Quetta Acquisition Corp (QETA) - 10-K Summary
Business Context and Reporting Period
Company: Quetta Acquisition Corporation (QETA)
Filing Type: Form 10-K (Annual Report)
Reporting Period: Fiscal year ended December 31, 2025
Business Model: Special Purpose Acquisition Company (SPAC) formed to effect a business combination with one or more target businesses, primarily in Asia.
Status: As of December 31, 2025, the Company had not consummated an initial business combination. The Company is classified as an "emerging growth company" and a "smaller reporting company."
Key Financial Metrics
| Metric | 2025 | 2024 |
|---|---|---|
| Net Income (Loss) | $(780,924) | $2,094,096 |
| Interest Income (Trust Account) | $845,374 | $3,637,871 |
| Operating Expenses | $1,467,731 | $810,534 |
| Cash and Cash Equivalents | $1,195 | $1,554,737 |
| Trust Account Balance | $19,233,261 | $73,115,355 |
| Working Capital Deficit | $(2,630,904) | Not Reported |
| Deferred Underwriting Fee | $2,415,000 | $2,415,000 |
Note: The Company has no operating revenue. Expenses consist primarily of formation costs, administrative fees, and franchise taxes.
Material Changes vs. Prior Period
- Trust Account Reduction: The Trust Account balance decreased significantly from $73.1 million in 2024 to $19.2 million in 2025. This was primarily due to the redemption of 5,199,297 shares (approx. $55.2 million) by public stockholders in January 2025.
- Profitability Shift: The Company reported a net loss of $780,924 in 2025, compared to net income of $2.1 million in 2024. The decline in income was driven by lower interest earnings on the reduced Trust balance and increased operating expenses.
- Extension Fees: The Company incurred $720,000 in extension fees deposited into the Trust Account during 2025 to extend the deadline for consummating a business combination.
- Excise Tax Liability: A liability of $551,522 was recorded for the 1% excise tax on stock repurchases (redemptions) under the Inflation Reduction Act.
Outlook, Risks, and Unusual Items
Business Combination Status
- Terminated Deal: The proposed business combination with KM QUAD, announced in February 2025, was terminated on January 15, 2026.
- New Agreement: On March 6, 2026, the Company entered into a Business Combination Agreement with Smart Kreate Group Limited (SKG). The transaction values the merger at an enterprise value of $200 million.
- Extension Deadline: Following monthly extension deposits, the deadline to complete a business combination was extended to May 10, 2026.
Risks and Contingencies
- Going Concern: Management has determined that conditions raise substantial doubt about the Company's ability to continue as a going concern within one year of the report date due to the working capital deficit and the requirement to complete a business combination or liquidate.
- Internal Controls: The Company identified a material weakness in internal controls over financial reporting due to inadequate segregation of duties and insufficient written policies.
- Liquidity: The Company has minimal cash outside the Trust Account ($1,195) and relies on promissory notes from related parties and the target company to fund operations.
Investor Verification Checklist
- Trust Account Balance: Verify the current balance of the Trust Account ($19.2M as of Dec 31, 2025) and the per-share redemption value.
- Extension Payments: Confirm the status of monthly extension deposits ($60,000/month) required to maintain the deadline through May 2026.
- New Target Due Diligence: Review the terms of the March 2026 agreement with Smart Kreate Group Limited, including the $200M valuation and conversion terms.
- Excise Tax Payment: Monitor the payment status of the $551,522 excise tax liability, which is due April 30, 2026, to avoid penalties.
- Related Party Loans: Assess the repayment terms of the $1.04 million promissory note to KM QUAD (now due following termination) and $160,000 to the Sponsor.