UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2025

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 001-42460

RAIN ENHANCEMENT TECHNOLOGIES HOLDCO, INC.

(Exact name of registrant as specified in its charter)

Massachusetts		99-3527155
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)

4851 Tamiami Trail N, Suite 200

Naples, FL

34103

(Address of Principal Executive Offices)

(Zip Code)

339-222-6714

Registrant’s telephone number, including area code

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A common stock, par value $0.0001 per share	RAIN	The Nasdaq Stock Market LLC

Redeemable warrants, each whole warrant exercisable for one share of Class A common stock at an exercise price of $11.50	RAINW	The Nasdaq Stock Market LLC

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of November 13, 2025, there were 8,131,081 shares of the registrant’s Class A common stock, par value $0.0001 per share (including 602,320 restricted stock awards), and 57,752 shares of the registrant’s Class B common stock, par value $0.0001 per share, outstanding.

RAIN ENHANCEMENT TECHNOLOGIES HOLDCO, INC.

Table of Contents

		Page No.
PART I. FINANCIAL INFORMATION
Item 1.	Unaudited Condensed Consolidated Financial Statements	1
	Condensed Consolidated Balance Sheets as of September 30, 2025 (unaudited) and December 31, 2024	1
	Unaudited Condensed Consolidated Statements of Operations for the Three and Nine months Ended September 30, 2025 and 2024	2
	Unaudited Condensed Consolidated Statements of Changes in Shareholders’ Deficit for the Three and Nine months Ended September 30, 2025 and 2024	3
	Unaudited Condensed Consolidated Statements of Cash Flows for the Nine months Ended September 30, 2025 and 2024	4
	Notes to Unaudited Condensed Consolidated Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	27
Item 4.	Disclosure Controls and Procedures	27
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	28
Item 1A.	Risk Factors	28
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	29
Item 3.	Defaults Upon Senior Securities	29
Item 4.	Mine Safety Disclosures	29
Item 5.	Other Information	29
Item 6.	Exhibits	29
SIGNATURES		30

PART I. FINANCIAL INFORMATION

Item 1. Unaudited Condensed Consolidated Financial Statements

RAIN ENHANCEMENT TECHNOLOGIES HOLDCO, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

	September 30, 2025			December 31, 2024
	(unaudited)
Assets:
Current assets:
Cash	$	236,735		$	32,604
Prepaid expenses		349,080			12,335
Deferred financing costs		-			75,000
Subscription receivable		-			650,000
Total current assets		585,815			769,939
Equipment		414,034			414,034
Construction in-process equipment		858,492			-
Intangible assets, net		83,670			92,427
Total Assets	$	1,942,011		$	1,276,400

Liabilities and Stockholders’ Deficit:
Current liabilities:
Accounts payable	$	2,284,222		$	1,946,931
Accrued expenses		611,753			700,000
Accrued expenses - related party		415,714			-
Line of credit - related party		6,598,673			3,110,149
Note payable from related parties		400,000			400,000
Accrued interest - related parties		361,590			38,192
Shortfall payment liability		20,636			20,636
Total current liabilities		10,692,588			6,215,908
Derivative warrant liabilities		825,000			350,000
Total liabilities		11,517,588			6,565,908

Commitments and Contingencies

Stockholders’ Deficit:
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; no shares issued and outstanding as of September 30, 2025 and December 31, 2024		-			-
Class A common stock, $0.0001 par value; 30,000,000 shares authorized; 8,131,081 and 7,528,761 shares (including 602,320 and 0 restricted stock awards as of September 30, 2025 and December 31, 2024, respectively) issued and outstanding as of September 30, 2025 and December 31, 2024, respectively		813			753
Class B common stock, $0.0001 par value; 1,000,000 shares authorized; 57,752 shares issued and outstanding as of September 30, 2025 and December 31, 2024		6			6
Additional paid-in capital		1,313,605			964,335
Accumulated deficit		(10,890,001	)		(6,254,602	)
Total stockholders’ deficit		(9,575,577	)		(5,289,508	)
Total Liabilities and Stockholders’ Deficit	$	1,942,011		$	1,276,400

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.

RAIN ENHANCEMENT TECHNOLOGIES HOLDCO, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

	For the three months ended September 30,						For the nine months ended September 30,
	2025			2024			2025			2024
Installation costs	$	55,594		$	-		$	74,284		$	-
General and administrative expenses		1,539,719			2,997,306			3,930,914			3,332,582
Research and development expenses		46,243			-			47,727			-
Corporate tax expenses		-			-			912			225
Amortization expenses		2,919			2,919			8,757			8,757
Loss from operations		(1,644,475	)		(3,000,225	)		(4,062,594	)		(3,341,564	)

Other income (expenses):
Change in fair value of warrant liability		(312,500	)		-			(475,000	)		-
Gain from settlement with vendor		-			-			225,517			-
Interest expense		(243,225	)		(7,479	)		(323,398	)		(22,274	)
Interest income earned from operating cash		16			58			76			64
Total other expenses		(555,709	)		(7,421	)		(572,805	)		(22,210	)

Net loss	$	(2,200,184	)	$	(3,007,646	)	$	(4,635,399	)	$	(3,363,774	)

Weighted average Class A common stock outstanding, basic and diluted		7,528,761			636,488			7,528,761			1,816,340
Basic and diluted net loss per Class A common stock	$	(0.29	)	$	(4.67	)	$	(0.61	)	$	(1.84	)

Weighted average Class B common stock outstanding, basic and diluted		57,752			8,009			57,752			8,009
Basic and diluted net loss per Class B common stock	$	(0.29	)	$	(4.67	)	$	(0.61	)	$	(1.84	)

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.

RAIN ENHANCEMENT TECHNOLOGIES HOLDCO, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ DEFICIT

	For the three and nine months ended September 30, 2025
	Class A Common Stock				Class B Common Stock				Additional Paid-In		Accumulated			Total Stockholders’
	Shares		Amount		Shares		Amount		Capital		Deficit			Deficit
Balance - December 31, 2024		7,528,761	$	753		57,752	$	6	$	964,335	$	(6,254,602	)	$	(5,289,508	)
Net loss		-		-		-		-		-		(1,482,444	)		(1,482,444	)
Balance - March 31, 2025 (unaudited)		7,528,761		753		57,752		6		964,335		(7,737,046	)		(6,771,952	)
Net loss		-		-		-		-		-		(952,771	)		(952,771	)
Balance - June 30, 2025 (unaudited)		7,528,761		753		57,752		6		964,335		(8,689,817	)		(7,724,723	)
Issuance of restricted stock awards to management		602,320		60		-		-		349,270		-			349,330
Net loss		-		-		-		-		-		(2,200,184	)		(2,200,184	)
Balance - September 30, 2025 (unaudited)		8,131,081	$	813		57,752	$	6	$	1,313,605		(10,890,001	)	$	(9,575,577	)

	For the three and nine months ended September 30, 2024
	Class A Common Stock				Class B Common Stock				Subscription			Additional Paid-In			Accumulated			Total Stockholders’
	Shares		Amount		Shares		Amount		Receivable			Capital			Deficit			Deficit
Balance - December 31, 2023		-	$	-		-	$	-	$	-		$	1,083,966		$	(1,720,841	)	$	(636,875	)
Retroactive application of Business Combination (Note 1)		1,766,554		177		-		-		-			(177	)		-			-
Balance - December 31, 2023, recasted		1,766,554		177		-		-		-			1,083,789			(1,720,841	)		(636,875	)
Net loss		-		-		-		-		-			-			(31,340	)		(31,340	)
Balance - March 31, 2024 (unaudited)		1,766,554		177		-		-		-			1,083,789			(1,752,181	)		(668,215	)
Net loss		-		-		-		-		-			-			(324,788	)		(324,788	)
Balance - June 30, 2024 (unaudited)		1,766,554	$	177		-	$	-	$	-		$	1,083,789		$	(2,076,969	)	$	(993,003	)
Issuance of RET’s Class A common stock		358,985		36		-		-		(400,000	)		739,964			-			340,000
Issuance of RET’s Class B common stock		-		-		57,752		6		(50,000	)		124,994			-			75,000
Stock based compensation expense		-		-		-		-		-			2,777,507			-			2,777,507
Net loss		-		-		-		-		-			-			(3,007,646	)		(3,007,646	)
Balance - September 30, 2024 (unaudited)		2,125,539	$	213		57,752	$	6	$	(450,000	)	$	4,726,254		$	(5,084,615	)	$	(808,142	)

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.

RAIN ENHANCEMENT TECHNOLOGIES HOLDCO, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

	For the nine months ended September 30,
	2025			2024

Cash Flows from Operating Activities:
Net loss	$	(4,635,399	)	$	(3,363,774	)
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization expense		8,757			8,757
General and administrative expenses advanced by related parties		1,451,589			195,663
Stock based compensation expense		349,330			2,777,507
Change in fair value of warrant liability		475,000			-
Gain from settlement with vendor		(225,517	)		-
Changes in operating assets and liabilities:
Prepaid expenses		(336,745	)		(2,395	)
Deferred financing costs		75,000			-
Accounts payable		562,808			206,182
Accrued expenses		(88,247	)		(10,650	)
Accrued expenses - related party		415,714			-
Accrued interest - related parties		323,398			22,274
Tax payable		-			(225	)
Net cash used in operating activities		(1,624,312	)		(166,661	)

Cash Flows from Investing Activities:
Capital expenditures for equipment		(858,492	)		(45,827	)
Net cash used in investing activities		(858,492	)		(45,827	)

Cash Flows from Financing Activities:
Proceeds from draw down under line of credit		2,036,935			-
Proceeds from payment of subscription receivable		650,000			-
Proceeds from issuance of RET’s Class A common stock		-			340,000
Proceeds from issuance of RET’s Class B common stock		-			75,000
Net cash provided by financing activities		2,686,935			415,000

Net change in cash		204,131			202,512

Cash - beginning of the period		32,604			37,345
Cash - end of the period	$	236,735		$	239,857

Supplemental disclosure of noncash activities:
Subscription receivable	$	-		$	450,000

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements

RAIN ENHANCEMENT TECHNOLOGIES HOLDCO, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2025

Note 1 — Description of Organization and Business Operations

Description of Business

Rain Enhancement Technologies Holdco, Inc. (the “Company” or “Holdco”) was formed in Massachusetts to combine unique expertise, machine learning, and existing tools and ionization units to develop, improve and commercialize ionization rainfall generation technology. The Company plans to develop improvements on existing rainfall generation technologies by leveraging robust measurement tools, including software monitoring technology, machine learning, rain gauges, and weather stations.

