What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2024-08-08 compared with 2023-07-27 · 145 added, 575 removed, 83 unchanged (90% of the section changed)

2 unchanged sentences

Our management, with the participation of our CEO

and CFO, has evaluated the effectiveness of the Company’s disclosure controls and procedures, as defined in Rule 13a-15(e) and 15d-15(e)

of the Exchange Act, as of April 30, 2023.

(principal executive officer) and CFO (principal financial officer), has evaluated the effectiveness of the Company’s disclosure

controls and procedures, as defined in Rule 13a-15(e) and 15d-15(e) of the Exchange Act, as of April 30, 2024.

The term “disclosure controls and procedures”

as defined in Rules 13a-15(e) and 15d-15(e) means controls and other procedures of the Company that are designed to ensure that information

required to be disclosed by a company in reports, such as this report, that it files or submits under the Exchange Act is recorded, processed,

summarized and reported within the time periods specified in the SEC rules and forms.

Disclosure controls and procedures include, without

limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files

or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive

and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.

Management recognizes that any

controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives,

and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

required to be disclosed by the Company in reports, such as this report, that it files or submits under the Exchange Act is recorded,

processed, summarized and reported within the time periods specified in the SEC’s rules and forms.

Disclosure controls and procedures

include, without limitation, controls and procedures designed to ensure that information required to be disclosed by the Company in the

reports that it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its

principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions

regarding required disclosure.

Management recognizes that any controls and procedures, no matter how well designed and operated, can provide

only reasonable assurance of achieving their objectives, and management necessarily applies its judgment in evaluating the cost-benefit

relationship of possible controls and procedures.

Based on that evaluation,

21 unchanged sentences

The standard measures adopted by management in making its evaluation are the measures in the Internal-Control

Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission.

Based on management’s

assessment using the COSO criteria, our CEO and CFO concluded that our internal control over financial reporting as of April 30, 2023

was effective.

Integrated Framework published by the Committee of Sponsoring Organizations (“COSO”) of the Treadway Commission.

Based on management’s assessment using the

COSO criteria, our CEO and CFO concluded that our internal control over financial reporting was not effective, specifically

pertaining to the year ended April 30, 2023 for which we restated items related to right of use assets and liabilities as well as

the removal of the derivative liabilities.

The Company is currently in the process of formalizing narratives and processes which are

expected to mitigate these weaknesses, and has hired additional personnel to strengthen the internal control environment.

Attestation Report of the Registered Public Accounting

8 unchanged sentences

OTHER INFORMATION

During the fiscal

quarter ended April 30, 2024, none of our directors or executive officers adopted or terminated any contract, instruction

or written plan for the purchase or sale of Company securities that was intended to satisfy the affirmative defense conditions of Rule

10b5-1(c) or any "non-Rule 10b5-1 trading arrangement."

DISCLOSURE REGARDING FOREIGN JURISDICTIONS

THAT PREVENT INSPECTIONS

Not applicable .

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

following table sets forth information regarding our current directors and executive officers:

Chief Executive Officer and Director

Operating Officer

Financial Officer, Treasurer and Secretary

Thompson, President and Chief Executive Officer

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

In December 1999, Mr.

Thompson founded Towerstream

Corporation (Nasdaq:TWER), a 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

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.

Allan Evans, Chief Operating Officer

Allan Evans is a serial entrepreneur with a history of founding and leading technology innovation.

He has extensive experience in overseeing

different emerging technologies.

Prior to becoming Chief Operating Officer of the Company, Dr.

Evans was the Chief Executive Officer

of our subsidiary, Fat Shark.

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

degree from Michigan State University.

Evans has 45 pending or issued patents that cover a range of technologies from

implantable medical devices to mixed reality headsets.

Academically, his work has an h-index of 15, an i-index of 27, and has been cited

in more than 900 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.

Hernon , Chief Financial Officer and Secretary

Hernon has been Chief Financial Officer and Secretary of the Company since January 23, 2020.

Hernon has extensive experience as a

Chief Financial Officer over the course of his 35-year career.

Hernon was a financial consultant to various private companies from

May 2016 until January 2020.

Prior to that, Mr.

