Red Cat Holdings Announces Closing of $46.75 Million Registered Direct Offering of Common Stock

Rhea-AI Summary

Red Cat Holdings has closed a $46.75 million registered direct offering of common stock, selling 6,448,276 shares to institutional investors. The drone technology company plans to use proceeds for general corporate purposes and its new unmanned surface vessel division. Red Cat highlighted operational progress including expanded manufacturing capacity for Edge 130 production to 150 units monthly and plans to double Black Widow production to 1,000 units monthly. The company maintained its 2025 revenue guidance of $80-120 million, broken down as: $25-65M in SRR-related Black Widow sales, $25M in non-SRR Black Widow sales, $25M in Edge 130 sales, and $5M in Fang FPV sales. Northland Capital Markets acted as exclusive placement agent with Ladenburg Thalmann as financial advisor.

Positive

• Successfully raised $46.75 million through institutional investors
• Manufacturing capacity expansion with new facility capable of producing 150 Edge 130s monthly
• Plans to double Black Widow production to 1,000 units per month
• Strong 2025 revenue guidance of $80-120 million maintained
• Strategic expansion into maritime autonomy market with new USV division

Negative

• Potential dilution for existing shareholders due to issuance of 6,448,276 new shares
• Additional expenses from placement agent fees and offering costs will reduce net proceeds
• Significant operational costs expected for new USV division development

Insights

Financial Analyst

Red Cat secured $46.75M financing to fuel USV division growth and manufacturing expansion, supporting ambitious $80-120M revenue guidance for 2025.

Red Cat Holdings has successfully closed a $46.75 million registered direct offering, selling 6,448,276 shares to institutional investors. This significant capital infusion comes at a strategic time as the company expands beyond traditional drone technology into the maritime autonomy market with its new Unmanned Surface Vessels (USVs) division.

The financing strengthens Red Cat's balance sheet considerably, providing essential working capital to scale manufacturing operations. The company has already begun expanding production capacity, moving Edge 130 manufacturing to a larger facility capable of producing 150 units monthly, while simultaneously doubling Black Widow production capacity to eventually reach 1,000 units monthly.

Most notably, management has reiterated their ambitious $80-120 million revenue guidance for calendar year 2025, with detailed segmentation across product lines:

• $25-65 million from SRR-related Black Widow sales
• $25 million from non-SRR Black Widow sales
• $25 million from Edge 130 sales
• $5 million from Fang FPV sales

The wide range in the SRR-related Black Widow sales projection ($25-65 million) indicates significant upside potential but also uncertainty around exact order volumes. This substantial revenue guidance, representing a major growth trajectory, now has stronger credibility given the fresh capital to support increased production capacity and the expansion into maritime applications.

With Northland Capital Markets serving as exclusive placement agent and Ladenburg Thalmann as financial advisor, this institutional backing signals strong market confidence in Red Cat's growth strategy across both aerial and maritime autonomous systems.

SAN JUAN, Puerto Rico, June 18, 2025 (GLOBE NEWSWIRE) -- Red Cat Holdings, Inc. (Nasdaq: RCAT) (“Red Cat” or “Company”), a drone technology company integrating robotic hardware and software for military, government, and commercial operations, has successfully closed the previously announced registered direct offering with certain institutional investors for the purchase and sale of 6,448,276 shares of common stock resulting in gross proceeds of approximately $46.75 million, before deducting placement agent fees and other offering expenses. The offering closed on June 18, 2025.

The Company intends to use net proceeds from the offering for general corporate and working capital purposes, including but not limited to operating expenditures related to its new unmanned surface vessel division.

“We believe this financing positions Red Cat for significant growth in the drone industry and will accelerate our product development and production for our newly formed Unmanned Surface Vessels (USVs) division for the maritime autonomy market,” said Jeff Thompson, Founder, Chairman and Chief Executive Officer of Red Cat.

