Company: PELI
Filing Date: 2025-06-27
Form Type: 10-Q
Source: 0001829126-25-004771
Chunk: 12

Company: Pelican Acquisition Corp
Filing Date: 2025-06-27
Form: 10-Q
Item: Part I, Item 1
Chunk 12
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 shares that features redemption rights
that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within
the Company’s control) will be classified as temporary equity. At all other times, ordinary shares will be classified as
stockholders’ equity. In accordance with ASC 480-10-S99, the Company classifies the ordinary shares subject to redemption
outside of permanent equity as the redemption provisions are not solely within the control of the Company. Given that the 8,625,000
ordinary shares sold as part of the Units in the IPO and full excise of over-allotment option were issued with other freestanding
instruments (i.e., rights), the initial carrying value of ordinary shares classified as temporary equity has been allocated to the
proceeds determined in accordance with ASC 470-20. If it is probable that the equity instrument will become redeemable, the Company
has the option to either (i) accrete changes in the redemption value over the period from the date of issuance (or from the date
that it becomes probable that the instrument will become redeemable, if later) to the earliest redemption date of the instrument or
(ii) recognize changes in the redemption value immediately as they occur and adjust the carrying amount of the instrument to equal
the redemption value at the end of each reporting period. The Company has elected to recognize the changes immediately. Immediately
upon the closing of the IPO, the Company recognized the accretion from initial book value to redemption value. The change in the
carrying value of redeemable shares will result in charges against additional paid-in capital (to the extent available) and
accumulated deficit.

Rights Accounting

The Company accounts for rights as either equity-classified or liability-classified instruments based on an assessment of the right’s specific terms and applicable authoritative guidance in ASC 480 and ASC 815. The assessment considers whether the rights are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the rights meet all of the requirements for equity classification under ASC 815, including whether the rights are indexed to the Company’s own ordinary shares and whether the right holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of right issuance and as of each subsequent quarterly period end date while the rights are outstanding.

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