Company: EMCRF
Filing Date: 2025-08-19
Form Type: 10-Q
Source: 0001641172-25-024827
Chunk: 38

Company: Embrace Change Acquisition Corp.
Filing Date: 2025-08-19
Form: 10-Q
Item: Part I, Item 1
Chunk 38
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 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 June 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, 2023, the Company borrowed $10,000 from the Sponsor. The loan 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, this loan will convert, at a price of $10.00 per unit, into units identical to the private
placement units issued in connection with the Company’s initial public offering.

21

From
October 2023 to December 2024, the Company borrowed $841,112 in total from our Chief Financial Officer, in form of convertible promissory
notes, for working capital and extension deposits purposes (as described in Note 5 of the Notes to the Financial Statements). These loans
bear no interest and are repayable in full upon the consummation of the Company’s Business Combination. They are convertible at
the CFO’s election upon the consummation of the Company’s