Company: RAIN
Filing Date: 2025-08-14
Form Type: 424B3
Source: 0001213900-25-076764
Chunk: 32

Company: Rain Enhancement Technologies Holdco, Inc.
Filing Date: 2025-08-14
Form: 424B3
Chunk 32
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Forward Purchase Agreement with Meteora

Also in connection with the Business Combination,
on December 30, 2024, we entered into a forward purchase agreement (the “Forward Purchase Agreement”) with Meteora Capital
Partners, LP and affiliated funds (“Meteora”) for an OTC equity prepaid forward transaction as described in our Annual Report
on Form 10-K filed with the SEC on April 16, 2025.

We 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”, we recognize
a liability for the Prepayment Shortfall at fair value, with subsequent changes in fair value recognized in our unaudited condensed consolidated
statements of operations each reporting period until the Maturity Date. As of June 30, 2025 and December 31, 2024, the value of the shortfall
payment liability at its maximum value of approximately $21,000 remained unchanged.

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Recent Developments

On April 1, 2025, the Board increased the size
of the Board from five to seven directors and appointed Mr. Marcus Peperzak and Mr. Robert Reardon to the Board to fill the resulting
vacancies.

In connection with their appointments to the Board,
Mr. Reardon and Mr. Peperzak each entered into Director Agreements which are the form of agreement adopted by the Board in April 2025
to govern the terms of service and compensation of our company’s non-employee directors. Additionally, effective as of April 4,
2025, we entered into Director Agreements with Lyman Dickerson,