Company: RAIN
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001213900-25-044438
Chunk: 98

Company: Rain Enhancement Technologies Holdco, Inc.
Filing Date: 2025-05-15
Form: 10-Q
Item: Part I, Item 8
Chunk 98
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 study that evaluates the impact of our devices and related technology on rainfall enhancement in the initial U.S. locations
where our systems have been installed.

Liquidity and Capital Resources

As of March 31, 2025, we had approximately $273,000
in cash and had a working capital deficit of approximately $6.6 million. We expect to continue to incur expenses and begin to generate
revenues as we continue to grow and scale our business.

In connection with the Business Combination, on
December 30, 2024, RHY, an affiliate of Harry You, our Chairman, entered into the Loan Agreement and agreed to issue a LOC to Holdco for
up to $7 million. In addition, Mr. You and his affiliate also agreed to rollover all outstanding amount that Coliseum and RWT owed to
them prior to Closing under the LOC. The Rollover amount does not reduce the $7 million funding available to the Company under the LOC.
The Loan has an interest rate of 5%, and interest will be due and payable in arrears quarterly. As of March 31, 2025, we had drawn approximately
$737,000 from the LOC, bringing the total outstanding balance under the LOC to approximately $3.8 million (including the Rollover). Subsequent
to March 31, 2025, we drew an additional amount of approximately $554,000 under the LOC.

Our management estimates approximately $6.3 million
and approximately $62 million in expenses for our one-year and five-year business plan. These funds are expected to be used for producing
units, integrating and rolling out software for the rain enhancement platform, expanding water services through the ‘land and expand’
client acquisition model, and potentially acquiring other weather technologies. Since the base technology and products are developed
and proven, the need for additional capital will primarily be driven by growth in customer acquisition and projects. Our management believes
that the budget can be scaled in line with the funds actually received, enabling RWT to expand its client base, deliver equipment and
technology to newly acquired clients, and develop new products for the RWT platform.

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We expect to fund our future development and
exploration activities using the available funding under the LOC and future operating cash flow. The timing of most capital expenditures
is largely discretionary. We have a significant degree of flexibility to adjust the level of our capital expenditures as circumstances
warrant. If our plans or assumptions change, we