Business Combination Agreement

On December 31, 2024 (the “Closing Date”), Holdco, Coliseum Acquisition Corp, a Cayman Islands exempted company (“Coliseum”), Rain Enhancement Technologies, Inc., a Massachusetts corporation (“RWT”), Rainwater Merger Sub 1, Inc., a Cayman Islands exempted company and wholly-owned subsidiary of Holdco (“Merger Sub 1”), and Rainwater Merger Sub 2A, Inc., a Massachusetts corporation and wholly-owned subsidiary of Coliseum (“Merger Sub 2”) consummated the previously announced business combination (the “Business Combination”) pursuant to the terms of the Business Combination Agreement, dated as of June 25, 2024 (as amended on August 22, 2024, the “Business Combination Agreement”).

Pursuant to the Business Combination Agreement, on the Closing Date, (i) Coliseum merged with and into Merger Sub 1, with Merger Sub 1 as the surviving company of such merger (the “SPAC Merger”) and (ii) following the SPAC Merger and as a part of the same overall transaction, Merger Sub 2 merged with and into RWT, with RWT as the surviving entity of such merger (the “Company Merger” and, together with the SPAC Merger, the “Mergers”), and, after giving effect to such Mergers, each of Merger Sub 1 and RWT became a wholly owned subsidiary of Holdco (the time that the SPAC Merger became effective being referred to as the “SPAC Merger Effective Time,” the time that the Company Merger became effective being referred to as the “Company Merger Effective Time,” and the time after which both Mergers became effective being referred to as the “Closing”). Following the Closing, Holdco holds all of the equity interests of RWT and Merger Sub 1.

The Business Combination was treated as a reverse recapitalization in accordance with U.S. GAAP. Under this method of accounting, Coliseum was treated as the “acquired” company for financial reporting purposes. Accordingly, for accounting purposes, the Business Combination was treated as the equivalent of RWT issuing stock for the net assets of Coliseum, accompanied by a recapitalization. The net assets of Coliseum were stated at historical cost, with no goodwill or other intangible assets recorded.

The Company’s common stock and warrants commenced trading on the Nasdaq Stock Market LLC under the symbols “RAIN” and “RAINW”, respectively, on January 2, 2025. Refer to Note 3, Business Combination in our Annual Report on Form 10-K filed with the SEC on April 16, 2025, for additional details.

Recent Developments

Nasdaq Compliance Notices

On February 18, 2025, the Company received written notice (the “MVLS Notice”) from the Listing Qualifications Staff (“Staff”) of the Nasdaq Stock Market LLC (“Nasdaq”) which notified the Company that, for the 30 consecutive business days ended February 14, 2025, the Company’s market value of listed securities (“MVLS”) closed below the $50,000,000 MVLS threshold required for continued listing on the Nasdaq Global Market under Nasdaq Listing Rule 5450(b)(2)(A) (the “MVLS Rule”). Also on February 18, 2025, the Company received written notice (the “MVPHS Notice”) from the Staff that for the 30 consecutive business days ended February 14, 2025, the Company’s market value of publicly held securities (“MVPHS”) closed below the $15,000,000 MVPHS threshold required for continued listing on Nasdaq under Nasdaq Listing Rule 5450(b)(2)C) (the “MVPHS Rule”). In accordance with Nasdaq Listing Rule 5810(c)(3)(D), the Company had 180 calendar days, or until August 18, 2025, to regain compliance with each of the MVLS Rule and the MVPHS Rule.

RAIN ENHANCEMENT TECHNOLOGIES HOLDCO, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2025

On August 19, 2025, the Company received a notice (the “Notice”) from the Staff indicating that the Company had not regained compliance with either the MVLS Rule or the MVPHS Rule and, unless the Company timely requests a hearing before the Nasdaq Hearings Panel (the “Panel”), the Company’s securities would be subject to suspension and delisting from The Nasdaq Global Market at the opening of business on August 28, 2025.

The Company submitted its timely request for a hearing before the Panel on August 21, 2025, to request additional time to regain compliance with the MVLS Rule and the MVPHS Rule. As part of the compliance plan submitted to the Panel, the Company requested a transfer of its listing from the Nasdaq Global Market to the Nasdaq Capital Market. A hearing before the Panel was held on September 18, 2025 and on October 14, 2025, the Panel granted the Company’s request for continued listing on Nasdaq, subject to the Company’s application to transfer its listing from the Nasdaq Global Market to the Nasdaq Capital Market on or before October 20, 2025, and its demonstration of compliance with all listing rules of the Nasdaq Capital Market on or before October 31, 2025.

The Company applied for listing on the Nasdaq Capital Market and demonstrated compliance with all of the listing rules of the Nasdaq Capital Market, and Nasdaq approved the listing of the Company’s securities on the Nasdaq Capital Market. In connection with the approval of the Company’s application, the listing qualifications staff of Nasdaq indicated that the Company’s previously disclosed deficiencies are cured.

The Company’s Class A common stock and warrants will continue to trade under the symbol “RAIN” and “RAINW”, respectively. This transfer does not affect the Company’s business operations, which continue as normal.

Going Concern Consideration

In connection with the Company’s assessment of going concern considerations in accordance with the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Classification (“ASC”) Subtopic 205-40, “Presentation of Financial Statements - Going Concern,” the Company evaluates whether there are conditions or events that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the financial statements are issued. This assessment considers the Company’s current cash position, projected cash requirements, and its ability to obtain additional funding.

As of September 30, 2025, the Company had approximately $237,000 in cash and had a working capital deficit of approximately $10.1 million. The Company expects to continue incurring expenses as it scales its operations and begins to generate revenue. While the Company intends to fund future operations using available capacity under its LOC (as defined in Note 6) and projected cash flows from operations, the absence of revenue to date raises substantial doubt about its ability to continue as a going concern.

Management’s plans to address this uncertainty include reducing expenditures and seeking additional financing through debt, equity, or a combination of both. However, there is no assurance that such funding will be available on acceptable terms, or at all.

Accordingly, management has determined that the Company does not have sufficient liquidity to meet its anticipated obligations over the next year from the date of issuance of these unaudited condensed consolidated financial statements. The unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q do not include any adjustments that might result from the outcome of this uncertainty.

Risks and Uncertainties

Various macroeconomic, geopolitical and regulatory uncertainties and challenges pose risks to economic conditions in the U.S. and globally, including, among others, any resurgence in inflation; supply chain interruptions; increased cyberattacks against U.S. companies; changes to trade and tariff, immigration, energy and other policies resulting from the new U.S. administration; changes in interest rate policies; the Russia-Ukraine war; conflicts in the Middle East including the escalation of the Israel-Hamas conflict and continuing tensions between Israel and the U.S. with Iran; and economic conditions and tensions involving China.

RAIN ENHANCEMENT TECHNOLOGIES HOLDCO, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2025

Any of the above mentioned factors, or any other negative impact on the global economy, capital markets or other geopolitical conditions, and subsequent sanctions or related actions, instability, volatility or lack of liquidity in the financial markets, could adversely affect the Company’s business, financial and operating results.

Note 2 — Summary of Significant Accounting Policies

Basis of Consolidation and Presentation

The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries: Rainwater Acquisition Corp (f.k.a Merger Sub 1) and RWT. All significant intercompany accounts and transactions have been eliminated.

The unaudited condensed consolidated financial statements are presented in U.S. dollars in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”) for interim financial information. Certain disclosures normally included in financial statements have been condensed or omitted from these unaudited condensed consolidated financial statements as they are not required for interim financial statements under GAAP and the rules of the SEC. Accordingly, these unaudited condensed consolidated financial statements do not include all the information and footnotes necessary for a comprehensive presentation of financial position, results of operations, or cash flows. In the opinion of management, all adjustments (consisting of normal accruals) considered for a fair presentation of the financial position, operating results and cash flows for the periods presented have been included. Operating results for the three and nine months ended September 30, 2025 are not necessarily indicative of the results that may be expected for the year ending December 31, 2025 or any future period.

The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the Company’s Annual Report Form 10-K as of December 31, 2024, as filed with the SEC on April 16, 2025, which contains the Company’s audited consolidated financial statements and notes thereto.

Use of Estimates

The preparation of the unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets, liabilities and expenses and disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements. Actual results could differ from those estimates.

Cash and Cash Equivalents

The Company considers all highly liquid investments with original maturities at the date of purchase of three and nine months or less to be cash equivalents. Cash and cash equivalents are stated at fair value and may include money market funds, U.S. Treasury and U.S. government-sponsored agency securities, corporate debt, commercial paper, and certificates of deposit. The Company had no cash equivalents as of September 30, 2025 and December 31, 2024.

Financial Instruments

The fair value of the Company’s assets and liabilities, which qualify as financial instruments under the FASB ASC Topic 820, “Fair Value Measurements and Disclosures,” approximates the carrying amounts represented in the accompanying consolidated balance sheets, either because of the short-term nature of the instruments or because the instrument is recognized at fair value.

RAIN ENHANCEMENT TECHNOLOGIES HOLDCO, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2025

Fair Value Measurements

Fair value is defined as the price that would be received for sale of an asset or paid for transfer of a liability in an orderly transaction between market participants at the measurement date. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers include:

●

Level 1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets;

●

Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and

●

Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

In some circumstances, the inputs used to measure fair value might be categorized within different levels of the fair value hierarchy. In those instances, the fair value measurement is categorized in its entirety in the fair value hierarchy based on the lowest level input that is significant to the fair value measurement.

