Note 10 — Stockholders’ Deficit

Shares Authorization

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

Class A common stock entitles the holders thereof to one vote per share on all matters on which the shares of Class A common stock is entitled to vote, and Class B common stock entitles the holders thereof to fifteen votes per share on all matters on which the shares of Class B common stock are entitled to vote. Additionally, for so long as the RET Founders (Paul T. Dacier, Harry L. You, and Niccolo de Masi, or their affiliates) hold at least 20% of the number of shares of Class B common stock collectively held by them as of the Closing, the RET Founders have rights that are different from unaffiliated shareholders, including the right to fill vacancies on the Board and to call special meetings of shareholders. The Articles permit action by written consent of the shareholders and requires that amendments to the Articles be approved by a majority of the shares of common stock entitled to vote in lieu of two-thirds of the shares of 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 RET Founders or their Permitted Transferees collectively own twenty percent (20%) or less of the number of shares of 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 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 Class B common stock representing not less than two-thirds (2∕3) of the voting power of the Class B common stock. The Class A common stock and the Class B common stock have identical economic rights, including dividend and liquidation rights.

Incentive Plan

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

The Company 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, and increased to 1,530,160 as of January 1, 2026. 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 the Company’s capitalization, the Compensation Committee of the Board 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 June 30, 2026 and December 31, 2025, there were 1,530,160 and 1,123,606 shares of Class A common stock, respectively, authorized for issuance under the 2024 Incentive Plan. As of such dates, an aggregate of 1,142,320 and 602,320 shares, respectively, had been granted under the 2024 Incentive Plan, leaving 387,840 and 521,286 shares, respectively, available for future grants.

Preferred Stock

As of June 30, 2026 and December 31, 2025, there were no preferred shares outstanding.

Class A Common Stock

As of June 30, 2026 and December 31, 2025, the Company had an aggregate of 10,283,984 and 8,131,081 shares (including 301,160 and 602,320 unvested restricted stock awards, respectively) of Class A common stock issued and outstanding, respectively.

Class B Common Stock

As of June 30, 2026 and December 31, 2025, 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 RET’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. The Company fully recognized the fair value of the stock option as stock-based compensation expenses upon issuance in August 2024. As of June 30, 2026 and December 31, 2025, 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.

New Issuance

On June 5, 2026, the Company issued an aggregate of 540,000 shares of Class A common stock pursuant to the Rain Enhancement Technologies Holdco, Inc. 2024 Equity Incentive Plan, as follows: (i) 80,000 shares were issued to each of Lyman Dickerson, Alexandra Steele, Robert Reardon, and Marcus Peperzak, 50,000 shares were issued to Christopher Riley, and 40,000 shares were issued to David Sylvester, each directors of the Company, as payment of director compensation pursuant to their director agreements (see Note 7), (ii) 50,000 shares of to its Interim Chief Financial Officer, (iii) 50,000 shares were issued to Mr. Morris, and (iv) 30,000 shares were granted to Christopher Monroe, an independent contractor. All of these shares were fully vested upon issuance.

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

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 $1.4 million and approximately $1.7 million of stock compensation expense within the general and administrative expenses in the accompanying unaudited condensed consolidated statements of operations for the three and six months ended June 30, 2026, respectively. There was no issued or outstanding RSAs during the three and six months ended June 30, 2025. As of June 30, 2026 and December 31, 2025, total unrecognized compensation cost related to RSAs was approximately $508,000 and $1.0 million, which is expected to be recognized over a remaining weighted-average vesting period of 0.51 years and 1.5 years, respectively.