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Item 9A. Controls and Procedures

2022-07-27 compared with 2021-08-12 · 82 added, 915 removed, 34 unchanged (97% of the section changed)

2 unchanged sentences

EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The following table sets forth information regarding

our current directors and executive officers:

President, Chief Executive Officer and Director

Chief Operating Officer

Joseph Hernon

Chief Financial Officer, Treasurer and Secretary

Nicolas Liuzza, Jr.

Jonathan Read

Joseph Freedman

Our directors hold office until the next annual meeting

of shareholders of the Company and until their successors have been elected and qualified.

Our officers are elected by and serve at the

discretion of the board of directors.

President and Chief Executive Officer

Jeffrey Thompson has been

President and Chief Executive Officer of the Company since May 15, 2019.

Thompson was a director of Exactus, Inc.

(OTCMKTS:EXDI),

a producer and marketer of products made from industrial hemp containing cannabidiol, currently traded on the OTCQB venture market from

January 2019 until April 2020.

In December 1999, Mr.

Thompson founded Towerstream Corporation (OTCQB:TWER), fixed-wireless fiber alternative

company delivering high-speed internet access to businesses, and served as its president, chief executive officer and a director from

November 2005 to February 2016.

Thompson founded EdgeNet Inc., a privately held Internet service provider (which was sold

to Citadel Broadcasting Corporation in 1997) and became eFortress through 1999.

Thompson holds a B.S.

degree from the University

of Massachusetts.

Thompson’s management

and public company experience and his role as President and Chief Executive Officer of the Company, led to his appointment as a director.

Joseph Hernon , Chief

Financial Officer and Secretary

Joseph Hernon has been Chief Financial

Officer and Secretary of the Company since January 23, 2020.

Hernon has extensive experience in financial services over the course

of his 30-year career.

Prior thereto from May 2016, Mr.

Hernon was a financial consultant to various private companies.

Prior to that,

Hernon was the Chief Financial Officer for three public companies, including, most recently, Towerstream Corporation from May 2008

through May 2016.

Previously, Mr.

Hernon was employed for almost 10 years by PricewaterhouseCoopers in its audit practice and was

a Senior Business Assurance Manager during his last five years with the firm.

Hernon is a certified public accountant and earned

a Master’s degree in Accountancy from Bentley University in 1986.

Allan Evans, Chief

Operating Officer

Allan Evans has been appointed

as Chief Operating Officer of the Company, effective June 3, 2021.

Evans is a serial entrepreneur with a history of founding and

leading technology innovation and has more than a decade's worth of experience in design, engineering, and emerging technologies.

has served as Chief Executive Officer of our subsidiary, Fat Shark since 2017 under an Employment Agreement dated January 11, 2021.

his appointment as our new COO, Mr.

Evans continues to serve and is being compensated in his role as CEO of Fat Shark Holdings under

his existing Employment Agreement.

From August 2017 to October 2020, Dr.

Evans served as a board member for Ballast Technologies,

a company that specialized in technology for location-based entertainment.

In November 2012, he co-founded Avegant, a technology company

focused on developing next-generation display technology to enable previously impossible augmented reality experiences.

He led design,

development, and initial production of the glyph head mounted display and oversaw technology research and patent strategy while serving

as Chief Technology Officer of Avegant until 2016.

Evans received a PhD and M.S.

degree in electrical engineering from the University

of Michigan and has a B.S.

degree from Michigan State University.

Evans has 38 total patents that cover a range of technologies from

implantable medical devices to mixed reality headsets.

Academically, his work has an h-index of 14, an i-index of 24, and has been cited

in almost 800 publications.

He has extensive experience with new technologies, engineering, business development, and corporate strategy

and his expertise in these areas strengthens the company’s collective knowledge and capabilities.

Joseph Freedman , Director

Freedman has been a director of the Company since

January 11, 2021.

Freedman is an entrepreneur with experience launching and exiting companies in the legal recruitment, technology

and hospitality sectors, several of which have been acquired by NYSE listed, private equity and privately held companies.

Four such companies

were listed on the Inc.

500/5000, 14 times, with one being listed in the top 100.

Freedman co-founded and currently serves

on the board of Peachtree Tents & Events Holdings, LLC.

Freedman co-founded and served as the chief executive officer of Richmond

Title, LLC until its acquisition in 2006, and founded and served as chief executive officer of AMICUS Legal Staffing, Inc.

acquisition in 1996.

Freedman co-founded and served on the board of RFx Legal, LLC, a company which used proprietary technology

to automate the way corporations sourced and procured legal services, until its acquisition in 2013.

Freedman also co-founded eConception,

LLC, Weberize, LLC, and Acymtech LLC.

Freedman currently serves as an advisor to Headsets.com and sits on numerous privately held

company boards.

Freedman is the past president of the Nashville Chapter of the Entrepreneurs Organization and currently serves on

their Strategic Council.

Freedman earned a B.S.

degree in Finance from Louisiana State University.

Freedman’s business and financial

experience provide the basis upon which the Company has appointed him to the Board.

Nicholas Liuzza Jr.

has been a director

of the Company since June 1, 2019.

Liuzza serves as an Executive Vice President of Real Matters, Inc.

a network management services

provider for the mortgage lending and insurance industries (“Real Matters”), a position he has held from April of 2016.

Matters is listed on the Toronto Stock Exchange.

Liuzza co-founded and served as the Chief Executive Officer of Beeline Mortgage

LLC, a residential mortgage lender, since 2019.

Prior to founding Beeline Mr.

Liuzza founded Linear Title & Closing in 2005, and

was a senior executive until its sale in 2016.

Liuzza was also the founder and CEO of Linear Settlement Services, LLC, a title insurance

agency acquired by Real Matters.

Liuzza founded and was the President of New Age Nurses, a healthcare staffing company which

he grew into a national provider of healthcare personnel services which became the platform for a reverse merger upon its acquisition

in 2003 by Crdentia.

Priorthereto, Mr.

Liuzza was Executive Vice President of AMICUS Legal Staffing, a national staffing services

provider with a specialization in real estate transactions.

Liuzza started his career with Xerox Corporation in 1988.

Liuzza’s

more than 20 years of experience as an entrepreneur in the software industry and his sales experience and software development led to

his appointment as a director.

Mitchell, Director

Mitchell has been a director

of the Company since June 1, 2019.

Mitchell has been the Chief Executive Officer of The Carpenter Health Network, a health care provider

in the Gulf Coast region providing nursing, home care, hospice, and rehabilitation care services, since 2014.

Mitchell founded

Joseph Hospice with the mission of providing peace, comfort and dignity to those facing terminal illness.

The Carpenter Health Network

was created in 2014 as the parent company of St.

Joseph Hospice and its sister companies.

Mitchell formed STAT Home Health,

a healthcare services company, leading to Louisiana’s first AIM Palliative Home Health Program that helps seriously ill patients

who lack coordinated hospital, home health and hospice care.

Mitchell created Homedica, a healthcare services company, to

improve the patient experience and reducing hospitalizations by enabling physicians and mid-level care providers to make house calls.

Mitchell is a graduate of the University of Louisiana-Monroe.

Mitchell’s experience building

companies and his merger and acquisitions and corporate finance experience led to his appointment as a director.

Jonathan Read, Director

Jonathan Read has been a director of the

Company since August 18, 2017 and was the Chief Executive Officer, Secretary and Treasurer of the Company from October 20, 2017 until

From July 14, 2017 through July 20, 2018, Mr.