Derivative Financial Instruments

The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates all of its 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 FASB ASC Topic 815, “Derivatives and Hedging” (“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 the Company’s own ordinary shares, among other conditions for equity classification.

Foreign Currency Translation and Transactions

The U.S. dollar is the Company’s functional currency. Transactions denominated in currency other than the Company’s functional currency are recorded upon initial recognition at the exchange rate on the date of the transaction. After initial recognition, monetary assets and liabilities denominated in foreign currency are remeasured at each reporting date into the foreign currency at the exchange rate on that date. Exchange rate differences, other than those accounted for as hedging transactions, are recognized as foreign currency transaction gain or loss included in the Company’s statements of operations within the general and administrative expenses.

During the three and nine months ended September 30, 2025 and 2024, the only foreign currency transaction the Company incurred was the amount paid to its senior technology advisor in Australian Dollars. The amount of these foreign currency payments was translated into U.S. dollars.

RAIN ENHANCEMENT TECHNOLOGIES HOLDCO, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2025

Equipment and Construction In-Process Equipment

The Company capitalizes its cost to build its rainfall ionization equipment (the “Equipment”), including materials and allocated labor costs. Upon the completion of building the Equipment, the Company transferred its capitalized cost from Construction in-process to Equipment. In July 2024, the Company completed its building process for its two initial units and transferred those into Equipment.

Equipment as of September 30, 2025 and December 31, 2024 was comprised of the following:

	September 30, 2025		December 31, 2024
Equipment:
Rainfall ionization equipment and systems, in-process	$	858,492	$	-
Rainfall ionization equipment and systems, completed		414,034		414,034
Total	$	1,272,526	$	414,034

As soon as the Equipment is placed in service upon agreement with other parties, the Company 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.

The Company completed installation and placed its Equipment in service in the first week of November 2025, at which point depreciation commenced. The Company incurred an aggregate of $56,000 and $74,000 for the three and nine months ended September 30, 2025, respectively, in installation costs to prepare its units for service readiness in the accompanying unaudited condensed statements of operations.

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 initial recognition, intangible assets are carried at cost less any accumulated amortization and accumulated impairment losses.

Intangible assets with finite lives are amortized using the straight-line method over the estimated useful economic life. The amortization period and the amortization method for an intangible asset with a finite useful life are reviewed at least at the end of each reporting period. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are considered to modify the amortization period or method, as appropriate, and are treated as changes in accounting estimates. The amortization expense on intangible assets with finite lives is recognized in the statements of operations and in the expense category that is consistent with the function of the intangible assets.

Intangible assets with finite lives are tested for impairment whenever events or changes in circumstances indicate the carrying amount may not be recoverable. These conditions may include a change in the extent or manner in which the asset is being used or a change in future operations. The Company assesses the recoverability of the carrying amount by preparing estimates of future revenue, margins, and cash flows. If the sum of expected future cash flows (undiscounted and without interest charges) is less than the carrying amount, an impairment loss is recognized. The impairment loss recognized is the amount by which the carrying amount exceeds the fair value of the asset. Fair value of these assets may be determined by a variety of methodologies, including discounted cash flow models. As of September 30, 2025 and December 31, 2024, the Company did not have any intangible assets with indefinite useful lives.

Research and Development Expenses

Research and development costs are expensed as incurred. Research and development expenses consist of expenditures incurred in the discovery and development of new products, processes or services and the improvement of existing products, processes or services and the cost of conducting trials.

RAIN ENHANCEMENT TECHNOLOGIES HOLDCO, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2025

Leases

The Company follows the guidance of ASC 842, “Leases,” which requires an entity to recognize a right-of-use (“ROU”) asset and a lease liability for virtually all leases. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. The Company determines the present value of lease payments utilizing its incremental borrowing rate, as the implicit rate of interest in the respective leases is not readily determinable. The Company’s incremental borrowing rate is a hypothetical rate based on its understanding of what its credit rating would be.

The Company has elected not to recognize ROU assets and lease liabilities for short-term leases that have a lease term of 12 months or less. The Company recognizes the lease payments associated with its short-term land leases as an expense on a straight-line basis over the lease term. Variable lease payments associated with these leases are recognized and presented in the same manner as for all other Company leases.

Stock Compensation

The Company’s policy is to account for stock-based compensation expense in accordance with FASB ASC Topic 718, “Compensation-Stock Compensation” (“ASC 718”). Under ASC 718, stock-based compensation associated with equity awards is measured at fair value upon the grant date and recognized over the requisite service period. To the extent a stock-based award is subject to performance conditions, the amount of expense recorded in a given period, if any, reflects an assessment of the probability of achieving such performance condition, with compensation recognized once the event is deemed probable to occur. Forfeitures are recognized as incurred.

Income Taxes

The Company follows the asset and liability method of accounting for income taxes under FASB ASC 740, “Income Taxes” (“ASC 740”). Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the unaudited condensed consolidated financial statements carrying amounts of existing assets and liabilities and their respective tax basis. 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 September 30, 2025 and December 31, 2024, the Company had approximately $1.8 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 September 30, 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 September 30, 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 restricted stock awards (“RSAs”), 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 and nine months ended September 30, 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.

RAIN ENHANCEMENT TECHNOLOGIES HOLDCO, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2025

The net loss per share presented in the unaudited condensed consolidated statements of operations is based on the following for the three and nine months ended September 30, 2025 and 2024:

	For the three months ended September 30,
	2025						2024
	Class A common stock			Class B common stock			Class A common stock			Class B common stock
Basic and diluted net loss per common share:
Numerator:
Allocation of net loss	$	(2,183,435	)	$	(16,749	)	$	(2,970,269	)	$	(37,377	)

Denominator:
Basic and diluted weighted average share outstanding		7,528,761			57,752			636,488			8,009

Basic and diluted net loss per common share	$	(0.29	)	$	(0.29	)	$	(4.67	)	$	(4.67	)

	For the nine months ended September 30,
	2025						2024
	Class A common stock			Class B common stock			Class A common stock			Class B common stock
Basic and diluted net loss per common share:
Numerator:
Allocation of net loss	$	(4,600,112	)	$	(35,287	)	$	(3,349,006	)	$	(14,768	)

Denominator:
Basic and diluted weighted average share outstanding		7,528,761			57,752			1,816,340			8,009

Basic and diluted net loss per common share	$	(0.61	)	$	(0.61	)	$	(1.84	)	$	(1.84	)

Recent Accounting Pronouncements

In December 2023, the FASB issued ASU No. 2023-09 (Topic 740), Improvements to Income Tax Disclosures. The ASU requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as an expansion of other income tax disclosures. The ASU is effective on a prospective basis for annual reporting periods beginning after December 15, 2024. The Company will adopt ASU 2023-09 in its fourth quarter of 2025 for the period ending December 31, 2025, and the adoption will impact only the disclosures with no material impact on the Company’s consolidated financial statements.

Issued in November 2024, ASU 2024-03, Disaggregation of income Statement Expenses (Subtopic 220-40), requires the disaggregated disclosure of specific expense categories, including purchases of inventory, employee compensation, depreciation, and amortization, within relevant income statement captions. This ASU also requires disclosure of the total amount of selling expenses along with the definition of selling expenses. The ASU is effective for annual periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Adoption of this ASU can either be applied prospectively to consolidated financial statements issued for reporting periods after the effective date of this ASU or retrospectively to any or all prior periods presented in the consolidated financial statements. While early adoption is permitted, the Company does not plan to adopt this standard early. This ASU will likely result in additional disclosures being included in the Company’s consolidated financial statements once adopted. The Company is currently evaluating the provisions of this ASU will have on its consolidated financial statements.

RAIN ENHANCEMENT TECHNOLOGIES HOLDCO, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2025

Note 3 — Business Combination Updates

PIPE Subscriptions Receivable

On February 6, 2025, Holdco received $650,000 of the PIPE investment subscription receivable jn connection with the Business Combination as described in the Company’s Annual Report on Form 10-K filed with the SEC on April 16, 2025.

Forward Purchase Agreement with Meteora

Also in connection with the Business Combination, 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 as described in the Company’s Annual Report on Form 10-K filed with the SEC on April 16, 2025.

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 value reported in 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 unaudited condensed consolidated statements of operations each reporting period until the Maturity Date. As of September 30, 2025 and December 31, 2024, the value of the shortfall payment liability at its maximum value of approximately $21,000 remained unchanged.

Note 4 — Intangible Assets

Patent License

On November 21, 2022, the Company entered into a license agreement with Dr. Theodore Anderson, a plasma physicist, whereby the Company was granted an exclusive, worldwide license under certain of Dr. Anderson’s patents. The consideration paid for the license of $33,000, which was fully paid in November of 2022, was recorded as a finite-lived intangible asset.

Consulting Agreement for Rainfall Ionization Equipment

The Company entered into a consulting agreement to engage its senior technology advisor (“Technical Advisor”) in 2022, pursuant to which the Company agreed to pay the Technical Advisor a one-time fee upon execution of the agreement and a consulting fee of AUD 250,000 per year (equivalent to approximately $170,000 as of the effective date). In February, the agreement was amended to increase the annual consulting fee to $186,000, and in June 2025, it was further increased to $252,000 in exchange for the consultant assuming additional role and responsibilities. The agreement also provides for success fees payable upon the achievement of specified sales and development milestones, which remain unchanged.

In connection with the consulting agreement, the Company also obtained from the Technical Advisor an irrevocable, perpetual, non-exclusive license under certain engineering designs in connection with rainfall ionization equipment and systems. The Company fully paid the license amount of $83,750 in June 2023.

RAIN ENHANCEMENT TECHNOLOGIES HOLDCO, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2025

Intangible Assets

Intangible assets as of September 30, 2025 and December 31, 2024 are composed of licenses under certain patents and designs for weather modification and rainfall ionization equipment to Dr. Anderson and the Technical Advisor as discussed above.

