PART I. FINANCIAL INFORMATION Item 1. Unaudited Condensed Financial Statements This section presents the unaudited condensed financial statements and notes for periods ended June 30, 2025, and December 31, 2024 Condensed Balance Sheets The condensed balance sheets provide a snapshot of the company's financial position, highlighting changes between December 31, 2024, and June 30, 2025 Condensed Balance Sheet Summary | Metric | June 30, 2025 (Unaudited) | December 31, 2024 | | :----------------------------------- | :-------------------------- | :------------------ | | Cash | $9,804 | $28,407 | | Restricted cash - held in trust account | $19,856,826 | $- | | Marketable securities held in trust account | $11,354,936 | $30,124,557 | | Total assets | $31,347,191 | $30,187,964 | | Total current liabilities | $24,988,997 | $3,626,322 | | Total liabilities | $26,886,347 | $5,523,672 | | Total stockholders' deficit | $(6,632,749) | $(5,359,553) | - Restricted cash held in the trust account increased significantly to $19,856,826 as of June 30, 2025, from $0 at December 31, 2024, primarily due to funds restricted for pending Class A common stock redemptions115888 - Marketable securities held in the trust account decreased from $30,124,557 at December 31, 2024, to $11,354,936 at June 30, 2025, reflecting redemptions and withdrawals11102 Condensed Statements of Operations The condensed statements of operations show the company's financial performance for the three and six months ended June 30, 2025, and 2024 Condensed Statements of Operations Summary | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Formation and operating costs | $343,812 | $424,028 | $658,628 | $876,445 | | Loss from operations | $(343,812) | $(424,028) | $(658,628) | $(876,445) | | Dividend and interest income | $320,723 | $737,335 | $637,205 | $1,495,275 | | Income (loss) before income taxes | $(23,089) | $313,307 | $(21,423) | $618,830 | | Income tax provision | $(65,735) | $(146,651) | $(126,631) | $(321,572) | | Net income (loss) | $(88,824) | $166,656 | $(148,054) | $297,258 | | Basic and diluted net income (loss) per share (Class A common stock) | $(0.02) | $0.03 | $(0.04) | $0.04 | - The company reported a net loss of $88,824 for the three months ended June 30, 2025, compared to a net income of $166,656 for the same period in 2024. For the six months, net loss was $148,054 in 2025 versus net income of $297,258 in 202415221222 - Dividend and interest income decreased significantly, from $737,335 (Q2 2024) to $320,723 (Q2 2025) and from $1,495,275 (H1 2024) to $637,205 (H1 2025), primarily due to a decreased balance in the Trust Account resulting from redemptions15223 Condensed Statements of Changes in Common Stock Subject to Possible Redemption and Stockholders' Deficit This statement details changes in common stock subject to redemption and stockholders' deficit for periods ended June 30, 2025, and 2024 Condensed Statements of Changes in Common Stock and Stockholders' Deficit Summary | Metric | June 30, 2025 | December 31, 2024 | | :----------------------------------- | :------------ | :------------------ | | Class A Shares Subject to Possible Redemption | 960,307 | 2,668,693 | | Amount of Class A Shares Subject to Possible Redemption | $11,093,593 | $30,023,845 | | Accumulated Deficit | $(6,632,890) | $(5,359,694) | | Total Stockholders' Deficit | $(6,632,749) | $(5,359,553) | - Redemptions of Class A common stock subject to possible redemption totaled $19,856,826 for 1,708,386 shares during the six months ended June 30, 2025185888 - The accumulated deficit increased from $(5,359,694) at December 31, 2024, to $(6,632,890) at June 30, 2025, reflecting net losses and accretion adjustments1813 Condensed Statements of Cash Flows The condensed statements of cash flows outline cash activities for the six months ended June 30, 2025, and 2024 Condensed Statements of Cash Flows Summary | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(489,603) | $(1,066,559) | | Net cash provided by (used in) investing activities | $(450,000) | $30,144,055 | | Net cash provided by (used in) financing activities | $921,000 | $(29,087,256) | | Net change in cash | $(18,603) | $(9,760) | | Cash - end of the period | $9,804 | $862 | - Net cash used in operating activities decreased from $(1,066,559) in H1 2024 to $(489,603) in H1 202522 - Investing activities shifted from providing $30,144,055 in H1 2024 (due to redemption of investments) to using $(450,000) in H1 2025 (due to extension payments deposited into Trust Account)22 - Financing activities provided $921,000 in H1 2025, primarily from promissory notes, a significant change from using $(29,087,256) in H1 2024 due to Class A common stock redemptions22 Notes to Unaudited Condensed Financial Statements These notes provide detailed explanations and disclosures supporting the unaudited condensed financial statements NOTE 1 - Organization and Description