could extend the period of time to consummate a Business Combination by two additional 3-month periods (for a total of up to 18 months) without submitting proposed extensions to its shareholders for approval or offering its public shareholders redemption rights in connection therewith. In connection with the extraordinary general meeting of shareholders held on January 30, 2024, the Company’s memorandum and articles of association were amended to allow for the Company to have 21 months from the closing of this offering (or 27 months from the closing of this offering, if the Company extends the period of time to consummate a Business Combination) to complete its initial Business Combination.

If the Company is unable to complete its initial Business Combination within such 21-month period (or 27-month period), the Company 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 us to pay the Company’s income taxes (less up to $50,000 of interest to pay dissolution expenses), 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 liquidating distributions, if any), subject to applicable law; and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining shareholders and its board of directors, dissolve and liquidate, subject in each case to the Company’s obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law.

The Company’s Sponsor, officers and directors have entered into a letter agreement with the Company, pursuant to which they have agreed to waive their redemption rights with respect to any founder shares and any Public Shares held by them in connection with the completion of the Company’s initial Business Combination. In addition, the Company’s initial shareholders have agreed to waive their rights to liquidating distributions from the Trust Account with respect to any founder shares held by them if the Company fails to complete its initial Business Combination within the prescribed time frame. However, if the Company’s Sponsor or any of its officers, directors or affiliates acquires Public Shares in or after this offering, they will be entitled to liquidating distributions from the Trust Account with respect to such Public Shares if the Company fails to complete its initial Business Combination within the prescribed time frame.

Liquidity and management’s plan

In connection with the Company’s assessment of going concern considerations in accordance with Accounting Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” management believes that the funds which the Company has available following the completion of the Initial Public Offering and Private Placement may not be enough to sustain operations for a period of one year from the issuance date of these financial statements. If the Company is unable to complete the Extension or the Business Combination due to a lack of sufficient funds, the Company may be forced to cease operations and liquidate the Trust Account. In addition, following the Business Combination, if cash on hand is insufficient, the Company may need to obtain additional financing in order to meet the Company’s obligations. There is no assurance that the Company’s plans to consummate a business combination will be successful within the Combination Period as described above. As a result, there is substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the financial statement are issued or are available to be issued. The financial statements do not include any adjustments that might result from the outcome of the uncertainty.

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation

The accompanying unaudited financial statements have been prepared in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”) for interim financial information and pursuant to the rules and regulations of the SEC. In the opinion of management, all adjustments, consisting of normal recurring accruals, considered necessary for a fair presentation have been included. Operating results for the period from October 1, 2023 through June 30, 2024 are not necessarily indicative of the results that may be expected for the period ending September 30, 2024, or any future period.

F-21

The accompanying unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Form 10-K filed by the Company with the SEC on December 28, 2023.

Cash and cash equivalents

The Company considers all short-term investments held outside the Trust Account with an initial maturity of three months or less when purchased to be cash equivalents. As of June 30, 2024 and September 30, 2023, there were $206,762 and $178,793 of cash and cash equivalents, respectively.

Investments in Trust Account

The funds held in the Trust Account can be invested in United States government treasury bills, notes or bonds having a maturity of 185 days or less or in money market funds meeting the applicable conditions under Rule 2a-7 promulgated under the Investment Company Act of 1940, as amended, until the earlier of the consummation of its first business combination and the Company’s failure to consummate a business combination within 21 months (or 27 months as applicable) from the consummation of the IPO.

The Company’s investments held in the Trust Account are classified as trading securities. Trading securities are presented on the balance sheet at fair value at the end of each reporting period. Gains and losses resulting from the change in fair value of investments held in Trust Account are included in investment income on trust account in the accompanying statements of operations. The estimated fair values of investments held in Trust Account are determined using available market information (see Note 8).

As of June 30, 2024 and September 30, 2023, the Company had $22,836,871 and $72,587,820 held in the Trust Account, respectively.

Emerging growth company

The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended, (the “Securities Act”), as modified by the Jumpstart our Business Startups Act of 2012, (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.

Further, section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Securities Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accountant standards used.

Use of estimates

F-22

Ordinary shares subject to possible redemption

The Company accounts for its ordinary shares subject to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” Conditionally redeemable ordinary shares (including ordinary shares that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) are classified as temporary equity. The Company’s Public Shares feature certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, as of June 30, 2024, ordinary shares subject to possible redemption are presented at the redemption value of $10.97 per share as temporary equity, outside of the shareholders’ equity section of the Company’s balance sheet. The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable ordinary shares to equal the redemption value at the end of each reporting period. Increases or decreases in the carrying amount of redeemable ordinary shares are affected by charges against additional paid in capital or retained earnings (accumulated deficit) if additional paid in capital equals to zero.

In connection with the Shareholder Meeting to approve the Extension Amendment Proposal, the Company and its Sponsor entered into non-redemption agreements (the “Non-Redemption Agreements”) on substantially the same terms with several unaffiliated third parties who are also the Company’s existing shareholders (the “Investors”), pursuant to which such Investors agreed not to redeem an aggregate of 1,813,380 Ordinary Shares of the Company in connection with the Extension Amendment Proposal. In exchange for the foregoing commitments not to redeem such Ordinary Shares of the Company, the Company and the Sponsor will agree to ScanTech AI Systems Inc., a Delaware corporation and a wholly owned subsidiary of the Company (“Pubco”), to issue to Investors an aggregate of 362,676 common stock of Pubco following the consummation of the initial business combination.