Management anticipates that equipment utilizing certain of these patents and designs will become operational and placed in service within 2025. The Company amortizes those assets on a straight-line basis over the estimated useful lives of the assets under full-month convention. The Company plans to continually adapt to incorporate new technologies and to expand into markets that may be created by new technologies for rainfall generation. As a result, the Company anticipates that the licensed patents and designs will have a ten-year useful life before the Company transitions and adopts new technologies.

Intangible assets as of September 30, 2025 and December 31, 2024 were comprised of the following:

			Carrying Value
	Weighted Average Useful Life (Years)		September 30, 2025			December 31, 2024
Intangible assets:
Licensed technology for weather modification		10	$	33,000		$	33,000
Purchased intellectual property for rainfall ionization equipment		10	$	83,750			83,750
Less:
Accumulated amortization				(33,080	)		(24,323	)
Total intangible assets, net			$	83,670		$	92,427

The Company incurred approximately $3,000 and $9,000 in amortization expenses for each of the three and nine months ended September 30, 2025 and 2024, which is included in the accompanying unaudited condensed consolidated statements of operations. The intangible assets are tested for impairment whenever events or changes in circumstances indicate the carrying amount may not be recoverable. These conditions may include a change in the extent or manner in which the asset is being used or a change in future operations. For the three and nine months ended September 30, 2025 and 2024, there were no impairment charges associated with the Company’s intangible assets.

Note 5 — Commercial Agreements

Leases

On September 10, 2025, the Company entered into a lease agreement to lease a parcel of land in Colorado (“Colorado Lease”), which served as its installation site for the Company’s first Equipment unit. The lease commencement date is the date selected by the Company within 30 days following the applicable government hearing granting permission for use. The Company obtained its permit on October 29, 2025, and selected November 1, 2025 as the lease commencement date. The lease has an initial term of a one year and includes four options to extend the term, each for an additional one-year period. Under the Colorado Lease, the Company is required to make an upfront payment of $2,500 upon commencement date and pay a monthly base rate of $2,500, which will automatically increase for each extension term at the rate of 5%.

On September 21, 2025, the Company entered into another land lease agreement for a parcel of land in Utah (“Utah Lease”). The lease commencement date is the date selected by the Company within 30 days following the applicable government hearing granting permission for use. The lease has an initial term of one year and includes four options to extend the term, each for an additional one-year period. The Company has not obtained its permit. The Utah Lease has a monthly base rate of $200, which will automatically increase for each extension term at the rate of 5%.

RAIN ENHANCEMENT TECHNOLOGIES HOLDCO, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2025

Note 6 — Related Party Transactions

Note Payable and Line of Credit from Related Parties

On February 2, 2023, RWT issued a promissory note (the “Note”) to its former CEO, Mr. You and Mr. de Masi for an aggregate amount of $600,000. The Note has an annual interest rate of 5% and is currently due on demand.

On December 30, 2024, Holdco entered into a loan agreement (the “Loan Agreement”) with RHY Management LLC (“RHY”), an affiliate of Harry You, Holdco’s Chairman, pursuant to which RHY agreed to issue a line of credit (the “LOC”) to Holdco for up to $7 million, in addition to the Rollover amount described below (such amounts borrowed under the LOC, together with the Rollover, the “Loan”). The Loan bears interest at the greater of 5% per annum or the applicable IRS short-term rate in the month of each drawdown (“Interest Rate”), payable quarterly in arrears. If a quarterly payment is missed, the loan balance increases by an amount equal to the principal multiplied by the Default Rate (as defined below). If an event of default has occurred and is continuing, then upon written notice by RHY to Holdco, the outstanding principal balance and any unpaid accrued interest will accrue interest at 2% above the Interest Rate (the “Default Rate”).

Prior to closing of the Business Combination, the outstanding amount that Coliseum and RWT owed to Mr. You and his affiliates was approximately $3.1 million. All of these outstanding amounts (the “Rollover”) were assigned to and assumed by Holdco and are treated for all purposes as Loans outstanding under the Loan Agreement. The Rollover amount does not reduce the $7 million funding available to the Company under the LOC. As a result, as of December 31, 2024, the Company had approximately $3.1 million outstanding under the LOC, comprised solely of the Rollover amount.

As of September 30, 2025, the Company had drawn approximately $3.5 million under the LOC, bringing the total outstanding balance under the Loan Agreement to approximately $6.6 million (including the $3.1 million Rollover). Subsequent to September 30, 2025, the Company drew an additional amount of approximately $310,000 under the LOC.

As of September 30, 2025 and December 31, 2024, the Company had an outstanding accrued interest balance in connection with both the Note and the LOC of approximately $362,000 and $38,000, respectively.

Employment Agreement

Effective January 2, 2025, RWT entered into a binding offer letter (the “Offer Letter”), which was later amended on June 27, 2025, with its new CEO, Mr. Seidl. Pursuant the amended Offer Letter, Holdco agreed to pay to the CEO (i) an annual salary of $500,000, (ii) an annual incentive bonus up to 200% of his base salary, subject to Board approval and (iii) a cash bonus of $5.82 million (the “Retention Bonus”) payable on the earlier of (x) December 31, 2028, (y) the date on which the Company terminates the CEO’s employment without cause, or (z) the date on which a change of control is consummated. The Company accrues the Retention Bonus over the period of service. As of September 30, 2025, the Company accrued approximately $416,000 of Retention Bonus in accrued expenses to related party in the accompanying unaudited condensed consolidated balance sheet.

In addition, subject to approval by the Board and the Compensation Committee, Mr. Seidl is also entitled to equity awards under the Company’s equity incentive plan. On September 5, 2025, the Company granted 602,320 RSAs to Mr. Seidl, 50% of which shall vest on January 1, 2026 and 50% of which shall vest on January 1, 2027, subject to continued employment or service through such vesting date.

RAIN ENHANCEMENT TECHNOLOGIES HOLDCO, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2025

Board of Directors Agreement

On April 1, 2025, the Board increased the size of the Board from five to seven directors and appointed Mr. Marcus Peperzak and Mr. Robert Reardon to the Board to fill the resulting vacancies.

In connection with their appointments to the Board, Mr. Reardon and Mr. Peperzak each entered into Director Agreements which are the form of agreement adopted by the Board in April 2025 to govern the terms of service and compensation of the Company’s non-employee directors (the “Director Agreements”). Additionally, effective as of April 4, 2025, the Company entered into Director Agreements with Lyman Dickerson, Alexandra Steele, and Christopher Riley, each non-employee members of the Board. Pursuant to the terms of the Director Agreements, the Company agreed to pay to each Board member (i) subject to approval by the Board and compensation committee of the Board (the “Compensation Committee”), a cash payment of $12,500 promptly following attendance at each quarterly Board meeting, for a total annual cash compensation of $50,000; and (ii) subject to approval by the Board and the Compensation Committee, a grant of restricted stock, with the number of shares and terms to be determined by the Board. The Company recognized an aggregate of $100,000 in connection with such agreement during the three and nine months ended September 30, 2025 within general and administrative expenses in the accompanying unaudited condensed statements of operations. As of September 30, 2025, there has been no grants of restricted stock.

Termination Letter

On January 29, 2025, Holdco, RWT and Christopher Riley entered into a letter agreement whereby Mr. Riley resigned as Co-Chief Executive Officer of the Company and RWT effective as of January 30, 2025 (the “Termination Letter”). Mr. Riley remains as a member of the Board. The Company appointed Randall Seidl to serve as Co-Chief Executive Officer effective as of January 2, 2025 as discussed above. Following the resignation of Mr. Riley, Mr. Seidl is the Company’s sole Chief Executive Officer.

Pursuant to the Termination Letter, in lieu of all other compensation and payments of any kind due and payable to Mr. Riley, the Company agreed to pay Mr. Riley an aggregate of $124,500, payable in 18 monthly installments beginning in February 2025 in consideration for his past services. As of September 30, 2025, the Company had an aggregate of approximately $69,000 in outstanding amount in connection with such agreement that was included in accrued expenses in the accompanying unaudited condensed balance sheet. Additionally, conditioned on approval by the Compensation Committee of the Board, the Termination Letter provides that Mr. Riley will be granted 10,000 shares of Class A Common Stock of the Company vesting one year from the date of grant. As of September 30, 2025, the stock has not been granted.

Note 7 — Warrants

As of September 30, 2025 and December 31, 2024, the Company has 5,000,000 warrants to purchase Holdco Class A Common Stock (“Warrants”) outstanding, which was the rollover of the 5,000,000 Coliseum Public Warrants upon closing of the Business Combination. The Warrants may only be exercised for a whole number of shares. No fractional shares will be issued upon exercise of the Warrants. The Warrants became exercisable on January 31, 2025 and will expire on December 31, 2029 at 5:00 p.m., New York City time, or earlier upon liquidation. Each Warrant entitles the holder thereof to purchase one share of Class A Common Stock at an initial exercise price of $11.50 per share and exercisable on a cashless basis under certain circumstances specified in the warrant agreement.

The Warrants are derivative warrant liabilities in accordance with ASC 815. Accordingly, the Company recognizes the warrant instruments as liabilities at fair value and adjusts the instruments to fair value at each reporting period. The warrant liabilities are subject to re-measurement at each balance sheet date. With each such re-measurement, the warrant liabilities are adjusted to current fair value, with the change in fair value recognized in the Company’s statements of operations. The Company will reassess the classification at each balance sheet date. If the classification changes as a result of events during the period, the warrants will be reclassified as of the date of the event that causes the reclassification. Refer to Note 7 for additional information on the fair value measurements of these warrants.

