Company: RAIN
Filing Date: 2025-01-31
Form Type: S-1
Source: 0001213900-25-008536
Chunk: 142

Company: Rain Enhancement Technologies Holdco, Inc.
Filing Date: 2025-01-31
Form: S-1
Chunk 142
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, respectively.

Deferred Consulting Fee

On November 22, 2023, in connection with the November 2023 extension, we engaged Meteora, who also holds certain of our Public Shares, to provide us with consulting, advisory and related services. We agreed to pay Meteora $250,000 upfront in cash and a Deferred Consulting Fee at the Closing in cash equal to the product of (i) 100,000 and (ii) the Redemption Price. In order for Meteora to receive the Deferred Consulting Fee in the form of cash, Meteora must not redeem 100,000 Public Shares at the time of the Business Combination redemption deadline. If Meteora does not hold 100,000 Public Shares through the redemption deadline for the Business Combination, Meteora will receive 100,000 Founder Shares at the time of Closing in lieu of the cash payment of the Deferred Consulting Fee.

The obligation, which may be share-settled, is an equity-linked financial instrument that is required to be recognized as a liability at fair value, with changes in fair value recognized in the Company’s statements of operations. We recognized the initial fair value of the Deferred Consulting Fee as a liability, upon execution of the consulting agreement in November 2023. As of September 30, 2024 and December 31, 2023, the fair value of the Deferred Consulting Fee was $35,904 and $31,233, respectively. Loss resulted from change in fair value of such instrument of $6,069 and $4,671 was recognized in the Company’s statements of operations for the three and nine months ended September 30, 2024, respectively.

Critical Accounting Policies and Estimates

The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and revenues and expenses during the periods reported. Actual results could materially differ from those estimates. We have identified the following accounting policies as those that require significant judgments, assumptions and estimates and that have a significant impact on our financial condition and results of operations. These policies are considered critical because they may result in fluctuations in our reported results from period to period due to the significant judgments, estimates and assumptions about highly complex and inherently uncertain matters and because the use of different judgments, assumptions or estimates could have a material impact on our financial condition or results of operations. We evaluate