Read served as a director of BTCS Inc, a digital asset-related company which

may be deemed a potential competitor.

From November 1, 2015 to January 31, 2017, Mr.

Read was Chief Executive Officer and a director

of the Company.

Since 2013, Mr.

Read has been Managing Partner of Quadratam1 LLC, a Scottsdale, Arizona based firm specializing in providing

financial and organizational consulting services for growth-stage companies in the United States and China.

From 2005 through 2012, Mr.

Read was the Chief Executive Officer and a director of ECOtality, Inc.

(“ECOtality”), a San Francisco based company that

Read founded.

In 2013, ECOtality, Inc.

filed for Chapter 11 bankruptcy protection.

Read filed for bankruptcy personally.

Read’s prior experience with the Company and other public company led to his appointment as a director.

Composition of our Board of Directors

Our board of directors currently consists of five

Our directors hold office until their successors have been elected and qualified or until the earlier of their death, resignation

There are no family relationships among any of our directors or executive officers.

Director Independence

Our Board has determined that all of our present

directors are independent, in accordance with standards under the Nasdaq Listing Rules, other than Mr.

Our Board determined

that, under the Nasdaq Listing Rules, Mr.

Thompson is not an independent director because he is the Chief Executive Officer and President

of the Company.

Our Board has determined that Messrs.

Read and Liuzza

are independent under the Nasdaq Listing Rules’

independence standards for Audit Committee members.

Our Board has also determined

that they are independent under the Nasdaq Listing Rules independence standards for Compensation Committee members and for Governance

and Nominating committee members.

Committees of the Board of Directors

Audit Committee

The Audit Committee is composed

of two independent directors:

Nicholas Liuzza and Jonathan Read.

Each member of the Audit Committee is an independent director as defined

by the rules of the SEC and Nasdaq.

The Audit Committee has the sole authority and responsibility to select, evaluate and engage independent

auditors for the Company.

The Audit Committee reviews with the auditors and with the Company’s financial management all matters

relating to the annual audit of the Company.

The Audit Committee monitors

the integrity of our financial statements, monitors the independent registered public accounting firm’s qualifications and independence,

monitors the performance of our internal audit function and the auditors, and monitors our compliance with legal and regulatory requirements.

The Audit Committee also meets with our auditors to review the results of their audit and review of our annual and interim financial

The Audit Committee meets

at least on a quarterly basis to discuss with management the annual audited financial statements and quarterly financial statements and

meets from time to time to discuss general corporate matters.

Audit Committee Financial

determined that Jonathan Read is qualified as an Audit Committee Financial Expert, as that term is defined by the rules of the SEC, in

compliance with the Sarbanes-Oxley Act of 2002.

Compensation Committee

Compensation Committee, which currently consists of Joseph Freedman and Nicholas Liuzza, each of whom are independent directors.

other things, the Compensation Committee reviews, recommends and approves salaries and other compensation of the Company’s executive

officers, and administers the Company’s equity incentive plans (including reviewing, recommending and approving stock option and

other equity incentive grants to executive officers).

The Compensation Committee meets in executive session to determine the compensation

of the Chief Executive Officer of the Company.

In determining the amount, form, and terms of such compensation, the Committee considers

the annual performance evaluation of the Chief Executive Officer conducted by the Board in light of company goals and objectives relevant

to Chief Executive Officer compensation, competitive market data pertaining to Chief Executive Officer compensation at comparable companies,

and such other factors as it deems relevant, and is guided by, and seeks to promote, the best interests of the Company and its shareholders.

subject to existing agreements, the Compensation Committee determines the salaries, bonuses, and other matters relating to compensation

of the executive officers of the Company using similar parameters.

It sets performance targets for determining periodic bonuses payable

to executive officers.

It also reviews and makes recommendations to the Board regarding executive and employee compensation and benefit

plans and programs generally, including employee bonus and retirement plans and programs (except to the extent specifically delegated

to a Board appointed committee with authority to administer a particular plan).

In addition, the Compensation Committee approves the

compensation of non-employee directors and reports it to the full Board.

Compensation Committee also reviews and makes recommendations with respect to stockholder proposals related to compensation matters.

The committee administers the Company’s equity incentive plans, including the review and grant of stock options and other equity

incentive grants to executive officers and other employees and consultants.

Compensation Committee may, in its sole discretion and at the Company’s cost, retain or obtain the advice of a compensation consultant,

legal counsel or other adviser.

The Compensation Committee is directly responsible for the appointment, compensation and oversight of

the work of any compensation consultant, legal counsel and other adviser retained by the committee.

Governance and Nominating

Governance and Nominating Committee, consists of Joseph Freedman and Nicholas Liuzza, each of whom meets the independence requirements

of all other applicable laws, rules and regulations governing director independence, as determined by the Board.

The Governance and Nominating

Committee identifies individuals qualified to become members of the Board, consistent with criteria approved by the Board;

to the Board the director nominees for the next annual meeting of stockholders or special meeting of stockholders at which directors

are to be elected;

recommends to the Board candidates to fill any vacancies on the Board;

develops, recommends to the Board, and reviews

the corporate governance guidelines applicable to the Company;

and oversees the evaluation of the Board and management.

In recommending

director nominees for the next annual meeting of stockholders, the Governance and Nominating Committee ensures the Company complies with

its contractual obligations, if any, governing the nomination of directors.

It considers and recruits candidates to fill positions on

the Board, including as a result of the removal, resignation or retirement of any director, an increase in the size of the Board or otherwise.

The Committee conducts, subject to applicable law, any and all inquiries into the background and qualifications of any candidate for

the Board and such candidate’s compliance with the independence and other qualification requirements established by the Committee.

The Committee also recommends candidates to fill positions on committees of the Board.

and recommending candidates for election to the Board or appointment to any committee of the Board, the Committee does not believe that

it is appropriate to select nominees through mechanical application of specified criteria.

Rather, the Committee shall consider such

factors at it deems appropriate, including, without limitation, the following:

personal and professional integrity, ethics and values;

experience in corporate management, such as serving as an officer or former officer of a publicly-held company;

experience in the Company’s

experience as a board member of another publicly-held company;

diversity of expertise and experience in substantive matters

pertaining to the Company’s business relative to other directors of the Company;

practical and mature business judgment;

and composition

of the Board (including its size and structure).

Committee develops and recommends to the Board a policy regarding the consideration of director candidates recommended by the Company’s

stockholders and procedures for submission by stockholders of director nominee recommendations.

In appropriate

circumstances, the Committee, in its discretion, will consider and may recommend the removal of a director, in accordance with the applicable

provisions of the Company’s certificate of incorporation and bylaws.

If the Company is subject to a binding obligation that requires

director removal structure inconsistent with the foregoing, then the removal of a director shall be governed by such instrument.

Committee oversees the evaluation of the Board and management.

It also develops and recommends to the Board a set of corporate governance

guidelines applicable to the Company, which the Committee shall periodically review and revise as appropriate.

In discharging its oversight

role, the Committee is empowered to investigate any matter brought to its attention.

Board Diversity

we do not have a formal policy on diversity, the Board considers diversity to include the skill set, background, reputation, type and

length of business experience of the Board members as well as a particular nominee’s contributions to that mix.

believes that diversity brings a variety of ideas, judgments and considerations that benefit the Company and its stockholders.

Although there are many other factors, the Board seeks individuals with experience on operating and growing businesses.

Board Leadership Structure

Thompson serves as the Chairman of the Board and actively interfaces with management, the Board and counsel regularly.

