10-Q: Rainmaker Worldwide Inc. Reports Q1 2025 Results, Cites Ongoing Losses and Strategic Shifts

Rainmaker Worldwide Inc. reports a net loss for Q1 2025, highlighting strategic shifts including a reduced stake in Rainmaker Worldwide Inc. (Ontario) and a focus on distribution agreements.

Summary

• Rainmaker Worldwide Inc. (RAKR) reported its Q1 2025 financial results, showing a net loss of $215,799 compared to a net loss of $265,418 for the same period in 2024.
• The company's revenue remained at $0 for both periods.
• General and administrative expenses decreased by 29.3% to $68,926.
• RAKR's ownership in Rainmaker Worldwide Inc. (Ontario) (RWI) decreased to 12.38% following a restructuring and new capital investment in RWI.
• The company impaired its investment in RWI to zero due to insufficient cash flow, net liabilities, and ongoing net losses at RWI.
• RAKR is focusing on leveraging distribution agreements, particularly for Miranda products, in North, South, and Central America, as well as the Caribbean.
• The company's accumulated deficit stands at $75,336,458 as of March 31, 2025.
• There is substantial doubt about the company's ability to continue as a going concern without additional financing or becoming revenue positive.

Sentiment

Score: 3

Explanation: The document presents a concerning financial situation with ongoing losses, no revenue, and doubts about the company's ability to continue as a going concern. While there are some positive aspects, such as reduced losses compared to the previous year, the overall sentiment is negative.

Positives

• The net loss for Q1 2025 decreased by 29% compared to Q1 2024.
• General and administrative expenses decreased by 29.3% compared to the same period in 2024.
• The company is focusing on distribution agreements for Miranda products, which could lead to increased revenue.

Negatives

• Revenue remained at $0 for both Q1 2025 and Q1 2024.
• The company impaired its investment in RWI to zero due to RWI's financial difficulties.
• The accumulated deficit is $75,336,458.
• There is substantial doubt about the company's ability to continue as a going concern.

Risks

• The company's ability to continue as a going concern is contingent upon obtaining additional financing or becoming revenue positive.
• The company has a significant accumulated deficit.
• The company's internal control over financial reporting was not effective as of March 31, 2025.
• The company relies heavily on entity or management review controls due to the inherent issue of segregation of duties in a small company.
• The company did not establish a formal written policy for the approval, identification, and authorization of related party transactions.

Future Outlook

The company plans to focus on business development across North, South, and Central America, as well as the Caribbean, positioning itself as a leader in sustainable water solutions. The company recognizes the need to raise additional capital or imminently become revenue positive in order to continue to execute its business plan in the future.

Management Comments

• RAKR remains committed to delivering advanced water production and purification solutions, leveraging its innovative technologies and expanded product range, particularly through its distribution agreements for Miranda products.
• Both companies understand that the water infrastructure sector has long sales cycles, often contingent upon factors such as timely permitting for projects that require water treatment.

Industry Context

The report highlights the growing global need for sustainable water solutions, citing statistics from Water.Org, the United Nations, and the World Health Organization. The company positions itself within the context of a global water market estimated at $880 billion in 2023, expected to reach $1.2 trillion by 2031.

Comparison to Industry Standards

• The document does not provide specific comparisons to industry standards or comparable companies.
• The document mentions that the company's solutions are optimally profitable when competing with bottled water that is transported or bulk water that is transported by truck to local communities.
• The document states that the company's fully amortized cost of water per liter allows it to compete profitably to generate corporate value beneficial to shareholders.

Legal Proceedings

• 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 $ 4,423,910.
• An appeal was filed on November 9, 2016, by the previous management.
• A decision on the appeal was rendered on June 22, 2018, and the original judgement was upheld.
• As a result, the Company has recorded a contingent liability of $ 4,423,910 as of March 31, 2025 (2024: $ 4,423,910 ).
• The Company, since its last report, has not been contacted by the Plaintiff.

Related Party Transactions

• Outstanding compensation and expense reimbursements due to consultants engaged by the Company $ 899,591 (2024: $ 688,049 ).
• Refer to other related party payables in Notes 4 and 5.
• On December 31, 2024, the Company entered into an Agreement whereby this loan to RHBV was applied to certain payables related to RHBV fully eliminating this loan and all accrued interest to this date.
• On November 6, 2023, the Company issued 1,600,000 shares to RWI to finalize the Miranda acquisition.
• On January 16, 2024, the Company made an investment in RWI in the amount of $ 400,000.
• As of December 31, 2024, $ 7,000 in distribution payments have been received.
• Due to the restructuring discussed above, the Company converted the remaining investment into shares of RWI and remains on the balance sheet an investment in the amount of $ 280,622 (See Note 3 and Note 16 for more details).

Stakeholder Impact

• Shareholders face the risk of further dilution if the company raises additional capital through equity financing.
• Employees and consultants may be impacted by the company's financial difficulties, potentially leading to delayed payments or layoffs.
• Customers may be concerned about the company's ability to fulfill orders and provide ongoing support due to its financial situation.
• Creditors face the risk of non-payment if the company is unable to secure additional financing or generate sufficient revenue.

Next Steps

• The company plans to focus on business development across North, South, and Central America, as well as the Caribbean.
• The company needs to secure additional financing or become revenue positive to continue operations.

Key Dates

Keywords

Rainmaker Worldwide Inc., financial results, Q1 2025, net loss, revenue, RWI, Miranda, distribution agreements, going concern, water purification, water production