# Red Cat secures $46.75 million in direct offering of common stock

SAN JUAN, Puerto Rico - Drone technology company Red Cat Holdings, Inc. (NASDAQ:RCAT), currently valued at $835 million and showing remarkable momentum with a 720% return over the past year according to InvestingPro data, has entered into securities purchase agreements with institutional investors for the sale of 6,448,276 shares of common stock in a registered direct offering, the company announced Tuesday.

The transaction is expected to generate approximately $46.75 million in gross proceeds before deducting placement agent fees and other offering expenses. The offering is anticipated to close on or about Wednesday, subject to customary closing conditions. InvestingPro analysis indicates the company operates with a moderate debt level, which could make this capital raise strategically important for its growth plans.

Red Cat plans to use the net proceeds for general corporate and working capital purposes, including operating expenditures related to its new unmanned surface vessel division. Northland Capital Markets is serving as the exclusive placement agent for the transaction.

The offering is being conducted under an effective shelf registration statement on Form S-3 that was declared effective by the Securities and Exchange Commission on December 11, 2024.

Red Cat develops drone technology through its subsidiaries Teal Drones and FlightWave Aerospace. The company’s product line includes the Black Widow unmanned ISR system, which was awarded a U.S. Army contract, along with other drone systems designed for military and government operations.

This capital raise comes as the company continues to develop its drone technology portfolio for military, government, and commercial applications. While analysts anticipate sales growth in the current year, InvestingPro data reveals additional insights about the company’s prospects, with 12 more exclusive ProTips available to subscribers, along with comprehensive financial analysis and Fair Value estimates in the Pro Research Report.

According to the press release statement, the final prospectus supplement and accompanying prospectus relating to the offering will be filed with the SEC and made available on the SEC’s website.

In other recent news, Red Cat Holdings reiterated its revenue guidance for 2025, projecting earnings between $80 million and $120 million, with most of the revenue expected in the latter half of the year. The company ended Q1 2025 with $9 million in cash and receivables, bolstered by an additional $30 million raised in April. Red Cat is expanding its manufacturing capabilities, with plans to produce 150 drones per month by year-end. Additionally, the company announced a partnership with Empirical Systems Aerospace to scale production of the Black Widow drone, which is part of the U.S. Army’s Short Range Reconnaissance Program. This collaboration aims to meet growing demand from U.S. and international customers by leveraging ESAero’s aerospace-grade manufacturing capabilities. Red Cat is also launching a new Maritime Unmanned Surface Vessel division, although revenue from this segment is expected to be minimal in 2025. The company is addressing production needs by expanding its facilities and preparing for increased demand.

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