Rain Enhancement Technologies Holdco, Inc.
For the period ended Jun 30, 2025. Filed Aug 14, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2025 · Filed Aug 14, 2025
RAIN$0.50-6.7%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-31; filed 2025-05-15.
0001213900-25-044438
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-08-14.
0001213900-25-076727
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 98 previous paragraphs and 104 current paragraphs.
67 unchanged; 21 reworded; 15 added; 10 removed; 0 previous and 1 current paragraphs rearranged.
Tables are not compared: 0 previous and 0 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (15)
Current report
Business Combination Updates
Current report
PIPE Subscriptions Receivable
Current report
On February 6, 2025, we received $650,000 of the PIPE investment subscription receivable jn connection with the Business Combination as described in our Annual Report on Form 10-K filed with the SEC on April 16, 2025.
Current report
We 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.
Current report
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”, we recognize a liability for the Prepayment Shortfall at fair value, with subsequent changes in fair value recognized in our unaudited condensed consolidated statements of operations each reporting period until the Maturity Date. As of June 30, 2025 and December 31, 2024, the value of the shortfall payment liability at its maximum value of approximately $21,000 remained unchanged.
Current report
Going Concern Consideration
Current report
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.
Current report
As of June 30, 2025, we had approximately $16,000 in cash and had a working capital deficit of approximately $8.3 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.
Current report
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.
Current report
For the three months ended June 30, 2025, we had net loss of approximately $953,000, which consisted of general and administrative expenses of approximately $1.1 million (primarily related to personnel costs, professional services including quarterly audit, marketing, and other corporate operating expenses), amortization expenses of approximately $3,000, a loss due to change in fair value of warrant liability of $72,500, and interest expenses and minimal tax expenses and interest income from operating account of approximately $34,000, partially offset by gain from settlement with vendor of approximately $226,000.
Current report
For the six months ended June 30, 2025, we had net loss of approximately $2.4 million, which consisted of general and administrative expenses of approximately $2.4 million (primarily related to personnel costs, professional services including annual audit, marketing, and other corporate operating expenses), amortization expenses of approximately $6,000, a loss due to change in fair value of warrant liability of $162,500, and interest expenses and minimal tax expenses and interest income from operating account of approximately $81,000, partially offset by gain from settlement with vendor of approximately $226,000.
Current report
As of June 30, 2025, we had drawn approximately $2.4 million under the LOC, bringing the total outstanding balance under the Loan Agreement to approximately $5.5 million (including the $3.1 million Rollover). Subsequent to June 30, 2025, we drew an additional amount of approximately $354,000 under the LOC.
Current report
As of June 30, 2025 and December 31, 2024, we had an outstanding accrued interest balance in connection with both the Note and the LOC of approximately $118,000 and $38,000, respectively.
Current report
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. As of June 30, 2025, no equity awards have been granted.
Current report
Termination Letter
Removed paragraphs (10)
Previous report
Business Combination
Previous report
PIPE Subscriptions
Previous report
In connection with the Closing, Holdco entered into the PIPE Subscription Agreements with the PIPE Investors and related parties to sell an aggregate of 118,557 shares of Holdco Class A Common Stock at $11.39 per share, for a total of $1.35 million. Of this, Holdco received $700,000 of the PIPE Investment and recorded a subscription receivable of $650,000 on the consolidated balance sheet as of December 31, 2024. Such receivable was fully paid on February 6, 2025.
Previous report
Loan Agreement with an Affiliate of Harry You
Previous report
On December 30, 2024, Holdco entered into the Loan Agreement with RHY, an affiliate of Harry You, our Chairman, pursuant to which RHY committed to provide Holdco with up to $7 million in new loans. Prior to each drawdown, pursuant to the Loan Agreement, Holdco must certify to RHY, among other things, that it has used its best efforts to raise equity, equity-linked, or debt financing on terms available in the market to a similarly-situated company in similar circumstances, and is unable to obtain alternate financing in the amount of such drawdown. Once amounts are borrowed, they may not be re-borrowed. Additionally, Mr. You agreed to roll over an aggregate of approximately $3.1 million of loans and advances owed to him or to his affiliates by Coliseum and RWT into the Loan Agreement and such amounts were treated for all purposes as loans outstanding pursuant to the Loan Agreement (which, for the avoidance of doubt, does not decrease the $7 million commitment). The Loan has an interest rate of 5%, and interest will be due and payable quarterly in arrears. As of March 31, 2025, we had drawn around $737,000 from the LOC, bringing the total outstanding balance under the Loan Agreement to approximately $3.8 million (including the Rollover). Subsequent to March 31, 2025, we drew an additional amount of approximately $554,000 under the LOC.