Board Risk Oversight

The Company’s

risk management function is overseen by the Board.

The Company’s management keeps the Board apprised of material risks and provides

its directors access to all information necessary for them to understand and evaluate how these risks interrelate, how they affect us,

and how management addresses those risks.

Norman Gardner, Chairman of the Board, works closely together with the other members of the

Board when material risks are identified on how to best address such risks.

If the identified risk poses an actual or potential conflict

with management, the Company’s independent directors may conduct the assessment.

Presently, the primary risk affecting us are our

liquidity and the lack of material revenue.

Relationships

are no family relationships among any of our officers or directors.

in Legal Proceedings

are not aware of any of our directors or officers being involved in any legal proceedings in the past ten years relating to any matters

in bankruptcy, insolvency, criminal proceedings (other than traffic and other minor offenses) or being subject to any of the items set

forth under Item 401(f) of Regulation S-K other than Mr.

Read as described under “Biographies”.

Code of Ethics

has adopted a Code of Business Conduct and Ethics (the “Code of Ethics”) that applies to all of the Company’s employees,

including the Company’s Chief Executive Officer and Chief Financial Officer.

Although not required, the Code of Ethics also applies

to the Company’s directors.

The Code of Ethics provides written standards that we believe are reasonably designed to deter wrongdoing

and promote honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and

professional relationships, full, fair, accurate, timely and understandable disclosure and compliance with laws, rules and regulations

and the prompt reporting of illegal or unethical behavior, and accountability for adherence to the Code of Ethics.

Delinquent Section 16(a) Reports

Section 16(a) of the Securities Exchange Act of 1934

requires our executive officers and directors, and persons who beneficially own more than 10% percent of our equity securities ("Reporting

Persons") to file reports of ownership and changes in ownership with the SEC.

Based solely on our review of copies of such reports

and representations from the Reporting Persons, we believe that during the fiscal year ended April 30, 2021, the Reporting Persons timely

filed all such reports, except that Allan Evans filed a Form 4 reporting common stock transferred in recognition

of services provided late;

Allan Evans filed a Form 3 reporting becoming an Officer late;

Brains Riding in Tanks, LLC filed a Form 3 reporting

becoming a 10% owner late;

Greg French filed a Form 3 reporting becoming a 10% Owner late;

Jeffrey Thompson filed a Form 4 reporting the

purchase of common stock late;

Jeffrey Thompson filed a Form 4 reporting conversion of a convertible note into common stock late;

Freedman filed a Form 4 reporting conversion of a convertible note and the exercise of warrants into common stock late;

Joseph Freedman

filed a Form 3 reporting becoming a Director late;

Nicholas Liuzza filed a Form 4 reporting conversion of convertible notes into common

Nicholas Liuzza filed a Form 4 reporting conversion of a convertible note into common stock, issuance of a convertible note,

and issuance of warrants late.

Changes in Nominating Process

There are no material changes to the procedures by

which security holders may recommend nominees to our Board.

The information required for this Item is incorporated

by reference from our Definitive Proxy Statement for our 2022 Annual Meeting of Stockholders which was filed on July 13, 2022.

EXECUTIVE COMPENSATION

The following table sets forth information concerning

all cash and non-cash compensation awarded to, earned by or paid to our Chief Executive Officer and the other (1 executive officer with

compensation exceeding $100,000 during the fiscal years ended April 30, 2021 and 2020 (each a "Named Executive Officer").

SUMMARY COMPENSATION TABLE

Name and Principal Position

Option Awards

All Other Compensation

Jeffrey Thompson

Chief Executive Officer and President

Joseph Hernon

Chief Financial Officer and Secretary

Hernon joined the company in February 2020

(2) Represents

the grant date fair value of the award, calculated in accordance with FASB Accounting Standard

Codification 718, “Compensation –

Stock Compensation,”

assumptions used in calculating the grant date fair value of the option awards are set forth

in Note 1 of the Financial Statements to our Form 10-K for the year ended April 30,2021”

2019 Equity Incentive Plan

On May 24, 2019, the holders of the majority of the

Company’s common stock approved the Company’s 2019 Equity Incentive Plan (the “Plan”).

The Plan provides for

the award of stock options (incentive and non-qualified), stock awards and stock appreciation rights to officers, directors, employees

and consultants who provide services to the Company.

The terms of awards under the

Plan are made by the Board, or by a compensation committee appointed by the Board.

The Company has reserved 10,500,000,000 shares (before

the 1,200 to 1 reverse stock split) for issuance under the Plan.

The Board may terminate the Plan at any time.

Unless sooner terminated,

the Plan will terminate ten years after the effective date of the Plan.

All vested or unvested awards are immediately forfeited at the

option of the Board in the event that the recipient performs certain acts against the interests of the Company as described in the Plan.

The number of shares of common stock covered by each outstanding stock right, and the number of shares of common stock which have been

authorized for issuance under the Plan as well as the price per share of common stock (or cash, as applicable) covered by each such outstanding

option or SAR, shall be proportionately adjusted for any increases or decrease in the number of issued shares of common stock resulting

from a stock split, reverse stock split, stock dividend, combination or reclassification, or any other increase or decrease in the number

of issued shares of common stock effected without receipt of consideration by the Company.

Employment Agreements

Employment Agreement with Joseph Hernon, CFO of

Red Cat Holdings

On July 1, 2021, Red Cat Holdings, Inc.

(the “Company”)

entered into a one-year executive employment agreement (the “Employment Agreement”) with Joseph Hernon (“Executive”),

to serve as chief financial officer of the Company.

The Employment Agreement will automatically renew for successive one-year terms unless

either party notifies the other party at least three months prior to the expiration of the then current term of its desire to terminate

the Employment Agreement.

In consideration therefor, Executive will be paid

a base salary equal to 75% percent of the salary of the Company’s Chief Executive Officer in effect from time to time (“Base

Salary”), in periodic installments in accordance with the Company’s regular payroll practices.

Base Salary may not be decreased

without the written consent of Executive.

Executive will also be eligible to receive an annual cash bonus of up to 150% percent of Base

Salary (“Annual Bonus”).

Executive also received a grant of 375,000 shares

of the Company’s common stock, par value $0.001 per share (“Common Stock”), 45,000 of which shares vest on November

1, 2021, and the remaining 330,000 shares vest in 11 equal quarterly installments commencing on February 1, 2022, subject to Executive’s

continued employment by the Company or its parent or any subsidiary.

The grant of shares will also vest immediately upon a change of

control, as defined in the Company’s 2019 Equity Incentive Plan (the “Plan”).

Executive will also be eligible for additional

awards under the Plan.

Upon termination of employment for any reason, the

Executive shall be entitled to Base Salary and a pro-rata portion of the Annual Bonus earned through the date of termination.

Upon termination

by the Company for any reason other than for “cause”

or by Executive for “good reason”, as such terms are defined

in the Employment Agreement, Executive will be entitled to all vested and unvested shares in accordance with the award vesting as if

no termination occurred.

Upon termination by the Company without cause, by

Executive for good reason or by Executive within 180 days of a change of control, as defined in the Employment Agreement, Executive will

also be entitled to the):

(i) the greater of Base Salary through the balance of the term, or 12 months of Base Salary;

(ii) continued

participation in Company benefit plans (including health benefits) for at least twenty four months and (iii) immediate vesting of all

stock options or equity awards.

Fat Shark will also pay for Executive’s COBRA premiums so long as Executive qualifies therefor.

