Company: FORL
Filing Date: 2025-01-15
Form Type: 10-Q
Source: 0001829126-25-000187
Chunk: 38

Company: Four Leaf Acquisition Corp
Filing Date: 2025-01-15
Form: 10-Q
Item: Part I, Item 1
Chunk 38
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 the Company before a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination involving the Company (“the Triggering Event”), all of such director’s shares shall be returned to Sponsor. Further, considering that in case the business combination does not occur these awards will be forfeited, it was deemed that the above terms result in the vesting provision whereby the share awards would vest only upon the consummation of a business combination or change of control event. As a result, any compensation expense in relation to these grants will be recognized at the Triggering Event. Therefore, the Company recorded no compensation expense for the period from March 3, 2022 (inception) through September 30, 2024.

The fair value of the Founder Shares on the grant date was approximately $0.81 per share. The valuation performed by the Company determined the fair value of the shares on the date of grant by applying a discount based upon (a) the probability of a successful IPO, (b) the probability of a successful business combination, and (c) the lack of marketability of the Founder Shares. The aggregate grant date fair value of the awards amounted to approximately $40,500.

Total unrecognized compensation expense related to unvested Founder Shares at September 30, 2024 amounted to approximately $40,500 and is expected to be recognized upon the Triggering Event.

Representative Shares

On March 16, 2023, in conjunction with the IPO, the Company issued to the underwriter 52,000 shares of Class A common stock for nominal consideration (the “Representative Shares”).

On March 17, 2023, the underwriters partially exercised their over-allotment option. As a result of the partial over-allotment, the underwriter received an additional 2,210 Representative Shares, bringing the total Representative Shares to 54,210.

The fair value of the Representative Shares was accounted for as compensation under ASC 718 and was included in the offering costs. The fair value of the 54,210 Representative Shares at the date of issuance was determined to be $270,520.

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NOTE 9 – INCOME TAXES

The Company’s effective tax rate (“ETR”) is calculated quarterly based upon current assumptions relating to the Company’s known and estimable operating results and various tax-related items.

The Company’s ETR was 35.9% and 34.8% for the three months ended September 30, 2024