Business Context and Reporting Period
Company: Quetta Acquisition Corporation (QETA)
Filing Type: Form 10-Q (Unaudited)
Reporting Period: Three months ended March 31, 2026
Business Model: A blank check company (SPAC) incorporated in Delaware, formed to effect a business combination with target businesses, primarily in Asia. The Company has not commenced operations and generates no operating revenue.
Current Status: The Company is in the process of consummating a Business Combination with Smart Kreate Group Limited ("SKG"), having terminated a prior agreement with KM QUAD in January 2026.
Key Financial Metrics
| Metric | Q1 2026 | Q1 2025 |
|---|---|---|
| Net Income (Loss) | $(13,521) | $(193,671) |
| Loss from Operations | $(149,693) | $(417,102) |
| Interest Income (Trust Account) | $169,702 | $273,997 |
| Total Assets | $19,563,234 | $19,255,692 |
| Cash and Cash Equivalents | $909 | $243,921 |
| Trust Account Balance | $19,541,732 | $19,233,261 |
| Total Liabilities | $5,389,398 | $5,068,335 |
| Working Capital Deficit | $(2,952,897) | $(2,630,904) |
| Stockholders' Deficit | $(5,494,249) | $(3,598,387) |
Material Changes vs. Prior Period
- Net Loss Reduction: Net loss decreased significantly from $(193,671) in Q1 2025 to $(13,521) in Q1 2026. This improvement was driven by a reduction in formation and operation costs (from $377,102 to $109,693) and lower income tax expenses, partially offset by lower interest income from the Trust Account.
- Trust Account Growth: The Trust Account balance increased by approximately $308,471 due to interest earnings and extension fee deposits, despite no new redemptions in the current quarter.
- Liability Increases: Current liabilities increased by approximately $321,000, primarily due to new promissory notes from SKG ($120,000) and related party funding, as well as accrued administrative fees.
- Cash Position: Operating cash decreased to $909, reflecting a net cash outflow from operating activities of $47,517.
Outlook, Risks, and Contingencies
Business Combination Progress
On March 6, 2026, the Company entered into a Business Combination Agreement with Smart Kreate Group Limited ("SKG"). The Company terminated its prior merger agreement with KM QUAD on January 15, 2026. Subsequent to the balance sheet date (April 30, 2026), KM QUAD released the Company from obligations under promissory notes totaling $1,040,000.
Liquidity and Going Concern
Management has raised substantial doubt about the Company's ability to continue as a going concern. The Company has a working capital deficit of approximately $2.95 million and minimal operating cash ($909). The Company relies on extension payments (currently funded by SKG) and potential capital raises to fund operations and complete a business combination by the extended deadline of October 10, 2026.
Key Risks and Contingencies
- Excise Tax Liability: The Company has a recorded excise tax payable of $551,522 related to share redemptions in January 2025. This amount is due April 30, 2026. Failure to pay may result in interest and penalties.
- Extension Fees: The Company must deposit $60,000 monthly into the Trust Account to extend the combination period. SKG has agreed to fund these fees for six months commencing March 2026.
- Nasdaq Listing: The Company received notice on May 12, 2026, that its listing was approved for transfer from the Nasdaq Global Market to the Nasdaq Capital Market, effective May 14, 2026, following a period of non-compliance with market value requirements.
- Internal Controls: Management concluded that disclosure controls and procedures were ineffective as of March 31, 2026.
Investor Verification Checklist
- Excise Tax Payment: Verify if the $551,522 excise tax liability due April 30, 2026, has been settled to avoid penalties.
- SKG Transaction Status: Confirm the progress of the Business Combination Agreement with Smart Kreate Group Limited and the status of the $120,000 extension funding.
- Going Concern Funding: Assess the Company's ability to fund operations beyond the current SKG extension support, given the $909 cash balance.
- Nasdaq Compliance: Monitor the Company's status on the Nasdaq Capital Market to ensure continued listing compliance.
- Internal Controls: Review subsequent filings for updates on the remediation of ineffective disclosure controls.