Rainmaker Worldwide Inc 10-Q for FY2024 Q3
Rainmaker Worldwide Inc. (RAKR)
About this 10-Q
Rainmaker Worldwide Inc filed this 10-Q on November 14, 2024, covering the quarter ended September 30, 2024 (FY2024 Q3).
Headline figures
Quarter ended September 30, 2024, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $143.73K
- up 82.1% from $78.91K a year earlier
- Net loss
- $246.82K
- compared with a net loss of $193.96K a year earlier
- Diluted EPS
- -$0.01
- compared with -$0.03 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For
the quarterly period ended |
or
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:
(Exact name of registrant as specified in its charter)
| (State
or other jurisdiction of incorporation or organization) |
(I.R.S.
Employer Identification No.) | |
| (Address of principal executive offices) | (Zip Code) |
(Registrant’s telephone number, including area code)
N/A
(Former name or former address and former fiscal year, if changed since last report)
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.
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).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a 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 ☐ | |
| 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 Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes ☐ No ☐
APPLICABLE ONLY TO CORPORATE ISSUERS
The number of shares of the registrant’s Common Stock, $ par value, outstanding as of November 14, 2024 was . The number of shares of the registrant’s Preferred Stock, $0.001 par value, outstanding as of November 14, 2024 was 150,000.
TABLE OF CONTENTS
| Page No. | ||
| PART I | FINANCIAL INFORMATION | 4 |
| Item 1. | Financial Statements (2024 unaudited, 2023 unaudited) | 4 |
| Balance Sheets | 4 | |
| Statements of Operations and Comprehensive Loss | 5 | |
| Statements of Stockholders’ Equity (deficit) | 6 | |
| Statements of Cash Flows | 7 | |
| Notes to the Financial Statements | 8-21 | |
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 22 |
| Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 27 |
| Item 4. | Controls and Procedures | 27 |
| PART II | OTHER INFORMATION | 28 |
| Item 1. | Legal Proceedings | 28 |
| Item 1A. | Risk Factors | 28 |
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 28 |
| Item 3. | Defaults Upon Senior Securities | 29 |
| Item 4. | Mine Safety Disclosures | 29 |
| Item 5. | Other Information | 29 |
| Item 6. | Exhibits | 29 |
| SIGNATURES | 30 | |
| 2 |
CAUTIONARY NOTE REGARDING FORWARD LOOKING-STATEMENTS
This quarterly report on Form 10-Q (“Form 10-Q”) of Rainmaker Worldwide Inc. (the “Company”) includes statements that are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. In some cases, these forward-looking statements can be identified by the use of such terms as “believes,” “estimates,” “anticipates,” “expects,” “plans,” “intends,” “may,” “could,” “might,” “will,” “should,” “approximately” or the negative or other variations thereon or comparable terminology, although not all forward-looking statements contain these words. They appear in a number of places throughout this Form 10-Q and include statements regarding our intentions, beliefs, projections, outlook, analyses or current expectations concerning, among other things, our results of operations, financial condition, our available cash, liquidity, prospects, growth and strategies, the length of time that we will be able to continue to fund our operating expenses and capital expenditures, our expected financing needs and sources of financing, the industry in which we operate and the trends that may affect our industry or us.
By their nature, forward-looking statements involve risks and uncertainties because they relate to the occurrence and timing of events or circumstances, many of which are beyond the control of the Company. As a result of this, we cannot assure you that the forward-looking statements in this Form 10-Q will prove to be accurate. Although we believe that we have a reasonable basis for each forward-looking statement contained in this Form 10-Q, we caution you that forward-looking statements are not guarantees of future performance and that our actual results of operations, financial condition and liquidity, and the development of the industry in which we operate, may differ materially from the forward-looking statements contained in this Form 10-Q. In addition, even if our results of operations, financial condition and liquidity, and the development of the industry in which we operate, are consistent with the forward-looking statements contained in this Form 10-Q, they may not be predictive of results or developments in future periods.
Some of the material factors that we believe could cause actual results to differ from those anticipated or predicted include:
| ● | the successful development and implementation of our sales and marketing campaigns; |
| ● | the size and growth of the potential markets for our product and our ability to serve those markets; |
| ● | regulatory developments in the United States and other countries; |
| ● | our available cash; |
| ● | the accuracy of our estimates regarding expenses, future revenues, capital requirements and needs for additional financing; |
| ● | our ability to obtain additional funding; |
| ● | our ability to manufacture and the performance of third-party manufacturers; |
| ● | our ability to identify license and collaboration partners and to maintain existing relationships; and |
| ● | our ability to successfully implement our strategy. |
You should also read carefully the factors described in the “Risk Factors” section of the Form 10-12GA. Any forward-looking statements that we make in this Form 10-Q speak only as of the date of such statement, and we undertake no obligation to update such statements to reflect events or circumstances after the date of this Form 10-Q except as required by the federal securities laws.
This Form 10-Q includes statistical and other industry and market data that we obtained from industry publications and research, surveys and studies conducted by third parties. Industry publications and third-party research, surveys and studies generally indicate that their information has been obtained from sources believed to be reliable, although they do not guarantee the accuracy or completeness of such information. While we believe these industry publications and third-party research, surveys and studies are reliable, we have not independently verified such data.
| 3 |
PART I — FINANCIAL INFORMATION
Item 1. Financial Statements
RAINMAKER WORLDWIDE INC.
(Formerly Gold and Silver Mining of Nevada Inc.)
Balance Sheets
| Sept 30, | December 31, | |||||||
| 2024 | 2023 | |||||||
| (Unaudited) | (Audited) | |||||||
| Assets | ||||||||
| Current Assets | ||||||||
| Cash | $ | $ | ||||||
| Other receivables | ||||||||
| Prepaid expenses | ||||||||
| Total Current Assets | ||||||||
| Long Term Assets | ||||||||
| Equity Investment | ||||||||
| Total Long-Term Assets | ||||||||
| Total Assets | $ | $ | ||||||
| Liabilities and Stockholders’ Equity (Deficit) | ||||||||
| Current Liabilities | ||||||||
| Accounts payable | $ | $ | ||||||
| Related party payables | ||||||||
| Accrued liabilities | ||||||||
| Customer deposits | ||||||||
| Contingent liability | ||||||||
| Convertible notes payable net of discount of $ and $ | ||||||||
| Convertible notes payable-related parties net of discount of $ | ||||||||
| Notes payable - related parties | ||||||||
| Derivative liabilities | ||||||||
| Total Current Liabilities | ||||||||
| Long Term Liabilities | ||||||||
| Long term notes payable – related parties | ||||||||
| Total Long Term Liabilities | ||||||||
| Total Liabilities | $ | $ | ||||||
| Mezzanine Equity | ||||||||
| Preferred stock - $ par value; stated value $; authorized shares: Series A; issued and outstanding at Sept 30, 2024 and at December 31, 2023 | $ | $ | ||||||
| Preferred Stock Payable | ||||||||
| Total Mezzanine Equity | $ | $ | ||||||
| Stockholders’ Equity (Deficit) | ||||||||
| Common stock - $ par value; authorized shares; outstanding at Sept 30, 2024 and December 31, 2023 | $ | $ | ||||||
| Additional paid-in capital | ||||||||
| Stock receivable | ( | ) | ||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total Stockholders’ Equity (Deficit) | $ | ( | ) | $ | ( | ) | ||
| Total Liabilities and Stockholders’ Equity (Deficit) | $ | $ | ||||||
The accompanying notes are an integral part of these financial statements.
| 4 |
RAINMAKER WORLDWIDE INC.
(Formerly Gold and Silver Mining of Nevada Inc.)
Statements of Operations and Comprehensive Loss
| Three month | Three month | Nine month | Nine month | |||||||||||||
| Sept 30 | Sept 30 | Sept 30 | Sept 30 | |||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||
| Revenue | $ | $ | $ | $ | ||||||||||||
| Cost of Goods Sold | ||||||||||||||||
| Gross Margin | ||||||||||||||||
| Expenses | ||||||||||||||||
| General and administrative expense | ||||||||||||||||
| Total Expenses | ||||||||||||||||
| Loss from Operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other income (expense) | ||||||||||||||||
| Income (loss) from equity method investment | ( | ) | ( | ) | ||||||||||||
| Interest expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Amortization of debt discount | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Initial derivative expense | ( | ) | ||||||||||||||
| Change in derivative liabilities expense | ||||||||||||||||
| Total other income (expense) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Loss from continuing operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Discontinued operations: | ||||||||||||||||
| Loss from operations of discontinued operations | ||||||||||||||||
| Total discontinued operations | $ | $ | $ | $ | ||||||||||||
| Net income (loss) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Net loss per share: | ||||||||||||||||
| Basic and diluted | $ | ) | $ | ) | $ | ) | $ | ) | ||||||||
| Weighted average number of common shares outstanding: | ||||||||||||||||
| Basic and diluted | ||||||||||||||||
The accompanying notes are an integral part of these financial statements.
| 5 |
RAINMAKER WORLDWIDE INC.
