Company: DTSQ
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001641172-25-001417
Chunk: 89

Company: DT Cloud Star Acquisition Corp
Filing Date: 2025-03-31
Form: 10-K
Item: Item 1
Chunk 89
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 affected.

Furthermore,
as these foreign exchange regulations are still relatively new and their interpretation and implementation has been constantly evolving,
it is unclear how these regulations, and any future regulation concerning offshore or cross-border transactions, will be interpreted,
amended and implemented by the relevant government authorities. For example, we may be subject to a more stringent review and approval
process with respect to our foreign exchange activities, such as remittance of dividends and foreign currency-denominated borrowings,
which may adversely affect our financial condition and results of operations. In addition, if we decide to acquire a PRC domestic company,
we cannot assure you that we or the owners of such company, as the case may be, will be able to obtain the necessary approvals or complete
the necessary filings and registrations required by the foreign exchange regulations. This may restrict our ability to implement our
acquisition strategy and could adversely affect our business and prospects.

54

We
may consummate a business combination with a target business based in and primarily operating in China, after which the PRC subsidiaries
of the combined company will be subject to restrictions on dividend payments.

We
may consummate a business combination with a target business based in and primarily operating in China. After such business combination,
the combined company may rely on dividends and other distributions from the PRC subsidiaries of the combined company to provide it with
cash flow and to meet its other obligations. These dividends or other distributions to be paid by the PRC subsidiaries arise from the
combined company’s entitlements to substantially all of the economic benefits of the PRC subsidiaries. Current regulations in China
would permit the combined company’s PRC subsidiaries to pay dividends only out of their accumulated distributable profits, if any,
determined in accordance with Chinese accounting standards and regulations. In addition, the combined company’s PRC subsidiaries
in China will be required to set aside at least 10% of their after-tax profits each year to fund their respective statutory reserves
(up to an aggregate amount equal to half of their respective registered capital). Such cash reserve may not be distributed as cash dividends.
In addition, if the combined company’s PRC subsidiaries incur debt on their own behalf in the future, the instruments governing
the debt may restrict their ability to pay dividends or make payments to the combined company or its PRC subsidiaries, as applicable.

The
M&A Rules and certain other PRC regulations establish complex procedures for certain acquisitions of Chinese companies by foreign
investors, which could make it more difficult for us to pursue a business combination with a China