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, but not presently licensed to practice, and earned a Master’s degree in Accountancy from Bentley University

Freedman , Director

Joe Freedman is an entrepreneur with experience

in launching, growing, and successfully exiting businesses in executive search, title insurance, legal services, and hospitality.

entrepreneurial journey includes turnarounds, mergers & acquisitions, as well as winding down and liquidating the assets of an unprofitable

Prior to selling three businesses to NYSE-listed, private equity, and privately held companies, he successfully built them into

industry market leaders.

Five companies led by Mr.

Freedman were listed on the Inc.

500/5000 a total of 15 times, with one ranking in

Freedman co-founded Peachtree Tents

& Events Holdings, LLC, where he served as chief executive officer until 2021 and currently serves on the board.

Previously, he co-founded

and served as chief executive officer of RFx Legal, LLC, Richmond Title, LLC, and AMICUS Legal Staffing, Inc.

until their acquisitions.

In addition to his entrepreneurial pursuits,

Freedman actively participates in various civic boards, including the Entrepreneurs’ Organization (Nashville Chapter), where

he has held multiple board positions, including that of president.

Currently, he holds the position of Governance Chair.

Freedman established the nonprofit organization, Drones For Good Worldwide, driven by his passion for making a positive impact.

The organization

focuses on providing drones to support humanitarian efforts during disasters worldwide.

Freedman holds a B.S.

degree in Finance

from Louisiana State University and a Juris Doctorate from Northwestern California University School of Law.

His experience in recruiting,

business, and finance has provided the foundation for his appointment to the Board of the Company.

has been a director of the Company since June 1, 2019.

Liuzza co-founded Beeline Loans, a Digital Mortgage Lender in 2019.

Previously, Mr Liuzza founded Linear Title & Closing, Ltd, a highly automated, and one of the largest, private national title agencies

in the U.S in 2005.

In 2012, he founded Nexgen Mortgage Services.

Both companies merged with Real Matters and went public on the Toronto

Stock Exchange (TSX) in 2018 at a $1 billion valuation.

Nick served as Executive Vice President of Real Matters, Inc.

and exited in 2020

to work for Beeline Loans.

Liuzza founded 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 which listed on the OTC upon its acquisition in 2003 by

Prior thereto, 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 and software development experience led to his appointment

as a director.

Moe , Director

Moe serves as the Chief Financial Officer and Director of Yates Electrospace Corporation, a heavy payload autonomous

cargo delivery drone developer and producer.

Earlier he was the Chairman, Chief Executive Officer and co-Founder

of ProBrass Inc., a rifle brass cartridge case manufacturing company.

Previously he was the Chief Financial Officer

of Vectrix Holdings Limited, a subsidiary of GP Industries Ltd (G20:SGX), an international developer and manufacturer of electric

motorcycles and Chief Financial Officer and Director of Mission Motor Company, a company focused on advanced EV and hybrid

powertrains for automobile and power sports applications.

Earlier he served as the Chief Financial Officer & Director of

Vectrix Corporation (LSE:VRX), Managing Director of GH Ventures, Managing Director of Kirkland Investment Corporation, Chief Executive

Officer of St.

Louis Ship Industries, Vice President of Wasserstein, Perella & Co.’s merchant banking fund and Vice President/Area

Head with Citicorp’s Leveraged Capital Group.

He served as a Captain of United States Marines and deployed with

artillery and infantry units twice to the Western Pacific and Indian Ocean.

He is the Treasurer

of The Pennfield School and the former Treasurer of the Zabriskie Memorial Church of Saint John the Evangelist.

BA degree in English from Brown University and an MBA from the Harvard Business School.

Moe’s experience in operational finance, and with venture capital, private equity, M&A, and corporate finance transactions,

both as agent and principal, with a focus on transportation, provide the basis upon which the Company appointed him to the

of our Board of Directors

board of directors currently consists of four members.

Our directors hold office until their successors have been elected and qualified

or until the earlier of their death, resignation or removal.

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

of the Board of Directors

The Audit Committee is composed

of three independent directors:

Christopher Moe, Nicholas Liuzza, and Joseph Freedman.

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.

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 statements.

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.

Committee Financial Expert

Board determined that Christopher Moe 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.

The Compensation Committee,

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

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.

