Company: RAIN
Filing Date: 2025-11-13
Form Type: 10-Q
Source: 0001213900-25-110062
Chunk: 26

Company: Rain Enhancement Technologies Holdco, Inc.
Filing Date: 2025-11-13
Form: 10-Q
Item: Part I, Item 1
Chunk 26
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11.50 per share and exercisable
on a cashless basis under certain circumstances specified in the warrant agreement.

The Warrants are derivative warrant liabilities
in accordance with ASC 815. Accordingly, the Company recognizes the warrant instruments as liabilities at fair value and adjusts the instruments
to fair value at each reporting period. The warrant liabilities are subject to re-measurement at each balance sheet date. With each such
re-measurement, the warrant liabilities are adjusted to current fair value, with the change in fair value recognized in the Company’s
statements of operations. The Company will reassess the classification at each balance sheet date. If the classification changes as a
result of events during the period, the warrants will be reclassified as of the date of the event that causes the reclassification. Refer
to Note 7 for additional information on the fair value measurements of these warrants.

15

RAIN ENHANCEMENT TECHNOLOGIES HOLDCO, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS

SEPTEMBER 30, 2025

Note 8 — Fair Value Measurements

Financial liabilities measured at fair value during
the periods on a recurring basis consisted of the following as of September 30, 2025 and December 31, 2024:

September 30, 2025

    Fair Value Hierarchy  

    Level 1  
    Level 2  
    Level 3  
    Total 
  
    Financial liabilities: 

    Warrant liability – Public Warrants 
    $-  
    $825,000  
    $-  
    $825,000 
  
    Shortfall payment liability 
     -  
     -  
     20,636  
     20,636 
  
    Total financial liabilities 
    $-  
    $825,000  
    $20,636  
    $845,636 

December 31, 2024

    Fair Value Hierarchy  

    Level 1  
    Level 2  
    Level 3  
    Total 
  
    Financial liabilities: 

    Warrant liability – Public Warrants 
    $-  
    $350,000  
    $-  
    $350,000 
  
    Shortfall payment liability 
     -  
     -  
     20,636  
     20,