During the term of employment and for three years

thereafter, if there is a restatement of any financial results resulting from material non-compliance of the Company with financial reporting

requirements under the federal securities laws from which any metrics were determined to be achieved which were the basis of the granting

and calculation of the Annual Bonus and any stock-based compensation, Executive agrees to repay any amounts which were determined by

reference to any financial results which were later restated.

Executive is entitled to participate in all benefit

plans at substantially the same levels as the Company’s senior executive officers.

Executive may terminate the Employment Agreement

without Good Reason and other than for a change of control upon thirty days prior written notice.

Upon such termination, the Company

will have no further obligations or liability to Executive, except for the Base Salary and pro-rata Annual Bonus earned prior to the

date of termination.

The Employment Agreement contains for customary confidentiality

provisions during and after the term of employment of Executive.

Employment Agreement with Jeffrey Thompson, CEO

of Red Cat Holdings

On March 31, 2021, the Company entered into a written

employment agreement (the “Employment Agreement”) with Jeffrey M.

Thompson, the Company’s Chief Executive Officer.

The Employment Agreement provides for an initial term of one year and will renew for successive one-year terms unless either party provides

written notice of their intent not to renew the agreement at least three months prior to expiration.

The Employment Agreement provides

for a base salary of $248,000 per year, payable in periodic installments in accordance with the Company’s regular payroll practices.

At the option of Mr.

Thompson, in any fiscal in which:

A) at any time market capitalization is at least $500,000,000;

and B) the Company’s

traded price per share is at least $6.00 on a national securities exchange for 60 consecutive days, Mr.

Thompson may elect to receive

all or any portion of the base salary for a subsequent period in shares of Company common stock valued at the thirty-day VWAP for each

pay period for which the election is applicable.

The Employment Agreement also provides certain Incentive

Criteria for Mr.

Thompson tied to the Company’s share price and market capitalization, Mr.

Thompson may earn an annual bonus in

an amount up to 200% of his base salary upon meeting certain Company goals and objectives to be defined by the Company’s Compensation

Committee, in consultation with Mr.

Thompson, including the full annual bonus amount in any fiscal in which:

A) at any time market capitalization

is at least $500,000,000;

and B) the Company’s traded price per share is at least $6.00 on a national securities exchange for 60

consecutive days.

Thompson may also elect to receive all or any portion of such bonus in common stock of the Company, valued at the

thirty-day VWAP on the date set for payment of the bonus.

The Employment Agreement contains certain “clawback”

provisions, which are triggered if there is a restatement of any Company financial results which were the basis for payment of compensation

Under the clawback provisions, Mr.

Thompson will be required to repay any annual bonus and stock-based compensation

determined by reference to any Company financial results which were later restated, to the extent the amounts paid exceeded the amounts

that would have been paid, based on the restatement of the Company’s financial information.

Upon termination of the Employment Agreement for

any reason, Mr.

Thompson will be entitled to all base salary earned through the termination date, as well pro-rated annual bonuses, if

any, and payment of all accrued but unused vacation time and reimbursement of all reimbursable expenses.

Upon termination of the Agreement

by the Company for any reason other than “Cause”

as defined in the agreement, or upon termination by Mr.

Thompson for “Good

Reason”

as defined in the Agreement, Mr.

Thompson will also be entitled to:

(i) the greater of his continued base salary through

the balance of the employment period, as renewed, or twenty-four (24) months of his then Base Salary;

(ii) continued participation in

Company welfare benefit plans (including health benefits) on the same terms as immediately prior to termination and to be paid in full

by the Company for a period of not less than twelve (12) months;

and (iii) immediate vesting of all stock options/equity awards.

In connection with the Employment Agreement, the

Company granted Mr.

Thompson fully-vested 10-year stock options to purchase 500,000 shares of the Company's common stock (the “Options”)

pursuant to the Company’s 2019 Equity Incentive Plan.

The Options are exercisable at a per share exercise price of $3.95, which

represents the fair market value of the Company’s common stock as determined by the Board in a manner consistent with the Internal

Revenue Code of 1986.

The Options can be exercised for cash, in the form of shares of Common Stock on a cashless basis or a combination

Employment Agreement with Allan Evans, CEO of

On January 11, 2021, Red Cat Holdings, Inc., the

Company and Fat Shark entered into a one-year executive employment agreement (the “Employment Agreement”) with Allan Evans

(“Evans”), to serve as chief executive officer of Fat Shark.

The Employment Agreement will automatically renew for successive

one-year terms unless either party notifies the other party at least three months prior to the expiration of the then current term of

its desire to terminate the Employment Agreement.

In consideration therefor, Evans will be paid a base

salary equal to 70% percent of the salary of the Company’s Chief Executive Officer in effect from time to time (“Base Salary”),

in periodic installments in accordance with the Company’s regular payroll practices.

Base Salary may not be decreased without the

written consent of Executive.

Evans will also be eligible to receive an annual cash bonus of up to 100% percent of Base Salary (“Annual

Bonus”).

Evans also received a grant of 1,000,000 shares of

the Company’s common stock, par value $0.001 per share (“Common Stock”), 250,000 of which shares vest on January 11,

2021, and the remaining 750,000 shares vest in 36 equal monthly installments commencing on February 28, 2021, subject to Evans’

continued employment by Fat Shark or its parent or any subsidiary.

the grant of shares will also vest:

(i) immediately upon a change

of control, as defined in the Company’s 2019 Equity Incentive Plan (the “Plan”);

(ii) as to 250,000 shares, upon the

final closing price of the Common Stock for 30 consecutive days at or above $5.00 per share;

(iii) as to 125,000 shares, upon receipt

of payment in full by Fat Shark from an unrelated third-party purchaser of goods or services in an amount of $250,000 or more at a net

profit margin no less than the average net profit margin of Fat Shark for similar goods or services during the preceding 12 months;

(iv) as to 125,000 shares, upon receipt of payment in full by Fat Shark from any unrelated third-party purchaser of goods or services

in an amount of $1,000,000 (exclusive of any purchase described in (iii) above) at a net profit margin no less than the average net profit

margin of Fat Shark for similar goods or services during the preceding 12 months.

Evans will also be eligible for additional awards under

Upon termination of employment for any reason, the

Evans shall be entitled to Base Salary and a pro-rata portion of the Annual Bonus earned through the date of termination.

Upon termination

by the Company for any reason other than for “cause”

or by Evans for “good reason”, as such terms are defined

in the Employment Agreement, Evans will be entitled to all vested and unvested shares in accordance with the award vesting as if no termination

Upon termination by the Company without cause, by

Evans for good reason or by Evans within 180 days of a change of control, as defined in the Employment Agreement, Evans will also be

entitled to the):

(i) the greater of Base Salary through the balance of the term, or 12 months of Base Salary;

(ii) continued participation

in Company benefit plans (including health benefits) for at least twelve months and (iii) immediate vesting of all stock options or equity

Fat Shark will also pay for Evans’

COBRA premiums so long as Evans qualifies therefor.

During the term of employment and for three years

thereafter, if there is a restatement of any financial results resulting from material non-compliance of Fat Shark with financial reporting

requirements under the federal securities laws from which any metrics were determined to be achieved which were the basis of the granting

and calculation of the Annual Bonus and any stock-based compensation, Evans agrees to repay any amounts which were determined by reference

to any Fat Shark financial results which were later restated.

Evans is entitled to participate in all benefit plans

at substantially the same levels as the Company’s senior executive officers.