RAIN ENHANCEMENT TECHNOLOGIES HOLDCO, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2025

Note 8 — Fair Value Measurements

Financial liabilities measured at fair value during the periods on a recurring basis consisted of the following as of September 30, 2025 and December 31, 2024:

September 30, 2025

	Fair Value Hierarchy
	Level 1		Level 2		Level 3		Total
Financial liabilities:
Warrant liability – Public Warrants	$	-	$	825,000	$	-	$	825,000
Shortfall payment liability		-		-		20,636		20,636
Total financial liabilities	$	-	$	825,000	$	20,636	$	845,636

December 31, 2024

	Fair Value Hierarchy
	Level 1		Level 2		Level 3		Total
Financial liabilities:
Warrant liability – Public Warrants	$	-	$	350,000	$	-	$	350,000
Shortfall payment liability		-		-		20,636		20,636
Total financial liabilities	$	-	$	350,000	$	20,636	$	370,636

The Warrants are listed on the Nasdaq under the ticker “RAINW”. As of September 30, 2025 and December 31, 2024, the fair value measurements for the Warrants were classified as Level 2 due to low trading volume.

During the three and nine months ended September 30, 2025, there were no transfers between levels of the fair value hierarchy.

Note 9 — Stockholders’ Deficit

Shares Authorization

The Company is authorized to issue 30,000,000 shares of Holdco Class A Common Stock, par value $0.0001, 1,000,000 shares of Holdco Class B Common Stock, par value $0.0001, and 1,000,000 shares of preferred stock, par value $0.0001.

Holdco Class A Common Stock entitles the holders thereof to one vote per share on all matters on which the shares of Holdco Class A Common Stock is entitled to vote, and Holdco Class B Common Stock entitles the holders thereof to fifteen votes per share on all matters on which the shares of Holdco Class B Common Stock are entitled to vote. Additionally, for so long as the RWT Founders (Paul T. Dacier, Harry L. You, and Niccolo de Masi, or their affiliates) hold at least 20% of the number of shares of Holdco Class B Common Stock collectively held by them as of the Closing, the RWT Founders have rights that are different from unaffiliated shareholders, including the right to fill vacancies on the Holdco Board and to call special meetings of shareholders. The Holdco A&R Articles permits action by written consent of the shareholders and requires that amendments to the Holdco A&R Articles be approved by a majority of the shares of Holdco Common Stock entitled to vote in lieu of two-thirds of the shares of Holdco Common Stock entitled to vote on the matter after the date on which the issued and outstanding Class B Common Stock represents less than 50% of the total voting power of the then outstanding shares of capital stock entitled to vote.

The dual class structure will terminate on December 31, 2029, or earlier (i) at the option of the holder at any time, (ii) automatically on the date on which the RWT Founders or their Permitted Transferees collectively own twenty percent (20%) or less of the number of shares of Holdco Class B Common Stock collectively held by such persons or their Permitted Transferees immediately after the completion of the Business Combination, (iii) automatically upon the occurrence of a transfer of Holdco Class B Common Stock that is not a Permitted Transfer, and (iv) automatically on the date specified by the affirmative vote of the holders of Holdco Class B Common Stock representing not less than two-thirds (2∕3) of the voting power of the Holdco Class B Common Stock. The Holdco Class A Common Stock and the Holdco Class B Common Stock have identical economic rights, including dividend and liquidation rights.

RAIN ENHANCEMENT TECHNOLOGIES HOLDCO, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2025

Holdco Incentive Plan

Effective December 31, 2024, in connection with the Closing, the Company adopted 2024 Equity Incentive (the “2024 Incentive Plan”), which authorizes the grant of equity and equity-based incentive awards to officers, employees, non-employee directors and consultants.

Holdco initially reserved 747,168 shares of Class A Common Stock for the issuance of awards under the 2024 Incentive Plan. The number of shares reserved for issuance under the 2024 Incentive Plan will increase automatically on January 1 of each of 2025 through 2034 by the number of shares equal to 5.0% of the total number of outstanding shares (rounded down to the nearest whole share) of Class A Common Stock as of December 31 of the immediately preceding year. Notwithstanding anything to the contrary in the 2024 Incentive Plan, no more than the number of shares of Class A Common Stock initially reserved under the 2024 Incentive Plan may be issued pursuant to the exercise of incentive stock options (“ISOs”) under the 2024 Incentive Plan.

Shares of Class A Common Stock underlying awards that are forfeited, canceled, expire unexercised, or are settled in cash will again become available for issuance under the 2024 Incentive Plan. In the event of any change in Holdco’s capitalization, the plan’s Compensation Committee may, in its sole discretion, make equitable adjustments to (i) the number of shares reserved under the plan, (ii) the number of shares subject to outstanding awards, (iii) applicable award limits, and (iv) the exercise price of outstanding options.

The 2024 Incentive Plan has a term of 10 years from December 31, 2024, after which no additional awards may be granted. The Board may amend, suspend, or terminate the plan at any time, subject to stockholder approval to the extent required by law or the plan’s provisions.

As of September 30, 2025, the Company issued 602,320 RSAs under the 2024 Incentive Plan to Mr. Seidl as described above, leaving 144,848 shares reserved and unissued under the plan.

Holdco Preferred Stock

As of September 30, 2025 and December 31, 2024, there was no preferred shares outstanding, as retroactively restated to reflect the Business Combination.

Holdco Class A Common Stock

As of September 30, 2025 and December 31, 2024, the Company had an aggregate of 7,528,761 shares (excluding 602,320 restricted stock awards), of Class A Common Stock issued and outstanding as a result of the conversion and issuance of shares in connection with the closing of the Business Combination as discussed in the Company’s Annual Report on Form 10-K filed with the SEC on April 16, 2025.

Holdco Class B Common Stock

As of September 30, 2025 and December 31, 2024, the Company had an aggregate of 57,752 shares of Class B Common Stock issued and outstanding as a result of the conversion of shares in connection with the closing of the Business Combination as discussed in the Company’s Annual Report on Form 10-K filed with the SEC on April 16, 2025.

Stock Options

On August 23, 2024, the Company granted 1,433,892 and 716,946 options, as retroactively restated to reflect the Business Combination, to purchase RWT’s Class A common stock to Harry You and Niccolo de Masi, respectively. The options expire ten years from the date of grant, had an exercise price of $2.06 and were fully vested upon the grant date. As of September 30, 2025 and December 31, 2024, the Company had an aggregate of 2,150,838 options issued and outstanding.

Restricted Stock Awards (RSAs)

RSAs are awards of common stock that are legally issued and outstanding. RSAs are subject to time-based restrictions on transfer and unvested portions are generally subject to a risk of forfeiture if the award recipient ceases providing services to the Company prior to the lapse of the restrictions or does not meet certain performance conditions.

RAIN ENHANCEMENT TECHNOLOGIES HOLDCO, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2025

The following summarizes the Company’s restricted stock award activity and the RSAs outstanding:

			Weighted Average		Weighted Average Remaining
	Shares		Grant Date Fair Value		Contractual Life (in years)
Unvested at June 30, 2025		-	$	-
Granted		602,320		4.40
Forfeited		-		-
Vested		-		-
Unvested at September 30, 2025		602,320		4.40		0.75

The aggregate fair value was calculated based on the closing market price of the Company’s common stock on the date of grant and is recognized ratable over the vesting period. The Company recognized approximately $349,000 of stock compensation expense within the general and administrative expenses in the accompanying unaudited condensed consolidated financial statements for the three and nine months ended September 30, 2025. As of September 30, 2025, total unrecognized compensation cost related to RSAs was approximately $2.3 million, which is expected to be recognized over a remaining weighted-average vesting period of 0.75 years.

Note 10 — Segment Information

ASC Topic 280, “Segment Reporting,” establishes standards for companies to report in their financial statement information about operating segments, products, services, geographic areas, and major customers. Operating segments are defined as components of an enterprise for which separate financial information is available that is regularly evaluated by the Company’s chief operating decision maker, or group, in deciding how to allocate resources and assess performance.

The Company operates and manages the business as one reportable and operating segment, which is the business of developing, manufacturing and commercializing ionization rainfall generation technology. The Company’s Chief Executive Officer has been identified as the chief operating decision maker (“CODM”), who reviews the operating results for the Company as a whole to make decisions about allocating resources and assessing financial performance. Accordingly, management has determined that the Company only has one operating segment.

When evaluating the Company’s performance and making key decisions regarding resource allocation the CODM reviews several key metrics, which include the following:

	For the three months ended September 30,						For the nine months ended September 30,
	2025			2024			2025			2024
Installation costs	$	55,594		$	-		$	74,284		$	-
General and administrative expenses		1,115,389			219,799			3,506,584			555,300
Research and development expenses		46,243			-			47,727			-
Other significant non-cash items:
Stock based compensation expenses		349,330			2,777,507			349,330			2,777,507
Amortization expenses		2,919			2,919			8,757			8,757
Loss from operations		(1,644,475	)		(3,000,225	)		(3,986,682	)		(3,341,564	)
Total other income (expenses)		(555,709	)		(7,421	)		(573,717	)		(22,210	)
Net loss	$	(2,200,184	)	$	(3,007,646	)	$	(4,635,399	)	$	(3,363,774	)

As the Company has not earned any revenue, the key measures of segment profit or loss reviewed by the Company’s CODM are general and administrative expenses, installation and research and development expenses to monitor, manage and forecast cash to ensure enough capital is available for working capital needs. The CODM also reviews general and administrative costs to manage, maintain and enforce all contractual agreements to ensure costs are aligned with all agreements and budget.

Note 11 — Subsequent Events

The Company evaluated subsequent events and transactions that occurred after the balance sheet date through November 14, 2025, the date at which the unaudited condensed consolidated financial statements were issued. Based upon this review, the Company did not identify any subsequent events that required adjustment or disclosure in the unaudited condensed consolidated financial statements, except as noted below.

Subsequent to September 30, 2025, the Company drew an additional amount of approximately $310,000 under the LOC.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the unaudited condensed consolidated financial statements and the notes thereto contained elsewhere in this quarterly report. References in this quarterly report on Form 10-Q (this “Report”) to the “Company,” “Holdco”, “us” or “we” refer to Rain Enhancement Technologies Holdco, Inc. on a consolidated basis. References to our “management” or our “management team” refer to our officers and directors.

