Company: EMCRF
Filing Date: 2025-05-20
Form Type: 10-Q
Source: 0001829126-25-003812
Chunk: 17

Company: Embrace Change Acquisition Corp.
Filing Date: 2025-05-20
Form: 10-Q
Item: Part I, Item 1
Chunk 17
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 Combination and in connection with certain amendments to the Company’s amended and restated
certificate of incorporation. In accordance with ASC 480, conditionally redeemable ordinary shares (including ordinary shares that
feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain
events not solely within the Company’s control) are classified as temporary equity. Ordinary liquidation events, which involve
the redemption and liquidation of all of the entity’s equity instruments, are excluded from the provisions of ASC 480. In
connection with the shareholders’ vote at the Extraordinary General Meeting on August 9, 2023, 1,550,710
ordinary shares were tendered for redemption. On August 14, 2023, the Company accepted a reversal request for 109,819
shares. As a result, a total of 1,440,891
ordinary shares were redeemed, leaving 5,951,964 ordinary shares subject to possible redemption after the August 7, 2023 redemption. In
connection with the Annual General Meeting held on October 20, 2023, 824,682
ordinary shares were tendered for redemption, leaving 5,127,282
ordinary shares subject to possible redemption still outstanding. In connection with the shareholders’ vote at the Extraordinary General Meeting of shareholders held by the Company on August 12, 2024, 2,903,151 ordinary shares were redeemed, leaving 2,224,131 ordinary shares subject to possible redemption after the August 12, 2024 redemption.

Accordingly, as of March 31, 2025 and December 31,
2024, 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