Red Cat Holdings, Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Note 20 - Segment Reporting

Note 20 - Segment Reporting

3 Months Ended

Jul. 31, 2022

Note 20 - Segment Reporting

We define our segments as those operations whose results are regularly reviewed by our CODM to analyze performance and allocate resources. Therefore, segment information is prepared on the same basis that management reviews financial information for operational decision-making purposes. Our CODM is a committee comprised of our CEO, COO, and CFO.

The Enterprise segment is focused on opportunities in the commercial sector, including military. Enterprise is building the infrastructure to manage drone fleets, fly and provide services remotely, and navigate confined industrial interior spaces and dangerous military environments.

The Consumer segment is focused on enthusiasts and hobbyists which are expected to increase as drones become more visible in our daily lives.

Our CODM allocates resources to and assesses the performance of our two operating segments based on the operating segments’ net sales and gross profit. The following table sets forth information by reportable segment for the three months ended July 31, 2022 and 2021, respectively.


	For the three months ended July 31, 2022
	Enterprise			Consumer			Corporate			Total
Revenues	$	1,126,551		$	1,942,720		$	—		$	3,069,271
Cost of goods sold		1,044,431			1,667,213			—			2,711,644
Gross margin		82,120			275,507			—			357,627

Operating expenses		1,661,363			495,028			1,899,732			4,056,123
Operating loss		(1,579,243	)		(219,521	)		(1,899,732	)		(3,698,496	)

Other expenses, net		63,229			(124	)		49,998			113,103
Net loss	$	(1,642,472	)	$	(219,397	)	$	(1,949,730	)	$	(3,811,599	)

The following table sets forth specific asset categories which are reviewed by our CODM in the evaluation of operating segments:


	For the three months ended July 31, 2022
	Enterprise		Consumer		Corporate		Total
Accounts receivable, net	$	688,244	$	241,628	$	—	$	929,872
Inventory, net		3,486,487		1,098,349		—		4,584,836
Inventory deposits	$	1,158,195	$	646,344	$	—	$	1,804,539