Company: RAIN
Filing Date: 2025-04-16
Form Type: 10-K
Source: 0001213900-25-032239
Chunk: 903

Company: Rain Enhancement Technologies Holdco, Inc.
Filing Date: 2025-04-16
Form: 10-K
Item: Item 5
Chunk 903
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Use of Estimates

The preparation of the consolidated financial
statements in conformity with U.S. GAAP requires the Company’s management to make estimates and assumptions that affect the reported
amounts of assets, liabilities and expenses and disclosure of contingent assets and liabilities at the date of the 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 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 December 31, 2024 and 2023.

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.

F-9

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 value might
be categorized within different levels of the fair value hierarchy. In those instances, the fair value