Company: FORL
Filing Date: 2025-01-15
Form Type: 10-Q
Source: 0001829126-25-000187
Chunk: 28

Company: Four Leaf Acquisition Corp
Filing Date: 2025-01-15
Form: 10-Q
Item: Part I, Item 1
Chunk 28
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 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 September 30, 2024 and December 31, 2023, the Company held Level 1 financial instruments, which are the Company’s marketable securities held in the Trust Account.

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The over-allotment option expired on
April 30, 2023.The fair value of the over-allotment option was $134,583
and zero 0
at the IPO date and April 30, 2023, respectively. There was no change in the over-allotment option for the three months ended
September 30, 2024 and 2023. The change in the over-allotment option was zero 0 and ($134,583)
for the nine months ended September 30, 2024 and September 30, 2023, respectively, which is included in other income in
the accompanying unaudited condensed 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 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