Share Structure and Ownership - As of December 31, 2023, the company had 7,423,175 ordinary shares issued and outstanding held by five stockholders of record[101]. - As of July 25, 2024, the company had 7,423,175 ordinary shares issued and outstanding, with Wuren Fubao Inc. holding 2,221,964 shares, representing 29.9% of the total[192]. - Mizuho Financial Group, Inc. and Wolverine Asset Management, LLC held 600,740 shares (7.4%) and 466,742 shares (6.3%) respectively[194]. - The company issued an aggregate of 1,437,500 ordinary shares to initial shareholders prior to the IPO, which later increased to 2,156,250 shares after a 0.50 share dividend[196]. - A total of 1,440,891 ordinary shares were redeemed at a redemption price of approximately $10.68 per share, totaling $15,385,924[118]. - A total of 1,440,891 ordinary shares were redeemed in August 2023, leaving 5,127,282 ordinary shares subject to possible redemption outstanding as of December 31, 2023[270]. - As of October 20, 2023, there were 5,127,282 ordinary shares subject to possible redemption outstanding after the annual general meeting[248]. Financial Performance - For the year ended December 31, 2023, the company reported a net income of $2,424,391, consisting of investment income of $3,486,597 and operating costs of $1,062,206[123]. - The company reported a net income of $2,424,391 for the year ended December 31, 2023, compared to a net income of $410,646 in 2022, indicating a significant increase of approximately 493.5%[230]. - Basic and diluted net income per ordinary share rose to $0.27 in 2023 from $0.08 in 2022, reflecting an increase of 237.5%[230]. - The company’s cash balance significantly decreased to $5,308 in 2023 from $403,012 in 2022, a decline of approximately 98.7%[227]. - Total current liabilities rose to $1,531,905 in 2023 from $157,051 in 2022, marking an increase of approximately 873.5%[227]. - Accumulated deficit increased to $(4,114,326) in 2023 from $(2,341,247) in 2022, representing a deterioration of approximately 75.6%[228]. - Investment income earned on investments held in the Trust Account increased to $3,486,597 in 2023 from $764,689 in 2022, a growth of approximately 357.5%[230]. - Cash used in operating activities amounted to $352,351 for 2023, compared to $197,513 in 2022, indicating a 78% increase in cash outflow[236]. Initial Public Offering (IPO) and Financing - The company generated gross proceeds of $73,928,550 from its IPO by selling 7,392,855 Public Units at a price of $10.00 per unit[104]. - The Company completed its initial public offering on August 12, 2022, raising gross proceeds of $73,928,550 from the sale of 7,392,855 units at $10.00 per unit[124]. - The Company incurred offering costs of $3,898,030 during its Initial Public Offering, with $2,587,499 allocated for deferred underwriting commissions[240]. - The Company incurred offering costs of approximately $3,898,030 related to the IPO, with $210,873 recorded for the year ended December 31, 2023[284]. - A private placement generated total proceeds of $3,737,500 from the sale of 373,750 private units[125]. - The total proceeds from the private placement of 373,750 units during the IPO amounted to $3,737,500[198]. Business Combination and Future Plans - The company has not selected any specific business combination target and has not initiated substantive discussions with any potential targets[114]. - The company expects to incur significant costs in pursuing its acquisition plans and cannot assure the success of completing a Business Combination[115]. - The company extended the Combination Period from August 12, 2023, to April 12, 2024, by depositing $600,000 into the Trust Account[120]. - The company has the right to extend the Combination Period for an additional four months, from April 12, 2024, to August 12, 2024[120]. - The Company expects to incur significant costs in pursuit of its financing and acquisition plans, raising substantial doubt about its ability to continue as a going concern if it does not complete a Business Combination by August 12, 2024[255]. - The Company has not yet commenced any operations and will not generate operating revenues until after completing a business combination[239]. - The Company may pursue a business combination target in any business or industry, as it is a blank check company formed for this purpose[238]. Internal Controls and Governance - Management assessed that internal controls over financial reporting were not effective as of December 31, 2023, due to material weaknesses[145]. - The Company plans to enhance its internal controls by increasing board size and consulting third-party professionals[146]. - The audit committee consists of independent directors Jiangping (Gary) Xiao, Mo Zhou, and Hang Zhou, ensuring compliance with Nasdaq standards[161]. - The compensation committee, chaired by Hang Zhou, is responsible for reviewing and approving executive compensation policies and plans[165]. - The nominating committee, also composed of independent directors, oversees the selection of board nominees based on significant achievements and ethical standards[169]. - The company has established guidelines for selecting director nominees, emphasizing intelligence, experience, and dedication to shareholder interests[170]. - Potential conflicts of interest may arise as officers and directors are not required to commit full time to the company[174]. - The company has agreed not to consummate a business combination with entities affiliated with initial shareholders unless independent fairness opinions are obtained[184]. - Officers and directors have contractually agreed to present suitable business opportunities to the company before any other entity[182]. - Initial shareholders have agreed to vote in favor of any proposed business combination and not to redeem shares prior to its consummation[185]. Assets and Liabilities - As of December 31, 2023, total assets decreased to $56,236,360 from $76,944,986 in 2022, representing a decline of approximately 26.9%[226][227]. - Total liabilities increased to $4,119,404 in 2023 from $2,744,550 in 2022, reflecting an increase of approximately 50.1%[227]. - The estimated fair value of investments held in the Trust Account was $56,231,052 as of December 31, 2023, down from $76,541,453 in 2022[260]. - The Company had $400,112 outstanding under Convertible Promissory Notes for extension and working capital purposes as of December 31, 2023[254]. - The Company had no cash equivalents as of December 31, 2023 and 2022[259]. - The Sponsor is liable to the Company if claims reduce the amounts in the Trust Account below $10.25 per share[252]. - The Company has not made any adjustments in its financial statements for the potential negative impact of the COVID-19 pandemic, as the specific impact is not readily determinable[281]. Miscellaneous - The Company is considered an "emerging growth company" and may take advantage of certain exemptions from various reporting requirements[257]. - Mo Zhou has served as an independent director since December 2022, bringing legal and SPAC experience to the board[153]. - Hang Zhou has been an independent director since May 2022, with extensive experience in product and channel management[154]. - Each whole warrant entitles the holder to purchase one ordinary share at a price of $11.50 per share[283]. - The Private Warrants will expire worthless if the Company does not consummate a business combination within the Combination Period[286].
Embrace Change Acquisition Corp.(EMCGU) - 2023 Q4 - Annual Report