Company: DTSQ
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001641172-25-001417
Chunk: 46

Company: DT Cloud Star Acquisition Corp
Filing Date: 2025-03-31
Form: 10-K
Item: Item 1
Chunk 46
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 not have an immediate impact on our liquidity, the fact that we report charges of this nature could contribute to
negative market perceptions about us or our securities. In addition, charges of this nature may cause us to violate net worth or other
covenants to which we may be subject as a result of assuming pre-existing debt held by a target business or by virtue of our obtaining
post-combination debt financing.

Our
directors may decide not to enforce indemnification obligations against our sponsor, resulting in a reduction in the amount of funds
in the trust account available for distribution to our public shareholders.

In
the event that the proceeds in the trust account are reduced below $10.00 per share and our sponsor asserts that it is unable to satisfy
its obligations or that it has no indemnification obligations related to a particular claim, our independent directors would determine
on our behalf whether to take legal action against our sponsor to enforce its indemnification obligations. While we currently expect
that our independent directors would take legal action on our behalf against our sponsor to enforce its indemnification obligations to
us, it is possible that our independent directors in exercising their business judgment may choose not to do so in any particular instance.
If our independent directors choose not to enforce these indemnification obligations on our behalf, the amount of funds in the trust
account available for distribution to our public shareholders may be reduced below $10.00 per share.

31

The
conversion of the promissory notes upon consummation of our business combination into private units may have an adverse effect on the
market price of our ordinary shares and make it more difficult to effect a business combination.

In
order to meet our working capital needs following the consummation of our initial public offering until completion of an initial business
combination or to extend the period of time to consummate a business combination, our initial shareholders, officers and directors or
their affiliates may, but are not obligated to, loan us funds, from time to time or at any time, in whatever amount they deem reasonable
in their sole discretion. Each loan would be evidenced by a promissory note. The promissory note would either be paid upon consummation
of our initial business combination, without interest, or, at the lender’s discretion, up to $300,000 of the promissory note may
be converted upon consummation of our business combination into private units at a price of $10.00 per unit. As such, each promissory
note will result