Rain Enhancement Technologies and Tensor Networks Sign Binding LOI for Business Combination

Rain Enhancement Technologies Enters Binding Agreement with AI Security Firm

Rain Enhancement Technologies Holdco, Inc. (NASDAQ:RAIN) and Tensor Networks, Inc. have entered into a binding letter of intent for a business combination that would transform RAIN into a multi-technology platform.1

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The all-stock transaction is structured to result in Tensor Networks becoming part of RAIN's publicly traded holding company, with closing anticipated in the first quarter of 2027.2

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The deal represents a strategic shift for Rain Enhancement Technologies, which has built its business around ionization weather modification technology. Harry You, Chairman of the Board of RAIN, emphasized that the corporate structure was specifically designed to acquire additional businesses alongside Rain Enhancement Technologies, Inc. (RET).1

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Tensor Networks Brings Predictive AI Infrastructure Security

Founded in 2019, Tensor Networks develops predictive AI infrastructure technology centered on what the company calls its "Safe AI" approach to infrastructure security.1

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The company's patent-pending technology includes the Predictive Tensor Control Plane (PTCP) and Tensor Network Quantum Gravity (TNQG) frameworks.2

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PTCP combines predictive workload orchestration with topological caging, an approach designed to isolate AI workloads behind independent hardware boundaries. This hardware-level isolation is intended to help contain threats and limit data exfiltration or lateral movement across AI infrastructure.1

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The technology has been developed and tested through three U.S. Air Force contracts that Tensor Networks has been awarded and delivered against.1

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Transaction Structure and Ownership Split

Under the terms of the binding letter of intent, Tensor Networks' equity holders are expected to own approximately 90% of the fully diluted equity of the combined company, with RAIN's existing shareholders retaining approximately 10%.2

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This ownership distribution reflects the relative valuations of the two companies prior to dilution from contemplated financing.

RAIN's outstanding debt is expected to be converted, restructured, or forgiven on mutually agreeable terms prior to or concurrently with closing.2

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A minimum of $25 million in gross proceeds from an equity or equity-linked financing is a condition to closing, with net proceeds expected to fund Tensor Networks' growth and working capital.1

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Leadership Changes and Operating Structure

Eric Frazier, Founder and Chief Executive Officer of Tensor Networks, will become chief executive officer of RAIN upon closing.2

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Randy Seidl, current CEO of RAIN, will transition to president of RAIN, with both executives reporting to the board of directors.2

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RET and Tensor Networks would each continue to operate as wholly owned operating subsidiaries of RAIN, pursuing separate commercial strategies under their own management teams rather than being operationally merged.1

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Each operating company will leverage shared general and administrative resources while maintaining operational independence.

RAIN insiders, Tensor Networks insiders, and Tensor Networks employees will be subject to lock-up agreements of 12 to 18 months following closing.2

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Market Context and Strategic Rationale

The transaction addresses the growing importance of securing infrastructure that powers artificial intelligence. As AI adoption accelerates across government, defense, and enterprise networks, the systems that route and process AI workloads have become increasingly attractive targets.1

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Randy Seidl noted that the transaction represents an important step in building RAIN into a multi-technology platform, providing a second growth engine alongside RET.1

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Eric Frazier emphasized that as AI capabilities scale, security cannot be an afterthought bolted onto legacy software, positioning Tensor Networks' approach of using independent hardware boundaries as a proactive solution.1

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The transaction remains subject to due diligence, negotiation and execution of a definitive transaction agreement, and Nasdaq approval.2

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