Company: FORL
Filing Date: 2025-04-30
Form Type: 10-K
Source: 0001213900-25-037576
Chunk: 1813

Company: Four Leaf Acquisition Corp
Filing Date: 2025-04-30
Form: 10-K
Item: Item 9B
Chunk 1813
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 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 to apply to taxable income in the years in which those temporary differences are expected to
be recovered or settled. 

F-19

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