Evans may terminate the Employment Agreement without

Good Reason and other than for a change of control upon thirty days prior written notice.

Upon such termination, Fat Shark will have

no further obligations or liability to Evans, except for the Base Salary and pro-rata Annual Bonus earned prior to the date of termination.

The Employment Agreement contains for customary confidentiality provisions during and after the term of employment of Evans.

Consulting Agreement with Director Joseph Freedman

On June 7, 2021, our Board of Directors approved

a Consulting Agreement (the “Agreement”) with our Director Joseph Freedman.

Under the Agreement, Mr.

Freedman has agreed

to assist the company with various strategic tasks and initiatives, including managing the pre and post-merger integration planning,

developing and managing quarterly and annual planning sessions, assisting with executive recruiting, and identifying and assisting with

acquisitions.

Under the Agreement, Mr.

Freedman will be acting as a consultant only, and will have no responsibility or obligation for

execution of our business plan or any ability to obligate or bind the company in any respect.

In approving the Agreement, our Board of

Directors determined that Mr.

Freedman remains an “Independent Director”

within the meaning of Nasdaq Rule 5605.

The term of the Agreement is one (1) year, during

Freedman will be paid a consulting fee of $6,000 per month.

As additional compensation, Mr.

Freedman was granted options to

purchase 150,000 shares of common stock at a price of $2.51 per share, exercisable for five years.

The options will vest in equal quarterly

installments.

Outstanding Equity Awards

The table below reflects all outstanding equity awards

made to each Named Executive Officer that were outstanding on April 30, 2021

of Securities Underlying Unexercised Options (#) Exercisable

of Securities Underlying Unexercised Options (#) Unexercisable

Exercise Price

Joseph Hernon

Director Compensation

Director Compensation Table

Fees Earned or Paid

Options Awards

Non-Equity Incentive

Plan Compensation

Nonqualified Deferred

Compensation Earnings

All Other Compensation

Joseph Freedman

(1) Represents the aggregate grant date fair value

computed in accordance with FASB ASC Topic 718 (See Note 11 to the financial statements) of 10-year options to purchase 100,000 shares

of common stock at an exercise price of $2.01, 50,000 of which shares vested on the grant date of January 5, 2021 and 25,000 of which

shares vest on each of the first and second anniversary of the grant date.

During the year ended April 30, 2021, no cash compensation

has been paid to our directors in consideration for their services rendered in their capacities as directors.

Employee Benefit Plans

The Company currently has no employee benefit plans.

The information required for this Item is incorporated

by reference from our Definitive Proxy Statement for our 2022 Annual Meeting of Stockholders which was filed on July 13, 2022.

SECURITY OWNERSHIP OF CERTAIN

BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

SECURITY OWNERSHIP OF CERTAIN

BENEFICIAL OWNERS AND MANAGEMENT

The following table lists, as of July 28, 2021, the

number of shares of common stock beneficially owned by (i) each person, entity or group (as that term is used in Section 13(d)(3) of

the Securities Exchange Act of 1934) known to the Company to be the beneficial owner of more than 5% of the outstanding common stock;

(ii) each of our directors (iii) each of our Named Executive Officers and (iv) all executive officers and directors as a group.

relating to beneficial ownership of common stock by our principal stockholders and management is based upon information furnished by

each person using "beneficial ownership"

concepts under the rules of the SEC.

Under these rules, a person is deemed to be a

beneficial owner of a security if that person directly or indirectly has or shares voting power, which includes the power to vote or

direct the voting of the security, or investment power, which includes the power to dispose or direct the disposition of the security.

The person is also deemed to be a beneficial owner of any security of which that person has a right to acquire beneficial ownership within

Under the SEC rules, more than one person may be deemed to be a beneficial owner of the same securities, and a person may be

deemed to be a beneficial owner of securities as to which he or she may not have any pecuniary interest.

Except as noted below, each

person has sole voting and investment power with respect to the shares beneficially owned and each stockholder's address is c/o Red Hat

Holdings, Inc., 607 Ponce de Leon Ave, Suite 407.San Juan, Puerto Rico, 85251.

The percentages below are calculated based on 48,244,219

shares of common stock issued and outstanding as of August 9, 2021.

Name and Address of Beneficial Owner

Amount of Shares Beneficially

Percentage of Beneficial

Named Executive Officers and Directors:

Jeffrey Thompson

Nicholas Liuzza, Jr.

Patrick Mitchell

Jonathan Read

Joseph Hernon

Joseph Freedman

All executive officers and directors as a group (7 persons)

Other 5% Holders

Gregory French

Brains Riding in Tanks, LLC

Empery Asset Management, LP

CVI Investments, Inc.

Sabby Volatility Warrant Master Fund, Ltd

*Represents less than 1%

(1) Includes 500,000 of fully vested stock options.

(2) Includes 335,000 warrants to purchase common

stock and 100,000 stock options exercisable within 60 days.

(3) Includes 100,000 stock options exercisable within

(4) Includes 416,667 shares under a restricted

stock agreement which have vested or will vest within 60 days.

(5) Includes 41,667 shares which have vested under

a restricted stock agreement.

(6) Includes 550,000 stock options currently

(7) Includes 87,500 stock options exercisable within

(8) Under the Lock-Up Agreement with Mr.

up to the greater of 20% or $1,000,000 of his shares may be sold prior to November 2, 2021 (the 12-month anniversary of the closing of

the Fat Shark acquisition) in previously negotiated transactions.

Thereafter, shares may be sold at 10% of the average daily volume of

the common stock during the prior 10 days.

(9) Chad Kapper is

the managing member of Brains Riding in Tanks, LLC.

In such capacity, he has voting and dispositive control over the securities held

by such entity.

(10) Each of Ryan M.

Lane and Martin D.

Managing Member of Empery AM GP, LLC, the general partner of Empery Asset Management, LP.

(11) Heights Capital Management is the investment

(12) Sabby Management LLC is the investment manager.

Change-in-Control Agreements

The Company does not have any change-in-control agreements

with any of its executive officers.

The information required for this Item is incorporated

by reference from our Definitive Proxy Statement for our 2022 Annual Meeting of Stockholders which was filed on July 13, 2022.

CERTAIN RELATIONSHIPS AND

RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

The following is a description of transactions since

May 1, 2018, to which we were a party or will be party, in which the amount involved exceeded or will exceed the lesser of $120,000 or

1% of the average of our total assets at year-end for the last two completed fiscal years, and any of our directors, executive officers

or holders of more than 5% of our outstanding capital stock, or any immediate family member of, or person sharing the household with,

any of these individuals or entities, had or will have a direct or indirect material interest.

On October 12, 2018, Company

issued a promissory note in the principal amount of $15,000 to Jonathan Read, our director and former Chief Executive Officer.

and accrued interest thereon, was repaid in full in January 2019.

On May 13, 2019, the Company

paid $1,820 to Mr.

Read for expenses paid on behalf of the Company by Mr.

The Company rented office space

from Jeffrey Thompson, our Chief Executive Officer until March 31, 2019 and paid a total of $8,100 from May 1, 2018 to March 31, 2019

for such space.

In December 2019, we issued a

two-year convertible note in the principal amount of $125,000 to Nicholas Liuzza, Jr., a director, and a convertible note in the principal

amount of $25,000 to Jeffrey Thompson, our chief executive officer.

The notes bear interest at a rate of 12% per annum which accrues

and is payable in full upon maturity.

