Quarterly Report for Quarter Ending September 30, 2026 (Form 10-Q)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

References in this report (the "Quarterly Report") to "we," "us" or the "Company" refer to Quetta Acquisition Corporation. References to our "management" or our "management team" refer to our officers and directors, and references to the "Sponsor" refer to Yocto Investments LLC. The following discussion and analysis of the Company's financial condition and results of operations should be read in conjunction with the financial statements and the notes thereto contained elsewhere in this Quarterly Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.

Special Note Regarding Forward-Looking Statements

This Quarterly Report includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Exchange Act that are not historical facts and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. All statements, other than statements of historical fact included in this Form 10-Q including, without limitation, statements in this "Management's Discussion and Analysis of Financial Condition and Results of Operations" regarding the completion of the Proposed Business Combination (as defined below), the Company's financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. Words such as "expect," "believe," "anticipate," "intend," "estimate," "seek" and variations and similar words and expressions are intended to identify such forward-looking statements. Such forward-looking statements relate to future events or future performance, but reflect management's current beliefs, based on information currently available. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements, including that the conditions of the Proposed Business Combination are not satisfied. For information regarding factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the risk factors described in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2025, filed with the SEC on April 23, 2026, and in the Company's subsequent SEC filings. The Company's securities filings can be accessed on the EDGAR section of the SEC's website at www.sec.gov. Except as expressly required by applicable securities law, the Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.

Overview

We are a blank check company incorporated in Delaware on May 1, 2023. We were formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses or entities, which we refer to herein as our "initial business combination." Our efforts to identify a prospective target business are not limited to any particular industry or geographic region, although we intend to focus on target businesses in Asia that operate in the financial technology sector. We intend to utilize cash derived from the proceeds of our initial public offering ("IPO" as defined below) and the private placement of Private Units, our securities, debt or a combination of cash, securities and debt, in effecting our initial business combination.

On July 6, 2026, the chief executive officer of SKG discussed in an interview published by Sing Tao Headline SKG's strategic partnership with KEC (Hong Kong) Limited, a subsidiary of KLN Logistics Group Limited, to jointly develop a cross-border e-commerce logistics platform, with SKG providing the technology platform and KEC contributing order volume and operational resources. SKG's chief executive officer also discussed SKG's plans to expand into additional overseas markets and to introduce a software-as-a-service platform intended for small and medium-sized enterprise customers. The proposed Business Combination remains subject to customary closing conditions, including regulatory review and shareholder approvals.

We expect to continue to incur significant costs in the pursuit of our acquisition plans. We cannot assure you that our plans to complete an initial business combination will be successful.

Extensions of Time Period to Complete a Business Combination

On October 18, 2024, the Company entered into a non-binding LOI with QUAD, regarding a potential business combination (the "Proposed Transaction"). The LOI is non-binding and no agreement providing for any Proposed Transaction or any other transaction or the participation by either party therein will be deemed to exist unless and until definitive agreements have been executed. As a result of the execution of the LOI, the deadline by which the Company must complete its initial business combination has been extended to January 10, 2025.

On January 10, 2025, the Company held a special meeting of stockholders (the "January Special Meeting"). During the January Special Meeting, stockholders approved the proposal to amend Company's amended and restated certificate of incorporation and Trust Agreement to extend the date by which the Company has to consummate a business combination from January 10, 2025 to October 10, 2026 (thirty six (36) months from the consummation of the IPO), on a month-by-month basis, up to a total of twenty-one (21) times, by depositing $60,000 into the Company's trust account for each such one-month extension.

Redemption

In connection with the stockholders' vote at the January Special Meeting of stockholders held by the Company on January 10, 2025, 5,199,297 shares were tendered for redemption. As a result, approximately $55,152,224 (approximately $10.608 per share) were removed from the Company's trust account to pay such holders, without taking into account additional allocation of payments to cover any tax obligation of the Company, since that date. As a result, approximately $18,040,430 remained in the trust account. Following the redemptions, the Company has 3,747,748 shares of common stock issued and outstanding.

Acquisition Criteria Expansion

In connection with the stockholders' vote at the January Special Meeting of stockholders held by the Company on January 10, 2025, stockholders approved the proposal to include any entity with its principal business operations in the geographical regions of the People's Republic of China, the Hong Kong special administrative region, and the Macau special administrative region in the Company's acquisition criteria in its search for a prospective target business for its business combination.

Trust Amendment

At the January Special Meeting held on January 10, 2025, stockholders approved an amendment to the Company's amended and restated certificate of incorporation and trust agreement to extend the date by which the Company has to consummate a business combination from January 10, 2025 to October 10, 2026, on a month-by-month basis, by up to twenty-one (21) one-month extensions, by depositing $60,000 into the Company's trust account for each such one-month extension.