Offering costs associated with the Initial Public Offering

The Company complies with the requirements of the Financial Accounting Standard Board (the “FASB”) ASC 340-10-S99-1 and SEC Staff Accounting Bulletin Topic 5A — “Expenses of Offerings.” Offering costs, consist of legal, accounting, underwriting fees and other costs incurred through the balance sheet date that are directly related to the Initial Public Offering, were charged to shareholders’ equity upon the completion of the Initial Public Offering.

The Company allocates offering costs between Public Shares, public warrants and public rights based on the estimated fair values of them at the date of issuance.

Deferred offering costs

Deferred offering costs consist of costs incurred in connection with preparation for the Initial Public Offering. These costs, together with the underwriting discounts and commissions, were be charged to additional paid in capital upon completion of the Initial Public Offering. As of June 30, 2024 and September 30, 2023, the Company had no deferred offering costs. Upon consummation of the IPO on February 16, 2023, total offering costs related to the IPO were $4,398,891, and were allocated between the Public Shares and public rights based on their relative fair values at the date of issuance. Accordingly, $2,724,927 was allocated to the Public Shares and charged to temporary equity (see Note 3).

Income taxes

The Company complies with the accounting and reporting requirements of ASC Topic 740, “Income Taxes,” which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will result in future taxable or deductible amounts, based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

F-23

The Company’s management determined that the Cayman Islands is the Company’s only major tax jurisdiction. There is currently no taxation imposed on income by the Government of the Cayman Islands. In accordance with Cayman income tax regulations, income taxes are not levied on the Company. Consequently, income taxes are not reflected in the Company’s financial statement. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months.

Net income (loss) per share

The Company complies with accounting and disclosure requirements of ASC Topic 260, “Earnings Per Share.” Net income (loss) per share is computed by dividing net loss by the weighted average number of ordinary shares outstanding during the period. The Company applies the two-class method in calculating income (loss) per ordinary share. At June 30, 2024 and September 30, 2023, the Company did not have any dilutive securities and other contracts that could, potentially, be exercised or converted into shares of ordinary shares and then shares in the earnings of the Company. As a result, diluted income (loss) per share is the same as basic income (loss) per share for the periods presented.

The following tables reflect the calculation of basic and diluted net income (loss) per ordinary share (in dollars, except per share amounts):

Ordinary shares subject to possible redemption:

	For the three months ended June 30,					For the nine months ended June 30,
	2024			2023		2024		2023
Numerator:
Allocation of net income (loss)	$	(47,388	)	$	535,536	$	698,373	$	600,584
Denominator
Basic and diluted weighted average shares outstanding		2,081,432			6,900,000		4,209,340		3,386,813
Basic and diluted net income (loss) per share	$	(0.02	)	$	0.08	$	0.17	$	0.18

Ordinary shares not subject to possible redemption:

	For the three months ended June 30,					For the nine months ended June 30,
	2024			2023		2024		2023
Numerator:
Allocation of net income (loss)	$	(54,458	)	$	185,652	$	228,318	$	260,770
Denominator
Basic and diluted weighted average shares outstanding		2,392,000			2,392,000		2,392,000		2,052,392
Basic and diluted net income (loss) per share	$	(0.02	)	$	0.08	$	0.10	$	0.13

F-24

Fair value of financial instruments

See Note 8 for discussion of short-term marketable securities.The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value Measurements and Disclosures,” approximates the carrying amounts represented in the accompanying balance sheet, primarily due to their short-term nature.

	·	Level 1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets;

	·	Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and

	·	Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

Forward Purchase Agreement Liabilities

The Company accounts for forward purchase agreements as liability-classified instruments based on an assessment of the forward purchase agreement’s specific terms and applicable authoritative guidance in FASB ASC 480, Distinguishing Liabilities from Equity (“ASC 480”) The assessment considers whether the forward purchase agreement is a freestanding financial instrument pursuant to ASC 480 and meets the definition of a liability pursuant to ASC 480, including whether the forward purchase agreement is indexed to the Company’s own common shares and whether the forward purchase agreement holder could potentially require “net cash settlement” in a circumstance outside of the Company’s control. This assessment, which requires the use of professional judgment, is conducted at the time of forward purchase agreement issuance and as of each subsequent quarterly period end date while the warrants forward purchase agreement are outstanding.

Convertible Promissory Note — Sponsor Working Capital Loan

The Company accounts for the convertible promissory notes under ASC 815, Derivatives and Hedging (“ASC 815”). Under 815-15-25, the election can be made at the inception of a financial instrument to account for the instrument under the fair value option under ASC 825. The Company has made such election for the convertible promissory note. Using the fair value option, the convertible promissory note is required to be recorded at its initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the note are recognized as other income (expense) in the statements of operations.

Recent accounting pronouncements

Management does not believe that any other recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have an effect on the Company’s financial statements.

Concentration of credit risk

Financial instruments that potentially subject the Company to concentration of credit risk consist of cash accounts in a financial institution which, at times may exceed the federal depository insurance coverage of $250,000. The Company has not experienced losses on these accounts and management believes the Company is not exposed to significant risks on such accounts.

F-25

NOTE 3 — INITIAL PUBLIC OFFERING

On February 16, 2023, the Company consummated its Initial Public Offering of 6,900,000 Units, including 900,000 Units that were issued pursuant to the underwriters’ full exercise of their over-allotment option. The Units were sold at a price of $10.00 per Unit, generating gross proceeds to the Company of $69,000,000.

Each Unit consists of one ordinary share and one right to receive two-tenths (2/10) of one ordinary share upon consummation of the Company’s initial Business Combination (“Right”). The holder must hold Rights in multiples of 5 in order to receive shares for all of their Rights upon closing of a Business Combination (see Note 7).