Interest on the notes may be paid in cash or in shares of common stock of the Company at the holder’s

sole discretion as follows:

(i) prior to an equity financing which generates gross proceeds of not less than $3,000,000 (a “Qualified

Offering”), at the 30 day volume weighted average of the closing price of our common stock, or (ii) after we have consummated a

Qualified Offering, at 40% of the price per share of common stock sold in the Qualified Offering.

We may, upon 10 business days advance

notice, elect to pre-pay the notes, including all accrued interest, in whole or in part, provided that any such prepayment prior to the

one-year anniversary of the note issuance be at a price equal to 112% of the then outstanding original principal amount.

Upon an event

of default, as described in the notes, the outstanding principal and interest shall become immediately due and payable.

Additionally,

under the note, unless waived by the holder, the holder may not convert the note if such conversion would result in beneficial ownership

by the holder and its affiliates of more than 9.99% of the outstanding shares of common stock of the Company.

In October 2020, Mr.

Liuzza converted

his convertible note in the amount of $125,000 plus $11,342 of accrued interest into 209,758 shares of common stock.

In October 2020, Mr.

converted his convertible note in the amount of $25,000 plus $2,416 of accrued interest into 29,166 shares of common stock.

In October 2020, we issued a

two-year convertible note in the principal amount of $300,000 to Nicholas Liuzza, a director.

The notes bear interest at a rate of 12%

per annum which accrues and is payable in full upon maturity.

Interest on the notes may be paid in cash or in shares of common stock

of the Company at the holder’s sole discretion as follows:

the lower of (a) $1.00, if the conversion occurs prior an offering

of Common Stock resulting in the listing for trading of the Common Stock on the Nasdaq Capital Market (a "Qualified Offering")

or (b) a 25% discount of the price per share of Common Stock offered in the Qualified Offering, if the conversion occurs simultaneous

with the Qualified Offering.

We may, upon 10 business days advance notice, elect to pre-pay the notes, including all accrued interest,

in whole or in part.

Upon an event of default, as described in the notes, the outstanding principal and interest shall become immediately

due and payable.

Additionally, under the note, unless waived by the holder, the holder may not convert the note if such conversion would

result in beneficial ownership by the holder and its affiliates of more than 9.99% of the outstanding shares of common stock of the Company.

In connection with the transaction, Mr.

Liuzza was issued 200,000 warrants to purchase shares of common stock.

The warrants are

exercisable at a price equal to the lower of (i) $1.50 per share or (ii) a 25% discount to the price per share of the common stock offered

in a Qualified Offering.

In March 2021, Mr.

Liuzza converted

his convertible note in the amount of $300,000 plus $17,852 of accrued interest into 317,852 shares of common stock.

On January 11, 2021, the Company

issued a ten-year option to purchase 100,000 shares of Common Stock at an exercise price of $2.01 per share under the Equity Incentive

Plan to Joseph Freedman upon his acceptance of appointment as a director of the Company.

Fifty percent of these options are vested immediately,

with twenty-five percent of the options vesting on each of the first and second anniversary of the grant date.

On January 11, 2021, the Company

issued 1,000,000 shares of Common Stock to Allan Evans under the Plan pursuant to the Employment Agreement described above.

In January 2021, we issued a

two-year convertible note in the principal amount of $100,000 to Nicholas Liuzza, Jr., a director.

The notes bear interest at a rate

of 12% per annum which accrues and is payable in full upon maturity.

Interest on the notes may be paid in cash or in shares of common

stock of the Company at the holder’s sole discretion as follows:

the lower of (a) $1.00, if the conversion occurs prior an

offering of Common Stock resulting in the listing for trading of the Common Stock on the Nasdaq Capital Market (a "Qualified

Offering") or (b) a 25% discount of the price per share of Common Stock offered in the Qualified Offering, if the conversion occurs

simultaneous with the Qualified Offering.

We may, upon 10 business days advance notice, elect to pre-pay the notes, including all

accrued interest, in whole or in part.

Upon an event of default, as described in the notes, the outstanding principal and interest shall

become immediately due and payable.

Additionally, under the note, unless waived by the holder, the holder may not convert the note if

such conversion would result in beneficial ownership by the holder and its affiliates of more than 9.99% of the outstanding shares of

common stock of the Company.

In connection with the transaction, Mr.

Liuzza was issued 135,000 warrants to purchase shares of common

The warrants are exercisable at a price equal to the lower of (i) $1.50 per share or (ii) a 25% discount to the price per

share of the common stock offered in a Qualified Offering.

In March 2021, Mr.

Liuzza converted

his convertible note in the amount of $100,000 plus $2,992 of accrued interest into 102,992 shares of common stock.

In January 2021, we issued a

two-year convertible note in the principal amount of $50,000 to Joseph Freedman, Jr., a director.

The notes bear interest at a rate of

12% per annum which accrues and is payable in full upon maturity.

Interest on the notes may be paid in cash or in shares of common stock

of the Company at the holder’s sole discretion as follows:

the lower of (a) $1.00, if the conversion occurs prior an offering

of Common Stock resulting in the listing for trading of the Common Stock on the Nasdaq Capital Market (a "Qualified Offering")

or (b) a 25% discount of the price per share of Common Stock offered in the Qualified Offering, if the conversion occurs simultaneous

with the Qualified Offering.

We may, upon 10 business days advance notice, elect to pre-pay the notes, including all accrued interest,

in whole or in part.

Upon an event of default, as described in the notes, the outstanding principal and interest shall become immediately

due and payable.

Additionally, under the note, unless waived by the holder, the holder may not convert the note if such conversion would

result in beneficial ownership by the holder and its affiliates of more than 9.99% of the outstanding shares of common stock of the Company.

connection with the transaction, Mr.

Freedman was issued 67,500 warrants to purchase shares of common stock.

The warrants are exercisable

at a price equal to the lower of (i) $1.50 per share or (ii) a 25% discount to the price per share of the common stock offered in a Qualified

In March 2021, Mr.

Freedman converted

his convertible note in the amount of $50,000 plus $1,134 of accrued interest into 51,134 shares of common stock.

In March 2021, Mr.

Freedman also

exercised his warrants on a cashless basis which resulted in the net issuance of 44,343 shares of common stock.

On March 31, 2021, we entered

into an Employment Agreement with our CEO, Jeffrey Thompson, as described under the subsection entitled “Employment Agreements”,

The information required

for this Item is incorporated by reference from our Definitive Proxy Statement for our 2022 Annual Meeting of Stockholders which was filed

on July 13, 2022 .

PRINCIPAL ACCOUNTING FEES

The following table reflects the aggregate fees billed

for professional services rendered by our principal accountant, BF Borgers, CPA P.C.

(“BFB”), for the fiscal year ended April

30, 2021 and 2020 of $86,400 and $64,800, respectively and Ciro E.

Adams, CPA, LLC for the fiscal year ended April 30, 2020 of $30,000.

April 30, 2021

April 30, 2020

Audit-Related Fees

All Other Fees

Consists of fees for professional

services rendered for the audit of our annual financial statements included in our Annual Report on Forms 10-K for our fiscal years ended

April 30, 2021 and 2020 and reviews of our interim financial statements included in our Quarterly Reports on Form 10-Q.

Audit-Related Fees .

Consists of fees for assurance

and related services that are reasonably related to the audit.

This category includes fees related to assistance consulting on financial

accounting/reporting standards.

Consists of amounts billed

for professional services rendered for tax return preparation, tax planning, and tax advice.

All Other Fees .

Consists of amounts

billed for services other than those noted above.

