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

Company: Rain Enhancement Technologies Holdco, Inc.
Filing Date: 2025-05-15
Form: 10-Q
Item: Part I, Item 1
Chunk 15
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. Deferred tax assets and liabilities are
measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected
to be recovered or settled.

The effect on deferred tax assets and liabilities
of a change in tax rates is recognized in income in the period that included the enactment date. Valuation allowances are established,
when necessary, to reduce deferred tax assets to the amount expected to be realized. As of March 31, 2025 and December 31, 2024, the
Company had approximately $1.1 million and $824,000, respectively, in deferred tax assets.

ASC 740 prescribes a recognition threshold
and a measurement attribute for the unaudited condensed consolidated financial statements recognition and measurement of tax positions
taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be
sustained upon examination by taxing authorities. There were no unrecognized tax benefits as of March 31, 2025 and December 31, 2024.
The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. No amounts were accrued
for the payment of interest and penalties as of March 31, 2025 and December 31, 2024. The Company is currently not aware of any issues
under review that could result in significant payments, accruals or material deviation from its position. The Company is subject to income
tax examinations by major tax authorities since inception.

Net Loss Per Common Share

Basic net loss per share of common stock is computed by dividing net loss by the weighted average number of shares of common stock outstanding
during the periods. Diluted net loss per share is computed by giving effect to all potential shares of common stock, including warrants,
and stock options, to the extent dilutive. Stock options and warrants with exercise prices greater than the average market price of the
Company’s common stock for the period are excluded from the calculation of diluted net income (loss) per share as their inclusion
would be anti-dilutive. For the three months ended March 31, 2025 and 2024, due to a net loss, all potential shares of common stock were
not included in the calculation of dilutive net loss per share as their effect would have been anti-dilutive. As a result, diluted net
loss per share is the same as basic net loss per share for the periods presented.

10

RAIN ENH