All of the 6,900,000 public shares sold as part of the public Units in the Initial Public Offering contain a redemption feature which allows for the redemption of such public shares if there is a stockholder vote or tender offer in connection with the Business Combination and in connection with certain amendments to the Company’s amended and restated certificate of incorporation, or in connection with the Company’s liquidation. In accordance with the SEC and its staff’s guidance on redeemable equity instruments, which has been codified in ASC 480-10-S99, redemption provisions not solely within the control of the Company require ordinary shares subject to redemption to be classified outside of permanent equity.

As of June 30, 2024, the ordinary shares subject to possible redemption reflected on the balance sheet are reconciled in the following table.

	As of June 30, 2024			As of September 30, 2023
Gross proceeds	$	69,000,000		$	69,000,000
Proceeds allocated to public rights		(876,833	)		(876,833	)
Offering costs allocated to ordinary shares subject to possible redemption		(3,965,620	)		(3,965,620	)
Redemption of shares		(51,616,246	)		—
Remeasurement of ordinary shares subject to possible redemption		10,295,570			8,430,273
Ordinary shares subject to possible redemption	$	22,836,871		$	72,587,820

NOTE 4 — PRIVATE PLACEMENT

On February 16, 2023, the Company sold 391,000 Private Placement Units, including 36,000 Private Placement Units that were issued pursuant to the underwriters’ full exercise of the over-allotment option, at $10.00 per Unit, generating gross proceeds of $3,910,000 in the Private Placement. The proceeds from the Private Placement were added to the proceeds from the Initial Public Offering held in the Trust Account. The Company will have until 21 months (or 27 months as applicable) from the closing of this Initial Public Offering to consummate a Business Combination (the “Combination Period”). If the Company does not complete a Business Combination within the Combination Period, the Rights contained within the Private Placement Units will expire worthless.

NOTE 5 — RELATED PARTY TRANSACTIONS

Founder shares

During the period ended September 30, 2022, the Company issued 1,000,000 shares to the Sponsor at par value (“Founder Shares”). On October 20, 2021, the Company issued an additional 138,500 Founder Shares to the Sponsor to bring the aggregate owned by the Sponsor up to 1,138,500 Founder Shares. On the same day, the Company issued 586,500 Founder Shares to officers and directors of the Company. As of June 30, 2024 and September 30, 2023, there were 1,725,000 Founder Shares outstanding.

The Company’s initial shareholders have agreed not to transfer, assign, or sell any of their Founder Shares until the earlier to occur of: (i) six months after the date of the consummation of the Company’s initial Business Combination; or (ii) the date on which the Company consummates a liquidation, merger, stock exchange, or other similar transaction that results in all of the Company’s shareholders having the right to exchange their shares for cash, securities, or other property. Any permitted transferees will be subject to the same restrictions and other agreements of the Company’s initial shareholders with respect to any Founder Shares. Notwithstanding the foregoing, if the closing price of the Company’s ordinary shares equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalization, and the like) for any 20 trading days within any 30-trading day period commencing 60 days after the Company’s initial Business Combination, the Founder Shares will no longer be subject to such transfer restrictions.

F-26

Notes payable

The Company’s Sponsor had agreed to loan the Company up to $300,000 to be used for the payment of costs related to the Initial Public Offering (the “Note”). The Note was non-interest bearing, unsecured, and was due on the closing of the Initial Public Offering. As of September 30, 2023, the outstanding balance of note payable to the affiliate was $0, and no interest was accrued. As of February 16, 2023, the Sponsor agreed to apply the Note in its entirety to the Private Placement with the Company, and the note was extinguished.

Working capital loans

In order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor or certain of the Company’s directors and officers may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). If the Company completes a Business Combination, the Company would repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. Otherwise, the Working Capital Loans would be repaid only out of funds held outside the Trust Account. In the event that a Business Combination does not close, the Company may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans, but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. Except for the foregoing, the terms of such Working Capital Loans, if any, have not been determined and no written agreements exist with respect to such loans. The Working Capital Loans would either be repaid upon consummation of a Business Combination, without interest, or, at the lender’s discretion, up to $1,500,000 of such Working Capital Loans may be convertible into units of the post-Business Combination entity at a price of $10.00 per unit. The units would be identical to the Private Placement Units.

On March 31, 2024, the Company entered into a Convertible Promissory Note with certain affiliates of the Sponsor with a principal amount of $200,000. The principal amount can be prepaid by the Company at anytime and no interest accrues on the Convertible Promissory Note. Upon closing of the initial Business Combination, the Convertible Promissory Note automatically converts into 24,000 ordinary shares of the Company. In the event no business combination occurs, there is no obligation to repay the Convertible Promissory Note. The Company recorded the instrument at its fair value.

To fund extensions of the deadline for the Company to complete its initial Business Combination, the Sponsor deposited an additional $145,000 into the Trust Account on April 30, 2024. In return, the Company issued an additional Convertible Promissory Notes that are to either be repaid upon the consummation of a Business Combination, without interest, or, at the Sponsor’s discretion, converted upon consummation of a Business Combination into an additional 17,400 Private Placement Units at a price of $10.00 per Unit. The Company recorded the instrument at its fair value.

Such Convertible Notes are to either be repaid upon the consummation of a Business Combination, without interest, or, at the Sponsor’s discretion, converted upon consummation of a Business Combination into an additional 41,400 Private Placement Units at a price of $10.00 per Unit. In the event that a Business Combination does not close, the Company may use a portion of proceeds held outside the Trust Account to repay the Sponsor Working Capital Loans, but no proceeds held in the Trust Account would be used to repay the Sponsor Working Capital Loans. As of June 30, 2024, the principal amount outstanding under the Convertible Notes was $345,000, and the fair value of the Convertible Notes was $452,088.

