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Four Leaf Acquisition Corporation(FORLU) - 2023 Q4 - Annual Report
FORLUFour Leaf Acquisition Corporation(FORLU)2024-04-01 21:29

Financial Condition - As of December 31, 2023, the company had cash of 10,622andaworkingcapitaldeficitof10,622 and a working capital deficit of 851,869, excluding current liabilities related to franchise and income taxes[52]. - As of December 31, 2023, the company had 10,622incashandhadborrowed10,622 in cash and had borrowed 272,000 from its Sponsor to fund working capital[78]. - The company has net tangible assets exceeding 5,000,000,exemptingitfromcertainSECrulesforblankcheckcompanies[73].−Thecompanyanticipatesthatpublicstockholdersmayreceiveapproximately5,000,000, exempting it from certain SEC rules for blank check companies[73]. - The company anticipates that public stockholders may receive approximately 10.40 per share upon liquidation of the trust account if the initial business combination is not completed[94]. - Public stockholders may only receive approximately 10.40pershareuponliquidationiftheinitialbusinesscombinationisnotcompleted[143].−Theper−shareredemptionamountforpublicstockholderscouldbelessthan10.40 per share upon liquidation if the initial business combination is not completed[143]. - The per-share redemption amount for public stockholders could be less than 10.40 due to potential claims against the trust account[79]. - If the company fails to complete its initial business combination by June 22, 2024, public stockholders may receive less than 10.40pershareduetopotentialnegativeinterestratesontrustaccountassets[193].BusinessCombinationRisks−Thecompanyhasincurredsignificantcostsinpursuitofacquisitionplansandcannotassuresuccessfulcapitalraisingorinitialbusinesscombinationcompletion[52].−IfthecompanydoesnotcompleteitsinitialbusinesscombinationbyJune22,2024,itwillceaseoperationsandredeempublicsharesatapricepotentiallylessthan10.40 per share due to potential negative interest rates on trust account assets[193]. Business Combination Risks - The company has incurred significant costs in pursuit of acquisition plans and cannot assure successful capital raising or initial business combination completion[52]. - If the company does not complete its initial business combination by June 22, 2024, it will cease operations and redeem public shares at a price potentially less than 10.40 per share[66]. - The company may not be able to complete its initial business combination due to general market conditions and other risks[68]. - The company may face challenges in negotiating initial business combinations due to the time constraints imposed by the completion deadline[65]. - The company may face bankruptcy claims that could reduce the per-share amount received by stockholders in the event of liquidation, especially if bankruptcy proceedings are initiated before distributing trust account proceeds[86]. - The company may struggle to obtain additional financing for business combinations, which could lead to restructuring or abandonment of transactions[142]. - The company may face intense competition from other entities with similar business objectives, which may limit its ability to complete an initial business combination[75]. - Increased competition among special purpose acquisition companies may lead to a scarcity of attractive targets and higher costs for initial business combinations[124]. - The company may not be required to obtain a fairness opinion for its business combinations, relying instead on the judgment of its board of directors[118]. - The company may face challenges in maintaining control of the target business post-combination, potentially leading to a minority interest for existing stockholders[161]. Shareholder Considerations - Initial stockholders have agreed to vote in favor of the initial business combination, potentially requiring only 37.6% of public shares to approve the transaction[56]. - Stockholders holding more than 15% of Class A common stock may lose the ability to redeem shares in excess of that amount without prior consent[74]. - The company’s directors may choose not to enforce indemnification obligations against the Sponsor, potentially reducing funds available for distribution to public stockholders[83]. - The company’s initial stockholders could lose their entire investment if the initial business combination is not completed, creating a conflict of interest in selecting target businesses[184]. - The company’s management team may negotiate employment agreements with target businesses, potentially influencing their decision-making in business combinations[173]. - The company’s initial stockholders will receive additional shares of Class A common stock if shares are issued to consummate an initial business combination, differing from other SPACs[148]. Regulatory and Compliance Issues - The company may be subject to burdensome compliance requirements if deemed an investment company under the Investment Company Act, which could hinder its ability to complete the initial business combination[92]. - Changes in laws or regulations may adversely affect the company's ability to negotiate and complete its initial business combination[96]. - The company must maintain a minimum stockholders' equity of 2,500,000andatleast300publicholderstoremainlistedonNasdaq[189].