of Business Four Leaf Acquisition Corporation is a blank check company facing business combination extensions, Nasdaq compliance issues, and going concern uncertainties - The Company is a blank check company incorporated on March 3, 2022, for the purpose of effecting a business combination25 - On December 17, 2024, the Company entered into a Merger Agreement with Xiaoyu Dida Interconnect International Limited (Smart Station)2665 - The Company has extended its business combination period multiple times, most recently until September 22, 2025, with potential for further extensions until June 22, 2026, by depositing $75,000 monthly into the Trust Account5762 - The Company received delisting notices from Nasdaq due to falling below the $35 million Market Value of Listed Securities (MVLS) requirement and failure to timely file reports, but was granted continued listing until October 3, 2025, to complete its business combination737679 - The company's liquidity condition and potential mandatory liquidation raise substantial doubt about its ability to continue as a going concern, with cash outside the Trust Account of $9,804 as of June 30, 2025, insufficient for the next 12 months8082218 - Redemptions of Class A common stock on June 18, 2024 ($30.2 million for 2,752,307 shares) and June 27, 2025 ($19.9 million for 1,708,386 shares) are subject to a 1% U.S. federal excise tax under the Inflation Reduction Act of 2022, with accrued liabilities of $500,512 as of June 30, 202586878889 NOTE 2 - Summary of Significant Accounting Policies This section outlines key accounting principles applied in preparing the unaudited condensed financial statements - The financial statements are prepared in accordance with U.S. GAAP for interim financial information, with certain disclosures condensed or omitted per SEC rules92 - The Company is an 'emerging growth company' and has elected to use the extended transition period for complying with new or revised financial accounting standards9596 - Business combination costs are expensed as incurred, with $100,000 incurred for the six months ended June 30, 202597165 - Class A common stock subject to possible redemption is classified as temporary equity and accreted to redemption value, including dividend and interest income earned in the Trust Account and extension payments109 - The Company adopted ASU 2023-09 on January 1, 2025, with no material impact, and is evaluating ASU 2024-03 for future impact120121 NOTE 3 – Initial Public Offering This note details the IPO of the company's units, including shares sold and underwriters' over-allotment option - On March 16, 2023, the Company sold 5,200,000 Units at $10.00 per Unit, each consisting of one Class A common stock share and one Public Warrant29123 - Underwriters partially exercised their over-allotment option on March 17, 2023, purchasing an additional 221,000 Units for $2,210,00029124 NOTE 4 – Private Placement This note describes the private placement of warrants to the Sponsor, detailing warrants purchased and proceeds generated - The Sponsor purchased 3,449,500 Private Placement Warrants at $1.00 per warrant, generating $3,449,50030125 - An additional 127,400 Private Placement Warrants were issued due to the underwriters' partial over-allotment option, generating $127,500125 NOTE 5 – Related Party Transactions This note details transactions with related parties, including Founder Shares, private placement warrants, and working capital loans - The Sponsor initially acquired 2,156,250 Class B common stock (Founder Shares) for $25,000, with subsequent forfeitures resulting in 1,355,250 Founder Shares outstanding as of June 30, 2025127128 - The Sponsor provided Working Capital Loans totaling $921,000 during the six months ended June 30, 2025, used for working capital needs ($471,000) and monthly extension payments ($450,000)132 Related Party Loan Balances | Related Party Loan | June 30, 2025 | December 31, 2024 | | :----------------------------------- | :------------ | :------------------ | | Convertible note – related party | $2,000,000 | $2,000,000 | | Promissory note – related party | $1,116,100 | $195,100 | | Due to related party (Administrative Support Agreement) | $242,180 | $182,180 | - The Company pays the Sponsor $10,000 per month for administrative services, with $242,180 remaining unpaid as of June 30, 2025136137 NOTE 6 - Commitments and Contingencies This note outlines the company's contractual obligations and potential liabilities, including registration rights and deferred underwriting commissions - Holders of Founder Shares, Private Placement Warrants, and warrants from Working Capital Loans are entitled to registration rights138 - A deferred underwriting commission of $1,897,350 is payable to the underwriter solely upon the completion of a business combination139 NOTE 7 - Stockholders' Deficit This note details the components of stockholders' deficit, including