Business combination expected to close in Q2
2024.
Fortune Rise Acquisition Corporation (Nasdaq: FRLA) and
OriginClear Inc. (OTC Other: OCLN), the Clean Water Innovation
Hub™, today announced that FRLA and Water On Demand Inc. (WOD), a
subsidiary of OriginClear, Inc., have entered into a definitive
business combination agreement (the "BCA").
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The transaction represents a pro forma
equity valuation of approximately $72 million of the Combined
Company, assuming no further redemptions of FRLA public shares by
FRLA's public shareholders. The proceeds will be used to develop
the Water On Demand water-as-a-service network, grow the Modular
Water and Progressive Water business units, and carry out an
aggressive acquisition program, which is expected to accelerate the
existing growth. (Graphic by OriginClear)
The transaction represents a pro forma equity valuation of
approximately $72 million of the Combined Company, assuming no
further redemptions of FRLA public shares by FRLA's public
shareholders. The estimated cash proceeds available to the Combined
Company from the transaction consists of FRLA's $ 39,635,883 of
cash held in trust, assuming no further redemptions of FRLA public
shares.
The proceeds will be used to develop the Water On Demand
water-as-a-service network, grow the Modular Water and Progressive
Water business units, and carry out an aggressive acquisition
program, which is expected to accelerate the existing growth. A
number of assumptions have been made as to purchase multiples, net
growth, synergies and other factors, and there are no guarantees
that the Combined Company will succeed in the acquisitions and
subsequent integrations of the acquired entities. The acquisitions
will prioritize network management software, management and
engineering staffing, and vertical integration through acquisition
of component fabricators.
Upon closing of the transactions contemplated under the BCA, and
assuming none of FRLA's public shareholders elect to redeem their
shares of common stock and no additional shares of common stock are
issued, it is anticipated that FRLA's public shareholders would
retain an ownership interest of approximately 46% of the Combined
Company, the sponsors, officers, directors and other holders of
FRLA founder shares and private shares will retain an ownership
interest of approximately 18% of the Combined Company, and the WOD
stockholders will own approximately 36% of the Combined Company,
based on its agreed acquisition valuation of $32 million, an
approximate 3.2x multiple of its 2022 revenue. The existing
stockholders of WOD are expected to roll 100% of their equity into
the Combined Company.
The board of directors of each of FRLA and WOD unanimously
approved the transaction, which is expected to be completed in the
second quarter of 2024, subject to, among other things, the
approval by the shareholders of FRLA and WOD, satisfaction of the
conditions stated in the definitive agreement and other customary
closing conditions, including a registration statement being
declared effective by the SEC, and approval by The Nasdaq Stock
Market to list the securities of the Combined Company.
About Fortune Rise Acquisition Corporation
FRLA is a blank check company incorporated in February 2021 as a
Delaware corporation formed for the purpose of effecting a merger,
capital stock exchange, asset acquisition, stock purchase,
reorganization or similar business combination with one or more
businesses.
FRLA is a "shell company" as defined under the Securities
Exchange Act of 1934, as amended, because it has no operations and
nominal assets consisting almost entirely of cash. FRLA will not
generate any operating revenues until after the completion of its
initial business combination, at the earliest. To date, FRLA’s
efforts have been limited to organizational activities and
activities related to its initial public offering as well as the
search for a prospective business combination target.
Advisors
EF Hutton, a division of Benchmark Investments, LLC is acting as
Capital Markets Advisor in the transaction.
About Water On Demand, Inc.
Once a government monopoly, the business of treating and reusing
sewage water is going private. Local industries and communities are
now treating-in-place, helping to reduce the burden on municipal
systems and save on fast-rising water rates while also responding
to the challenge of climate change. That’s good for business and
good for sustainability. Now, the innovative fintech, Water On
Demand™, is enabling clean water to become an investable asset,
open to main street investors, with the potential for generational
royalties. OriginClear has consolidated under Water on Demand, its
Modular Water Systems, the downsized technology that businesses
need for on-site water treatment and recycling, and Progressive
Water Treatment, a 25-year veteran engineered solutions subsidiary
based in McKinney, Texas, with its Water on Demand business. This
combination adds technology and the ability to execute on larger
and more prestigious installations. “OriginClear has retained a
controlling percentage of the new combined company,” said Riggs
Eckelberry, OriginClear CEO. “Our longtime shareholders can
confidently expect that the parent company will continue to benefit
greatly from any positive outcomes of this new, consolidated
company.”
