What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2023-04-19 compared with 2022-03-31 · 165 added, 161 removed, 177 unchanged (65% of the section changed)

18 unchanged sentences

We are currently developing

Water-as-a-Service (“WaaS”) projects in various locations around the globe.

projects in various locations around the globe using RAKR and partner technologies.

We are implementing these projects using proprietary

2 unchanged sentences

ownership stake in RHBV.

RAKR retains access to the technology based on a cost-plus formula, which was negotiated in an exclusive WaaS

Distribution Agreement with RHBV.

RAKR retains access to the technology based on a cost-plus formula.

Worldwide Inc.

8 unchanged sentences

His wealth of knowledge and expertise

continues to inspire and guide the Company’s executive management team and policy, our distribution partners, and RHBV.

continues to inspire and guide the Company’s executive management team and policy.

July 3, 2017, RWI shareholders completed a share exchange with the Company (the “Merger”) pursuant to a share exchange agreement

19 unchanged sentences

Upon closing, Sphere 3D’s name would have changed to Rainmaker

Worldwide Inc., and its business model would focus on WaaS.

Rainmaker management would have assumed operational leadership of the combined

The transaction was subject to completion of an equity financing, or series of financings, for a minimum of US$15 million at

a share price to be mutually agreed prior to closing and such other customary regulatory and shareholder approvals, including the approval

Closing was originally expected to occur prior to December 31, 2020, but was subject to extension to February 28, 2021, under

certain circumstances if mutually agreed by the parties.

As part of this process, Sphere 3D agreed to advance US$1.85 million to Rainmaker

by way of a secured convertible note for Rainmaker to sustain multiple growth initiatives.

The funds were used to fulfill recent contracts

and expand its equipment production capacity.

This note remains payable and is presented in RAKR’s financial statements.

various transactional and regulatory complications the agreement was ultimately terminated on February 12, 2021 and was subsequently

announced publicly.

a result of the incomplete Sphere 3D transaction, on March 31, 2021, the Company, including RWI, entered a business agreement with RHBV,

DRM and Wind en Water Technologie Holding B.V.

These companies were considered related parties on that date by virtue

of stock ownership exceeding 10%.

The parties agreed to an exchange of contractual obligations, debt owed, and shares of common stock

in full settlement of all obligations among the parties.

The resultant Financial Statements, in accordance with ASC 205-20-45-1E, reflect

the impact of these exchanges to the Company.

The Company and RHBV decided to restructure in order to optimize business operations and

broaden access to the capital markets.

Worldwide Inc., and its business model would have focused on “WaaS”.

Rainmaker management would have assumed operational

leadership of the combined entity.

The agreement was ultimately terminated on February 12, 2021 and was subsequently announced publicly.

a result of the incomplete Sphere 3D transaction, on March 31, 2021, the Company, including RWI, entered into a business agreement with

RHBV, DRM and Wind en Water Technologie Holding B.V.

These companies were considered related parties on that date

by virtue of stock ownership exceeding 10%.

The parties agreed to an exchange of contractual obligations, debt owed, and shares of common

stock in full settlement of all obligations among the parties.

The resultant Financial Statements, in accordance with ASC 205-20-45-1E,

reflect the impact of these exchanges to the Company.

The Company and RHBV decided to restructure in order to optimize business operations

and broaden access to the capital markets.

The Company and RHBV, as mutual shareholders in each other’s company, continue to pursue

the mission and objective of providing low-cost water to communities and commercial entities in need of water solutions.

Company operates out of its head office based in Peterborough, Ontario, Canada.

In support of its WaaS project implementation strategy,

the Company will utilize 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.

Company’s current and ongoing focus is to deliver WaaS, i.e., selling water directly to the customer on a per liter basis, using

the two Rainmaker technologies discussed above or other complementary technologies acquired or licensed by the Company.

This focus shall

be administered by forming local joint venture partnerships (“JV”) where demand exists with profitable pricing scenarios.

The JVs will in turn own the water delivery system and related equipment.

In most if not all cases, RAKR expects to have ownership stakes

Ownership percentages will typically be determined by the relative contribution of the stakeholders.

Company has concurrently planned various WaaS projects in Turks and Caicos and other Caribbean countries.

Moreover, although there can

be no assurance, our business development activities are expected to yield more commercial contracts in 2022.

The implementation dates

have continuously shifted due to logistical and supply chain issues related to Covid-19.