(FORMERLY GOLD AND SILVER MINING OF NEVADA, INC.)
Statement of Stockholders’ Equity (deficit)
| Shares | Amount | capital ($) | Preferred | Shares | Amount ($) | capital ($) | Receivable | Deficit ($) | income ($) | Total | ||||||||||||||||||||||||||||||||||
| Mezzanine Equity | ||||||||||||||||||||||||||||||||||||||||||||
| Series A Preferred Stock | Accumulated | |||||||||||||||||||||||||||||||||||||||||||
| Additional | Stock | Additional | other | |||||||||||||||||||||||||||||||||||||||||
| paid-in | Payable - | Common Stock | paid-in | Stock | comprehensive | |||||||||||||||||||||||||||||||||||||||
| Shares | Amount | capital ($) | Preferred | Shares | Amount ($) | capital ($) | Receivable | Deficit ($) | income ($) | Total | ||||||||||||||||||||||||||||||||||
| Balance, December 31, 2022 | | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||||
| Conversion of convertible promissory notes | ||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | - | |||||||||||||||||||||||||||||||||||||||||||
| Foreign currency translation | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||||
| Net gain (loss) for the year | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||
| Balance, March 31, 2023 | $ | $ | $ | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||
| Conversion of convertible promissory notes | ||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | - | |||||||||||||||||||||||||||||||||||||||||||
| Stock payable-Preferred | $ | - | ||||||||||||||||||||||||||||||||||||||||||
| Foreign currency translation re disposal of foreign subsidiary | - | ( | ) | |||||||||||||||||||||||||||||||||||||||||
| Net gain (loss) for the year | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||
| Balance, June 30, 2023 | $ | $ | $ | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||
| Conversion of convertible promissory notes | ||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | - | |||||||||||||||||||||||||||||||||||||||||||
| Stock payable-Preferred | ( |
( | ) | |||||||||||||||||||||||||||||||||||||||||
| Issuance of Series A preferred stock for cash | |
$ | |
$ | ||||||||||||||||||||||||||||||||||||||||
| Disposition of discontinued operations | - | |||||||||||||||||||||||||||||||||||||||||||
| Foreign currency translation re disposal of foreign subsidiary | - | |||||||||||||||||||||||||||||||||||||||||||
| Foreign currency translation | - | |||||||||||||||||||||||||||||||||||||||||||
| Net gain (loss) for the period | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||
| Balance, September 30, 2023 | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | |||||||||||||||||||||||||||||||
| Balance, December 31, 2023 | $ | $ | $ | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||
| Stock-based compensation | - | |||||||||||||||||||||||||||||||||||||||||||
| Settlement of derviative liability | - | |||||||||||||||||||||||||||||||||||||||||||
| Stock payable-Preferred | - | |||||||||||||||||||||||||||||||||||||||||||
| Receipt of funds owed | - | |||||||||||||||||||||||||||||||||||||||||||
| Net gain (loss) for the period | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||
| Balance, March 31, 2024 | $ | $ | $ | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||
| Stock payable-Preferred | - | |||||||||||||||||||||||||||||||||||||||||||
| Net gain (loss) for the period | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||
| Balance, June 30, 2024 | $ | $ | $ | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||
| Balance | $ | $ | $ | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||
| Stock payable-Preferred | ||||||||||||||||||||||||||||||||||||||||||||
| Adjustment to APIC and common stock after share consolidation | ||||||||||||||||||||||||||||||||||||||||||||
| Net gain (loss) for the period | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||||
| Net gain (loss) | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||||
| Balance, September 30, 2024 | $ | $ | $ | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||
| Balance | $ | $ | $ | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these financial statements.
| 6 |
RAINMAKER WORLDWIDE INC.
(Formerly Gold and Silver Mining of Nevada Inc.)
Statements of Cash Flows (Unaudited)
| 2024 | 2023 | |||||||
| Nine Months Ended | ||||||||
| September 30, | ||||||||
| 2024 | 2023 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash provided by (used for) operating activities: | ||||||||
| Stock-based compensation | ||||||||
| Change in fair value of derivative liabilities | ( | ) | ( | ) | ||||
| Initial derivative expense | ||||||||
| Discount amortization | ||||||||
| Income/loss from equity method investment | ||||||||
| Change in operating assets and liabilities: | ||||||||
| Accounts receivable | ( | ) | ||||||
| Prepaid expenses | ||||||||
| Accounts payable, related party payables and accrued liabilities | ||||||||
| CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES | ( | ) | ( | ) | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
| Investment in equity affiliate | ( | ) | ||||||
| Distributions from investment in equity affiliate | ||||||||
| CASH USED FOR INVESTING ACTIVITIES | ( | ) | ||||||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
| Proceeds from sale of stock-Preferred stock | ||||||||
| Proceeds from convertible notes | ||||||||
| Borrowed on debt | ( | ) | ||||||
| Repayments on debt – related party | ( | ) | ||||||
| Repayment on convertible promissory note | ( | ) | ||||||
| Stock issued for cash | ||||||||
| CASH PROVIDED BY FINANCING ACTIVITIES | ||||||||
| Effect on Foreign Currency Exchange | ( | ) | ||||||
| NET INCREASE (DECREASE) IN CASH | ( | ) | ||||||
| CASH AT BEGINNING OF YEAR | ||||||||
| CASH AT PERIOD END | $ | $ | ||||||
| NON-CASH TRANSACTIONS | ||||||||
| Conversion of AP to convertible notes payable | ||||||||
| Conversion of AP to LT notes payable | ||||||||
| Shares issued for conversion | ||||||||
| Initial Derivative Liability/Discount | ||||||||
| Reattribution of AOCI for disposal of foreign subsidiary | ||||||||
| Amendment to convertible note | ||||||||
| Settlement of derivative liability | ||||||||
The accompanying notes are an integral part of these financial statements.
| 7 |
Note 1: Nature of Operations and Going Concern
Nature of Operations
Rainmaker Worldwide Inc. (“Rainmaker” or the “Company” or “RAKR”) is a Nevada company which previously operated Rainmaker Worldwide Inc. (Ontario) (“RWI”) until March 31, 2023, with its head office in Peterborough, Ontario, Canada. The Company distributes two main types of energy-efficient, fresh water-producing technologies: (1) Air-to-Water (“AW”), which harvests fresh water from humidity in the atmosphere, and (2) Water-to-Water (“WW”), which transforms seawater or polluted water into drinking water. The technology can be wind, solar, or use conventional power sources (grid or generator), is deployable anywhere, and leaves no carbon trace if renewable resources are deployed.
The Company generates its revenue through the direct sales of water production and purification systems. Another source of revenue is in exchange for operating, maintenance and professional services to clients and potentially joint ventures.
Effective
April 1, 2023, Rainmaker (RAKR) divested
Rainmaker holds an indirect interest in Rainmaker Holland B.V. (“RHBV”) through its ownership in RWI which consists of the innovation and manufacturing center located in Rotterdam, Netherlands. RAKR will purchase equipment on a favorable cost-plus formula.
Company History
RWI
was incorporated on
Going Concern
The
Company has incurred continuing losses from its operations and has an accumulated deficit of $
The Company’s ability to continue its operations and to pay its obligations when they become due is contingent upon the Company obtaining additional financing. Management’s plans include seeking to procure additional funds through debt and equity financing to enable it to meet its operating needs including current and future sales orders. In addition, revenues are being forecasted at the operational level.
