EDGAR 10-K Filing

Company CIK: 1849294
Filing Year: 2024
Filename: 1849294_10-K_2024_0001683168-24-002016.json

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ITEM 1. BUSINESS
ITEM 1. BUSINESS
In this Annual Report on Form 10-K (the “Form 10-K”), references to the “Company” and to “we,” “us,” and “our” refer to Fortune Rise Acquisition Corporation.
Overview
We are a blank check company formed as a Delaware corporation for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization, or similar business combination with one or more businesses, which we refer to throughout this report as our initial business combination. We are not limited to a particular industry or geographic region for purposes of consummating an initial business combination.
On November 5, 2021, we consummated our initial public offering (the “IPO”) of 9,775,000 units (including 1,275,000 units issued upon the full exercise of the over-allotment option, the “Units”). Each Unit consists of one share of Class A Common Stock, $0.0001 par value per share (the “Class A Common Stock”), and one-half of one redeemable warrant (the “Warrant”), each whole Warrant entitling the holder thereof to purchase one share of Class A Common Stock at an exercise price of $11.50 per share. The Units were sold at an offering price of $10.00 per Unit, generating gross proceeds of $97,750,000. Simultaneously with the closing of the IPO, we completed the private sale (the “Private Placement”) of 545,500 shares of Class A Common Stock (the “Private Placement Shares”) including 505,500 shares to our sponsor, Fortune Rise Sponsor LLC (the “Sponsor”) and 40,000 shares to U.S. Tiger Securities (“US Tiger”) and EF Hutton, a division of Benchmark Investment LLC, two representatives of the several underwriters (each, a “Representative”), at a purchase price of $10.00 per Private Placement Share, generating gross proceeds to the Company of $5,455,000. The Private Placement Shares are identical to the shares of Class A Common Stock sold as part of the Units in the IPO, except that the holders have agreed not to transfer, assign or sell any of the Private Placement Shares (except to certain permitted transferees) until 30 days after the completion of our initial business combination. The proceeds of $99,705,000 ($10.20 per Unit) in the aggregate from the IPO and the Private Placement were placed in a trust account (the “Trust Account”) established for the benefit of our public stockholders and the underwriters of the IPO with Wilmington Trust, National Association acting as trustee. References herein to “Initial Stockholders” are to the Sponsor and other initial holders of our Class B common stock, par value $0.0001 per share (“Class B Common Stock”).
Our management has broad discretion with respect to the specific application of the proceeds of the IPO and the Private Placement that are held out of the Trust Account, although substantially all the net proceeds are intended to be applied generally towards consummating a business combination and working capital.
Since our IPO, our sole business activity has been identifying and evaluating suitable acquisition transaction candidates. We presently have no revenue and have had losses since inception from incurring formation and operating costs. We have relied upon the sale of our securities and loans from the Sponsor and other parties to fund our operations.
Extensions
We originally had until November 5, 2022 to consummate our initial business combination; however, on November 4, 2022, an aggregate of $977,500 (the “First Extension Payment”) was deposited into our Trust Account for the public stockholders, representing $0.10 per public share, which enabled us to extend the period of time we had to consummate our initial business combination by three months from November 5, 2022 to February 5, 2023 (the “First Extension”). The First Extension was the first of the two three-month extensions permitted under our governing documents. In connection with the First Extension Payment, we issued unsecured promissory notes (the “First Extension Notes”) to certain Initial Stockholders including (i) a note of $413,750 to Mr. Koon Keung Chan, the former manager of our Sponsor, (ii) a note of $150,000 to US Tiger, and (iv) a note of $170,000 to Dr. Lei Xu, the former President and Chairwoman of the Company.
The First Extension Notes are non-interest bearing and payable (subject to the waiver against trust provisions) on the earlier of (i) consummation of our initial business combination and (ii) the date of the liquidation of the Company. The principal balance may be prepaid at any time, at the election of the Company. The holders of the First Extension Notes have the right, but not the obligation, to convert their First Extension Notes, in whole or in part, respectively, into private shares of the Class A Common Stock (the “First Extension Conversion Shares”) of the Company, as described in the public offering prospectus we filed with the Securities and Exchange Commission on November 3, 2021, File No. 333-256511 (the “Prospectus”). The number of First Extension Conversion Shares to be received by the holders in connection with such conversion shall be an amount determined by dividing (x) the sum of the outstanding principal amount payable to such holders by (y) $10.00. The First Extension Notes were later assigned to our Sponsor on December 22, 2022.
In addition, on February 6, 2023, $977,500 (the “Second Extension Payment”) was deposited into our Trust Account for the public stockholders, representing $0.10 per public share, which enables us to extend the period of time we have to consummate our initial business combination by three months from February 5, 2023 to May 5, 2023 (the “Second Extension”). The Second Extension is the second and final of the two three-month extensions permitted under our governing documents. In connection with the Second Extension Payment, we issued an unsecured promissory note (the “Second Extension Note”) to Water On Demand, Inc., a Nevada corporation that controls our Sponsor (“WODI”).
The Second Extension Note is non-interest bearing and payable (subject to the waiver against trust provisions) on the earlier of (i) consummation of our initial business combination and (ii) the date of the liquidation of the Company. The principal balance may be prepaid at any time, at the election of the Company. The holder of the Second Extension Note has the right, but not the obligation, to convert its Second Extension Note, in whole or in part, into private shares of the Class A Common Stock (the “Second Extension Conversion Shares”) of the Company, as described in the Prospectus. The number of Second Extension Conversion Shares to be received by the holders in connection with such conversion shall be an amount determined by dividing (x) the sum of the outstanding principal amount payable to such holders by (y) $10.00.
After prior approval of our board of directors, on April 10, 2023, at a special meeting of stockholders, our stockholders approved the filing of an amendment to the Amended and Restated Certificate of Incorporation (the “First Amendment”) to further extend, upon the request of our Sponsor, and approval by our board of directors, the period of time for the Company to (i) consummate a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination involving the Company and one or more businesses, which we refer to as a “business combination,” (ii) cease its operations if it fails to complete such business combination, and (iii) redeem or repurchase 100% of the Company’s Class A Common Stock included as part of the units sold in the Company’s initial public offering that was consummated on November 5, 2021, up to six times, each by an additional month, for an aggregate of six additional months (i.e., from May 5, 2023 up to November 5, 2023) (with an amended price per unredeemed share of Class A Common Stock of $0.0625 for each such one-month extension) or such earlier date as determined by the board of directors. As a result, on April 11, 2023, we filed the First Amendment with the Delaware Secretary of State. The stockholder vote to approve the First Amendment also triggered a redemption right for the holders of the public shares of Class A Common Stock. As a result of the First Amendment, 4,493,968 shares of Class A Common Stock elected to be redeemed. We have effected all six of those permitted monthly extensions.
After prior approval of our board of directors, on June 2, 2023, at a special meeting of stockholders, our stockholders approved the filing of an amendment to the Company’s Amended and Restated Certificate of Incorporation to amend the monthly extension amounts to be paid by the Sponsor (or its affiliates), to extend the period of time for the Company to consummate a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination involving the Company to be made upon the request of the Sponsor, and approval by the Company’s board of directors, from a previously amended price per unredeemed share of Class A Common Stock of $0.0625 to the lower of $100,000 or $0.05 per unredeemed share of Class A Common Stock. In connection with the June 2, 2023 special meeting of stockholders, the holders of 1,666,080 public shares redeemed their shares for cash at a redemption price of approximately $10.76 per share, for an aggregate redemption amount of $17,927,021..
After prior approval of our board of directors, on October 25, 2023, at a special meeting of stockholders, our stockholders approved the filing of an amendment to the Amended and Restated Certificate of Incorporation (the “Second Amendment”) to further extend, upon the request of our Sponsor, and approval by our board of directors, the period of time for the Company to (i) consummate a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination involving the Company and one or more businesses, which we refer to as a “business combination,” (ii) cease its operations if it fails to complete such business combination, and (iii) redeem or repurchase 100% of the Company’s Class A Common Stock included as part of the units sold in the Company’s initial public offering that was consummated on November 5, 2021, up to twelve times, each by an additional month, for an aggregate of twelve additional months (i.e. from November 5, 2023 up to November 5, 2024) (with an amended price per unredeemed share of Class A Common Stock of the lesser of: (x) $100,000 and (y) an aggregate amount equal to $0.05 multiplied by the number of public shares that are not redeemed, for each such one-month extension) or such earlier date as determined by the board of directors. On October 25, 2023, we filed the Second Amendment with the Delaware Secretary of State. The stockholder vote to approve the Second Amendment also triggered a redemption right for the holders of the public shares of Class A Common Stock. As a result of the Second Amendment, 452,404 shares of Class A Common Stock elected to be redeemed for cash at a redemption price of approximately $10.96 per share, for an aggregate redemption amount of $4,958,348. Following such redemptions, 3,614,952 public shares of Class A Common Stock remained outstanding as of December 31, 2023. As of the date of this filing, we have effected five of those permitted twelve monthly extensions.
Sponsor Transfers
Effective December 22, 2022, Ka Wai Cheung, Koon Lin Chan, and Koon Keung Chan, our Sponsor, and WODI entered into a Membership Interest Purchase and Transfer Agreement pursuant to which they sold to WODI all right, title and interest in and to the membership interests held by each of Messrs. Cheung, Chan, and Chan in the Sponsor (100 membership interests) for $400,000.
In addition, effective December 22, 2022, our Sponsor entered into a Securities Transfer Agreement with each of US Tiger Securities, Inc. (as designee of Lei Huang), Lei Xu, Yuanmei Ma, Norman C. Kristoff, David Xianglin Li, Michael Davidov, and Christy Szeto (the “Sellers”) pursuant to which the Sellers sold to the Sponsor an aggregate of 343,750 shares of Class B Common Stock for the purchase price of $3,506.25. Out of the issued and outstanding shares of Class B Common Stock, an aggregate of 100,000 shares remain owned by former management.
Lastly, on December 22, 2022, each of Koon Keung Chan, Lei Xu, and US Tiger Securities, Inc. assigned each of their promissory notes issued on November 4, 2022 in the aggregate amount of $773,750 to the Sponsor.
Business Combination Agreement
On October 24, 2023, we entered into a Business Combination Agreement (as it may be amended, supplemented or otherwise modified from time to time, the “BCA”) with FRLA Merger Sub, Inc., a Delaware corporation and our wholly owned subsidiary (the “Merger Sub”) and WODI.
The Business Combination
The BCA provides, among other things, that Merger Sub will merge with and into WODI, with WODI as the surviving company in the merger and, after giving effect to such merger, WODI shall be a wholly-owned subsidiary of FRLA (the “Merger”). We will change our name to “Water on Demand, Inc.” The Merger and the other transactions contemplated by the BCA are hereinafter referred to as the “Business Combination.” Other capitalized terms used, but not defined, herein, shall have the respective meanings given to such terms in the BCA.
In accordance with the terms and subject to the conditions of the BCA, at the Effective Time, among other things: (i) each share of Class A Common Stock and each share of Class B Common Stock (except for shares of Class B Common Stock held by the Sponsor which are subject to forfeiture pursuant to the Sponsor Letter Agreement) that is issued and outstanding immediately prior to the Merger will become one share of common stock, par value $0.0001 per share; (ii) by virtue of the Merger and without any action on the part of any Party or any other Person, each share of capital stock of Merger Sub issued and outstanding immediately prior to the Effective Time shall be automatically cancelled and extinguished and converted into one share of common stock, par value $0.0001, of WODI; (iii) by virtue of the Merger and without any action on the part of any Party or any other Person, each share of WODI Common Stock (other than WODI Common Stock cancelled and extinguished pursuant to Section 2.1(a)(viii) of the BCA) issued and outstanding as of immediately prior to the Effective Time shall be automatically canceled and extinguished and converted into the right to receive that number of shares of Class A Common Stock equal to the Merger Consideration; provided, however, that any shares of WODI Common Stock that are Restricted Shares shall be converted into restricted shares of Class A Common Stock, subject to the same vesting, transfer and other restrictions as the applicable Restricted Shares; (iv) by virtue of the Merger and without any action on the part of any Party or any other Person, each share of WODI Common Stock held immediately prior to the Effective Time by WODI as treasury stock shall be automatically canceled and extinguished, and no consideration shall be paid with respect thereto; and (v) the Company shall take all necessary action, including causing our directors to resign, so that immediately after the Effective Time, our board of directors will consist of five (5) individuals: two (2) persons that are designated by WODI prior to the Closing; and three (3) persons that are mutually designated by us and WODI prior to the Closing, each of whom shall be required to qualify as an independent director under the Nasdaq rules, T. Riggs Eckelberry shall become our Chief Executive Officer and Prasad Tare shall become our Chief Financial Officer.
Representations and Warranties; Covenants
The parties to the BCA have agreed to customary representations and warranties for transactions of this type. In addition, the parties to the BCA agreed to be bound by certain customary covenants for transactions of this type, including, among others, covenants with respect to the conduct of WODI and its subsidiaries during the period between execution of the BCA and the Closing. Each of the parties to the BCA has agreed to use its reasonable best efforts to cause all actions and things necessary to consummate and expeditiously implement the Business Combination.
Conditions to Each Party’s Obligations
Under the BCA, the obligations of the parties to consummate the Merger are subject to the satisfaction or waiver of certain customary closing conditions of the respective parties, including, without limitation: (i) no order or law issued by any court of competent jurisdiction or other governmental entity or other legal restraint or prohibition preventing the consummation of the transactions contemplated by the Business Combination being in effect; (ii) the registration statement on Form S-4 containing the joint proxy statement/prospectus to be filed by us relating to the BCA and the Merger (the “Registration Statement”) becoming effective in accordance with the provisions of the Securities Act, no stop order being issued by Securities and Exchange Commission (the “SEC”) and remaining in effect with respect to the Registration Statement, and no proceeding seeking such a stop order being threatened or initiated by the SEC and remaining pending; (iii) our initial listing application with Nasdaq in connection with the Business Combination having been approved; (iv) our Board consisting of the number of directors, and comprising the individuals, determined pursuant to the BCA; (v) the approval and adoption of the BCA and the transactions contemplated thereby by the requisite vote of our stockholders; (vi) the approval and adoption of the BCA and the transactions contemplated thereby by the requisite vote of WODI’s stockholders; (vii) the absence of a Company Material Adverse Effect since the date of the BCA that is continuing and (viii) the absence of an FRLA Material Adverse Effect since the date of the BCA that is continuing.
Termination
The BCA may be terminated under certain customary and limited circumstances at any time prior to the Closing, including, without limitation, (i) by the mutual written consent of us and WODI; (ii) by us, subject to certain exceptions, if any of the representations or warranties made by WODI are not true and correct or if WODI fails to perform any of its covenants or agreements under the BCA (including an obligation to consummate the Closing) such that certain conditions to our obligations could not be satisfied and the breach (or breaches) of such representations or warranties or failure (or failures) to perform such covenants or agreements is (or are) not cured or cannot be cured within the earlier of (A) thirty (30) days after written notice thereof, and (B) July 24, 2024 (the “Termination Date”); (iii) by WODI, subject to certain exceptions, if any of the representations or warranties made by us are not true and correct or if we fail to perform any of its covenants or agreements under the BCA (including an obligation to consummate the Closing) such that the condition to the obligations of WODI could not be satisfied and the breach (or breaches) of such representations or warranties or failure (or failures) to perform such covenants or agreements is (or are) not cured or cannot be cured within the earlier of (A) thirty (30) days after written notice thereof, and (B) the Termination Date; (iv) by either us or WODI, if the Closing does not occur on or prior to the Termination Date, unless the breach of any covenants or obligations under the BCA by the party seeking to terminate proximately caused the failure to consummate the transactions contemplated by the BCA; (v) by either us or WODI, if (A) any governmental entity shall have issued an order or taken any other action permanently enjoining, restraining or otherwise prohibiting the transactions contemplated by the BCA and such order or other action shall have become final and non-appealable; or (B) if the required Company or our stockholder consent is not obtained; (vi) by us, if WODI stockholders meeting has been held, has concluded, WODI stockholders have duly voted, and WODI stockholder approval was not obtained; (vii) by WODI, should we not have timely taken such actions as are reasonably necessary to extend the period of time for it to complete an initial business combination for an additional period of six months from November 5, 2023; provided, that it shall be the obligation of WODI to timely make the deposit into the Trust Account in connection with such extension, and WODI shall not have a right to terminate the BCA as a result of WODI’s failure to make such deposit; (viii) by us should WODI not deposit into the Trust Account in a timely manner the funds necessary to extend the period for us to complete an initial business combination for an additional period of six months from November 5, 2023, in accordance with, and as required pursuant to, the BCA; and (ix) by is should: (A) Nasdaq not approve the initial listing application for the combined company with Nasdaq in connection with the Business Combination; (B) the combined company not have satisfied all applicable initial listing requirements of Nasdaq; or (C) the common stock of the combined company not have been approved for listing on Nasdaq prior to the Closing Date.
In the event of the termination of this BCA, the BCA will become void (and there will be no Liability or obligation on the part of the Parties and their respective Non-Party Affiliates) with the exception of Section 5.3(a), Section 7.2, Article VIII and Article I (to the extent related to the termination), each of which will survive such termination and remain valid and binding obligations of the Parties.
The BCA contains representations, warranties and covenants that the respective parties made to each other as of the date of the BCA or other specific dates. The assertions embodied in those representations, warranties and covenants were made for purposes of the contract among the respective parties and are subject to important qualifications and limitations agreed to by the parties in connection with negotiating such agreement. The representations, warranties and covenants in the BCA are also modified in important part by the underlying disclosure schedules which are not filed publicly and which are subject to a contractual standard of materiality different from that generally applicable to stockholders and were used for the purpose of allocating risk among the parties rather than establishing matters as facts. We do not believe that these schedules contain information that is material to an investment decision.
Amendment to the Business Combination Agreement
On February 6, 2024, we and WODI entered into Amendment No. 1 to the BCA (the “BCA Amendment”). The BCA Amendment amended the BCA to delete Section 6.1(g), which required us to have at least $5,000,001 of net tangible assets immediately after the Effective Time (as defined in the BCA), and amended certain WODI Disclosure Schedules.
Business Strategy and Acquisition Criteria
Our strategy has been to identify, acquire, and initiate an initial business combination with the mindset and goal to build and grow a company or companies, in search of potential targets from various industries which we believe could materially grow revenue and earnings through the efforts of a combined management team following the completion of an initial business combination. We will not undertake our initial business combination with any entity with its principal business operations in China (including Hong Kong and Macau). Our Certificate of Incorporation prohibit us from undertaking our initial business combination with any entity that conducts a majority of its business or is headquartered in China (including Hong Kong and Macau).
Consistent with our business strategies and objectives, we identified the following general criteria and guidelines that we believe are helpful in evaluating prospective targets companies for acquisition or business combination, which we believe are important in evaluating prospective target businesses. While we intend to use these criteria and guidelines in evaluating prospective businesses, we may deviate from these criteria and guidelines should we see justification to do so.
· Strong management Team. We will seek to acquire those businesses with reasoned and strong managements having a track record of driving growth and profitability; or having proposition of the businesses that may likely be well received by public investors.
· Growth Potential. We will be looking for businesses that we believe present the potential for revenue and earnings growth through a combination of business, management and resources. We will also consider businesses with potential to generate stable and increasing free cash flow. We may also seek to prudently leverage this cash flow in order to enhance stockholder value.
· Benefit from being a public company. We intend to only acquire a business or businesses that will benefit from being publicly traded and which can effectively utilize access to broader sources of capital and a public profile that are associated with being a publicly traded company.
This list of criteria and guidelines are not intended to be exhaustive. Our management team will evaluate and value potential target company on a case-by-case basis. Any evaluation relating to the merits of a particular initial business combination or acquisition may be based, to the extent relevant, on these general guidelines as well as other considerations, factors, and criteria that our management may deem relevant. In the event that we decide to enter into our initial business combination or acquisition with a target business that does not meet the above criteria and guidelines, we will disclose that the target business does not meet the above criteria and guideline in our stockholder communications, which as discussed in the Prospectus would be in the form of proxy solicitation or tender offer materials that we would file with the SEC.
Our Acquisition Process
We will evaluate a potential target’s strengths, weaknesses, and opportunities to identify the relative risk and return profile of any potential target for our initial business combination.
Besides WODI, we currently do not have any specific business combination under consideration. Our officers and directors have not individually selected a target business aside from WODI. The prior management team was made aware of potential business opportunities, one or more of which may have been desirable to pursue for a business combination, but they were not successful in consummating a transaction. Besides as discussed above, we have not (nor has anyone on our behalf) had any substantive discussions, directly or indirectly, with any business combination target with respect to an initial business combination with us.
Each of our officers and directors presently has, and any of them in the future may have additional, fiduciary or contractual obligations to other entities pursuant to which such officer or director is or will be required to present a business combination opportunity. Accordingly, if any of our officers or directors becomes aware of a business combination opportunity which is suitable for an entity to which he or she has then-current fiduciary or contractual obligations, he or she will honor his or her fiduciary or contractual obligations to present such opportunity to such entity.
Our Sponsor and directors and officers are not prohibited from sponsoring, investing or otherwise becoming involved with, any other blank check companies, including in connection with their initial business combinations, prior to us completing our initial business combination. Our management team, in their capacities as directors or officers or in their other endeavors, may choose to present potential business combinations to third parties before they present such opportunities to us, subject to his or her fiduciary duties under Delaware law and any other applicable fiduciary duties. Our Amended and Restated Certificate of Incorporation provides that we renounce our interest in any corporate opportunity offered to any director or officer unless such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of our company and such opportunity is one we are legally and contractually permitted to undertake and would otherwise be reasonable for us to pursue.
Our officers may become an officer or director of any other special purpose acquisition company with a class of securities registered under the Exchange Act, even before we enter into a definitive agreement regarding our initial business combination or we have failed to complete our initial business combination by April 5, 2024, unless extended monthly to November 5, 2024 by approval of our board of directors and payment of the extension deposit by our Sponsor, or its affiliates. Subject to his or her fiduciary duties under Delaware law, none of the members of our management have any obligation to present us with any opportunity for a potential business combination of which they become aware. Our Sponsor and directors and officers are also not prohibited from sponsoring, investing or otherwise becoming involved with, any other blank check companies, including in connection with their initial business combinations, prior to us completing our initial business combination. Our management team, in their other endeavors, may choose to present potential business combinations to third parties, before they present such opportunities to us, subject to his or her fiduciary duties under Delaware law and any other applicable fiduciary duties. Our Amended and Restated Certificate of Incorporation provides that we renounce our interest in any corporate opportunity offered to any director or officer unless such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of the company and it is an opportunity that we are able to complete on a reasonable basis.
If any of our officers or directors becomes aware of a business combination opportunity which is suitable for an entity to which he or she has then current fiduciary, contractual or other obligations, he or she will honor his or her fiduciary, contractual or other obligations to present such opportunity to such entity and only present it to us if such entity rejects the opportunity and he or she determines to present the opportunity to us. These conflicts may not be resolved in our favor and a potential target business may be presented to another entity prior to its presentation to us. However, we do not believe that the fiduciary duties or contractual obligations of our officers or directors will materially affect our ability to complete our initial business combination.
