OriginClear, Inc. has announced that its privately held subsidiary, Water On Demand Inc. (WODI), has decided to terminate the Business Combination Agreement with Fortune Rise Acquisition Corporation (FRLA), initially entered into on October 23, 2023. The planned business combination was meant to transition WODI into a publicly listed company. However, due to ongoing delays in the registration process, WODI and FRLA mutually agreed to end the merger.
Termination of the Business Combination Agreement
On December 12, 2024, WODI and FRLA executed a Mutual Termination Agreement, officially ending the Business Combination Agreement, effective immediately. The decision to terminate the agreement was made in accordance with the provisions outlined in Section 7.1(a) of the agreement. A key factor in the termination was the persistent delays in the registration process for the S-4 Registration Statement, which caused continuous costs and uncertainties.
The delays had a significant impact on the potential closing date of the business combination, which, according to the companies, could have been pushed into March 2025 or later. This prolonged timeline posed the risk of further financial burdens, listing challenges, and increasing market uncertainty, all of which could harm the interests of existing shareholders.
Focus on Water On Demand’s Future Growth
In a statement regarding the decision, Eckelberry, the CEO of OriginClear, expressed disappointment but also optimism about the future. “Although we are disappointed in this result, we believe this presents a great opportunity to pivot and focus capital and other resources on expanding Water On Demand operations and growing the business,” Eckelberry said. He pointed out that other companies in the water-as-a-service sector had experienced considerable success and achieved notable exits. He further emphasized that Water On Demand is well-positioned to compete within this industry, noting that while success is not guaranteed, the precedent for growth and opportunity within the sector is substantial.
Eckelberry also highlighted the pressing need to address water infrastructure issues in the U.S., which have been growing in urgency due to frequent sewer main breaks and other system failures. “With sewer main breaks and infrastructure failures happening daily, the U.S. desperately needs to address this impending issue,” he stated. “Water as a managed service is the future, and we intend to help it spread rapidly in our target markets.”
Regulation A Offering to Continue
In line with their new strategic direction, Water On Demand plans to continue its offering under Regulation A, which had been previously paused due to the pending merger. Regulation A, also known as Regulation A+, offers a pathway to raise capital from a broader pool of investors and is an alternative to traditional public offerings. WODI believes this regulatory option offers greater control over the process, allowing the company to focus on expansion without the uncertainties and costs associated with the delayed merger.
“Regulation A+ is an established pathway that we feel we can better control,” Eckelberry explained. “The Board believes that this decision preserves shareholder value and keeps us on a path to making a major difference in the water industry.”
This decision aligns with Water On Demand’s long-term strategy to grow its position in the water-as-a-service market, providing water treatment and management solutions to businesses and municipalities across the U.S. The company has already been positioning itself as a leader in this space, and the termination of the merger allows WODI to refocus efforts on scaling operations and accelerating market penetration.
Future Plans and Market Opportunity
With the water industry in critical need of innovative solutions for aging infrastructure and growing demand, WODI aims to be at the forefront of the water-as-a-service model. The company plans to provide scalable water treatment systems, offering businesses and municipalities an efficient way to manage water resources without the high upfront costs and operational burdens typically associated with water treatment facilities. The sector is expected to see strong growth, driven by increasing awareness of water sustainability and the need to address outdated infrastructure.
While no specific timeline for future expansion or initiatives has been set, the decision to refocus on capital raising through Regulation A and prioritize organic growth signals Water On Demand’s determination to establish itself as a prominent player in the water management industry.
As WODI moves forward, it remains committed to addressing critical issues surrounding water access and sustainability, with a keen eye on expanding its customer base and continuing to innovate in water management technologies.