F-27

Administrative service fee

The Company has an informal agreement (the “Administrative Services Agreement”) to pay affiliates of the Sponsor for office space, utilities, secretarial, and administrative support of $15,000 per month. Between May 2023 and April 2024, the Company did not paid any amounts under this informal agreement, and the affiliates have chosen not to seek compensation for such support during this time period. These payments resumed in May 2024. For the three and nine months ended June 30, 2024, the total amount billed for these services was $38,500 and the total amount paid was $32,300.

NOTE 6 — COMMITMENTS AND CONTINGENCIES

Registration rights

The holders of the Founder Shares and Private Placement Units are entitled to registration rights pursuant to a registration rights agreement signed February 16, 2023. The holders of these securities are entitled to make up to three demands, excluding short form demands, that the Company register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the consummation of a Business Combination. The Company will bear the expenses incurred in connection with the filing of any such registration statements.

Underwriting agreement

The Company has engaged Maxim Group LLC (“Maxim”) as its underwriter. The Company granted the underwriters a 45-day option until March 26, 2023 to purchase up to 900,000 additional Units to cover over-allotments, if any, at the Initial Public Offering price less the underwriting discounts and commissions. On February 16, 2023, the underwriters fully exercised this option in respect of 900,000 Units.

The underwriters were entitled to an underwriting discount of $0.20 per unit, or $1,380,000 in the aggregate, which was paid upon the closing of the Initial Public Offering.

Representative shares

The Company has issued to Maxim and/or its designees, 276,000 shares of ordinary shares upon the consummation of the Initial Public Offering (the “Representative Shares”). The Company accounted for the Representative Shares as an offering cost associated with the Initial Public Offering, with a corresponding credit to shareholders’ equity. The Company estimated the fair value of the Representative Shares to be $2,724,927. Maxim has agreed not to transfer, assign, or sell any such shares until the completion of the Business Combination. In addition, Maxim has agreed: (i) to waive its redemption rights with respect to such shares in connection with the completion of the Business Combination; and (ii) to waive its rights to liquidating distributions from the Trust Account with respect to such shares if the Company fails to complete its Business Combination within 21 months (or 27 months, as applicable) from the closing of the Initial Public Offering.

Subject to certain conditions, the Company granted Maxim, for a period beginning on February 16, 2023 and ending 12 months after the date of the consummation of the Business Combination, a right of first refusal to act as book-running managing underwriter or placement agent for any and all future public and private equity, equity-linked, convertible and debt offerings for the Company or any of its successors or subsidiaries. In accordance with FINRA Rule 5110(g)(6), such right of first refusal shall not have a duration of more than three years from February 9, 2023.

F-28

Forward Purchase Agreement

On September 4, 2023, the Company and RiverNorth entered into an Prepaid Forward Purchase Agreement (“FPA”). Pursuant to the FPA, RiverNorth is expected to purchase up to 1,500,000 shares of Mars ordinary shares (“FPA Shares”) subject to a cap of 9.9% of outstanding shares on a post-Transaction basis, at a per share price no more than the price per share paid to redeeming Mars public shareholders in connection with the vote to approve the Transactions (the “redemption price”).

The Prepaid Forward Purchase Agreement entered into on September 4, 2023 (“FPA” or the “Agreement”) resulted in RiverNorth holding a put option to sell up to a maximum of 1,500,000 of the Company’s shares. Pursuant to ASC 480, this instrument meets the definition of a liability and accordingly was recognized at fair value. The FPA resulted in the initial recognition of a forward purchase agreement liability of approximately $263,000 during the quarter ended March 31, 2024 and was expensed in the Company’s statement of operations. The fair value of this put option was $293,000 as of June 30, 2024 and insignificant at September 30, 2023 and December 31, 2023, assuming the investor will purchase the maximum number of shares. Changes in the estimated fair value of the FPA are recognized as a non-cash gain or loss on the statements of operations.

In connection with its purchase of the FPA Shares, RiverNorth will waive its redemption rights in connection with the shareholder vote to approve the Transactions.

Following the closing of the Transactions, an amount equal to the number of FPA Shares multiplied by the redemption price, will be prepaid to RiverNorth. The FPA Shares held by RiverNorth and subject to the FPA may be sold into the market by RiverNorth at any time following the closing of the Transactions. RiverNorth is entitled to sell into the market FPA Shares without any payment to the Company. The Company may receive up to $15,000,000 from the termination of all or a portion of the FPA transaction at $10.00 per terminated FPA Share, subject to reduction upon any Dilutive Offering Reset. To the extent RiverNorth elects not to terminate the FPA transaction prior to the maturity date, the Company will be entitled to receive from RiverNorth the number of FPA Shares not so terminated, and RiverNorth will be entitled to “maturity” consideration, paid in shares or cash, subject to the terms of the FPA.

The FPA expires automatically if the Business Combination is not consummated by the one-year anniversary of the date of the FPA, subject to acceleration at the Seller’s option upon the volume weighted average price per share being at or below $10.00 per share for any 10 trading days during a 30 consecutive trading day-period and upon any delisting of the Company’s ordinary shares.

