Company: DTSQ
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001641172-25-001417
Chunk: 191

Company: DT Cloud Star Acquisition Corp
Filing Date: 2025-03-31
Form: 10-K
Item: Item 1A
Chunk 191
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 interest in the target, our shareholders prior to the business combination may collectively own a minority
interest in the post-business combination company, depending on valuations ascribed to the target and us in the business combination
transaction. For example, we could pursue a transaction in which we issue a substantial number of new shares in exchange for all of the
outstanding capital stock of a target. In this case, we acquire a 100% controlling interest in the target. However, as a result of the
issuance of a substantial number of new shares, our shareholders immediately prior to such transaction could own less than a majority
of our outstanding shares subsequent to such transaction. In addition, other minority shareholders may subsequently combine their holdings
resulting in a single person or group obtaining a larger share of the company’s stock than we initially acquired. Accordingly,
this may make it more likely that we will not be able to maintain our control of the target business.

34

Risks
Relating to Our Securities

The
value of the initial shares following completion of our initial business combination is likely to be substantially higher than the nominal
price paid for them, even if the trading price of our ordinary shares at such time is substantially less than $10.00 per share.

Upon
the closing of our initial public offering and the full exercise of the underwriter’s over-allotment option, our initial shareholders
invested in us an aggregate of $2,094,000, comprised of the $25,000 purchase price for the initial shares and the $2,069,000 purchase
price for the private units. Assuming a trading price of $10.00 per share upon consummation of our initial business combination, the
1,725,000 initial shares would have an aggregate implied value of $17,250,000. Even if the trading price of our ordinary shares were
as low as approximately $1.07 per share, the value of the initial shares would be approximately equal to the initial shareholders’
initial investment in us. As a result, our initial shareholders are likely to be able to make a substantial profit on the investment
in us at a time when our public shares have lost significant value (whether because of a substantial amount of redemptions of our public
shares or any other reason). Accordingly, our management team, which owns interests in our sponsor, may be more willing to pursue a business
combination with a riskier or less-established target business than would be the case if our sponsor had paid the same