$FRLA
Fortune Rise Acquisition Corp

2024 Q2 Form 10-Q Financial Statement

#000168316824003520 Filed on May 15, 2024

View on sec.gov

Income Statement

Concept 2024 Q2 2024 Q1
Revenue $0.00 $0.00
YoY Change
Cost Of Revenue
YoY Change
Gross Profit
YoY Change
Gross Profit Margin
Selling, General & Admin $35.70K $34.90K
YoY Change 78.5% -30.2%
% of Gross Profit
Research & Development
YoY Change
% of Gross Profit
Depreciation & Amortization
YoY Change
% of Gross Profit
Operating Expenses $364.8K $487.2K
YoY Change -34.86% 2.73%
Operating Profit -$364.8K -$487.2K
YoY Change -34.61% 2.73%
Interest Expense $167.2K $0.00
YoY Change -78.0% -100.0%
% of Operating Profit
Other Income/Expense, Net
YoY Change
Pretax Income -$197.6K -$487.2K
YoY Change -197.95% -178.43%
Income Tax $20.29K $0.00
% Of Pretax Income
Net Earnings -$217.9K -$487.2K
YoY Change 4322.14% -236.77%
Net Earnings / Revenue
Basic Earnings Per Share
Diluted Earnings Per Share -$0.03 -$0.08
COMMON SHARES
Basic Shares Outstanding 6.272M shares 6.272M shares
Diluted Shares Outstanding

Balance Sheet

Concept 2024 Q2 2024 Q1
SHORT-TERM ASSETS
Cash & Short-Term Investments $3.960K $6.980K
YoY Change -98.02% -95.42%
Cash & Equivalents $3.957K $6.981K
Short-Term Investments
Other Short-Term Assets $18.86K $34.53K
YoY Change -90.57% -63.77%
Inventory
Prepaid Expenses $18.86K $34.53K
Receivables
Other Receivables
Total Short-Term Assets $22.82K $41.51K
YoY Change -94.29% -83.23%
LONG-TERM ASSETS
Property, Plant & Equipment
YoY Change
Goodwill
YoY Change
Intangibles
YoY Change
Long-Term Investments $35.62M $35.23M
YoY Change -8.19% -66.06%
Other Assets
YoY Change
Total Long-Term Assets $35.62M $35.23M
YoY Change -8.16% -66.06%
TOTAL ASSETS
Total Short-Term Assets $22.82K $41.51K
Total Long-Term Assets $35.62M $35.23M
Total Assets $35.65M $35.27M
YoY Change -9.04% -66.1%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $533.9K $446.8K
YoY Change 433.88% 165.73%
Accrued Expenses $703.9K $703.9K
YoY Change 0.55%
Deferred Revenue
YoY Change
Short-Term Debt $5.849M $5.387M
YoY Change 72.02% 125.23%
Long-Term Debt Due
YoY Change
Total Short-Term Liabilities $7.144M $6.553M
YoY Change 67.35% 121.59%
LONG-TERM LIABILITIES
Long-Term Debt $0.00 $0.00
YoY Change
Other Long-Term Liabilities $3.421M $3.421M
YoY Change 0.63% 0.0%
Total Long-Term Liabilities $3.421M $3.421M
YoY Change 0.63% 0.0%
TOTAL LIABILITIES
Total Short-Term Liabilities $7.144M $6.553M
Total Long-Term Liabilities $3.421M $3.421M
Total Liabilities $10.57M $9.974M
YoY Change 37.39% 53.94%
SHAREHOLDERS EQUITY
Retained Earnings -$10.48M -$9.929M
YoY Change 42.56% 73.17%
Common Stock
YoY Change
Preferred Stock
YoY Change
Treasury Stock (at cost)
YoY Change
Treasury Stock Shares
Shareholders Equity -$10.48M -$9.929M
YoY Change
Total Liabilities & Shareholders Equity $35.65M $35.27M
YoY Change -9.04% -66.1%

Cashflow Statement

Concept 2024 Q2 2024 Q1
OPERATING ACTIVITIES
Net Income -$217.9K -$487.2K
YoY Change 4322.14% -236.77%
Depreciation, Depletion And Amortization
YoY Change
Cash From Operating Activities -$210.0K -$215.9K
YoY Change -84.09% -74.6%
INVESTING ACTIVITIES
Capital Expenditures
YoY Change
Acquisitions
YoY Change
Other Investing Activities -$225.0K -$380.0K
YoY Change -100.34% -51.14%
Cash From Investing Activities -$225.0K -$380.0K
YoY Change -100.34% -51.14%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net
YoY Change
Debt Paid & Issued, Net
YoY Change
Cash From Financing Activities 432.0K $590.0K
YoY Change -100.67% -63.31%
NET CHANGE
Cash From Operating Activities -210.0K -$215.9K
Cash From Investing Activities -225.0K -$380.0K
Cash From Financing Activities 432.0K $590.0K
Net Change In Cash -3.020K -$5.929K
YoY Change -110.07% -70.41%
FREE CASH FLOW
Cash From Operating Activities -$210.0K -$215.9K
Capital Expenditures
Free Cash Flow
YoY Change

Facts In Submission

Frame Concept Type Concept / XBRL Key Value Unit
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CY2024Q1 us-gaap Increase Decrease In Income Taxes
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380000 usd
CY2023Q1 frla Purchase Of Funds Held In Trust Account
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CY2024Q1 frla Withdrawal Of Investments Held In Trust Account
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CY2024Q1 us-gaap Proceeds From Issuance Of Debt
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CY2023Q1 us-gaap Proceeds From Issuance Of Debt
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CY2024Q1 frla Advances From Related Party
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CY2023Q1 frla Advances From Related Party
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CY2023Q1 us-gaap Net Cash Provided By Used In Financing Activities
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CY2024Q1 us-gaap Cash Cash Equivalents Restricted Cash And Restricted Cash Equivalents Period Increase Decrease Including Exchange Rate Effect