Business Combination Agreement

On September 5, 2023, the Company entered into a Business Combination Agreement (the “Business Combination Agreement”) with ScanTech AI Systems Inc., a Delaware corporation and a wholly owned subsidiary of the Company (“Pubco”), Mars Merger Sub I Corp., a Cayman Islands exempted company and a wholly owned subsidiary of the Company (“Purchaser Merger Sub”), Mars Merger Sub II LLC, a Delaware limited liability company and a wholly owned subsidiary of Pubco (“Company Merger Sub”), ScanTech Identification Beam Systems, LLC, a Delaware limited liability company (“ScanTech”), and Dolan Falconer in the capacity as the representative (the “Seller Representative”). The aggregate consideration to be paid to ScanTech shall be a number of shares of Pubco Common Stock with an aggregate value equal to one hundred ten million U.S. Dollars ($110,000,000). Additionally, after the Closing, subject to the terms and conditions set forth in the Business Combination Agreement, the ScanTech Holder Participants will have the contingent right to receive up to a number of shares of Pubco Common Stock equal to ten percent (10%) of the fully diluted shares of Pubco Common Stock outstanding immediately following the Closing (subject to adjustment based on stock splits and similar events) based on Pubco’s achievement of certain milestones, including commercial milestones and revenue and EBITDA milestones, as more particularly set forth in the Business Combination Agreement.

Under the Business Combination Agreement, either ScanTech or Mars had the right to terminate the Business Combination Agreement if the Business Combination had not been consummated by January 31, 2024 (the “Outside Date”).

F-29

Amendments to the Business Combination Agreement

On December 19, 2023, the Company, Pubco, Purchaser Merger Sub, Company Merger Sub, ScanTech, and Seller Representative entered into Amendment No. 1 to the Business Combination Agreement to extend the Outside Date to May 15, 2024 in order to facilitate the completion of the Business Combination.

On April 2, 2024, Mars, Pubco, Purchaser Merger Sub, Company Merger Sub, ScanTech, and Seller Representative entered into Amendment No. 2 to the Business Combination Agreement to amend that the Merger Consideration shall be adjusted to One Hundred Ten Million U.S. Dollars ($110,000,000) minus (or plus, if negative) the amount of the closing net debt that exceeds Twenty Million U.S. Dollars ($20,000,000). In addition, every issued and outstanding Ordinary Share that is not redeemed shall be converted automatically to (i) one share of Pubco Common Stock and (ii) one additional (1) share of Pubco Common Stock, or a convertible security convertible or exercisable for one (1) share of Pubco Common Stock upon consummation of the Business Combination.

On April 17, 2024, Mars, Pubco, Purchaser Merger Sub, Company Merger Sub, ScanTech, and Seller Representative entered into Amendment No. 3 to the Business Combination Agreement to extend the Outside Date to September 30, 2024 in order to facilitate the completion of the Business Combination.

Subscription Agreement with Polar Multi-Strategy Master Fund

On April 2, 2024, the Company entered into a definitive subscription agreement (the “Subscription Agreement”) with Polar Multi-Strategy Master Fund (the “Investor”), the Sponsor, and ScanTech for Investor to provide ScanTech up to $1,000,000 in funding for working capital expenses in connection with the Business Combination in exchange for the Subscription Shares. On May 29, 2024, the Company, the Investor, the Sponsor, and ScanTech entered into an additional definitive subscription agreement (together, the “Subscription Agreements”) for the Investor to provide ScanTech up to an additional $250,000 in funding for working capital expenses in connection with the Business Combination in exchange for the Subscription Shares. Pursuant to the Subscription Agreements, upon an initial drawdown request of up to $500,000 and subsequent drawdown requests for working capital for a total of $1,250,000, Investor shall provide funding within five (5) calendar days.

In connection therewith, Pubco shall issue to Investor one share of Pubco Common Stock for each dollar the Investor provided as of the Closing without transfer restrictions (“Subscription Shares”). The Subscription Shares are to be issued upon successful Closing of the Business Combination. The Subscription Shares shall not be subject to any transfer restrictions or any other lock-up provisions, earn outs, or other contingencies. The Subscription Shares (i) to the extent feasible and in compliance with all applicable laws and regulations shall be registered as part of any registration statement issuing shares before or in connection with the Business Combination Closing or (ii) if no such registration statement is filed in connection with the Business Combination Closing, shall promptly be registered pursuant to the first registration statement filed by the Company or the surviving entity following the Business Combination Closing, which shall be filed no later than 30 days after the Business Combination Closing and declared effective no later than 120 days after the Business Combination Closing. The Sponsor shall not sell, transfer, or otherwise dispose of any securities owned by the Sponsor until the Subscription Shares have been transferred to the Investor and the registration statement has been made effective. Upon the Business Combination Closing, the Company or its successor will repay the Investor’s Capital Investment within five business days, either in cash or shares of Common Stock at a rate of 1 share per $10 invested. ScanTech, the Company, and Sponsor are jointly responsible for this payment, and funds provided by ScanTech for liquidation will prioritize Investor’s capital return before covering other expenses. If Sponsor, ScanTech, or the Company defaults under this agreement and the default continues for five business days post-notification, the Company or its successor will issue to the Investor on the Default Date 0.1 shares of Common Stock for each dollar of the Investor’s capital investment, and an additional 0.1 shares for each dollar of the Investor’s capital investment monthly until the default is resolved.

If the Business Combination is terminated in accordance with the provisions set forth in the Business Combination Agreement, ScanTech will be required to repay any funds borrowed from the Investor, and the Company will not be liable for any funds borrowed via a promissory note. As of June 30, 2024, no liability for any funds borrowed or shares to be issued was recorded based on the probability of the completion of the initial Business Combination, therefore, the Company has not recorded a liability for any funds borrowed or shares to be issued.

