Company: EMCRF
Filing Date: 2025-08-19
Form Type: 10-Q
Source: 0001641172-25-024827
Chunk: 22

Company: Embrace Change Acquisition Corp.
Filing Date: 2025-08-19
Form: 10-Q
Item: Part I, Item 1
Chunk 22
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 the requirements of applicable law) and the Private Warrants will expire worthless.

13

NOTE
5. RELATED PARTY TRANSACTIONS

Founder
Shares

During
the period ended December 31, 2021, the Company issued an aggregate of 2,156,250 shares of Ordinary shares to the Sponsor for an aggregate
purchase price of $25,000 in cash. On July 1, 2022, the sponsor surrendered an aggregate of 287,500 founder shares for no consideration,
which surrender was effective retroactively, resulting in 1,868,750 shares being outstanding. On August 12, 2022, as a result of the
partial exercise of the Representative’s Over-Allotment Option, an aggregate of 20,536 founder shares was further forfeited to
the Company, which surrender was effective retroactively and resulting in 1,848,214 shares being outstanding, so that the Sponsor will
collectively own 20% of the Company’s issued and outstanding shares after the IPO (assuming the initial shareholders do not purchase
any Public Shares in the IPO and excluding the Private Units and underlying securities).

Subject
to certain limited exceptions, the initial shareholders have agreed not to transfer, assign or sell their founder shares until six months
after the date of the consummation of the Company’s Business Combination or earlier if, subsequent to Business Combination, the
Company consummate a subsequent liquidation, merger, stock exchange or other similar transaction which results in all of the shareholders
having the right to exchange their ordinary shares for cash, securities or other property.

Due
to Related Party

As
of June 30, 2025 and December 31, 2024, the amounts due to related party was $144,060 for expenses paid by CFO on behalf of the Company.
These amounts are unsecured, non-interest bearing and due on demand.

Convertible
Promissory Notes - Related Party

On
September 8, 2023, the Company issued an unsecured promissory note (the “September 2023 Convertible Note”), effective as
of September 8, 2023, in an amount of $10,000 to the Sponsor. The Convertible Promissory Note No.1 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, the note will convert,