In the event we seek to complete our initial business combination with a company that is affiliated with, or which there is a fiduciary, contractual or other obligation by, our Sponsor, officers or directors, we, or a committee of independent directors, may obtain an opinion from an independent investment banking firm which is a member of the Financial Industry Regulatory Authority, or FINRA, or an independent accounting firm that the consideration to be paid by us in the initial business combination is fair to our company from a financial point of view. Any such entity may co-invest with us in the target business at the time of our initial business combination, or we could raise additional proceeds to complete the acquisition by making a specified future issuance to any such entity. Our Amended and Restated Certificate of Incorporation provides that we renounce our interest in any corporate opportunity offered to any director or officer unless such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of our company and such opportunity is one we are legally and contractually permitted to undertake and would otherwise be reasonable for us to pursue.
Our Amended and Restated Certificate of Incorporation provides that we renounce our interest in any corporate opportunity offered to any director or officer unless such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of our company and such opportunity is one we are legally and contractually permitted to undertake and would otherwise be reasonable for us to pursue.
Potential Conflicts
Subject to his or her fiduciary duties under Delaware law, none of the members of our management team has any obligation to present us with any opportunity for a potential business combination of which they become aware. Our Sponsor and directors and officers are also not prohibited from sponsoring, investing or otherwise becoming involved with, any other blank check companies, including in connection with their initial business combinations, prior to us completing our initial business combination. Our management team, in their capacities as directors and officers, in their other endeavors, may choose to present potential business combinations to third parties, before they present such opportunities to us, subject to his or her fiduciary duties under Delaware law and any other applicable fiduciary duties. Our Amended and Restated Certificate of Incorporation provides that we renounce our interest in any corporate opportunity offered to any director or officer unless such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of the company and it is an opportunity that we are able to complete on a reasonable basis.
As more fully discussed in “Directors, Executive Officers and Corporate Governance - Conflicts of Interest,” if any of our officers or directors becomes aware of an initial business combination opportunity that falls within the line of business of any entity to which he has pre-existing fiduciary or contractual obligations, he may be required to present such initial business combination opportunity to such entity prior to presenting such initial business combination opportunity to us. Our officers and directors may have certain relevant fiduciary duties or contractual obligations to such other entities (as well as to us). We do not believe, however, that any fiduciary duties or contractual obligations of our executive officers would materially undermine our ability to complete our initial business combination.
For more information on the foregoing conflicts of interest and the relevant pre-existing fiduciary duties or contractual obligations of our management team, see the section titled “Directors, Executive Officers and Corporate Governance - Conflicts of Interest.”
Our Sponsor, officers, and directors have interests that may be different from, or in addition to, your interests as a stockholder. These interests include, among other things:
· the fact that our Sponsor holds 2,283,750 shares of Class B Common Stock (and our officer and directors collectively hold 60,000 shares of Class B Common Stock) which will be worthless if we liquidate instead of completing an initial business combination;
· the fact that our Sponsor, and its affiliates (WODI), also hold convertible promissory notes in the aggregate principal amount of $4,763,735 as of December 31, 2023 and will likely further loan money to our company for working capital purposes, all of which will likely be worthless if we liquidate instead of completing an initial business combination;
· the fact that WODI, which controls our Sponsor, is also the target for acquisition by our company as a result of the BCA. The Sponsor as well as WODI have an interest in completing an initial business combination as WODI’s stockholders stand to benefit from the merger consideration as well seeing that the equity our Sponsor owns in our company, and the deposits made to the Trust Account, including recently to extend the date of the business combination to April 5, 2024 (and any subsequent extension deposits), are put to use in an initial business combination, and not liquidated in a winding up of our company; and
· the fact that, if the Trust Account is liquidated, including in the event we are unable to complete an initial business combination within the required time period, the Sponsor has agreed to indemnify us to ensure that the proceeds in the Trust Account are not reduced below $10.20 per public share, or such lesser per public share amount as is in the Trust Account on the liquidation date, by the claims of prospective target businesses with which we have entered into an acquisition agreement or claims of any third party for services rendered or products sold to us, but only if such a third party or target business has not executed a waiver of any and all rights to seek access to the Trust Account.
Status as a Public Company
We believe our structure will make us an attractive business combination partner to target businesses. As an existing public company, we offer a target business an alternative to the traditional initial public offering through a merger or other business combination. In this situation, the owners of the target business would exchange their shares of stock in the target business for shares of our stock or for a combination of shares of our stock and cash, allowing us to tailor the consideration to the specific needs of the sellers. Although there are various costs and obligations associated with being a public company, we believe target businesses will find this method a more certain and cost-effective method to becoming a public company than the typical initial public offering. In a typical initial public offering, there are additional expenses incurred in marketing, road show and public reporting efforts that may not be present to the same extent in connection with a business combination with us.
Furthermore, once a proposed business combination is completed, the target business will have effectively become public, whereas an initial public offering is always subject to the underwriters’ ability to complete the offering, as well as general market conditions, which could delay or prevent the offering from occurring or could have negative valuation consequences. Once public, we believe the target business would then have greater access to capital and an additional means of providing management incentives consistent with stockholders’ interests. It can offer further benefits by augmenting a company’s profile among potential new customers and vendors and aid in attracting talented employees.
We are an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the JOBS Act. As such, we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. If some investors find our securities less attractive as a result, there may be a less active trading market for our securities and the prices of our securities may be more volatile.
In addition, Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We intend to take advantage of the benefits of this extended transition period.
We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of the IPO, (b) in which we have total annual gross revenue of at least $1.235 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our Class A Common Stock that is held by non-affiliates exceeds $700 million as of the prior June 30th, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period.
Financial Position
With funds in the Trust Account as of March 29, 2024 available for a business combination in the amount of approximately $31.4 million after payment of $3,421,250 for deferred underwriting commissions, before fees and expenses associated with our initial business combination, we offer a target business a variety of potential options such as creating a liquidity event for its owners, providing capital for the potential growth and expansion of its operations or strengthening its balance sheet by reducing its debt or leverage ratio. Because we may be able to complete our business combination using our cash, debt or equity securities, or a combination of the foregoing, we have the flexibility to use the most efficient combination that will allow us to tailor the consideration to be paid to the target business to fit its needs and desires. However, prior to consummating a business combination, the Trust Account may be reduced or substantially depleted by shareholder redemptions, thereby limiting the amount of cash that we would ultimately have available to complete the transaction or meet the objectives of a potential target. We have not taken steps to secure third-party financing and there can be no assurance it will be available to us.
Effecting our Initial Business Combination
We are not presently engaged in, and we will not engage in, any operations for an indefinite period of time. We intend to complete our initial business combination using remaining cash from the proceeds of the IPO and the Private Placement of the Private Placement Shares (subject to potential reduction of the Trust Account by shareholder redemptions), our capital stock, debt or a combination of these as the consideration to be paid in our initial business combination. We may seek to complete our initial business combination with a company or business that may be financially unstable or in its early stages of development or growth, which would subject us to the numerous risks inherent in such companies and businesses.
If our initial business combination is paid for using equity or debt instruments, or not all of the funds released from the Trust Account are used for payment of the consideration in connection with our business combination or used for redemptions of our Class A Common Stock, we may apply the balance of the cash released to us from the Trust Account for general corporate purposes, including for maintenance or expansion of operations of the post-transaction company, the payment of principal or interest due on indebtedness incurred in completing our initial business combination, to fund the purchase of other assets, companies or for working capital.
We may seek to raise additional funds through a private offering of debt or equity securities in connection with the completion of our initial business combination, and we may complete our initial business combination using the proceeds of such offering rather than using the amounts held in the Trust Account. Subject to compliance with applicable securities laws, we would expect to complete such financing only simultaneously with the completion of our business combination. In the case of an initial business combination funded with assets other than the Trust Account assets, our tender offer documents or proxy materials disclosing the business combination would disclose the terms of the financing and, only if required by law, we would seek stockholder approval of such financing. There is no limitation on our ability to raise funds through the issuance of equity or equity-linked securities or through loans, advances or other indebtedness in connection with our initial business combination, including pursuant to forward purchase agreements or backstop agreements we may enter into. At this time, we are not a party to any arrangement or understanding with any third party with respect to raising any additional funds through the sale of securities or otherwise. None of our founders, officers, directors, or stockholders is required to provide any financing to us in connection with or after our initial business combination. Our Amended and Restated Certificate of Incorporation provides that, prior to the consummation of our initial business combination, we will be prohibited from issuing additional securities that would entitle the holders thereof to (i) receive funds from the Trust Account or (ii) vote as a class with our public shares (a) on any initial business combination or (b) to approve an amendment to our Amended and Restated Certificate of Incorporation to (x) extend the time we have to consummate a business combination beyond November 5, 2024 or (y) amend the foregoing provisions, unless (in connection with any such amendment to our Amended and Restated Certificate of Incorporation) we offer our public stockholders the opportunity to redeem their public shares.
The time required to select and evaluate a target business and to structure and complete our initial business combination, and the costs associated with this process, are not currently ascertainable with any degree of certainty. Any costs incurred with respect to the identification and evaluation of a prospective target business with which our business combination is not ultimately completed will result in our incurring losses and will reduce the funds we can use to complete another business combination.
Sources of Target Businesses
The former management expected to receive a number of proprietary transaction opportunities to originate as a result of the business relationships, direct outreach, and deal sourcing activities of that management team. In addition to the proprietary deal flow, they anticipated that target business candidates would be brought to our attention from various unaffiliated sources, including investment banking firms, consultants, accounting firms, private equity groups, large business enterprises, and other market participants. However, they were not successful in completing a business combination. The new management may also have target businesses introduced to us on an unsolicited basis, since many of these sources will have read the Prospectus and know what types of businesses we are targeting. However, besides as discussed above regarding WODI, the current management has not (nor has anyone on our behalf) had any substantive discussions, directly or indirectly, with any business combination target with respect to an initial business combination with us.
Some of our officers, directors, and advisors may enter into employment or consulting agreements with the post-transaction company following our initial business combination. The presence or absence of any such fees or arrangements will not be used as a criterion in our selection process of an acquisition candidate. Although we have approved monthly cash compensation to each of our directors and officers, in no event will the Sponsor or any of our existing officers or directors, or any entity with which they are affiliated, be paid any finder’s fee, consulting fee, advisory fee or other compensation prior to, or for any services they render in order to effectuate, the completion of our initial business combination (regardless of the type of transaction that it is) although we may consider cash or other compensation to officers or advisors we may hire to be paid either prior to or in connection with our initial business combination.
We are not prohibited from pursuing an initial business combination with a business combination target that is affiliated with our founders, officers, directors, or advisors or making the acquisition through a joint venture or other form of shared ownership with our officers, directors or advisors. WODI is such a potential target. In the event we seek to complete our initial business combination with a business combination target that is affiliated with our founders, officers, directors, or advisors, we, or a committee of independent directors, would obtain an opinion from an independent investment banking firm which is a member of FINRA or an independent accounting firm that such an initial business combination is fair to our company from a financial point of view. We are not required to obtain such an opinion in any other context. As more fully discussed in the section of this Report entitled “Directors, Executive Officers and Corporate Governance - Conflicts of Interest,” if any of our officers or directors becomes aware of a business combination opportunity that falls within the line of business of any entity to which he or she has pre-existing fiduciary or contractual obligations, he or she may be required to present such business combination opportunity to such entity prior to presenting such business combination opportunity to us.
Lack of Business Diversification
For an indefinite period of time after the completion of our initial business combination, the prospects for our success may depend entirely on the future performance of a single business. Unlike other entities that have the resources to complete business combinations with multiple entities in one or several industries, it is probable that we will not have the resources to diversify our operations and mitigate the risks of being in a single line of business. In addition, we intend to focus our search for an initial business combination in a single industry. By completing our business combination with only a single entity, our lack of diversification may:
· subject us to negative economic, competitive and regulatory developments, any or all of which may have a substantial adverse impact on the particular industry in which we operate after our initial business combination, and
· cause us to depend on the marketing and sale of a single product or limited number of products or services.
Limited Ability to Evaluate the Target’s Management Team
Although we intend to closely scrutinize the management of a prospective target business when evaluating the desirability of effecting our business combination with that business, our assessment of the target business’ management may not prove to be correct. In addition, the future management may not have the necessary skills, qualifications or abilities to manage a public company. Furthermore, the future role of members of our management team or of our board, if any, in the target business cannot presently be stated with any certainty. While it is possible that one or more of our directors will remain associated in some capacity with us following our business combination, it is presently unknown if any of them will devote their full efforts to our affairs subsequent to our business combination. Moreover, we cannot assure you that members of our management team will have significant experience or knowledge relating to the operations of the particular target business. The determination as to whether any members of our board of directors will remain with the combined company will be made at the time of our initial business combination.
Following a business combination, to the extent that we deem it necessary, we may seek to recruit additional managers to supplement the incumbent management team of the target business. We cannot assure you that we will have the ability to recruit additional managers, or that additional managers will have the requisite skills, knowledge or experience necessary to enhance the incumbent management.
Stockholders May Not Have the Ability to Approve our Initial Business Combination
We may conduct redemptions without a stockholder vote pursuant to the tender offer rules of the SEC. However, we will seek stockholder approval if it is required by law or applicable stock exchange rule, or we may decide to seek stockholder approval for business or other legal reasons. Presented in the table below is a graphic explanation of the types of initial business combinations we may consider and whether stockholder approval is currently required under Delaware law for each such transaction.
Type of Transaction
Whether
Stockholder
Approval is
Required
Purchase of assets
No
Purchase of stock of target not involving a merger with the company
No
Merger of target into a subsidiary of the company
No
Merger of the company with a target
Yes
Under Nasdaq’s listing rules, stockholder approval would be required for our initial business combination if, for example:
· we issue shares of Class A Common Stock that will be equal to or in excess of 20% of the number of shares of our Common Stock then outstanding;
· any of our directors, officers or substantial stockholders (as defined by Nasdaq rules) has a 5% or greater interest (or such persons collectively have a 10% or greater interest), directly or indirectly, in the target business or assets to be acquired or otherwise and the present or potential issuance of Common Stock could result in an increase in outstanding common shares or voting power of 5% or more; or
· the issuance or potential issuance of Common Stock will result in our undergoing a change of control.
The decision as to whether we will seek stockholders approval of a proposed business combination in those instances in which stockholder approval is not required by applicable law or stock exchange listing requirements will be made by us, solely in our discretion, and will be based on business and legal reasons, which include a variety of factors, including, but not limited to: (i) the timing of the transaction, including in the event we determine stockholder approval would require additional time and there is either not enough time to seek stockholder approval or doing so would place the company at a disadvantage in the transaction or result in other additional burdens on the company; (ii) the expected cost of holding a stockholder vote; (iii) the risk that the stockholders would fail to approve the proposed business combination; (iv) other time and budget constraints of the company; and (v) additional legal complexities of a proposed business combination that would be time-consuming and burdensome to present to stockholders.
Permitted Purchases of our Securities
In the event we seek stockholder approval of our business combination and we do not conduct redemptions in connection with our business combination pursuant to the tender offer rules, our founders, officers, directors, advisors or their affiliates may purchase shares in privately negotiated transactions or in the open market either prior to or following the completion of our initial business combination. However, they have no current commitments, plans or intentions to engage in such transactions and have not formulated any terms or conditions for any such transactions.
None of the funds in the Trust Account will be used to purchase shares in such transactions. They will not make any such purchases when they are in possession of any material non-public information not disclosed to the seller or if such purchases are prohibited by Regulation M under the Exchange Act. Such a purchase may include a contractual acknowledgement that such stockholder, although still the record holder of our shares is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights. In the event that our founders, officers, directors, advisors or their affiliates purchase shares in privately negotiated transactions from public stockholders who have already elected to exercise their redemption rights, such selling stockholders would be required to revoke their prior elections to redeem their shares. We do not currently anticipate that such purchases, if any, would constitute a tender offer subject to the tender offer rules under the Exchange Act or a going-private transaction subject to the going-private rules under the Exchange Act; however, if the purchasers determine at the time of any such purchases that the purchases are subject to such rules, the purchasers will comply with such rules.
The purpose of such purchases would be to (i) vote such shares in favor of the business combination and thereby increase the likelihood of obtaining stockholder approval of the business combination or (ii) to satisfy a closing condition in an agreement with a target that requires us to have a minimum net worth or a certain amount of cash at the closing of our business combination, where it appears that such requirement would otherwise not be met. This may result in the completion of our business combination that may not otherwise have been possible.
In addition, if such purchases are made, the public “float” of our Common Stock may be reduced and the number of beneficial holders of our securities may be reduced, which may make it difficult to maintain or obtain the quotation, listing or trading of our securities on a national securities exchange.
Our founders, officers, directors, advisors or their affiliates anticipate that they may identify the stockholders with whom our founders, officers, directors, advisors or their affiliates may pursue privately negotiated purchases by either the stockholders contacting us directly or by our receipt of redemption requests submitted by stockholders following our mailing of proxy materials in connection with our initial business combination. To the extent that our founders, officers, directors, advisors or their affiliates enter into a private purchase, they would identify and contact only potential selling stockholders who have expressed their election to redeem their shares for a pro rata share of the Trust Account or vote against the business combination. Our founders, officers, directors, advisors or their affiliates will only purchase shares if such purchases comply with Regulation M under the Exchange Act and the other federal securities laws.
Any purchases by our founders, officers, directors, advisors or their affiliates who are affiliated purchasers under Rule 10b-18 under the Exchange Act will only be made to the extent such purchases are able to be made in compliance with Rule 10b-18, which is a safe harbor from liability for manipulation under Section 9(a)(2) and Rule 10b-5 under, the Exchange Act. Rule 10b-18 has certain technical requirements that must be complied with in order for the safe harbor to be available to the purchaser. Our founders, officers, directors, advisors or their affiliates will not make purchases of Common Stock if the purchases would violate Section 9(a)(2) of, or Rule 10b-5 under, the Exchange Act.
Redemption Rights for Public Stockholders upon Completion of our Initial Business Combination
We will provide our public stockholders with the opportunity to redeem all or a portion of their shares of Class A Common Stock upon the completion of our initial business combination at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account as of two business days prior to the consummation of the initial business combination including interest earned on the funds held in the Trust Account and not previously released to us to pay our taxes, divided by the number of then outstanding public shares, subject to the limitations described herein. The amount in the Trust Account was initially $10.20 per public share. The per-share amount we will distribute to investors who properly redeem their shares will not be reduced by deferred underwriting commissions we will pay to the underwriters. Our founders and advisors have entered into a letter agreement with us, pursuant to which they have agreed to waive their redemption rights with respect to any founder shares and any Private Placement Shares held by them in connection with the completion of our business combination. However, if our founders acquire public shares in or after the IPO, they will be entitled to liquidating distributions from the Trust Account with respect to such public shares if we fail to complete our initial business combination.
Manner of Conducting Redemptions
We will provide our public stockholders with the opportunity to redeem all or a portion of their shares of Class A Common Stock upon the completion of our initial business combination either (i) in connection with a stockholder meeting called to approve the business combination or (ii) by means of a tender offer. The decision as to whether we will seek stockholder approval of a proposed business combination or conduct a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors such as the timing of the transaction and whether the terms of the transaction would require us to seek stockholder approval under the law or stock exchange listing requirement. Asset acquisitions and stock purchases would not typically require stockholder approval while direct mergers with our company where we do not survive and any transactions where we issue more than 20% of our outstanding Common Stock or seek to amend our Amended and Restated Certificate of Incorporation would require stockholder approval. If we structure a business combination transaction with a target company in a manner that requires stockholder approval, we will not have discretion as to whether to seek a stockholder vote to approve the proposed business combination. We intend to conduct redemptions without a stockholder vote pursuant to the tender offer rules of the SEC unless stockholder approval is required by law or stock exchange listing requirements or we choose to seek stockholder approval for business or other legal reasons. So long as we maintain a listing for our securities on Nasdaq, we will be required to comply with such rules.
If a stockholder vote is not required and we do not decide to hold a stockholder vote for business or other legal reasons, we will, pursuant to our Amended and Restated Certificate of Incorporation:
· conduct the redemptions pursuant to Rule 13e-4 and Regulation 14E under the Exchange Act, which regulate issuer tender offers, and
· file tender offer documents with the SEC prior to completing our initial business combination which contain substantially the same financial and other information about the initial business combination and the redemption rights as is required under Regulation 14A under the Exchange Act, which regulates the solicitation of proxies.
Upon the public announcement of our business combination, we or our founders will terminate any plan established in accordance with Rule 10b5-1 to purchase shares of our Class A Common Stock in the open market if we elect to redeem our public shares through a tender offer, to comply with Rule 14e-5 under the Exchange Act.
