Exhibit 10.14


 


 


SECURITIES PURCHASE AGREEMENT






This SECURITIES PURCHASE
AGREEMENT (this “Agreement”), dated as                                                , 2020, by and between Red Cat Holdings, Inc.,
a Nevada corporation, with offices at 1607 Ponce De Leon Avenue, Suite 407, San Juan, Puerto Rico 00909 (the “Company”),
and                                (the “Buyer”), with offices at 8220 Sullivan Hill Rd. Atlanta
GA 30350.


 


WHEREAS:


 


A.
The Company and the Buyer are executing and delivering this Agreement in reliance upon the exemption from securities registration
afforded by the rules and regulations as promulgated by the United States Securities and Exchange Commission (the “SEC”)
under the Securities Act of 1933, as amended (the “Securities Act”); and


 


B.
Buyer desires to purchase and the Company desires to issue and sell, upon the terms and conditions set forth in this Agreement,
(i) a 12% convertible note (the “Note”) of the Company, in the form attached hereto as Exhibit A in the
principal amount of $                      , convertible into shares of common stock, $0.001 par value per share, of the Company (the “Common
Stock”), and (ii) a Common Stock Purchase Warrant (the “Warrant”), in the form attached hereto as
Exhibit B, with an exercise price of $1.50 per share, upon the terms and subject to the limitations and conditions set forth
in such Note and Warrant; and


 


C.
The Buyer wishes to purchase, upon the terms and conditions stated in this Agreement, the Note and the Warrant as set forth
immediately below its name on the signature pages hereto.


 


NOW THEREFORE,
in consideration of the mutual covenants and other agreements contained in this Agreement, the Company and the Buyer hereby agree
as follows:


1.
Purchase and Sale of Note and Warrant.


 


a.
Purchase of Note and Warrant. On the Closing Date (as defined below), the Company shall issue and sell to the Buyer
and the Buyer agrees to purchase from the Company the Note and Warrant.


 


b.
Form of Payment. On the Closing Date, (i) the Buyer shall fund the principal amount for the Note and Warrant to be
issued and sold to it at the Closing (as defined below) by wire transfer of immediately available funds to the Company, in accordance
with the Company’s written wiring instructions, against delivery of the Note and Warrant, and (ii) the Company shall
deliver such duly executed Note and Warrant on behalf of the Company, to the Buyer, against delivery of the purchase price thereof.


 


c.
Closing Date. The date and time of the issuance and sale of the Note and Warrant pursuant to this Agreement (the
“Closing Date”) shall be on or about simultaneous with the execution and delivery of this Agreement, or such
other mutually agreed upon time. The closing of the transactions contemplated by this Agreement (the “Closing”)
shall occur on the Closing Date at such location as may be agreed to by the parties.


 


d.
Closing. On the Closing Date, upon the terms and subject to the conditions set forth herein, the Company agrees to
sell, and the Buyer agrees to purchase, the Note and Warrant as set forth on each Buyer’s signature page hereto. At any closing
hereunder, the Company shall deliver to each Buyer its respective Note and Warrant.


 


2.
Buyer’s Representations and Warranties. The Buyer represents and warrants to the Company that:


 


a.
Investment Purpose. As of the date hereof, the Buyer is purchasing the Note and the Warrant, and the shares of Common
Stock issuable upon conversion of the Note pursuant to the terms thereof and exercise of the Warrant pursuant to the terms thereof
(such shares of Common Stock being collectively referred to herein as the “Conversion Shares” and, collectively
with the Note and Warrant, the “Securities”) for its own account and not with a present view towards the public
sale or distribution thereof, except pursuant to sales registered or exempted from registration under the Securities Act.


 


b.
Accredited Investor Status. The Buyer is, as of the date hereof, and on each date on which it exercises the Warrants
or converts the Note, an “accredited investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under
the Securities Act.


 


c.
Reliance on Exemptions. The Buyer understands that the Securities are being offered and sold to it in reliance upon
specific exemptions from the registration requirements of United States federal and state securities laws and that the Company
is relying upon the truth and accuracy of, and the Buyer’s compliance with, the representations, warranties, agreements,
acknowledgments and understandings of the Buyer set forth herein in order to determine the availability of such exemptions and
the eligibility of the Buyer to acquire the Securities.