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CY2023Q1 us-gaap Cash Cash Equivalents Restricted Cash And Restricted Cash Equivalents Period Increase Decrease Including Exchange Rate Effect
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CY2024Q1 us-gaap Cash Cash Equivalents Restricted Cash And Restricted Cash Equivalents
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CY2023Q1 us-gaap Cash Cash Equivalents Restricted Cash And Restricted Cash Equivalents
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CY2024Q1 us-gaap Income Taxes Paid Net
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CY2023Q1 us-gaap Income Taxes Paid Net
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CY2024Q1 us-gaap Interest Paid Net
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CY2023Q1 us-gaap Interest Paid Net
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CY2024Q1 frla Accretion Of Carrying Value To Redemption Value
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CY2023Q1 frla Accretion Of Carrying Value To Redemption Value
AccretionOfCarryingValueToRedemptionValue
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CY2024Q1 us-gaap Nature Of Operations
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<p id="xdx_800_eus-gaap--NatureOfOperations_zINdNnbAUeD4" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Note 1 — <span id="xdx_82C_zkUIAxd1vAOg">Organization and Business Operation</span></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Fortune Rise Acquisition Corporation (the “Company”) is a blank check company incorporated as a Delaware corporation on February 1, 2021. The Company was formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses (a “Business Combination”). The Company has signed a non-binding Letter of Intent for the Proposed Business Combination as discussed below. The Company has selected December 31 as its fiscal year end.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As of March 31, 2024 and December 31, 2023, the Company had not commenced any operations. For the period from February 1, 2021 (inception) through March 31, 2024, the Company’s efforts have been limited to organizational activities as well as activities related to the IPO (as defined below). The Company will not generate any operating revenues until after the completion of a Business Combination, at the earliest. The Company had generated non-operating income in the form of money market fund dividend income earned from the proceeds derived from the IPO up until September 2023 when all the money market funds were converted into cash.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The registration statement for the Company’s initial public offering (“IPO”) became effective on November 2, 2021. On November 5, 2021, the Company consummated the IPO of <span id="xdx_90C_ecustom--UnitsIssuedDuringPeriodSharesNewIssues_iI_c20211105__us-gaap--SubsidiarySaleOfStockAxis__us-gaap--IPOMember_zCPYI2kmelma" title="Number of units sold">9,775,000</span> units (including 1,275,000 units issued upon the full exercise of the over-allotment option, the “Public Units”). Each Public Unit consists of <span id="xdx_90C_ecustom--NumberOfSharesIssuedPerUnit_c20211104__20211105__us-gaap--StatementClassOfStockAxis__us-gaap--CommonClassAMember__us-gaap--SubsidiarySaleOfStockAxis__us-gaap--IPOMember_zUmfo5vljD24" title="Number of shares issued per unit sold">one share of Class A Common Stock</span>, $<span id="xdx_90A_eus-gaap--CommonStockParOrStatedValuePerShare_iI_c20211105__us-gaap--StatementClassOfStockAxis__us-gaap--CommonClassAMember__us-gaap--SubsidiarySaleOfStockAxis__us-gaap--IPOMember_z5ttXXdx3tlb" title="Common stock par value">0.0001</span> par value per share (“Class A Common Stock”), and <span id="xdx_903_ecustom--NumberOfSharesIssuedPerUnit_c20211104__20211105__us-gaap--StatementClassOfStockAxis__us-gaap--WarrantMember__us-gaap--SubsidiarySaleOfStockAxis__us-gaap--IPOMember_zOdeUz1rRyJa" title="Number of shares issued per unit sold">one-half of one redeemable warrant</span> (“Warrant”), each whole Warrant entitling the holder thereof to purchase one share of Class A Common Stock at an exercise price of $<span id="xdx_901_eus-gaap--ClassOfWarrantOrRightExercisePriceOfWarrantsOrRights1_iI_c20211105__us-gaap--ClassOfWarrantOrRightAxis__us-gaap--WarrantMember__us-gaap--StatementClassOfStockAxis__us-gaap--CommonClassAMember__us-gaap--SubsidiarySaleOfStockAxis__us-gaap--IPOMember_zE4CaGrcHbt8" title="Exercise price">11.50</span> per share. The Units were sold at an offering price of $10.00 per Unit, generating gross proceeds of $<span id="xdx_90D_eus-gaap--ProceedsFromIssuanceInitialPublicOffering_c20211104__20211105__us-gaap--SubsidiarySaleOfStockAxis__us-gaap--IPOMember_z5Wjx8mVA3k7" title="Proceeds from issuance initial public offering">97,750,000</span>. The shares of Class A Common Stock included in the Public Units are referred to as the “public shares.”