In the event that we conduct redemptions pursuant to the tender offer rules, our offer to redeem will remain open for at least 20 business days, in accordance with Rule 14e-1(a) under the Exchange Act, and we will not be permitted to complete our initial business combination until the expiration of the tender offer period. If public stockholders tender more shares than we have offered to purchase, we will withdraw the tender offer and not complete the initial business combination.
If, however, stockholder approval of the transaction is required by law or stock exchange listing requirement, or we decide to obtain stockholder approval for business or other legal reasons, we will, pursuant to our Amended and Restated Certificate of Incorporation:
· conduct the redemptions in conjunction with a proxy solicitation pursuant to Regulation 14A under the Exchange Act, which regulates the solicitation of proxies, and not pursuant to the tender offer rules, and
· file proxy materials with the SEC.
In the event that we seek stockholder approval of our initial business combination, we will distribute proxy materials and, in connection therewith, provide our public stockholders with the redemption rights described above upon completion of the initial business combination.
If we seek stockholder approval, we will complete our initial business combination only if a majority of the outstanding shares of Common Stock voted are voted in favor of the business combination. A quorum for such meeting will consist of the holders present in person or by proxy of shares of outstanding capital stock of the company representing a majority of the voting power of all outstanding shares of capital stock of the company entitled to vote at such meeting. We intend to give approximately 30 days (but not less than 10 days nor more than 60 days) prior written notice of any such meeting, if required, at which a vote shall be taken to approve our initial business combination.
These quorums and voting thresholds, and the voting agreements of our Initial Stockholders may make it more likely that we will consummate our initial business combination. Each public stockholder may elect to redeem its public shares irrespective of whether they vote, do not vote or abstain, and if they do vote, irrespective of whether they vote for or against the proposed transaction, and irrespective of whether they were a public stockholder on the record date for the general meeting held to approve the proposed transaction.
Limitation on Redemption upon Completion of Initial Business Combination if We Seek Stockholder Approval
Notwithstanding the foregoing, if we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our business combination pursuant to the tender offer rules, our Amended and Restated Certificate of Incorporation provides that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from seeking redemption rights with respect to more than an aggregate of 15% of the shares sold in the IPO, which we refer to as the “Excess Shares.” We believe this restriction will discourage stockholders from accumulating large blocks of shares, and subsequent attempts by such holders to use their ability to exercise their redemption rights against a proposed business combination as a means to force us or our management to purchase their shares at a significant premium to the then-current market price or on other undesirable terms. Absent this provision, a public stockholder holding more than an aggregate of 15% of the shares sold in the IPO could threaten to exercise its redemption rights if such holder’s shares are not purchased by us or our management at a premium to the then-current market price or on other undesirable terms. By limiting our stockholders’ ability to redeem no more than 15% of the shares sold in the IPO, we believe we will limit the ability of a small group of stockholders to unreasonably attempt to block our ability to complete our business combination, particularly in connection with a business combination with a target that requires as a closing condition that we have a minimum net worth or a certain amount of cash. However, our Amended and Restated Certificate of Incorporation does not restrict our stockholders’ ability to vote all of their shares (including Excess Shares) for or against, or to abstain from voting on, our business combination.
Tendering Stock Certificates in Connection with a Tender Offer or Redemption Rights
We may require our public stockholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in “street name,” to either tender their certificates to our transfer agent prior to the date set forth in the tender offer documents mailed to such holders, or up to two business days prior to the vote on the proposal to approve the business combination in the event we distribute proxy materials, or to deliver their shares to the transfer agent electronically using the Depository Trust Company’s DWAC (Deposit/Withdrawal At Custodian) System, at the holder’s option. The tender offer or proxy materials, as applicable, that we will furnish to holders of our public shares in connection with our initial business combination will indicate whether we are requiring public stockholders to satisfy such delivery requirements. Accordingly, a public stockholder would have from the time we send out our tender offer materials until the close of the tender offer period, or up to two days prior to the vote on the business combination if we distribute proxy materials, as applicable, to tender its shares if it wishes to seek to exercise its redemption rights. Given the relatively short exercise period, it is advisable for stockholders to use electronic delivery of their public shares.
There is a nominal cost associated with the above-referenced tendering process and the act of certificating the shares or delivering them through the DWAC System. The transfer agent will typically charge the tendering broker $100.00 and it would be up to the broker whether or not to pass this cost on to the redeeming holder. However, this fee would be incurred regardless of whether or not we require holders seeking to exercise redemption rights to tender their shares. The need to deliver shares is a requirement of exercising redemption rights regardless of the timing of when such delivery must be effectuated.
The foregoing is different from the procedures used by many blank check companies. In order to perfect redemption rights in connection with their business combinations, many blank check companies would distribute proxy materials for the stockholders’ vote on an initial business combination, and a holder could simply vote against a proposed business combination and check a box on the proxy card indicating such holder was seeking to exercise his or her redemption rights. After the business combination was approved, the company would contact such stockholder to arrange for him or her to deliver his or her certificate to verify ownership. As a result, the stockholder then had an “option window” after the completion of the business combination during which he or she could monitor the price of the company’s stock in the market. If the price rose above the redemption price, he or she could sell his or her shares in the open market before actually delivering his or her shares to the company for cancellation. As a result, the redemption rights, to which stockholders were aware they needed to commit before the stockholder meeting, would become “option” rights surviving past the completion of the business combination until the redeeming holder delivered its certificate. The requirement for physical or electronic delivery prior to the meeting ensures that a redeeming holder’s election to redeem is irrevocable once the business combination is approved.
Any request to redeem such shares, once made, may be withdrawn at any time up to the date set forth in the tender offer materials or the date of the stockholder meeting set forth in our proxy materials, as applicable. Furthermore, if a holder of a public share delivered its certificate in connection with an election of redemption rights and subsequently decides prior to the applicable date not to elect to exercise such rights, such holder may simply request that the transfer agent return the certificate (physically or electronically). It is anticipated that the funds to be distributed to holders of our public shares electing to redeem their shares will be distributed promptly after the completion of our business combination.
If our initial business combination is not approved or completed for any reason, then our public stockholders who elected to exercise their redemption rights would not be entitled to redeem their shares for the applicable pro rata share of the Trust Account. In such case, we will promptly return any certificates delivered by public holders who elected to redeem their shares.
Redemption of Public Shares and Liquidation if no Initial Business Combination
Our Amended and Restated Certificate of Incorporation provides that we will have only until April 5, 2024, unless extended monthly up to November 5, 2024, upon approval of our board of directors and extension deposits made by our Sponsor or its affiliate, to complete our initial business combination. If we are unable to complete our business combination within such period, we will: (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account including interest earned on the funds held in the Trust Account and not previously released to us to pay our taxes (less up to $50,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to our Warrants, which will expire worthless if we fail to complete our business combination within the time period.
Our Initial Stockholders have waived their rights to liquidating distributions from the Trust Account with respect to any founder shares, Private Placement Shares and Representative Shares held by them if we fail to complete our initial business combination by April 5, 2024, unless extended monthly upon approval of our board of directors and extension deposits made by our Sponsor or its affiliate. However, if our Initial Stockholders acquire public shares in or after the IPO, they will be entitled to liquidating distributions from the Trust Account with respect to such public shares if we fail to complete our initial business combination within the allotted time period.
Our Initial Stockholders have agreed, pursuant to a letter agreement with us, that they will not propose any amendment to our Amended and Restated Certificate of Incorporation (i) that would modify the substance or timing of our obligation to allow redemption in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination by April 5, 2024, unless extended monthly upon approval of our board of directors and extension deposits made by our Sponsor or its affiliate, or (ii) with respect to any other material provision relating to stockholders’ rights or pre-initial business combination activity, unless we provide our public stockholders with the opportunity to redeem their shares of Class A Common Stock upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account including interest earned on the funds held in the Trust Account and not previously released to us to pay our taxes divided by the number of then outstanding public shares.
We expect that all costs and expenses associated with implementing our plan of dissolution, as well as payments to any creditors, will be funded from amounts remaining out of the funds held outside the Trust Account or by our Sponsor (under its indemnity obligations), although we cannot assure you that there will be sufficient funds for such purpose. However, if those funds are not sufficient to cover the costs and expenses associated with implementing our plan of dissolution, to the extent that there is any interest accrued in the Trust Account not required to pay taxes on dividend income earned on the Trust Account balance, we may request the trustee to release to us an additional amount of up to $50,000 of such accrued interest to pay those costs and expenses.
If we were to expend all of the remaining net proceeds of the IPO and the sale of the Private Placement Shares, other than the proceeds deposited in the Trust Account, and without taking into account interest, if any, earned on the Trust Account, the per-share redemption amount received by Class A stockholders upon our dissolution would be approximately $11.03. The proceeds deposited in the Trust Account could, however, become subject to the claims of our creditors which would have higher priority than the claims of our public stockholders. We cannot assure you that the actual per-share redemption amount received by stockholders will not be substantially less than $11.03. Under Section 281(b) of the DGCL, our plan of dissolution must provide for all claims against us to be paid in full or make provision for payments to be made in full, as applicable, if there are sufficient assets. These claims must be paid or provided for before we make any distribution of our remaining assets to our stockholders. While we intend to pay such amounts, if any, we cannot assure you that we will have funds sufficient to pay or provide for all creditors’ claims.
Although we will seek to have all vendors, service providers, prospective target businesses or other entities with which we do business execute agreements with us waiving any right, title, interest and claim of any kind in or to any monies held in the Trust Account for the benefit of our public stockholders, there is no guarantee that they will execute such agreements or even if they execute such agreements that they would be prevented from bringing claims against the Trust Account including but not limited to fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain an advantage with respect to a claim against our assets, including the funds held in the Trust Account. If any third party refuses to execute an agreement waiving such claims to the monies held in the Trust Account, our management will perform an analysis of the alternatives available to it and will only enter into an agreement with a third party that has not executed a waiver if management believes that such third party’s engagement would be significantly more beneficial to us than any alternative. Examples of possible instances where we may engage a third party that refuses to execute a waiver include the engagement of a third-party consultant whose particular expertise or skills are believed by management to be significantly superior to those of other consultants that would agree to execute a waiver or in cases where management is unable to find a service provider willing to execute a waiver.
In addition, there is no guarantee that such entities will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts or agreements with us and will not seek recourse against the Trust Account for any reason. Our Sponsor has agreed that it will be liable to us if and to the extent any claims by a third party for services rendered or products sold to us, or a prospective target business with which we have discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below (i) $10.20 per public share or (ii) such lesser amount per public share held in the Trust Account as of the date of the liquidation of the Trust Account, due to reductions in value of the trust assets, in each case net of the amount of interest which may be withdrawn to pay taxes, except as to any claims by a third party who executed a waiver of any and all rights to seek access to the Trust Account and except as to any claims under our indemnity of the underwriters of the IPO against certain liabilities, including liabilities under the Securities Act. In the event that an executed waiver is deemed to be unenforceable against a third party, then the Sponsor will not be responsible to the extent of any liability for such third party claims We have not independently verified whether the Sponsor has sufficient funds to satisfy its indemnity obligations and believe that the Sponsor’s only assets are securities of our company. We have not asked the Sponsor to reserve for such indemnification obligations. Therefore, we cannot assure you that the Sponsor would be able to satisfy those obligations. As a result, if any such claims were successfully made against the Trust Account, the funds available for our initial business combination and redemptions could be reduced to less than $10.20 per public share. In such event, we may not be able to complete our initial business combination, and you would receive such lesser amount per share in connection with any redemption of your public shares. None of our officers will indemnify us for claims by third parties including, without limitation, claims by vendors and prospective target businesses.
In the event that the proceeds in the Trust Account are reduced below (i) $10.20 per public share or (ii) such lesser amount per public share held in the Trust Account as of the date of the liquidation of the Trust Account, due to reductions in value of the trust assets, in each case net of the amount of interest which may be withdrawn to pay taxes, and the Sponsor asserts that it is unable to satisfy its indemnification obligations or that it has no indemnification obligations related to a particular claim, our independent directors would determine whether to take legal action against the Sponsor to enforce its indemnification obligations. While we currently expect that our independent directors would take legal action on our behalf against the Sponsor to enforce its indemnification obligations to us, it is possible that our independent directors in exercising their business judgment may choose not to do so if, for example, the cost of such legal action is deemed by the independent directors to be too high relative to the amount recoverable or if the independent directors determine that a favorable outcome is not likely. We have not asked the Sponsor to reserve for such indemnification obligations and we cannot assure you that the Sponsor would be able to satisfy those obligations. Accordingly, we cannot assure you that due to claims of creditors the actual value of the per-share redemption price will not be less than $10.20 per public share.
We will seek to reduce the possibility that the Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers, prospective target businesses or other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account. The Sponsor will also not be liable as to any claims under our indemnity of the underwriters of the IPO against certain liabilities, including liabilities under the Securities Act. We may not have access to funds outside of the Trust Account with which to pay any such potential claims. In the event that we liquidate and it is subsequently determined that the reserve for claims and liabilities is insufficient, stockholders who received funds from our Trust Account could be liable for claims made by creditors.
Under the DGCL, stockholders may be held liable for claims by third parties against a corporation to the extent of distributions received by them in a dissolution. The pro rata portion of our Trust Account distributed to our public stockholders upon the redemption of our public shares in the event we do not complete our business combination by April 5, 2024, unless extended monthly upon approval of our board of directors and extension deposits made by our Sponsor or its affiliate, may be considered a liquidating distribution under Delaware law. If the corporation complies with certain procedures set forth in Section 280 of the DGCL intended to ensure that it makes reasonable provision for all claims against it, including a 60-day notice period during which any third-party claims can be brought against the corporation, a 90-day period during which the corporation may reject any claims brought, and an additional 150-day waiting period before any liquidating distributions are made to stockholders, any liability of stockholders with respect to a liquidating distribution is limited to the lesser of such stockholder’s pro rata share of the claim or the amount distributed to the stockholder, and any liability of the stockholder would be barred after the third anniversary of the dissolution.
Furthermore, if the pro rata portion of our Trust Account distributed to our public stockholders upon the redemption of our public shares in the event we do not complete our business combination by April 5, 2024, unless extended monthly upon approval of our board of directors and extension deposits made by our Sponsor or its affiliate, is not considered a liquidating distribution under Delaware law and such redemption distribution is deemed to be unlawful, then pursuant to Section 174 of the DGCL, the statute of limitations for claims of creditors could then be six years after the unlawful redemption distribution, instead of three years, as in the case of a liquidating distribution. If we are unable to complete our business combination by April 5, 2024, unless extended monthly upon approval of our board of directors and extension deposits made by our Sponsor or its affiliate, we will: (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account including interest earned on the funds held in the Trust Account and not previously released to us to pay our taxes or for working capital purposes (less up to $50,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. Accordingly, it is our intention to redeem our public shares as soon as reasonably possible following our deadline and, therefore, we do not intend to comply with those statutory procedures. As such, our stockholders could potentially be liable for any claims to the extent of distributions received by them (but no more) and any liability of our stockholders may extend well beyond the third anniversary of such date.
Because we will not be complying with Section 280, Section 281(b) of the DGCL requires us to adopt a plan, based on facts known to us at such time that will provide for our payment of all existing and pending claims or claims that may be potentially brought against us within the subsequent 10 years. However, because we are a blank check company, rather than an operating company, and our operations will be limited to searching for prospective target businesses to acquire, the only likely claims to arise would be from our vendors (such as lawyers, investment bankers, etc.) or prospective target businesses. As described above, pursuant to the obligation contained in our underwriting agreement, we will seek to have all vendors, service providers, prospective target businesses or other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the Trust Account. As a result of this obligation, the claims that could be made against us are significantly limited and the likelihood that any claim that would result in any liability extending to the Trust Account is remote. Further, the Sponsor may be liable only to the extent necessary to ensure that the amounts in the Trust Account are not reduced below (i) $10.20 per public share or (ii) such lesser amount per public share held in the Trust Account as of the date of the liquidation of the Trust Account, due to reductions in value of the trust assets, in each case net of the amount of interest withdrawn to pay taxes and will not be liable as to any claims under our indemnity of the underwriters of the IPO against certain liabilities, including liabilities under the Securities Act. In the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability for such third-party claims.
If we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, the proceeds held in the Trust Account could be subject to applicable bankruptcy law, and may be included in our bankruptcy estate and subject to the claims of third parties with priority over the claims of our stockholders. To the extent any bankruptcy claims deplete the Trust Account, we cannot assure you we will be able to return $10.20 per share to our public stockholders. Additionally, if we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, any distributions received by stockholders could be viewed under applicable debtor/creditor and/or bankruptcy laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy court could seek to recover some or all amounts received by our stockholders. Furthermore, our board of directors may be viewed as having breached its fiduciary duty to our creditors and/or may have acted in bad faith, thereby exposing itself and our company to claims of punitive damages, by paying public stockholders from the Trust Account prior to addressing the claims of creditors. We cannot assure you that claims will not be brought against us for these reasons.
Our public stockholders will be entitled to receive funds from the Trust Account only (i) in the event of the redemption of our public shares if we do not complete our business combination by April 5, 2024, unless extended monthly upon approval of our board of directors and extension deposits made by our Sponsor or its affiliate, subject to applicable law, (ii) (a) in connection with a stockholder vote to approve an amendment to our Amended and Restated Certificate of Incorporation to modify the substance or timing of our obligation to allow redemption in connection with our initial business combination or to redeem 100% of our public shares if we have not consummated an initial business combination by April 5, 2024, unless extended monthly upon approval of our board of directors and extension deposits made by our Sponsor or its affiliate, or (b) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity or (iii) our completion of an initial business combination, and then only in connection with those public shares that such stockholder properly elected to redeem, subject to the limitations described in the Prospectus. In no other circumstances will a stockholder have any right or interest of any kind to or in the Trust Account. In the event we seek stockholder approval in connection with our initial business combination, a stockholder’s voting in connection with the business combination alone will not result in a stockholder’s redeeming its shares to us for an applicable pro rata share of the Trust Account. Such stockholder must have also exercised its redemption rights as described above.
Competition
In identifying, evaluating and selecting a target business for our business combination, we may encounter intense competition from other entities having a business objective similar to ours, including other blank check companies, private equity groups and leveraged buyout funds, and operating businesses seeking strategic acquisitions. Many of these entities are well established and have extensive experience identifying and effecting business combinations directly or through affiliates. Moreover, many of these competitors possess greater financial, technical, human and other resources than we do. Our ability to acquire target businesses will be limited by our available financial resources. This inherent limitation gives others an advantage in pursuing the acquisition of a target business. Furthermore, our obligation to pay cash in connection with our public stockholders who exercise their redemption rights may reduce the resources available to us for our initial business combination and our outstanding Warrants, and the future dilution they potentially represent, may not be viewed favorably by certain target businesses. Either of these factors may place us at a competitive disadvantage in successfully negotiating an initial business combination.
Employees
We currently have one executive officer, Mr. Ryan Spick, who serves as FRLA’s Chief Financial Officer and Principal Executive Officer. Mr. Spick is not obligated to devote any specific number of hours to our matters but he intends to devote as much of his time as he deems necessary to our affairs until we have completed our initial business combination. The amount of time Mr. Spick will devote in any time period will vary based on whether a target business has been selected for our initial business combination and the stage of the initial business combination process we are in. We do not intend to have any full-time employees prior to the completion of our initial business combination.
Periodic Reporting and Financial Information
We have registered our Units, Class A Common Stock and Warrants under the Exchange Act and have reporting obligations, including the requirement that we file annual, quarterly and current reports with the SEC. In accordance with the requirements of the Exchange Act, our annual reports will contain financial statements audited and reported on by our independent registered public accountants.
We have filed a Registration Statement on Form 8-A with the SEC to register our securities under Section 12 of the Exchange Act. As a result, we are subject to the rules and regulations promulgated under the Exchange Act. We have no current intention of filing a Form 15 to suspend our reporting or other obligations under the Exchange Act prior or subsequent to the consummation of our business combination.
We will provide stockholders with audited financial statements of the prospective target business as part of the tender offer materials or proxy solicitation materials sent to stockholders to assist them in assessing the target business. In all likelihood, these financial statements will need to be prepared in accordance with U.S. GAAP. We cannot assure you that any particular target business selected by us as a potential acquisition candidate will have financial statements prepared in accordance with U.S. GAAP or that the potential target business will be able to prepare its financial statements in accordance with U.S. GAAP. To the extent that this requirement cannot be met, we may not be able to acquire the proposed target business. While this may limit the pool of potential acquisition candidates, we do not believe that this limitation will be material.
We are required to evaluate our internal control procedures for the fiscal year ended December 31, 2023 as required by the Sarbanes-Oxley Act. Only in the event we are deemed to be a large accelerated filer or an accelerated filer will we be required to have our internal control procedures audited. A target company may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding adequacy of their internal controls. The development of the internal controls of any such entity to achieve compliance with the Sarbanes-Oxley Act may increase the time and costs necessary to complete any such acquisition.

