OriginClear's Water On Demand And Fortune Rise Acquisition Corporation Seek To Combine Under Form S-4 Registration Statement
OriginClear, Inc. (OTC Other: OCLN), the Clean Water Innovation Hub™, and Fortune Rise Acquisition Corporation (NASDAQ:FRLA), a Special Purpose Acquisition Company (SPAC), today announced the filing of a registration statement on Form S-4 with the SEC which includes a preliminary proxy statement and prospectus in connection with the proposed business combination with OCLN subsidiary Water On Demand (WODI), an investor-funded service offering decentralized water management solutions and technologies to businesses and communities, potentially without the burden of upfront capital expenditures. WODI is a subsidiary of OriginClear, Inc. (OTC Other: OCLN). The Registration Statement is available on the SEC's website at https://www.sec.gov/Archives/edgar/data/1849294/000109690624000209/frla_s4.htm.
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Upon closing of the proposed business combination, the combined company (the "Combined Company") is expected to list its common stock on Nasdaq under the new ticker symbol "WODI". The transaction is expected to close in the second half of 2024 and is subject to approval by FRLA shareholders as well as other customary closing conditions, including approval by the Nasdaq Stock Market to list the securities of the Combined Company.
While the Registration Statement has not yet become effective and the information contained therein is subject to change, it provides important information about WODI, FRLA and the proposed business combination.
On October 23, 2023, WODI entered into a Business Combination Agreement (the "BCA") with FRLA. The transaction represents a pro forma combined equity valuation of approximately $72 million, assuming no further redemptions of FRLA public shares by FRLA's public shareholders. The agreed upon acquisition valuation of WODI is $32 million, based upon a 3.2x multiple of its 2022 revenue.
"OriginClear has retained a controlling percentage of its Water On Demand subsidiary," 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."
Available proceeds from the business combination will be used to develop the Water On Demand water-as-a-service network, grow the Modular Water and Progressive Water business units, and execute an ongoing acquisition program, which is expected to accelerate 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.