</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Substantially concurrently with the closing of the IPO, the Company completed the private sale of <span id="xdx_90A_eus-gaap--StockIssuedDuringPeriodSharesNewIssues_c20211104__20211105__us-gaap--StatementClassOfStockAxis__us-gaap--CommonClassAMember__us-gaap--SubsidiarySaleOfStockAxis__us-gaap--PrivatePlacementMember_zjgEBiKCYG44" title="Number of shares issued">545,500</span> shares of Class A Common Stock (the “Private Placement Shares”), comprised of <span id="xdx_906_eus-gaap--StockIssuedDuringPeriodSharesNewIssues_c20211104__20211105__us-gaap--SubsidiarySaleOfStockAxis__us-gaap--PrivatePlacementMember__us-gaap--StatementClassOfStockAxis__us-gaap--CommonClassAMember__srt--CounterpartyNameAxis__custom--SponsorMember_z4me77miiPja" title="Number of shares issued">505,500</span> shares sold to the Company’s sponsor, Fortune Rise Sponsor LLC (the “Sponsor”) and <span id="xdx_901_eus-gaap--StockIssuedDuringPeriodSharesNewIssues_c20211104__20211105__us-gaap--SubsidiarySaleOfStockAxis__us-gaap--PrivatePlacementMember__us-gaap--StatementClassOfStockAxis__us-gaap--CommonClassAMember__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--USTigerSecuritiesAndEfHuttonMember_ztV5ystU20og" title="Number of shares issued">40,000</span> shares sold to US Tiger Securities, Inc. (“US Tiger Securities”), and EF Hutton, a division of Benchmark Investment LLC, the representatives of the several underwriters (each, a “Representative”), at a purchase price of $<span id="xdx_909_eus-gaap--SharesIssuedPricePerShare_iI_c20211105__us-gaap--SubsidiarySaleOfStockAxis__us-gaap--PrivatePlacementMember_zxST1mTgjy0a" title="Purchase price, per unit">10.00</span> per Private Placement Share, generating gross proceeds to the Company of $<span id="xdx_905_eus-gaap--ProceedsFromIssuanceOfPrivatePlacement_c20211104__20211105__us-gaap--SubsidiarySaleOfStockAxis__us-gaap--PrivatePlacementMember_zzY8kDcZuLqj" title="Proceeds from issuance of private placement">5,455,000</span>. The Private Placement Shares are identical to the public shares, 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.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Transaction costs for the IPO amounted to $<span id="xdx_903_ecustom--TransactionCosts_iI_c20211105_zJEy0eNudsgb" title="Transaction costs">5,822,268</span>, consisting of $<span id="xdx_903_ecustom--SaleOfStockUnderwritingFees_iI_c20211105_zcyPbG2R6BPd" title="Underwriting fees">5,376,250</span> of underwriting fees (including $<span id="xdx_907_ecustom--DeferredUnderwritingFees_iI_c20211105_zX4z31iKiMZd" title="Deferred underwriting fees">3,421,250</span> of deferred underwriting fees) and $<span id="xdx_901_ecustom--SaleOfStockOtherOfferingCosts_iI_c20211105_zExMDwaIQ7H1" title="Other offering costs">446,018</span> of other offering costs.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company also issued <span id="xdx_909_eus-gaap--StockIssuedDuringPeriodSharesNewIssues_c20211104__20211105__us-gaap--StatementClassOfStockAxis__us-gaap--CommonClassAMember__us-gaap--SubsidiarySaleOfStockAxis__us-gaap--IPOMember__srt--CounterpartyNameAxis__custom--RepresentativeSharesMember_zApZ28l09Zs9" title="Number of shares issued to representatives as compensation">120,000</span> shares of Class A Common Stock (the “Representative Shares”) to the Representatives as part of their underwriting 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 the Company’s 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 the IPO 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 the Company’s initial Business Combination and (ii) to waive their rights to liquidating distributions from the Trust Account (as defined below) with respect to such shares if the Company fails to complete its initial Business Combination by June 5, 2024 (or up to November 5, 2024, if the Company extends the time to complete a Business Combination).</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Following the closing of the IPO and the issuance and the sale of Private Placement Shares on November 5, 2021, $<span id="xdx_90F_eus-gaap--RestrictedCash_iI_c20211105__us-gaap--SubsidiarySaleOfStockAxis__us-gaap--PrivatePlacementMember__us-gaap--CashAndCashEquivalentsAxis__custom--TrustAccountMember_z6zpSV4SHYMi" title="Cash restricted">99,705,000</span> ($10.20 per Public Unit) from the net proceeds of the sale of the Public Units in the IPO and the sale of Private Placement Shares was placed in a trust account (the “Trust Account”) maintained by Wilmington Trust, National Association as a trustee and invested the proceeds in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act of 1940, with a maturity of 