Four Leaf Acquisition (FORL) - 2023 Q2 - Quarterly Report

IPO and Financial Proceeds - The Company completed its IPO on March 16, 2023, raising total gross proceeds of $54,210,000 from the sale of 5,421,000 units at an offering price of$10.00 per unit[133]. - The Company incurred transaction costs of $4,019,087 related to the IPO, including underwriting commissions and other offering costs[135]. - The underwriter will receive$1,897,350 in deferred underwriting commissions, payable only if the Company completes an initial business combination[153]. Financial Position and Liquidity - As of June 30, 2023, the Company had cash in the Trust Account amounting to $56,564,625, which is intended for use in completing its initial business combination[143]. - As of June 30, 2023, the Company had cash of$148,233 held outside the Trust Account, which may not be sufficient for operations over the next 12 months[146]. - The Company has a working capital deficit of $136,743 as of June 30, 2023, excluding franchise and income tax liabilities[139]. - The Company may need to raise additional capital through loans or investments to meet its liquidity needs prior to completing a business combination[148]. - If the Company does not complete a business combination by March 22, 2024, it will cease operations and redeem shares of Class A common stock at a price equal to the amount in the Trust Account[138]. Income and Expenses - For the three months ended June 30, 2023, the Company reported a net income of$453,111, primarily due to $666,505 in dividend and interest income earned in the Trust Account[150]. - The Company incurred formation and general administrative costs of$253,135 for the three months ended June 30, 2023, reflecting increased expenses associated with operating as a public company[151]. - The Company incurred expenses of $30,000 related to the administrative support agreement for the three and six months ended June 30, 2023[154]. Sponsor and Warrants - The Sponsor purchased an aggregate of 3,449,500 Private Placement Warrants at a price of$1.00 per warrant, totaling $3,449,500[171]. - The Company has the option to convert up to$2,000,000 of Working Capital Loans into warrants at a price of $1.00 per warrant upon consummation of the initial business combination[177]. - The Company will pay the Sponsor a total of$10,000 per month for administrative services until the completion of the initial business combination or liquidation[179]. - The Company has no borrowings under the Working Capital Loans as of June 30, 2023[178]. Internal Control and Compliance - The Company identified a material weakness in internal control over financial reporting related to the review and approval of cash disbursements[183]. - Significant efforts and resources are being devoted to the remediation and improvement of internal control over financial reporting[183]. - Additional time is required to ensure that newly implemented controls will operate effectively to address the material weakness[184]. - The Company has implemented additional controls related to vendor verification[185]. - There has been no change in internal control over financial reporting that materially affects the reporting during the most recently completed fiscal quarter[185]. - Additional review of each payment is now conducted by several authorized individuals[185]. Accounting Standards - The Company is evaluating the potential impact of adopting new accounting standards effective after December 15, 2023[164]. - The Company accounts for its common stock subject to possible redemption as temporary equity, which is accreted to the redemption value over time[162]. - The Sponsor forfeited an aggregate of 373,750 Founder Shares, resulting in a total of 1,495,000 Founder Shares held by the Sponsor and directors[169].