Company: EMCRF
Filing Date: 2025-12-10
Form Type: 10-Q
Source: 0001493152-25-027065
Chunk: 101

Company: Embrace Change Acquisition Corp.
Filing Date: 2025-12-10
Form: 10-Q
Item: Part I, Item 2
Chunk 101
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,413, partially offset by investment income earned on cash and investments held in trust account of $831,949. For the nine months
ended September 30, 2024, we had a net income of $1,212,138 which consists of investment income earned on cash and investments held in
trust account of $2,072,719 partially offset by operating costs of $478,567, loss on modification of deferred underwriter commission
of $378,501 and interest expense of $3,513.

Liquidity
and Capital Resources

As
of September 30, 2025, we had cash of $5,431 on our balance sheet and a working capital deficit of $30,681,811.

22

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 September 30, 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,