180 days or less, or in any open-ended investment company that holds itself out as a money market fund meeting the conditions of Rule 2a-7 of the Investment Company Act of 1940, as amended (the “Investment Company Act”), as determined by the Company, until the earlier of: (a) the completion of the initial Business Combination, (b) the redemption of any public shares properly submitted in connection with a stockholder vote to amend the Company’s Amended and Restated Certificate of Incorporation (i) to modify the substance or timing of the Company’s obligation to allow redemption in connection with the initial Business Combination or to redeem 100% of the Company’s public shares if it does not complete the initial Business Combination by June 5, 2024 (or up to November 5, 2024, if the Company extends the time to complete a Business Combination) or (ii) with respect to any other provision relating to stockholders’ rights or pre-initial Business Combination activity and (c) the redemption of the Company’s public shares if it is unable to complete the Business Combination by June 5, 2024 (or up to November 5, 2024, if the Company extends the time to complete a Business Combination), subject to applicable law. The proceeds deposited in the Trust Account could become subject to the claims of the Company’s creditors, if any, which could have priority over the claims of the Company’s public stockholders.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company’s initial Business Combination must occur with one or more target businesses that together have an aggregate fair market value of at least 80% of the assets held in the Trust Account (excluding the deferred underwriting fee and taxes payable and interest previously released for working capital purposes on the income earned on the Trust Account) at the time of the agreement to enter into the initial Business Combination. However, the Company will only complete a Business Combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires an interest in the target sufficient for the post-transaction company not to be required to register as an investment company under the Investment Company Act. There is no assurance that the Company will be able to complete a Business Combination successfully.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The shares of Class A Common Stock subject to redemption were recorded at a redemption value and classified as temporary equity upon the completion of the IPO, in accordance with Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” The Company will proceed with a Business Combination (if the Company seeks stockholder approval), if a majority of the issued and outstanding shares voted are voted in favor of the Business Combination. The Company will have until June 5, 2024 (or up to November 5, 2024, if the Company extends the time to complete a Business Combination and payment of the extension deposit by the Sponsor, or its affiliates), to complete the initial Business Combination (the “Combination Period”). If the Company is unable to complete the initial Business Combination within the Combination Period, the Company 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 the Company for working capital purposes or to pay the Company’s 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 the Company’s remaining stockholders and its board of directors, dissolve and liquidate, subject in each case to the Company’s 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 the Company’s warrants, which will expire worthless if the Company fails to complete the Business Combination within the Combination Period. The founders have entered into a letter agreement with the Company, pursuant to which they have agreed (i) to waive their redemption rights with respect to any Founder Shares (defined below), Private Placement Shares, and any public shares held by them in connection with the completion of the initial Business Combination, (ii) waive their redemption rights with respect to their Founder Shares, Private Placement Shares and public shares in connection with a stockholder vote to approve an amendment to the Company’s Amended and Restated Certificate of Incorporation (A) to modify the substance or timing of the Company’s obligation to allow redemption in connection with the initial Business Combination or to redeem 100% of the Company’s public shares if the Company does not complete its initial Business Combination by June 5, 2024 (or up to November 5, 2024, if the Company extends the time to complete a Business Combination) and payment of the extension deposit by our Sponsor, or its affiliates), or (B) with respect to any other provision relating to stockholders’ rights or pre-initial Business Combination activity and (iii) to waive their rights to liquidating distributions from the Trust Account with respect