{"url_path":"/sec/dtsq/10-k/2026/item-7","section_key":"item-7","section_title":"Item 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations**","topic":"sec","document":{"doc_type":"10-K/A","doc_date":"2026-06-17","source_url":"https://www.sec.gov/Archives/edgar/data/2017950/0001493152-26-029131-index.html","accession_number":"0001493152-26-029131","cik":"0002017950","ticker":"DTSQ","issuer_name":"DT Cloud Star Acquisition Corp","edgar_url":"https://www.sec.gov/Archives/edgar/data/2017950/0001493152-26-029131-index.html","primary_entity_key":"0002017950","primary_entity_name":"DT Cloud Star Acquisition Corp"},"word_count":3762,"has_tables":true,"body_markdown":"**Item\n7. Management’s Discussion and Analysis of Financial Condition and Results of Operations**\n\n \n\nThe\nfollowing discussion and analysis of the company’s financial condition and results of operations should be read in conjunction\nwith our audited financial statements and the notes related thereto which are included in “*Financial Statements and Supplementary\nData*” of this Report. Certain information contained in the discussion and analysis set forth below includes forward-looking\nstatements. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors,\nincluding those set forth under “*Special Note Regarding Forward-Looking Statements*,” “*Risk Factors*”\nand elsewhere in this Report.\n\n \n\n*References\nto the “company,” “our,” “us” or “we” refer to DT Cloud Star Acquisition Corporation.\nThe following discussion and analysis of the company’s financial condition and results of operations should be read in conjunction\nwith the audited financial statements and the notes related thereto which are included in “Financial Statements and Supplementary\nData” of this Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements.\nOur actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including\nthose set forth under “Cautionary Note Regarding Forward-Looking Statements and Risk Factor Summary,” “Risk Factors”\nand elsewhere in this Report.*\n\n \n\n**Cautionary\nNote Regarding Forward-Looking Statements**\n\n \n\n*This\nReport includes forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act.\nWe have based these forward-looking statements on our current expectations and projections about future events. These forward-looking\nstatements are subject to known and unknown risks, uncertainties and assumptions about us that may cause our actual results, levels of\nactivity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements\nexpressed or implied by such forward-looking statements. In some cases, you can identify forward-looking statements by terminology such\nas “may,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,”\n“believe,” “estimate,” “continue,” or the negative of such terms or other similar expressions. Factors\nthat might cause or contribute to such a discrepancy include, but are not limited to, those described in our other SEC filings.*\n\n \n\n**Overview**\n\n \n\nWe\nare a blank check company incorporated in the Cayman Islands on November 29, 2022 as an exempted company with limited liability. We were\nformed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, recapitalization, reorganization or\nsimilar business combination with one or more businesses or entities, which we refer to as a “target business.” We are an\nemerging growth company and, as such, we are subject to all of the risks associated with emerging growth companies.\n\n \n\n59\n\n \n\n \n\nWe\nhave neither engaged in any operations nor generated any revenues to date. Our entire activity since inception has been to prepare for\nour initial public offering, which was consummated on July 26, 2024 and, after the initial public offering, identifying a target company\nfor a business combination.\n\n \n\nAs\nindicated in the accompanying financial statements, as of December 31, 2025, we had cash and cash in escrow of $461 and working capital\ndeficit of $361,245.\nFurther, we expect to incur significant costs in the pursuit of our initial business combination.\nWe cannot assure you that our plans to raise capital or to complete our initial business combination will be successful.\n\n \n\nWe\ninitially have 15 months from the closing of our initial public offering to consummate our initial business combination. On October 22,\n2025, we entered into an amendment to the Investment Management Trust Agreement (the “Trust Agreement”), with Wilmington\nTrust National Association. Pursuant to the Trust Agreement, we have the right to extend the time for us to complete our initial business\ncombination for a period for 12 months from October 26, 2025 to October 26, 2026 by depositing into the trust account $75,000 for all\nremaining public shares for each one-month extension.