Company: EMCRF
Filing Date: 2025-12-10
Form Type: 10-Q
Source: 0001493152-25-027065
Chunk: 20

Company: Embrace Change Acquisition Corp.
Filing Date: 2025-12-10
Form: 10-Q
Item: Part I, Item 1
Chunk 20
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 ASC 480.

From
August 2023 through August 2024, 5,168,724 ordinary shares were redeemed for an aggregated of approximately $57.6 million, and the related
redemption payments have been fully settled. Following the August 12, 2024 redemption, 2,224,131 ordinary shares remained subject to
possible redemption. In connection with the shareholders’ vote at the Third Extraordinary General Meeting held by the Company on
August 12, 2025, 2,097,743 ordinary shares were tendered for redemption, leaving 126,388 ordinary shares remained subject to possible redemption. On December 4, 2025, the Company paid approximately $26 million to holders of 2,097,743 ordinary shares for the redemption
requests they submitted on August 11, 2025, and such unpaid amounts have been recorded as amount due to redeemed
public shareholders of $26,272,128 on the consolidated balance sheet as of September 30, 2025.

Accordingly,
as of September 30, 2025 and December 31, 2024, 126,388
(excluding 2,097,743
shares that have been redeemed but remained unpaid as of September 30, 2025) and 2,224,131
ordinary shares subject to possible redemption at the redemption amount were presented at redemption value as temporary equity,
outside of the stockholders’ deficit section of the Company’s consolidated balance sheets.

Income
Taxes

The
Company complies with the accounting and reporting requirements of ASC Topic 740, “Income Taxes,” which requires an asset
and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed
for differences between the financial statement and tax bases of assets and liabilities that will result in future taxable or deductible
amounts, based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income.
Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

ASC
Topic 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax
positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not
to be sustained upon examination by taxing authorities. The Company’s management determined that the Cayman Islands is the Company’s
major tax jurisdiction. The Company recognizes