F-30

Agreement with Roth Capital Partners

On December 22, 2023, the Company entered into an agreement with Roth Capital Partners (“Roth”), whereby Roth will provide the Company with capital markets advisory services in connection with the closing of the Business Combination in exchange for the following:

$500,000, payable in cash, upon consummation of the Business Combination and upon the Company raising a minimum of $5,000,000, net of fees and expenses, in a Financing concurrent with the Business Combination, and;

$1,000,000, payable in cash or in exchange for 100,000 shares of Pubco, upon consummation of the Business Combination.

The Company has no obligation to pay these fees if the Business Combination is terminated in accordance with the provisions set forth in the Business Combination Agreement. As of June 30, 2024, no liability for any funds borrowed or shares to be issued was recorded based on the probability of the completion of the initial Business Combination, therefore, the Company has not recorded a liability for the shares to be issued to Roth.

NOTE 7 — SHAREHOLDERS’ EQUITY

Ordinary Shares — The Company is authorized to issue 800,000,000 ordinary shares with a par value of $0.000125 per share. Holders of the Company’s ordinary shares are entitled to one vote for each share. As of June 30, 2024 and September 30, 2023, there were 2,392,000 ordinary shares outstanding, respectively.

Rights — Each holder of a Right will automatically receive two-tenths (2/10) of one share of ordinary shares upon consummation of a Business Combination, except in cases where the Company not the surviving company in a Business Combination, and even if the holder of such Right redeemed all shares of ordinary shares held by it in connection with a Business Combination. No additional consideration will be required to be paid by a holder of a Right in order to receive its additional shares upon consummation of a Business Combination, as the consideration related thereto has been included in the unit purchase price paid for by investors in the Initial Public Offering. If the Company enters into a definitive agreement for a Business Combination in which the Company will not be the surviving entity, the definitive agreement will provide for the holders of Right to receive the same per share consideration the holders of shares of ordinary shares will receive in the transaction on an as-exchanged for ordinary shares basis, and each holder of a Right will be required to affirmatively exchange its Rights in order to receive the 2/10 share underlying each Right (without paying any additional consideration) upon consummation of a Business Combination. More specifically, the Rights holder will be required to indicate its election to exchange the Right for the underlying shares within a fixed period of time after which period the Rights will expire worthless.

Pursuant to the Rights agreement, a Rights holder may exchange Rights only for a whole number of shares of ordinary shares. This means that the Company will not issue fractional shares in connection with an exchange of Rights, and Rights may be exchanged only in multiples of 5 Rights (subject to adjustment for stock splits, stock dividends, reorganizations, recapitalization and the like). Fractional shares will either be rounded down to the nearest whole share or otherwise addressed in accordance with the applicable provisions of the Cayman Islands Law.

If the Company is unable to complete a Business Combination within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of Rights will not receive any such funds with respect to their Rights, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with respect to such Rights, and the Rights will expire worthless. Further, there are no contractual penalties for failure to deliver securities to holders of the Rights upon consummation of a Business Combination. Additionally, in no event will the Company be required to net cash settle the Rights. Accordingly, the Rights may expire worthless.

F-31

NOTE 8 — FAIR VALUE MEASUREMENTS

The following table presents information about the Company’s assets and that are measured at fair value on a recurring basis at June 30, 2024 and September 30, 2023 and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:

Description	Level		June 30, 2024		September 30, 2023
Assets:
Marketable securities held in Trust Account		1	$	22,836,871	$	72,587,820
			$	22,836,871	$	72,587,820
Liabilities:
Working Capital Loans		1	$	452,088	$	—
Prepaid forward purchase agreement		3		293,000		—
			$	745,088	$	—

Working capital loans

To fund extensions of the deadline for the Company to complete its initial Business Combination, the Sponsor deposited an additional $345,000 into the Trust Account during the nine months ended June 30, 2024. In return, the Company issued the Sponsor non-interest bearing, unsecured promissory notes (the “Convertible Notes”). Such Convertible Notes are to either be repaid upon the consummation of a Business Combination, without interest, or, at the Sponsor’s discretion, converted upon consummation of a Business Combination into an additional 41,400 Private Placement Units at a price of $10.00 per Unit.

As of June 30, 2024, the principal amount outstanding under the Convertible Notes was $345,000, and the fair value of the Convertible Notes was $452,088.

Forward Purchase Agreement Liabilities

The Company utilizes a Monte Carlo simulation model to value the forward purchase agreement at initiation and at the reporting period, with changes in fair value recognized in the statement of operations. Inherent in the model are assumptions related to share price on valuation date, volatilities, expected life, risk-free rate and probability of business combination. The Company estimates the pre-business combination volatility based on the low historical volatilities exhibited by the Company and SPACs-based and the post-merger volatility is estimated based on the median historical and implied volatilities exhibited by companies operating in the industry of the Company’s expected target. The risk-free interest rate is based on the 3-year and 5-year U.S. Treasury note which is similar to the expected remaining life of the FPA. The expected life of the forward purchase agreement is assumed to be equivalent to their remaining contractual term.

In order to calculate the fair value of the forward purchase agreement liabilities, the Company utilized the following key inputs:

	June 30, 2024
Risk-free interest rate		4.9	%
Expected term (years)		1.5
Stock price	$	10.90
Estimated volatility		60.0	%

NOTE 9 — SUBSEQUENT EVENTS

The Company evaluated subsequent events and transactions that occurred after the balance sheet date, up to the date that the financial statements were issued. The Company did not identify any subsequent events that would have required adjustment or disclosure in the financial statements.

F-32

Exhibit 99.5

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION OF MARS

References to the “Company,” “Mars,”“us,” “our” or “we” refer to Mars Acquisition Corp. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our financial statements and related notes included herein.

Overview

We are a blank check company incorporated in the Cayman Islands on April 23, 2021 for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses.