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ITEM 1A. RISK FACTORS
ITEM 1A. RISK FACTORS
As a smaller reporting company, we are not required to make disclosures under this Item.

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ITEM 1B. UNRESOLVED STAFF COMMENTS
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.

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ITEM 2. PROPERTIES
ITEM 2. PROPERTIES
We do not own any real estate or other physical properties materially important to our operations. We maintain our principal executive office at 13575 58th Street North, Suite 200, Clearwater, Florida 33760. We consider our current office space, combined with the other office space otherwise available to our executive officer, adequate for our current operations.

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ITEM 3. LEGAL PROCEEDINGS
ITEM 3. LEGAL PROCEEDINGS
We are not currently a party to any material litigation or other legal proceedings brought against us. We are also not aware of any legal proceeding, investigation or claim, or other legal exposure that has a more than remote possibility of having a material adverse effect on our business, financial condition or results of operations.

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ITEM 4. MINE SAFETY DISCLOSURE
ITEM 4. MINE SAFETY DISCLOSURES
Not Applicable.
PART II

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ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Our Units began to trade on the Nasdaq Global Market, or Nasdaq, under the symbol “FRLAU” on November 3, 2021. The Class A Common Stock and Warrants comprising the units began separate trading on Nasdaq on December 27, 2021, under the symbols “FRLA” and “FRLAW,” respectively.
Holders of Record
As of March 29, 2024, there were eight holders of record of our separately traded Class A Common Stock, one holder of record of our units, one holder of record of our separately traded Warrants, and eight holders of record of our Class B Common Stock. The number of record holders was determined from the records of our transfer agent and, with respect to the Class B Common Stock, the Company’s book entry and does not include beneficial owners of Class A Common Stock, Units, and separately traded Warrants whose shares are held in the names of various security brokers, dealers, and registered clearing agencies.
Dividends
We have not paid any cash dividends on our shares of Common Stock to date and do not intend to pay cash dividends prior to the completion of an initial business combination. The payment of cash dividends in the future will be dependent upon our revenues and earnings, if any, capital requirements and general financial condition subsequent to completion of a business combination. The payment of any dividends subsequent to a business combination will be within the discretion of our board of directors at such time. It is the present intention of our board of directors to retain all earnings, if any, for use in our business operations and, accordingly, our board of directors does not anticipate declaring any dividends in the foreseeable future. In addition, our board of directors is not currently contemplating and does not anticipate declaring any share dividends in the foreseeable future. Further, if we incur any indebtedness, our ability to declare dividends may be limited by restrictive covenants we may agree to in connection therewith.
Securities Authorized for Issuance Under Equity Compensation Plans
None.
Recent Sales of Unregistered Securities
None.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
None.

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ITEM 6. SELECTED FINANCIAL DATA
ITEM 6. [RESERVED]

