Note 3 – Equity Investment

RAINMAKER WORLDWIDE INC. (ONTARIO)(RWI)

On April 1, 2023, RAKR divested 60% interest in RWI. On January 16, 2024, RAKR entered into an agreement with RWI to acquire Miranda Environmental and Water Treatment Technologies, Energy, Natural Resources, Engineering, Consulting, Construction and Commerce Inc. (“Miranda”) in Ankara, Turkey. This required RAKR to invest $400,000 into RWI to execute this acquisition. This investment was considered an Equity Investment. On December 31, 2024, under a Debt Swap and Conversion Agreement, RWI assumed $112,378 owed by RAKR to RWI and four affiliated parties thereby reducing its investment in RWI. The remaining balance of the investment was then converted into shares of RWI, which—together with RWI’s simultaneous restructuring—resulted in the Company’s ownership decreasing to 13.65%, no longer considering the investment as an Equity Investment at the fiscal year end 2024.

 Schedule of Equity Investment 

Impairment of Investment in RWI

Based on the information available, the Company’s management have decided to impair the asset in accordance with standard accounting principles. Specifically, as of December 31, 2024, RWI’s financials reflected insufficient cash, a net liability position, and ongoing net losses. Given these circumstances, the Company believed it is unlikely that the investment would generate a sufficient return on investment (ROI) to support the continued capitalization of the balance, especially following the loss of the equity method investment. As a result, the Company impaired this asset to zero. The Company was well aware of this position in advance of the restructuring. More important than the equity value to the Company is the strategic value of the asset that is expected to jointly generate future revenues and technological advancements. While this cannot be guaranteed, the Company and RWI continue to work together to advance the value of both businesses. The water infrastructure business has a long sales cycle and depends on factors such as developers receiving permits in a timely fashion for projects that would require water treatment. (see also Note 10 and 16).