 


d.
Information. The Buyer and the Buyer’s attorney, accountant, purchaser representative and/or tax advisor, if
any (collectively, the “Advisors”), as the case may be, if any, have been, and for so long as the Note remain
outstanding will continue to be, furnished with all materials relating to the business, finances and operations of the Company
and materials relating to the offer and sale of the Securities which have been requested by the Buyer or its advisors. The Buyer
and its advisors, if any, have been, and for so long as the Note remain outstanding will continue to be, afforded the opportunity
to ask questions of the Company. Notwithstanding the foregoing, the Company has not disclosed to the Buyer any material nonpublic
information and will not disclose such information unless such information is disclosed to the public prior to or promptly following
such disclosure to the Buyer. Neither such inquiries nor any other due diligence investigation conducted by Buyer or any of its
advisors or representatives shall modify, amend or affect Buyer’s right to rely on the Company’s representations and
warranties contained in Section 3 below. The Buyer understands that its investment in the Securities involves a significant degree
of risk. The Buyer is not aware of any facts that may constitute a breach of any of the Company's representations and warranties
made herein.


 


e.
Governmental Review. The Buyer understands that no United States federal or state agency or any other government
or governmental agency has passed upon or made any recommendation or endorsement of the Securities.


 


f.
Transfer or Re-sale. The Buyer understands that (i) the sale or re-sale of the Securities has not been and is not
being registered under the Securities Act or any applicable state securities laws, and the Securities may not be transferred unless
(a) the Securities are sold pursuant to an effective registration statement under the Securities Act, (b) the Buyer shall
have delivered to the Company, at the cost of the Buyer, an opinion of counsel that shall be in form, substance and scope customary
for opinions of counsel in comparable transactions to the effect that the Securities to be sold or transferred may be sold or transferred
pursuant to an exemption from such registration, which opinion shall be accepted by the Company, (c) the Securities are sold
or transferred to an “affiliate” (as defined in Rule 144 promulgated under the Securities Act (or a successor rule)
(“Rule 144”)) of the Buyer who agrees to sell or otherwise transfer the Securities only in accordance with this
Section 2(f) and who is an Accredited Investor, (d) the Securities are sold pursuant to Rule 144, or the Securities are
sold pursuant to Regulation S under the Securities Act (or a successor rule) (“Regulation S”), and the Buyer
shall have delivered to the Company, at the cost of the Buyer, an opinion of counsel that shall be in form, substance and scope
customary for opinions of counsel in corporate transactions, which opinion shall be accepted by the Company; (ii) any sale of such
Securities made in reliance on Rule 144 may be made only in accordance with the terms of said Rule and further, if said Rule is
not applicable, any re-sale of such Securities under circumstances in which the seller (or the person through whom the sale is
made) may be deemed to be an underwriter (as that term is defined in the Securities Act) may require compliance with some other
exemption under the Securities Act or the rules and regulations of the SEC thereunder; and (iii) neither the Company nor any other
person is under any obligation to register such Securities under the Securities Act or any state securities laws or to comply with
the terms and conditions of any exemption thereunder (in each case). Notwithstanding the foregoing or anything else contained herein
to the contrary, the Securities may be pledged as collateral in connection with a bona fide margin account or other lending
arrangement.


 


g.
Legends. The Buyer understands that the Note and Warrant, and, until such time as the Conversion Shares have been
registered under the Securities Act or may be sold pursuant to Rule 144 without any restriction as to the number of securities
as of a particular date that can then be immediately sold, the Conversion Shares may bear a restrictive legend in substantially
the following form (and a stop-transfer order may be placed against transfer of the certificates for such Securities):


 


“NEITHER THE ISSUANCE AND SALE
OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE,
SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY ACCEPTABLE
FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING
THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT
SECURED BY THE SECURITIES.”


 


The legend set forth
above shall be removed and the Company shall issue a certificate without such legend to the holder of any shares upon which it
is stamped, if, unless otherwise required by applicable state securities laws, (a) such Security is registered for sale under an
effective registration statement filed under the Securities Act without any restriction as to the number of securities as of a
particular date that can then be immediately sold, or (b) such holder provides the Company with an opinion of counsel, in form,
substance and scope customary for opinions of counsel in comparable transactions, to the effect that a public sale or transfer
of such Security may be made without registration under the Securities Act, which opinion shall be accepted by the Company so that
the sale or transfer is effected. The Buyer agrees to sell all Securities, including those represented by a certificate(s) from
which the legend has been removed, in compliance with applicable prospectus delivery requirements, if any.


h.
Residency. The Buyer is a resident of the jurisdiction set forth immediately below the Buyer’s name on the
signature pages hereto.