to any Founder Shares held by them if the Company fails to complete the initial Business Combination by June 5, 2024 (or up to November 5, 2024, if the Company extends the time to complete a Business Combination and payment of the extension deposit by our Sponsor, or its affiliates), although they will be entitled to liquidating distributions from the Trust Account with respect to any public shares they hold if the Company fails to complete the initial Business Combination within the prescribed time frame. If the Company submits its initial Business Combination to its stockholders for a vote, the Company will complete its initial Business Combination only if a majority of the outstanding shares of common stock voted are voted in favor of the initial Business Combination. In no event will the Company redeem its public shares of Class A Common Stock in an amount that would cause its net tangible assets to be less than $5,000,001. In such case, the Company would not proceed with the redemption of public shares of Class A Common Stock and the related Business Combination, and instead may search for an alternate Business Combination. As approved by its stockholders at the Special Meeting on October 25, 2023, the Company deleted the limitations that the Company shall not consummate a business combination or redeem shares if such actions would cause the Company’s net tangible assets to be less than $5,000,001 and filed an amendment to its Amended and Restated Certificate of Incorporation with the Delaware Secretary of State on October 25, 2023.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Sponsor has agreed that it will be liable to the Company if and to the extent any claims by a third party for services rendered or products sold to the Company, or by a prospective target business with which the Company has 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 the value of the trust assets, in each case net of the interest which may be withdrawn to pay taxes. This liability will not apply with respect 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 the Company’s indemnity of the underwriters of the IPO against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, then the Company’s Sponsor will not be responsible to the extent of any liability for such third-party claims.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Change of Sponsor</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On December 22, 2022, Water On Demand, Inc., a Nevada corporation (“WODI”), entered into a Membership Interest Purchase and Transfer Agreement with Ka Wai Cheung, Koon Lin Chan, and Koon Keung Chan (each a “Seller,” and collectively, the “Sellers”) and the Sponsor, pursuant to which WODI purchased 100 membership interests in the Sponsor from the Sellers, which constitutes 100% of the membership interests in the Sponsor. The Sponsor holds 2,343,750 shares out of 2,443,750 shares of the issued and outstanding shares of Class B Common Stock of the Company.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>The Proposed Business Combination</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On January 5, 2023, the Company filed a press release which announced the signing of a non-binding Letter of Intent (“LOI”) with WODI under which the Company proposes to acquire all the outstanding securities of WODI, based on certain material financial and business terms and conditions being met. On September 28, 2023, the Company announced that the LOI was amended and assigned to Water On Demand, Inc. (f/k/a Progressive Water Treatment Inc.), a Texas corporation (“WODI-PWT”). WODI-PWT recently merged with WODI. Accordingly, the LOI executed January 5, 2023 with WODI has been amended to designate WODI-PWT as the new target of the acquisition. Under the revised/amended LOI, the Company proposes to acquire all the outstanding securities of WODI-PWT, based on certain material financial and business terms and conditions being met. The LOI is not binding on the parties and is intended solely to guide good-faith negotiations toward definitive agreements.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On October 24, 2023, the Company 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 a wholly owned subsidiary of the Company incorporated on October 13, 2023 (“Merger Sub”), and WODI-PWT.