Under the amended terms, if the Company fails to timely make a payment for any given month during the twenty-one (21) month extension period, the Company has a forty-five (45) day cure period to make such payment, together with accrued but unpaid interest thereon at a rate of three percent (3%). If the Company fails to make any applicable past due payment during the cure period, the Company will cease all operations except for the purpose of winding up and will redeem the public shares and liquidate with the same effect as if the Company had failed to complete a business combination within the applicable time period.

Following the January Special Meeting, the Company deposited $60,000 into the trust account for each monthly extension from January 2025 through September 2026, thereby extending the date by which the Company could complete a business combination to October 10, 2026. As of September 30, 2026, the deadline for the Company to complete an initial Business Combination had been extended to October 10, 2026.

October 2026 Special Meeting and Extension Amendment

On October 9, 2026, the Company held a special meeting of stockholders (the "October 2026 Special Meeting"). At the October 2026 Special Meeting, stockholders approved an amendment to the Company's third amended and restated certificate of incorporation to permit the Company to extend the deadline by which it must consummate an initial business combination from October 10, 2026 to October 10, 2027, or such earlier date as the Company's board of directors may determine, through up to twelve successive one-month extensions, subject to the deposit of $5,000 into the trust account for each such extension. The $5,000 monthly extension deposit replaced the $60,000 monthly deposit required under the January 2025 extension amendment.

In connection with the October 2026 Special Meeting, holders of 1,550,843 shares of common stock properly exercised their right to redeem such shares at a redemption price of approximately $11.89 per share, for an aggregate redemption amount of approximately $18.4 million, which was paid from the trust account in October 2026. Following the redemptions, 149,860 public shares remained issued and outstanding.

On October 10, 2026, $5,000 was deposited into the trust account, extending the date by which the Company must consummate an initial business combination from October 10, 2026 to November 10, 2026.

On November 9, 2026, $5,000 was deposited into the trust account, extending the date by which the Company must consummate an initial business combination from November 10, 2026 to December 10, 2026.

Delisting from Nasdaq

On October 7, 2026, the Company received a notice from Nasdaq stating that, because the Company had not completed an initial business combination within 36 months of the effectiveness of its IPO registration statement as required by Nasdaq Listing Rule IM-5101-2, Nasdaq had determined to delist the Company's common stock, rights and units. The Company did not appeal the determination. Trading in the Company's securities on Nasdaq was suspended on October 14, 2026, and Nasdaq filed a Form 25-NSE with the SEC to remove the Company's securities from listing and registration on Nasdaq. The Company's common stock, units and rights are quoted on the OTC Pink market under the symbols "QETA," "QETAU" and "QETAR," respectively. The delisting does not affect the Company's obligation to file periodic reports with the SEC, and the Company intends to continue to pursue the proposed Business Combination with SKG. As a result of the delisting, the Company is no longer required to satisfy the Nasdaq 80% fair market value test described in Note 1 to the financial statements.

Results of Operations

We have neither engaged in any operations nor generated any operating revenues to date. Our activities for the three and nine months ended September 30, 2026 consisted primarily of identifying and evaluating target businesses and pursuing the proposed Business Combination with Smart Kreate Group Limited (the "SKG") and related parties pursuant to the BCA entered into on March 6, 2026, maintaining our public company status, funding monthly extension deposits, and managing Trust Account and working capital activities. We do not expect to generate any operating revenues until after the completion of our initial business combination.

We generate non-operating income in the form of interest income on cash and investments held in the Trust Account. We expect to continue to incur expenses as a public company, including legal, financial reporting, accounting and auditing compliance costs, as well as due diligence and transaction-related expenses in connection with identifying and completing an initial business combination.

For the three months ended September 30, 2026, we had net loss of $113,225, which consisted of formation and operational costs of $125,372, related party administrative fees of $30,000, franchise tax expense of $10,200, interest and penalties on excise tax payable of $93,849 and income tax expense of $36,151, partially offset by interest income of $18 and interest earned on cash and investments held in the Trust Account of $182,329.

For the three months ended September 30, 2025, we had net loss of $34,853, which consisted of formation and operational costs of $144,254, related party administrative fees of $30,000, franchise tax expense of $19,880 and income tax expense of $37,056, partially offset by interest income of $693 and interest earned on cash and investments held in the Trust Account of $195,644.

The increase in net loss for the three months ended September 30, 2026 compared to the three months ended September 30, 2025 was primarily due to interest and penalties on excise tax payable of $93,849 recognized in 2026, partially offset by a decrease in formation and operational costs.