 


i.
No Solicitation. The Buyer is unaware of, is in no way relying on, and did not become aware of the offering of the
Securities through or as a result of, any form of general solicitation or general advertising including, without limitation, any
article, notice, advertisement or other communication published in any newspaper, magazine or similar media or broadcast over television
or radio, in connection with the offering and sale of the Securities and is not subscribing for the Securities and did not become
aware of the offering of the Securities through or as a result of any seminar or meeting to which the Buyer was invited by, or
any solicitation of a subscription by, a person not previously known to the Buyer in connection with investments in securities
generally.


j.
Brokerage Fees. The Buyer has taken no action that would give rise to any claim by any person for brokerage commissions,
finders’ fees or the like relating to this Agreement or the transaction contemplated hereby.


k.
Buyer’s Advisors. The Buyer and its Advisors, as the case may be, have such knowledge and experience in financial,
tax, and business matters, and, in particular, investments in securities, so as to enable it to utilize the information made available
to it in connection with the Notes to evaluate the merits and risks of an investment in the Notes and the Company and to make an
informed investment decision with respect thereto.


l.
Buyer Liquidity. The Buyer has adequate means of providing for Buyer’s current financial needs and foreseeable
contingencies and has no need for liquidity of its investment in the Securities for an indefinite period of time, and after purchasing
the Securities the Buyer will be able to provide for any foreseeable current needs and possible personal contingencies. The Buyer
must bear and acknowledges the substantial economic risks of the investment in the Securities including the risk of illiquidity
and the risk of a complete loss of this investment.


 


m.
No Other Representations or Information. In evaluating the suitability of an investment in the Securities, the Buyer
has not relied upon any representation or information (oral or written) with respect to the Company or its subsidiaries, or otherwise,
other than as stated in this Agreement. No oral or written representations have been made, or oral or written information furnished,
to the Buyer or its Advisors, if any, in connection with the offering of the Notes.


 


n.
Authorization; Enforcement. The Buyer has the requisite power and authority to enter into and perform this Agreement
and to purchase the Securities. The execution, delivery and performance of this Agreement and the Securities by the Buyer and the
consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary corporate or
partnership action, and no further consent or authorization of the Buyer or its Board of Directors, stockholders, partners, members,
as the case may be, is required. This Agreement has been duly authorized, executed and delivered by the Buyer and upon execution
of this Agreement by the Company, constitute, or shall constitute when executed and delivered, a valid and binding obligation of
the Buyer enforceable against the Buyer in accordance with the terms hereof and thereof, except as such enforceability may be limited
by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and other similar
laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and remedies.


o.
No Conflicts. The execution, delivery and performance of this Agreement and the consummation by the Buyer of
the transactions contemplated hereby and thereby or relating hereto do not and will not (i) if the Buyer is not an individual,
result in a violation of the Buyer’s charter documents or bylaws or other organizational documents or (ii) conflict with,
or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others
any rights of termination, amendment, acceleration or cancellation of any agreement, indenture or instrument or obligation to which
the Buyer is a party or by which its properties or assets are bound, or result in a violation of any law, rule, or regulation,
or any order, judgment or decree of any court or governmental agency applicable to the Buyer or its properties (except for such
conflicts, defaults and violations as would not, individually or in the aggregate, have a material adverse effect on the Buyer).
The Buyer is not required to obtain any consent, authorization or order of, or make any filing or registration with, any court
or governmental agency in order for it to execute, deliver or perform any of its obligations under this Agreement or to purchase
the Securities in accordance with the terms hereof.


p.
SEC Filings.The Buyer has reviewed, or had an opportunity to review, all of the SEC Filings and “Forward
Looking Statements” disclaimers contained therein.  In addition, the Buyer has reviewed and acknowledges it has
such knowledge, sophistication, and experience in securities matters, and understands the risks related to the Company, including
without limitation to, the “Risk Factors’ in the 10K form filed on April 30, 2020, which the Company has made available
through the EDGAR system.


q.
Restricted Securities.   Buyer understands that the Securities have not been registered under the
1933 Act and such Buyer will not sell, offer to sell, assign, pledge, hypothecate or otherwise transfer any of the Securities unless
pursuant to an effective registration statement under the 1933 Act, or unless an exemption from registration is available.  Notwithstanding
anything to the contrary contained in this Agreement, such Buyer may transfer (with an opinion of counsel satisfactory to the Company
and its counsel) the Securities to its Affiliates (as defined below), provided that each such Affiliate is an “accredited
investor” under Regulation D and such Affiliate agrees to be bound by the terms and conditions of this Agreement. For the
purposes of this Agreement, an “Affiliate” of any person or entity means any other person or entity directly or indirectly
controlling, controlled by or under direct or indirect common control with such person or entity.  Affiliate includes
each subsidiary of the Company.  For purposes of this definition, “control” means the power to direct the
management and policies of such person or firm, directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise.


