Company: FORL
Filing Date: 2025-04-30
Form Type: 10-K
Source: 0001213900-25-037576
Chunk: 707

Company: Four Leaf Acquisition Corp
Filing Date: 2025-04-30
Form: 10-K
Item: Item 2
Chunk 707
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 paying these monthly fees. As of December
31, 2024 and 2023, $182,180 and $62,180, respectively, of amounts due to the Sponsor under the Administrative Support Agreement remain
unpaid and are included in Due to Related Party on the balance sheets.

Critical Accounting Policies and Estimates 

The preparation of the 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 assumptions include the fair
value of the Company’s Public Warrants and Representative Shares at their issuance dates, the valuation of the over-allotment option
provided to the underwriters and the excise tax liability in connection with redemption of Class A common stock. Actual results could
differ from those estimates

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, Distinguishing
Liabilities from Equity (“ASC 480”) and ASC 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.

74

At the IPO date, 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. The over-allotment option was accounted for as a liability under ASC 480,
as it is an option exercisable into redeemable shares.

Common Stock Subject to Possible Redemption

The Company accounts for its common stock subject
to possible redemption in accordance with the guidance in 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