\n\n \n\nIf\nwe anticipate that we may be unable to consummate our initial business combination within such period, we may seek shareholder approval\nto amend our amended and restated memorandum and articles of association to extend the date by which we must consummate our initial business\ncombination. If we seek shareholder approval for an extension, our public shareholders will be offered an opportunity to redeem their\nshares at a per share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest\n(net of taxes payable), divided by the number of then issued and outstanding public shares, subject to applicable laws. If we are unable\nto complete our initial business combination by October 26, 2026 (unless further extended), we will (1) cease all operations except for\nthe purpose of winding up; (2) as promptly as reasonably possible but no more than ten business days thereafter, redeem 100% of the outstanding\npublic shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest\nearned (net of taxes payable), which redemption will completely extinguish public shareholders’ rights as shareholders (including\nthe right to receive further liquidation distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible\nfollowing such redemption, subject to the approval of the remaining shareholders and our board of directors, proceed to commence a voluntary\nliquidation and thereby a formal dissolution of our company, subject in each case to its obligations to provide for claims of creditors\nand the requirements of applicable law.\n\n \n\n**Going\nConcern Consideration**\n\n \n\nAs\nof December 31, 2025, we had approximately $461 in cash and cash in escrow and working capital\ndeficit of approximately $361,245. We had net income of $2,132,715 for the year ended December\n31, 2025, which is mainly from the interest earned in trust account.\n\n \n\nWe\nhave incurred and expect to continue to incur significant costs in pursuit of our acquisition plans. We initially have 15 months from\nthe closing of our initial public offering to consummate our initial business combination. On October 22, 2025, we entered into an amendment\nto the Investment Management Trust Agreement (the “Trust Agreement”), with Wilmington Trust National Association. Pursuant\nto the Trust Agreement, we have the right to extend the time for us to complete our initial business combination for a period for 12\nmonths from October 26, 2025 to October 26, 2026 by depositing into the trust account $75,000 for all remaining public shares for each\none-month extension.\n\n \n\nIf\nwe do not complete a business combination by October 26, 2026 (unless further extended), we will trigger an automatic winding up, dissolution\nand liquidation pursuant to the terms of the amended and restated memorandum and articles of association. As a result, this has the same\neffect as if we had formally gone through a voluntary liquidation procedure under the Companies Act (As Revised) of the Cayman Islands.\nAccordingly, no vote would be required from our shareholders to commence such a voluntary winding up, dissolution and liquidation. If\nwe are unable to consummate our initial business combination by October 26, 2026 (unless further extended), we will, as promptly as possible\nbut not more than ten business days thereafter, redeem 100% of our outstanding public shares for a pro rata portion of the funds held\nin the trust account, including a pro rata portion of any interest earned on the funds held in the trust account and not necessary to\npay taxes, and then seek to liquidate and dissolve. However, we may not be able to distribute such amounts as a result of claims of creditors\nwhich may take priority over the claims of our public shareholders. In the event of dissolution and liquidation, our warrants and rights\nwill expire and will be worthless.\n\n \n\n60\n\n \n\n \n\nIn\nconnection with our assessment of going concern considerations in accordance with Accounting Standards Update (“ASU”) 2014-15,\n“Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” our management has determined\nthat if we are unsuccessful in consummating an initial business combination within the prescribed period of time from the closing of\nour initial public offering, the requirement that we cease all operations, redeem the public shares and thereafter liquidate and dissolve\nraises substantial doubt about the ability to continue as a going concern.\n\n* *\n\n*Business\nCombination Agreement*\n\n* *\n\nSubsequent\nto December 31, 2025, on February 2, 2026, we entered into a Business Combination Agreement\n(the “BCA”) with PrimeGen US, Inc. and certain other parties, pursuant to which we intend to consummate our initial business\ncombination through a series of merger transactions. Management believes that the consummation of the proposed business combination,\nif completed, would provide us with an operating business and additional capital resources. However, the completion of the proposed business\ncombination is subject to customary closing conditions, including regulatory approvals and shareholder approval, and there can be no\nassurance that the transaction will be consummated. Accordingly, the matters described above do not alleviate the substantial doubt about\nour ability to continue as a going concern.