Share Consolidation
On September 26, 2024, the Company filed Articles of Amendment to effect a share consolidation (also known as a reverse stock split) of its issued and outstanding common shares on a one-for-twenty-five basis. The share consolidation became effective on September 26, 2024. All share and per share amounts have been restated for all periods presented to reflect the share consolidation.
| 8 |
Note 2: Significant Accounting Policies
Basis of Preparation
The financial statements presented are for the entity Rainmaker. The financial statements have been prepared in accordance with United States Generally Accepted Accounting Principles (“GAAP”).
The preparation of the financial statements, in conformity with GAAP, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
All accounting policies are chosen to ensure the resulting financial information satisfies the concepts of relevance and reliability.
Foreign Currency Translation
The reporting currency of the Company is the United States dollar.
Intangible Assets
No Intangible Assets.
Property and Equipment
Property and equipment are stated at cost less accumulated depreciation and any recognized impairment loss. Cost includes the original purchase price of the asset and any costs attributable to bringing the asset to its working condition for its intended use.
Depreciation is provided at rates estimated to write off the cost of the relevant assets less their estimated residual values by equal annual amounts over their expected useful lives. Residual values and expected useful lives are reviewed and adjusted, if appropriate, at the end of each reporting period. Depreciation periods for the Company’s property and equipment are as follows:
Schedule of Estimated Useful Lives of Property and Equipment
| Leasehold Improvements – | Manufacturing
Equipment – |
| Office
Furniture & Equipment – |
Demonstration
Equipment – |
| Intellectual
Property – |
Computer
Software – |
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, including stock purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives.
For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported as charges or credits to income. For option-based simple derivative financial instruments, the Company used a Monte Carlo simulation model to value the derivative instruments at inception and subsequent valuation dates. 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.
| 9 |
Debt Issue Costs and Debt Discount
The Company may record debt issue costs and/or debt discounts in connection with raising funds through the issuance of debt. These costs may be paid in the form of cash or equity (such as warrants). These costs are amortized to interest expense over the life of the debt. If a conversion of the underlying debt occurs, a proportionate share of the unamortized amounts is immediately expensed.
Demonstration Equipment
Demonstration equipment is stated at cost less accumulated depreciation and any recognized impairment loss. Cost includes the original purchase price of the asset and any costs attributable to bringing the asset to its working condition for its intended use.
Depreciation of the demonstration equipment is at a rate estimated to write off the cost of the equipment less its estimated residual value by an equal annual amount over its expected useful life. The residual value and expected useful life of the demonstration equipment is reviewed and adjusted, if appropriate, at the end of each reporting period.
Revenue Recognition
In May 2014, the FASB issued an accounting standard update (‘ASU”), 2014-09, Revenue from Contracts with Customers (Topic 606). This ASU amends the existing accounting standards for revenue recognition and is based on the principle that revenue should be recognized to depict the transfer of goods or services to a customer at an amount that reflects the consideration a company expects to receive in exchange for those goods or services. On January 1, 2018, the Company adopted the new Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers using the modified retrospective method, and the Company determined the new guidance does not change the Company’s policy of revenue recognition.
The Company generates its revenue through the direct sales of water production and purification systems. A contract with a customer is established once an agreement is signed and the initial down payment is received. Each transaction price is established in the signed contract. Unearned revenue is recognized upon receipt of the down payment for the system. The revenue is recognized once title of the system transfers to the customer. The nature of the business of equipment sales implies there is only one performance obligation, which is delivery of the product to the customer. Our contracts outline each party’s rights and obligations, including the terms and timing of payments. Another source of revenue is in exchange for operating, maintenance and professional services. That revenue is recognized in the period it is earned.
In June 2018, the FASB issued guidance clarifying the revenue recognition and measurement issues for grants, contracts, and similar arrangements, ASU Topic 958. Government grants and contracts are agreements that generally provide cost reimbursement for certain types of expenditures in return for research and development activities over a contractually defined period. Accordingly, the Company recognizes revenue from grants and contracts in the period during which the related costs are incurred, provided that the conditions under which the grants and contracts were provided have been met and only perfunctory performance obligations are outstanding.
Revenues
recognized at September 30, 2024 and September 30, 2023 are $
Related Party Transactions
Parties are related if one party can directly or indirectly control the other party or exercise significant influence over the other party in making financial and operating decisions. Parties are also considered to be related if they are subject to common control or common significant influence. Related parties may be individuals or corporate entities. A transaction is a related party transaction when there is a transfer of resources or obligations between related parties. Related party transactions that are in the normal course of business and have commercial substance are measured at the exchange amount.
Share-based Payment Expense
The Company follows the fair value method of accounting for stock awards granted to employees, directors, officers, and consultants. Share-based awards for employees are measured at the fair value of the related share-based awards. Share-based payments to others are valued based on the related services rendered or goods received or if this cannot be reliably measured, on the fair value of the instruments issued. Issuances of shares are valued using the fair value of the shares at the time of grant; issuances of options are valued using the Black-Scholes model with assumptions based on historical experience and future expectations.
| 10 |
Financial Liabilities and Equity Instruments
Financial liabilities and equity instruments are classified and accounted for as debt or equity according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities.
Marketing, Advertising and Promotional Costs
As required by Generally Accepted Accounting Principles of the United States, the Company records marketing costs as an expense in the year to which such costs relate. The Company does not defer amounts on its year-end balance sheets with respect to marketing costs. Advertising costs are expensed as incurred.
Use of Estimates
The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the year. Management bases its estimates on historical experience and on other assumptions considered to be reasonable under the circumstances. However, actual results may differ from the estimates.
The Company reports loss per share in accordance with ASC 260, “Earnings per Share”. Basic loss per share is computed by dividing net loss by the weighted average number of common stock outstanding during each period. Diluted loss per share is computed by dividing net loss by the weighted average number of shares of common stock and other potentially dilutive securities outstanding during the year. .
Income Taxes
The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, we determine deferred tax assets and liabilities on the basis of the differences between the financial statement and tax bases of assets and liabilities by using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.
The Company recognizes deferred tax assets to the extent that we believe that these assets are more likely than not to be realized. In making such a determination, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. If we determine that we will be able to realize our deferred tax assets in the future in excess of their net recorded amount, we would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes.
The Company records uncertain tax positions in accordance with ASC 740 on the basis of a two-step process in which (1) we determine whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, we recognize the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority.
Income tax assets and liabilities for the current period are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted by the date of the statement of financial position.
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Equity-Settled Transactions
The costs of equity-settled transactions with employees are measured by reference to the fair value at the date on which they are granted.
The costs of equity-settled transactions are recognized, together with a corresponding increase in equity, over the period in which the performance and/or service conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to the award (“the vesting date”). The cumulative expense is recognized for equity-settled transactions at each reporting date until the vesting date and reflects the Company’s best estimate of the number of equity instruments that will ultimately vest. The profit or loss charge or credit for a period represents the movement in cumulative expense recognized as at the beginning and end of that period and the corresponding amount is represented in share-based compensation reserve.
No expense is recognized for awards that do not ultimately vest, except for awards where vesting is conditional upon a market condition, which are treated as vesting irrespective of whether or not the market condition is satisfied provided that all other performance and/or service conditions are satisfied.
Where the terms of an equity-settled award are modified, the minimum expense recognized is the expense as if the terms had not been modified. An additional expense is recognized for any modification which increases the total fair value of the share-based payment arrangement or is beneficial to the employee as measured at the date of modification.
Inventory
Inventory and work in progress are valued at the lower of cost and net realizable value. The production cost of inventory includes an appropriate proportion of depreciation and production overheads based on the ratio of indirect vs. direct costs. Cost is determined on the following bases: Raw materials and consumables are valued at cost on a first in, first out (FIFO) basis; finished products are valued at raw material cost, labor cost and a proportion of manufacturing overhead expenses.
Financial Instruments
ASC 820 “Fair Value Measurements and Disclosures” provides the framework for measuring fair value. That framework provides a fair value hierarchy prioritizing the inputs to valuation techniques used to measure 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).
Fair value is defined as an exit price, representing the amount that would be received upon the sale of an asset or payment to transfer a liability in an orderly transaction between market participants.
Fair value is a market-based measurement that is determined based on assumptions that market participants would use in pricing an asset or liability. A three-tier fair value hierarchy is used to prioritize the inputs in measuring fair value as follows:
Level 1 - Quoted prices in active markets for identical assets or liabilities.
Level 2 - Quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable, either directly or indirectly.
Level 3 - Significant unobservable inputs that cannot be corroborated by market data.
