RAKR 10-K & 10-Q changes, risk factors and insider trading

Investing in our common stock involves risks. Each of these risks as well as other risks and uncertainties not presently known to us or that we currently deem immaterial could adversely affect our business, results of operations, cash flows and financial condition and cause the value of our common shares to decline, which may result in the loss of part or all of your investment.

The Company has recently commercialized its business to deploy its technologies using AW and WW and partner products and services. Consequently, the Company has limited operating history and an unproven marketing and sales strategy. Our primary activities to date have been the research and development of intellectual property and technology assets and identifying prospective global clients that management believes would operationalize our technologies. As such, weWe may not be able to achieve positive cash flows and our lack of operating history makes evaluation of our future business and investment prospects difficult. The Company’s success is dependent upon the successful development and implementation of suitable water projects and establishing its water production technology capabilities in a variety of complex environmental crises crises worldwide. Any future success that we might achieve will depend upon various factors, including factors beyond our control that cannot cannot be predicted at this time. These factors may include but are not limited to:

As our business grows and expands, RAKR expects to have substantial planned expenses in order to facilitate and maintain strategic distribution channels and key relationships. We expect our cost of revenues, business development, marketing, sales, operational, general, and administrative expenses to continue to increase. If revenues do not increase to correspond with these increased expenses or if outside capital is not secured, there may be a material adverse effect on our business, cash flow, and overall financial condition.

We expect to raise additional funds by engaging in equity and/or debt financing transactions if capital providers supply the desired amount of financial capital on the basis of terms we believe reasonable to provide for working capital needs, finance the acquisition of capital assets, and carry out business development efforts in the best interest of existing shareholders. Any sales of additional equity and/or convertible debt securities would result in dilution of the equity interests of our existing stockholders, which could be substantial. Additionally, if we issue shares of preferred stock or convertible debt to raise funds, the holders of those securities might be entitled to various preferential rights over the holders of our Common Stock, including repayment of their investment, and possibly additional amounts, before any payments could be made to holders of our Common Stock in connection with an acquisition of the Company. Incurring additional debt, if authorized, would create rights and preferences that would be senior to, or otherwise adversely affect, the rights and the value of our Common Stock and would have to be repaid from future cash flow before there would be any return to investors. On June 29, 2022 the Company increased its authorized capital to 500,000,000 and established one million preferred shares of which 150,000 have been issued. On September 26, 2024 the Company effected a 25:1 share consolidation.

The competition in AW and WWother technologytechnologies is limited.evolving and growing. Until recently, smaller remote on-site solutions have not been cost-competitive compared to alternatives, but that has changed. At the present time, we are aware of other companies that produce AW and/or WWour technologies. To the extent that future technological advance in the market results in pricing pressures, and the possibility that that will affect the Company’s ability to increase its market share, we may face an adverse effect on our business, operating results, and overall financial condition. At such time, the Company will consider its technological options accordingly.

The shares of the Company’s common stock issued in the 2017 were issued and designated as “restricted” or “control” shares as defined in Rule 144 under the Securities Act and are subject to resale restrictions. Consequently, these shares were not able to be freely sold at the time unless registered under the Securities Act of 1933 or sold pursuant to an available exemption under Rule 144. As of March 22,31, 2024,2025, approximately 392,559,425 16,348,573 shares of the Company’s common stock, held by non-affiliate stockholders are eligible for resale pursuant to Rule 144 without resale restrictions. This represents approximately 78.6%81.8% of the total issued and outstanding shares of stock. While this remains a risk factor the number of shareholders and the percentpercentage of tradeable shares suggest a functioning market for the Company’s shares.

To date, the Company has not paid any cash dividends on its common stock and does not anticipate paying any such dividends in the foreseeable future. Payment of future dividends will depend on earnings andearnings, our capital requirements andrequirements, our debt facilities and other factors considered appropriate by our Executive Officers and Directors. There is no assurance that we will, at any time, generate sufficient profits or surplus cash that would be available for distribution as a dividend to the holders of our common stock. Our current plans are to use any profits that we may generate to fund our ongoing marketing, sales, and operations. Therefore, any return on your investment would be derived from an increase in the price of our stock, which may or may not occur.

