Company: RAIN
Filing Date: 2025-11-13
Form Type: 10-Q
Source: 0001213900-25-110062
Chunk: 134

Company: Rain Enhancement Technologies Holdco, Inc.
Filing Date: 2025-11-13
Form: 10-Q
Item: Part I, Item 2
Chunk 134
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 reporting periods. Our estimates are based on our historical experience and on various other factors that it believes are reasonable
under the circumstances. The results of these estimates form the basis for making judgments about the carrying value of assets and liabilities
that are not readily apparent from other sources. Actual results may differ from these estimates.

While our significant accounting policies are
described in the notes to our unaudited condensed consolidated financial statements included elsewhere in this Annual Report, our management
believes there was no critical accounting estimates identified during the three and nine months ended September 30, 2025 and 2024.

Derivative Financial Instruments

We do not use derivative instruments to hedge
exposures to cash flow, market, or foreign currency risks. We evaluate all of our 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 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 our own ordinary shares, among other conditions for equity classification.

Equipment

We capitalize our cost to build its rainfall ionization
equipment (the “Equipment”), including materials and allocated labor costs. In July 2023, we finished building the Equipment
and transferred its capitalized cost from Construction in-process to Equipment. As soon as the Equipment is placed in service upon agreement
with the customers, we will begin to depreciate those assets on a straight- line basis over the estimated useful lives of the assets,
generally 10 to 15 years. At the time of retirement or other disposition of the Equipment, the cost and accumulated depreciation
will be removed from the accounts and the resulting gain or loss, if any, will be reflected in operations. As of September 30, 2025, no
Equipment has been placed in service.

Intangible Assets

Recognized intangible assets have finite lives
and include acquired licenses for market-ready technology and designs of weather modification and rainfall ionization equipment. Intangible
assets acquired separately are measured on initial recognition at cost. Following