Company: RAIN
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001213900-25-076727
Chunk: 116

Company: Rain Enhancement Technologies Holdco, Inc.
Filing Date: 2025-08-14
Form: 10-Q
Item: Part I, Item 2
Chunk 116
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ize rainfall generation technology and successfully execute our sales strategy.

Business Combination Updates

On the Closing Date, Coliseum, RWT, Holdco, Merger
Sub 1, and Merger Sub 2 consummated the Business Combination pursuant to the terms of the Business Combination Agreement. Following the
Closing, Holdco holds all of the equity interests of RWT and Merger Sub 1.

The Business Combination was treated as a reverse
recapitalization in accordance with U.S. GAAP. Under this method of accounting, Coliseum was treated as the “acquired” company
for financial reporting purposes. Accordingly, for accounting purposes, the Business Combination was treated as the equivalent of RWT
issuing stock for the net assets of Coliseum, accompanied by a recapitalization. The net assets of Coliseum were stated at historical
cost, with no goodwill or other intangible assets recorded.

Our common stock and warrants commenced trading
on the Nasdaq Stock Market LLC under the symbols “RAIN” and “RAINW”, respectively, on January 2, 2025.

PIPE Subscriptions Receivable

On February 6, 2025, we received $650,000 of
the PIPE investment subscription receivable jn connection with the Business Combination as described in our Annual Report on Form 10-K
filed with the SEC on April 16, 2025.

Forward Purchase Agreement with Meteora

Also in connection with the Business Combination,
on December 30, 2024, we 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 as described in our Annual Report
on Form 10-K filed with the SEC on April 16, 2025.

We 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