Company: RAIN
Filing Date: 2025-05-16
Form Type: 424B3
Source: 0001213900-25-044498
Chunk: 19

Company: Rain Enhancement Technologies Holdco, Inc.
Filing Date: 2025-05-16
Form: 424B3
Chunk 19
---
the “Forward
Purchase Shares”) are subject to the Forward Purchase Agreement, for which Meteora was paid approximately $4.1 million 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 $10.00 per share. If Meteora sells
any of the Forward Purchase Shares, Meteora will pay to Holdco $10.00 for 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.

<div align='center'>12

RAIN ENHANCEMENT TECHNOLOGIES HOLDCO, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2025</div>

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