Red Cat Holdings, Inc. 10-Q

ITEM 1A. RISK FACTORS We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information. ITEM 2. RECENT UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS Except as set forth below there were no sales of equity securities sold during the period covered by this Report that were not registered under the Securities Act and were not previously reported in a Current Report on Form 8-K filed by the Company. On September 18, 2020 we issued 209,758 shares of common stock to a director upon the conversion of a promissory note in the principal amount of $125,000 and $11,342 of accrued interest. On October 5, 2020, we closed a financing which included the issuance of (i) convertible notes to four investors in the aggregate amount of $600,000 and (ii) warrants to purchase an aggregate of 399,998 shares of common stock at an exercise price equal to the lower of $1.50 per share to or at a 25% discount to the price per share of common stock sold in a Qualified Offering. A director of the Company purchased $300,000 of the convertible notes and was issued 200,000 of the warrants. On October 7, 2020, we issued 471,521 shares of common stock to an investor upon the conversion of a promissory note in the principal amount of $300,000 and $31,266 of accrued interest. On October 9, 2020, we issued 29,166 shares of common stock to our chief executive officer upon the conversion of a promissory note in the principal amount of $25,000 and $2,416 of accrued interest. 24 ITEM 3. DEFAULTS UPON SENIOR SECURITIES None. ITEM 4. MINE SAFETY DISCLOSURES Not applicable