Business Context and Reporting Period
Company: Quetta Acquisition Corp (QETA)
Filing Type: Form 10-Q (Unaudited)
Reporting Period: Quarter and six months ended June 30, 2026
Business Overview: A blank check company (SPAC) incorporated in Delaware, formed to effect a business combination with target businesses in Asia, specifically the financial technology sector. The Company has not commenced operations and generates no operating revenue. It is classified as an emerging growth company and a shell company.
Key Financial Metrics
| Metric | Six Months Ended June 30, 2026 | Six Months Ended June 30, 2025 |
|---|---|---|
| Net Income (Loss) | $871,383 | $(801,621) |
| Operating Loss | $(381,642) | $(1,181,301) |
| Trust Account Balance | $19,854,590 | $19,233,261 (Dec 31, 2025) |
| Cash (Outside Trust) | $4,575 | $1,195 (Dec 31, 2025) |
| Working Capital Deficit | $(2,380,850) | $(2,630,904) (Dec 31, 2025) |
| Total Liabilities | $4,922,155 | $5,068,335 (Dec 31, 2025) |
| Redeemable Common Stock | $19,902,696 (1,700,703 shares) | $19,294,398 (Dec 31, 2025) |
Material Changes and Unusual Items
- Gain on Debt Forgiveness: The Company recorded a non-cash gain of $1,040,000 due to the forgiveness of promissory notes owed to KM QUAD following the termination of their merger agreement on January 15, 2026. This was the primary driver of net income for the period.
- Excise Tax Penalties: The Company recognized $62,526 in interest and penalties related to an excise tax liability of $614,048 (arising from stock redemptions in January 2025) which was due on April 30, 2026.
- Extension Fees: The Company incurred $360,000 in extension fees (recorded as non-cash financing activities) to extend the business combination deadline. These fees are funded by deposits into the Trust Account.
- Redemptions: Significant redemptions occurred in January 2025 (5,199,297 shares), reducing the Trust Account balance from the IPO proceeds. No redemptions occurred during the six months ended June 30, 2026.
Outlook, Risks, and Management Commentary
- Business Combination Status: On March 6, 2026, the Company entered into a Business Combination Agreement with Smart Kreate Group Limited (SKG). The transaction is subject to customary closing conditions, including regulatory review and shareholder approval.
- Extension Deadline: The deadline to consummate a business combination has been extended to September 10, 2026, following subsequent deposits of $120,000 made in July and August 2026.
- Going Concern: Management has determined that substantial doubt exists regarding the Company's ability to continue as a going concern within one year due to a working capital deficit and the uncertainty of completing a business combination. The financial statements do not include adjustments related to this uncertainty.
- Internal Controls: Disclosure controls and procedures were deemed ineffective as of June 30, 2026, due to material weaknesses including inadequate segregation of duties and insufficient written policies.
- Nasdaq Listing: The Company transferred its listing from the Nasdaq Global Market to the Nasdaq Capital Market on May 14, 2026, after regaining compliance with minimum market value requirements.
Investor Verification Checklist
- Debt Forgiveness Validity: Verify the legal finality of the $1.04 million debt forgiveness from KM QUAD and ensure no contingent liabilities remain.
- Excise Tax Liability: Confirm the status of the $614,048 excise tax liability and the plan to settle the accrued interest and penalties.
- Extension Funding: Verify the source of funds for future monthly extension payments ($60,000/month) given the minimal cash balance outside the Trust Account ($4,575).
- SKG Transaction Progress: Monitor the status of the Business Combination Agreement with Smart Kreate Group Limited and any regulatory hurdles.
- Internal Control Remediation: Review plans to address the material weaknesses in internal controls over financial reporting.