The Compensation Committee is guided by, and seeks to promote, the best interests of the

Company and its shareholders.

addition, 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,

as well as benefit plans and programs, 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, as well as 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.

and Nominating Committee

The Governance and Nominating

Committee, consists of Joseph Freedman, Nicholas Liuzza, and Christopher Moe each of whom meets the independence requirements of all

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

Governance and Nominating Committee (i) identifies individuals qualified to become members of the Board, consistent with criteria approved

by the Board, (ii) recommends 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, (iii) recommends to the Board candidates to fill any vacancies on the Board, (iv) develops, recommends

to the Board, and reviews the corporate governance guidelines applicable to the Company, and (v) oversees the evaluation of the Board

and management.

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.

selecting 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 (i) personal and professional integrity, ethics and

values, (ii) experience in corporate management, such as serving as an officer or former officer of a publicly-held company (iii) experience

in the Company’s industry, (iv) experience as a board member of another publicly-held company, (v) diversity of expertise and experience

in substantive matters pertaining to the Company’s business relative to other directors of the Company, (vi) practical and mature

business judgment, (vii) 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.

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.

Special Committee

In September 2022, the Red

Cat Board of Directors established a Special Committee ("SC") with a mandate to oversee and manage the negotiation, structure,

and terms of the anticipated UMAC transaction.

Additionally, the committee is tasked with providing essential support for this transaction

and managing any other matters that may be assigned to them by the board.

Joe Freedman and Chris Moe were chosen as Co-Chairs of the committee

and were authorized to receive a payment of $15,000 each for their time.

Upon the execution or termination

of the UMAC transaction and the satisfactory resolution of all other assigned matters, the Special Committee will have fulfilled its purpose

and will be dissolved.

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.

The Board 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 in operating and growing businesses

Leadership Structure

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

Risk Oversight

Company’s risk management function is overseen by the Board.

The Company’s management keeps the Board apprised of material

risks and provides the directors with 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.

Jeffrey Thompson, 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 is that we have never been profitable and we have limited financial resources to support our operations.

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.

Board 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 and its Chief Operating Officer.

The Code of Ethics provides written standards that we

believe are reasonably designed to deter wrongdoing and promote honest and ethical conduct, including (i) the ethical handling of actual

or apparent conflicts of interest between personal and professional relationships, (ii) full, fair, accurate, timely and understandable

disclosure and compliance with laws, rules and regulations, (iii) the prompt reporting of illegal or unethical behavior, and (iv) accountability

for adherence to the Code of Ethics.

Director Compensation

following table presents the total compensation for each person who served as a non-employee director during Fiscal 2023.

Thompson is not included in the table below, as he is employed as our Chief Executive Officer and receives no compensation for his service

The compensation received by Mr.

Thompson as an employee is included in the “Executive Compensation—Summary

Compensation Table.”

Earned or Paid in Cash

Incentive Plan Compensation

Deferred Compensation Earnings

Joseph Freedman

Nicholas Liuzza

Jonathan Read (3)

Christopher Moe

Mary Beth Long (4)

value stock awards based on their fair value on the date that awards vest.

Fair value is calculated by multiplying the number of

awards vesting times the Company’s closing stock price on the date of vesting.

value option awards in accordance with Accounting Standards Codification Topic 718, Compensation - Stock Compensation.

is determined based on the Black-Scholes Model using inputs reflecting our estimates of expected volatility, term, discount rates

and dividend expectations.

Compensation expense is recognized based on the vesting terms of the award.

Read resigned on November 14, 2022.

Long was appointed on November 14, 2022 and resigned July 25, 2023.

Director Compensation Arrangements

April 2022, the Board of Directors established a formal compensation plan for Non-Employee Directors.

Under the plan, Non-Employee Directors

shall receive annual compensation of $100,000 consisting of:

in cash compensation, payable in monthly installments beginning May 1, 2022

in equity compensation, payable in the form of shares of restricted common stock to be issued

on May 1 annually, with 25% of the shares vesting immediately and the remaining 75% vesting

in 24 monthly

beginning on June 1

addition, the Chairman of each Committee of the Board shall receive additional annual cash compensation, payable in monthly installments,

- Audit Committee

- Compensation Committee

- Nominating and Governance Committee

addition, in November 2022, the Board of Directors established Lead Director compensation of $22,500 annually, payable monthly as well

as a one-time payment of $15,000 to each member of the Special Committee, payable in the form of fully vested restricted common stock.

