Yotta Acquisition Corp Reports Decrease in Net Income and Faces Compliance Challenges Amid Merger Plans

Yotta Acquisition Corp, a special purpose acquisition company (SPAC), reported a net income of $180,036 for the fiscal year ending December 31, 2024, a decrease from the previous year's net income of $1,429,419. The decline in profitability was attributed to a significant reduction in interest income, which fell from $2,788,029 in 2023 to $364,159 in 2024. General and administrative expenses also increased, totaling $625,842, compared to $1,499,150 in the prior year. The company has not generated any operating revenues, as its activities have primarily focused on preparing for its initial business combination.

In terms of strategic developments, Yotta has entered into a merger agreement with DRIVEiT Financial Auto Group, Inc., with a total consideration of $100 million to be paid in shares of Yotta common stock. This merger is expected to be completed after obtaining necessary approvals from stockholders and satisfying customary closing conditions. Additionally, Yotta has faced compliance issues with Nasdaq listing rules, receiving notices regarding its market value and public share count. The company has since applied for a transfer to the Nasdaq Capital Market and has until November 2024 to regain compliance.

Operationally, Yotta has made significant changes to its board of directors, with the resignation of Michael Lazar and the appointment of Qi Gong in April 2024. The company has also extended the deadline to complete its business combination multiple times, with the latest extension allowing until October 22, 2025. As of December 31, 2024, Yotta had cash of $194,779 outside its trust account and a working capital deficit of $4,310,282, indicating liquidity challenges as it seeks to finalize its merger.

Yotta's financial position remains precarious, with substantial doubt about its ability to continue as a going concern if it cannot complete a business combination by the extended deadline. The company has indicated that it may need to secure additional financing to meet obligations related to the merger or to redeem public shares. The management has acknowledged the need for improved internal controls, particularly in financial reporting, and is actively working on remediation efforts to address identified weaknesses.

Looking ahead, Yotta's success will largely depend on the completion of its merger with DRIVEiT and its ability to navigate the regulatory landscape while addressing its financial and operational challenges. The company has expressed intentions to utilize the funds held in its trust account for the acquisition and operational expenses of the target business, but the uncertainty surrounding its compliance with Nasdaq requirements and the overall market conditions poses risks to its future performance.