Special Note Regarding Forward-Looking Statements

This Report includes “forward-looking statements” for purposes of the safe harbor provisions under the United States Private Securities Litigation Reform Act of 1995, including statements regarding, among other things, the plans, strategies and prospects, both business and financial, of the Company. All statements, other than statements of historical fact included in this Report including, without limitation, statements in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding the Company’s financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. Words such as “expect,” “believe,” “anticipate,” “intend,” “estimate,” “seek” and variations and similar words and expressions are intended to identify such forward-looking statements. Such forward-looking statements relate to future events or future performance, but reflect management’s current beliefs, based on information currently available. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements. For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to “Item 4. Risk Factors” in this Report, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2024, and in our other Securities and Exchange Commission (“SEC”) filings. The Company’s securities filings can be accessed on the EDGAR section of the SEC’s website at www.sec.gov. Except as expressly required by applicable securities law, the Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.

Overview

We were founded to provide the world with reliable access to water, one of life’s most important resources. To achieve this mission, we aim to develop, manufacture and commercialize ionization rainfall generation technology.

We are combining unique expertise and personnel to develop, improve and undertake efforts to commercialize ionization rainfall generation technology that enhances rainfall when conditions are appropriate in the atmosphere. We are building our proprietary Weather Enhancement Technology Array (“WETA”) platform with software, meteorology, hardware, product design and operations to make rainfall generation more dependable. We aim to improve the existing rainfall generation technologies by introducing robust measurement tools, including automation technology, rain gauges, and weather stations, to more precisely quantify the positive water benefit it expects to deliver to millions globally.

We aim to develop, invent, improve, manufacture, commercialize and operate technologies that enhance rainfall and elevate water reserves. We believe that our future services will yield potable water that can be used for all purposes. The projected cost (not including land costs, which are still being determined) and energy requirements for our future technology are modest on a per gallon basis for communities and ecosystems, estimated to be $0.10 per cubic meter, less than other alternative technologies. We aim to enhance agricultural, industrial and household water supplies for all the communities in which we operate by developing technology and services to serve governmental and commercial clients’ needs in creating water resiliency and abundancy.

Our business model is based on a unique one-to-many community-centric business model. The numerous client segments to which we market includes large landowners including agriculture, resorts, energy and transportation companies, insurance and reinsurance companies, decarbonization initiatives of major corporations and philanthropists, supranational governmental organizations, and city, county, state, federal and non-U.S. governments. In addition, we aim to leverage our offerings and enhance our potential market position by exploring ways to expand our future water generation products through licensing and acting as a channel partner for additional water generation technologies.

Since the beginning of 2025 we have created new marketing and sales programs, identified and contacted potential customers in core market segments, expanded our contacts with rain enhancement experts who could endorse our technology and introduce us into existing projects looking to address lack of rainfall, and organized our production of systems to serve expected demand.

We have a limited operating history and have not yet generated any revenue, and our ability to generate revenue sufficient to achieve profitability will depend on our ability to successfully build and commercialize rainfall generation technology and successfully execute our sales strategy.

Recent Developments

Business Developments

In October 2025, we announced preliminary field observations from a fog-mitigation pilot conducted in Australia using our WETA platform. The observations suggested ionization may influence fog dissipation under certain atmospheric conditions. Based on these results, we plan to conduct expanded, instrumented pilot programs in 2026 in Oregon, California, Utah and Colorado to further evaluate performance across different fog types and use cases, and we are also exploring the potential application of our technology to snow enhancement. These activities remain in the research and development stage and are not expected to generate material revenue until validation and commercialization.

In the beginning of the fourth quarter of 2025, we began installing our first two fully built rain generation systems in the United States, which are expected to be placed in service in November 2025 upon completion of installation.

Nasdaq Compliance Notices

On February 18, 2025, we received written notice (the “MVLS Notice”) from the Listing Qualifications Staff (“Staff”) of the Nasdaq Stock Market LLC (“Nasdaq”) which notified us that, for the 30 consecutive business days ended February 14, 2025, our market value of listed securities (“MVLS”) closed below the $50,000,000 MVLS threshold required for continued listing on the Nasdaq Global Market under Nasdaq Listing Rule 5450(b)(2)(A) (the “MVLS Rule”). Also on February 18, 2025, we received written notice (the “MVPHS Notice”) from the Staff that for the 30 consecutive business days ended February 14, 2025, our market value of publicly held securities (“MVPHS”) closed below the $15,000,000 MVPHS threshold required for continued listing on Nasdaq under Nasdaq Listing Rule 5450(b)(2)C) (the “MVPHS Rule”). In accordance with Nasdaq Listing Rule 5810(c)(3)(D), we had 180 calendar days, or until August 18, 2025, to regain compliance with each of the MVLS Rule and the MVPHS Rule.

On August 19, 2025, we received a notice (the “Notice”) from the Staff indicating that we had not regained compliance with either the MVLS Rule or the MVPHS Rule and, unless we timely requests a hearing before the Nasdaq Hearings Panel (the “Panel”), our securities would be subject to suspension and delisting from The Nasdaq Global Market at the opening of business on August 28, 2025.

We submitted its timely request for a hearing before the Panel on August 21, 2025, to request additional time to regain compliance with the MVLS Rule and the MVPHS Rule. As part of the compliance plan submitted to the Panel, we requested a transfer of our listing from the Nasdaq Global Market to the Nasdaq Capital Market. A hearing before the Panel was held on September 18, 2025 and on October 14, 2025, the Panel granted our request for continued listing on Nasdaq, subject to our application to transfer our listing from the Nasdaq Global Market to the Nasdaq Capital Market on or before October 20, 2025, and our demonstration of compliance with all listing rules of the Nasdaq Capital Market on or before October 31, 2025.

We applied for listing on the Nasdaq Capital Market and demonstrated compliance with all of the listing rules of the Nasdaq Capital Market, and Nasdaq approved the listing of our securities on the Nasdaq Capital Market. In connection with the approval of our application, the listing qualifications staff of Nasdaq indicated that our previously disclosed deficiencies are cured.

Our Class A common stock and warrants will continue to trade under the symbol “RAIN” and “RAINW”, respectively. This transfer does not affect our business operations, which continue as normal.

Plan of Operations

12-Month Plan

RWT has two fully built rain generation systems. The systems were built by a leading ionization rainfall generation engineer, and have undergone rigorous evaluation, testing, and documentation. These units arrived in the US in September 2025, and we began the installation process during the third quarter of 2025. Installation is expected to be completed in November 2025, at which point the units will be placed in service.

We have also reached the near final stage of development of ten additional rain generation systems for deployment in new locations and we expect to begin the installation process in 2026. While we have begun documenting the sourcing, manufacturing, and building processes, we will collaborate with highly skilled technical advisors to develop a step-by-step training manual that can be scaled as our system volume increases. While systematically documenting the process, we will also explore ways to enhance efficiency and scalability, such as reviewing the bill of materials to domesticate component sourcing and initiating the request-for-proposal process with prospective U.S.-based manufacturers. We are actively hiring and plan to recruit additional personnel to support sales, and operations.

The regions where we install our systems are expected to host one or more systems to serve one or multiple clients. Our goal is to install the systems in a way that creates contiguous or overlapping areas of potential rainfall enhancement. Depending on updrafts, humidity, and other weather conditions, each installed system is expected to generate rainfall within an area of approximately 230,000 acres and 360 square miles. Site selection will be prioritized based on client engagement, projected returns for the company, and expected local weather and topography. We anticipate that our supply chain will support the manufacturing and installation of additional systems during 2026, allowing RWT to scale operations rapidly as client referral effects drive increased demand.

Concurrent with placing our units into service, we are developing a rain gauge with our intellectual property to assist with automating the operation of both the installed system and future systems based on local weather conditions.

We will continue to update and refine internal documentation that outlines the criteria for selecting sites to install and operate the systems. This will include, but not be limited to, factors such as weather patterns, terrain, setbacks, access, prevailing wind direction, and average humidity. Additionally, we plan to enhance our operations process to include a complete set of drawings necessary for permitting, as well as incorporating all feedback received from the site of our initial installation.

We expect to begin operationalizing the manufacturing, testing, and warehousing of devices for the installation pipeline in 2026. At that point, we anticipate having well-developed documentation that we can follow to ensure a steady stream of successful system installations.

As we continue to refine our manufacturing process for rain technology devices, we will also seek research partnerships with universities. Our goal for these partnerships is to launch a multi-year case study that evaluates the impact of our devices and related technology on rainfall enhancement in the initial U.S. locations where our systems have been installed.

Going Concern Consideration

In connection with our management’s assessment of going concern considerations in accordance with the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Classification (“ASC”) Subtopic 205-40, “Presentation of Financial Statements - Going Concern,” we evaluate whether there are conditions or events that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the financial statements are issued. This assessment considers our current cash position, projected cash requirements, and its ability to obtain additional funding.

As of September 30, 2025, we had approximately $237,000 in cash and had a working capital deficit of approximately $10.1 million. We expect to continue incurring expenses as we scale our operations and begin to generate revenue. While we intend to fund future operations using available capacity under our line of credit (“LOC”) and projected cash flows from operations, the absence of revenue to date raises substantial doubt about its ability to continue as a going concern.

Our management’s plans to address this uncertainty include reducing expenditures and seeking additional financing through debt, equity, or a combination of both. However, there is no assurance that such funding will be available on acceptable terms, or at all.

Accordingly, our management has determined that we do not have sufficient liquidity to meet our anticipated obligations over the next year from the date of issuance of these unaudited condensed consolidated financial statements. The unaudited condensed consolidated financial statements included in this Report do not include any adjustments that might result from the outcome of this uncertainty.

Results of Operations

For the three months ended September 30, 2025, we had net loss of approximately $2.2 million, which consisted of general and administrative expenses of approximately $1.5 million (primarily related to personnel costs, stock based compensation expenses, professional services including quarterly audit, marketing, and other corporate operating expenses), installation costs of approximately $56,000, research and development expenses of approximately $46,000, amortization expenses of approximately $3,000, a loss due to change in fair value of warrant liability of $312,500, and net interest expenses and interest income from operating account of approximately $243,000.