Results of Operations and Known Trends or Future Events

We have neither engaged in any operations nor generated any revenues to date. Our only activities since inception have been organizational activities and those necessary to prepare for the IPO, and activities related to identifying ScanTech as the target for the Business Combination. Since our IPO, we have not generated any operating revenues and do not intend to until after completion of the Business Combination, except for the non-operating income in the form of interest income on cash and cash equivalents held in the Trust Account.

We incurred expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as expenses as we conducted due diligence on prospective business combination candidates, including ScanTech.

We expect to incur additional costs in the pursuit of the Business Combination. We cannot assure you that our plans to raise capital or to complete the Business Combination will be successful.

For the three months period ended June 30, 2024, we incurred expenses in the amount of $322,770.

Liquidity, Capital Resources, Going Concern

Our Registration Statement for the IPO was declared effective on February 13, 2023. On February 16, 2023, we consummated the IPO of 6,900,000 Units, including 900,000 additional Units issued pursuant to the full exercise by the underwriter of its over-allotment option, generating gross proceeds of $69,000,000.

Simultaneously with the consummation of the IPO and the sale of the Units, Mars consummated the Private Placement of 391,000 Units, each Private Placement Unit consisting of one Ordinary Share and one Right, to our Sponsor, Mars Capital Holding Corporation, a British Virgin Islands business company with limited liability, at a price of $10.00 per Private Placement Unit, generating total proceeds of $3,910,000.

Following the closing of the IPO on February 16, 2023, an amount of $70,380,000 ($10.20 per Unit) from the net proceeds of the sale of the Units in the IPO and the Private Placement was placed in the Trust Account. The funds held in the Trust Account may be invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “Investment Company Act”), with a maturity of 185 days or less or in any open-ended investment company that holds itself out as a money market fund selected by us meeting the conditions of Rule 2a-7 of the Investment Company Act, as determined by the us, until the earlier of: (i) the completion of a Business Combination or (ii) the distribution of the Trust Account.

On January 30, 2024, the Company held the Shareholder Meeting to amend, by way of special resolution, the Company’s amended and restated memorandum and articles of association to remove the net tangible asset requirement so that Mars need not have net tangible assets of at least $5,000,001 to consummate a business combination, and without depositing additional funds into the Trust Account, to extend for the first time, the date by which the Company has to consummate a business combination from February 16, 2024 to November 16, 2024 for a total of an additional nine months, unless the closing of a business combination shall have occurred prior thereto. If Mars cannot complete the Business Combination by November 16, 2024, we will need to extend the period of time to consummate a business combination up to two times, each by an additional three months (for a total of up to 27 months to complete a Business Combination). In connection with the Shareholder Meeting and subsequent redemptions, a total of 107 Public Shareholders elected to redeem an aggregate of 4,818,568 Public Shares. Following the redemptions, Mars had $22,296,189.61 left in its Trust Account. As of June 30,2024, there is approximately $22,836,871 in cash held in the Trust Account. We may need to obtain additional financing if we become obligated to redeem a significant number of our public shares upon another extension or the completion of the Business Combination, in which case we may issue additional securities or incur debt in connection with the extension or the Business Combination. If we are unable to complete the extension or the Business Combination because we do not have sufficient funds available to us, we may be forced to cease operations and liquidate the Trust Account. In addition, following the Business Combination, if cash on hand is insufficient, we may need to obtain additional financing in order to meet our obligations.

We intend to use substantially all of the funds held in the Trust Account, including any amounts representing interest earned on the Trust Account, to complete the Business Combination. To the extent that our capital stock or debt is used, in whole or in part, as consideration to complete the Business Combination, the remaining proceeds held in the Trust Account will be used as working capital to finance the operations of ScanTech, make other acquisitions and pursue our growth strategies.

On March 31, 2024, Mars received $200,000 through non-interest bearing loans from affiliates of the Sponsor, in order to fund working capital. If we complete the Business Combination, such loaned amounts will either be repaid or converted into up to 24,000 shares of Pubco Common Stock.

On April 30, 2024, Mars received $145,000 through non-interest bearing loans from affiliates of the Sponsor, in order to fund working capital. If we complete the Business Combination, such loaned amounts will either be repaid or converted into up to 17,400 shares of Pubco Common Stock.

For the three-month period ended June 30, 2024, we incurred expenses in the amount of $322,770.

Other than as described above, the terms of such loans by our officers and directors, if any, have not been determined and no written agreements exist with respect to such loans. We do not expect to seek additional loans from parties other than our Sponsor or an affiliate of our Sponsor as we do not believe third parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in our Trust Account.

There is no assurance that our plans to consummate the Business Combination will be successful within the Combination Period. As a result, there is substantial doubt about Mars’ ability to continue as a going concern within one year after the date that the financial statements are issued or are available to be issued.

Off-Balance Sheet Financing Arrangements

We have no obligations, assets or liabilities, which would be considered off-balance sheet arrangements as of June 30, 2024. We do not participate in transactions that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established for the purpose of facilitating off-balance sheet arrangements. We have not entered into any off- balance sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or purchased any non-financial assets.

Contractual Obligations

We do not have any long-term debt obligations, capital lease obligations, operating lease obligations, purchase obligations or long-term liabilities.

Our Sponsor, officers and directors, or any of their respective affiliates, will be reimbursed for any out-of-pocket expenses incurred in connection with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable business combination targets. Our audit committee will review on a quarterly basis all payments that were made to our Sponsor, officers or directors or our or their affiliates and will determine which expenses and the amount of expenses that will be reimbursed. There is no cap or ceiling on the reimbursement of out-of-pocket expenses incurred by such persons in connection with activities on our behalf.