Principally, WaaS involves the selling of produced

(AW) or purified water (WW) on a per liter basis either in a bottle for drinking or in bulk for industrial and commercial services.

commercial activity requires the Company to deliver operational, maintenance, marketing and sales expertise in combination with local

partners in most dealings.

Usually, projects often require working with complementary technology for post treatment of water and mineralization

in tandem with bottling plants and renewable energy businesses.

Additional commercial activities include but are not limited to the integration

of the foregoing technologies and post implementation operation and maintenance-based functions.

retains a 12% ownership stake in RHBV.

RAKR retains access to the technology based on a cost-plus formula.

Company is based in Peterborough, Ontario, Canada.

The Company will utilize 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.

Company’s current and ongoing focus is to use the two Rainmaker technologies discussed above or other complementary technologies

acquired or licensed by the Company.

This focus shall be administered by forming joint venture partnerships (“JV”).

if not all cases, RAKR expects to have ownership stakes in JVs.

Ownership percentages will typically be determined by the relative contribution

of the stakeholders.

the Caribbean, locations have been identified and operating plans defined.

1 unchanged sentence

expect delivery by Q3 2023.

Specifically, locations have been identified and operating plans defined for Turks and Caicos.

Company has generated limited revenue up until the present time, and its operations for the past three years have been typically focused

on business development, market research, technology research and development activities.

Specifically, locations have been identified and operating plans defined for various locations.

Company has generated no revenue up until 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, on a consolidated basis, had total

7 unchanged sentences

present, the Company executes consulting agreements with experienced executive personnel and senior advisors.

Sales are heavily driven

by independent distributors and project developers.

The Company had no revenue for the years ending December 31, 2021 and 2020 and had

net losses of $2,725,465 and $22,645,796 for the years ended December 31, 2021 and 2020, respectively.

A large proportion of the 2021

losses relate to uncustomary expenses associated with the restructuring ($467,118 amortization of debt discount and non-recurring consultancy

expenses of $587,500) as well as losses from equity investments ($112,000) and write-down of inventory ($219,701)).

The losses associated

with discontinued operations ($333,733) are not expected to reoccur in future years.

The total of these expense categories is $1,720,052

Sales are heavily

driven by independent distributors and project developers.

The Company had no revenue for the years ending December 31, 2022 and

2021 and had net losses of $1,837,611 and $2,725,464 for the years ended December 31, 2022 and 2021, respectively.

proportion of the 2021 losses relate to uncustomary expenses associated with the restructuring ($467,118 amortization of debt

discount and non-recurring consultancy expenses of $587,500) as well as losses from equity investments ($112,000) and write-down of

inventory ($219,701)).

The losses associated with discontinued operations ($333,733) are not expected to reoccur in future years.

The total of these expense categories is $1,720,052 or 63.1%.

of the net loss.

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 2021 stated that there

was substantial doubt about the Company’s ability to continue as a going concern.

The losses in 2022 have been reduced by 33% compared

The 2022 losses are driven by operating expenses, the first important component being the cost associated with maintaining

the Company’s listing and current filing status with the SEC.

The second component is consulting expenses including stock option expenses which incorporate derivative liabilities

for warrants, the majority of

which remains on the balance sheet as related party payables.

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.

Due to a lack of sales, a

review of the inventory required that it be fully impaired at December 31, 2023 which amounted to $335,000 of the 2022 losses.

Company still plans to sell the inventory and if successful will report according to US GAAP.

The Company’s auditor’s

report for 2022 stated that there was substantial doubt about the Company’s ability to continue as a going concern.

June 29, 2022, the Company held a Special Meeting of Stockholders that confirmed majority vote was achieved.

Each share of the Company’s

common stock was entitled to one vote per share.

The matter voted upon and the results are set forth below.

The Proposal presented:

in Authorized Shares and Establishment of Preferred shares.

Stockholders approved an increase in the Company’s authorized common

stock to 500,000,000 and the establishment of 1,000,000 preferred shares.

March 11, 2020, the World Health Organization categorized COVID-19 as a pandemic.

a global corporation the economic effects within the Company’s environment have been substantial.

In global markets, disruptions

in supply chains and increases in related costs have had a real impact on our ability to deliver WaaS projects.

Measures being introduced

at various levels of government to curtail the spread of the virus (such as travel restrictions, closures of non-essential municipal

and private operations, imposition of quarantines and social distancing) have had a material impact on the Company’s operations.

The extent of the impact of this outbreak and related containment measures on the Company’s operations cannot be reliably estimated

at this time but at the same time the impact has been significant since the declaration of the pandemic two years ago.