authorized and outstanding shares and warrants - The Company is authorized to issue 5,000,000 shares of preferred stock, with none issued or outstanding as of June 30, 2025141 Stock and Warrant Holdings | Stock Class | June 30, 2025 | December 31, 2024 | | :----------------------------------- | :------------ | :------------------ | | Class A common stock outstanding | 1,014,517 | 2,722,903 | | Class A common stock subject to possible redemption | 960,307 | 2,668,693 | | Class B common stock outstanding | 1,355,250 | 1,355,250 | | Public Warrants outstanding | 5,421,000 | 5,421,000 | | Private Placement Warrants outstanding | 3,576,900 | 3,576,900 | - Class B common stock automatically converts into Class A common stock at the time of a business combination, at a ratio ensuring 20% of the post-IPO common stock (on an as-converted basis) is held by Founder Shares144 - Warrants become exercisable 30 days after a business combination and expire five years thereafter, with an exercise price of $11.50 per share148145 NOTE 8 - Stock-Based Compensation This note discusses accounting for stock-based compensation related to Class B common stock transfers and Representative Shares - 25,000 Class B common stock shares were transferred to each of two independent directors, vesting upon the consummation of a business combination151 - No compensation expense has been recognized for these grants from inception through June 30, 2025, with total unrecognized compensation expense of approximately $40,500151153 - 54,210 Representative Shares were issued to the underwriter, with a fair value of $270,520 accounted for as compensation and included in offering costs154155 NOTE 9 - Income Taxes This note provides information on the company's income tax provisions, including effective tax rates and deferred tax assets Effective Tax Rate Analysis | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Effective Tax Rate (ETR) | (285)% | 47.0% | (591)% | 48% | - The significant fluctuations in ETR are primarily due to changes in the valuation allowance related to deferred organizational costs and permanent differences from business combination costs158159 - The Company incurred $22,012 of interest and penalties on unremitted income tax obligations for the six months ended June 30, 2024, but no material amounts for the current periods161 NOTE 10 - Segment Information This note clarifies that the company operates as a single segment entity, focused on activities for a business combination - The Company is a blank check company and has not commenced any operations as of June 30, 2025, thus operating as a single segment entity163 - The Chief Executive Officer, as the CODM, reviews interest earned on Trust Account investments and operating/formation costs to manage shareholder value and business combination expenses165 NOTE 11 - Subsequent Events The company did not identify any subsequent events requiring disclosure beyond those already mentioned Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on financial condition, results of operations, liquidity, and capital resources Cautionary Note Regarding Forward-Looking Statements This subsection advises that the report contains forward-looking statements subject to risks and uncertainties - The report includes forward-looking statements based on current expectations and projections, subject to known and unknown risks and uncertainties170 Risks and Uncertainties This section highlights factors that could adversely affect the company's operations and ability to complete a business combination - The company's ability to complete a business combination may be adversely affected by economic uncertainty, market volatility, and geopolitical circumstances, including elevated inflation, interest rates, and trade tensions171 Overview This overview reiterates the company's nature as a blank check company, its IPO, private placement, and business combination efforts - Four Leaf Acquisition Corporation is a blank check company formed on March 3, 2022, to effect a business combination172 - The company consummated its IPO on March 16, 2023, raising $54,210,000 from 5,200,000 units, and a private placement of 3,576,900 warrants to the Sponsor for $3,577,000175176 - A significant portion of IPO proceeds ($55,836,300) was placed in a Trust Account for investment in U.S. government securities, to be released upon business combination or redemption179 - The company must complete a business combination with an aggregate fair market value of at least 80% of the assets in the Trust Account180 Initial Extension of Period to Complete Initial Business Combination This section details the initial extension of the business combination period, including the sponsor's Trust Account deposit - On March 19, 2024, the Company extended its business combination period by three months, until June 22, 2024, with the Sponsor depositing $542,100 into the Trust Account for a