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

Quarterly report pursuant to Section 13 or 15(d)

Note 21 - Segment Reporting

Note 21 - Segment Reporting

9 Months Ended

Jan. 31, 2023

Note 21 - 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 and nine months ended January 31, 2023, respectively.


	For the three months ended January 31, 2023
	Enterprise			Consumer			Corporate			Total
Revenues	$	1,667,683		$	1,438,961		$	—		$	3,106,644
Cost of goods sold		1,764,612			1,239,420			—			3,004,032
Gross margin		(96,929	)		199,541			—			102,612

Operating expenses		2,981,826			541,234			2,105,350			5,628,410
Operating loss		(3,078,755	)		(341,693	)		(2,105,350	)		(5,525,798	)

Other expenses, net		106,611			(11,614	)		45,207			140,204
Net loss	$	(3,185,366	)	$	(330,079	)	$	(2,150,557	)	$	(5,666,002	)


	For the nine months ended January 31, 2023
	Enterprise			Consumer			Corporate			Total
Revenues	$	3,541,846		$	4,164,531		$	—		$	7,706,377
Cost of goods sold		3,432,804			3,579,679			—			7,012,483
Gross margin		109,042			584,852			—			693,894

Operating expenses		8,041,686			1,567,611			7,081,225			16,690,522
Operating loss		(7,932,644	)		(982,759	)		(7,081,225	)		(15,996,628	)

Other expenses, net		265,855			(19,788	)		(520,617	)		(274,550	)
Net loss	$	(8,198,499	)	$	(962,971	)	$	(6,560,608	)	$	(15,722,078	)

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


	As of January 31, 2023
	Enterprise		Consumer		Corporate		Total
Accounts receivable, net	$	2,054,022	$	9,850	$	—	$	2,063,872
Inventory, net		6,456,158		2,838,095		—		9,294,253
Inventory deposits	$	712,104	$	2,596,211	$	—	$	3,308,315