Company: FORL
Filing Date: 2025-01-15
Form Type: 10-Q
Source: 0001829126-25-000187
Chunk: 94

Company: Four Leaf Acquisition Corp
Filing Date: 2025-01-15
Form: 10-Q
Item: Part I, Item 4
Chunk 94
---
Limitations on Effectiveness of Controls and Procedures

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

Evaluation of Disclosure Controls and Procedures

As required by Rules 13a-15 and 15d-15 under the Exchange Act, our Chief Executive Officer and Chief Financial Officer carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of September 30, 2024. Based upon their evaluation, our Chief Executive Officer and Chief Financial Officer concluded that during the period covered by this report, our disclosure controls and procedures were not effective due to a material weakness in internal controls over financial reporting related to the Company’s review and approval of cash disbursements.

During the third quarter of 2024, the Company withdrew $464,229 of interest and dividend income earned in the Trust Account (the “Withdrawn Trust Funds”). Such Withdrawn Trust Funds were restricted for payment of the Company’s tax liabilities as provided in the Company’s certificate of incorporation and the terms of the Trust Agreement. During the three months ended September 30, 2024, the Company mistakenly used $110,269 of the Withdrawn Trust Funds for the payments of general operating expenses counter to the terms of the Trust Agreement. As a result of the foregoing, management concluded that the existing control structure failed and that a material weakness exists in our internal control over financial reporting related to the review and approval of cash disbursements.

To address this material weakness management has devoted, and plans to continue to devote, significant effort and resources to the remediation and improvement of its internal control over financial reporting.

    ●
    The Company implemented additional controls related to vendor verification. 

    ●
    The Company implemented additional reviews of each payment made by several authorized individuals. 

    ●
    The Company is in the process of opening a separate bank account to segregate the funds that are restricted as to their use from those that can be utilized for working capital needs. 

We can offer no assurance that these initiatives will ultimately have the intended effects.

Changes in Internal