Company: RAIN
Filing Date: 2025-04-16
Form Type: 10-K
Source: 0001213900-25-032239
Chunk: 703

Company: Rain Enhancement Technologies Holdco, Inc.
Filing Date: 2025-04-16
Form: 10-K
Item: Item 3
Chunk 703
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 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 measurement is categorized in its
entirety in the fair value hierarchy based on the lowest level input that is significant to the fair value measurement.

Derivative Financial Instruments

The Company does not use derivative instruments to hedge exposures
to cash flow, market, or foreign currency risks. The Company evaluates all of its financial instruments to determine if such instruments
are derivatives or contain features that qualify as embedded derivatives, pursuant to FASB ASC Topic 480 “Distinguishing Liabilities
from Equity” (“ASC 480”) and FASB ASC Topic 815, “Derivatives and Hedging” (“ASC 815”). The
classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed
at the end of each reporting period. The assessment considers whether the financial instruments are freestanding financial instruments
pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the financial instruments meet all of the requirements
for equity classification under ASC 815, including whether the financial instruments are indexed to the Company’s own ordinary shares,
among other conditions for equity classification.

Foreign Currency Translation and Transactions

The U.S. dollar is the Company’s functional
currency. Transactions denominated in currency other than the Company’s functional currency are recorded upon initial recognition
at the exchange rate on the date of the transaction. After initial recognition, monetary assets and liabilities denominated in foreign
currency are remeasured at each reporting date into the foreign currency at the exchange rate on that date. Exchange rate differences,
other than those accounted for as hedging transactions, are recognized as foreign currency transaction gain or loss included in the Company’s
statements of operations within the general and administrative expenses.

During the years ended December 31, 2024 and 2023, the only foreign
currency transaction the Company incurred was the amount paid to its Senior Technology Advisor