For the nine months ended September 30, 2025, we had net loss of approximately $4.6 million, which consisted of general and administrative expenses of approximately $3.9 million (primarily related to personnel costs, stock based compensation expenses, professional services including annual audit, marketing, and other corporate operating expenses), installation costs of approximately $74,000, research and development expenses of approximately $48,000, amortization expenses of approximately $9,000, a loss due to change in fair value of warrant liability of $475,000, and interest expenses and minimal tax expenses and interest income from operating account of approximately $323,000, partially offset by gain from settlement with vendor of approximately $226,000.

For the three months ended September 30, 2024, we had net loss of approximately $3.0 million, which consisted of general and administrative expenses and minimal amortization expenses of approximately $3,000 and interest expense in connection with the note payable to related parties of approximately $7,000.

For the nine months ended September 30, 2024, we had net loss of approximately $3.4 million, which consisted mainly of general and administrative expenses of approximately $3.3 million, amortization expenses of approximately $9,000 and tax and interest expenses in connection with the note payable to related parties of approximately $22,000.

Cash Flows

For the nine months ended September 30, 2025, net cash used in operating activities was approximately $1.6 million, net cash used in investing activities was approximately $858,000, and net cash provided by financing activities was approximately $2.7 million. Net loss of approximately $4.6 million, and gain from settlement with vendor of approximately $226,000, partially offset by changes in operating assets and liabilities of approximately $952,000, amortization expense of approximately $9,000, approximately $1.5 million paid by related parties on behalf of RWT, stock-based compensation expenses of approximately $349,000, and change in fair value of warrant liability of $475,000, resulted in approximately $1.6 million of net cash used in operating activities. Cash used in investing activities consisted solely of payment for building Equipment of approximately $858,000. Cash provided by financing activities resulted from proceeds from payment of subscription receivable of $650,000 and proceeds from drawdowns under the LOC of approximately $2.0 million.

For the nine months ended September 30, 2024, net cash provided by operating activities was approximately $167,000, net cash used in investing activities was approximately $46,000, and net cash provided by financing activities was $415,000. Net loss of approximately $3.4 million was partially offset by amortization expense of approximately $9,000, expenses paid by related parties on behalf of RWT of approximately $2.8 million, stock-based compensation expenses of approximately $196,000, and changes in operating assets and liabilities of approximately $215,000, resulted in net cash used in operating activities of approximately $167,000. Cash used in investing activities consisted solely of payment for building Equipment of approximately $46,000. Cash provided by financing activities resulted solely from proceeds from subscription agreements for RET’s Class A and Class B common stock of $415,000.

Patent and Consulting Agreements

Patent License

On November 21, 2022, RWT entered into a license agreement with Dr. Theodore Anderson, a plasma physicist, whereby RWT was granted an exclusive, worldwide license under certain of Dr. Anderson’s patents. The consideration paid for the license of $33,000, which was fully paid in November 2022, was recorded as a finite-lived intangible asset.

Consulting Agreement for Rainfall Ionization Equipment

We entered into a consulting agreement to engage our senior technology advisor (“Technical Advisor”) in 2022, pursuant to which we agreed to pay the Technical Advisor a one-time fee upon execution of the agreement and a consulting fee of AUD 250,000 per year (equivalent to approximately $170,000 as of the effective date). In February, the agreement was amended to increase the annual consulting fee to $186,000, and in June 2025, it was further increased to $252,000 in exchange for the consultant assuming additional role and responsibilities. The agreement also provides for success fees payable upon the achievement of specified sales and development milestones, which remain unchanged.

In connection with the consulting agreement, we also agreed to obtain from the Technical Advisor an irrevocable, perpetual, non-exclusive license under certain engineering designs in connection with rainfall ionization equipment and systems. We fully paid this amount of $83,750 in June 2023.

Related Party Transactions

Note Payable and Line of Credit from Related Parties

On December 30, 2024, Holdco entered into a loan agreement (the “Loan Agreement”) with RHY Management LLC (“RHY”), an affiliate of Harry You, our Chairman, pursuant to which RHY agreed to issue an LOC to Holdco for up to $7 million, in addition to the Rollover amount described below (such amounts borrowed under the LOC, together with the Rollover, the “Loan”). The Loan bears interest at the greater of 5% per annum or the applicable IRS short-term rate in the month of each drawdown (“Interest Rate”), payable quarterly in arrears. If a quarterly payment is missed, the loan balance increases by an amount equal to the principal multiplied by the 2% Default Rate (as defined below). If an event of default has occurred and is continuing, then upon written notice by RHY to Holdco, the outstanding principal balance and any unpaid accrued interest will accrue interest at 2% above the Interest Rate (the “Default Rate”).

Prior to closing of the Business Combination, the outstanding amount that Coliseum and RWT owed to Mr. You and his affiliates was approximately $3.1 million. The Rollover amounts were assigned to and assumed by Holdco and are treated for all purposes as Loans outstanding under the Loan Agreement. The Rollover amount does not reduce the $7 million funding available to the Company under the LOC. As a result, as of December 31, 2024, we had approximately $3.1 million outstanding under the LOC, comprised solely of the Rollover amount.

As of September 30, 2025, we had drawn approximately $3.5 million under the LOC, bringing the total outstanding balance under the Loan Agreement to approximately $6.6 million (including the $3.1 million Rollover). Subsequent to September 30, 2025, we drew an additional amount of approximately $310,000 under the LOC.

As of September 30, 2025 and December 31, 2024, we had an outstanding accrued interest balance in connection with both the Note and the LOC of approximately $362,000 and $38,000, respectively.

Employment Agreement

Effective January 2, 2025, we entered into a binding offer letter (the “Offer Letter”), which was later amended on June 27, 2025, with our new CEO, Mr. Seidl. Pursuant to the amended Offer Letter, we agreed to pay to the CEO (i) an annual salary of $500,000, (ii) an annual incentive bonus up to 200% of his base salary, subject to Board approval, and (iii) a cash bonus of $5.82 million (the “Retention Bonus”) payable on the earlier of (x) December 31, 2028, (y) the date on which we terminate the CEO’s employment without cause, or (z) the date on which a change of control is consummated. We accrue the Retention Bonus over the period of service. As of September 30, 2025, we accrued approximately $416,000 of Retention Bonus in accrued expenses to related party in the accompanying unaudited condensed consolidated balance sheet.

In addition, subject to approval by the Board and the Compensation Committee, Mr. Seidl is also entitled to equity awards under our equity incentive plan. On September 5, 2025, we granted 602,320 RSAs to Mr. Seidl, with 50% of which shall vest on January 1, 2026 and 50% of which shall vest on January 1, 2027, subject to continued employment or service through such vesting date.

Board Agreement

On April 1, 2025, the Board increased the size of the Board from five to seven directors and appointed Mr. Marcus Peperzak and Mr. Robert Reardon to the Board to fill the resulting vacancies.

In connection with their appointments to the Board, Mr. Reardon and Mr. Peperzak each entered into the Director Agreements which are the form of agreement adopted by the Board in April 2025 to govern the terms of service and compensation of our company’s non-employee directors. Additionally, effective as of April 4, 2025, we entered into Director Agreements with Lyman Dickerson, Alexandra Steele, and Christopher Riley, each non-employee members of the Board. Pursuant to the terms of the Director Agreements, we agreed to pay to each Board member (i) subject to approval by the Board and compensation committee of the Board (the “Compensation Committee”), a cash payment of $12,500 promptly following attendance at each quarterly Board meeting, for a total annual cash compensation of $50,000; and (ii) subject to approval by the Board and the Compensation Committee, a grant of restricted stock, with the number of shares and terms to be determined by the Board. We recognized an aggregate of $100,000 in connection with such agreement during the three and nine months ended September 30, 2025 within general and administrative expenses in the accompanying unaudited condensed statements of operations. As of September 30, 2025, there has been no grants of restricted stock.

Termination Letter

As discussed above, pursuant to the Termination Letter, in lieu of all other compensation and payments of any kind due and payable to Mr. Riley, we agreed to pay Mr. Riley an aggregate of $124,500, payable in 18 monthly installments beginning in February 2025 in consideration for his past services. As of September 30, 2025, we had an aggregate of approximately $69,000 in outstanding amount in connection with such agreement that was included in accrued expenses in the accompanying unaudited condensed balance sheet. Additionally, conditioned on approval by the Compensation Committee of the Board, the Termination Letter provides that Mr. Riley will be granted 10,000 shares of Class A Common Stock vesting one year from the date of grant. As of September 30, 2025, the stock has not been granted.

Segments

We operate and manage the business as one reportable and operating segment, which is the business of developing, manufacturing and commercializing ionization rainfall generation technology. Our chief executive officer, who is the chief operating decision maker, or CODM, reviews financial information on an aggregate basis for allocating resources and evaluating financial performance.

Off-Balance Sheet Arrangements

We did not have off-balance sheet arrangements as of September 30, 2025, and do not currently have, any off-balance sheet financing arrangements or any relationships with unconsolidated entities or financial partnerships, including entities sometimes referred to as structured finance or special purpose entities, that were established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.

Critical Accounting Estimates

The unaudited condensed consolidated financial statements have been prepared in accordance with U.S. GAAP and pursuant to the rules and regulations of the SEC.

Preparation of the unaudited condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities. We also make estimates and assumptions on revenue generated and reported expenses incurred during the 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

Intangible assets with finite lives are amortized using the straight-line method over the estimated useful economic life. The amortization period and the amortization method for an intangible asset with a finite useful life are reviewed at least at the end of each reporting period. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are considered to modify the amortization period or method, as appropriate, and are treated as changes in accounting estimates. The amortization expense on intangible assets with finite lives is recognized in the unaudited condensed consolidated statements of operations and in the expense category that is consistent with the function of the intangible assets.