This resulted in total compensation to each Non-Employee Director for the fiscal year ended April 30, 2023 as follows:

to Joseph Freedman, consisting of $40,000 for board service, $733 as Chairman of the Compensation Committee, $5,000 as Chairman of

the Nominating and Governance Committee, $11,250 as Lead Director, and $64,652 representing the fair value of the 30,353 shares which

vested in the fiscal year ended April 30, 2023.

to Nicholas Liuzza, consisting of $40,000 for board service, $1,218 as Chairman of the Audit Committee.

$5,267 as Chairman of the

Compensation Committee and $58,437 representing the fair value of the 27,435 shares which vested in the fiscal year ended April 30,

to Jonathan Read, consisting of $21,220 for board service and $14,999 representing the fair value of the 7,042 shares which vested

in the fiscal year ended April 30, 2023.

to Christopher Moe consisting of $40,000 for board service, $8,770 as Chairman of the Audit Committee and $64,652 representing the

fair value of the 30,353 shares which vested in the fiscal year ended April 30, 2023.

to Mary Beth Long, consisting of $18,554 for board service and $25,589 representing the fair value of the 21,324 shares which vested

in the fiscal year ended April 30, 2023.

In May 2023, the Board of Directors established Board

compensation for the fiscal year ended April 30, 2024.

Base compensation was established at $105,000, consisting of $45,000

in cash and $60,000 in restricted stock awards.

In addition, Leadership compensation, payable in cash, was established at $25,000

for Joe Freedman, $20,000 for Christopher Moe, $10,000 for Nick Liuzza, and $10,000 for Mary Beth Long.

Finally, Committee compensation,

payable in restricted stock awards, was established at $30,000 for each of Joe Freedman and Chris Moe.

Total compensation for fiscal

2024 was established at $160,000 for Joe Freedman, $155,000 for Chris Moe, $115,000 for Nick Liuzza, and $115,000 for Mary Beth Long.

The number of shares of restricted stock to be awarded shall be based on the $1.06 closing price on May 15, 2026, the date these

actions were approved.

Cash payments shall be made monthly in arrears and the restricted stock awards shall vest as follows:

(i) 25% on May 15, 2023, (ii) the remainder vests ratably over 24 monthly installments commencing June 1, 2023.

The information required

by this Item 10 will be included under the captions “Board of Directors and Corporate Governance,” “Executive Officers,”

and “Delinquent Section 16(a) Reports” in our definitive Proxy Statement for the 2024 Annual Meeting of Stockholders to be

filed with the SEC within 120 days after the end of our fiscal year (the “Proxy Statement”) and is incorporated herein by

We have adopted a Corporate

Code of Conduct and Ethics applicable to our directors, officers and employees which is designed to deter wrongdoing and to promote:

honest and ethical conduct;

full, fair, accurate, timely and understandable disclosure in reports and

documents that we file with the SEC and in our other public communications;

compliance with applicable laws, rules and regulations, including insider

trading compliance;

accountability for adherence to the code and prompt internal reporting of

violations of the code, including illegal or unethical behavior regarding accounting or auditing practices.

You may obtain a copy of

our Corporate Code of Conduct and Ethics on our website at www.redcat.red under Company — Investor Relations — Governance

— Governance Documents.

The Compliance Committee, which is composed of our Chief Executive Officer and Chief Financial Officer,

is responsible for reviewing the Corporate Code of Conduct and Ethics and amending as necessary.

Any amendments will be disclosed on our

EXECUTIVE COMPENSATION

following table sets forth information concerning all cash and non-cash compensation awarded to, earned by or paid to each Officer with

compensation exceeding $100,000 during the fiscal years ended April 30, 2022 and 2021 (each a "Named Executive Officer").

Compensation Table

and Principal Position

Compensation (3)

Chief Executive

Officer and President

Joseph Hernon

Chief Financial

Officer and Secretary

Chief Operating

Joseph Hernon

joined the Company in January 2020

joined the Company in November 2020

the fair value of restricted stock upon its vesting as follows:

(i) Thompson – 153,120 shares in fiscal 2023;

(ii) Hernon –

231,360 shares in fiscal 2023 and 75,000 shares in fiscal 2022;

and (iii) Evans – 401,702 shares in fiscal 2023 and 369,318

shares in fiscal 2022.