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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the consolidated financial statements and the notes thereto contained elsewhere in this report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.
We are a blank check company formed as a Delaware corporation for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization, or similar business combination with one or more businesses.
Effective December 22, 2022, Ka Wai Cheung, Koon Lin Chan, and Koon Keung Chan, Fortune Rise Sponsor LLC (the “Sponsor”), and Water On Demand, Inc., a Nevada corporation that controls our Sponsor (“WODI”), entered into a Membership Interest Purchase and Transfer Agreement pursuant to which they sold to WODI all right, title and interest in and to the membership interests held by each of Messrs. Cheung, Chan, and Chan in the Sponsor (an aggregate of 100 membership interests) for $400,000.
In addition, effective December 22, 2022, our Sponsor entered into a Securities Transfer Agreement with each of US Tiger Securities, Inc. (as designee of Lei Huang), Lei Xu, Yuanmei Ma, Norman C. Kristoff, David Xianglin Li, Michael Davidov, and Christy Szeto (the “Sellers”), pursuant to which the Sellers sold to the Sponsor an aggregate of 343,750 shares of Class B Common Stock for the purchase price of $3,506.25. Out of the issued and outstanding shares of Class B Common Stock, an aggregate of 100,000 shares remain owned by former management.
Lastly, on December 22, 2022, each of Koon Keung Chan, Lei Xu, and US Tiger Securities, Inc. assigned each of their promissory notes issued on November 4, 2022 in the aggregate amount of $733,750 to the Sponsor.
Since our inception, we have been actively searching for a suitable business combination target, and on October 24, 2023, we entered into a Business Combination Agreement (as it may be amended, supplemented or otherwise modified from time to time, the “BCA”) with FRLA Merger Sub, Inc., a Delaware corporation and our wholly owned subsidiary (the “Merger Sub”) and WODI.
We will effectuate our business combination using cash (subject to potential reduction of the trust account for the benefit of our public stockholders (the “Trust Account”) by stockholder redemptions) derived from the proceeds of (i) our initial public offering (the “IPO”), (ii) the sale of Common Stock (the “Private Placement Shares”) in a private placement (the “Private Placement”) to the Sponsor, and/or (iii) the issuance of additional shares, debt or a combination of shares and debt.
We expect to continue to incur significant costs in the pursuit of our acquisition plans. We cannot assure you that our plans to complete a business combination will be successful. Our management has broad discretion with respect to the specific application of the proceeds of the IPO and the Private Placement that are held outside of the Trust Account, although substantially all the net proceeds are intended to be applied generally towards consummating a business combination and working capital.
Since our IPO, our sole business activity has been identifying and evaluating suitable acquisition transaction candidates. We presently have no revenue and have had losses since inception from incurring formation and operating costs. We have relied upon the sale of our securities and loans from the Sponsor and other parties to fund our operations.
Recent Developments
Extension of the Company’s Time to Consummate its Initial Business Combination
On November 4, 2022, an aggregate of $977,500 (the “First Extension Payment”) was deposited into our Trust Account for the public stockholders, representing $0.10 per public share, which enabled us to extend the period of time we had to consummate our initial business combination by three months from November 5, 2022 to February 5, 2023 (the “First Extension”). The First Extension was the first of the two three-month extensions permitted under our Amended and Restated Certificate of Incorporation prior to its amendment in April 2023. In connection with the First Extension Payment, we issued unsecured promissory notes (the “First Extension Notes”) to certain Initial Stockholders including (i) a note of $413,750 to Mr. Koon Keung Chan, the former manager of the Sponsor, (ii) a note of $150,000 to US Tiger Securities, and (iii) a note of $170,000 to Dr. Lei Xu, our former President and Chairwoman. The First Extension Notes were later assigned to our Sponsor on December 22, 2022.
On February 6, 2023, $977,500 (the “Second Extension Payment”) was deposited into the Trust Account, for the public stockholders, representing $0.10 per public share, which enabled us to extend the period of time we had to consummate our initial business combination by three months from February 5, 2023 to May 5, 2023 (the “Second Extension”). The Second Extension was the second and final of the two three-month extensions permitted under our Amended and Restated Certificate of Incorporation prior to its amendment in April 2023. In connection with the Second Extension Payment, we issued an unsecured promissory note (the “Second Extension Note”) to WODI.
On May 5, 2023, $330,064.50 (the “Third Extension Payment”) was deposited into the Trust Account, for the public stockholders, representing $0.0625 per public share, which enabled us to extend the period of time we had to consummate our initial business combination by one month from May 5, 2023 to June 5, 2023 (the “Third Extension”). The Third Extension was the first of the six one-month extensions permitted under our Amended and Restated Certificate of Incorporation after its amendment in April 2023. In connection with the Third Extension Payment, we issued an unsecured promissory note (the “Third Extension Note”) to WODI.
On June 5, 2023, $100,000 (the “Fourth Extension Payment”) was deposited into the Trust Account, for the public stockholders, representing $0.027 per public share, which enabled us to extend the period of time we had to consummate our initial business combination by one month from June 5, 2023 to July 5, 2023 (the “Fourth Extension”). The Fourth Extension was the second of the six one-month extensions permitted under our Amended and Restated Certificate of Incorporation after its amendment in April 2023. In connection with the Fourth Extension Payment, we issued an unsecured promissory note (the “Fourth Extension Note”) to WODI.
On July 5, 2023, $100,000 (the “Fifth Extension Payment”) was deposited into the Trust Account, for the public stockholders, representing $0.027 per public share, which enabled us to extend the period of time we had to consummate our initial business combination by one month from July 5, 2023 to August 5, 2023 (the “Fifth Extension”). The Fifth Extension was the third of the six one-month extensions permitted under our Amended and Restated Certificate of Incorporation after its amendment in April 2023. In connection with the Fifth Extension Payment, we issued an unsecured promissory note (the “Fifth Extension Note”) to WODI.
On August 4, 2023, $100,000 (the “Sixth Extension Payment”) was deposited into the Trust Account, for the public stockholders, representing $0.027 per public share, which enabled us to extend the period of time we have to consummate our initial business combination by one month from August 5, 2023 to September 5, 2023 (the “Sixth Extension”). The Sixth Extension was the fourth of the six one-month extensions permitted under our Amended and Restated Certificate of Incorporation after its amendment in April 2023. In connection with the Sixth Extension Payment, we issued an unsecured promissory note (the “Sixth Extension Note”) to WODI.
On September 5, 2023, $100,000 (the “Seventh Extension Payment”) was deposited into the Trust Account, for the public stockholders, representing $0.027 per public share, which enabled us to extend the period of time we have to consummate our initial business combination by one month from September 5, 2023 to October 5, 2023 (the “Seventh Extension”). The Seventh Extension was the fifth of the six one-month extensions permitted under our Amended and Restated Certificate of Incorporation after its amendment in April 2023. In connection with the Seventh Extension Payment, we issued an unsecured promissory note (the “Seventh Extension Note”) to WODI.
On October 5, 2023, $100,000 (the “Eighth Extension Payment”) was deposited into the Trust Account, for the public stockholders, representing $0.027 per public share, which enabled us to extend the period of time we have to consummate our initial business combination by one month from October 5, 2023 to November 5, 2023 (the “Eighth Extension”). The Eighth Extension was the sixth of the six one-month extensions permitted under our Amended and Restated Certificate of Incorporation after its amendment in April 2023. In connection with the Eighth Extension Payment, we issued an unsecured promissory note (the “Eighth Extension Note”) to WODI.
On November 6, 2023, $100,000 (the “Ninth Extension Payment”) was deposited into the Trust Account, for the public stockholders, representing $0.032 per public share, which enabled us to extend the period of time we have to consummate our initial business combination by one month from November 5, 2023 to December 5, 2023 (the “Ninth Extension”). The Ninth Extension was the first of the twelve one-month extensions permitted under our Amended and Restated Certificate of Incorporation after its amendment in October 2023. In connection with the Ninth Extension Payment, we issued an unsecured promissory note (the “Ninth Extension Note”) to WODI.
On December 6, 2023, $100,000 (the “Tenth Extension Payment”) was deposited into the Trust Account, for the public stockholders, representing $0.032 per public share, which enabled us to extend the period of time we have to consummate our initial business combination by one month from December 5, 2023 to January 5, 2024 (the “Tenth Extension”). The Tenth Extension was the second of the twelve one-month extensions permitted under our Amended and Restated Certificate of Incorporation after its amendment in October 2023. In connection with the Tenth Extension Payment, we issued an unsecured promissory note (the “Tenth Extension Note”) to WODI.
On January 5, 2024, $100,000 (the “Eleventh Extension Payment”) was deposited into the Trust Account, for the public stockholders, representing $0.032 per public share, which enabled us to extend the period of time we have to consummate our initial business combination by one month from January 5, 2024 to February 5, 2024 (the “Eleventh Extension”). The Eleventh Extension was the third of the twelve one-month extensions permitted under our Amended and Restated Certificate of Incorporation after its amendment in October 2023. In connection with the Eleventh Extension Payment, we issued an unsecured promissory note (the “Eleventh Extension Note”) to WODI.
On February 5, 2024, $100,000 (the “Twelfth Extension Payment”) was deposited into the Trust Account, for the public stockholders, representing $0.032 per public share, which enabled us to extend the period of time we have to consummate our initial business combination by one month from February 5, 2024 to March 5, 2024 (the “Twelfth Extension”). The Twelfth Extension was the fourth of the twelve one-month extensions permitted under our Amended and Restated Certificate of Incorporation after its amendment in October 2023. In connection with the Twelfth Extension Payment, we issued an unsecured promissory note (the “Twelfth Extension Note”) to WODI.
On March 5, 2024, $100,000 (the “Thirteenth Extension Payment”) was deposited into the Trust Account, for the public stockholders, representing $0.032 per public share, which enabled us to extend the period of time we have to consummate our initial business combination by one month from March 5, 2024 to April 5, 2024 (the “Thirteenth Extension”). The Thirteenth Extension was the fifth of the twelve one-month extensions permitted under our Amended and Restated Certificate of Incorporation after its amendment in October 2023. In connection with the Thirteenth Extension Payment, we issued an unsecured promissory note (the “Thirteenth Extension Note,” collectively with the First Extension Notes, the Second Extension Note, the Third Extension Note, the Fourth Extension Note, the Fifth Extension Note, the Sixth Extension Note, the Seventh Extension Note, the Eighth Extension Note, the Ninth Extension Note, the Tenth Extension Note, the Eleventh Extension Note, and the Twelfth Extension Note, herein referred to as the “Extension Notes”) to WODI.
The Extension Notes are non-interest bearing and payable (subject to the waiver against trust provisions) on the earlier of (i) consummation of our initial business combination and (ii) the date of our liquidation. The principal balance may be prepaid at any time, at our election. The holders of the Extension Notes have the right, but not the obligation, to convert their Extension Notes, in whole or in part, respectively, into private shares of our Class A Common Stock (the “Conversion Shares”), as described in our IPO prospectus (File Number 333-256511). The number of Conversion Shares to be received by the holders in connection with such conversion shall be an amount, up to $3,000,000, determined by dividing (x) the sum of the outstanding principal amount payable to such holders by (y) $10.00.
Extension of Business Combination Deadline
On March 3, 2023, our board of directors approved a stockholder proposal to amend our Amended and Restated Certificate of Incorporation to extend, upon the request of our Sponsor and approval by our board of directors, the period of time for us to (i) consummate a business combination, (ii) cease our operations if we fail to complete such business combination, and (iii) redeem or repurchase 100% of the public shares, up to six times, each by an additional month, for an aggregate of six additional months (i.e., from May 5, 2023 to up to November 5, 2023) or such earlier date as determined by the board of directors.
At our April 10, 2023 special meeting of stockholders, our stockholders approved the filing of an amendment to the Amended and Restated Certificate of Incorporation (the “First Amendment”) to extend, upon the request of our Sponsor, and approval by our board of directors, the period of time for us to (i) consummate a business combination, (ii) cease our operations if we fail to complete such business combination, and (iii) redeem or repurchase 100% of the public shares, up to six times, each by an additional month, for an aggregate of six additional months (i.e., from May 5, 2023 to up to November 5, 2023) or such earlier date as determined by the board of directors. As a result, on April 11, 2023, we filed the First Amendment with the Delaware Secretary of State. The stockholder vote to approve the First Amendment also triggered a redemption right for the holders of the public shares of Class A Common Stock. As a result of the First Amendment, 4,493,968 shares of Class A Common Stock were redeemed for a total redemption amount of $47,501,242. We have effected all six of those permitted monthly extensions.
As a result of our June 2, 2023 special meeting of stockholders, we filed with the Secretary of State of the State of Delaware an amendment to our Amended and Restated Certificate of Incorporation to amend the monthly extension amounts to be paid by the Sponsor (or its affiliates), to extend the period of time for us to consummate a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination involving us to be made upon the request of the Sponsor, and approval by our board of directors, from a previously amended price per unredeemed share of Class A Common Stock of $0.0625 to the lower of $100,000 or $0.05 per unredeemed share of Class A Common Stock.
At that June 2, 2023 special meeting of stockholders, the holders of 1,666,080 public shares properly exercised their right to redeem their shares (and did not withdraw their redemption) for cash at a redemption price of approximately $10.76 per share, for an aggregate redemption amount of $17,927,021. Following such redemptions, 3,614,952 public shares of Class A Common Stock remained outstanding.
At our October 25, 2023 special meeting of stockholders, the holders of 452,404 public shares properly exercised their right to redeem their shares (and did not withdraw their redemption) for cash at a redemption price of approximately $10.96 per share, for an aggregate redemption amount of $4,958,347. Following such redemptions, 3,162,548 public shares of Class A Common Stock remain outstanding. As of the date of this filing, we have effected five of those permitted twelve monthly extensions.
Results of Operations
Our entire activity from inception to date was related to our formation, the IPO and general and administrative activities. Since the IPO, our activity has been limited to the evaluation of business combination candidates, and we will not generate any operating revenues, if any, until the closing and completion of our initial business combination. We generate non-operating income in the form of money market fund dividend income earned on investments held in the Trust Account. We are incurring expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses.
For the year ended December 31, 2023, we had a net loss of $351,705 which consisted of dividend earned on investment held in Trust Account of $2,342,684, offset by formation and operating costs $2,060,089, franchise tax expenses of $138,050 and income tax provision of $496,250.
For the year ended December 31, 2022, we had a net loss of $47,609 which consisted of dividend earned on investment held in Trust Account of $1,466,677, offset by formation and operating costs $959,457, franchise tax expenses of $199,759 and income tax provision of $355,070.
Liquidity and Capital Resources
As of December 31, 2023, we had cash outside the Trust Account of $12,910 available for working capital needs. All remaining cash is held in the Trust Account and is generally unavailable for our use prior to an initial business combination, and is restricted for use either in a business combination or to redeem the public shares of Common Stock. As of December 31, 2023, none of the amount on deposit in the Trust Account was available to be withdrawn as described above except for tax payments.
For the year ended December 31, 2023, there was $3,186,843 of cash used in operating activities resulting from net loss of $351,705, dividend earned on investment held in Trust Account amounting to $2,342,684, non-cash deferred tax benefit of $83,724, increase in prepaid expenses of $102,658, decrease in income tax payable of $271,346 and decrease in franchise tax payable of $199,759, offset by decrease in prepaid expenses - related party of $25,000, increase in due to a related party of $2,903, and increase in accounts payable and accrued expenses of $137,130.
For the year ended December 31, 2022, there was $689,068 of cash used in operating activities resulting from net loss of $47,609, dividend earned on investment held in Trust Account amounting to $1,466,677, increase in prepaid expenses - related party of $25,000, offset by non-cash deferred tax expense of $83,724, decrease in prepaid expenses of $183,500, increase in accounts payable and accrued expenses of $147,850, increase in income tax payable of $271,346 and increase in franchise tax payable of $163,798.
For the year ended December 31, 2023, there was $69,434,064 of cash provided by investing activities resulting from the withdrawal of an investment held in the Trust Account amounting to $71,441,629, offset by the purchase of an investment held in Trust Account amounting to $2,007,565.
For the year ended December 31, 2022, there was $769,539 of cash used in investing activities resulting from the purchase of an investment held in Trust Account amounting to $977,500, offset by the withdrawal of an investment held in the Trust Account amounting to $207,961.
For the year ended December 31, 2023, there was $66,406,625 of cash used in financing activities resulting from the Class A common stock redemptions of $70,386,610, offset by the proceeds from the issuance of promissory notes to a related party amounting to $3,979,985.
For the year ended December 31, 2022, there was $783,750 of cash provided by financing activities resulting from the proceeds from the issuance of promissory notes to a related party amounting to $733,750 and advances from a related party amounting to $50,000.
Until consummation of the business combination, we will use the funds held outside the Trust Account, and any additional funding that may be loaned to us by our Sponsor, for identifying and evaluating prospective acquisition candidates, performing business due diligence on prospective target businesses, traveling to and from the offices, plants or similar locations of prospective target businesses, reviewing corporate documents and material agreements of prospective target businesses, selecting the target business to acquire and structuring, negotiating and consummating the business combination.
If our estimates of the costs of undertaking in-depth due diligence and negotiating a business combination are less than the actual amount necessary to do so, we may have insufficient funds available to operate our business prior to the business combination and will need to raise additional capital. In this event, our officers, directors or their affiliates may, but are not obligated to, loan us funds as may be required. If we consummate an initial business combination, we would repay such loaned amounts out of the proceeds of the Trust Account released to us upon consummation of the business combination, or, at the lender’s discretion, up to $3,000,000 of such loans may be convertible into shares of Class A Common Stock of the post business combination entity at a price of $10.00 per share of Class A Common Stock. In the event that the initial business combination does not close, we may use a portion of the working capital held outside the Trust Account to repay such loaned amounts, but no proceeds from our Trust Account would be used for such repayment. The terms of such loans by our Initial Stockholders, officers and directors, if any, have not been determined and no written agreements exist with respect to such loans.
Moreover, we may need to obtain additional financing either to consummate our initial business combination or because we become obligated to redeem a significant number of our public shares upon consummation of our initial business combination, in which case we may issue additional securities or incur debt in connection with such business combination. Subject to compliance with applicable securities laws, we would only consummate such financing simultaneously with the consummation of our initial business combination. Following our initial business combination, if cash on hand is insufficient, we may need to obtain additional financing in order to meet our obligations.
In connection with our assessment of going concern considerations in accordance with Financial Accounting Standard Board’s Accounting Standards Update (ASU) 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” management has determined that these conditions raise substantial doubt about our ability to continue as a going concern. Management’s plan in addressing this uncertainty is through the Promissory Notes - related parties and the Working Capital Loans. In addition, if we are unable to complete a business combination within the Combination Period by April 5, 2024 (or up to November 5, 2024, if the Company extends the time to complete a Business Combination), our board of directors would proceed to commence a voluntary liquidation and thereby a formal dissolution of the Company. There is no assurance that our plans to consummate a business combination will be successful within the Combination Period. As a result, management has determined that this additional condition also raises substantial doubt about our ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Off-Balance Sheet Financing Arrangements
We have no obligations, assets or liabilities that would be considered off-balance sheet arrangements as of December 31, 2023 and 2022. We do not participate in transactions that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established for the purpose of facilitating off-balance sheet arrangements. We have not entered into any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or purchased any non-financial assets.
Contractual Obligations
As of December 31, 2023 and 2022, we do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities. As of December 31, 2023 and 2022, we have $2,903 and $50,000, respectively, payable due to a related party. As of December 31, 2023 and 2022, we have $4,763,735 and $733,750, respectively, promissory notes issued to related parties.
We are obligated to pay the underwriters a deferred underwriters’ discount equal to 3.5% of the gross proceeds of the IPO. The deferred underwriters’ discount of $3,421,250 will become payable to the US Tiger Securities and EF Hutton, a division of Benchmark Investment LLC, the representatives of the several underwriters of the IPO (each, a “Representative”), from the amounts held in the Trust Account solely in the event that we complete a business combination.
Critical Accounting Estimates
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates. The Company does not have any critical accounting estimates.
Recent Accounting Pronouncements
In August 2020, the FASB issued ASU 2020-06, “Debt - Debt Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40).” The amendment in this ASU is to address issues identified as a result of the complexity associated with applying generally accepted accounting principles (GAAP) for certain financial instruments with characteristics of liabilities and equity. For convertible instruments, the Board decided to reduce the number of accounting models for convertible debt instruments and convertible preferred stock per this ASU. Limiting the accounting models results in fewer embedded conversion features being separately recognized from the host contract as compared with prior GAAP. Convertible instruments that continue to be subject to separation models are (1) those with embedded conversion features that are not clearly and closely related to the host contract, that meet the definition of a derivative, and that do not qualify for a scope exception from derivative accounting and (2) convertible debt instruments issued with substantial premiums for which the premiums are recorded as paid-in capital. The amendments in this ASU are effective for public business entities that meet the definition of a Securities and Exchange Commission (SEC) filer, excluding entities eligible to be smaller reporting companies as defined by the SEC, for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The Board specified that an entity should adopt the guidance as of the beginning of its annual fiscal year. We have not early adopted the ASU, and it will become effective for us on January 1, 2024, as we are an emerging growth company. We believe that the adoption of this ASU would not have a material effect on our consolidated financial statements.
In December 2023, the FASB issued Accounting Standards Update No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” (“ASU 2023-09”), which modifies the rules on income tax disclosures to require entities to disclose (1) specific categories in the rate reconciliation, (2) the income or loss from continuing operations before income tax expense or benefit (separated between domestic and foreign) and (3) income tax expense or benefit from continuing operations (separated by federal, state and foreign). ASU 2023-09 also requires entities to disclose their income tax payments to international, federal, state and local jurisdictions, among other changes. The guidance is effective for annual periods beginning after December 15, 2024. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. ASU 2023-09 should be applied on a prospective basis, but retrospective application is permitted. We are currently evaluating the potential impact of adopting this new guidance on our consolidated financial statements and related disclosures.
Management does not believe that any recently issued, but not effective, accounting standards, if currently adopted, would have a material effect on our consolidated financial statements.

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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
As a smaller reporting company, we are not required to make disclosures under this Item.

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The consolidated financial statements and supplementary data required by this item are included following the signature page of this Annual Report.

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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.

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ITEM 9A. CONTROLS AND PROCEDURES
ITEM 9A. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of our management, including our Chief Financial Officer who also serves as our principal executive officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures as of December 31, 2023, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based on this evaluation, our Chief Financial Officer who also serves as our principal executive officer has concluded that during the period covered by this report, our disclosure controls and procedures were effective.
Disclosure controls and procedures are designed to ensure that information required to be disclosed by us in our Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
Management’s Annual Report on Internal Control over Financial Reporting
As required by SEC rules and regulations implementing Section 404 of the Sarbanes-Oxley Act, our management is responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of our financial statements for external reporting purposes in accordance with U.S. GAAP. Our internal control over financial reporting includes those policies and procedures that:
(1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of our company,
(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors, and
(3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect errors or misstatements in our financial statements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree or compliance with the policies or procedures may deteriorate. Management assessed the effectiveness of our internal control over financial reporting at December 31, 2023. In making these assessments, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control - Integrated Framework (2013). Based on our assessments and those criteria, management determined that we maintained effective internal control over financial reporting as of December 31, 2023.
This Annual Report on Form 10-K does not include an attestation report of internal controls from our independent registered public accounting firm due to our status as an emerging growth company under the JOBS Act.
Changes in Internal Control over Financial Reporting
There have been no changes in our internal control over financial reporting during the quarter ended December 31, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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ITEM 9B. OTHER INFORMATION
ITEM 9B. OTHER INFORMATION
During the quarter ended December 31, 2023, no director or officer adopted or terminated any Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement, as each term is defined in Item 408(a) of Regulation S-K.

