Embrace Change Acquisition (EMCG) - 2022 Q1 - Quarterly Report

Financial Performance - The company reported a net loss of $3,230 for the three months ended March 31, 2022, consistent with the loss reported for the same period in 2021[12]. - The Company reported a net loss per share, with diluted loss per share being the same as basic loss per share due to the absence of dilutive securities[47]. - The company has not engaged in any operations or generated any revenues to date, with activities limited to organizational tasks and preparations for the IPO[83]. Assets and Equity - Total assets as of March 31, 2022, were $174,130, an increase from $169,050 as of December 31, 2021, representing a growth of approximately 2.4%[9]. - Total stockholders' equity remained stable at $21,770 as of March 31, 2022, unchanged from December 31, 2021[9]. - As of March 31, 2022, the company had 1,868,750 ordinary shares issued and outstanding, with a par value of $0.0001[9]. Cash and Liabilities - Cash balance at the end of the period was $4,602, unchanged from the previous period[20]. - The company has a promissory note related party liability of $152,360 as of March 31, 2022, up from $147,280 at the end of 2021, indicating a 2.3% increase[9]. - As of March 31, 2022, the Company had cash of $4,602 and a working capital deficit of $147,758, indicating financial challenges[33]. Business Combination Plans - The Company plans to conduct an initial public offering of 6,500,000 units at $10.00 per unit, potentially increasing to 7,475,000 units if the underwriters' over-allotment option is fully exercised[24]. - The Company will only complete a Business Combination if it has net tangible assets of at least $5,000,001 immediately prior to consummation[25]. - The Company has until 12 months from the closing of the Proposed Offering to complete a Business Combination, extendable to 18 months[29]. - There is no assurance that the Company will successfully complete a Business Combination, raising substantial doubt about its ability to continue as a going concern[33]. Costs and Expenses - The Company has incurred and expects to continue incurring significant costs in pursuit of financing and acquisition plans[33]. - The company expects to incur approximately $70,000 in legal and accounting expenses, $100,000 for target business searches, and $50,000 for SEC filing obligations related to the initial business combination[86]. - The company anticipates increased expenses as a public company, including legal, financial reporting, and due diligence costs[83]. Trust Account and Proceeds - The Company will hold the proceeds from the Proposed Offering in a Trust Account, which may only be invested in U.S. government treasury obligations or money market funds[24]. - Approximately $66.625 million, or $76.619 million if the over-allotment option is exercised in full, will be held in the trust account for the purpose of acquiring a target business[84]. - The remaining estimated $500,000 not held in the trust account will be used for operational expenses over the next 12 months[86]. Shareholder and Sponsor Commitments - The Sponsor has agreed to vote in favor of a Business Combination and not to redeem any shares in connection with such a vote[28]. - The Sponsor has committed to purchase 342,500 Private Units at $10.00 per Private Unit, totaling $3,425,000, which will be added to the net proceeds from the Proposed Offering[54]. - Each holder of a right will receive one-eighth (1/8) of one ordinary share upon consummation of a Business Combination[75]. Regulatory and Compliance - The company continues to be classified as an emerging growth company, allowing it to take advantage of certain regulatory exemptions[5]. - The Company is classified as an emerging growth company, allowing it to take advantage of certain exemptions from reporting requirements[35]. - The company has evaluated subsequent events up to July 20, 2022, and found no events requiring adjustment or disclosure in the financial statements[77]. Risk Factors - The company may need additional financing to complete its initial business combination or to meet obligations if a significant number of public shares are redeemed[87]. - There have been no material changes in risk factors since the last report, and the company has no off-balance sheet arrangements or contractual obligations[96][89].