Previous report
Liquidity and Capital Resources
Previous report
As of March 31, 2025, we had approximately $273,000 in cash and had a working capital deficit of approximately $6.6 million. We expect to continue to incur expenses and begin to generate revenues as we continue to grow and scale our business.
Previous report
In connection with the Business Combination, on December 30, 2024, RHY, an affiliate of Harry You, our Chairman, entered into the Loan Agreement and agreed to issue a LOC to Holdco for up to $7 million. In addition, Mr. You and his affiliate also agreed to rollover all outstanding amount that Coliseum and RWT owed to them prior to Closing under the LOC. The Rollover amount does not reduce the $7 million funding available to the Company under the LOC. The Loan has an interest rate of 5%, and interest will be due and payable in arrears quarterly. As of March 31, 2025, we had drawn approximately $737,000 from the LOC, bringing the total outstanding balance under the LOC to approximately $3.8 million (including the Rollover). Subsequent to March 31, 2025, we drew an additional amount of approximately $554,000 under the LOC.
Previous report
Our management estimates approximately $6.3 million and approximately $62 million in expenses for our one-year and five-year business plan. These funds are expected to be used for producing units, integrating and rolling out software for the rain enhancement platform, expanding water services through the ‘land and expand’ client acquisition model, and potentially acquiring other weather technologies. Since the base technology and products are developed and proven, the need for additional capital will primarily be driven by growth in customer acquisition and projects. Our management believes that the budget can be scaled in line with the funds actually received, enabling RWT to expand its client base, deliver equipment and technology to newly acquired clients, and develop new products for the RWT platform.
Previous report
We expect to fund our future development and exploration activities using the available funding under the LOC and future operating cash flow. The timing of most capital expenditures is largely discretionary. We have a significant degree of flexibility to adjust the level of our capital expenditures as circumstances warrant. If our plans or assumptions change, we may seek additional funding through debt or other equity financing arrangements, implement incremental expense reduction measures or a combination thereof to continue financing our operations. Although our management continues to pursue these plans, there is no assurance that we will be successful in obtaining sufficient funding on terms acceptable to us to fund continuing operations, if at all.
Reworded paragraphs (21)
Previous wording
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 core platform with software, meteorology, hardware, product design and operations to make rainfall generation more dependable. We aim to improve on 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.
Current wording
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 core 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.
Previous wording
On December 30, 2024, Holdco entered into a forward purchase agreement (the “Forward Purchase Agreement”) with Meteora Capital Partners, LP and affiliated funds (“Meteora”) for an OTC equity prepaid forward transaction. An aggregate of 361,858 shares of Holdco Class A Common Stock (the “Forward Purchase Shares”) are subject to the Forward Purchase Agreement, for which Meteora was paid approximately $4.1 million at Closing (the “Prepayment”) and we retained approximately $20,000 (the “Prepayment Shortfall”). The Forward Purchase Agreement matures on the date of the effectiveness of a certain registration statement filed by Holdco with the Securities and Exchange Commission following the Closing Date (the “Maturity Date”). Meteora may sell the Forward Purchase shares at any time following the Closing Date until the Maturity Date at a price not less than $10.00 per share. If Meteora sells any of the Forward Purchase Shares, Meteora will pay to Holdco $10.00 for each share sold, less the Prepayment Shortfall. On Maturity Date, any Forward Purchase Shares that have not been sold by Meteora will be returned to us for no consideration, provided that if the proceeds of the shares sold by Meteora prior to the Maturity Date is less than the Prepayment Shortfall, then we will pay cash to Meteora in an amount equal to such difference.
Current wording
Also in connection with the Business Combination, on December 30, 2024, we 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 our Annual Report on Form 10-K filed with the SEC on April 16, 2025.
Previous wording
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.
Current wording
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 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, 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.
Previous wording
RWT currently is warehousing two fully built rain generation systems in Sydney, Australia. The systems were built by a leading ionization rainfall generation engineer, and have undergone rigorous evaluation, testing, and documentation. These units are expected to arrive in the U.S. by August 2025 and expect to execute our first client contract and begin the installation process in the third quarter of 2025. Concurrently, we plan to identify, recruit, and hire a CTO, CFO and other go to market resources.
Current wording
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 U.S. in July 2025 and we expect to execute our first client contract and begin the installation process in the third quarter of 2025.
Previous wording
In March 2025, we began planning the development of ten additional rain generation systems for deployment in new locations. 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.
