Company: RAIN
Filing Date: 2025-11-13
Form Type: 424B3
Source: 0001213900-25-110123
Chunk: 14

Company: Rain Enhancement Technologies Holdco, Inc.
Filing Date: 2025-11-13
Form: 424B3
Chunk 14
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obligation to make lease payments arising from the lease. The Company determines the present value of lease payments utilizing its incremental
borrowing rate, as the implicit rate of interest in the respective leases is not readily determinable. The Company’s incremental
borrowing rate is a hypothetical rate based on its understanding of what its credit rating would be.

The Company has elected not to recognize ROU assets
and lease liabilities for short-term leases that have a lease term of 12 months or less. The Company recognizes the lease payments associated
with its short-term land leases as an expense on a straight-line basis over the lease term. Variable lease payments associated with these
leases are recognized and presented in the same manner as for all other Company leases.

Stock Compensation

The Company’s policy is to account for stock-based
compensation expense in accordance with FASB ASC Topic 718, “Compensation-Stock Compensation” (“ASC 718”). Under
ASC 718, stock-based compensation associated with equity awards is measured at fair value upon the grant date and recognized over the
requisite service period. To the extent a stock-based award is subject to performance conditions, the amount of expense recorded in a
given period, if any, reflects an assessment of the probability of achieving such performance condition, with compensation recognized
once the event is deemed probable to occur. Forfeitures are recognized as incurred.

Income Taxes

The Company follows the asset and liability method
of accounting for income taxes under FASB ASC 740, “Income Taxes” (“ASC 740”). Deferred tax assets and liabilities
are recognized for the estimated future tax consequences attributable to differences between the unaudited condensed consolidated financial
statements carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are
measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected
to be recovered or settled.

The effect on deferred tax assets and liabilities
of a change in tax rates is recognized in income in the period that included the enactment date. Valuation allowances are established,
when necessary, to reduce deferred tax assets to the amount expected to be realized. As of September 30, 2025 and December 31, 2024, the
Company had approximately $1.8 million and $824,000, respectively, in deferred tax assets.

ASC 740 prescribes a recognition threshold
and a measurement attribute for the unaudited condensed consolidated financial statements recognition and measurement of tax positions