3.
Representations and Warranties of the Company. The Company represents and warrants to the Buyer that, except as otherwise
disclosed in the Company’s public filings and reports with the SEC:


 


a.
Organization and Qualification. The Company and each of its subsidiaries, if any, is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction in which it is incorporated, with full power and authority
(corporate and other) to own, lease, use and operate its properties and to carry on its business, such that the failure to so qualify
would not have a material adverse effect on the assets or business of the Company, its subsidiaries, or the ability of the Company
to perform its obligations hereunder.


 


b. Authorization;
Enforcement. (i) The Company has all requisite corporate power and authority to enter into and perform this Agreement, and
to consummate the transactions contemplated hereby and to issue the Securities, in accordance with the terms hereof and thereof,
(ii) the execution and delivery of this Agreement, by the Company and the consummation by it of the transactions contemplated
hereby (including without limitation, the issuance of the Note and the Warrant and the issuance and reservation for issuance of
the Conversion Shares issuable upon conversion or exercise thereof) have been duly authorized by the Company’s Board of
Directors and no further consent or authorization of the Company, its Board of Directors, or its shareholders is required, (iii)
this Agreement has been duly executed and delivered by the Company by its authorized representative, and such authorized representative
is the true and official representative with authority to sign this Agreement and the other documents executed in connection herewith
and bind the Company accordingly, and (iv) this Agreement constitutes, and upon execution and delivery by the Buyer, will constitute,
a legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms except as such
enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation and other similar laws relating to, or affecting generally, the enforcement of applicable creditors’ rights
and remedies.


c.
Issuance of Shares. The Conversion Shares are duly authorized and reserved for issuance and, upon conversion of the
Note and the Warrant in accordance with its respective terms, will be validly issued, fully paid and non-assessable, and free from
all taxes, liens, claims and encumbrances with respect to the issue thereof and shall not be subject to preemptive rights or other
similar rights of shareholders of the Company and will not impose personal liability upon the holder thereof.


 


d.
Acknowledgment of Dilution. The Company understands and acknowledges the potentially dilutive effect to the Common
Stock upon the issuance of the Conversion Shares upon conversion of the Note and exercise of the Warrant. The Company further acknowledges
that its obligation to issue Conversion Shares upon conversion of the Note and exercise of the Warrant in accordance with the respective
terms thereof, is absolute and unconditional regardless of the dilutive effect that such issuance may have on the ownership interests
of other shareholders of the Company.


 


e.
No Conflicts. The execution, delivery and performance of this Agreement, the Note and the Warrant by the Company
and the consummation by the Company of the transactions contemplated hereby and thereby (including, without limitation, the issuance
and reservation for issuance of the Conversion Shares) will not (i) conflict with or result in a violation of any provision of
the Certificate of Incorporation or By-laws, or (ii) violate or conflict with, or result in a breach of any provision of, or constitute
a default (or an event which with notice or lapse of time or both could become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, any agreement, indenture, patent, patent license or instrument to which
the Company or any of its subsidiaries is a party, or (iii) result in a violation of any law, rule, regulation, order, judgment
or decree (including federal and state securities laws and regulations and regulations of any self-regulatory organizations to
which the Company or its securities are subject) applicable to the Company or any of its subsidiaries or by which any property
or asset of the Company or any of its subsidiaries is bound or affected (except for such conflicts, defaults, terminations, amendments,
accelerations, cancellations and violations as would not, individually or in the aggregate, have a material adverse effect). All
consents, authorizations, orders, filings and registrations which the Company is required to obtain pursuant to the preceding sentence
have been obtained or effected on or prior to the date hereof.


 


f.
Absence of Litigation. There is no action, suit, claim, proceeding, inquiry or investigation before or by any court,
public board, government agency, self-regulatory organization or body pending or, to the knowledge of the Company or any of its
subsidiaries, threatened against or affecting the Company or any of its subsidiaries, or their officers or directors in their capacity
as such, that could have a material adverse effect.