−ThecompanyissubjecttostateregulationsifitisnolongerlistedonNasdaq,whichcouldhinderthesaleofitssecurities[192].−Thecompanyisclassifiedasan"emerginggrowthcompany"andmaytakeadvantageofexemptionsfromcertainreportingrequirements,potentiallymakingitssecuritieslessattractivetoinvestors[208].−CompliancewiththeSarbanes−OxleyActmayincreasethetimeandcostsassociatedwithcompletinganinitialbusinesscombination[213].InternationalOperationsandMarketConditions−Thecompanymayseekbusinesscombinationopportunitiesinsectorsoutsideofitsmanagement′sexpertise,particularlyfocusingonIoTcompanies[106].−IfthecompanyengagesinbusinesscombinationswithentitiesoutsidetheUnitedStates,itwillencounteradditionalrisks,includinghigheroperationalcostsandcompliancechallenges[163].−Thecombinedcompany′soperationsandrevenuewillbesignificantlyinfluencedbyeconomic,political,andlegalconditionsinthePRC[234].−ThePRCgovernmenthassignificantcontrolovereconomicconditions,whichcouldadverselyaffecttheabilitytooperateprofitablyinthePRC[227].−ThePRCgovernmentmayinterveneinbusinessoperations,affectingtheabilitytoconductabusinesscombinationwithaPRC−basedtarget[239].−TheapprovalprocessforacquisitionsinChinaisexpectedtobemoretime−consumingandcostly,potentiallyhinderingtransactioncompletion[220].−ThePRCgovernmenthasindicatedanintenttoexertmoreoversightoverforeigninvestments,whichcouldhinderbusinesscombinationsandaffectsecurityvalues[237].FinancialInstrumentsandSecurities−Thecompanymayissuesharesinprivateplacementtransactionsatapriceof2,500,000 and at least 300 public holders to remain listed on Nasdaq[189]. - The company is subject to state regulations if it is no longer listed on Nasdaq, which could hinder the sale of its securities[192]. - The company is classified as an "emerging growth company" and may take advantage of exemptions from certain reporting requirements, potentially making its securities less attractive to investors[208]. - Compliance with the Sarbanes-Oxley Act may increase the time and costs associated with completing an initial business combination[213]. International Operations and Market Conditions - The company may seek business combination opportunities in sectors outside of its management's expertise, particularly focusing on IoT companies[106]. - If the company engages in business combinations with entities outside the United States, it will encounter additional risks, including higher operational costs and compliance challenges[163]. - The combined company's operations and revenue will be significantly influenced by economic, political, and legal conditions in the PRC[234]. - The PRC government has significant control over economic conditions, which could adversely affect the ability to operate profitably in the PRC[227]. - The PRC government may intervene in business operations, affecting the ability to conduct a business combination with a PRC-based target[239]. - The approval process for acquisitions in China is expected to be more time-consuming and costly, potentially hindering transaction completion[220]. - The PRC government has indicated an intent to exert more oversight over foreign investments, which could hinder business combinations and affect security values[237]. Financial Instruments and Securities - The company may issue shares in private placement transactions at a price of 10.00 per share, which could be significantly less than the market price at that time[61]. - The company may issue additional common or preferred stock to complete its initial business combination, which could dilute existing shareholders' interests[119]. - The company may convert up to 2,000,000ofloansintowarrantsatapriceof2,000,000 of loans into warrants at a price of 1.00 per warrant upon consummation of the initial business combination[78]. - The company’s securities could be quoted on an over-the-counter market if Nasdaq delists them, leading to reduced liquidity and market quotations[190]. - The company’s Class A common stock may be classified as a "penny stock" if delisted, resulting in stricter trading rules[191]. - The company may amend the terms of the Public Warrants with the approval of at least a majority of the outstanding Public Warrants, potentially increasing the exercise price or shortening the exercise period[203].