Company: FORL
Filing Date: 2025-04-30
Form Type: 10-K
Source: 0001213900-25-037576
Chunk: 1544

Company: Four Leaf Acquisition Corp
Filing Date: 2025-04-30
Form: 10-K
Item: Item 8
Chunk 1544
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 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, and the Embedded Feature
does not include a significant premium, the Embedded Feature is not required to be accounted for separately.

Income
Taxes

The Company
adopted ASC 740, Income Taxes (“ASC 740”), at its inception. Under ASC 740, deferred tax assets and liabilities are
recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets
and liabilities and their respective tax bases. Deferred tax assets, including tax loss and credit carryforwards, and liabilities are
measured using enacted tax rates expected