The Company’s policy is to recognize transfers into and out of Level 3 as of the date of the event or change in the circumstances that caused the transfer. There were no such transfers during the periods being reported.
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Customer Concentration
Due to the infancy of the Company’s market penetration, current sales are concentrated on a limited number of customers, regions and sectors.
Cash and Cash Equivalents
The
Company considers all highly liquid instruments with a maturity of three months or less to be cash equivalents. The Company maintains
the majority of its cash accounts at a commercial bank. Cash balances are insured by the Canada Deposit Insurance Corporation (“CDIC”)
up to CAD
Customer Deposits
The
typical arrangement for customer deposits for purchases of Company products is
Note 3 – Equity Investment
RAINMAKER WORLDWIDE INC. (ONTARIO)(RWI)
Effective
April 1, 2023, Rainmaker (RAKR) divested
The
Company uses the equity method to account for its interest in RWI. As of September 30, 2024, the Company invested $
Schedule of Equity Investment
| Location | Percentage Ownership | September 30, 2024 | December 31, 2023 | |||||||||||
| Carrying Value as of | ||||||||||||||
| Location | Percentage Ownership | September 30, 2024 | December 31, 2023 | |||||||||||
| Rainmaker Worldwide Inc. | Ontario, Canada | % | ||||||||||||
| Initial investment cost | $ | |||||||||||||
| Less: Distributions | ||||||||||||||
| Less: Share of net loss | ||||||||||||||
| Carrying value | $ | |||||||||||||
| 2024 | 2023 | |||||||
| Quarter Ended September 30, | ||||||||
| 2024 | 2023 | |||||||
| Statements of operations: | ||||||||
| Operating revenue | $ | |||||||
| Operating expenses | ||||||||
| Net loss | $ | |||||||
| September 30, 2024 | December 31, 2023 | |||||||
| Balance sheets: | ||||||||
| Current assets | $ | |||||||
| Long-term assets | ||||||||
| Current liabilities | ( | ) | ||||||
| Long-term liabilities | ( | ) | ||||||
| Net assets | $ | ( | ) | |||||
Note 4: Convertible Notes Payable
The Convertible Notes Payable are defined below.
A
$
On
September 14, 2020, the Company issued a Senior Secured Convertible Promissory Note in the amount of $
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On
June 28, 2022, the Company issued a convertible promissory note in the amount of $
On
July 26, 2022, the Company issued a convertible promissory note in the amount of $
On
September 12, 2022, the Company issued a convertible promissory note in the amount of $
On
October 25, 2022, the Company issued a convertible promissory note in the amount of $
On
February 21, 2023, the Company issued a convertible promissory note in the amount of $
On
May 8, 2023, the Company issued a convertible promissory note in the amount of $
On
January 8, 2024, the Company, as part of a debt restructuring, issued four convertible promissory notes for payables owed to
executives and management of the Company totaling $
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Note 5: Derivative Liabilities
During
the quarter, on September 26, 2024, the Company executed a
Schedule of Derivative Liabilities and Fair Value
Derivative liabilities (fair value)
| Beginning Balance | $ | |||
| Change due to Issuances | ||||
| Change due to Conversions | ( | ) | ||
| Mark-to-market | ( | ) | ||
| Ending Balance June 30, 2024 | $ | |||
| Gain on derivatives-convertible notes | ||||
| Gain on derivatives-warrants | ||||
| Fair Value Balance September 30, 2024 | $ |
Note 6: Notes Payable, Related Parties
Promissory
notes dated November 6, 2016, with a principal amount of $
In
2017 compensation was due to members of the executive management team in the amount of $
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During
2021, a related party loaned the Company, on a short-term basis, $
On
January 8, 2024, to alleviate the payables burden on the Company, executives agreed to, and the Company issued three long-term promissory
notes totaling $
Also
on January 8, 2024, the Company, as part of a debt restructuring, issued four convertible promissory notes for payables owed to executives
and management of the Company totaling $
Note 7: Other Loans Payable
On
February 2, 2021, the company entered into a short-term loan agreement in the amount of $
Note 8: Intellectual Property
As of the filing, the Company holds no intellectual property.
Note 9: Property and Equipment
Demonstration Equipment
The Company may have demonstration equipment to allow it to show a working version of its technology and equipment to customers and organizations in the future. Demonstration equipment is stated at cost less accumulated depreciation and any recognized impairment loss. Cost would include the original purchase price of the asset and any costs attributable to bringing the asset to its working condition for its intended useful life. Depreciation for the demonstration equipment would be at a rate estimated to write off the cost of the equipment less its estimated residual value by an equal annual amount over its expected useful life. The residual value and expected useful life of the demonstration equipment is reviewed and adjusted, if appropriate, at the end of each reporting period. The Company does not currently have any demonstration equipment.
Note 10: Common Stock
Common Stock
On September 26, 2024, the Company filed Articles of Amendment to effect a share consolidation (also known as a reverse stock split) of its issued and outstanding common shares on a one-for-twenty-five basis. The share consolidation became effective on September 26, 2024. All share and per share amounts have been restated for all periods presented to reflect the share consolidation.
As at September 30, 2024, the Company had authorized shares, of which shares are Common Stock with a par value of $ per share and shares are Preferred Stock (see Note 17) with a par value of $ per share.
At September 30, 2024, common stock was issued and outstanding. The following table details the number of common stock issued:
Schedule of Common Stock
| Number of Stock | ||||
| Balance, December 31, 2022 | ||||
| Conversion of convertible promissory notes | ||||
| Common shares issued for acquisition | ||||
| Balance, December 31, 2023 | ||||
| Balance, September 30, 2024 | ||||
During 2023, the Company issued shares upon conversions of convertible promissory notes (see Note 4 for details). No shares have been issued this fiscal year to September 30, 2024.
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Note 11: Related Party Transactions
Outstanding
compensation and expense reimbursements due to consultants engaged by the Company $
Refer to other related party payables in Notes 5 and 6.
The
Company (the lender) signed a loan agreement with RHBV (the borrower) on June 21, 2022. RAKR agreed to a two-year loan facility with
an interest rate of
Effective
April 1, 2023, Rainmaker (RAKR) divested
On
November 6, 2023, the Company issued shares to RWI (a related party) to finalize the Miranda acquisition. Shares were valued
at $
On
January 16, 2024, the Company made an investment in Rainmaker Worldwide Inc. (Ontario) (RWI) in the amount of $
Note 12: Commitments and Contingencies
In the ordinary course of operating the Company’s business, it may, from time to time, be subject to various claims or possible claims. Management’s view that there are no claims or possible claims that if resolved would either individually or collectively result in a material adverse impact on the Company’s financial position, results of operations, or cash flows. These matters are inherently uncertain, and management’s view of these matters may change in the future.
On
April 27, 2018, the Company identified a judgement dated August 8, 2016, against six Defendants including a former subsidiary of the
Company as well as a predecessor of the Company as currently named and constituted. The amount of the judgement including costs is $
Note 13: Inventory
Inventory is stated at the lower of cost or market. Cost is recorded at standard cost, which approximates actual cost, on the first-in first-out basis. The Company, at this time, holds no inventory but may in the future.
Note 14: Leases
The Company determines whether a contract is or contains a lease at inception of the contract and whether that lease meets the classification criteria of a finance or operating lease. When available, the Company uses the rate implicit in the lease to discount lease payments to present value; the Company’s leases do not provide a readily determinable implicit rate. Therefore, the Company must discount lease payments based on an estimate of its incremental borrowing rate.
There are no lease-related assets and liabilities recorded on the Company’s balance sheet and the Company has no lease expenses.
