Company: FORL
Filing Date: 2025-04-30
Form Type: 10-K
Source: 0001213900-25-037576
Chunk: 354

Company: Four Leaf Acquisition Corp
Filing Date: 2025-04-30
Form: 10-K
Item: Item 1A
Chunk 354
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 Distinguishing
Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment
considers whether the instruments are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant
to ASC 480, and meet all of the requirements for equity classification under ASC 815, including whether the instruments are indexed to
the Company’s own stock and whether the holders of the instruments could potentially require “net cash settlement” in
a circumstance outside of the Company’s control, among other conditions for equity classification.

74

At the IPO date, the Public Warrants and Private
Placement Warrants were accounted for as equity instruments as they meet all of the requirements for equity classification under ASC 815
based on current expected terms, which are subject to change. The over-allotment option was accounted for as a liability under ASC 480,
as it is an option exercisable into redeemable shares.

Common Stock Subject to Possible Redemption

The Company accounts for its common stock subject
to possible redemption in accordance with the guidance in ASC 480. Class A common stock subject to mandatory redemption (if any) are classified
as a liability instrument and are measured at fair value. Conditionally redeemable common stock (including common stock that feature 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) are classified as temporary equity. At all other times, common stock is classified as stockholders’
equity. The Company’s Class A common stock sold as part of the IPO, feature certain redemption rights that are considered to be
outside of the Company’s control and subject to the occurrence of uncertain future events. Accordingly, Class A common stock subject
to possible redemption are classified as temporary equity and are accreted from the initial carrying amount to the redemption value over
the period from the date of issuance to the earliest redemption date of the instrument on a straight-line basis. Subsequent to the IPO
date, the accretion also includes the dividend and interest income earned in the Trust Account in excess of income and franchise taxes.

The change in the carrying value of Class A common
stock subject to possible redemption resulted in charges against additional paid-in capital. Subsequent to the IPO date, the Company accretes
a portion of the accretion that reflects a redemption in excess of fair value, extension deposits made into the Trust Account and dividend