Recent Operational Highlights

• Expansion of our manufacturing capacity by moving the Edge 130 production to a new, larger facility that will produce 150 Edge 130s per month and is in process of doubling the Black Widow production capacity, enabling an eventual production of 1,000 per month.
• We have been diligently working to identify top talent and manufacturing capacity for our USV division to meet end market demand for maritime applications.
• Reiterate 2025 annual revenue guidance of $80 to $120 million for calendar year 2025, which consists of:
  • $25 to $65 million in SRR-related Black Widow sales
  • $25 million in Non-SRR Black Widow sales
  • $25 million in Edge 130 sales
  • $5m in Fang FPV sales
    

Northland Capital Markets acted as the exclusive placement agent and Ladenburg Thalmann served as financial advisor for the transaction.

The offering is being made pursuant to an effective shelf registration statement on Form S-3 (File No. 333-283242), which was declared effective by the Securities and Exchange Commission (the “SEC”) on December 11, 2024. A final prospectus supplement and the accompanying prospectus relating to the registered direct offering will be filed with the SEC and will be available on the SEC's website located at http://www.sec.gov. Additionally, when available, electronic copies of the final prospectus supplement and the accompanying prospectus may be obtained, when available, from Northland Securities, Inc., 150 South Fifth Street, Suite 3300, Minneapolis, MN.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy any of the securities described herein, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

About Red Cat Holdings, Inc.

Red Cat (Nasdaq: RCAT) is a drone technology company integrating robotic hardware and software for military, government, and commercial operations. Through two wholly owned subsidiaries, Teal Drones and FlightWave Aerospace, Red Cat has developed a leading-edge Family of Systems. This includes the flagship Black Widow™, a small unmanned ISR system that was awarded the U.S. Army’s Short Range Reconnaissance (SRR) Program of Record contract. The Family of Systems also includes TRICHON™, a fixed wing VTOL for extended endurance and range, and FANG™, the industry's first line of NDAA compliant FPV drones optimized for military operations with precision strike capabilities. Learn more at www.redcat.red.

Safe Harbor Forward-Looking Statements

This press release contains "forward-looking statements" that are subject to substantial risks and uncertainties. All statements, other than statements of historical fact, contained in this press release are forward-looking statements. Forward-looking statements contained in this press release may be identified by the use of words such as "anticipate," "believe," "contemplate," "could," "estimate," "expect," "intend," "seek," "may," "might," "plan," "potential," "predict," "project," "target," "aim," "should," "will" "would," or the negative of these words or other similar expressions, although not all forward-looking statements contain these words. Such statements include, but are not limited to, statements relating to our intended use of proceeds from the offering, annual revenue guidance, future manufacturing capacities and future market demand. Forward-looking statements are based on Red Cat Holdings, Inc.'s current expectations and are subject to inherent uncertainties, risks and assumptions that are difficult to predict. Further, certain forward-looking statements are based on assumptions as to future events that may not prove to be accurate. These and other risks and uncertainties are described more fully in the section titled "Risk Factors" in the Form 10-KT filed with the Securities and Exchange Commission on March 31, 2025. Forward-looking statements contained in this announcement are made as of this date, and Red Cat Holdings, Inc. undertakes no duty to update such information except as required under applicable law.

Contact:

INVESTORS:
E-mail: Investors@redcat.red

NEWS MEDIA:
Phone: (347) 880-2895
Email: peter@indicatemedia.com

FAQ

What is the size of Red Cat Holdings' (RCAT) recent stock offering?

Red Cat Holdings closed a $46.75 million registered direct offering, selling 6,448,276 shares of common stock to institutional investors on June 18, 2025.

What will Red Cat Holdings (RCAT) use the offering proceeds for?

The company will use net proceeds for general corporate and working capital purposes, including operating expenditures for its new unmanned surface vessel division.

What is Red Cat Holdings' (RCAT) revenue guidance for 2025?

Red Cat Holdings projects 2025 revenue between $80-120 million, including $25-65M in SRR Black Widow sales, $25M in non-SRR Black Widow sales, $25M in Edge 130 sales, and $5M in Fang FPV sales.

What is Red Cat Holdings' (RCAT) manufacturing capacity expansion plan?

The company is moving Edge 130 production to a new facility capable of 150 units monthly and plans to double Black Widow production capacity to 1,000 units per month.

Who were the financial advisors for Red Cat Holdings' (RCAT) offering?

Northland Capital Markets acted as the exclusive placement agent, and Ladenburg Thalmann served as financial advisor for the transaction.