For the Company,

it is particularly disruptive because of limitations on our business development and engineering experts to travel and implement projects.

As global operations open, we expect that we will begin to track according to the original business plan.

a global corporation the economic effects within the Company’s environment were substantial and there are still lingering economic

impacts globally.

In global markets, disruptions in supply chains and increases in related costs have had a real impact on our ability

to deliver projects.

Measures being introduced at various levels of government to curtail the spread of the virus (such as travel restrictions,

closures of non-essential municipal and private operations, imposition of quarantines and social distancing) had a material impact on

the Company’s operations.

The extent of the impact of this outbreak and related containment measures on the Company’s operations

cannot be reliably estimated at this time but at the same time the impact has been significant since the declaration of the pandemic

three years ago.

For the Company, it was particularly disruptive because of limitations on our business development and engineering experts

to travel and implement projects.

As global operations have recently become more open, we have begun reopening our connections with distributors

to deliver products to market.

the world, fresh water is unevenly distributed.

2 unchanged sentences

Fundamentally,

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

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

& Cost-effective

15 unchanged sentences

of unit deployed.

the core focus on WaaS delivered on a per liter basis, the relevant Cost Information is the cost per liter of alternative suppliers.

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.

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 through our distributed WaaS model and distribution agreement

with RHBV, 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.

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.

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.

global nature of our approach means that regulatory conditions vary by jurisdiction.

3 unchanged sentences

to World Health Organization standards for clean water using the technologies that are authorized in a particular sovereign jurisdiction.

Recurring Revenue Model

RAKR business model begins with the identification of a trusted local partner.

The next step is to enter into JV structures, which maximize

value to all stakeholder-parties.

Rainmaker delivery systems are to be installed by entering into contracts with local third-party experts that are typically Heating,

Ventilation and Air Conditioning (“HVAC”) experts.

RAKR model charges a market determined price per liter of bottled water or similarly treated water.

Revenue sources include bottled water,

bulk water, and industrial water.

A representative project in the Caribbean currently under development is expected to generate $110,000

dollars in revenue per month once seven allocated machines are operational.

The capital expenses for the project are roughly $650,000

and the payback is less than one year.

This representative project reflects the project profile that we will be seeking in the future.

believe the value we will offer through our WaaS projects is based on the following factors:

are no upfront costs to the customer.

costs are borne through the JVs and other partnerships.

Only end-consumers of the water pay on a per liter basis.

combination of (1) and (2) above make it economically viable to deploy in communities that do not have the resources or network infrastructure

to independently finance projects that require high amounts of financial capital.

improvements and related applications that we are pursuing or plan to pursue include the following:

more strategic and technology-based partnerships with complementary technology and business development companies to expand our global

reach and service offering.

with RHBV to identify relevant technological advances based on lessons learned from previously implemented projects to reduce total

costs and enhance net profits.

RAKR business model typically begins with the identification of a trusted local partner.

When applicable, the next step is to enter into

JV structures, which maximize value to all stakeholder-parties.

The Rainmaker delivery systems are to be installed by entering into contracts

with local third-party experts that are typically Heating, Ventilation and Air Conditioning (“HVAC”) experts.

addition, over the course of the past year, we have been developing partnerships with highly experienced developers of complementary

That gives RAKR the ability to have a more comprehensive product set when proposing solutions to communities, developers

and commercial entities.

The most significant agreement to date is with Miranda Environmental and Water Treatment Technologies, Energy,

Natural Resources, Engineering, Consulting, Construction and Commerce Inc.

July 28, 2022, the Company signed a Joint Development Agreement (“JDA”) with Miranda whose primary manufacturing operations

reside in Ankara, Turkey.

This JDA allows for reciprocal distribution rights for all of RAKR and Miranda’s combined technologies

and fosters a long-term technological integration strategy between the two companies.

They have been delivering systems for more than

ten years across 40 countries globally.

As a result, their global experience in invaluable to Rainmaker and Rainmaker shareholders.

On October 5, 2022, the Company entered into a Memorandum of Understanding (the “MOU”) with Miranda to

formalize the mutual intention to integrate the two firms at both strategic and operating levels.

This was a non-binding agreement allowing

for standard due diligence to take place before the creation of definitive agreements.

The MOU was renewed on March 21, 2023 and will

remain in force until May 30, 2023.

There can be no assurance that the parties will reach a definitive agreement.

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.

the past ten years, there has been a growing awareness of the shortage of fresh water—and the associated economic and social effects

32 unchanged sentences

of that global level of demand.

