Fortune Rise Acquisition Corporation, a shell company classified as a non-accelerated filer and emerging growth company, reported significant financial changes in its latest 10-Q filing for the quarter ending September 30, 2024. The company has not commenced any operations and continues to rely on funds from its initial public offering (IPO) and loans for financing.

As of September 30, 2024, the company held cash of $8,446, a decrease from $12,910 at the end of 2023. Total current assets plummeted to $29,237 from $119,568, while total assets increased slightly to $36,357,004 from $34,970,714, primarily due to cash held in the Trust Account, which rose to $36,327,767 from $34,851,146. Total current liabilities increased to $7,951,783 from $5,763,686, contributing to a total liabilities increase to $11,373,033 from $9,184,936. The accumulated deficit also widened to $(11,170,135) from $(9,097,067).

For the three months ended September 30, 2024, the company reported a net loss of $(96,762), a stark contrast to a net income of $40,383 for the same period in 2023. Operating costs decreased slightly to $386,714 from $393,380, while interest income from the Trust Account was $404,427, down from $487,742 in the prior year. The loss before income taxes was $(19,687), compared to a profit of $56,362 in the previous year.

For the nine months ended September 30, 2024, the net loss was $(801,807), compared to a net income of $391,662 for the same period in 2023. Cash used in operating activities improved to $(677,293) from $(2,592,619) year-over-year, while cash used in investing activities shifted dramatically to $(905,000) from a positive cash flow of $64,749,327 in 2023. Financing activities provided $1,577,829, a reversal from $(62,217,277) in the previous year.

Strategically, the company is in the process of a business combination with Water On Demand, Inc. (WODI-PWT), having entered into a Business Combination Agreement on October 24, 2023. The merger is expected to convert shares of WODI-PWT into common stock of Fortune Rise, with an aggregate equity value of $32 million. The deadline for completing this business combination has been extended to May 5, 2025, with provisions for further extensions.

The company has faced challenges, including substantial professional and transaction costs, raising doubts about its ability to continue as a going concern. If the business combination is not completed by the deadline, the company may face liquidation.