Company: DTSQ
Filing Date: 2025-05-14
Form Type: 10-Q
Source: 0001641172-25-010262
Chunk: 14

Company: DT Cloud Star Acquisition Corp
Filing Date: 2025-05-14
Form: 10-Q
Item: Part I, Item 1
Chunk 14
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. The Company’s
ordinary shares feature certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence
of uncertain future events. Accordingly, as of March 31, 2025, ordinary shares subject to possible redemption are presented at redemption
value as temporary equity, outside of the shareholders’ equity section of the Company’s balance sheet.

The
Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable ordinary shares
to equal the redemption value at the end of each reporting period. Increases or decreases in the carrying amount of redeemable ordinary
shares are affected by charges against additional paid-in capital and accumulated deficit if additional paid in capital equals to zero.
The interest and dividends earned by the marketable security held in trust, and the extension fee invest into the marketable security
held in trust, were also recognized in redemption value against additional paid-in capital and accumulated deficit immediately.

Income
Taxes

Income
taxes are determined in accordance with the provisions of Accounting Standards Codification Topic 740, “Income Taxes”
(“ASC 740”). Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable
to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred
tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the years in which those
temporary differences are expected to be recovered or settled. Any effect on deferred tax assets and liabilities of a change in tax rates
is recognized in income in the period that includes the enactment date.

ASC
740 prescribes a comprehensive model for how companies should recognize, measure, present, and disclose in their unaudited financial
statements uncertain tax positions taken or expected to be taken on a tax return. Under ASC 740, tax positions must initially be recognized
in the unaudited financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities.
The Company’s management determined that the Cayman Islands is the Company’s major tax jurisdiction. The Company recognizes
accrued interest and penalties related to unrecognized tax benefits, if any, as income tax expense. There were no unrecognized tax benefits
and no amounts accrued for interest and penalties as of March 31, 2025 and December 31, 2024. The Company is currently not aware of any
issues under review that could result in significant payments, accruals or material deviation from its position.

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