Current wording
In March 2025, we began planning the 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.
Previous wording
We are actively hiring and plan to recruit up to five employees to support sales, operations, or climate science functions by the end of 2025.
Current wording
We are actively hiring and plan to recruit additional personnel to support sales, operations, or climate science functions by the end of 2025.
Previous wording
We will also plan and prepare for the installation of our system at our first location in August 2025. This process will include securing the services of a general contractor (“GC”) in the area. We will collaborate with the GC to obtain all necessary building permits, which we anticipate will be similar to those required for cell tower installations and should be acquired efficiently and at a reasonable cost.
Current wording
As described above, we are planning and preparing for the installation of our system at our first location in the third quarter of 2025. This process will include securing the services of a consultant in the area. We will collaborate with the consultant to obtain all necessary building permits, which we anticipate will be similar to those required for cell tower installations and should be acquired efficiently and at a reasonable cost.
Previous wording
We will also begin finalizing site selection for the region where we plan to install a system in 2025. These regions 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 approximately 50-mile radius. 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 within 2026, allowing RWT to scale operations rapidly as client referral effects drive increased demand.
Current wording
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.
Previous wording
In connection with the Company’s assessment of going concern considerations in accordance with FASB ASC Subtopic 205-40, “Going Concern,” our management has determined that although 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, we have access to funds under the LOC. Additionally, an existing shareholder has pledged financial support as necessary and has the financial ability to provide such funds, that are sufficient to fund our working capital needs over the next twelve months from the date of issuance of these unaudited condensed consolidated financial statements.
Current wording
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.
Previous wording
For the three months ended March 31, 2024, we had net loss of approximately $31,000, which consisted of general and administrative expenses of approximately $21,000, amortization expenses of approximately $3,000 and interest expense in connection with the note payable to related parties of approximately $7,000.
Current wording
For the three months ended June 30, 2024, we had net loss of approximately $325,000, which consisted of general and administrative expenses of approximately $315,000, amortization expenses of approximately $3,000 and interest expense in connection with the note payable to related parties of approximately $7,000.
Previous wording
For the three months ended March 31, 2025, we had net loss of approximately $1.5 million, which consisted of general and administrative expenses of approximately $1.3 million, amortization expenses of approximately $3,000, loss in change in fair value of warrant liability of $90,000, and interest expense in connection with the note payable to related parties of approximately $47,000. The Company experienced higher expenses compared to previous years due to the merger completed on December 31, 2024.
Current wording
For the six months ended June 30, 2024, we had net loss of approximately $356,000, which consisted of general and administrative expenses of approximately $335,000, amortization expenses of approximately $6,000 and interest expense in connection with the note payable to related parties of approximately $15,000.
Previous wording
For the three months ended March 31, 2025, net cash used in operating activities was approximately $1.0 million, net cash used in investing account was approximately $139,000, and net cash provided by financing activities was approximately $1.4 million. Net loss of approximately $1.5 million was partially offset by changes in operating assets and liabilities of approximately $368,000 and non-cash activities, including amortization expense of approximately $3,000, minimal expenses paid by related parties on behalf of RWT, and change in fair value of warrant liability of $90,000, resulted in approximately $1.0 million of cash used in operating activities. Cash used in investing activities consisted solely of payment for building Equipment of approximately $139,000. Cash provided by financing activities resulted from proceeds from payment of subscription receivable of $650,000 and proceeds from drawdown under the LOC of approximately $737,000.
Current wording
For the six months ended June 30, 2025, net cash used in operating activities was approximately $1.4 million, net cash used in investing activities was approximately $613,000, and net cash provided by financing activities was approximately $2.0 million. Net loss of approximately $2.4 million, and gain from settlement with vendor of approximately $226,000, partially offset by changes in operating assets and liabilities of approximately $39,000, amortization expense of approximately $6,000, approximately $1.1 million paid by related parties on behalf of RWT, and change in fair value of warrant liability of $162,500, resulted in approximately $1.4 million of net cash used in operating activities. Cash used in investing activities consisted solely of payment for building Equipment of approximately $613,000. 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 $1.3 million.
Previous wording
For the three months ended March 31, 2024, net cash provided by operating activities was approximately $13,000, net cash used in investing account was approximately $41,000. Net loss of approximately $31,000 plus changes in operating assets and liabilities of approximately $128,000 was affected by amortization expense of approximately $3,000 and expenses paid by related parties on behalf of RWT of approximately $169,000, resulted in cash provided by operating activities of approximately $13,000. Cash used in investing activities consisted solely of payment for building Equipment of approximately $41,000.
