Company: EMCRF
Filing Date: 2025-12-10
Form Type: 10-Q
Source: 0001493152-25-027065
Chunk: 29

Company: Embrace Change Acquisition Corp.
Filing Date: 2025-12-10
Form: 10-Q
Item: Part I, Item 1
Chunk 29
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 to the terms of the underwriting
agreement. The Company evaluated the Satisfaction and Discharge Agreement and concluded that the share settlement portion of the Satisfaction
and Discharge Agreement is representative of a share-based payment transaction in which the Company is acquiring services to be used
within the Company’s operations and upon settlement agreeing to issue ordinary shares. In this case, the share settlement portion
of the Satisfaction and Discharge Agreement is within the scope of FASB ASC Topic 718, “Compensation-Stock Compensation”
(“ASC 718”). Under ASC 718, stock-based compensation associated with equity-classified awards is measured at fair value upon
the Satisfaction and Discharge Agreement executed date (the “Grant Date”). The Company used the public trading price of ordinary
shares at Grant Date to value the fair value of the Granted Shares. The fair value of the 200,000 Granted Shares was $2,216,000 in total,
or $11.08 per share. The Satisfaction and Discharge Agreement was executed on March 4, 2024, the underwriter has provided service to
the Company prior to closing of the IPO and the Company has recorded $1,837,499 deferred liability for the share settlement portion of
the Satisfaction and Discharge Agreement at the closing of the IPO. The fair value of Granted Shares in excess of the liability settled,
in the amount of $378,501, as a result of the Satisfaction and Discharge Agreement was recorded as loss on the modification of deferred
underwriting commission in the accompanying consolidated statements of operations.

In
addition, the Company paid the representative of the underwriters, at closing of the Initial Public Offering, 1.00% of the of the IPO
shares in the Company’s ordinary shares or 73,929 ordinary shares as the underwriters’ over-allotment was partially exercised.

Right
of First Refusal

For
a period beginning on the closing of the Company’s IPO and ending 6 months from the closing of a business combination, the Company
have granted D. Boral a right of first refusal to act as sole investment banker, sole book running manager and/or sole placement agent
for any and all future private or public equity, equity-linked, convertible and debt offerings during such period. In accordance with
FINRA Rule 5110(g)(6)(A), such right of first refusal shall not have a duration of more than three years from the commencement of sales
in the Company’s IPO.

NOTE
9. STOCKH