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In order to compensate members of the board and executives, the following stock options have been granted, vesting as described.
| ● | Effective July 1, 2022, the Company granted options as compensation to the newly filled position, VP Sales and to the newly filled position, Executive VP Finance. and options respectively vested immediately and the remaining options vest over one year, with a term of years and exercisable at $ per share. In January, 2024, the Board of Directors modified the exercise price to $ per share as part of the change described directly below. | |
| ● | January
8, 2024, the Board of Directors granted fully vested options to the Company’s CEO, with a term of years and exercisable
at $ per share ( | |
| ● | For
the period ended December 31, 2023, the Company recorded a stock option expense of $ |
Schedule of Warrants and Options
| Warrants and Options | ||||||||||||
| Vested | Granted | Vested | Non-Vested | |||||||||
| Dec 31, 2023 | To September 30, 2024 | To September 30, 2024 | To September 30, 2024 | |||||||||
| ● | The assumptions used in the Company’s Black Scholes option pricing is as follows: |
| Stock Price | $ | -$ | ||
| Exercise Price | $ | -$ | ||
| Number of Options Granted | ||||
| Dividend Yield | % | |||
| Expected Volatility | - % | |||
| Weighted Average Risk-Free Interest Rate | % | |||
| Term (in years) |
Note 16: Income Taxes
The
Company recognizes deferred tax assets and liabilities using the asset and liability method. Deferred tax assets and liabilities are
recorded based on the differences between the financial statement and tax bases of assets and liabilities and the tax rates in effect
when these differences are expected to reverse. This method requires the reduction of deferred tax assets by a valuation allowance if,
based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.
As of December 31, 2022, the Company’s deferred tax assets relate to net operating loss (“NOL”) carry-forwards that
were derived from operating losses and stock-based compensation from prior years. A full valuation allowance has been applied to the
Company’s deferred tax assets. The valuation allowance will be reduced when and if the Company determines it is more likely than
not that the related deferred income tax assets will be realized. At September 30, 2024, the Company had federal net operating loss carry-forwards,
which are available to offset future taxable income, of $
Schedule of Effective Income Tax Rate Reconciliation
Quarter ended September 30, | Year ended December 31, | |||||||
| 2024 | 2023 | |||||||
| Net Loss | ( | ) | ( | ) | ||||
| Add back: | ||||||||
| Stock Compensation | ||||||||
| Amortization of Debt Discount | ||||||||
| Taxable Income | ( | ) | ( | ) | ||||
| Tax Rate | % | % | ||||||
| Deferred Tax Asset: | ||||||||
| Net Operating (Gain) Loss | ||||||||
| Valuation Allowance | ( | ) | ( | ) | ||||
| Net Deferred Asset | ||||||||
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Note 17: Discontinued Operations
Effective
April 1, 2023, the Company came to an agreement to divest
Note 18: Mezzanine Equity
Effective June 29, 2022, the Company has authorized shares of , of which shares are common stock (see Note 10) with a par value of $ per share and shares are preferred stock with a par value of $ per share.
On
May 23, 2023, a Certificate of Designation was executed designating Preferred Stock as a new class of Preferred Stock designated
Series A Preferred Stock. The total face value of this entire series is one hundred and fifty thousand dollars ($
The holder of Series A Preferred Stock has the following rights:
(a) 1.5% MONTHLY FIXED DIVIDEND ON RESTRICTED COMMON STOCK:
Each
share of Preferred Stock shall be entitled to a monthly fixed dividend of
The amount of the Monthly Dividend payable in shares of Restricted Common Stock shall be based on the volume-weighted average price (“VWAP”) of the Common Stock over the 30-day period ending on the last trading day of the month preceding the payment date. The number of shares of Restricted Common Stock to be issued in payment of the Monthly Dividend shall be determined by dividing the amount of the Monthly Dividend payable in shares of Restricted Common Stock by the VWAP; and
The Company may, in its sole discretion, elect to pay the Monthly Dividend in cash or in shares of Restricted Common Stock, subject to the provisions of this Agreement. If the Company elects to pay the Monthly Dividend in cash, it shall be paid on or before the fifteenth day of each calendar month, beginning with the month following the Closing Date. If the Company elects to pay the Monthly Dividend in shares of Restricted Common Stock, such shares shall be issued on or before the fifteenth day of each calendar month, beginning with the month following the Closing Date, subject to the limitations set forth herein.
(b) APPROVAL ON COMMON AND PREFERRED SHARE DILUTION:
Each share of Preferred Stock shall be entitled to approval rights on any future dilution of the Common Stock or Preferred Stock of the Company, subject to the terms and conditions set forth herein. In connection with any proposed issuance of Common Stock or Preferred Stock that would result in a dilution of the existing Common Stock or Preferred Stock of the Company, the Company shall provide written notice to the holders of Preferred Stock (the “Holders”) no less than ten (10) days prior to the proposed issuance, including the proposed terms of such issuance;
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The Holders shall have the right to approve or reject the proposed issuance, such approval not to be unreasonably withheld and taking into consideration the financial situation of the Company at the time of the requested dilution. The Company shall not issue any Common Stock or Preferred Stock that would result in a dilution of the existing Common Stock or Preferred Stock of the Company without the approval of the Holders, except as provided herein. Nothing in this Section shall prohibit the Company from issuing any shares of common stock upon the exercise or conversion of currently outstanding securities;
If the Holders approve the proposed issuance, the Company shall use its best efforts to issue and deliver the Common Stock or Preferred Stock within ten (10) business days of such approval. If the Holders reject the proposed issuance, the Company may not issue any Common Stock or Preferred Stock on the proposed terms, unless and until the proposed terms are revised to the satisfaction of the Holders. Any proposed issuance that is not approved by the Holders shall be deemed a breach of this Agreement; and
The approval rights set forth herein shall terminate upon the earliest of (i) the conversion or redemption of all outstanding Preferred Stock, (ii) the occurrence of a Change of Control, or (iii) the written agreement of the Company and the Holders.
(c) OPTION TO APPOINT DIRECTORS:
Each holder of Preferred Stock shall be entitled to the right to appoint up to three (3) directors to the Board of Directors of the Company. The right to appoint directors shall be subject to the terms and conditions set forth herein;
If a holder of Preferred Stock wishes to exercise their right to appoint directors, they shall provide written notice to the Company no less than thirty (30) days prior to the date of the Company’s annual meeting of stockholders. The notice shall identify the individuals proposed to be appointed as directors and shall include all information required to be disclosed under applicable law;
The Company shall use its best efforts to ensure that the individuals proposed to be appointed as directors are duly elected to the Board of Directors at the annual meeting of stockholders. If the Company fails to cause the individuals proposed to be appointed as directors to be duly elected, then the Company shall take such actions as may be necessary or appropriate to ensure that such individuals are appointed as directors; and
The right to appoint directors set forth herein shall terminate upon the earliest of (i) the conversion or redemption of all outstanding Preferred Stock, (ii) the occurrence of a Change of Control, or (iii) the written agreement of the Company and the holders of a majority of the outstanding shares of Preferred Stock.
(d) RIGHT TO AUTHORIZE A ROLLBACK OF COMMON SHARES
The holder(s) Preferred Stock shall have the right to authorize a rollback of common shares of the Company in accordance with the terms and conditions set forth herein. For the purposes of this section, a “rollback of common shares” shall mean a reverse stock split or any other transaction or series of transactions that reduces the number of outstanding common shares of the Company;
In the event that the holder(s) of Preferred Stock wish to authorize a rollback of common shares, they shall provide written notice to the Company of their intention to do so. Such notice shall identify the proposed terms of the rollback, including the ratio of common shares to be exchanged for each new share;
The Company shall use its best efforts to carry out the rollback in accordance with the terms set forth in the notice. If the Company is unable to carry out the rollback as proposed, it shall promptly notify the holder(s) of Preferred Stock and negotiate with them in good faith to reach an agreement on the terms of the rollback; and
The right to authorize a rollback of common shares set forth herein shall terminate upon the earliest of (i) the conversion or redemption of all outstanding Preferred Stock, (ii) the occurrence of a Change of Control, or (iii) the written agreement of the Company and the holders of a majority of the outstanding shares of Preferred Stock.
In
the event that the Company puts forth a proposal to effect a reverse stock split of the Company’s Common Stock, the holders of
the Preferred Stock shall have the right to vote
| 20 |
(e) BUYBACK TRIGGER AND INVESTOR’S OPTION TO TAKE OWNERSHIP OF EQUITY
The Preferred Stock shall have a Buyback trigger based on the following conditions. The Preferred Stockholders have the right to do demand/receive cash if any of the following happen. To date, no such demands have been made:
1) RAKR is no longer SEC compliant;
2) RAKR is no longer publicly traded on an OTC exchange;
3) Any breach of the conditions (a-g);
4) On the 24-month anniversary of the subscription, or with an extension mutually agreed by RAKR and the holder(s) of Preferred Stock.