 


g.
Acknowledgment Regarding Buyer’ Purchase of Securities. The Company acknowledges and agrees that the Buyer
is acting solely in the capacity of arm’s length purchasers with respect to this Agreement and the transactions contemplated
hereby. The Company further acknowledges that the Buyer is not acting as a financial advisor or fiduciary of the Company (or in
any similar capacity) with respect to this Agreement and the transactions contemplated hereby and any statement made by the Buyer
or any of its respective representatives or agents in connection with this Agreement and the transactions contemplated hereby is
not advice or a recommendation and is merely incidental to the Buyer’ purchase of the Securities. The Company further represents
to the Buyer that the Company’s decision to enter into this Agreement has been based solely on the independent evaluation
by the Company and its representatives.


 


h.
No Integrated Offering. Neither the Company, nor any of its affiliates, nor any person acting on its or their behalf,
has directly or indirectly made any offers or sales in any security or solicited any offers to buy any security under circumstances
that would require registration under the Securities Act of the issuance of the Securities to the Buyer. The issuance of the Securities
to the Buyer will not be integrated with any other issuance of the Company’s securities (past, current or future) for purposes
of any shareholder approval provisions applicable to the Company or its securities.


 


4.
Expenses. Each of the parties hereto shall pay its own fees and expenses (including the fees of any attorneys, accountants,
appraises or others engaged by such party) in connection with this Agreement and the transactions contemplated hereby whether or
not the transactions contemplated hereby are consummated.


5.
Miscellaneous.


 


a.
Governing Law. This Agreement shall be governed by and interpreted in accordance with the laws of the State of Nevada
without regard to the principles of conflict of laws. The parties further agree that any action between them shall be heard exclusively
in federal or state court sitting in Clark County, Nevada, and expressly consent to the jurisdiction and venue of the Supreme Court
of Nevada, sitting in Douglas County and the United States District Court for the District of Nevada for the adjudication of any
civil action asserted pursuant to this paragraph. The Company and Buyer waive trial by jury. The prevailing party shall be entitled
to recover from the other party its reasonable attorney's fees and costs. Each party hereby irrevocably waives personal service
of process and consents to process being served in any suit, action or proceeding in connection with this Agreement by mailing
a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address
in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process
and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner
permitted by law.


b.
Counterparts; Signatures by Facsimile. This Agreement may be executed in one or more counterparts, each of which
shall be deemed an original but all of which shall constitute one and the same agreement and shall become effective when counterparts
have been signed by each party and delivered to the other party. This Agreement, once executed by a party, may be delivered to
the other party hereto by facsimile or other electronic transmission of a copy of this Agreement bearing the signature of the party
so delivering this Agreement.


 


c.
Headings. The headings of this Agreement are for convenience of reference only and shall not form part of, or affect
the interpretation of, this Agreement.


 


d.
Severability. In the event that any provision of this Agreement is invalid or unenforceable under any applicable
statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall
be deemed modified to conform with such statute or rule of law. Any provision hereof which may prove invalid or unenforceable under
any law shall not affect the validity or enforceability of any other provision hereof.


 


e. Entire Agreement;
Amendments. This Agreement and the instruments referenced herein contain the entire understanding of the parties with respect
to the matters covered herein and therein and, except as specifically set forth herein or therein, neither the Company nor the
Buyer makes any representation, warranty, covenant or undertaking with respect to such matters. No provision of this Agreement
may be waived or amended other than by an instrument in writing signed by the majority in interest of the Buyer and by the Company.


 


f.
Rescission and Withdrawal Right. Notwithstanding anything to the contrary contained in this Agreement, whenever Buyer
exercises a right, election, demand or option under this Agreement and the Company does not timely perform its related obligations
within the periods therein provided, then Buyer may rescind or withdraw, in its sole discretion from time to time upon written
notice to the Company, any relevant notice, demand or election in whole or in part without prejudice to its future actions and
rights; provided, however, that, in the case of a rescission of a conversion of a Note or exercise of a Warrant,
the applicable Buyer shall be required to return any shares of Common Stock subject to any such rescinded conversion or exercise
notice concurrently with the return to such Buyer of the aggregate exercise price paid to the Company for such shares and the restoration
of such Buyer’s right to acquire such shares pursuant to such Buyer’s Warrant (including, issuance of a replacement
warrant certificate evidencing such restored right).