For the nine months ended September 30, 2026, we had net income of $758,158, which consisted of interest earned on cash and investments held in the Trust Account of $525,317, gain on forgiveness of promissory note of $1,040,000, interest income of $460, partially offset by formation and operational costs of $426,814, related party administrative fees of $90,000, franchise tax expense of $30,400, interest and penalties on excise tax payable of $156,375 and income tax expense of $104,030.

For the nine months ended September 30, 2025, we had net loss of $836,474, which consisted of formation and operational costs of $1,245,355, related party administrative fees of $90,000, franchise tax expense of $40,080 and income tax expense of $ 131,298, partially offset by interest income of $8,253 and interest earned on cash and investments held in the Trust Account of $662,006.

The increase in net income for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025 was primarily due to a gain on forgiveness of promissory loan and a decrease in formation and operational costs, partially offset by lower interest earned on cash and investments held in the Trust Account and interest and penalties on excise tax payable incurred in 2026.

Liquidity and Capital Resources

On January 10, 2025, in connection with the special meeting of stockholders, holders of 5,199,297 shares exercised their right to redeem such shares for a pro rata portion of the funds held in the trust account. As a result, approximately $55.2 million was removed from the trust account to pay such redeeming stockholders, and approximately $18.0 million remained in the trust account following such redemptions. Following the January 10, 2025 special meeting, the Company was permitted to extend the date by which it must consummate a business combination from January 10, 2025 to October 10, 2026 on a month-by-month basis, by up to twenty-one one-month extensions, by depositing $60,000 into the trust account for each such one-month extension. The Company deposited $60,000 for each monthly extension through September 2026.

We intend to use substantially all of the funds held in the trust account, including any interest earned thereon not previously released to us to pay our taxes, to consummate our initial business combination. We may withdraw interest income from the trust account to pay taxes. To the extent that our capital stock or debt is used, in whole or in part, as consideration to complete our initial business combination, the remaining proceeds held in the trust account, as well as any other net proceeds not expended, will be used as working capital to finance the operations of the target business, make other acquisitions and pursue our business strategy.

As of September 30, 2026, the Company had cash of $384, cash and investments held in the Trust Account of $20,216,920, and a working capital deficit of $2,856,405. As of December 31, 2025, the Company had cash of $1,195 and a working capital deficit of $2,630,904. The Company has incurred and expects to continue to incur significant professional costs to remain as a publicly traded company and to incur significant transaction costs in pursuit of the consummation of a Business Combination. There is no assurance that the Company's plans to raise capital will be successful. In connection with the Company's assessment of going concern considerations in accordance with Financial Accounting Standard Board's Accounting Standards Update ("ASU") 2014-15, "Disclosures of Uncertainties about an Entity's Ability to Continue as a Going Concern," management has determined that these conditions raise substantial doubt about the Company's ability to continue as a going concern, within one year after the date that the consolidated financial statements are issued. In addition, if the Company is unable to complete a Business Combination within the Combination Period, the Company's board of directors would proceed to commence voluntary liquidation and thereby a formal dissolution of the Company. There is no assurance that the Company's plans to consummate a Business Combination will be successful within the Combination Period. As a result, management has determined that such additional condition also raises substantial doubt about the Company's ability to continue as a going concern until the earlier of the consummation of the Business Combination or the date the Company is required to liquidate. The consolidated financial statements do not include any adjustments that might result from the Company's inability to continue as a going concern.

As of September 30, 2026, the Company's deadline to complete an initial Business Combination was October 10, 2026. Following stockholder approval of additional monthly extensions on October 9, 2026, a $5,000 deposit was made into the Trust Account on October 10, 2026, extending the deadline to November 10, 2026, and a further $5,000 deposit was made on November [10], 2026, extending the deadline to December 10, 2026. At the October 9, 2026 special meeting of stockholders, stockholders approved an amendment to the Company's certificate of incorporation permitting up to twelve additional one-month extensions, to as late as October 10, 2027, upon the deposit of $5,000 into the Trust Account for each such extension. In connection with the special meeting, holders of 1,550,843 shares of common stock exercised their right to redeem such shares at approximately $11.89 per share, and approximately $18.4 million was paid to the redeeming stockholders from the Trust Account in October 2026, leaving 149,860 public shares outstanding. The Company will need to fund the $5,000 monthly extension deposits, as well as its operating costs and transaction costs, from working capital held outside the Trust Account, loans from the Sponsor or its affiliates, or funding from SKG, none of which is assured.

Off-Balance Sheet Arrangements

We have no obligations, assets or liabilities, which would be considered off-balance sheet arrangements as of September 30, 2026. 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.