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ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
The following table sets forth information about our directors and executive officers as of the date of this annual report.
Name
Age
Position
Ryan Spick
Chief Financial Officer and Principal Executive Officer
Ronald J. Pollack
Director and Chairman
Beau Vuillemot
Director
Philip Goodman
Director
Below is a summary of the business experience of each of our executive officers and directors:
Ryan Spick
Ryan Spick has served as Chief Financial Officer and Principal Executive Officer of FRLA since December 2023, and previously served on the FRLA Board from December 2022 to December 2023. In 2007, Mr. Spick founded The Dream Builder Group, a personal and business development company helping individuals and professionals to accomplish their ideal lifestyle and optimal success. Mr. Spick works with business owners to scale up their companies through analysis and targeted improvements. His proven expertise ranges from determining target audience, market research, branding, developing budgets, estimates, scopes of work to client relations, as well as implementing back-office functions and coordinating with trades. With an extensive background in institutional and commercial construction, Mr. Spick specializes today in planning, strategizing, and managing sophisticated real estate projects from start to finish. He attended the British Columbia Institute of Technology and began his business career in Canada. Mr. Spick is now based in Arizona and is passionate about mountain sports.
Ronald J. Pollack
Ronald Pollack has served on our Board since December 2022. Mr. Pollack is an experienced financial professional, angel investor and board member. He currently serves on the Board of Directors of Ronati (eCommerce software, private) (since 2021) and Venocare (medical devices, private) (since 2021) and the Advisory Board of CISO Global (cyber security managed services, NASDAQ: CISO) (since 2020). Mr. Pollack previously served on the Board of Directors of TiE Tampa (a global entrepreneurship organization) and co-chair of its Florida angel network (from 2019 to 2022). He was a founding investor and served as Chairman of the Board of Telepathy Labs (artificial intelligence, private) from its inception in 2016 through its Series Seed in 2020. He is expert in finance and investing, having built a successful hedge fund business across multiple strategies and industry sectors. Mr. Pollack was founder and Managing Partner of Bulldog Capital Management, founded in 1992, a $1+ billion family of investment funds with a special focus on technology, including early-stage venture investments such as Digital Lightwave (fiber optic data networking, exited via IPO), Inktomi (search engine, exited via IPO), Lynx Therapeutics (DNA sequencing, exited via acquisition, now part of Illumina), Radiant Logic (identity data unification, exited via sale to TA Associates) and Vendio (e-commerce, exited via acquisition by Alibaba). Mr. Pollack started his career as an investment banker at Goldman Sachs in 1983, followed by Drexel Burnham Lambert from 1986 to 1987. He holds an MBA from Harvard Business School; a JD from Harvard Law School; and a Bachelor of Arts, Magna Cum Laude with Distinction in Economics & Political Science, from Yale University.
Mr. Pollack was appointed as a director due to his background in corporate finance.
Beau Vuillemot
Beau Vuillemot cofounded Viking Revolution LLC, an ecommerce business with a proprietary line of men’s grooming products, in October 2016. In 2018, Viking Revolution LLC was acquired and Mr. Vuillemot now serves as its Chief Marketing Officer. Mr. Vuillemot does not have any arrangement or understanding between him and any other person(s) pursuant to which he was or is to be selected as a director or nominee.
Mr. Vuillemot was appointed as a director due to his experience as an executive officer of growth companies.
Philip Goodman
Philip Goodman has served on our Board since March 2023. Mr. Goodman has been an officer or director of both public and private companies since 1973, when he became Vice President, Sales and Marketing of Digital Computer Controls (OTC). He was a cofounder and Chairman of the Board of FastComm Communications (OTC) from 1980 until 1984. He co-founded Control Transaction Corporation, a company that was sold to GEAC in 1996; at that time GEAC was a $600 million conglomerate. Mr. Goodman served as VP of Sales and Marketing and member of the Board of Directors. Mr. Goodman was a co-founder of Ardent Acquisition, an early SPAC that merged with Avant Air in 2007. Mr. Goodman was a member of the board, as well as a member of the audit committee, of Ardent. Mr. Goodman has broad experience in creating, evaluating, restructuring and growing high technology and life science start-ups, turnarounds and established companies. Most recently Mr. Goodman was a member of the Board of Directors and Chief Operating Officer, on a contract basis, of Oxford Biomedical Technologies, from 2012 to 2018. Mr. Goodman received an AA degree in the renowned 14 comps from the University of Chicago. He earned a BA from Miami University of Ohio in Anthropology, having studied Meta Linguistics. At Miami he was honored with membership in Phi Beta Kappa. He then studied engineering at Case Institute of Technology.
Mr. Goodman was appointed as a director due to his experience with public companies.
Our directors are appointed for the remainder of the full term of the class of director to which the new directorship was added or in which the vacancy occurred and until his or her successor has been elected and qualified, subject, however, to such director’s earlier death, resignation, retirement, disqualification or removal. Our officers are appointed by our Board of Directors and hold office until their successors are duly elected and qualified by our Board or until their earlier death, resignation, retirement, disqualification, or removal from office.
There are no family relationships between or among our directors and executive officers.
Director Independence
NASDAQ listing standards require that a majority of our board of directors be independent as long as we are not a controlled company. An “independent director” is defined under the Nasdaq rules generally as a person other than an officer or employee of the company or its subsidiaries or any other individual having a relationship which in the opinion of the company’s board of directors, would interfere with the director’s exercise of independent judgment in carrying out the responsibilities of a director. Our board of directors has determined that each of Messrs. Pollack, Vuillemot, and Goodman is an “independent director” as defined in the NASDAQ listing standards and applicable SEC rules. Our independent directors have regularly scheduled meetings at which only independent directors are present.
Audit Committee
Since our IPO, we established an audit committee of the board of directors. Messrs. Pollack, Vuillemot, and Goodman serve as members of our audit committee, with Mr. Goodman serving as the Chairman of the audit committee. Under the Nasdaq listing standards and applicable SEC rules, we are required to have at least three members of the audit committee, all of whom must be independent, subject to certain phase-in provisions. Each such person meets the independent director standard under Nasdaq listing standards and under Rule 10-A-3(b)(1) of the Exchange Act.
Each member of the audit committee is financially literate and our board of directors has determined that Mr. Pollack qualifies as an “audit committee financial expert” as defined in applicable SEC rules.
We have adopted an audit committee charter, which details the principal functions of the audit committee, including:
· the appointment, compensation, retention, replacement, and oversight of the work of the independent auditors and any other independent registered public accounting firm engaged by us;
· pre-approving all audit and non-audit services to be provided by the independent auditors or any other registered public accounting firm engaged by us, and establishing pre-approval policies and procedures;
· reviewing and discussing with the independent auditors all relationships the auditors have with us in order to evaluate their continued independence;
· setting clear hiring policies for employees or former employees of the independent auditors;
· setting clear policies for audit partner rotation in compliance with applicable laws and regulations;
· obtaining and reviewing a report, at least annually, from the independent auditors describing (1) the independent auditor’s internal quality-control procedures and (2) any material issues raised by the most recent internal quality-control review, or peer review, of the audit firm, or by any inquiry or investigation by governmental or professional authorities, within, the preceding five years respecting one or more independent audits carried out by the firm and any steps taken to deal with such issues;
· reviewing and approving any related party transaction required to be disclosed pursuant to Item 404 of Regulation S-K promulgated by the SEC prior to us entering into such transaction; and
· reviewing with management, the independent auditors, and our legal advisors, as appropriate, any legal, regulatory, or compliance matters, including any correspondence with regulators or government agencies and any employee complaints or published reports that raise material issues regarding our financial statements or accounting policies and any significant changes in accounting standards or rules promulgated by the Financial Accounting Standards Board, the SEC or other regulatory authorities.
Compensation Committee
Since our IPO, we established a compensation committee of the board of directors. Messrs. Vuillemot, Pollack and Goodman serve as members of our compensation committee, with Mr. Vuillemot serving as the chairman of the compensation committee. Under the Nasdaq listing standards and applicable SEC rules, we are required to have at least two members of the compensation committee, all of whom must be independent, subject to certain phase-in provisions. Each such person meets the independent director standard under Nasdaq listing standards applicable to members of the compensation committee We have adopted a compensation committee charter, which details the principal functions of the compensation committee, including:
· reviewing and approving on an annual basis the corporate goals and objectives relevant to our Principal Executive Officer’s compensation, evaluating our Principal Executive Officer’s performance in light of such goals and objectives, and determining and approving the remuneration (if any) of our Principal Executive Officer’s based on such evaluation in executive session at which the Principal Executive Officer is not present;
· reviewing and approving the compensation of all of our other executive officers;
· reviewing our executive compensation policies and plans;
· implementing and administering our incentive compensation equity-based remuneration plans;
· assisting management in complying with our proxy statement and annual report disclosure requirements;
· approving all special perquisites, special cash payments, and other special compensation and benefit arrangements for our executive officers and employees;
· producing a report on executive compensation to be included in our annual proxy statement; and
· reviewing, evaluating, and recommending changes, if appropriate, to the remuneration for directors.
The current charter of the Compensation Committee also provides that the compensation committee may, in its sole discretion, retain, or obtain the advice of a compensation consultant, legal counsel, or other adviser and will be directly responsible for the appointment, compensation, and oversight of the work of any such adviser. Before engaging or receiving advice from a compensation consultant, external legal counsel, or any other adviser, however, the compensation committee will consider the independence of each such adviser, including the factors required by Nasdaq and the SEC.
Director Nominations
We do not have a standing nominating committee. In accordance with Rule 5605(e)(2) of the Nasdaq Rules, a majority of the independent directors may recommend a director nominee for selection by the board of directors. The board of directors believes that the independent directors can satisfactorily carry out the responsibility of properly selecting or approving director nominees without the formation of a standing nominating committee. As there is no standing nominating committee, we do not have a nominating committee charter in place.
The board of directors will also consider director candidates recommended for nomination by our stockholders during such times as they are seeking proposed nominees to stand for election at the next annual meeting of stockholders (or, if applicable, a special meeting of stockholders). Our stockholders that wish to nominate a director for election to our board of directors should follow the procedures set forth in our bylaws.
We have not formally established any specific, minimum qualifications that must be met or skills that are necessary for directors to possess. In general, in identifying and evaluating nominees for director, our board of directors considers educational background, diversity of professional experience, knowledge of our business, integrity, professional reputation, independence, wisdom, and the ability to represent the best interests of our stockholders.
Code of Ethics
We have adopted a code of ethics that applies to all of our executive officers, directors and employees. The code of ethics codifies the business and ethical principles that govern all aspects of our business.
Conflicts of Interest
Subject to his or her fiduciary duties under Delaware law, none of the members of our management team have any obligation to present us with any opportunity for a potential business combination of which they become aware. Our Sponsor and directors and officers are also not prohibited from sponsoring, investing or otherwise becoming involved with, any other blank check companies, including in connection with their initial business combinations, prior to us completing our initial business combination. Our management team, in their capacities as directors or officers, in their other endeavors, may choose to present potential business combinations to third parties, before they present such opportunities to us, subject to his or her fiduciary duties under Delaware law and any other applicable fiduciary duties. Our Amended and Restated Certificate of Incorporation provides that we renounce our interest in any corporate opportunity offered to any director or officer unless such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of the company and it is an opportunity that we are able to complete on a reasonable basis.
Although we do not believe any conflict currently exists between us and our founders, affiliates of our founders or an officer or director may compete with us for acquisition opportunities. If such entities decide to pursue an opportunity, we may be precluded from procuring such opportunity. In addition, investment ideas generated within our founders may be suitable for both us and for an affiliate of founders and may be directed to such entity rather than to us. Neither our founders nor members of our management team will have any obligation to present us with any opportunity for a potential business combination of which they become aware, unless presented to such member specifically in his or her capacity as an officer or director of the Company.
Each of our officers and directors presently has, and any of them in the future may have additional, fiduciary or contractual obligations to other entities pursuant to which such officer or director is or will be required to present business combination opportunities to such entity. Accordingly, in the future, if any of our officers or directors becomes aware of a business combination opportunity which is suitable for an entity to which he or she has then-current fiduciary or contractual obligations, he or she will honor his or her fiduciary or contractual obligations to present such opportunity to such entity. We do not believe, however, that any fiduciary duties or contractual obligations of our officers arising in the future would materially undermine our ability to complete our business combination. Our Amended and Restated Certificate of Incorporation provides that we renounce our interest in any corporate opportunity offered to any director or officer unless such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of our company and such opportunity is one we are legally and contractually permitted to undertake and would otherwise be reasonable for us to pursue.
Our officers or directors may become an officer or director of any other special purpose acquisition company with a class of securities registered under the Exchange Act even before we enter into a definitive agreement regarding our initial business combination or we have failed to complete our initial business combination by April 5, 2024, unless extended monthly upon approval of our board of directors and extension deposits made by our Sponsor or its affiliate.
Our founders, officers or directors may also purchase public units or shares during or after the IPO, including in the open market or through privately negotiated transactions.
Potential investors should also be aware of the following other potential conflicts of interest:
· None of our officers or directors is required to commit his or her full time to our affairs and, accordingly, may have conflicts of interest in allocating his or her time among various business activities.
· Our officers and directors collectively hold 60,000 shares of our Class B Common Stock, which will be worthless if we liquidate instead of completing an initial business combination.
· Our officers may become an officer or director of any other SPACs even before we enter into a definitive agreement regarding our initial business combination or we have failed to complete our initial business combination by April 5, 2024, unless extended monthly upon approval of our board of directors and extension deposits made by our Sponsor or its affiliate, and, as a result, our officers or directors may present a potential target to our competitor that would had been presented to us or devote time to our affairs which may have a negative impact on our ability to complete our initial business combination.
· In the course of their other business activities, our officers and directors may become aware of investment and business opportunities which may be appropriate for presentation to us as well as the other entities with which they are affiliated. Our management may have conflicts of interest in determining to which entity a particular business opportunity should be presented.
· Our Initial Stockholders have agreed to waive their redemption rights with respect to any founder shares, Private Placement Shares and any public shares held by them in connection with the consummation of our initial business combination. Additionally, our Initial Stockholders have agreed to waive their redemption rights with respect to any founder shares and Private Placement Shares held by them if we fail to consummate our initial business combination by April 5, 2024, unless extended monthly upon approval of our board of directors and extension deposits made by our Sponsor or its affiliate. If we do not complete our initial business combination within such applicable time period, the proceeds of the sale of the Private Placement Shares held in the Trust Account will be used to fund the redemption of our public shares, and the Private Placement Shares will be worthless. With certain limited exceptions, 50% of founder shares will not be transferable, assignable by our founders until the earlier to occur of: (A) six months after the date of the consummation of our initial business combination, or (B) the date on which the closing price of our Class A Common Stock equals or exceeds $12.50 per share (as adjusted for share splits, share dividends, reorganizations and recapitalizations) for any 20 trading days within any 30-trading day period commencing after our initial business combination and the remaining 50% of the founder shares may not be transferred, assigned or sold until six months after the date of the consummation of our initial business combination, or earlier, in either case, if, subsequent to our initial business combination, we consummate a subsequent liquidation, merger, stock exchange or other similar transaction which results in all of our stockholders having the right to exchange their shares for cash, securities or other property. With certain limited exceptions, the Private Placement Shares and the shares that may be issued upon conversion of working capital loans (“Working Capital Shares”), will not be transferable, assignable or salable by the Sponsor or its permitted transferees until 30 days after the completion of our initial business combination. Since our Initial Stockholders may directly or indirectly own founder shares, Private Placement Shares, and Representative Shares following the IPO, our Initial Stockholders may have a conflict of interest in determining whether a particular target business is an appropriate business with which to complete our initial business combination.
· Our officers and directors may have a conflict of interest with respect to evaluating a particular business combination if the retention or resignation of any such officers and directors was included by a target business as a condition to any agreement with respect to our initial business combination.
· Our Initial Stockholders may have a conflict of interest with respect to evaluating a business combination and financing arrangements as we may obtain loans from our Sponsor or an affiliate of our founders or any of our officers and directors to finance transaction costs in connection with an intended initial business combination. Up to $3,000,000 of such loans may be convertible into Working Capital Shares at a price of $10.00 per share at the option of the lender. Such Working Capital Shares would be identical to the Private Placement Shares sold in the Private Placement.
The conflicts described above may not be resolved in our favor.
In general, officers and directors of a corporation incorporated under the laws of the State of Delaware are required to present business opportunities to a corporation if:
· the corporation could financially undertake the opportunity;
· the opportunity is within the corporation’s line of business; and
· it would not be fair to our company and its stockholders for the opportunity not to be brought to the attention of the corporation.
Accordingly, as a result of multiple business affiliations, our officers and directors may have similar legal obligations relating to presenting business opportunities meeting the above-listed criteria to multiple entities. Furthermore, our Amended and Restated Certificate of Incorporation provides that we renounce our interest in any corporate opportunity offered to any director or officer unless such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of our company and such opportunity is one we are legally and contractually permitted to undertake and would otherwise be reasonable for us to pursue, and to the extent the director or officer is permitted to refer that opportunity to us without violating another legal obligation.
We are not prohibited from pursuing an initial business combination with a company that is affiliated with our Sponsor or any affiliate, subject to certain approvals and consents. In the event we seek to complete our initial business combination with such a company, we, or a committee of independent directors, would obtain an opinion from an independent investment banking firm which is a member of FINRA, or from an independent accounting firm, that such an initial business combination is fair to our company from a financial point of view.
In the event that we submit our initial business combination to our stockholders for a vote, our Initial Stockholders have agreed to vote any founder shares, Private Placement Shares and Representative Shares held by them and any public shares purchased during or after the offering in favor of our initial business combination and our officers and directors have also agreed to vote any public shares purchased during or after the offering in favor of our initial business combination.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended, or the Exchange Act, requires our executive officers, directors and persons who beneficially own more than 10% of a registered class of our equity securities to file with the Securities and Exchange Commission initial reports of ownership and reports of changes in ownership of our shares of Common Stock and other equity securities. These executive officers, directors, and greater than 10% beneficial owners are required by SEC regulation to furnish us with copies of all Section 16(a) forms filed by such reporting persons.
Based solely on our review of such forms furnished to us and written representations from certain reporting persons, we believe that, during 2023, our directors, executive officers, and ten percent stockholders complied with all Section 16(a) filing requirements, except for one late Form 4 (each reporting one transaction) for each of Mr. Huang, Mr. Li, Mr. Kristoff, Mr. Davidov, Ms. Ma, Dr. Xu, our Sponsor, Mr. Pollack, Mr. Goodman and Mr. Spick, and one late Form 3 for each of Mr. Goodman and Mr. Vuillemot.

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ITEM 11. EXECUTIVE COMPENSATION
ITEM 11. EXECUTIVE COMPENSATION
Executive Officers and Director Compensation
Executive Compensation
The following table sets forth information concerning the annual compensation awarded to, earned by, or paid to the following named executive officers for all services rendered in all capacities to our Company for the years ended December 31, 2023 and 2022.
Summary Compensation Table
Name and principal position
Year
Salary ($)
Stock Awards
Total
($)
($)
Ryan Spick
2,903
-
2,903
Chief Financial Officer and Principal Executive Officer(1)
Richard Brand
50,000
-
50,000
Former Chief Financial Officer and Principal Executive Officer(2)
J. Richard Iler
100,000
-
100,000
Former Chief Financial Officer and Principal Executive Officer(3)
50,000(4)
-
50,000
Lei Huang
-
-
-
Former Chief Executive Officer(5)
Yuanmei Ma
-
-
-
Former Chief Financial Officer(6)
_______________
(1) Mr. Spick has served since December 22, 2023. Mr. Spick is party to a consulting agreement dated as of December 22, 2023 that provides for compensation of $10,000 per month.
(2) Mr. Brand served from July 14, 2023 until December 22, 2023. Mr. Brand was party to a consulting agreement dated as of July 14, 2023 that provided for compensation of $10,000 per month.
(3) Mr. Iler served from December 22, 2022 until July 14, 2023. Effective December 1, 2022, Mr. Iler entered into a Consulting Agreement with the Company and OriginClear, Inc., a Nevada corporation (on behalf of Water On Demand, Inc.) pursuant to which Mr. Iler received an initial payment of $50,000 and was to receive separate payments of $25,000 monthly for January through April 2023.
(4) $25,000 was a prepayment for services performed in 2023.
(5) Mr. Huang served from inception until December 22, 2022.
(6) Ms. Ma served from inception until December 22, 2022.
Employment Agreements
The terms and conditions of Mr. Spick’s service as our Chief Financial Officer and Principal Executive Officer are governed by a consulting agreement dated as of December 22, 2023 by and between the Company and Mr. Spick (the “Spick Consulting Agreement”). The Spick Consulting Agreement provides for compensation to Mr. Spick of $10,000 per month. The Spick Consulting Agreement provides for a term of six months, unless earlier terminated by either party upon 10 business days’ written notice.
The terms and conditions of Mr. Brand’s service as our former Chief Financial Officer and Principal Executive Officer were governed by a consulting agreement dated as of July 14, 2023 by and between the Company and Mr. Brand (the “Brand Consulting Agreement”). The Brand Consulting Agreement provided for compensation to Mr. Brand of $10,000 per month. The Brand Consulting Agreement provided for a term of six months, unless earlier terminated by either party upon 10 business days’ written notice.
The terms and conditions of Mr. Iler’s service as our former Chief Financial Officer and Principal Executive Officer were governed by a consulting agreement dated as of December 1, 2022 by and among the Company, OriginClear, Inc. (on behalf of Water On Demand, Inc.) and Mr. Iler (the “Iler Consulting Agreement”). Pursuant to the Iler Consulting Agreement, Mr. Iler received an initial payment of $50,000 and was to receive separate payments of $25,000 monthly for January through April 2023. The Iler Consulting Agreement provided for a term of six months, unless earlier terminated by either party upon 10 business days’ written notice.
Director Compensation
The following table sets forth information concerning the annual compensation awarded to, earned by, or paid to the following directors for all services rendered in all capacities to our Company for the year ended December 31, 2023.
Name
Fees Earned
or Paid in Cash
($)
Total
($)
Ronald Pollack
132,000
132,000
Ryan Spick(1)
74,000
74,000
Philip Goodman
54,000
54,000
Payam Eshraghian(2)
22,666
22,666
Beau Vuillemot(3)
-
-
(1) Mr. Spick served on our board of directors until December 22, 2023.
(2) Mr. Eshraghian served on our board of directors until March 1, 2023.
(3) Mr. Vuillemot joined our board of directors on December 22, 2023.
In addition to the compensation above, our officers, directors or any of their respective affiliates will be reimbursed for any out-of-pocket expenses incurred in connection with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable business combinations.
After the completion of our initial business combination, directors or members of our management team who remain with us may be paid consulting or management fees from the combined company. All of these fees will be fully disclosed to stockholders, to the extent then known, in the tender offer materials or proxy solicitation materials furnished to our stockholders in connection with a proposed business combination. We have not established any limit on the amount of such fees that may be paid by the combined company to our directors or members of management. It is unlikely the amount of such compensation will be known at the time of the proposed business combination, because the directors of the post-combination business will be responsible for determining officer and director compensation. Any compensation to be paid to our officers will be determined, or recommended to the board of directors for determination, either by a compensation committee constituted solely by independent directors or by a majority of the independent directors on our board of directors.
Following a business combination, to the extent we deem it necessary, we may seek to recruit additional managers to supplement the incumbent management team of the target business. We cannot assure you that we will have the ability to recruit additional managers, or that additional managers will have the requisite skills, knowledge or experience necessary to enhance the incumbent management.