 


g. Notices. All
notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be in writing
and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified, return
receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid, or (iv) transmitted
by hand delivery, telegram, or facsimile, addressed as set forth below or to such other address as such party shall have specified
most recently by written notice. Any notice or other communication required or permitted to be given hereunder shall be deemed
effective (a) upon hand delivery or delivery by facsimile, with accurate confirmation generated by the transmitting facsimile
machine, at the address or number designated below (if delivered on a business day during normal business hours where such notice
is to be received), or the first business day following such delivery (if delivered other than on a business day during normal
business hours where such notice is to be received) or (b) on the second business day following the date of mailing by express
courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur.
The addresses for such communications shall be:


 


If to the Company, to:


 


Red Cat Holdings, Inc.


1607 Ponce De Leon Avenue


Suite 407


San Juan, Puerto Rico 00909


Attn: Jeffrey M. Thompson,
Chief Executive Officer 


 


With a copy to (which copy should not constitute a notice hereunder):


 


The Crone
Law Group P.C.


500 Fifth Avenue


Suite 938


New York, NY 10110


Attn: Mark Crone  


 


If
to the Buyer:


 


________________


________________


________________


 


 





Each party shall provide
notice to the other party of any change in address.


 


h.
Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors
and assigns. Neither the Company nor the Buyer shall assign this Agreement or any rights or obligations hereunder without the prior
written consent of the other.


 


i.
Third Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective
permitted successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other person.


 


j.
Survival. The representations and warranties of the Company and the agreements and covenants set forth in this Agreement
shall survive the closing hereunder notwithstanding any due diligence investigation conducted by or on behalf of the Buyer. Each
party agrees to indemnify and hold harmless the other party and all their officers, directors, employees and agents for loss or
damage arising as a result of or related to any breach or alleged breach by such party of any of its representations, warranties
and covenants set forth in this Agreement.


 


k.
Further Assurances. Each party shall do and perform, or cause to be done and performed, all such further acts and
things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as the other party may
reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions
contemplated hereby.


 


l.
No Strict Construction. The language used in this Agreement will be deemed to be the language chosen by the parties
to express their mutual intent, and no rules of strict construction will be applied against any party.


 


[Remainder of Page Intentionally Omitted;
Signature Page to Follow]




    	 



    	 



    

 


 


IN WITNESS WHEREOF, the
undersigned Buyer and the Company have caused this Agreement to be duly executed as of the date first above written.


 


 


RED CAT HOLDINGS, INC.


 


 


 


By: _______________________________


Jeffrey M. Thompson


President and Chief Executive Officer 


 


 


 


 


By:_________________________________


Name:


Title:


 


SUBSCRIPTION AMOUNT:


 


	Aggregate Principal Amount of Note:	$






 




    	 



    	 



    

 


 


 


RED
CAT HOLDINGS, INC.


 


ACCREDITED INVESTOR CERTIFICATION


 


For Individual Investors Only


(all Individual Investors must
INITIAL where appropriate):


 


	Initial _______ 	I have a net worth of at least US$1 million either individually or through aggregating my individual holdings and those in which I have a joint, community property or other similar shared ownership interest with my spouse. (For purposes of calculating your net worth under this paragraph, (a) your primary residence shall not be included as an asset; (b) indebtedness secured by your primary residence, up to the estimated fair market value of your primary residence at the time of your purchase of the securities, shall not be included as a liability (except that if the amount of such indebtedness outstanding at the time of your purchase of the securities exceeds the amount outstanding 60 days before such time, other than as a result of the acquisition of your primary residence, the amount of such excess shall be included as a liability); and (c) indebtedness that is secured by your primary residence in excess of the estimated fair market value of your primary residence at the time of your purchase of the securities shall be included as a liability.)
	Initial _______	I have had an annual gross income for the past two years of at least US$200,000 (or US$300,000 jointly with my spouse) and expect my income (or joint income, as appropriate) to reach the same level in the current year.
	Initial _______	I am a director or executive officer of Red Cat Holdings, Inc.
	 	 