If any of the above triggers occur and RAKR fails to repurchase the Preferred Stock within 60 days of the occurrence of such trigger, the holder(s) of the Preferred Stock shall have the right to exercise an option to take ownership of the Ontario Rainmaker Worldwide Common Share equity owned by RAKR, subject to the following conditions:
i. The option to take ownership of the equity must be exercised within 60 days of the expiration of the repurchase period described above;
ii. The value of the equity to be transferred to the holder(s) of Preferred Stock shall be equal to the aggregate principal amount of the Preferred Stock outstanding at the time of exercise of the option; and
iii. The transfer of the equity shall be subject to any applicable laws and regulations, including without limitation any securities laws and regulations.
(f) RIGHT TO PURCHASE AND CONVERT TO COMMON STOCK
The
holder of the Preferred Stock shall have the right to purchase, when common stock becomes available for issuance, up to US$
The exercise of these rights are subject to the following terms and conditions:
i. Availability of Shares: The purchase of common stock by the holder of the Preferred Stock shall be contingent upon the Company making such shares available for issuance.
ii.
Purchase Notice: When common stock becomes available for issuance, the holder of the Preferred Stock shall provide a written notice to
the Company indicating their intent to exercise their right to purchase the common stock. The notice shall specify the desired number
of shares to be purchased, not exceeding the US$
iii.
Purchase Price: The purchase price per share shall be US$, reflecting a discount to market price of
iv. Payment Terms: The holder of the Preferred Stock shall remit the full payment for the purchased common stock within a specified timeframe determined by the Company.
v. Transfer of Shares: Upon receipt of the full payment, the Company shall transfer the purchased common stock to the holder of the Preferred Stock, and the stock certificates or electronic equivalents shall be issued accordingly.
vi. Limitations: The right to purchase common stock is subject to applicable laws, regulations, and the Company’s Articles of Incorporation and Bylaws.
(g) Voting Rights.
The
Series A Holder shall be entitled to notice of any stockholders’ meeting and to vote as a single class upon any matter submitted
to the stockholders and their approval shall be required to effect such action. In the event that the Company determines to put forth
a proposal to its stockholders to effect a reverse split of its outstanding Common Stock, the Series A holder shall have the right to
such number of votes as shall equal
As
of May 26, 2023 the Company received $
As
of September 30, 2024 and December 31, 2023, the Company had shares of Series A Preferred Stock outstanding for each period and
recorded as mezzanine at face value of $
Note 19: Subsequent Events
No subsequent events.
| 21 |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis contain forward-looking statements about our plans and expectations of what may happen in the future. Forward-looking statements are based on a number of assumptions and estimates that are inherently subject to significant risks and uncertainties, and our results could differ materially from the results indicated by our forward-looking statements as a result of many known or unknown factors, including, but not limited to, those factors discussed in Item 1A. “Risk Factors” in our on Form 10-12GA below in Part II Item 1A. “Risk Factors” of this Form 10-Q and in the “Cautionary Note Regarding Forward-Looking Statements” set forth at the beginning of this report.
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-Q. 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.
Share Consolidation
On September 26, 2024, the Company filed Articles of Amendment to effect a share consolidation (also known as a reverse stock split) of its issued and outstanding common shares on a one-for-twenty-five basis. The share consolidation became effective on September 26, 2024. All share and per share amounts have been restated for all periods presented to reflect the share consolidation.
Overview
Rainmaker Worldwide Inc. (“RAKR”, the “Company”, “we”, “us” or “our”) is a Nevada corporation originally formed on February 27, 1998. The corporation became RAKR on July 3, 2017, in a reverse merger. We are currently developing projects in various locations around the globe using RAKR and partner technologies. We are implementing these projects using technology of Rainmaker Holland B.V. (“RHBV”). RAKR retains access to the technology based on a cost-plus formula.
Rainmaker Worldwide Inc. (Ontario) (“RWI”), an Ontario Corporation, was formed in Peterborough, Ontario, Canada on July 21, 2014, under the Ontario Business Corporations Act to finance and commercialize patented technology and to consolidate the assets, intellectual property, and executive management expertise of DRM. RAKR retains a 40% interest in RWI following an investment from financial partners to affect the acquisition of Miranda.
On July 3, 2017, RWI shareholders completed a share exchange with the Company (the “Merger”) pursuant to a share exchange agreement dated June 28, 2017 (the “Share Exchange Agreement”) among the Company, RWI and RWI’s 45 shareholders at the time. Upon completion of the Merger, and in accordance with the terms and provisions of the Share Exchange Agreement, the Company acquired an aggregate of 9,029,562 common shares of stock in the capital of RWI from the RWI Shareholders (being all the issued and outstanding shares of RWI) in exchange for an aggregate of 2,672,750 restricted shares of the Company’s common stock. Therefore, RWI became a wholly owned subsidiary of the Company effective July 3, 2017. The Company’s former name, Gold and Silver Mining of Nevada, Inc. (“CJT”) was changed on April 24, 2017, in expectation of and conditional upon completion of the Merger. The Merger was accounted for as a reverse acquisition with RWI considered the accounting acquirer since the former RWI shareholders remained in control of the combined entity after the consummation of the transaction. As part of the Merger, net liabilities of $235,495 were recognized on the Company’s balance sheet. As a result of the Merger, the Company trades on the OTC:Pink under the symbol RAKR.
The Company is headquartered in Peterborough, Ontario, Canada. The Company will utilize its two main types of energy-efficient, fresh water-producing/purification technologies: (1) Air-to-Water (“AW”), which harvests fresh water from humidity and heat in the atmosphere, and (2) Water-to-Water (“WW”), which transforms seawater or polluted water into drinking water. The technologies can be wind driven, solar based, or can use conventional power sources, such as grid or generator. It is deployable anywhere and leaves no carbon trace if renewable resources are deployed. Through the acquisition of Miranda and RAKR’s own technologies we have multiple options to purify wastewater to potable water standards.
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Miranda Acquisition
On January 22, 2024, RWI, a 40% subsidiary of RAKR, finalized the acquisition of Miranda. The first payment of one million USD together with 1,600,000 RAKR common shares was paid to the shareholders of Miranda. This provides RWI with controlling interest of Miranda initially at 60% of Miranda common stock holdings. The remaining two million USD is to be paid no later than 2 years from the closing date of January 22nd, 2024. Miranda 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 their solutions in Canada, US, Mexico, the Caribbean, Central America and South America. The expanded product portfolio will assist in market entry opportunities for Miranda and RAKR products alike, bringing revenue and value to all of the companies.
Ongoing Approach to Sales and Marketing
The Company’s ongoing focus will be to pair Rainmaker technologies with those of Miranda and our affiliate partners.
The Company has generated limited revenue up to the present time, and its operations for the past four years have been typically focused on business development, market research, technology research and development activities. The Company had total assets of $30,725, as of December 31, 2023. As of September 30, 2024, net assets were $280,306.
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 revenue for the quarters ending September 30, 2023 and September 30, 2024 of $78,912 and $143,725 respectively. The Company had net losses of $246,815 and $193,963 for the quarters ending September 30, 2024 and 2023, respectively. Year-to-date losses for September 30, 2024 and 2023 were $592,987 and $947,955 respectively. The losses in 2024 were reduced by 37% compared to the same period in 2023. The losses for the current quarter are driven by operating expenses including the costs associated with maintaining the Company’s listing and current filing status with the SEC, consulting expenses, stock option expenses, as well as interest. 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 2023 stated that there was substantial doubt about the Company’s ability to continue as a going concern.
Products and Services
Overview
Across the world, fresh water is unevenly distributed. Many regions are desperately under-served, including North Africa, the Middle East, India, Mexico, large portions of South America, and various island geographies.
Fundamentally, the solutions are based on deploying technology with the following attributes to ensure low-cost delivery and Company profitability:
| ● | Versatile | |
| ● | Scalable & Cost-effective | |
| ● | Environmentally & Socially Sustainable | |
| ● | Applying Proprietary Technology through partners and affiliates |
Air-to-Water (AW) – Harvests fresh water from airborne humidity by using advanced heating and cooling technologies. Water-to-Water (WW) technologies – 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 technologies we have multiple options to purify wastewater to potable water standards.
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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 WW enable decentralized deployment, in which water is distributed directly to the consumption site with no expensive piping or truck transport. AW and WW are both cost-effective technology solutions and can be powered by solar, wind, or grid electricity, or a combination of power sources. They can produce roughly 5,000 to 150,000 liters of water per unit, per day, depending on the local conditions and the type of unit deployed.
