Company: RAIN
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001213900-25-044438
Chunk: 78

Company: Rain Enhancement Technologies Holdco, Inc.
Filing Date: 2025-05-15
Form: 10-Q
Item: Part I, Item 8
Chunk 78
---
 2024, Holdco entered into subscription agreements (collectively, the “PIPE Subscription Agreements”) with certain
investors and related parties to sell an aggregate of 118,558 shares of Holdco Class A Common Stock at $11.39 per share, for a total
of $1.35 million. Of this, Holdco received $700,000 of the PIPE Investment and recorded a subscription receivable of $650,000 on
the consolidated balance sheet as of December 31, 2024. The subscription receivable was collected in full by February 6, 2025.

Forward Purchase Agreement with Meteora

On December 30, 2024, Holdco 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. An aggregate of 361,858 shares of Holdco Class A Common Stock (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