About OriginClear
OriginClear® is the Clean Water Innovation Hub™, dedicated to
launching new ventures such as Water On Demand™ and Modular Water
Systems™ – a leader in onsite, prefabricated systems made with
sophisticated materials that can last decades. Another OriginClear
subsidiary acquired in 2015, Progressive Water Treatment, helped
achieve a company-wide increase of 250% in revenues from 2021 to
2022, and has now merged with Water On Demand and Modular Water
Systems in a combination known as Water On Demand Inc., intended to
create better enterprise value for a potential merger. Get live
weekly updates every Thursday by signing up at
www.originclear.com/ceo.
ADDITIONAL INFORMATION AND WHERE TO FIND IT
For additional information on the proposed transaction, see
FRLA’s Current Report on Form 8-K, which will be filed concurrently
with this press release. In connection with the proposed
transaction, the parties intend to file relevant materials with the
Securities and Exchange Commission, including a registration
statement on Form S-4 to be filed by FRLA with the SEC, which will
include a proxy statement/prospectus of FRLA, and will file other
documents regarding the proposed transaction with the SEC. FRLA’s
shareholders and other interested persons are advised to read, when
available, the preliminary proxy statement/prospectus and the
amendments thereto and the definitive proxy statement and documents
incorporated by reference therein filed in connection with the
proposed business combination, as these materials will contain
important information about WOD, FRLA and the proposed business
combination. Promptly after the Form S-4 is declared effective by
the SEC, FRLA will mail the definitive proxy statement/prospectus
and a proxy card to each shareholder entitled to vote at the
meeting relating to the approval of the business combination and
other proposals set forth in the proxy statement/prospectus. Before
making any voting or investment decision, investors and
stockholders of FRLA are urged to carefully read the entire
registration statement and proxy statement/prospectus, when they
become available, and any other relevant documents filed with the
SEC, as well as any amendments or supplements to these documents,
because they will contain important information about the proposed
transaction. The documents filed by FRLA with the SEC may be
obtained free of charge at the SEC’s website at www.sec.gov, or by
directing a request to Fortune Rise Acquisition Corporation, 13575
58th Street North, Suite 200, Clearwater, Florida 33760, Attention:
Secretary or to fracrich@yahoo.com.
Participants in the Solicitation
WOD, FRLA and their respective directors and executive officers
may be deemed participants in the solicitation of proxies from its
shareholders with respect to the business combination. A list of
the names of those directors and executive officers and a
description of their interests in FRLA will be included in the
proxy statement/prospectus for the proposed business combination
when available at www.sec.gov. Information about FRLA’s directors
and executive officers and their ownership of FRLA common stock
will be included in the proxy statement/prospectus pertaining to
the proposed business combination when it becomes available. These
documents can be obtained free of charge from the source indicated
above.
FORWARD-LOOKING STATEMENTS
This communication contains “forward-looking statements” within
the meaning of the Private Securities Litigation Reform Act of
1995. Such statements include, but are not limited to, statements
about future financial and operating results, our plans,
objectives, expectations and intentions with respect to future
operations, products and services; and other statements identified
by words such as “will likely result,” “are expected to,” “will
continue,” “is anticipated,” “estimated,” “believe,” “intend,”
“plan,” “projection,” “outlook” or words of similar meaning. These
forward-looking statements include, but are not limited to,
statements regarding WOD’s industry and market sizes, future
opportunities for WOD and FRLA, WOD’s estimated future results and
the proposed business combination between FRLA and WOD, including
the implied enterprise value, the expected transaction and
ownership structure and the likelihood, timing and ability of the
parties to successfully consummate the proposed transaction. Such
forward-looking statements are based upon the current beliefs and
expectations of our management and are inherently subject to
significant business, economic and competitive uncertainties and
contingencies, many of which are difficult to predict and generally
beyond our control. Actual results and the timing of events may
differ materially from the results anticipated in these
forward-looking statements.