Current wording
For the six months ended June 30, 2024, net cash provided by operating activities was approximately $46,000, net cash used in investing activities was approximately $45,000, and net cash provided by financing activities was $415,000. Net loss of approximately $356,000 was partially offset by amortization expense of approximately $6,000, expenses paid by related parties on behalf of RWT of approximately $228,000, and changes in operating assets and liabilities of approximately $76,000, resulted in net cash used in operating activities of approximately $46,000. Cash used in investing activities consisted solely of payment for building Equipment of approximately $45,000. Cash provided by financing activities resulted solely from proceeds from subscription payable of $415,000.
Previous wording
In November 2022, RWT entered into a consulting agreement, which was later amended on December 8, 2022, to engage with its senior technology advisor (“Technical Advisor”). RWT agreed to pay the Technical Advisor a one-time fee upon execution of the agreement (“First-time fee”) and a consulting fee of AUD 250,000 per year (equivalent to approximately $170,000 as of the effective date), which was later amended to $186,000 in February 2025, as well as certain bonuses that will be paid upon reaching certain milestones.
Current wording
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.
Previous wording
On February 2, 2023, RWT issued a promissory note (the “Note”) to its former CEO and 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.
Current wording
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.
Previous wording
On December 30, 2024, Holdco entered into the Loan Agreement with 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. The Loan has an interest rate of 5%, and interest will be due and payable in arrears quarterly.
Current wording
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”).
Previous wording
Prior to Closing, the outstanding amount that Coliseum and RWT owed to Mr. You and his affiliates were: (i) approximately $1.7 million and approximately $333,000 of advances to Coliseum and RWT, respectively, (ii) convertible note balance of $667,500 to Coliseum, and a portion under the Note discussed above of approximately $216,000 to RWT (which amount includes $200,000 in principal and approximately $16,000 in accrued interest), and (iii) an outstanding balance of $180,000 in accrued administrative fees to Coliseum, for a total of 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 of March 31, 2025, we had drawn approximately $737,000 from the LOC, bringing the total outstanding balance under the LOC to approximately $3.8 million (including the Rollover). Subsequent to March 31, 2025, we drew down an additional amount of approximately $554,000 under the LOC.
Current wording
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.
Previous wording
On December 31, 2024, Holdco entered into a binding offer letter (the “Offer Letter”) with its new CEO, Mr. Seidl effective January 2, 2025, pursuant to which 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, (iii) a contingent bonus payment of $5.0 million that will be issued under a form of an unsecured note payable (the “Officer Note”) on the earlier of (x) the four-year anniversary of the Officer Note, subject to the CEO’s continued service with Holdco through such date, (y) the date of a change in control of Holdco, and (z) the date of termination, if Holdco terminates the CEO’s employment without cause. Holdco and Mr. Seidl agreed to replace the Officer Note, which was not yet issued, with a retention bonus agreement to better reflect the nature of the commitment (“Retention Bonus”). As of March 31, 2025, the Retention Bonus has not been issued.
Current wording
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 June 30, 2025, we accrued approximately $14,000 of Retention Bonus in accrued expenses to related party in the accompanying unaudited condensed consolidated balance sheet.
Previous wording
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.
Current wording
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 six months ended June 30, 2025 within general and administrative expenses in the accompanying unaudited condensed statements of operations. As of June 30, 2025, there has been no grants of restricted stock.
Previous wording
On January 29, 2025, Holdco, RWT and Christopher Riley entered into a letter agreement whereby Mr. Riley resigned as Co-Chief Executive Officer of our company and RWT effective as of January 30, 2025 (the “Termination Letter”). Pursuant to the Termination Letter, in lieu of all other compensation and payments of any kind due and payable to Mr. Riley, Mr. Riley will be paid for services rendered in an amount of $124,500, payable in 18 monthly installments beginning in February 2025. Additionally, conditioned on approval by the Compensation Committee of our board of directors, 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.
Current wording
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. We recognized approximately $21,000 and approximately $35,000 in connection with such agreement during the three and six months ended June 30, 2025, respectively, within general and administrative expenses in the accompanying unaudited condensed statements of operations. 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 June 30, 2025, the stock has not been granted.
Previous wording
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 months ended March 31, 2025 and 2024.
Current wording
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 six months ended June 30, 2025 and 2024.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
On January 29, 2025, Holdco, RWT and Christopher Riley entered into a letter agreement whereby Mr. Riley resigned as Co-Chief Executive Officer of our company and RWT effective as of January 30, 2025 (the “Termination Letter”).