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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The following table sets forth information regarding the beneficial ownership of our Common Stock as of the date of this annual report, by:
· each person known by us to be the beneficial owner of more than 5% of the shares of our outstanding Common Stock;
· each of our officers and directors; and
· all of our officers and directors as a group.
Unless otherwise indicated, we believe that all persons named in the table have sole voting and investment power with respect to all shares of Common Stock beneficially owned by them. The following table does not reflect record of beneficial ownership of the Warrants included in the Units sold in the IPO as these Warrants are not exercisable until the later of 30 days after the completion of our initial business combination, or 12 months from the closing of the IPO. As of March 29, 2024, there were 6,271,798 shares of Common Stock issued and outstanding, including 3,828,048 shares of Class A Common Stock and 2,443,750 shares of Class B Common Stock.
Name and Address of Beneficial Owner(1)
Amount and
Approximate
Nature of
Percentage of
Beneficial
Outstanding
Ownership
Common Stock
Executive Officers and Directors:
Ryan Spick
10,000
*
Ronald J. Pollack
30,000
*
Beau Vuillemot
-
-
Philip Goodman
20,000
*
All executive officers and directors as a group (4 individuals)
60,000
1.0%
Over 5% Stockholders:
Fortune Rise Sponsor LLC(2)
2,283,750
36.4%
Water On Demand, Inc.(2)
2,283,750
36.4%
Karpus Investment Management (3)
628,174
10.0%
183 Sully’s Trail
Pittsford, New York 14534
Yakira Capital Management, Inc. (4)
547,938
8.7%
1555 Post Road East, Suite 202
Westport, CT 06880
Lighthouse Investment Partners, LLC (5)
507,336
8.1%
3801 PGA Boulevard, Suite 604
Palm Beach Gardens, FL 33410
* less than 1%.
(1) Unless otherwise noted, the business address of each of the following entities or individuals is c/o Fortune Rise Acquisition Corporation, 13575 58th Street North, Suite 200, Clearwater, Florida 33760.
(2) The Sponsor is the record holder of 2,283,750 Class B Shares of Common Stock reported herein. Water On Demand, Inc. is the owner of all of the equity interests of the Sponsor.
(3) Information shown is based solely on information reported by the filer on a Schedule 13G/A filed with the SEC on February 13, 2024, in which Karpus Investment Management reported that it and its related entities have shared voting and dispositive power over 628,174 shares of Class A common stock.
(4) Information show is based solely on information reported by the filers on a Schedule 13G/A filed with the SEC on January 26, 2024 filed by Yakira Capital Management, Inc. on behalf of each of Yakira Partners, L.P., a Delaware limited partnership (“Yakira Partners”), Yakira Enhanced Offshore Fund Ltd., a Cayman Islands entity (“Yakira Enhanced”), and MPA 136 Segregated Portfolio (“MPA 136”), a Cayman Islands entity. The Schedule 13G/A reflects that Yakira Partners has sole voting power and sole dispositive power with respect to 37,582 shares of Class A common stock, Yakira Enhanced has sole voting power and sole dispositive power with respect to 3,020 Class A common stock, and MPA 136 has sole voting power and sole dispositive power with respect to 507,336 Class A common stock.
(5) Information shown is based solely on information reported by the filer on a Schedule 13G filed with the SEC on February 14, 2024, in which Lighthouse Investment Partners, LLC and MAP 136 Segregated Portfolio, a segregated portfolio of LMA SPC, reported that it and its related entities have shared voting and dispositive power over 507,336 shares of Class A common stock.
The founder shares, Private Placement Shares, Representative Shares and Working Capital Shares are each subject to transfer restrictions pursuant to lock-up provisions in a letter agreement with us entered into by our Initial Stockholders. Those lock-up provisions provide that such securities are not transferable or salable (i) in the case of the founder shares, 50% of founder shares may not be transferred, assigned or sold until the earlier to occur of: (a) six months after the date of the consummation of our initial business combination, or (b) the date on which the closing price of our Class A Common Stock equals or exceeds $12.50 per share (as adjusted for share splits, share dividends, reorganizations and recapitalizations) for any 20 trading days within any 30-trading day period commencing after our initial business combination and the remaining 50% of the founder shares may not be transferred, assigned or sold until six months after the date of the consummation of our initial business combination, or earlier, in either case, if, subsequent to our initial business combination, we consummate a subsequent liquidation, merger, stock exchange or other similar transaction which results in all of our stockholders having the right to exchange their shares for cash, securities or other property, and (ii) in the case of the Private Placement Shares, until 30 days after the completion of our initial business combination, except in each case (a) to our officers or directors, any affiliates or family members of any of our officers or directors, any affiliate of our founders, any members of our founders, or any of their affiliates, officers, directors, direct and indirect equity holders, (b) in the case of an individual, by gift to a member of the individual’s immediate family, to a trust, the beneficiary of which is a member of the individual’s immediate family or an affiliate of such person, or to a charitable organization; (c) in the case of an individual, by virtue of laws of descent and distribution upon death of the individual; (d) in the case of an individual, pursuant to a qualified domestic relations order; (e) by private sales or transfers made in connection with the consummation of a business combination at prices no greater than the price at which the securities were originally purchased; (f) in the event of our liquidation prior to the completion of our initial business combination; or (g) by virtue of the laws of Delaware or our founders’ limited liability company agreement upon dissolution of our founders, provided, however, that in the case of clauses (a) through (e), or (g) these permitted transferees must enter into a written agreement agreeing to be bound by these transfer restrictions.
In order to meet our working capital needs following the consummation of the IPO, our Sponsor, officers, directors and their affiliates may, but are not obligated to, loan us funds, from time to time or at any time, in whatever amount they deem reasonable in their sole discretion. Each working capital loan would be evidenced by a promissory note. The working capital notes would either be paid upon consummation of our initial business combination, without interest, or, at holder’s discretion, up to $3,000,000 of the notes may be converted to Working Capital Shares, at a price of $10.00 per share at the option of the lender. The Working Capital Shares would be identical to the Private Placement Shares. In the event that the initial business combination does not close, we may use a portion of the working capital held outside the Trust Account to repay such loaned amounts, but no proceeds from our Trust Account would be used for such repayment.

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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
Founder and Private Placement Shares
On February 18, 2021, the Sponsor acquired 2,443,750 shares of Common Stock for a purchase price of $25,000. On March 2, 2021, we adopted our Amended and Restated Certificate of Incorporation to divide our Common Stock into Class A common Stock and Class B Common Stock without changing the total number of the authorized shares of Common Stock. Accordingly, we cancelled and forfeited 2,443,750 shares of our Common Stock but issued 2,443,750 shares of Class B Common Stock, or founder shares, to the Sponsor. Prior to the initial investment in the Company of $25,000 by the Sponsor, we had no assets, tangible or intangible.
As of December 31, 2023, there were 2,443,750 founder shares issued and outstanding. The aggregate capital contribution was $25,000, or approximately $0.01 per share.
The number of founder shares issued was determined based on the expectation that such founder shares would represent 20% of the outstanding shares upon completion of the IPO (excluding the sale of the Privates Placement Shares and issuance of Representative Shares and assuming our founders do not purchase public shares in the IPO). The per share purchase price of the founder shares was determined by dividing the amount of cash contributed to the company by the aggregate number of founder shares issued.
The Sponsor transferred an aggregated amount of 443,750 shares of Class B Common Stock to former officers, directors, secretary and their designees at the same price originally paid for such shares prior to the closing of the IPO. As a result of such transfers, US Tiger Securities, Inc., a Representative of the underwriters of the IPO, as the designee of Mr. Lei Huang, acquired 122,000 founder shares at the same price originally paid for such shares.
The holders of the founder shares have agreed not to transfer, assign or sell 50% of their founder shares until the earlier to occur of: (A) six months after the date of the consummation of the Company’s initial business combination, or (B) the date on which the closing price of the Company’s Class A Common Stock equals or exceeds $12.50 per share (as adjusted for share splits, share dividends, reorganizations and recapitalizations) for any 20 trading days within any 30-trading day period commencing after the Company’s initial business combination and the remaining 50% of the founder shares may not be transferred, assigned or sold until six months after the date of the consummation of the Company’s initial business combination, or earlier, in either case, if, subsequent to the Company’s initial business combination, the Company consummates a subsequent liquidation, merger, stock exchange or other similar transaction which results in all of the Company’s stockholders having the right to exchange their shares for cash, securities or other property.
On November 5, 2021, the Company completed the private sale of 505,500 shares of Class A Common Stock to the Sponsor, at a purchase price of $10.00 per share, generating gross proceeds to the Company of $5,055,000. The Private Placement Shares are identical to the shares of Class A Common Stock sold as part of the Units in the IPO, except that the holders have agreed not to transfer, assign or sell any of the Private Placement Shares (except to certain permitted transferees) until 30 days after the completion of the Company’s initial business combination.
Effective December 22, 2022, Ka Wai Cheung, Koon Lin Chan, and Koon Keung Chan, our Sponsor, and WODI entered into a Membership Interest Purchase and Transfer Agreement pursuant to which they sold to WODI all right, title and interest in and to the membership interests held by each of Messrs. Cheung, Chan, and Chan in the Sponsor (an aggregate of 100 membership interests) for $400,000.
In addition, effective December 22, 2022, our Sponsor entered into a Securities Transfer Agreement with each of US Tiger Securities, Inc. (as designee of Lei Huang), Lei Xu, Yuanmei Ma, Norman C. Kristoff, David Xianglin Li, Michael Davidov, and Christy Szeto (the “Sellers”) pursuant to which the Sellers sold to the Sponsor an aggregate of 343,750 shares of Class B Common Stock for the purchase price of $3,506.25. Out of the issued and outstanding shares of Class B Common Stock, an aggregate of 100,000 shares remain owned by former management.
Lastly, on December 22, 2022, each of Koon Keung Chan, Lei Xu, and US Tiger Securities, Inc. assigned each of their promissory notes issued on November 4, 2022 in the aggregate amount of $733,750 to the Sponsor.
On October 20, 2023, in connection with the prior appointments to board of directors of FRLA of Ronald Pollack, Philip Goodman and Ryan Spick, the Sponsor transferred 30,000 shares of Class B Common Stock to Ronald Pollack, 20,000 shares of Class B Common Stock to Philip Goodman and 10,000 shares of Class B Common Stock to Ryan Spick.
In connection with BCA, on October 24, 2023, the Sponsor, the Company and WODI entered into a letter agreement (the “Sponsor Letter Agreement”) pursuant to which the Sponsor agreed to (a) vote in favor of the Business Combination Agreement and the Business Combination, (b) waive any adjustment to the conversion ratio set forth in the governing documents of the Company or any other anti-dilution or similar protection with respect to the Class B Common Stock, such that the Class B Common Stock will convert into Class A Common Stock at the Closing on a one-to-one basis, and (c) to forfeit certain of the Class B Common Stock held by the Sponsor.
Representative Shares
We issued 120,000 shares of Class A Common Stock (the “Representative Shares”) to two Representatives without any consideration as part of the IPO compensation. The Representative Shares are identical to the public shares except that the representatives have agreed not to transfer, assign or sell any such Representative Shares until the completion of our initial business combination. The Representative Shares are deemed compensation by FINRA and are therefore subject to a lock-up for a period of 180 days immediately following the date of the commencement of sales in this offering pursuant to FINRA Rule 5110(e)(1). In addition, the representatives have agreed (i) to waive their redemption rights with respect to such shares in connection with the completion of our initial business combination and (ii) to waive their rights to liquidating distributions from the Trust Account with respect to such shares if we fail to complete our initial business combination by April 5, 2024, unless extended monthly upon approval of our board of directors and extension deposits made by our Sponsor or its affiliate.
Prepaid Expenses - Related Party
Effective December 1, 2022, Mr. J. Richard Iler, the Company’s former Principal Executive Officer, Chief Financial Officer, Secretary, and Treasurer, entered into a Consulting Agreement (the “Iler Consulting Agreement”) with the Company and OriginClear, Inc. (OriginClear), a Nevada corporation and the parent company of the Sponsor, pursuant to which Mr. Iler received an initial payment of $50,000 and received separate payments of $25,000 monthly for January 2023 through April 2023. The term of the Iler Consulting Agreement was for six months, unless earlier terminated. As of December 31, 2022, the Company prepaid to Mr. Iler under the Agreement amounted to $25,000.
Due to Related Parties
In December 2022, OriginClear advanced $50,000 to the Company for working capital. On April 17, 2023, the board of directors of the Company approved the issuance of an unsecured promissory note dated November 23, 2022 in the principal amount of $50,000 to OriginClear and the Company reclassified this $50,000 advance into a promissory note - related party. As of December 31, 2023, balance due to OriginClear amounted to $0.
On December 22, 2023, the board of directors appointed Ryan Spick to serve as the Company’s Principal Executive Officer and Chief Financial Officer effective as of December 22, 2023. The terms and conditions of Mr. Spick’s appointment will be governed by a consulting agreement dated as of December 22, 2023 by and between the Company and Mr. Spick (the “Consulting Agreement”). The Consulting Agreement provides for compensation to Mr. Spick of $10,000 per month. The Consulting Agreement provides for a term of six months, unless earlier terminated by either party upon 10 business days’ written notice. As of December 31, 2023, balance due to Mr. Spick amounted to $2,903.
Promissory Notes - Related Party (Extension and Working Capital) Loans
On November 4, 2022, an aggregate of $977,500 (the “First Extension Payment”) was deposited into the Company’s Trust Account for the public stockholders, representing $0.10 per public share, which enabled the Company to extend the period of time it had to consummate its initial Business Combination by three months from November 5, 2022 to February 5, 2023 (the “First Extension”). The First Extension was the first of the two three-month extensions permitted under the Company’s Amended and Restated Certificate of Incorporation prior to its amendment in April 2023. In connection with the First Extension Payment, the Company issued unsecured promissory notes (the “First Extension Note”) to certain Initial Stockholders, including (i) a note of $413,750 to Mr. Koon Keung Chan, the former manager of the Sponsor of the Company who resigned on December 22, 2022, (ii) a note of $150,000 to US Tiger Securities, an existing stockholder, and (iii) a note of $170,000 to Dr. Lei Xu, the former President and Chairwoman of the Company who resigned on December 22, 2022. The three promissory notes together with the Company’s working capital fund were used to pay for the First Extension Payment. These three promissory notes totaling $733,750 were assigned to WODI as creditor on December 22, 2022.
On February 6, 2023, $977,500 (the “Second Extension Payment”) was deposited into the Trust Account, for the public stockholders, representing $0.10 per public share, which enabled the Company to extend the period of time it had to consummate its initial Business Combination by three months from February 5, 2023 to May 5, 2023 (the “Second Extension”). The Second Extension was the second and final of the two three-month extensions permitted under the Company’s Amended and Restated Certificate of Incorporation prior to its amendment in April 2023. In connection with the Second Extension Payment, the Company issued an unsecured promissory note (the “Second Extension Note”) to WODI.
On March 16, 2023, the board of directors of the Company approved the issuance of an unsecured promissory note dated March 9, 2023 in the principal amount of $75,000 (the “Note 1”) to WODI.
On April 17, 2023, the board of directors of the Company, approved the issuance of the following unsecured promissory notes (“Notes 2”):
· Unsecured promissory note dated November 23, 2022 in the principal amount of $50,000 to OriginClear;
· Unsecured promissory note dated January 6, 2023 in the principal amount of $25,000 to WODI;
· Unsecured promissory note dated January 9, 2023 in the principal amount of $75,000 to WODI;
· Unsecured promissory note dated February 15, 2023 in the principal amount of $106,920 to WODI;
· Unsecured promissory note dated February 28, 2023 in the principal amount of $12,500 to WODI;
· Unsecured promissory note dated February 28, 2023 in the principal amount of $8,500 to WODI;
· Unsecured promissory note dated March 3, 2023 in the principal amount of $45,000 to WODI;
· Unsecured promissory note dated March 8, 2023 in the principal amount of $12,500 to WODI;
· Unsecured promissory note dated March 17, 2023 in the principal amount of $125,000 to WODI; and
· Unsecured promissory note dated March 31, 2023 in the principal amount of $145,000 to WODI.
On May 5, 2023, in connection with the Third Extension Payment, the Company issued an unsecured promissory note in the principal amount of $330,065 (the “Third Extension Note”) to WODI.
On June 5, 2023, in connection with the Fourth Extension Payment, the Company issued an unsecured promissory note in the principal amount of $100,000 (the “Fourth Extension Note”) to WODI.
The Company also issued the following unsecured promissory notes (“Notes 3”) to WODI for working capital purpose:
· Unsecured promissory note dated May 2, 2023 in the principal amount of $30,000 to WODI;
· Unsecured promissory note dated May 5, 2023 in the principal amount of $25,000 to WODI;
· Unsecured promissory note dated May 25, 2023 in the principal amount of $130,000 to WODI;
· Unsecured promissory note dated June 2, 2023 in the principal amount of $105,000 to WODI;
· Unsecured promissory note dated June 6, 2023 in the principal amount of $100,000 to WODI;
· Unsecured promissory note dated June 8, 2023 in the principal amount of $48,000 to WODI;
· Unsecured promissory note dated June 9, 2023 in the principal amount of $25,000 to WODI; and
· Unsecured promissory note dated June 23, 2023 in the principal amount of $100,000 to WODI.
On July 5, 2023, in connection with the Fifth Extension Payment, the Company issued an unsecured promissory note in the principal amount of $100,000 (the “Fifth Extension Note”) to WODI.
On August 4, 2023, in connection with the Sixth Extension Payment, the Company issued an unsecured promissory note in the principal amount of $100,000 (the “Sixth Extension Note”) to WODI.
On September 5, 2023, in connection with the Seventh Extension Payment, the Company issued an unsecured promissory note in the principal amount of $100,000 (the “Seventh Extension Note”) to WODI.
On October 5, 2023, in connection with the Eighth Extension Payment, the Company issued an unsecured promissory note in the principal amount of $100,000 (the “Eighth Extension Note”) to WODI.
On November 6, 2023, in connection with the Ninth Extension Payment, the Company issued an unsecured promissory note in the principal amount of $100,000 (the “Ninth Extension Note”) to WODI.
On December 6, 2023, in connection with the Tenth Extension Payment, the Company issued an unsecured promissory note in the principal amount of $100,000 (the “Tenth Extension Note”) to WODI.
On January 5, 2024, in connection with the Eleventh Extension Payment, the Company issued an unsecured promissory note in the principal amount of $100,000 (the “Eleventh Extension Note”) to WODI.
On February 5, 2024, in connection with the Twelfth Extension payment, the Company issued an unsecured promissory note in the principal amount of $100,000 (“Twelfth Extension Note”) to WODI.
On March 5, 2024, in connection with the Thirteenth Extension payment, the Company issued an unsecured promissory note in the principal amount of $100,000 (“Thirteenth Extension Note”) to WODI.
The Company also issued the following unsecured promissory notes (“Notes 4”) to WODI for working capital purpose:
· Unsecured promissory note dated July 14, 2023 in the principal amount of $75,000 to WODI;
· Unsecured promissory note dated August 1, 2023 in the principal amount of $70,000 to WODI;
· Unsecured promissory note dated August 14, 2023 in the principal amount of $10,000 to WODI;
· Unsecured promissory note dated September 8, 2023 in the principal amount of $75,000 to WODI;
· Unsecured promissory note dated September 21, 2023 in the principal amount of $80,000 to WODI;
· Unsecured promissory note dated October 5, 2023 in the principal amount of $100,000 to WODI;
· Unsecured promissory note dated November 3, 2023 in the principal amount of $125,000 to WODI;
· Unsecured promissory note dated December 6, 2023 in the principal amount of $42,000 to WODI;
· Unsecured promissory note dated December 19, 2023 in the principal amount of $202,000 to WODI;
· Unsecured promissory note dated January 9, 2024 in the principal amount of $30,000 to WODI;
· Unsecured promissory note dated January 12, 2024 in the principal amount of $75,000 to WODI; and
· Unsecured promissory note dated February 9, 2024 in the principal amount of $28,000 to WODI.
The First Extension Note, the Second Extension Note, the Third Extension Note, the Fourth Extension Note, the Fifth Extension Note, the Sixth Extension Note, the Seventh Extension Note, the Eighth Extension Note, the Ninth Extension Note, the Tenth Extension Note, the Eleventh Extension Note, the Twelfth Extension Note, the Thirteenth Extension Note, Note 1, Notes 2, Notes 3, and Notes 4 (herein referred to as the “Notes” or the “Working Capital Loans”) are non-interest bearing and payable (subject to the waiver against trust provisions) on the earlier of (i) consummation of the Company’s initial Business Combination and (ii) the date of the liquidation of the Company. The principal balance may be prepaid at any time, at the election of the Company. The holders of the Notes have the right, but not the obligation, to convert their Notes, in whole or in part, respectively, into private shares of Class A Common Stock (the “Conversion Shares”), as described in the IPO prospectus of the Company (File Number 333-256511). The number of Conversion Shares to be received by the holders in connection with such conversion shall be an amount, up to $3,000,000, determined by dividing (x) the sum of the outstanding principal amount payable to such holders by (y) $10.00.
In order to finance transaction costs in connection with an intended initial Business Combination, the founders or an affiliate of the founders or certain of the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required. If the Company completes the initial Business Combination, it would repay such loaned amounts. Up to $3,000,000 of such loans may be convertible into Working Capital Shares, at a price of $10.00 per share at the option of the lender. Such Working Capital Shares would be identical to the Private Placement Shares. In the event that the initial Business Combination does not close, the Company may use a portion of the working capital held outside the Trust Account to repay such loaned amounts, but no proceeds from the Trust Account would be used for such repayment.
As of December 31, 2023, the Company had borrowings of $4,763,735 under the promissory notes - related party (working capital loans).
RELATED PARTY POLICY
We have not yet adopted a formal policy for the review, approval or ratification of related party transactions. Accordingly, the transactions discussed above were not reviewed, approved or ratified in accordance with any such policy.
We have adopted a code of ethics requiring us to avoid, wherever possible, all conflicts of interests, except under guidelines or resolutions approved by our board of directors (or the appropriate committee of our board) or as disclosed in our public filings with the SEC. Under our code of ethics, conflict of interest situations will include any financial transaction, arrangement or relationship (including any indebtedness or guarantee of indebtedness) involving the company.
In addition, our audit committee is responsible for reviewing and approving related party transactions to the extent that we enter into such transactions. An affirmative vote of a majority of the members of the audit committee present at a meeting at which a quorum is present will be required in order to approve a related party transaction. A majority of the members of the entire audit committee will constitute a quorum. Without a meeting, the unanimous written consent of all of the members of the audit committee will be required to approve a related party transaction. We also require each of our directors and executive officers to complete a directors’ and officers’ questionnaire that elicits information about related party transactions.
These procedures are intended to determine whether any such related party transaction impairs the independence of a director or presents a conflict of interest on the part of a director, employee or officer.
To further minimize conflicts of interest, we have agreed not to consummate an initial business combination with an entity that is affiliated with any of our founders, officers or directors unless we, or a committee of independent directors, have obtained an opinion from an independent investment banking firm which is a member of FINRA or an independent accounting firm that our initial business combination is fair to our company from a financial point of view. Furthermore, other than as set forth elsewhere in the Prospectus, no finder’s fees, reimbursements or cash payments will be made to our founders, existing officers, directors or advisors, or our or their affiliates, for services rendered to us prior to or in connection with the completion of our initial business combination although we may consider cash or other compensation to officers or advisors we may hire subsequent to the IPO to be paid either prior to or in connection with our initial business combination. In addition, the following payments will be made to our founders or their affiliates, none of which will be made from the proceeds of the IPO held in the Trust Account prior to the completion of our initial business combination:
· Reimbursement for any out-of-pocket expenses related to identifying, investigating and completing an initial business combination; and
· Repayment of loans which may be made by our founders or an affiliate of our founders to finance transaction costs in connection with an intended initial business combination, the terms of which have not been determined nor have any written agreements been executed with respect thereto. Up to $3,000,000 of such loans may be convertible into Working Capital Shares, at a price of $10.00 per share at the option of the lender. Such Working Capital Shares would be identical to the Private Placement Shares sold in the Private Placement.
Our audit committee will review on a quarterly basis all payments that were made to our founders or their affiliates.