Potential Payments and Benefits Upon Termination

or a Change in Control

Our named executive officers

are entitled to certain benefits in the event their employment is terminated without cause by the Company or for good reason by the Executive,

as described in the Employment Agreements.

The following table describes the potential payments and benefits to each of our named executive

officers, as if these obligations were payable on April 30, 2023.

The actual amounts payable to each executive listed below upon termination

can only be determined definitively at the time of each executive’s actual departure.

In addition to the amounts shown in the table

below, each executive would receive payments for amounts of base salary and vacation time accrued through the date of termination and

payment for any reimbursable business expenses incurred.

In the event of a named executive officer’s death, the named executive

officer’s beneficiary, legal representative or estate would receive the named executive officer’s potential payments.

Potential Payments and Benefits

Jeffrey Thompson

Joseph Hernon

Base Salary (1)

Healthcare Benefits (2)

Equity Awards Vesting on Termination (3)

(1) Represents

the named executive officer’s base salary payable over twenty-four (24) months for Thompson and twelve (12) months for Hernon and

(2) Represents

the cost of continued healthcare coverage for 18 months for Thompson and 12 months for Hernon and Evans.

This value is based upon the

type of health insurance coverage and premiums in effect on April 30, 2023.

(3) Represents

the value attributable to the accelerated vesting of unvested shares of restricted stock and stock options.

The value of accelerated options

is determined by multiplying the number of options accelerated by the difference between the closing price of our common stock and the

exercise price of the options.

The value of accelerated stock is determined by multiplying the number of shares accelerated by the closing

price of our common stock on April 30, 2023 which was $0.885.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

following table lists, as of July 24, 2023, 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.

Information 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.

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 60 days.

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 Cat Holdings, Inc., 15 Ave.

Munoz Rivera, STE 2200, San Juan, PR 00901.

percentages below are calculated based on 55,541,173 shares of common stock issued and outstanding as of July 24, 2023.

and Address of Beneficial Owner

of Shares Beneficially Owned

of Beneficial Ownership

Executive Officers and Directors:

Beth Long (resigned July 25, 2023)

executive officers and directors as a group (7 persons)

Includes 12,292,057 shares of common stock, and 500,000 shares issuable upon the exercise of options.

Represents 331,882 shares of common stock, 1,000,000 shares issuable upon the exercise of options, and 22,965 shares of restricted stock

vesting in the next 60 days.

Represents 1,337,734 shares of common stock.

Consists of 967,826 shares of common stock, 335,000 shares issuable upon the exercise of warrants, 100,000 shares issuable upon the exercise

of options, and 8,527 shares of restricted stock vesting in the next 60 days.

Includes 190,301 shares of common stock, 250,00 shares issuable upon the exercise of options, and 7,654 shares of restricted stock vesting

in the next 60 days.

Includes 69,796 shares of common stock, and 7,654 shares of restricted stock vesting in the next 60 days.

Includes 45,631 shares of common stock, and 7,950 shares of restricted stock vesting in the next 60 days.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

The following is a description of transactions

since May 1, 2022, 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.

footnotes 6 and 12 to financial statements filed herewith.

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 Christopher Moe, Nicholas

Liuzza, and Joseph Freedman are independent under the Nasdaq Listing Rules’ independence standards for Audit Committee members.

Our Board has also determined that Nicholas Liuzza, Christopher Moe and Joseph Freedman are independent under the Nasdaq Listing Rules

independence standards for Compensation Committee members and that Joseph Freedman and Nicholas Liuzza are independent under the Nasdaq

Listing Rules independence standards for Governance and Nominating committee members.

SECTION 16(A) REPORTS

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 such filings and other information available to us, as well as representations from

the Reporting Persons, we believe that during the fiscal year ended April 30, 2023, the Reporting Persons timely filed all such reports,

except that the following forms were filed late by the indicated individuals:

Evans for four Form 4’s related to shares of vested stock which were withheld by the

Company to satisfy tax withholding obligations

Hernon for one Form 4 reporting shares of restricted stock which vested, net of shares withheld by the Company to satisfy tax withholding

Liuzza for one Form 4 related to open market purchases and sales of shares of common stock

Beth Long for a Form 3 reporting her equity holdings

upon becoming a Director of the Company

PRINCIPAL ACCOUNTING FE ES AND SERVICES

Borgers, CPA, PC audited our financial statements for the fiscal year ended April 30, 2023.