Representative

existing projects reside within the Caribbean and specifically Turks and Caicos and Europe.

stated previously, our principal supplier for the core technologies to be deployed is RHBV.

3 unchanged sentences

of different sizes and types.

technology (i.e., bottling, pre-post wastewater treatment, mineralization solutions, and renewable energy) – suppliers are global,

abundant, and highly competitive so as to ensure the lowest cost per liter for any given WaaS project planned implemented by the Company.

Rainmaker WaaS-focused 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.

also have suppliers of complementary technology that we expect to be delivering in 2023 to diversify the Rainmaker business model.

Complementary

and supplemental technology (i.e., bottling, pre-post wastewater treatment, mineralization solutions, and renewable energy) – suppliers

are global, abundant, and highly competitive so as to ensure the lowest cost per liter.

Rainmaker business model that will deliver potable water at the source of demand is uniquely positioned to address alternative competitive

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.

In virtue of our current affiliations, we believe we have a cost per liter competitive

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.

Subsidies and Incentives

1 unchanged sentence

we will pursue them in due course.

time, RAKR will seek subsidies and incentives through its deployment of WaaS in underserved countries and particular communities within

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

10 unchanged sentences

Stock-based compensation expense included in general and administrative expense

and administrative expenses, including stock-based compensation, for the year ended December 31, 2021 decreased approximately $14.4 million,

or 90.5%, compared to the same period in 2020.

This decrease primarily relates to (1) a decrease of $10.83 million in stock-based compensation,

(2) general and administrative expenses decreased by $1.59 million, (3) marketing and advertising decreased $1.17 million, (4) depreciation

expense reduced by approximately $0.52 million and (5) consulting fees decreased by $.27 million, and, (6) rent expense reduced by $32,109

due to the reduction in our commitment of our office lease.

Excluding stock-based compensation, general and administrative expenses decreased

$3.58 million.

and administrative expenses, including stock-based compensation, for the year ended December 31, 2022 decreased $1,829, compared to the

same period in 2021.

This minor decrease primarily relates to (1) a decrease of $519,000 in consulting fees, (2) marketing and advertising

decreased $17,273, and (3) rent expense reduced by $12,364 due to the reduction in our commitment of our office lease.

These decreases

were offset by the following increases to expense categories;

stock-based compensation increased $347,922, general and administrative

expenses increased $194,210 due to the impairment of inventory at December 31, 2022 ($335,000) and travel $4,676).

Excluding stock-based

compensation, general and administrative expenses decreased $349,751

and Capital Resources

to other development stage companies, our products have yet to generate significant revenue.

to other development stage companies, our products have yet to generate revenue.

As a result, we have historically suffered

recurring losses and we do not have required cash resources to fully execute our business plans.

However, we have approximately $175,000

in inventory we believe can be converted into revenue once logistics bottlenecks are opened up that may provide sufficient interim cash

resources until such time as we may arrange a larger financing.

Furthermore, once this inventory is delivered to the ultimate destination

it should start to generate recurring revenue.

However, we have completed the

assembly of three machines, which, after a review for impairment at December 31, 2023, have been removed from inventory.

these machines can be converted into cash flow and will be appropriately reflected under US GAAP at such time as they are

transferred to prospective clients.

Historically,

1 unchanged sentence

stock) and debt financings.

From 2015 through to the date of this filing, the Company raised approximately $7.7 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 commercial ready product and as soon as logistics and supply chains allow, deliver these products into

identified projects and begin to generate revenue.

The Company has sustained losses from operations in each fiscal year since our inception,

and we expect losses to continue for the indefinite future.

As of December 31, 2021 and December 31, 2020, the Company had an accumulated

deficit of approximately $71 million and $68.3 million, respectively, and stockholders’ equity of approximately $(8.9) million

From 2015 through to the fiscal year end date December 31, 2022, the Company raised approximately $8 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 commercial ready product and as soon as logistics and supply chains allow, deliver these

products into identified projects and begin to generate revenue.

The Company has sustained losses from operations in each fiscal year

since our inception, and we expect losses to continue for the indefinite future.

As of December 31, 2022 and December 31, 2021, the Company

had an accumulated deficit of approximately $73 million and $71 million, respectively, and stockholders’ equity of approximately

$(10.3) and $(8.9) million, respectively.

18 unchanged sentences

Issued Accounting Standards Not Yet Effective or Adopted

does not believe that any recently issued, but not yet effective accounting pronouncements, if adopted, would have a material impact

on the accompanying condensed consolidated financial statements.

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.

and Qualitative Disclosures About Market Risk

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis