Company: FORL
Filing Date: 2025-08-27
Form Type: 10-Q
Source: 0001213900-25-080962
Chunk: 66

Company: Four Leaf Acquisition Corp
Filing Date: 2025-08-27
Form: 10-Q
Item: Part I, Item 1
Chunk 66
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 of the unaudited condensed financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial
statements. Significant estimates include the excise tax liability in connection with redemptions
of Class A common stock that occurred at the 2025 Special Meeting and the 2024 Special Meeting.  Actual results could differ from
those estimates

34

Derivative
Financial Instruments

The
Company issued Warrants to its investors, and the over-allotment option to the underwriter. The Company accounts for financial instruments
as either equity-classified or liability-classified instruments based on an assessment of the specific terms of the instruments and applicable
authoritative guidance in ASC 480 and ASC Topic 815, “Derivatives and Hedging” (“ASC 815”). The assessment considers
whether the instruments are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC
480, and meet all of the requirements for equity classification under ASC 815, including whether the instruments are indexed to the Company’s
own stock and whether the holders of the instruments could potentially require “net cash settlement” in a circumstance outside
of the Company’s control, among other conditions for equity classification.

The
Public Warrants and Private Placement Warrants were accounted for as equity instruments as they meet all of the requirements for equity
classification under ASC 815 based on current expected terms, which are subject to change.

Common
Stock Subject to Possible Redemption

The
Company accounts for its common stock subject to possible redemption in accordance with the guidance in ASC Topic 480, “Distinguishing
Liabilities from Equity” (“ASC 480”). Class A common stock subject to mandatory redemption (if any) are classified
as a liability instrument and are measured at fair value. Conditionally redeemable common stock (including common stock that feature
redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not
solely within the Company’s control) are classified as temporary equity. At all other times, common stock is classified as stockholders’
equity. The Company’s Class A common stock sold as part of the IPO, feature certain redemption rights that are considered to be
outside of the Company’s control and subject to the occurrence of uncertain future events. Accordingly, Class A common stock subject
to possible redemption are classified as temporary