The Company engages Tanner, LLC & HLB

Puerto Rico to complete its corporate tax returns.

Tax fees paid to HLB Puerto Rico totaled $43,251 for Fiscal 2023.

to Tanner, LLC totaled $56,139 for Fiscal 2022.

Fees paid to Tanner, LLC and HLB Puerto Rico are listed under Tax fees below.

Registered Public Accounting Firm Fees and Services

regularly review the services and fees from our independent registered public accounting firm.

These services and fees are also reviewed

with our Audit Committee annually.

In accordance with standard policy, BF Borgers, CPA, PC periodically rotates the individuals who are

responsible for our audit.

During the years ended April 30, 2023 and April 30, 2022, fees for services provided by BF Borgers, CPA, PC

were as follows:

Audit-related

Consists of fees rendered

in connection with the audit of our consolidated financial statements included in our annual report on Form 10-K, review of the interim

consolidated financial statements included in our quarterly reports and services normally provided in connection with regulatory

Consists of fees billed

for assurance and related services that are reasonably related to the performance of the audit or review of our consolidated financial

statements and are not reported under “Audit Fees.”

Consists of fees billed

for professional services for tax compliance, tax advice and tax planning.

These services include assistance regarding federal, state

and international tax compliance, as well as technical tax advice related to federal and state income tax matters, assistance with

sales tax and assistance with tax audits.

Consists of fees for professional

services other than those reported in the categories above, including access to resource materials and portals.

on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent Registered Public Accounting Firm

Audit Committee’s policy is to pre-approve all audit and permissible non-audit services provided by our independent registered

public accounting firm, the scope of services provided by our independent registered public accounting firm and the fees for the services

to be performed.

These services may include audit services, audit-related services, tax services and other services.

Pre-approval is

detailed as to the particular service or category of services and is generally subject to a specific budget.

Our independent registered

public accounting firm and management are required to periodically report to the Audit Committee regarding the extent of services provided

by our independent registered public accounting firm in accordance with this pre-approval, and the fees for the services performed to

All of the services relating to the fees described in the table above were approved by our Audit Committee.

The information required

by this Item 11 will be included under the captions “Director Compensation Table,” “Non-Employee Director Compensation

Arrangements,” and "Executive Compensation" in the Proxy Statement and is incorporated herein by reference.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL

OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The information

required by this Item 12 will be included under the captions “Security Ownership of Certain Beneficial Owners and Management”

and “2019 Equity Incentive Plan” in the Proxy Statement and is incorporated herein by reference.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS,

AND DIRECTOR INDEPENDENCE

The information

required by this Item 13 will be included under the captions “Certain Relationships and Related Transactions, and Director Independence,”

“Director Compensation Table,” “Non-Employee Director Compensation Arrangements,” and “Executive

Compensation” in the Proxy Statement and is incorporated herein by reference.

PRINCIPAL ACCOUNTING FEES AND SERVICES

The information required by this

Item 14 will be included under the caption “Fees Paid to Auditors” in the Proxy Statement and is incorporated herein by reference.

EXHIBITS, FINANCIAL STATEMENTS SCHEDULES.

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)

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)

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)

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)

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)

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)

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

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

and Restated Articles of Incorporation, dated July 17, 2019 (incorporated by reference to Exhibit B to the Company’s Schedule

21 unchanged sentences

August 13, 2020)

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)

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

(Timefire”), Red Cat Propware, Inc, and Red Cat Propware,

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)

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)

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)

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)

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)

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)

Exchange Agreement, dated May 13, 2019, between Timefire and Gary Smith (incorporated by reference to Exhibit 10.7 to the Company’s

of Stock Option Agreement

of Restricted Share Unit Award Agreement

Equity Incentive Plan

Amendment to Executive Employment Agreement with Jeffrey Thompson (incorporated by reference to Exhibit 10.1 to the Company’s

Current Report on Form 8-K filed with the SEC on May 22, 2023).

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)

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)

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)

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)

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)

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

and stockholders of Teal

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

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)

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)

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).

to Executive Employment Agreement with Joseph Hernon

Amendment to Executive Employment Agreement with Allan Evans (incorporated by reference to Exhibit 10.2 to the Company’s Current

Report on Form 8-K filed with the SEC on May 22, 2023).

