Company: FORL
Filing Date: 2025-04-30
Form Type: 10-K
Source: 0001213900-25-037576
Chunk: 1015

Company: Four Leaf Acquisition Corp
Filing Date: 2025-04-30
Form: 10-K
Item: Item 4
Chunk 1015
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 in active markets or quoted prices for identical or similar instruments in markets that are not active; and

    ●
    Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

In some
circumstances, the inputs used to measure fair value might be categorized within different levels of the fair value hierarchy. In those
instances, the fair value measurement is categorized in its entirety in the fair value hierarchy based on the lowest level input that
is significant to the fair value measurement.

As of December
31, 2024 and 2023, the Company held Level 1 financial instruments, which are the Company’s marketable securities held in the Trust
Account. 

The over-allotment
option expired on April 30, 2023. The fair value of the over-allotment option was $134,583 and zero at the IPO date and April 30, 2023,
respectively. The change in the over-allotment option was zero and ($134,583) for the year ended December 31, 2024 and 2023, respectively,
which is included in other income in the accompanying statements of operations. Prior to the over-allotment option’s expiration,
it was considered to be a recurring Level 3 fair value measurement.

The Representative
Shares were valued at the IPO date using the fair value of the Class A common stock, adjusted for 50% probability of consummation of the
business combination and a discount for lack of marketability. The Public Warrants were valued at the IPO date using a Monte Carlo simulation
based on management’s assumption incorporating 50% probability of completing a successful business combination. These estimates
at the IPO date were considered to be non-recurring Level 3 fair value measurements.

Working
Capital Loans 

The Working
Capital Loans (Note 5) are issued in the form of convertible notes, with the embedded feature to convert the up to $2,000,000 of the Working
Capital Loans into Private Placement Warrants at a price of $1.00 per warrant (the “Embedded Feature”). Given that the Embedded
Feature is indexed to the Company’s common stock which is classified as equity, the Embedded Feature does not require the Company
to settle the obligation in cash, the Embedded Feature does not contain a beneficial conversion feature,