Company: DTSQ
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001641172-25-001417
Chunk: 82

Company: DT Cloud Star Acquisition Corp
Filing Date: 2025-03-31
Form: 10-K
Item: Item 1
Chunk 82
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 and/or defend our company and our decisions. This situation may be a major distraction
to our management. If such allegations are not proven to be groundless, we will be severely hampered and your investment in our securities
post business combination could be rendered worthless.

50

Regulations
relating to the transfer of state-owned property rights in enterprises may increase the cost of our acquisitions and impose an additional
administrative burden on us.

The
legislation governing the acquisition of a PRC state-owned company contains stringent governmental regulations. The transfer of state-owned
property rights in enterprises must take place through a government-approved “state-owned asset exchange,” and the value
of the transferred property rights must be evaluated by those Chinese appraisal firms qualified to perform “state-owned assets
evaluations.” The final price must not be less than 90% of the appraisal price. Additionally, bidding/auction procedures are essential
in the event that there is more than one potential transferee. In the case of an acquisition by foreign investors of state-owned enterprises,
the acquirer and the seller must make a resettlement plan to properly resettle the employees, and the resettlement plan must be approved
by the Employees’ Representative Congress. The seller must pay all unpaid wages and social welfare payments from the existing assets
of the target company to the employees. These regulations may adversely affect our ability to acquire a PRC state-owned business or assets.

Our
initial business combination may be subject to national security review by the PRC government and we may have to spend additional resources
and incur additional time to complete any such business combination or be prevented from pursuing certain investment opportunities.

On
February 3, 2011, the PRC government issued a Notice Concerning the Establishment of Security Review Procedure on Mergers and Acquisitions
of Domestic Enterprises by Foreign Investors (the Security Review Regulations), which became effective on March 5, 2011. The Security
Review Regulations cover acquisitions by foreign investors of a broad range of PRC enterprises if such acquisitions could result in de
facto control by foreign investors and the enterprises relate to military, national defense, important agriculture products, important
energy and natural resources, important infrastructures, important transportation services, key technologies or important equipment manufacturing.
The scope of the review includes whether the acquisition will impact national security, economic and social stability, and the research
and development capabilities of key national security-related technologies. Foreign investors should submit a security review application
to the Ministry of Commerce for its initial review for a contemplated acquisition