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The BCA provides, among other things, that Merger Sub will merge with and into WODI-PWT, with WODI-PWT as the surviving company in the merger and, after giving effect to such merger, WODI-PWT shall be a wholly-owned subsidiary of the Company (the “Merger”). The Company will change its name to “Water on Demand, Inc.” The Merger and the other transactions contemplated by the BCA are hereinafter referred to as the “Business Combination.” In accordance with the terms and subject to the conditions of the BCA, at the effective time of the Merger (the “Effective Time”), among other things: (i) each share of Class A Common Stock and each share of Class B Common Stock (except for 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, of the Company, and (ii) each share of common stock of WODI-PWT (subject to limited exceptions) 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 the Company’s common stock equal to an exchange ratio, calculated as (a) the aggregate equity value of WODI-PWT of $32.0 million, divided by the aggregate number of shares of WODI-PWT common stock outstanding immediately prior to the Effective Time, divided by (b) the FRLA Share Value, where “FRLA Share Value” means (i) the aggregate amount of cash on deposit in the Trust Account (without giving effect to stockholder redemptions) as of two business days prior to the closing date of the Merger, including interest not previously released to the Company to pay taxes of the Company divided by (ii) the total number of then issued and outstanding shares of Class A Common Stock (without giving effect to stockholder redemptions).</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Extension Amendments for Business Combination</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On April 11, 2023, the Company filed with the Secretary of State of the State of Delaware an amendment (the “First Amendment”) to the Company’s Amended and Restated Certificate of Incorporation to extend the date by which the Company must consummate a Business Combination 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. The Company’s stockholders approved the First Amendment at a special meeting of stockholders of the Company on April 10, 2023.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As a result of the June 2, 2023 special meeting of stockholders of the Company, the Company filed with the Secretary of State of the State of Delaware 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.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As approved by its stockholders at the special meeting of stockholders held on October 25, 2023, the Company entered into an amendment to the Investment Management Trust Agreement, dated as of November 2, 2021 (the “Trust Agreement”), by and between the Company and Wilmington Trust, National Association (“Wilmington Trust”), on October 25, 2023 (the “Trust Amendment”). The Trust Amendment extended the initial date on which Wilmington Trust must commence liquidation of the Trust Account to up to November 5, 2024, or such earlier date as determined by the Company’s board of directors, unless the closing of the Company’s initial business combination shall have occurred, provided that the Sponsor (or its affiliates or permitted designees) will deposit into the Trust Account the lesser of: (i) $100,000 and (ii) an aggregate amount equal to $0.05 multiplied by the number of public shares of the Company that are not redeemed, for each such one-month extension unless the closing of the Company’s initial business combination shall have occurred, in exchange for a non-interest bearing, unsecured promissory note payable upon consummation of a business combination.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">From November 2022 to May 2024, a total of $<span id="xdx_904_eus-gaap--OtherPaymentsToAcquireBusinesses_c20221101__20240531__us-gaap--BusinessAcquisitionAxis__custom--WilmingtonTrustMember__us-gaap--TransactionTypeAxis__custom--TrustAgreementMember__srt--StatementScenarioAxis__srt--ScenarioForecastMember_zYBye2UgYiLi" title="Cash deposited in trust">3,485,065</span> was deposited into the Trust Account for the public stockholders, which enabled the Company to extend the period of time it had to consummate its initial Business Combination from November 5, 2022 to June 5, 2024.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Liquidity and Going Concern</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As of March 31, 2024, the Company had $<span id="xdx_900_eus-gaap--Cash_iI_c20240331_z7c9ZXWhTgK9" title="Cash held">6,981</span> in cash held outside the Trust Account available for the Company’s payment of expenses related to working capital purposes and a working capital deficit of $<span id="xdx_90A_ecustom--WorkingCapital_iI_c20240331_zFPe7CyuxfCd" title="Working capital">6,511,284</span>. The Company has incurred and expects to continue to incur significant professional costs to remain as a publicly traded company and to incur significant transaction costs in pursuit of the consummation of a Business Combination. Accordingly, the Company may not be able to obtain additional financing. If the Company is unable to raise additional capital, it may be required to take additional measures to conserve liquidity, which could include, but not necessarily be limited to, curtailing operations, suspending the pursuit of a potential transaction, and reducing overhead expenses.