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ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Public Accounting Fees
The following chart sets forth public accounting fees in connection with services rendered by Friedman LLP and Marcum LLP for the years ended December 31, 2023 and 2022.
Audit Fees $ 185,400 $ 70,000
Audit-Related Fees - -
Tax Fees - -
All Other Fees - -
Audit fees were for professional services rendered by Friedman LLP (prior to Friedman LLP combining with Marcum LLP effective September 1, 2022) and Marcum LLP for the audits of our annual financial statements, and services that are normally provided by Friedman LLP and Marcum LLP in connection with statutory and review of the financial information included in our Quarterly Reports Form 10-Q or engagements for those fiscal years, including services rendered in connection with our IPO.
Pre-Approval of Services
The audit committee pre-approved all of the foregoing services.
PART IV

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ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Financial Statements:
The following consolidated financial statements are filed with this Annual Report:
Report of Independent Registered Public Accounting Firm - Marcum LLP (PCAOB ID: 688)
Consolidated Balance Sheets at December 31, 2023 and 2022
Consolidated Statements of Operations for the years ended December 31, 2023 and 2022
Consolidated Statements of Changes in Stockholders’ Deficit for the years ended December 31, 2023 and 2022
Consolidated Statements of Cash Flows for the years ended December 31, 2023 and 2022
Notes to Consolidated Financial Statements
(b) Exhibits
Exhibit
No.
Description
1.1
Underwriting Agreement, dated November 2, 2021, among the Registrant, US Tiger Securities, Inc., and EF Hutton, division of Benchmark Investments, LLC, as representatives of the several underwriters (incorporated by reference to Exhibit 1.1 to the Current Report on Form 8-K/A filed with the Securities & Exchange Commission on November 5, 2021)
2.1
Business Combination Agreement, by, between, and among Fortune Rise Acquisition Corporation, Water on Demand, Inc., and FRLA Merger Sub, Inc. (incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K filed with the Securities & Exchange Commission on October 24, 2023
2.2
Amendment No. 1 to Business Combination Agreement, by and between, Fortune Rise Acquisition Corporation, Water on Demand, Inc., and FRLA Merger Sub, Inc. (incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K filed with the Securities & Exchange Commission on February 7, 2024)
3.1
Amended and Restated Certificate of Incorporation, dated October 27, 2021 (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K/A filed with the Securities & Exchange Commission on November 5, 2021)
3.2
Amendment No. 1 to the Amended and Restated Certificate of Incorporation filed April 11, 2023 (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed with the Securities & Exchange Commission on April 13, 2023)
3.3
Amendment No. 2 to the Amended and Restated Certificate of Incorporation filed June 2, 2023 (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed with the Securities & Exchange Commission on June 2, 2023)
3.4
Amendment No. 3 to the Amended and Restated Certificate of Incorporation filed October 25, 2023 (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed with the Securities & Exchange Commission on October 27, 2023)
3.5
Bylaws (incorporated by reference to Exhibit 3.4 to Amendment No. 6 to the Registration Statement on Form S-1/A filed with the Securities & Exchange Commission on May 26, 2021)
4.1
Specimen Unit Certificate (incorporated by reference to Exhibit 4.1 to Amendment No. 6 to the Registration Statement on Form S-1/A filed with the Securities & Exchange Commission on November 2, 2021)
4.2
Specimen Class A Common Stock Certificate (incorporated by reference to Exhibit 4.2 to Amendment No. 6 to the Registration Statement on Form S-1/A filed with the Securities & Exchange Commission on November 2, 2021)
4.3
Specimen Warrant Certificate (incorporated by reference to Exhibit 4.3 to Amendment No. 6 to the Registration Statement on Form S-1/A filed with the Securities & Exchange Commission on November 2, 2021)
4.4
Warrant Agreement, dated November 2, 2021, between the Company and VStock Transfer, LLC, as warrant agent (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K/A filed with the Securities and Exchange Commission on November 8, 2021)
4.5*
Description of Company’s Securities
10.1
Letter Agreements, dated November 2, 2021, among the Company and certain security holders (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K/A filed with the Securities & Exchange Commission on November 8, 2021)
10.2
Investment Management Trust Account Agreement, dated November 2, 2021, between the Company and Wilmington Trust, National Association, as trustee (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K/A filed with the Securities & Exchange Commission on November 8, 2021)
10.3
Registration Rights Agreement, dated November 2, 2021, among the Registrant, certain security holders (incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K/A filed with the Securities & Exchange Commission on November 8, 2021)
10.4
Private Placement Shares Purchase Agreement, dated November 2, 2021, between the Company and the Underwriters (incorporated by reference to Exhibit 10.4 to the Current Report on Form 8-K/A filed with the Securities & Exchange Commission on November 8, 2021)
10.5
Indemnity Agreements, dated November 2, 2021, between the Company and each of its directors and officers (incorporated by reference to Exhibit 10.5 to the Current Report on Form 8-K/A filed with the Securities & Exchange Commission on November 8, 2021)
Exhibit
No.
Description
10.6
Securities Subscription Agreement, between the Company and the Sponsor dated February 18, 2021, including amendment dated March 1, 2021 (incorporated by reference to Exhibit 10.5 to Amendment No.6 to the Registration Statement on Form S-1/A filed with the Securities & Exchange Commission on November 2, 2021)
10.7
Promissory Note, dated February 6, 2023, issued by Fortune Rise Acquisition Corporation to Water On Demand, Inc. (incorporated by reference to Exhibit 99.1 to the Current Report on Form 8-K filed with the Securities & Exchange Commission on February 7, 2023)
10.8
Promissory Note, dated March 9, 2023, issued by Fortune Rise Acquisition Corporation to Water On Demand, Inc. (incorporated by reference to Exhibit 99.1 to the Current Report on Form 8-K filed with the Securities & Exchange Commission on March 22, 2023)
10.9
Promissory Note, dated November 23, 2022, issued by Fortune Rise Acquisition Corporation to OriginClear, Inc. (incorporated by reference to Exhibit 99.1 to the Current Report on Form 8-K filed with the Securities & Exchange Commission on April 21, 2023)
10.10
Promissory Note, dated March 31, 2023, issued by Fortune Rise Acquisition Corporation to Water On Demand, Inc. (incorporated by reference to Exhibit 99.10 to the Current Report on Form 8-K filed with the Securities & Exchange Commission on April 21, 2023)
10.11
Promissory Note, dated January 6, 2023, issued by Fortune Rise Acquisition Corporation to Water On Demand, Inc. (incorporated by reference to Exhibit 99.2 to the Current Report on Form 8-K filed with the Securities & Exchange Commission on April 21, 2023)
10.14
Promissory Note, dated February 28, 2023, issued by Fortune Rise Acquisition Corporation to Water On Demand, Inc. (incorporated by reference to Exhibit 99.5 to the Current Report on Form 8-K filed with the Securities & Exchange Commission on April 21, 2023)
10.15
Promissory Note, dated February 28, 2023, issued by Fortune Rise Acquisition Corporation to Water On Demand, Inc. (incorporated by reference to Exhibit 99.6 to the Current Report on Form 8-K filed with the Securities & Exchange Commission on April 21, 2023)
10.16
Promissory Note, dated March 3, 2023, issued by Fortune Rise Acquisition Corporation to Water On Demand, Inc. (incorporated by reference to Exhibit 99.7 to the Current Report on Form 8-K filed with the Securities & Exchange Commission on April 21, 2023)
10.17
Promissory Note, dated March 8, 2023, issued by Fortune Rise Acquisition Corporation to Water On Demand, Inc. (incorporated by reference to Exhibit 99.8 to the Current Report on Form 8-K filed with the Securities & Exchange Commission on April 21, 2023)
10.18
Promissory Note, dated March 17, 2023, issued by Fortune Rise Acquisition Corporation to Water On Demand, Inc. (incorporated by reference to Exhibit 99.9 to the Current Report on Form 8-K filed with the Securities & Exchange Commission on April 21, 2023)
10.19
Promissory Note, dated May 5, 2023, issued by Fortune Rise Acquisition Corporation to Water On Demand, Inc. (incorporated by reference to Exhibit 99.1 to the Current Report on Form 8-K filed with the Securities & Exchange Commission on May 8, 2023)
10.20
Promissory Note, dated June 5, 2023, issued by Fortune Rise Acquisition Corporation to Water On Demand, Inc. (incorporated by reference to Exhibit 99.1 to the Current Report on Form 8-K filed with the Securities & Exchange Commission on June 6, 2023)
10.21
Promissory Note, dated July 5, 2023, issued by Fortune Rise Acquisition Corporation to Water On Demand, Inc. (incorporated by reference to Exhibit 99.1 to the Current Report on Form 8-K filed with the Securities & Exchange Commission on July 19, 2023)
10.22
Promissory Note, dated August 4, 2023, issued by Fortune Rise Acquisition Corporation to Water On Demand, Inc. (incorporated by reference to Exhibit 99.1 to the Current Report on Form 8-K filed with the Securities & Exchange Commission on August 7, 2023)
10.23
Promissory Note, dated September 5, 2023, issued by Fortune Rise Acquisition Corporation to Water On Demand, Inc. (incorporated by reference to Exhibit 99.1 to the Current Report on Form 8-K filed with the Securities & Exchange Commission on September 6, 2023)
10.24
Promissory Note, dated October 5, 2023, issued by Fortune Rise Acquisition Corporation to Water On Demand, Inc. (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the Securities & Exchange Commission on October 5, 2023)
10.25
Promissory Note, dated November 6, 2023, issued by Fortune Rise Acquisition Corporation to Water On Demand, Inc. (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the Securities & Exchange Commission on November 7, 2023)
10.26
Promissory Note, dated December 6, 2023, issued by Fortune Rise Acquisition Corporation to Water On Demand, Inc. (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the Securities & Exchange Commission on December 7, 2023)
10.27
Consulting Agreement, dated July 14, 2023 by and between Fortune Rise Acquisition Corp. and AllFor LLC, Richard Brand, Originator (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed with the Securities & Exchange Commission on July 19, 2023)
Exhibit
No.
Description
10.28
Sponsor Letter Agreement, dated as of October 24, 2023, by and among the Sponsor, Fortune Rise Acquisition Corp. and Water on Demand, Inc. (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the Securities & Exchange Commission on October 24, 2023)
10.29
Amendment No. 1 to the Investment Management Trust Agreement, dated as of October 25, 2023, by and between Fortune Rise Acquisition Corporation and Wilmington Trust, National Association (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the Securities & Exchange Commission on October 27, 2023)
10.30
Consulting Agreement, dated December 22, 2023 by and between Fortune Rise Acquisition Corp. and Dream Builder Group - Ryan Spick, Principal (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed with the Securities & Exchange Commission on December 22, 2023)
14.1
Code of Ethics (incorporated by reference to Exhibit 14 to Amendment No. 6 to the Registration Statement on Form S-1/A filed with the Securities & Exchange Commission on May 26, 2021)
31.1*
Certifications of Principal Executive Officer and Principal Financial and Accounting Officer pursuant to Rules 13a-14 and 15d-14(a) under the Securities and Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1**
Certifications of Principal Executive Officer and Principal Financial and Accounting Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
97.1*
Clawback Policy
99.1
Audit Committee Charter (incorporated by reference to Exhibit 99.1 to Amendment No. 6 to the Registration Statement on Form S-1/A filed with the Securities & Exchange Commission on May 26, 2021)
99.2
Compensation Committee Charter (incorporated by reference to Exhibit 99.2 to Amendment No. 6 to the Registration Statement on Form S-1/A filed with the Securities & Exchange Commission on May 26, 2021)
101.INS
Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)
101.SCH
Inline XBRL Taxonomy Extension Schema Document
101.CAL
Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF
Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB
Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE
Inline XBRL Taxonomy Extension Presentation Linkbase Document
Cover Page Interactive Data File (formatted in inline XBRL and contained in Exhibit 101).
__________________
*Filed with this Report.
** These certifications are furnished to the SEC pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, as amended, and are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall they be deemed incorporated by reference in any filing under the Securities Act, except as shall be expressly set forth by specific reference in such filing.