	For Non-Individual Investors
	(all Non-Individual Investors must INITIAL where appropriate):
	 	 
	Initial _______	The investor certifies that it is a partnership, corporation, limited liability company or business trust that is 100% owned by persons who meet at least one of the criteria for Individual Investors set forth above. 
	Initial _______	The investor certifies that it is a partnership, corporation, limited liability company or business trust that has total assets of at least US$5 million and was not formed for the purpose of investing the Company.
	Initial _______	The investor certifies that it is an employee benefit plan whose investment decision is made by a plan fiduciary (as defined in ERISA §3(21)) that is a bank, savings and loan association, insurance company or registered investment advisor.
	Initial _______	The investor certifies that it is an employee benefit plan whose total assets exceed US$5,000,000 as of the date of this Agreement.
	Initial _______	The undersigned certifies that it is a self-directed employee benefit plan whose investment decisions are made solely by persons who meet at least one of the criteria for Individual Investors.
	Initial _______	The investor certifies that it is a U.S. bank, U.S. savings and loan association or other similar U.S. institution acting in its individual or fiduciary capacity.
	Initial _______	The undersigned certifies that it is a broker-dealer registered pursuant to §15 of the Securities Exchange Act of 1934.
	Initial _______	The investor certifies that it is an organization described in §501(c)(3) of the Internal Revenue Code with total assets exceeding US$5,000,000 and not formed for the specific purpose of investing in the Company.
	Initial _______	The investor certifies that it is a trust with total assets of at least US$5,000,000, not formed for the specific purpose of investing in the Company, and whose purchase is directed by a person with such knowledge and experience in financial and business matters that such person is capable of evaluating the merits and risks of the prospective investment.
	Initial _______	The investor certifies that it is a plan established and maintained by a state or its political subdivisions, or any agency or instrumentality thereof, for the benefit of its employees, and which has total assets in excess of US$5,000,000.
	Initial _______	The investor certifies that it is an insurance company as defined in §2(13) of the Securities Act of 1933, or a registered investment company.




    	 



    	 



    

RED CAT HOLDINGS,
INC.


 


For
Non-U.S. Person Investors


(all Investors
who are not a U.S. Person must INITIAL this section): 





 


	Initial _______	The investor is not a “U.S. Person” as defined in Regulation S; and specifically, the investor is not:
	A.	a natural person resident in the United States of America, including its territories and possessions (“United States”);
	B.	a partnership or corporation organized or incorporated under the laws of the United States;
	C.	an estate of which any executor or administrator is a U.S. Person;
	D.	a trust of which any trustee is a U.S. Person;
	E.	an agency or branch of a foreign entity located in the United States;
	F.	a non-discretionary account or similar account (other than an estate or trust) held by a dealer or other fiduciary for the benefit or account of a U.S. Person;
	G.	a discretionary account or similar account (other than an estate or trust) held by a dealer or other fiduciary organized, incorporated, or (if an individual) resident in the United States; or
	H.	a partnership or corporation: (i) organized or incorporated under the laws of any foreign jurisdiction; and (ii) formed by a U.S. Person principally for the purpose of investing in securities not registered under the Securities Act, unless it is organized or incorporated, and owned, by accredited investors (as defined in Rule 501(a) under the Securities Act) who are not natural persons, estates or trusts.
	And, in addition:
	I.	the investor was not offered the securities in the United States;
	J.	at the time the buy-order for the securities was originated, the investor was outside the United States; and
	K.	the investor is purchasing the securities for its own account and not on behalf of any U.S. Person (as defined in Regulation S) and a sale of the securities has not been pre-arranged with a purchaser in the United States.



 




    	 



    	 



    

RED
CAT HOLDINGS, INC.


 


Investor
Profile

(Must be completed by Investor)


Section
A - Personal Investor Information


Investor Name(s):                                                                                                                                                                     


Individual executing
Profile or Trustee:                                                                                                                                    


Social Security Numbers
/ Federal I.D. Number:                                                                                                                      


 


	Date
    of Birth:	                                     	 	Marital
    Status:                                                        
	Joint Party Date
    of Birth:	                                     	 	Investment Experience
    (Years):                              
	Annual Income:	                                     	 	Liquid Net Worth:
                                                      
	Net Worth*:	                                     	 	 






Tax Bracket:                    _____
15% or below                    _____
25% - 27.5%                    _____
Over 27.5%


Home Street Address:                                                                                                                                                               


Home City, State
& Zip Code:                                                                                                                                                


Home Phone:                                                 Home
Fax:                                               Home
Email:                                    


Employer:                                                                                                                                                                                  


Employer Street Address:
                                                                                                                                                        


Employer City, State
& Zip Code:                                                                                                                                           


Bus. Phone:                                                   Bus.
Fax:                                                  Bus.
Email:                                       


Type of Business:
                                                                                                                                                                    


Outside Broker/Dealer:
                                                                                                                                                             