convertible note188 2024 Special Meeting of the Stockholders This section describes the 2024 Special Meeting where stockholders approved extensions, leading to significant share redemptions - On June 18, 2024, stockholders approved amendments allowing up to twelve one-month extensions of the Combination Period until June 22, 2025, each requiring a $75,000 deposit into the Trust Account189 - In connection with these amendments, 2,752,307 Public Shares were redeemed for approximately $30.2 million ($10.97 per share)190 - The Sponsor made seven monthly extension deposits of $75,000 each from June 2024 to December 2024191192193194195196197 2025 Special Meeting of the Stockholders This section details the 2025 Special Meeting where stockholders approved further extensions, resulting in additional share redemptions - On June 27, 2025, stockholders approved amendments allowing up to twelve one-month extensions of the Combination Period until June 22, 2026, each requiring a $75,000 deposit203 - 1,708,386 Public Shares were redeemed for approximately $19.9 million ($11.62 per share), with funds restricted for payment as of June 30, 2025, and remitted in August 2025204 - The Sponsor made three monthly extension deposits of $75,000 each from January 2025 to March 2025, and three more from April 2025 to June 2025198199200201202205 - If a business combination is not completed by September 22, 2025 (or June 22, 2026 with extensions), the company will liquidate and redeem Class A common stock208 Liquidity, Capital Resources and Going Concern This section discusses liquidity, capital resources, and substantial doubt about the company's ability to continue as a going concern - As of June 30, 2025, the company had cash of $9,804 and a working capital deficit of $4,597,916 (excluding tax liabilities)211 - The company's ability to operate for the next 12 months is in substantial doubt without a business combination, relying on potential loans from the Sponsor218 - The company had $3,116,100 in outstanding Working Capital Loans from its Sponsor as of June 30, 2025213 - Funds from the Trust Account, including interest, are primarily for the business combination, with $1,897,350 deferred underwriting commissions and tax obligations to be paid from interest214 Results of Operations This section analyzes financial performance, highlighting net loss driven by decreased income and operating costs Results of Operations Summary | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income (loss) | $(88,824) | $166,656 | $(148,054) | $297,258 | | Dividend and interest income | $320,723 | $737,335 | $637,205 | $1,495,275 | | Formation and operating costs | $343,812 | $424,028 | $658,628 | $876,445 | | Income tax expense | $65,735 | $146,651 | $126,631 | $321,572 | - Net loss for the three and six months ended June 30, 2025, was primarily due to lower dividend and interest income and higher income tax expense compared to the prior year221222223 - Formation and operating costs decreased in 2025 compared to 2024, mainly due to reductions in accounting and legal expenses223 Commitments and Contractual Obligations This section details the company's commitments, including registration rights, deferred underwriting commissions, and administrative fees - The company has registration rights agreements for Founder Shares, Private Placement Warrants, and shares from Working Capital Loans224 - A deferred underwriting commission of $1,897,350 is payable to the underwriter upon completion of an initial business combination225 - The company pays the Sponsor $10,000 per month for administrative services, with $242,180 unpaid as of June 30, 2025226 Critical Accounting Policies and Estimates This section highlights critical accounting policies and estimates, focusing on excise tax, derivatives, and redeemable common stock - Significant estimates include the excise tax liability related to Class A common stock redemptions at the 2024 and 2025 Special Meetings227 - Public and Private Placement Warrants are accounted for as equity instruments, meeting classification requirements under ASC 815229 - Class A common stock subject to possible redemption is classified as temporary equity and accreted to redemption value, including dividend and interest income and extension deposits230231 Recently Adopted Accounting Pronouncements This section notes the adoption of ASU 2023-09, effective January 1, 2025, with no material financial impact - The company adopted ASU 2023-09 on January 1, 2025, which did not have a material impact on the unaudited condensed financial statements232 Recently Issued Accounting Pronouncements This section discusses ASU 2024-03, which the company is currently evaluating for potential financial statement impact - The company is evaluating ASU 2024-03, effective for annual periods beginning after December 15, 2026, for its potential impact on financial statements233 JOBS Act This section