Company: RAIN
Filing Date: 2025-04-18
Form Type: POS AM
Source: 0001213900-25-033116
Chunk: 200

Company: Rain Enhancement Technologies Holdco, Inc.
Filing Date: 2025-04-18
Form: POS AM
Chunk 200
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the “Forward Purchase Shares”) are subject to the Forward Purchase Agreement, for which Meteora was paid approximately $ 4.1million at Closing (the “Prepayment”) and the Company retained approximately $ 20,000(the “Prepayment Shortfall”). The Forward Purchase Agreement matures on the date of the effectiveness of a certain registration statement filed by Holdco with the Securities and Exchange Commission following the Closing Date (the “Maturity Date”). Meteora may sell the Forward Purchase shares at any time following the Closing Date until the Maturity Date at a price not less than $ 10.00per share. If Meteora sells any of the Forward Purchase Shares, Meteora will pay to Holdco $ 10.00for each share sold, less the Prepayment Shortfall. On Maturity Date, any Forward Purchase Shares that have not been sold by Meteora will be returned to the Company for no consideration, provided that if the proceeds of the shares sold by Meteora prior to the Maturity Date is less than the Prepayment Shortfall, then Holdco will pay cash to Meteora in an amount equal to such difference. The Company’s management determined that the prepaid Forward Purchase Agreement is a hybrid instrument with an embedded derivative (forward purchase contract), which meets the definition of a derivative and does not meet the criteria for the derivative accounting scope exception in ASC 815. As such, the embedded derivative is recognized initially and subsequently at fair value, with changes in fair value reported in earnings in accordance with ASC 815. Because the bifurcated embedded derivative is a forward contract, it must have an initial fair value of zero. As a result, the prepayment amount was allocated entirely to the host contract, which represents a receivable classified as contra-equity. Any shares issued under the Forward Purchase Agreement were accounted for and classified as issued and outstanding for accounting purposes. Until the earlier of 1) the Maturity Date, and 2) the date that gross proceeds from the sale of the shares by Meteora equal 100% of the “Prepayment Shortfall”, the Company recognizes a liability for the Prepayment Shortfall at fair value, with subsequent changes in fair value recognized in the Company’s consolidated statements of operations each reporting period until the Maturity Date. As of December 31, 2024, the prepayment shortfall liability was recorded at maximum value. Upon receipt of consideration related to the sale of any shares sold by Meteora, the Company will record the receipt of