Company: RAIN
Filing Date: 2025-04-16
Form Type: 10-K
Source: 0001213900-25-032239
Chunk: 404

Company: Rain Enhancement Technologies Holdco, Inc.
Filing Date: 2025-04-16
Form: 10-K
Item: Item 1B
Chunk 404
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2.06 per share.

F-13

PIPE Subscriptions

In connection with the Business Combination,
Holdco entered into subscription agreements (collectively, the “PIPE Subscription Agreements”) with certain investors and
related parties to sell an aggregate of $1.35 million of shares of Holdco Class A Common Stock at $11.39 per share, of which Holdco received
$700,000 of the PIPE Investment and recorded subscription receivable of $650,000 on the consolidated balance sheet as of December 31,
2024. Such receivable was fully paid on February 6, 2025.

Forward Purchase Agreement with Meteora

On December 30, 2024, Holdco 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. An aggregate of 361,858 shares of Holdco Class A Common Stock (the “Forward Purchase
Shares”) are subject to the Forward Purchase Agreement, for which Meteora was paid approximately $4.1 million at Closing (the “Prepayment”)
and the Company retained approximately $20,000 (the “Prepayment Shortfall”). The Forward Purchase Agreement matures on the
date of the effectiveness of a certain registration statement filed by Holdco with the Securities and Exchange Commission following the
Closing Date (the “Maturity Date”). Meteora may sell the Forward Purchase shares at any time following the Closing Date until
the Maturity Date at a price not less than $10.00 per share. If Meteora sells any of the Forward Purchase Shares, Meteora will pay to
Holdco $10.00 for each share sold, less the Prepayment Shortfall. On Maturity Date, any Forward Purchase Shares that have not been sold
by Meteora will be returned to the Company for no consideration, provided that if the proceeds of the shares sold by Meteora prior to
the Maturity Date is less than the Prepayment Shortfall, then Holdco will pay cash to Meteora in an amount equal to such difference.

The Company’s management 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