Intangible assets with finite lives are tested for impairment whenever events or changes in circumstances indicate the carrying amount may not be recoverable. These conditions may include a change in the extent or manner in which the asset is being used or a change in future operations. We assess the recoverability of the carrying amount by preparing estimates of future revenue, margins, and cash flows. If the sum of expected future cash flows (undiscounted and without interest charges) is less than the carrying amount, an impairment loss is recognized. The impairment loss recognized is the amount by which the carrying amount exceeds the fair value of the asset. Fair value of these assets may be determined by a variety of methodologies, including discounted cash flow models. As of September 30, 2025, we did not have any intangible assets with indefinite useful lives.

Stock Compensation

Our policy is to account for stock-based compensation expense in accordance with FASB ASC Topic 718, “Compensation-Stock Compensation” (“ASC 718”). Under ASC 718, stock-based compensation associated with equity awards is measured at fair value upon the grant date and recognized over the requisite service period. To the extent a stock-based award is subject to a performance condition, the amount of expense recorded in a given period, if any, reflects an assessment of the probability of achieving such performance condition, with compensation recognized once the event is deemed probable to occur. Forfeitures are recognized as incurred.

Recent Accounting Pronouncements

In December 2023, the FASB issued ASU No. 2023-09 (Topic 740), Improvements to Income Tax Disclosures. The ASU requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as an expansion of other income tax disclosures. The ASU is effective on a prospective basis for annual reporting periods beginning after December 15, 2024. The Company is currently evaluating the impact this ASU will have on its consolidated financial statements and related disclosures.

Emerging Growth Company Status

Holdco is an emerging growth company, as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a registration statement under the Securities Act declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards.

Section 107 of the JOBS Act allows emerging growth companies to take advantage of the extended transition period for complying with new or revised accounting standards. Under Section 107, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. Any decision to opt out of the extended transition period for complying with new or revised accounting standards is irrevocable. The Company has elected to use the extended transition period available under the JOBS Act, which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s consolidated financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.

The Company will remain an emerging growth company until the earlier of: (1) the last day of the fiscal year (a) following the fifth anniversary of the effectiveness of the Company’s registration statement on Form S-4 in connection with the Business Combination, (b) in which the Company has total annual revenue of at least $1,235,000,000, or (c) in which the Company is deemed to be a large accelerated filer, which means the market value of its common equity that is held by non-affiliates exceeds $700.0 million as of the end of the prior fiscal year’s second fiscal quarter; and (2) the date on which the Company has issued more than $1.0 billion in non-convertible debt securities during the prior three-year period.

We are also a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. The Company will remain a smaller reporting company until the last day of the fiscal year in which (i) the market value of the shares of Class A Common Stock held by non-affiliates exceeds $250.0 million as of the prior September 30, and (ii) the Company’s annual revenue exceeds $100.0 million during such completed fiscal year and the market value of the shares of Class A Common Stock held by non-affiliates exceeds $700.0 million as of the prior June 30. To the extent the Company takes advantage of such reduced disclosure obligations, it may also make comparison of the Company’s financial statements with other public companies difficult or impossible.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

This item is not applicable as we are a smaller reporting company.

ITEM 4. DISCLOSURE CONTROLS AND PROCEDURES.

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under Securities Exchange Act of 1934, as amended (the “Exchange Act”) is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding and the preparation of the Company’s consolidated financial statements and required disclosures.

Evaluation of Disclosure Controls and Procedures

As required by Rules 13a-15 and 15d-15 under the Exchange Act, our Chief Executive Officer and Chief Financial Officer carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of September 30, 2025. Based upon their evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures (as defined in Rules 13a-15 (e) and 15d-15 (e) under the Exchange Act) were not effective due to the material weakness discussed below. As a result, we performed additional analysis as deemed necessary to ensure that our consolidated financial statements were prepared in accordance with U.S. GAAP. Accordingly, management believes that the consolidated financial statements included in this Report present fairly in all material respects our financial position, results of operations and cash flows for the periods presented.

As previously disclosed, in connection with the restatement of RWT’s audited financial statements as of and for the year ended December 31, 2023 and as of December 31, 2022 and for the period from November 10, 2022 (inception) through December 31, 2022, RWT’s management identified a material weakness in RWT’s internal controls over financial reporting regarding the calculation of deferred tax assets and disclosure of income taxes in accordance with FASB ASC 740. Upon the completion of the Business Combination, RWT became a wholly-owned subsidiary of the Company. In connection with the preparation and audit of the Company’s consolidated financial statements as of and for the year ended December 31, 2024, management determined that such material weakness had not been remediated as of September 30, 2025.

While we have processes to identify and appropriately apply applicable accounting requirements, we intend to take steps to remediate this material weakness, including plans to hire or engage a specialist to assist in the preparation of the income tax provision and disclosures. The elements of our remediation plan can only be accomplished over time, and we can offer no assurance that these initiatives will ultimately have the intended effects.

Changes in Internal Control Over Financial Reporting

Management has implemented steps to remediate the material weakness identified. Specifically, we expanded and improved our review process for income taxes calculation and disclosures, and hired third-party professionals with whom to consult for such issues.

During the most recently completed fiscal quarter, there has been no other changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

There is no material litigation, arbitration or governmental proceeding currently pending against us or any members of our management team.

ITEM 1A. RISK FACTORS

Factors that could cause our actual results to differ materially from those in this Report are any of the risks described in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on April 16, 2025 (the “Annual Report”). Any of these factors could result in a significant or material adverse effect on our results of operations or financial condition. Additional risk factors not presently known to us or that we currently deem immaterial may also impair our business or results of operations. As of the date of this Report, except as set forth below, there have been no material changes to the risk factors disclosed in the Annual Report. We may disclose changes to such risk factors or disclose additional risk factors from time to time in our future filings with the SEC.

Our management has determined that there exists substantial doubt about our ability to continue as a “going concern.”

We may not have sufficient liquidity to meet our anticipated obligations over the next year from the issuance of these unaudited condensed consolidated financial statements. In connection with our assessment of going concern considerations in accordance with FASB ASC 205-40, “Presentation of Financial Statements – Going Concern,” management has determined that the Company does not have sufficient liquidity to meet its anticipated obligations over the next year from the date of issuance of these unaudited condensed consolidated financial statements. Management’s plans to address this uncertainty include reducing expenditures and seeking additional financing through debt, equity, or a combination of both. However, there is no assurance that such funding will be available on acceptable terms, or at all. The unaudited condensed consolidated financial statements included in this Report do not include any adjustments that might result from the outcome of this uncertainty.

We are currently in a period of economic uncertainty and capital markets disruption, which has been significantly impacted by a new U.S. presidential administration and accompanying regulatory activities and economic policies and events related thereto, ongoing military conflicts and geopolitical instability and inflation and interest rates.

U.S. and global markets have recently been experiencing volatility and disruption caused by economic uncertainty, including as a result international trade disputes and ongoing military disputes and related geopolitical uncertainty. International trade disputes, including threatened or implemented tariffs by the Trump administration and threatened or implemented tariffs by foreign countries in retaliation, could adversely impact our business. Trade disputes could also adversely impact supply chains which could now or in the future increase costs for us or delay delivery of key inventories and supplies. Trade disputes can also be highly disruptive to global financial markets. The length and impact of the ongoing trade disputes and military conflicts are highly unpredictable. We are continuing to monitor the trade disputes, inflation, interest rates and the military conflicts and the impacts to global capital markets and to our business.

RWT’s future success depends in part on recruiting and retaining key personnel and failure to do so may make it more difficult for us to execute the business strategy.

RWT is dependent upon the continued services of key personnel, including members of its executive management team. The loss of any one of these individuals could disrupt our operations or its strategic plans. Additionally, RWT’s future success will depend on, among other things, its ability to hire and retain the necessary qualified sales, marketing and managerial personnel, for whom it competes with numerous other companies, academic institutions and organizations. Restraints on the flow of technical and professional talent, including as a result of changes to U.S. immigration policies or laws, may inhibit our ability to adequately staff our engineering, research and development efforts. If RWT loses key employees, if it is unable to retain other qualified personnel, or if its management team is not able to effectively manage it through these events, RWT’s business, financial condition, and results of operations may be adversely affected.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

On September 5, 2025, we granted 602,320 shares of Class A Common Stock, in the form of RSAs, to Mr. Seidl in consideration of services to be provided by Mr. Seidl. 50% of such shares shall vest on January 1, 2026 and 50% of shall vest on January 1, 2027, subject to continued employment or service through such vesting date. No underwriting discounts or commissions were paid with respect to such RSAs. This issuance was made pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

The following exhibits are filed as part of, or incorporated by reference into, this Report on Form 10-Q.

Exhibit No.		Description
10.1+		Retention Bonus Agreement, dated as of June 27, 2025, by and between Rain Enhancement Technologies, Inc. and Randall Seidl (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed by Rain Enhancement Technologies Holdco, Inc. with the Securities and Exchange Commission on July 3, 2025).
10.2+		Amendment to Employment Agreement, dated June 27, 2025, by and between Rain Enhancement Technologies, Inc. and Randall Seidl (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed by Rain Enhancement Technologies Holdco, Inc. with the Securities and Exchange Commission on July 3, 2025).
31.1*		Certification of Principal Executive Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*		Certification of Principal Financial Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1**		Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2**		Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS*		XBRL Instance Document
101.CAL*		XBRL Taxonomy Extension Calculation Linkbase Document
101.SCH*		XBRL Taxonomy Extension Schema Document
101.DEF*		XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*		XBRL Taxonomy Extension Labels Linkbase Document
101.PRE*		XBRL Taxonomy Extension Presentation Linkbase Document
104*		Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

*	Filed herewith.
**	Furnished herewith.
+	Denotes management contract or compensatory plan or arrangement.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	Rain Enhancement Technologies Holdco, Inc.

Date: November 13, 2025	By:	/s/ Randall Seidl
		Name:	Randall Seidl
		Title:	Chief Executive Officer and Director

Date: November 13, 2025	By:	/s/ Oanh Truong
		Name:	Oanh Truong
		Title:	Interim Chief Financial Officer

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Rain Enhancement Technologies Holdco, Inc. 10-Q