You should read the following discussion and analysis in conjunction with the audited financial statements, and the related footnotes thereto, appearing elsewhere in this Form 10-K, and in conjunction with management’s discussion and analysis and the audited financial statements included in our Form 10-12GA.10-K. In addition, we intend to use our media and investor section on our website (www.rainmakerww.com/category/investor-updates/), SEC filings and press releases to communicate with the public about Rainmaker, its services and other issues.

On January 22, 2024, RWI, a 40% subsidiary of RAKR,RWI finalized the acquisition of Miranda. The first payment of one million USD together with 40 million1,600,000 RAKR common shares was paid to the shareholders of Miranda. This providesprovided RWI with a 60% controlling interest of Miranda initially at 60% of Miranda common stock holdings.Miranda. The remaining two million USD is to be paid no later than 2 years from the closing date of January 22nd, 2024. MirandaRAKR is coming into 2024 after having a solid year of results in 2023 delivering projects in Iraq and Fiji among others. RWI and RAKR are actively marketing theirMiranda solutionsproducts inthrough Canada,distribution US,agreements Mexico,with RWI, primarily for Mexico and the Caribbean,United States. It is possible that RAKR will expand this territory to include Central America and South America.America Thein the future. With an expanded product portfolio willof assist in market entry opportunities for Miranda andproducts RAKR productshas alike,the bringingopportunity to increase revenue and value toshareholder all of the companies.value.

The Company’s ongoing focus will be to pair Rainmaker technologies with those of Miranda and theirour affiliate partners.

The Company has generated limited revenue up untilto the present time, and its operations for the past four yearspresent. Operations have been typically focused on business development, market research, technology research and development activities. The Company had total assets of $43,038,$30,725, as of December 31, 2022.2023. As of December 31, 2023,2024, net assets were $30,725.$50,116.

At present, the Company executes consulting agreements with experienced executive personnel and senior advisors. Future sales will be heavily driven by independent distributors and project developers. The Company had $78,912 in revenue for the year ending December 31, 2023 and no revenue for the year ending December 31, 2022 and had net losses of $1,218,908 and $1,837,611 for the years ended December 31, 2023 and 2022, respectively. The losses in 2023 have been reduced by 34% compared to 2022. The 2023 losses are driven by operating expenses, the first important component being the costcosts associated with maintaining the Company’s listing and current filing status with the SEC. The second component is consulting expenses including stock option expenses which incorporate derivative liabilities for warrants, the majority of which remains on the balance sheetSEC as relatedexpected partyare payables.significant. The Company has suffered recurring losses from operations, negative cash flows from operating activities and has limited resources or revenues to cover its operating costs. The Company’s auditor’s report for 20232024 stated that there was substantial doubt about the Company’s ability to continue as a going concern.

Fundamentally, our the solutions are based on deploying technology with the following attributes to ensure low-cost delivery and Company profitability:

Air-to-Water (AW) – Harvests fresh water from airborne humidity by using advanced heating and cooling technologies. Water-to-WaterThrough (WW) – Transforms contaminated water (saltwater, sewage, polluted) into safe, clean water by using an environmentally sustainable process. Through the acquisition of Miranda and RAKR’s own technologytechnologies wethe Company havehas multiple options to purify wastewater.wastewater to potable water standards.

The operating efficiency of these technologies allows us to provide customers with clean water at a price that is highly competitive relative to traditional alternatives. We substantially out-perform peer competitors because we can deploy remotely where the water is consumed and using up to 50% less power than those same competitors. The compact and scalable systems for AW and WWpurification equipment enable decentralized deployment, in which water is distributed directly to the consumption site with no expensive piping or truck transport. AWOur and WWtechnologies are both cost-effective technology solutions and can be powered by solar, wind, or grid electricity, or a combination of power sources. TheyAW can produce roughly 5,000 to 150,000 liters of water per unit, per day, depending on the local conditionsclimatic and the type of unit deployed.conditions.

Currently in remote locations, the principal source of supply is bottled water. Accordingly, our solutions are optimally profitable when we compete head-to-head with bottled water that is transported or bulk water that is transported by truck to local communities. In most remote communities where this water is imported, the minimum cost per liter is US$0.30 reaching as high as US$2.00, according to our market research. The Company’s fully amortized cost of water per liter including bottling, operating and maintenance, distribution and other costs allows us to compete profitably to generate corporate value beneficial to our shareholders. The market for distilled water supported in part by WW-based technology, which is essential to more specialized industrial or commercial activities, is expected to increase margins significantly.

The RAKR business model typically begins with the identification of a trusted local partner.technology Whenpartner applicable,and the next step is to enter into JV structures, which maximize value to all stakeholder-parties.distributor. The Rainmaker delivery systems are towill be installed by entering into contracts withcontracted local third-party experts that are typically Heating, Ventilation and Air Conditioning (“HVAC”) experts. We work with the end clients and their general contractors to build the supporting infrastructure required for our systems (i.e. holding tanks, platforms etc.).

In addition, over the course of the past year, we have been developing partnerships with highly experienced developers of complementary technology. That gives RAKR the ability to have a more comprehensive product set when proposing solutions to communities, developers and commercial entities. The most significant agreement advance to date is withthe acquisition of Miranda. On January 22, 2024, RWI finalized the acquisition of Miranda. Miranda has been delivering systems for more than ten years across 40 countries globally. As a result, their global experience is invaluable to Rainmaker and Rainmaker shareholders.

In the past tentwenty years, there has been a growing awareness of the shortage of fresh water—and the associated economic and social effects the problem magnifies in impoverished and underdeveloped communities. Entities ranging from Water.Org to the United Nations (access to safe drinking water represents #6 of the 17 Sustainable Development Goals articulated by the United Nations) are at the forefront of driving international policy momentum and prospects for multilateral cooperation in the realms of global governance and public-private co-regulation. Common to these efforts is the search for scalable and practical solutions that possess applications uniquely suited to the problem of shortage.

The above analysis points to a global market for water that is extraordinarily immense. Today, the annual global water market for all purposes and uses is $650$880 billion in 2023 and is expected to expand to $1$1.2 trillion by 2025.2031 (Source: RobecoSAMVerified StudyMarket (2015,Research: Junewww.verifiedmarketresearch.com). Water: the market of the future). Applying RAKR’s approach against the purposes and uses defined above, our solutions are tailored to meet roughly 70% of that global level of demand.

As stated previously, our principal suppliers for the core technologies to be deployed are Miranda and RHBV. Should RHBV not supply the appropriate scale of technology required by a project, RAKR has identified multiple technologies of different sizes and types. With the acquisition of Miranda, we now have complementary technology that we expect to deliver in 2024 to diversify the Rainmaker business model.

The Rainmaker business model that will deliver potable water at the source of demand is uniquely positioned to address alternative competitive models. We believe that competitive models, while relevant and plausible alternatives, will not ultimately fully support the global level of demand for water at a reasonable price per liter. InBy virtue of our current affiliations, we believe we have a cost per liter competitive advantage. Accordingly, on a global basis, we do not believe competitive conditions will thwart our ability to produce long-term, corporate value or significantly diminish our financial results in the near term. However, other companies with sufficiently greater resources may develop competing products and have an advantage over us based on the relative size.

While RAKR is not currently pursuing subsidies and incentives, we believe that over time such programs will be applicable to the Company, and we will pursue them in due course. Over time, RAKR will seek subsidies and incentives through its deployment of technology in underserved countries and particular communities within countries.

We have indirect access to considerable intellectual property assets as a consequence of our partial ownership of and variouspartnerships partnerships with RHBV and Miranda. We believe that this allows us to maintain an edge in the competitive process from a technological and economic cost perspective.

General and administrative expenses, including stock-based compensation, for the year ended December 31, 20232024 decreased $890,724,$258,580, compared to the same period in 2022.2023. This decrease primarily relates to (1) a reduction in consulting expense of $158,583, (2) stock-based compensation decreased by $62,832, (3) a decrease of $493,133$20,782 in general and administrative expenses, (2) stock-based compensation decreased $277,590, (3) consulting expense reduced by $83,417, and (4) marketingtravel and advertisingentertainment expense decreased by $48,811.$16,903. These decreases were offset minimally by an increase in travel.marketing and advertising expenses of $519. Excluding stock-based compensation, general and administrative expenses decreased decreased $613,134.$195,748.

Similar While we are similar to other development stage companies, we have now pursued and executed a strategy whereby we have a full suite of products that can deliver distributed water solutions globally. To date, our products have yet to generate significant revenue. As a result, we have historically suffered recurring losses and we do not have the required cash resources to fully execute our business plans.

Historically, the Company’s major sources of cash have comprised proceeds from various private offerings of its securities (including common stock) and debt financings.financing. From 2015 through to the fiscal year end date December 31, 2023, the Company raised approximately $8.2 million in gross proceeds from various private offerings of our common stock and convertible debt. These funds were raised during various stages of the company and allowed us first to develop a commercially ready product and as soon as logistics and supply chains allow, deliver these products into identified projects and begin to generate revenue. The Company has sustained losses from operations in each fiscal year since our inception, and we expect losses to continue for the indefinite future. As of December 31, 20232024 and December 31, 2022, 2023, the Company had an accumulated deficit of approximately $74 $75.1 million and $73$74.1 million, respectively,million and stockholders’ equity of approximately $(10.911.9) and $(10.310.9) million, respectively. As of December 31, 2023,2024, the Company had approximately $131$116 in cash.

The Company recognizes and is addressing the need to raise additional capital in order to continue to execute its business plan in the future. There is no assurance that additional financing will be available when needed or that the Company will be able to obtain financing on terms acceptable to it or whether the Company will become profitable and generate positive operating cash flow.

See Note 2 toin our condensed financial statements for a discussion of our significant accounting policies.

Until December 31, 2021, the Company evaluated embedded conversion features within convertible debt under ASC 815 Derivatives and Hedging to determine whether the embedded conversion feature(s) should be bifurcated from the host instrument and accounted for as a derivative at fair value with changes in fair value recorded in earnings. If the conversion feature did not require derivative treatment under ASC 815, the instrument was evaluated under ASC 470-20 Debt with Conversion and Other Options for consideration of any beneficial conversion features. On January 1, 2022 the Company adopted ASU 2020-06 using the modified retrospective method and reviewed and calculated the impact on the outstanding financial instruments as of this adoption date concluding there was no impact.

RAKR remains focused on the development and commercialization of advanced water production and purification technologies. With a growing product portfolio and regional distribution reach, the Company is actively pursuing business opportunities across North, Central, and South America, as well as the Caribbean. Through these efforts, RAKR aims to position itself as a leader in delivering sustainable and scalable water solutions to meet the world’s pressing water challenges. Rainmaker sashas the capability to be a full service water delivery partner for medium sized communities, developments of all kinds, and industrial/commercial applications.

The Company has generated limited revenue up to present. Operations have been typically focused on business development, market research, technology research and development activities. The Company had total assets of $50,116 as of December 31, 2024. As of JuneSeptember 30, 2025, 2025, net assets were $31,596.$104,189.

At present, the Company executes consulting agreements with experienced executive personnel and senior advisors. Future sales will be heavily driven by independent distributors and project developers. The Company had no revenue for the quarters ending JuneSeptember 30, 2025 and JuneSeptember 30, 2024 of $34,250 and $143,725, respectively, and had net losses of $543,287$929,521 and $346,172$592,987 for the quarters ending JuneSeptember 30, 2025 and 2024, respectively. The losses in 2025 increased by 57% compared to the same period in 2024.

Currently in remote locations, the principal source of supply of potable water is bottled water.bottled. Accordingly, our solutions are optimally profitable when we compete head-to-head with bottled water that is transported or bulk water that is transported by truck to local communities. In most remote communities where this water is imported, the minimum cost per liter is US$0.30 reaching as high as US$2.00, according to our market research. The Company’s fully amortized cost of water per liter including bottling, operating and maintenance, distribution and other costs allows us to compete profitably to generate corporate value beneficial to our shareholders. Our wastewater and related water purification systems are highly efficient when compared to competitors and in almost all cases will use a fraction of the electricity to treat the same amount of water.

InThis addition,strategy overwill thecontinue courseto of the past year, we have been building partnerships with highly experienced providers of complementary technology. That givesgive RAKR the ability to have a more comprehensive product setline when proposing solutions to communities, developers and commercial entities. The most significant advance to date is the acquisition of Miranda by RWI on January 22, 2024. RAKR directly benefits from this acquisition by providing the Company with vast experience and comprehensive water purification solutions.

As stated previously, our principal suppliers for the core technologies to be deployed are Miranda and other glogalglobal equipment manufacturers. With the acquisition of Miranda, we have complementary technology to diversify the Rainmaker market.

During the quarter ended June 30, 2025, the Company identified an error in its previously issued financial statements related to accrued interest on a legal judgment originally rendered in 2016. The judgment, which was upheld on appeal in 2018, accrues interest at a statutory rate of 5% per annum. The accrued interest had not been reflected in prior period financial statements. As a result, the Company has restated its previously issued financial statements to include the accrued interest. The correction resulted in an increase to accrued liabilities and a corresponding increase in accumulated deficit in the affected periods. The total contingent liability recorded as of June September 30, 2025 is $6,390,429$6,446,182 (2024: $6,281,346), which includes the judgment amount and related interest. The restatement did not impact the Company’s cash flows or cash balances, as the adjustment was non-cash in nature. For further details regarding the restatement and the legal matter, refer to Note 1819 – Restatement of Previously Issued Financial Statements.

Results of Operations for the SixNine Months ended JuneSeptember 30th, 2025 and 2024

Revenue was nil$34,250 and $143,725 for each of the sixnine months ended JuneSeptember 30, 2025, and JuneSeptember 30, 2024.2024, respectively.

General and administrative expenses primarily include consultant expenses, employee benefits, stock-based compensation for executive consultants, outside legal and professional services, marketing and advertising, and facilities-related costs. The following table sets forth general and administrative expenses for the six nine months ended JuneSeptember 30, 2025, and 2024:

General and administrative expenses, including stock-based compensation, increased by $87,527,$86,365, or 52.9%,33.6%, for the sixnine months ended June September 30, 2025, compared to the same period in 2024. The increase was primarily due to the following:

Historically, the Company’s major sources of cash have comprised proceeds from various private offerings of its securities (including common stock) and debt financing. From 2015 through to the fiscal year end date December 31, 2024, the Company raised approximately $8.2 million in gross proceeds from various private offerings of our common stock and convertible debt. These funds were raised during various stages of the company and allowed us first to develop a commercially ready product and as soon as logistics and supply chains allow, deliver these products into identified projects and begin to generate revenue. The Company has sustained losses from operations in each fiscal year since our inception, and we expect losses to continue for the indefinite future. As of JuneSeptember 30, 2025 and December 31, 2024, the the Company had an accumulated deficit of approximately $75.7$77.9 million and $75.1$76.9 million and stockholders’ equity of approximately $(11.313.2) and $(11.913.8) million, respectively. As of JuneSeptember 30, 2025, the Company had approximately $440$12 in cash.

As of JuneSeptember 30, 2025, the Company had no off-balance sheet arrangements.

Other income (expense) for the sixnine months ended June September 30, 2025 resulted in a net expense of $399,337,$594,668, compared to a net expense of $289,749 $335,830 for the same period in 2024. The change was primarily due to the following:

For the three months ended JuneSeptember 30, 2025, total other expense was $197,923,$195,331, compared to $67,250$155,164 in the same period in 2024. The increase primarily reflects the recognition of judgment-related interest and the absence of prior year derivative gains.

The Company reported a net loss of $652,370$929,521 for the six nine months ended JuneSeptember 30, 2025, compared to a net loss of $455,255$592,987 for the same period in 2024. The increased loss was primarily due to higher stock-based compensation, the recognition of accrued interest on a legal judgment, and the absence of favorable non-cash derivative income recorded in the prior year. For the three months ended JuneSeptember 30, 2025, net loss was $382,030,$277,151, compared to $135,296$246,815 in the same period of 2024.