Company: FORL
Filing Date: 2025-08-27
Form Type: 10-Q
Source: 0001213900-25-080962
Chunk: 108

Company: Four Leaf Acquisition Corp
Filing Date: 2025-08-27
Form: 10-Q
Item: Part I, Item 2
Chunk 108
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 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 equity and are accreted from the initial carrying amount to the redemption value over
the period from the date of issuance to the earliest redemption date of the instrument on a straight-line basis. Subsequent to the IPO
date, the accretion also includes the dividend and interest income earned in the Trust Account in excess of income and franchise taxes.

The
change in the carrying value of Class A common stock subject to possible redemption resulted in charges against additional paid-in capital.
Subsequent to the IPO date, the Company accretes a portion of the accretion that reflects a redemption in excess of fair value, extension
deposits made into the Trust Account and dividend and interest income earned in the Trust Account in excess of income and franchise taxes.

Recently
Adopted Accounting Pronouncements

In
December 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-