Embrace Change Acquisition Corp. Reports $89,624 Net Loss and Plans Merger with Tianji Tire Global

Embrace Change Acquisition Corp. reported a net loss of $89,624 for the three months ending March 31, 2025, a significant decline from a net income of $307,277 during the same period in 2024. The company's operating costs surged to $355,862, compared to $49,800 in the previous year, primarily due to increased formation and operational expenses. Investment income from cash and investments held in the trust account also decreased to $267,363 from $735,578, reflecting a challenging financial environment.

The company’s total assets as of March 31, 2025, stood at $26,435,551, a slight increase from $26,154,194 at the end of 2024. Cash and investments held in the trust account rose to $26,354,572, up from $26,087,209. However, current liabilities increased to $3,295,889 from $2,924,908, driven by higher accounts payable and accrued expenses. The stockholders' deficit widened to $(6,180,910) from $(5,823,923) as the company continues to navigate its pre-business combination phase.

Strategically, Embrace Change Acquisition Corp. is in the process of finalizing a merger agreement with Tianji Tire Global (Cayman) Limited, which was signed on January 26, 2025. This agreement outlines a business combination where Embrace Change will merge with a subsidiary, with Tianji becoming a wholly-owned subsidiary post-merger. The merger is expected to involve the issuance of 45 million ordinary shares valued at $450 million to Tianji shareholders, marking a significant step in the company's operational strategy.

As of the end of the first quarter of 2025, the company had 4,520,024 ordinary shares outstanding, with 2,224,131 shares subject to possible redemption. The company has also been actively managing its liquidity, with cash on hand of $17,229 and a working capital deficit of $3,214,910. Embrace Change has relied on loans from related parties and third parties to finance its operations, with $975,000 due to third parties as of March 31, 2025.

Looking ahead, Embrace Change Acquisition Corp. faces substantial uncertainty regarding its ability to complete a business combination by the extended deadline of August 12, 2025. The company has the option to extend this deadline further by making required deposits into its trust account. However, failure to consummate a business combination could lead to liquidation, raising concerns about its ongoing viability as a going concern. The management has indicated that it will continue to seek acquisition opportunities while managing its financial obligations.