In addition to factors previously disclosed in FRLA’s reports
filed with the SEC and those identified elsewhere in this
communication, the following factors, among others, could cause
actual results and the timing of events to differ materially from
the anticipated results or other expectations expressed in the
forward-looking statements: inability to meet the closing
conditions to the business combination, including the occurrence of
any event, change or other circumstances that could give rise to
the termination of the definitive agreement; the inability to
complete the transactions contemplated by the definitive agreement
due to the failure to obtain approval of FRLA’s shareholders or
WOD’s shareholders, or the failure to meet The Nasdaq Stock
Market’s initial listing standards in connection with the
consummation of the contemplated transactions; costs related to the
transactions contemplated by the definitive agreement; a delay or
failure to realize the expected benefits from the proposed
transaction; risks related to disruption of management’s time from
ongoing business operations due to the proposed transaction;
changes in the markets in which WOD competes, including with
respect to its competitive landscape, technology evolution or
regulatory changes; changes in domestic and global general economic
conditions, risk that WOD may not be able to execute its growth
strategies, including identifying and executing acquisitions; risk
that WOD may not be able to develop and maintain effective internal
controls; and other risks and uncertainties indicated in FRLA’s
final prospectus, dated November 2, 2021, for its initial public
offering, and the proxy statement/prospectus relating to the
proposed business combination, including those under “Risk Factors”
therein, and in FRLA’s other filings with the SEC. FRLA and WOD
caution that the foregoing list of factors is not exclusive.
Actual results, performance or achievements may differ
materially, and potentially adversely, from any projections and
forward-looking statements and the assumptions on which those
forward-looking statements are based. There can be no assurance
that the data contained herein is reflective of future performance
to any degree. You are cautioned not to place undue reliance on
forward-looking statements as a predictor of future performance as
projected financial information and other information are based on
estimates and assumptions that are inherently subject to various
significant risks, uncertainties and other factors, many of which
are beyond our control. All information set forth herein speaks
only as of the date hereof in the case of information about FRLA
and WOD or the date of such information in the case of information
from persons other than FRLA or WOD, and we disclaim any intention
or obligation to update any forward looking statements as a result
of developments occurring after the date of this communication.
Forecasts and estimates regarding WOD’s industry and end markets
are based on sources we believe to be reliable, however there can
be no assurance these forecasts and estimates will prove accurate
in whole or in part. Annualized, pro forma, projected and estimated
numbers are used for illustrative purpose only, are not forecasts
and may not reflect actual results.
No Offer or Solicitation
This press release shall not constitute a solicitation of a
proxy, consent, or authorization with respect to any securities or
in respect of the proposed business combination. This press release
shall also not constitute an offer to sell or the solicitation of
an offer to buy any securities, nor shall there be any sale of
securities in any states or jurisdictions in which such offer,
solicitation, or sale would be unlawful prior to registration or
qualification under the securities laws of any such jurisdiction.
No offering of securities shall be made except by means of a
prospectus meeting the requirements of Section 10 of the Securities
Act of 1933, as amended, or an exemption therefrom.
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version on businesswire.com: https://www.businesswire.com/news/home/20231024585722/en/
Media Contact The Pontes Group Lais Pontes Greene (954)
960-6083 lais@thepontesgroup.com www.thepontesgroup.com
Investor Relations and Press Contact: Devin Angus
Toll-free: 877-999-OOIL (6645) Ext. 3 International:
+1-323-939-6645 Ext. 3 Fax: 323-315-2301 ir@OriginClear.com
www.OriginClear.com
Fortune Rise Acquisition (NASDAQ:FRLA)
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