explains the company's 'emerging growth company' status under the JOBS Act, allowing delayed accounting standard adoption - As an 'emerging growth company' under the JOBS Act, the company elects to delay the adoption of new or revised accounting standards, potentially affecting comparability with other public companies235 - The company may also rely on other reduced reporting requirements, such as exemptions from auditor attestation reports on internal controls and certain executive compensation disclosures236 Inflation Reduction Act of 2022 This section details the 1% excise tax on stock repurchases under the Inflation Reduction Act, applied to Class A common stock redemptions - The Inflation Reduction Act of 2022 imposes a 1% excise tax on certain stock repurchases by publicly traded U.S. domestic corporations, effective January 1, 2023237 - Redemptions on June 18, 2024 ($30,194,356) and June 27, 2025 ($19.9 million) are subject to this excise tax, with $198,569 accrued for 2025 and $301,944 for 2024239240241242 - The proceeds and interest in the trust account will not be used to pay this excise tax239 Related Party Transactions This section details transactions with related parties, including Founder Shares, private placement warrants, and working capital loans - The Sponsor initially acquired 2,156,250 Class B common stock (Founder Shares) for $25,000, with subsequent forfeitures resulting in 1,355,250 Founder Shares outstanding243245 - The Sponsor purchased 3,449,500 Private Placement Warrants for $3,449,500, with an additional 127,400 warrants issued due to over-allotment246 - The Sponsor provided $921,000 in Working Capital Loans during the six months ended June 30, 2025, used for working capital and extension payments249 Related Party Loan Balances | Related Party Loan | June 30, 2025 | December 31, 2024 | | :----------------------------------- | :------------ | :------------------ | | Convertible note – related party | $2,000,000 | $2,000,000 | | Promissory note – related party | $1,116,100 | $195,100 | | Due to related party (Administrative Support Agreement) | $242,180 | $182,180 | Item 3. Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, Four Leaf Acquisition Corporation is not required to provide market risk disclosures - The Company is a smaller reporting company and is not required to provide quantitative and qualitative disclosures about market risk255 Item 4. Controls and Procedures This section addresses disclosure controls, identifying a material weakness in cash disbursement review and approval - The Chief Executive Officer and Chief Financial Officer concluded that disclosure controls and procedures were not effective as of June 30, 2025, due to a material weakness in internal controls over financial reporting related to cash disbursements257 - The material weakness arose from mistakenly using $117,610 of restricted Trust Account funds for general operating expenses258 - Remediation efforts include implementing additional controls for vendor verification, multiple authorized individual reviews for payments, and opening a separate bank account to segregate restricted funds261 PART II. OTHER INFORMATION Item 1. Legal Proceedings The company reported no legal proceedings - There are no legal proceedings to report264 Item 1A. Risk Factors As a smaller reporting company, the company is not required to provide specific risk factor disclosures - As a 'smaller reporting company,' the Company is not required to provide risk factor information265 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds from Registered Securities The company reported no unregistered sales of equity securities or use of proceeds from registered securities - There were no unregistered sales of equity securities or use of proceeds from registered securities to report266 Item 3. Defaults Upon Senior Securities The company reported no defaults upon senior securities - There were no defaults upon senior securities to report267 Item 4. Mine Safety Disclosures Mine safety disclosures are not applicable to the company - Mine safety disclosures are not applicable268 Item 5. Other Information The company reported no other information - There is no other information to report269 Item 6. Exhibits This section lists the exhibits filed with the Form 10-Q, including promissory notes and certifications - Exhibits include Promissory Notes, Certifications of Principal Executive and Financial Officers (pursuant to Sections 302 and 906 of Sarbanes-Oxley Act), and XBRL Instance, Schema, Calculation, Definition, Label, and Presentation Linkbase Documents270 SIGNATURES Signatures The report is duly signed by the Chief Executive Officer and Chief Financial Officer on August 27, 2025 - The report was signed by Bala Padmakumar, Chief Executive Officer, and Coco Kou, Chief Financial Officer, on August 27, 2025272273
Four Leaf Acquisition Corporation(FORLU) - 2025 Q2 - Quarterly Report