Company: EMCRF
Filing Date: 2025-05-20
Form Type: 10-Q
Source: 0001829126-25-003812
Chunk: 36

Company: Embrace Change Acquisition Corp.
Filing Date: 2025-05-20
Form: 10-Q
Item: Part I, Item 1
Chunk 36
---
, which consists of investment income earned on investments held in trust account of $735,578 partially offset by operating costs of $49,800 and loss on modification of deferred underwriter commission of $378,501.

Liquidity and Capital Resources

As of March 31, 2025, we had cash of $17,229 on our balance sheet and a working capital deficit of $3,214,910.

We intend to use the funds held outside of the Trust Account, proceeds from Convertible Promissory Notes (as described below) and loans received from the unrelated third parties (as described below) for identifying and evaluating prospective acquisition candidates, performing business due diligence on prospective target businesses, traveling to and from the offices, plants or similar locations of prospective target businesses, reviewing corporate documents and material agreements of prospective target businesses, selecting the target business to acquire and structuring, negotiating and consummating the Business Combination. The interest income earned on the investments held in the Trust Account are unavailable to fund operating expenses.

In order to finance transaction costs in connection with a Business Combination, the Company’s Sponsor or an affiliate of the Sponsor, or the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). Such Working Capital Loans would be evidenced by promissory notes. The notes would either be repaid upon consummation of a Business Combination, without interest, or, at the lender’s discretion, up to $500,000 of notes may be converted upon consummation of a Business Combination into additional Private Units at a price of $10.00 per Unit. In the event that a Business Combination does not close, the Company may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans, but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. As of March 31, 2025 and December 31, 2024, the Company borrowed $241,112 under Working Capital Loans, which was included in convertible promissory note - related party.

On September 8, 2023, the Company borrowed $10,000 from the Sponsor. The loan bears no interest and is repayable in full upon the consummation of the Company’s Business Combination. It is convertible at the Sponsor’s election upon the consummation of the Company’s Business Combination. Upon such election, this loan will convert, at a price of $10.00 per unit, into units identical to the