Company: RAIN
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001213900-25-076727
Chunk: 11

Company: Rain Enhancement Technologies Holdco, Inc.
Filing Date: 2025-08-14
Form: 10-Q
Item: Part I, Item 1
Chunk 11
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 and assumptions that affect
the reported amounts of assets, liabilities and expenses and disclosure of contingent assets and liabilities at the date of the unaudited
condensed consolidated financial statements. Actual results could differ from those estimates.

Cash and Cash Equivalents

The Company considers all highly liquid investments
with original maturities at the date of purchase of three and six months or less to be cash equivalents. Cash and cash equivalents are
stated at fair value and may include money market funds, U.S. Treasury and U.S. government-sponsored agency securities, corporate debt,
commercial paper, and certificates of deposit. The Company had no cash equivalents as of June 30, 2025 and December 31, 2024.

Financial Instruments

The fair value of the Company’s assets and
liabilities, which qualify as financial instruments under the FASB ASC Topic 820, “Fair Value Measurements and Disclosures,”
approximates the carrying amounts represented in the accompanying consolidated balance sheets, either because of the short-term nature
of the instruments or because the instrument is recognized at fair value.

7

RAIN ENHANCEMENT TECHNOLOGIES HOLDCO, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS

JUNE 30, 2025

Fair Value Measurements

Fair value is defined as the price that would
be received for sale of an asset or paid for transfer of a liability in an orderly transaction between market participants at the measurement
date. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy gives
the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and
the lowest priority to unobservable inputs (Level 3 measurements). These tiers include:

●Level
1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets;

●Level
2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices
for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and

●Level
3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions,
such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

In some circumstances, the inputs used to measure
fair