In addition, in order to finance transaction costs in connection with an intended business combination, our Sponsor or an affiliate of our Sponsor or certain of our officers and directors may, but are not obligated to, loan us funds as may be required. If we complete the Business Combination, we would repay such loaned amounts. In the event that the Business Combination does not close, we may use a portion of the working capital held outside the Trust Account to repay such loaned amounts, but no proceeds from our Trust Account would be used for such repayment. The terms of such loans by our officers and directors, if any, have not been determined and no written agreements exist with respect to such loans. We do not expect to seek loans from parties other than our Sponsor or an affiliate of our Sponsor as we do not believe third parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in our Trust Account.

Our Sponsor has agreed (a) to waive its redemption rights with respect to any Founder Shares and Public Shares held by it in connection with the completion of a Business Combination and (b) not to propose an amendment to the Mars Memorandum and Articles of Association (i) to modify the substance or timing of Mars’ obligation to allow redemption in connection with the our initial Business Combination or to redeem 100% of the Public Shares if we do not complete a Business Combination within the Combination Period or (ii) with respect to any other provision relating to shareholders’ rights or pre-initial business combination activity, unless we provide the Public Shareholders with the opportunity to redeem their Public Shares upon approval of any such amendment 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 Trust account and not previously released to pay taxes, divided by the number of then issued and outstanding Public Shares.

Our Sponsor has agreed to waive its rights to liquidating distributions from the Trust Account with respect to the Founder Shares it will receive if we fail to complete the Business Combination within the Combination Period. However, if the Sponsor or any of its respective affiliates acquire Public Shares, such Public Shares will be entitled to liquidating distributions from the Trust Account if we fail to complete the Business Combination within the Combination Period. In the event of such distribution, it is possible that the per share value of the assets remaining available for distribution will be less than the public offering price per Unit ($10.20).

The holders of the Founder Shares, Private Placement Units and Units that may be issued upon conversion of Working Capital Loans (and any shares of Ordinary Shares issuable upon the exercise of the Private Placement Right) will be entitled to registration rights pursuant to a registration rights agreement to signed prior to or on the effective date of the IPO requiring us to register such securities for resale. The holders of these securities will be entitled to make up to three demands, excluding short form registration demands, that we register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to completion of a business combination and rights to require us to register for resale such securities pursuant to Rule 415 under the Securities Act. However, the registration rights agreement provides that we will not be required to effect or permit any registration or cause any registration statement to become effective until the securities covered thereby are released from their lock-up restrictions. We will bear the expenses incurred in connection with the filing of any such registration statements.

On September 4, 2023, the Company entered into forward purchase agreements (“FPA”) with RiverNorth SPAC Arbitrage Fund, L.P. (“RiverNorth”) and other parties. Pursuant to these agreements, RiverNorth will be reimbursed from the funds held in the Trust Account for the purchase of Ordinary Shares.

On March 31, 2024, and on April 30, 2024, Sponsor and its affiliates loaned Mars an aggregate of $345,000 for working capital purposes and entered Notes that are non-interest bearing and payable upon the consummation of the Business Combination. If we complete the Business Combination, such loaned amounts will either be repaid or converted into up to 41,400 shares of Pubco Common Stock. In the event that the Business Combination does not close, we may use a portion of the working capital held outside the Trust Account to repay such loaned amounts but no proceeds from our Trust Account would be used for such repayment.

In connection with the initial extension meeting held on January 30, 2024, the Company and the Sponsor entered into non-redemption agreements (the “Non-Redemption Agreements”) on substantially the same terms with several unaffiliated third parties who are also Mars’ existing shareholders (the “Investors”), pursuant to which such Investors agreed not to redeem an aggregate of 1,813,380 ordinary shares of the Company in connection with the initial extension meeting. In exchange for the foregoing commitments not to redeem such ordinary shares of the Company, Mars and the Sponsor will agree to cause Pubco to issue to Investors an aggregate of 362,676 common stock of Pubco following the consummation of the initial business combination.

Critical Accounting Estimates

The preparation of the unaudited financial statements and related disclosures in conformity with U.S. GAAP requires management to make estimates, assumptions and judgments that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and income and expenses during the periods reported. Although actual results could materially differ from those estimates, such estimates are developed based on the best information available to management and management’s best judgments at the time.

Our significant accounting policies are described in Note 2 to the financial statements included in our Annual Report on Form 10-K for the fiscal year ended September 30, 2023. For the three and nine months ended June 30, 2024 we have identified the following critical accounting policies:

Forward Purchase Agreement Liabilities

The Company accounts for forward purchase agreements as liability-classified instruments based on an assessment of the forward purchase agreement’s specific terms and applicable authoritative guidance in FASB ASC 480, Distinguishing Liabilities from Equity (“ASC 480”) The assessment considers whether the forward purchase agreement is a freestanding financial instrument pursuant to ASC 480 and meets the definition of a liability pursuant to ASC 480. This assessment, which requires the use of professional judgment, is conducted at the time of forward purchase agreement issuance and as of each subsequent quarterly period end date while the forward purchase agreement is outstanding.

Convertible Promissory Note — Sponsor Working Capital Loan

The Company accounts for the convertible promissory notes under ASC 815, Derivatives and Hedging (“ASC 815”). Under 815-15-25, the election can be made at the inception of a financial instrument to account for the instrument under the fair value option under ASC 825. The Company has made such election for the convertible promissory note. Using the fair value option, the convertible promissory note is required to be recorded at its initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the note are recognized as non-cash gains or losses in the statements of operations.

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