JOBS Act

On April 5, 2012, the JOBS Act was signed into law. The JOBS Act contains provisions that, among other things, relax certain reporting requirements for qualifying public companies. We will qualify as an "emerging growth company" and under the JOBS Act will be allowed to comply with new or revised accounting pronouncements based on the effective date for private (not publicly traded) companies. We are electing to delay the adoption of new or revised accounting standards, and as a result, we may not comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. As a result, our financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.

Additionally, we are in the process of evaluating the benefits of relying on the other reduced reporting requirements provided by the JOBS Act. Subject to certain conditions set forth in the JOBS Act, if, as an "emerging growth company," we choose to rely on such exemptions, we may not be required to, among other things, (i) provide an auditor's attestation report on our system of internal controls over financial reporting pursuant to Section 404, (ii) provide all of the compensation disclosure that may be required of non-emerging growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (iii) comply with any requirement that may be adopted by the PCAOB regarding mandatory audit firm rotation or a supplement to the auditor's report providing additional information about the audit and the financial statements (auditor discussion and analysis), and (iv) disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the CEO's compensation to median employee compensation. These exemptions will apply for a period of five years following the completion of our IPO or until we are no longer an "emerging growth company," whichever is earlier.

Contractual Obligations

We do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities, other than described below.

Administrative Services Agreement

We have entered into an administrative services agreement pursuant to which we will pay the Sponsor a total of $10,000 per month for office space, utilities, secretarial and administrative support. However, pursuant to the terms of such agreement, the Sponsor agreed to defer the payment of such monthly fee. Any such unpaid amount will accrue without interest and be due and payable no later than the date of the consummation of the initial Business Combination. For the three and nine months ended September 30, 2026, the Company incurred $30,000 and $90,000 in administrative fees. As of September 30, 2026 and December 31, 2025, the Company had accrued administrative fees due to the Sponsor of $90,000 and $0, respectively.

Underwriting Agreement

Upon closing of a Business Combination, the underwriters will be entitled to a deferred fee of 3.5% of the gross proceeds of the IPO, or $2,415,000. The deferred fee will become payable to the underwriters from the amounts held in the Trust Account solely in the event that we complete a Business Combination, subject to the terms of the underwriting agreement. Additionally, we issued the underwriters 69,000 shares of common stock, or the representative shares, at the closing of the IPO as part of representative compensation.

Promissory Note in Connection with Extension Payments

The KM QUAD Merger Agreement provided that, in the event that the closing of the KM QUAD Business Combination does not occur by February 10, 2025, the Company shall have the right to extend the time to complete the KM QUAD Business Combination up to twenty-one (21) times for one month each time until October 10, 2026. QUAD would be responsible for the extension fees covering nine extensions over nine months, in total amount of $540,000.

On or before February 14, 2025, KM QUAD wired the first installment of the prepaid extension fees, in the amount of $250,000, to the Company's designated bank account in exchange for a promissory note issued by the Company. KM QUAD wired the second installment of the prepaid extension fees, in the amount of $290,000, to the Company's designated bank account on or before April 20, 2025 in exchange for a promissory note issued by the Company. If the closing of the KM QUAD Business Combination does not occur prior to October 10, 2025 due to a delay in obtaining CSRC approvals, KM QUAD would be responsible for any extension fees and other related fees incurred by the Company beyond October 10, 2025 not to exceed $100,000 per month. If the closing of the KM QUAD Business Combination or termination of the Agreement occurs prior to October 10, 2025, the Company would return the remaining balance of the prepaid extension fees, if any, to KM QUAD on a pro rata basis. Alternatively, at the closing of the KM QUAD Business Combination, the Company would have the right to convert any prepaid extension fees that were paid and not returned into Class A ordinary shares of Quad Global Inc., the Company's wholly owned subsidiary that would have survived the redomestication merger, at $10.00 per share.

As of December 31, 2025, the KM QUAD Business Combination had not been consummated. Subsequent to December 31, 2025, on January 15, 2026, the parties entered into a Termination Agreement pursuant to which the KM QUAD Merger Agreement was terminated by mutual consent.

On April 30, 2026, KM QUAD released and discharged the Company from all obligations under the KM QUAD Notes, including the outstanding principal balance of $500,000 and extension fee of $540,000.

Critical Accounting Policies and Estimates

The preparation of unaudited financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and income and expenses during the periods reported. Actual results could materially differ from those estimates. We have not identified any critical accounting policies and estimates.

Recent accounting pronouncements

In November 2024, the FASB issued Accounting Standards Update ("ASU") 2024-03, "Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses", requiring public entities to disclose additional information about specific expense categories in the notes to the unaudited financial statements on an interim and annual basis. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and for interim periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2024-03.

Management does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the Company's financial statements.