{"url_path":"/sec/dtsq/10-k/2026/item-13","section_key":"item-13","section_title":"Item 13 Certain Relationships and Related Transactions, and Director Independence**","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":2145,"has_tables":true,"body_markdown":"** **\n\n**Item\n13. Certain Relationships and Related Transactions, and Director Independence**\n\n** **\n\n**Initial\nShares and Private Placement**\n\n** **\n\nIn\nNovember 2022, March 2023 and January 2024, an aggregate of 1,725,000 initial shares were issued to our initial shareholders, for an\naggregate purchase price of $25,000, or approximately $0.014 per share. The initial shares held by our initial shareholders included\nan aggregate of up to 225,000 shares subject to forfeiture by our sponsor to the extent that the underwriters’ over-allotment option\nwas not exercised in full or in part, so that our initial shareholders would collectively own 20.0% of our issued and outstanding shares\nafter our initial public offering (excluding the sale of the private units and the issuance of representative shares and assuming our\ninitial shareholders did not purchase units in our initial public offering). On July 25, 2024, the underwriters exercised their over-allotment\noption in full.\n\n \n\nSimultaneously\nwith the closing of our initial public offering on July 26, 2024, we consummated the private placement with the Sponsor of 206,900 private\nunits at a price of $10.00 per private unit. This issuance was made pursuant to Section 4(a)(2) of the Securities Act, as the transaction\ndid not involve a public offering. No underwriting discounts or commissions were paid with respect to the private placement.\n\n \n\n**Related\nParty Loans and Advances**\n\n** **\n\nOn\nDecember 31, 2023, the Company issued an unsecured promissory note to the Sponsor, pursuant to which the Company may borrow up to an\naggregate principal amount of $300,000 (the “first Promissory Note”). The first Promissory Note is non-interest-bearing and\npayable on the earlier of (i) December 31, 2024 and (ii) the date on which the Company consummates an IPO or the date on which the Company\ndetermines not to conduct the IPO. The first Promissory Note terminated and paid back after consummation of IPO on July 29, 2024.\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\n77\n\n \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\nAs\nof December 31, 2025 and 2024, we had a temporary advance of $384,050 and $84,500 from the sponsor, respectively. The balance is unsecured,\ninterest-free and has no fixed terms of repayment.\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.\n\n \n\n**Administrative\nServices Arrangement**\n\n** **\n\nAn\naffiliate of the sponsor will agree that, commencing from the date that the Company’s securities are first listed on Nasdaq through\nthe earlier of our consummation of a business combination and its liquidation, to make available to us certain general and administrative\nservices, including office space, administrative and support services, as we may require from time to time. We have agreed to pay the\naffiliate of the sponsor $10,000 per month for these services commencing on the closing date of our initial public offering for 15 months.\n\n \n\n**Working\nCapital Loans**\n\n** **\n\nIn\norder to meet our working capital needs following the consummation of our initial public offering until completion of an initial business\ncombination or to extend the period of time to consummate a business combination, our initial shareholders, officers and directors or\ntheir affiliates may, but are not obligated to, loan us funds, from time to time or at any time, in whatever amount they deem reasonable\nin their sole discretion. Each loan would be evidenced by a promissory note. The promissory note would either be paid upon consummation\nof our initial business combination, without interest, or, at the lender’s discretion, up to $300,000 of the promissory note may\nbe converted upon consummation of our business combination into private units at a price of $10.00 per unit. In the event that the initial\nbusiness combination does not close, we may use a portion of proceeds held outside the trust account to repay the working capital loans,\nbut no proceeds held in the trust account would be used to repay the working capital loans.\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\n78\n\n \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**Conflicts\nof Interest**\n\n** **\n\nAs\nmore fully discussed in “Part III, Item 10. Directors, Executive Officers and Corporate Governance—Conflicts of Interest,”\nif any of our officers or directors becomes aware of a business combination opportunity that falls within the line of business of any\nentity to which he or she has then-current fiduciary or contractual obligations, he or she will honor his or her fiduciary or contractual\nobligations to present such business combination opportunity to such entity. Our officers and directors currently have certain relevant\nfiduciary duties or contractual obligations that may take priority over their duties to us.\n\n \n\n**Related\nParty Policy**\n\n** **\n\nOur\nCode of Conduct and Ethics requires us to avoid, wherever possible, all related party transactions that could result in actual or potential\nconflicts of interests, except under guidelines approved by the board of directors (or the audit committee). Related-party transactions\nare defined as transactions in which (1) the aggregate amount involved will or may be expected to exceed $120,000 in any calendar year,\n(2) we or any of our subsidiaries is a participant, and (3) any (a) executive officer, director or nominee for election as a director,\n(b) greater than 5% beneficial owner of our ordinary shares, or (c) immediate family member, of the persons referred to in clauses (a)\nand (b), has or will have a direct or indirect material interest (other than solely as a result of being a director or a less than 10%\nbeneficial owner of another entity). A conflict-of-interest situation can arise when a person takes actions or has interests that may\nmake it difficult to perform his or her work objectively and effectively. Conflicts of interest may also arise if a person, or a member\nof his or her family, receives improper personal benefits as a result of his or her position.\n\n \n\nWe\nalso require each of our directors and executive officers to annually complete a directors’ and officers’ questionnaire that\nelicits information about related party transactions.\n\n \n\nOur\naudit committee, pursuant to its written charter, is responsible for reviewing and approving related-party transactions to the extent\nwe enter into such transactions. All ongoing and future transactions between us and any of our officers and directors or their respective\naffiliates will be on terms believed by us to be no less favorable to us than are available from unaffiliated third parties. Such transactions\nwill require prior approval by our audit committee and a majority of our uninterested “independent” directors, or the members\nof our board who do not have an interest in the transaction, in either case who had access, at our expense, to our attorneys or independent\nlegal counsel. We will not enter into any such transaction unless our audit committee and a majority of our disinterested independent\ndirectors determine that the terms of such transaction are no less favorable to us than those that would be available to us with respect\nto such a transaction from unaffiliated third parties. Additionally, we require each of our directors and executive officers to complete\na directors’ and officers’ questionnaire that elicits information about related party transactions.\n\n \n\nThese\nprocedures are intended to determine whether any such related party transaction impairs the independence of a director or presents a\nconflict of interest on the part of a director, employee or officer.\n\n \n\nTo\nfurther minimize potential conflicts of interest, we have agreed not to consummate a business combination with an entity which is affiliated\nwith any of our initial shareholders unless we obtain an opinion from an independent investment banking firm that the business combination\nis fair to our unaffiliated shareholders from a financial point of view. Furthermore, in no event will any of our existing officers,\ndirectors or initial shareholders, or any entity with which they are affiliated, be paid any finder’s fee, consulting fee or other\ncompensation prior to, or for any services they render in order to effectuate, the consummation of a business combination.\n\n \n\n79\n\n \n\n \n\n**Director\nIndependence**\n\n** **\n\nNasdaq\nlisting standards require that a majority of our board of directors be independent. An “independent director” is defined\ngenerally as a person who has no material relationship with the listed company (either directly or as a partner, shareholders or officer\nof an organization that has a relationship with the company). Our board of directors has determined that each of Mr. Shaoke Li, Mr. Chi\nZhang and Ms. Longjiao Li are “independent directors” as defined in the rules of the Nasdaq and applicable SEC rules. Our\nindependent directors have regularly scheduled meetings at which only independent directors are present."}