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In connection with the Company’s 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 the Company’s ability to continue as a going concern. Management’s plan to address this uncertainty is through the Promissory Notes – related parties and the Working Capital Loans, as defined below (see Note 6). In addition, if the Company is unable to complete a Business Combination within the Combination Period by June 5, 2024 (or up to November 5, 2024, if the Company extends the time to complete a Business Combination), the Company’s board of directors would commence a winding up, dissolution and liquidation pursuant to the terms of the Amended and Restated Certificate of Incorporation and thereby a formal dissolution of the Company. There is no assurance that the Company’s plans to consummate a Business Combination will be successful within the Combination Period. As a result, management has determined that such additional condition also raises substantial doubt about the Company’s ability to continue as a going concern. The unaudited condensed financial statements do not include any adjustments that might result from the outcome of this uncertainty.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Inflation Reduction Act of 2022</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On August 16, 2022, the Inflation Reduction Act of 2022 (the “IR Act”) was signed into federal law. The IR Act provides for, among other things, a new U.S. federal 1% excise tax on certain repurchases (including redemptions) of stock by publicly traded U.S. domestic corporations and certain U.S. domestic subsidiaries of publicly traded foreign corporations occurring on or after January 1, 2023. The excise tax is imposed on the repurchasing corporation itself, not its stockholders from which shares are repurchased. The amount of the excise tax is generally 1% of the fair market value of the shares repurchased at the time of the repurchase. However, for purposes of calculating the excise tax, repurchasing corporations are permitted to net the fair market value of certain new stock issuances against the fair market value of stock repurchases during the same taxable year. In addition, certain exceptions apply to the excise tax. The U.S. Department of the Treasury (the “Treasury”) has been given authority to provide regulations and other guidance to carry out and prevent the abuse or avoidance of the excise tax. Any redemption or other repurchase that occurs after December 31, 2022, in connection with a Business Combination, extension vote or otherwise, may be subject to the excise tax. Whether and to what extent the Company would be subject to the excise tax in connection with a Business Combination, extension vote or otherwise would depend on a number of factors, including (i) the fair market value of the redemptions and repurchases in connection with the Business Combination, extension or otherwise, (ii) the structure of a Business Combination, (iii) the nature and amount of any “PIPE” or other equity issuances issued within the same taxable year of a Business Combination and (iv) the content of regulations and other guidance from the Treasury. In addition, because the excise tax would be payable by the Company and not by the redeeming holder, the mechanics of any required payment of the excise tax have not been determined. The foregoing could cause a reduction in the cash available on hand to complete a Business Combination and in the Company’s ability to complete a Business Combination.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As a result of the <span id="xdx_90F_eus-gaap--StockRedeemedOrCalledDuringPeriodShares_c20230401__20230430__us-gaap--StatementClassOfStockAxis__us-gaap--CommonClassAMember__dei--LegalEntityAxis__custom--InflationReductionActMember_zlRIgMmpqYl8" title="Number of shares redeemed, shares"><span id="xdx_908_eus-gaap--StockRedeemedOrCalledDuringPeriodShares_c20230601__20230630__us-gaap--StatementClassOfStockAxis__us-gaap--CommonClassAMember__dei--LegalEntityAxis__custom--InflationReductionActMember_zFP29Pi9CIo" title="Number of shares redeemed, shares"><span id="xdx_90B_eus-gaap--StockRedeemedOrCalledDuringPeriodShares_c20231101__20231130__us-gaap--StatementClassOfStockAxis__us-gaap--CommonClassAMember__dei--LegalEntityAxis__custom--InflationReductionActMember_zz2VfIA1lgna" title="Number of shares redeemed, shares">6,612,452</span></span></span> shares of Class A Common Stock redeemed in April 2023, June 2023 and November 2023 as discussed in Note 9, as of March 31, 2024 and December 31, 2023, the Company accrued the 1% excise tax in the amount of $<span id="xdx_90A_eus-gaap--StockRedeemedOrCalledDuringPeriodValue_c20240101__20240331__us-gaap--StatementClassOfStockAxis__us-gaap--CommonClassAMember__dei--LegalEntityAxis__custom--InflationReductionActMember_zBv3sfCN3JD9" title="Number of shares redeemed, value"><span id="xdx_905_eus-gaap--StockRedeemedOrCalledDuringPeriodValue_c20230101__20231231__us-gaap--StatementClassOfStockAxis__us-gaap--CommonClassAMember__dei--LegalEntityAxis__custom--InflationReductionActMember_zPzwXXtnew19" title="Number of shares redeemed, value">703,866</span></span> as a reduction of equity.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
