DT Cloud Star Acquisition Corporation Issues Unsecured Promissory Note to Sponsor

DT Cloud Star Acquisition Corporation (NASDAQ: DTSQ) disclosed in a recent 8-K filing with the Securities and Exchange Commission (SEC) that on October 28, 2024, they issued an unsecured promissory note to DT Cloud Star Management Limited, known as the “Sponsor.” This promissory note allows the Corporation to borrow up to a total principal sum of $300,000, designated as the “Working Capital Loan Note.”

According to the terms, the Working Capital Loan Note is not interest-bearing, and the principal amount becomes due on the completion date of an initial business combination. The Sponsor holds the right, albeit not the obligation, to convert the Working Capital Loan Note partially or entirely into private units labeled as “Conversion Units.” These Conversion Units mirror the securities issued during the company’s initial public offering, as outlined in the final prospectus released on July 24, 2024.

The conversion ratio for the Conversion Units will be determined by dividing the outstanding principal amount repayable to the Sponsor by $10.00. Additionally, DT Cloud Star Acquisition Corporation has granted registration rights to the Sponsor concerning these Conversion Units, in line with the registration rights agreement finalized on July 24, 2024. Should the initial business combination fail to conclude, a portion of the working capital outside the trust account can be utilized to repay the loaned sums, with no proceeds from the trust account allocated towards such repayment.

The disclosure further stated that the specifics in Item 1.01 of the Current Report on Form 8-K were incorporated into the explanation provided. As part of the financial obligations undertaken, the relevant information concerning the creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement was highlighted in Item 2.03 of the filing.

DT Cloud Star Acquisition Corporation is classified as an emerging growth company, meeting the criteria outlined in Rule 405 of the Securities Act of 1933. The company has indicated its choice to decline the extended transition period for compliance with new or amended financial accounting standards as per Section 13(a) of the Exchange Act.

The filing included that the Corporation has sorted the necessary financial statements and exhibits, with the list of these documents presented within Item 9.01 of the Form 8-K report. Among these exhibits was the dated Promissory Note from October 28, 2024.

Finally, the filing was officially signed on behalf of the Registrant by Bian Fan, the Chief Executive Officer, in accordance with the stipulations of the Securities Exchange Act of 1934, on November 1, 2024.

This article was generated by an automated content engine and was reviewed by a human editor prior to publication. For additional information, read DT Cloud Star Acquisition’s 8K filing here.

About DT Cloud Star Acquisition

DT Cloud Star Acquisition Corporation focuses on effecting a merger, share exchange, asset acquisition, share purchase, recapitalization, reorganization, or similar business combination with one or more businesses or entities. The company was incorporated in 2022 and is based in Brooklyn, New York.