Company: RAIN
Filing Date: 2025-04-16
Form Type: 10-K
Source: 0001213900-25-032239
Chunk: 1196

Company: Rain Enhancement Technologies Holdco, Inc.
Filing Date: 2025-04-16
Form: 10-K
Item: Item 7A
Chunk 1196
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 grant using a hybrid method of probability weighted expected return (“PWERM”), where the equity value was allocated
in one or more of the scenarios using a Black-Scholes option pricing model.

The assumptions used in the Company’s model
represent management’s best estimates. These estimates are complex, involve a number of variables, uncertainties and assumptions
and the application of management’s judgment, so that they are inherently subjective. If factors change and different assumptions
are used, the stock-based compensation expense could be materially different in the future.

These assumptions are estimated as follows:

●Estimated value of common stock: The Company allocated
equity value in one or more of the scenarios using a Black-Scholes option pricing model to derive the estimated value of common stock

●Risk-free interest rate: The Company used the implied yield available on U.S. Treasury zero-coupon
issues with an equivalent remaining term of the options for each option group.

●Expected term: The expected
term represents the period that the stock-based awards are expected to be outstanding. Because of the limitations on the sale or transfer
or the Company’s common stock as a privately held company as of grant date, the Company does not believe its historical exercise
pattern is indicative of the pattern it will experience as a publicly traded company. The Company estimated that the options issued to
its holders of Founder Shares will be held for the full ten-year term.

●Volatility:  The Company determined the price volatility factor based on the historical volatilities
of selected peer group as the Company did not have a sufficient trading history for its common stock.

●Dividend yield: The expected dividend assumption is based on the Company’s current expectations
about our anticipated dividend policy. The Company currently does not expect to issue any dividends.

F-19

The following assumptions were used in determining the fair value of
the options granted during the year ended December 31, 2024:

  Risk free interest rate   4.17%  Expected term (in years)   10   Expected volatility   45.0%  Dividend yield   0.0%  Estimated underlying stock price  $2,897.12   Fair value of options (per share)  $1,851.67  

Note 9 — Income Taxes

The Company’s income tax provision consists of the following:

    December 31, 

    2024  
    2023 
  
    Current