\n\n \n\nThe\nfinancial statements do not include any adjustments that might result from the outcome of this uncertainty. Our management has determined\nthat we have funds that are sufficient to fund the working capital needs of us until the consummation of an initial business combination\nor the winding up of our company as stipulated in the amended and restated memorandum and articles of association. The accompanying financial\nstatements have been prepared in conformity with U.S. GAAP, which contemplate continuation of our company as a going concern.\n\n \n\n**Liquidity\nand Capital Resources**\n\n \n\nWe\nconsummated the initial public offering of 6,900,000 units, which includes the exercise in full by the underwriters of their over-allotment\noption to purchase up to an additional 900,000 units on July 25, 2024. The units were sold at an offering price of $10.00 per unit, generating\ngross proceeds of $69,000,000. Simultaneously with the closing of our initial public offering on July 26, 2024, we consummated the private\nplacement with the sponsor of 206,900 units at a price of $10.00 per private unit, generating total gross proceeds of $2,069,000.\n\n \n\nFollowing\nour initial public offering and the private placement, a total of $69,000,000 of the net proceeds were deposited in the trust account.\nWe intend to use substantially all of the funds held in the trust account, including any amounts representing interest earned on the\ntrust account (excluding deferred underwriting commissions and less taxes payable) to complete our initial business combination. We may\nwithdraw interest from the trust account to pay our taxes. To the extent that our equity or debt is used, in whole or in part, as consideration\nto complete our initial business combination, the remaining proceeds held in the trust account will be used as working capital to finance\nthe operations of the target business or businesses, make other acquisitions and pursue our growth strategies. We intend to use the funds\nheld outside the trust account primarily for identifying and evaluating prospective acquisition candidates, performing business due diligence\non prospective target businesses, traveling to and from the offices, plants or similar locations of prospective target businesses, reviewing\ncorporate documents and material agreements of prospective target businesses, selecting the target business to acquire and structuring,\nnegotiating and consummating the business combination.\n\n \n\nFor\nthe year ended December 31, 2025, cash used by operating activities was $410,968, primarily due to prepayment of formation and operational\ncosts. As of December 31, 2025, we had cash at bank of $461.\n\n \n\nOn\nDecember 31, 2025, the Company had working capital deficit of $361,245, excluding deferred\nunderwriting commissions and the available cash held in the Trust Account for marketable securities, which indicated a lack of liquidity\nit needed to sustain operations for a reasonable period of time, which was considered to be one year from the issuance of the financial\nstatements.\n\n \n\n61\n\n \n\n \n\nIn\norder to fund working capital deficiencies or finance transaction costs in connection with an initial business combination, our sponsor,\nofficers, directors, or their affiliates may, but are not obligated to, loan us funds as may be required. If we complete our initial\nbusiness combination, we will repay such loaned amounts. In the event that the initial business combination does not close, we may use\na portion of the working capital held outside the trust account to repay such loaned amounts, but no proceeds from our trust account\nwould be used for such repayment.\n\n \n\nOn\nOctober 28, 2024, we issued an unsecured promissory note to the sponsor, pursuant to which we may borrow up to an aggregate principal\namount of $300,000 (the “Working Capital Loan Note”). The Working Capital Loan Note is non-interest-bearing and payable on\nthe consummation of the initial business combination or converted upon consummation of the business combination into additional private\nunits at a price of $10.00 per unit. On July 29, 2025, we entered into a Letter Agreement to the Working Capital Loan Note (the “Letter\nAgreement”) with the sponsor, pursuant to which we and the sponsor agreed to terminate the Working Capital Loan Note and confirmed\nthat the outstanding amount that we borrowed under the Promissory Note was $nil.