Annual Report for Fiscal Year Ending December 31, 2025 (Form 10-K)

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

The following discussion and analysis of the Company's financial condition and results of operations should be read in conjunction with our audited consolidated financial statements and the notes related thereto which are included in "Item 8. Financial Statements and Supplementary Data" of this Annual Report on Form 10-K. Certain information contained in the discussion and analysis set forth below includes forward-looking statements. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those set forth under "Special Note Regarding Forward-Looking Statements," "Item 1A. Risk Factors" and elsewhere in this Annual Report on Form 10-K.

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 have historically focused on opportunities involving businesses with operations in Asia.

Merger Agreement In Connection With KM QUAD Business Combination

On February 14, 2025, Quetta entered into an Agreement and Plan of Merger (the "KM QUAD Merger Agreement") with KM QUAD, Quad Global Inc., Quad Group Inc., certain shareholders of KM QUAD and the shareholders' representative. The KM QUAD Merger Agreement contemplated, among other things, the redomestication of Quetta into Purchaser and the acquisition by Purchaser of 100% of the issued and outstanding equity interests of KM QUAD. The aggregate consideration payable to KM QUAD shareholders was $300 million, payable in newly issued Purchaser ordinary shares valued at $10.00 per share. The KM QUAD Merger Agreement also contained customary representations, warranties and covenants of the parties, including provisions relating to the allocation of certain transaction costs, public company expenses and extension-related fees.

Pursuant to the KM QUAD Merger Agreement, KM QUAD deposited $250,000 with the Company on or before February 14, 2025, representing the first installment of extension fees, in exchange for a promissory note issued by the Company. KM QUAD also deposited $290,000 with the Company on or before April 20, 2025, representing the second installment of extension fees, in exchange for a promissory note issued by the Company.

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

Merger Agreement with Smart Kreate Group Limited

On March 6, 2026, Quetta, SMART KREATE GROUP LIMITED, an exempted company limited by shares incorporated under the laws of the Cayman Islands ("PubCo"), SKG Merger Sub 1 Limited, an exempted company limited by shares incorporated under the laws of the Cayman Islands and a wholly owned subsidiary of PubCo ("Merger Sub 1"), SKG Merger Sub 2 Limited, a business company with limited liability incorporated under the laws of the British Virgin Islands and a wholly owned subsidiary of PubCo ("Merger Sub 2"), and Smart Kreate Group Limited, a business company with limited liability incorporated under the laws of the British Virgin Islands ("SKG"), entered into a Business Combination Agreement (the "BCA"). Pursuant to the BCA, the parties will consummate a business combination transaction (the "Business Combination") through the following transactions: (i) Quetta will merge with and into Merger Sub 1 (the "Initial Merger"), with Merger Sub 1 surviving the Initial Merger and becoming a wholly owned subsidiary of PubCo; and (ii) immediately following the Initial Merger, Merger Sub 2 will merge with and into SKG (the "Acquisition Merger"), with SKG surviving the Acquisition Merger and becoming a wholly owned subsidiary of PubCo. The transaction values merger at an enterprise value of US$200 million. Subject to, and in accordance with, the terms and conditions of the BCA, in connection with the Initial Merger, (i) every issued and outstanding share of common stock of QETA will automatically be cancelled in exchange for one PubCo Class A ordinary share and (ii) each issued and outstanding right of QETA will cease to exist and be assumed by PubCo and converted automatically into a right to purchase one PubCo Class A ordinary share on substantially the same terms.

Extensions of Time Period to Complete a Business Combination

On October 18, 2024, the Company entered into a non-binding letter of intent ("LOI") with QUAD regarding a potential business combination. As a result of the execution of the LOI, the deadline by which the Company was required to complete its initial business combination was extended to January 10, 2025.

On January 10, 2025, the Company held a special meeting of stockholders (the "January Special Meeting"). At the January Special Meeting, stockholders approved proposals to amend 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.

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 will remain in the trust account. Following the redemptions, the Company will have 3,747,748 ordinary shares 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 April 2026, thereby extending the date by which the Company could complete a business combination to May 10, 2026.

Results of Operations

We have neither engaged in any operations nor generated any operating revenues to date. Our activities through December 31, 2025 consisted of organizational activities, identifying and evaluating prospective target businesses, negotiating and documenting a potential initial business combination, and activities in connection with maintaining our status as a public company. We do not expect to generate any operating revenues until after the completion of our initial business combination.

We expect to continue to 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 increased expenses as a result of being a public company, including legal, financial reporting, accounting and auditing compliance costs, as well as due diligence and transaction expenses in connection with identifying, negotiating and pursuing a business combination.

For the year ended December 31, 2025, we had net loss of $780,924, which primarily consisted of interest income of $853,854, offset by general and administrative expenses of $1,306,931, related party administrative fees of $120,000, franchise tax expense of $40,800 and income tax expense of $167,047.

For the year ended December 31, 2024, we had net income of $2,094,096, which consisted of interest income of $3,658,889, offset by general and administrative expenses of $623,356, related party administrative fees of $120,000, franchise tax expense of $67,178 and income tax expense of $754,259.

Liquidity and Capital Resources

On October 11, 2023, we consummated our initial public offering ("IPO") of 6,900,000 units (the "Public Units"), including the full exercise of the underwriters' over-allotment option of 900,000 Units, at $10.00 per Unit, generating gross proceeds of $69,000,000. Simultaneously with the closing of the IPO, we consummated a private placement of 253,045 private units (the "Private Units") to our Sponsor at $10.00 per Private Unit, generating gross proceeds of $2,530,450. Upon the closing of the IPO and the private placement, an aggregate of $69,690,000 was placed in a trust account maintained by Continental Stock Transfer & Trust Company as trustee.

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 (21) one-month extensions, by depositing $60,000 into the trust account for each such one-month extension. The Company subsequently deposited $60,000 for each monthly extension from January 2025 through April 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 December 31, 2025, the Company had $1,195 in cash 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.

Off-Balance Sheet Arrangements

We have no obligations, assets or liabilities, which would be considered off-balance sheet arrangements as of December 31, 2025. 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 Service Agreement

We have entered into an administrative service 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 year ended December 31, 2025 and 2024, the Company has incurred $120,000 for both years in related party fees for the services provided by the Sponsor under this agreement.

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 common stock, or the representative shares, at the closing of the IPO as part of representative compensation.

Promissory Note In Connection With Extension Payments

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 shall 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 shall 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 shall 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 shall have the right to convert any prepaid extension fees that were paid and not returned into Purchaser Class A Ordinary Shares 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.

Critical Accounting Policies and Estimates

The preparation of consolidated 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 consolidated 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 Standards

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