Company: RAIN
Filing Date: 2025-04-16
Form Type: 10-K
Source: 0001213900-25-032239
Chunk: 150

Company: Rain Enhancement Technologies Holdco, Inc.
Filing Date: 2025-04-16
Form: 10-K
Item: Item 1
Chunk 150
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 earnings in accordance with ASC 815. Because the bifurcated
embedded derivative is a forward contract, it must have an initial fair value of zero. As a result, the prepayment amount was allocated
entirely to the host contract, which represents a receivable classified as contra-equity. Any shares issued under the Forward Purchase
Agreement were accounted for and classified as issued and outstanding for accounting purposes.

Until the earlier of 1) the Maturity Date, and 2) the date that gross
proceeds from the sale of the shares by Meteora equal 100% of the “Prepayment Shortfall”, the Company recognizes a liability
for the Prepayment Shortfall at fair value, with subsequent changes in fair value recognized in the Company’s consolidated statements
of operations each reporting period until the Maturity Date. As of December 31, 2024, the prepayment shortfall liability was recorded
at maximum value.

Upon receipt of consideration related to the sale of any shares sold
by Meteora, the Company will record the receipt of funds as an increase to cash and a decrease to the “Prepayment Shortfall liability”
until the “Prepayment Shortfall Liability” is zero, and then any remaining proceeds received will reduce the receivable previously
recorded as contra-equity.

The Company incurred no transaction costs that
were directly related to issuance of the Forward Purchase Agreement.

As of December 31, 2024, the Company recorded
the $4.1 million of Prepayment amount paid at closing within additional paid-in capital and approximately $20,000 in shortfall payment
liability in the accompanying consolidated balance sheet.

Public and Private Placement Warrants

Prior to Closing, Coliseum had 5,000,000 Public
Warrants and 3,225,000 Private Placement Warrants outstanding. In connection with the Business Combination, as discussed above, an aggregate
of 3,225,000 Private Placement Warrants were converted into 806,250 shares of Holdco Class A Common Stock, and the Public Warrants were
exchanged into warrants to purchase 5,000,000 of Holdco Class A Common Stock.

F-14

Redemption 

 Prior to the Closing, certain Coliseum public
shareholders exercised their right to redeem certain of their outstanding shares for cash, resulting in the redemption of 1,063,698 Coliseum
public shares for an aggregate payment of approximately $12.1 million. After redemptions, there