Company: FORL
Filing Date: 2025-08-27
Form Type: 10-Q
Source: 0001213900-25-080962
Chunk: 36

Company: Four Leaf Acquisition Corp
Filing Date: 2025-08-27
Form: 10-Q
Item: Part I, Item 1
Chunk 36
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4, the Company held Level 1 financial instruments, which are the Company’s marketable securities
held in the Trust Account. 

Convertible
Notes 

The
Working Capital Loans (Note 5) are issued in the form of convertible notes, with the embedded feature to convert 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 to apply to taxable income in the years in which those temporary differences are expected
to be recovered or settled. 

The
effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment
date. Deferred income tax expense represents the change during the period in the deferred tax assets and deferred tax liabilities. Deferred
tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all
of the deferred tax assets will not be realized. 

The
Company recognizes the tax benefits of uncertain tax positions only when the positions are “more likely than not” to be sustained
assuming examination by tax authorities and determined to be attributed to the Company. The determination of attribution, if any, applies
for each jurisdiction where the Company is subject to income taxes on the basis of laws and regulations of the jurisdiction. The application
of laws and regulations is subject to legal and factual interpretation, judgement, and uncertainty. Tax laws and regulations themselves
are subject to change as a result of changes in fiscal policy, changes in legislation, the evolution of regulations, and court rulings.
Therefore, the actual liability of the various jurisdictions may be materially different from management’s estimate. As of June
30, 202