Company: DTSQ
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001641172-25-001417
Chunk: 226

Company: DT Cloud Star Acquisition Corp
Filing Date: 2025-03-31
Form: 10-K
Item: Item 1A
Chunk 226
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, we cannot assure you that we will be able to complete the necessary
government registrations or obtain the necessary government approvals on a timely basis, if at all, with respect to future loans by us
to a PRC subsidiary or with respect to future capital contributions by us to a PRC subsidiary. If we fail to complete such registrations
or obtain such approvals, our ability to conduct our business post-initial business combination and to capitalize or otherwise fund PRC
operations may be negatively affected, which could materially and adversely affect our liquidity and our ability to fund and expand our
business.

53

PRC
regulations relating to offshore investment activities by PRC residents may limit our ability to inject capital in our Chinese subsidiaries
and Chinese subsidiaries’ ability to change their registered capital or distribute profits to the combined company or otherwise
expose it or its PRC resident beneficial owners to liability and penalties under PRC laws.

In
July 2014, SAFE promulgated the Circular on Relevant Issues Concerning Foreign Exchange Control on Domestic Residents’ Offshore
Investment and Financing and Roundtrip Investment Through Special Purpose Vehicles (“SAFE Circular 37”). SAFE Circular 37
requires PRC residents (including PRC individuals and PRC corporate entities as well as foreign individuals that are deemed as PRC residents
for foreign exchange administration purpose) to register with SAFE or its local branches in connection with their direct or indirect
offshore investment activities. SAFE Circular 37 is applicable to our shareholders who are PRC residents and may be applicable to any
offshore acquisitions that we make in the future.

Under
SAFE Circular 37, PRC residents who make, or have prior to the implementation of SAFE Circular 37 made, direct or indirect investments
in offshore special purpose vehicles, or SPVs, will be required to register such investments with SAFE or its local branches. In addition,
any PRC resident who is a direct or indirect shareholder of an SPV, is required to update its filed registration with the local branch
of SAFE with respect to that SPV, to reflect any material change, including, among other things, any major change of a PRC resident shareholder,
name or term of operation of the SPV, or any increase or reduction of the SPV’s registered capital, share transfer or swap, merger
or division. Moreover, any subsidiary of such SPV in China is required to urge the PRC resident shareholders to update their registration
with the local branch of SAFE. If any PRC shareholder of such SPV fails to