Administration of the Engagement;

of Audit and Permissible Non-Audit Services

Nick Liuzza is the Chairman of the Audit Committee

and is the second member of the Committee.

The Committee pre-approves all services provided by BFB.

The percentage of hours expended

on BFB's respective engagement to audit our financial statements for the most recent fiscal year that were attributed to work performed

by persons other than the principal accountant's full-time, permanent employees was 0%.

The information required for this Item is incorporated

by reference from our Definitive Proxy Statement for our 2022 Annual Meeting of Stockholders which was filed on July 13, 2022.

EXHIBITS, FINANCIAL STATEMENTS SCHEDULES.

Underwriting Agreement, dated July 18, 2021, between the Company and

ThinkEquity, as Representative of the Several Underwriters (incorporated by reference to Exhibit 1.1 to the Company’s Current

Report on Form 8-K filed with the SEC on July 19, 2021)

Underwriting Agreement, dated April 29, 201 between the Company and ThinkEquity

(incorporated by reference to Exhibit 1.1.

to the Company’s Current Report on Form 8-K dated with the SEC on April 30, 2021)

Agreement and Plan of Merger (incorporated by reference to Exhibit 2.1 to the Company’s

Current Report on Form 8-K filed with the SEC on September 13, 2016)

Articles of Merger- Nevada (incorporated by reference to Exhibit 2.2 to the Company’s

Current Report on Form 8-K filed with the SEC on September 13, 2016)

Articles of Merger- Arizona (incorporated by reference to Exhibit 2.3 to the Company’s

Current Report on Form 8-K filed with the SEC on September 13, 2016)

Agreement of Merger, dated January 23, 2019, among the Company, Rotor Riot Acquisition,

LLC and the stockholder signatory thereon (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form

8-K filed with the SEC on January 29, 2020)

Underwriting Agreement, dated July 18, 2021, between the Company and ThinkEquity, as Representative of the Several Underwriters (incorporated by reference to Exhibit 1.1 to the Company’s Current Report on Form 8-K filed with the SEC on July 19, 2021)

Underwriting Agreement, dated April 29, 201 between the Company and ThinkEquity (incorporated by reference to Exhibit 1.1.

to the Company’s Current Report on Form 8-K dated with the SEC on April 30, 2021)

Agreement and Plan of Merger (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed with the SEC on September 13, 2016)

Articles of Merger- Nevada (incorporated by reference to Exhibit 2.2 to the Company’s Current Report on Form 8-K filed with the SEC on September 13, 2016)

Articles of Merger- Arizona (incorporated by reference to Exhibit 2.3 to the Company’s Current Report on Form 8-K filed with the SEC on September 13, 2016)

Agreement of Merger, dated January 23, 2019, among the Company, Rotor Riot Acquisition, LLC and the stockholder signatory thereon (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on January 29, 2020)

Amendment No.

1 to the Agreement of Merger, dated December 31, 2019, among the Company,

Rotor Riot Acquisition, LLC and the stockholder signatory thereon (incorporated by reference to Exhibit 10.2 to the Company’s

Current Report on Form 8-K filed with the SEC on January 29, 2020)

1 to the Agreement of Merger, dated December 31, 2019, among the Company, Rotor Riot Acquisition, LLC and the stockholder signatory thereon (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the SEC on January 29, 2020)

Amendment No.

2 to the Agreement of Merger, dated December 31, 2019, among the Company,

Rotor Riot Acquisition, LLC and the stockholder signatory thereon (incorporated by reference to Exhibit 10.3 to the Company’s

Current Report on Form 8-K filed with the SEC on January 29, 2020)

Amended and Restated Articles of Incorporation, dated July 17, 2019 (incorporated

by reference to Exhibit B to the Company’s Schedule 14C Information Statement filed with the SEC on July 2, 2019)

Bylaws (incorporated by reference to Exhibit 3.2 to the Company’s Registration

Statement on Form S-1 filed with the SEC on February 8, 2017)

Certification of Designation of Series A Preferred Stock (incorporated by reference

to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on December 12, 2018)

Certification of Designation of Series E Convertible Preferred Stock (incorporated

by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on December 12, 2018)

2 to the Agreement of Merger, dated December 31, 2019, among the Company, Rotor Riot Acquisition, LLC and the stockholder signatory thereon (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed with the SEC on January 29, 2020)

Amended and Restated Articles of Incorporation, dated July 17, 2019 (incorporated by reference to Exhibit B to the Company’s Schedule 14C Information Statement filed with the SEC on July 2, 2019)

Bylaws (incorporated by reference to Exhibit 3.2 to the Company’s Registration Statement on Form S-1 filed with the SEC on February 8, 2017)

Certification of Designation of Series A Preferred Stock (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on December 12, 2018)

Certification of Designation of Series E Convertible Preferred Stock (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on December 12, 2018)

Amendment No.

1 to Certification of Designation of Series E Convertible Preferred

Stock (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K filed with the SEC on December

Certificate of Withdrawal, dated May 13, 2019 of Certification of Designation of

the Series A Preferred Stock, dated December 6, 2018, Series E Convertible Preferred Stock, dated January 3, 2018 and the Amendment

to the Certification of Designation of the Series E Convertible Preferred Stock, dated January 3, 2018 (incorporated by reference

to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on May 16, 2019)

Certification of Designation of Series A Preferred Stock, dated May 10, 2019 (incorporated

by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K filed with the SEC on May 16, 2019)

Certification of Designation of Series B Preferred Stock, dated May 10, 2019 (incorporated

by reference to Exhibit 3.3 to the Company’s Current Report on Form 8-K filed with the SEC on May 16, 2019)

Description of Capital Stock

Form of Senior Convertible Note (incorporated by reference to Exhibit 10.1 to the

Company’s Current Report on Form 8-K filed with the SEC on May 6, 2019)

1 to Certification of Designation of Series E Convertible Preferred Stock (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K filed with the SEC on December 12, 2018)

Certificate of Withdrawal, dated May 13, 2019 of Certification of Designation of the Series A Preferred Stock, dated December 6, 2018, Series E Convertible Preferred Stock, dated January 3, 2018 and the Amendment to the Certification of Designation of the Series E Convertible Preferred Stock, dated January 3, 2018 (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on May 16, 2019)

Certification of Designation of Series A Preferred Stock, dated May 10, 2019 (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K filed with the SEC on May 16, 2019)

Certification of Designation of Series B Preferred Stock, dated May 10, 2019 (incorporated by reference to Exhibit 3.3 to the Company’s Current Report on Form 8-K filed with the SEC on May 16, 2019)

of Capital Stock (incorporated by reference to Exhibit 4.2 to the Company’s Annual Report on Form 10-K filed with the SEC on

August 13, 2020)

Form of Senior Convertible Note (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on May 6, 2019)

Share Exchange Agreement, dated as of May 13, 2019, among TimefireVR, Inc.

(Timefire”),

Red Cat Propware, Inc, and Red Cat Propware, Inc’s.

shareholders (incorporated by reference to Exhibit 10.1 to the Company’s

Current Report on Form 8-K filed with the SEC on May 16, 2019)

Warrant, dated May 5, 2019, issued to Calvary Fund I LP (“Calvary”)

(incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the SEC on May 16, 2019)

Restricted Stock Unit Agreement, dated May 15, 2019, between Timefire and Jonathan

Read (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed with the SEC on May 16, 2019)

Securities Exchange Agreement, dated May 13, 2019, between Timefire

and Calvary (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed with the SEC on May

Securities Exchange Agreement, dated May 13, 2019, between Timefire and L1 Capital

Global Opportunity Master Fund Ltd.

(incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K

filed with the SEC on May 16, 2019)

Securities Exchange Agreement, dated May 13, 2019, between Timefire and Digital

Power Lending, LLC (incorporated by reference to Exhibit 10.6 to the Company’s Current Report on Form 8-K filed with the SEC

on May 16, 2019)

Securities Exchange Agreement, dated May 13, 2019, between Timefire and Gary Smith

(incorporated by reference to Exhibit 10.7 to the Company’s Current Report on Form 8-K filed with the SEC on May 16, 2019)

Securities Exchange Agreement, dated May 13, 2019, between Timefire and Edward Slade

Mead (incorporated by reference to Exhibit 10.8 to the Company’s Current Report on Form 8-K filed with the SEC on May 16, 2019)

Redemption Letter for Series A Preferred Stock, dated May 9, 2019, from Timefire

to Jonathan (incorporated by reference to Exhibit 10.9 to the Company’s Current Report on Form 8-K filed with the SEC on May

2019 Equity Incentive Plan (incorporated by reference to Exhibit C to the Company’s

Schedule 14C Information Statement filed with the SEC on July 2, 2019)

(Timefire”), Red Cat Propware, Inc, and Red Cat Propware, Inc’s.

shareholders (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on May 16, 2019)

Warrant, dated May 5, 2019, issued to Calvary Fund I LP (“Calvary”) (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the SEC on May 16, 2019)

Restricted Stock Unit Agreement, dated May 15, 2019, between Timefire and Jonathan Read (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed with the SEC on May 16, 2019)

Securities Exchange Agreement, dated May 13, 2019, between Timefire and Calvary (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed with the SEC on May 16, 2019)

Securities Exchange Agreement, dated May 13, 2019, between Timefire and L1 Capital Global Opportunity Master Fund Ltd.

(incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K filed with the SEC on May 16, 2019)

Securities Exchange Agreement, dated May 13, 2019, between Timefire and Digital Power Lending, LLC (incorporated by reference to Exhibit 10.6 to the Company’s Current Report on Form 8-K filed with the SEC on May 16, 2019)

Securities Exchange Agreement, dated May 13, 2019, between Timefire and Gary Smith (incorporated by reference to Exhibit 10.7 to the Company’s Current Report on Form 8-K filed with the SEC on May 16, 2019)

Securities Exchange Agreement, dated May 13, 2019, between Timefire and Edward Slade Mead (incorporated by reference to Exhibit 10.8 to the Company’s Current Report on Form 8-K filed with the SEC on May 16, 2019)

Redemption Letter for Series A Preferred Stock, dated May 9, 2019, from Timefire to Jonathan (incorporated by reference to Exhibit 10.9 to the Company’s Current Report on Form 8-K filed with the SEC on May 16, 2019)

2019 Equity Incentive Plan (incorporated by reference to Exhibit C to the Company’s Schedule 14C Information Statement filed with the SEC on July 2, 2019)

$175,000 Promissory Note, dated January 23, 2020, issued to Brains Riding in Tanks.

LLC (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed with the SEC on January 29,2020)

Make Whole Agreement, dated January 23, 2020, among the Company, Brains Riding in

LLC, Rotor Riot, LLC and Chad Kapper (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form

8-K filed with the SEC on January 29,2020)

Share Purchase and Liquidity Event Agreements, dated February 11, 2021 among

the Company, Giuseppe Santangelo, the holders of common stock and SAFE agreements representing 97.46% of Skypersonic (incorporated

by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on February 17, 2021)

Agreement and Plan of Merger, dated July 13, 2021, among the Company, Teal Drones,

Inc and Teal Acquisition I Corp.

LLC (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed with the SEC on January 29,2020)

Make Whole Agreement, dated January 23, 2020, among the Company, Brains Riding in Tanks.

LLC, Rotor Riot, LLC and Chad Kapper (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed with the SEC on January 29,2020)

Purchase and Liquidity Event Agreements, dated February 11, 2021 among the Company, Giuseppe Santangelo, the holders of common

stock and SAFE agreements representing 97.46% of Skypersonic (incorporated by reference to Exhibit 10.1 to the Company’s Current

Report on Form 8-K filed with the SEC on February 17, 2021)

Agreement and Plan of Merger, dated July 13, 2021, among the Company, Teal Drones, Inc and Teal Acquisition I Corp.

and stockholders of Teal Drones, Inc.

(incorporated by reference to Exhibit 10.1 to the Company’s

Current Report on Form 8-K filed with the SEC on July 14, 2021

Executive Employment Agreement with Jeffrey Thompson, dated March 31, 2021 (incorporated

by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed with the SEC on April 6, 2021)

Employment Agreement with Joseph Hernon, dated July 1, 2021 (incorporated by reference

to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed with the SEC on July 1, 2021)

Consulting Agreement Joseph Freedman, dated July 7, 2021 (incorporated by reference

to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed with the SEC on July 8, 2021).

(incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on July 14, 2021

Executive Employment Agreement with Jeffrey Thompson, dated March 31, 2021 (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed with the SEC on April 6, 2021)

Employment Agreement with Joseph Hernon, dated July 1, 2021 (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed with the SEC on July 2, 2021)

Consulting Agreement Joseph Freedman, dated July 7, 2021 (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed with the SEC on July 8, 2021).

List of Subsidiaries

Certification of Principal Executive Officer pursuant to Exchange Act Rules 13a-14(a)

and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Certification of Principal Financial and accounting Officer pursuant to Exchange

Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Certification of Principal Executive Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Certification of Principal Financial and accounting Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Certification of Chief Executive Officer pursuant to 18 U.S.C.

Section 1350, as

adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Certification of Chief Financial Officer pursuant to 18 U.S.C.

Section 1350, as

adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

XBRL Instance Document

1 unchanged sentence

XBRL Taxonomy Extension Calculation Linkbase Document

*Filed herewith

FORM 10-K SUMMARY

3 unchanged sentences

duly authorized.

Red Hat Holdings, Inc.

August 12, 2021

Red Hat Holdings,

July 27, 2022

Jeffrey Thompson

Chief Executive Officer and President

(Principal Executive Officer)

Chief Executive

Officer and President

(Principal Executive

Pursuant to the requirements of the Securities Exchange

Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the

dates indicated.

/s/ Jeffrey M.

Chief Executive Officer, President and Director

August 12, 2021

Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates

Chief Executive Officer,

President and Director

July 27, 2022

(Principal Executive Officer)

/s/ Joseph Hernon

August 12, 2021

Joseph Hernon

Chief Financial Officer, Treasurer and Secretary (Principal Financial and Accounting Officer)

/s/ Nicolas Liuzza, Jr.

August 12, 2021

Chief Financial Officer, Treasurer and Secretary

July 27, 2022

Joseph Hernon

(Principal Financial and Accounting Officer)

Nicholas Liuzza, Jr.

July 27, 2022

Nicolas Liuzza, Jr.

/s/ Patrick T, Mitchell

August 12, 2021

/s/ Joseph Freedman

August 12, 2021

Christopher Moe

July 27, 2022

Christopher Moe

Joseph Freedman

/s/ Jonathan Read

August 12, 2021

July 27, 2022

Joseph Freedman

Jonathan Read

July 27, 2022

Jonathan Read

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 9A. Controls and Procedures