 


Section
B – Certificate Delivery Instructions


____ Please deliver
Note to the Employer Address listed in Section A.


____ Please deliver
Note to the Home Address listed in Section A.


____ Please deliver
Note to the following address:                                                                                                                    


 


 


Please
check if you are a FINRA member or affiliate of a FINRA member firm: ____






		 	
	Investor
    Signature	 	Date 


 


 


*       For
purposes of calculating your net worth in this form, (a) your primary residence shall not be included as an asset; (b)
indebtedness secured by your primary residence, up to the estimated fair market value of your primary residence at the time of
your purchase of the securities, shall not be included as a liability (except that if the amount of such indebtedness outstanding
at the time of your purchase of the securities exceeds the amount outstanding 60 days before such time, other than as a result
of the acquisition of your primary residence, the amount of such excess shall be included as a liability); and (c) indebtedness
that is secured by your primary residence in excess of the estimated fair market value of your primary residence at the time of
your purchase of the securities shall be included as a liability



    	 	 	 



     


    

ANTI MONEY LAUNDERING REQUIREMENTS


The USA PATRIOT Act


The USA PATRIOT Act is designed to detect,
deter, and punish terrorists in the United States and abroad. The Act imposes new anti-money laundering requirements on brokerage
firms and financial institutions. Since April 24, 2002 all brokerage firms have been required to have new, comprehensive anti-money
laundering programs.


To help you understand these efforts,
we want to provide you with some information about money laundering and our steps to implement the USA PATRIOT Act.


What is money laundering?


Money laundering is the process of disguising
illegally obtained money so that the funds appear to come from legitimate sources or activities. Money laundering occurs in connection
with a wide variety of crimes, including illegal arms sales, drug trafficking, robbery, fraud, racketeering, and terrorism.


How big is the problem and why is
it important?


The use of the U.S. financial system
by criminals to facilitate terrorism or other crimes could well taint our financial markets. According to the U.S. State Department,
one recent estimate puts the amount of worldwide money laundering activity at $1 trillion a year.


What are we required to do to eliminate
money laundering?


Under rules required by the USA PATRIOT
Act, our anti-money laundering program must designate a special compliance officer, set up employee training, conduct independent
audits, and establish policies and procedures to detect and report suspicious transaction and ensure compliance with such laws.
As part of our required program, we may ask you to provide various identification documents or other information. We will ask you
for your name, address, date of birth and other information that will allow us to identify you. We will ask to see a non-expired
valid issued government identification, such as your driver’s license or other identifying documents. Until you provide the
information or documents we need, we may not be able to effect any transactions for you.




    	 



    	 



    

ANTI-MONEY LAUNDERING INFORMATION FORM


The following is required in accordance with
the AML provision of the USA PATRIOT ACT.


(Please fill out and return with requested
documentation.)


INVESTOR NAME:______________________________________________


LEGAL ADDRESS:______________________________________________


______________________________________________       


SSN# or TAX ID#


OF INVESTOR:_________________________________________________


FOR INVESTORS WHO ARE INDIVIDUALS:



YEARLY INCOME:  _________________________           AGE:  ________


NET WORTH (excluding value of primary
residence):  _____________________________________________________


OCCUPATION:  ________________________________________________


ADDRESS OF EMPLOYER:_______________________________________


 _______________________________________


INVESTMENT OBJECTIVE(S): ____________________________________


IDENTIFICATION & DOCUMENTATION
AND SOURCE OF FUNDS:


		1.	Please submit a copy of non-expired identification for the authorized signatory(ies) on the investment
documents, showing name, date of birth, address and signature. The address shown on the identification document MUST match the
Investor’s address shown on the Investor Signature Page.



	Current Driver’s License	or	Valid Passport	or	Identity Card


(Circle one or more)


		2.	If the Investor is a corporation, limited liability company, trust or other type of entity, please
submit the following requisite documents: (i) Articles of Incorporation, By-Laws, Certificate of Incorporation, Bylaws, Trust or
other similar documents for the type of entity; and (ii) Corporate Resolution or power of attorney or other similar document granting
authority to signatory(ies) and designating that they are permitted to make the proposed investment.



		3.	Please advise where the funds were derived from to make the proposed investment:



	Investments	Savings	Proceeds of Sale	Other ____________


(Circle one or more)


Signature:  ___________________________________


Print Name:  __________________________________


Title (if applicable):  ____________________________


Date:  _______________________________________