DEF: DT Cloud Acquisition Seeks Shareholder Approval for Extension to Complete Business Combination

DT Cloud Acquisition Corporation is seeking shareholder approval to extend the deadline for completing a business combination from February 23, 2026, to May 23, 2026, to allow more time for regulatory approvals and to incentivize the sponsor to continue funding monthly extensions.

Summary

• DT Cloud Acquisition Corporation is holding an Extraordinary General Meeting on March 20, 2025, to vote on proposals to extend the deadline for completing a business combination.
• The company is seeking to amend its Amended and Restated Memorandum and Articles of Association to extend the period to consummate a business combination from up to twelve times (February 23, 2026) to up to fifteen times (May 23, 2026).
• This extension is subject to the sponsor depositing additional funds into the trust account for each one-month extension.
• Shareholders are also being asked to approve an amendment to the Investment Management Trust Agreement to reflect the proposed extension.
• A third proposal seeks authorization to adjourn the meeting if necessary to solicit additional proxies.
• The board of directors recommends voting FOR all three proposals.
• If the extension is not approved, the company may be forced to liquidate.
• Public shareholders can redeem their shares for a pro rata portion of the trust account, estimated to be approximately $10.59 per share as of March 4, 2025.
• The closing price of DT Cloud's ordinary shares on March 4, 2025, was $10.57.
• The sponsor must deposit $0.03 per public share into the trust account for each one-month extension.

Sentiment

Score: 6

Explanation: The document is neutral to slightly positive. While it highlights the need for an extension, which can be seen as a negative, it also emphasizes the potential benefits of completing a business combination and provides shareholders with redemption rights.

Positives

• The extension provides more time to complete a business combination, potentially benefiting shareholders.
• Shareholders have the option to redeem their shares for a pro rata portion of the trust account.
• The sponsor is incentivized to fund the monthly extensions, demonstrating commitment to completing a deal.
• The board believes the extension is in the best interests of shareholders.

Negatives

• If the extension is not approved, the company may be forced to liquidate, resulting in a loss of investment opportunity.
• Redemption of shares will reduce the amount in the trust account, potentially requiring additional funding to complete a business combination.
• The sponsor, directors, and officers have interests that may differ from those of other shareholders.

Risks

• The business combination may be subject to U.S. foreign investment regulations, which may impose conditions or limit certain investors' ability to purchase stock.
• Delays associated with CFIUS review could prevent the business combination from being consummated within the Combination Period.
• If the business combination is ultimately prohibited by CFIUS or another U.S. government entity, the company would cease all operations except for the purpose of winding up and redeem all the public shares and liquidate.
• The company cannot assure shareholders that they will be able to sell their shares of DT Cloud in the open market, as there may not be sufficient liquidity in its securities when shareholders wish to sell their shares.

Future Outlook

If the Extension Amendment Proposal and the Trust Amendment Proposal are adopted by the shareholders, the Combination Period could be extended for up to fifteen times from the Original Termination Date (i.e., until May 23, 2026) by an additional one month each time which may be accomplished only if the Sponsor deposits additional funds for each one-month extension into the Trust Account.

Management Comments

• The Board has determined that it is in the best interests of the Company to seek Extension Amendment to allow for additional time and opportunity to clear regulatory approvals and consummate the business combination.
• The Board believes that Proposal 1 and Proposal 2 are necessary in order to be able to consummate an initial business combination.
• The Board recommends that you vote or give instruction to vote FOR the Extension Amendment Proposal, FOR the Trust Amendment Proposal, and FOR the Adjournment Proposal.

Industry Context

SPACs often seek extensions to complete business combinations due to regulatory hurdles, market conditions, or difficulty finding suitable targets. This extension request is not uncommon in the current SPAC market.

Comparison to Industry Standards

• Many SPACs, such as Venus Acquisition Corporation (Nasdaq: Vena), and Alpha Star Acquisition Corporation (Nasdaq: ALSA), have sought extensions to complete their initial business combinations.
• The $0.03 per share monthly extension fee is a common mechanism used by SPACs to incentivize sponsors to continue funding the trust account.
• The length of the proposed extension, up to 15 months, is within the typical range for SPAC extensions.

Stakeholder Impact

• Shareholders have the opportunity to vote on the extension and redeem their shares.
• Employees of DT Cloud and Maius are impacted by the uncertainty surrounding the completion of the business combination.
• The sponsor is impacted by the requirement to deposit additional funds into the trust account.

Next Steps

• Shareholders to vote on the extension, trust amendment, and adjournment proposals at the Extraordinary General Meeting on March 20, 2025.
• If approved, the sponsor will need to deposit additional funds into the trust account for each one-month extension.
• The company will continue to work towards completing the business combination with Maius Pharmaceutical Co., Ltd.

Key Dates