CY2021Q4 frla Transaction Costs
TransactionCosts
5822268 usd
CY2021Q4 frla Sale Of Stock Underwriting Fees
SaleOfStockUnderwritingFees
5376250 usd
CY2021Q4 frla Deferred Underwriting Fees
DeferredUnderwritingFees
3421250 usd
CY2021Q4 frla Sale Of Stock Other Offering Costs
SaleOfStockOtherOfferingCosts
446018 usd
CY2024Q1 us-gaap Cash
Cash
6981 usd
CY2024Q1 frla Working Capital
WorkingCapital
6511284 usd
CY2024Q1 us-gaap Use Of Estimates
UseOfEstimates
<p id="xdx_845_eus-gaap--UseOfEstimates_zYeE8vrhQLNe" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><span id="xdx_86C_zSbQmRfALyra">Use of Estimates</span></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The preparation of unaudited condensed consolidated 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 accompanying unaudited condensed consolidated financial statements include all adjustments management considers necessary for a fair presentation.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
CY2024Q1 us-gaap Cash Equivalents At Carrying Value
CashEquivalentsAtCarryingValue
0 usd
CY2023Q4 us-gaap Cash Equivalents At Carrying Value
CashEquivalentsAtCarryingValue
0 usd
CY2024Q1 us-gaap Assets Held In Trust
AssetsHeldInTrust
35231146 usd
CY2023Q4 us-gaap Assets Held In Trust
AssetsHeldInTrust
34851146 usd
CY2024Q1 us-gaap Dividend Income Operating
DividendIncomeOperating
0 usd
CY2023Q1 us-gaap Dividend Income Operating
DividendIncomeOperating
1095375 usd
CY2024Q1 us-gaap Concentration Risk Credit Risk
ConcentrationRiskCreditRisk
<p id="xdx_845_eus-gaap--ConcentrationRiskCreditRisk_zq6YLrOx1D18" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><span id="xdx_86E_zsDM1qtphCIf">Concentration of Credit Risk</span></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Financial instruments that potentially subject the Company to concentration of credit risk consist of a cash account in a financial institution, which, at times, may exceed the Federal Depository Insurance Corporation coverage limit of $250,000. The Company has not experienced losses on this account and management believes the Company is not exposed to significant risks on such account.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
CY2023Q4 us-gaap Unrecognized Tax Benefits
UnrecognizedTaxBenefits
0 usd
CY2023Q4 us-gaap Unrecognized Tax Benefits Income Tax Penalties And Interest Accrued
UnrecognizedTaxBenefitsIncomeTaxPenaltiesAndInterestAccrued
0 usd
CY2024Q1 us-gaap Assets Held In Trust Noncurrent
AssetsHeldInTrustNoncurrent
35231146 usd
CY2023Q4 us-gaap Assets Held In Trust Noncurrent
AssetsHeldInTrustNoncurrent
34851146 usd
CY2024Q1 us-gaap Preferred Stock Shares Authorized
PreferredStockSharesAuthorized
2000000 shares
CY2024Q1 us-gaap Preferred Stock Par Or Stated Value Per Share
PreferredStockParOrStatedValuePerShare
0.0001
CY2024Q1 us-gaap Preferred Stock Shares Issued
PreferredStockSharesIssued
0 shares
CY2024Q1 us-gaap Preferred Stock Shares Outstanding
PreferredStockSharesOutstanding
0 shares
CY2023Q4 us-gaap Preferred Stock Shares Issued
PreferredStockSharesIssued
0 shares
CY2023Q4 us-gaap Preferred Stock Shares Outstanding
PreferredStockSharesOutstanding
0 shares
CY2021Q1 us-gaap Common Stock Shares Issued
CommonStockSharesIssued
2443750 shares
CY2021Q1 us-gaap Common Stock Shares Outstanding
CommonStockSharesOutstanding
2443750 shares
CY2024Q1 us-gaap Class Of Warrant Or Right Outstanding
ClassOfWarrantOrRightOutstanding
4887500 shares
CY2023Q4 us-gaap Class Of Warrant Or Right Outstanding
ClassOfWarrantOrRightOutstanding
4887500 shares
CY2024Q1 us-gaap Warrants And Rights Outstanding
WarrantsAndRightsOutstanding
4400000 usd
CY2024Q1 us-gaap Effective Income Tax Rate Reconciliation At Federal Statutory Income Tax Rate
EffectiveIncomeTaxRateReconciliationAtFederalStatutoryIncomeTaxRate
0.000 pure
CY2023Q1 us-gaap Effective Income Tax Rate Reconciliation At Federal Statutory Income Tax Rate
EffectiveIncomeTaxRateReconciliationAtFederalStatutoryIncomeTaxRate
0.427 pure
CY2024Q1 ecd Rule10b51 Arr Adopted Flag
Rule10b51ArrAdoptedFlag
false
CY2024Q1 ecd Non Rule10b51 Arr Adopted Flag
NonRule10b51ArrAdoptedFlag
false
CY2024Q1 ecd Rule10b51 Arr Trmntd Flag
Rule10b51ArrTrmntdFlag
false
CY2024Q1 ecd Non Rule10b51 Arr Trmntd Flag
NonRule10b51ArrTrmntdFlag
false

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