2 to Share Purchase Agreement Amendment dated March 31, 2023 (incorporated by reference to Exhibit 10.1 to the Company’s

Current Report on Form 8-K filed with the SEC on July 14, 2023).

of Registration Rights Agreement (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed

with the SEC on July 14, 2023).

Sales Agreement with ThinkEquity LLC (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K

filed with the SEC on August 8, 2023).

Agreement (incorporated by reference to Exhibit 1.1 to the Company’s Current Report on Form 8-K filed with the SEC on December

3 to Share Purchase Agreement dated September 18, 2023 (incorporated by reference to Exhibit 10.3 to the Company’s Quarterly

Report on Form 10-Q filed with the SEC on December 15, 2023)

4 to Share Purchase Agreement with Unusual Machines, Inc.

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

Report on Form 8-K filed with the SEC on December 15, 2023)

of 8% Promissory Note from Unusual Machines, Inc.

(incorporated by reference to Exhibit 10.2 to the Company’s Current Report

on Form 8-K filed with the SEC on December 15, 2023)

Promissory Note from Unusual Machines, Inc.

(incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form

8-K filed with the SEC on February 22, 2024)

of Registration Rights Agreement with Unusual Machines, Inc.

(incorporated by reference to Exhibit 10.3 to the Company’s Current

Report on Form 8-K filed with the SEC on December 15, 2023)

Rights Agreement with Unusual Machines, Inc.

(incorporated by reference to Exhibit 10.2 to the Company’s Current Report on

Form 8-K filed with the SEC on February 22, 2024)

Non-Competition

Agreement with Unusual Machines, Inc., Rotor Riot, LLC, and Fat Shark Holdings, Ltd.

(incorporated by reference to Exhibit 10.3 to

the Company’s Current Report on Form 8-K filed with the SEC on February 22, 2024)

agreement with Allan Evans (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed with

the SEC on February 22, 2024)

to Executive Employment Agreement with Joseph Hernon (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly

Report on Form 10-Q filed with the SEC on March 18, 2024)

#2 to Executive Employment Agreement, between Joseph Hernon and the Company, dated March 15, 2024 (incorporated by reference

to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on March 18, 2024)

Services Agreement, between Joseph Hernon and the Company, dated March 15, 2024 (incorporated by reference to Exhibit 10.2 to the Company’s

Current Report on Form 8-K filed with the SEC on March 18, 2024)

of Subsidiaries

of BF Borgers, CPA PC

of The Crone Law Group, P.C.

(incorporated by reference to Exhibit 23.1 to the Company’s Current Report on Form 8-K filed with

the SEC on August 8, 2023)

of dbbmckennon

Certification

10 unchanged sentences

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

Instance Document

Taxonomy Extension Schema Document

Taxonomy Extension Calculation Linkbase Document

XBRL Instance Document

XBRL Schema Document

XBRL Calculation Linkbase Document

XBRL Label Linkbase Document

XBRL Presentation Linkbase Document

XBRL Definition Linkbase Document

Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

* Filed herewith.

management contract or compensatory plan.

FORM 10-K SUMMARY

to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed

on its behalf by the undersigned thereunder duly authorized.

Cat Holdings, Inc.

July 27, 2023

Not applicable.

Pursuant to the requirements of Section 13 or 15(d)

of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunder

duly authorized.

Red Cat Holdings, Inc.

August 8, 2024

/ s/ Jeffrey Thompson

Jeffrey Thompson

Executive Officer and President

Executive Officer)

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.

Executive Officer, President and Director

Executive Officer)

Joseph Hernon

Financial Officer, Treasurer and Secretary

Financial and Accounting Officer)

Nicholas Liuzza, Jr.

Chief Executive Officer and President

(Principal Executive Officer)

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

/s/ Jeffrey M.

Chief Executive Officer, President and Director

August 8, 2024

(Principal Executive Officer)

/s/ Leah Lunger

Chief Financial Officer, Treasurer and Secretary

August 8, 2024

(Principal Financial and Accounting Officer)

/s/ Nicholas Liuzza, Jr.

August 8, 2024

Nicolas Liuzza, Jr.

/s/ Christopher Moe

August 8, 2024

Christopher Moe

/s/ Joseph Freedman

August 8, 2024

Joseph Freedman

/s/ Paul Edward Funk II

August 8, 2024

Paul Edward Funk II

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