\n\n \n\nOn\nOctober 22, 2025, we entered into an amendment to the Investment Management Trust Agreement (the “Trust Agreement”), with\nWilmington Trust National Association. Pursuant to the Trust Agreement, we have the right to extend the time for us to complete our initial\nbusiness combination for a period for 12 months from October 26, 2025 to October 26, 2026 by depositing into the trust account $75,000\nfor all remaining public shares for each one-month extension. On October 23, 2025, we issued an unsecured promissory note in the aggregate\nprincipal amount of $75,000 (the “Note”) to the sponsor, in exchange for its depositing such amount into the our trust account\nin order to extend the amount of time we have available to complete the business combination. The Note does not bear interest and matures\nupon the closing of our business combination. In addition, the Note may be converted by the holder into units identical to the units\nissued in our initial public offering at a price of $10.00 per unit. As of December 31, 2025, we have issued additional unsecured promissory\nnotes to the sponsor in connection with subsequent one-month extensions, resulting in an aggregate principal amount of $150,000 deposited\ninto the trust account for business combination extension purposes.\n\n \n\nAdditionally,\nduring the shareholder meeting, a total of 5,247,491 shares of common stock were tendered for redemption. This redemption of public shares\nresulted in a significant reduction in the number of outstanding public shares and has impacted the Company’s available liquidity.\nManagement is actively managing the Company’s cash resources to ensure that sufficient funds are available to meet the minimum\ncash condition required to consummate the business combination.\n\n \n\nThe\nredemption of public shares, together with the extension of the business combination deadline, provides the Company with additional time\nto pursue suitable acquisition targets. However, the redemption activity has reduced the amount of cash available outside of the Trust\nAccount, and any further redemptions could further impact the Company’s liquidity position and its ability to consummate the business\ncombination. To support its ongoing liquidity needs and fund operating and transaction-related expenses, the Company plans to issue additional\npromissory notes to the Sponsor or its affiliates, subject to mutually agreed terms. The Company will continue to closely monitor its\nliquidity position and take appropriate actions to ensure that it maintains sufficient capital resources to complete the business combination.\n\n \n\n**Results\nof Operations**\n\n \n\nWe\nhave neither engaged in any operations nor generated any revenue to date. Our entire activity since inception through December 31, 2025\nrelated to our formation, the preparation for the initial public offering, and since the closing of the initial public offering, the\nsearch for a prospective e initial business combination. We do not expect to generate any operating revenues until the closing and completion\nof our initial business combination, at the earliest. We will generate non-operating income in the form of interest income from the amount\nheld in the trust account. We expect that we will incur increased expenses as a result of being a public company (for legal, financial\nreporting, accounting and auditing compliance), as well as for due diligence expenses in connection with search for, and completing,\na business combination.\n\n \n\nFor\nthe year ended December 31, 2025, we had net income of $2,132,715, which consisted of operating costs of $557,174, offset by interest earned on marketable securities held in the operating account and Trust Account of $2,689,889.\n\n \n\nSubsequent\nto December 31, 2025, on February 2, 2026, we entered into a Business Combination Agreement\n(the “BCA”) with PrimeGen US, Inc. and certain other parties, pursuant to which we intend to consummate our initial business\ncombination. As the proposed business combination had not been consummated as of December 31, 2025, the execution of the BCA did not\nhave any impact on our results of operations for the year ended December 31, 2025. Accordingly, we did not recognize any revenues related\nto the target business during the period, and our expenses continued to primarily consist of legal, accounting, advisory and other professional\nfees incurred in connection with identifying and evaluating a target business and preparing for the proposed business combination.\n\n \n\n62\n\n \n\n \n\n**Contractual\nObligations**\n\n \n\n*Registration\nRights*\n\n \n\nPursuant\nto a registration rights agreement entered into on July 24, 2024, the holders of the initial\nshares, private placement units (including securities contained therein), and units (including\nsecurities contained therein) that may be issued on conversion of working capital loans are entitled to certain customary registration\nrights for the resale of such securities. The holders of these securities are entitled to make requests for no more than two demand registrations,\nexcluding short form demands, that we register such securities. In addition, the holders have certain “piggy-back” registration\nrights with respect to registration statements filed subsequent to our completion of initial business combination and rights to require\nus to register for resale such securities pursuant to Rule 415 under the Securities Act. We will bear the expenses incurred in connection\nwith the filing of any such registration statements.