Quetta Acquisition Corp(QETAU) - 2023 Q4 - Annual Report

IPO and Financial Proceeds - The company completed its IPO on October 11, 2023, raising gross proceeds of $69,000,000 from the sale of 6,900,000 units at$10.00 per unit[75]. - A total of $69,690,000 from the IPO and private placement proceeds was placed in a trust account, with$816,524 generated as interest income[78]. - The total transaction costs related to the IPO amounted to $4,202,729, including$2,415,000 in deferred underwriting fees[192]. - The underwriters are entitled to a deferred fee of 3.5% of the gross proceeds from the IPO, amounting to $2,415,000, payable upon completion of a business combination[94]. - The underwriters fully exercised their over-allotment option on October 11, 2023, purchasing an additional 900,000 Units at a price of$10.00 per Public Share[154]. - The total underwriting fee paid by the Company was $1,380,000, which includes the fee due upon the full exercise of the underwriters' over-allotment option[155]. - The Company issued 69,000 shares of common stock as part of representative compensation to the underwriters[248]. Financial Performance - The company reported a net income of$535,209 for the period from May 1, 2023, to December 31, 2023, primarily from interest income of $826,991[84]. - The company reported a net income of$535,209 for the period from May 1, 2023, to December 31, 2023, with a basic and diluted net income per share of $0.13[184]. - Net income attributable to redeemable common stock was$297,378, resulting in a basic and diluted net income per share of $0.13[228]. - The Company recognized net income of$535,209, with net income attributable to non-redeemable common stock at $237,831, also resulting in a basic and diluted net income per share of$0.13[228]. Assets and Liabilities - As of December 31, 2023, total assets amounted to $71,224,921, with current assets of$718,397 and investments held in a Trust Account of $70,506,524[181]. - The Company has$610,185 in cash and working capital of $486,406 as of December 31, 2023[204]. - As of December 31, 2023, the company had total current liabilities of$231,991, including income tax payable of $170,649[181]. - Total stockholders' deficit was recorded at$(1,743,594) as of December 31, 2023, primarily due to accumulated deficit of $(1,743,798)[186]. - The fair value of investments held in the Trust Account was$70,506,524, classified entirely as Level 1 inputs[256]. Corporate Governance - The board of directors consists of five members, three of whom are independent under SEC and Nasdaq rules[108]. - The audit committee is composed exclusively of independent directors and is responsible for reviewing annual audited financial statements and discussing significant financial reporting issues[111]. - The compensation committee is responsible for reviewing and approving the compensation of the Chief Executive Officer and other executive officers[115]. - The company intends to form a corporate governance and nominating committee as required by law or NASDAQ rules[117]. - The audit committee includes a member qualified as an "audit committee financial expert" under SEC rules[113]. - The company has established a clawback policy as part of its governance framework[97.1]. - The company has a Code of Ethics in place, reflecting its commitment to ethical business practices[14]. Management and Executive Compensation - Hui Chen has been the Chief Executive Officer and Chairman since May 2023, bringing extensive experience in computer science and law[101]. - Robert L. Labbe has served as Chief Financial Officer since May 2023, with over 30 years of experience in real estate finance[102]. - No executive officer has received cash compensation for services rendered to the company[140]. - The company has not entered into any employment agreements with its executive officers[139]. - Officers and directors will be reimbursed for out-of-pocket expenses incurred in connection with business activities, with no limit on the amount reimbursable[141]. - The company has agreed to indemnify its directors and officers to the fullest extent authorized by Delaware law[131]. - The company has purchased a policy of directors' and officers' liability insurance[132]. Business Strategy and Operations - The company is focused on identifying target businesses in the financial technology sector in Asia, excluding China, Hong Kong, and Macau[80]. - The company has not commenced any operations and will not generate operating revenues until after completing a Business Combination[190]. - The company must complete its initial Business Combination with target businesses having an aggregate fair market value equal to at least 80% of the Trust Account funds[194]. - The Trust Account will only release funds upon the completion of the initial Business Combination or liquidation, with a total of $69,690,000 deposited[193]. - The Company may extend the Combination Period for a Business Combination up to 21 months by depositing$690,000 for each extension, totaling $1,380,000 for two extensions[199]. - If the Company fails to complete a Business Combination within the Combination Period, it will redeem Public Shares at a price equal to the amount in the Trust Account divided by the number of outstanding Public Shares[201]. - The Initial Stockholders have agreed to waive their redemption rights concerning the Founder Shares and Private Shares in connection with a Business Combination[198]. Audit and Internal Controls - The company's disclosure controls and procedures were evaluated as ineffective as of December 31, 2023[97]. - The company does not expect its disclosure controls and procedures to prevent all errors and instances of fraud, providing only reasonable assurance[98]. - There were no changes in internal control over financial reporting during the most recent fiscal quarter that materially affected the company's internal controls[99]. - The audit was conducted in accordance with PCAOB standards, ensuring reasonable assurance about the financial statements being free of material misstatement[177]. - The independent auditor has served the company since 2023, indicating a stable auditing relationship[179]. - The audit committee will preapprove all auditing services and permitted non-audit services to be performed by the auditors going forward[163]. Tax and Regulatory Matters - The Company is subject to a new 1$170,649[260]. - The company's effective income tax rate was 26.30%, influenced by a valuation allowance of 5.30%[261]. - Management established a full valuation allowance due to significant uncertainty regarding the realization of deferred tax assets[262]. - The total deferred tax asset as of December 31, 2023, was $34,389, with a full valuation allowance established[258]. - The company has no unrecognized tax benefits or amounts accrued for interest and penalties as of December 31, 2023[224].