Quetta Acquisition Corporation Reports Mixed Financial Results, Extends Deadline for Business Combination

Quetta Acquisition Corporation, incorporated on May 1, 2023, focuses on targeting businesses in the financial technology sector in Asia, excluding China, Hong Kong, and Macau. The company completed its Initial Public Offering (IPO) on October 11, 2023, selling 6,900,000 units at $10.00 per unit, generating gross proceeds of $69 million. Additionally, 253,045 private units were sold to the Sponsor for $2.53 million, bringing total proceeds to $69.69 million, which were placed in a Trust Account for public shareholders.

As of September 30, 2024, Quetta reported total assets of $73.68 million, an increase from $71.22 million at the end of 2023. However, total current assets decreased significantly from $718.40 thousand to $387.77 thousand, primarily due to a reduction in cash from $610.19 thousand to $329.36 thousand. The company also experienced a substantial increase in total current liabilities, rising from $231.99 thousand to $931.67 thousand, contributing to a total liabilities increase from $2.65 million to $3.35 million. Consequently, total stockholders’ deficit widened from $(1.74) million to $(2.15) million.

In terms of profitability, Quetta reported net income of $603.90 thousand for the three months ended September 30, 2024, a significant increase from just $2.95 thousand in the same period of the previous year. For the nine months ended September 30, 2024, net income reached $1.76 million, compared to only $3.69 thousand from inception through September 30, 2023. The increase in net income was driven by interest income of $944.24 thousand for the quarter, offset by operational costs and taxes.

The company has incurred substantial professional and transaction costs related to remaining publicly traded and pursuing a business combination, raising concerns about its ability to continue as a going concern. Management has indicated that if a business combination is not completed within the designated period, the company may initiate voluntary liquidation.

Quetta entered into a non-binding Letter of Intent (LOI) on May 30, 2024, with a clinical-stage therapeutics company as a potential business combination target. The deadline for completing the initial business combination has been extended to January 11, 2025, due to this LOI. However, negotiations for a definitive agreement have since been terminated.

As of September 30, 2024, the company had a working capital deficit of $543.91 thousand and cash of $329.36 thousand, indicating ongoing liquidity challenges. The company continues to monitor market conditions and regulatory changes, including the implications of the Inflation Reduction Act of 2022, which imposes a 1% excise tax on stock repurchases.