Rain Enhancement Technologies to acquire AI security firm Tensor Networks

Rain Enhancement Technologies Holdco, Inc. (NASDAQ: RAIN) and privately held Tensor Networks, Inc. have signed a binding letter of intent for a business combination that would bring Tensor Networks under RAIN's publicly traded holding company, according to a press release from the companies.

The all-stock transaction is expected to close in the first quarter of 2027, subject to customary closing conditions. Under the deal terms, Tensor Networks' equity holders would own approximately 90% of the fully diluted equity of the combined company, with RAIN's existing shareholders retaining approximately 10%, prior to dilution from a contemplated financing.

A minimum of $25 million in gross proceeds from an equity or equity-linked financing is a condition to closing. RAIN's outstanding debt is to be converted, restructured, or forgiven prior to or concurrently with closing.

Founded in 2019 and based in Sunnyvale, California, Tensor Networks develops predictive AI infrastructure technology, including its patent-pending Predictive Tensor Control Plane (PTCP) and Tensor Network Quantum Gravity (TNQG) frameworks. The company has been awarded and delivered against three U.S. Air Force contracts supporting its technology development.

Upon closing, both RET and Tensor Networks would operate as wholly owned subsidiaries of RAIN, each maintaining its own management team and commercial strategy while sharing general and administrative resources.

Eric Frazier, founder and chief executive of Tensor Networks, would become CEO of RAIN. Randy Seidl, current CEO of RAIN, would become president, with both reporting to the board of directors.

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

The transaction remains subject to due diligence, execution of a definitive agreement, and Nasdaq granting RAIN's pending request for continued listing, among other conditions.

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