The acquisition of Miranda provides the Company with a full suite of water production and purifications systems that are distributed and available to communities who need them the most.
Cost Information
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.
Regulatory Information
The global nature of our approach means that regulatory conditions vary by jurisdiction. We believe that the ultimate test of profitability in this complex, cross-jurisdictional environment will be the quality of the water that is bottled and tested. The Company seeks to adhere to World Health Organization standards for clean water using the technologies that are authorized in a particular sovereign jurisdiction.
Business Model
The RAKR business model typically begins with the identification of a trusted local technology partner and distributor. The Rainmaker delivery systems will be installed by contracted 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 advance to date is the acquisition of Miranda. On January 22, 2024, RWI finalized the acquisition of Miranda (RAKR owns 40% of RWI). 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.
Potential Improvements
Potential improvements and related applications that we are pursuing or plan to pursue include seeking more strategic and technology-based partnerships with complementary technology and business development companies to expand our global reach and service offering.
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Market Opportunity
In the past ten 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 metrics that underpin the international need for ingenuity and action are the same as those that animate and sustain the market opportunity for our Company:
| (1) | Less than 3% of the world’s water is fresh – the rest is seawater and undrinkable in its current state. | |
| (2) | Of this 3%, over 2.5% is frozen and locked up in Antarctica, the Arctic and glaciers. | |
| (3) | People and animals rely on 0.5% of the world’s water. (Source: Unwater.org - Facts and Trends: Water) |
Moreover, at any moment, the atmosphere contains approximately 37.5 million billion gallons of water. This potential is not currently harvested by the means of private organizations or government institutions and thus presents a significant opportunity for AW technology to satisfy worldwide demand for water.
The World Health Organization estimates that 50 liters of water per day is required per individual to meet basic needs. It is estimated by the OECD that by 2030 nearly half of humanity will be living in a condition of severe water stress. Currently, according to UNICEF, 2.2 billion people around the globe lack safe drinking water. While high-income countries only treat 70% of wastewater, low-income countries treat 8%. With the world’s population expected to reach 9 billion by 2038, the global need is indisputably high. Much of the population expansion is or will be in the very areas that are already suffering from the problem of water scarcity.
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 billion and is expected to expand to $1 trillion by 2025. (Source: RobecoSAM Study (2015, June). 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.
Suppliers
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.
Competition
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. By 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.
Government Subsidies and Incentives
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. One example is First Nations in Canada where there is an ongoing and desperate shortage of safe drinkable and general-purpose water.
Intellectual Property
We have indirect access to intellectual property assets as a consequence of our partial ownership of and various 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.
Results of Operations for the Nine Months ended September 30, 2024 and 2023
Revenue
Revenue was $143,725 and $78,912 the nine months ended September 30, 2024, and September 30, 2023.
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General and Administrative Expenses
General and administrative expenses primarily include consultant expenses and benefit costs and stock-based compensation expense for executive consultants, outside legal and professional services, marketing and advertising, and facilities costs. General and administrative expenses for the nine months ended September 30, 2024 and September 30, 2023 were as follows:
| Nine
Months Ended September 30, | Increase
(Decrease) | |||||||||||||||
| 2024 | 2023 | $ | % | |||||||||||||
| General and administrative expense | $ | 257,157 | $ | 466,902 | $ | (209,745 | ) | (44.9 | )% | |||||||
| Stock-based compensation expense included in general and administrative expense | $ | 23,979 | $ | 89,772 | $ | (65,793 | ) | (73.3 | )% | |||||||
General and administrative expenses, including stock-based compensation, for the nine months ended September 30, 2024, decreased $209,745, or 44.9%, compared to the same period in 2023. This decrease relates to (1) a decrease in consulting expense of $125,583 (2) stock option expense decrease of $65,793, (3) a decrease of $15,472 in general and administrative expenses, (4) marketing, advertising and promotion expense decreased by approximately $532 and, (5) a decrease in travel expense of $2,365. Excluding stock-based compensation, general and administrative expenses decreased $143,952.
Liquidity and Capital Resources
Management’s Plans
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 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 September 30, 2024 and December 31, 2023, the Company had an accumulated deficit of approximately $74.7 million and $74.1 million and stockholders’ equity of approximately $(11.5) and $(10.9) million, respectively. As of September 30, 2024, the Company had approximately $288 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.
Off-Balance Sheet Arrangements
As of September 30, 2024, the Company had no off-balance sheet arrangements.
Critical Accounting Estimates
The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts and related disclosures in the financial statements. Management considers an accounting estimate to be critical if:
| ● | it requires assumptions to be made that were uncertain at the time the estimate was made, and | |
| ● | changes in the estimate or different estimates that could have been selected could have material impact in our results of operations or financial condition. |
While we base our estimates and judgments on our experience and on various other factors that we believe to be reasonable under the circumstances, actual results could differ from those estimates and the differences could be material. The most significant estimates impact the following transactions or account balances: stock compensation.
See Note 2 in our financial statements for a discussion of our significant accounting policies.
Recently Issued Accounting Standards Not Yet Effective or Adopted
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.
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Item 3. Quantitative and Qualitative Disclosures About Market Risk
Not applicable.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Based on an evaluation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) required by paragraph (b) of Rule 13a-15 or Rule 15d-15, as of December 31, 2022, our Chief Executive Officer and Acting Chief Financial Officer has concluded that our disclosure controls and procedures were not effective in ensuring that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms. Our Chief Executive Officer and Acting Chief Financial Officer also concluded that, as of September 30, 2024, our disclosure controls and procedures were not effective in ensuring that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Acting Chief Financial Officer, to allow timely decisions regarding required disclosure.
Management’s Report on Internal Control over Financial Reporting
We are responsible for establishing and maintaining adequate internal control over financial reporting in accordance with Exchange Act Rule 13a-15. With the participation of our Chief Executive Officer and Acting Chief Financial Officer, our management conducted an evaluation of the effectiveness of our internal control over financial reporting as of September 30, 2024, based on the criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013). Based on this evaluation, management concluded that our internal control over financial reporting was not effective as of September 30, 2024, based on those criteria. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected.
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. We have identified the following material weaknesses:
| 1. | As of September 30, 2024, due to the inherent issue of segregation of duties in a small company, we have relied heavily on entity or management review controls. Accordingly, management has determined that this control deficiency constitutes a material weakness. | |
| 2. | As of September 30, 2024, we did not establish a formal written policy for the approval, identification, and authorization of related party transactions. | |
| 3. | During the 2023 audit, it was necessary to record adjusting journal entries. Management has determined that the effects of the corrected misstatements are material, both individually and in aggregate, to the financial statements as a whole. The corrected misstatements or the matters underlying them could potentially cause future period financial statements to be materially misstated, even though, in the judgment of our auditor previously, such corrected misstatements are material to the financial statements under audit. | |
| Professional standards define an audit adjustment as a proposed correction of the financial statements that, in the judgment of our auditor previously, may not have been detected except through the auditing procedures. An audit adjustment may or may not indicate matters that could have a significant effect on the Company’s financial reporting process (that is, cause future financial statements to be materially misstated). In the judgment of our auditor previously, the adjustments proposed indicate matters that could have a significant effect on the Company’s financial reporting process. |
Because of these material weaknesses, management has concluded that the Company did not maintain effective internal control over financial reporting as of September 30, 2024, based on the criteria established in “Internal Control-Integrated Framework” issued by the COSO.
Changes in Internal Control over Financial Reporting
During the quarter ended September 30, 2024, there were no changes in our internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Rule 13a-15 or Rule 15d-15 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
Limitations on Effectiveness of Controls
Our management, including our CEO and EVP Finance, do not expect that our disclosure controls and procedures or our internal controls over financial reporting will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our company have been detected.
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PART II — OTHER INFORMATION
Item 1. Legal Proceedings
The Company is not currently in any legal proceedings.
Item 1A. Risk Factors
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.
There has been no change since filing the 2023 10-K.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
On January 9, 2023, a convertible promissory note dated June 28, 2022 in the amount of $64,250 was partially converted. $15,000 principal was converted into 230,769 shares leaving a principal balance owing of $49,250.
On January 26, 2023, a convertible promissory note dated July 26, 2022 in the amount of $35,00 was partially converted. $12,000 principal and $595.07 accrued interest was converted into 129,180 shares leaving a principal balance owing of $23,000.
On February 2, 2023, the Company issued shares upon a partial conversion of the June 28, 2023 convertible promissory note. $15,000 principal was converted into 300,000 shares leaving a principal balance owing of $34,250.
On February 3, 2023, the Company issued shares upon partial conversion of the July 26, 2022 convertible promissory note. $8,000 principal plus accrued interest of $416.44 was converted into 172,645 shares leaving a principal balance of $15,000.
On February 7, 2023, the Company issued shares upon partial conversion of the June 28, 2022 convertible promissory note. $16,250 principal was converted into 361,111 shares leaving a principal balance of $18,000.
On February 8, 2023, the Company issued shares upon a partial conversion of the July 26, 2023 convertible promissory note. $8,000 principal and $427.40 accrued interest was converted into 199,465 shares leaving a principal balance of $7,000.
On February 13, 2023, the Company issued shares upon partial conversion of the June 28, 2022 convertible promissory note. $15,600 principal was converted into 390,000 shares leaving a principal balance of $2,400.
On February 14, 2023, the Company issued shares upon a partial conversion of the July 26, 2022 convertible promissory note. This final partial conversion was in the amount of $7,000 principal plus $383.56 accrued interest and was converted into 215,385 shares. This note is now fully converted.
On February 21, 2023, the Company issued shares upon a partial conversion of the June 28, 2022 convertible promissory note. This final partial conversion was in the amount of $2,400 principal plus $3212.50 accrued interest and was converted into 140,313 shares. This note is now fully converted.
On March 15, 2023, the Company issued shares upon partial conversion of a convertible promissory note dated September 12, 2022 in the amount of $49,250. $15,000 principal was converted into 375,000 shares leaving a principal balance of $34,250.
On March 20, 2023, the Company issued shares upon partial conversion of the convertible promissory note dated September 12, 2022. $12,200 principal was converted into 443,636 shares leaving a principal balance of $22,050.
On March 27, 2023, the Company issued shares upon partial conversion of the convertible promissory note dated September 12, 2022. $10,600 principal was converted into 465,934 shares leaving a principal balance of $11,450.
On April 24, 2023, the Company issued shares upon partial conversion of the convertible promissory note dated September 12, 2022. $10,400 principal was converted into 489,412 shares leaving a principal balance of $1,050.
On May 22, 2023, the Company issued shares upon partial conversion of the convertible promissory note dated September 12, 2022. $1,050 and accrued interest of $3,512.50 principal was converted into 216,154 shares. This note is now fully converted.
On May 25, 2023, the Company issued shares upon partial conversion of the convertible promissory note dated October 25, 2022. $8,500 principal was converted into 523,077 shares leaving a principal balance of $35,750.
On June 5, 2023, the Company issued shares upon partial conversion of the convertible promissory note dated October 25, 2022. $8,100 principal was converted into 549,153 shares leaving a principal balance of $27,650.
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On June 9, 2023, the Company issued shares upon partial conversion of the convertible promissory note dated October 25, 2022. $8,550 principal was converted into 579,661 shares leaving a principal balance of $19,100.
On June 14, 2023, the Company issued shares upon partial conversion of the convertible promissory note dated October 25, 2022. $7,900 principal was converted into 607,692 shares leaving a principal balance of $11,200.
On June 16, 2023, the Company issued shares upon partial conversion of the convertible promissory note dated October 25, 2022. $7,900 principal was converted into 607,692 shares leaving a principal balance of $3,300.
On June 20, 2023, the Company issued shares upon partial conversion of the convertible promissory note dated October 25, 2022. $3,300 principal and accrued interest of $2212.50 was converted into 424,038. This note is now fully converted.
On September 5, 2023, the Company issued shares upon partial conversion of the convertible promissory note dated February 21, 2023. $10,150 principal was converted into 688,136 shares leaving a principal balance of $34,100.
On September 12, 2023, the Company issued shares upon partial conversion of the convertible promissory note dated February 21, 2023. $9,400 principal was converted into 723,077 shares leaving a principal balance of $24,700.
On September 21, 2023, the Company issued shares upon partial conversion of the convertible promissory note dated February 21, 2023. $8,740 principal was converted into 760,000 shares leaving a principal balance of $15,960.
On September 26, 2023, the Company issued shares upon partial conversion of the convertible promissory note dated February 21, 2023. $7,760 principal was converted into 795,897 shares leaving a principal balance of $8,200.
On September 27, 2023, the Company issued shares upon partial conversion of the convertible promissory note dated February 21, 2023. $8,180 principal was converted into 838,974 shares leaving a principal balance of $20.
Item 3. Defaults Upon Senior Securities
None
Item 4. Mine Safety Disclosures
Not applicable to smaller companies.
Item 5. Other Information
None
Item 6. Exhibits
| Exhibit No. | Description | |
| 31.1* | Certification of Principal Executive Officer pursuant to section 302 of the Sarbanes-Oxley Act of 2002 | |
| 31.2* | Certification of Principal Financial Officer pursuant to section 302 of the Sarbanes-Oxley Act of 2002 | |
| 32.1* | Certification of Principal Executive Officer pursuant to section 906 of the Sarbanes-Oxley Act of 2002 | |
| 32.2* | Certification of Principal Financial Officer pursuant to section 906 of the Sarbanes-Oxley Act of 2002 | |
| 101.INS | Inline XBRL Instance Document | |
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document | |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | |
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
* Filed herewith.
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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.
| Rainmaker Worldwide Inc. | ||
| Date: November 14, 2024 | By: | /s/ Michael O’Connor |
| Michael O’Connor | ||
| President, Chief Executive Officer and Interim | ||
| Chief Financial Officer | ||
| 30 |
EXHIBIT 31.1
CERTIFICATION PURSUANT TO
RULE 13a-14(a) OR RULE 15d-14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
I, Michael O’Connor, certify that:
| 1. | I have reviewed this Quarterly Report on Form 10-Q of Rainmaker Worldwide Inc. for the quarter ended September 30, 2024; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | As the registrant’s certifying officer, I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |
| b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |
| c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |
| d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of this annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | As the registrant’s certifying officer, I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and | |
| b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| Date: November 14, 2024 | |
| /s/ Michael O’Connor | |
| Michael O’Connor | |
| Chief Executive Officer and | |
Acting Chief Financial Officer (Principal Executive Officer and Principal Financial and Accounting Officer) |
EXHIBIT 31.2
CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
PURSUANT TO 18. U.S.C. 7350
(SECTION 302 OF THE SARBANES OXLEY ACT OF 2002)
I, Michael O’Connor, certify that:
| 1. | I have reviewed this quarterly report on Form 10-Q for the quarter ended September 30, 2024 of Rainmaker Worldwide Inc.; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| (a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |
| (b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |
| (c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |
| (d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant has disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| (a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and | |
| (b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| November 14, 2024 | ||
| By: | /s/ Michael O’Connor | |
| Name: | Michael O’Connor | |
| Title: | President, Chief Executive Officer and Interim | |
| Chief Financial Officer | ||
EXHIBIT 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Rainmaker Worldwide Inc. (the “Company”) on Form 10-Q for the quarter ended September 30, 2024, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Michael O’Connor, Chief Executive Officer and Acting Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. section 906 of the Sarbanes-Oxley Act of 2002, that:
| (1) | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities and Exchange Act of 1934; and | |
| (2) | The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. |
| Date: November 14, 2024 | |
| /s/ Michael O’Connor | |
| Michael O’Connor | |
| Chief Executive Officer and | |
| Acting Chief Financial Officer | |
| (Principal Executive Officer and Acting Principal Financial and Accounting Officer) |
EXHIBIT 32.2
CERTIFICATION OF CHIEF FINANCIAL OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Rainmaker Worldwide Inc., a Nevada corporation (the “Company”), on Form 10-Q for the quarter ended September 30, 2024 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, the Chief Financial Officer, hereby certifies pursuant to 18 U.S.C. Sec. 1350 as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002 that, to the undersigned’s knowledge:
(1) the Report of the Company filed today fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operation of the Company.
A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.
| November 14, 2024 | By: | /s/ Michael O’Connor |
| Name: | Michael O’Connor | |
| Title: | President, Chief Executive Officer and Interim | |
| Chief Financial Officer |