\n\n \n\n*Underwriting\nAgreement*\n\n \n\nThe\nunderwriters are entitled to a cash underwriting commission of 2.5% of the gross proceeds of the initial public offering upon the closing\nof the initial business combination, including (1) $0.15 per unit, or $1,035,000 in the aggregate, payable to the underwriters in cash\nupon the consummation of the initial public offering, and (2) $0.10 per unit, or $690,000 in the aggregate, for deferred underwriting\ncommissions that will be placed in the trust account as described in the final\nprospectus related to the initial public offering and payable to the underwriters in cash upon\nthe consummation of the initial business combination. In addition, we agreed to issue 69,000 ordinary shares (the “Representative\nShares”) to Alliance Global Partners (“A.G.P.”) upon the consummation of the initial public offering as part of the\nunderwriting compensation in connection with the offering. On July 26, 2024 we issued 69,000 Representative Shares to A.G.P. at the closing\nof our initial public offering, which have been received by A.G.P.\n\n \n\n*Administrative\nServices Agreement*\n\n \n\nOn\nJuly 24, 2024, we entered into an agreement with the Sponsor, pursuant to which we agreed to pay the sponsor a total of $10,000 per month\nfor secretarial and administrative support services provided to us through the earlier of consummation of the initial business combination\nand our liquidation.\n\n \n\nIn\naddition, our sponsor, officers and directors, or any of their respective affiliates, will be reimbursed for any out-of-pocket expenses\nincurred in connection with activities on our behalf such as identifying potential target businesses and performing due diligence on\nsuitable business combinations. There is no cap or ceiling on the reimbursement of out-of-pocket expenses incurred by such persons in\nconnection with activities on our behalf.\n\n** **\n\n**Critical\nAccounting Estimates**\n\n \n\nThe\npreparation of financial statements and related disclosures in conformity with U.S. GAAP requires management to make estimates and assumptions\nthat affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial\nstatements, and the reported amounts of income and expenses during the periods reported. Actual results could materially differ from\nthose estimates.\n\n \n\nA\ncritical accounting estimate to our financial statements includes the valuation of ordinary shares subject to possible redemption. We\nhave not identified any critical accounting estimates.\n\n \n\nIn\nconnection with the proposed business combination, management has estimated the costs related to the transaction, which include legal,\naccounting, advisory, and other professional fees. These costs are expensed as incurred and are subject to change depending on the final\nstructure of the business combination and the parties involved. The Company has not yet finalized the total amount of transaction costs,\nwhich will be reflected in the financial statements upon the consummation of the business combination.\n\n** **\n\n63\n\n \n\n** **\n\n**Recent\nAccounting Pronouncements**\n\n \n\nOur\nmanagement does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have\na material effect on our audited financial statements.\n\n \n\n**Off-Balance\nSheet Arrangements and Contractual Obligations**\n\n \n\nAs\nof December 31, 2025, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii)\nof Regulation S-K.\n\n \n\n**JOBS\nAct**\n\n \n\nWe\nqualify as an “emerging growth company” under the JOBS Act and are allowed to comply with new or revised accounting pronouncements\nbased on the effective date for private (not publicly traded) companies. We elected to delay the adoption of new or revised accounting\nstandards, and as a result, we may not comply with new or revised accounting standards on the relevant dates on which adoption of such\nstandards is required for non-emerging growth companies. As a result, our financial statements may not be comparable to companies that\ncomply with new or revised accounting pronouncements as of public company effective dates.\n\n \n\nAs\nan “emerging growth company”, we are not required to, among other things, (1) provide an auditor’s attestation report\non our system of internal controls over financial reporting pursuant to Section 404, (2) provide all of the compensation disclosure that\nmay be required of non-emerging growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (3) comply\nwith any requirement that may be adopted by the PCAOB regarding mandatory audit firm rotation or a supplement to the auditor’s\nreport providing additional information about the audit and the financial statements (auditor discussion and analysis), and (4) disclose\ncertain executive compensation related items such as the correlation between executive compensation and performance and comparisons of\nthe CEO’s compensation to median employee compensation. These exemptions will apply for a period of five years following the completion\nof our initial public offering or until we are no longer an “emerging growth company,” whichever is earlier."}