Company: DTSQ
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001641172-25-001417
Chunk: 225

Company: DT Cloud Star Acquisition Corp
Filing Date: 2025-03-31
Form: 10-K
Item: Item 1A
Chunk 225
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 than
Renminbi owed to any entities outside China or to make other capital expenditure payments outside China in a currency other than Renminbi.

In
light of the flood of capital outflows of China in 2016 due to the weakening Renminbi, the PRC government has imposed more restrictive
foreign exchange policies and stepped-up scrutiny over major outbound capital movements including overseas direct investment. More restrictions
and substantial vetting process have been put in place by SAFE to regulate cross-border transactions that fall under the capital account
transactions. The PRC government may in the future at its discretion further restrict access to foreign currencies for current account
transactions. If the foreign exchange control regulations prevent the combined company from obtaining sufficient foreign currencies from
its PRC subsidiaries to satisfy its capital demands, the combined company may not be able to pay dividends in foreign currencies to its
shareholders.

If
our initial business combination target has the majority of its operations in China, the PRC regulation on loans to, and direct investment
in, such a PRC subsidiary by offshore holding companies and governmental control of currency conversion may restrict our ability to make
loans or capital contributions to such subsidiary, which could materially and adversely affect our liquidity and our ability to fund
and expand our business post-business combination.

If
our initial business combination target has the majority of its operations in China, it may become necessary or desirable for us to make
loans or capital contributions to our PRC subsidiary after the completion of our initial business combination. Our ability to make such
loans or capital contributions may be restricted by certain PRC laws and regulations, including but not limited to the Notice of the
State Administration of Foreign Exchange on Reforming the Administration of Foreign Exchange Settlement of Capital of Foreign invested
Enterprises (“SAFE Circular 19”), effective on June 1, 2015, and the Notice of the State Administration of Foreign Exchange
on Reforming and Standardizing the Foreign Exchange Settlement Management Policy of Capital Account (“SAFE Circular 16”),
effective on June 9, 2016, each promulgated by SAFE, which impose limitations on offshore entities in transferring foreign currencies
to PRC persons.

In
light of the various requirements imposed by PRC regulations, for example, SAFE Circular 19 and SAFE Circular 16, on loans to, and direct
investment in, a PRC subsidiary by offshore holding companies, and the fact that the PRC government may at its discretion restrict access
to foreign currencies for current account transactions in the future